CHAPTER XVII
IN THE INTEREST OF ALL
Thedifference in freights against Rice was so great, as the Interstate Commerce Commission found, after taking hundreds of pages of testimony, that he had to pay $600 to $1200, "or more," on the same quantity his opponent got through for $500. These discriminations were made, as the commissioners say, "on no principle.... Neither greater risks, greater expense, competition by water transportation, nor any other fact or circumstance brought forward in defence, nor all combined, can account for these differences."[414]
The railroads had, of course, to give some reason, and they put forward the plea that it was much more expensive and dangerous to carry Rice's shipments, which were in barrels, than those of the combination, which were in tank-cars.[415]This excuse for charging him rates at which he could not ship at all did not stand examination by the Interstate Commerce Commission.
But he did not wait for that. When he found the railroads were so fond of tank-cars, he set about getting them. He wrote the general freight agent and the president of the road that he would build tank-cars, and asked what his rate would be then; but he got no answer. He wrote other roads, but got no answer. He asked the general manager of the Queen City and Crescent Route the same question. After a correspondence of five months with him and other officials, in which he was shuttlecocked from one to another and back again, he had not only not succeeded in getting any tank-carrates, but at the end of that protracted exchange of letters the general manager wrote: "I was not aware that you had asked for rates on oil in tank-cars."[416]Rice wrote the Louisville and Nashville: "I will build immediately twenty tank-cars if you will guarantee me ... as low a net rate as accorded any other shipper." Commenting on his failure to get answers, the commissioners say: "Complainant did not succeed in obtaining rates. The denial of his right was plain, and stands unexcused.... What reason there may have been for it"—the refusal of rates—"we do not know, but find that they were not just or legal reasons."[417]
How history is made! One of the reasons given by the solicitor of the oil trust[418]for its success is its use of the tank-car, with the obvious inference that its would-be competitors had no such enterprise. And Peckham, in his valuable and usually correct "Census Report on Petroleum," in 1885, says that the railroads require shippers to use tank-cars![419]
Determined to keep in the field and to have tank-cars, if tank-cars were so popular with the railroad officials, Rice went to the leading manufacturers to have some built. He found they were glad to get his contract. After making arrangements at considerable trouble and expense to build him the cars, they telegraphed him that they had to give it up. Bankers, who had promised to advance them money on the security of the cars, backed out "on account of some supposed controversy which they claim you have had with the Standard Oil Company and various railroads in the West. They feared you could not use these cars to advantage if the railroads should be hostile to your interests."[420]
Through the all-pervading system of espionage, to which cities[421]as well as individuals were subject, his plans had been discovered and thwarted. The espionage over shipments provided for by the South Improvement scheme has nowextended to business between manufacturer and manufacturer. Why should it stop at unsealing private correspondence in the post-office in the European style, and making its contents known to those who need the information for the protection of their rights to the control of the markets?
Rice, who was nothing if not indomitable, finally got ten cars from the Harrisburg works. But this supply was entirely inadequate, and he had to continue doing the bulk of his business in barrels. What a devil's tattoo the railroad men beat on these barrels of his! They made him pay full tariff rates on every pound weight of the oil and of the barrel, but they hauled free the iron tanks, which were the barrels of his rivals, and also gave them free the use of the flat-cars on which the tanks were carried.[422]Hauling the tanks free, on trucks furnished free, was not enough. The railroads hauled free of all charge a large part, often more than half, of the oil put into the tanks. In the exact phrase of the Interstate Commerce Commission, they made out their bills for freight to the oil combination "regardless of quantity." This is called "blind-billing."
Of the 3000 tank-cars of the combination only two carried as little as 20,000 pounds; according to the official figures there were hundreds carrying more than 30,000 pounds, and the weight ran up to 44,250 pounds, but they were shipped at 20,000 pounds.[423]A statement put in evidence showed that shipments in tank-cars actually weighing 1,637,190 pounds had been given to the roads by the combination as weighing only 1,192,655 pounds. Cars whose loads weighed 44,250, 43,700, 43,500, 36,550 pounds were shipped as having on board only 20,000 pounds. At this rate more than one-quarter of the transportation was stolen.
The stockholders of the road were paying an expensivestaff of inspectors to detect attempts of shippers to put more in their cars than they paid for, but these shippers paid for three car-loads and shipped from four to six regularly, and were never called to account. This "blind-billing," the Commission said, was "specially oppressive." It was done by the roads in violation of their own rule. It had been mutually agreed among them, and given out to the public, "that tank-cars shall be taken at actual weight."[424]
When Rice was trying to get the roads to allow him to use tank-cars, he asked how the charge on them was calculated. Of those that answered none answered right. None of them gave him the slightest intimation that there was any such practice as "blind-billing." On the contrary, they assured him he would have to pay for every pound he shipped. The Missouri Pacific replied with a "statement not warranted by the facts," as the Commission softly put it. They said they charged for the "actual weight," while, as the Commission shows, they made shipments "regardless of quantity." Rice asked the Newport News and Mississippi Valley Railroad for tank-car rates. "A tank-car is supposed to weigh (carry) 20,000 pounds; if it weighs more, then we will charge for it." At the same time the agent wrote Rice this, he was hauling cars containing 35,000 pounds "with no additional charge." "If this statement was made in good faith," the Commission says, "it is difficult to account for it, and it is not accounted for." "Had he (Rice) provided himself with cars for tank shipment, and been charged as he was told he would be, the discrimination against him would have put success in the traffic out of the question."
When they wanted to turn some new screw in freight rates against Rice, the railroad officials would whip themselves around the stump by printing a new tariff sheet on a type-writer, and tacking it, perhaps, as one of the Interstate Commerce Commission said, on some back door in their offices. This they called "publishing" their rates, as required by theInterstate Commerce law. To Rice, asking for tank-car rates, they would send this printed sheet, showing that if he shipped by tank-car he must pay for every pound, and they held him off with this printed, official, and apparently authentic tariff, though shipping 44,000 for 20,000 pounds for the trust. This was done after the Interstate Commerce Act went into force.[425]
One of these roads assured Rice that its rates had been fixed "by the special authority of the National Railway Commissioners." The fact was, as the Commission declares: "The Commission never investigated coal-oil rates, or gave special authority for their renewal; it never sanctioned any difference in the rates as between tank-car and barrel shipments, and had never, up to the date of this letter, had its attention called to them in any way."[426]
The representative of the combination was called as a witness before the Interstate Commerce Commission. "We pay for exactly what is put in the tanks,"[427]he testified. "In fact, this was never done," says the Commission.[428]Even the railroad officials, who could go any length in "blind-billing" for him, could not "go it blind" on the witness-stand to the extent of supporting such a statement. "Our price per tank-car was not based on any capacity or weight; they have been made simply per tank-car."[429]
"What, generally, is the object of false billing?"
