Source: Emily Arnold McCully. Ida M. Tarbell - The Woman That
Challenged Big Business, And Won! (2014)
Challenged Big Business, And Won! (2014)
Ida Tarbell and her employer, S.S. McClure (McClure's Magazine) shared a longing for the bygone era of an "Uncorrupted America". Both wanted to do their part to restore that ideal, and in the process, assist working-class Americans as well as incoming immigrants. Exposing the ills of America would mean a huge investment in terms of money, time, and energy, and McClure's would be open to potential lawsuits as well. Therefore, Tarbell and McClure knew that the any articles that attacked big business would need to be exceptionally well-written and credible. Tarbell, McClure, and the staff at McClure's believed that reform-minded articles should be targeted to more than just the middle class and the "Upper-10's" (upper-10% of the population in terms of wealth).
After weeks of discussion and debate, the McClure's staff became convinced that Trusts (not a big business, but a board that supervised the operation of the big business) would be their focus for exposure and potential reform . . . but which Trust? Steel was considered, in that J.P. Morgan was in the process of creating the behemoth U.S. Steel, which would be the first "Billion Dollar Trust" . . . . but everything associated with that possible story line seemed too complicated. Tarbell told her colleagues about growing up in Northwest Pennsylvania around the emerging and expanding oil industry; given her skill-set and experience, it was a no-brainer that Ida Tarbell would write about John D. Rockefeller and Standard Oil (she reluctantly agreed to pursue the project). Tarbell wondered if readers would really enjoy a feature about interlocking corporations and their balance sheets; she didn't sense any potential for danger, just a desire to discover truth.
After weeks of discussion and debate, the McClure's staff became convinced that Trusts (not a big business, but a board that supervised the operation of the big business) would be their focus for exposure and potential reform . . . but which Trust? Steel was considered, in that J.P. Morgan was in the process of creating the behemoth U.S. Steel, which would be the first "Billion Dollar Trust" . . . . but everything associated with that possible story line seemed too complicated. Tarbell told her colleagues about growing up in Northwest Pennsylvania around the emerging and expanding oil industry; given her skill-set and experience, it was a no-brainer that Ida Tarbell would write about John D. Rockefeller and Standard Oil (she reluctantly agreed to pursue the project). Tarbell wondered if readers would really enjoy a feature about interlocking corporations and their balance sheets; she didn't sense any potential for danger, just a desire to discover truth.
John D. Rockefeller had, in essence, created the first modern corporation by establishing the Standard Oil Trust (SOT) in 1882. Even before 1882, the Standard Oil Company controlled the production and distribution of oil, as well as determining its use by the consumer. The SOT was created in that Combinations (big consolidated businesses) couldn't do business across state lines; Rockefeller wanted to consolidate even more power and influence in the oil industry.
Rockefeller purchased tank cars, pipelines, banks, real estate, and even bribed politicians. He invested in newspapers so he could be portrayed in the most positive light; he never responded to criticisms and investigations of his methods or his Trust. New oil reserves were discovered in Ohio in 1885, and Rockefeller believed that this huge reservoir was a "Gift from God" given directly to him (even though the oil in Ohio had a strong sulfur content, but Rockefeller made it work as marketable fuel nonetheless). Ohio became the main source of petroleum for the SOT; not only had the SOT dominated refining, but by the mid-1890s the SOT became the dominant producer of oil in the industry.
Rockefeller purchased tank cars, pipelines, banks, real estate, and even bribed politicians. He invested in newspapers so he could be portrayed in the most positive light; he never responded to criticisms and investigations of his methods or his Trust. New oil reserves were discovered in Ohio in 1885, and Rockefeller believed that this huge reservoir was a "Gift from God" given directly to him (even though the oil in Ohio had a strong sulfur content, but Rockefeller made it work as marketable fuel nonetheless). Ohio became the main source of petroleum for the SOT; not only had the SOT dominated refining, but by the mid-1890s the SOT became the dominant producer of oil in the industry.
Rockefeller continued to crush the independent oil producers by underselling them, and by using unsavory methods, such as industrial espionage. By the mid-1890s, the SOT was a financial colossus, no longer subject to the market fluctuations in the oil industry. As late as 1900, most Americans still burned kerosene in their homes instead of electricity, and the SOT produced 86% of that kerosene - it seemed that no independent producer could survive (one survivor was the Pure Oil Company, and its treasurer was Will Tarbell, Ida's brother).
