“The Great Oil Octopus."

Maoriland Worker, Volume 3, Issue 45, 19 January 1912, Page 5

“The Great Oil Octopus."

Story of the Development, Methods, Men, and Results of " Standard Oil." ißy London "Truth's" Investigator.

Oil AFTER IX. THE TRUST IN AMERICA ANO ASIA. ! i know of nothing more despicableand pathetic than a man who devotes nil the waking hours of the day to niak\vg money for moneys snk-p."—Jolin I) = HorkerVllor, in "Random RemhmSO11CO5." Hitherto we have been dealing with the history of the Standard Oil Trust on its native lu>ath, tho United Slates of America. It in now time to pass in brief review some of its operations in forHiin countries. It appears in many lands, this protean conspirator, and always in some new guise. Here it is the pioneer and prophet of native oil; there it is the importer of vast floods of foreign oil. Itself protected by a heavy tariff in the United States, it poses in other lands as the chief of apostles of froo trade. It demands alike freedom to on&er foreign oilfields as a prospector and foreign oil markets as a retailor. In one country it is the advocate of high prices: in another it is the ruthless undercutter of its competitors. Always preferring secrecy to daylight, its underground agitations embrace the press, tho politicians and the public. It is not always -easy at first to discover who is behind a Standard Oil agitation, but I shall give a few clues which may assist the student of oleaginous origins. The Trust in Mexico. Turning first to Mexico, we find that the Standard's operations there havo been conducted under the name of the Waters-Pierce Oil Company of Missouri, which is now, after many years of falsehood, admitted to be a tentacle of the Trust. The history of the reentry of the Wators-Pieree Company to the State of Texas is a good example of the Standard's methods. There sits in the United Stat** Senate one Joseph Bailey, a Democrat of tho deepest dye. A lawyer, an orator, one of those puresouled patriots who deniounce in public the trusts and monopolies, Senator Bailey was exactly the man tho Standard wanted. The full facts are given by Miss Ida M. Tarbell in an article in the "American JVI alanine" for January, 1008. The Texas Legislature passed a sweeping anti-trust law; under it the Waters-Pierce' Company was prosecuted from court to court until finally, in March, lOU'l, tho United States Supremo Court sustained the decisions of the Texas courts, and the Company was ordered to close up its business and get out. At this point Senator (then Bailey appeared, and for a fee of 3300 dollars (charged on the the company's books to "profit and loss") succeeded i<: obtaining from the Democratic Attorney-General of Texas two months' The 'Waters-Pierce Company finally transferred itself to a new company o , ' the same name, which took over the entire business of the original company, and Mr. Henry Clay Pierce, the .manager, applied for a charter for the new one. He swore that it was in no way connected with the Standard Oil Trust, and that he owned 3P06 shares out of 4000 shares. Largely through the influence of Congressman Bail<\v the m'W charter was granted. Four'weeks !at>T Bailey, who was always regarded as a poor man. was able to !>uv the -splendid Grape Vine Ranch at 'Dallas, Texas, of 0000 acres—a coincidence, to say the least.

The Oil Company went on tradiuLj until in the Missouri pimwdiujcs in IS."Hi Mr. Henry Clay Pierce, tli« niana»ing director, was at last forced on to the witness-stand, lie there admitted that in? only owned l'->oo shares of the now Waters-Pierce Company, and that the- Standard owned iToO. Ho admitted quite frankly that in order to evade tlw> anti-Trust law of tin' Stato of Texas the .Standard's 2750 slnu-os stood on tho hooks in his name from May, 1000, to September, 1904. During this period the dividends were sent to Mr. Bayne, of the tSeaboard National Bank of New York—a gentleman wliose nainc my readers will recall as appearing in connection with the Standard's carefully concealed ownership of the Security Oil Company of Texas. In June, 1004, Mr. H. C. Pierce was asked to transfer these '2750 shares to Mr. Van Binvn, who happens, oddly enough, to bo tho son-iu-la-w of Mr. J. D. Arehbold, woh.so Mine has appeared so often in. previoio chapters.

