SONG OF THE BARREL
Genius could take so unspeakable a thing as a shirt and sing it
into an immortal song, but a barrel--and an oil-barrel, greasy and
ill-smelling--even genius could do nothing with that. But the barrel
plays a leading rôle in the drama of the great monopoly. Out of it
have flown shapes of evil that have infected private fortunes, the
prosperity of more than one industry, the fiduciary honor of great
men, the faithfulness of the Government to its citizens. Perhaps
a part of what genius could do for the shirt--force a hearing for
the wronged--may be done for this homely vessel of the struggling
independent by the kindly solicitude of the people to learn every
secret spring of the ruin of their brothers.
The market--the barrel that went to market--the freight rate that
stopped the barrel that went to market--the railway king who made the
rate that stopped the barrel that went to market--the greater king who
whispered behind to the railway king to make the rate that stopped the
barrel that went to market--this is the house that Jack unbuilt.
Such is the superiority of a simple business organization, where
"evolution" has not carried the details of the industry out of sight
of the owner, and where the master and man, buyer and seller, are in
touch, that the independent refiners could overcome the tax imposed
on them by this pooling of the pipe line and the railroads, and not
only survive but prosper moderately. During the three years--from
1885 to 1888--following the first attack upon them under the contract
just described, they state, in their appeal to the Interstate
Commerce Commission in 1888, they were "enabled by their advantages
in the local markets to keep up, maintain, and even increase their
business."[227] These "outsiders" shipped their oil largely in barrels
because the trunk-lines had made it as nearly impossible as they
could for them to ship in tank-cars. They, like all in the trade,
could not live without access to the European market. Out of every
hundred barrels of various kinds of products from the distillation
of petroleum, forty are of an illuminating oil not good enough to be
burned in this country. It must be sold in Europe or not sold at all;
and a manufacturer who cannot get rid of 40 per cent. of his product
must give up manufacturing. To destroy the barrel method of shipment
would destroy those who could use no other; and to close their outlet
to Europe would make it impossible for them to continue to manufacture
for the home supply. The barrel was the only life-raft left to the
sinking independent.
They who had planned the secret pool of 1885 between the pipe line
and the railroads, and the further advance of rates by both in 1888,
now called upon the railroads to deliver a final stroke against the
independents.[228] The railroads, when directed in previous years to
say "no" to applications for transportation, and "no" to those who
wanted the right to put their own tank-cars on the road, had obeyed;
they obeyed again.
A pretext for the suppression of the barrel was easily found. It was
a poor one, but poor pretexts are better than none. When the future
"trustees" of the "light of the world" were doing a small fraction
of the business, they got the contract of 1872 from the railroads to
"overcome" all their competitors, on the pretext of "increasing the
trade."[229] When by this contract and those that followed it they had
secured nine-tenths of the trade, they got the railroads to say "no"
to the remaining one-tenth, on the pretext that they could not ship as
much.[230] When the Interstate Commerce law declared it to be a crime
for railroads to forbid persons the road because they could not ship as
much as others, the combination had the railroads shut out its rivals,
on the pretext that they did not use tank-cars,[231] although tank-cars
"are worse than powder." When regular tank-cars were offered by its
competitors for shipment--as to the Pacific coast--the combination
introduced an inferior tank-car, of which it claimed, without warrant,
as the courts afterwards held, that it owned the patent, and so
obtained the sole right of way across the continent, on the pretext
that other shippers did not use this poor car.[232]
The pretext now used against the refiners of Pennsylvania was the
passing phrase, "He must pay freight on barrels," in a decision of
the Interstate Commerce Commission concerning Southern traffic. This
decision had no relevancy to the oil business of the North. Six months
went by after it was given with no intimation from any one that it
related in any way to the situation in Pennsylvania, and to be so
applied it had to be turned inside out and upside down. In the Rice
case the Commission had decided that freight rates must be reduced on
barrel shipments. This was, in the sharp language of the decision, to
put an end to "the most unjust and injurious discrimination against
barrel shippers in favor of tank shippers," a discrimination which the
Commission has elsewhere said "inured mostly to the benefit of one
powerful combination."
In ordering this reduction it said: "Even then the shipper in barrels
is at some disadvantage, for he must pay freight on barrels as well as
on oil."
By "must pay" the Commission meant "was paying." It was, as it
afterwards protested, "rather a statement of a prevailing practice
than a ruling."[233] And the remark furthermore concerned the trade in
the South and Southwest alone, where special circumstances existed not
found at the North.