"I suppose to beat the railroad company."[430]
In defence of the discrimination against the barrel shippers, a great deal has been made of danger from fire, damage to cars from leakage, and trouble of handling in the case of barrel shipments, but the best expert opinion which the Interstate Commerce Commission could get went against all these plausible pretences.[431]The manager of the tank line on the Pennsylvania roads showed that the risks were least when the transportation was in barrels. Another reason given for the lower rates on tanks was that they returned loaded withturpentine and cotton-seed oil from the South; but, as the Interstate Commerce Commission shows, this traffic was taken at rates so astonishingly low that it was of little profit;[432]and the commissioner of the Southern Railway and Steamship Association informed the Commission that the return freight business in cotton alone, brought back by the box-cars, to say nothing of other freight, was worth more than these back-loads of turpentine in the tank-cars.[433]It was, consequently, the box-car in which barrel shipments were made, and not the tanks, on which the railroad men should have given a better rate, according to their own reasoning. Turpentine and cotton-seed oil are worth three or four times more than kerosene, and it costs no more, no less, to haul one than the other; but the railroads would carry the cotton-seed oil and turpentine for one-third or one-fourth the rate they charged for kerosene. The Commission could not understand why the rates given by the roads on these back-loads of turpentine and cotton-seed oil were so low. "This charge, for some reason not satisfactorily explained to the Commission, is made astonishingly low when compared with the charge made upon petroleum, although the cotton-seed oil is much the more valuable article."[434]
The newspapers of the South have contained many items of news indicating that the men who have made the oil markets theirs have similarly appropriated the best of the turpentine trade, but nothing is known through adjudicated testimony. The trustees of oil have always denied that there was any connection between them and the Cotton-seed Oil Trust, although the latter shipped its product in the oil trust's cars. The reasons, therefore, for the "extraordinarily low" rates made on the turpentine and cotton-seed oil shipped North in its tank-cars must remain, until further developments, where the Commission leaves it—"not satisfactorily explained." The railroads said they made the rates low for tanks because of the enticing prospects of these back-loads,in which there was no profit to speak of; but they extended these special rates to points from which there was no such back-loading.[435]Rice saw how the cost of sending his oil South could be reduced by bringing back-loads of turpentine at these "astonishingly low" rates. He found there was still turpentine in the South he could buy; but the railroads would not so much as answer his application for rates.
"They absolutely refused."
"Was this refusal since the Interstate Commerce decision in your case?"
"Yes, sir; since that decision."[436]
It might have been thought this would have been enough—hauling the tank itself free; furnishing the flat-cars free for many tanks; carrying free a quarter to a half, "or more." But there was more than this. The railroads paid the combination for putting its tank-cars on their lines. For every mile these cars were hauled, loaded or empty, the roads paid it a mileage varying from ¾ to 1½ cents. This mileage was of itself a handsome revenue, enough to pay a profit of 6 per cent. on its investment in the cars. But when Rice asked what the railroads would charge him for hauling back his empty tank-cars, he was not told that he would be paid for their use, as others were. He was told that he would be charged "generally a cent and a half a mile," or, "we make the usual mileage charge on return of empty tanks." "This last statement," the Interstate Commerce Commissioners say, "was not warranted by the facts."[437]The vessel which contains the oil of the combination "receives a hire coming and going," Mr. Rice's lawyer said before the Committee of Congress on Commerce; "that which contains Rice's oil pays a tax." When Rice tried to sell his oil on the Pacific coast he found that if he shipped in tank-cars he would have to pay $95 to bring the empty car back, which others got back free.
The representative of the oil combination was questioned about all this by the Interstate Commerce Commission.
"Are you allowed mileage on tank-cars?"
"No, sir."
"Neither way?"
"Neither way."[438]
But the railroad officials again could not "blind-bill" him as far as this. Asked what mileage they paid him, they replied:
"Three-quarters of a cent a mile."[439]
When the freight agents who did these queer things at the expense of their employers—i.e., their proper employers, the stockholders—were put on the stand before the Interstate Commerce Commission to explain, they cut a sorry figure. "It was an oversight," "a mistake," said one. Another could only ring confused changes on "I think it is an error.... I cannot tell why that is so.... It is simply an error.... I cannot tell."[440]There were never any errors, suppositions, oversights for Rice.[441]Referring to this, the Commission says, caustically:
"The remarkable thing about the matter is that so many of these defendants should make the same mistake—a mistake, too, that it was antecedently so improbable any of them would make. The Louisville and Nashville, the Cincinnati, New Orleans and Texas Pacific, the Newport News and Mississippi Valley, and the Illinois Central companies are all found giving out the same erroneous information, and no one of them can tell how or why it happened to be done, much less how so many could contemporaneously, in dealing with the same subject, fall into so strange an error. It is to be noted, too, that it is not a subordinate agent or servant who makes the mistake in any instance, but it is the man at the head of the traffic department, and whose knowledge on the subject any inquirer would have a right to assume must be accurate. In no case is the error excused."[442]
The cases in which Rice prosecuted the railroads beforethe Interstate Commerce Commission are among the most important that have been tried by the Commission. The charges made by Rice were conclusively proved, except as to some minor roads and circumstances. The Commission declared the rates that were charged him to be illegal and unjust, and a discrimination that must be stopped. It ordered the roads to discontinue using their power as common carriers to carry Rice's property into the possession of a rival. "The conclusion is irresistible that the rate sheets were not considerately made with a view to relative justice."[443]
The facts of these discriminations—"unjust," "illegal," and "abhorrent"—are on the records as judicially and finally determined. But one of the combination said before the Pennsylvania Legislature, at Harrisburg, as reported in the HarrisburgPatriot, February 19, 1891:
"I say to you all, in good faith, that since the passage of the Interstate Commerce law, and the introduction of that system, we have never taken a rebate. I mean we have taken no advantage over what any other shipper can get. I make the statement broadly, and I challenge the statement to the very utmost, and will pay the expenses of any litigation undertaken to try it."
