RISE OF THE STANDARD OIL COMPANY 185 



"alliance" at any price. But the Standard Oil company, 

 with its high degree of mechanical efficiency, its well organ- 

 ized United Pipe Line system, and its firm alliance with the 

 Erie and the New York Central railroads, proved superior. 

 On October 17, 1877, the Pennsylvania railroad was forced 

 to abandon the struggle, and to sign a contract which gave 

 the Standard Oil company practically the monopoly of the 

 production and transportation of oil in the United States. 

 According to this contract the Standard Oil company was ap- 

 pointed "evener," to apportion oil traffic in the following 

 ratio: 63 per cent of the oil traffic was to go to New York 

 city and 37 per cent to Philadelphia and Baltimore; of the 

 traffic going to New York city, the New York Central, the 

 Erie, and the Pennsylvania railroads were each to carry one 

 third; of the traffic going to Philadelphia and Baltimore, the 

 Pennsylvania railroad was to carry 70 per cent and the Balti- 

 more and Ohio 30 per cent. By the terms of the contract the 

 Pennsylvania railroad was guaranteed an annual traffic of 

 not less than 2,000,000 barrels; and the Empire Transporta- 

 tion company was purchased for $3,000,000 by the Standard 

 Oil company and the United Pipe Line company. The 

 Standard Oil company, meanwhile, for its services as "evener" 

 was remunerated in the following fashion: After May 1, 

 1878, when the contracts between the Pennsylvania railroad 

 and its shippers expired, the Standard Oil company received 

 a rebate of 10 per cent on all its freight. In addition to this 

 it was allowed, with other shippers, a rebate of 68^ cents in 

 order that it might be on an equality with those refineries who 

 shipped by the Erie canal; and the American Transfer com- 

 pany, which had now been united with the United Pipe Line 

 company, was allowed 22^ cents as its share of the through 

 rate. 



The Pennsylvania railroad offered to carry oil for all 

 shippers on these terms, except that for the 10 per cent rebate 

 it asked such considerations as the Standard alone could fur- 

 nish; and, indeed, for those refiners who made all their ship- 

 ments over its line, it continued to give rates as low as those 

 of the Standard Oil company. On December 8, 1878, how- 

 ever, when the Erie canal was closed, the railroad ceased mak- 



