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New York there were great storage stations maintained by the New York Central and the Erie Railroads. Rockefeller got these. Then the Standard began to buy up the pipe lines, built to free the oil business from dependence on the railroads. The great pipe line from western Pennsylvania to Baltimore, five hundred miles in length, had been completed less than two years when Rockefeller bought it. His next move was to build factories to make his own barrels, and to build his own distributing stations all over the country.

With the refining, transportation, and wholesale oil business nearly all concentrated in his hands, Rockefeller next made an effort to secure all the retail oil business in the country. His plans for securing control of the final work of distribution were carefully made, and rigorously executed. The whole country was divided into districts, with an agent in charge of each. It was the duty of the agent to sell all the oil that was used in his district. If he succeeded, he was sure of a comfortable place for the rest of his life; if he failed, he was unceremoniously dropped. There was no room in the Standard Oil Company for weaklings or incompetents.

Part of the duty of these district agents was to find out whether any of the few remaining independent companies were doing any business, and if so, how much. The methods used in this oil war are vividly described in Miss Tarbell's History of the Standard Oil Company. No less an authority than the Federal Supreme Court found some of the tactics open to adverse criticism. If a country grocer for example ordered a barrel of oil from an independent dealer, an agent of the Standard would call upon the grocer before his shipment arrived. He would try to have the man cancel his order, promising to supply him with oil for the future. If the grocer refused to yield, the Standard drove him out of business by cutting prices so low that he could not follow. If the rival happened to be a big dealer, the Standard would first find out all about his business, how much oil he sold, where he got it, and to whom he sold it. Then a dummy company would appear selling oil at a price far below cost. After the competitor had given up the contest, the dummy company would come out as a branch of the Standard, and put the price up high enough to make up for any loss incurred during the price war.

Theoretically the Standard Oil Company should have been an asset to the country. Its methods were highly efficient, all waste was eliminated, and all by-products were utilized. With every step

in the process of production and distribution controlled by a single company, numerous economies were effected. It seemed to the consumers, however, that these benefited the Standard Oil Company, not the general public. Where there was no competition, the price of oil averaged around thirty per cent higher than in sections where competition prevailed. The Standard could, and did, sell kerosene for as low as four cents a gallon, in South Dakota, in spite of the cost of transportation there, and for three and one-half cents in Michigan. From five to eight cents per gallon was common over much of the competitive area. Where there was no competition, the price ranged from twelve up to thirty-seven and one-half cents. The economies incident to large scale production and sale therefore had little if any effect on the price to the consumer. That was determined by the exigencies of competition, or by what the traffic would bear.

The Standard Oil Company passed through various forms of organization in the course of its development, the most famous of which was the "trust," an arrangement whereby the stock of newly affiliated companies was placed in the hands of a board of trustees, to be held by them for the benefit of the stockholders. In 1899 the company was reorganized as a New Jersey Corporation. In 1911 the United States Supreme Court ordered the dissolution of the company, and, in theory at least, it separated into its constituent parts. But the annual reports of dividends would suggest that the dissolution has had no adverse effect upon the profits of the owners. With reference to dissolutions of this sort the late J. P. Morgan once asked the very pertinent question, "How are you going to unscramble eggs?"

If the users of petroleum products have met with any relief, that has been due, not to the dissolution of the Standard, but to discoveries of petroleum outside of Pennsylvania, on such a scale that competing companies could be organized. Long before 1911 the Standard had ceased to be a monopoly, although users of gasoline found that the price fixed by the competing companies was almost always the price charged by the Standard. The first signs of genuine competition did not appear to the consumer until 1923.

The success of the Standard Oil Company seemed to furnish inspiration to promoters in almost all kinds of business. One famous combination was that which controlled the street cars and in many cases the lighting systems in scores of towns and cities, ranging from Philadelphia, New York, and Pittsburgh to Chicago. This was the Yerkes,

Widener, Elkins, Whitney, and Ryan combination. They secured their franchises from the city governments, and then managed to dominate the governments themselves. The principles guiding Yerkes, one of the leaders in the traction and lighting monopoly, were bluntly set forth in his dictum: "The strap-hanger pays the dividends." Poor cars, wretched service, ill-treated employees were other features of the system.

Many of these large combinations resorted to methods similar to those of Rockefeller in creating his Standard Oil monopoly. Small competing concerns were unceremoniously frozen out, while the public was rendered powerless by the hold which "Big Business" had on the legislatures, and in some cases, on the courts.

In some cities retail stores which were competing with each other would sometimes combine to drive out a new merchant who presumed to encroach upon their field. One of the larger eastern cities furnished an illuminating illustration of this practice some years ago. A young man from a Vermont farm, who may be called Smith, came down to work in one of the large department stores. He was an able salesman, with no little executive ability, and in a short time he was placed in charge of the silk department. After several years he decided to form a partnership with his brother, in a silk business of their own. From the start they met with the bitterest opposition. The older stores would place orders with dealers, on condition that the dealers should sell nothing to "Smith Brothers." Had it not been for the assistance of a liberal-minded manufacturer, who had a regard for fair play, the brothers would have been forced out of business.

The great combinations of capital meant not only fortunes for individuals, but power. These men knew what they wanted, and they were not slow in learning how to get it. If the city government had what they needed, they bought enough aldermen to secure it. If the state legislature had to be controlled, they could easily make the necessary arrangements with the all-powerful "boss," of course for a consideration. He might be above the acceptance of a bribe, but he was not at all opposed to seeing a substantial contribution go into the party treasury. With the political system of the states reduced to a highly centralized system like that controlled by "Tom" Platt, and with millions of dollars available for use in securing nominations and in swinging elections, it is not surprising that the out

look for democracy was dark. There was enough to compel admiration in the bigness of the work of these "captains of industry"or "malefactors of great wealth," as one conspicuous reformer described them—and in the smoothness of the political operations which they helped to manage. But there was small hope for the ordinary mortal who possessed neither wealth nor power.

CHAPTER LII

ORGANIZED LABOR

The transition from small scale to large scale industry in the United States happened to be going on while the process of occupying the western lands was being completed. In Europe the rise of industrialism had created an acute labor problem before the middle of the nineteenth century. In the United States the rise of that problem was deferred by the conditions in the West. As long as the free land remained, dissatisfied laborers always had available a way of escape from unfavorable conditions. Even though a factory employee never went west, the opportunity was there, and the very knowledge of it tended to keep him contented. By 1890 this economic safety valve had been practically closed, at the very time when the unscrupulous operations of the great corporations made a means of escape more necessary than ever. So it happened that the industrial centers of the country began to take on the appearance of industrial centers in Europe, and the state of mind of the European worker-generally one of chronic discontent-began to appear occasionally in this country.

THE LABOR PROBLEM

The integration of small industrial units into the great trusts tended to separate the laborer from his employer, and as opportunities for an exchange of views disappeared, ill-will, friction, and often violence resulted. With the industrial leaders setting the example, it is not surprising that laborers should have united, in sheer selfdefense. As individuals the employees of a great corporation were helpless; so too were numerous groups of skilled artisans, who depended for employment upon the business men.

In dealing with the problem of labor, investigators always find, among other things, one constant source of uneasiness: insecurity of employment. The laborer's fortune is not in his own hands, and he knows it. No matter how competent and how faithful he may be, there is always hanging over his head the possibility of the loss of his job. His employer's intentions may be of the best; his wages may be

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