"I say to you all, in good faith, that since the passage of the Interstate Commerce law, and the introduction of that system, we have never taken a rebate. I mean we have taken no advantage over what any other shipper can get. I make the statement broadly, and I challenge the statement to the very utmost, and will pay the expenses of any litigation undertaken to try it."
When it was found that this practice of charging the preferred shipper for only 20,000 pounds when it shipped 25,000, 30,000, 40,000, or 44,000, was going to be investigated by the Interstate Commerce Commission, there were intellects ready to meet the emergency. A pot of paint and a paint-brush furnished the shield of righteousness. Each car being known by its number, and only by its number, all the old numbers of the 3000 tank-cars of the oil trust were painted out, and new numbers painted on. Whether its mighty men left their luxurious palaces in New York, and stole about in person after dark, each with paint-pot and brush, or whether they asked employés to do such work, the evidence does not state. The device was simple, but it did. Rice was suing for his rights to use the highways before the Interstate Commerce Commission, and before the Supreme Court of Ohio, throughthe Attorney-General of the State, who had found the matter of sufficient importance to use his official power to institute suits inquo-warrantoagainst two railroads. It was necessary that evidence should be forthcoming in these suits to prove what his rate was in comparison with the others. The only way this could be done was by comparing the actual size of the cars with the size given in the freight bills, or manifests. The cars are known in the bills only by their numbers, and without its number no car could be identified. The report of Congress reprints the following from the testimony of the representative of the trust before the Interstate Commerce Commission:
"Has there recently been any general change in the numbering of the cars?"
"Yes, sir; there has been quite a general renumbering, repainting, and overhauling."
"When did that change take place?"
"I think it was commenced some time in July; it may have been later."
The result of that renumbering made it practically impossible to identify any car as connected with any shipment made before that time. The cars were there, looking as fresh and innocent as good men who have donned robes of spotless white earned by the payment of generous pew-rent. The cars showed even to the unassisted eye, as the Interstate Commerce Commission said, how much larger they were than was pretended. There were still the accounts of the railroads, showing that these cars had been "blind-billed" as containing only 20,000 pounds, but the cars mentioned in the manifesto could no longer be identified with the cars on the tracks. The sin of "blind-billing" was washed out in paint. Rice went to the Interstate Commerce Commission with his complaint in this case in July. Immediately the repainting and renumbering took place. "It was commenced some time in July; it may have been later."[444]
In such cases time is money, and more. "Seest thou a man diligent in business, he shall stand before kings. He shall not stand before mean men."
The members of this combination have many thousand tank-cars engaged in carrying their oil, and some of them have another kind of tank-car travelling about the country. Under the head of the "Gospel Car" theDaily Statesman, of Portland, Oregon, printed the following article, Sunday, December 13, 1891: "The Gospel Car.—The mission car 'Evangel' arrived yesterday, and was side-tracked on the penitentiary switch. A song service attracted many people during the morning. There will be services at 10.30 this morning, and in the afternoon, at 3 o'clock, a Sunday-school will be organized. This will be the first Sunday-school ever organized from the gospel car, which has been on the road since last spring. The 'Evangel' is sixty feet in length, ten feet wide, and seats nearly one hundred people. It is the generous gift of"—several New York millionaires, the most important of them belonging to the oil trust—" ... to the American Baptist Publication Society. The reverend gentleman who was in charge of the 'Evangel,'" theStatesmancontinued, "will visit the smaller towns along the railway, and conduct evangelistic meetings in the car." One of these cars was in Chicago early in 1893, and was admiringly described by the Chicago press. Though corporations have no souls they are ready to help save the souls of others, for the railroads give these cars free hauling, and the messages and the packages of its occupants are franked by the telegraph and express companies. The contents of this tank-car are distributed by its donors to the people without money and without price. It is conceivable that by making it so "cheap" and by multiplying the "Evangel" into an evangelical tank line of thousands of cars, the donors might drive the churches, which have no tank-cars, out of the business, as they have done the tankless refiners, and ultimately add to their monopoly of the Light of the World that of the Light of the other World.
Tho effect of all this on the family co-operation at Mariettadoes not need to be described. Its head told Congress that if he had had no difficulty in getting the same freight as others he could have run his refinery to its full capacity, and could have increased his works largely.
"Are not your expenses less than theirs?"
"Yes, sir.... I am running very moderately now.... One-third to one-half generally."[445]
"I am virtually ruined," he says still later in a statement of his condition in a circular to the public, urging them to petition Congress to make the imperfect Interstate Commerce law operative. He is virtually ruined, though he has won his cases before the Interstate Commerce Commission, and that Federal tribunal has ordered the roads to give him his rights on the highways; but it has been a barren victory. His circular is entitled "My Experience Very Briefly Told." Its opening sentences give us in a phrase the secret of the significance of Rice's story, and dignify his appeal to the public. They show how thoroughly adversity had driven home into this plain man's mind a great civic truth which his fellow-citizens have not yet learned, probably because they have not yet had adversity enough. His solitary and fruitless, although successful, struggle taught him that the citizens of industry can no more maintain their rights acting singly than the citizens of government. He had learned that "competition," "supply and demand," "eternal laws of trade," were catchwords as impotent in the markets to give individuals their rights, if unassociated, as the incantations of royalty and loyalty, and law and order, to save people from their king until they made themselves a People. Persons fail; only a People can get and keep freedom. This Rice had begun to learn from his failure to enforce single-handed rights which all the courts declared were his, but which no court could secure. In his card to the people, he said: "I am fighting for my rights and for my existence (which happens to be in the interest of all) single-handed and alone, at my own expense and time lost....I am here ... to do what I can to get the Interstate Commerce Act amended at this present session of the Fiftieth Congress, to cure existing evils, and all I ask is that you will take hold and assist me by your signature and approval to the enclosed petition. You are subject to the same influences, and now is your time, my fellow-countrymen, to come forward and assist a little to stop this nefarious work."
