NUMBER 58 (See page 2225)
JOHN D. ARCHBOLD’S STATEMENT ON THE PRICES THE STANDARD RECEIVES FOR REFINED OIL
[Report of the Industrial Commission, 1900. Volume I, pages 569–570.]
Q. Now, the general result then is this: By virtue of your greater power you are enabled to secure prices that on the whole could be considered steadily somewhat above competitive rates?
A. Well, I hope so. I think we have better merchandising facilities, better marketing facilities, better distributing facilities, and better talent than a competitor can have.
Q. I am not asking with reference to your power of making profits, but it is with reference to getting the prices from the consumer.
A. Prices are what make the profit. If we had a better average price, we could get a better profit.
Q. You think, generally speaking, that you get prices for oil slightly above competitive prices?
A. Well, I should think so; I could not answer—that is a very general question, and very difficult to answer. I could not answer that specifically. I hope that we do.
Q. Of course, in this investigation, we are seeing if we can get some general principles on which legislation might be based, and these questions are to bring out, if we can, the power that so great an organisation has in fixing prices. Would you say, then, that in the case of an organisation that controls perhaps eighty per cent. of the markets of the country, there is a monopolistic element that enters in which enables them to hold prices above the regular rate? Is there a monopolistic power that comes merely from the power of capital itself?
A. Undoubtedly, there is an ability, and when that ability, as I have said, is unwisely used, it is sure to bring its own defeat.
Q. If that ability goes to get an exorbitant price, of course it will invite competition, but when that ability is kept within modest limits, would you still say that it was in the power of such an organisation to get the benefit of the monopolistic power that comes merely from the power of capital itself?
A. Well, I should say that that would be a very restricted power, a very restricted limit. The competitors in this country are very active.
Q. What?
A. The competitors are very active; they are alert at all points with their small offerings in the hope to find just such a condition as you describe.
Q. Certainly.
A. But as I say, as business is and as it has been for many years, we could not have that ability to any considerable extent as merchants.
Q. If the ability were operative only to a slight extent, would it still be enough, do you think, to make a difference between what we may call a moderate dividend, say 6 or 7 per cent., and a pretty high dividend of between 15 and 20 per cent.?
A. Well, that involves so nice a question that I could hardly undertake to answer it; but generally as to the effect on the community, I should say——
Q. Generally on the prices in the United States?
A. I should say that the lessened cost incident to doing business in a large volume would more than compensate the consumer for any ability in getting higher prices.
Q. Then that leads to this point, whether the large capital does itself give an organisation the power to get a somewhat higher price than it could in the market provided the competitors were substantially equal in power?
A. Oh, it may be so, but that is a difficult question to answer.
NUMBER 59 (See page 2254)
W. H. VANDERBILT’S CHARACTERISATION OF STANDARD OIL MEN
[Report of the Special Committee on Railroads, New York Assembly, 1879. Volume II, pages 1668–1669.]
Q. Can you attribute, or do you attribute, in your own mind, the fact of there being one refiner instead of fifty, now, to any other cause except the larger capital of the Standard Oil Company?
A. There are a great many causes; it is not from their capital alone that they have built up this business; there is no question about it but that these men—and if you come in contact with them I guess you will come to the same conclusion I have long ago—I think they are smarter fellows than I am, a good deal; they are very enterprising and smart men; never came in contact with any class of men as smart and able as they are in their business, and I think a great deal is to be attributed to that.
Q. Would that alone monopolise a business of that sort?
A. It would go a great way toward building it up; they never could have got in the position they are in now without a great deal of ability, and one man would hardly have been able to do it; it is a combination of men.
Q. Wasn’t it a combination that embraced the smart men in the railways, as well as the smart men in the Standard Company?
A. I think these gentlemen from their shrewdness have been able to take advantage of the competition that existed between the railroads for their business, as it grew, and that they have availed themselves of that there is not a question of doubt.
