ORDINARY SUPPLY AND DEMAND
"Do I understand you that they have not sought in any way to make the
operations of refineries outside the trust so unprofitable that parties
would either come into the trust or have to abandon the business--has
anything of that sort been done?"
"They have not; no, sir, they have not," was the triple negative of the
president.
"They" (the trustees) "have lived on good terms with what I may call
their competitors?"
"They have; and have to-day very pleasant relations with those
gentlemen."
"So far as you know," he was asked, "the product of the crude oil and
the manufacture and sale of the refined oil has been absolutely left to
the ordinary rules of supply and demand, has it not?"
"It has."[453]
In the winter of 1873 a young farmer living among the blue hills of
Wyoming, in western New York, where he had been born and bred, was
asked by a stranger from Rochester to help him in a search for oil
lands. The old-fashioned quiet of the little community was agitated by
the hope that the milk and honey of their valleys might be replaced
by a more precious flow. The stranger and his son were prosperous oil
refiners, but a little cloud, about the size of a "trustee's" hand,
had crept into their sunshine. As they set about drilling a well on
some "likely-looking" land they had leased, the stranger told the
farmer why he was so anxious to strike oil for his own exclusive use.
The reader is better prepared to understand his explanation than the
then inexperienced agriculturist to whom he gave his confidence. It had
begun to be difficult for him to get a full and regular supply of the
crude petroleum for his works. There were restrictions, he said, about
the shipments.[454] What that meant the young farmer was to learn for
himself.
There was no oil in Wyoming, and the refiner went back to Rochester,
and, as so many others have done, sold the control of his works,
the Vacuum, to the "successful men" of the combination, and stepped
silently into the minority place. His Wyoming friend, Charles B.
Matthews, had continued in his service, and when the Vacuum was sold
he and two other of its employés made up their minds to go into the
business of refining in Buffalo on their own account. They were under
no obligations or contract to remain, and did not suppose themselves
to have been sold along with the concern. They were capable men, and
showed great business sense in their arrangements. Buffalo, by its
connections by rail and the lake with the market, and its nearness
to the oil supply, was a much better situation than Rochester or
Cleveland. An independent refining company--the Atlas--was then
constructing an independent pipe line from the oil regions to Buffalo.
"This made Buffalo the best point for establishing refining industries
in the country, with its canal and lake transportation for the products
of the factory, and with a pipe line, in the hands of independents,
from the crude oil wells to the city," said the Buffalo _Express_.
Matthews had by this time had several years' experience in the
business. Of the two with him, Albert was a laborer, who had worked
his way up in the Vacuum refinery until he could run the stills, and
had learned how to make oil. He and his thrifty wife had saved a few
thousand dollars. He was ambitious. He had learned at school and in the
army and at Fourth-of-July celebrations that America is a free country
for all, and that there are no classes here, and that any workman
may go to the top. Farmer Matthews had fed his boyhood with stories
of country boys who had gone to the city and matured into business
magnates. He and Albert pooled their visions and their savings,
borrowed some money, and went to work. As for competition, though
they knew it was close, they were not afraid but that they could hold
their own in a fair fight, and of anything but a fair fight they never
dreamed.
"How are you going to get your crude oil?" Albert and Matthews were
asked when they went to tell their employer what they were going to do.
"From the Atlas pipe line."
"You will wake up some day and find that there is no Atlas Oil Company.
"We have ways," he continued, "of making money you know nothing about,"
using, singularly enough, the phraseology employed by a greater man in
the interview with another would-be competitor.[455]
"As gentlemen," he went on to say, "I respect you, but as to the
Buffalo Lubricating Oil Company I shall do all in my power to injure or
destroy it."[456]
Afterwards Albert alone was sent for. "Don't you think it would be
better for you to leave these men, and have $20,000 deposited to your
wife's credit than go with these parties?"
"I went out with them in good faith, and I propose to stay."
"It will be only a matter of a few days with the Buffalo institution at
the furthest. We will crush them out, and you will lose what little you
have got."
Albert was shown an elaborate statement of the cost of making oil and
its selling price, proving that there was no money in oil.[457] The
record of dividends was produced in court afterwards. It showed that
just before this--January 18, 1881--a dividend of 50 per cent. had been
paid in one month.[458] Dividends of $300,000 had been paid in 1881 on
the capital of $100,000. "No wonder they did not want competition,"
said the New York _World_.
