The Anti-Trust Laws and the Oil Industry

Date01 January 1930
DOI10.1177/000271623014700110
Published date01 January 1930
AuthorCharles B. Steele
Subject MatterArticles
78
The
Anti-Trust
Laws
and
the
Oil
Industry
By
CHARLES
B.
STEELE
Member,
State
Bar
of
Oklahoma,
Okmulgee,
Oklahoma
CHAOS
has
laid
hold
of
the
petro-
leum
industry
many
times
since
the
beginning
of
its
history
in
this
country.
This
has
been
caused
by
the
fact
that
usually
there
has
existed
either
an
oversupply
or
a
shortage
of
oil,
a
problem
of
how
to
care
for
the
gushers
or
a
mad
search
to
locate
new
sources
of
supply.
A
discovery
has
always
led
to
a
wild
scramble
and
a
life
and
death
race
to
reach
the
oil
sand
and
capture
the
black
liquid
that
has
revolutionized
so
many
other
indus-
tries.
The
migratory
nature
of
petro-
leum
and
the
uncertainty
in
locating
new
fields
are
the
two
principal
factors
which
have
contributed
to
such
cha-
otic
conditions.
The
class
of
men
who
pioneered
this
industry
were
for
the
most
part
hardy,
adventurous
and
extremely
individu-
alistic.
The
very
elements
which
had
to
be
contended
with
made
it
a
game
in
which
the
weak
could
not
survive.
Because
the
industry
was
unorganized
there
were
no
precedents
to
govern,
nor
were
there
any
standards
of
ethics.
EARLY
ATTEMPTS
AT
C06PERATION
AND
CONSERVATION
In
1870
John
D.
Rockefeller
had
be-
come
one
of
the
principal
figures
in
the
petroleum
industry.
He
hated
the
in-
tense
competition
existing
at
that
time
because
he
regarded
it
as
&dquo;idiotic,
senseless
destruction.&dquo;
He
looked
on
&dquo;cooperation
and
conservation&dquo;
as
the
ideal
to
be
attained
in
the
operation
and
the
development
of
this
new
and
important
industry
which
was
begin-
ning
to
expand
in
this
country.
Mr.
Rockefeller
may
have
had
the
proper
conception
of
the
ideal
to
be
attained,
but
his
plans
for
realizing
it
resulted
in
opposition
that
has
left
its
mark
on
the
industry
to
this
day
in
the
way
of
legis-
lation
and
court
decisions.
&dquo; Cooperation
and
conservation &dquo;
at
that
time
meant
the
elimination
of
competition
and
the
bringing
together
of
all
the
units
of
the
industry
into
one
group
under
one
leadership.
In
short,
it
meant
the
creation
of
a
monopoly.
Competition
was
considered
the
under-
lying
principle
of
trade
and
commerce
by
economists
and
legislators,
so
any
attempts
to
gain
a
monopoly
were
viewed
with
suspicion.
Men
who
had
taken
the
lead
in
this
new
industry
indulged
in
unethical
practices
which
have
never
been
justi-
fied.
The
railroads
which
were
being
extended
into
every
state
had become
the
principal
means
of
transportation.
Alliances
were
made
between
the
rail-
road
companies
and
the
most
powerful
men
in
the
oil
industry.
Rebates
and
drawbacks
were
secured
from
the
rail-
roads
and
the
many
other
pernicious
practices
indulged
in
made
oil
the
tar-
get
for
legislation
and
court
action
for
years.
At
that
time
new
methods
of
busi-
ness
organization
were
beginning
to
be
employed.
Business
corporations
were
organized
to
take
over
the
individual
or
partnership
form
of
business.
Larger
aggregations
of
capital
were
brought
together
in
business
enterprises.
It
was
the
oil
industry
and
the
railroads
that
led
the
way.
In
the
attempt
to
monopolize
the
in-
dustry,
corporations
executed
trust
agreements
for
the
purpose
of
bringing
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