Cutting to Kill

standard, buckley, oil, information, business, system, independent, reports, freight and lewis

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A comparison of this report with the firm's own accounts shows that the Standard came within a small per cent. of an accurate estimate of the X Y Z's business.

Another curious use made of these reports from the freight offices is forming a card catalogue of local dealers. (See form on page 55.) Oil is usually sold at retail by grocers. It is with them that the local agents deal. Now the daily reports from the freight offices show the oil they receive. The compe tition reports from local agents also give more or less infor mation concerning their business. A card is made out for each of them, tabulating the date on which he received oil, the name and location of the dealer he got it from, the quality, and the price he sells at. In a space left for remarks on the card there is written in red ink any general information about the dealer the agent may have picked up. Often there is an explanation of why the man does not buy Standard oil—not infrequently this explanation reads: "Is opposed to monop olies." It is impossible to say from documentary evidence how long such a card catalogue has been kept by the Standard; that it has been a practice for at least twenty-five years the following quotation from a letter written in 1903 by a promi nent Standard official in the Southwest to one of his agents shows: "Where competition exists," says the official, "it has been our custom to keep a record of each merchant's daily purchase of bulk oil; and I know of one town at least in the Southern Texas Division where that record has been kept, whether there was competition or not, for the past fifteen years." * The inference from this system of "keeping the eyes open" is that the Standard Oil Company knows practically where every barrel shipped by every independent dealer goes ; and where every barrel bought by every corner-grocer from Maine to California comes from. The documents from which the writer draws the inference do not, to be sure, cover the entire country, but they do cover in detail many different states, and enough is known of the Standard's competitive methods in states outside this territory to justify one in believing that the system of gathering information is in use everywhere. That it is a perfect system is improbable. Bribery is not as dangerous business in this country as it deserves to be—of course noth ing but a bribe would induce a clerk to give up such informa tion as these daily reports contain—but, happily, such is the force of tradition that even those who have practised it for a long time shrink from discovery. It is one of those political and business practices which are only respectable when con cealed. Naturally, then, the above system of gathering infor mation must be handled with care, and can never have the same perfection as that Mr. Rockefeller expected when he signed the South Improvement Company charter.

The moral effect of this system on employees is even a more serious feature of the case than the injustice it works to competition. For a "consideration" railroad freight clerks give confidential information concerning freight going through their hands. It would certainly be quite as legitimate for post-office clerks to allow Mr. Rockefeller to read the private letters of his competitors, as it is that the clerks of a railroad give him data concerning their shipments. Everybody through whose hands such information passes is contaminated by the knowledge. To be a factor, though even so small a one, in such a transaction, blunts one's sense of right and fairness. The effect on the local Standard agent cannot but be demoralising. Prodded constantly by letters and telegrams

from superiors to secure the countermand of independent oil, confronted by statements of the amount of sales which have gotten away from him, information he knows only too well to have been secured by underhand means, obliged to ex plain why he cannot get this or that trade away from a rival salesman, he sinks into habits of bullying and wheedling utterly inconsistent with self-respect. "Is there nothing you independents can do to prevent our people finding out who you sell to?" an independent dealer reports a hunted Stand ard agent asking him. "My life is made miserable by the pressure brought on to chase up your sales. I don't like such business. It isn't right, but what can I do?" The system results every now and then, naturally enough, in flagrant cases of bribing employees of the independents themselves. Where the freight office does not yield the infor mation, the rival's own office may, and certainly if it is legiti mate to get it from one place it is from the other. It is not an unusual thing for independent refiners to discharge a man whom they have reason to believe gives confidential informa tion to the Standard. An outrageous case of this, which oc curred some ten years ago, is contained in an affidavit which has been recently put at the writer's disposition. It seems that in 1892 the Lewis Emery Oil Company, an independent sell ing concern in Philadelphia, employed a man by the name of Buckley. This man was discharged, and in September of that year he went into the employ of the leading Standard refinery of Philadelphia, a concern known as the Atlantic Refining Company. According to the affidavit made by this man Buckley, the managers of the Standard concern, some time in February, 1893, engaged him in conversation about affairs of his late employer. They said that if they could only find out the names of the persons to whom their rival sold, and for what prices, they could soon run him out of business! And they asked Buckley if he could not get the information for them. After some discussion, one of the Standard man agers said: "What's the matter with the nigger?" alluding to a coloured boy in the employment of the Lewis Emery con cern. Buckley told them that he would try him. "You can tell the nigger," said one of the men, "that he needn't be afraid, because if he loses his position there's a position here for him." Buckley saw the negro and made a proposition to him. The boy agreed to furnish the information for a price. "Start ing from February, 1893," says Mr. Buckley, "and lasting up to about August of the same year, this boy furnished me peri odically with the daily shipments of the Lewis Emery con cern, which I took and handed personally, sometimes to one and sometimes to the other manager. They took copies of them, and usually returned the originals." The negro .also brought what is known as the price-book to Buckley, and a complete copy of this was made by the Standard managers. "In short," says Mr. Buckley in his affidavit, "I obtained from the negro all the inside facts concerning the Lewis Emery Oil Com pany's business, and I furnished them all to the Standard managers." In return for this information the negro lad was paid various sums, amounting in all to about ninety dollars. Buckley says that they were charged upon the Standard books to "Special Expenses." The transaction was ended by the discharge of the coloured boy by the Lewis Emery concern.

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