These negotiations had been with the son. Albert not yielding to this
pressure, and pushing ahead with the construction of the rival stills,
the father, who was in California, came back. At his request Albert
again interrupted the work on the new refinery, which he alone of
the partners could direct, and came from Buffalo to Rochester for an
interview.
"You have made a grand mistake," said his old employer, "by going out
with those fellows.... The company will not last long.... The result
will be, if you stay with them, you will lose all you have got in
it.... We are going to commence suits against them. We will not only
sue them, but serve an injunction on them and stop their work. The
result of it is that when these suits commence, if you are in it, you
will be responsible, and you have got a little money, and you will lose
it all.... If you come back and work with us everything will be all
right, and we will make everything satisfactory to you."
"If I leave them it will leave them in bad shape," Albert urged.
"That is just exactly what I want to do,"[459] his former employer
replied.
Albert began to weaken. "I had," he afterwards told in court, ...
"about $6000 altogether, or a little more. They had reason to know
that I had some property there."[460] This was all he had to show for
the work of a lifetime, and it began to look as if it were fading away
under these reiterated threats and warnings, which went on from March
to June. Albert gave way. He went to his lawyer, Mr. Truesdale, of
Rochester. "We have come," said his former employer, who accompanied
him, "to see what disposition can be made of Al's property."
"They are going to bust the company up," said Albert to his lawyer,
when asked why he was going back to the Vacuum Company. "I am an
indorser on one of its notes, and if I do not come back with the
Vacuum, what property and money I have will be taken away from me."
The lawyer was pressed to tell how Albert could get out of his
arrangement with his company. They could not get along without him, and
were not likely to discharge him.
"If they won't release him or buy him out, the only other way," said
the lawyer, "is to leave them, and take the consequences. If he has
entered into a contract and violated it, I presume there will be a
liability for damages as well as for the debts."
"I think there is other ways for Albert to get out of it," said the
representative of the Vacuum method in commerce and morals.
"I see no way except to back out or sell out; no other honorable way,"
persisted the lawyer.
"Suppose he should arrange the machinery so it would bust up or smash
up, what would the consequences be?"
"If negligently, carelessly, not purposely done, he would be only
civilly liable for damages caused by his negligence; but if it was
wilfully done, there would be a further criminal liability for
malicious injury to the property of the company."
"You wouldn't want me, would you," said the poor man to his late
employer and friend, "to do anything to lay myself liable?"
"You have been police justice," said the Vacuum man to the lawyer, "and
have had some experience in criminal law. I would like to have you look
up the law carefully on that point, and we will see you again."[461]
Or, in effect: "See about how much crime we can commit," District
Attorney Quinby paraphrased it afterwards to the jury.
In a day or so the two managers of the Vacuum--father and son--came
back again with Albert.
"Have you looked up that matter, Mr. Truesdale?" asked they.
"Yes, I have looked it up."
"What do you think about it?"
"My impression has not changed. Such a course would involve him in a
criminal liability if he did it on purpose. Everybody who advised or
counselled him in such a course would be equally liable with him. The
consequences, if you follow that course, would be that you would get
into State's prison. If he is an honest man he won't think of taking
any such action as that. I advise him to keep out of any such thing."
"Such things will have to be found out before they can be punished,"
was the Vacuum reply. "They will have to find him before they can do
anything to him. We will take care of him." "Having in mind," said
District Attorney Quinby to the jury, "what happened afterwards--that
they should spirit him away."
"The suggestion is altogether wrong," persisted the lawyer. "The action
would certainly be very hazardous as well as wrong."
On leaving, the elder of the two, evidently persisting in his plan,
said to the lawyer, "If you want to communicate with Albert, you can do
so through C.M."[462]--his son.
These men were too careless to note that the lawyer they were talking
to was not their lawyer, but Albert's. When they were brought to trial
for the crime that followed, and Albert, repentant, told the truth,
the lawyer was free to testify against them. "I am entirely willing,"
said Albert in court, "that Mr. George Truesdale shall state what took
place. I withdraw any legal objections I might have."
