Serious legal difficulties as well as business rivals have also constantly beset the path of the Standard interests. In 1872 and in 1876 its methods were investigated by committees from Congress. Bitter complaint against its monopoly was made by the independent operators of Pennsylvania in 1878, with an appeal to the governor for some legislative action. Public feeling ran so high that officers of the company were hanged in effigy in Titusville, and processions of masked men besieged the com pany's local offices. The Standard Oil Trust, a new form of organization adopted in 1882, was de prived of its charter and dissolved by the Ohio courts for various offenses ten years later, while recently it has received widespread consideration as a violator of state and federal laws. Resent ment in Kansas was so keen in 1904 that the legis lature appropriated several hundred thousand dollars to establish a rival business. In Illinois, Tennessee, Louisiana, Missouri, California and New York, thousands of indictments have been returned on one count or another, one trial for acceptance of rebates resulting in the famous fine recently set aside on technical grounds by the Court of Appeals.
Despite all opposition, however, the Standard has continued to prosper and has persistently fol lowed the same policy of extending its operations wherever oil is found. No matter how great efforts might be required of it in the pursuit of this policy, the company has never hesitated, for only by un ceasing activity and overcoming every obstacle could the Standard control of the business be kept intact.
When the rich McDonald district in southwest ern Pennsylvania was opened in 1891, for exam ple, the production rose from 50,000 barrels month ly to over 1,800,000 barrels five months later. The Standard pipe lines, the only ones there, had a capacity of about 3,500 barrels a day at the be ginning of July, 1891, when the daily production was probably not more than half that amount. During July, however, the flood of oil appeared, sending the production upward at an unheard-of rate. The Standard had to take care of it; and how well they rose to the emergency can be seen from the fact that in six weeks their pipe-line capacity was increased to over 26,000 barrels and in six months to over 90,000 barrels a day. This tremendous expansion in such a short time meant far more than the mere placing of equipment and setting it to work. It meant also work night and day in boiler shops and rolling mills to turn out the necessary tanks, boilers, engines, pumps and pipes; stupendous efforts which no number of small concerns could have commanded satisfactorily.
Control of transportation facilities has always been one of the chief sources of Standard success.
Railway rebates and discriminations gave the Standard its original hold on the business. By allowing it to sell for prices where others could not make a profit, the Standard practically held control of transportation between the refinery and the con sumer. Later on in its development, the acqui sition of pipe lines added also the control of the equally important link between the refinery and the producer. This policy of controlling trans portation has necessitated the addition of pipe line after pipe line, until now the Standard owns over 40,000 miles of pipe, covering all the fields from Kansas to the coast, with great trunk routes to the refineries. The one important line in Cali fornia belongs to the Standard. Only in the Gulf field is there any extensive competition by inde pendent pipe lines.
This complete control of crude-oil movement has been used in a variety of ways to stifle competition, but principally through the refusal to transport or sell crude oil to independent refiners. State laws in general have declared the pipe line to be a com mon carrier, hence legally required to transport oil for any shipper requesting the service. Being the only carrier has also made the Standard the chief buyer and hence the chief seller in the Eastern lo calities. It has, however, frequently been accused of refusing absolutely to sell crude oil to outside interests or having so restricted the amount as to make refining unprofitable. Furthermore, by re fusing to deliver at the required point, by charg ing outrageous rates, or by refusing to carry at all, in direct defiance of the law, the Standard is said to have prevented independent concerns from se curing oil of outside dealers.
The pipe line has been an equally valuable aid to the Standard in developing its efficient arrange ment of refineries and distributing systems. No refiner who is dependent on railroad transporta tion for his crude oil can nowadays hope to be an important factor in the business. Refiners not af filiated with pipe-line service must locate near the wells from which they can buy their supplies and, as a result of this location, they find themselves either restricted to the small markets of neighbor ing districts, or else forced to pay comparatively heavy freight charges on the long hauls of distilled products to the leading markets. Through its pipe line system the Standard, on the contrary, has been able to choose strategic positions near important industrial and commercial centers for the location of its refineries. It has been possible, at the same time, to replace many small establishments by a single plant where all the economies of large-scale operations can be secured.