NUMBER 49 (See page 2120)
A STATEMENT FROM AN OIL-PRODUCER’S STAND-POINT FOR 1886
[Circular used in the campaign against the Billingsley Bill.]
Total production for the year, 25,145,088 barrels.
Average price per barrel, .71½.
The gross income from the entire Oil Regions, based on these figures, $17,978,237.
The cost of producing the above amount of oil was as follows:
Wells drilled, 3,525—at an average cost of $3,000 each $10,575,000 Cost of pumping and raising the oil to the surface and keeping rigs and wells in repair, estimated at .25 per barrel of production 6,286,272 Add estimated cost of royalty, one-eighth 2,247,342 Total expenditures $19,108,614 Deduct total income of the entire Oil Regions 17,978,737 Net loss to oil producers during the year $1,129,877 If the estimated value of the one-eighth royalty be not added, then the value of five acres of land should be added to the cost of each well and the result would be practically the same.
The daily production January 1, 1886, was 59,603 barrels, valued at $750 per barrel $44,702,250 The daily production January 1, 1887, was 66,383 barrels, valued at $500 per barrel 33,191,500 Showing a shrinkage in value of the producing territory for the year 1886 to be $11,510,750 Note.—To make it more clear to the uninitiated, the foregoing means that producing territory was bought and sold in 1885 on the basis of $750 to each barrel of production, and in 1886 on the basis of $500. It is on this basis that the value of oil-producing territory is estimated. A well producing one barrel a day at the present time is valued at $500; one year ago it was worth $750.
The valuation of the stock of the Standard Oil Company at the present time is $150,000,000, or nearly five times as great as the entire Oil Region country valuation. The profits of the Standard Oil Company for the year 1886 were over $26,000,000.
Strangers may ask, Why is there no competition in pipage and storage of oil if the profits are so great? We answer, that with rebates, drawbacks, discrimination, and conspiracies the Standard Oil Company has been able to freeze out and suppress nearly every attempt at competition.
Does not the foregoing array of figures, showing as it does the terrible shrinkage which the property of the oil producers has sustained, amounting to nearly twenty-five per cent. in one year, demand such relief in pipage, storage, and shrinkage, as is contemplated by the Billingsley Bill, now before the Senate of Pennsylvania?
NUMBER 50 (See page 2121)
THE BILLINGSLEY BILL
[Legislature of Pennsylvania. File of the House of Representatives. Number 104, session of 1887.]
An act to punish corporations, companies, firms, associations and persons and each of them engaged in business of transporting by pipe-lines or lines or storing petroleum in tank or tanks, under certain restrictions and penalties from charging in excess of certain fixed rates for receiving, transporting, storing, and delivering petroleum, and to regulate deductions for losses caused to petroleum in pipe-lines and storage tanks by lightning, fire, storm, or other unavoidable causes.
Sec. 1. Be it enacted by the Senate and House of Representatives of the Commonwealth of Pennsylvania in general assembly met, and it is hereby enacted by authority of the same: That no corporation, company, firm, association, person or persons who are now, or shall hereafter engage in the business of transporting or storing crude or refined petroleum by means of pipe-line or pipe-lines, or storage by tank or tanks, shall demand or receive any rate of charge in excess of ten cents per barrel, reckoning forty-two gallons for each barrel, for all services performed within this commonwealth in receiving petroleum from tank or tanks or other receptacle on the lease or farm at the place of its production and transporting and delivering the same, or petroleum of like kind and quantity in every essential particular in the division of such pipe-line within which the same shall have been received at any shipping point in said division which may be designated by the holder, owner, or purchaser of said petroleum, whether said petroleum is held by certificate, voucher, receipt, credit balance, accepted order or otherwise. And such corporation, company, firm, association, person or persons, and each of them are hereby required immediately upon this act becoming a law to erect and establish, if not already established, and maintain thereafter at least one shipping point within each pipe-line division within this commonwealth of sufficient dimensions, capacity and equipment to accommodate the entire trade within each such pipe-line division.
Sec. 2. No such corporation, company, firm, association, person or persons shall demand or receive from any person or persons, firms, association, company or corporation owning or holding a credit balance for petroleum in line or tank within this commonwealth, any rate of charge whatever for the tankage or storage of petroleum owned or so held by credit balance for the first thirty days from the date of said credit balance. And no corporation, company, firm, association, person or persons who are now engaged or shall hereafter engage in the business of transporting or storing crude or refined petroleum by means of pipe-line or pipe-lines, or storage tank or tanks, shall demand or receive, from any source whatever, for the tankage of crude or refined petroleum within this commonwealth any rate of charge in excess of one-sixtieth of one cent per barrel of forty-two gallons a day or fractional part thereof so long as said petroleum shall thereafter be held and stored in tank.