The accident which has let us see how the employés of a trust coolly
debated with lawyers the policy of blowing up a competitor's works,
is one of the few glimpses the American public will ever get into the
relations of great legal lights and law-reformers with the mighty
capitalists who wreck railroads and execute wholesale corruption of
courts, legislatures, and trustees, and evade and transgress the laws
with the sure march of those who know that indictments and bail-bonds
and verdicts of "guilty" and the penitentiary are only for men not
rich enough to plan crime "by advice of counsel." When such men went
marauding through the treasury of a great railroad and the courts of
an Empire State, we saw the greatest of law-reformers, with a host
of legal luminaries, picketing and scouting for them. Every sound in
nature is phonographed somewhere, as its waves strike, and Judgment Day
will be rich with the revelations from these invisible rolls of the
confidential conversations between "trustees" and counsel, who are not
honorable lawyers as George Truesdale was, prostituting their functions
as "officers of courts" into those of officers of crime.
All these trips from Buffalo to Rochester for these interviews made bad
breaks in the construction of the works of the new company at Buffalo.
The partners, who were wholly dependent upon Albert's knowledge and
experience for the building of the refinery, and running it when built,
were mystified and alarmed. Time and again he ran away without a word
to them, and all work would stop until he came back. When he was on
hand his task did not prosper as if his heart were still in it. When
one of the three stills of the refinery had been set up ready for use,
and before any oil was run, Albert went up to Rochester again. At this
rendezvous the sinister suggestion of "doing something" was repeated.
"You go back to Buffalo and construct the pipes and stills so that they
cannot make good oil, and then if you would give them a little scare
... they not knowing anything about the business ... you know how to
do it." Swearing he would not consent, but already succumbing to this
temptation, as he had given way to the threat of ruin, he replied as
before: "I don't propose to do anything to make myself criminally
liable."[463] At their suggestion he took a man they sent all through
the new works, showing him how the stills had been constructed, how the
oil was to be made, and all the details of the refinery.[464]
The day came at last--long expected, delayed by these unaccountable
absences--when the members of the new company were to have the
happiness of seeing their enterprise set going. The one still that
was ready was filled with crude oil. The morning of the start Albert
weighted down the safety-valve with heavy iron, and packed it with
plaster of Paris. "Fire this still," he said to his fireman, "as heavy
as you possibly can." The fireman did as he was ordered. During the
forenoon Albert came to him. "Damn it!" he said, "you ain't firing this
still half. Fire this still! I want you to fire this still! You ain't
got no fire under it!" He took the shovel himself and threw some coal
in, although there was, as the fireman expressed it, "an inordinary
fire." The fire-box grew cherry red.[465]
Albert knew well enough what the next chapter in the history of his
associates was likely to be. He had carried a dark-lantern into the
still-room one day when he was superintendent of the Vacuum. "I was
badly burned by the explosion," he testified before the coroner's jury
investigating the explosion in Rochester, in 1887. There were four
explosions in the Vacuum works while he was there. In the second, four
men were burned. As one of them ran to get water, with his clothes
burning, he set fire to the gas coming out of the sewer. Flames flashed
all about him. "There's hell all around!" he exclaimed. The third
explosion came from an overheated condensing-pipe, and destroyed one of
the buildings. The fourth burned up three tanks. Remembering all this,
he now took himself off to the grounds of the Atlas Company, out of
harm's reach. The brickwork about the still cracked apart with the heat.
But the "smash-up or something" had not been thoroughly arranged.
Despite the heavy weight and the packing of plaster, the safety-valve
lifted itself under the unusual pressure, and was a safety-valve yet.
It was blown open, and a large mass of vapor rose and spread. This
was the real accident: that the safety-valve broke loose instead of
keeping the gases in to explode, as had been planned. The spreading
vapor was not steam, as that had not been admitted to the still, but
the gas of distilling petroleum, as inflammable as gunpowder. There was
danger still, as great almost as that of explosion. A spark of fire,
and it would have wrapped all within its reach in flames. The boiler
fires were but twenty feet distant; not far from them the distilled oil
was being gathered in the "tail-house"; near the tail-house stood the
tanks of crude oil, hundreds of barrels of the fuel that conflagration
loves--the kind of fuel the cooks use who, beginning with kerosene for
kindling, make the whole house into a stove, and cook themselves and
the family with the breakfast.
