Standard Oil Co. Inc. is an American oil production, transport, refining and marketing company. Founded in 1870 by John D. Rockefeller and Henry Flagler as a company in Ohio, it was the world's largest oil refinery of its time. His controversial history as one of the world's first and largest multinationals ended in 1911, when the United States Supreme Court ruled that Standard Oil was an illegal monopoly.
The Oil Standard dominates the oil product market initially through horizontal integration in the refining sector, then, on vertical integration years later; the company is an innovator in the development of business confidence. The Oil Standard Trust simplifies production and logistics, lowers costs, and weakens competitors. Observers of "trust dissidents" have accused Standard Oil of using aggressive pricing to destroy competitors and form monopolies that threaten other businesses.
John D. Rockefeller is the founder, chairman and principal shareholder. With the dismissal of Standard Oil's trust to 34 small firms, Rockefeller became the richest man in the world, as the companies' initial revenues proved far greater than larger single companies. His successors like ExxonMobil or Chevron are still one of the largest income companies worldwide. In 1882, his chief aide was John Dustin Archbold. After 1896, Rockefeller broke away from business to concentrate on his philanthropy, leaving Archbold in control. Other Standard Oil chiefs include Henry Flagler, developer of East Florida Railway and resort towns, and Henry H. Rogers, who built the Virginian Railway.
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Establishment and early years
The pre-history of Standard Oil began in 1863 as an Ohio partnership formed by industrialist John D. Rockefeller, his brother William Rockefeller, Henry Flagler, chemist Samuel Andrews, the silent couple Stephen V. Harkness, and Oliver Burr Jennings, women from William Rockefeller's Wife. In 1870, Rockefeller abolished the partnership and incorporated Standard Oil in Ohio. Of the initial 10,000 shares, John D. Rockefeller received 2,667; Harkness received 1,334; William Rockefeller, Flagler, and Andrews each received 1,333; Jennings received 1,000, and the firm Rockefeller, Andrews & amp; Flagler receives 1,000. Rockefeller chose the name "Standard Oil" as a "standard" symbol of the quality and reliable service he dreamed of for the newborn oil industry.
In the early years, John D. Rockefeller dominated the merger; he is the most important figure in shaping the new oil industry. He quickly distributes the power and tasks of policy formation to the committee system, but has always been the largest shareholder. Authority is centered in the company's main office in Cleveland, but decisions at the office are made in a cooperative way.
The company grew by increasing sales and through acquisitions. After buying a competing company, Rockefeller closes those who are considered inefficient and defend others. In a seminal agreement, in 1868, the Lake Shore Railroad, part of New York Central, gave the Rockefeller company a rate of one cent per gallon or forty-two cents per barrel, effective discount of 71% of tariffs registered in return for a pledge to deliver at least 60 cargo oil every day and to handle the load and disassemble itself. Small firms denounced the deal unfairly because they did not produce enough oil to qualify for a discount.
Standard measures and covert transport transactions helped the price of kerosene drop from 58 to 26 cents from 1865 to 1870. Competitors disliked corporate business practices, but consumers favored lower prices. Standard Oil, which was well established before the invention of the Spindletop oil field (in Texas, away from Standard Oil's base in the Mid-West) and the demand for oil other than heat and light, was well placed to control the growth of the oil business. The Company is considered to own and control all aspects of trade.
In 1872, Rockefeller joined South Improvement Co. which will allow him to receive rebates for shipping and weaknesses on oil sent by his competitors. But when this agreement was discovered, the competitors convinced the Pennsylvania Legislature to lift the South Improvement charter. No oil is sent in this setting. Using highly effective tactics, then widely criticized, he absorbed or destroyed most of his competitors in Cleveland in less than two months and then across the northeastern United States.