during all thii t'mo that, the TVaters•Piereo Oil Company was posing as an "independent" business it was carrying on a very largn and profitable trade in the adjoining Republic of Mexico. Although thcro are large natural deposits of petroleum in Mexico, the WatersPierce Company preferred to import crude oil from Texas and Oklahoma., <*- fine it in Mexico., and sell it at a price which returned a profit of 600 per cent, on tho invested capital. But the Mexican GoverMiKsnfc desired to develop tho natural resources of the Republic, and as they wore quite tired. ( >' the high prices of the Standard, which had a monopoly, they gnuitod largo oil concessions to tho'Pcwrsou interests, which are headed by Lord Cowdray. The Poarson J&na litul executed largo railway waterworks. xnA harbor contraota

for :hfl M<*xi<un Government, and they de.\elop"d t.li-o petroleum resources ot Mexico si> ri»i)i(lly that th« Standard, which was hampered by a duty of 4J <J(»J!;»rs a barrel on all the- crude oil tlu-y i:np<irt'»4, *o<lll began to led the piiK-ii. The Trust's Press Bureau. Tlieu ••n.iUf.'l tin- rate war which lasted so iuaiiy mouths in Mexico, but which is i'.'iHiiu'd w be now compromised. 'I'lir. , YVaIiTS-l'iercu Company built a r"liiK'iy iv Mexico, and spent largo sums in bu.\ing Mexican oil lanils. J'licv cut prices so hesuily that they sold' ujl under cost, but the natural advantages of Uie Pearson interests ivtii' so great to render tlieni impregnable, and the Kagie Oil Company u'a ssuccossfully laniK'iii'd on tho LoiidoJi market by'Lori Cou dray's him to i'arry out extensive developments, on the oil-bearing lands they own. During Liio bitter contest there was plenty of evidence of tho existence of the Standard's. ->f<'s> bureau, the head of which gels :.hi> liberal salary of 12,500 dollars a year. Articles appeared in the London tiinmrial ii'".vsj)apers predicting the ii.iminent ruin ot the Pearson interests, am! obviously intended to stop the English invest')!' from backing their flotations. According to a statement recently published in tho United States, a more subtle campaign seems to have been carried out against President Diaz, who favors the Pearson interests. Ma'iy officials of the Government, including a- son of President Diaz, have become share, holders in tho Pearson local oil company, being naturally ilesirous of developing their national resources and lighting this American monopoly. Now, under the title of ''Barbarous Mexico," an ostensibly humanitarian campaign was opened in newspapers pud .magazines of the United States of America against the alleged harsh treatment of tho Yaqui Indians by tho Mexican Government. In the "Cosmopolitan Magazine , ' of March, 1910, it was categorically °sserrwl by Mr. Alfred H. Lewis, out of the foremost American magazine writers, that this'campaign had been inspired by the Oil Trust. They were determined to be revenged on President Diaz, and therefore they induced a number of well-meaning Americans— who haven't time to put down the public lynching of negroes in the United States—to plead the cause of the unfortunate semi-enslaved Yaqui Indians. I cannot prove this charge, but Mr. Lewis says it is believed by Americans resident in Toxas and Mexico. From the nature of the case this allegation is difficult to substantiate, but for the present purpose it is a sufficiently sig-niti-aut fact that a writer of Mr. Lewis's reputation should believe that such st Machiavellian scheme is possible. That the Standard will stick at noUiing' appears from the fact that when Lord Oowdray visited New York in June, 1010, he was shadowed by their detectives. The Standard Oil Tri;3t issued a formal denial of this charge, but Lord Cowdray repeated it and reaffirmed it in the "Daily Mail." The Railway Rebate in Canada. Turning to Canada, we find that tiie British flag has been no protection against th« Standard's invasion. Hen , , too. railway discrimination was the principal weapon employed, and this was aided by the legislation which the Standard obtained at Ottawa permitting them to ship their oil along the intfTiiatiojial waterways and the Canadian canals in bulk steamers to Canadian ports, whore it was easy to transfer it to tank cars. In 1898 the late Mr. Deary D. Lloyd, author of "■Wealth Against Commonwealth," wrote a> follows to the present writer with regard to these discriminations: — My information came direct from the attorney of one of the principal Canadian refiners. This refiner carried on his business with my book at his elbow, and he told his attorney that precisely the things that I had exposed in.that book were ihero and then being done to him. The-discrimination was managed by sonic- manipulation of the rates with regard to shipments in barrels. The Oil Trust had barrelling works of its own at certain points, from which it received rates at discriminations that killed the profits of the home refiners who did not have theso central stations. The refiner I speak of was prosperous, liked the business, and would have continued in ifc but lor this railroad discrimination. He made every possible effort by appeals to the railroad people in Canada to remedy the. wrong, hut found them as determined to favor the American Trust as railroads in the United States.

