RISE OF THE STANDARD OIL COMPANY 191 



From the very beginning of the oil industry in Penn- 

 sylvania, movements for the restriction of oil production had 

 been frequent. Restriction had been the aim of the Petro- 

 leum Producers' association at its organization in 1869. 

 The association had maintained an agency to store all oil 

 above a certain amount and keep it from the market. This 

 early "shut down" failed because of the enormous produc- 

 tion in Butler county. Succeeding "shut downs" in 1872, 

 1874, 1876, and 1878, met with similar fate. In 1884 there 

 was another general movement among producers to restrict 

 drilling; but, through the refusal of the operators who were 

 running large wells in the new Thorn Creek district, the 

 movement was only partially successful. It led, however, to 

 the organization of the Producers' Associated Oil company, 

 with a capital stock enabling it, when necessary, to purchase 

 oil property in order to curtail production 



On the 1st of October, 1887, this new organization, em- 

 bracing 85 per cent of the 14,000 producers in the oil regions, 

 agreed with the Standard Oil company to restrict production. 

 From June to October the Producers' Protective association, 

 by various secret and public meetings, had encouraged the 

 movement. The conditions of the industry favored the organi- 

 zation. The accumulated stock of oil was 31,000,000 barrels, 

 prices were below the remunerative point, and the Standard 

 was losing by the deterioration of oil in its store. After 

 conference between the Standard and the associated producers, 

 it was agreed that the producers should restrict their pro- 

 ductions one third during the following year, in consideration 

 for which the Standard turned over to the producers 6,000,000 

 barrels of oil, at the market price at the time of the contract, 

 and secured to the producers the profit from the anticipated 

 rise in price. 



By this bargain the producers immediately profited. 

 On the oil they received from the Standard they made nine 

 cents a gallon. Encouraged by their success, they made 

 agreements during the next year with the well drillers' union 

 to equalize the amount of oil produced by each individual. 

 Although it was not possible to bring all the producers into 

 the agreement the price of crude oil was advanced by this 



