Excerpts from Ida Tarbell’s Reporting. Plain Dealer 12/12/2004

 

Excerpts from Tarbell’s reporting
Plain Dealer, The (Cleveland, OH) - Sunday, December 12, 2004
Author: The Plain Dealer

Ida M. Tarbell’s “The History of the Standard Oil Company” packs two volumes with examples of the company’s business practices and the tenacity of its founder. Some passages, by topic: 

Advantages 

“Its chief competitors began to suspect something. John Rockefeller might get his oil cheaper now and then, they said, but he could not do it more often. . . . Where was his advantage? There was but one place where it could be, and that was in transportation. He must be getting better rates from the railroads.” 

“It was the [railroad] rebate which had made the Standard Oil Trust, the rebate, amplified, systemized, glorified into a power never equaled before or since by any business of the country. The rebate had made the trust, and the rebate, in spite of ten years of combination, Petroleum Associations, Producers’ Unions, resolutions, suits in equity, suits in quo warranto, appeals to Congress, legislative investigations – the rebate was still Mr. Rockefeller’s most effective weapon.” 

Competition 

“A few of the refiners contested before surrendering. Among them was Robert Hanna. . . . The Standard Oil Company asked an interview with him and his associates. . . . ‘But we don’t want to sell,’ objected Mr. Hanna. ‘You can never make any more money, in my judgment,’ said Mr. Rockefeller. ‘You can’t compete with the Standard. We have all the large refineries now. If you refuse to sell, it will end in your being crushed.’ ” 

“Other refiners burst into the market and undersold for a day; but when Mr. Rockefeller began to undersell, he kept it up day in and day out, week in and week out, month in and month out, until there was literally nothing left of his competitor.” 

Spies 

“A Cleveland refiner, John Teagle, testified [to a congressional committee] . . . that one day in 1883 his bookkeeper came to him and told him that he had been approached by a brother of the secretary of the Standard Oil Co. at Cleveland, who had asked him if he did not wish to make some money. . . . 

“For twenty-five dollars down and a small sum per year he was to make a transcript of Mr. Teagle’s daily shipments with net price received for the same; he was to tell what the cost of manufacturing in the refinery was; the amount of gasoline and naphtha made and the net price received for them; what was done with the tar; and what percentage of different grades of oil was made; also how much oil was exported. This information was to be mailed regularly to Box 164 of the Cleveland post-office.” 

Contradictions 

“Mr. Rockefeller was ‘good.’ There was no more faithful Baptist in Cleveland than he. . . . He was simple and frugal in his habits. He never went to the theatre, never drank wine. He gave much time to the training of his children, seeking to develop in them his own habits of economy and charity. 

“Yet he was willing to strain every nerve to obtain for himself special and unjust privileges from the railroads which were bound to ruin every man in the oil business. . . . Religious emotion and sentiments of charity, propriety and self-denial seem to have taken the place in him of notions of justice and regard for the rights of others.” 

Contracts 

“The contract was signed at night at Mr. Rockefeller’s house on Euclid Avenue in Cleveland, where he told the gentlemen that they must not tell even their wives about the new arrangement, that if they made money they must conceal it – they were not to drive fast horses, ‘put on style,’ or do anything to let people suspect there were unusual profits in oil refining. That would invite competition. They were told that all accounts were to be kept secret. Fictitious names were to be used in corresponding, and a special box at the post-office was employed for these fictitious characters.” 

Perceptions 

“Scores of boys and girls grew up in the Oil Regions in those days with the same feeling of terrified curiosity toward those who had ‘sold to the Standard’ that they had toward those who had ‘been in jail.’ ” 

“Years of war with a humiliating outcome had inspired the producers with the conviction that fighting was useless, that they were dealing with a power verging on the superhuman – a power carrying concealed weapons, fighting in the dark, and endowed with an altogether diabolic cleverness. Strange as the statement may appear, there is no disputing that by 1884 the Oil Regions as a whole looked on Mr. Rockefeller with superstitious awe. Their notion of him was very like that which the English common people had for Napoleon.”