Six months after this decision the Pennsylvania and other Northern
roads made these words, "He must pay freight on the barrels," the
occasion of an increase of rates, which stopped the refineries of
the independents. They were carrying free the heavy tanks--"the
most undesirable business we do," in the language of their freight
agent. They had been carrying the barrels of the independents free
for twenty years. Now, continuing to carry the tank-cars free, they
levied a prohibitory transportation tax on the barrels. To cap it all,
they declared, in announcing the new rule, that it had been forced
upon them by the Interstate Commerce Commission. But the President
of the Pennsylvania Railroad is found admitting that it was the oil
combination that dictated the move--"the seaboard refiners insisted."
"Upon your decision" (in the Rice case) "being promulgated," he wrote
the Interstate Commerce Commission, "the seaboard refiners insisted
that we were bound to charge for packages," barrels, not tanks, "as
well as for the oil."[234]
The seaboard refiners were the members of the oil trust; the others
at the seaboard had been wiped out years before by the help of the
railroads. Though the Pennsylvania Railroad was not a party to the case
before the Commission, though it had not been called upon to change
its practice, which was what it ought to be, it did now change it from
right to wrong. The Commission had ordered that discrimination between
the barrel and the tank should cease. The Pennsylvania, which had not,
strange to say, been practising that forbidden kind of discrimination,
immediately resorted to it, and, stranger still, gave as its reason the
order of the Commission against it. It must have been a keen eye that
could find in a "qualified and incidental remark," as the Interstate
Commerce Commission styles it, in such a decision, a command to charge
for the weight of the barrels and increase freight rates; but such
an eye there was--an eye that will never sleep as long as Naboth's
vineyard belongs to Naboth.
All the trunk-line railroads to the East took part in the new
regulation--September 3, 1888--that freight must be paid thereafter
on the weight of the barrels as well as on the oil itself, and at the
same rate. This increased the cost of transportation to New York to
66 cents from 52 cents, and to other points proportionately. Freight
rates on the oil of "the seaboard refiners" who shipped in tanks were
left untouched. In the circulars announcing the change it was said to
be done "in accordance with the directions of the Interstate Commerce
Commission."[235] When the refiners whom this advance threatened
with ruin wrote to expostulate, they got the same reply from all the
railroad officials as from President Roberts of the Pennsylvania
Railroad: "The advance in rates ... has been forced upon us by the
Interstate Commerce Commission."[236]
The Commission immediately called the responsible official of the
Pennsylvania Railroad, which was the leader in this move, "to a
personal interview," "expressed their surprise," and suggested the
withdrawal of the circular and of the increased rates. This was in
August.[237] No attention was paid to this by the road. The Commission
waited until October 10th, and then sent a formal communication to
the President of the Pennsylvania Railroad, which was followed by
correspondence and personal conferences with him. The Commission
pointed out that the statement of the circular was "misleading," "not
true," "decidedly objectionable"; that the Commission had made no
decision with reference to the rates of the Pennsylvania Railroad or
the other Eastern lines; that its decision, applicable solely to the
roads of the South or Southwest, had been that rates on barrels must
be reduced, and that it was not right to use this as an excuse for
increasing the rates on barrels. Finally, the Commission said that
if it had made any ruling applicable to the Pennsylvania Railroad it
would have been compelled to hold that its practice, of twenty years'
standing, of carrying the barrels free, since it carried tanks free,
was "just and proper," and that there was nothing to show that an
advance in its rates was called for.[238]
The Interstate Commerce Commission was the body specially created by
Congress to interpret the Interstate Commerce Law. The Pennsylvania
Railroad was one of the common carriers under the orders of the
Commission, and its managers were subjects of jurisdiction, not judges.
But its method of running the Supreme Court of Pennsylvania, as if it
were one of its limited trains, was now applied with equal confidence
to the Interstate Commerce Commission. It insisted that it was itself,
not the Commission, which was the judge of what the latter meant by
its own decisions. The road continued the rates against which the
Commission protested. The Commission demanded that the assertions that
the new rule of charging for the barrels and the advance of rates was
made "in accordance with the directions" of the Interstate Commerce
Commission be withdrawn. The Pennsylvania road responded with another
circular, in which it changed the form but repeated the substance. "The
action referred to was taken for the purpose of conforming the practice
of this company to the principles decided by the Interstate Commerce
Commission." The Commission protested that it was not laying down any
such "principles" but the corporation declared that that was what it
"understood," and held to the advance made on that understanding.[239]
To the almost weeping expostulations of the Commission in interviews
and letters, to show that it had said nothing which could justify the
action of the roads, the officials made not the slightest concession.
"I did not consider it in that way," said one of them.[240] "That
was their (the Commission's) view of the case, but it was not shared
by us," said the President of the Pennsylvania Railroad. "It was
considered best to continue the practice," he said.[241]
"Why did you not rescind the order?" he was asked before the Interstate
Commerce Commission.
