Morning Oregonian., November 20, 1908, Page 9, Image 9

V
WHY OIL OCTOPUS
COBBLED RIVALS
Rockefeller Tells of Growth for
20 Years by Buying .
Competitors.
POOLING OF OIL TRAFFIC
11 u a I Kates From All Points Fol
lowed Fight With Pennsylvania
Road Organization of Trut
In Ohio Climax of Story.
i
NEW YORK, Nov. 19. With the story
of the first years of industrial develop
ment of the Standard Oil Company, the
tstiinony of John D. Rockefeller, presi
dent of the company, defendant !i the
suit to dissolve the Standard Oil Com
pany, was brought to an unexpected close
this afternoon. The head of the Stand
ard Oil Company told today of the pro
ceases and causes of the company's
growth up to the truet agreement of
l&U and, after Identifying- the parties
to the agreement, counsel for the de
fense announced that Mr. Rockefeller
had concluded his direct testimony and
requested an adjournment until tomor
row. Friday will find Mr. Rockefeller on
the witnejw stand under the sharp fire
of cros-examinatlon by Frank B. Kel
3 'PC Special Aosltftant Attorney-General
prosecuting the case for the Government.
This will be generally confined to the
period from lSil to 1A
Counsel for the Standard let It be
known today that the history of the com
pany from the trust agreement of 1832
would be told on the witness stand by
John IX Archbold. vice-president, who is
conversant with the combine's develop
ments. Mr. Rockefeller's testimony today had
to do principally with the acquisition of
other refininjr companies together with
th transportation concerns and pipe
lines, which he declared were necessi
tated by the natural growth of the
Standard's business.
Uncertain Crude Oil Supply.
When Mr. Rockefeller resumed his testi
mony, his counsel again called his at
tention to the- uncertainties of the oil
business in the early 7s, and asked him
what bearing the supply of raw material
had thereon.
"It had an important bearing- and must
always have such importance, as we
never know when the supply may give
out. rendering the properties for the re
fining of oil comparatively valueless."
replied Mr. Rockefeller. He added that
In the early oil ri.iys the supply of crude
oil was limited to a small area, coming
principally from Vena n 50 County. Penn
sylvania. Pome oil wells were very short
lived. Mr. Rockefeller's counsel then asked
him If he recalled thai a producers' union
was formed at the time of the agitation
regarding the South Improvement Com
piny.
"Yes." replied Mr. Rockefeller, "It was
formed a little later and was composed
of a large proportion of the oil produc
ers." That led t an association of oil refin
vfrs who were desirous of having a sup
ply of crude oil which was not con
trolled by interests antagonistic to them,
and the refiner ali wanted to be as
sured of n market for th1r raw material.
'We desired pU'n.nnt relations with the
producers," ?:iul M r. Rockefeller.
JHrIi Price Caused Overproduction.
In December. 177. Mr. Rockefeller said,
th Producers' I'nion and the Refiners
Association entered Into an agreement,
the purpose of which was "to secure as
high a price for crude oil aj possible,"
and to introduce an element of regularity
Into the biiPinetts. which had been fluctu
ating greatly. Mr. Rockefeller said he
w3 unable to give the number of pro
ducers In the I'nion, but it included a
large percentage of them ami the Re
finers' Association Included a large pro
portion of the refiners.
Hy direction of his counsel. Mr. Rocke
feller noted that the agreement fixed the
price of crude oil at $3 per barrel at com
mon rn:nts. The operation of that agree
ment, he said, stimulated an overproduc
, tlon of oil beyond what the refiners could
use at that price. The temptation was
very great with the producers to develop
more oil than they had promised to the
refiners. The refiners could only take
as much oil as the public would con
sume. As a result the producers vio
lated the agreement and sold oil under
the price which had been fixed. The
agreement did not last long, said Mr.
Rockefeller.
Buying: Out Competitors.
To secure better facilities and to make
shipments to Kurope. the Standard OH
Company in 17.1 purchased the plant of
the ljong Island Refining Company In
Tti(t Island L'itv and began to refine at
the seaboard. The crude oil was brought
through to the refinery by railroads.
