But the Oil Regions have always been prone to jump at conclusions. They were forgetting Mr. Rockefeller's record when they concluded that he was through with the Tide water. Because he had failed in his old South Improvement Company trick, that is, failed to create a panic among Tide water stockholders, and so get their property at panic prices, was no reason at all to suppose he had abandoned the chase. There still remained a legitimate method of getting into the company, and, as a last resort, Mr. Rockefeller accepted it. He bought the minority stock of the concern, held by the Taylor party. Up to this time Mr. Rockefeller had appeared in Tidewater affairs as a destroyer. He now appeared in a role in which he is quite as able—as a pacifier, and his ex traordinary persuasiveness was never exercised to better effect. "We own $2oo,00o worth of your stock," he could tell the people he had been fighting. "If you will consent to confine yourselves to a fixed percentage of our joint business, and will sustain pipage rates and the price of refined oil, we will let you alone. Let us dwell together in peace." The Tidewater, tired of the fight, accepted. And so these men—to whom the oil business owes one of its most remark able developments, who, in face of the most powerful and unscrupulous opposition, had in four years built up a business worth five and one-half millions of dollars—signed contracts in October, 1883, fixing the relative amount of business they were henceforth to do as IT% per cent. of the aggregate, the Standard having 88Y2 per cent. The two simply became allies.
The agreement •between them was the same in effect as all Mr. Rockefeller's running agreements—it limited and kept up prices.* Any benefit the oil business might have reaped from natural and decent competition between the two was of course ended by the alliance. For all practical purposes the two were one. In the phrase of the region, the Tidewater had "gone over to the Standard," and there it has always remained. The contract was made for fifteen years, but since its expiration it has been lived up to honourably by both parties without other than a verbal understanding. For, note this : Mr. Rockefeller always keeps his word. Indeed, in studying his career, one is frequently reminded of Tom Sawyer's great resolution—never to sully piracy by dishonesty! The Tidewater has prospered within the boundary Mr. Rockefeller drew for it, as those who have accepted sub missively his boundaries have never failed to do. Mr. Rocke feller is right when he says, as he does so often, that all who come with him prosper. That the company would have suc ceeded in becoming eventually a formidable rival of the Stand ard, and in controlling much more than eleven per cent. of the business, no one can doubt who knew Mr. Benson, Major Hopkins, Mr. McKelvy, and their colleagues. They were busi
ness men of the first order, as their tremendous work from 1878 to 1883 shows.
Once more the good of the oil business was secure, and Mr. Rockefeller at once proceeded to arrange his great house in the new order made necessary by the introduction of the sea board pipe-line. The entire transportation department of the business had to be reorganised. When the seaboard pipe-line became a factor in the oil business, in 1879, the Standard Oil Company owned practically the entire system of oil-gathering pipe-lines—that is, the lines carrying oil from the wells to the storing or shipping points. These lines were organised under the name of the United Pipe Lines, and the organisation was magnificent in both extent and in character of service ren dered. Never, indeed, has the ability of the men Mr. Rocke feller gathered into his machine shone to better advantage than in the building up and management of the pipe-line business. At the end of 1883, when the alliance was made with the Tidewater, the United Pipe Lines were taking from the wells of Pennsylvania fully a million and a half barrels of oil a month. Their pipes, of an aggregate length of 3,000 miles, connected with thousands of wells scattered all over the wide Oil Regions.
Whenever the oil men opened a new field, no matter how remote from those already developed, the United Pipe Lines immediately went there to care for the oil. In more than one case, in these years of rapid and excessive development of oil territory, the pipe-line company invested great sums in pre paring to take care of oil fields whose yield never paid the cost of the pipe laid. Thus, in 1882, there was a tremendous excitement over the opening of the Cherry Grove field. The Standard spent $2,000,000 getting ready to take care of a great outpouring of oil—which came, but did not stay. In 1882 Cherry Grove produced 2,345,400 barrels; in 1883, It cost the company forty-six cents a barrel to take care of the production of one short-lived group of wells in this field, on which they never realised more than twenty cents pipage.
The Standard not only gathered this oil ; it stored it, to wait its owner's demand. At this date it controlled 40,000,000 bar rels of iron tankage, in which it stored the enormous stocks, over 35,000p0o barrels, which had accumulated in the five pre vious years. When the oil passed to the pipe-line, the owner received his money for it at once, if he wished, or the line 4‘ carried" it. When a producer had i,000 barrels in the line, he received a pipe-line certificate for it. In December of 1883 the United Pipe Lines had issued certificates for nearly all of the 35,000,00o barrels of stocks above ground. The oil men thus had a bank for their oil, a bank recognised gener ally as sound as any in the United States.