Standard Oil Company; Trusts, Industrial -- United States
The then president of the United Pipe Lines of the oil combination, who
was also president of a subordinate corporation, was a witness in 1879
in the suit brought by the Commonwealth of Pennsylvania. His refinery,
he stated, did nothing but make the oil. "It is taken and sold by
another organization"--the oil combination. "We agree to take the same
prices that they take for their oil. It is kind of pooled--the sale of
the oil." The "agreement," he said, is "simply to hold up the price of
refined oil, ... to get all we can for it ... under some arrangement by
which they keep the price up to make a profit." Not only was the price
fixed under the agreement "to get all we can," but the combination, as
at Cleveland,[608] fixed the amount to be produced. The subordinate
company was allowed to have nothing to do with the business--except to
do the work, and to do only as much as its superior chose to permit.
Other refiners, in the same investigation, were shown to be sufferers
from the same kind of "grip." Asked what other concerns besides his
of Oil City were in this arrangement, he named the principal ones of
Titusville, Pittsburg, Philadelphia, and New York.
"These companies were all acting in concert, were they?"
"So far as sales of refined oil were concerned, I think they were."
Capitalists are usually supposed to be hard of heart and head,
suspicious, great sticklers for "black and white," and careful to
have all that is due them "nominated in the bond." This arrangement,
by which this witness and his associates put themselves entirely at
the disposal of others--as to how much they should manufacture, what
freight they should pay, what price they should receive, etc.--was not
in writing.
"It is a verbal one."[609]
The purchase of the refineries at Baltimore by the oil combination
in 1877, under the name of the Baltimore United Oil Company, was
immediately followed by an advance in price. The Baltimore _Sun_, in
December, 1877, said: "The combination has already begun to exert
its influence on the market. Oil for home consumption was yesterday
quoted at 14 cents, having raised from 11-1/2 cents, the quotation
on Wednesday. The combination will not make contracts ahead, which
might be interpreted to mean an intended advance in price." In Buffalo
the manager of one of the properties of the oil combination said in
evidence: "My son is on a committee, he told me, that regulates the
price of oil."[610] While the trust had the trade of Buffalo to itself,
it held the price of oil at a high rate. "In Buffalo there were then no
rival works," said State's Attorney Quinby to the jury who were trying
its representatives for conspiracy against a competing refinery, "and
we were paying for kerosene 18 cents a gallon. To-day, with the little
Buffalo company in the market making kerosene, you can get it for 6
cents a gallon."
Public-domain text, read in full here on John Shaqi.
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