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To renew call Telephone Center, 333-8400 UNIVERSITY OF ILLINOIS LIBRARY AT URBANA-CHAMPAIGN APR 3G) 1980 NOV 23 1996 L161—O-1096 UNIVERSITY ILLINOIS LIBRARY URBANA-CHAMPAIGN BOOKSTACKS Digitized by the Internet Archive in 2022 with funding from University of Illinois Urbana-Champaign https://archive.org/details/standardoilcompa0Ohubb a , sm ag w &S ea) peach i t =| il | We | S| dt a ait mt =| Beak _ UA Ltn Lar by oi pomalintien + 1) -ateieleca dtm sstirete sen menthinninieniiieiar nen anoen tbyrnperstan dpyvar-sabority ie Aes Gr ah eae Ree pepe ye ee ge eine alate eS oe ee tg Rite, Sipe The Standard Oil Company~ By ELBERT HUBBARD Being a reprint from ‘‘The Fra” Magazine DONE INTO A BOOK BY THE ROYCROFTERS, AT THEIR SHOP, WHICH IS IN EAST AURORA, ERIE COUNTY, NEW YORK .% ANNO CHRISTI, MCMX Copyright 1910 by Elbert Hubbard (i) The Standard Oil Company (We sg HE Standard Oil Company is an Sy American institution. The Standard Oil Company is the largest employer of labor in the world. In average times it gives work directly to more than eighty thousand men. Its daily payroll is more than one hundred fifty thousand dollars .% .% Most of its equipment is‘ the invention of Americans, and its best and highest-paid chemists and engineers are also Americans, although it has searched the civilized world for talent and skill. The Standard Oil Company is our largest exporter of American products. The money pumped into the United States %: oO It deals in an American product. It supplies this product in its various forms to consumers in every country in the world, except those countries which have passed prohibitory tariff- laws, and thus have barred competition, not being able to meet it. THE STANDARD OIL COMPANY from foreign countries for American products through The Standard Oil Company’s financial pipe-lines is over two hundred fifty thousand dollars a day. This money at once finds its way through all the channels of American trade .* Europe has oil-fields as extensive as those in America. There are also oil-fields in Persia, Bulgaria, Burma, Ceylon, Australia, New Zealand, parts of South America, and the Balkans. Yet The Standard Oil Company could send its products to all of these countries at a profit, if not shut out by a tariff. The competi- tion of the world fades before it, because it is organized on a scale and in a way that no foreign competitor is. It is organized on the American plan. In Oriental countries individual effort still largely prevails. In Italy, Spain and Egypt, wells are drilled by hand, and pumps are operated by digital process. The use of the ‘“‘srasshopper connection-rod,’’ which pumps a dozen or more wells by the use of one engine, was recently forbidden in Turkey, because, forsooth, ‘“‘Allah is great and Mohammed is his prophet, and a pump like that will throw 4 THE STANDARD OIL COMPANY the Faithful out of work.’ @ The argument that the forty men thrown out of work could be used to a better advantage elsewhere met with a shrug of doubt, and the remark: “ Allah be praised, if they work at this, they will not have to work at that.” Capital and Investment HE Russian oil-fields are about as big & as those in America. The largest com- bination of capital under one management in the oil business in Russia is one million dollars and it is a wonderoski! There is not a single millionaire in Russia, outside of the Czar and the Grand Dukes, and they do not count, since their business is consumption and waste, and not production. The capital of The Standard Oil Company is one hundred ten million dollars. And very much adverse criticism has been brought for- ward because it pays forty million dollars annually in dividends, or, say, an interest on capital of forty per cent. This, like most half-truths, is misleading. The fact is that, while The Standard Oil Company is capitalized for one hundred ten million 5 THE STANDARD OIL COMPANY dollars, its investment in plant and equipment is about seven hundred million dollars. In figuring percentages, the per cent of dividends should be calculated on the assets, and not on the nominal capitalization. Think, say, of the Chemical National Bank! q It should also be noted that, while The Standard Oil Company pays forty million dol- lars a year in dividends, the amount it yearly pays out in wages is fifty millions. The yearly amount of its business is about eighteen hundred millions, so its profits on the business done are about two and one-half per cent. . The Standard Oil Company owns one hundred twenty iron tank-steamships that are employed in its foreign trade. It also owns ten thousand miles of trunk-line pipe-line, and eighty thousand miles of con- tributory or feeding lines. One small item of its assets is twenty thousand tank-wagons, used in supplying