In response to state laws that seek to limit the scale of the company, Rockefeller and his colleagues develop innovative ways of organizing, to effectively manage rapidly growing companies. On January 2, 1882, they merged their different companies, spread across dozens of states, under a group of guardians. Under the secret agreement, 37 existing shareholders delivered their shares "in trust" to nine guardians: John and William Rockefeller, Oliver H. Payne, Charles Pratt, Henry Flagler, John D. Archbold, William G. Warden, Jabez Bostwick, and Benjamin Brewster. This organization proved so successful that other giant companies adopted this form of "trust".
In 1885, Standard Oil of Ohio moved its headquarters from Cleveland to its permanent base at 26 Broadway in New York City. At the same time, Standard Oil of Ohio managers chartered Standard Oil Co. from New Jersey (SOCNJ) to take advantage of the more lenient New Jersey share ownership laws.
Also in 1890, Congress passed the Sherman Antitrust Act - a source of American anti-monopoly laws. The law prohibits any contract, scheme, agreement, or conspiracy to withhold trade, even though the phrase "trade control" remains subjective. The Standard Oil Group quickly attracted the attention of antitrust authorities leading to a lawsuit filed by Ohio Attorney General David K. Watson.
From 1882 to 1906, Standard paid $ 548,436,000 in dividends with a 65.4% payout ratio. Total net income from 1882 to 1906 totaled $ 838,783,800, exceeding a dividend of $ 290,347,800, which was used for crop expansion.
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1895-1913
In 1896, John Rockefeller retired from Standard Oil Co., New Jersey, the group holding company, but remains president and major shareholder. Vice President John Dustin Archbold takes a big part in running the company. At the same time, state and federal laws seek to counter these developments with "anti-monopoly" laws. In 1911, the US Department of Justice sued the group under federal antimonopoly laws and ordered the rupture of 34 companies.
Standard Oil's market position was initially established through an emphasis on efficiency and responsibility. While most companies throw gasoline in the river (this is before the car is popular), the Standard uses it to fuel its engines. While other companies' refineries piled heaps of heavy waste, Rockefeller found a way to sell them. For example, the Standard created the first synthetic competitor for beeswax and purchased a company that created and produced Vaseline, Chesebrough Manufacturing Co., which was a Standard company only from 1908 to 1911.
One of the original "Muckrakers" is Ida M. Tarbell, an American writer and journalist. His father was an oil producer whose business failed because of Rockefeller's business dealings. After a lengthy interview with a senior executive sympathetic to Standard Oil, Henry H. Rogers, Tarbell's investigation of Standard Oil sparked an increasing public offensive on Standard Oil and on monopoly in general. His work was published in 19 sections in McClure's magazine from November 1902 to October 1904, then in 1904 as the book The History of the Standard Oil Co.
The Standard Oil Trust is controlled by a small group of families. Rockefeller declared in 1910: "I think it's true that the Pratt family, the Payne-Whitney family (the one, since all the shares are from Colonel Payne), the Harkness-Flagler family (who came to the company together) and the Rockefeller Family controlled some big share during all the company's history to date. "
These families reinvest most of the dividends in other industries, especially trains. They are also investing heavily in the gas and electricity business (including the giant Consolidated Gas Co. of New York City). They made large-scale purchases of shares in US Steel, Amalgamated Copper, and even Corn Products Refining Co.
Weetman Pearson, a British petroleum entrepreneur in Mexico, began negotiating with Standard Oil in 1912-13 to sell his "El Aguila" oil company, because Pearson was no longer bound by a promise to the Porfirio DÃÆ'az regime (1876-1911) not to sell to US interests. However, the deal failed and the company was sold to Royal Dutch Shell.
In Chinese
Standard Oil's production increased so rapidly that it soon surpassed US demand and companies began to see export markets. In the 1890s, Standard Oil began to market kerosene to a large Chinese population of close to 400 million as lamp fuel. For Chinese trademarks and Standard Oil brands, use the name Mei Foo (Mandarin: ?? ), (which translates to American Trust). Mei Foo also became the name of lead bulbs produced by Standard Oil and sold cheaply to Chinese farmers, encouraging them to switch from vegetable oil to kerosene. Positive response, sales increased and China became Standard Oil's largest market in Asia. Prior to Pearl Harbor, Stanvac was the largest single US investment in Southeast Asia.
