APPENDIX

2295

NUMBER 37 (See page 2004) ARTICLES OF INCORPORATION OF THE TIDEWATER PIPE LINE

Incorporation Tidewater Pipe Company, Limited, of Titusville, Pennsylvania. Recorded November 22, 1878. William F. Dickson, Recorder.

The undersigned persons, to wit: Byron David Benson, Robert Emmet Hopkins, Andrew Worton Perrin, Alanson Ashford Sumner, David Boyd Stewart, David McKelvy, Samuel Queen Brown, Adam Clark Hawkins, Willis Booth Benedict, Marcus Brownson, William Henry Nicholson, Calvin Nathaniel Payne, John Hahn Dilks, Hascal Ledger Taylor, William Henry Conley, Thomas Benton Riter, Clark Isaac Hayes, Gershom Hyde, James Henry Caldwell, George Lawrence Benton, George Hill Graham, Elisha Gilbert Patterson, Benjamin Bakewell Campbell, Delos Olcott Wickham, Joseph Henry Simmonds, Lewis Henry Smith, desire to form a partnership association, pursuant to the provisions of an act of the General Assembly of the Commonwealth of Pennsylvania, entitled, “An Act, authorising the formation of partnership association in which the capital subscribed shall alone be responsible for the debts of the association except under certain circumstances,” approved the second day of June, A.D. 1874, and the several supplements thereto for the purpose of conducting a legal business or occupation, within the United States or elsewhere, whose principal office or place of business shall be established and maintained within the state of Pennsylvania, by subscribing and contributing capital thereto, which capital shall alone be liable for the debts of such association, and to that end sign and acknowledge the following statement:

Full names of the persons desiring to form such association are: Byron David Benson, Robert Emmet Hopkins, Andrew Worton Perrin, Alanson Ashford Sumner, David Boyd Stewart, David McKelvy, Samuel Queen Brown, Adam Clark Hawkins, Willis Booth Benedict, Marcus Brownson, William Henry Nicholson, Calvin Nathaniel Payne, John Hahn Dilks, Hascal Ledger Taylor, William Henry Conley, Thomas Benton Riter, Clark Isaac Hayes, Gershom Clark Hyde, James Henry Caldwell, George Lawrence Benton, George Hill Graham, Elisha Gilbert Patterson, Benjamin Bakewell Campbell, Delos Olcott Wickham, Joseph Henry Simmonds, Lewis Henry Smith.

The amount of capital of said association subscribed for by each is as follows, to wit:

2296Said Byron David Benson has subscribed for $100,300 of the capital of said association; the said Robert Emmet Hopkins has subscribed for $72,400 of the capital of said association; said Andrew Worton Perrin has subscribed for $24,700 of the capital of said association; said David Boyd Stewart has subscribed for $16,800 of the capital of said association; said David McKelvy has subscribed for $72,500 of the capital of said association; said Samuel Queen Brown has subscribed for $25,000 of the capital of said association; said Adam Clark Hawkins has subscribed for $6,000 of the capital of said association; said Willis Booth Benedict has subscribed for $5,000 of the capital of said association; said Marcus Brownson has subscribed for $10,000 of the capital of said association; said William Henry Nicholson has subscribed for $5,000 of the capital of said association; said Calvin Nathaniel Payne has subscribed for $5,000 of the capital of said association; said John Hahn Dilks has subscribed $82,300 of the capital of said association; said Hascal Ledger Taylor has subscribed for $50,000 of the capital of said association; said William Henry Conley has subscribed for $2,500 of the capital of said association; said Thomas Benton Riter has subscribed for $2,500 of the capital of said association; said Clark Isaac Hayes has subscribed for $10,000 of the capital of said association; said Gershom Clark Hyde has subscribed for $1,000 of the capital of said association; said James Henry Caldwell has subscribed for $2,500 of the capital of said association; said George Lawrence Benton has subscribed for $1,000 of the capital of said association; said George Hill Graham has subscribed for $1,000 of the capital of said association; said Elisha Gilbert Patterson has subscribed for $5,000 of the capital of said association; said Benjamin Bakewell Campbell has subscribed for $10,000 of the capital of said association; said Delos Olcott Wickham has subscribed for $2,500 of the capital of said association; said Joseph Henry Simmonds has subscribed for $1,000 of the capital of said association; said Lewis Henry Smith has subscribed for $1,000 of the capital of said association.

Second.—The total amount of the capital of the said association is $625,000, and said capital shall be paid at the times and in the manner following, to wit: Twenty-five per cent. thereof on the second day of December, A.D. 1878; twenty-five per cent. thereof on the second day of January, A.D. 1879; twenty-five per cent. thereof on the first day of February, A.D. 1879, and the balance of twenty-five per cent. thereof the third day of March, A.D. 1879. The whole of said capital shall be paid in lawful money to the treasurer of said association at the principal office or place of business of said association at Titusville, Pennsylvania.

Third.—The character of the business to be conducted by said association is the production, shipping, refining, storing, insuring, buying and selling of petroleum and its products, and the acquisitions, manufacture and management of such property, real, personal and mixed, as may be deemed necessary or advisable to use in such business or in connection therewith. The location of the business to be conducted 2297by said association is at the city of Titusville, in the county of Crawford, and state of Pennsylvania, where the principal office or place of business of said association is established and shall be maintained.

Fourth.—The name of the said association is the Tidewater Pipe Company (Limited).

Fifth.—The contemplated duration of said association is twenty years from the date of this statement.

Sixth.—The names of the officers of said association selected in conformity with the provisions of said act are as follows:

The managers of said association so elected are: Byron David Benson, Hascal Ledger Taylor, Alanson Ashford Sumner, Robert Emmet Hopkins, and John Hahn Dilks, of whom said Byron David Benson is so selected chairman of said association; said Robert Emmet Hopkins is so selected treasurer of said association; and said Alanson Ashford Sumner is so selected secretary of said association.

In Witness Whereof, the persons named in this statement have hereunto severally signed their names, this thirteenth day of November, Anno Domini one thousand eight hundred and seventy-eight:

Elisha Gilbert Patterson, Byron David Benson, Marcus Brownson, Hascal Ledger Taylor, George Lawrence Benton, Alanson Ashford Sumner, Delos Olcott Wickham, David Mckelvy, Adam Clark Hawkins, David Boyd Stewart, John Hahn Dilks, George Hill Graham, William Henry Nicholson, Joseph Henry Simmonds, Gershom Clark Hyde, Lewis Henry Smith, Willis Booth Benedict, Benjamin Bakewell Campbell, William Henry Conley, Calvin Nathaniel Payne, Thomas Benton Riter, James Henry Caldwell, Clark Isaac Hayes, Andrew Norton Perrin, Samuel Queen Brown, Robert Emmet Hopkins.

2298

NUMBER 38 (See page 2015) TESTIMONY OF HENRY M. FLAGLER IN REGARD TO THE TIDEWATER CONTEST

[Proceedings in Relation to Trusts, House of Representatives, 1888. Report Number 3,112, page 783.]

Q. Now you can make your statement.

A. I want to say this: The Tidewater Pipe Line was the first line built to the seaboard, and it had a connection with the Reading Railroad, by which the railroad and the line jointly undertook to do business. We had several discussions of pipe-lines of the future with the representatives of the Tidewater Pipe Line, and would have had no difficulty whatever in making satisfactory arrangements with them, which would have removed all unnecessary competition, but the New York Central, the Erie road, and the Pennsylvania Central said to us: “Gentlemen, we don’t want you to make any alliance of any formal nature with the Tidewater Pipe Line.” They added: “We will protect you in the matter of rates as against any competition furnished by the Reading and Tidewater Pipe Line.” I replied to that: “I have never seen a contest begun of this kind but what there was an end to it. Now, we can make a satisfactory arrangement with the Tidewater Pipe Line and avoid all this contest. It is not necessary for you to throw away any money. We are not seekers after low rates. We have done our business by you, and are willing to continue, but only upon one single, solitary condition: we would prefer not to have this contest; it is better that the Tidewater and Reading Railroad should be recognised.” The reply was: “We never will recognise them as carriers of oil.”

Q. That was the reply of these three trunk lines?

A. Yes, sir. I said: “Gentlemen, the other thing is of a great deal more importance than the rates. The rates are short-lived affairs.” Now, I will make this explanation in justice to ourselves, in reply to the remark you made of our contest with the Tidewater Line. We had no contest. It was simply a contest of the transportation lines, and we, like fools, allowed ourselves, instead of making arrangements with the Tidewater Line, to say to the trunk lines: “Very well, then, we will stick to you and leave you to fight out this battle.” They fought it for a year or two, and you know how it ended.

2299Q. Three or four years, was it not?

A. I thought it was two years.

Q. Then I understand you to say that all that struggle, and the low rate that the trunk line charged at the time the competition with the Tidewater and Reading came into existence, was brought about by the trunk lines themselves?

A. It was a struggle on the part of the trunk lines to hold the entire oil business, and they avowed it to me not once, but many times, that it was their firm intention never to recognise the Tidewater to the seaboard.

Q. And during that struggle they actually carried it at fifteen cents a barrel?

A. I should have said twenty or twenty-five cents. I knew it was a ridiculously low rate.

2300

NUMBER 39A (See page 2024) AGREEMENT BETWEEN STANDARD AND TIDEWATER REFINERIES

[From manuscript presented to the Industrial Commission by Lewis Emery, Jr.]

