Foreign and domestic markets and marketing channels
The advent of flowing wells during the spring and summer of 1861 removed most doubts about supplies of crude sufficient to support an expanding petroleum-refining industry and to justify the development of more adequate transport facilities. But if potential crude supplies offered no long run obstacle to expansion, the outbreak of the Civil War in April, 1861, did make it uncertain whether marketing outlets would be available for any significant increase in the distribution of petroleum products.
The secession of eleven Confederate states with a population of some nine million cut off almost one-third of the domestic market for illuminating oil. Another threat to the new industry came when Congress early in 1862 announced its intention of levying heavy taxes on both crude and refined petroleum. Congress waived taxation of crude, but under legisla-