The Ministry of Social Affairs of Northern China operates a subsidiary company called Socony River and Coastal Fleet, North Coast Division, which became the Northern China Division Stanvac (Standard Vacuum Oil Company) after the company was formed in 1933. To distribute its products, storage tanks made by Standard Oil, canning (bulk oil from large marine tankers bundled back into 5-US-gallon barrels (19 Â ± 1.2; gal)), warehouses and offices in major cities China. For land distribution, the company owns motorcycle tankers and rail tanker cars, and for river navigation has a fleet of low-powered steamers and other vessels.
The North China division of Stanvac, based in Shanghai, has hundreds of river boats, including motor boats, steamers, launches, tugs and tankers. Up to 13 tankers operate on the Yangtze River, the largest of which are Mei Ping (1,118 gross tonnage), May Hsia (1.048 GT), and Mei An (934 GT). All three were destroyed in the 1937 USS Panay incident. Mei An was launched in 1901 and was the first ship in the fleet. Other vessels include Mei Mei Chuen Mei Mei Mei Mei Mei Mei Mei Mei Mei Mei Mei Lu > Mei Tan , Mei Su , Mei Xia , Mei Ying, and Mei Yun/i>. Mei Hsia , a tanker, designed specifically for river duty and built by Shanghai's New Engineering and Shipbuilding Works, which also built the launch of 500 ton May Foo in 1912. Mei Hsia ("Beautiful Canyon") was launched in 1926 and carried 350 tons of bulk oil in three hatches, plus a front cargo load, and the space between deck to carry general cargo or solid oil. It has a length of 206 feet (63 m), a 32-foot (9.8 m) tall depth of 10 feet 6 inches (3.2 m), and has a bulletproof ballroom. Mei Ping ("Beautiful Tranquility"), launched in 1927, was designed offshore, but assembled and finished in Shanghai. The fuel oil burner comes from the US and the water canisters come from the UK.
In the Middle East
Standard Oil Company and Socony-Vacuum Oil Company are partners in providing markets for oil reserves in the Middle East. In 1906, SOCONY (later Car) opened his first fuel terminal in Alexandria. It was explored in Palestine before the outbreak of World War, but was in conflict with the British government.
Monopoly fees and anti-trust laws
In 1890, Standard Oil controlled 88 percent of the flow of refined oil in the United States. The state of Ohio succeeded in suing the Standard, forcing the dissolution of confidence in 1892. But the Standard separated the Ohio Standard Oil and controlled it. Finally, the state of New Jersey changed its merger law so the company could own shares in other companies in any state. Thus, in 1899, the Standard Oil Trust, based in 26 Broadway in New York, was legally reborn as a holding company, Standard Oil Co. from New Jersey (SOCNJ), which has stocks in 41 other companies, which control other companies, which in turn control other companies. According to Daniel Yergin in his prize-winning Pulitzer Prize: The Epic Quest for Oil, Money, and Power (1990), this conglomerate is seen by the public as all-pervasive, controlled by a voter. a group of directors, and entirely unaccountable.
In 1904, the Standard controlled 91 percent of production and 85 percent of final sales. Most of the output is kerosene, of which 55 percent is exported worldwide. After 1900, the company did not try to force competitors out of business by lowering their prices. The Federal Corporations Commissioner studied Standard operations from the period 1904 to 1906 and concluded that "there can be no doubt... the dominant position of Standard Oil Co. in the refining industry is due to unfair practices - misuse of pipeline controls, for rail discrimination, and unfair competition methods in the sale of pure oil products.Because competition from other companies, their market share gradually eroded to 70 percent in 1906 which was the year when antitrust cases were filed against the Standard, and dropped to 64 percent in 1911 when the Standard was ordered damaged and at least 147 purification firms competing with Standards including the Gulf, Texaco, and Shell It did not try to monopolize oil exploration and pumping (its share in 1911 was 11 percent).
