CHAPTER XXIX

"THE COMMODITY IS NOT SO GOOD AS BEFORE"

--_Lord Coke._

Three hundred years ago Lord Coke, in the "Case of the Monopolies,"[587] declared these to be the inevitable result of monopoly: the price of the commodity will be raised; the commodity is not so good as before; it tends to the impoverishment of artisans, artificers, and others.

In 1878 and 1879, when railway presidents were saying "No" to every application of the few remaining independents for passage along the road to market,[588] and the oil combination was supreme from the well to the lamp, a concerted protest was made against its oil by commercial bodies representing trade all over Europe. An international congress was held specially to consider means for the protection of the European consumer, by the interposition of the governments of Europe and America, or by commercial measures. In the archives of the State Department at Washington are the documents in which this episode can be read.[589] At this moment of triumph over all rivals, "even what was classed as superior brands was a poor article."[590] The English trade met in London, in January, 1879, and remonstrated. One of the delegates stated that a small dealer who bought of him had written, threatening to commit suicide on account of the trouble this poor oil was giving him.[591] The American consul at Antwerp, under date of February 19, 1879, called the attention of the State Department to the congress about to be held to consider the serious complaints which had been made of late against American refined petroleums. He gave the warning that unless there was an improvement the Belgian government would interfere for the protection of the people with regulations which would greatly embarrass the export trade from America. A bill was introduced into the German Reichstag to protect the people of Germany against the flood of bad oil from America. Against those dealing in oil dangerous to human safety it provided penalties from fines to loss of citizenship and penal servitude.

At the congress which met at Bremen in February were represented all the European nations of any importance except France, which imports only crude, and does all its refining at home. It was an indignation meeting. The consul at Bremen wrote the State Department, under date of February 27, 1879, an account of it. It was "very important," he said. "Delegates were present from the chambers of commerce of Antwerp, Amsterdam, Berlin, Breslau, Christiania, Copenhagen, Danzig, Frankfort-on-Main, Hamburg, Königsberg, Lubeck, Mannheim, Nürnberg, Rostock, Rotterdam, Stettin, Trieste, Moscow, and Vienna."

The "united refiners," to explain away the faults of their oil, sent a representative to the congress who was one of the inspectors of the State of New York, in the pay of the people, but using his official prestige in behalf of a private interest. The consul at Bremen names the two chief points made in the defence: First, that the refined oil was bad because half the crude then produced in America was from the Bradford field, "and is so different in quality from the so-called Parker oil that the same quality of refined oil cannot be made--at any rate, by the ordinary processes hitherto in use." Second, that the wicks in common use were poor. That the inferior quality of the Bradford oil was not the real reason was proved by the fact that the refined oil manufactured and exported by the refineries of the combination from the crude of the other fields deteriorated at the same time and as much.[592] The Bremen congress knew this. It was at this precise moment--though this the Bremen congress did not know--that the combination was tying up a great inventor and hauling his apparatus to the junk-yard to prevent the test of a new method for making better and cheaper oil.[593] Its members would have had the benefit of it if successful, but with the spirit which men who seek exclusive control always exhibit, they did not want to change.

The congress declined to treat with any respect the excuses that were offered. It declared "that the complaints regarding the inferior quality of much of the petroleum recently received from America, and especially of the different brands of the" oil combination, were "fully justified." It consequently demanded from the American refiners, and especially from the oil combination, "First, that they give greater care to the refining of crude oil than they have recently done, in order that the petroleum may in the future be again as free as it formerly was from acids and heavy oils, that inferior qualities may no longer be shipped to Europe, and that the consumer may again receive the former customary good quality."