This agreement, made and entered into the ninth day of October, A.D. 1883, by and between the Standard Oil Company, a corporation of Ohio, the Standard Oil Company of New York, a corporation of New York, and the Standard Oil Company of New Jersey, a corporation of New Jersey, who collectively constitute the party of the first part, and the Ocean Oil Company, a corporation of New Jersey, the Chester Oil Company, a corporation of Pennsylvania, and Ayres, Lombard and Company, a corporation of New York, who collectively constitute the party of the second part.

Witnesseth: That in consideration of the mutual covenants and agreements hereby made and entered into, the said parties do hereby covenant and agree to and with each other as follows:

First.—That for the purpose of this contract the business of refining petroleum is defined to mean the distillation of crude petroleum within the United States, without regard to where the crude is obtained; the quantity of crude petroleum received at each refinery, except for export in its crude state, shall be regarded as the quantity refined by it.

Second.—That in said business the refineries named in schedule “A” and schedule “B” (which schedules are hereto attached and made a part of this agreement) shall respectively be entitled to have and do the following percentage or proportionate part of the aggregate business of all refineries named in both schedules, viz.: The refineries named in Schedule “A,” eighty-eight and one-half (88½) per cent. thereof, and the refineries named in Schedule “B” eleven and one-half (11½) per cent. thereof.

Third.—The refineries named in Schedule “A” and the refineries named in Schedule “B” shall respectively do as nearly as practicable their said proportion or percentage of said business; and is agreed that,

A.—If in any calendar month the refineries named in Schedule “A” shall receive more than their said percentage of the said aggregate of crude petroleum received except for export in its crude state, the party of the first part hereto will pay to the party of the second part hereto, twenty (20) cents per barrel on the quantity so received in excess of their said percentage.

B.—If in any calendar month the refineries named in Schedule “B” shall receive 2301more than their said percentage of the said aggregate of crude petroleum received except for export in its crude state, the party of the second part hereto will pay to the party of the first part hereto twenty (20) cents per barrel on the quantity so received in excess of this said percentage.

C.—If in any year the refineries named in Schedule “A” shall neglect or refuse to do eighty (80) per cent. of their said percentage of said business, then the party of the first part shall return and repay the party of the second part the sums received under the provisions of this paragraph in excess of the sums paid under the same provisions during the same year.

D.—If in any year the refineries named in Schedule “B” shall neglect or refuse to do eighty (80) per cent. of their said percentage of said business, then the party of the second part shall return and repay to the party of the first part the sums received under the provisions of this paragraph in excess of the sums paid under the same provisions during the same year.

Fourth.—Each party hereto shall make to the other daily reports showing all crude petroleum received at the refineries named in said schedule, and when, where and from whom received, and all crude petroleum exported therefrom, and when, where and to whom delivered. The reports of the party of the first part shall show the crude received at and exported from refineries named in Schedule “A,” and the reports of the party of the second part shall show the crude received at and exported from refineries named in Schedule “B.” The correctness of such reports shall, if required of either party, be verified by the party making them.

Fifth.—A settlement shall be made, on or before the fifteenth day of each month, of all business done under this agreement during the preceding month, and payments shall then be made of all such sums as under the terms hereof shall be found payable by either party to the other.

Sixth.—All refineries now owned or controlled by those owning or controlling a majority of the refineries embraced in Schedule “A” are or shall be included in Schedule “A,” and all refineries which may hereafter be acquired or controlled in the same interest shall, as acquired or controlled, be added to said Schedule “A,” and by such addition be included in the terms of this agreement. All refineries now owned or controlled by those owning or controlling a majority of the refineries embraced in Schedule “B,” and all refineries which may hereafter be acquired or controlled in the same interest shall, as acquired or controlled, be added to said Schedule “B,” and by such addition be included in the terms of the agreement.

Seventh.—It is understood that forty-two gallons constitute a barrel.

Eighth.—A year, whenever used in this contract, is understood to mean a calendar year.

Ninth.—This agreement shall take effect on the first day of October, 1883, and remain in force for fifteen (15) years from said date.

2302Provided, however, and it is agreed that it shall not remain in force longer than a certain other agreement of even date herewith between the National Transit Company and the United Pipe Lines of the first part, and the Tidewater Pipe Company, Limited, of the second part, shall remain in force, and that a termination of said other agreements shall at the same time terminate this one.

In Witness Whereof, the said parties have caused their common and corporate seals to be hereto attached and to be attested by the signature of their proper officers the day and year first aforesaid.

Standard Oil Company, by

O. H. Payne, Vice-President.

[S. O. C., Cleveland] Attest: W. P. Thompson, Secretary.

Standard Oil Company of New York, by

William Rockefeller, President.

[S. O. C., New York] Attest: George H. Vilas, Secretary.

Standard Oil Company of New Jersey, by

J. A. McGee, President.

[S. O. C., New Jersey] Attest: Geo. H. Vilas, Secretary.

2303

NUMBER 39B (See page 2024) AGREEMENT BETWEEN STANDARD AND TIDEWATER PIPE LINES

[From manuscript presented to the Industrial Commission by Lewis Emery, Jr.]

This agreement, entered into the ninth day of October, A.D. 1883, by and between the National Transit Company and the United Pipe Lines, each being a corporation of the state of Pennsylvania, parties of the first part, and the Tidewater Pipe Company, Limited, a limited partnership association formed under the laws of the state of Pennsylvania, party of the second part.

Witnesseth: That in consideration of the mutual covenants and agreements hereby made and entered into, the said parties do hereby covenant and agree to and with each other as follows:

First.—That for the purposes of this contract the business hereinafter referred to is divided into departments, one known as the “Gathering Department,” one known as the “Transporting Department,” one known as the “Interior Export Department,” and one known as the “Seaboard Export Department.”

All crude petroleum received directly or indirectly from wells located in the state of New York or state of Pennsylvania, and into the system of pipes and tanks now owned or controlled, or which may hereafter be owned or controlled by any party hereto, either directly or indirectly, shall constitute gathering, and the business of so receiving crude petroleum is the business of said gathering department. All deliveries from local lines of pipe of crude petroleum gathered as aforesaid, to or for any of the refineries then embraced in Schedule “A” or Schedule “B” (which schedules are hereto attached and made part of this agreement), and also all deliveries of crude petroleum from any of the trunk lines of pipe now owned or controlled, or which may hereafter be owned or controlled, by any party hereto, either directly or indirectly, and the getting of such crude petroleum to the point of delivery shall constitute transporting, and the business of so getting and delivering crude petroleum is the business of said transporting department, except, and it is agreed, that whatever petroleum gathered as aforesaid shall be delivered to or for any party hereto, or to or for any refinery or refining company then embraced in either of said schedules, for export in its crude state, whether the same shall be delivered from a local line of pipe or a trunk 2304line of pipe, shall not be included in transporting, nor in the business of said transporting department.

All petroleum gathered as aforesaid and delivered from local lines of pipe for export in its crude state (other than deliveries to trunk lines of pipe of such petroleum for export in its crude state) by or for any party hereto or by or for any refinery or refining company then embraced in either of said schedules, shall constitute interior exporting and the business of receiving and exporting such petroleum in its crude state shall be the business of said interior export department.

All petroleum gathered as aforesaid and delivered from trunk lines of pipe for export in its crude state by or for any party hereto or by or for any refinery or refining company then embraced in either of said schedules shall constitute seaboard exporting, and the business of receiving and exporting such petroleum in its crude state shall be the business of said seaboard export department.

All pipes used for gathering and delivering at points in the oil-producing regions are herein called local lines.

All lines of pipe used for transporting beyond the oil-producing regions are herein called trunk lines.

Second.—That in each said department of the business the respective parties hereto shall be entitled to do the following percentage or proportionate part of the aggregate business done by all parties hereto then in said department, viz.: The said parties of the first part eighty-eight and one-half (88½) per centum thereof, and the said party of the second part eleven and one-half (11½) per centum thereof.

Third.—Each party hereto shall do as nearly as practicable its said proportion or percentage of said business. And it is agreed that:

A.—If in any calendar month either party shall gather more than its said percentage of said aggregate of crude petroleum gathered, as gathering is herein defined, it shall pay to the other party on the quantity gathered in excess of its said percentage an amount per barrel equal to three-fourths of the then current full rate per barrel charged for collecting and delivering crude petroleum in the oil-producing regions—commonly called local pipage;

Provided, however, and it is hereby agreed that this clause shall not be applicable to crude petroleum gathered as aforesaid prior to September 1, 1884.

And provided, further, That the excess over its said percentage gathered prior to September 1, 1884, by either party shall on demand of the other be delivered to the other party at some point or points in the oil-producing regions convenient to both the party receiving and the party delivering (the means and places to be mutually agreed upon) when and as often as the said excess amounts to ten thousand (10,000) barrels, upon legal orders or certificates with storage and assessments thereon paid to date of delivery being presented therefor, or upon the payment of the then market price of United Pipe Line certificates for a like quantity. The party receiving shall pay the party 2305delivering the same a gathering charge of ten (10) cents per barrel upon all petroleum so delivered.

B.—If in any calendar month either the parties of the first part or the party of the second part shall transport and deliver more than their or its said percentage of the said aggregate of crude petroleum transported, as transporting is herein defined, they or it shall pay to the other party twenty-five (25) cents per barrel upon the quantity transported and delivered in excess of their or its said percentage.

Provided, That the amount payable under this clause shall not exceed the amount it would cost to bring said excess from the mouth of a local pipe in the oil-producing regions to either the port of New York or the port of Philadelphia at the then current rate of transportation by any route or method not owned or controlled directly or indirectly by any party hereto.