Q. Don’t you think they have also been able to make their affiliations with railroad companies and railroad officers?
A. I have not heard it charged that any railway official has any interest in any of their companies, only what I used to see in the papers some years ago, that I had an interest in it.
Q. Your interest in your railway is so large a one that nobody would conceive, as a matter of personal interest, that you would have an interest antagonistic to your road?
A. When they came to do business with us in any magnitude; that is the reason I disposed of my interest.
Q. And that is the only way you can account for the enormous monopoly that has thus grown up?
A. Yes; they are very shrewd men; I don’t believe that by any legislative enactment or anything else through any of the states or all of the states, you can keep such men as them down; you can’t do it; they will be on top all the time; you see if they are not.
Q. You think they get on top of the railways?
A. Yes; and on top of everybody that comes in contact with them; too smart for me.
NUMBER 60 (See page 2259)
FAC-SIMILE OF ONE OF MR. KEMPER’S SHARES
[From History of Standard Oil Case in Supreme Court of Ohio, 1897–1898. Part II, page 271.]
No. S. 11 509,104
972,500
of one share.Incorporated under the laws of the State of Pennsylvania. Whole Shares
$50 each.NATIONAL TRANSIT COMPANYThis certifies that J. L. Kemper is the owner of Five Hundred Nine Thousand One Hundred and Four 972,500ths of one share of stock in the National Transit Company. The holder or assignee of this Scrip will be entitled to a Certificate of Stock, and to have his name entered on the corporate books as a stockholder, on presentation of sufficient fractional Scrip to entitle him to one full share.
Witness the corporate seal of said Company, attested by the signatures of its President and Treasurer at Philadelphia, Pa., this 20th day of February, 1896.
H. H. Rogers,President.Geo. W. ColtonTreasurer.[Seal][On the reverse side.]For value received .... hereby sell, assign, and transfer unto .... 972,500ths of one share of the Capital Stock represented by the within Certificate of Scrip, and do hereby irrevocably constitute and appoint .... Attorney to transfer the said Scrip on the books of the within named company, with full power of substitution in the premises.
Dated, ......
J. L. Kemper.In the presence of Harwood R. Pool.
Notice.—The signatures to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever.
NUMBER 61
GENERAL BALANCE SHEET, STANDARD OIL INTERESTS, DECEMBER 31, 1896
[In the case of James Corrigan vs. John D. Rockefeller in the Court of Common Pleas, Cuyahoga County, Ohio, 1897.]
| ASSETS | NOMINAL LIABILITIES | |||||||
|---|---|---|---|---|---|---|---|---|
| Plant | Other Assets | Total | Liabilities | Net Value | Capital Stock | Surplus or Impairment. | Net Value | |
| Anglo-American Oil Co., Lim. | $6,111,436.75 | $10,877,942.53 | $16,989,379.28 | $8,997,759.61 | $7,991,619.67 | $2,530,666.66 | $5,460,953.01 | |
| Atlantic Refining Co. | 4,879,636.08 | 6,637,750.39 | 11,517,386.47 | 357,691.56 | 11,159,694.91 | 5,000,000.00 | 6,159,694.91 | |
| Buckeye Pipe Line Co. | 4,559,213.27 | 8,593,413.44 | 13,152,626.71 | 302,998.58 | 12,849,628.13 | 10,000,000.00 | 2,849,628.13 | |
