RISE OF THE STANDARD OIL COMPANY 173 



New York, wells had been bored for oil. So rapid had been 

 the increased demand for the products of petroleum, and so 

 unexpected had been the increase of supply, that in 1865 

 existing refineries proved quite inadequate to the business 

 suddenly thrust upon them. 



The difficulties besetting refiners in 1865 were chiefly 

 such as could be cured by an increase of capital. In 1861 the 

 best wells had been thirty miles from the railroads. Because 

 of the lack of barrels and the difficulty of transportation, 

 petroleum had fallen from $20 a barrel to almost nothing. By 

 1863 boats had begun transporting petroleum down Oil creek, 

 and small pipe lines and branch railway lines had been built. 

 In 1866 a more efficient cylinder refining still was invented, 

 casing and torpedoes were coming to be used in drilling, the 

 tank car began to replace the clumsy flat car with its wooden 

 tubs, and pipe lines regularly transported petroleum from the 

 wells to the railroads. To secure these economies in refining, 

 small concerns must either increase their capital to about 

 $500,000 or else combine into this larger and more efficient 

 unit of production. Mr. Rockefeller was among the first to 

 see the exigency; and in 1867 he united into the firm of 

 Rockefeller, Andrews & Flagler the refineries of William 

 Rockefeller & Co., Rockefeller & Andrews, Rockefeller & 

 Co., S. V. Harkness, and H. M. Flagler. The reasons for 

 this union, as he afterwards stated them, must even then 

 have been evident: "The cause leading to the combination 

 was the desire to unite our skill and capital, in order to carry 

 on a business of some magnitude and importance in place of 

 the small business that each had separately heretofore car- 

 ried on." 



With the reorganization of the firm of Rockefeller, An- 

 drews & Flagler, in 1870, into the Standard Oil company of 

 Ohio, with capital stock of $1,000,000, the first period of the 

 oil industry may be said to close. No company had sought, 

 or, indeed, has since sought, to control the oil fields. So far as 

 may be known, no refiner had yet organized the pipe lines to 

 his exclusive advantage or exacted of the railroads better 

 freight rates than were granted to his competitor. The trans- 

 portation of oil by rail and by pipe line was left to independ- 



