Editing Standard Oil (section)

==1895–1913==
[[File:Standard oil.gif|thumb|Financials<ref name="Hyr3z" />]]

In 1896, John Rockefeller retired from the Standard Oil Co. of New Jersey, the holding company of the group, but remained president and a major shareholder. Vice-president [[John Dustin Archbold]] took a large part in the running of the firm. In the year 1904, Standard Oil controlled 91% of oil refinement and 85% of final sales in the United States.<ref name="l8Fpb" /> At this time, state and federal laws sought to counter this development with [[antitrust]] laws. In 1911, the [[United States Department of Justice|U.S. Justice Department]] sued the group under the federal antitrust law and ordered its breakup into 39 companies.

Standard Oil's market position was initially established through an emphasis on efficiency and responsibility. While most companies dumped [[gasoline]] in rivers (this was before the automobile was popular), Standard used it to fuel its machines. While other companies' refineries piled mountains of heavy waste, Rockefeller found ways to sell it. For example, Standard bought the company that invented and produced [[Vaseline]], the [[Chesebrough Manufacturing Company|Chesebrough Manufacturing Co.]], which was a Standard company only from 1908 until 1911.

One of the original "[[Muckraker]]s" [[Ida M. Tarbell]], was an American author and journalist whose father was an oil producer whose business had failed because of Rockefeller's business dealings. After extensive interviews with a sympathetic senior executive of Standard Oil, [[Henry H. Rogers]], Tarbell's investigations of Standard Oil fueled growing public attacks on Standard Oil and monopolies in general. Her work was published in 19 parts in ''[[McClure's]]'' magazine from November 1902 to October 1904, then in 1904 as the book ''[[The History of the Standard Oil Company|The History of the Standard Oil Co]]''.

The Standard Oil Trust was controlled by a small group of families. Rockefeller stated in 1910: "I think it is true that the Pratt family, the Payne–[[Whitney family]] (which were one, as all the stock came from Colonel Payne), the Harkness-Flagler family (which came into the company together) and the [[Rockefeller family]] controlled a majority of the stock during all the history of the company up to the present time."<ref name="IF6vl" />

These families reinvested most of the dividends in other industries, especially railroads. They also invested heavily in the gas and the electric lighting business (including the giant [[Consolidated Edison|Consolidated Gas Co. of New York City]]). They made large purchases of stock in [[U.S. Steel]], [[Amalgamated Copper]], and even [[Corn Products Refining Company|Corn Products Refining Co.]]<ref name="FcwqW" />

[[Weetman Pearson]], a British petroleum entrepreneur in Mexico, began negotiating with Standard Oil in 1912–13 to sell his "El Aguila" oil company, since Pearson was no longer bound to promises to the [[Porfirio Díaz]] regime (1876–1911) to not to sell to U.S. interests. However, the deal fell through and the firm was sold to [[Royal Dutch Shell]].<ref name="ebHJz" />

===China===
Standard Oil's production increased so rapidly it soon exceeded U.S. demand, and the company began viewing export markets. In the 1890s, Standard Oil began marketing kerosene to China's large population of close to 400&nbsp;million as lamp fuel.<ref name="r3ibf" /> For its Chinese trademark and brand, Standard Oil adopted the name ''Mei Foo'' ({{zh|<!--hant-->美孚}}) as a transliteration.<ref name="B5WZt" /><ref name="uJG4Q" /> Mei Foo also became the name of the tin lamp that Standard Oil produced and gave away or sold cheaply to Chinese farmers, encouraging them to switch from vegetable oil to kerosene. The response was positive, sales boomed, and China became Standard Oil's largest market in Asia. Prior to Pearl Harbor, [[Standard Vacuum Oil Company|Stanvac]] was the largest single U.S. investment in [[Southeast Asia]].<ref name="bJUhL" />