| Eureka Pipe Line Co. | 1,489,533.37 | 5,050,615.30 | 6,540,148.67 | 352,320.90 | 6,187,827.77 | 5,000,000.00 | 1,187,827.77 | |
| Forest Oil Company | 4,236,370.10 | 800,482.59 | 5,036,852.69 | 198,645.38 | 4,838,207.31 | 5,500,000.00 | 661,792.69 | |
| Indiana Pipe Line Co. | 992,426.01 | 2,222,381.90 | 3,214,807.91 | 7,821.80 | 3,206,986.11 | 1,000,000.00 | 2,206,986.11 | |
| National Transit Co. | 6,800,056.66 | 42,529,353.39 | 49,329,410.05 | 23,296,866.66 | 26,032,543.39 | 25,455,200.00 | 577,343.39 | |
| New York Transit Co. | 1,860,334.55 | 5,171,303.80 | 7,031,638.35 | 202,139.33 | 6,829,499.02 | 5,000,000.00 | 1,829,499.02 | |
| Northern Pipe Line Co. | 639,001.65 | 583,766.46 | 1,222,768.11 | 44,161.69 | 1,178,606.42 | 1,000,000.00 | 178,606.42 | |
| N. W. Ohio Nat. Gas. Co. | 118,679.71 | 204,480.33 | 323,160.04 | 11,384.76 | 311,775.28 | 1,967,100.00 | 1,655,324.72 | |
| Ohio Oil Co., The | 4,832,307.19 | 310,705.42 | 5,143,012.61 | 326,923.43 | 4,816,089.18 | 2,000,000.00 | 2,816,089.18 | |
| Solar Refining Co., The | 537,797.54 | 1,323,374.92 | 1,861,172.46 | 298,137.91 | 1,563,034.55 | 500,000.00 | 1,063,034.55 | |
| Southern Pipe Line Co. | 1,527,175.80 | 2,074,374.05 | 3,601,549.85 | 66,929.31 | 3,534,620.54 | 5,000,000.00 | 1,465,379.46 | |
| South Penn Oil Co. | 11,300,603.72 | 1,735,979.54 | 13,036,583.26 | 1,278,580.96 | 11,758,002.30 | 2,500,000.00 | 9,258,002.30 | |
| Standard Oil Co., Indiana | 3,105,001.95 | 4,918,025.18 | 8,023,027.13 | 3,372,518.91 | 4,650,508.22 | 1,000,000.00 | 3,650,508.22 | |
| Standard Oil Co., Kentucky | 474,352.83 | 4,236,638.24 | 4,710,991.07 | 49,835.90 | 4,661,155.17 | 1,000,000.00 | 3,661,155.17 | |
| Standard Oil Co., New Jersey | 5,469,277.44 | 13,864,446.39 | 19,333,723.83 | 2,396,607.81 | 16,937,116.02 | 10,000,000.00 | 6,937,116.02 | |
| Standard Oil Co., New York | 4,957,545.26 | 56,822,284.95 | 61,779,830.21 | 48,919,899.34 | 12,859,930.87 | 7,000,000.00 | 5,859,930.87 | |
| Standard Oil Co., Ohio | 1,166,013.90 | 2,752,274.01 | 3,918,287.91 | 1,013,373.13 | 2,904,914.78 | 3,500,000.00 | 595,085.22 | |
| Union Tank Line Co. | 2,615,594.64 | 340,563.75 | 2,956,158.39 | 11,653.38 | 2,944,505.01 | 3,500,000.00 | 555,494.99 | |
| Total Plant | $67,672,358.42 | |||||||
| Other Assets | $171,050,156.58 | |||||||
| Total Assets | $238,722,515.00 | |||||||
| Less Actual Liabilities | $91,506,250.35 | |||||||
| Total Net Value | $147,216,264.65 | |||||||
| Capital Stock | $98,452,966.66 | |||||||
| Total Undivided Profits | $48,763,297.99 | |||||||
| Total Capital and Surplus | $147,216,264.65 | |||||||
| Other Assets S. O. Trust | 4,135.25 | |||||||
| $147,220,399.90 | ||||||||
NUMBER 62 (See page 2267)
AMENDED CERTIFICATE OF INCORPORATION OF THE STANDARD OIL COMPANY OF NEW JERSEY
Resolved, That it is advisable to alter the charter of this company to read as below stated, and that a meeting of the stockholders be called to meet at the principal office of the company in Bayonne, N. J., on the fourteenth day of June, 1899, at 11 A.M., to take action hereon, notice of such meeting to be signed by the president and secretary and given to each stockholder in person or mailed to his proper post-office address at least ten days previous to the time of meeting as provided by the by-law.
First.—The name of the corporation is STANDARD OIL COMPANY.