consumers. Oil property is subject to great deterioration, in the fact that wells are constantly growing dry, and districts may be producing actively 6 THE STANDARD OIL COMPANY today, and tomorrow may be dry holes. In such cases the pipe-lines are of so little value that they are often simply abandoned and no attempt is made to remove them. A Decentralized Industry HE.Standard Oil Company owns a con- trolling interest in about fifty refining companies. Most of these were organized by the Standard directly, but some of them were bought up, and their active managers retained on salaries. A few were organized for the pur- pose of selling out to the Standard. This decentralization is one of the chief reasons for the success of the Standard. It is on the order of the modern department-store, which is merely fifty, sixty or seventy stores in one, each under a competent general manager. Every department has its own complete system of bookkeeping, and must make a profit, or show a reason why. In the old way of merchandising, the life of a successful business was twenty years, then it went broke. There were leaks that could not be located, dead stock, dead wood, dead men who thought that they were alive, salesmen in 7 THE STANDARD OIL COMPANY a comatose state, extravagant buyers, and lime in the bones of the boss. The law of diminishing returns wrecks every big venture that is not decentralized, that is, divided up into water- tight compartments, so if one springs a leak all the damage that is done is to flood that particular department. The ship still floats. @ The General Electric Company has recently begun to decentralize, and so have most of the other big corporations. And all of these are simply following the lead of The Standard Oil Company .% .% Its Marvelous Organization an organization, The Standard Oil Com- ae is equaled by only one other institu- tion on Earth—and I’ll not tell you what that one is. If you do not know, the matter would not interest you, anyway. The success of The Standard Oil Company has turned on its selection of men and its service to the public, and not on its strength of capital. The capital came as a result—it was an incident. The men who manage The Standard Oil Com- pany at one time had no capita —they did, however, have brains and energy. “ All wealth 8 THE STANDARD OIL COMPANY is a result of labor, applied to land,” says Adam Smith. Later he added capital as a factor in the production of wealth. Modern economists add a fourth factor, and this is the most important of all—it is Enterprise. The French call it the service of the Entrepreneur. Ida Tarbell surely tells one great truth. It is this: ‘‘Even the elevator-boys in the Standard Oil offices are selected with an idea to their development.” The Result of Competition HE position of The Standard Oil Company in the commercial world is the result of competition. It is the natural result of a com- mercial struggle for existence. It is the survival of the fittest. People who hate a monopoly should reverence The Standard Oil Company. For the men who manage The Standard Oil Company went into a free-for-all field, and won their way to fortune with exactly the same tools and weapons that all of their competitors had. In this fight for business there was no favor asked nor given. And the battle was fought according to the established rules of the game. 9 THE STANDARD OIL COMPANY They have done to their competitors what their competitors were trying to do to them. Often after the fight these competitors found them- selves with money enough to live on in ease the rest of their days. Retired oil-merchants living in easy affluence in many sections are thick as fleas on a,dog—one result of, Standard Oil rapacity.' The New Business Ethics RACTICALLY, the world has been made over within twenty years’ time, and we have now a new business ethic. The error of some reformers is to try a man, according to present-day standards, for offenses committed in Eighteen Hundred Eighty-five. @ In that year I well recall how the firm for which I worked had a shipment of heavy chemicals arrive on the docks in New York from Liverpool. The goods had not been removed from the lighters before we had bids from three different railroads and two canal-lines to transport the shipments to Buffalo. The reduced bids came in the form of rebates for “cartage,’’ “lighterage,” “dock- age’? or “commissions.”