THE RAILROADS AND THE PIPE LINES contract between the railroads and the South Improvement Company was signed, and armed with this deadly weapon, Mr. Rockefeller went round to all the rival refineries in Cleveland and explained to their respective proprietors, gently but firmly, that they were as good as dead men in the oil trade, and that the only way they could avoid utter ruin was to turn over their refineries to the South Improve ment Company either for stock or cash at the latter's valuation. It seems scarcely credible, but it is an historical fact that no less than twenty out of these five-and-twenty Cleveland refiners— who, by the way, were approached one by one and under pledge of secrecy—as soon as they learnt that they were thus morally dead, pro ceeded at once to order their coffins. That is, they sold up as requested. The Cleveland re finers fell at Mr. Rockefeller's feet through sheer fright, and thus in less than three months' time the Standard Oil group absorbed twenty other refineries and increased its capacity from 1,500 . barrels a day to 10,000 barrels—from one-tenth to one-fifth the total capacity of the United States.
Of course, the murder was soon out, and the Oil Regions, which were interested in oil wells as distinct from refining, which was the Standard's business, were aflame with indig nation. A Petroleum Producers' Union was formed in opposition. Mass meetings were held and Congress was petitioned. The Penn sylvania Legislature repealed the charter of the South Improvement Company, and on March 25th the peccant railroads signed a con tract with the Petroleum Producers' Union, of which the first and chief clause provided— That all arrangements for the transportation of oil after this date shall be upon a basis of perfect equality to all shippers, producers, and refiners, and that no rebates, drawbacks, or other arrangements of any character shall be made or allowed that will give any party the slightest difference in rates or discrimin ation of any character whatever.
On April 4th General McClellan (Atlantic and Great Western), Horace F. Clark (Lake Shore and Michigan Southern), Thomas A. Scott (Penn sylvania), and W. H. Vanderbilt (New York Central) all sent emphatic messages to the Petroleum Producers' Union declaring that their roads had no understanding of any nature in regard to freights with the Standard Oil Com pany. On April 8th John D. Rockefeller telegraphed to the Petroleum Producers' Union : " In answer to your telegram, this Company holds no contract with the railroad companies or any of them or with the South Improvement Company." Yet we now know from a contract
thoughtlessly exhibited by H. M. Flagler seven years later to a Commission of the Ohio State Legislature—a contract between his Company and the railroads—that a rate had been fixed " From April 1st until the middle of November, 1872, about seven months, $1.25." Now the corresponding rate openly published and re corded in the contract between the roads and the Petroleum Producers' Union just quoted, which was signed March 25th, was $1.50. A rebate of 16i per cent. ! Mr. Rockefeller had it all the time, in spite of his own assertions and those of the railroad officials to the contrary.
Mr. Rockefeller has committed very few indis cretions in his lifetime, but he did achieve one at this early date in his career. He talked under the smart of his rebuff, and so did others of his colleagues in the late South Improve ment Company. He was reported in the Oil City Derrick to have said to a prominent man of Oil City that the South Improvement Com pany could work under the charter of the Standard Oil Company, and to have added that in less than two months his auditor would be glad to join him. One of his colleagues simply said : " The business now will be done by the Standard Oil Company. . . . We mean to show the world that the South Improvement Com pany was organised for business, and means business, in spite of opposition." This went the round of the American Press a few days after the repeal of the charter, and since then to the present day the indiscreetly uttered threat has been stealthily fulfilled to the letter. The South Improvement Company was formally dissolved in order to calm the popular indignation, but the same men continued to operate through the Standard Oil Company of Cleveland, and, as we have seen, to receive similar rebates, which enabled them to build up the Standard Oil Trust. On May 3, 1910—to bring the matter well down to date by a concrete instance—the United States Court of Appeal confirmed a decree of the Circuit Court of the Western District of New York State fining the Standard Oil Company $20,000 (£4,000) " for accepting concessions from the published rate of the Pennsylvania, New York Central, and Rutland Railroads in violation of Inter-State Commer cial Law." But the fine, of course, is an ineffective flea-bite, and is only worth quoting to show that the iniquitous conspiracy of in justice and robbery entered into by the rail roads and the Standard Oil Trust in 1872 still continues to baffle justice in America and to outrage the moral sense of the civilised world.