Sec. 3. Such corporation, company, firm, association, person or persons are hereby obliged and required, and it is hereby made the duty of such corporation, company, firm, association, person or persons, and each of them, to hold and store in tank any and all petroleum offered for storage or transportation, or any and all petroleum received and transported by them or either of them for the owner thereof; or for the person or persons holding certificate, voucher, receipt, credit balance or accepted order thereof, for a period of one year or for any shorter period than one year from the time when said petroleum was first received by such corporation, company, firm, association, person or persons for storage, if requested so to do by the owner thereof, or by the person or persons holding certificate, voucher, receipt, credit balance or accepted order therefor, at and for the rate of charge of one-sixtieth of one cent per barrel of forty-two gallons for each day, or fractional part thereof thereafter. Except that when said petroleum is held by credit balance, no rate of charge whatever shall be made or charged on said credit balance for the first thirty days from the date of said credit balance.
Sec. 4. Such corporation, company, firm, association, person or persons shall be allowed to make a deduction from the crude petroleum received, transported or stored, not to exceed one-half of one per cent. of said petroleum so received, transported or stored, on account of water, sediment, evaporation, waste, and the like. The deduction mentioned in this section shall be made when the petroleum is first run or transported by such corporation, company, firm, association, person or persons, from the tank or receptacle on the lease or farm where produced, and it is hereby declared to be unlawful for such corporation, company, firm, association, person or persons to make the reduction in this section provided for at any other time or place than as above provided.
Sec. 5. Any corporation, company, firm, association, officer or officers, agent or agents, person or persons, engaged in the business of transporting or storing crude or refined petroleum within this commonwealth by means of pipe-line or pipe-lines or storage tank or tanks shall, upon application of the owner of any well or wells, lay pipe or pipes to any well or wells on any lease or leases in any locality where there is any oil on any farm or farms in this commonwealth, and receive the oil therefrom and transport the same through their pipe-line or pipe-lines and store the same in their storage tank or tanks, in any division or in any place in any division designated by the owner or purchaser of said petroleum, and hold the same subject to the owner or purchaser at the rate or charge prescribed in the preceding sections.
Sec. 6. Such corporation, company, firm, association, person or persons shall be liable for all loss caused by lightning, fire, storm, or other unavoidable cause to the petroleum received, transported or stored by them, and in the event of any such loss the same shall be charged by said corporation, company, firm, association, person or persons, pro rata, upon and deducted from all petroleum in the custody of such corporation, company, firm, association, person or persons, at the date of such loss.
Sec. 7. Any corporation, company, firm, association, officer or officers, agent or agents thereof, person or persons engaged in the business of transporting or storing crude or refined petroleum within this commonwealth by means of pipe-line or pipe-lines or storage tank or tanks, who shall demand or receive any rate of charge in excess of ten cents per barrel, reckoning forty-two gallons for each barrel, for all services performed within this commonwealth for receiving petroleum from tank or tanks or other receptacle on the lease or farm at the place of its production and transporting and delivering the same or petroleum of like kind and quality in every essential particular in the division of the pipe-line within which the same shall have been received at the shipping points designated by the holder, owner or purchaser of said petroleum, or who shall fail or neglect to erect and establish immediately upon this act becoming a law—if not already established—and maintain thereafter at least one shipping point within each pipe-line division within this commonwealth of sufficient dimensions and capacity and properly equip the same to accommodate the entire trade within each such district, or who shall demand or receive for the storage of petroleum within this commonwealth any rate of charge in excess of one-sixtieth of one cent a barrel of forty-two gallons a day or a fractional part thereof so long as said petroleum shall thereafter be held and stored in tank, or who shall demand or receive from any person or persons, firm, association, company, or corporation owning or holding a credit balance for petroleum in line or tank within this commonwealth, any rate of charge whatsoever for the tankage or storage of petroleum so owned or held by credit balance for the first thirty days commencing from the date of said credit balance, or who shall refuse to hold and store in tank any and all petroleum received and transported by them or either of them for the owner thereof, or for the person or persons holding certificate, voucher, receipt, credit balance or accepted order therefor for the period of one year, or for any shorter period than one year from the time when said petroleum was first received, by such corporation, company, firm, association, person or persons for storage if requested so to do by the owner thereof, or by the person or persons holding certificate, voucher, receipt, credit balance or accepted order therefor, at and for the rate of charge of one-sixtieth of one cent per barrel of forty-two gallons for each day or fractional part thereof thereafter—but no rate of charge whatever shall be had or made for the first thirty days from date of credit balance when oil is held by credit balance—or who shall make any deduction on account of water, sediment, evaporation, waste, or the like, in excess of one-half of one per cent. of the petroleum received, transported, and stored, or who shall violate any or either of the provisions or requirements of any or either of the first sections of this act, shall be deemed guilty of a misdemeanour, and on conviction thereof shall be sentenced to pay a fine of not less than one thousand dollars nor more than two thousand dollars for the first offense, and for the second and any subsequent offenses to pay a fine of not less than two thousand dollars nor more than five thousand dollars, and to undergo an imprisonment of not less than sixty days and not exceeding one year, one-half of any such fine or fines to be paid to the prosecutor and the other one-half to be for the use of the county in which such offence or offences shall have been committed, and in addition to the penalties hereinbefore provided shall be liable in any action of debt to any person or persons, firm, company, association, or corporation thereby aggrieved for double the amount of the damage sustained by reason of the violation of any of the provisions of this act.
