LAYING A SIX-INCH PIPE LINE, CAIRO, WEST VIRGINIA
The Standard took back its 13,013 shares and patiently went on picking up more. By January, 1896, they held 29,764 shares, enough, with Colonel Carter's 300, to give them a clean majority. Colonel Carter appeared at 26 Broadway at this opportune moment and offered to buy the stock at 100. Mr. Archbold and his colleagues thought it worth 150. (They are said to have paid as high as 220 for some of it.) Mr. Carter, in his frank colloquial testimony when on the witness-stand, described the conversation over the price:
"Mr. Archbold says, 'I don't know, John, but what you are asking us to sell that stock too cheap. Don't you think it is worth more money?' I says, 'Not to me, it is not.' I says, 'I am willing to start in on this thing and put it on a paying basis and pay par for it.' 'Well,' he says, 'I guess that we will have to think that thing over,' and it dropped right there."
There were several interviews between Mr. Archbold, Mr. Rogers and Mr. Carter. They wanted to know how he proposed to run the Producers' Oil Company if he obtained a majority of the stock. "If I run that pipe-line," Mr. Carter reports himself as saying, "I am going to run it according to law and business principles. Any man that wants oil of me, and has the money to pay for it, shall have it."
"Will you let Mr. Emery have some oil if he wants it?" asked Mr. Rogers. "Yes, I will." "And all the outside refiners?" "Yes, I will. I shall make no discrimination against the outside refiner and in favour of the Standard Oil Company, or vice versa"
The Standard Oil seems to have been convinced that Colonel Carter was their friend — they probably never had any doubt of their ability to manage him, and it is evident from the Colonel's testimony that he never had any doubt about his own ability to manage both independents and Standard — and the sale was made at 100, Colonel Carter giving his check for $297,640 on the Seaboard Bank.
Stock in hand, Colonel Carter went back to the Oil Regions to take possession. It was not so easy as he anticipated. The secretary refused to transfer the stock. He sought the president, Mr. Lee. What took place Colonel Carter himself told later on the witness-stand:
"Senator Lee and myself retired to my room in the hotel and we had quite a preliminary conversation on the situation and in regard to the Producers' Pipe Line. Then I stated to him my ownership of the majority of the stock of the Producers' Oil Company, Limited, and stated furthermore that I purchased it from the National Transit Company; that my desire was to stop all contention on the part of the producers and myself, to run the business on a business principle, so that the stock belonging to the various members and myself might pay something, instead of dragging its slow length along as it had been for the past six years. I told him, furthermore, that I was perfectly willing that he should elect what portion of the directors that his stock would warrant him, and I would elect those that I could. The Senator replied then: 'You propose to take charge of the association?' 'Yes,' I said; 'I did.' The Senator then stated emphatically that I could not do it; he would not permit it; if he had to spend the whole capital of the company he would resist it. … He gave me to understand emphatically that there was not anything except the management of the company by himself and his associates that would be tolerated, and I told him then I was sorry that I would have to go into court and determine my rights in court. That was about all, but it is only fair, furthermore, to say that at the time the Senator was rather warm, and I presume I was warm in the collar myself. I stated to him plainly that if there was any attempt to eject me from a legally constituted meeting in which I was there, I would resist it if I killed the man that attempted to put me out."
Mr. Carter's cool announcement that he meant to run the company "from a business stand-point, and not from the standpoint of a gadfly" — there seems to be a doubt about its being the producers who had played the part of the gadfly — exasperated the independents to the last degree, and in June, 1896, they met the colonel in court. His ownership of a majority of the company's stock was admitted, but it was urged by the independents that the Producers' Oil Company was a limited partnership, and that under the Pennsylvania law no one owning stock can become a member without being elected by a majority in number and value of the interests. Colonel Carter had been elected member on only 300 shares. Both the lower and supreme courts sustained the independents, and Colonel Carter found himself an owner of a majority of the concern's stock without the right of control. Under those circumstances neither he nor the Standard wanted the stock, and the company bought it below par.
