182 GILBERT HOLLAND MONTAGUE 



freight rates were given. Their overcapacity had become so 

 excessive, their competition so ill considered, and their sol- 

 vency so much a matter of doubt that by 1874 most of them 

 had been united into the system of Vandergrift & Forman, 

 the Pennsylvania Transportation company, the Columbia 

 Conduit company, or the American Transfer company. Van- 

 dergrift & Forman at that time controlled 25 or 30 per cent 

 of the pipe line traffic in the oil regions, and the five companies 

 together controlled by far the greater part of the traffic. Such 

 was the situation when the Standard Oil company took a hand 

 in the business. 



In 1874 the firm of Vandergrift & Forman was reorgan- 

 ized. Its name was changed to the United Pipe Line com- 

 pany; and its officers were Mr. Vandergrift, president, and 

 six officials of the Standard " alliance" among its nine direct- 

 ors. In the same year the five great systems of pipe lines 

 agreed upon a uniform schedule of charges, and the patrons 

 of these systems were allowed no special discriminations by 

 the railroads. This new adjustment contained in the Rutter 

 circular of September 9, 1874, raised the charges for trans- 

 portation of oil nearly to the rates fixed by the contract of 

 the South Improvement company, and allowed a rebate of 

 22 cents on all oil coming from the five great systems of pipe 

 lines which maintained the uniform schedule of charges. By 

 this new tariff the organization of the remaining lines into one 

 or another system was considerably hastened; and in this 

 process of bringing order into the confused network of pipe 

 lines the Standard "alliance," the United Pipe Line company, 

 owned by the Standard Oil company, and the great systems 

 and their patrons were greatly benefited. With the railway 

 companies the purpose was merely to put an end to the un- 

 reliable service of the small pipe lines, and to secure for them- 

 selves a larger and more certain traffic. With the pipe lines, 

 however — though each of the allied pipe lines and every re- 

 finer who was served by them shared impartially in the rebate 

 — the effect was particularly to build up the larger pipe line 

 and the larger refiner at the expense of the smaller. For this 

 reason the economies in transportation by rail and pipe line 

 effected in 1874 tended greatly to increase the predominance 



