THE LUBRICATING OIL TRADE
It is time now to turn to the Standard’s other English branch, the
Vacuum Oil Company, Limited, which posed at first as an American
company entirely independent and unconnected with the Standard. It was
registered at Somerset House as a limited liability company, with a
capital of £55,000, on May 13, 1901. Its object was to take over the
business of its parent, the Vacuum Oil Company of Rochester, N.Y.,
U.S.A., and it purchased all the assets of that company in the United
Kingdom for £29,947. Up to October, 1905, its five directors were as
follows--
John Dustin Archbold, 26, Broadway, N.Y.
Charles Millard Pratt, 26, Broadway, N.Y.
Charles Marvin Everest, Rochester, N.Y.
Howard B. Case, Norfolk Street, Strand.
Henry Forster Grierson, Farnborough, Hants.
Charles M. Pratt is a son of the late Mr. Charles Pratt, who founded
the refinery already referred to in connection with Mr. H. H. Rogers.
C. M. Everest has been mentioned in the Buffalo explosion prosecution,
in which he was convicted. In 1908 the Company adopted new articles
providing that the number of shareholders must never exceed fifty, and
binding the directors to refuse to register any transfer of shares
which will have the effect of increasing the shareholders beyond that
number. The directors are also empowered to refuse to register any
transfer of shares without giving their reasons. The following were the
shareholders on November, 30, 1909:--
Shares.
Vacuum Oil Company of Rochester, N.Y. 50,000
Charles Marvin Everest, Rochester, N.Y. 2,000
Howard B. Case, managing director 50
Henry Forster Grierson, Farnborough 10
Louis Chas. Panizzardi, Paris, merchant 50
Edward Prizer, 29, Broadway, N.Y. 2,790
Ernest Michaelson, Copenhagen, merchant 50
Everett Oscar Wader, 29, Broadway, N.Y. 50
------
Total 55,000
Mr. Archbold and Mr. Pratt have left the board of directors, which
included in November, 1909, Messrs. Everest, Case, Grierson, Prizer,
Panizzardi, Michaelson, and Mr. George Percy Whaley, of 29, Broadway,
New York. (Probably 29, Broadway is a copyist’s blunder for 26, the
Standard’s home.)
One complaint which the English trade makes against the Vacuum Oil
Company is this: through the Anglo-American Oil Company the Standard
sells large quantities of refined oils to British manufacturers,
compounders, or blenders of lubricants. At the same time, through
the Vacuum Oil Company, it goes to the customers of these firms and
offers to undersell them, saying that it can supply the oils direct.
A great deal of correspondence appeared in the _Oil and Colourman’s
Journal_ on this subject in 1905. For example, one correspondent told
this story of his experience with the Standard. He was dealing in
illuminating oil, getting all his supplies from the Anglo-American
Oil Company. In 1898 his trade was 60,000 gallons per annum, then the
“Anglo” sent tank wagons to his customers, and in 1905 it was less
than 15,000 gallons. He was persuaded then to devote his attention to
motor-car spirit. After he had spent a considerable sum on bricks,
concrete, iron doors, &c., for storage purposes, the Anglo-American
began delivering broadcast motor spirit to cycle agents. This merchant,
when he saw his kerosene trade vanishing, put up plant for blending,
filtering, and refining for the lubricating oil trade. Then he found
the Vacuum Oil Company underselling him with his own customers. Of
course, it was quite obvious that if the Vacuum Oil Company could by
these tactics secure the whole trade of the British lubricating oil
blenders, the price of lubricants would go up as suddenly as the price
of kerosene always did when the Standard had killed competition. This
fact was pointed out in the trade Press, and I understand that the
Vacuum’s great campaign in 1905 has not destroyed the British makers of
lubricants.