The winning of the Carter case gave encouragement that a similar suit brought by the Standard pipe-lines against the United States Pipe Line might fail. As already noted, the Standard began to buy into that company as soon as it was under way, and by the summer of 1895 they had collected 2,613 shares. In August of that year the annual meeting of the company was held, and the agent of the Standard Oil Company who had been buying the stock, J. C. McDowell, presented himself prepared to vote. He was stopped at the door by Michael Murphy, the present president of the Pure Oil Company, and told emphatically that they considered that he was sent there by the Standard Oil Company to spy on their actions; that, legal or illegal, they would throw him out if he crossed the threshold. Mr. Murphy is well known to be a man of his word, and as he was backed by young and athletic independent stockholders, Mr. McDowell discreetly withdrew. Naturally a suit followed, but this time the independents lost. The United States Pipe Line, being a corporation, was obliged to recognise the Standard interest in the concern and eventually to allow them a director on its board.
The humiliation and disgust over this result shook the independents' interests to their foundation. There perhaps was never a period of more heart-breaking discouragement for many of the men than when they saw their dearest hopes frustrated, and a Standard representative in their councils. This defeat came, too, when they were smarting under a continued and intolerable interference by the Standard with the extension of their pipe-lines to the seaboard. That both the crude and refined lines should ultimately reach the sea had, of course, been the intention from the first. But it was not until 1895 that the company felt firm enough in its finances to push the extension. The route laid out was from Wilkes-barre to Bayonne, New Jersey, by way of Hampton Junction, on the Jersey Central Railroad. By this course two railroads were to be crossed, the Pennsylvania and the Delaware, Lackawanna and Western. Under both of them ran the pipe-lines of the Standard and the Tidewater, and the United States Pipe Line officials believed they had an equal right to go under, but they took it for granted they would be opposed, and prepared for it. Looking over the titles of the land along the Pennsylvania, Mr. Emery, the president of the company, who was personally directing the extension, found one for an acre; the owner did not know of his possession and was glad to sell it. This gave the United States people a crossing, but even then they were obliged to carry on a long litigation in the courts before they were free to use their right.
Coming to the Delaware, Lackawanna and Western, they decided to test their position by laying a pipe. It was promptly torn out. A farm over which the railroad passed was then purchased and preparations made to lay the pipe in a roadway under the tracks. As this road was some seventeen feet below the rails, any claim that there was possible danger from the oil seemed feeble. Knowing that the point was watched, Mr. Emery tried strategy. Taking fifty men with him he went in the night to the culvert under which he meant to cross, laid his pipes four feet under ground, fastened them down with heavy timbers, piled rocks on them, anchored them with chains, established a camp on each side of the track, and prepared for war. They soon had it. First, with a body of railroad men armed with picks and bars, who invaded the camp. "I told the boys," said Mr. Emery in describing the incident to the Industrial Commission in 1899, "to take the men by the shoulders and the seat of the pants, and take them out and lay them down carefully, which they did." The next day two wrecking-cars, with 250 men, came down the road and charged the camp, but again they were routed. The matter was taken by mutual agreement into court, and while Mr. Emery was before the justice of the peace, two locomotives were run down and the camp attacked with hot water and coals!
By this time the whole countryside was aroused. The unfairness of the thing was so patent that even the railroad employees engaged in it did not hestitate to say, in excuse of their employers, that it was the Standard Oil Company which was at the bottom of the opposition! As for the inhabitants, they offered any aid they could give. The local G. A. R. sent forty-eight muskets to the scene of war. Mr. Emery bought eighteen Springfield rifles, the camp was barricaded, and for seven months the pipes were guarded while the courts were deciding the legal title to the crossing.
This interim was employed by the pipe-line people in an attempt to get a free pipe-line bill through the New Jersey Legislature. If this could be done they could go under the Delaware, Lackawanna and Western without its consent. The bill was introduced in February, 1896, J. W. Lee, Hugh King and Lewis Emery, Jr., all appearing before the committee to argue for it. At first there seemed to be no opposition to it. Everybody agreed it was a just and proper measure. Then, suddenly, within a few days of the end of the session, a violent opposition sprang up. Trenton became alive with lobbyists — men well enough known to politicians. The newspapers came out boldly with the charge that the railroads and Standard were going to defeat the bill. Its friends could not believe it, nor did they until they found, the morning it was to be presented, that the Senator having it in charge had disappeared, taking with him the bill and everything concerning it. Four days later the Legislature adjourned, and the precious Senator, when next heard from, was in the far West!
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