"We understood their ruling to be a ruling for the whole country," he
incorrigibly replied.
The railway president studiously withheld any assurance that he would
obey if the Commission issued a direct command, which it had not done,
though it had the authority.
"We would then take the subject up," he said.
Change the order to comply with the ruling of the Interstate Commerce
Commission the roads would not and did not.[242]
All the roads to the seaboard and New England had made the order in
concert, and together they maintained it. It was one hand, evidently,
that moved them all, and though that hand moved them, for the benefit
of a carrier rival of theirs--the pipe line of the trust--against their
own customers, against their own employers, against the authority of
the United States Government, all these railroad presidents and freight
agents obeyed it with the docility of domestic animals.
These officials were the loyal subjects of a higher power than that of
the United States, higher even than that of their railway corporations.
They serve the greatest sovereign of the modern world--the concentrated
wealth, in whose court the presidents of railways and republics, kings,
parliaments, and congresses are but lords in waiting.
Thanks to the superior enterprise of their greater need, the
independents of Oil City and Titusville had been able to survive the
blows that had preceded, but this was too much. They had weathered
the surrender in 1883 of the Tidewater Pipe Line, which had promised
them freedom forever. Even the "contract" which made the allied pipe
lines and the railroads in 1885 one, to tax them half as much again
for transportation, had not broken them down. In spite of it they had
been able "to maintain and increase their business."[243] But now they
closed their works. The new attack had been shrewdly timed to spoil
for them in that year--1888--the season of greatest activity in the
export to Europe and Asia. They appealed to the Interstate Commerce
Commission. "The greater proportion of our refineries are idle."[244]
"I have not a customer in the entire New England States. I have not had
since the advance of last September."
"How was it before the advance?"
"I had a number of customers."[245]
Labor, though, as always, the most silent, suffered the most. Three
hundred coopers were thrown out of work in Titusville alone within a
short time, and the loss of employment to the workmen in the refineries
was still more serious. This was not because trade was bad. Exports
were never greater than in 1889. Government statistics reveal as in a
mirror what was being done.
The exports of refined petroleum increased 21 per cent. in 1889 over
1888. But Perth Amboy, from which the independents shipped for the
most part, showed a decrease of over 18-1/2 per cent. By the stroke of
a freight agent's pen the business of these men was being taken from
them, to be given to others. The general tide was rising, but their
feet were sinking in a quicksand.
The export business of Boston in oil was given to the "seaboard
refiners" by the same stroke. Freights that had been $100 were now $174
to Boston, and $188 to New York. These rates were so high as to stop
oil from going through. "The Nova Scotia trade," it was testified,
"goes to New York, and from there by water, whereas they used to buy
in Boston. Boston brokers will ship oil from New York and get it to
Nova Scotia cheaper than if it went from Boston, whereas when we had
the export rate we could compete in that market."[246] Two months
later most of what remained of the business of the independents in
New England was added to the gift of their foreign trade, which had
already been made to the "seaboard refiners." By an order of October
25, 1888, the railroads made it known to these "pestilences," as the
lawyers of the railroads called the independent refiners in court,[247]
that they would not be allowed to send any more through shipments into
New England. This was done, as in Ohio in 1879,[248] without the notice
required by law, though in the meantime a Federal law had been passed
requiring notice.[249]
This order was the finishing touch in the task of using the freight
tariff to prevent freight shipment. It shut the independents--the
hunted shippers--out of over 150 towns in New Hampshire, Vermont,
Maine, Massachusetts, including Manchester, Burlington, Portland,
Salem, in which they had built up a good business, and it made
it impossible to reach these places except by paying high local
rates--from station to station--which were not required of their
competitor, who shipped on through rates. The railroads would take the
oil of the independents for shipment, but would not tell them what the
rates would be. In this, as in all the moves of this game, we see the
railroad managers of a score of different roads, at points thousands
of miles apart, taking the same step at the same time, like a hundred
electric clocks ticking all over a great city to the tune of the clock
at headquarters that makes and breaks their circuit.