C.—If in any calendar month either party shall do more than its said percentage of business in either the exterior export department or the seaboard export department, it shall pay to the other party twenty-five (25) cents per barrel upon the quantity so exported in excess of its said percentage.

Provided, however, That the amount per barrel payable under this clause shall not exceed the amount per barrel which would be payable under Clause B and its proviso at the same time for excess in the transporting department.

D.—If in any year either party shall neglect or refuse to do eighty (80) per centum of its said proportion or percentage in any department of said business, then the party so doing less than eighty (80) per centum of its said proportion shall return or repay to the other party the sums received in that department under the provisions of this paragraph in excess of the sums paid in the same department under the same provisions during the same year.

Fourth.—Each party shall make to the other daily reports showing:

1st. All crude petroleum gathered, as gathering is herein defined.

2nd. All crude petroleum delivered from local lines other than deliveries to trunk lines, stating when, where and to whom delivered.

3rd. All crude petroleum delivered from local lines to trunk lines, stating when, where and to which line delivered.

4th. All crude petroleum delivered from trunk lines, stating when, where and to whom delivered.

5th. All crude petroleum exported in the crude state, stating when, where and from whom received, so as to distinguish between receipts from local lines and receipts from trunk lines, and when, where and to whom delivered for export. The correctness of such reports shall, if required by either party, be verified by the party making them.

Fifth.—On all deliveries of crude petroleum from local lines made by said parties of the first part or either of them, other than such deliveries as constitute transporting, 2306as transporting is hereinbefore defined, the parties of the first part will account for and pay to the party of the second part eleven and one-half (11½) per centum of the then current full rate of local pipage, first deducting from such full rate ten (10) cents per barrel for the work of gathering and delivering such petroleum.

On all deliveries of crude petroleum from local lines made by said party of the second part other than such deliveries as constitute transporting as hereinbefore defined, the party of the second part will account for and pay to the parties of the first part eighty-eight and one-half (88½) per centum of the then current full rate of local pipage, first deducting from such full rate ten (10) cents per barrel for the work of gathering and delivering such petroleum.

Sixth.—It is agreed that in case of excess of deliveries over the quantity gathered, as gathering is herein before defined, by all the parties hereto, the stocks in custody of the respective parties shall to the extent of such excess be diminished in the ratio of eighty-eight and one-half (88½) per centum thereof from the stocks in custody of said parties of the first part, and eleven and one-half (11½) per centum thereof from the stocks in custody of said party of the second part; and to this end it is agreed that whenever and as often as under the working of this agreement the depletion of the stocks in the custody of either of the respective parties shall amount to ten thousand (10,000) barrels in excess of such party’s percentage of depletion, then the other party shall and will on demand deliver, and the party whose stocks are so depleted will when tendered receive, said ten thousand (10,000) barrels at some point or points in the oil-producing regions convenient to both the party receiving and the party delivering (the means and place to be mutually agreed upon), upon legal orders or certificates with storage and assessments thereon paid to date of delivery being presented therefor, or upon the payment of the then market price of United Pipe Line certificates for a like quantity. The party receiving shall pay to the party delivering a gathering charge of ten (10) cents per barrel upon all petroleum gathered.

Seventh.—A settlement shall be made on or before the fifteenth day of each month of all business done under this agreement during the preceding month, and payment shall then be made of all such sums as under the terms hereof shall be found payable by either party to the other.

Eighth.—If in any year the profits of the party of the second part added to the profits of the several refineries then embraced in Schedule “B” shall in the aggregate amount to less than five hundred thousand (500,000) dollars (excluding from the calculations all profits realised and losses sustained from speculation and the value of property destroyed by fire), then the said party of the second part shall have the right within three months from the time the profits of such year shall have been ascertained to cancel this agreement.

Provided, however, That the said right shall not exist or shall not be exercised under the following circumstances, to wit:

23071st. If the average of such profits during the said year and all previous years from the beginning of this agreement shall equal five hundred thousand (500,000) dollars per year.

2nd. If the said parties of the first part or either of them shall contribute to the said party of the second part such sums of money as together with the said profits for the said year will make the average profit five hundred thousand (500,000) dollars per year.

And provided, further, That in exercising the right of cancellation the said party of the second part must give to one or both of said parties of the first part three (3) months’ written notice of said cancellation, which notice must be accompanied by a statement of the said profits of the party of the second part, and of said refineries then embraced in Schedule “B,” and any contributions made as aforesaid must be made within the said three (3) months.

The party receiving said notice shall have the right to verify the statement by an examination of the books of said party of the second part, and books of said refineries.

Ninth.—All refineries now owned or controlled by those owning or controlling a majority of the refineries embraced in Schedule “A” are or shall be included in Schedule “A”; and all refineries which may hereafter be acquired or controlled in the same interest shall, as acquired or controlled, be added to said Schedule “A,” and by such addition be included in the terms of this agreement.

All refineries now owned or controlled by those owning or controlling a majority of the refineries embraced in Schedule “B” are or shall be included in Schedule “B”; and all refineries which may hereafter be acquired or controlled in the same interest shall, as acquired or controlled, be added to said Schedule “B,” and by such addition be included in the terms of this agreement.

Tenth.—It is agreed that any business done in either the interior export department or the seaboard export department by any of the refineries or refining companies then embraced in Schedule “A” shall be treated for the purpose of this agreement as if done by the parties of the first part; and that any business done in either of said export departments by any of the refineries or refining companies then embraced in Schedule “B” shall be treated for the purposes of this agreement as if done by the party of the second part.

Eleventh.—It is understood that forty-two (42) gallons constitute a barrel.

Twelfth.—A year, whenever used in this contract, is understood to mean a calendar year.

Thirteenth.—This agreement shall take effect as of the first day of October, 1883, and unless sooner cancelled, as provided in the eighth paragraph, shall remain in force for fifteen (15) years from said first day of October, 1883.

In Witness Whereof, the said parties of the first part have caused their common and corporate seals to be hereto attached and to be attested by the signatures of their proper officers; and the said party of the second part has caused the same to be 2308signed in its name and on its behalf by two of its managers, the day and year first aforesaid.

National Transit Company,

[Nat. Tran. Co. Seal.] (Signed by) Benjamin Brewster, Vice-President.

Attest: John Bushnell, Secretary.

United Pipe Lines,

[U. P. L. Seal.] (Signed by) J. J. Vandergrift, President.

Attest: H. D. Hancock, Secretary.

SCHEDULE OF REFINERIES REFERRED TO IN THE ATTACHED AGREEMENT

SCHEDULE “A”

Atlas Refining Co. Works at Buffalo, N. Y.

Acme Oil Co. of Pennsylvania Works at Titusville, Pa.

Acme Oil Co. of New York Works at Olean, N. Y.

Atlantic Refining Co. Works at Philadelphia, Pa.

American Lubricating Oil Co. Works at Cleveland, Ohio.

Baltimore United Oil Co. Works at Canton, Md.

Bush Denslow Mfg. Co. Works at South Brooklyn, N. Y.

Camden Consolidated Oil Co. Works at Parkersburg, W. Va.

Camden Consolidated Oil Co. Works at Canton, Md.

Central Refining Co., Limited Works on Newtown Creek, L. I.

Empire Refining Co., Limited Works on Newtown Creek, L. I.

Eclipse Lubricating Co., Limited Works at Franklin, Pa.

Eclipse Lubricating Co., Limited Works at Olean, N. Y.

Eagle Oil Co. Works at Communipaw, N. J.

Galena Oil Works, Limited Works at Franklin, Pa.

Imperial Refining Co. Works at Oil City, Pa.

Pratt Mfg. Co. Works at Bushwick Creek, L. I.

Jenny & Son, S. Works at Wallabout Land.

Donald & Co., James Works at Newtown Creek, L. I.

Portland Kerosene Co. Works at Portland, Me.

Paine, Ablett & Co., Limited Works at Smith’s Ferry.

Paine, Ablett & Co., Limited Works at Freedom, Pa.

Sone Fleming Mfg. Co., Limited Works at Newtown Creek, L. I.

Standard Oil Co. of New York Works at Newtown Creek, L. I.

Standard Oil Co. of New York Works at Hunter’s Point, L. I.

Standard Oil Co. of New Jersey Works at Bayonne, N. J.

Standard Oil Co. of Pennsylvania Works at Pittsburg, Pa.

Standard Oil Co. of Ohio Works at Cleveland, Ohio.

Union Refining Co., Limited Works at Oil City, Pa.

Vacuum Oil Co. Works at Rochester, N. Y.

SCHEDULE “B”

Chester Oil Co. Works at Chester, Pa.

Ocean Oil Co. Works at Bayonne, N. J.

Seaboard Oil Co. Works at Bayonne, N. J.

Solar Oil Co. Works at Buffalo, N. Y.

2309

NUMBER 40 (See page 2028) TWO AGREEMENTS OF EVEN DATE, AUGUST 22, 1884, BETWEEN THE PENNSYLVANIA RAILROAD COMPANY AND THE NATIONAL TRANSIT COMPANY

[Report of the Industrial Commission, 1900. Volume I, pages 663–666.]

Memorandum of a traffic agreement, made this twenty-second day of August, 1884, between the Pennsylvania Railroad Company, hereinafter designated the railroad company, and the National Transit Company, hereinafter designated the transit company, Witnesseth:

That for consideration mutually interchanged, the parties hereto agree, each with the other, as follows:

First.—The transit company owns an extended system of local pipes in the Oil Regions of Pennsylvania and New York, which are grouped into a separate division, known as the United Pipe Lines Division of the National Transit Company. This division will be hereinafter designated as the Transit Company’s Local Division.