A gentleman connected with the lubricating trade wrote me the other
day of the latest methods of these people. The Standard ships large
quantities of oils for lubricating to the Anglo-American by the
ordinary steamship lines. In a very attractive little booklet which
I have before me, entitled “The Light that Fails Not,” issued by the
Anglo-American Oil Company in 1902, it is stated that their import of
lubricating oil in a year was 462,000 barrels. This is now larger, and
is a valuable freight, and so the Vacuum people go to the principal
steamship lines, and say, “We give you this freight; you must let
us lubricate your boats in return.” The result is that the freight
which the English maker of lubricants pays on what he buys from the
“Anglo” is used to secure business for his trade rivals, who are
undercutting him with owners of engines. This may be the American idea
of “business,” but it will take a great deal of acclimatising here, and
the Vacuum is not growing in popularity.
But the Vacuum does not always undersell. Complaint is made that in
some of the large tramway undertakings, especially municipal ones, no
other lubricant but the Vacuum oils can get accepted, although other
oils of equally good lubricating quality can be and are produced by
British firms at lower prices than the Vacuum obtains. The reason for
this phenomenon is simply that the engineers in charge of the plants
refuse to use any other than Vacuum oils. Of course they must be able
to supply a plausible reason for this to their superiors, and such an
explanation is provided in the “Official Circular” of the Tramways and
Light Railways Association for April and May, 1905. This “Circular”
reports a paper read at a meeting of the Association on April 28, 1905,
by Mr. William E. Parish, jun., chief technical expert of the Vacuum
Oil Company, on “Friction as Affected by Lubrication.” The keynote of
Mr. Parish’s paper may probably be found in these lines:--
It is possible to exactly duplicate a fine lubricating oil on the
basis of chemical tests with an improperly manufactured article. The
results from the use of both oils, _while the chemical readings show
they are exactly the same_, are widely different when applied to
actual work.
Translated into plain English this means that the lubricants supplied
by the Vacuum’s competitors (manufactured out of the Standard Oil
Trust’s own oils) are by every recognised chemical test as good as
theirs, but yet that it is right and proper that the engineer who
actually uses the lubricants on the machinery should prefer the Vacuum
oils--a very satisfactory doctrine for both the Vacuum Company and the
engineer!
Further on in his paper Mr. Parish was good enough to give various
tables and experiments relating to what he called
A full efficiency test of a textile mill where an effort is being
made to reduce the total horse-power by means of applying lubricants
more suited to the work than the oils in use.
That means, in plain English, by applying Vacuum oils, whose chemical
readings are exactly the same as those of their competitors, and whose
virtues can only be discovered by the engineer. In the debate on the
paper I notice that Mr. W. Scott Taggart, while congratulating Mr.
Parish on his paper, let fall this very valuable observation:--
I must say there is only one thing that spoils these tests for a
society like this or any other society of a scientific character,
and it is that these tests are all made by a person or an engineer
responsible to the oil company making them. I think they would be of
much greater value if carried out by some unprejudiced engineer.
In replying afterwards on this important point, Mr. Parish urged that
comparative testing was very difficult, and that
Engineers for work of this kind absolutely cannot exist outside the
large oil companies, where they have practically all the world to
operate in, and the unpublished knowledge of many experienced men in
this particular line of work to draw upon.
Whether this reply is scientifically sufficient I do not know, but it
is obvious that it is not likely to satisfy the competitors of the
Vacuum Oil Company, who regard all these novel scientific merits, which
cannot be distinguished by any recognised chemical tests, as so much
clever “advertising bunkum”--to use Mr. Paul Babcock’s language about
the Anglo-American Oil Company’s orange-barrel advertisement. But it
can hardly be doubted that tramway and other engineers find such papers
as that read by Mr. Parish, jun., before their technical association
a very useful argument in justifying their exclusive use of Vacuum
lubricants.
Before I leave this subject I may note that _Fairplay_, the well-known
shipping journal, has drawn attention to another aspect of this
question, and that is how the Inland Revenue collects income-tax
from this combination. As the Vacuum Company is a branch of the
Standard it can buy its oils at a high price and sell them at cost,
so that its books would show no profit assessable to income-tax. That
profit, of course, would have really vanished into the balance-sheet
of the Standard Oil Company of New Jersey. The same applies to the
Anglo-American Oil Company, which, according to the evidence in the
Missouri case, sells oil here on commission. The lower the commission
the “Anglo” accepts from the Standard Oil Company of New Jersey, the
lower its profits on its balance-sheet, and the less income-tax. But I
advise Mr. Lloyd George to look after the “richest Baptist on earth.” I
fear that he is not paying his proper share towards the expenses of the
country where he makes so many millions.