To further extend its market, the
ftrandard Oil Company purchased the De
vo Company and in lf73 bought about
one-half of th Chess, Carley & Co.. of
Tyu!s llle. which had a large domestic
business in the Southwest. A year later,
Mr. Rockefeller 11 his company touch t
out the Imperial Oil Refining Company,
of Otl Citv. Ta.. which had been owned
principally by Captain J. J. Vandearlft
and John Itcairn. The Standard Oil
'ivnrny later organized the Imperial
Kefinlnx Com par y. limited, to operate
this plant. The purpose of this purchase
was to enlarge ths Standard Oil's export
trade and the Imperial Company had di
rect lines for shipping to the seaboard.
Aim to Kxtend KxHrts.
Mr. Rockefeller then told of the
Standard t il Company's purchase of
rr-neries in Brooklyn. Philadelphia and
Pittsburg at a cost of $3.W.tW.
The object of these purchases, said
Mr. Rockefeller, was to extend the ex
port business and secure the valuable
soe-laities in cans. Asked about the
Smith's Kerry Oil Transportation Com
pany. Mr. Rockefeller said he could not
recall distinctly anything about that
company.
Mr. Rockefeller said bis attention
was first directed to lubricating oil
about 1576. About the Standard
JI Company purchased the American
Lubricating Oil Company, of Cleveland,
and the Mica Axle Grease Company.
The purchases were made with the Idea
of further diversifying the business and
securing: a rubricating trade.
FljSht With Pennsylvania Road.
"I want to bring to your attention the
Kmp'.re Transportation Company and
w ht its relations were."
"The company was the owners of car
and the transporter of oil and other pro
dues on the Pennsylvania Railroad. As
we understand, the company was con
trolled by Pennsylvania interests.
"Ra:!road and refining Interests were
d.sturbed. There was a great cutting of
rates. The refining interests were dis
turbed, as wire the railroads, which laid
considerable stress on the amount of oil
.hey should carry."
"What relations were effected on the
sw York Cautrai, Ert Ajiagtlc & Grea
Western and Baltimore & Ohio by the
Pennsylvania having a refining busi
ness?" They were much concerned aa to what
lo? of the oil trade to them would fol
low, and there was a heavy cutting of
rates."
Did Xot Seek to Cripple Rival.
Soon after the opening of the after
noon session, llr. Rockefeller's coun
sel asked him if It were true that the
rates obtained by him during the per
iod of the Standard Oil Company's
war with the Pennsylvania Railroad
were to crush and cripple the Empire
Transportation Company so that the
Standard Oil Company might acquire
Its property.
'It is not." replied Mr. Rockefeller.
Previous to the putting of this ques
tion. Mr. Rockefeller said that, when
the Empire Transportation Company
was organized, "our Interests" pre
sented the matter to the railroads and
protested to the Pennsylvania. "We
stopped our shipments over the Penn
sylvania and used other lines," he con
tinued. "We objected to the Pennsylvania
Railroad engaging In the refining busi
ness. We did not know where we
stood. They were shipping their own
oil over their own lines and discrim
inating against us. Other railroads
agreed to stand by us. but there was
much bitterness between the railroads.
We made our shipments over the Lake
Shore and New York Central and we
purchased the Empire Transportation
Company and pipe lines to which I
have referred. The Pennsylvania Hall
road acquired the cars of the Empire
Transportation Company and Issued
car trust certificates, which we pur
chased." Traffic Deal "With Railroads.
Mr. Rockefeller said that when the
transaction was completed" and the.
Pennsylvania Road stopped refining,
the railroad war stopped and an agree
ment was entered into between the
roads whereby they obtained a per
centage of the oil-carrying trade. The
Standard Oil Interests were called
upon to make these arrangements ef
fective. The witness said that the
war between the railroads to obtain
the oil trade had been demoralizing
to -the oil business.
Mr. Rockefeller's attention was then
called to an agreement between "Wil
liam Rockefeller and Thomas S. Scott,
president of the Pennsylvania Rail
road, which had been approved by all
the oil-carrying roads.