The kindly wind of a June day carried the cloud of gas away from the
fire until it passed out of sight. The unsuspecting, inexperienced
men, whose lives and property had been at the mercy of explosion, knew
nothing of their peril until years afterwards. The worst they knew
then was that the "batch" of 200 barrels of petroleum was spoiled,
and that Albert, the only practical man among them, was gone, leaving
them crippled for a year. They waited for him, but he did not come.
They looked for him, but could not find him. Matthews went to the
depot night after night, sometimes at midnight, or later, to watch the
trains, but Albert never came.
"What would be the consequences?" Albert was asked afterwards in court,
when he was telling about "the pretty heavy fires" he had made under
the still--"what would be the consequences in case too hot fires were
applied, and the gas should blow off the pipes and become ignited?"
"The consequences would be that, if ignited, there would be a
fire."[466]
An Associated Press despatch from Louisville, Kentucky, June 30, 1890,
describing an explosion in an oil refinery there, and the "five acres
of fire" that followed, reproduces for us the picture which it had been
planned to paint at Buffalo as part of the panorama of "the ordinary
rules of supply and demand." A tank-car had been opened to run some oil
out. As the workmen lifted the cap from the manhead of the tank a cloud
of gas poured forth. It had been generated simply by the heat of the
summer sun, without the aid of an "inordinary" hot fire. The men jumped
and ran. Before they had taken a dozen steps the vapor, spreading over
the ground and moving with the wind, had reached one of the sheds near
by in which there was a fire. There was a flash. The men were bathed in
a lake of fire. They ran with the flames streaming from them. At the
infirmary their bodies were found to be charred in spots, literally
roasted alive, and the flesh dropped off as their clothing was removed.
Three men died and several were injured.
Several years after the Buffalo explosion, when those convicted for
their part in it were fighting for stay of proceedings, new trial,
anything to escape sentence, and were trying by every means in their
power to impress upon the public the altogether innocent character of
the little incident at the works of their rival, something happened
at their own works--the Vacuum in Rochester--which gave the people
an appalling sense of the terrors of the new school of supply and
demand. Naphtha is one of the by-products of petroleum distillation,
and is used by the gas companies in the manufacture of the greased
air they furnish under the name of gas. The Vacuum Company were
selling their naphtha to the Rochester Gas Company. It was delivered
to the gas company through a pipe line. On the afternoon of December
21, 1887, there was an explosion on Platt Street, Rochester, tearing
away the pavement, shattering the basement of a building, and filling
the air with missiles. In a few seconds another explosion occurred
a short distance away, making a hole in the street several feet in
diameter, from which came large volumes of smoke and flame. A third
and fourth "bust-up" rapidly followed, and then a fifth, in the
Clinton Flouring Mill, tearing away a considerable portion of the
building, blowing off the roof and upper stories of the Jefferson
Mill adjoining, and shattering the Washington Mill. The Jefferson and
Clinton and Washington mills were burned to the ground. People were
killed by flying débris, burned to death, smashed by falling walls,
crippled by jumping from the upper stories of factories and mills on
fire. "There is probably no chemical product," says Professor Joy, of
Columbia College, "which has occasioned the loss of so many lives and
the destruction of so much property as naphtha.... From its highly
explosive and inflammable nature it has proved little better in the
hands of ignorant people than so much gunpowder."
"The counsel for the defence," said District Attorney Quinby, in
summing up the case before the jury, "laughed at the idea of Matthews
and his associates coming to Buffalo with a little money to compete.
I congratulate him that instead of defending for conspiracy he is
not here to-day pleading for the defendants' lives. If a person had
been killed, and it had been under the advice and instruction of his
clients, he would have been differently situated from what he is
to-day. How well you men may be thankful that the gases from this still
did not flow down and, becoming ignited, explode and kill the fireman!
You ought to get down on your knees and thank your God that Providence
prevented any such terrible thing as that for you."
After the "bust-up" had been planned, and before it was done, one of
the Vacuum managers went to New York, where the "trustees" for whom
he was managing the company were. After the "bust-up" Albert heard by
telegram from New York, as had been arranged, and went to meet his
old employer. "What do you say to going down to Boston?" he was asked
on his arrival. Later a man came in and was introduced by the name
of one of the three trustees who purchased and directed the Vacuum.