Second.—The location of the principal office in the State of New Jersey is at the company’s refinery, in the City of Bayonne, County of Hudson. The name of the agent therein and in charge thereof, and upon whom process against this company may be served, is J. H. Alexander.
Third.—The objects for which this company is formed are: To do all kinds of mining, manufacturing, and trading business; transporting goods and merchandise by land or water in any manner; to buy, sell, lease, and improve lands; build houses, structures, vessels, cars, wharves, docks, and piers; to lay and operate pipe-lines; to erect and operate telegraph and telephone lines and lines for conducting electricity; to enter into and carry out contracts of every kind pertaining to its business; to acquire, use, sell, and grant licenses under patent rights; to purchase or otherwise acquire, hold, sell, assign and transfer shares of capital stock and bonds or other evidences of indebtedness of corporations, and to exercise all the privileges of ownership including voting upon the stocks so held; to carry on its business and have offices and agencies therefor in all parts of the world, and to hold, purchase, mortgage, and convey real estate and personal property outside the State of New Jersey.
Fourth.—The total authorised stock of the corporation is One Hundred and Ten Million Dollars, divided into One Million and One Hundred Thousand shares of the par value of One Hundred Dollars each. Of said stock the One Hundred Thousand shares now issued and existing shall be preferred stock, and the increase of One Million shares shall be common stock. Said preferred stock shall entitle the holder thereof to receive out of the net earnings a dividend of and not exceeding one and one-half per cent. quarterly before any dividend shall be paid on the common stock. Common stock may at the discretion of the company be issued in exchange for preferred stock, and all preferred stock so received by the company shall be cancelled. Common stock may also be issued in payment for such property as the company has authority to purchase. Holders of preferred and of common stocks shall have like voting power.
Fifth.—The names and post-office addresses of the incorporators and the number of shares subscribed for by each shall remain as set forth in the original certificate of incorporation.
Sixth.—The duration of the corporation shall be unlimited.
Seventh.—The corporation may use and apply its surplus earnings, or accumulated profits authorised by law to be reserved, to the purchase or acquisition of property, and to the purchase or acquisition of its own capital stock from time to time, to such extent and in such manner and upon such terms as its Board of Directors shall determine; and neither the property nor the capital stock so purchased or acquired, nor any of its capital stock taken in payment or satisfaction of any debt due to the corporation, shall be regarded as profits for the purpose of declaration or payment of dividends, unless otherwise determined by a majority of the Board of Directors, or a majority of the stockholders.
The corporation, in its by-laws, may prescribe the number necessary to constitute a quorum of the Board of Directors which may be less than a majority of the whole number.
The number of directors at any time may be increased or diminished by vote of the Board of Directors, and in case of any such increase the Board of Directors shall have power to elect such additional directors, to hold office until the next meeting of stockholders, or until their successors shall be elected.
The Board of Directors shall have power to make, alter, amend, and rescind the by-laws of the corporation, to fix the amount to be reserved as working capital, to authorise and to cause to be executed mortgages and liens upon the real and personal property of the corporation, and from time to time to sell, assign, transfer or otherwise dispose of any or all of the property of the corporation; but no such sale of all of the property shall be made except pursuant to the votes of at least two-thirds of the Board of Directors.
The Board of Directors, by resolution passed by a majority of the whole Board, may designate three or more directors to constitute an executive committee, which committee, to the extent provided in said resolution or in the by-laws of the corporation, shall have, and may exercise, the power of the Board of Directors in the management of the business and affairs of the corporation, and shall have power to authorise the seal of the corporation to be affixed to all papers which may require it.
The Board of Directors from time to time shall determine whether and to what extent, and at what times and places, and under what conditions and regulations, the accounts and books of the corporation, or any of them, shall be open to the inspection of the stockholders; and no stockholder shall have any right of inspecting any account or book or document of the corporation, except as conferred by statute or authorised by the Board of Directors, or by a resolution of the stockholders.