The superiority of its barrels was specially mentioned by the head of the oil combination to explain why all competitors failed. "All its advantages," he said in court in Cleveland, "are legitimate business advantages, due to the very large volume of supplies which it purchases, its long continuance in the business, the experience it has thereby acquired, the knowledge of all the avenues of trade, the skill of experienced employés, the possession and use of all the latest and most valuable mechanical improvements, appliances, and processes for the distillation of crude oil, and in the manufacture of its own barrels, glue, etc., by reason of which it is enabled to put the oil on the market at a cost of manufacture much less than by others not having equal advantages." But the Bremen congress made a special attack on the "barrels" and "glue." It complained that "the continental petroleum trade has suffered heavy losses on account of inferior barrels," and demanded that the oil combination should "only use barrels of well-seasoned, air-dried, split (not sawed) white oak staves and heads." It even particularized that the barrels should be "painted with blue linseed-oil paint, and supplied with double, strong head-hoops," and "more carefully glued, and not filled until the glue is thoroughly dry."

"They were substantially without competition," was said in explanation of the poor quality of the product sent to Europe, and also "to all parts of this country. The quality of the oil which they sent was not a matter of first-class importance for them to retain their business." It was "a negligence which came in a great measure from the absence of competition." This witness was asked by the lawyer of the combination if he meant the committee to understand that it "was committing suicide by furnishing a continuously deteriorating article of oil to the consumer."

"They were not committing suicide, because they had the business in their own hands almost exclusively at that time."[594]

This was in 1879, and the complaints of the quality of American oil sent abroad continue to this day. Export oil, the Interstate Commerce Commission say, in 1892, "is an inferior oil."[595]

One of the means by which a market was found for American oil in Scotland was the lowering of the British requirements in 1879 as to quality, from a flash-test of 100° to one of 73°, so that the more explosive American oil, until then debarred, could be legally sold to the people of Great Britain. The oil made in Scotland was "a very superior article--very good indeed."[596] There were two ways of getting the market: to meet the Scotch manufacturer with as good an oil, or to induce the government to permit the sale of something inferior. The latter policy was adopted. The government was induced to permit the sale to private consumers of oil that would give off an inflammable gas at a temperature of 73°--a lower temperature than often exists in living-rooms. Meanwhile the government continued to insist upon oil that would stand a test of 105° for its own use in the navy and 145° in its light-houses. The absurdity of this legal test was proved by Mr. T. Graham Young, son of Mr. James Young, founder of the Scotch oil industry, in a letter to the Glasgow _Herald_ of May 12, 1894. He showed by the records that the year before there had been sixty days in London in which the temperature had gone above 73°. The government, that is, gave its sanction to the sale of oil which might explode at a heat below that ordinarily reached in an English summer! Commenting on the strange fact that the Scotch oil companies did not move against the change of test which had put them and the British consumer at the mercy of this explosive American oil, Mr. Young said: "It is generally understood that they are precluded from doing so by an agreement with the foreign producers. I hold a letter from one of the interested parties ... stating that for the above reason he could not discuss the matter." In discussing this matter, the Glasgow _Herald_ notes that even patient and poverty-struck India complains of the "very poor quality" of the oil sent there.

The Scotch papers are continually printing indignant comments on this action of the British government, and wondering inquiries as to the influence by which so injurious a change in the regulations for public protection could have been effected. The Scotch manufacturers are continually agitating to have the coroners in England and Ireland, and the procurators-fiscal in Scotland, make particular inquiry in all cases of fatal lamp explosions into the flash-point of the oil and its origin--whether American or Scotch. At the December, 1892, meeting of the Society of Chemical Industry of Great Britain it was declared that about three hundred deaths a year occurred in England and Wales from lamp accidents, due to the explosiveness of the American oil sold under this reduction of the test.

The agitation against this dangerous oil has been increasing in Great Britain year by year. The subject has been investigated by the Glasgow Chamber of Commerce, which found that many serious accidents to life and property had resulted from the use of this oil, and at its meeting of May 14, 1894, the chamber voted to petition the government to raise the test again to 100°. The Manchester and Edinburgh chambers of commerce took similar action. A number of other bodies have taken the subject up, and the government has had to promise to make an inquiry.

