Nearly every line here comes from court opinions, sworn testimony, government reports, and the books of those who fought over the company, its founder’s among them. Where counts differ, the story says who counted. The case for the company and the case against each get their say, and the story does not pick one.
1870
Cleveland
The world wanted kerosene for its lamps, and refiners were crowding in. Rockefeller’s savings joined with the still of Samuel Andrews, who “had been a day laborer in refineries, and so poor that his wife took in sewing.” In January 1870 they became the Standard Oil Company. It was one of about 26 refiners in Cleveland alone.
58¾ to 26⅜ centsWhat Rockefeller got for a gallon of exported oil, 1865 and 1870
Where Mr. Rockefeller had received on an average 58¾ cents a gallon for the oil he exported in 1865, the year he went into business, in 1870 he received but 26⅜ cents.
The History of the Standard Oil Company (2 vols.), Ida M. Tarbell, McClure, Phillips & Co. (text via Project Gutenberg #60692), 1904. Scholarship & press. Open the source
26 Feb 1872
A secret deal
A small group signed contracts with the railroads as the South Improvement Company. To New York, the open rate on crude was $2.56 a barrel. The group would get $1.06 back. It would get the same again on every barrel its rivals shipped. Rockefeller was a director. On 26 February 1872 the rates leaked out: nearly double for everyone else.
it was given in cash a like amount on each barrel of crude shipped by parties outside the combination
Ida Tarbell, The History of the Standard Oil Company, 1904. Scholarship & press. Open the source
Mar 1872
Three months
One Cleveland refiner swore that unless they joined, “we were virtually killed as refiners.” Rockefeller answered in 1909: “It has been said that I forced the men who became my partners in the oil business to join with me. I would not have been so short-sighted.”
21 of 26Cleveland refineries that sold out in three months, by Ida Tarbell’s count
Of the twenty-six refineries, at least twenty-one sold out. From a capacity of probably not over 1,500 barrels of crude a day, the Standard Oil Company rose in three months’ time to one of 10,000 barrels.
The History of the Standard Oil Company (2 vols.), Ida M. Tarbell, McClure, Phillips & Co. (text via Project Gutenberg #60692), 1904. Scholarship & press. Open the source
28 Mar 1872
The Oil War
In the oil country of Pennsylvania, producers rose up. “A wonderful row followed,” remembered a girl who lived there, Ida Tarbell. On 28 March 1872 the railroads annulled their contracts, and the state repealed the company’s charter. The scheme was dead. The Cleveland refineries stayed sold.
I remember a night when my father came home with a grim look on his face and told how he with scores of other producers had signed a pledge not to sell to the Cleveland ogre
Ida Tarbell, All in the Day’s Work, 1939. Self-published. Open the source
1882
The eel
By 1882 some fifty people with stakes in companies of different states had put their stock in the hands of nine trustees, for trust certificates. The companies ran as one. Yet the thing itself, Tarbell wrote, “signed no contracts, kept no books. It had no legal existence.”
You could no more grasp it than you could an eel.
Ida Tarbell, The History of the Standard Oil Company, 1904. Scholarship & press. Open the source
1906
How much of it
The counts differ, so here is who counted. John Archbold of the company testified to about 10 per cent of U.S. refining in 1870 and probably 75 per cent in 1888. A history of Cleveland says 90 per cent ten years after 1872. The government’s suit said 90 per cent.
80 to 90 per centStandard Oil’s share of the illuminating oil made in the U.S., by the Bureau of Corporations, 1906
The Standard Oil Company produces from 80 to 90 per cent of the illuminating oil made in the United States
Report of the Commissioner of Corporations on the Transportation of Petroleum, May 2, 1906 (with President Roosevelt's transmittal), U.S. Bureau of Corporations / Government Printing Office (scan on Internet Archive, OCR text), 2 May 1906. Primary record. Open the source
Mar 1881
The first alarm
Henry Demarest Lloyd’s article made the company known to the country. His book of 1894 ended on a warning: “Monopoly is business at the end of its journey. It has got there.” A New York Senate committee called the trust “the type of a system which has spread like a disease through the commercial system of this country.”
Very few of the forty millions of people in the United States who burn kerosene know that its production, manufacture, and export, its price at home and abroad, have been controlled for years by a single corporation, — the Standard Oil Company.
Henry Demarest Lloyd, The Atlantic, March 1881. Scholarship & press. Open the source
1880
The company’s answer
Rockefeller swore that “the average price to consumers of refined oil has been lower than for years previous.” A railroad officer swore that denying a big shipper its low rate would hurt “the consumers, who in the end pay the transportation charges.”
But none of these things were done by the plaintiff for the purpose of creating and maintaining a monopoly of the business of refining, but were done for the purpose of conducting its business more efficiently.