Sec. 8. No contract heretofore made or now existing for receiving, transporting, or storing petroleum within this commonwealth shall be in any manner impaired or affected by the provisions of this act.
Sec. 9. All acts and parts of acts inconsistent herewith are hereby repealed.
Sec. 10. This act shall take effect immediately upon its becoming a law.
NUMBER 51 (See page 2130)
EXTRACTS FROM TESTIMONY OF H. H. ROGERS
[Report of Special Committee on Railroads, New York Assembly, 1879. Volume III, pages 2613–2618.]
Q. Was your firm’s business sold out to the Standard Oil Company?
A. I would like to have the question explained.
Q. Was there a sale or transfer made of your business to the Standard Oil Company, by which practically the Standard Oil Company really controlled your business?
A. I will answer this much of the question, by saying that the Standard Oil Company does not practically control our business.
Q. Do they control the rates at which your business gets the transportation of oil?
A. That I don’t know anything about; I don’t know anything about the rates of transportation.
By the Chairman.
Q. Was not your firm taken in with the Standard Oil Company upon some agreed basis or arrangement, whether you regard it as a purchase or transfer or not?
A. We worked in harmony with the Standard Oil Company for a number of years.
Q. Upon an agreed basis of general business?
A. Our interest was in common, to a certain extent.
Q. Has your firm any contract with the Standard Oil Company?
A. That I cannot answer.
Q. What member of your firm would be able to answer that?
A. I think Mr. Pratt would, if he were here.
Q. When was it that your firm began to work in harmony with the Standard Oil Company?
A. I cannot say exactly how long ago; seven or eight years ago we got up a refining association here; that was the first, and then we got up another, and we got up another, and we have always been trying to get into some relations with all the refiners, so that we might make some money out of the business.
Q. Had you difficulty before you entered into relations with the Standard Oil Company to make money out of the business?
A. The competition was always very sharp, and there was always some one that was willing to sell goods for less than they cost, and that made the market price for everything; we got up an association, and took in all the refiners until some of them went back on us, and that would break up the association; we tried that two or three times.
Q. Then finally you entered the Standard Oil arrangement?
A. Then we made an alliance or association with some of the refiners about here, and it was more successful.
Q. What are the refiners about here with whom that alliance was made, and are they or are they not all of them covered by the Standard Oil arrangement?
A. They would come in and then they would go out; there is no refiner that I know of, with one exception, about New York but what has been in the association.
Q. What are the refiners that are now in association of the Standard Oil?
A. The people that are working in harmony with us comprise about, I should think, 90 or 95 per cent. of the refiners.
Q. Now tell us their names, the leading ones.
A. Some of the leading ones? The Standard Oil Company; Charles Pratt and Company; the Sone and Fleming Manufacturing Company; Warden, Frew and Company of Philadelphia; the Standard Oil Company of Pittsburg; the Acme Oil Refining Company of Titusville; the Imperial Refining Company of Oil City; the Baltimore United Oil Company of Baltimore.
Q. You said that substantially 95 per cent. of the refiners were in the Standard arrangement?
A. I said 90 to 95 per cent. I thought were in harmony.
Q. When you speak of their being in harmony with the Standard, what do you mean by that?
A. I mean just what harmony implies.
Q. Do you mean that they have an arrangement with the Standard?
A. If I am in harmony with my wife, I presume I am at peace with her, and am working with her.
Q. You are married to her, and you have a contract with her?
A. Yes, sir.
Q. Is that what you mean?
A. Well, some people live in harmony without being married.
Q. Without having a contract?
A. Yes; I have heard so.
Q. Now, which do you mean? Do you mean the people who are in the Standard arrangement, and are in harmony with it, are married to the Standard or in a state of freedom—celibacy?
A. Not necessarily, so long as they are happy.
Q. Is it the harmony that arises from a marriage contract?
A. Not necessarily, so long as they are happy.
Q. When you speak of their harmony, is it a relation of contract?
A. I mean by harmony that if you and I agree to go on Wall Street and buy a hundred shares of Erie at 33, and we agree to sell it out together at 40, that is harmony. I mean just the same that way—if I go into the Standard Oil office and conclude to buy some oil of them and agree on a fair price to sell it out at, that is harmony.
Q. Is that the harmony that you mean—that you gentlemen have agreed between each other the rate at which you will buy and the rate at which you will sell?