The business of this division is to collect oil from producer, store it in tanks, and deliver it, as may be desired, to any through carrier of petroleum, which will transport the same to where it is to be refined or otherwise disposed of.

The transit company also own certain through or trunk line pipes, extending from several points of connection with the aforesaid local pipe division to various refining and terminal points.

With these latter pipes, which will be hereinafter entitled the Transit Company’s Trunk Line Division, it competes in the through carriage of petroleum with all other through carriers, whether pipe or rail.

The business of its local division is therefore entirely distinct from the business of its through trunk line division.

It undertakes and agrees that its local division will deliver into cars furnished by the railroad company at any of its regular delivery points and under its regular delivery rules whatever petroleum the owners thereof may desire to have so delivered, and as the railroad may furnish cars to transport, and will make no discrimination in its local charges for carriage, storage, and other services, or in the use of any of its local facilities, against such oil, but will at all times treat it in the said respects as favourably 2310as it at the same time treats any other petroleum which may be delivered to its own trunk line division or to any other through carriers.

Second.—The transit company agrees that all petroleum brought to the Atlantic seaboard by all existing carriers, whether rail or pipe, now engaged in transporting such property, or which may hereafter engage in such transportation in conjunction with the transit company’s pipe-lines, shall be ascertained monthly, and so much of it as shall have been shipped in the refined state shall be reduced to its equivalent in crude oil by considering that one and three-tenths (13 10) gallons of crude are required to make one (1) gallon of refined oil. It further undertakes and agrees that if of the total so transported the railroad company shall not have moved in its cars twenty-six (26) per centum thereof, the transit company shall cause to be delivered to cars furnished by the railroad company at Milton, Pa., such quantity of crude petroleum as shall, when added to the amount which has been actually transported by the railroad company to the seaboard in said month, make the total transported by the railroad company in said month equal to said twenty-six (26) per centum.

The railroad company agrees to furnish the needful cars and facilities, and promptly transport the oil which the transit company agrees in this contract to deliver to it at Milton:

Provided, That if during any month the railroad company is not able to assign from its oil equipments a sufficient number of cars to the traffic of the transit company to move the proportion of oil herein provided to be delivered at Milton, then during that month the transit company shall only be required to so deliver to the railroad company such quantity of oil as the railroad company shall be able to transport, and shall not be required to make up any deficiency that may occur during said month.

Efforts shall be made by the transit company to deliver so much during each month as will probably be necessary to make the total carried by the railroad company equal to said percentage.

Shortages, if not due to short supply of cars, and such excesses as may be found to have occurred in any month, shall be adjusted in the following month, or as soon afterwards as shall be possible.

Third.—It is agreed that the proportion of petroleum which the transit company is to deliver under the second section of this agreement shall be considered as petroleum transported from Coalgrove, Pa., via Milton, Pa., to the Atlantic seaboard, and that the railroad company shall be entitled to one-half of the current through rates thereon.

It is agreed that whenever the through rates shall be so low that the railroad company shall suspend the movement of oil by its cars, at other points than Milton, the transit company shall during such suspension not be bound to deliver to the railroad company any oil at Milton.

2311Fourth.—All joint rates for the joint transportation of oil from any delivery point of the local pipe division aforesaid to any refining or terminal point shall be fixed by the railroad company, subject to the advice and concurrence of the transit company.

It is agreed that said joint through rates shall be uniform to all parties. The railroad company stipulates that it will make no discrimination whatever, either in rates or facilities, against the transit company or against the oil which the said transit company herein covenants to deliver to it.

It is agreed that the joint through rates to Philadelphia shall always be five cents less per barrel on crude oil, or its refined equivalent, than shall be currently charged to New York harbour.

It is agreed that the joint through rates, which shall be so fixed from time to time, shall be as low as shall be currently made between same and similar points by rival carriers of petroleum, and shall not be higher than an approximate mileage proportion of rates current on petroleum produced south of Oil City, nor than rates from Olean and similar points.

It is also agreed that rates on refined oil and other products of crude oil shall be fixed by the railroad company upon the following basis, viz.:

From railroad stations in the Oil Regions to which oil is delivered by local pipes the rate to any point east thereof on a barrel of refined oil or other products shall be one and three-tenths (13 10) times the current rate on a barrel of crude oil to the same point.

From Pittsburg the rate to any point east thereof on a barrel of refined oil or other products shall be one and three-tenths (13 10) the rate currently charged on crude oil to any such eastern point from rail points south of Oil City:

Provided, That one and three-tenths times the charges for moving a barrel of crude oil by rail or through pipe from the local pipe to Pittsburg shall first be deducted therefrom.

From Cleveland and Buffalo the net rate on a barrel of refined oil or other products to any point east thereof shall be not less than is currently charged to the same point from Pittsburg.

Fifth.—Whenever the term barrel is used herein, unless otherwise specified, it means forty-five gallons of crude petroleum; and whenever the term oil is used herein, unless otherwise specified, it means crude petroleum.

Sixth.—The transit company hereby agrees that it will not make any more favourable terms with any other rail line connecting with any of its pipes than the terms which under this agreement are given to the railroad company; or if for any reason it should desire to do so, it hereby agrees to modify this contract so as to give the said “more favourable terms” to the railroad company.

Seventh.—All existing contracts between the parties hereto shall be deemed to have 2312been accomplished, and shall become void and of no effect upon the day this contract goes into operation.

Eighth.—This contract shall take effect as of the first day of August, 1884, and shall continue until terminated under the provisions hereof. It may be terminated after August 1, 1889, by either party hereto giving ninety days’ written notice to the other of a desire that it shall end, at the expiration of which notice it shall cease and determine.

In Witness Whereof, the parties hereto have executed this agreement under their corporate seals the day and date above written.

The Pennsylvania Railroad Company,

[L.S.] By Frank Thomson, Second Vice-President.

Attest: John C. Sims, Jr., Secretary.

The National Transit Company,

[L.S.] By C. A. Griscom, President.

Attest: John Bushnell, Secretary.

Memorandum of agreement, made this twenty-second day of August, 1884, between the Pennsylvania Railroad Company, hereinafter designated the railroad company, and the National Transit Company, hereinafter designated the transit company.

Witnesseth: That for considerations mutually interchanged the parties hereto hereby agree with each other as follows:

Whereas, The parties hereto have made an agreement of even date herewith, in which, among other things, it is stipulated that under certain circumstances the transit company shall deliver certain crude petroleum into cars furnished by the railroad company at Milton, Pa.; and

Whereas, It has been proposed that the railroad company shall contract with the transit company to the effect that the transit company shall transport through its pipe-lines the aforesaid crude oil, which, under the other contract aforesaid, it has undertaken to deliver into the cars of the railroad company at Milton.

Now, therefore, this agreement witnesseth:

First.—The railroad company agrees that instead of delivering said crude oil to said cars at Milton, the transit company shall transport the same through its pipes to destination, and the transit company undertakes and agrees to do such transportation. It is mutually agreed that the compensation to the transit company for doing said work shall be as follows:

Whenever the through rate for transporting a barrel of crude petroleum from Olean 2313to Philadelphia shall be forty cents, the transit company shall receive eight cents per barrel as such compensation for so much of said oil as under the provisions hereof shall be considered as Philadelphia oil.

For each five cents of increase or diminution in said rates from Olean to Philadelphia the said compensation on Philadelphia oil shall be increased or diminished one cent per barrel.

Provided, however, That the transit company shall not be obliged to accept less than six cents per barrel, and shall not receive more than ten cents per barrel on such Philadelphia oil.

It is agreed that the said compensation on the oil, which under the provisions hereof is to be deemed New York oil, shall be one cent per barrel greater than it currently shall be on Philadelphia oil.

Whenever, and from time to time, as the said joint through rates shall be so low that the said minimum compensation to the transit company of six cents per barrel shall be as much or more than the railroad company’s share of said joint through rates, this contract may, at the option of either party hereto, be suspended during all or any part of the time such low rates shall prevail. During such suspension the aforesaid other contract shall alone remain in force; but whenever, and from time to time, as said joint through rates shall again be high enough to make the said minimum compensation, under said sliding scale, less than the said share of said joint through rates, this contract shall again resume its force and effect.

Second.—The transit company agrees to account for, and pay to the railroad company, on or before the twentieth of each month, the latter’s share of the joint rates on joint business via Milton (as provided in said other contract) during the next preceding month, first retaining, however, the proportion of such share which it is hereinbefore agreed the transit company is to have for its services in pumping said oil to the seaboard.

It is agreed that all such joint business shall be considered as having transported from Coalgrove via Milton, Pa., to the Atlantic seaboard, and that it shall be considered as having gone either to Baltimore, Philadelphia, or New York, or partly to each. The proportion thereof which has constructively gone to New York shall be determined upon the following basis:

The total amount of oil transported in any month by the railroad company to New York shall be compared with fifty (50) per centum of the total oil which the railroad company is entitled to carry in said month under the aforesaid other agreement. If the amount which has been in such month carried by cars to New York shall be less than fifty (50) per centum, then the difference shall be considered as having been moved by the pipe to New York, at New York rates, and shall be accounted for accordingly. The remainder of the oil via Milton shall be accounted for at Philadelphia rates.

2314This contract shall commence and terminate simultaneously with said other contract.

Witness the corporate seals of said parties duly attested the day and date above written.

