178 GILBERT HOLLAND MONTAGUE 



tions to be carried on by the party hereto of the first part will 

 greatly promote the interest of the party hereto of the second 

 part, and make it desirable for it by fixing certain rates of 

 freight, drawbacks and rebates, and by the other provisions 

 of this agreement to encourage the outlay proposed by the 

 party hereto of the first part, and to facilitate and increase 

 the transportation to be received from it, . . . the party 

 hereto of the second part covenants and agrees." And for 

 the attainment of that end, the railroads reserved the right 

 to grant similar rebates and advantages to any other party 

 who should furnish an amount of transportation equal to that 

 furnished by the South Improvement company and equal 

 facilities for promoting the petroleum trade. 



In general outline the contract was very like those subse- 

 quently made with the grain elevator owners in the north- 

 west, and with the cattle shippers of Chicago. Throughout 

 this period it was the policy of the railroads to bind to them- 

 selves growing businesses, in which, as in the elevator and re- 

 fining industries, considerable capital and much enterprise 

 were necessary in order to succeed, and by granting to these 

 concerns special rates to build up trade for the industries and 

 traffic for themselves. By this form of personal discrimina- 

 tion the railroads entering New York had built up traffic for 

 themselves and business for A. T. Stewart, who was compet- 

 ing for the market in the central west with Field, Leiter & Co. 

 of Chicago. Where the competition for traffic was keen, the 

 railroads usually contracted with the strongest shipper or 

 group of shippers to carry freight at a special rate, or else — 

 as in the case of the large cattle shippers at Chicago and the 

 South Improvement company in the oil regions — appointed 

 the group "evener," and in return for a special rebate required 

 it to apportion traffic among the roads according to a fixed 

 ratio. 



Such are the economic grounds on which to judge this 

 contract. Popular judgment, however, was much less delib- 

 erate. On January 18th the contract was signed; and, on 

 February 27th, the day after the contract went into effect, an 

 excited mass meeting was held at Titusville and an organiza- 

 tion to oppose the new company hastily effected. At once a 