Such, then, is the evidence, summarised of course, which has
accumulated in all parts of the world against the Standard Oil Trust.
In the examination of this evidence, which has now been completed, I
claim to have established the following propositions:--
1. That the Standard Oil group have always aimed, not at fair
competition, but at absolute monopoly.
2. That they secretly obtained from the United States railroads rebates
on the carriage of their own oil, and even larger rebates on all the
oil carried for their competitors--thus rendering it to the interest
of the railroads to decrease the shipments of “independent” oil, by
refusing to furnish adequate cars, and by delaying delivery.
3. That by means of these rebates they were able to undersell their
competitors, and either to ruin them or force them to sell out at heavy
loss.
4. That, whereas in 1870 they controlled nearly 10 per cent. of the
American oil refining business, by means of these rebates they had
secured in 1880 control of 90 per cent.
5. That when the petroleum well owners constructed pipe lines to pump
their oil to the seaboard refineries, the Standard used vexatious
litigation, and even open violence, to obstruct the work, and when it
was completed bought up a majority of the stock.
6. That although they were legally “common carriers,” the Standard
constantly refused to pipe oil for other refiners, and thus forced the
well owners to sell their crude oil to them at their own price, as in
practice the Standard had become the only buyer.
7. That an elaborate system of espionage has been established by which
information is corruptly obtained from employees as to shipment of
independent refiners’ oil; and that the oil dealer who receives such
oil is then undersold by Standard agents.
8. That in districts where the feeling against the malpractices of the
Trust is strong, the Trust runs “bogus independent” oil companies and
“anti-Trust” oil shops, and uses them to undersell the oil dealers who
really attempt to sell non-Trust oil.
9. That although the rebates are not paid on all the railroads now,
there existed as late as 1907--and probably still exist--widespread
railroad discriminations giving the Standard advantages over other
refiners.
10. That although the Standard constantly claims credit for improving
the processes of manufacture and transport, most of the important
inventions of the industry were invented by others. The main thing the
Trust invented was the secret rebate.
11. That in regard to the Standard’s claim to have reduced the price of
illuminating oil to the consumer, the Hepburn Congressional Committee
found that it had only done so when fresh supplies of petroleum had
come on the world’s markets, or in order to kill competition.
12. That Mr. Rockefeller and his associates have frequently made on
oath before Congressional Committees and in judicial proceedings false
statements about the Trust.
13. That the Standard Oil group has systematically adopted the methods
of bribery (direct and indirect) in dealing with politicians and
newspapers.
14. That in Great Britain it has successfully obtained official support
for the maintenance of a dangerously low flash-point of illuminating
oil, which enables it to dump here “export oil” that it is not allowed
to sell in the majority of the American States.
15. That the Trust has been successfully prosecuted in the courts
of its native land, and that in every country that it enters it is
the enemy of legitimate commerce. It either ruins the dealers in its
commodities, or reduces them to the position of “tied houses.”
In fine, the Standard Oil Trust is the most unscrupulous, as well as
the most ambitious and successful, combination of capitalists that
the world has yet seen. The men it has ruined, the businesses it has
wrecked, the little children it has roasted in its oil-fires--all these
constitute a hideous record of death and destruction which not all
the long prayers and the huge alms of John D. Rockefeller should ever
induce the world to forget.