Finally the Standard clinched the matter by purchasing a Canadian refinery, which it runs as the Imperial Oil Company, a nice patriotic sort of name which no doubt appeals to the Canadian public. AVitli this refinery and the raiiroad discriminations they are as powerful in Canada as they are in the United States.

When one turns to the Far East it is surprising to disoovor that the Standard lias not liad things all its own way. It does a huge business ill Cliiiui and Manchuria in case-oil, bub it has there had to fight, first, Russian oil slapped in bulk, and, when that fell off, tho competition oi the Dutch- East Indies. Several of these islands arc vary rich in petroleum, and, in my

opinion, its failure to secure & footing there was tin* Standard's lirst gn*t <i" feat. The story is told with eoinmemfcable bluiitiK'ss and candour by Mr. Robinson, Kiitish Consul at Ainstwdam, in his annual report for the yea-r 1897 (Koreiun OfUce Consular llcpoits, So. liOoi;. He says: —

At present a very important question lias bren raised by the attempt of the well-knowi) monopolist undortakinii, the '■Standard Oil Company, to acquire a footing in UlO Dutch JCasl Indies by the i>Krchase of the sha.res of the M'lwaVa I'jiini Company, an important concession in Sumatra. An extraordinary general meeting of the latter company was to have lieeu held in lie last days of Kebrun-ry for the ptu , -

pose ,(!' ratifying the agreement with iv , Standard Oil Company, but the Dutch Government has interfered by the categorical declaration that no concession will bo granted to a company under the control of the American raonUT monopoly, and the meeting has laturally bieh postponed. It remains 0 be seen whether the financial j>ow«*r of tin l St.iiKliiid Oil Company <an be 'I'lVetively resisted by such steps. :but the Government stenit quite determined to use all possible means to this end. Ind the course which it has adont'Ml will certainly be a popular one, Ihreatened as Xetiierland India is by an "iniiK'iiumin imperio" of this description. Tho. agitation against the Standard Oi l Company's monopoly, in co far as 111 i• inflicts- on this country all the dangers find disasters caused by an exclusive supply 01 tyvv-flasliiiig oil, is a constantly increasing one. The Benzine Battle in the Far East. Tile re-,ult was tiiat Hie Moeara K-iiim Coinpam ivi>rp unable to sell, and the Standard has never been able to get into the Dutch indies. Worse still, the Moeara Kniiu ;inn two other Dutch petroleum companies Mere absorbed by the Royal ■llu'teh Petroleum Company, and this in its'.cum. became in 1!K)7 allied with the - Shell Transport and Trading Company of London, of which Sir Marcus- Samuel is the head. Briefly, the present position is that two new companies have been created, iv which th«> Hoyal Dutch and the Shell Company hold all the shares. '1 t>e. Haranfselie JVtrolciuji Maatscliappij is ;i Dutch Company with a capiial of «t,(K)i),flO() florins, which carries on all the pumping and refining operations of the combine in the Far East, whilo a new English company, the Anglo-Snxolj Petroleum Company, with a capital of