The North China Department of [[Socony]] (Standard Oil Company of New York) operated a subsidiary called Socony River and Coastal Fleet, North Coast Division, which became the North China Division of Stanvac (Standard Vacuum Oil Company) after that company was formed in 1933.<ref name="ukMJV" /> To distribute its products, Standard Oil constructed storage tanks, canneries (bulk oil from large ocean tankers was re-packaged into {{convert|5|usgal|adj=on}} tins), warehouses, and offices in key Chinese cities. For inland distribution, the company had motor tank trucks and railway tank cars, and for river navigation, it had a fleet of low-draft steamers and other vessels.<ref name="GU2OV" />

Stanvac's North China Division, based in Shanghai, owned hundreds of vessels, including motor barges, steamers, launches, tugboats, and tankers.<ref name="svxm4" /> Up to 13 tankers operated on the [[Yangtze River]], the largest of which were ''Mei Ping'' ({{GRT|1,118|disp=long}}), ''Mei Hsia'' ({{GRT|1,048|link=off}}), and ''Mei An'' ({{GRT|934|link=off}}).<ref name="qhz95" /> All three were destroyed in the 1937 [[USS Panay incident|USS ''Panay'' incident]].<ref name="DqcVc" />

''Mei An'' was launched in 1901 and was the first vessel in the fleet. Other vessels included ''Mei Chuen'', ''Mei Foo'', ''Mei Hung'', ''Mei Kiang'', ''Mei Lu'', ''Mei Tan'', ''Mei Su'', ''Mei Hsia'', ''Mei Ying'', and ''Mei Yun''. ''Mei Hsia'', a tanker, was specially designed for river duty. It was built by New Engineering and Shipbuilding Works of Shanghai, who also built the 500-ton launch ''Mei Foo'' in 1912.<ref name="61Eab" /><ref name="uYZ8R" />

''Mei Hsia'' ("Beautiful Gorges") was launched in 1926 and carried 350 tons of bulk oil in three holds, plus a forward cargo hold, and space between decks for carrying general cargo or packed oil. She had a length of {{convert|206|ft}}, a beam of {{convert|32|ft}}, a depth of {{convert|10|ft|6|in|1}}, and had a bulletproof wheelhouse. ''Mei Ping'' ("Beautiful Tranquility"), launched in 1927, was designed off-shore, but assembled and finished in Shanghai. Its oil-fuel burners came from the U.S. and water-tube boilers came from England.<ref name="61Eab" /><ref name="uYZ8R" />

===Middle East===
Standard Oil Company and Socony-Vacuum Oil Company became partners in providing markets for the oil reserves in the Middle East. In 1906, SOCONY (later Mobil) opened its first fuel terminals in Alexandria. It explored in Palestine before the World War broke out, but ran into conflict with the local authorities.<ref name="pjbbD" />

===Monopoly charges and antitrust legislation===
{{See also|Standard Oil Co. of New Jersey v. United States}}
By 1890, Standard Oil controlled 88 percent of the refined oil flows in the United States. 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.<ref name="auto">{{harvp|Yergin|1991|pp=96–98}}.</ref>

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'' (SOCNJ), which held stock in 41 other companies, which controlled other companies, which in turn controlled yet other companies. According to [[Daniel Yergin]] in his [[Pulitzer Prize for General Non-Fiction|Pulitzer Prize-winning]] ''[[The Prize: The Epic Quest for Oil, Money, and Power]]'' (1990), this conglomerate was seen by the public as all-pervasive, controlled by a select group of directors, and completely unaccountable.<ref name="auto"/>

[[File:PuckCartoon-TeddyRoosevelt-05-23-1906.jpg|thumb|170px|U.S. President [[Theodore Roosevelt]] depicted as the infant [[Hercules]] grappling with Standard Oil in a 1906 ''[[Puck (magazine)|Puck]]'' magazine cartoon by [[Frank A. Nankivell]]]]
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 selling at a loss.<ref name="YjrPF" /> The federal Commissioner of Corporations studied Standard's operations from the period of 1904 to 1906<ref name="CNNcF" /> and concluded that "beyond question ... the dominant position of the Standard Oil Co. in the refining industry was due to unfair practices—to abuse of the control of pipe-lines, to railroad discriminations, and to unfair methods of competition in the sale of the refined petroleum products".<ref name="KaxEH" />

