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The Buffalo Case

oil, vacuum, business, matthews, time, company and wilson

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THE BUFFALO CASE soon after Mr. Rockefeller began to "acquire" independent refineries, whose owners were loath to sell or go out of business, unpleasant stories began to be circulated in the oil world of the methods used in getting the offending plants out of the way. When freight discriminations, cutting off of crude supply, and price wars in the market failed, other means were tried, and these means included sometimes, it was whispered, the actual de struction of the plants. The only case in which this charge was made which ever came to trial was that of the Buffalo Lubricating Oil Company, Limited. For sake of clearness, a narrative of the case has been drawn from the testimony of fered, no statements being admitted which were not brought out in the trials.

It seems that some time in 1879 the owners of the Vacuum Oil Works, of Rochester, New York—H. B. and C. M. Everest, father and son—sold to H. H. Rogers, J. D. Arch bold and Ambrose McGregor of the Standard Oil Company, for $2oo,000, a three-fourths interest in that concern. The purchase was not made for the gentlemen in whose names it appeared, but for the Standard. Thus, when on the witness stand J. D. Archbold was questioned as to the real owner ship of the stock which had been bought in his name, the examiner wanted to know whether the purchasers represented themselves or somebody else.

The Vacuum manufactured principally lubricating oils used on harness and car wheels. It controlled several valuable patents and had been doing a prosperous business for a num ber of years. By the terms of the sale in 1879 the Everests remained as managers of the refinery, on a salary of $1o,000 a year. They also contracted to enter into no outside oil business for ten years. The business policy of the Vacuum, including the fixing of salaries, was dictated by a board of directors made up of Messrs. Rogers, Archbold, McGregor and the two Ever ests. The meetings of this board were held at the office of the Standard Oil Company, in New York or in Rochester, as convenient.

So far as can be inferred from the testimony, the works were well managed, the dividends large, and the employees well treated. In 188o the salesman of the concern, J. Scott Wilson, decided to leave the Vacuum and go into business for himself. The decision seems natural, for until 1878 Mr.

Wilson had carried on an independent oil business of one kind or another. He had been a partner in a refinery and under stood making oils. He had been a jobber on his own account before going with the Everests, and as such had had a con siderable clientele. Wilson told one of his fellow employees, Charles B. Matthews, of his decision, and asked him to go with him. Matthews had been with the Everests about the same length of time as Wilson—some two years. Previous to this engagement he had been a farmer, and his acquaintance with the Vacuum people had come about by his drilling on his farm for oil. Matthews was worth some $2o,000, but he had had no experience in oil refining, for his duties at the Vacuum had been mainly looking after outside business—for instance, he had several times gone to New York to consult J. D. Archbold and H. H. Rogers concerning business mat ters, and particularly concerning patents owned by the Vacuum, of whose validity there was some doubt. For some time Matthews had been dissatisfied with his salary—he had asked for a raise, but had not got it—a fact which probably made him more favourable to Wilson's suggestion.

The two men decided finally to form a company and to build an oil refinery at Buffalo. Wilson said on the witness stand that he did not want to handle the Vacuum processes in the new works, but to make only the oils with which he was familiar. Matthews, however, had convinced himself that the patents which covered certain of the Vacuum processes and apparatus were invalid, and insisted that they build at least one Vacuum still. The question of what steps the Vacuum might take to stop them was discussed, and according to Wil son's testimony Matthews remarked that he expected they would pay $ioo,000 or $rso,000 to prevent their going into business. Matthews's remark was natural enough, considering the conditions under which outside refiners were forced to do business. It is probable that no man undertook any kind of independent oil business at that time, particularly oil refin ing, without considering the possibility of being driven to sell.

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