202 GILBERT HOLLAND MONTAGUE 



utilize all these by-products requires the greatest specialization 

 of methods, encouragement of invention, investment of capi- 

 tal, and extension of plant. A refinery of a capitalization of 

 $500,000 cannot realize such economies. The undoubtedly 

 large profit accruing to the Standard Oil company from the 

 utilization of by-products is owing entirely to its superior 

 mechanical efficiency and organization. 



Aggregation of capital has brought to the Standard Oil 

 company its greatest advantage in the development of foreign 

 trade. In its contest on the continent, and especially in Rus- 

 sia, with the great oil interests of the Rothschilds, of the Nobel 

 Brothers, and of prominent England capitalists, its success 

 has been entirely due to its great capitalization. Since 1871 

 the export of petroleum products has increased seven times, 

 and of the present exports the Standard Oil company ships 90 

 per cent. In Russia the competition between the Standard 

 and the Nobel Brothers is keen. The price of Russian crude oil 

 is lower than that of American oil ; and the Nobels are at pres- 

 ent shipping it in tank steamers to India, China, and Japan. 

 To meet this competition, the Standard Oil company has es- 

 tablished agencies all over the world, and has built bulk tank- 

 ships for transporting its product. With the exception of the 

 trade in the far east, where Russian competition is especially 

 keen, the export price of oil has always been kept above the 

 American price. 



The present position of the Standard Oil company is one of 

 abundant prosperity and power. It is opposed by a combina- 

 tion — the Pure Oil company — which works in harmony with 

 an independent seaboard pipe line — the United States Pipe 

 Line — and with 66 independent refineries. The Standard 

 controls 90 per cent of the export trade and 80 per cent of 

 the domestic trade. By its control of the pipe line situa- 

 tion it has become quite independent of the railroads. By its 

 preponderant purchases of crude oil it has been able to steady 

 and roughly direct the course of prices of petroleum. By its 

 advantages in locating its refineries near their several markets 

 and in utilizing by-products it has effected enormous econo- 

 mies in transportation and manufacture, and increased its 

 dividend from 12 per cent in 1892, when the Standard Oil 



