Chapter XV: 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,”)