Ida's father told her not to publish the first three parts of "The History of the Standard Oil Company", in that he feared that Rockefeller's retribution would be fierce (e.g. buying McClure's Magazine). Tarbell's search for documents was difficult, in that the SOT and the railroads (esp. NY Central, Erie, and PA) destroyed as many documents as possible relating to the South Improvement Company (SIC). But she persevered, and found that while most documents were destroyed, some remained in scattered locations. Tarbell proved that the SIC was Rockefeller's tool, using not only rebates, but "drawbacks" (a percentage of the freight rates that the independents paid the railroads went directly to the SIC). Rockefeller promised that he would ship all his refined oil with the NY Central, Erie, and Pennsylvania railroads in exchange for the rebates/drawbacks; it wasn't illegal, but it certainly wasn't ethical . . . and to Tarbell, it was grossly unfair, and more-than-worth investigating further.
Ida's father told her not to publish the first three parts of "The History of the Standard Oil Company", in that he feared that Rockefeller's retribution would be fierce (e.g. buying McClure's Magazine). Tarbell's search for documents was difficult, in that the SOT and the railroads (esp. NY Central, Erie, and PA) destroyed as many documents as possible relating to the South Improvement Company (SIC). But she persevered, and found that while most documents were destroyed, some remained in scattered locations. Tarbell proved that the SIC was Rockefeller's tool, using not only rebates, but "drawbacks" (a percentage of the freight rates that the independents paid the railroads went directly to the SIC). Rockefeller promised that he would ship all his refined oil with the NY Central, Erie, and Pennsylvania railroads in exchange for the rebates/drawbacks; it wasn't illegal, but it certainly wasn't ethical . . . and to Tarbell, it was grossly unfair, and more-than-worth investigating further.
Then, through a connection with Mark Twain (Ida had known him for quite a few years), Tarbell was able to meet with the Vice President of the Standard Oil Trust, Henry Rogers
(pictured below: Mark Twain with Henry Rogers, in front). Rogers admitted that the SIC was a mistake, and he even offered to arrange a meeting with Rockefeller. Ida visited Rogers at the SOT headquarters (26 Broadway in NYC) often for the next two years; she spent so much time there that some independents refused to talk with her, fearing that she was in league w/ Rockefeller. (Interesting fact: Tarbell earned $4000 per article, $107k today; by comparison, Rogers' secretary earned $10,000 per year at the SOT - $269,000 today). While Rogers cooperated most of the time, Tarbell still suspected that chicanery was afoot; she couldn't yet prove the espionage and criminal acts that she knew occurred due to the actions of the SOT.
(pictured below: Mark Twain with Henry Rogers, in front). Rogers admitted that the SIC was a mistake, and he even offered to arrange a meeting with Rockefeller. Ida visited Rogers at the SOT headquarters (26 Broadway in NYC) often for the next two years; she spent so much time there that some independents refused to talk with her, fearing that she was in league w/ Rockefeller. (Interesting fact: Tarbell earned $4000 per article, $107k today; by comparison, Rogers' secretary earned $10,000 per year at the SOT - $269,000 today). While Rogers cooperated most of the time, Tarbell still suspected that chicanery was afoot; she couldn't yet prove the espionage and criminal acts that she knew occurred due to the actions of the SOT.
The "breakthrough evidence" came from an unexpected source: a Standard Oil office boy. His job was to burn selected documents every night, and while doing so, saw the name of his Sunday School teacher on some documents. His Sunday School teacher was a refiner, and the documents showed that the railroads were warning the SOT well in advance of the oil shipments from the independent producers. As a result, the SOT could ship its product first, undercutting the competition.
The office boy took the documents to his Sunday School teacher, who had already read Tarbell's first three installments of "The History of the Standard Oil Company", and believed in Ida's integrity to the point where he gave her the documents. Those documents proved that the SOT was still engaged in unethical, and even illegal shenanigans, and in February 1904, McClure's published "Cutting to Kill" . . . Henry Rogers refused to meet with Ida Tarbell again.
The office boy took the documents to his Sunday School teacher, who had already read Tarbell's first three installments of "The History of the Standard Oil Company", and believed in Ida's integrity to the point where he gave her the documents. Those documents proved that the SOT was still engaged in unethical, and even illegal shenanigans, and in February 1904, McClure's published "Cutting to Kill" . . . Henry Rogers refused to meet with Ida Tarbell again.