"In the interest of all." This is exactly the relation which the struggle of this common citizen bears to the general welfare. The investigation by the Ohio Legislature in 1879;[446]the removal by the United States Court of the railroad receiver who agreed to pay the oil trust $25 out of every $35 freight collected from Rice;[447]the refund ordered by the Supreme Court of Ohio from a pipe-line company which had charged Rice 15 cents extra on every barrel he shipped to pay it to his competitors;[448]the successful prosecution, by the Attorney-General of Ohio before the Supreme Court, of the railroads discriminating against Rice;[449]the cases before the Interstate Commerce Commission from its beginning till now, involving hundreds of railroads, and decided, so far as it did decide, on almost every point in Rice's favor;[450]the disruption, as far as forms go, of the oil trust in Ohio by the Supreme Court of the State ousting corporations from the right to become members of such combinations and to pool their earnings therein;[451]the investigation of the oil trust by Congress in 1888 and 1889, devoted in large part to the various aspects of Rice's experience—these are some only of the public functions which had to be invoked in the ineffectual attempt to protect this one man on the high-road and in his livelihood, and they show how little his was merely a "private affair."
When the amendment of the Interstate Commerce law was before Congress in 1889, eminent counsel were employed by Rice to explain the defects of the law to the committees, and petitions to Congress through his instrumentality were circulated all over the country, and numerously signed. Though a poor man, who could ill afford it, he gave time and money and attention, frequently spending weeks at Washington, discussing the subject with members, and presenting petitions. The act was amended in partial accordance with these petitions and recommendations.
To obtain the elementary right of a stockholder, never withheld in the course of ordinary business—to vote and receive dividends on stock in the oil trust which the trustees had sold and he had bought in the open market—Rice had to sue through all the New York courts from 1888 to 1892. The Court of Appeals decided that there had been no lawful reason for the denial of his rights, and ordered that they be accorded him. This was another barren victory. The trust had meanwhile ostensibly been dissolved; but the dissolution has every appearance of being like that of its progenitor, the South Improvement Company, a dissolution "in name" only; not in reality. In place of the old trust certificates listed on the New York Stock Exchange, new certificates have been issued which were selling in the spring of 1894 at about the same quotation as the former ones.
In this case the trust asked the New York courts to deny Rice his rights because he had in other matters, and as to other parties, appealed to other courts. His other suits had been against the railroads, not against the oil combination. He acted on the defensive, and went into court only to save himself from commercial strangulation. In all of them that went to trial he was successful, with but one or two exceptions. He was so successful that even the judges who heard his case and decided in his favor were moved to outbursts of unaffected indignation on the bench. The only result aimed at or procured was that the courts decreed that these common carriers must in the future give this citizen his legal rights on the railways; not that he must have the same rates as his opponent, but only that the difference in their favor shall not be "excessive," "illegal," "unjust."
Because of this attempt to secure the fair use of the highways side by side with it, the trust pleaded in the Supreme Court of New York that his appeal to courts as a shipper was a reason why the courts should withhold his rights as a stockholder.
In making this plea the trustees described themselves as having been for years persecuted by the independent of Marietta, and moistened the dry pages of their legal pleadings with appeals for the sympathy of the courts and the public. He has "diligently and persistently sought to become acquainted with" our "methods of business and private affairs;" "he has used efforts to injure" our "business"; "he is attempting to harass, injure, and annoy" us; "he has ever since ... 1876, when he first engaged in business, ... maintained a hostile attitude, and been engaged in hostile transactions and proceedings against" us, ... "for the purpose of injuring" us and our "business"; he "has been uninterruptedly prosecuting ... a series of litigations ... in the courts, as well as before the Interstate Commerce Commission, and before an investigating committee of Congress ... for the purpose of harassing and annoying" us.[452]And when in 1891 Rice was appealing to the Attorney-General of New York to bring suit in the name of the State against the oil combination in New York, like that which had been successfully brought in Ohio, he was publicly stigmatized in court as a "black-mailer" because he had once named a price at which he was willing to sell his refinery and quit. So the citizens of Nashville were called black-mailers for competing, and the citizens of Buffalo for bringing a criminal conspiracy to justice.
It is this dancing attendance upon State legislatures, courts, attorney-generals, Congress, the Interstate Commerce Commission, as shown in this recital, which the modern American business man must add to Thrift, Industry, and Sobriety as a condition of survival.
CHAPTER XVIII
ORDINARY SUPPLY AND DEMAND
"DoI understand you that they have not sought in any way to make the operations of refineries outside the trust so unprofitable that parties would either come into the trust or have to abandon the business—has anything of that sort been done?"
"They have not; no, sir, they have not," was the triple negative of the president.
"They" (the trustees) "have lived on good terms with what I may call their competitors?"
"They have; and have to-day very pleasant relations with those gentlemen."
"So far as you know," he was asked, "the product of the crude oil and the manufacture and sale of the refined oil has been absolutely left to the ordinary rules of supply and demand, has it not?"
"It has."[453]
In the winter of 1873 a young farmer living among the blue hills of Wyoming, in western New York, where he had been born and bred, was asked by a stranger from Rochester to help him in a search for oil lands. The old-fashioned quiet of the little community was agitated by the hope that the milk and honey of their valleys might be replaced by a more precious flow. The stranger and his son were prosperous oil refiners, but a little cloud, about the size of a "trustee's" hand, had crept into their sunshine. As they set about drilling a well on some "likely-looking" landthey had leased, the stranger told the farmer why he was so anxious to strike oil for his own exclusive use. The reader is better prepared to understand his explanation than the then inexperienced agriculturist to whom he gave his confidence. It had begun to be difficult for him to get a full and regular supply of the crude petroleum for his works. There were restrictions, he said, about the shipments.[454]What that meant the young farmer was to learn for himself.
