We saw Mr. Scott on the 18th of March, 1872, in Philadelphia, and he said to us that he was very much surprised to hear of this agitation in the Oil Regions; that the object of the railroads in making this contract with the South Improvement Company was to obtain an evener to pool the freight — pool the oil freights among the different roads; that they had been cutting each other on oil freights for a number of years, and had not made any money out of it, although it was a freight they should have made money from; that they had endeavoured to make an arrangement among themselves, but had always failed; he said that they supposed that the gentlemen representing the South Improvement Company represented the petroleum trade, but as he was now convinced they did not, he would be very glad to make an arrangement with this committee, who undoubtedly did represent the petroleum trade; the committee told him that they could not make any such contract; that they had no legal authority to do so; he said that could be easily fixed, because the Legislature was then in session, and by going to Harrisburg a charter could be obtained in a very few days; the committee still said that they would not agree to any such arrangement, that they did not think the South Improvement Company's contract was a good one, and they were instructed to have it broken, and so they did not feel that they could accept a similar one, even if they had the power.
Leaving Colonel Scott the committee went on to New York, where they stayed for about a week, closely watched by the newspapers, all of which treated the "Oil War" as a national affair. Their first interview of importance in New York was with Commodore Vanderbilt, who said to them very frankly at the beginning of their talk: "I told Billy (W. H. Vanderbilt) not to have anything to do with that scheme." The committee in its report said that the Commodore fully agreed with them upon the justice of their claims, and frequently asserted his objections to any combination seeking a monopoly of other men's property and interests. He told them that if what they asked was that the railroads should fix a tariff which, while giving them a paying rate, would secure the oil men against drawbacks, rebates, or variations in the tariff, he would willingly co-operate. The Commodore ended his amiable concessions by reading the committee a letter just received from the South Improvement Company offering to co-operate with the producers and refiners or to compromise existing differences. The oil men told the Commodore emphatically that they would not treat with the South Improvement Company or with anyone interested in it nor would they recognise its existence. And this stand they kept throughout their negotiations though repeated efforts were made by the railroad men, particularly those of the Central system, to persuade them to a compromise.
At the meeting with the officials of the Erie and the Atlantic and Great Western the committee was incensed by being offered a contract similar to that of the South Improvement Company — on consideration that the original be allowed to stand. It seemed impossible to the railroad men that the oil men really meant what they said and would make no terms save on the basis of no discriminations of any kind to anybody. They evidently believed that if the committee had a chance to sign a contract as profitable as that of the South Improvement Company, all their fair talk of "fair play" — "the duty of the common carrier" — "equal chance to all in transportation — would at once evaporate. They failed utterly at first to comprehend that the Oil War of 1872 was an uprising against an injustice, and that the moral wrong of the thing had taken so deep a hold of the oil country that the people as a whole had combined to restore right. General McClellan of the Atlantic and Great Western and Mr. Diven, one of the Erie's directors, were the only ones who gave the committee any support in their position.
The final all-important conference with the railroad men was held on March 25, at the Erie offices. Horace Clark, president of the Lake Shore and Michigan Southern Railroad, was chairman of this meeting, and, according to H. H. Rogers' testimony before the Hepburn Committee, in 1879, there were present, besides the oil men, Colonel Scott, General McClellan, Director Diven, William H. Vanderbilt, Mr. Stebbins, and George Hall. The meeting had not been long in session before Mr. Watson, president of the South Improvement Company, and John D. Rockefeller presented themselves for admission. Up to this time Mr. Rockefeller had kept well out of sight in the affair. He had given no interviews, offered no explanations. He had allowed the president of the company to wrestle with the excitement in his own way, but things were now in such critical shape that he came forward in a last attempt to save the organisation by which he had been able to concentrate in his own hands the refining interests of Cleveland. With Mr. Watson he knocked for admission to the council going on in the Erie offices. The oil men flatly refused to let them in. A dramatic scene followed, Mr. Clark, the chairman, protesting in agitated tones against shutting out his "life-long friend, Watson." The oil men were obdurate. They would have nothing to do with anybody concerned with the South Improvement Company. So determined were they that although Mr. Watson came in he was obliged at once to withdraw. A Times reporter who witnessed the little scene between the two supporters of the tottering company after its president was turned out of the meeting remarked sympathetically that Mr. Rockefeller soon went away, "looking pretty blue."
The acquiescence of the "railroad kings" in the refusal of the oil men to recognise representatives of the South Improvement Company was followed by an unwilling promise to break the contracts with the company. Another strong effort was made to persuade the independents to make the same contracts on condition that they shipped as much oil, but they would not hear of it. They demanded open rates, with no rebates to anyone. Horace Clark and W. H. Vanderbilt particularly stuck for this arrangement. Their opposition to the oil men's position was so strong that the latter in reporting it to the Union said: "We feel it proper to say that we are in no wise indebted to these gentlemen for any courtesy or consideration received at their hands." So well did the committee fight its battle and so strongly were they supported by the New York refiners that the railroads were finally obliged to consent to revoke the contracts and to make a new one embodying the views of the Oil Regions. The contract finally signed at this meeting by H. F. Clark for the Lake Shore road, O. H. P. Archer for the Erie, W. H. Vanderbilt for the Central, George B. McClellan for the Atlantic and Great Western, and Thomas A. Scott for the Pennsylvania, agreed that all shipping of oil should be made on "a basis of perfect equality to all shippers, producers, and refiners, and that no rebates, drawbacks, or other arrangements of any character shall be made or allowed that will give any party the slightest difference in rates or discriminations of any character whatever." 24 It was also agreed that the rates should not be liable to change either for increase or decrease without first giving William Hasson, president of the Producers' Union, at least ninety days' notice.
The same rate was put on refined oil from Cleveland, Pittsburg and the creek, to Eastern shipping points; that is, Mr. Rockefeller could send his oil from Cleveland to New York at $1.50 per barrel; so could his associates in Pittsburg; and this was what it cost the refiner on the creek; but the latter had this advantage: he was at the wells. Mr. Rockefeller and his Pittsburg allies were miles away, and it cost them, by the new contract, fifty cents to get a barrel of crude to their works. The Oil Regions meant that geographical position should count, that the advantages Mr. Rockefeller had by his command of the Western market and by his access to a cheap Eastward waterway should be considered as well as their own position beside the raw product.
This contract was the first effective thrust into the great bubble. Others followed in quick succession. On the 28th the railroads officially annulled their contracts with the company. About the same time the Pennsylvania Legislature repealed the charter. On March 30 the committee of oil men sent to Washington to be present during the Congressional Investigation, now about to begin, spent an hour with President Grant. They wired home that on their departure he said: "Gentlemen, I have noticed the progress of monopolies, and have long been convinced that the national government would have to interfere and protect the people against them." The President and the members of Congress of both parties continued to show interest in the investigation, and there was little or no dissent from the final judgment of the committee, given early in May, that the South Improvement Company was the "most gigantic and daring conspiracy" a free country had ever seen. This decision finished the work. The "Monster" was slain, the Oil Regions proclaimed exultantly.
And