The odds against the oil men in developing the business had not been merely physical ones. There had been more than the wilderness to conquer, more than the possibilities of a new product to learn. Over all the early years of their struggle and hardships hovered the dark cloud of the Civil War. They were so cut off from men that they did not hear of the fall of Sumter for four days after it happened, and the news for the time blotted out interest even in flowing wells. Twice at least when Lee invaded Pennsylvania the whole business came to a stand-still, men abandoning the drill, the pump, the refinery to make ready to repel the invader. They were taxed for the war — taxes rising to ten dollars per barrel in 1865 — one dollar on crude and twenty cents a gallon on refined (the oil barrel is usually estimated at forty-two gallons). They gave up their quota of men again and again at the call for recruits, and when the end came and a million men were cast on the country, this little corner of Pennsylvania absorbed a larger portion of men probably than any other spot in the United States. The soldier was given the first chance everywhere at work, he was welcomed into oil companies, stock being given him for the value of his war record. There were lieutenants and captains and majors — even generals — scattered all over the field, and the field felt itself honoured, and bragged, as it did of all things, of the number of privates and officers who immediately on disbandment had turned to it for employment.

It was not only the Civil War from which the Oil Regions had suffered; in 1870 the Franco-Prussian War broke the foreign market to pieces and caused great loss to the whole industry. And there had been other troubles. From the first, oil men had to contend with wild fluctuations in the price of oil. In 1859 it was twenty dollars a barrel, and in 1861 it had averaged fifty-two cents. Two years later, in 1863, it averaged $8.15, and in 1867 but $2.40. In all these first twelve years nothing like a steady price could be depended on, for just as the supply seemed to have approached a fixed amount, a "wildcat" well would come in and "knock the bottom out of the market." Such fluctuations were the natural element of the speculator, and he came early, buying in quantities and holding in storage tanks for higher prices. If enough oil was held, or if the production fell off, up went the price, only to be knocked down by the throwing of great quantities of stocks on the market. The producers themselves often held their oil, though not always to their own profit. A historic case of obstinate holding occurred in 1871 on the "McCray farm," the most productive field in the region at that time. Prices were hovering around three dollars, and McCray swore he would not sell under five dollars. He bought, hired and built iron tankage until he had upward of 200,000 barrels. There was great loss from leakage and from evaporation and there were taxes, but McCray held on, refusing four dollars, $4.50, and even five dollars. Evil times came in the Oil Regions soon after and with them "dollar oil." McCray finally was obliged to sell his stocks at about $1.20 per barrel. To develop a business in face of such fluctuations and speculation in the raw product took not only courage — it took a dash of the gambler. It never could have been done, of course, had it not been for the streams of money which flowed unceasingly and apparently from choice into the regions. In 1865 Mr. Wright calculated that the oil country was using a capital of $100,000,000. In 1872 the oil men claimed the capital in operation was $200,000,000. It has been estimated that in the first decade of the industry nearly $350,000,000 was put into it.

Speculation in oil stock companies was another great evil. It reached its height in 1864 and 1865 — the "flush times" of the business. Stocks in companies whose holdings were hardly worth the stamps on the certificates were sold all over the land. In March, 1865, the aggregate capital of the oil companies whose charters were on file in Albany, New York, was $350,000,000, and in Philadelphia alone in 1864 and 1865 1,000 oil companies, mostly bogus, are said to have been formed. These swindles were dignified by the names of officers of distinction in the United States army, for the war was coming to an end and the name of a general was the most popular and persuasive argument in the country. Of course there came a collapse. The "oil bubble" burst in 1866, and it was nothing but the irrepressible energy of the region which kept the business going in the panic which followed.

Then there was the disturbing effect of foreign competition. What would become of them if oil was found in quantities in other countries? A decided depression of the market occurred in 1866 when the government sent out reports of developments of foreign oil fields. If there was oil in Japan, China, Burmah, Persia, Russia, Bavaria, in the quantities the government reports said, why, there was trouble in store for Pennsylvania, the oil men argued, and for a day the market fell — it was only for a day. Men forgot easily in the Oil Regions in the sixties.

An evil in their business which they were only beginning to grasp fully in 1871 was the unholy system of freight discrimination which the railroads were practising. Three trunk lines competed for the business by 1872 — the Pennsylvania, which had leased the Philadelphia and Erie, the Erie and the Central. (The latter road reached the Oil Regions by a branch from Ashtabula on the Lake Shore and Michigan Southern division to Oil City; this branch was completed in 1868.) The Pennsylvania claimed the oil traffic as a natural right; for the Oil Regions were in Pennsylvania, and did not Tom Scott own that state? The Erie road for about five years had been in the hands of those splendid pirates, Jay Gould and "Jim" Fisk. Naturally they took all they could get of the oil traffic and took it by freebooting methods. "Corners" and "rings" were their favourite devices for securing trade, and more than once their aid had carried through daring and unscrupulous speculations in oil. The Central in this period was waging its famous desperate war on the Erie, Commodore Vanderbilt having marked that highway for his own along with most other things in New York State. All three of the roads began as early as 1868 to use secret rebates on the published freight rates in oil as a means of securing traffic. This practice had gone on until in 1871 any big producer, refiner, or buyer could bully a freight agent into a special rate. Those "on the inside," those who had "pulls," also secured special rates. The result was that the open rate was enforced only on the innocent and the weak.

