180 GILBERT HOLLAND MONTAGUE 



in favor of the large refiners was the other and more aggravat- 

 ing cause. For, though they never resumed the contract of 

 the South Improvement company, nevertheless, at the solicita- 

 tion of refiners who had signed the agreement of March 25, 

 1872, the railroads soon resumed the practice of increasing 

 traffic by giving special rates to the large shippers; and, 

 though their motives were — so far as evidence is shown — 

 thoroughly self interested, they hastened the absorption of 

 the small refineries by the larger, and especially the expan- 

 sion of the Standard Oil company, which was the largest of 

 all. To profit by these discriminations, and immediately by 

 the advantages of concentrated capital, the Standard Oil com- 

 pany of Ohio increased its capital stock in 1872 to $2,500,000, 

 and in the same year combined with the Standard Oil com- 

 pany of Pittsburg, the Cleveland Standard refinery, the Pitts- 

 burg refinery, the Atlantic Refining company of Philadelphia, 

 and Charles Pratt & Co. of New York — all leading independent 

 refiners — into the Standard "alliance," which ten years later 

 was to be the basis of the Standard Oil trust. "It was a union, 

 not of corporations, but of their stockholders,' ' says the solic- 

 itor of the Standard Oil company. "The several companies 

 continued to conduct their business as before. They ceased 

 to be competitive with each other in the sense of striving to 

 undersell each other. They continued to be competitors in 

 the sense that each strove to show at the end of each year the 

 best results in making the best product at low cost. From 

 time to time new persons and additional capital were taken 

 into this association. Whenever and wherever a man showed 

 himself skillful and useful in any branch of the business, he 

 was sought after. As business increased, new corporations 

 were formed in various states, in the same interest, some as 

 trading companies, some as manufacturing companies." The 

 motives of the combination, as stated by Mr. Dodd, were all 

 owing to conditions prevalent in the period from 1870 till 

 1874. "Railroad rates were excessive and lacking in uni- 

 formity. When refiners were able to combine and throw a 

 large volume of business to any particular road, they would 

 get favorable rates. The rebate and drawback system was 

 then universal, and was not confined to oil. Undoubtedly, 



