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Slide 1

Standard Oil:
Ascent and Assessment

Photo of two men walking in an oil field


Slide 2

The Benefits of History

  • Better Understanding of the Past on its Own Terms

  • Better Understanding of Modern Economic and Legal Issues

    • Point of comparison, contrast

    • Source of useful additional questions, perspectives to consider

  • Help to Inform Modern Decision Making


Slide 3

Perspectives and Insight

  • Business Historians

  • Legal Historians

  • Intellectual Historians

  • Economists

  • Legal Scholars

  • Other Scholars and Commentators


Slide 4

Earlier Antitrust Episodes in General; Standard Oil Story in Particular

  • Great deal to tell us

  • “Freedom from a falsely imagined past”

  • Insight into how many of our current mainstream ideas first came to be established in antitrust law


Slide 5

  • Simultaneously, insight into how

    1. Early antitrust thinking was not simply a less sophisticated early form of neoclassical economic thought;

    2. Variations from modern economic analysis found in earlier antitrust analysis do not simply reflect the power of “non-economic” concerns uninformed by any systematic theoretical outlook


Slide 6

  1. Much of early antitrust debate, legislation, lawyering, and judicial decision making was influenced by a different kind of theoretical outlook

    That embraced as a part of, and not simply alongside of, its economic analysis,

    Simultaneous concerns for


Slide 7

  • Individual Opportunity

  • Freedom of Contract

  • Efficiency

  • Economic Progress and Prosperity

  • Fair Distribution of Wealth and

  • Political freedom;

All to be promoted through a process of largely “non-discretionary” judicial decision making


Slide 8

  • Obviously, a more encompassing antitrust vision

    • Contra more thorough-going modern belief in the “inevitability of tradeoffs”


Slide 9

Ascent and Challenge


Slide 10

  • The Rise of Standard Oil

    • Origins

Standard Oil stock certificate


Slide 11

Photo of Standard Oil refinery - Cleaveland, Ohio 1870


Slide 12

  • Products

  • Cartel Activity and Relations with Railroads

  • The Cleveland Acquisitions

  • Later Acquisitions


Slide 13

  • The 1879 Trust      
  • The 1882 Trust


Slide 14

  • Movement into Crude Oil Production

  • Dominance in Pipe Line Transportation

  • Expansion of Retail Marketing

Photo of Standard Oil horse drawn oil tank wagon


Slide 15

  • Expansion of Product Offerings

  • Dissolution of the 1882 Trust Under Ohio State Challenge

  • Establishment of the Standard Oil Company of New Jersey as a New Jersey Holding Company


Slide 16

  • Standard Oil’s Position – Export Trade


Slide 17

  • Standard Oil’s Position – Domestic Trade

Photo of refinery


Slide 18

  • The Federal Antitrust Challenge

Political cartoon depicting Standard Oil as an octopus with tenticles around the capitol building and some bureaucrats Political cartoon depicting President Teddy Roosvelt swinging a big bat with bodies labelled Oil Trust, R.R. Trust, Everything, In General, and unreadable others laying on the floor


Slide 19

  • Filed 1906

Political cartoon depicting Standard Oil as an octopus with tenticles around the capitol building and some bureaucrats Political cartoon depicting President Teddy Roosvelt swinging a big bat with bodies labelled Oil Trust, R.R. Trust, Everything, In General, and unreadable others laying on the floor


Slide 20

Position of the United States

  • Conspiracy to Monopolize First Formed in 1870

  • Continued to the Time of Suit through Three Periods

    • 1870-1882

    • 1882-1899

    • 1899-Time of Suit
Photo of man - period 1800's


Slide 21

Position of the United States

  • Evidence Stressed

    • Acquisitions and Combination

    • Market Shares

    • Profits

    • Increases in the Prices of the Principal Products


Slide 22

Position of the United States

    • Other Means Used to Monopolize Commerce

      • Railroad Rate Discrimination

      • Control of pipe lines and pipe line discrimination

      • Contracts with independent refiners

      • Unfair competition ...


Slide 23

Position of the United States

  • Unfair competition

    • Local Price Discrimination/Predatory Pricing

    • Secret market intelligence gathering and espionage

    • Operation of secret bogus independent companies


Slide 24

Position of the United States

  • The Trust Agreements of 1879 and 1882 were in unreasonable restraint of trade, tended to monopoly, and were void at common law

  • The corporate combination achieved through the establishment of Standard Oil of New Jersey as a holding company was void under

    • Sherman Act § 1

    • Sherman Act § 2


Slide 25

Position of the United States

  • Remedy


Slide 26

Photo of refinery

Photo of refinery

Photo of refinery


Slide 27

Photo of refinery

Photo of refinery

Photo of refinery


Slide 28

The Case in Hindsight


Slide 29

General Questions

  • What was wrong and what was right about the government’s position?

  • How might the case be approached differently today?


Slide 30

Scholarly Perspectives

  • Remedy

  • Was Standard Oil a monopolist?

    • If so, what was monopolized?

  • What were the Bases of Standard Oil’s Preeminence?


Slide 31

  • Economies of Scale or Other Efficiencies

  • Mergers and Acquisitions

    • Uncoerced

    • Coerced

  • Bad Acts

    • Predatory Pricing

    • Other

  • Enforcement of a Railroad Cartel

  • Pipe Line Dominance


Slide 32

Questions and Implications

Photo of two men walking in an oil field