Regulating Trusts: The History of Standard Oil by Ida Tarbell

“The History of the Standard Oil Company” (1902)

By Ida M. Tarbell

To know every detail of the oil trade…to control even its weakest factor—this was John D. Rockefeller’s ideal of doing business….for him to be able to direct the course of any particular gallon of oil from the moment it gushed from the earth until it went into the lamp of a housewife. There must be nothing—nothing in his great machine he did not know to be working right…he undertook, late in the seventies [1870s], to organize the oil markets of the world…Mr. Rockefeller was driven to this new task of organization…by that thing so abhorrent to his mind—competition. If, as he claimed, the oil business belonged to him, and if, as he had announced, he was prepared to refine all the oil that men would consume, it followed that the markets of the world belonged to him. . . .

“The coal-oil business belongs to us,” was Mr. Rockefeller’s motto, and from the beginning of his campaign in the markets his agents accepted and acted on that principle. If a dealer bought but a barrel of oil a year, it must be from Mr. Rockefeller.

…Mr. Rockefeller and his friends (other oil companies he controlled) were occupied with…a remarkable scheme…which was…to persuade all the railroads transporting oil to give to his company…special rebates…If they could get such rates it was evident that those outside of their combination (trust) could not compete with them long and that they would become eventually the only refiners. They could then…keep up prices. This done, they could easily persuade the railroads to transport no crude (unrefined oil straight from the ground) for exportation (selling to other countries), so that the foreigners would be forced to buy American refined (oil that Rockefeller’s company had refined)…In short, the scheme they worked out put the entire oil business in their hands.

…Mr. Rockefeller and Mr. Watson and their associates began to seek converts. In order that their great scheme might not be injured…they asked of each person whom they approached a pledge of secrecy.