Oil Vs Standard Oil Essay

Decent Essays
Standard Oil began as an Ohio partnership incorporated in 1870 by John D. Rockefeller. Using innovative business tactics, it absorbed or destroyed most of its competition in Cleveland in less than two months.
Especially in early years, John D. Rockefeller was the single most important figure in shaping the new oil industry. He distributed power and the tasks of policy formation to a system of committees, but always remained the largest shareholder.
In response to state laws trying to limit the scale of companies, Rockefeller and his associates developed innovative ways of organizing their rapidly growing company. On January 2, 1882, they combined their disparate companies, spread across dozens of states, under a single group of trustees. By
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The state of Ohio successfully sued Standard, compelling the dissolution of the trust in 1892. But Standard simply separated Standard Oil of Ohio and kept control of it. Eventually, the state of New Jersey changed its incorporation laws to allow a company to hold shares in other companies in any state. So, in 1899, the Standard Oil Trust, based at 26 Broadway in New York, was legally reborn as a holding company, the Standard Oil Co. of New Jersey, which held stock in 41 other companies, which controlled other companies, which in turn controlled yet other companies.
-In 1904, Standard controlled 91 percent of production and 85 percent of final sales. Most of its output was kerosene, of which 55 percent was exported around the world. After 1900 it did not try to force competitors out of business by underpricing them. The federal Commissioner of Corporations studied Standard's operations from the period of 1904 to 1906 and concluded that "beyond question... the dominant position of the Standard Oil Co. in the refining industry was due to unfair practices".
In 1909, the US Department of Justice sued Standard under federal anti-trust law, the Sherman Antitrust Act of 1890, for sustaining a monopoly and restraining interstate commerce by:
"Rebates, preferences, and other discriminatory practices in favor of the combination by railroad companies; restraint and monopolization by control of pipe lines, and unfair practices against competing pipe
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