The Development of American Petroleum Pipelines: A Study in Private Enterprise and Public Policy, 1862-1906

By Arthur Menzies Johnson | Go to book overview

III
Pipelines as Competitive Weapons, 1875-1878

T HE producers' failure to obtain pipeline legislation in 1875 shifted the struggle over pipeline power back into the arena of bareknuckled competitive strife. The next two years were crucial in this contest, which arrayed the producers against the growing Standard Oil alliance and provided them with unexpected aid from the Pennsylvania Railroad. Allied with producers and independent refiners, the Pennsylvania challenged the Standard Oil group, which was backed by the northern roads. In the ensuing conflict pipelines were important weapons, and Standard Oil's dominance in crude oil transportation between the wells and railroad shipping points was strengthened by the outcome of the struggle.


The Changing Scene, 1875

The spring of 1875 was a time of rapid change in the unstable alliances which characterized the petroleum industry. The breakup of the railroad pool, initiated by the Pennsylvania's rate cuts on March 1, was the signal for each road to reconsider its competitive position. The Erie had already expressed its displeasure with the Pennsylvania Railroad's relationship to the Empire Transportation Company, which George Blanchard of the Erie believed to be the recipient of secret rebates. As he put it in 1879, "It was clear that,

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