? There was a strife Io THE STANDARD OIL COMPANY for traffic, and the company that gave the biggest rebate got the business. We bought in the lowest market, and sold in the highest. The railroads have but one thing to sell and that is transportation. All railroads then sold their transportation for as much as they could, and took what they had to. Every- body bought scalpers’ tickets, except those who rode on passes. I rode on passes, first because I was a big shipper, and the rule of the times was that big shippers must be favored. Later, I rode on passes because I pushed what you call “a virile pen’’—and admitted it. Reduced to simple terms, it was this: I wrote so well that I molded public opinion, and thus had the power to injure the railroads. Therefore I was retained, as it were, by these base monopolies, and supplied transportation. We called it “the courtesies of the road.’’.* I rode on passes until January First, Nineteen Hundred Seven. Did I then turn in my passes ? Oh, no! The passes were taken away from me —and they nearly had to give me ether to do it. Now, I pay my fare and am proud of it, if not a little boastful. II THE STANDARD OIL COMPANY Make-Up of The Standard HE Standard Oil Company is made up of graduates of the University of Hard Knocks. They have played the game according to regulation American rules, and they have won because they had the foresight, patience, quickness, courage, good cheer, economy, skill. The men who went down before them failed for lack of these American qualities —these qualities inculcated in our public schools, extolled in books, preached in sermons —the qualities that have made Americans supreme wherever they have had a fair field. The American invasion has been carried even to that dear ol’ Lunnon, whose underground railways have been rendered light, airy and safe through being electrified by American push, pluck and perseverance. Now, Americans as a people are fair—or at least we wish to be fair. When we judge Moses and Aaron we judge them according to the times in which they lived. And when the Great Agnostic wrote a lecture on the “ Mis- takes of Moses’? we resented the proposition that Moses was a rogue and a robber because I2 THE STANDARD OIL COMPANY he made war on the Hittites, Ammonites, and Midianites. We invoked the statute of limi- tations by saying that these things happened over three thousand years ago, and besides, did not Moses lead the Children of Israel out of captivity? That is to say, we point to the Ten Command- ments and the moral code of Moses and all the good he did as a set-off to deeds doubtful according to present-day standards. Moreover, we refuse to abandon the history of Moses as written by himself and his friends, and accept that of the disciples of Gog and Magog. Vilification Rampant P to this time, or until very recently, The Standard Oil Company has declined to answer its assailants. Its managers have been so busy doing things that they have had no time to shake the red rag of wordy warfare. Their faith has been that their work would speak for itself. Usually, this is a wise policy, but in this instance I think it has been a mis- taken one. Silence has been construed into a plea of guilt. There is a time to speak and a time to refrain 13 THE STANDARD OIL COMPANY from speaking, says Ecclesiastes. The Standard Oil Company should have nailed a few of the . Ida Tarbell fairy-tales, ten years ago. Ida Tarbell is not a charter member of the Ananias Club—she is worse than that—she is an honest, bitter, talented and prejudiced person who wrote from her own point of view. @ And that view is from the ditch, where her father’s wheelbarrow was landed by a Standard Oil tank-wagon. To understand her book, it is not enough to read it—you must have a glimpse at the author. Ida Tarbell has twenty-three pictures of John D. Rockefeller in her book, but none of herself. Her own history is written between the lines, and her picture is on the fly-leaves. She shot from cover, and she shot to kill. Such literary bushwhackers should be answered shot for shot. Sniping the commercial caravan may be legitimate, but to my mind the Tarbell- Steffens-Russell-Roosevelt-Sinclair method of inky warfare is quite as unethical as the alleged tentacled-octopi policy which they attack .* q] There is a life of George Washington written by a Cockney who was born within sound of 14 THE STANDARD OIL COMPANY Bow Bells and who. was never farther away from Charing Cross than Hammersmith. We call Washington the ‘Father of his Country,” but this man calls him “‘arch-fiend’”’ and “a bloody, blooming rebel.” Recently, a man picked out of a file of the New York “Tribune” one hundred editorials on Lincoln. The intent was to reprint the Greeley editorials as a literary curiosity, but no pub- lisher could be found with stomach to stand for the joke—it was sickening. Yet, Greeley was an honest man. His attacks on Lincoln, like those on Wendell Phillips, represent a point of view, and a point of view which we now see was out of focus. Ida Tarbell is a great woman, but if she were to write my life, I’d take hers—with apologies to Ursa Major. She might tell in truth of how I stole watermelons, turned the cows into the corn, because I had