A. Well, not going too far into detail, I would say that the relations are very pleasant.
Q. But we want the detail; we want precisely what that harmony is, what it consists of, and what produces it.
A. Well, is it a railroad abuse, or is it an abuse to be in harmony with people?
Q. No; it is not abuse to be in harmony; there are some kinds of harmony that the law considers conspiracy.
A. Well, I have heard so.
By the Chairman.
Q. What we want to know is this: This Standard Oil Company in itself is, as we understand it, a large organisation, not very extensive, but is made so by contracts with various other organisations, that are not a part of it, by their written contract or verbal contract or understanding, or whatever you term it; we want to know whether that is not the fact, and if that is not what you refer to when you speak about working in harmony.
A. Mr. Chairman, I want to give you all the information that is necessary in this matter for your purposes, but it is a question in my mind whether it is a proper thing for me, even if there is no harm done by it, to divulge my business secrets.
Q. We do not ask you for your secrets; we simply ask you the general nature of this organisation.
A. I have explained it, I think, to you quite as fully as I can.
NUMBER 52 (See page 2136)
THE TRUST AGREEMENT OF 1882
[Proceedings in Relation to Trusts, House of Representatives, 1888. Report Number 3,112, pages 307–313.]
This agreement, made and entered upon this second day of January, A.D. 1882, by and between all the persons who shall now or may hereafter execute the same as parties thereto:
Witnesseth: I. It is intended that the parties to this agreement shall embrace three classes, to wit:
1st. All the stockholders and members of the following corporations and limited partnerships, to wit:
Acme Oil Company, New York; Acme Oil Company, Pennsylvania; Atlantic Refining Company of Philadelphia; Bush and Company (limited); Camden Consolidated Oil Company; Elizabethport Acid Works; Imperial Refining Company (limited); Charles Pratt and Company; Paine, Abbett and Company; Standard Oil Company, Ohio; Standard Oil Company, Pittsburg; Smith’s Ferry Oil Transportation Company; Solar Oil Company (limited); Sone and Fleming Manufacturing Company (limited).
Also, all the stockholders and members of such other corporations and limited partnerships as may hereafter join in this agreement, at the request of the trustees herein provided for.
2d. The following individuals, to wit:
W. C. Andrews, John D. Archbold, Lide K. Arter, J. A. Bostwick, Benjamin Brewster, D. Bushnell, Thomas C. Bushnell, J. N. Camden, Henry L. Davis, H. M. Flagler, Mrs. H. M. Flagler, John Huntington, H. A. Hutchins, Charles F. G. Heye, A. B. Jennings, Charles Lockhart, A. M. McGregor, William H. Macy, William H. Macy, Jr., estate of Josiah Macy, William H. Macy, Jr., executor, O. H. Payne, A. J. Pouch, John D. Rockefeller, William Rockefeller, Henry H. Rogers, W. P. Thompson, J. J. Vandergrift, William T. Wardwell, W. G. Warden, Joseph L. Warden, Warden, Frew and Company, Louise C. Wheaton, H. M. Hanna and George W. Chapin, D. M. Harkness, D. M. Harkness, trustee, S. V. Harkness, O. H. Payne, trustee; Charles Pratt, Horace A. Pratt, C. M. Pratt, Julia H. York, George H. Vilas, M. R. Keith, trustees, George F. Chester.
Also, all such individuals as may hereafter join in the agreement at the request of the trustees herein provided for.
3d. A portion of the stockholders and members of the following corporations and limited partnerships, to wit:
American Lubricating Oil Company; Baltimore United Oil Company; Beacon Oil Company; Bush and Denslow Manufacturing Company; Central Refining Company of Pittsburg; Cheesborough Manufacturing Company; Chess, Carley Company; Consolidated Tank Line Company; Inland Oil Company; Keystone Refining Company; Maverick Oil Company; National Transit Company; Portland Kerosene Oil Company; Producers’ Consolidated Land and Petroleum Company; Signal Oil Works (limited); Thompson and Bedford Company (limited); Devoe Manufacturing Company; Eclipse Lubricating Oil Company (limited); Empire Refining Company (limited); Franklin Pipe Company (limited); Galena Oil Works (limited); Galena Farm Oil Company (limited); Germania Mining Company; Vacuum Oil Company; H. C. Van Tine and Company (limited); Waters-Pierce Oil Company.
Also, stockholders and members (not being all thereof) of other corporations and limited partnerships who may hereafter join in this agreement at the request of the trustees herein provided for.
II. The parties hereto do covenant and agree to and with each other, each in consideration of the mutual covenants and agreements of the others, as follows:
1st. As soon as practicable a corporation shall be formed in each of the following states, under the laws thereof, to wit, Ohio, New York, Pennsylvania, New Jersey; provided, however, that instead of organising a new corporation any existing charter and organisation may be used for the purpose when it can advantageously be done.
