Cutting to Kill

oil, standard, independent, trade, dealer, reports, sold, letter, companies and business

Page: 1 2 3 4 5 6 7

This was in the territory of the Standard agents at Portland, Oregon, one of whom wrote to a South Bend dealer when he heard of the intrusion : "We will state for your information that never a drop of oil has reached South Bend of better quality than what we have always shipped into that territory. They can name it `Sunlight,' Moonlight,' or 'Starlight,' it makes no difference. You can rest assured if another carload of `Sunlight' arrives at your place, it will be sold very cheap. We do not purpose to allow another carload to come into that territory unless it comes and is put on the market at one half its actual cost. You can convey this idea to the young man who imported the carload of 'Sunlight' oil." When John D. Archbold, of the Standard Oil Com pany, had his attention called to this letter by Professor Jenks, of the Industrial Commission, Mr. Archbold characterised the letter as "a foolish statement by a foolish and unwise man" and promised to investigate it. Later he presented the com mission with an explanation from the superior of the agent, who declared that the writer of the letter did not have any authority to say that oil would be sold on the basis mentioned. "The letter," he continued, "was intended to be written in a jocular manner to deny a claim that he was selling oil infe rior in quality to that sold by others." It is hard for the mere outsider to catch the jocularity of the letter, and it must have been much more difficult for the dealer who received it to appreciate it.

Independent oil dealers of the present day complain bitterly of a rather novel way employed by the Standard for bringing into line dealers whose prejudices against buying from them are too strong to be overcome by the above methods. This is through what are called "bogus" oil companies. The obdurate dealer is approached by the agent of a new independent con cern, call it the A B C Oil Company, for illustration. The agent seeks trade on the ground that he represents an inde pendent concern and that he can sell at lower prices than the firm from which the dealer is buying. Gradually he works his way into the independent's trade. As a matter of fact, the new company is merely a Standard jobbing house which makes no oil, and which conceals its real identity under a misleading name. The mass of reports from railroad freight offices quoted from in this article corroborate this claim of the independents. The A B C Oil Company is mentioned again and again as shipping oil, and in the audited reports it is always checked off in the same fashion as the known Standard companies, and none of its shipments is referred to Standard agents. Independents all over the country tell of loss of mar kets through underselling by these "bogus" companies. The lower price which a supposedly independent concern gives to a dealer who will not, under any condition, buy of the Standard, need not demoralise the Standard trade in the vicinity if the concession is made with caution. After the trade is secure, that is, after the genuine independent is ousted, the masquerading concern always finds itself obliged to ad vance prices. When the true identity of such a company

becomes known its usefulness naturally is impaired, and it withdraws from the field and a new one takes its place.

There is never a dealer in oil too small to have applied the above methods of competition. In recent years they have fre quently been applied even to oil peddlers. In a good many towns of the country oil is sold from door to door by men whose whole stock in trade is their peddling wagons. Many of these oil peddlers build up a good trade. As a rule they sell Standard oil. Let one take independent oil, however, and the case is at once reported. His customers are located and at once approached by a Standard tank wagon man, who fre quently, it is said, not only sells at a lower price than they have been paying, but even goes so far as to clean and fill the lamps! In these raids on peddlers of independent oil, refined oil has been sold in different cities at the doors of consumers at less than crude oil was bringing at the wells, and several cents per gallon less than it was selling, to wholesale dealers in refined. It is claimed by independents that at the present time the "bogus" companies generally manage this matter of driving out peddlers, thus saving the Standard the unpopu larity of the act and the dissatisfaction of the rise in price which, of course, follows as soon as the trade is secured.

The general explanation of these competitive methods which the Standard officials have offered, is that they originate with employees and are disapproved of promptly if brought to the attention of the heads of the house. The cases seem rather too universal for such an explanation to be entirely satisfactory. Certainly the system of collecting infor mation concerning competitive business is not practised by the exceptional "over-zealous" employee, but is a recognised department of the Standard Oil Company's business. In the mass of documents from which the reports of oil shipments referred to above were drawn, are certain papers showing that the system is nearly enough universal to call for elab orate and expensive bookkeeping at the headquarters of each Standard marketing division. For instance, on the next page is a fragment illustrating the page of a book kept at such a headquarters.

What does this show? Simply that every day the reports received from railroad freight agents are entered in records kept for the purpose ; that there is on file at the Standard Oil headquarters a detailed list of the daily shipments which each independent refiner sends out, even to the initials and num ber on the car in which the shipment goes. From this remark able record the same set of documents shows that at least two sets of reports are made up. One is a report of the annual volume of business being done by each particular independent refiner or wholesale jobber, the other of the business of each individual local dealer, so far as the detectives of the Standard have been able to locate it. For instance, among the docu ments is the report on a well-known oil jobbing house in one of the big cities of the country—reproduced on the next page.

Page: 1 2 3 4 5 6 7