The World-Struggle for OilL'Espagnol de la Tramerye, Pierre Paul Ernest
History
The World-Struggle for Oil
L'Espagnol de la Tramerye, Pierre Paul Ernest
Petroleum; Petroleum industry and trade; War -- Economic aspects
At its zenith, in 1911, when it was declared illegal by the Supreme
Court of the United States, the _Standard_ owned 90 per cent. of the
pipe-lines and controlled 86-1/2 per cent. of the oil production of
America. A single company, the _Pure Oil Company_, founded in 1895,
whose field of exploitation was Germany, was able to maintain its
independence. The seventy-five small refineries existing outside
the Trust did not refine, all put together, a fifth as much as the
_Standard_. The refinery which the latter possessed at Bayonne was by
itself more important than ten of these competing refineries.
The European market was almost completely conquered. Everywhere the
_Standard_ operated by means of its subsidiary companies:--
The _Anglo-American Oil Company_ in Great Britain.
The _American Petroleum_ in Holland.
The _Deutsche Amerikanische Petroleum Gesellschaft_ in Germany.
The _Société pour la Vente du Pétrole_ in Belgium.
The _Vacuum Oil_ in Austria-Hungary.
The _Societa Italo-Americana per Petrollo_ in Italy.
The _Romana-Americana_ in Rumania.
The _Danske Petroleum Altieselskabet_ in Denmark.
The _Swenska Petroleum Altiebolage_ in Sweden.
The _International Oil_ in Japan.
In Galicia, the Trust held its own against all similar indigenous
enterprises. The Rumanian refiners were obliged to come to an
understanding with it; otherwise it would, with its powerful means
of pressure, have created a monopoly for itself. And the _French Oil
Cartel_ was at its mercy.
Causes of the Success of the Standard
The difficulty is not to produce oil, but to transport it, for it is
generally found in more or less desert regions. Hence Rockefeller's
brilliant idea, to construct pipe-lines bringing the oil direct to the
great centres! Thenceforward, since the oil was transported almost
automatically, its price dropped considerably. All the producers became
tributaries of the pipe-lines, and the _Standard_ obtained practically
complete control of the market.
This was the first cause of the success of the _Standard_. All
the small producing companies became compulsorily its clients. As
controller of the market, it fixed the price in draconian fashion.
There is a second cause: its alliance with the great railway companies,
and the support which it received from the railway magnates--Scott of
the _Pennsylvania Railroad_, Vanderbilt of the _New York Central_,
Jewet of the _Erie Railroad_, Watson of the _Lake Shore_, and many
others less well known.
Its subsidiary, the _South Improvement Company_, on January 18, 1872,
made contracts with the railway companies, by which it fixed the
proportionate shares in the transport of oil to the Atlantic seaboard
as follows:--
27-1/2 per cent. to the _Erie_,
27-1/2 per cent. to the _New York Central_,
45 per cent. to the _Pennsylvania_.
Public-domain text, read in full here on John Shaqi.
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