The History of the Standard Oil CompanyTarbell, Ida M. (Ida Minerva)
History
The History of the Standard Oil Company
Tarbell, Ida M. (Ida Minerva)
Petroleum industry and trade -- United States -- History; Standard Oil Company -- History
When the Empire Transportation Company took over this line nothing had
been demonstrated but that oil could be driven, by relay pumps, five
miles through a two–inch pipe. The Empire’s first effort was to get a
longer run by fewer pumps. The agent in charge, C. P. Hatch, believed
that oil could be brought the entire ten and one-half miles from Pithole
to Titusville by one pump. He met with ridicule, but he insisted on
trying it in the new line his company had acquired. The experiment was
entirely successful. Improvements followed as rapidly as hands could
carry out the suggestions of ingenuity and energy. One of the most
important made the first year of the business was connecting wells by
pipe directly with the tanks at the pumping stations, thus doing away
with the expensive hauling in barrels to the “dump.” A new device for
accounting to the producer for his oil was made necessary by this
change, and the practice of taking the gauge or measure of the oil in
the producer’s tank before and after the run and issuing duplicate “run
tickets” was devised by Mr. Hatch. The producers, however, were not all
“square”; it sometimes happened that they sold oil by a transfer order
on the pipe-line, which they did not have in the line! To prevent these
the Empire Transportation Company in 1868 began to issue certificates
for credit balances of oil; these soon became the general mediums of
trade in oil, and remain so to-day.
One of the cleverest of the pipe-line devices of the Empire Company was
its assessment for waste and fire. In running oil through pipes there is
more or less lost by leaking and evaporation. In September, 1868, Mr.
Hatch announced that thereafter he would deduct two per cent. from oil
runs for wastage. The assessment raised almost a riot in the region,
meetings were held, the Empire Transportation Company was denounced as a
highway robber, and threats of violence were made if the order was
enforced. While this excitement was in progress there came a big fire on
the line. Now the company’s officials had been studying the question of
fire insurance from the start. Fires in the Oil Regions were as regular
a feature of the business as explosions used to be on the Mississippi
steamboats, and no regular fire insurance company would take the risk.
It had been decided that at the first fire there should be announced
what was called a “general average assessment,” that is, a fire tax, and
to be ready, blanks had been prepared. Now in the thick of the
resistance to the wastage assessment came a fire and the line announced
that the producers having oil in the line must pay the insurance. The
controversy at once waxed hotter than ever, but was finally compromised
by the withdrawal in this case of the fire insurance if the producers
would consent to the tax for waste. They did consent, and later when
fires occurred the general average assessment was applied without
serious opposition. Both of these practices prevail to-day. By the end
Public-domain text, read in full here on John Shaqi.
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