solicitous about the transportation, and we were a little afraid that the refiners might combine in a single institution, and some of them expressed a strong desire to associate themselves permanently with us. We therefore suggested to the Pennsylvania road that we should do what we did not wish to do-associate ourselves. That is, our business was transportation and nothing else; but, in order that we might reserve a nucleus of refining capacity to our lines, we suggested we should become interested in one or more refineries, and we became interested in two, one in Phiadelphia and one in New York. It was incidental merely to our transportation. The extreme limit was four thousand barrels a day only."

The Standard
Calls a Halt

It was in the spring of 1876 that the Empire began to interest itself in re

*The illustrations on pages 611 and 612 are from photographs furnished by J. A. Mather of Titusville, Pennsylvania, as most of the illustrations used in the preceding instalment of this History of the Standard Oil Company have been. Mr. Mather is the veteran photographer of the Oil Region, owning an almost complete collection of the oil men, oil wells and oil farms from 1850 until the present day. A collection unique, we believe, in the history of American industry.

fineries. No sooner did Mr. Rockefeller discover this than he sought Mr. Scott and Mr. Cassatt, then the third vice-president of the Pennsylvania, in charge of transportation. It was not fair! Mr. Rockefeller urged. The Empire was a transportation company. If it went into the refining business it was not to be expected that it would deal as generously with rivals as with its own factories; besides, it would disturb the one shipper who, they all had agreed, was such a benefit to the railroads. Mr. Scott and Mr. Cassatt might have reminded Mr. Rockefeller that he was as truly a transporter as the Empire, but if they did they were met

with a prompt denial of this now wellknown fact. He was an oil refiner-only that and nothing more. "They tell us that they do not control the United Pipe Lines," Mr. Cassatt said in his testimony in 1879. Mr. Vanderbilt and Mr. Jewett soon joined their protests to Mr. Rockefeller's. "The steps it (the Empire) was then taking," said Mr. Jewett, "unless checked would result in a diversion largely of the trans

our roads; the New York Central road and our own determined that we ought not to stand by and permit those improvements and arrangements to be made which, when completed, would be beyond our control."*

These protests increased in vehemence, until finally the Pennsylvania officials remonstrated with Mr. Potts. "We endeavored,' says Mr. Cassatt, "to try to get those difficulties harmonized, talked of getting the Empire Transportation Company to lease its refineries to the Standard Oil Company, or put them into other hands, but we did not succeed in doing that." "Rather than do that," Colonel Potts told Mr. Cassatt, when he proposed that the Empire sell its refineries, "we had rather you would buy us out and close our contract with you."

When the Standard *Hepburn Commission, 1879.

Oil Company and its allies, the Erie and Central, found that the Pennsylvania

would not or could not drive the Empire from its position, they determined on war. Mr. Jewett, the Erie president, in his testimony of 1879, before the Hepburn Commission, takes the burden of starting the fight. "Whether the Standard Oil Company was afraid of the Empire Line as a refiner," he said, "I have no means of knowing. I never propounded the question. We were opposed to permitting the Empire Line, a creature of the Pennsylvania Railroad, to be building refineries, to become the owners of pipe lines leading into the oil field and leading to the coast, without a contest, and we made it without regard to the Standard Oil Company or anybody else; but when we did determine to make it I have no doubt we demanded of the Standard Oil Company during the

compel the Empire to this course. According to Mr. Potts's own story the road was partially goaded to its decision by a demand for more rebates, which came from Mr. Rockefeller at about the time he pronounced his ultimatum on the Empire. They swooped upon the railways," says Colonel Potts, "with a demand for a vast increase in their rebate. They threatened, they pleaded, it has been said. they purchased-however that may bethey conquered. Minor officials entrusted with the vast power of according secret rates conceded all they were asked to do, even to concealing from their superiors for months the real nature of their illegal agreements." Probably it was at this time that there took place the little

tion with us; it is only on a fair competitive basis, a fair competition for business at a price that I consider will pay the company to do it."

Soon after this interview, so rumor says, Mr. Vanderbilt sold the Standard stock he had acquired as a result of the deals made through the South Improvement Company. "I think they are smarter fellows than I am, a good deal," he told the commission, somewhat ruefully. "And if you come in contact with them I guess you will come to the same conclusion."

The Standard Attacks the
Pennsylvania

Spurred on then by resentment at the demands for new rebates, as well as by the injustice of Mr. Rockefeller's demand that the Empire give up its refineries, the Pennsyl

vania ac

cepted the Standard's challenge, resolved to stand by the Empire, and henceforth to treat all its shippers alike. No sooner was its resolution announced in

March, 1877, than all the freight of the Standard, amounting to fully sixtyfive per cent. of the road's

oil traffic, was

taken away. An exciting situation, one of out-andout war, developed, for the Empire at once entered on an ener

for help, that as soon as the rates were cut on the Standard lines many of them began to attempt to force the Pennsylvania to follow. "They found the opportunity for immediate profits by playing one belligerent against the other too tempting to resist," says Colonel Potts.

"We paid them large rebates," said Mr. Cassatt; "in fact, we took anything we could get for transporting their oil. In some cases we paid out in rebates more than the wholefreight.

I recollect one instance where carried oil to New York for

we

Mr. Ohlen, or some one he represented,

I think at eight cents less than nothing. I do not say any large quantities, but oil was carried at that rate."

Rate Cutting: But

One Outcome Possible

While the railroads

were waging this costly war, the Standard was carrying the fight into the refined market. The Empire had gone systematically to work to develop markets for the output of its own and of the independent refineries. Mr. Rockefeller's business was to prevent any such development. He was well equipped for the task by his system of "predatory competition," for in spite of the fact that Mr. Rockefeller claimed