John D. Rockefeller’s sworn affidavit, 1880, printed by Tarbell. Scholarship & press. Open the source
2 Jul 1890
A law
On 2 July 1890 Congress passed “An act to protect trade and commerce against unlawful restraints.” Its first section named the trust. The sentence ends: illegal.
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations,
Sherman Antitrust Act, section 1. Primary record. Open the source
2 Mar 1892
A fifty-cent book
Ohio’s attorney general stopped at a Columbus book shop and picked up a small yellow volume called “Trusts.” At the end he found the trust agreement, the first time he had seen it. Ohio sued and won in 1892. In 1899 the business moved into a holding company, Standard Oil of New Jersey.
Its object was to establish a virtual monopoly of the business of producing petroleum, and of manufacturing, refining and dealing in it and all its products, throughout the entire country
Supreme Court of Ohio, 1892. Primary record. Open the source
1904
The record
Decades of investigations had left a public paper trail, and Ida Tarbell read it. Her father said: “Don’t do it, Ida—they will ruin the magazine.” She described the work as “neither apologists nor critics, only journalists.” Her history of the company came out in 1904.
There is in existence just such documentary material for a history of the Standard Oil Company as there is for a history of the Civil War or the French Revolution
Ida Tarbell, The History of the Standard Oil Company, 1904. Scholarship & press. Open the source
3 Aug 1907
The fine
In 1906 President Roosevelt sent Congress a Bureau of Corporations report on how oil moved. Company officials had told the Bureau they got no rebate. Then a jury found Standard Oil of Indiana guilty on 1,462 counts: the published rate from Whiting was 18 cents per 100 pounds, and it had paid 6.
$29,240,000Judge Landis’s fine, 1907. An appeals court reversed the judgment in 1908
It is the judgment and sentence of the court that the defendant, Standard Oil Company, pay a fine of $29,240,000.
United States v. Standard Oil Co. of Indiana, 155 F. 305 (N.D. Ill.) (Judge Landis, sentence), U.S. District Court, N.D. Illinois (text via Harvard Caselaw Access Project), 3 Aug 1907. Primary record. Open the source
1911
Broken up
The record ran to about 12,000 pages. In 1911 the Supreme Court upheld the breakup, and gave the company six months instead of thirty days. Chief Justice Edward White read the Sherman Act by a “standard of reason”: not every restraint of trade, only unreasonable ones.
The Standard Oil Company of New Jersey and thirty-three other corporations, John D. Rockefeller, William Rockefeller, and five other individual defendants, prosecute this appeal
Justice Harlan agreed that the company had broken the law. His quarrel was with the reasoning. The act said every contract in restraint of trade. Earlier, he wrote, the Court had declined to insert “the word ‘unreasonable’” into it: that would be “judicial legislation.”
the court by its decision, when interpreted by the language of its opinion, has not only upset the long-settled interpretation of the act, but has usurped the constitutional functions of the legislative branch of the government.
Justice John Marshall Harlan, 1911. Primary record. Open the source
1 Dec 1998
The pieces
Standard Oil of New Jersey became Exxon in 1972. Standard Oil of New York merged with Vacuum Oil, and in 1966 that company became Mobil. Standard Oil of California became Chevron in 1984. Eighty-seven years after the Court split them, the first two agreed to be one company.
On or about December 1, 1998, Exxon and Mobil entered into an agreement to merge the two corporations into a corporation to be known as Exxon Mobil Corp.
U.S. Federal Trade Commission, 1999. Primary record. Open the source
1958
The case for
The economist John McGee went back through the trial record. “Standard Oil was not born with monopoly power,” he wrote. Rockefeller said prices “decreased as the efficiency of the business has been built up.” Even the Ohio court allowed: “It may be true that it has improved the quality and cheapened the costs.”
I can not find a single instance in which Standard used predatory price cutting to force a rival refiner to sell out, to reduce asset values for purchase, or to drive a competitor out of business.
John S. McGee, Journal of Law and Economics, 1958. Scholarship & press. Open the source
1892
The case against
The same court went on. Cheap oil, it wrote, “is not one of the usual or general results of a monopoly,” and the law looks at “what usually happens.” Tarbell’s record held the rest: a secret rate, and cash paid on every barrel a rival shipped.
Experience shows that it is not wise to trust human cupidity where it has the opportunity to aggrandize itself at the expense of others.
Supreme Court of Ohio, 1892. Primary record. Open the source
1913
The giving
He helped build the University of Chicago, and set up the Rockefeller Institute for Medical Research, the General Education Board, and in 1913 a foundation “to promote the well-being of mankind throughout the world.” The best philanthropy, he wrote, is “an attempt to cure evils at their source.”
$19.31What Rockefeller gave to local charities in 1856. By 1892 it was $1.35 million
In 1856 he donated $19.31 to local charities; his donations grew to $250,000 in 1887 and $1.35 million in 1892.
Rockefeller, John D., Encyclopedia of Cleveland History, Case Western Reserve University. Scholarship & press. Open the source