"Sometimes in seeing that the exact
division of the traffic had been carried
out. we shipped our oil to our own
disadvantage when we could have
shipped it more profitably by other
lines." said Mr. Rockefeller.
"We had nothing to do with the
division of traffic, which the railroads
determined upon."
Mr. Rockefeller said that the com
pany guaranteed the Pennsylvalia Rail
road Company a certain number of
barrels of oil a year and In consider
ation that company guaranteed to pay
bark 10 per cent of the rate on the
oil shipped.
Baying of Pipelines.
Mr. Rockefeller said that the Stand
ard began acquiring pipe line in
terests In 1873. and increased Its own
ership from time to time until 1R77,
when they were assembled into the
I'n'ited Pipe Line. The Standard also
had- the American Transfer Pipe Line.
The pipe lines were regarded as an
Important adjunct. Mr. Rockefeller
then described the gathering of pipe
lines into a system to carry the oil
from the wells to the railroads before
the trunk line system was established.
There were many small systems which
could not reach the oil wells because
of financial inability to construct new
lines. Jt was brought home to him,
Mr. Rockefeller said, that the im
provements were necessary and as the
oil supply increased new pipe lines
were built.
"It was a big undertaking, and very
Interesting." said Mr. Rockefeller. "It
was necessary to see that there should
be go waste of oil and no delays.
Wherever there was oil we had men
to take care of It. Our conservative
men felt that 'we should not go into
such expenditure, hut our men In the
field came In and made pressing de
mantle for 500,000 barrels of tankage.
We gave it to them. Millions of bar
rels of tankage were built and through
It we saved much oil that would other
wise have been lost under the old
system. It was a Godsend to the
country that we moved boldly in the
matter."
Origin or )hT Oil Trust.
Mr. Rockefeller said that all the pur
chases to'whlch he referred were made
by the Standard Oil Company of Ohio
fend that the money was taken from Its
treasury Instead of being collected
from the stockholders. The stock of
other companies which was purchased
was field by members of the Standard
Oil Company of Ohio for its stock
holders. He said that In 1879 this plan
of ownership was put In written form
and. when he was shown the paper on
the witness stand today, he identified
It. It was shown by this paper that
Vilas. Keith & Chester also were trus
tees for other stock held for the bene
fit of the Standard stockholders. The
capital stock of the Standard Oil Com
pany of Ohio at that time was shown
to be J.i.r.oo.ooo.
A trust agreement, made In 1882. af
fecting the stockholders of the Stand
ard Oil Company of Ohio and Vilas.
Keith & Chester as trustees, was put
into evidence. Attached to It were con
tracts made with the Erie and New
York Central Railroad Companies.
Commenting upon It. Mr. Rockefeller
said the railroads wanted experienced
warehousemen to handle the oil yjjon
arrival at its terminals, as much re
cooperage and rebolting was necessary
and that that was the reason for mak
ing the contracts.
Pooling and Rebate Contract.
Mr. Rockefeller was shown a pooling
contract for the distribution of oil
carrying between different railroads
fixing rates on refined and crude oil
and collecting provision for "draw
backs" to refiners for certain shipments
to seaboard. The witness said the con
tract was drawn to put , the different
refining points on a parallel. The ef
fect of this agreement was that it
would cost the man in Cleveland no
more to ship refined oil to seaboard
than from any other point. It also
assured refiners that the same rates
for shipments would be alike on all
the lines, said Mr. Rockefeller.
He added that the contract further
showed that the shippers of crude oil
to seaboard received 22 cents a barrel
drawback if the pipage rates were
maintained as agreed upon by the pip
ing company.
Saved Cleveland From Extinction.
Mr. Rockefeller said he had not been
closely familiar with the freight busi
ness for more than 30 years.
"This agreement produced steadiness
and did away with the wiping out of
Cleveland, as Thomas Scott promised to
do." he declared.
John G. Milburn. Mr." Rockefeller's
counsel, announced that Mr. Rockefel
ler's direct examination ended at this
point, and an adjournment was taken
until tomorrow, when the cross-ex
amination will be begun.
