The United States Since the Civil WarLingley, Charles Ramsdell
History
The United States Since the Civil War
Lingley, Charles Ramsdell
United States -- History -- 1865-1921
Although it was upon the Standard Oil Company that people turned when
they denounced the trusts and feared or condemned their practices, the
principles to which the Standard adhered when under the strain of
competition were the practices which were followed by their
contemporaries, both big and little. When the Diamond Match Company, for
example, was before the Courts of Michigan in 1889, it appeared that the
organization was built up for the purpose of controlling the manufacture
and trade in matches in the United States and Canada. Its policy was to
buy up and "remove" competition, so that it might monopolize the
manufacture and sale of matches. It could then fix the price of its
commodity at such a point that it could recoup itself for the expense of
eliminating competitors and also make larger profits than were possible
when its rivals were active.
Still more dangerous was the combination of the hard coal operators. By
1873, six corporations owned both the hard coal deposits of Pennsylvania
and the railroads which made it possible to haul the coal out to the
markets. In the same year and later these companies made agreements
which determined the amounts of coal that they would mine, the price
which they would charge, and the proportion of the whole output that
each company would be allowed to handle. Independent operators--that is,
operators not in the combination--found their existence precarious in
the extreme, for their means of transportation was in the hands of the
six coal-carrying railroads, who could raise rates almost at will and
find reasons even for refusing service. The states were powerless to
remedy the situation because their authority did not extend to
interstate commerce, yet it was intolerable for a small group of
interested parties to have power to fix the output of so necessary a
commodity as coal, on no other basis than that provided by their own
desires.
Other abuses appeared which showed that industrial combinations were
open to many of the complaints which, in connection with the railroads,
had led to the Interstate Commerce Act. Industrial pools resembled
railroad pools and were objected to for similar reasons. Bankers and
others who organized combinations were given returns that seemed as
extravagant as the prices paid to railroad construction companies; the
issues of the stock of corporations were bought and sold by their own
officers for speculative purposes; and stock-watering was as common as
in railroading. The industrial combinations also had somewhat the same
effect on politics that the railroads had. Lloyd declared that the
Standard Oil Company had done everything with the Pennsylvania
legislature except refine it.
Public-domain text, read in full here on John Shaqi.
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