2d. The purposes and powers of said corporations shall be to mine for, produce, manufacture, refine, and deal in petroleum and all its products, and all the materials used in such businesses, and transact other business collateral thereto. But other purposes and powers shall be embraced in the several charters such as shall seem expedient to the parties procuring the charter, or, if necessary to comply with the law, the powers aforesaid may be restricted and reduced.
3d. At any time hereafter, when it may seem advisable to the trustees herein provided for, similar corporations may be formed in other states and territories.
4th. Each of said corporations shall be known as the Standard Oil Company of (and here shall follow the name of the state or territory by virtue of the laws of which said corporation is organised).
5th. The capital stock of each of said corporations shall be fixed at such an amount as may seem necessary and advisable to the parties organising the same, in view of the purpose to be accomplished.
6th. The shares of stock of each of said corporations shall be issued only for money, property, or assets equal at a fair valuation to the par value of the stock delivered therefor.
7th. All of the property, real and personal, assets and business of each and all of the corporations and limited partnerships mentioned or embraced in class first, shall be transferred to and vested in the said several Standard Oil companies. All of the property, assets, and business in or of each particular state shall be transferred to and vested in the Standard Oil Company of that particular state, and in order to accomplish such purpose the directors and managers of each and all of the several corporations and limited partnerships mentioned in class first are hereby authorised and directed by the stockholders and members thereof (all of them being parties to this agreement) to sell, assign, transfer, convey, and make over, for the consideration hereinafter mentioned, to the Standard Oil Company or companies of the proper state or states, as soon as said corporations are organised and ready to receive the same, all the property, real and personal, assets and business of said corporations and limited partnerships. Correct schedules of such property, assets, and business shall accompany each transfer.
8th. The individuals embraced in class second of this agreement do, each for himself, agree for the consideration hereinafter mentioned to sell, assign, transfer, convey, and set over all the property, real and personal, assets and business mentioned and embraced in schedules accompanying such sale, and transfer to the Standard Oil Company or companies of the proper state or states, as soon as the said corporations are organised and ready to receive the same.
9th. The parties embraced in class third of this agreement do covenant and agree to assign and transfer all of the stock held by them in the corporations or limited partnerships herein named, to the trustees herein provided for, for the consideration and upon the terms hereinafter set forth. It is understood and agreed that the said trustees and their successors may hereafter take the assignment of stocks in the same or similar companies upon the terms herein provided, and that whenever and as often as all the stocks of any corporations or limited partnerships are vested in said trustees, the proper steps may then be taken to have all the moneys, property, real and personal, of such corporation or partnership assigned or conveyed to the Standard Oil Company, of the proper state, on the terms and in the mode herein set forth, in which event the trustees shall receive stocks of the Standard Oil companies, equal to the value of the money, property, and business assigned, to be held in place of the stocks of the company or companies assigning such property.
10th. The consideration for the transfer and conveyance of the money, property, and business aforesaid to each or any of the Standard Oil companies shall be stock of the respective Standard Oil Company to which said transfer or conveyance is made, equal at par value to the appraised value of the money, property, and business so transferred. Said stock shall be delivered to the trustees hereinafter provided for, and their successors, and no stock of any of said companies shall ever be issued except for money, property, or business, equal, at least, to the par value of the stock so issued, nor shall any stock be issued by any of said companies for any purpose, except to the trustees herein provided for, to be held subject to the trusts hereinafter specified. It is understood, however, that this provision is not intended to restrict the purchase, sale, and exchange of property by said Standard Oil companies as fully as they may be authorised to do by their respective charters; provided only that no stock be issued therefor except to said trustees.
11th. The consideration for any stocks delivered to said trustees, as above provided for, as well as for stocks delivered to said trustees by persons mentioned or included in class third of this agreement, shall be the delivery by said trustees, to the persons entitled thereto, of trust certificates hereinafter provided for, equal at par value to the par value of the stocks of the said several Standard Oil companies so received by said trustees and equal to the appraised value of the stocks of other companies or partnerships delivered to said trustees.
The said appraised value shall be determined in a manner agreed upon by the parties in interest and said trustees.
It is understood and agreed, however, that the said trustees may, with any trust funds in their hands, in addition to the mode above provided, purchase the bonds and stocks of other companies engaged in business similar or collateral to the business of said Standard Oil companies on such terms and in such mode as they may deem advisable, and shall hold the same for the benefit of the owners of said trust certificates, and may sell, assign, transfer, and pledge such bonds and stocks whenever they may deem it advantageous to said trust so to do.
III. The trusts upon which said stock shall be held, and the number, powers, and duties of said trustees shall be as follows:
1st. The number of trustees shall be nine.
2d. J. D. Rockefeller, O. H. Payne and William Rockefeller are hereby appointed trustees, to hold their office until the first Wednesday of April, A.D. 1885.
3d. J. A. Bostwick, H. M. Flagler and W. G. Warden are hereby appointed trustees, to hold their office until the first Wednesday of April, A.D. 1884.