The Pennsylvania Railroad Company,

[L.S.] By Frank Thomson, President.

Attest: John C. Sims, Secretary.

The National Transit Company,

[L.S.] By C. A. Griscom, President.

Attest: John Bushnell, Secretary.

2315

NUMBER 41 (See page 2060) TABLE SHOWING PRICES OF OIL AT COMPETITIVE AND NON-COMPETITIVE POINTS IN 1892

[Trust Investigation of Ohio Senate, 1898. Appendix, pages 43–44.]

Territories and States. Prime White Oil. Water-White Oil. Per Gallon.

Non-competitive per gallon. Competitive per gallon. Non-competitive per gallon. Competitive prices per gallon.

Barrels. Case. Bulk. Barrels. Case. Bulk. Barrels. Case. Bulk. Barrels. Case. Bulk. Highest. Lowest. Difference. Difference per tank car 6,000 gallons.

Arizona 31 31

Arkansas 14 13 8 7½ 16 17 17 7½ 9½ $570

Alabama 13 8½ 8¼ 6½ 17 12 10¾ 17 6½ 10½ 630

California 16 13 12½ 26½ 13 17½ 11½ 26½ 11½ 15 900

Colorado 26 21 10 15 7 31 25 31 7 24 1,440

Florida 13½ 16 12 17 18½ 18½ 12 6½ 390

Georgia 14 9½ 9½ 6½ 17 14 17 6½ 10½ 630

Idaho 22½ 29 22½ 30 17 30 17 13 780

Illinois 10 8 7½ 5½ 15 7¾ 3½ 15 5½ 9½ 570

Indiana 6¼ 5 12½ 6½ 12½ 5 7½ 450

Iowa 9½ 8 7 12 10½ 8 12 7 5 300

Kansas 10½ 9½ 8½ 16½ 9½ 16½ 8½ 8 480

Kentucky 9½ 8¾ 7 6½ 12 8½ 12 6½ 5½ 330

Louisiana 12 10 7¼ 7 16 14 7¾ 7½ 16 7 9 540

Michigan 8½ 6¾ 6¾ 3½ 8½ 7 7½ 3⅖ 8½ 3½ 5 300

Minnesota 9 7½ 5 13 11 8 5½ 13 5 8 480

Mississippi 13½ 7¼ 15½ 9½ 15½ 7¼ 8¼ 435

Missouri 12 6 5½ 17 7¾ 5½ 17 5½ 11½ 690

Montana 20 13 21 33 25 33 13 20 1,200

Nebraska 18 7½ 27 8½ 27 7½ 19½ 1,170

Nevada 37½ 37½

New Mexico 31 26 32 28 32 26 6 360

North Dakota 15½ 12½ 18 14 12¼ 11¼ 18 11¼ 6¾ 405

Oregon 21 14 19 13 24 23 24 13 11 660

Oklahoma 15 9½ 17 17 9½ 7½ 450

South Carolina 12½ 8 13½ 9 13½ 8 5½ 330

South Dakota 11½ 8 12 8 12 8 4 240

Tennessee 11½ 8½ 7¾ 6 17 8½ 17 6 11 660

Texas 25 27½ 19 8 14 9 30 33½ 24 12 16½ 8 33½ 8 25½ 1,530

Utah 23 28 25 13 28 13 15 900

Washington 16 20½ 15 25½ 25½ 15 10½ 630

Wisconsin 9 7½ 6 15¼ 7½ 6 15¼ 6 9¼ 555

Wyoming 20 25 15 21 35 29 8 16 15 35 8 27 1,620

PRIME WHITE OIL

The table shows that this grade of oil ranges in price as follows:

In barrels 6 to 25 cents per gallon

In cases 14 to 37½ cents per gallon

In bulk 3½ to 25 cents per gallon

2316

WATER-WHITE OIL

This table also shows that this grade of oil ranges in price as follows:

In barrels 6½ to 30 cents per gallon

In cases 16 to 35 cents per gallon

In bulk 3½ to 29 cents per gallon

A comparison of these two grades of oil shows:

A difference of 24 cents per gallon on barrelled oil

A difference of 21 cents per gallon on case oil

A difference of 25½ cents per gallon on bulk oil

2317

NUMBER 42 (See page 2069) STANDARD OIL COMPANY’S PETITION FOR RELIEF AND INJUNCTION

[In the case of the Standard Oil Company vs. William C. Scofield et al., in the Court of Common Pleas, Cuyahoga County, Ohio, 1880.]

The said plaintiff, the Standard Oil Company, now comes and says that on the twentieth day of July, A.D. 1876, it was and still is a corporation organised and existing under and by virtue of the laws of the state of Ohio, and that at the same time the said defendants, William C. Scofield, Charles W. Scofield, Daniel Shurmer and John Teagle, were and still are partners doing business in the firm name of Scofield, Shurmer and Teagle, and the said plaintiff complains of the said defendants, and says: That on the said twentieth day of July, A.D. 1876, the said plaintiff and the said defendants as such partners were each separately engaged in the business of refining and dealing in crude petroleum and its products, said plaintiff having a number of refining establishments at Cleveland, Ohio, and the said defendants owning and operating one refinery only, also located at Cleveland, Ohio, on the line of the Atlantic and Great Western Railroad, and while so engaged and on the said twentieth day of July, A.D. 1876, the said plaintiff and the said defendants as such partners entered into a joint arrangement in writing in and by which it was, amongst other things, agreed between the said plaintiff and the said defendants individually and as such partners that the said defendants would continue their then business in the firm name of Scofield, Shurmer and Teagle of buying, refining and selling crude petroleum and its products as theretofore carried on by them, for a period of ten years from July 20, A.D. 1876, and furnish for the conducting of said business their refinery aforesaid with all tanks, fixtures, buildings, erections, tools, and all mechanical appliances then or theretofore used by them in their said business, together with the land on which the same are situated, and also within five days from the date of said agreement furnish for the use of said joint business adventure the sum of ten thousand dollars in cash to be used continuously in said business until July 20, A.D. 1886. That the said William C. Scofield, Charles W. Scofield, Daniel Shurmer and John Teagle, in and by said agreement for conducting said joint adventure, further covenanted and agreed with the plaintiff to devote all their time and personal attention necessary to conduct the said business for the period aforesaid, and that during the existence of said adventure they would 2318not nor would either of them as a firm or as individuals directly or indirectly engage or be concerned in any business connected with petroleum or any of its products in Cuyahoga County or elsewhere, except in connection with the parties of the first part under this agreement, nor would they or either of them enter into any new business which would interfere with the time necessary to be devoted to the full and faithful conduct of the business of said adventure.

That the said William C. Scofield, Charles W. Scofield, Daniel Shurmer and John Teagle, in and by said agreement for conducting said joint adventure, further covenanted and agreed with said plaintiff that the amount of crude petroleum to be distilled by them in the business of said adventure should not exceed annually eighty-five thousand barrels of forty-two gallons each in any year, but the same should be distributed as nearly as practicable in equal quantities of 42,500 barrels of forty-two gallons each, each and every six months from the twentieth day of July, A.D. 1876, but the said 42,500 barrels might be run in a less period than six months.

That in and by said agreement for conducting the business of said joint adventure it was stipulated and agreed by both parties, amongst other things, that from the net profits of the business of said joint adventure the said defendants should first be entitled to retain and be paid the sum of $35,000 per annum while the said agreement was in force and operation, and in the case the net profits should not amount to $35,000 for any year that said agreement for conducting said joint adventure was in force and operation, then at the expiration of any such year the plaintiff should on demand pay to the said defendants a sum of money sufficient to make that amount, viz., $35,000 for any year that said agreement should be in force and operation. That all net profits over the amount of $35,000 so stipulated to belong to said defendants annually should belong and be paid to said plaintiff until the plaintiff should receive therefrom as much as said defendants had received from the net profits under the provisions of said agreement, and all net profits in excess of $70,000 annually should be divided equally between the parties thereto.

That in consideration thereof and in and by said agreement for conducting said joint adventure, the said plaintiff stipulated and agreed with the said defendants, amongst other things, that on or before the twenty-fifth day of July, A.D. 1876, it would furnish to the said defendants for them to use in the business of said joint adventure the sum of $10,000 in cash, which sum was so paid in as agreed and still remains in the business.

That the said plaintiff would receive, dock, and sell in the city of New York all oil and the products of petroleum consigned to it for sale at New York by said firm of Scofield, Shurmer and Teagle at actual cost of brokerage and handling without commissions.

That the said plaintiff would and did in said agreement guarantee to the said defendants that their share of the net profits arising from the business of said joint adventure 2319should for ten years from July 20, A.D. 1876, to July 20, A.D. 1886, amount to the sum of $35,000 annually, during the operation of this contract, as hereinbefore stated. The plaintiff further says that between July 20, 1876, and the present time, the said defendants have repeatedly violated their said agreement in this, to wit: that every year since the making of said agreement the said defendants have distilled over 85,000 barrels of crude petroleum; that during the year from July 20, 1876, to July 20, 1877, they distilled 89,983.34–42 barrels; that during the year from July 20, 1877, to July 20, 1878, they distilled 87,754.4–42 barrels; that during the year from July 20, 1878, to July 20, 1879, they distilled 100,246.25–42 barrels, and from July 20, 1879, to July 20, 1880, they distilled 90,082.34–42 barrels.