The independents were saved by a Canadian railroad from the destruction
which American railroads had planned for them. The Grand Trunk gave
them a rate by which they could still do some business in the upper
part of New England, though to do this they had to ship the oil into
Canada and back into the United States. The effect of this abolition of
through rates in "cheapening" oil was that the people of Vermont, for
instance, had to pay 2 cents a gallon more than any other place in New
England.[250]
While all access for others to New England was cut off, the "seaboard
refiners," sending the oil in free tanks to the seaboard, transshipping
it there into vessels by the facilities of "which they have a
monopoly,"[251] easily made their own the business of their rivals in
the 150 towns from which the latter were thus cut off. No one has been
able to move all the railroads in this way, as one interlocking switch,
to obey a law or accommodate the public. But it was done easily enough
for this kind of work. Possession was got of the railway managers at
the initial points, as was done so successfully in another case,[252]
and all the other railway managers, as far as Boston, followed in their
trail. Reproducing the tactics in Ohio in 1879, it was only against oil
that this attack of the tariff was made. Other freight for export, of
which there was a vast variety, continued to be carried to Boston at
the same rate as before.[253]
All the freight agent of the initial road had to do with the oil on its
way to Europe was to pass it along to the next line. Whether, after
leaving his road, it went by the way of Boston or that of New York made
no difference to his road, and was in no way his affair. But it made a
great deal of difference to those who wanted all the business of Europe
and America for themselves, and we consequently find him serving them,
and dis-serving his employer (the railroad), by charging 21 cents a
barrel if the oil was going to Boston after leaving his line, but only
15-56/100 cents if it was going to New York. When asked if he thought
he was justified as a railroad man under the law in making the charges
for what he did vary according to what was done by the business after
it left his hands, he refused to answer.
"You will not answer?"
"Not at present."[254]
All the connecting and following roads are on record as having
protested against the measures in which they followed the lead of
the initial lines.[255] The freight agent of the West Shore Railroad
declared that the prohibition of through shipments to the towns of
Massachusetts, Vermont, New Hampshire, and Maine "occurred simply
through mistake;" but the mistake, he acknowledged, had never been
corrected.[256] This "mistake" and that of September, which preceded
it, put an end to a large business, amounting in 1888 to 900,000
barrels. The men, whom the railroads began to massacre after having
pledged them full protection, saved a fraction of their trade in
New England, as we have seen, only by taking refuge with a foreign
railroad. The railroads against their will, as they swore, lost
business as well as honor, but the mistake was not corrected.
It would tax the imagination of a Cervantes to dream out a more
fantastic tangle of sense and nonsense in quixotic combat than that
which these highwaymen spun out of the principles of "scientific
railroading." All that highway control could do to destroy the barrel
shippers for the benefit of the tank shippers was done; and yet the
barrel method is the safer and more profitable for the railroads.[257]
The cars that carry oil in barrels can return loaded; the railroads
have to haul the tank-cars back empty and pay mileage on them.[258] For
a series of years on the Pennsylvania Railroad the damage from carrying
oil in barrels was less than half the damage from the carrying of oil
in tanks.[259] The general freight agent of the Pennsylvania Railroad
Company tells the Interstate Commerce Commission that the carriage of
oil in tank-cars "is the most undesirable business we do." He described
a smash-up at New Brunswick where there was a collision with a line of
tank-cars. The oil got on fire; it ran two squares, got into a sewer,
overflowed the canal, which was then frozen over, and followed the ice
a square or two beyond. Besides having to pay nearly five hundred
thousand dollars damages for the destruction done, the railroad lost
its bridge, which cost two or three hundred thousand dollars. It lost
more money than it could make carrying oil for ten years. "I regard
it," he said, "as worse than powder to carry; I would rather carry
anything else than oil in tanks."[260] Barrel shipments being the best
for the railroads, these princes of topsy-turvydom move heaven and
earth to destroy them.[261]
There was no end to the "mistakes" made by the railroads for the
"self-renunciation" of their business, though this was in favor of
those whose pipe line made them rivals. They charged more for kerosene
in barrels than for other articles of more value, contradicting
their own rule of charging what the traffic will bear. They let the
combination carry sixty-two gallons in every tank free on the theory
of leakage in transportation. "The practice," said the Commission, "is
so obvious and palpable a discrimination that no discussion of it is
necessary;" and they ordered it discontinued.[262]
Though the railroads brought back the tanks free, for the return of
the empty barrels they never forgot to charge. This charge was made so
high that at one time it prohibited the return from all points.[263]
"The monopoly uses a large number of barrels in New York City," the
independents said to the Commission; "it is to its interest that empty
second-hand barrels should not be returned to the inland refiner." When
this was brought out the Pennsylvania and other railroads promised to
make reparation, but had not done so years later when the case was
still "hung up" in the Interstate Commerce Commission.
It was not lack of capital or of diligence that made the independents
use barrels instead of tanks; tanks were useless to them. All the
oil terminal facilities of the railroads at the seaboard had been
surrendered to the combination for its exclusive use.[264] These were
the only places where tank-cars could be unloaded into steamers. "There
are no facilities to which we, as outside refiners, have access to load
bulk oil into vessels," and none where these refiners could send oil in
tank-cars to be barrelled for shipment abroad.[265] No matter how many
tank-cars and tank-vessels the independents might have provided, they
could not have got them together. Between the two were the docks in the
unrelenting grip which held solely for its private use the shipping
facilities of these public carriers. Not even oil in barrels could the
independents get through these oil docks.