Woolgrowers Want Higher Duty.
SALT UKE CITY. Nov. 19. A still
higher duty on Imported wool is the
demand expressed in & resolution
adopted by a mass meeting of Utah
woolgrowers at the Salt Lake Xom-
BIGGEST TQBACGO
DEAL M RECORD
Kentuckians Paid by American
Company $14,000,000 for
80,000,000 Pounds.
NIGHT RAIDS WILL END
Central Kentucky Flooded With
Money Sale Includes Crops of
1906-07, Both of Which
Were Pooled.
LOUISVILLE Ky., Nov. Id. The big
deal between the American Tobacco Com
pany and the Burley Tobacco Society for
the 1906 crop and part of the 1907 crop
of tobacco, which has been hanging fire
for several weeks, was closed today. The
price agreed upon In the transaction,
which is said to be the largest of its
kind ever put through, is an average of
204 cents a pound for the 1906 crop and
17 cents for the 1907 product. The deal
Involved nearly 80,000,000 pounds of to
bacco held in the pool by the Burley
Tobacco Society, and an outlay of about
$14,000,000 on the part of the American
Tobacco Company, virtually all of this
money being placed in circulation at
once in Central Kentucky.
The tobacco sold includes the larger
part of the holdings of the Burley To
bacco Growers' Association, which was
formed several years ago and pooled the
crops in 1906 and 1907.
No crop was raised by the members
of the association in 1903 although a num
ber of independents raised large crops
in Central Kentucky, under guard. Ac
cording to many who are in position to
know, the sale of the pooled crop will
mark the end of the night riders in Cen
tral and Eastern Kentucky, at least for
the present, as ir is thought that with
these crop outfof the way virtually all
of the growers will raise tobacco next
year.
The sale has nothing to do with the
crops in the dark district, or western por
tion of Kentucky and Northern Tennessee.
JOHNSON'S FORTUNE GONE
(Continued From First Pag-e.)
my life, leaving out of consideration the
loss of my brother.
"I am going to be happy yet, too. We
may have to go back to a cottage, but
that's the way we started and we can
look upon life Just as joyfully there as
we did in the big house on Euclid ave
nue. "They tell me my enemies are plan
ning to bring financial trouble upon me.
I've been expecting it. Theres one mis
take I have not made that of failing to
foresee the efforts of those who would
like to destroy me if opportunity -presented.
My enemies are capable of that.
One may expect nothing else from spe
cial privileges. However, I realize that
any other set of men In the same cir
cumstances would act the same.
Thousand Fights Left in Him.
"Let them do what they may. Let
them make any sort f attack upon me
that they choose, with whatever suc
cess, and they will find me with a thou
sand rights left In me. I ll never give
up. I am well and strong and confident,
and they'll always find me at the front.
"If I had been a coward If I had run
away from this fight for the people of
Cleveland I could have saved my for
tune and built it pp. But I had chosen
my course and I did not have any mind
for altering it.
"The pursuit of mere dollars does not
interest me. I suppose I could go down
In Wall street now and make some
mony. I have bought and sold with E.
H. Harriman and I suppose I could go
and do it again. But I am not going to
do anything of the sort.
"I don't want you to misunderstand
what I have been working for as Mayor.
I have not been laboring with the ex
pectation of being rewarded by the grati
tude of the people. One cannot count on
that. It's the pleasure in doing work
that I like that has kept -me in the fight.
Made No Money on Street Railway.
"I have never made a single penny
out of the street railway since I became
Maytr. Nobody else has worked as hard
as I, and I have not drawn a cent of pay
from the Municipal Traction Company as
treasurer. I don't propose to ask a cent
for my work in helping the receivers.
"I have never spent money in politics.
In no campaign have I ever paid more
than my assessment. $600. on the $6000
salary of Mayor. Sometimes I have not
paid that much In cash, when the com
mittee has allowed me a certain amount
for the us? of my tenth. We have never
been in debt at the end of a campaign
but once.
"When- I gave up active business af
fairs t did It because the requirements of
mr work did not square with my prin
ciples. I suppose I could have taken up
a life of ease when I retired, had I
wished. I was welcome at the clubs.
