igo GILBERT HOLLAND MONTAGUE 



the railroad one-third of the transportation of oil to the sea- 

 board. The Standard was to pay exactly the same rate as 

 other shippers over the railroad. On such oil as was carried 

 partly by pipe line and partly by rail, a through rate was 

 made, of which the pipe line naturally received a share; and, 

 finally, the Pipe Line company agreed to remit part of the 

 charge to its local pipes to the railroad. Instead of a contract 

 for rebates to the Standard, this was a contract for rebates 

 to the railroad. The reason for this contract was that the 

 seaboard pipe line of the Standard did not extend beyond 

 Hamilton, Pa.; and to compensate the railroad for its low 

 rate of freight and for its grants of rights of way — no free 

 pipe line law then existing in New Jersey — these rebates were 

 provided. 



Strengthened by these mutually helpful contracts, the 

 National Transit company and railroads were meanwhile 

 wearing out the Tidewater Pipe Line company, and in 1883 

 forced it to cease its opposition. The company was never 

 absorbed by the Standard Oil trust; but on October 9, by an 

 agreement with the National Transit company, it agreed to 

 accept as its share of the oil traffic 11 J per cent of the total 

 pipe line transportation of petroleum to the seaboard, and 

 was guaranteed $500,000 in annual profits for fifteen years. 

 With this settlement the war of the transportation agents 

 ceased, and the Standard Oil trust established itself in the 

 strategic position which substantially controlled the transpor- 

 tation of oil to the seaboard. By the early seventies the 

 Standard had attained the pre-eminence in mechanical effi- 

 ciency which it has ever since maintained; by the agreement 

 with the Pennsylvania railroad in 1878 it had gained a dom- 

 inance over transportation which it never since has lost; 

 and by its contract in 1881 it made possible the completion 

 of its pipe line to the seaboard and its independence of rail- 

 roads. Such contracts as the Standard subsequently made 

 with the Pennsylvania railroad were agreements by which 

 the railroad got some part of the freight, though it did no part 

 of the carrying. The Standard Oil trust now gave rebates 

 instead of receiving them. Over every branch of the industry, 

 in 1883, it was supreme. 



