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    Description

    [Standard Oil Company]. John D. Rockefeller Contract Signed. One handwritten page with integral blank, 7.75" x 9.75", n. p., March 19, 1870. This contract "between the Allegheny Transportation Company of Pennsylvania and the Standard Oil Company of Cleveland Ohio" stipulates that "the Allegheny Transportation Company will pay to the Standard Oil Company five cents (5) per bbl [standard abbreviation for oil barrel] of forty-five gallons on . . . crude oil . . . for their use in the business of refining in Cleveland . . . for the period of one year commencing with the 24th day of February 1870, and will also pay the same amount . . . between the first day of January 1870 and date above mentioned by the Standard Oil Company Settlement to be made . . . on April 1st . . . and after that, on the 15th day of each succeeding month." For their part, Standard Oil agrees "not to ship to Cleveland by any other line than the Atlantic & Great Western Railway during the existence of this contract." Standard Oil was founded in 1870 making this one of that company's earliest contracts. Countersigned by Henry Flagler (in whose hand this document is written), a co-founder of Standard Oil, as a witness and Henry Harley, president of Allegheny Transportation Co.

    In the latter half of the nineteenth century, the oil industry was in turmoil. The refiners, putting into practice the laws of supply and demand, attempted to regulate the industry by limiting the amount of oil extracted and the quantity of kerosene (a result of fractional distillation of petroleum) distributed. Drillers, on the other hand, were under the impression that the refiners were trying to cut off their business. In retaliation, they built their own refineries. Due to an overabundance of both crude oil and kerosene, the price of kerosene plummeted.

    In an effort to steady the industry's decline and stabilize the wholesale price of oil, John D. Rockefeller (1839-1937) knew he needed to control every facet of oil production, from extraction to refinement. Henry Flagler's friendship with Jay Gould gave him connections throughout the railroad industry, connections he put to good use. Flagler negotiated deal after deal guaranteeing transport of crude oil along the nation's railways to the Cleveland based refinery, Standard Works (owned by Rockefeller and his brother, William). Through a partnership with Standard Works in 1867, the Allegheny Transportation Company was born. Slowly, Rockefeller gained a monopoly in the oil business and organized the Standard Oil Trust in 1882. The trust was ordered dissolved by the Ohio Supreme Court in 1892, to little effect. It was finally disbanded in 1911 after the U.S. Supreme Court found them in violation of the Sherman Antitrust Act.


    Auction Info

    Auction Dates
    October, 2013
    17th-18th Thursday-Friday
    Bids + Registered Phone Bidders: 4
    Lot Tracking Activity: N/A
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