The Weehawken oil docks of the Erie road on New York harbor are the
best in the world. The Erie Railroad has $920,760 invested in them, but
only one shipper can use them either for tanks or barrels.
The Western traffic manager of the Erie was asked:
"Would you take a shipment there over the Erie road of independent oil
consigned to the New York docks?"
"No, sir."[266]
The Pennsylvania Railroad refuses to haul tank-cars for the
independents to any other point at New York than the terminals so
controlled by the combination. It will not haul them to other docks of
its own. It will not let oil be shipped over its line to the points
at which it connects with other roads for other harbors, though it
will take shipments of anything else than oil.[267] This amounts to a
refusal to allow the independents to use tank-cars or tank-steamers.
Practically the same policy is pursued by all the main trunk-lines.
These independents could get rid of their export oil only by selling
to the combination. Through its other self--the company which controls
the terminals--it has kept an agent in the oil regions for years to
buy for export this refined oil which its owners and makers could not
export themselves. This is the "immediate shipment" of 1878 in another
phase.[268]
"You have to sell to the Standard Oil Company in order to get your oil
shipped in bulk from Communipaw?"
"Yes, sir."
"The independent cannot get his oil into a bulk vessel at Communipaw?"
"No, sir."[269]
To meet these disclosures the Pennsylvania presented two affidavits.
One was from its general freight agent that its tank-cars were offered
freely to all; but it did not deny, for it could not deny, any of
these facts about terminals, which explained why the flies did not
walk into its parlor. The other affidavit was from the secretary of
the corporation controlling the terminals for the oil combination, and
it similarly declared that its accommodations were furnished "upon
exactly the same terms to all." How long it had been doing so, or how
long it would continue to do so, it did not state, as the independents
pointed out to the Commission. If this were the truth instead of
being, as the independents hinted, "evidently a situation that has
been recently arranged for the purposes of this application"--to the
Interstate Commerce Commission for further delay--why had none of the
independents, dying for want of export facilities, resorted to it? This
was not explained, for it could not be. The independents explained the
situation to the Interstate Commerce Commission: "The inland refiner
who intrusts his oil to a storage company at the seaboard with a view
to exporting, puts himself completely into the power of such concern.
The exactions that may be unfairly imposed in individual cases for
'loss by leakage,' 'dumping and mixing for off-color or off-test,'
'cost of water white oil for mixing,' 'tares,' 'tares guarantee,'
'commissions on sales,' 'interest on goods until loaded and paid for,'
'incidental expenses,' and many other known matters of charge, may
amount to a partial confiscation of the cargo."
The corporation which manages this monopoly of the terminals at
Communipaw is a mysterious concern. Who own its stock, and what its
relations with the railroad are, the Interstate Commerce Commission
could not find out. Its president and treasurer were summoned to
testify, but refused to attend. The manager of the oil combination's
pipe lines stated that he knew of stock in the company that was owned
by a member of the trust, though he afterwards qualified that he
did not know it "positively."[270] The charge that this company was
controlled by the monopoly was specifically made before the Interstate
Commerce Commission and was not denied, and the Commission found
that the oil combination "have a monopoly of those facilities to the
exclusion of complainants."[271] It thus reported the same state of
facts in 1892 as the New York Legislature in 1879.
The barrel was therefore the fountain of life for the independent.
Without barrels he could not get his oil on board ship for export, and
without exporting he could not live and refine for the home market.
The oil combination ships in barrels also. According to the figures
given in this case by one of its "assistant managers" its shipments by
barrel are very large. This testimony was introduced to make it appear
cruel to insinuate that the difference between barrels and tanks was
made by the railroads to favor it, since it as well as the independents
used barrels. The Commission openly expressed its dissatisfaction with
this evidence, and dismissed the subject by the conclusive observation
that the combination gains more by the low tank-car rates than it
loses by the high barrel rates.[272] For the independent, however, the
difference in rates was almost all loss, for he at that time shipped
mostly in barrels. The high prices it made for oil and for freights at
Titusville and Oil City did not hurt the combination. It had only to
close its refineries there and transfer their business for the time to
its establishments elsewhere. This it did, keeping some of them idle
for years.[273]
Such was the story told to the Interstate Commerce Commission, in many
hundred pages of testimony, by the refiners of Oil City and Titusville,
who appealed to it for the justice "without expense, without delay, and
without litigation" promised the people when the Interstate Commerce
Commission was created.[274] The game, of which you have perhaps
been able to get a dim idea from the printed page, the Commissioners
saw played before them like chess with living figures. For years
the principal subject of their official investigations had been the
manoeuvres of the oil ring. They had been compelled by the law and
the facts to condemn its relation with the railroads in language of
stinging severity, as every court has done before which it has been
brought. Better than any other men in the country, except the men in
the ring, the Commissioners knew what was being done. They comprehended
perfectly who the "seaboard refiners" were whose demand that their
competitors should be shut out of Europe and New England was better law
with the Pennsylvania Railroad than the decisions of the Commission.