vi,000,000, own* all the petroleum fields in which they operate, ami also .lie very larsft? fleet of tank stunners formerly owned by tin- Shell Company, in which their products are earned. They send into London alone 80,(100 ifiiKS of " petroleum spirit annually through the Asiatic Petroleum Company, their marketing agents. Last year t!ie same cimbinaiioii sent 10,01)0,----000 gallons of this motor spirit into the United States, supplying firms who wore competitors of tlio Standard Jil Trust. In 1 ( JO9 the Ko.val DutchSlifll combine took over the business of ninny of tljeir agents. For this purpose tho Shell. Company provided an additional' nnpjtal amounting; to (J4-10,----(1(10, the Royal Dutch put tip CO'b'n.OOO, and the Asiatic IVtroleuin Company £200.000, making an additional ouiiay of t:1,300.000 for one branch of their business. A large Roumanian oil company, the 'Astra, lias been secured, and the Shangliai-l.aii;j,kat Company, which operate.*-refineries in JSorneo, has also been 'vvught out.since the amalgamation of 10u7. Tliat amalgamation lia.s apparently-; been profit a h'j? to those engaged in it; for the Shell Company's dividend, which had been only .1 per cent, per annum between l('(l! md UHlfi, rose to 15 per cent, in HMI7, 20 per cent, in ; l!i08. and 2'2\ per cent, in 1909. ~ The Secret of the "Oil War." Sow the awkward part of this chain of events .so far as the Standard i.s concerned is that the whole, petroleum world has been turned npside down by the motor in 18D7 Mr. I'aul Habcock, diroetor of the Standard, told the Select Committee on IVtroleuin that they hud in iNew York tanks full of iiaptlia which they could not sill, llr. Morjfheiin, -a well-known Galicitu oil producer, told a City meeting the other <!ay tiiat lip could recall the day when his firm itave the naptha to any- !'.*■ who would take it away. Then the Standard, with its control of the tank installations and the selling agencies for reaching tho ooiistutier of liliiiniiiuting oil (or kero?ene) was the master of lie world. , Now the consumption of kci'ospiie is threatened by electricity among the ri<'h and slot-gas meters among tho poor, and if is the despised naptha (or berfzinp). whie.h is in demand. Alolwr (:ar,s. motor cycles, nn;ti»r omnibuses, motor lorries, aeroplanes,

'I those engines are demanding petrol, and it is the good fortune of the Shell combine that its crude oil provides a larger percentage of benzine than the Standard's American. "While huge quantities of benzine, for which there is an increasing demand, arc being sent to Europe by the Shell combine, tbc Standard is lei't with its monopoly of kerosene, i'or which the demand is decreasing. At the same time, the Sumatra and Borneo crude produces a very profitable percentage of petroleum wax, for which there is. also an increasing demand, and there is a big market fur tho residue all over tho Far East as uel oil. This is the real secret oi' tho recent "oil war," which has broken out chiefly because the Standard finds its supremacy challenged by wealthy and vigorous competitors, and is trying to ;e its vast accumulated profits in a "rate-cutting ,- ' war. The latest news i this connection was the intelligence that th-ft Standard is attempting to repair its initial failure of thirteen yours ago by obtaining petroliferous areas in Java and-Sumatra, fy propose to do Uiis through tho medium ol tho Hol-land-American Petroleum Cumpauy of

Amsterdam, which being nominally * Dutch company, can legacy acquiro his property. Whether tiuv.f/utcfi Government, which took so strong;* ■stand against tin- Standard s invasion. ii 18!)7, will consent to bo fooled byj snoh an obvious device as this remain* to l>e seen, lint the fact that ther scliemo has been initiated indicates Tflio desperate, straits to which tlie Standard.' is reduced for benzine. ' A Calumny. . Tliis is net the first time tin- Stand* aid lias comu into collision with the 1" September, IUOt, the "New York Herald" published an inie'iTtety with Air. W. H. Libb.v, the foreign marketing agent, of the Standard in Now i'ork. This was a long ''puff" of the Standard, and contained the allegations that in the, "rate-cutting" which, had then been going on tho Shell -Company had be-cn reduced to serious financial straits, and wcrti selling oil falsely branded. As these allegations \U.vo eft. tirely false, the Shell Canipany brought an action ayainst tho "A'lw York Herald" in th« English courts for libel, which ended in 1905 in aoooi- !- (ilete victory for the victims of Stflml:ud Oil cahiiiiii\. Mr. J. Eklou Jlaukes, K.V. i,iun\ Mr. Justice Hwiikcs) fitate4 hi behalr ot tlio (le)'f.iulaiits that tht>y had made inquiik's into the matter and found that the statements could not be siibstantiiiU'd, and therefore withdrew, apologised, and paid tho p'attUiff't ■osts as between solicitor and cliortt. As vro proceed wo shall find other points at which tho Standard and' Shell iia\e collided, but the vital factor in, tho present oil situation is the Sumatram benzine, which the Rockefellers failed j secure in 1897. . „ Passing to India, the Standard had '> iiy;lit> for years with the- Russian oil exported in bulk through the Suez Oanal, and is now pressed hard by the Burma Oil Company, an undertaking mainly under Scotch oontrol, which has until recently had a monopoly <if the Burma oil output. As there is « tariff on American oil in India fr-uni which Burmese oil is exempt, it was obviously to.tho intorost of the Standard—;"P'hich believes in tariffs at hoire —to get behind that oliStacle by ;ilil? to rolino Burma oil and vend it in India. There is another reason, and that is the large percentage of petroleum M'AK which the Burma'crude contains. Thero is a large and increasing demand all over tbo world for >vax, which'ih used for candles, chewing-guin, the waterprooiiug of fabrics without rubbw, and for many other commercial purines. In its desire to. get a footing in tfiis promising field Hie Standard Oil Trust applied to the Indian (lovernment for an oil-prospecting liee-nse in Burma, and was much grieved when the li'.'lian Government refused it. We camr ;.cross that same Mr. \V. H. I/ibby Hit ting about India, lv Xfivemhcr, I!.''L', tht* C'alcutt acorrespnndeirt of the v nan- r; 'i<'iiil News'' reporvs that tls'.s 'Xt--uilfinaH' was trying to iiuliiee the Helical (.11-am-bcj , of CDinineice to suppi.Tt his little sclieme agninsi the Indian Goverhjne.nb. The correspondent gives a pretty picture of Mr. Libby's viriHoio piOtostations :—