Index
Abel, Sir F., 159, 210, 220, 233
Acme Oil Company, 67
American Wick Company, 23
Ammonia in Scotch shales, 206
Andrews, Samuel, 15, 29, 193
Anglo-American Oil Company, Ltd., 11, 22, 111, 196, 241
” Caucasian Oil Company, Ltd., 163
” Saxon Petroleum Company, 148, 170
Archbold, John D., 18, 19, 67, 78, 94, 97, 110, 175, 196, 239
Asiatic Petroleum Company, 148, 170
Atlantic Refining Company (Standard), 102
Attfield, Professor, 208, 210, 224
Babcock, Paul, 149, 192, 223
Bailey, Senator, and the Trust in Texas, 140
Baku Refiners’ Union, 163
“Barbarous Mexico” (its inspiration), 144
Base, Geo. (on Standard agreements), 203
Bataafsche Petroleum Maatschappij, 148, 170
Bayne, H. (and Security Oil Company), 113
Benzine, its influence on “the oil war,” 149
Bliss, Frank E., 195
Bostwick, J. A., 37, 52
Brady, A. N. (Manhattan Oil Company), 109
Bribery charges, 77, 181
Buffalo Refinery explosion, 97
Burma petroleum, 152, 233
Chandler, Professor C. F. (of New York), 222
Chesebrough Manufacturing Company (Vaseline), 21
Choate, Hon. Joseph, 154
Collings, Right Hon. Jesse, 226, 228, 232
Consolidated Petroleum Company, Ltd., 163
Cowdray, Lord (shadowed in New York), 145
Cuthbert, John H. (alleged Standard Oil agent), 118
Devereux, General J. H., on rebates, 31
Devoe Manufacturing Company, 23, 192
Diaz, President of Mexico, and the Trust, 144
Dupre, Dr. (the late), 229
Dutch Government excludes the Standard, 147
Eagle Oil Company (of Mexico), 14
Elkin, P. J. (Attorney-General of Pennsylvania), and the Archbold
letters, 84
Erie Railroad rebates, &c., 37, 40, 50, 53, 55, 59
Everest, C. M., 94, 97, 175, 239
Flagler, Henry M., 18, 29, 74, 197
Flash-point scandal in Great Britain, 209
” in India, 233
Foraker, Senator, J. B., 78
Galena-Signal Oil Company and American railways, 21
Galicia, discriminations against the Standard, 166
Garfield, J. R. (United States Commissioner of Corporations), 28
General Industrials Development Syndicate (of London), 108 _et seq._
German Vacuum Oil Company, 170 _et seq._
Gould, Jay (the late), 37
Hamburg Court’s decision on “re-branding,” 177
Hanna, Senator M. (the late), 83
Hearst, W. R., and the Archbold letters, 18, 77
Hepburn Committee (U.S.A.), 35, 56, 72
Home Office and the flash-point, 229
Inventions, the Standard’s claims to them, 129
Kelvin, Lord (the late), 213
Lake Shore Railroad, 31, 46
Lawson, T. W., on H. H. Rogers, 17
Leonard, W. J. (Standard tactics in England), 200
Lethaby, Dr. (the late), 210
Libby, W. H. (Standard lobbyist), 151, 152, 232
Limanova Petroleum Company, 166
Lloyd, Henry D. (the late), 5, 97
Lockhart, Charles, 65, 193
Lockwood, F. W. (Standard Oil agent), on wicks, 194
London Commercial Trading and Investment Company, Ltd., 113 _et seq._
Macdonald, Jas. H., 111, 199
Maikop field, the new, 164
Majendie, Sir V. (the late), 214, 219
Manhattan Oil Company, 108 _et seq._
Mantascheffs of Baku, the, 164, 169
Mendeleef, the late Professor, 224
Merrill, Joshua (lubricating oil pioneer), 131
Missouri, proceedings against the Trust, 135
Moeara Enim Company and the Dutch Government, 147
Monnett, F. S. (Attorney-General of Ohio), 81, 134
Newspapers, Trust subscriptions to, 86
New York Central Railroad, 37, 40, 48, 52, 60
Nobels of Baku, the, 162
O’Day, Daniel, 19, 54, 198
“Oil War,” the, 147
“Orange Barrel,” the, 223
Oswego Manufacturing Company, 23
Parish, W. E. (of the Vacuum Oil Company, Ltd.), 243
Payne, Oliver H., 20, 193
Pearson firm (Mexico), 142
Pennsylvania Railroad and rebates, 31, 37, 56, 59