They needed no enlightenment as to the purpose of the secret contract
between the members of the oil trust and the Pennsylvania, nor any
instruction that the "pool" between the pipe line and the railroad was
as hostile to the public interest as any pool between common carriers.
The chairman of the Commission had openly hinted that the relations of
the oil trust and the railroads were collusive, and that the spring
from which they flowed was a secret contract.[275] It was shown to the
Commission that at the same time the railroads advanced their rates the
oil combination bid up the price of the raw material of the Titusville
and Oil City refineries. This is called "advancing the premium."[276]
The raise of the freight rate added 14 cents a barrel to the cost of
production, and the increased price of oil put on 12 cents more, either
item large enough to embarrass competition. The Interstate Commerce
Commission in its decision recognized the practical simultaneity of
the three movements to the disadvantage of the independent refiners:
(1) the bidding up of the price of crude oil against them; (2) the new
rule of charging for the weight of the barrel; and (3) the abrogation
of the through rates to New England. These three things occurred in a
period of about two months. This, the Commission says, lends color to
the charge that there was concert of action between the combination and
the railroad.
The Commissioners in their sittings had seen that the counsel for the
railroads did not pretend to bring forward any evidence to prove that
their attack on the barrel shippers was just or proper. Although "the
seaboard refiners," for whose pecuniary profit these things had been
done, were not on trial, their witnesses, agents, and attorneys were
in constant attendance, and kept close watch of the testimony and
arguments. The Commission had its attention called specifically to the
fact that the defence of the railroads on trial was being directed by
the same "seaboard refiners" who had "insisted" that the railroads
should violate the law. The counsel for the Erie road was frank
enough to admit that it was they who had prompted that carrier in its
litigation before the Commission. When the Erie appeared before the
Commission to give "further testimony," its representative could not
tell at whose request its application therefor had been made, and said
he had known nothing about the matter until the day before. Three of
the six witnesses then examined were from the offices of the oil trust,
whose members had refused to come when summoned. The only subpoenas
they obey are those issued from their own headquarters.
The president of the oil combination's pipe lines--who is also
the president of the steamship line in which its members are
interested--and the vice-president of the pipe lines, and the president
and the treasurer of the company which holds for the trust the monopoly
of the terminal facilities, and the President of the New York, Lake
Erie, and Western Railroad, and its vice-president, were all served
with official notice to come and testify. But these gentlemen refused
to appear. "It is for your honors," said the counsel for the refiners,
suggestively, "to determine what obedience shall be paid to your
subpoenas."[277] But the Commission did nothing.
The defendant corporations, and their lawyers, officers, and witnesses,
made no pretence of treating the Interstate Commerce Commission with
anything more than a physical respect. The representatives of the
railroad companies practically told the Commission that its decisions
were subordinate to theirs, and that they knew better than it what
its rulings meant. Witnesses refused to answer questions they found
awkward, and the lawyers gave the court to understand that if it did
what they did not like they would snuff it out. The Commission heard
one of the refiners who was a petitioner before it assailed with
coarse vituperation, described in open court as a "pestilence,"[278]
because he had dared to write more than once to the railroads for the
reduction of rates which would save him from destruction, and which the
Commission had, not once, but half a dozen times, said the railroads
ought to give to all.
The Commission had itself, outrunning the complainants, been the first
to "pointedly disapprove" the attempt to destroy the barrel shippers,
and to call upon the railroads to rescind their action. This protest
it had made repeatedly--first with the subalterns, then with the chief
of the Pennsylvania Railroad, in personal interviews, letters, and
finally in an official pamphlet, which was an appeal to the public to
judge between it and the corporation. It had reiterated its protest
in a formal decision rendered September 5, 1890, after deliberating
seven months on the evidence and arguments. In this "they recalled
the fact, now almost ancient history, that" the change was "pointedly
disapproved by the Commission" when first made, and with lamentations
noted that, though almost two years had passed, "the carriers have
failed to comply with the suggestions there made. In charging for
the weight of the barrels as well as the oil, the carriers that make
use of both modes of transportation have disregarded the principles
plainly and emphatically laid down by the Commission in the cases
cited, and have paid no attention to the subsequent official memorandum
explanatory of the decisions in those cases, but have persisted
in maintaining a discrimination against barrel shippers. An order
requiring the discontinuance of the discrimination has therefore become
necessary."[279]
An order has therefore become necessary. The Commission then ordered
one road concerned in this separate case to "cease and desist" within
thirty days. Although several cases affecting a number of refiners and
a number of roads had been heard and submitted together, as practically
one in traffic, territory, circumstances, and the main question, it
confined its decision to the case which involved only one road, and
that a subordinate. There the Commission stopped; and there it stuck
for more than two years, from September 5, 1890, to November 14, 1892,
refraining from a decision in the case of the principal offender, the
Pennsylvania Railroad.
