Passing next to Austria, we find the Standard operating in the Galician oil-field, the production of which has risen from 214,800 tons in 1895 to 1,734,235 tons in 1908. The story is told in the Foreign Office Report on Austria-Hungary for 1908 (No. 4,355 Consular Reports). was an enormous production in 1908, but the State railways could not use the raw oil in its locomotives until the benzine was extracted. This is our Consul's narrative (p. 15) :— The Producers' Association, however, had not the capital to build the necessary works for this process or the new reservoirs required, and at this stage the Standard Oil Company of America saw an opportunity to extend its influence in Austria. The American company entered into negotiations with the association and offered to erect the factory for extracting the benzine, and further to build the new reservoirs and lease them to the producers, who would, in return, have to supply raw oil to the Standard Oil Company's representatives in Austria at a special price. An arrangement on these lines, which would have given the American Combine a predominating influence in the Austrian oil industry, was on the point of being signed when the Austrian Government intervened in June, 1909, to prevent it by undertaking to carry out the necessary works itself on much easier terms for the producers. . . .
By this arrangement the Standard Oil Company has been entirely excluded from the business of supplying the State rail ways with oil ; but the Austrian Government has gone further in its desire to protect the Austrian oil industry from the com petition of the American Trust, which is represented here by an affiliated company [i.e., the Vacuum Oil Company, of Austria, a branch of the Vacuum Oil Company, of Rochester, N.Y.] , and has introduced a Bill in the Reichsrat containing various provisions aimed directly at the Standard Oil Company. Thus a concession will in future be necessary for carrying on the business of storing, handling, and refining raw oil, and the provincial authorities are able to refuse this at their discretion.
Further, the distribution of petroleum by means of tank carts is only to be allowed by permission of the Ministry of Com merce. The tank carts were recently introduced into Austria by the representatives of the American Trust, but met with great opposition on the part of the trade because they rendered the middleman superfluous, and there is little doubt that the Ministry will not give the permission required.
The Times Vienna correspondent on Sep tember 14, 1910, reported further developments of this war against the Standard. It appears that there is also operating in Galicia a certain Limanova Petroleum Company, which, though registered as an Austrian company, has about £500,000 of French capital invested in it. It has been working " in some sort of unconfessed relationship with the Vacuum Oil Company," and the Times correspondent tells us how the Rockefellers have been forced to swallow their favourite medicine. He writes :—
The object of the Standard Oil and its affiliated companies in Austria (as in other countries) is to obtain control of the Galician oil-fields, which are worked chiefly by a large number of Austrian producers and refiners organised in a loose ring or trust. The tactics of selling oil at or below cost price cur rently employed by the Standard Oil Company to kill its competitors or to bring them to their knees appear to have been employed both by the Vacuum and the Limanova Com panies.
Some months ago the Austrian Government intervened to protect the Austrian producers and refiners, and applied to the Limanova Company in particular methods of adminis trative chicanery and railway discrimination strikingly similar to those which made the name of the Standard Oil Company a byword in the United States. The tactics of the Austrian authorities are as indefensible, or as defensible, as are those of the Standard Oil Company.
The Standard did not enjoy railroad discrimi nations applied to itself, and it not only made unavailing representations to the Austrian Government through the United States Minis ter at Vienna, but, acting through the French shareholders in the Limanova Company, they induced the French Minister to .remonstrate with Austria.
These representations having produced little effect, the French Government is now stated to be about to adopt measures of retaliation, and to impose a prohibitive tariff upon Austrian petroleum imported into France.
In order to help the Standard Oil Trust to crush out the Galician oil industry, the French consumer was to pay more for the petroleum products, ozokerit, &c., that he buys from Austria. But this scheme has failed, for on November 9, 1910, it was announced in the Neue Freie Press (quoted here by the Financial Times) that the Limanova Company had sur rendered. It has agreed to give up all business transactions with the Vacuum Company, not to sell directly or indirectly to them either crude oil or the products of petroleum, and not to make use of the selling agency of the Vacuum Oil Company for the sale of its own products. It has further agreed not to undersell the other Galician refiners, and the Austrian Government has therefore cancelled the discriminations referred to which it employed against the Limanova Company. Deserted thus by its French ally, the Vacuum Company has to rely on itself, and it is announced that the United States Government has sent a special envoy to Vienna to discuss with the American Ambassador, among other things, the differ ences between the Austrian Government and the Vacuum Oil Company. It looks as though the Austrian Government is going to win in its struggle with this unscrupulous monopoly, and that the Vacuum Oil Company will have to climb down.