RISE OF THE STANDARD OIL COMPANY 175 



City, hauled oil to Pittsburg, a distance of eighty miles, and 

 to Philadelphia, a distance of four hundred miles. The Erie 

 railroad, which had no direct communication with the oil 

 country, effected an entrance by a connection with the Atlantic 

 & Great Western road, and hauled oil from Oil City to New 

 York, a distance of five hundred and fifty miles. The New 

 York Central railroad entered Oil City b3^ connections at 

 Cleveland, and hauled oil to New Y^ork, a distance of seven 

 hundred and forty miles. Just as agents of the roads had 

 annually agreed upon a rate from Chicago to the seaboard, 

 making the charge 80 cents by each road with a differential of 

 5 cents in favor of Baltimore and Philadelphia, so in the case 

 of the oil traffic the same rate was charged by each road on 

 oil moving from Oil City to the seaboard. The effect of this 

 " group rate" was naturally displeasing to refiners at Pitts- 

 burg; it deprived them of all geographical advantage, and 

 enabled their competitors at Cleveland — among others, the 

 Standard Oil company — to ship oil seven hundred and forty 

 miles by the New York Central railroad at precisely the rate 

 they were charged for a haulage of four hundred miles. 



Cleveland not only enjoyed the same railroad rates that 

 Pittsburg had, but also had water communication to the east 

 by way of the great lakes and the Erie canal. Pittsburg de- 

 pended almost entirely for transportation upon the railroads. 

 Cleveland, however, could at any time avail herself of the 

 competition of rail and water transportation by taking to 

 lake vessels whenever the charges of the New York Central 

 railroad were unsatisfactory. 



Cleveland, as a competitive point, therefore, had the oil 

 traffic of the New York Central at her mercy. Unless the 

 refiners at Cleveland were allowed low freight rates, the New 

 York Central must see its traffic directed to lake vessels. As 

 the danger of such loss became more imminent, the New York 

 Central was obliged to grant greater and greater favors to the 

 refiners. And when, in 1871, an unexpected shift in the center 

 of oil production threatened the entire refining business at 

 Cleveland, the railroads dependent on this business were 

 stirred to unusual action. 



