The Grand Acquisitor

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Foremost among these practices was an evil device called the drawback. Not content with enjoying a large competitive advantage through its special rebates, Standard also forced the railroads to pay it a portion of the freight charges paid by non-Standard refiners! Thus Daniel O’Day, a particularly ruthless Standard official, used his local economic leverage to get a small railroad to carry Standard’s oil at ten cents a barrel, to charge all independents thirty-five cents, and to turn over the twenty-five-cent differential to a Standard subsidiary . Another Standard agent, finding that a competitor’s car had slipped through without paying the Standard exaction, wrote the road to collect the amount owing, adding: “Please turn another screw.”

Such incidents and practices—always denied by the company and never admitted by Rockefeller—plagued the Standard for years. And the impression of highhandedness was not much improved by the behavior of the Standard’s officials when they went on public view. John D. Archbold, a key executive called to testify before New York State’s Hepburn Committee in 1879, was a typical bland witness. When pressed hard, he finally admitted he was a stockholder of the Standard. What was his function there? “I am a clamorer for dividends. That is the only function I have in connection with the Standard Oil Company.” Chairman Alonzo Hepburn asked how large dividends were. “I have no trouble transporting my share,” answered Archbold. On matters of rebates he declined to answer. Finally Hepburn asked him to return for further questioning the next day. “I have given today to the matter,” replied Archbold politely. “It will be impossible for me to be with you again.”

Not least, there was the rising tide of public protest against the monopoly itself. In 1881 Henry Demarest Lloyd, a journalist of passionate reformist sentiments, wrote for the Atlantic Monthly an article called “The Story of a Great Monopoly.” Editor William Dean Howells gave it the lead in the magazine, and overnight it was a sensation (that issue of the Atlantic went through seven printings). “The family that uses a gallon of kerosene a day pays a yearly tribute to the Standard of $32 … ,” wrote Lloyd. “America has the proud satisfaction of having furnished the world with the greatest, wisest, and meanest monopoly known to history.”

Standard’s profits were nothing so great as described by Lloyd, but that hardly mattered. If the article was imprecise or even downright wrong in detail, it was right in its general thrust. What counted was Lloyd’s incontrovertible demonstration that an industrial concern had grown to a position of virtual impregnability, a position which made it in fact no longer subordinate to the states from which it drew its legal privilege of existence, but their very peer or better in financial strength and even political power. Before Lloyd wrote his article, the Standard was the source of rage or loss to scattered groups of producers, businessmen, or consumers. When he was through with his indictment, it was a national scandal.

That it should be a scandal was totally incomprehensible to John D. The mounting wave of protest and obloquy perplexed him more than it irritated him. Ida Tarbell’s famous—and generally accurate— History of the Standard Oil Company he dismissed as “without foundation.” The arrogance of an Archbold he merely chuckled at, recounting the Hepburn testimony in his Random Reminiscences of Men and Events with the comment that Archbold had a “well-developed sense of humor.” With his own passion for order, he understood not a whit the passions of those whose demise was required that order might prevail. On one occasion when he was testifying in court, he spied in the courtroom George Rice, an old adversary (against whom, as a matter of fact, the famous screw had been turned, and whom Rockefeller had once offered to buy out). As he left the witness stand, Rockefeller walked over to Rice and, putting out his hand, said: “How do you do, Mr. Rice? You and I are getting to be old men, are we not?”

Rice ignored the hand. “Don’t you think, Mr. Rice,” pursued Rockefeller, “it might have been better if you had taken my advice years ago?”

“Perhaps it would,” said Rice angrily. “You said you would ruin my business and you have done so.”

“Pshawl Pshaw!” rejoined Rockefeller.

“Don’t you pooh-pooh me,” said Rice in a fury. “I say that by the power of your great wealth you have ruined me.”

“Not a word of truth in it,” Rockefeller answered, turning and making his way through the crowd. “Not a word of truth in it.”

He could not in fact bring himself to believe that there was a word of truth in any of it. There was nothing to argue about concerning the need for giant enterprise, or “industrial combinations” as they were called. They were simply a necessity, a potentially dangerous necessity admittedly, but a necessity nonetheless. All the rest was ignorance or willful misunderstanding. “You know,” he wrote to a university president who offered to prepare a scholarly defense of Standard’s policies, “that great prejudice exists against all successful business enterprise—the more successful, the greater the prejudice.”