Instructor’s Name Course Title
Standard OilCompany Summary
In the History of the Standard Oil Company, Ida Tarbell exposes theconspiracy led by the then John Rockefeller’s Standard Oil Company.It all started with rumors of a possible increase in the Freightrates and factoring in the effect such a move would have on theregion it sparked a mass demonstration from the stakeholders whosensed a conspiracy. What worsened the situation is that only onecompany South Improvement Company was exempted from the Freightrates increase, and this led to the region’s oil refiners to reduceoil production while at the same time appealed to the Legislature todeclare void the said company`s charter. In one of the stakeholders’meeting, it was held that the scheme to take other oil refineries outof the market had started several months before it finally reachedthe media and only a small group of people knew and chose to remainsilent. At the time, the perpetrators of the conspiracy were unknown.However, the local newspaper come up with a list of seven menbelieved to be the leaders of Southern Improvement Company and theirrespective petroleum companies starting with Mr. Watson as thepresident, and Mr. Logan, Mr. Lockbart, Mr. Wating, Mr. Bosrwick,Mr. Warden, Mr. Rockefeller and Mr. Stone as the company’sdirectors. The region’s oil traders ensured that the brokers tothese enlisted companies were prevented from buying oil from theregion, despite offering higher prices for the commodity and thissparked violence. Mr. Watson tried to meet these traders outside theregion to convince them that the contract with Railroad was in theregion and America’s interest.
The region’s oil producer’s union required that certaininformation be supplied to them on the owners, charter, motives ofthe South Improvement Company and its contract with Railroad. Theinformation they received sounded unbeliever particularly on thepower granted to the company by its charter. To mention a few, thecompany`s charter gave it an unlimited jurisdiction in terms of whereto be located and the business to engage in, who to be responsible toand the right not to disclose its reports and capital to the publicand shareholders. While the company’s charter was unbelievable,what was unreal were the terms of the contract between the companyand railroads. The contract did not only cause a 100% increase infreight rates, but it saved a dollar on every barrel it shipped inaddition to receiving a dollar on every barrel shipped by itscompetitors. As the Congress heard, although the railroads contractwas open to any refiners, it did not stipulate that they ought tojoin. Besides, the company aimed to increase the price of oilglobally in the name of increasing profit for the producers. Afterthe discovery of this information, the oil men had their fightsparkled as they saw it as a moral war against the company. Theyreceived support from many of the other oil companies and it as thisjuncture that Mr. Rockefeller joined Mr. Watson in the war, but theywere left out of a contract that would see the shipment of oil withno drawbacks and rebates. The new contract disadvantaged Mr.Rockefeller and his associates as being away from Cleveland cost theman addition fifty cent on every barrel compared to theircompetitions on the Creek. The Company faced more drawbacks as theircontract with the railroads was annulled, and their charter appealed.The South Improvement company was destroyed as firms were forbiddenfrom trading their oil with the company. This brought Rockefeller tohis knees and exposed the activities of his company of acquiring hisrival refineries in preparation of the takeover of the oil business.
Tarbell, Ida M. The History of Standard Oil Company: The Oil War of1872.