And there the investigations of 1888 ended. There had been much noise over them, and for what good? So asked the dis contented oil public. It simply had secured the form of an agreement which could no more be touched by legislation than human greed. It was characteristic that the oil public, intent on immediate remedies, should be discouraged. If they had applied to their cause the same patience and foresight Mr. Rockefeller did to his, they would have realised that, as a matter of fact, a respectable first step had been taken toward their real goal, a goal which has not by any means been reached—that is, a legal form of organisation for corpo rations doing interstate business which would enable the pub lic to know promptly if they were securing special privileges or were restricting trade. This first step was in securing the famous trust agreement. That was now in the hands of people given to thinking about things, and something came of it, even more quickly than the philosophical observer of public events might expect, and in this wise: In 1887 there was elected to the attorney-generalship of Ohio a lawyer, something under forty years of age, named David K. Watson. Two years later Mr. Watson was a candi date for re-election. One day, while busy with his campaign, he came out of his office in the state-house on the public square in Columbus, and, crossing the street, stopped, as he often did, at a book-shop to look over new publications. He happened there on a small yellow leatherette volume entitled "Trusts." It was written by William W. Cook, of the New York bar, and cost fifty cents. Mr. Watson bought the book and spent the evening reading it. At the end he found the Standard Oil Trust agreement. It was the first time he had ever seen it. He read it carefully and saw at once that, if it was a bona fide agreement, the Standard Oil Company of Ohio was and had been for seven years violating the laws of the state of Ohio by taking the affairs of the company from the directors and placing them in the hands of trustees, nearly all of whom were non-residents of the state. Mr. Watson knew on the instant that, if this were a bona fide agreement and he were re-elected attorney-general of Ohio, it would be his duty to bring an action against the Standard Oil Company of the state. He laid the little book away until he knew the result of the election.
A few weeks later Mr. Watson was re-elected attorney general. He at once began a search into the authenticity of the documents in Mr. Cook's little volume. He sent for the reports of the investigations by the committees of the New York Senate and of Congress. He read the testimony word for word. But he still doubted the correctness of the document, fearing that, even if it were in the main correct, there might be some loophole by which the Standard Oil Company could escape. Now, in reading the report of the House investiga tions, Mr. Watson had been particularly impressed with the clearness and directness of the questions put by one of the mem bers of the investigating committee, Mr. Buchanan, of New Jersey. He accordingly went to Washington, inquired from a friend if Mr. Buchanan could be relied upon, and, receiving the assurance of his high character, sought an interview with him. "Was the Standard trust agreement as published in the committee's report bona fide?" was the inquiry. "Yes," said Mr. Buchanan. "But why do you ask?" "Because if it is,"
replied Mr. Watson, "I believe the Standard Oil Company of Ohio has violated the laws of the state, and on my return to Columbus I shall file an action in quo warranto against it in the Supreme Court of the state." "You would not dare do that, would you?" exclaimed Mr. Buchanan.
"I was young then," Mr. Watson told the writer in describ ing this interview, "and I supposed it was expected of a pub lic officer to perform his duty. So I explained to Mr. Buchanan that there was a statute in Ohio which required an attorney-general to bring suit against any corporation which he had reason to believe was violating the laws of the state; that I had no personal feeling against the Standard Oil Com pany, but I meant to enforce the law against it as I would against any other company which I believed to be violating the law." "I admire your courage," said Mr. Buchanan, "but I would not do it." On May 8, 189o, Mr. Watson filed his petition in the Supreme Court of Ohio.* The petition averred that, in viola tion of the law of Ohio, the Standard Oil Company had en tered into an agreement by which it had transferred 34,993 shares out of 35,00o to the trustees of the Standard Oil Trust, most of whom were non-residents of the state; that it was these trustees who chose the board of directors of the Standard Oil Company of Ohio, and directed its policy, and prayed that, on account of this violation of law, the company should be "adjudged to have forfeited and surrendered its corporate rights, privileges, powers and franchises, and that it be ousted and excluded therefrom, and that it be dissolved." The petition came on the trust like a thunderbolt. There had been already more or less erratic and ill-advised anti-trust legislation in various states, but it had been framed in igno rance of the actual organisation of the trust, and carried out with a crude notion that the trust, in spite of the fact that it was already thoroughly intrenched in the business life of the country, could be destroyed by a hostile act of a Legislature. Mr. Watson's suit was something very different. It was an application of recognised laws to admitted facts. It brought the Standard Oil Company face to face with several legal propositions it did not like to meet. After a long delay an answer was filed by the Standard. To Mr. Watson's joy, the one thing he feared—the denial of the correctness of the agree ment—made no part of this answer. It admitted the agree ment, but it denied that the Standard Oil Company of Ohio was a party to it. The agreement was signed by the individual stockholders of the Standard Oil Company, not by the com pany in its corporate capacity. The Standard Oil Company of Ohio had nothing to do with the Standard Oil Trust. True, certain of its stockholders had turned over their stock to the nine trustees, but the company did its business as before, dis charging all its duties as its charter required. This was the essential point of the defendant's answer. This, and the claim that if the court should hold that the action of the stockholders in becoming parties to the agreement in their individual capacity was a corporate act of the Standard Oil Company, even then the charter should not be forfeited, since the law barred an act committed more than five years before a peti tion was filed.