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Superficially it would appear that the Standard Oil, which was dissolved into 38 separate companies in 1911 by order of the U. S. Supreme Court, was an incoherent concern. Among the disjuncta membra of 1911 are the Anglo-American Oil Co., the Atlantic Refining Co., Borne, Serymser Co., Buckeye Pipe Line Co., Crescent Pipe Line Co., Cumberland Pipe Line Co., Eureka Pipe Line Co., Galena-Signal Oil Co., Illinois Pipe Line Co., Indiana Pipe Line Co., National Transit Co., National Transit Pump and Machinery Co., New York Transit Co., Northern Pipe Line Co., Ohio Oil Co., Mid-Kansas Oil & Gas Co., Pierce Oil Co., Pierce Pipe Line Co., Prairie Oil and Gas Co., Prairie Pipe Line Co., Solar Refining Co., South Penn. Oil Co., Penn-Mex Fuel Co., South West Pennsylvania Pipe Line Co., Southern Pipe Line Co., the Standard Oil Companies of California, Indiana, Kansas,. Kentucky, Nebraska, New Jersey, Louisiana, New York and Ohio, Swan & Finch Co., Union Tank Car Co., Vacuum Oil Co; and the Washington Oil Co. The combined capitalization of these companies is $957,843,750, but as it has until very recently been the policy of Standard Oil to undercapitalize, its actual resources are considerably in excess of this sum. Within the last few months there has been a tendency to increase capital stock by capitalizing the large surpluses that have accumulated, probably with a view to avoiding new corporate taxes and to secure wide stock distribution. An idea of the size of the surpluses is given by the fact that, after deduction of taxes, the net earnings of Standard Oil in the years 1912-18 were $378,000,000, while dividends were approximately $176,000,000.
Past History. The origin of the Standard Oil monopoly, for practical monopoly it still is, was the foundation of a refinery in Cleveland by an Englishman named Samuel Andrews in 1862. John D. Rockefeller invested $4,000 in the venture. In 1867 the concern was organized under the name of Rockefeller, Andrews and Flagler. In 1870 it was incorporated as the Standard Oil Com-pany of Ohio, with a capitalization of $1,000,000. The parties interested were John D. Rockefeller, Henry M. Flagler, Samuel Andrews, Steven V. Harkness and William Rockefeller.
In 1871-2 a scheme was worked out whereby the railroads gave the Standard Oil secret rebates. This was done through the notorious South Improvement Co., a concern organ-ized by Rockefeller, which bought a charter with the right to carry on any kind of business in any country and in any way. The rebates were secured by arrangements with Vanderbilt and Clark of the New York Central, Jay Gould and General McClellan of the Erie, and Thompson and Scott of the Pennsylvania. In
1872 there was a Congressional investigation and the rebates were revoked, but continued in secret to the extent of 25%, and with this advantage the Standard Oil controlled 95% of production by 1877.