That up to the present time the defendants have distilled more than by the terms of their said agreement they have a right to distil up to January 20, 1881, and have purchased large quantities of crude petroleum and are distilling portions thereof, and threaten to distil the balance without regarding their said contract. That the crude petroleum so as aforesaid distilled by the defendants has not by them been distributed as nearly as practicable in equal quantities of 42,500 barrels of forty-two gallons each, each and every six months as they agreed to do, but in violation of their said agreement they distilled from July 20, 1876, to January, 1, 1877, 43,509.36–42 barrels; from January 1, 1877, to July 20, 1877, 46,473.40–42 barrels; from July 20, 1877, to January 1, 1878, 50,416.12–42 barrels; from January 1, 1878, to July 20, 1878, 37,337.34–42 barrels; from July 20, 1878, to January 1, 1879, 56,974.15–42 barrels; from January 1, 1879, to July 20, 1879, 43,272.10–42 barrels; from July 20, 1879, to January 1, 1880, 57,499.35–42 barrels; that on or about the twentieth day of July, 1879, the plaintiff having discovered that the said defendants had in violation of said agreement distilled about 22,984 barrels of oil more than they were entitled to by the terms of said agreement, the plaintiff objected and complained to the defendants in regard thereto, and thereupon the defendants admitted the violation of the contract in that respect, and it was agreed between the parties that the defendants would and should during the then coming year diminish their manufacture sufficiently to bring the entire amount of manufacture under said contract within the terms of said agreement.

That during the then coming year from July 20, 1879, to July 20, 1880, the said defendants did not diminish their distillation below the 85,000 barrels as they had agreed to do, but from July 20, 1879, to January 1, 1880, they distilled 57,499.35–42 barrels, and from January 1, 1880, to July 20, 1880, they distilled 32,582.41–42 barrels, making a total of 90,082.34–42 barrels for the year, thus increasing their distillation over the 85,000 barrels 5,082 barrels, instead of diminishing it as they had agreed to do.

That the defendants threaten to and have informed the plaintiff that they will hereafter wholly disregard said contract and continue to distil crude petroleum without regard to quantity.

2320The plaintiff further says that since the making of said agreement and within the past year the said Daniel Shurmer and John Teagle have in violation of their said contract engaged and been connected in constructing a refinery at Buffalo, New York, for the purpose of distilling crude petroleum with others than the plaintiff under said agreement and are now so engaged.

That within the past year the said Daniel Shurmer and John Teagle and each of them have invested money to the amount of $10,000, and are now engaged and connected in constructing refineries for the purpose of distilling crude petroleum and its products with others in no way connected with the plaintiff or under said agreement, but intending thereby to establish and prosecute with others the same business as that contemplated and conducted under said agreement, and thereby establishing and conducting a rival business to the business of said adventure and tending to involve the plaintiff in loss by reason of its guarantee that the profits of said adventure should amount to the sum of $35,000 annually to defendants, and have during the past year been at said Buffalo and other places giving the said business their time and personal attention, and have done so at times when their time and personal attention was needed and was requisite to properly conduct the business of said adventure under said agreement at Cleveland.

The plaintiff further says that because of the said failures and refusals of the defendants to carry out their said agreement it has already sustained great damage and will sustain further damage if the said defendants are permitted to continue their said violation of said agreement. That the said plaintiff has no adequate remedy therefor at law for the reason that the damages arising therefrom are so remote and difficult of ascertainment, and constantly recurring would necessitate a multiplicity of suits and would involve the plaintiff in the increased hazards of losses arising from such increased manufacture and deprive it of all the benefits of said contract.

The plaintiff therefore prays that the said William C. Scofield, Charles W. Scofield, Daniel Shurmer and John Teagle may by proper process be made defendants herein and compelled to answer this petition; that a preliminary injunction and restraining order be granted restraining the said William C. Scofield, Charles W. Scofield, Daniel Shurmer and John Teagle, and each of them individually and as partners in the name of Scofield, Shurmer and Teagle, until the further order of the court, from distilling at their said works at Cleveland, Ohio, more than 85,000 barrels of crude petroleum of forty-two gallons each in every year, and also from distilling more than 42,500 barrels of crude petroleum of forty-two gallons each, each and every six months, and also from distilling any more crude petroleum until the expiration of six months from and after July 20, 1880, and also from directly or indirectly engaging in or being concerned in any business connected with petroleum or any of its products, except in connection with the plaintiff under their said agreement, and that on the final hearing 2321of this case the said defendants may in like manner be restrained and enjoined from doing any of said acts until the expiration of said agreement, and for such other and further relief in the premises as equity can give.

M. R. Keith,

R. P. Ranney,

Attorneys for Plaintiff.

2322

NUMBER 43 (See page 2070) ANSWER OF WILLIAM C. SCOFIELD ET AL.

[In the case of the Standard Oil Company vs. William C. Scofield et al., in the Court of Common Pleas, Cuyahoga County, Ohio, 1880.]

That the so-called agreement is and at all times has been utterly void and of no effect, as being by its terms in restraint of trade and against public policy.

These defendants further say that they deny that through any action of theirs said plaintiff has sustained or will sustain any damage whatever, but these defendants say that their business of distilling oil has been carried on at a large profit, and that the same is now attended with large profits, and the price of refined oil is now so high, and there is such a large margin between the price of crude oil and refined, that the manufacture and sale of refined oil is attended with large profit; that it is impossible to supply the demand of the public for oil if the business and refineries of both plaintiff and defendant are carried on and run to their full capacity, and if the business of defendants were stopped as prayed for by plaintiff it would result in a still higher price for refined oil and the establishment of more perfect monopoly in the manufacture and sale of the same by plaintiff.

These defendants further say that said plaintiff has constantly and persistently violated the terms of said so-called written agreement in that it has intentionally failed to give and has withheld from the defendants the benefits of the advantages therein agreed to be given, and that it has not given to defendants the benefits of its contracts relating to freight on crude and refined oil, but these defendants have been constantly required to pay more and larger freights than said plaintiff, and that said plaintiff has not allowed to defendants the same rebate that it has received with different carriers; and, further, that said plaintiff has recently constructed a pipe-line to the Oil Regions of Pennsylvania through which its oil has been pumped to Cleveland at an expense of about twelve cents a barrel, but has charged defendants for pumping their oil through the same pipe twenty cents per barrel.

The defendants further say that at the time when said writing was signed said plaintiff was endeavouring by contracts with divers persons to establish a monopoly in the manufacture of refined oil in the state of Ohio and in the United States, and that, for the purpose of monopolising the trade in refined oil and enhancing the price 2323thereof, and maintaining an unnaturally high price, said plaintiff entered into said so-called agreement under the form of a joint arrangement or adventure, and for no other purpose, and contributed to the capital of said so-called adventure the sum of $10,000, whereas those defendants contributed thereto the sum of $73,000 and their time and attention, and their refinery had the capacity for refining 180,000 barrels of crude oil per year, as plaintiff well knew, and said plaintiff thereby, and by said other contracts made with the same design, succeeded in creating a substantial monopoly and averting competition and maintaining an unnaturally high price for refined oil, and that said so-called agreement is therefore in restraint of trade and against public policy, and void.

These defendants further say that defendants have from time to time paid to plaintiff their full share of the profits of said so-called adventure, and at no time has plaintiff been required to pay any sum whatever to defendants, but has realised large profits from said business, and on the fourth day of March, 1880, with full knowledge of how much oil in excess of 85,000 barrels per year had been manufactured by defendants, demanded of said defendants that they should pay to plaintiff the entire profits upon said excess, and claimed that its monopoly was so perfect that it would have sold said excess if defendants had not, and defendants did pay to plaintiff the one-half of the profits on said excess.

2324

NUMBER 44 (See page 2071) AFFIDAVIT OF JOHN D. ROCKEFELLER

[In the case of the Standard Oil Company vs. William C. Scofield et al., in the Court of Common Pleas, Cuyahoga County, Ohio, 1880.]

John D. Rockefeller being duly sworn, says that for about eighteen years past he has been engaged in the business of refining crude petroleum; that from about the year 1863 to 1870 he was engaged as a member of firms in such refining, and from January, 1870, he has been and still is engaged in such refining business as president of said plaintiff, the Standard Oil Company; that during said time he has given the business personal attention and has thereby become familiar with the general business of refining crude petroleum, with the amount of crude petroleum produced, with the amount of crude petroleum refined, so far as the same can be ascertained, and especially with the business of the Standard Oil Company.

Affiant says the said Standard Oil Company owns and operates its refineries at Cleveland, Ohio, and its refinery at Bayonne, New Jersey; that it has no other refineries nor any interest in any other refineries, nor does the Standard Oil Company operate or control in the United States any other refineries of crude petroleum; that there are in Ohio, West Virginia, Pennsylvania, New York, and New Jersey a large number of refineries of crude petroleum that are not owned or controlled by said Standard Oil Company, and in which the said Standard Oil Company has no interest whatever, directly or indirectly, which are now and for years past have been refining crude petroleum and selling it in the open market; that the amount of crude petroleum refined by the said Standard Oil Company does not exceed thirty-three per cent. of the total amount refined in the United States.

Affiant further says that the capacity of all the refineries in the United States is more than sufficient to supply the markets of the world, and in the judgment of affiant if all the refineries were run to their full capacity they would refine at least twice as much oil as the markets of the world require; that this difference between the capacity of refineries and the demands of the market has existed for at least seven years past, and during that period the refineries of the Standard Oil Company have not been run to their full capacity, and in the judgment of affiant not to exceed one-half of their capacity.

