THE BIRTH OF THE TRUST arrangements which have now been described were the foundation on which the Standard Oil Trust was built. Some time in the summer of 1874, when he had become sure that the so-called " equalisation " scheme would be worked in his favour by the railroads and leading pipe lines simultaneously, Mr. Rocke feller conferred at Saratoga with two of his old friends of the South Improvement Company —W. G. Warden, of Philadelphia, and Charles Lockhart, of Pittsburg—both big refiners, and agreed with them to form an oil refiners' Trust, which was to work with absolute secrecy, and gradually acquire control of a11 the refineries in America. The instrument by which this large order was to be put through was, of course, the secret rebate and the new " equalisation," or, less euphemistically, discrimination. Secrecy was to be maintained by each firm as it came in carry ing on business ostensibly as before under its old style and title, staff, and management, but its actual business was to be directed solely by the central board of the Trust, presided over by Mr. Rockefeller, which would control all operations of buying, transport, and selling. The refineries had to become the absolute property, how ever, of the Standard Oil Company, their late proprietors taking stock of that Company in exchange. We know this from an account of the Saratoga meeting given at a later period by Charles Lockhart, of Pittsburg, to Miss Ida M. Tarbell.
In March, 1875, something leaked out as to the constitution of the Trust, which was then spoken of as the Central Association. It gradually roped in most of the refining firms in America, the process being effected by one sensational collapse after another under the influence of the discrimination and the rebate. An exception was the huge refinery of Charles Pratt and Co., of New York, of which the famous H. H. Rogers was one of the most considerable assets. This firm sold itself more or less voluntarily to the Standard Oil for stock at 265. The absorption of the " Creek " refineries, i.e., those in the Oil Regions, was conducted by the scarcely less famous J. D. Archbold, who appeared in Titusville as the representative of a Standard Oil offshoot, since known to fame as the Acme Oil Company.
Between 1875 and 1879 Mr. Archbold won his spurs in the Standard by buying out, dis mantling, or shutting down nearly every refinery on the " Creek." The history of this collapse makes pitiful reading, and I need not enter into it beyond giving a specimen or two extracted from contemporary records.
In 1888 Mr. A. H. Tack, a partner of the Citizens' Oil Refining Company of Pittsburg, after explaining on oath before the House Committee on Manufactures how his splen didly organised business gradually became non-paying under the Standard Oil influence, added :— In 1874 I went to (see Rockefeller if we could make arrange ments with him by which we could run a portion of our works. It was a very brief interview. He said there was no hope for us all. He remarked this—I cannot give the exact quotation " There is no hope for us," and probably he said, " There is no hope for any of us " ; but he says, " The weakest must go first." And we went 1 The case of Scofield, Shurmer and Teagle, a Cleveland refinery, is evidence of the de moralisation of the times. At first the firm showed fight, and in 1876 brought a suit against the Lake Shore and Michigan Southern and the New York Central and Hudson River railroads for " unlawful and unjust discrimina tion, partialities, and preferences made and practised . . . in favour of the Standard Oil Company, enabling the said Standard Oil Company to obtain, to a great extent, the monopoly of the oil and naphtha trade of Cleveland." But Mr. Rockefeller persuaded them to drop their suit and obtain bigger profits than they were making by becoming his fellow-conspirators. They signed a con tract, consequently, with him for ten years, the firm putting in a plant worth $73,000 and its entire time, and Mr. Rockefeller putting in $10,000—and his railway discriminations ! The firm was guaranteed $35,000 a year net profit -about 50 per cent. on capital ; profits over $35,000 went, to Mr. Rockefeller up to $70,000 —about 100 per cent. ; any further profits were to be divided.