The Pennsylvania Railroad is the representative carrier in the oil
traffic. It controls all the oil business that passes over its lines,
no matter how far away it originates. The initial road which led
the attack on the barrel shippers is subsidiary to the Pennsylvania
in the oil business, and the Pennsylvania controls its rates and
regulations.[280] The Pennsylvania has been the head and front of the
railroad attack on these men, and has been the open nullifier of the
law and the Commission in this matter. It was the principal defendant
on trial, and its case was identical with that of the others, except
that it was the most flagrant; but no order would the Commission issue
against it for two years. Wendell Phillips says: "There is no power
in one State to resist such a giant as the Pennsylvania road. We have
thirty-eight one-horse legislatures in this country; and we have a man
like Tom Scott with three hundred and fifty millions in his hands, and
if he walks through the States they have no power. Why, he need not
move at all; if he smokes, as Grant does, a puff of the waste smoke
out of his mouth upsets the legislatures." When the Commission had
ordered a change of rates on barrels in the South, the Pennsylvania did
the Commission the double disrespect of declaring that that order was
binding upon itself against the protest of the Commission, and of using
an order to reduce rates as an excuse for raising them. But now when
the Commission, September 5, 1890, made a decision on the same point in
a case arising in the territory and traffic in which the Pennsylvania
was the chief carrier--a case, too, of a bunch of cases in which the
Pennsylvania was a defendant--that road ignored it. The Commission,
in the Rice, Robinson and Witherop case, in 1890, promulgated the
very rule which the Pennsylvania Railroad established, which it had
been following for twenty years, and which its officers before the
Commission swore was the correct one, but the Pennsylvania refused
now to accept and follow it. The road which was now ordered to go
back to the correct practice, and which had perforce done so, was the
initial road. The Pennsylvania had followed its initiative in adopting
a "false" and "misleading" and "unwarranted" practice, but would not
follow it in changing to the good.
The attitude in which the Pennsylvania road and the Commission were
thus placed towards each other was this: Shall the Pennsylvania
Railroad be allowed to make a charge which the Commission volunteered
to rebuke it for making, and which it had decided, in the parallel
case of another road in the same situation, was altogether unwarranted
and must cease? They stood thus facing each other more than two years.
There was apparently no excuse for delay the Commission would not
accept. At one time it granted postponement on the plea of a lawyer
that his father was sick. More than the lawyer's father were sick; a
whole community of business men were sick; the entire country was sick,
its industry, law, politics, morals--all. The administration of justice
was sick. If the facts had been uncertain, or the law undetermined,
the course of justice would still have seemed cruelly sluggish; but
here was a matter in which the facts and the law in question had been
settled, and by the Commission itself, over and over again. The only
thing remaining was that the Pennsylvania Railroad, as well as the road
which was its next neighbor, must obey the law. The railroad against
which the Interstate Commerce Commission decided in 1890 on this point
joined the Pennsylvania at Irvineton and Corry. The Commission put the
law into force on one side of those points, but for two years gave
the Pennsylvania Railroad and others "rehearings" and other means of
delay, and did not open its lips to say that the same law must reign on
the other. The conduct of this corporation meant that it intended to
respect neither the Interstate Commerce Commission nor the Interstate
Commerce law; that it recognized the will of cliqued wealth as the
supreme law; that the protestations of loyalty to the law and the
Commission with which it accompanied its defiance of both were not
offered as a disguise of respect, but were chosen as a method which
would most embarrass the people's tribunal in upholding itself and the
rights of the citizens. All that was needed by those who had contrived
and were continuing the wrong was time--they had everything else. Time
they got, and plenty of it.
July 15, 1891, the refiners said to the Commission: "Two and one-half
years have elapsed since these complaints were filed, and the end
is not yet. We earnestly hoped that we had succeeded in convincing
this Commission that this respondent was inflicting on complainants a
great and unnecessary wrong, which merited the most speedy remedy and
redress possible. If we have failed in this we are unable to ascribe
the failure to a lack of evidence or promptness in presenting it.
