Standard Oil Company; Trusts, Industrial -- United States
The great lawyer, who soon afterwards became a justice of the Supreme
Court of the United States, could not answer the questions he raised.
The facts were hidden in secret contracts with the railroads. As
regards Cleveland, they did not come out until five years later, in
1885. It then became an adjudicated fact that in 1875, the year before
this "Agreement for an Adventure," the Lake Shore Railroad had made
a contract with the oil combination to drive these very competitors
and all others out of business, just as the same road had done for
the South Improvement Company in 1872. When they escaped from their
"reconciler," they brought this railroad and the contract into court.
The case was fought up to the Supreme Court.
That tribunal found that the Lake Shore road had contracted with this
company to carry its products ten cents per barrel cheaper than for any
other customers. It showed that this made a difference to the victims
of the "Adventure" equal to more than 21 per cent. a year on their
capital.
"The understanding," the court said, "was to keep the price _down_ for
the favored customers, but _up_ for all the others, and the inevitable
tendency and effect of this contract was to enable the Standard Oil
Company to establish and maintain an overshadowing monopoly, to ruin
all other operators, and drive them out of business." The course of the
railroad the court declared to be one of "active participation in the
unlawful purposes" of the oil company. The Lake Shore was to have all
its business out of Cleveland, but, a competing railroad being built,
the Lake Shore made a contract to give this new line a part of the
plum, to induce it to unite in the policy of keeping freights _down_
for the favored customer, and _up_ for all others. When the President
of the trust was asked afterwards by the New York Legislature if there
had been no arrangement by which it got its transportation cheaper than
others could, he replied, "No, sir." And later he reiterated that in
their arrangements for freight there was "nothing peculiar."[103]
But the Supreme Court of Ohio, in describing this arrangement,
diversify the staid rhetoric of their legal deliverance with the
unaffected exclamation:
"How peculiar!"
They declared the contract between the two railroads "void," and "not
only contrary to a sound public policy, but to the lax demands of
the commercial honesty and ordinary methods of business." They also
pronounced the contract between the railroad and the oil company as
"made to build up a monopoly," and as "unlawful."[104]
The great lawyer, we have said, could not answer the questions he
asked. The facts, we have said, were hidden in a secret contract. And
yet the answers to the questions, the facts, had been all brought to
the verge of disclosure by the investigation by Congress early in the
same year, 1876.
Public-domain text, read in full here on John Shaqi.
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