Page:The History of the Standard Oil Company Vol 1.djvu/364

Rh A. We were not to have a rebate, we were to have a drawback.

Q. What is the difference between a rebate and a drawback?

A. There is not much difference in one sense. A rebate is made at the time we pay our freight; a drawback is made afterward.

Q. That is a technical, rather than a real, difference, is it not?

A. I want to state it as you will find it in the contract.

Q. The effect was that those who did not go into the combination could not get their oil as cheaply as you could?

A. No, sir; they could not; I want to explain in what relation that occurred and why this arrangement was made. I may say that it never entered into my head that the refineries would not all be brought in; a fair manufacturer's profit was all we wanted. They were all to be brought in on equal terms, and the object of the drawback was not to cover all the oil to be refined in this country, but only the oil that was to be exported.

Q. If all had gone into the combination, then the result would not have been to injure the producers and refiners, but to injure the consumers of the country?

A. No, sir; the purpose was not to injure them.

Q. Would it not have been to increase the price of oil, if you had increased the cost of freight?

A. Yes, sir.

Q. You say the railroad companies were going to increase the rate of freight anyhow; they had the right to do that if they were carrying too low, but would that justify them in increasing the rates of freight to such an extent that they could afford to give you a sum of money for it?

A. I will tell you how that was done. The men in our trade are a very hard kind of men to hold. Those of us who deal in oil know that when we have purchased a lot, they would deliver it in New York for less than anybody could afford to deliver it. That has been the fact almost continuously ever since 1869. Oil has been delivered in the East for less money than was apparent from any rates known to the market; less than even we who refined it could deliver it for. The railroads were kept constantly besieged by one or another, and they were continually cutting under other routes for New York or for Cleveland, so that nobody knew what the rates were. They have been paying rebates, more or less, for the last two years.

Q. And you contemplated an increase of rates for the simple purpose of having the railroads divide with you?

A. There was no divide.

Q. A rebate is a divide to a certain extent, is it not? The proposition was that there should be taken out of the producers and consumers of this country a certain percentage of the freight for you?