4th. Charles Pratt, Benjamin Brewster and John Archbold are hereby appointed trustees, to hold their office until the first Wednesday of April, A.D. 1883.
5th. Elections for trustees to succeed those herein appointed shall be held annually, at which election a sufficient number of trustees shall be elected to fill all vacancies occurring either from expiration of the term of the office of trustee or from any other cause. All trustees shall be elected to hold their office for three years, except those elected to fill a vacancy arising from any cause except expiration of term, who shall be elected for the balance of the term of the trustee whose place they are elected to fill. Every trustee shall hold his office until his successor is elected.
6th. Trustees shall be elected by ballot by the owners of trust certificates or their proxies. At all meetings the owners of trust certificates, who may be registered as such on the books of the trustees, may vote in person or by proxy, and shall have one vote for each and every share of trust certificates standing in their names, but no such owner shall be entitled to vote upon any share which has not stood in his name thirty days prior to the day appointed for the election. The transfer books may be closed for thirty days immediately preceding the annual election. A majority of the shares represented at such election shall elect.
7th. The annual meeting of the owners of said trust certificates for the election of trustees, and for other business, shall be held at the office of the trustees in the City of New York, on the first Wednesday of April of each year, unless the place of meeting be changed by the trustees, and said meeting may be adjourned from day to day until its business is completed. Special meetings of the owners of said trust certificates may be called by a majority of the trustees, at such times and places as they may appoint. It shall also be the duty of the trustees to call a special meeting of holders of trust certificates whenever requested to do so by a petition signed by the holders of ten per cent. in value of such certificates. The business of such special meetings shall be confined to the object specified in the notice given therefor. Notice of the time and place of all meetings of the owners of trust certificates shall be given by personal notice so far as possible, and by public notice in one of the principal newspapers of each state in which a Standard Oil Company exists, at least ten days before such meeting. At any meeting, a majority in value of the holders of trust certificates represented consenting thereto, by-laws may be made, amended, and repealed relative to the mode of the election of trustees, and other business of the holders of trust certificates; provided, however, that said by-laws shall be in conformity with this agreement. By-laws may also be made, amended, and repealed at any meeting, by and with the consent of a majority in value of the holders of trust certificates, which alter this agreement relative to the number, powers, and duties of the trustees, and to other matters tending to the more efficient accomplishment of the objects for which the trust is created; provided only, that the essential intents and purposes of this agreement be not thereby changed.
8th. Whenever a vacancy occurs in the board of trustees, more than sixty days prior to the annual meeting for the election of trustees, it shall be the duty of the remaining trustees to call a meeting of the owners of Standard Oil Trust certificates for the purpose of electing a trustee or trustees to fill the vacancy or vacancies. If any vacancy occurs in the board of trustees, from any cause, within sixty days of the date of the annual meeting for the election of trustees, the vacancy may be filled by a majority of the remaining trustees, or, at their option, may remain vacant until the annual election.
9th. If for any reason at any time a trustee or trustees shall be appointed by any court to fill any vacancy or vacancies in said board of trustees, the trustee or trustees so appointed shall hold his or their respective office or offices only until a successor or successors shall be elected in the manner above provided for.
10th. Whenever any change shall occur in the board of trustees, the legal title to the stock and other property held in trust shall pass to and vest in the successors of said trustees without any formal transfer thereof. But if at any such time formal transfer shall be deemed necessary or advisable, it shall be the duty of the board of trustees to obtain the same, and it shall be the duty of any retiring trustee, or the administrator or executor of any deceased trustee, to make said transfer.
11th. The trustees shall prepare certificates which shall show the interest of each beneficiary in said trust and deliver them to the persons properly entitled thereto. They shall be divided into shares of the par value of $100 each, and shall be known as the Standard Oil Trust certificates, and shall be issued subject to all the terms and conditions of this agreement. The trustees shall have power to agree upon and direct the form and contents of said certificates and the mode in which they shall be signed, attested, and transferred. The certificates shall contain an express stipulation that the holders thereof shall be bound by the terms of this agreement and by the by-laws herein provided for.
12th. No certificates shall be issued except for stocks and bonds held in trust as herein provided for, and the par value of certificates issued by said trustees shall be equal to the par value of the stocks of said Standard Oil Company and the appraised value of other bonds and stocks held in trust. The various bonds, stocks, and moneys held under said trust shall be held for all parties in interest jointly, and the trust certificates so issued shall be the evidence of the interest held by the several parties in this trust. No duplicate certificates shall be issued by the trustees, except upon surrender of the original certificate or certificates for cancellation, or upon satisfactory proof of the loss thereof, and in the latter case they shall require a sufficient bond of indemnity.