The representative oi tiii! iSi:iM<!-artl Oil Company sri'iD.s to ui.sh tin' Jti Chamber of Commcrc-i- to lielii've that the motives of lii.s co/npauy in-ri*. not wholly mercenary •— th.it on tin- iitli-er hand, they were .philanthropy., ijias-nuu-h as }:'■ says that ''it \yas 'cfi<> intention of tin , Standard Oil Company to ;'>> jiiuii.r i>urnie.*-.> nai-ives as possible to cuter the producing business, liy aiding thoii, in ilie ('itii<rif,vtii«ii(r of iikkUiii machinery ant! tnodvi'i'i liiotll(itis, by |)ro\iHini; with an iiiimoti iit to cash m'nrkft iw their fi.iule pil, Hiiil hy loans, il iioocssary, at- I'liy moderate rates oi' Hifeeit'st, to tlii , tik! that produ< , !ion iniglit l>o stiniiii.ui;! :ni<r an important industry crontcl. 'iii<i .*>tai>-dai-d hoped to derive its own profits by economics in reliiiiug, Ity.itiatcnaHy improving tho quality .and value tho ltian'.iiactured pnlits, ami liy distfti'iiitiiiij; tho said prodii'-ts in Juriij a.nd other Oriental inarket.s, wlwn , .sive fil'orts Plight .<.«- coii-suniption. Standard Philanthropy. We kno'.v, of foursc, tlijit tie S'Uud:wd has aluays been willing to pr.opura'j;e utiier people tD underl-ak+i the risks oi' f)il-iwll »iukii\<x, l>«t tli«» idea of sthtiiilatlnu: this speculative l>usinw(H for the hfiiolit of tl'.e luttj-.vs of a semibarbiiruiis co\mtry is uovol as well as captiratini;. When Mr. fißiliy's ojuufsiloil in lu'lia he rtvino to London, and his elniins w<to prepM en tlw Indi-i Office l)y the United Aml>asM\dor in Londoii, the Hon. Sisopl: Olioate. As the Antliassa-dur li;«d often appeaii'd for the St-attdani when at the AiiK'iuan Bar, ami as he lukl kiijiself .stated tlmt Iμ , was a sWc.lioldej in the. 'I'ruit, we may he sure tliAt Ins ndnieacy of the StaiKlard's srJii i*i I'jiirnta clki not- lack either 7t-al yr a!>Uity. But it faijed.. fiid the Tru.it' connot set to Burma. T\\y imj-oj-ts '«f all clusse-s of oils from Uuntn iiU-o M;m!»'.is I'rpsideiicy durinp 19<>9-IO ;a mounted U> t;)l7,StiS," as (.■onip.ar.'il with i".'!'.',' , -'? i;i IODK-'l. In tho sni".. period t ih imports of American oils dVrrcased from .£.-21!,.'-'? t;» /JlSf , ,:^^- CTo be continu'-xL*