There was no oil in Wyoming, and the refiner went back to Rochester, and, as so many others have done, sold the control of his works, the Vacuum, to the "successful men" of the combination, and stepped silently into the minority place. His Wyoming friend, Charles B. Matthews, had continued in his service, and when the Vacuum was sold he and two other of its employés made up their minds to go into the business of refining in Buffalo on their own account. They were under no obligations or contract to remain, and did not suppose themselves to have been sold along with the concern. They were capable men, and showed great business sense in their arrangements. Buffalo, by its connections by rail and the lake with the market, and its nearness to the oil supply, was a much better situation than Rochester or Cleveland. An independent refining company—the Atlas—was then constructing an independent pipe line from the oil regions to Buffalo. "This made Buffalo the best point for establishing refining industries in the country, with its canal and lake transportation for the products of the factory, and with a pipe line, in the hands of independents, from the crude oil wells to the city," said the BuffaloExpress. Matthews had by this time had several years' experience in the business. Of the two with him, Albert was a laborer, who had worked his way up in the Vacuum refinery until he could run the stills, and had learned how to make oil. He and his thriftywife had saved a few thousand dollars. He was ambitious. He had learned at school and in the army and at Fourth-of-July celebrations that America is a free country for all, and that there are no classes here, and that any workman may go to the top. Farmer Matthews had fed his boyhood with stories of country boys who had gone to the city and matured into business magnates. He and Albert pooled their visions and their savings, borrowed some money, and went to work. As for competition, though they knew it was close, they were not afraid but that they could hold their own in a fair fight, and of anything but a fair fight they never dreamed.
"How are you going to get your crude oil?" Albert and Matthews were asked when they went to tell their employer what they were going to do.
"From the Atlas pipe line."
"You will wake up some day and find that there is no Atlas Oil Company.
"We have ways," he continued, "of making money you know nothing about," using, singularly enough, the phraseology employed by a greater man in the interview with another would-be competitor.[455]
"As gentlemen," he went on to say, "I respect you, but as to the Buffalo Lubricating Oil Company I shall do all in my power to injure or destroy it."[456]
Afterwards Albert alone was sent for. "Don't you think it would be better for you to leave these men, and have $20,000 deposited to your wife's credit than go with these parties?"
"I went out with them in good faith, and I propose to stay."
"It will be only a matter of a few days with the Buffalo institution at the furthest. We will crush them out, and you will lose what little you have got."
Albert was shown an elaborate statement of the cost of making oil and its selling price, proving that there was no money in oil.[457]The record of dividends was produced incourt afterwards. It showed that just before this—January 18, 1881—a dividend of 50 per cent. had been paid in one month.[458]Dividends of $300,000 had been paid in 1881 on the capital of $100,000. "No wonder they did not want competition," said the New YorkWorld.
These negotiations had been with the son. Albert not yielding to this pressure, and pushing ahead with the construction of the rival stills, the father, who was in California, came back. At his request Albert again interrupted the work on the new refinery, which he alone of the partners could direct, and came from Buffalo to Rochester for an interview.
"You have made a grand mistake," said his old employer, "by going out with those fellows.... The company will not last long.... The result will be, if you stay with them, you will lose all you have got in it.... We are going to commence suits against them. We will not only sue them, but serve an injunction on them and stop their work. The result of it is that when these suits commence, if you are in it, you will be responsible, and you have got a little money, and you will lose it all.... If you come back and work with us everything will be all right, and we will make everything satisfactory to you."
"If I leave them it will leave them in bad shape," Albert urged.
"That is just exactly what I want to do,"[459]his former employer replied.
Albert began to weaken. "I had," he afterwards told in court, ... "about $6000 altogether, or a little more. They had reason to know that I had some property there."[460]This was all he had to show for the work of a lifetime, and it began to look as if it were fading away under these reiterated threats and warnings, which went on from March to June. Albert gave way. He went to his lawyer, Mr. Truesdale, of Rochester. "We have come," said his former employer, who accompanied him, "to see what disposition can be made of Al's property."
"They are going to bust the company up," said Albert to his lawyer, when asked why he was going back to the Vacuum Company. "I am an indorser on one of its notes, and if I do not come back with the Vacuum, what property and money I have will be taken away from me."
The lawyer was pressed to tell how Albert could get out of his arrangement with his company. They could not get along without him, and were not likely to discharge him.
"If they won't release him or buy him out, the only other way," said the lawyer, "is to leave them, and take the consequences. If he has entered into a contract and violated it, I presume there will be a liability for damages as well as for the debts."
"I think there is other ways for Albert to get out of it," said the representative of the Vacuum method in commerce and morals.
"I see no way except to back out or sell out; no other honorable way," persisted the lawyer.
"Suppose he should arrange the machinery so it would bust up or smash up, what would the consequences be?"
"If negligently, carelessly, not purposely done, he would be only civilly liable for damages caused by his negligence; but if it was wilfully done, there would be a further criminal liability for malicious injury to the property of the company."
"You wouldn't want me, would you," said the poor man to his late employer and friend, "to do anything to lay myself liable?"
"You have been police justice," said the Vacuum man to the lawyer, "and have had some experience in criminal law. I would like to have you look up the law carefully on that point, and we will see you again."[461]Or, in effect: "See about how much crime we can commit," District Attorney Quinby paraphrased it afterwards to the jury.
In a day or so the two managers of the Vacuum—father and son—came back again with Albert.
"Have you looked up that matter, Mr. Truesdale?" asked they.
"Yes, I have looked it up."
"What do you think about it?"
"My impression has not changed. Such a course would involve him in a criminal liability if he did it on purpose. Everybody who advised or counselled him in such a course would be equally liable with him. The consequences, if you follow that course, would be that you would get into State's prison. If he is an honest man he won't think of taking any such action as that. I advise him to keep out of any such thing."
"Such things will have to be found out before they can be punished," was the Vacuum reply. "They will have to find him before they can do anything to him. We will take care of him." "Having in mind," said District Attorney Quinby to the jury, "what happened afterwards—that they should spirit him away."
"The suggestion is altogether wrong," persisted the lawyer. "The action would certainly be very hazardous as well as wrong."
On leaving, the elder of the two, evidently persisting in his plan, said to the lawyer, "If you want to communicate with Albert, you can do so through C.M."[462]—his son.
These men were too careless to note that the lawyer they were talking to was not their lawyer, but Albert's. When they were brought to trial for the crime that followed, and Albert, repentant, told the truth, the lawyer was free to testify against them. "I am entirely willing," said Albert in court, "that Mr. George Truesdale shall state what took place. I withdraw any legal objections I might have."
