Standard Oil And The Largest Petroleum Products Company

1058 Words Apr 25th, 2016 5 Pages
In 1870 John D. Rockefeller started Standard Oil Co. and it quickly became the largest petroleum products company in the world. By 1890 Standard controlled 90 percent of refined oil in the United States and was sued by the state of Ohio for its anticompetitive practices. Standard Oil of Ohio which was its original name simply broke the company into 41 separate companies, and controlled them through the new Standard Oil Trust, legally known as Standard Oil Co. of New Jersey. Because there were no federal laws prohibiting anticompetitive behavior in business Standard Oil was able to avoid any serious repercussions from the government. Standard Oil achieved market dominance by undercutting the competition, arranging special deals with railroads, and aggressively buying out its competition. Between 1902 and 1904 the writer Ida Tarbell, the daughter of a failed oil businessman whose company went under because of Standard Oils practices, wrote a 19-part investigational report into the practices of Standard Oil. These articles led to the wide spread public outcry for the government to do something about Standard Oil and monopolies in all other industries. In 1911 Standard Oil was sued by the United States and the case reached the Supreme Court. Under the Sherman Act the government alleged Standard Oil was a monopoly and abused its monopolistic power to restrain trade through predatory pricing and unfair deals with railroad companies. Standard Oil cut oil prices severely in areas…
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