Because of competition from other firms, their market share gradually eroded to 70 percent by 1906 which was the year when the antitrust case was filed against Standard. Standard's market share was 64 percent by 1911 when Standard was ordered broken up.<ref name="zEhM2" /> At least 147 refining companies were competing with Standard including Gulf, Texaco, and Shell.<ref name="bXoDi" /> It did not try to monopolize the exploration and extraction of oil (its share in 1911 was 11 percent).{{Citation needed|date=February 2008}}

[[File:Landis Rockefeller 1.png|thumb|170px|John D. Rockefeller sitting in the witness stand and testifying before Judge [[Kenesaw Mountain Landis]], July 6, 1907]]
In 1909, the [[United States Department of Justice|U.S. Justice Department]] sued Standard under federal antitrust law, the [[Sherman Antitrust Act]] of 1890, for sustaining a monopoly and restraining interstate commerce by:

<blockquote>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 lines; contracts with competitors in restraint of trade; unfair methods of competition, such as local price cutting at the points where necessary to suppress competition; [and] espionage of the business of competitors, the operation of bogus independent companies, and payment of rebates on oil, with the like intent.<ref name="MUnNu" /></blockquote>

The lawsuit argued that Standard's monopolistic practices had taken place over the preceding four years:

<blockquote>The general result of the investigation has been to disclose the existence of numerous and flagrant discriminations by the railroads on behalf of the Standard Oil Co. and its affiliated corporations. With comparatively few exceptions, mainly of other large concerns in California, the Standard has been the sole beneficiary of such discriminations. In almost every section of the country that company has been found to enjoy some unfair advantages over its competitors, and some of these discriminations affect enormous areas.<ref name="rC00n" /></blockquote>

The government identified four illegal patterns: (1) secret and semi-secret railroad rates; (2) discriminations in the open arrangement of rates; (3) discriminations in classification and rules of shipment; (4) discriminations in the treatment of private tank cars. The government alleged:

<blockquote>Almost everywhere the rates from the shipping points used exclusively, or almost exclusively, by the Standard are relatively lower than the rates from the shipping points of its competitors. Rates have been made low to let the Standard into markets, or they have been made high to keep its competitors out of markets. Trifling differences in distances are made an excuse for large differences in rates favorable to the Standard Oil Co., while large differences in distances are ignored where they are against the Standard. Sometimes connecting roads prorate on oil—that is, make through rates which are lower than the combination of local rates; sometimes they refuse to prorate; but in either case the result of their policy is to favor the 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 rates on petroleum oil is such as to give the Standard an unreasonable advantage over its competitors.<ref name="lVwTF" /></blockquote>

The government said that Standard raised prices to its monopolistic customers but lowered them to hurt competitors, often disguising its illegal actions by using bogus, supposedly independent companies it controlled.

<blockquote>The evidence is, in fact, absolutely conclusive that the Standard Oil Co. charges altogether excessive prices where it meets no competition, and particularly where there is little likelihood of competitors entering the field, and that, on the other hand, where competition is active, it frequently cuts prices to a point which leaves even the Standard little or no profit, and which more often leaves no profit to the competitor, whose costs are ordinarily somewhat higher.<ref name="oDQ16" /></blockquote>

On May 15, 1911, the [[US Supreme Court]] upheld the lower court judgment and declared the Standard Oil group to be an "unreasonable" [[monopoly]] under the [[Sherman Antitrust Act]], Section II. It ordered Standard to break up into 39 independent companies with different boards of directors, the biggest two of the companies being Standard Oil of New Jersey (which became [[Exxon]]) and Standard Oil of New York (which became [[Mobil]]).<ref name="yA9lf" />

Standard's president, John D. Rockefeller, had long since retired from any management role. But, as he owned a quarter of the shares of the resultant companies, and those share values mostly doubled, he emerged from the dissolution as the richest man in the world.<ref name="6rWCc" /> The dissolution had actually propelled Rockefeller's personal wealth.<ref name="DmItM" />