The accident which has let us see how the employés of a trust coolly debated with lawyers the policy of blowing up acompetitor's works, is one of the few glimpses the American public will ever get into the relations of great legal lights and law-reformers with the mighty capitalists who wreck railroads and execute wholesale corruption of courts, legislatures, and trustees, and evade and transgress the laws with the sure march of those who know that indictments and bail-bonds and verdicts of "guilty" and the penitentiary are only for men not rich enough to plan crime "by advice of counsel." When such men went marauding through the treasury of a great railroad and the courts of an Empire State, we saw the greatest of law-reformers, with a host of legal luminaries, picketing and scouting for them. Every sound in nature is phonographed somewhere, as its waves strike, and Judgment Day will be rich with the revelations from these invisible rolls of the confidential conversations between "trustees" and counsel, who are not honorable lawyers as George Truesdale was, prostituting their functions as "officers of courts" into those of officers of crime.
All these trips from Buffalo to Rochester for these interviews made bad breaks in the construction of the works of the new company at Buffalo. The partners, who were wholly dependent upon Albert's knowledge and experience for the building of the refinery, and running it when built, were mystified and alarmed. Time and again he ran away without a word to them, and all work would stop until he came back. When he was on hand his task did not prosper as if his heart were still in it. When one of the three stills of the refinery had been set up ready for use, and before any oil was run, Albert went up to Rochester again. At this rendezvous the sinister suggestion of "doing something" was repeated. "You go back to Buffalo and construct the pipes and stills so that they cannot make good oil, and then if you would give them a little scare ... they not knowing anything about the business ... you know how to do it." Swearing he would not consent, but already succumbing to this temptation, as he had given way to the threat of ruin, he replied as before: "I don't propose to do anything to make myself criminallyliable."[463]At their suggestion he took a man they sent all through the new works, showing him how the stills had been constructed, how the oil was to be made, and all the details of the refinery.[464]
The day came at last—long expected, delayed by these unaccountable absences—when the members of the new company were to have the happiness of seeing their enterprise set going. The one still that was ready was filled with crude oil. The morning of the start Albert weighted down the safety-valve with heavy iron, and packed it with plaster of Paris. "Fire this still," he said to his fireman, "as heavy as you possibly can." The fireman did as he was ordered. During the forenoon Albert came to him. "Damn it!" he said, "you ain't firing this still half. Fire this still! I want you to fire this still! You ain't got no fire under it!" He took the shovel himself and threw some coal in, although there was, as the fireman expressed it, "an inordinary fire." The fire-box grew cherry red.[465]
Albert knew well enough what the next chapter in the history of his associates was likely to be. He had carried a dark-lantern into the still-room one day when he was superintendent of the Vacuum. "I was badly burned by the explosion," he testified before the coroner's jury investigating the explosion in Rochester, in 1887. There were four explosions in the Vacuum works while he was there. In the second, four men were burned. As one of them ran to get water, with his clothes burning, he set fire to the gas coming out of the sewer. Flames flashed all about him. "There's hell all around!" he exclaimed. The third explosion came from an overheated condensing-pipe, and destroyed one of the buildings. The fourth burned up three tanks. Remembering all this, he now took himself off to the grounds of the Atlas Company, out of harm's reach. The brickwork about the still cracked apart with the heat.
But the "smash-up or something" had not been thoroughlyarranged. Despite the heavy weight and the packing of plaster, the safety-valve lifted itself under the unusual pressure, and was a safety-valve yet. It was blown open, and a large mass of vapor rose and spread. This was the real accident: that the safety-valve broke loose instead of keeping the gases in to explode, as had been planned. The spreading vapor was not steam, as that had not been admitted to the still, but the gas of distilling petroleum, as inflammable as gunpowder. There was danger still, as great almost as that of explosion. A spark of fire, and it would have wrapped all within its reach in flames. The boiler fires were but twenty feet distant; not far from them the distilled oil was being gathered in the "tail-house"; near the tail-house stood the tanks of crude oil, hundreds of barrels of the fuel that conflagration loves—the kind of fuel the cooks use who, beginning with kerosene for kindling, make the whole house into a stove, and cook themselves and the family with the breakfast.
The kindly wind of a June day carried the cloud of gas away from the fire until it passed out of sight. The unsuspecting, inexperienced men, whose lives and property had been at the mercy of explosion, knew nothing of their peril until years afterwards. The worst they knew then was that the "batch" of 200 barrels of petroleum was spoiled, and that Albert, the only practical man among them, was gone, leaving them crippled for a year. They waited for him, but he did not come. They looked for him, but could not find him. Matthews went to the depot night after night, sometimes at midnight, or later, to watch the trains, but Albert never came.
"What would be the consequences?" Albert was asked afterwards in court, when he was telling about "the pretty heavy fires" he had made under the still—"what would be the consequences in case too hot fires were applied, and the gas should blow off the pipes and become ignited?"
"The consequences would be that, if ignited, there would be a fire."[466]
An Associated Press despatch from Louisville, Kentucky, June 30, 1890, describing an explosion in an oil refinery there, and the "five acres of fire" that followed, reproduces for us the picture which it had been planned to paint at Buffalo as part of the panorama of "the ordinary rules of supply and demand." A tank-car had been opened to run some oil out. As the workmen lifted the cap from the manhead of the tank a cloud of gas poured forth. It had been generated simply by the heat of the summer sun, without the aid of an "inordinary" hot fire. The men jumped and ran. Before they had taken a dozen steps the vapor, spreading over the ground and moving with the wind, had reached one of the sheds near by in which there was a fire. There was a flash. The men were bathed in a lake of fire. They ran with the flames streaming from them. At the infirmary their bodies were found to be charred in spots, literally roasted alive, and the flesh dropped off as their clothing was removed. Three men died and several were injured.