a tiff with the owner’s daughter—sold a railroad-pass, rode on the bumpers, gave a false name to a policeman who had curiosity plus, made fun of my grand-. mother, and put a Smallpox sign on old Massa- chusetts Hall in Harvard Yard. 15 THE STANDARD OIL COMPANY Of course, that does n’t exhaust the list—there is still more to be told, which my kind neighbors will supply. A man’s friends never quite know all about him —they never fully analyze him. To know all about a person is the pleasing assumption of his enemies. The Square Deal OW, in the interests of the Square Deal, that thing of which we hear so much and see so little, if you tell of my faults and lapses, you should also tell of the good I have done. If my tank-wagon bumps into a wheelbarrow, you ought to give me the benefit of letting me tell where I was going, and how the accident happened. Perhaps I was on the right side of the road going carefully, and the wheelbarrow may have been exceeding the speed limit— who knows! A man in England once said to me: “Oh, what a pity that Rockefeller robbed and ruined the oil country—the destitution there must be terrible!” The man had been reading Ida Tarbell. Then I had to tell my friend that, while I 16 THE STANDARD OIL COMPANY did n’t know much about John D. Rockefeller, I was familiar with the oil country, and I knew that, since The Standard Oil Company had got a-going, there had been a steady growth of prosperity in the oil country, where before there was the fear of uncertainty, and all the doubt that disturbs, distresses and dissolves. I told him that The Standard Oil Company was not made up of gamblers—they were miners, producers, distributors and creators. Titusville, Oil City, Corry, Franklin, Olean are beautiful and growing cities where peace and plenty are the rule—cities of homes, schools, churches, stores, opera-houses and libraries— where good things were to be found in an abundance and to a degree never before known. @ Also, I told him that wherever the Standard Oil went it carried system, order, safety, prosperity; and that it paid a wage beyond its competitors, even beyond ‘Union Scale,” and absorbed the best and strongest into its ranks; that The Standard Oil Company met its obligations, never defaulted on its payroll, and supplied the world a high quality of goods at prices regarded as reasonable and right. 17 THE STANDARD OIL COMPANY Its offense lay in the fact that it had succeeded; and through the inappreciation and lack of understanding as to what a tremendously rich and bountiful country this is in which to live. What is History ? NE of the greatest books ever written by mortal man is Thomas Henry Buck- le’s ‘History of Civilization.” Buckle never got beyond the introduction, which forms a volume in itself, and is immortal on account of its wealth of logic and clearness of insight .% The whole volume is a protest against the way in which history has been written—a protest against the assumption that military history, a history of marches and countermarches, of skirmishes and fights, of sieges and slaughters, is history at all. Certainly it is not the history of the life and evolution of a people. That which makes or unmakes a nation is the quiet, peaceful, productive life of the people. Nations are great through their architects, engineers, artists, teachers, business men and workers, and not through their lawyers, preachers and policemen .% .% 18 THE STANDARD OIL COMPANY It is commerce—production and distribution —-that has given America her proud place among the Nations, not lawsuits .% Our supremacy lies in the one fact that “we have produced the goods.” And yet in reading Ida Tarbell you find thirty-six pages given to an account of a lawsuit with an outcome comparatively trivial in any event, and in which, as in most lawsuits, all parties lost out to the lawyers. Jaggers was the only man who won. To read Tarbell is to read history militant, as if nothing really happened in America between the time Jackson beat the British in Eighteen Hundred Twelve at New Orleans and the time Sumter was fired upon in Eighteen Hundred Sixty-one. The Tarbell history is a history of strife, of bickerings, of misunderstandings, of lawsuits —an infinite sez he, sez she, and sez I. It is over-the-back-fence gossip, raised to fortis- simo. For instance, the gifted author cites Commodore Vanderbilt as authority concern- ing the genius of John D. Rockefeller and his partners. She should first have read ‘‘ Moore 19 THE STANDARD OIL COMPANY on Facts,’’? wherein the credibility of witnesses is treated at great length. There she would have learned that, when she quotes Commodore Vanderbilt, in justice to the jury she should have stated that when Vanderbilt gave his testimony he was eighty-three years old, and moreover was talking of a man he had never