Standard Oil

Standard Oil (1863 - 1911) was a large integrated oil producing, transporting, refining, and marketing organization. It was founded by John D. Rockefeller (1839-1937) and partners in 1863, with the plan of making kerosene, which was sweeping the home lighting market, supplanting the commonly used whale oil (blubber). Borrowing heavily to expand his business, Rockefeller drew five big refineries including the business concern of Henry Morrison Flagler into one large firm, Rockefeller, Andrews & Flagler. By 1868 Rockefeller and Company headed Standard Oil of Pennsylvania, based in Pittsburg, one of the world's largest oil refining concerns.

Monopoly

By 1890 Standard Oil controlled over 90% of the refined oil flows in the United States. Though conspicuous, it made John D. Rockefeller, the wealthiest man in the world. It was at this time that Standard Oil of Ohio moved its headquarters out of Cleveland and into its permanent headquarters at 60 Broadway in New York City. It was at this time that the Standard Oil of Ohio's trustees chartered the Standard Oil Company of New Jersey in order to take advantages of New Jersey's more lenient corporate stock ownership laws. Standard Oil of New Jersey eventually became one of many important trusts that dominated key markets; steel and railroad were also concentrated markets. In the same year, The Congress of the United States passed the Sherman Antitrust Act - the source of all American anti-monopoly laws. The law forbids every contract, scheme, deal, or conspiracy to restrain trade, though the phrase "restrain trade" is open to interpretation. Standard Oil Trust quickly attracted attention from antitrust authorities and the Ohio Attorney General filed and won an antitrust suit in 1892.

Related Topics:
1890 - Congress of the United States - Sherman Antitrust Act - Antitrust - Ohio - Attorney General - 1892

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Standard Oil?s quasi-monopolistic position had developed from aggressively competitive business practices, including purchasing competitors and engaging in volume-discount transportation deals with the railroad companies to ensure it could undercut smaller competitors' prices. This helped kerosene to drop in price from 58 to 26 cents between 1865 and 1870. Competitors might not have appreciated the company's business practices, but consumers appreciated the drop in prices. Standard Oil, being formed well before the discovery of Spindletop and a demand for oil other than for heat and light, was well placed to control the growth of the oil business. It was perceived that it did this by ensuring it owned and controlled all aspects of the trade. Oil literally could not leave the oil field unless Standard Oil agreed to move it: the ?posted price? for oil was the price that Standard Oil agents printed on flyers that were nailed to posts in oil producing areas, and producers were in a take-it-or-leave-it position.

Related Topics:
Railroad - Spindletop

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Then came Ida M. Tarbell, an American author and journalist, known as one of the leading muckrakers. Following extensive interviews with senior executive Henry H. Rogers, Tarbell's investigations of Standard Oil for McClure's magazine, ran in 19 parts from November 1902 to October 1904. They were collected and published as The History of the Standard Oil Company in 1904. The book fueled growing public attacks on Standard Oil and on trusts in general, and is credited with hastening the 1911 breakup of Standard Oil.

Related Topics:
Ida M. Tarbell - American - Muckrakers - Henry H. Rogers - McClure's - 1902 - 1904 - The History of the Standard Oil Company

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