A noteworthy development of the conspiracy between the Standard Oil Company and the railroads was what became known as Standard control of the railroad " terminal facilities." By terminal facilities is understood the unload ing, storing, and handling of oil at the railroad termini, chiefly in the vicinity of New York harbour. The railroads handed over the entire control and management of their oil yards and wharves to this one favoured oil company, authorising it to collect the oil-yard charges from its rivals, and to handle its rivals' oil consignments according to its own goodwill and Fancy one of our British railway companies tting all its railway sidings in London under the control of a single firm of Newcastle coal merchants, and allowing this firm to load or unload, forward or delay the consignment of rival firms according to its own convenience or good pleasure ! Fancy the outcry that would be raised against this privileged firm when it became known that the only check upon its dealing unjustly with its rivals was that, whatever charges it elected to make for loading, unloading, and storage at the railway company's sidings, such charges were to be uniform in all cases ! This last proviso was a mere mockery. The only authority appointed to see that no advantage was given to one competitor over another was the arch-competitor — the Standard Oil Company. The companies entering into this special conspiracy were the Erie, the New York Central and Hudson River, the Baltimore and Ohio, and the Pennsylvania railroads at the Atlantic seaboard. I have before me as I write copies of the contracts made by all these railroads, excepting the Pennsylvania, with the Standard Oil Company, and they make astounding reading.
This matter of the " terminal facilities " very naturally received attention in the United States Government prosecution of the Standard Oil Company of New Jersey, in the State of Missouri, when the Court found that the Company was identical with the Standard Oil Trust, which had previously been ordered by the Court to be dissolved as an illegal con spiracy in restraint of trade. The effect of the decision has been suspended by an appeal to the Supreme Court of the United States, which would have been decided last spring had it not been for the death of Judge Brewer, the presiding judge. The appeal is expected to be decided under his tardily appointed successor, Judge Hughes, this spring or early summer. In the meantime, the finding of the Missouri Circuit Court, before which the case was argued, is that of " Guilty." When Mr. Rockefeller had, with the greatest difficulty, been haled before this court and asked to explain these contracts on oath, all he could urge in his favour was that " the Standard interests were handling very large quantities of oil, and were the natural parties to have control of the warehousing, receiving, and shipping of oil." Cross-examination could extract very little from him. He could not even say when the Standard Oil interests got possession of the terminals nor how long they retained them. He admitted that the Standard levied terminal charges on the oil of inde pendents, but did not know the amount. He relapsed, in short, into that painfully afflicting condition of amnesia which seems to be con stitutional with Standard Oil officials when subjected to the rude shock of public examination.
But, luckily, the written letter of the con tracts is now to hand to supplement this lamentable want of memory. Take, for instance, that with the Erie Company dated April 17, 1874, in Section 7 of which the Standard agrees to pay 5 cents a barrel to the Erie Railroad for the use of its yards, and further agrees " to make the charges uniform to all parties who use the yards or for whom services are performed therein, and always as low as any other oil yard, affording proper facilities for the transfer, storage, preparation, and shipment of the oil at any terminus of any railway or other line competing with the Erie Railway at or adjacent to the port of New York." There is something like humour in the phrase " as low as any other oil yard." Every " other oil yard " was simi larly controlled by the Standard. One of its directors, Mr. Jabez A. Bostwick, stated on oath before the Hepburn Committee on October 16, 1879, that the Standard at that time controlled the terminals of the Erie and the New York Central railroads, and that the New York Central had no other oil terminals at New York Harbour except those controlled by the Standard. At the time he was testify ing he had charge of the New York Central yards, and declined to answer as to his relation with the Standard Oil Company in that connection. The usual atmosphere of mystery ! It is dissipated, however, at the present date, for we have now the text of the contract between the New York Central and the Standard before us, signed January 1, 1876, and referring to a previous contract of July 22, 1875.
One more point and I have done with the " terminal facilities." Section 8 of the Erie contract provides that the Standard Oil Com pany shall assume the collection of freights and charges on all oil received at the yard and render accounts weekly. " This provision," observes the " Brief for the United States," given to the Attorney-General in the Missouri case, " gave the Standard Company the power to collect the Erie's freight charges for transportation of competitors' oil, thereby giving the Standard the great advantage of knowledge of all competitive shipments and of the rates of freight, and enabling it to compel those parties to pay the full rate, while the Standard could obtain any rate it might arrange for with the railroad companies, and it will be shown that the Standard had rebates from all of them." In the light of all this, what becomes of the Standard Oil claim to superior business acumen and cleverness ? Under the conditions shown, a mere schoolboy could outstrip and ruin the most seasoned merchant in the race for commercial success. The claim to superior business methods is an absolutely unfounded one, and might as well be urged by a burglar who can make a fortune in a night ; but, then, his avocation is not usually referred to as " business." By this time the pumping of crude oil from the wells through pipe lines had commenced, first for short distances to collecting points on the railroads, but later for long distances, largely superseding the railroads. The Stan dard's pipe lines, called the United Pipe Lines, were under the management of the late Mr. Daniel O'Day, the big Irishman mentioned in the first chapter. At first the railroads and Standard pipe lines worked together to harass and delay the " independent " shipper and refiner.