The statistics show that last year nearly one in five (19.3 per cent.) of the fires in London and more than one in eight (13.24 per cent.) of the fires in Liverpool came from kerosene. The oil used in those cities is principally the cheap American article sold under the lowered test of the English law. But in Glasgow, where most of the oil burned is that of the Scotch manufacturers, who, by agreement, sell no lower quality than 100° test, the number of fires from kerosene is less than two in a hundred (1.7 per cent.). At a meeting of representatives of the leading insurance companies of Edinburgh and Glasgow, June 20, 1894, experiments were made with the American, Russian, and Scotch oils. The American was found to be the most explosive, and some of it flashed at 69°. A lighted match thrown into this oil heated to 88° started an instantaneous blaze; thrown into Scotch oil it was extinguished. Experts testified that the cost of making the oil safe would be about a farthing a gallon, and that if the Americans, whose "self-interest" and "private enterprise" are not equal to a voluntary effort, were compelled by law to furnish a better illuminant, their profits would be greater, not less.

A rich field for investigation is concealed beneath the elaborate system of State inspection, by which the people have sought to protect themselves from being tempted by deceptive prices to buy a sure death. We have seen in several places how the State inspectors are in the employ, at the same time, of the State and the seller, whom it is their duty to watch for the State.[597] Evidence abounds at every turn of the use of inspectors and inspection laws to embarrass and even suppress the smaller refiners. One of the latest instances is a new law in Tennessee, which puts special difficulties in the way of oil reaching the State by river, the avenue to which independent refiners are forced by the discriminations of the railroad. We saw an inspector of the State of New York appear at the Bremen congress as the avowed representative of the "united refineries," complaints of whose bad oils occasioned the congress.

By one of those coincidences in which the world of cause and effect abounds, the Fire Marshal of Boston, in the same year in which Joshua Merrill described his fruitless efforts to continue the manufacture of a first-class oil,[598] found it necessary to warn the people against the dangerous stuff they were burning in their lamps. In his report in 1888 he called attention to the fact that one-tenth, nearly, of all the fires in Boston the preceding year had been caused by the explosion of kerosene or by its accidental combustion. He got samples of the oil used in a number of the places where fires had occurred from explosion, and had them analyzed by professors of the Institute of Technology in Boston and of the School of Mines of Columbia College in New York. They found them to be below the quality required by the State. Singularly enough, one of the State oil inspectors, examining similar samples, declared them to be above the standard of the State. The Boston _Herald_, discussing the matter, pointed out that the oil inspectors were paid by the owner of the oil. This, it said, placed inspectors practically under the oil combination, which has ways, it continued, of making things unpleasant for inspectors who make reports unsatisfactory to it. The fire marshal's conclusion in all the cases he investigated of these fires by explosion was: "I have felt warranted in every instance in attributing the blame to the inferior quality of kerosene used."[599]

The European protest of 1879 followed close upon the success of the comprehensive campaign of 1878[600] "to overcome competition." The warning from the Fire Marshal of Boston in 1888 and the success of the movement, begun in 1885,[601] to shut the independents of Oil City and Titusville out of Boston and New England came close together. These are not coincidences merely. They are cause and effect.

It is known that a practice has grown up among the oil inspectors of the States of allowing certain refiners to brand their own oil as they please, or letting it go to market unbranded. This permits the sale of unbranded and therefore illicit and presumably dangerous oil. Charges that inspectors in Iowa loaned their stencils to the oil combination to do its own branding were made formally in writing, in 1890, by one of the deputy inspectors, in the form required by law, to the governor of the State. The law provides that charges so made shall be investigated by the governor. No investigation was made, but the inspector was removed just as he was about to lay before a grand-jury documentary evidence of this and other violations of the law. This inspector declared publicly that inspectors were in the habit of leaving their official stencils with companies in the oil combination, and allowing them to put any brand they chose on any oil. He refused to continue this practice, nor would he brand barrels until they were filled. The representative of the combination in that State used every device except force, the inspector says, to induce him to conform to the practice. "Don't you know," this representative said, "that if you leave us your brand and get into trouble you will have the oil combination back of you? You will be taken care of." In his formal complaint to the governor, this inspector declared that this representative said in substance to him: "You are the only fool among the inspectors. We have the stencils of the inspectors at every other point where we want them."