It was not thought possible that all this great length of time would
be required to reach a conclusion in these matters, under all these
circumstances, especially after the decision in the Rice, Robinson,
and Witherop case (September 5, 1890). The enemies of the complainants
could scarcely have found or wished for any more effectual way of
injuring complainants than by a long delay of their cause. Further
delay simply means further injury to complainants." The two years
and a half have gone on to more than five years. A decision has been
made, but the end is not yet. The delay prevented the injured men from
going to any other tribunal with their complaint. They have succeeded
in keeping alive, though barely alive, because the price of their raw
material has declined a little, and given them a margin to cling to.
This delay has denied them justice in the special tribunal they were
invited to attend, and has also denied them the relief they could have
got from other courts.
The Commission heard all this urged by eloquent counsel. It heard the
men who were being crushed tell how their refineries were being closed,
their customers lost, their business wrecked, their labor idle, while
the trade itself was growing larger than ever. It saw the statistics
which proved it. But no practical relief have the independents of
Oil City and Titusville been able to get from it. They have lost the
business, lost the hopes of five years, lost the growth they would have
made, lost five years of life.
This delay of justice is awful, but it is not the end, for the
decision, though it came at last in November, 1892, has brought no
help. It required the roads to either carry the barrels free or
furnish tank-cars to all shippers, and for the past ordered a refund
of the freight charged on barrels to shippers who had been denied
the use of tank-cars. More than five months after it was rendered
the independents, in an appeal (April 20, 1893) to the Interstate
Commerce Commission, called its attention to the fact that "none of
the railroads in any one of the cases has as yet seen fit to obey
any of its orders save such and to such extent as they found them
advantageous to themselves, although the time for doing so has
expired." More appalling still, it appeared, in an application made
in March, 1893, by the Pennsylvania Railroad for a reopening of the
case, that these years of litigation were but preliminary to further
litigation. The counsel of the railroad, in the spirit in which it
had previously warned the Commission that its powers "may be tested,"
now informed it that the road, if the application for further delay
were not granted, would "await proceedings in the Circuit Court for
enforcement of what it believed to be an erroneous order." And in
another passage it referred to the proceedings before the Commission as
being simply proceedings "in advance of any final determination of the
case on its merits." Four years and a half had been consumed when, as
the independents pleaded to the Commission, "it might reasonably have
been expected that as many months would have sufficed," and yet these
are only preliminary to "the final determination of the case on its
merits."
"The delay suffered has been despairing--killing," was the agonized cry
of the independents in their plea to the Interstate Commerce Commission
not to grant this new delay. "We pray that no more be permitted."
But in November, 1893, more delay was permitted by granting another
application of the Pennsylvania Railroad for "rehearing." This was
limited to thirty days, but these have run into months, and "the end is
not yet." Five years have now passed in this will-o'-the-wisp pursuit
of justice "without delay."
And another "outsider," who has been a suppliant since March,
1889,[281] before the Interstate Commerce Commission for the same
relief--the free carriage of barrels where tanks are carried free--is
still a suppliant in vain. The Commission consumed three years in
hearings and rehearings, only to report itself unable to decide this
and other important points raised by him. It was "a most perplexing
inquiry," "we are not prepared to hold," "we desire to be made
acquainted with the present situation," and "the results exhibited
by recent experience." "No such intimation is intended," said the
Commission, as that it is right for the roads to charge for barrels
when they carried tanks free--not at all. "We simply refrain" from
stopping the wrong, and "reserve further opinion for fuller information
and more satisfactory inquiry." Perhaps, however, by "voluntary
action"[282] the railroads which had contrived this wrong would be
good enough to stop it, though the Commission was not good enough to
order them to do so! The Commission held that the rates were "unlawful;
but, for want of sufficient data, we do not undertake to point out
the particular modifications and reductions which would satisfy the
demands of justice."[283] "We are not now prepared to determine," "we
feel unable to prescribe," "is not now decided," "reopened for further
evidence and argument," are the phrases with which the Commission
glided away from the settlement of other vital points as to which its
intervention had been invoked for more than three years. Even when it
directed the railroads to reduce their charge it added "to what extent
the Commission does not now determine, and the cases will be held open
for such further," etc. And there his case hangs even unto this day,
for since this "not-now-decided" decision the "outsider" has never
renewed his appeals to the Interstate Commerce Commission concerning
these cases or others,[284] but, hopeless of redress, has let them go
by default.
The secret contract stands, but the barrel men survive, barely, despite
monopoly, by changing to tank-cars, and getting a pipe-line and some
terminals. They create seaboard facilities and persuade the Jersey
Central to haul their tanks. To meet this road they lay the pipe now to
be described, and, to escape railroads altogether, will build to New
York, if not ruined meanwhile.