"ast Horses, yachts and other allurements
were open to me. For me. though, happf-
I III a -m -m TT TrT TT IB H Mi
McA tan- V cOonne U
IMI
lompany, Inc.
"THE STORE NOTED FOR BEST GOODS AT LOWEST PRICES"
Corner Third and Morrison Sts. Both Phones-Main 732, A 1 137
25c and 35c Ribbons
10c
to 7-inch Taffeta Ribbons
in all popular colors, standard
25c and 35c values. See Morrison-street
window.
THE new goods bought some weeks ago are now be
ginning to arrive, and as fast as possible the stocks
will be rearranged and the store brought strictly up-to-date.
As in the past, the store will continue to
carry only first - class merchandise, bringing the cost
to our customers to the lowest possible notch consistent
with good storekeeping.
SJhare in These Splendid
15c Handkerchiefs
5c
500 dozen women's fine hem
stitched, lace-trimmed and embroidery-trimmed
Handker
chiefs in hundreds of dainty
patterns. iSee window display.
FRIDAY AND SATURDAY SPECIALS
Hen's $1.50Cnderw'r
95c
Men's fine all-wool Underwear,
in gray only, light or heavy
weight, non-shrinking, silk fin
ished, complete line of sizes.
Best $1.50 quality.
No Mail or Phone Orders Filled at These Prices
and None C. O. D. All Goods as Advertised.
$5.00 Silk Umbrellas
Women's pure silk Umbrellas,
with best steel rod and paragon
frame ; choice assortment of
gold, silver and pearl handles.
$5.00 value.
$25.00 Tailored Suits
$11.98
Women's and misses' new Tai
lored Suits, braid and button
trimmed, very latest styles and
colors. On sale Friday and Sat
urday only.
$35 and $40 Suits
$18.83
High-grade man-tailored Suits
for women and misses, in new
long-coat models, - braid and
button trimmed. Regular val
ues up to $40.00.
Men,s$1.50So!tSiiirts
47c
With or without detached
cuffs, standard quality materi
als, in neat stripes, figures and
plain effects. Best regular $1.50
grade. See window.
$1.25IrishTableLinen
92c
70 inches wide, extra heavy and
warranted all pure linen; our
best regular $1.2.5 grade. Nap
kins to match, $3.47 a dozen.
Gray Cotton Blankets
59c
Gray cotton Blankets, with
fancy pink and blue borders, on
sale "Friday and Saturday at
the above low price. Regular
85c grade. ( i
$1.50 Satti Petticoats
69c
Black mercerized sateen Petti
coats, with bias stitched ruf
fles, good grade material; on
sale Friday and Saturday only
at above pi-ice.
$3.50 Sweater Jackets
$3.50 Sweater Jackets in cardi
nal, gray, black and white;
standard $3.50 quality, are es
pecially good value at this low
price f all sizes.
Nazareth Knit Waists
11c
Another great Friday and Sat
urday sale of the famous Naz
areth Knit Waists for boys and
girls; all sizes. Regular 25c
erade.
$3.50 Blk.Dress Goods
98c
Fine imported black Novelty
Dress Goods, 46 to 48 in. wide,
made in France, and sold regu
larly at $2.50 to $3.50 a yard;
choice, 98c.
Women's $1.25 Gowns
69c
Women's heavy flannel Gowns
in fancy blue and pink stripes;
extra good quality, and stand
ard $1.25 value at any store.
Women's 35c Hosiery
18c
Fast black and guaranteed ab
solutely stainless, double heel
and toe. A special purchase
bought to sell. at 35c a. pair. All
sizes.
IMIHcDoniiell Co, Inc.
" The Store Noted for Best Goods at Lowest Prices."
Cor. Third and Morrison Sts. Both Phones-Main 732, A 113?
$5-$7Leatii.Handbags
200 fine leather Handbags, in
dozens of the very latest styles;
regular values up to $7 apiece,
on sale Friilny and Saturday at
$1.88.
ness lay In another direction. Iy only
recreation has been automoblling. I'd
like to keep one of my automobiles, but
I am afraid I can't.