The law put upon the governor the duty to investigate upon receiving written complaint. But when written complaint was formally made, and that not by an ordinary citizen, but by one of the sworn officials of the State, the governor demanded that the inspector back up his charges with the affidavits of witnesses--that is, the governor demanded that the inspector, who had no power, should make the investigation. This put an end to the whole matter. The inspector could not make the investigation, and the governor would not. The same governor refused to allow the written charges to be seen, although they are public documents, and they remained invisible as long as he held office. Only a few weeks after the removal of this inspector, the State oil inspector was sued for heavy damages by the owner of a barn which had been burned down through the explosion of bad oil. The ground of the suit was that the inspector, having failed to inspect and condemn this oil, as he should have done, was liable on his bond to the State. The press of Iowa commented freely on the probable connection between destructive fires, like this one, and the custom of allowing the oil ring to inspect itself, by which it was given the opportunity to put inferior and dangerous oils on the market with the brand of the State on them as good. As far as the case has been carried, up to date, the Iowa courts have sustained the claim and held the inspector in damages.

That which is an uninvestigated charge in Iowa is an officially ascertained fact in Minnesota. The demonstration in the latter case amounts practically to confirmation for the former, since the parties in interest, the motive, and the opportunity are identical. An investigation was made of the conduct of the State oil inspector by the Committee on Illuminating Oils of the Minnesota Senate, in 1891. The committee say in their report, which was adopted by the Senate:

"The testimony further shows that stencils were left with different oil companies by the State inspector or his deputy, by which the companies caused their barrels containing oil to be branded by their own employés, without the supervision of any State official. It appears that after the arrangement for the payment of the inspectors' and deputies' salaries by the oil companies was made, the attitude of the inspector towards his duties may be summed up in a few words of his testimony: 'I am under no obligation to the State of Minnesota. The Standard Oil Company paid me.'"[602]

The methods covered by the general phrases of the Minnesota Senate Committee were described in detail by a "commissioner" of the Omaha _Daily Bee_, which found the same things being done in Nebraska. The _Bee_ in 1891 made an elaborate investigation of the manner in which the oil inspection of Nebraska was executed. Its reporter passed incognito by the guardians of the portals of the warehouse of companies belonging to the oil trust in Omaha, and stood by while barrels were filled with uninspected oil and loaded on the cars for shipment to various points. That the people who bought the oil might know their lives were safe, each barrel bore the brand of approval provided by law, as follows:

Approved. Flash Test 105°

........................... _State Inspector of Nebraska_.

By ........................ _Deputy_.

But there was no inspector present, and the barrels were all branded beforehand and while empty, in defiance of the law and public safety. The reporter stayed until the cars were loaded, the doors closed, and saw the trains pull out. It is from this warehouse that the greater part of the barrelled oil consumed in Nebraska is forwarded. At the warehouse of the same company in Nebraska City the reporter found the same thing going on, and there, too, he found the official stencil-plates of several of the State oil inspectors lying at hand on the tanks, waiting to be used at the pleasure of the employés of the company to brand the desired government guarantee on any oil, regardless of what it was. The Illinois _State Journal_ found the same practice permitted in Springfield by the oil inspector in February, 1894. The _Bee_ reporter describes how tanks, once branded, came and went, were filled and emptied and filled again for months, with no inspection of the oil in them. Often the tanks were not even branded.

