Q. By advancing the price of the crude material you necessarily advance the price of the refined ? A. Yes, sir.* The shut-down went into effect the first of November, 1887. The effect on stocks and the market was immediate— stocks fell off at the rate of a million barrels a month, and prices rose by January, i888, some twenty cents. But at the end of the year, though oil was higher and stocks consider ably less, the benefits of the shut-down had not been con spicuous enough to produce that "harmonious feeling" Mr. Rockefeller so much desired; not sufficient to distract the minds of the producers from the idea they had in forming their association, and that was a co-operative enterprise for taking care of their own oil. Throughout i888 and 1889 two schemes, known as the Co-operative Oil Company, Limited, and the United Oil Company, Limited, were under consid eration. By the end of the latter year it looked as if some thing could be done with the second, and it was turned over by the executive board of the association to a special com mittee, of which H. L. Taylor, of the Union Oil Company, one of the largest and oldest producing concerns of the Oil Regions, was chairman. How Mr. Taylor had succeeded in getting into the Producers' Protective Association it is hard to say, for it was he and his partner, Mr. Satterfield, who in 1883 had tried to throw the Tidewater Pipe Line into the hands of the Standard Oil Company, and who, when that unworthy scheme failed, had sold their stock to the Standard, thus giving that company its first holdings in the Tidewater.* The independents had forgotten or overlooked this fact, for Taylor was a member of the Producers' Protective Associa tion and prominent in its councils.
The special committee, of which Mr. Taylor was chair man, went actively to work. Lawyers were employed to con sider the safest form of organisation for a company doing an interstate pipe-line business and carrying on refineries. Certain German capitalists, owners of tank-steamers and in terested in foreign marketing agencies, were brought into the scheme. Things were going well, when suddenly the com mittee found the chairman cooling toward the enterprise. Then came the rumour that Mr. Taylor and his partners— Mr. Satterfield and J. L. and J. C. McKinney—had sold the Union Oil Company to the Standard. A meeting of the executive board was at once called, Messrs. Taylor and J. L. McKinney both being present. They acknowledged the truth of the report and were promptly informed their resignations would be accepted.
The rumour of the secret desertion of strong members of the Producers' Protective Association, while holding posi tions of trust, soon spread through the Oil Regions. It was a staggering blow. It took from them one of the largest single interests represented. It deprived them of men of ability on whom they had depended. It introduced a fear of treachery from others. It brought them face to face with a new and serious element in the oil problem—the Standard as an oil producer. Up to 1887, the year of the organisation of the Producers' Protective Association, Mr. Rockefeller had not taken his great combination into oil production to any ex tent, and wisely enough from his point of view. It was a business in which there were great risks, and as long as he could control the output by being its only buyer, why should he take them? Now, however, the situation was changing.
A number of sure fields had been developed—Bradford, Ohio, West Virginia. Their value was depressed by over production. Mr. Rockefeller had money to invest. The pro ducers were threatening to disturb his control by a co-opera tive scheme. It was certain that he had not yet produced a "harmonious feeling." It was not sure he would. If he failed in that they might one day even shut off his supply of oil, as they had done in 1872, and Mr. Rockefeller, with great foresight, determined to become a producer. In 1887 he went into Ohio fields. Soon after he began quietly to buy into West Virginia. When he learned, in 189o, from Mr. Taylor and his partners, that a co-operative company of producers was on foot, he naturally enough concluded that the best way to dismember it was to buy out the largest interest in it. The Union Oil Company saw the advantage of being a member of the Standard Oil Trust, and sold. In this one year, 189o, over 4o,000 shares of Standard Oil Trust certificates were issued to oil-producing companies,* as follows: There was general consternation in producing circles, and if there had not been a number of men in the organisation who realised that the life of the independent effort was at stake, and who turned all their strength to saving it, the association would undoubtedly have gone to pieces. Chief among these men were Lewis Emery, Jr., and C. P. Collins, of Bradford, Pennsylvania; J. W. Lee and David Kirk, of Pittsburg; A. D. Wood, of Warren; Michael Murphy, of Philadelphia; Rufus Scott, of Wellsville; J. B. Aiken, of Washington; R. J. Straight, of Bradford; Roger Sherman and M. W. Quick, of Titusville. They urged an immediate meeting of the General Assembly, at which a plan for co operative action should be adopted and at once put into force.
On January 28, 1891, the General Assembly convened at Warren, Pennsylvania. The whole miserable story of the co-operative plan which the executive board had worked out, and its destruction by the desertion of the Union Oil Com pany, came out. It was at once evident that, instead of dis heartening the Assembly, it was going to harden their deter mination and spur them to action; that they would not leave Warren until they had something to work on. The session lasted three days, and before finally adjourning it had adopted a drastic plan, framed by a committee of nine, of which Mr. Quick was chairman. This plan aimed, so the resolution adopted by the Assembly stated, to cut off the supplies of the producers' oil from the Standard Trust! This was to be accomplished by forming a limited partnership, whose subscribers should all be trusted members of the Pro ducers' Protective Association (only persons having no affili ation with the Standard Oil Company were members of the Producers' Protective Association, it will be remembered), and which should aim to take care of the crude oil from the wells of the producers who went into the movement, furnish it local transportation, and find a market for it either by building independent refineries or by alliance with those already in existence.
From Warren the delegates went home to work for the