Petroleum Association (of London), 160, 210, 214
” Committee (recommendation on flash-point), 225
” Producers’ Union, the, 46, 133
” wax, 152, 206
Pierce, Henry Clay, 141
“Pittsburg Plan,” the, 57
Port of London Authority and Standard intrigues, 236
Pratt, Charles, 66
” Charles M., 20, 175, 239
“Protection,” the cry of, 226
Railways, English, and petrol agitation, 235
“Re-branding” lubricants in Germany, 176
Redwood, Sir Boverton, 160, 192, 220, 221, 229
Refiners’ Association, the, 57, 59
Rice, George, 71
Rigby, W. T. (Liverpool retailer’s experience), 202
Rockefeller, Frank, 39
” John D., 15, 29, 33, 47, 51, 58, 67, 71, 197
” John D., jun., 20
” William, 19, 29, 37, 193
Rogers, H. H., 17, 33, 94, 97, 172, 195
Romano-American Petroleum Company, 22, 169
Roscoe, Sir Henry, 225
Rothschilds, the Paris, 163, 170
Royal Dutch Petroleum Combine, 147, 170
“Rutter circular,” 60
Samuel, Sir Marcus, 147, 157, 170
Scottish oil refiners and the flash-point, 215
Security Oil Company of Texas, 20, 113
Shell Transport and Trading Company, 147, 151, 170
Solar Refining Company (Ohio), 20, 110
Sone & Fleming Company, New York, 224
South Improvement Company, 34, 36, 46, 48
_Spectator_, the, on “lobbying,” 227
Standard Oil Company, of New Jersey, 19, 50, 135, 199
” ” of New York, 48
” ” of Indiana, 134
” ” of Ohio, 20, 29, 134
_Star_ newspaper and the flash-point, 225
Steana Romana, the, 169
Stone, Hon. W. A. (Governor of Pennsylvania), 83
Suez Canal Company and the bulk oil agitation, 158
Swedish naval engineers and Trust lubricants, 185
Tank steamers and the Suez Canal, 158
” wagons and retailers, 127, 166, 202, 205
Tarbell, Miss Ida M., 5, 16
Thompson, Professor Silvanus P. (and Lord Kelvin), 213
Thomson, Captain J. H. (the late), 229
“Three chemists’ cup,” the, 210
Tidewater pipe lines, 91, 120
Tramway engineers and Standard lubricants, 248
Union Tank Line Company, New Jersey, 22, 110
United Pipe lines, 54, 60
” States Pipe Line, 92
Ure, Alexander, K.C., M.P., 210, 212
Vacuum Oil Company, of Rochester, 20, 21, 94
” ” Ltd., 239 _et seq._
” ” of Vienna, 165
Van Buren (Mr. Archbold’s son-in-law), 142
Vanderbilt, William H., 37, 46
Vandergrift, J. J., 33
Van Syckel, Samuel (pipe line pioneer), 131
Warden, W. G. (South Improvement Company), 36, 65
” Frew & Co., 74, 193
Wardwell, William T. (the late), 18, 198
Waters-Pierce Oil Company (Mexico), 140
Watson, D. K., Attorney-General of Ohio, 82, 134
” P. H., President South Improvement Company, 37
The Gresham Press,
UNWIN BROTHERS, LIMITED,
WOKING AND LONDON.
Transcriber’s Note
Some inconsistencies in spelling, hyphenation, and punctuation have
been retained.
This file uses _underscores_ to indicate italic text. Small capitals
changed to all capitals.
p. 7: changed location of quotation marks for Chapters VII, VIII
entries to match the chapter titles
p. 72: changed “Insterstate” to “Interstate” (the Interstate Commerce
Commission)
p. 112: changed “o” to “of” (pretty close track of companies)
p. 115: changed shares total from “722,507” to “722,509”, correcting a
math error.
p. 129: changed “Stark’s” to “Starks’s” for consistency (cart it round
after Starks’s wagon)
p. 144: changed “monoply” to “monopoly” (fighting this American
monopoly)
p. 165: changed “Campany” to “Company” (the Vacuum Oil Company, of
Rochester)
p. 178: changed “Engine F” to “Engine I” (“Gas Engine I and Heavy”
respectively)
p. 200: changed “varies” to “various” (the various groups of middlemen)
p. 224: changed “bankum” to “bunkum” (“merely advertising bunkum,”)