The Omaha _Daily Bee_ of November 24, 1891, gives a careful analysis of the recently amended inspection law of Nebraska. It shows that in many important points the law has been changed so as to put the safety of the people in the power of the combination which supplies almost all the oil used in the State. The standard required has been lowered. The liability to a charge of manslaughter for death resulting from bad oil has been changed to a liability for damages. The method of making the tests has been changed for the worse. No provision has been made for the protection of travellers by the inspection of oil used by the railroads, although accidents and serious ones, from the use of dangerous oil were frequent in the trains and at stations.[603] The _Bee_ said editorially of the oil combination that it had "managed, by its shrewdness in enacting this law, to make Nebraska the refuse tank for its rejected Eastern oil, and at the same time to crowd out of the State about all opposition." By means of this lowering of the test, oil that was too poor to pass in Iowa could be sent on to Nebraska and sold there. The _Bee_ gives instances where this was done.

The _Bee_ continued its investigations in 1893. It declared, December 5, 1893, that the inspection law, imperfect at best, was "being still further annulled by the open defiance of the leading oil companies." It declared "the leading violator" to be one of the principal companies in the oil combination. In a later issue the _Bee_ printed the result of tests made for it of oils purchased in the principal towns of the State. In almost every such case these showed that oils which were below the test were being sold to the people as good under the guarantee of the State. Some of them were "as safe for household use as dynamite," the _Bee_ stated. It said editorially, December 15, 1893, that it had in its possession a letter from the secretary of the Iowa State Board of Health affirming that oil condemned by the State of Iowa is shipped to Nebraska. The oil inspector of the State made a vigorous denial, but the _Bee_ refused to withdraw its statements. Its tests, it said, had been made by competent chemists. A suit is now pending in San Francisco, brought by the New Zealand Fire Insurance Company against the oil combination. It is charged that it sold low-test oil, that its inflammability caused fire and destruction of a dwelling insured by the insurance company, which was compelled to pay the loss. Some power, certainly not originating among the people, has for years, in States where the inspection laws required a high quality of oil, been at work procuring a reduction of the test. In some cases this has been accomplished only after persistent lobbying for years, as in Michigan. The test in Michigan has been lowered by legislation, as in Nebraska, and with similar results. The reports of the Michigan State Board of Health show that as the standard was lowered, fires and deaths from explosions increased. The Detroit _Tribune_ of December 27, 1891, says that the reduction of the test in Michigan and Nebraska is due to the avarice of the producers (refiners) and nothing less than criminal carelessness of the legislators. The dangerous constituents of petroleum, such as naphtha and gasolene, are indistinguishable by the eye of the buyer from kerosene. They can be as easily mixed with it as hot and warm water with cold. These reductions of the test in various States permit mixtures more hazardous than dynamite to be sold to the people, lulled into reliance upon the State inspectors. "The advantage to the oil company," says the Detroit (Michigan) _Times_ of April 30, 1891, "is obvious. Naphtha and gasolene are worth, perhaps, three cents a gallon. Kerosene is worth three times as much. A test which allows one quart of kerosene and three quarts of gasolene to constitute a gallon of merchantable illuminating oil will enable a few more colleges to be endowed, though increasing the death-roll in a notable degree."

One of the demands of those who are conducting the agitation, noticed elsewhere, for the admission of American oils free into Canada is that the standard of Canadian oil inspection be lowered. This, says the Hamilton (Ontario) _Spectator_, will open the Canadian market to the low-test and dangerous oils made by the American combination, and "restore the old order of lamp explosions, with the consequent loss of life and property."

An unwritten chapter of this story is the experience of the Ohio oil producers, and the use of the inferior oil of the Ohio field to adulterate oils made from Pennsylvania petroleums.