Affiant further says that during all the period of time that he has been engaged 2325in the business of refining oil he has been familiar with the price of crude oil and with the price of refined oil and with the profits to be derived therefrom, and from such experience he states that the average price of refined oil and the average profits to the manufacturer per gallon on same since 1876 have been much less than the average profit for several years previous to 1876; that said Standard Oil Company has no means now and never has had any of influencing the price of refined oil, save by the sale of its product in the open market.

Affiant further says that the Standard Oil Company has not nor did it ever have any interest in any oil property or any control over the production of crude petroleum; that it does not own any oil wells or land producing oil, and never did; nor has it any control over the price of crude petroleum, but relies upon obtaining its supplies, as all others do, by purchase in the open market and at the prices paid by others at the same time; that the said Standard Oil Company is not now nor has it ever been a stockholder in any railroad, pipe-line, or other common carrier for the transportation of oil, but within the year past it has for its own convenience constructed, and owns and is now operating, a pipe-line from Cleveland to the western line of the state of Pennsylvania for the purpose of bringing oil to its refineries at Cleveland; that said pipe-line is now insufficient to supply the demands of the Standard Oil Company for crude oil for its own refineries, and for that reason it has been and is now compelled to bring crude oil to Cleveland in cars to supply its wants.

That from the deponent’s experience in business he knows it to be true that a large manufacturer always has an advantage in cheapness of manufacture over a small manufacturer; that all the advantages derived by the Standard Oil Company are legitimate business advantages, due to the very large volume of supplies which it purchases, its long continuance in the business, the experience it has thereby acquired, the knowledge of all the avenues of trade, the skill of experienced employees, the possession and use of all the latest and most valuable mechanical improvements, appliances and processes for the distillation of crude oil, and in the manufacture of its own barrels, glue, etc., etc., by reason of which it is enabled to put the oil on the market at a cost of manufacture much less than by others not having equal advantages. These advantages, by reason of which the Standard Oil Company is enabled to refine oil cheaper than smaller manufacturers, are not exclusive to the Standard Oil Company, but are open to every person doing business under similar circumstances. That this state of facts has been detrimental to smaller refineries and has prevented them from making as much profit as they desired, and in some cases compelled them to suspend refining, and this constitutes the only foundation for the oft-repeated expressions “crushed out,” “squeezed out,” and “bulldozing.”

Affiant says he has examined the answer of the defendants, Shurmer and Teagle, and his attention has been called to various statements contained in it. In regard to the statement made therein that “if the business of the defendants were stopped as prayed 2326for by plaintiff, it would result in a still higher price for refined oil and the establishment of a more perfect monopoly in the manufacture and sale of the same by plaintiff.” The same is untrue, as there is not, never has been, and never can be a monopoly in the manufacture of refined oil, nor has the limitation in said agreement as to quantity to be manufactured affected, nor will the stoppage by the defendants of their manufacture, as prayed for in plaintiff’s petition, in the least affect the price of refined oil, for the reason that leaving out the entire capacity of the refinery of defendants there would still remain a large excess of capacity for supplying all the demands of the public, and hence there would be no opportunity for advancing the price, nor would it tend to create a monopoly of the business by the plaintiff.

Affiant further says that it is not true that the said plaintiff has at any time or in any manner violated the terms of said agreement as alleged in said answer or in any other manner. That it is not true that plaintiff has intentionally or otherwise withheld from the defendants the benefit of the advantages agreed upon in said contract to be given them, nor is it true that the plaintiff has not given to defendants the benefit of its contracts relating to freight on crude and refined oil, but the plaintiff has given to the defendants privileges not required by the agreement. That it is not true that the defendants have ever been required to pay larger rates of freight than were paid by the plaintiff when the defendants made any shipments of oil in accordance with the terms of the contract; nor is it true that the plaintiff has not allowed to defendants the same rebates that it has received from different carriers upon any shipments of oil made in accordance with the terms of the contract.

That it is true that the plaintiff has recently constructed a pipe-line from Cleveland to the western line of the state of Pennsylvania, through which its oil has been pumped to Cleveland since the spring of 1880, but it is not true that it is the owner of the said pipe-line from the western line of the state of Pennsylvania to the Oil Regions. That it is true that to promote the interest of the defendants, the plaintiff has furnished to defendants crude oil through said pipe-line and charged them twenty cents per barrel for the transportation of same; but it is not true that said pipe-line was constructed for the purpose of transporting oil for others than the plaintiff, nor is it true that under the terms of said agreement the defendants are entitled to the transportation of oil through said pipe-line, nor is it true that the charge of twenty cents per barrel is an unreasonable price for transporting oil through said pipe-line from the Oil Regions to Cleveland; but affiant avers it to be true that during the time it so furnished the oil through the pipe-line at twenty cents per barrel, of forty-two gallons each, the railroads were charging freight at the rate of from thirty-five to fifty cents per barrel, of forty-five gallons each.

Plaintiff continued to deliver defendants through the pipe-line, and at twenty cents per barrel, until they had received all they were entitled to manufacture under the contract dated July 20, 1876.

2327Affiant says that it is not true that “at the time when said agreement was signed, said plaintiff was endeavouring by contracts with divers persons to establish a monopoly in the manufacture of refined oil in the state of Ohio and in the United States.” Affiant avers that it has made but one other contract with other persons like the one made with defendants, and that was a contract made at the same date, viz., July 20, 1876, with the Pioneer Oil Company of the City of Cleveland, of which the defendants had full knowledge. Affiant further says that he was present and participated in the negotiations which resulted in the formation of the contract with these defendants, and that it is not true that said contract was entered into for the purpose of monopolising the trade in refined oil or for the purpose of enhancing the price thereof and maintaining an unnaturally high price for the same; and affiant says that it is not true that plaintiff by said contract, and by the said other contract made with the same design, succeeded in creating a substantial monopoly and averting competition, and maintaining an unnaturally high price for refined oil; but said contract was made, as is therein stated, for the purpose of equalising the business of manufacturing oil and giving to each of said contracting parties their due proportion thereof, and that the amount of 85,000 barrels per annum to which the distillation of defendants is by said contract limited is, as agreed, a relative proportion to their full capacity, as is the amount distilled by plaintiff per annum since said contract was entered into to its total capacity for refining oil; and it is not true that said agreement is in restraint of trade and against public policy, as alleged in the said answer of defendants, Shurmer and Teagle. Affiant says that on or about the first day of October, 1879, it came to his knowledge that the defendants had, in violation of said agreement, distilled about 22,984 barrels of oil more than they were entitled to by the terms of said agreement, and thereupon he had an interview with defendants, W. C. Scofield and John Teagle, who admitted the defendants had distilled in excess of the quantity stipulated in the contract, and agreed to reduce the quantity distilled during the year following, July 20, 1879, by the amount they had already distilled in excess up to that date, but requested they might be allowed to distribute said reduction equally over each six months of the year instead of wholly in either the first or last six months of the year following July 20, 1879, to which request affiant assented.

Affiant says that it is not true that “the plaintiff, on the fourth day of March, 1880, with full knowledge of how much oil in excess of 85,000 barrels per year had been manufactured by defendants and plaintiff, demanded of said defendants that they should pay to plaintiff the entire profits upon said excess,” other than as is hereinafter stated; and it is not true that plaintiff, at the time it demanded said profits, claimed that it had any monopoly, or that its monopoly was so perfect that it would have sold said excess if defendants had not, or that it was entitled to said profits in consequence of any monopoly; but affiant says that it did claim the profits upon the oil sold in excess of said 85,000 barrels, because defendants had broken their agreement with said 2328plaintiff, and the profits on such excess the plaintiff at that time was willing to accept as compensation for such breach of said contract.

Affiant says that he does not know what contracts for the sale of oil defendants may have made, or what contracts for the manufacture or for the construction of barrels they may have entered into, or what obligations they may be under to their customers; but he says that for a long time past the defendants have had notice that plaintiff would insist upon the performance by them of their obligations under their said contract, and that if they have entered into contracts for the sale of oil as alleged by them and entered into other obligations, they have done so with the full knowledge that they were thereby violating and continuing the violation of said agreement of July 20, 1876.

I have read the affidavit of H. L. Taylor, filed in this case October 18, 1880, in which he says “that he has been for some six or eight years last past acquainted with Mr. Rockefeller, Mr. Flagler, Mr. Payne, and others; that he has had conversations with some of these parties with regard to the control by the Standard Oil Company of the distilling and refining business in the state of Ohio and in the United States, and that he has heard them say in substance that the Standard Oil Company intended to wipe out all the refineries in the country except theirs, and to control the entire refining business in the United States.” Affiant says that he has been acquainted with H. L. Taylor for several years past, that all the foregoing statements so far as they relate to him are false, and that he never made to said Taylor or to any person in his hearing any such statement, nor statements in substance to that effect. Affiant further says that he never in company with said Taylor visited any of the cities or places mentioned in his affidavit for the purpose of inspecting or examining refineries, though he may have met said Taylor incidentally at various places, but that he never showed him refineries that were formerly under the control of others and running independently and stated that the same had passed under the control of the Standard Oil Company, nor did anybody else make such statements to Taylor in his hearing.

Affiant says that it has not come to pass, as sworn to by said Taylor, that said Standard Oil Company has “wiped out” the refining business of the United States or that it to-day controls it, but affiant believes that at the time said Taylor made his affidavit he knew there were very many refineries running independently of and in no way connected with the Standard Oil Company, and that said Taylor was himself then interested in the profits of a large refining business represented by a number of refiners who were large competitors of the Standard Oil Company.

