RISE OF THE STANDARD OIL COMPANY 189 



to the seaboard, had been organized by oil producers. Upon 

 their failure, the producers organized the Tidewater Pipe Line 

 company, which ran from the Bradford region to Williamsport, 

 a distance of 110 miles; and thence, by a connection with the 

 Philadelphia and Reading railroad, the oil was carried a dis- 

 tance of 250 miles to Philadelphia. On the 1st of June, 1879, 

 this company commenced the shipment of oil. The railroads 

 were not content to see the oil traffic slip through their hands ; 

 and on the 5th of June, at a conference between the four trust 

 lines at Niagara Falls, resolute measures were adopted to drive 

 this rival transportation agent from the business. The rate on 

 crude oil per barrel was lowered to 20 cents on all oil of the 

 Standard " alliance" moving from the oil regions to New York, 

 Philadelphia, and Baltimore. A corresponding reduction of 

 the rate to the general public was made from $1.15 to 30 cents. 

 These rates took effect at once; and, as competition contin- 

 ued, a further reduction was made on August 1 to 15 cents 

 per barrel. 



Throughout the period of the organization of the trust, 

 and for a full year after, this fierce contest between the rail- 

 roads and the Tidewater Pipe Line company continued. The 

 immediate effect, of course, was to benefit the shippers, and 

 particularly the largest shipper, which was the Standard. The 

 ownership by the Standard of the terminal facilities and of the 

 greater number of the oil cars of the railroads now became a 

 fact of importance. In consideration of its heavy investments 

 in these interests, and of its agreement to ship and to unload 

 its oil at its own risk, the Standard had already been allowed 

 rebates. But now the Standard began the building of pipe 

 fines to the seaboard and the formation of the National Transit 

 company. As pipe lines were a cheaper mode of transporta- 

 tion than railways, the building of these lines made necessary a 

 readjustment of freight rates; and, as the pipe lines then build- 

 ing could not carry the oil the entire distance, contracts for 

 joint carrying had to be made with the railroads. The first 

 contract — made between the National Transit company and 

 the Pennsylvania railroad on May 6, 1881 — related to the ap- 

 portionment of the freight when the haul was partly by pipe 

 line and partly by rail. The Pipe Line company guaranteed 