Lord Coke's dictum about the decrease of quality never had a more spectacular illustration than was given at Oil City and Titusville on Sunday, June 5, 1892. Oil Creek was high with rains. A dam burst and made the creek a flood. Its waters ate away the insufficient foundations of tanks, and rivers of naphtha and gasolene and kerosene overran the river of water for miles. A spark did the rest. Oil refineries took fire, tanks exploded. There were two raging seas--water beneath, fire above. Men, women, children, animals, property were swept along in their intermingled waves. From every overturned tank and blazing refinery fresh streams of oil flowed into the sea of flame, which climbed the hills for the victims the other sea could not reach. Those who escaped drowning breathed in a more dreadful death. It was a volcano and deluge in one. It was one of the most terrible catastrophes of our times. Even the scare-heads of the newspapers could not exaggerate its horrors. The governor of the State made a public appeal for help. The coroner's jury held an inquest at Oil City upon fifty-five bodies at one sitting. It declared the cause of the calamity to have been the gross carelessness of the owners and custodians of a tank of naphtha, in permitting it, while filled with 15,000 barrels of naphtha, to stand without proper protection from fire and water. The tank was shown, by the testimony, to have stood on sand within a few feet of the creek and without safeguard. It was shown that complaints had been made to the managers of the refinery, which was one of the subsidiary companies of the oil trust, about this tank and others before the disaster, but without avail. The coroner's jury laid the blame where it belonged--upon the company whose tank gave way. Its verdict said: "The naphtha which caused this awful destruction of life and property ... was stored in a tank located on the bank of Oil Creek, on the Cornplanter Farm, near McClintockville, where it was built about four years previous to this time. At the time of its construction the tank was from twenty to thirty feet from ordinary high-water mark in the creek, but this distance has been gradually reduced by the action of the water prior to this flood to between six and ten feet, and this flood further washed away the ground up to and under the tank, a distance of from fifteen to twenty feet. A part of the tank bottom, thus being left without support, tore out, allowing the naphtha to escape into the creek. The evidence of the watchman, James Marsh, shows that he realized danger from the undermining of the tank, for he made a feeble effort previous to this flood to protect it by throwing loose stones between the tank and the creek. The jury find from the evidence that all persons owning and having in custody this tank and its contents were guilty of gross carelessness in permitting it, while filled with naphtha, to stand without proper protection from fire and water."

The company which owned this tank belonged to the oil combination. It was, strange to say, one of the tanks of the Keystone refinery, to which Matthews, the Buffalo independent, had turned for a supply of crude oil when all other sources failed,[604] and which had been thereupon bankrupted and taken into the combination seven years before. Here was one fruit of that victory over competition. The coroner's jury at Titusville reprobated in the strongest terms the folly of storing oil in tanks within reach of high-water. It called upon "citizens and officials, ... for the common good of all," to do what it said was "entirely practicable: to so locate and guard and construct oil-tanks and other receptacles of inflammable petroleum products that they cannot be floated away, or the contents floated out of them by water," and that "in case of flood and fire lives and private property cannot be endangered by them." Although here and all over the oil regions the business was under the control of one combination, and had been so since early in the seventies, the Titusville jury, less courageous than that of Oil City, declared that it could "attach no blame to any one in particular for the present loss of life," because this "custom of storing and manufacturing oil and its products, regardless of endangering the lives and property of others, had been allowed to grow up here as well as all over the oil regions." These verdicts have been followed by suits now pending in the Pennsylvania courts, claiming heavy damages from the oil combination as responsible for the disaster and the loss of life and property.

The Oil City and Titusville disaster is but a provincial affair compared with the metropolitan avalanche of ruin which is all ready to move upon the cities on New York Bay from the refineries and tanks along its shores. Several condensed oceans of unignited fire are waiting for such accident as happens almost every day to some gas-works or refinery or tank-car. On creeks running into the East River, on bays opening from the New Jersey shore into the greater bay, in tanks whose contents would overlay the whole sheet of water from the Narrows to Hell Gate and Spuyten Duyvil, these volcanoes are dozing, and they are light sleepers.