13th. The stocks of the various Standard Oil companies, held in trust by said trustees, shall not be sold, assigned, or transferred by said trustees, or by the beneficiaries, or by both combined, so long as this trust endures. The stocks and bonds of other corporations held by said trustees may be by them exchanged or sold and the proceeds thereof distributed pro rata to the holders of trust certificates, or said proceeds may be held and reinvested by said trustees for the purposes and uses of the trust; provided, however, that said trustees may, from time to time, assign such shares of stock of said Standard Oil Company as may be necessary to qualify any person or persons chosen or to be chosen as directors and officers of any of said Standard Oil companies.
14th. It shall be the duty of said trustees to receive and safely to keep all interest and dividends declared and paid upon any of the said bonds, stocks, and moneys held by them in trust, and to distribute all moneys received from such sources or from sales of trust property or otherwise by declaring and paying dividends upon the Standard Trust certificates as funds accumulate which in their judgment are not needed for the use and expenses of said trust. The trustees shall, however, keep separate accounts of receipts from interest and dividends, and of receipts from sales or transfers of trust property, and in making any distribution of trust funds, in which moneys derived from sales or transfers shall be included, shall render the holders of trust certificates a statement showing what amount of the fund distributed has been derived from such sales or transfers. The said trustees may be also authorised and empowered by a vote of a majority in value of holders of trust certificates, whenever stocks or bonds have accumulated in their hands from moneys purchases thereof, or the stocks or bonds held by them have increased in value, or stock dividends shall have been declared by any of the companies whose stocks are held by said trustees, or whenever, from any such cause, it is deemed advisable so to do, to increase the amount of trust certificates to the extent of such increase or accumulation of values and to divide the same among the persons then owning trust certificates pro rata.
15th. It shall be the duty of said trustees to exercise general supervision over the affairs of said several Standard Oil companies, and, as far as practicable, over the other companies or partnerships, any portion of whose stock is held in said trust. It shall be their duty, as stockholders of said companies, to elect as directors and officers thereof faithful and competent men. They may elect themselves to such positions when they see fit so to do, and shall endeavour to have the affairs of all of said companies managed and directed in the manner they may deem most conducive to the best interests of the holders of said trust certificates.
16th. All the powers of the trustees may be exercised by a majority of their number. They may appoint from their own number an executive and other committees. A majority of each committee shall exercise all the powers which the trustees may confer upon such committee.
17th. The trustees may employ and pay all such agents and attorneys as they deem necessary in the management of said trust.
18th. Each trustee shall be entitled to a salary for his services not exceeding $25,000 per annum, except the president of the board, who may be voted a salary not exceeding $30,000 per annum, which salaries shall be fixed by said board of trustees. All salaries and expenses connected with or growing out of the trust shall be paid by the trustees from the trust fund.
19th. The board of trustees shall have its principal office in the City of New York, unless changed by a vote of the trustees, at which office, or in some place of safe deposit in said city, the bonds and stocks shall be kept. The trustees shall have power to adopt rules and regulations pertaining to the meetings of the board, the election of officers, and the management of the trust.
20th. The trustees shall render at each annual meeting a statement of the affairs of the trust. If a termination of the trust be agreed upon, as hereinafter provided, or within a reasonable time prior to its termination by a lapse of time, the trustees shall furnish to the holders of trust certificates a true and perfect inventory and appraisement of all stocks and other property held in trust, and a statement of the financial affairs of the various companies whose stocks are held in trust.
21st. This trust shall continue during the lives of the survivors and survivor of the trustees in this agreement named, and for twenty-one years thereafter: provided, however, that if, at anytime after the expiration of ten years, two-thirds of all the holders in value, or if, after the expiration of one year, ninety per cent. of all the holders in value of trust certificates, shall, at a meeting of holders of trust certificates called for that purpose, vote to terminate this trust at some time to be by them then and there fixed, the said trust shall terminate at the date so fixed. If the holders of trust certificates shall vote to terminate the trust as aforesaid, they may, at the same meeting, or at a subsequent meeting called for that purpose, decide by a vote of two-thirds in value of their number the mode in which the affairs of the trust shall be wound up, and whether the trust property shall be distributed, or whether it shall be sold and the values thereof distributed; or whether part, and, if so, what part, shall be divided and what part shall be sold, and whether such sales shall be public or private.
The trustees, who shall continue to hold their offices for that purpose, shall make the distribution in the mode directed; or, if no mode be agreed upon by two-thirds in value, as aforesaid, the trustees shall make distribution of the trust property according to law. But said distribution, however made, and whether it be of property or values, or of both, shall be just and equitable, and such as to insure to each owner of a trust certificate his due proportion of the trust property, or the value thereof.
22d. If the trust shall be terminated by expiration of the time for which it is created, the distribution of the trust property shall be directed and made in the mode above provided.
23d. This agreement, together with the registry of certificates, books of accounts, and other books and papers connected with the business of said trust, shall be safely kept at the principal office of said trustees.