The Board of Directors shall have power to hold its meetings, to have one or more offices, and to keep the books of the corporation (except the stock and transfer books) outside of the state, at such places as may be from time to time designated by them.
I certify that the above resolution was adopted by the Board of Directors of the STANDARD OIL COMPANY, at a meeting held on the twenty-sixth day of May, A.D. 1899, a majority of directors being present and voting in favour thereof. Witness the seal of said corporation.
L. D. Clarke,Secretary.
NUMBER 63 (See page 2270)
PRODUCTION OF PENNSYLVANIA AND LIMA CRUDE OIL BY STANDARD OIL COMPANY 1890–1898
(Expressed in barrels of forty-two gallons.)
[Report of Industrial Commission, 1900. Volume I, page 561.]
| YEAR | PENNSYLVANIA OIL | LIMA OIL | GRAND TOTAL | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Total production | Standard Oil Co. production | Standard Oil per cent. of total | Total production | Standard Oil Co. production | Standard Oil per cent. of total | Pennsylvania and Lima production | Standard Oil Co. production | Standard Oil per cent. of total | |
| 1890 | 30,065,867 | 2,618,637 | 8.71 | 15,014,882 | 8,400,568 | 55.95 | 45,080,749 | 11,019,205 | 24.44 |
| 1891 | 35,742,127 | 4,913,775 | 13.74 | 17,381,923 | 9,319,156 | 53.61 | 53,124,050 | 14,232,931 | 26.79 |
| 1892 | 33,332,306 | 4,338,822 | 13.02 | 16,685,193 | 7,843,324 | 47.01 | 50,017,499 | 12,182,146 | 24.36 |
| 1893 | 31,256,283 | 6,705,276 | 21.45 | 17,823,255 | 7,260,899 | 40.74 | 49,079,538 | 13,966,175 | 28.46 |
| 1894 | 30,696,716 | 7,210,345 | 23.49 | 18,575,603 | 6,690,951 | 36.02 | 49,272,319 | 13,901,296 | 28.21 |
| 1895 | 30,891,868 | 9,119,920 | 29.52 | 21,719,250 | 6,808,876 | 31.35 | 52,611,118 | 15,928,796 | 30.28 |
| 1896 | 33,908,041 | 9,380,654 | 27.66 | 25,222,091 | 8,031,793 | 31.84 | 59,130,132 | 17,412,447 | 29.45 |
| 1897 | 35,170,367 | 9,787,353 | 27.83 | 22,793,033 | 7,497,349 | 32.89 | 57,963,400 | 17,284,702 | 29.82 |
| 1898 | 31,645,151 | 11,248,443 | 35.55 | 20,266,328 | 7,220,606 | 35.63 | 51,911,479 | 18,469,049 | 35.58 |
| Total | 92,708,726 | 65,323,225 | 22.32 | 175,481,558 | 69,073,522 | 39.36 | 468,190,284 | 134,396,747 | 28.70 |
NUMBER 64 (See page 2270)
BUSINESS OF STANDARD OIL COMPANY AND OTHER REFINERS 1894–1898
(Barrels of fifty gallons. All products, domestic trade.)[Report of Industrial Commission, 1900. Volume 1, page 560.]
| YEAR | STANDARD OIL COMPANY | OTHERS | TOTAL | ||
|---|---|---|---|---|---|
| Barrels | Per cent. of total | Barrels | Per cent. of total | Barrels | |
| 1894 | 18,118,933 | 81.4 | 4,145,232 | 18.6 | 22,264,165 |
| 1895 | 18,348,051 | 81.8 | 4,084,720 | 18.2 | 22,432,771 |
| 1896 | 16,341,161 | 82.1 | 3,569,719 | 17.9 | 19,910,880 |
| 1897 | 18,141,479 | 82.4 | 3,876,706 | 17.6 | 22,018,185 |
| 1898 | 19,999,939 | 83.7 | 3,914,999 | 16.3 | 23,914,938 |
| Total | 90,949,563 | 82.3 | 19,591,376 | 17.7 | 110,540,939 |