Page:The History of the Standard Oil Company Vol 2.djvu/431



[Proceedings in Relation to Trusts, House of Representatives, 1888. Report Number 3,112, pages 69-70.]

Memorandum of agreement, made this first day of November, 1887, between the Standard Oil Company of New York and the following-named persons, partnerships, and corporations, producers of crude petroleum, Thomas W. Phillips and others, whose names will be found in the schedule hereto attached and made part of this agreement, as follows:

Whereas, there has accumulated in past years an excessive stock of crude petroleum, which is deteriorating in quality, and a portion of which each year becomes sediment, valueless for any purpose, and the carrying of which excessive stock requires the expenditure of vast sums annually; and

Whereas, in consequence of the existence of said stock the price of crude petroleum has for the past year been largely below the cost at which the same was produced; now, in order as far as possible to preserve the said stock from further waste, and to conserve the public interest and our own, this agreement witnesseth:

That the Standard Oil Company of New York will set apart at sixty-two cents per barrel, and hold for the use of the above-named producers and those who shall hereafter become parties to this agreement, as hereinafter provided, 5,000,000 barrels of merchantable crude petroleum, of forty-two gallons each, to be sold and disposed of in the manner hereinafter provided. The said 5,000,000 barrels of petroleum to be subject, until sold by the said producers, to the usual assessments, storage charges, and interest upon the same, as also interest on the price of said petroleum, at sixty-two cents per barrel; said assessments, charges, and interest to be added to the price aforesaid.

In consideration of which the above-named producers agree to limit their production of petroleum, that for the year next ensuing from this date, they or any number of them shall, for said year, collectively produce at least 17,500 barrels of crude petroleum less per day than they or any number of them collectively produced per day for the months of July and August, 1887, and that they will use every reasonable endeavour to control their production so that the same shall be in the aggregate 30,000 barrels less per day than it was during the said period of July and August, 1887.