Entered Office Rich, Leaves It Poor.
"Back in my prosperous days I gave
the home on Euclid avenue to my wife.
It Is hers yet and she will own it still,
even though we can't afford to live in It.
"I don't feel discouraged. I am a free
man, and that means a great deal to me.
And I have my friends too.
' "Don't you suppose it will be worth
something to me to have my friends re
alize that I entered the Mayor's office
rich and left it poor? The realization
of what all that means is worth more to
me than the money I have loet.
"I am going to keep on just as I've
started. I am going to be a candidate
for Mayor again this term."
The Municipal Traction "Company, of
which Mr. Johnson was treasurer, passed
into the hands of receivers in the Fed
eral Court (several days aeo. Following
this came the transfer to two local banks
of the Depositors Savings & Trust Com
pany, of which the Mayor was president,
it is said this action was precipitated by
the threats of Mr. Johnson's individual
creditors to file suits to obtain pay
ment on notes indorsed by the Mayor.
It is said that Mr. Johnson has recently
lost approximately $400,000 in connection
with his interests at Moraine. O.
SEVERE REBUKE TO EVANS
Xewberry Reprimands Young Lieu
tenant Who Was Reduced.
"WASHINGTON. Nov. 19. Lieutenant
Frank L. Evans, U. S. N., who was re
cently reduced 150 numbers in rank for
conduct unbecoming an officer and pre
judicial to the service, has been repri
manded hy Acting. Secretary Newberry in
GGDTINFD
R GOATS
If f
Mi
- to
If you desire a Fur Coat this season, the following tre
mendous cut in price will compel you to purchase now,
yo such values have ever before been offered in Port
land. SABLE SQUIRREL JACKET Regular $85.00, sale
price Sj?52.50
RUSSIAN PONY COAT Regular $42.50, sale price. . . .27.50
BLENDED BROOK MINK Refnilar $85.00, sale price 50.00
ASTRA CHAN JAPANESE MINK JACKET Shawl
collar and cuffs, regular $75.00, sale price $52.50
ASTRA CHAN JACKET Regulation cut, regular $50.00,
sale price ., ..5j538.50
ASTRACHAN JACKET Brook Mink trimmed ; regular
$50.00, sale price $39.50
H. LIEBES & CO.
JOHN P. PLAGEMANN, Manager.
Store Open Saturday Evening
288 MORRISON ST.
Corbett Building
Send For Illustrated Catalogue
accordance with the findings of the court
martial in the following language:
"The department for reasons obvious
regards this as a deplorable case and in
publishing its disapproval of the conduct
of Lieutenant Evans, refrains from ex
pressing fully its condemnation of the
actions of this officer on the occasion in
question. A casual reading, however, of
the charges and specifications with the
findings thereon will be sufficient to en
able the service to form its own estimate
of an officer who has been found guilty
of the acts alleged in this case.''
Admiral Sperry. chief in command of
the Atlantic fleet battleships, in ap-'
proving the findings, said he did so in
order that Lieutenant Evans "shall not
entirely escape punishment" but made
known his belief that the young officer
had not been -adequately punished.
The court-martial found Lieutenant
Evans guilty of leaving his station before,
being adequately relieved, of disrespect
ful language to his superior officer and of
Inviting two enlisted men to have a botKe
of beer in his room.
Including Hayti. Panto Domlntro, Panama
and Liberia, there are now 24 republics In
tlie wnrlrl.
jWrVfJoS? Cut the
Cost
in Two
Of course, there's noth
ing to prevent you from
paying double the price for
your Clothing if you choose.
But is it wise?
"Michaels-Stern
Clothes
give you that well dressecf,
perfectly set-up appearance,
not because you pend too
well but wisely. ICt in
their fine fabrics and ex
clusive styling.
The trason'l nnvat modrtt
should be on sale in your Cilj. 1
not. we'll tell tu where to obtain
them and will'also nrwaairou one
of our handsome Portfolios oj styles
ij you 'II send ul your local dealer $
name'.
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