Several years after the Buffalo explosion, when those convicted for their part in it were fighting for stay of proceedings, new trial, anything to escape sentence, and were trying by every means in their power to impress upon the public the altogether innocent character of the little incident at the works of their rival, something happened at their own works—the Vacuum in Rochester—which gave the people an appalling sense of the terrors of the new school of supply and demand. Naphtha is one of the by-products of petroleum distillation, and is used by the gas companies in the manufacture of the greased air they furnish under the name of gas. The Vacuum Company were selling their naphtha to the Rochester Gas Company. It was delivered to the gas company through a pipe line. On the afternoon of December 21, 1887, there was an explosion on Platt Street, Rochester, tearing away the pavement, shattering the basement of a building, and filling the air with missiles. In a few seconds another explosion occurred a short distance away, making a hole in the street several feet in diameter, from which came large volumes of smoke andflame. A third and fourth "bust-up" rapidly followed, and then a fifth, in the Clinton Flouring Mill, tearing away a considerable portion of the building, blowing off the roof and upper stories of the Jefferson Mill adjoining, and shattering the Washington Mill. The Jefferson and Clinton and Washington mills were burned to the ground. People were killed by flying débris, burned to death, smashed by falling walls, crippled by jumping from the upper stories of factories and mills on fire. "There is probably no chemical product," says Professor Joy, of Columbia College, "which has occasioned the loss of so many lives and the destruction of so much property as naphtha.... From its highly explosive and inflammable nature it has proved little better in the hands of ignorant people than so much gunpowder."
"The counsel for the defence," said District Attorney Quinby, in summing up the case before the jury, "laughed at the idea of Matthews and his associates coming to Buffalo with a little money to compete. I congratulate him that instead of defending for conspiracy he is not here to-day pleading for the defendants' lives. If a person had been killed, and it had been under the advice and instruction of his clients, he would have been differently situated from what he is to-day. How well you men may be thankful that the gases from this still did not flow down and, becoming ignited, explode and kill the fireman! You ought to get down on your knees and thank your God that Providence prevented any such terrible thing as that for you."
After the "bust-up" had been planned, and before it was done, one of the Vacuum managers went to New York, where the "trustees" for whom he was managing the company were. After the "bust-up" Albert heard by telegram from New York, as had been arranged, and went to meet his old employer. "What do you say to going down to Boston?" he was asked on his arrival. Later a man came in and was introduced by the name of one of the three trustees who purchased and directed the Vacuum. On leaving, this "trustee" said: "I will see you again if you do not go to Boston." He thus showed that he knew of the plan that Albert should betaken away, and that they should go to Boston. The manager of the Vacuum now gave the world a genuine illustration of the harmony of labor and capital. He couldn't let Albert out of his sight. They went to Boston on the Fall River boat. The representative of a hundred millions took the laborer into his own state-room, and at Boston carried him into the splendors of Young's Hotel, where he registered, naming himself "and friend," and they shared one bedroom. They went to church together, and to Nantasket Beach, his friend introducing Albert to those whom they met under an assumed name. "You don't want to be known here," he said, "and I will introduce you by the name of Milner."
"That is the name I was known by while I was there."
"Albert has nothing to fear," said District Attorney Quinby on his trial. "He had never been in Boston before in his life. He had no acquaintance there. There was no reason why he should be registered 'and friend' at the hotel. There was no reason, so far as he was concerned, that he should be introduced under a fictitious name, except that his employer had been schooled in the wonderful university known as" the oil combination. In Boston, on a Monday, on the Common, within sight of the equestrian statue of the Father of his Country, his former employer made a contract with Albert to pay him $1500 a year for doing nothing except staying away from Buffalo.
"You won't have much to do, and you can stay here in Boston, and keep away from those fellows, and we will protect you."
"Who's going to make up if those fellows come on and sue me for damages? Who will make up this loss that I have been going to by sacrificing my property?"
"Leave that to me; I will fix that all right. You do just as I tell you, and you will come out all right.... Go wherever you like, stop where you like, and we will pay all your expenses while you are here."[467]
Albert loafed about Boston several weeks, sometimes helping to roll a barrel of oil in the Vacuum's store. When he wanted money he asked for it and got it. He had once been a hard drinker. Destruction was as carelessly invited upon the soul of a poor brother as upon the lives and property of competitors. He hung around Boston and Rochester nearly a year. Then his old employer, who was in California, sent for him to come there to help in a fruit cannery, his salary continuing as before. From the moment he deserted his partners, as Judge Edward Hatch, the counsel for Matthews, stated in the civil suit for damages in this conspiracy, Albert "never earned enough to cover the end of your knife-blade with salt at your dinner. But they pay him, in salary and bonus, over $4000. Why? To get him away, and to stifle lawful, legitimate, and honest competition; to stifle that which brings into every poor man's home an article of necessity at a cheaper rate." He stayed in California a few months, and, finally, sickened of the disgraceful part he was playing, turned at bay, and gave notice that he was going to leave. "This is kind of sudden," the agent of his employers replied, but said he would write to the principal director in New York and advise that he release him. "You will give me time, won't you? You know it takes a couple of weeks or longer to do business from here to New York." Albert waited, and in time the word came from New York. "I have heard from these parties, and they are willing to release you."[468]
Albert, who had put himself into the extraordinary position in which he was on the repeated pledges of the tempters that they would make it "all right" with him, and protect him from loss and harm, found that he had put his "trust in princes." When he came to settle he expected that those for whom he had sacrificed his honor, his property, and his career would make him some compensation. In answer to the question how much they ought to make up to him, he named $5000 or $10,000, which was certainly little enough, in viewof the fact that the business he had sacrificed to them was one in which, as the Vacuum's career showed, $100 shares came to be worth $2666 each. But the representative of the trust declared he could not think of such a thing, and in full of all obligations gave him nothing but the balance due of the wages agreed on. Then he asked Albert to hold himself still further at their service. As they parted, he said: "Now we have settled up; now we are good friends.... If anything ever comes up in this matter I would like to have you stand by us.... We will see that you are paid all right, and give you $25 a day while we need your services." Albert replied that he did not feel under any obligations to the oil combination. "I do not know as my interest lays that way. I do not think I shall do anything to benefit them; they have injured me all that they can; they have switched me all around, all over the country; they have got me out of employ, not given me anything to do, which I sought to have them do. I do not think they have used me right, and I have sacrificed considerable money by this transaction, and you have always promised that it would be made good, and you have not done so."[469]
CHAPTER XIX
THROUGH THE WOMAN'S EYES
Matthewsknew nothing and suspected nothing about the worst part of the plot against him until Albert's lawyer, Mr. Truesdale, nearly four years later, was called upon to testify in the suit Matthews brought for damages against the Vacuum people. This suit was to recover from them for having enticed Albert away, and having persecuted Matthews with false and malicious suits; but Truesdale's evidence at once revealed that there had been a deeper damnation still in the conspiracy against him. Mr. Matthews, one day on the street in Buffalo, ran across Albert, who had just come back from California.