With respect to the assertion of said Taylor that “in many instances to his knowledge the Standard Oil Company has bought refineries and taken them down,” affiant says that several years ago when the business was very much scattered, in several instances and for greater economy in manufacturing, the Standard Oil Company dismantled refineries unfavourably located and utilised the construction, machinery, and appliances of the same to increase its manufactory at Cleveland.

2329It is true that in many cases persons who had been unsuccessfully engaged in refining, but had experience, were to some extent employed by the Standard Oil Company in its business of refining, but that with respect to the averment in said Taylor’s affidavit that “in other cases said company employed men who had refineries, at large salaries and at the same time gave them no absolute employment,” the same is untrue. But it is true that it has restricted its employees from entering the business of refining and distilling oil except under said company’s direction.

But none of these things were done by the plaintiff for the purpose of creating and maintaining a monopoly of the business of refining, but were done for the purpose of conducting its business more efficiently.

And affiant says that it is not true, as sworn to by said Taylor, that the Standard Oil Company during a large portion of the time that he refers to, to wit, six or eight years past, or for any length of time, has substantially controlled the transportation of oil; that it is not true that said Standard Oil Company ever had, or that it now has, any contract with any lines of transportation in which it was stipulated that it should have a lower rate of freight than other shippers undertaking the same obligations and furnishing equal terminal facilities; that in all the contracts ever had with the railroads, the railroad companies have reserved the right to charge others the same rate of freight as that paid by the Standard Oil Company; and affiant further says that even those contracts with the railroad companies which gave the Standard Oil Company a commission for facilities furnished have long been abrogated and abandoned.

Affiant says that with respect to the statement in said Taylor’s affidavit that “other language has been used to him—said Taylor—by the officers of said Standard Oil Company to the effect that the said company intended to have all the refineries and aimed at having entire control of the oil market,” the same, so far as it related to him, is wholly untrue.

Affiant says that it is not true that the plaintiff got control of the refineries of the firm of Logan Brothers of Philadelphia, Octave Oil Company, Easterly and Davis, and Bennett, Warner and Company of Titusville, Pennsylvania; R. S. Waring and Citizens’ Oil Works of Pittsburg, or of either of them. The statement of H. L. Taylor that “the principal way by which these independent refineries came under the control of the Standard Oil Company was from the fact that said company had such rates of transportation that the small companies could not compete with it, and when said company had such in its power it would make such arrangements with parties engaged in these refineries as would prevent them from thereafter competing with the Standard Oil Company,” is false in its facts and its inferences. Affiant has already correctly stated the facts as to the purchase of refineries by the Standard Oil Company of Cleveland, what led to such purchases, and that persons engaged in such refineries were in some cases employed by said company; and any statement or inference to the effect that by illegal 2330means or unfair influences the plaintiff “squeezed out” or “crushed out” small refiners and prevented them from again entering into the business of refining, is untrue.

Affiant further responding to the affidavit of said Taylor, says that with reference to the statement therein contained that “the effect of the control of the refining business by the Standard Oil Company upon the oil market is to largely increase the price to consumers beyond what they ought to pay,” the same is untrue, and he avers again that since the date of the contract with defendants the average price to consumers of refined oil has been lower than for years previous.

As to the allegation of said Taylor that “if the business was distributed among the independent refineries it would furnish employment to a much larger number of persons than at present, and the interests of the country would be decidedly promoted by having the refining business in the hands of competent parties,” in so far as the same implies that there are not independent competing refineries outside of the works of said plaintiff, the same is untrue, and that it is a fact that a larger number of persons are now employed in connection with the business of refining oil than ever before.

Affiant says that with reference to the language used by the said Heisel in his affidavit that he, Heisel, was not afraid, to which Mr. Rockefeller replied, “You may not be afraid to have your head cut off, but your body will suffer,” “and that this was said by affiant prior to the time that he sold his interest in the refining business to Bishop and was said for the purpose of inducing affiant to sell out to the Standard Oil Company,” that affiant has no recollection of ever using any such language to said Heisel, and so far as said statement implies threats or inducements held out to said Heisel to procure the control of the works of Bishop and Heisel by the Standard Oil Company, the same is wholly false in spirit and effect.

Affiant says respecting the statement in said Heisel’s affidavit, that “the effect resulting from the control by this one company—the Standard Oil Company—of the entire refining business in Cleveland has been to largely increase the price of refined oil to consumers, to lessen its production, to reduce the number of hands employed in the refining business, and to reduce the price paid labourers for their work, and thereby to largely injure the public,” the same, so far as it alleges that there is a control by the Standard Oil Company of the entire refining business, is false; and that so far as it undertakes to state consequences of said alleged control by the Standard Oil Company, it is also false.

I have read the affidavit of Mrs. B. filed in this case on October 18, 1880. Said affidavit is incorrect, erroneous and in many respects false.

The first interview that I ever had with Mrs. B. was at her house, when she sent for Mr. Flagler and myself to consult with her in reference to selling out her establishment to one of her employees. This occurred during the year 1876. She stated to us the terms of an offer that she had received from the said employee, and expressed an earnest desire to dispose of the business and to be free from its perplexities and 2331annoyances, and evinced a disposition to accept the offer, and we advised her to accept providing the payments were made secure. I did not see her again until the fall of 1878, more than two years later. Then at her urgent request I met her at her house, at which time she made reference to the conversation she had had with Mr. Jennings, and desired me to pursue negotiations with her with reference to the sale of her property, which I positively declined, stating to her that I knew nothing about her business or the mechanical appliances used in the same, and that I could not pursue any negotiations with her with reference to the same, but that if, after reflection, she yet desired to do so, some of our people familiar with the lubricating oil business would take up the question with her. She was very desirous to begin negotiations, but I declined to negotiate and advised her not to take any hasty action, as from her own statements there was no such change in the condition of the business as to discourage the expectation that she could do as well in the future as she had in the past. When she responded expressing her fears about the future of the business, stating that she could not get cars to transport sufficient oil, and other similar remarks, I stated to her that though we were using our cars and required them in our own business, yet we would loan her any number she required or do anything else in reason to assist her, and I saw no reason why she could not prosecute her business just as successfully in the future as in the past. This is the last interview I had with her.

Affiant thinks it is true that Mrs. B. stated in the course of the conversation in substance that “the B. Oil Company was entirely in the power of the Standard Oil Company, and that all she could do would be to appeal to affiant’s honour as a gentleman and to his sympathy to do with her the best that he could do.” To the statement that she was in the power of the Standard Oil Company, affiant made a positive denial, and stated to her there was no foundation for the fears she expressed, and in this connection made the offer to her to furnish her with cars. He cannot remember what was said by Mrs. B. at this interview in relation to an agreement upon the part of the Standard Oil Company not to touch the lubricating branch of the trade. It is true that the Standard Oil Company had a contract with the B. Oil Company, made early in 1873, terminable on sixty days’ notice by either party, in reference to carbon oil only—which contract had been voluntarily assumed by the B. Oil Company—and it was entirely optional with the said B. Oil Company to discontinue said contract upon a notice of sixty days and thereby relieve itself from its obligations if it so desired; but said contract was continued in full force and effect up to the time of the sale by Mrs. B. of her interest in said B. Oil Company; but the Standard Oil Company had no contract with B. Oil Company by which it “agreed not to touch the lubricating branch of the trade,” nor did it have any contract with the said B. Oil Company having reference in any particular to the lubricating oil business, nor did affiant have any such contract. While affiant declined to enter into a negotiation with the said Mrs. B., it may be true that during the interview alluded to he said to her that in case a sale were made 2332she could retain whatever stock in the B. Oil Company she desired. As a result of the negotiations, in which affiant took no part, the construction and good-will of the B. Oil Company was purchased for sixty thousand dollars, which was at least twenty thousand dollars in excess of its value, and largely in excess of the value placed upon it by Mrs. B. in the interview above referred to between Mr. Flagler and affiant with her in 1876. In addition to the construction and good-will which was purchased for the sum of sixty thousand dollars, there was purchased of the B. Oil Company its entire stock of oils on hand at the full market value, and the sum paid for same amounted to $19,144.49, making an aggregate of $79,144.49, and did not include any other assets of the company, such as cash, accounts receivable and accrued dividends.

With respect to the allegation in said affidavit that “Mrs. B., seeing that the property had to go, asked that she might, according to the understanding with the president of the company, retain fifteen thousand dollars of her stock,” so far as said statement implies that she was parting with her property under any duress, restraint, or undue influence, or was forced thereto by any acts of the Standard Oil Company, the same is absolutely false; and it is also false that she ever had any understanding with the president of the Standard Oil Company that she should retain fifteen thousand dollars of the stock of the B. Oil Company, nor was there any reference to that subject save as is hereinbefore stated; and if the said Mrs. B. refers to this affiant in that connection wherein she says that “to this request the reply was, ‘No outsider can have any interest in this concern’ and ‘that said Standard Oil Company had dallied as long as it would over this matter, that it must be settled up that day or go, and insisted upon her signing the bond above referred to,’” the same is also false; nor has he any knowledge that during said negotiation any such language was ever used, or that the negotiations were ever carried on or closed in any such spirit.

Affiant says that it is not true that he made any promises that he did not keep in the letter and spirit; and it is not true that he was instrumental to any degree in her being obliged to sell the property much below its true value; and he avers that she was not obliged to sell out, and that such sale was a voluntary one upon her part and for a sum far in excess of its value, and that the construction which was purchased of her could be replaced for a sum not exceeding twenty thousand dollars.