Serious as all these problems were, there was no discouragement or shrinking from them. The oil men had rid themselves of bunco men and burst the "oil bubbles." They had harnessed the brokers in exchanges and made strict rules to govern them. They had learned not to fear the foreigners, and to take with equal sang froid the "dry-hole" which made them poor, or the "gusher" which made them rich. For every evil they had a remedy. They were not afraid even of the railroads, and loudly declared that if the discriminations were not stopped they would build a railroad of their own. Indeed, the evils in the oil business in 1871, far from being a discouragement, rather added to the interest. They had never known anything but struggle — with conquest — and twelve years of it was far from cooling their ardour for a fair fight.

More had been done in the Oil Regions in the first dozen years than the development of a new industry. From the first there had gone with the oil men's ambition to make oil to light the whole earth a desire to bring civilisation to the wilderness from which they were drawing wealth, to create an orderly society from the mass of humanity which poured pell-mell into the region. A hatred of indecency first drew together the better element of each of the rough communities which sprang up. Whiskey-sellers and women flocked to the region at the breaking out of the excitement. Their first shelters were shanties built on flatboats which were towed from place to place. They came to Rouseville — a collection of pine shanties and oil derricks, built on a muddy flat — as forlorn and disreputable a town in appearance as the earth ever saw. They tied up for trade, and the next morning woke up from their brawl to find themselves twenty miles away, floating down the Allegheny River. Rouseville meant to be decent. She had cut them loose, and by such summary vigilance she kept herself decent. Other towns adopted the same policy. By common consent vice was corralled largely in one town. Here a whole street was given up to dance-houses and saloons, and those who must have a "spree" were expected to go to Petroleum Centre to take it.


Decency and schools! Vice cut adrift, they looked for a school teacher. Children were sadly out of place, but there they were, and these men, fighting for a chance, saw to it that a shanty, with a school teacher in it, was in every settlement. It was not long, too, before there was a church, a union church. To worship God was their primal instinct; to defend a creed a later development. In the beginning every social contrivance was wanting. There were no policemen, and each individual looked after evil-doers. There were no firemen, and every man turned out with a bucket at a fire. There were no bankers, and each man had to put his wealth away as best he could until a peripatetic banker from Pittsburg relieved him. At one time Dr. Egbert, a rich operator, is said to have had $1,800,000 in currency in his house. There were no hospitals, and in 1861, when the horrible possibilities of the oil fire were first demonstrated by the burning of the Rouse well, a fire at which nineteen persons lost their lives, the many injured found welcome and care for long weeks in the little shanties of women already overburdened by the difficulties of caring for families in the rough community.

Out of this poverty and disorder they had developed in ten years a social organisation as good as their commercial. Titusville, the hamlet on whose outskirts Drake had drilled his well, was now a city of 10,000 inhabitants. It had an opera house, where in 1871 Clara Louise Kellogg and Christine Nilsson sang, Joe Jefferson and Janauschek played, and Wendell Phillips and Bishop Simpson spoke. It had two prosperous and fearless newspapers. Its schools prepared for college. Oil City was not behind, and between them was a string of lively towns. Many of the oil farms had a decent community life. The Columbia farm kept up a library and reading-room for its employees; there was a good schoolhouse used on Sunday for services, and there was a Columbia farm band of no mean reputation in the Oil Regions.

Indeed, by the opening of 1872, life in the Oil Regions had ceased to be a mere make-shift. Comforts and orderliness and decency, even opportunities for education and for social life, were within reach. It was a conquest to be proud of, quite as proud of as they were of the fact that their business had been developed until it had never before, on the whole, been in so satisfactory a condition.

Nobody realised more fully what had been accomplished in the Oil Regions than the oil men themselves. Nobody rehearsed their achievements so loudly. "In ten years," they were fond of saying, "we have built this business up from nothing to a net product of six millions of barrels per annum. We have invented and devised all the apparatus, the appliances, the forms needed for a new industry. We use a capital of $200,000,000, and support a population of 60,000 people. To keep up our supply we drill 100 new wells per month, at an average cost of $6,000 each. We are fourth in the exports of the United States. We have developed a foreign market, including every civilised country on the globe."

But what had been done was, in their judgment, only a beginning. Life ran swift and ruddy and joyous in these men. They were still young, most of them under forty, and they looked forward with all the eagerness of the young who have just learned their powers, to years of struggle and development. They would solve all these perplexing problems of over-production, of railroad discrimination, of speculation. They would meet their own needs. They would bring the oil refining to the region where it belonged. They would make their towns the most beautiful in the world. There was nothing too good for them, nothing they did not hope and dare. But suddenly, at the very heyday of this confidence, a big hand reached out from nobody knew where, to steal their conquest and throttle their future. The suddenness and the blackness of the assault on their business stirred to the bottom their manhood and their sense of fair play, and the whole region arose in a revolt which is scarcely paralleled in the commercial history of the United States.

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