The History of the Standard Oil Company

Ida M. Tarbell, The History of the Standard Oil Company. 19-part series in McClure’s published from 1902-1904. Published as a book in 1904. “Written by journalist Ida Tarbell in 1904, The History of the Standard Oil Company was an exposé of the Standard Oil Company, run at that time by oil tycoon John D. Rockefeller, the richest figure in America’s history. Originally serialized in 19 parts in McClure’s magazine, the book was a seminal example of muckraking (known today as “investigative journalism”) and inspired many other journalists to write about trusts. Trusts were large businesses that (in the absence of strong antitrust law in the 19th century) attempted to gain monopolies in various industries. The History of the Standard Oil Company was credited with hastening the breakup of Standard Oil, which came about in 1911.”

Excerpts from The Woman Who Took on the Tycoon by Gilbert King, Smithsonian, 5 July 2012:

At the age of 14 [1871], Ida Tarbell witnessed the Cleveland Massacre, in which dozens of small oil producers in Ohio and Western Pennsylvania, including her father, were faced with a daunting choice that seemed to come out of nowhere: sell their businesses to the shrewd, confident 32 year-old John D. Rockefeller, Sr. and his newly incorporated Standard Oil Company, or attempt to compete and face ruin.  She didn’t understand it at the time, not all of it, anyway, but she would never forget the wretched effects of “the oil war” of 1872, which enabled Rockefeller to leave Cleveland owning 85 percent of the city’s oil refineries….Her town of Titusville and surrounding areas in the Oil Creek Valley “had been developed into an organized industry which was now believed to have a splendid future. Then suddenly this gay, prosperous town received a blow between the eyes.”

That blow came in the form of the South Improvement Company, a corporation established in 1871 and widely viewed as an effort by Rockefeller and Standard Oil in Ohio to control the oil and gas industries in the region. In a secret alliance with Rockefeller, the three major railroads that ran through Cleveland—the Pennsylvania, the Erie and the New York Central—agreed to raise their shipping fees while paying “rebates” and “drawbacks” to him.

Word of the South Improvement Company’s scheme leaked to newspapers, and independent oilmen in the region were outraged. “A wonderful row followed,” Tarbell wrote. “There were nightly anti-monopoly meetings, violent speeches, processions; trains of oil cars loaded for members of the offending corporation were raided, the oil run on the ground, their buyers turned out of the oil exchanges.”…

Franklin Tarbell and the other small oil refiners pleaded with state and federal officials to crack down on the business practices that were destined to ruin them, and by April of 1872 the Pennsylvania legislature repealed the South Improvement Company’s charter before a single transaction was made. But the damage had already been done. In just six weeks, the threat of an impending alliance allowed Rockefeller to buy 22 of his 26 competitors in Cleveland. “Take Standard Oil Stock,” Rockefeller told them, “and your family will never know want.” Most who accepted the buyouts did indeed become rich. Franklin Tarbell resisted and continued to produce independently, but struggled to earn a decent living….Presumably, with Rockefeller’s plan uncovered in Cleveland, his efforts to corner the market would be stopped. But in fact, Rockefeller had already accomplished what he had set out to do. As his biographer Ron Chernow wrote, “Once he had a monopoly over the Cleveland refineries, he then marched on and did the same thing in Pittsburgh, Philadelphia, Baltimore, New York and the other refining centers. So that was really the major turning point in his career, and it was really one of the most shameful episodes in his career.”…
Excerpts from Tarbell’s The History of the Standard Oil Company:
Very often people who admit the facts, who are willing to see that Mr. Rockefeller has employed force and fraud to secure his ends, justify him by declaring, “It’s business.” That is, “it’s business” has to come to be a legitimate excuse for hard dealing, sly tricks, special privileges. It is a common enough thing to hear men arguing that the ordinary laws of morality do not apply in business. Now, if the Standard Oil Company were the only concern in the country guilty of the practices which have given it monopolistic power, this story never would have been written. Were it alone in these methods, public scorn would long ago have made short work of the Standard Oil Company. But it is simply the most conspicuous type of what can be done by these practices. The methods it employs with such acumen, persistency, and secrecy are employed by all sorts of business men, from corner grocers up to bankers. If exposed, they are excused on the ground that this is business. If the point is pushed, frequently the defender of the practice falls back on the Christian doctrine of charity, and points that we are erring mortals and must allow for each other’s weaknesses! — an excuse which, if carried to its legitimate conclusion, would leave our business men weeping on one another’s shoulders over human frailty, while they picked one another’s pockets….
And what are we going to do about it? for it is our business. We, the people of the United States, and nobody else, must cure whatever is wrong in the industrial situation, typified by this narrative of the growth of the Standard Oil Company. That our first task is to secure free and equal transportation privileges by rail, pipe and waterway is evident. It is not an easy matter. It is one which may require operations which will seem severe; but the whole system of discrimination has been nothing but violence, and those who have profited by it cannot complain if the curing of the evils they have wrought bring hardship in turn on them. At all events, until the transportation matter is settled, and settled right, the monopolistic trust will be with us, a leech on our pockets, a barrier to our free efforts.
As for the ethical side, there is no cure but in an increasing scorn of unfair play — an increasing sense that a thing won by breaking the rules of the game is not worth the winning. When the business man who fights to secure special privileges, to crowd his competitor off the track by other than fair competitive methods, receives…disdainful ostracism by his fellows…we shall have gone a long way toward making commerce a fit pursuit for our young men.