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STANDARD OIL TRUST.
ITS STRONG POSITION AFTER
LEGAL DISSOLUTION.
Technically, and according to the I
American law the Standard Oil Trust
is no more. _ It is crushed, smashed
into atoms, dissolved by the authority
of the U.S. Supreme Court's decision.
That is the law. But the fact is that
the Trust is more firmly ontrenched
than ever it was. It has dissolved in
order to better solidify. The trust's j
vast properties have got into fewer '
hands, and these hands have intercept
ed £50,000,000 in the process of trans
fer ; the trust is stronger, but will work
iu secret, and bigger dividends for the
future will follow. '
An article in "McClure's Magazine"
for August tells the story of tho stock- \
killing campaign which preceded the ;
latest haul of the trust loaders. What'
the Supremo Court of the United States
said last year in its final judgment was
; this:
Seven men and a corporate machine
have seized unlawfully the second grea
test mineral product of this country, j
and are converting it into mountainous J
private fortunes. For the safety of
the Republic, we now declare that the ;
dangerous conspiracy must be ended by j
November 15. " I
What the conspirators did was to ]
proceed to execute the orders of the I
Court, and then form a smaller but a
mors powerful and secret conspiracy j
quite within the law. The law had!
said that the trust was 34 companies, i
not one. and must be split into 34
parts. So be it, said tho trust. The
' stockholders were informed that each
! would get his fraction of shares. Each
share would bo divided into 34 parts.
This splitting of the shares alarmed the
small holders. There were 6000 stock
holders, and all received intimation of
the change in this way:
In the registered mail came the as
sorted package of strange paper mys
teries which had been confined in one
share of that unknown aggregation call
ed the Standard Oil:
One 994/983383 of Swan and Finch
Co.; face value 10 cents.
One 7143.9S3383 of Washington Oil
Co-; face value 7 cents.
One 1995/983383 of Borne-Scrymser
Co.; face value 20 vents.
And so on through all the nine hun_
dred and eighty-three thousand three
hundred and eighty-thirds up to the
249995/983383 of the Standard Oil of
California with its faco value of 25dol.
42 cents."
"KILLING" THE STOCK.
There were 300 stockholders who had.
1 one share of stock; many more had
three and five and ten apiece. More
than half of the 6000 stockholders had
less than 51. The absurdity of the
whole scheme was further brought home
when the dividends had to be paid. The
Chesebrough Manufacturing Company
sent out a dividend of 10 per cent., and
every owner of one share of Standard
Oil was given his portion of it
2 82/100 cents. The company -was forced
to pay each single share its dividend in
a three cent, cheque-a net dead loss of
18-100ths of a cent., and a matter of
distraction in bookkeeping.
The stockholder were absolutely at
sea; no information was given. They
knew nothing concerning the new com
panies, and the majority of owners, who
ran them, were not gomg to give them
any information-not the slightest-of
what property the companies owned, or
what business they did. or what profits
they were making. The small holders
were alarmed and sold, and the inner
ring of the trust bought. And then
the great main "killing" in the stock
began.
The stock of the various companies
having reached low-water mark, it was
then announced that the capital or
stock would be increased. In the case
of the Indiana Standard Oil Company,
for instance, it jumped up from one
million to 30 million dollars. As the
utmost secrecy was maintained the wild
, speculation in the stock only heightened
, the mystery. As "McClure's" savs:
"All this speculation was the froth on
the crest of 'the big main ware. Under
neath, the men who really knew were
quietly feeding on the stock that was
being disgorged by the little stock
holders. By the middle of March this
matter was made a scandal in the news
papers. Criticism arose to such a point
that the Standard Oil Press agent
broke the silence again, and gave out
another sheet of flimsy to the news
papers.
"By the end of March, in three
months' time, 200.000,000 dollars had
been added to the value of the stocks
for the men who now hold them-the
biggest "killing" _ on a sing]© stock in
so short a time in the history of the
financial district about Wall-street."
HOW "INSIDERS" PROFITED.
The ' insiders"-the Rockefellers and ,
their friends-had profited by these'
various manipulations. The increase in
the stock was not water. The value
vas there, hidden away, readv to be
oroduced on tho day when the trust
..hould be dissolved.^ The trust had
>een preparing for its own dissolution,
'ays the writer already quoted:
''Iho Lnited States Government did
.ot create new physical property, of
?ourse. The surplus which the compan- j
es divided had all the time been in the i
ompanies-the vast accumulations of a
; Ieeade-waiting until it could be dis
' .ributed without general public clamor.
The United States merely certified that
now the wicked and baneful 'trust' had
been converted into an innocent busi
iess organisation. Immediately upon
fch;s certification by the Supreme Court,
tho hidden millions were released for
distribution; they lay somewhere in a
score and a half of corporations, and
no one in the world but the 'insiders'
could know in just what corporations
tnev were concealed.
"The dividends on the Standard Oil
stock have boon held down for Tears "to
40,000.000 dollars a -rear, while the
earnings in 190G and 1907 are known to
have been over 80.000.000 dollars, and
a Standard Oil official has said that,
srnco tho earnings of one year reached 1
100,000,000 dollars. Now that there is
no danger of prosecution for declaring
great dividends on the stock, the pro
perty can distribute what it really
earns."
The "insiders" in tho Standard Oil
are now busy dividing their huge pro
fits along tho line made possible bv the
law of the land, enforced bv the Su
. preme Court. They have, to "this time,
' increased the face value of the securi
ties in their various concerns to more
than three and a quarter times the face
value of the stock in the old Standard
Oil Company._ And it is well under
stood that this is onlv a part of the
j increase in the stock which will be fin- !
> allv issued. j
LEGAL DISSOLUTION A FARCE. '
Meanwhile, the national uproar over
the Standard Oil is passing. Mr. John
I D. Rockefeller, with his sir, mysterious
face, pursues his quest of Ions life
across the golf fields. Mr.- William
Rockefeller hunts fiercely across the
earth to escape fatal disease.
_ "In the old Standard Oil building the
silence remains unbroken. The sound
of the soft footfalls of the aging men
on the old-fashioned carpets comes and
goes: subdued voices murmur in their
meetings of committees; as tliev divide
their millions: and. over the entrance
banes tho old sign:-'Hush! Hush!
Shut your mouth and carry on your
business!' "
And automatically, all over tho Uni
ted Stales, corporate proncrtv slides
into the private hands of the men with
a knowledge of the "inside"': a little
group, smaller and smaller as the great
industrial operations of the country
more and more converge and consoli
date under natural economic laws, and
more and more are co-ordinated under
the control of the central group of man
agement around Wall-street.
All this means that the legal dissolu
tion of trusts is a farce. Thev dissolve
to become more solid. Instead of being
more or less public corporations they
become, as in the case of the Standard
altogether private.
Three great trusts have now been
dissolved. The Northern Securities
Company was "smashed'' seven years
ago. yet the stocks in the two railways
which it owned are now under the same
control, and have increased £30,000,000
in value. The breaking-up of the To
bacco Trust was another failure, and
gave an^ opportunity, among other
things, for the British-American To
bacco Company-an English company
to presout its directors with shares
worth £2,250,000 on payment of
£674,592.
$