In 1909, the US Department of Justice sued the Standard under the federal anti-trust law, Sherman Antitrust Act of 1890, for defending its monopoly and withholding inter-state trade by:
Rebates, preferences, and other discriminatory practices that support combinations by railroad companies; control and monopoly by pipeline control, and unfair practices against competing pipelines; contracts with competitors in trade control; unfair competition methods, such as local price cuts at the points required to press the competition; [and] espionage from competitor businesses, false independent operations of companies, and rebate payments on oil, with the same intent.
The lawsuit states that standard monopolistic practices have occurred over the preceding four years:
The general result of the investigation is to disclose the many discriminations prominent by the railway company on behalf of Standard Oil Co. and its affiliated companies. With relatively few exceptions, especially from other major concerns in California, the Standards have become the sole beneficiaries of such discrimination. In almost every part of the country the company has been found to enjoy some unfair advantage over its competitors, and some of these discriminations affect a huge area.
The government identified four illegal patterns: (1) the level of secret and semi-secret trains; (2) discrimination in open tariff arrangements; (3) discrimination in the classification and delivery rules; (4) discrimination in the care of private tankers. The government accused:
Almost everywhere tariffs from point of delivery used exclusively, or almost exclusively, by the Standard are relatively lower than the price of the point of delivery of its competitors. Prices have been made low to let the Standards be a market, or they have been made high to keep their competitors out of the market. A very large distance difference is made as an excuse for big differences in favorable rates for Standard Oil Co., while large differences in distance are negligible where they conflict with Standards. Sometimes linking roads using prorated oils - that is, making lower rates of local tariff combinations; sometimes they refuse to prorate; but in both cases the result of their policy is to support Standard Oil Co. Different methods are used in different places and under different conditions, but the net result is that from Maine to California the general arrangement of open tariffs on petroleum oil is like to give the Standard an unreasonable advantage over its competitors.
The government says that the Standard raises prices to monopolist customers but lowers it to harm competitors, often disguising illegal acts by using a purportedly independent company it controls.
The proof, in fact, is really conclusive that Standard Oil Co. charging too high a price in which there is no competition, and especially where there is little chance of competitors entering the field, and that, on the other hand, where competition is active, often cuts prices to the point that makes even the Standard little or no gain, which more often do not provide benefits to competitors, whose costs are usually somewhat higher.
On May 15, 1911, the US Supreme Court upheld a lower court ruling and declared the Petroleum Standard group a "no-nonsense" monopoly under the Sherman Antitrust Act, Part II. It ordered the Standard to split 34 independent companies with different boards of directors, the two largest companies were Standard Oil of New Jersey (which became Exxon) and Standard Oil of New York (which became Mobil).
Standard President, John D. Rockefeller, has long retired from any management role. However, since he owns a quarter of the company's stock, and the stock's values ​​are mostly multiplied, he emerges from the dissolution of being the richest man in the world. The dissolution really boosted Rockefeller's personal wealth.
Disconnect
In 1911, with public condemnation at its peak, the United States Supreme Court ruled, at Standard Oil Co. from New Jersey v. United States , that Standard Oil of New Jersey must be dissolved under the Sherman Antitrust Act and divided into 34 companies. Two of these companies are Standard Oil of New Jersey (Jersey Standard or Esso), which eventually became Exxon, and Standard Oil of New York (Socony), which eventually became Mobil; the two companies then merged into ExxonMobil.
Over the next few decades, the two companies grew significantly. The Jersey Standard, led by Walter C. Teagle, became the world's largest oil producer. It acquired a 50% interest in Humble Oil & amp; Refining Co., Texas oil producer. Socony purchased 45 percent of Magnolia Petroleum Co., a major refiner, marketer, and pipe transporter. In 1931, Socony joined Vacuum Oil Co., an industry pioneer dating from 1866, and growth of Standard Oil grew by itself.
In the Asia-Pacific region, the Jersey Standard has oil and refinery production in Indonesia but no marketing network. Socony-Vacuum has an Asian marketing outlet supplied remotely from California. In 1933, the Jersey Standard and Socony-Vacuum combined their interests in the region into a 50-50 joint venture. Standard-Vacuum Oil Co., or "Stanvac", operates in 50 countries, from East Africa to New Zealand, before being dissolved in 1962.