met, and of a business concerning which he knew nothing. She should also have told that, even in his best days, Vanderbilt was of a most violent and prejudiced nature. Moore says that Pontius Pilate and Caiaphas . were both good men, but unsafe, unreliable and incompetent as witnesses. Commercial Sanity HIS country has just passed through a cyclone of defamation, vituperation and exposure—-much of it indecent. We have been in a state of panic through the policy of burning our barns to kill the mice. The national condition has been pathologic. We are now recovering our sanity. The com- mercial jolt we have experienced has shown us that when the railroads are prosperous—buying rails, extending their lines, building bridges, 20 THE STANDARD OIL COMPANY warehouses, collecting a better equipment—we are all prosperous. When the railroads cease pushing for better facilities, there is a lull, the bread-line forms, the tramp of the unemployed and the hoarse and ominous roar of the mob are heard in the land. In such times, an extra police force is needed and menace becomes imminent .% 2% Individuals at work are safe—and a nation is only safe when its people are employed. @ Now suppose you raise a cry of “Stop thief,”’ and turn the powerful resources of the govern- ment to harassing enterprise, with the endeavor to confiscate its property, take away its charac- ter, destroy its good-will, does it not stand to reason that we thus kill ambition, destroy initiative, smother aspiration, and get a con- dition where expansion ceases, orders are cancelled, men laid off, and th whole land suffers? Happily, however, we are now getting our nerves back to norm, and sanity will soon take the place of hysteria. We do business now according to Marquis of Queensberry Rules, when formerly London 21 THE STANDARD OIL COMPANY Rules governed the contest. Our fight is with six-ounce gloves. Horseshoes and railroad- spikes are barred. There was a time when we fought with bared knuckles. But business is not yet a ladies’ lunch—a suave and innocuous, harmless, tabby Four-o’clock. It is a struggle for supremacy. And it is a fight to a finish .% And it is just as full of romance as were the knightly jousts of old. The Utility of Wealth ONEY is the measure of power, but 5 hid money for its own sake is not worth the struggle. Modern millionaires do not hoard —they invest. And they invest that they may use. The successful man now always has the builder’s itch—he is always and forever widen- ing, extending, building, improving, and it is all in the line of human service, human better- ment. To exploit Society is to fail, and wise, successful men know it. Nothing is more silly and absurd than the idea that the men who have built up the great modern American fortunes are intent on ease and luxury. As a class they are men of abstemious habits, simple, rapid and direct 22 THE STANDARD OIL COMPANY in their dealings. They work sixteen hours a day. They are in the game and can’t get out of it if they would. Their millions are invested in a way that makes use an imperative neces- sity. To liquidate would be red ruin. “They say I am rich,’’ once said James J. Hill to me, “and the yellows roll off the number of my millions. The fact is, I owe more money than all the men in Minnesota. To make my investments profitable and to keep them from fading away, I am obliged eternally to struggle keeping them active.” One investment calls for another to protect it; so Mr. Hill is ever building, ever extending. This eternal unrest of business means national pros- perity .% .% Confidence and Business Stability E habit of certain newspapers of trying to inspire class hatred by picturing the great business-builder as a parasite, living on the labor of the proletariat, is an insult to the intelligence of the age. Should our Government begin to confiscate private property in the name of the law, that instant will enterprise grow old, and senility 23 THE STANDARD OIL COMPANY prate of the past. @ But this is not to be .»% We are beginning to realize that business is built on confidence, that when we destroy faith in our commercial fabric we are actually taking the roofs from homes, snatching food from children, and pushing bodies naked out into the storm. Business means homes, gardens, books, parks, music, good roads, schools— safety, peace and prosperity—and of these things the world has not yet seen a plethora. @ Shall we blast, wither and destroy with the breath of our mouths all that civilization holds dear? I think not. We can direct and regulate, but we will do it in justice and not in blindness and wrath, lest we welcome the angels of peace with bloody hands to hospitable graves, and we ourselves go down in the sunken roadway, horse and rider, pursuer and pursued. 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