On leaving, this "trustee" said: "I will see you again if you do not
go to Boston." He thus showed that he knew of the plan that Albert
should be taken away, and that they should go to Boston. The manager
of the Vacuum now gave the world a genuine illustration of the harmony
of labor and capital. He couldn't let Albert out of his sight. They
went to Boston on the Fall River boat. The representative of a hundred
millions took the laborer into his own state-room, and at Boston
carried him into the splendors of Young's Hotel, where he registered,
naming himself "and friend," and they shared one bedroom. They went to
church together, and to Nantasket Beach, his friend introducing Albert
to those whom they met under an assumed name. "You don't want to be
known here," he said, "and I will introduce you by the name of Milner."
"That is the name I was known by while I was there."
"Albert has nothing to fear," said District Attorney Quinby on his
trial. "He had never been in Boston before in his life. He had no
acquaintance there. There was no reason why he should be registered
'and friend' at the hotel. There was no reason, so far as he was
concerned, that he should be introduced under a fictitious name, except
that his employer had been schooled in the wonderful university known
as" the oil combination. In Boston, on a Monday, on the Common, within
sight of the equestrian statue of the Father of his Country, his former
employer made a contract with Albert to pay him $1500 a year for doing
nothing except staying away from Buffalo.
"You won't have much to do, and you can stay here in Boston, and keep
away from those fellows, and we will protect you."
"Who's going to make up if those fellows come on and sue me for
damages? Who will make up this loss that I have been going to by
sacrificing my property?"
"Leave that to me; I will fix that all right. You do just as I tell
you, and you will come out all right.... Go wherever you like, stop
where you like, and we will pay all your expenses while you are
here."[467]
Albert loafed about Boston several weeks, sometimes helping to roll
a barrel of oil in the Vacuum's store. When he wanted money he asked
for it and got it. He had once been a hard drinker. Destruction was
as carelessly invited upon the soul of a poor brother as upon the
lives and property of competitors. He hung around Boston and Rochester
nearly a year. Then his old employer, who was in California, sent for
him to come there to help in a fruit cannery, his salary continuing
as before. From the moment he deserted his partners, as Judge Edward
Hatch, the counsel for Matthews, stated in the civil suit for damages
in this conspiracy, Albert "never earned enough to cover the end of
your knife-blade with salt at your dinner. But they pay him, in salary
and bonus, over $4000. Why? To get him away, and to stifle lawful,
legitimate, and honest competition; to stifle that which brings into
every poor man's home an article of necessity at a cheaper rate."
He stayed in California a few months, and, finally, sickened of the
disgraceful part he was playing, turned at bay, and gave notice that
he was going to leave. "This is kind of sudden," the agent of his
employers replied, but said he would write to the principal director in
New York and advise that he release him. "You will give me time, won't
you? You know it takes a couple of weeks or longer to do business from
here to New York." Albert waited, and in time the word came from New
York. "I have heard from these parties, and they are willing to release
you."[468]
Albert, who had put himself into the extraordinary position in which
he was on the repeated pledges of the tempters that they would make it
"all right" with him, and protect him from loss and harm, found that
he had put his "trust in princes." When he came to settle he expected
that those for whom he had sacrificed his honor, his property, and his
career would make him some compensation. In answer to the question how
much they ought to make up to him, he named $5000 or $10,000, which
was certainly little enough, in view of the fact that the business
he had sacrificed to them was one in which, as the Vacuum's career
showed, $100 shares came to be worth $2666 each. But the representative
of the trust declared he could not think of such a thing, and in full
of all obligations gave him nothing but the balance due of the wages
agreed on. Then he asked Albert to hold himself still further at their
service. As they parted, he said: "Now we have settled up; now we are
good friends.... If anything ever comes up in this matter I would like
to have you stand by us.... We will see that you are paid all right,
and give you $25 a day while we need your services." Albert replied
that he did not feel under any obligations to the oil combination.
"I do not know as my interest lays that way. I do not think I shall
do anything to benefit them; they have injured me all that they can;
they have switched me all around, all over the country; they have got
me out of employ, not given me anything to do, which I sought to have
them do. I do not think they have used me right, and I have sacrificed
considerable money by this transaction, and you have always promised
that it would be made good, and you have not done so."[469]