The Company's original Petroleum Company entity continues to exist and is an operating entity for Sohio; now a subsidiary of BP. However, BP continued to sell gasoline under the Sohio brand until 1991. Other standard oil entities include "Standard Oil of Indiana" which became Amoco after other mergers and name changes in the 1980s, and "Standard Oil of California" which became Chevron Corp
Inheritance and farewell criticism
The US Supreme Court ruled in 1911 that antitrust laws required Standard Oil to be split into smaller independent corporations. Among the existing "Baby Standards" are ExxonMobil and Chevron. Some people speculate that if not for the court's verdict, Standard Oil might be worth more than $ 1 trillion in the 2000s. Is the breakup of Standard Oil beneficial is a matter of controversy. Some economists believe Standard Oil is not a monopoly, and also argues that tight free market competition results in cheaper oil prices and more diverse oil products. Critics claim that success in meeting consumer needs pushes other companies out of the market that does not work. An example of this thought was given in 1890 when the Rep. William Mason, on the grounds of supporting the Sherman Antitrust Act, said: "Trust has made products cheaper, has lowered prices, but if oil prices, for example, are reduced to a cent per barrel, it would not be wrong to do for people in the country this is by trust that has destroyed the legitimate competition and encouraged the honest man of the legitimate business enterprise ".
The Sherman Antitrust Act prohibits trade control. Defense advocates Standard Oil insist that the company does not withhold trade; they are just a superior competitor. The federal court ruled otherwise.
Some economic historians have observed that Standard Oil was in the process of losing its monopoly at the time of its breakup in 1911. Although the Standard had 90 percent of America's refining capacity in 1880, in 1911 it had shrunk to between 60 and 65 percent, due to expansion in capacity by competitors. Many regional competitors (such as East Pure Oil, Texaco and Gulf Oil, Cities Services and Sun in Midcontinent, Union in California, and Shell abroad) have organized themselves into competitive, vertically integrated oil companies, industrial structures pioneered the previous year by the Standard itself. In addition, the demand for petroleum products increases faster than the Standard's ability to expand. The result was that although in 1911 the Standard still controlled most of the production in the older areas of the Appalachian Basin (78 percent, down from 92 percent in 1880), Lima-Indiana (90 percent, down from 95 percent in 1906), and Illinois The basin (83 percent, down from 100 percent in 1906), is much lower in the burgeoning new area that will dominate US oil production in the 20th century. In 1911 the Standard controlled only 44 percent of production in Midcontinent, 29 percent in California, and 10 percent on the Gulf Coast.
Some analysts argue that the breakup is beneficial to consumers in the long term, and no one has ever suggested that the Petroleum Standard be rearranged in pre-1911 form. ExxonMobil, however, is indeed an important part of the original company.
Since the outbreak of Standard Oil, several companies, such as General Motors and Microsoft, have come under antitrust investigations because they are inherently too great for market competition; However, most of them stay together. The only company since the outbreak of Standard Oil which is divided into sections such as Standard Oil is AT & amp; T, which after several decades as a regulated natural monopoly, was forced to break away from the Bell System in 1984.
Successor company
The successor companies of the Standard Oil split form the core of the US oil industry today. (Some of these companies are considered among the Seven Sisters who dominated the industry worldwide for most of the 20th century.) They include:
- New Jersey Oil Standard (SONJ) - or Esso (S.O.), or Jersey Standard - combined with Humble Oil to form Exxon, now part of ExxonMobil. Standard Carter Oil Trust Company, Imperial Oil (Canada), and Standard of Louisiana are kept as part of Standard Oil of New Jersey after breaking up.
- The Standard Oil of New York - or Socony, joins Vacuum - renamed Car, now part of ExxonMobil.
- Standard Oil of California - or Socal - changed its name to Chevron, to ChevronTexaco, but back to Chevron.