Benj. Brewster; Jno. D. Archbold; J. A. Bostwick; Chas. Pratt; Henry H. Rogers; H. A. Pratt; C. M. Pratt; D. M. Harkness, Trustee, by H. M. Flagler, Attorney; Thomas C. Bushnell; W. C. Andrews; Chas. F. G. Heye; William T. Wardwell; Wm. H. Macy; Estate of Josiah Macy, Jr., Wm. H. Macy, Jr., Executor; Wm. H. Macy, Jr.; A. M. McGregor; J. N. Camden, by H. M. Flagler, Attorney; O. H. Payne, by H. M. Flagler, Attorney; Geo. F. Chester, Trustee; Geo. H. Vilas, Trustee; W. G. Warden; H. M. Flagler; John D. Rockefeller; Wm. Rockefeller; J. J. Vandergrift; Mrs. H. M. Flagler, by H. M. Flagler; A. J. Pouch; O. B. Jennings; D. M. Harkness, by H. M. Flagler, Attorney; W. P. Thompson, by H. M. Flagler, Attorney; S. V. Harkness, by H. M. Flagler, Attorney; John Huntington, by H. M. Flagler, Attorney; Lide K. Arter, by H. M. Flagler, Attorney; H. M. Hanna and Geo. W. Chapin, by H. M. Flagler, Attorney; Louise C. Wheaton, by H. M. Flagler, Attorney; O. H. Payne, Trustee, by H. M. Flagler, Attorney; Chas. Lockhart; Jos. L. Warden, by Henry L. Davis, Attorney; Julia H. York, by H. M. Flagler, Attorney; H. A. Hutchins, by H. M. Flagler, Attorney; M. R. Keith, Trustee; D. Bushnell; Warden, Frew and Company; Henry L. Davis.
Whereas, in and by an agreement dated January 2, 1882, and known as the Standard Trust agreement, the parties thereto did mutually covenant and agree inter alia as follows, to wit: That corporations to be known as Standard Oil companies of various states should be formed, and that all of the property, real and personal, assets, and business of each and all of the corporations and limited partnerships mentioned or embraced in class first of said agreement should be transferred to and vested in the said several Standard Oil companies; that all of the property, assets, and business in or of each particular state should be transferred to and vested in the Standard Oil company of that particular state, and the directors and managers of each and all of the several corporations and associations mentioned in class first were authorised and directed to sell, assign, transfer, and convey, and make over to the Standard Oil Company or companies of the proper state or states, as soon as said corporations were organised and ready to receive the same, all the property, real and personal, assets, and business of said corporations or associations; and
Whereas, it is not deemed expedient that all of the companies and associations mentioned should transfer their property to the said Standard Oil companies at the present time, and in case of some companies and associations it may never be deemed expedient that the said transfers should be made and said companies and associations go out of existence; and
Whereas, it is deemed advisable that a discretionary power should be vested in the trustees as to when such transfer or transfers should take place, if at all. Now, it is hereby mutually agreed between the parties to the said trust agreement, and as supplementary thereto, that the trustees named in the said agreement and their successors shall have the power and authority to decide what companies shall convey their said property as in said agreement contemplated, and when the said sales and transfers shall take place, if at all; and until said trustees shall so decide, each of said companies shall remain in existence and retain its property and business, and the trustees shall hold the stocks thereof in trust as in said agreement provided. In the exercise of said discretion, the trustees shall act by a majority of their number as provided in said trust agreement. All portions of said trust agreement relating to this subject shall be considered so changed as to be in harmony with this supplemental agreement.
In Witness Whereof, the said parties have subscribed this agreement, this fourth day of January, 1882.
Benjamin Brewster; John D. Archbold; J. A. Bostwick; Charles Pratt; Henry H. Rogers; H. A. Pratt; C. M. Pratt; D. M. Harkness, Trustee; D. M. Harkness; T. C. Bushnell; W. C. Andrews; Charles F. G. Heye; William T. Wardwell; William H. Macy; Estate of Josiah Macy, Jr., William H. Macy, Jr., Executor; William H. Macy, Jr.; A. M. McGregor; J. N. Camden; Julia H. York, by B. H. Y.; O. H. Payne; George F. Chester, Trustee; M. R. Keith, Trustee; H. M. Flagler; John D. Rockefeller; William Rockefeller; J. J. Vandergrift; Mrs. H. M. Flagler, by H. M. Flagler; A. J. Pouch; O. B. Jennings; W. O. Thompson; S. V. Harkness; John Huntington; Lide K. Arter; H. M. Hanna; George W. Chapin, H. M. Hanna, Attorney in Fact; Louise C. Wheaton, by H. M. Flagler; O. H. Payne, Trustee; Charles Lockhart; Joseph L. Warden; Henry L. Davis; W. G. Warden; Warden, Frew and Company; D. Bushnell; H. A. Hutchins; George H. Vilas, Trustee.