Another staggering bit of testimony concerned railroad rates. Asked if there had been any arrangements by which the trust or the companies controlled by it got transportation at any cheaper rates than was allowed to the general public, Mr. Rockefeller answered: "No, sir." As a matter of fact, the three great oil-carrying systems of the country—the Cen tral, Erie and Pennsylvania—had all of them, for much of the period between 1872 and i888, granted to Mr. Rocke feller rebates calculated to keep freight rates down for the Standard Oil Company and up for its competitors. Con tracts and agreements to this effect are easily accessible to any one caring to investigate the quality of Mr. Rockefeller's "no." said Mr. "we have had no better rates than our neighbours," and then, with that lack of the sense of humour which, ethical qualities aside, is his chief limitation, he hastened to add: "But, if I may be allowed, we have found repeated instances where other parties had secured lower rates than we had." Later in the day the committee, which seems to have known something of Mr. Rockefeller's former contracts with the railroads, returned to the subject, and the following colloquy, worthy of the study of all witnesses interested in how not to tell what you know, took place: Q. Has not some company or companies embraced within this trust enjoyed from railroads more favourable freight rates than those rates accorded to refineries not in the trust ? A. I do not recall anything of that kind.
Q. You have heard of such things ? R. I have heard much in the papers about it.
Q. Was there not such an allegation as that in the litigation or controversy recently disposed of by the Interstate Commerce Commission, Mr. Rice's suit; was not there a charge in Mr. Rice's petition that companies embraced within your trust enjoyed from railroad companies more favourable freight rates ? A. I think Mr. Rice made such a claim; yes, sir.
Q. Did not the commission find that claim true ? A. I think the return of the commission is a matter of record; I could not give it. Q. You don't know it; you haven't seen that they did so find ? A. It is a matter of record.
Q. Haven't you read that the Interstate Commerce Commission did find that charge to be true ? A. No, sir; I don't think I could say that. I read that they made a decision, but I am really unable to say what that decision was.
Q. You did not feel interested enough in the litigation to see what the decision was ? A. I felt an interest in the litigation; I don't mean to say that I did not feel an interest in it.
Q. Do you mean to say that you don't know what the decision was ? that you did not read to see what the decision was ? A. I don't say that; I know that the Interstate Commerce Commission had made a decision; the decision is quite a comprehensive one, but it is questionable whether it could be said that that decision in all its features results as I understand you to claim.
Q. You don't so understand it ? Will you say, as a matter of fact, that none of the companies embraced within this trust have enjoyed more favourable freight rates than the companies outside of your trust ? Will you say, as a matter of fact, that it is not so ? A. I stated in my testimony this morning that I had known of instances where companies altogether outside of the trust had enjoyed more favourable freights than companies in this trust; and I am not able to state that there may not have been arrange ments for freight on the part of companies within this trust as favourable as, or more favourable than, other freight arrangements; but, in reply to that, nothing peculiar in respect to the companies in this association; I suppose they make the best freight arrangements they can." * The committee had a vague idea that refineries outside of the Standard Combination had had a hard time to live, and asked if the trust had sought in any way to make the opera tions of outsiders so unprofitable that they would either have to come in or go out of the business.
"They have not; no, sir, they have not," replied Mr. Rocke feller.
"And they have lived on good terms with their competi tors ?" "They have, and have to-day very pleasant relations with those gentlemen." It would have been interesting to have heard the com ments of a number of gentlemen trying to carry on an inde pendent business in i888 on that answer: of the refiners in Oil City and Titusville, at that time preparing to carry their troubles to the Interstate Commerce Commission ; of George Rice and others at Marietta, Ohio; of H. H. Campbell, of the Bear Creek Refining Company at Pittsburg; of Scofield, Shurmer and Teagle at Cleveland.
If all of Mr. Rockefeller's testimony had been of the nature of the above, the investigation would have been worth little to the people who demanded it. But when it came to the questions which, after all, it was most essential to have an swered at that moment, Mr. Rockefeller, after some skirmish ing, gave the committee as frank testimony as is on record from him. The information wanted was in regard to the
organisation of the Standard Oil Trust. As pointed out in a previous chapter, there had been some kind of an agreement adopted in 1882, binding together the varied interests which controlled the oil business. But what it was, where it was kept, by what authority it lived, nobody knew. For six years it had succeeded in hiding itself. What was the understand ing which had made a trust of a company? The committee asked to know. Mr. Rockefeller and his counsel were the soul of amiability under the demand. They had only one request, and Mr. Choate made it persuasively: "If the committee please," he said, "I do not arise to make an objection to a request of the committee; we think that it is very proper that the committee should be made acquainted with this document and everything pertaining to it in order to advise them as to the nature and operation of this trust; at the same time, there are private interests and controversies involved which might be seriously prejudiced by a public exposition of its details, and therefore, in producing it, we, without asking the committee to make any promise or to commit themselves at all, request that while they make what ever use of it they please, it shall not be in all its details made a matter of public record or exhibition unless in their final judgment, after consideration of the matter, they shall consider it necessary. There are very important private interests involved that ought not, under the guise of a public investigation, to be interfered with." The committee examined the document and concluded to include it in its report.* Like all great things, it was simplicity itself—an agreement which anybody could understand, by which some fifty persons holding controlling interests in corporations, joint stock associations, and partnerships of dif ferent states, placed all their stock in the hands of nine trus tees, receiving in return trust certificates. These nine trustees themselves owned a majority of the stock and had complete control of all the property. Mr. Rockefeller, when questioned, stated that one of the trustees was a responsible officer in almost every refinery or organisation in the trust; that the trustees, as a body, knew by reports and correspondence, and by frequent consultation in New York with active promoters of each concern, just how the business was going on. "We all know how the business goes," said Mr. Rockefeller; "we get reports once in thirty days showing what it has cost for everything." The trustees evidently ran the entire great combination un der the agreement. But consider the anomaly of the situation. Thirty-nine corporations, each of them having a legal exist ence, obliged by the laws of the state creating it to limit its operations to certain lines and to make certain reports, had turned over their affairs to an organisation having no legal existence, independent of all authority, able to do anything it wanted anywhere ; and to this point working in absolute darkness. Under their agreement, which was unrecognised by the state, a few men had united to do things which no incor porated company could do. It was a situation as puzzling as it was new. The committee in reporting on what it discovered did nothing to solve the puzzle. It simply sounded a warning : "The actual value of property in the trust control at the present time is not leas than one hundred and forty-eight millions of dollars, according to the testimony of the trust's president before your committee. This sum in the hands of nine men, energetic, intelligent, and aggressive—and the trustees themselves, as has been said, own a majority of the stock of the trust which absolutely controls the one hundred and forty-eight millions of dollars—is one of the most active and possibly the most formidable moneyed power on this continent. Its influence reaches into every state and is felt in remote villages, and the products of its refineries seek a market in almost every seaport on the globe. When it is remembered that all this vast wealth is the growth of about twenty years, that this property has more than doubled in value in six years, and that with this increase the trust has made aggregate dividends during that period of over fifty millions of dollars, the people may well look with apprehension at such rapid development and centralisation of wealth wholly independent of legal control, and anxiously seek out means to modify, if not to prevent, the natural consequence of the device producing it, a device of late invention, namely, the aggrega tion of great corporations into partnerships with unbounded resources and a field of operations quite as extended as its resources. So much for the nature of the Standard Oil Trust. The committee regret that they are not able to make a more complete and satisfactory report as to the method of its operations and its effect upon public interests.