"No man ever used another meaner than I have you," said the now repentant man to him, volunteering all the information he had, and agreeing to testify if called on. This revelation made the farmer-refiner a reformer. This was the public's business. If such things could be plotted and done with impunity by one man against another, there was an end forthwith of every liberty the republic boasted. Especially menacing was such a conspiracy when concerted by the rich fanatic of business against the poorer citizen to prevent the latter from disputing the claim that a great market was a private preserve, and that the right to trade in it is a privilege which "belongs to us."[470]Matthews could have used his discovery as an irresistible weapon to force his enemy to his knees, but he laid his evidence before the district attorney. This official presented it to the grand-jury, which found thatthe facts warranted indictments. When the first indictment was quashed on technical grounds a second grand-jury, sifting the facts, agreed with the first that the accused should be held to answer in the criminal courts. This was six years after the crime. The five persons indicted were the two former owners of the Vacuum, now the resident managers of it for the combination, and the three members of the oil trust, as the combination then called itself, who had bought the Vacuum for it, and had been elected by the trustees directors to manage it for them, and had so managed it even to the most picayune details. The case caught the ears of the world, not because crime was charged against men who had dazzled even the gold-filmed eyes of their epoch by the meteor-like flash of their flight from poverty into a larger share of "property"—the property of others—than any other group of millionaires had assimilated in an equal period; not for that, but because the charges of crime against these quickest-richest men were to be brought to trial. Members of the combination had been often accused; they had been indicted. This was the first time, as District Attorney Quinby said in his speech to the jury, that they had found a citizen honest enough and brave enough to stand up against them—the only one. "There is no man," he said, "so respected to-day in Buffalo as he for the method he has used to bring these men to justice." He succeeded in doing alone what the united producers of the oil regions failed to do, although their resources were infinitely greater. The people of the entire oil country failed utterly to do so much as get the members of the oil combination, when indicted for conspiracy in 1879, to come into court to be tried. All its principal men were indicted—the president, the vice-president, the secretary, the cashier, and others. They could not even be got to give bail. One of them had said when the indictments were found, that the case would never be tried, and it never has been. The Governor would not move to have those of the accused who were non-residents extradited, as he would have done, does daily, in the case of poor men, and the courts so tangled up the questions of procedure that the people withdrew, and left the indictments, as they remain to this day, on file in the Clarion County court, swinging like the body of some martyr on a road-side gibbet in the pagan days, polluting the air and mocking justice.[471]
That the trust was thoroughly alarmed, and saw the necessity of rallying all its resources to save itself, was apparent from the formidable display with which it appeared in the court-room. Present with the five defendants, as if also on trial—a solid phalanx—were its president, the vice-president, the manager of its pipe-line system, the principal representatives of the trust in Buffalo, and many others. Their regular attorney of New York was present with two of the leading lawyers of Buffalo. Besides these there was a distinguished man from Rochester, reputed the ablest lawyer in western New York, whose voice is often heard in the Supreme Court at Washington. He had two important members of the Rochester bar as assistants, one of them in the summing up unmercifully scored by the District Attorney for fixing witnesses; and, not least, a well-known United States District Attorney, who made the convention speeches by which a distinguished citizen of Buffalo was nominated, successively and successfully, for Sheriff, Mayor, Governor, and President. The defendants come here, said the people's attorney, with the best legal talent the country affords, the best the profession can furnish; for the trust—"they are practically the defendants in this action—with its great wealth, has the choice of legal talent." Other eminent lawyers were also consulted, but were not present. Never was a weak defence made the most of with more skill than these gentlemen exhibited upon the trial.... But great as was the ability of the defence, Mr. George T. Quinby, the District Attorney, and his assistant, William L. Marcy, proved a match for them. Every political and moneyed influence that could be brought to bear was used to mislead the District Attorney, but all to no purpose. The jury could see that the complainant, Charles B.Matthews, did not get the indictment to sell out, otherwise he would have sold it out and not have insisted upon a trial. The fact that the case was on trial, at a cost of many thousands of dollars to the defendants, was conclusive upon that point. An emissary, trying to get Matthews to call off the District Attorney and to hush up this criminal prosecution, said the oil trust could "give him anything, even to being governor of a Western territory."[472]"You will have a chance," Matthews told the District Attorney, "to line the street from your house to the City Hall with gold bricks." But this public prosecutor had no price. He grasped the full scope of this extraordinary case, which involved not only a crime against persons and against the people, but against that true commerce of reciprocal and equal service on which alone the new civilization of humanity can rest.
The room in the Buffalo court-house, where the case was being heard, was bright with the sunshine of a May day, putting out the shadows of indictments and verdicts lurking in corners and pigeon-holes. Although it was a criminal case, the on-looker saw, strange as it seemed, that whatever strain there was in the situation appeared to be felt least by the accused, and most by the public and the jury. The nearer the eyes of the on-looker travelled towards the prisoners, the lighter and brighter was the scene. Close to the accused sat a bench full of notables, evidently friends lending moral support. That the bench was occupied by men of importance was evident. They were supported by platoons of eminent counsel and detectives. Only the judge betrayed no consciousness of the presence of the herd of millionaires. The whisperings and pointings and namings by one spectator to another showed that the people's curiosity was greatly excited by the sight of the richest men in the country, if not in the world, with attendant millionaire esquires in or about the dock of a criminal court. On this particular day the notables and their suite had come in specially good-humor. Nods of kindlyrecognition went about and smiles rippled everywhere as, settled into their seats, they listened to the recital by the witnesses. It had been as good as a play to hear the working-man, Albert, tell on the stand how he had been bribed and threatened with ruin until he yielded to the suggestion that he should "bust up" the works of his friends, partners, and employers, and run away. There had been nothing funny to Albert in those threats: "We will ruin you," "We will crush you," "You will lose what little you have got left."[473]