- Standard Oil of Indiana - or Stanolind, renamed Amoco (American Oil Co.) - now part of BP.
- Standard Atlantic and independent company Richfield merged to form Atlantic Richfield Company or ARCO, which later became part of BP, and has since been sold to Tesoro. The Atlantic operation was separated and purchased by Sunoco.
- The Standard Oil of Kentucky - or Kyso - was purchased by Standard Oil of California, currently Chevron.
- The Standard Oil Company (Ohio) - or Sohio - the original Standard Oil company entity, acquired by BP in 1987.
- The Ohio Oil Co. - or The Ohio - marketing gasoline under the name Marathon. The company is now known as Marathon Petroleum, and often becomes a rival with Standard spin-off in the state, Sohio.
Oil-off Other Standards:
- Standard Oil of Iowa - pre-1911 - bought by Chevron.
- Standard Oil of Minnesota - pre-1911 - purchased by Amoco.
- Standard Oil of Illinois - pre-1911 - purchased by Amoco.
- Standard Oil of Kansas - purification only, was eventually purchased by Amoco.
- Missouri Standard Oil - pre-1911 - was dissolved.
- Standard Oil of Louisiana - originally owned by Standard Oil of New Jersey (now by Exxon).
- Standard Oil of Brazil - originally owned by Standard Oil of New Jersey (now by Exxon).
Other companies divested in 1911:
Note: Standard Oil of Colorado is not a replacement company; the name was used to capitalize on the Standard Oil brand in the 1930s. Standard Oil of Connecticut is an oil fuel marketer unrelated to the Rockefeller company.
Right on behalf
Of the 34 "Baby Standards", 11 are granted rights on behalf of Petroleum Standards, based on the country in which they are located. Conoco and Atlantic chose to use their respective names instead of the Standard name, and their rights would be claimed by other companies..
In the 1980s, most companies used their respective brand names instead of Standard names, with Amoco being the last widely used name "Standard", as it gave Midwestern owners the option to use the Amoco name or Standard.
Three supermajor companies now have rights on behalf of the Standards in the United States: ExxonMobil, Chevron Corp., and BP. BP acquired its rights through the acquisition of Standard Oil of Ohio and Amoco, and has a small handful of stations in the Midwestern United States using the Standard name. Likewise, BP continues to sell marine fuel under the Sohio brand in various marinas across Ohio. ExxonMobil keeps the Esso trademark alive at stations selling diesel fuel by selling "Esso Diesel" displayed at the pump. ExxonMobil has full international rights on behalf of the Standards, and continues to use Esso's name overseas and in Canada. To protect its trademarks, Chevron has one station in each state that has the right to brand as Standard. Some standard branded stations have some mixed marks that say Standard and some signs that say Chevron. Over time, Chevron has changed which station under certain circumstances is the Standard station.
See also
- The history of the United States (1865-1918)
- Standard Oil Gasoline Station (disambiguation)
- Wamsutta Oil Refinery
References
Note
Bibliography
External links
- Disposal of The Standard Oil Trust
- Standard Oil Company History. by Ida Tarbell
- Educate Yourself - Standard Oil - Part I
- Witch Hunt for Baron Robbers: Standard Oil Story by Lawrence W. Reed - argues that the Petroleum Standard is not a coercive monopoly.
- The Truth About "Robber Barons" - on the grounds that Stand Oil is not a monopoly.
- Google Books: Dynastic America and Those Who Own It, 2003 (1921), by Henry H. Klein
- Standard Oil Trust Original certificate signed by John. D. Rockefeller, William Rockefeller, Henry M. Flagler, and Jabez Abel Bostwick - 1882 CHARLES A. WHITESHOT: OIL EFFECT WITH OIL. THE LARGEST ENTERPRISE HISTORY IN THE WORLD, OIL INDUSTRY Publisher: MANNINGTON 1905
- Standard Oil (New Jersey) Collection - A collection of digital photographs from a documentary project directed by Roy E. Stryker.
Source of the article : Wikipedia
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