Cutting to Kill

oil, standard, company, agent, name, rice, letters, railroad, carley and information

Page: 1 2 3 4 5 6 7

Several gentlemen testified before the recent Industrial Commission to the belief that their business was under the constant espionage of the Standard Oil Company. Theo dore Westgate, an oil refiner of Titusville, told the Commis sion that all of his shipments were watched. The inference from his testimony was that the Standard Oil Company re ceived reports direct from the freight houses. Lewis Emery, Jr., of Bradford, a lifelong contestant of the Standard, declared that he knew his business was followed now in the same way as it was in 1872 under the South Improvement Company contract. He gave one or two instances from his own business experience to justify his statements, and he added that he could give many others if necessary. Mr. Gall, of Montreal, Canada, declared that these same methods were in operation in Canada. "When our tank-cars come in," Mr. Gall told the Commission, "the Standard Oil Company have a habit of sending their men, opening a tank-car, and taking a sample out to see what it contains." Mr. Gall declared that he knew this a long time before he was able to get proof of it. He declared that they knew the number of cars that he shipped and the place to which they went, and that it was their habit to send salesmen after every shipment. Mrs. G. C. Butts, a daughter of George Rice, an independent refiner of Marietta, Ohio, told the Ohio Senate Committee which in vestigated trusts in 1898 that a railroad agent of their town had notified them that he had been approached by a Standard representative who asked him for a full report of all inde pendent shipments, to whom and where going. The agent re fused, but, said Mrs. Butts : "We found out later that some one was giving them this information and that it was being given right from our own works. . . . A party writing us from the Waters-Pierce office wrote that we had no idea of the network of detectives, generally railroad agents, that his company kept, and that everything that we or our agents said or did was reported back to the managers through a regular network of detectives who were agents of the railroads and oil company as well." But while the proofs the independents have offered of their charges show that such leaks have occurred at intervals all over the country, they do not show anything like a regular system of collecting information through this channel. From the evidence one would be justified in believing that the cases were rare, occurring only when a not over-nice Standard manager got into hot competition with a rival and prevailed upon a freight agent to give him information to help in his fight. In 1903, however, the writer came into possession of a large mass of documents of unquestionable authenticity, bear ing out all and more than the independents charge. They show that the Standard Oil Company receives regularly to-day, at least from the railroads and steamship lines repre sented in these papers, information of all oil shipped. A study of these papers shows beyond question that somebody having access to the books of the freight offices records regularly each oil shipment passing the office—the names of consignor and consignee, the addresses of each, and the quantity and kind of oil are given in each case. This record is made out usually on a sheet of blank paper, though occasionally the recorder has been indiscreet enough to use the railroad company's station ery. The reports are evidently intended not to be signed, though there are cases in the documents where the name of the sender has been signed and erased; in one case a printed head bearing the name of the freight agent had been used. The name had been cut out, but so carelessly that it was easy to identify him. These reports had evidently been sent to the office of the Standard Oil Company, where they had received a careful examination, and the information they contained had been classified. Wherever the shipment entered was from one of the distributing stations of the Standard Oil Company, a line was drawn through it, or it was checked off in some way. In every other case in the mass of reports there was written, opposite the name of the consignee, the name of a person known to be a Standard agent or salesman in the terri tory where the shipment had gone.

Now what is this for? Copies of letters and telegrams ac companying the reports show that as soon as a particular report had reached Standard headquarters and it was known that a carload, or even a barrel, of independent oil was on its way to a dealer, the Standard agent whose name was written after the shipment on the record had been notified. "If you

can stop car going to X, authorise rebate to Z (name of dealer) of three-quarters cent per gallon," one of the telegrams reads, There is plenty of evidence to show how an agent receiving such information "stops" the oil. He persuades the dealer to countermand the order. George Rice, when before the House Committee on Manufactures in i888, presented a number of telegrams as samples of his experience in having orders countermanded in Texas. Four of these were sent on the same day from different dealers in the same town, San Angelo. Mr. Rice investigated the cause, and, by letters from the vari ous firms, learned that the Standard agent had been around "threatening the trade that if they bought of me they would not sell them any more," as he put it.

Mrs. in her testimony in said that her firm had a customer in New Orleans to whom they had been selling from soo to i,000 barrels a month, and that the Standard representa tive made a contract with him to pay him $io,000 a year for five years to stop handling the independent oil and take Stand ard oil! Mrs. Butts offered as evidence of a similar transac tion in Texas the following letter: In case the agent cannot persuade the dealer to counter mand his order, more strenuous measures are applied. The letters quoted above hint at what they will be. Many letters have been presented by witnesses under oath in various inves tigations showing that Standard Oil agents in all parts of the country have found it necessary for the last twenty-five years to act at times as these letters threaten. One of the most aggres sive of these campaigns waged at the beginning of this war of exterminating independent dealers was by the Standard mar keting agent at Louisville, Kentucky—Chess, Carley and Com pany. This concern claimed a large section of the South as its territory. George Rice, of Marietta, Ohio, had been in this field for eight or ten years, having many regular customers. It became Chess, Carley and Company's business to secure these customers and to prevent his getting others. Mr. Rice was handicapped to begin with by railroad discrimination. He was never able to secure the rates of his big rival on any of the Southern roads. In r888 the Interstate Commerce Com mission examined his complaints against eight different South ern and 'Western roads, and found that no one of them treated him with "relative justice." Railroad discriminations were not sufficient to drive him out of the Southwest, however, and a war of prices was begun. According to the letters Mr. Rice himself has presented he certainly in some cases began the cutting, as he could well afford to do. For instance, Chess, Carley and Company were selling water-white oil in Septem ber, 188o, in Clarksville, Tennessee, at twenty-one cents a gal lon delivered in carloads—export oil was selling in barrels in New York at that date at cents a gallon. Rice's agent offered at eighteen cents. The dealer to whom he made the offer, Armstrong by name, wished to accept, but as he had been buying of Chess, Carley and Company, went first to see them about the matter. He came back "scared almost out of his boots," wrote the agent to Rice.

Very soon after this, Chess, Carley and Company took in hand a Nashville firm, Wilkinson and Company, which was buying of Rice. "It is with great reluctance," they wrote, "that we undertake serious competition with any one, and certainly this competition will not be confined to coal-oil or any one article, and will not be limited to any one year. We always stand ready to make reasonable arrangements with any one who chooses to appear in our .line of business, and it will be unlike anything we have done heretofore if we permit any one to force us into an arrangement which is not reasonable. Any loss, however great, is better to us than a record of this kind." And four days later they wrote : "If you continue to bring on the oil, it will simply force us to cut down our price, and no other course is left to us but the one we have intimated." Wilkinson and Company seem to have stuck to Rice's oil, for, sixteen months later, we find Chess, Carley and Company call ing on the agent of a railroad, which already was giving the Standard discriminating rates, to help in the fight.

Page: 1 2 3 4 5 6 7