THE CHAMBER OF COMMERCE
The Cleveland Chamber of Commerce is more than seventy years old and it was never more
vigorous or prosperous. For more than a quarter of a century, this representative body of business
and professional men has stood for all that was most truly progressive in municipal life and civic
spirit. The commercial and industrial inter-
1848-1918] - COMMERCE AND INDUSTRY - 707
ests of the city have been protected and developed, reformatory and benevolent movements
encouraged and a broad civic pride and liberal American patriotism propagated from it as a
powerful radial center. Its committee on labor disputes has done whatever it could to mediate
between employer and employe. Through its committee on agricultural development much
momentum has been given the very commendable movement throughout the state tending toward
the appointment of expert agents who cooperated with the farmers and the schools in educating
both young and old in advanced agricultural methods. Cuyahoga, Summit, Ashtabula, Huron,
Lake, Lorain, Medina and Trumbull counties, in the immediate sphere of Cleveland's influence,
have received particular benefits in this direction. Milk investigation, home gardening and many
other matters were handled to advantage by this committee.
The military committee has been among the busiest bodies of the Chamber and cooperated to the
utmost with the mayor's War Council and other associations connected with the home conduct of
the war. The committee on city finances concerns itself with state legislation, advises with
similar bodies of the common council, and makes its recommendations as to public school
finances and street improvements. There are also special committees on education, industrial
welfare, and public safety, on transportation and annexation, housing and sanitation, river and
harbor improvements, industrial development and even on foreign trade. A mere reading of these
titles indicates the wide scope of activities attending the work of the Cleveland Chamber of
Commerce. In a word, it is the most representative body of men which exists in the Forest City,
although it was not always so.
The early records of the old Board of Trade, from which the Chamber was developed, were
destroyed by fire. It is known, however, that it was founded on the seventh of July, 1848, and
various doings of the early body have been recorded. The formal record of organization is thus
published :
At a large meeting of the merchants of this city, held pursuant to notice at the Weddell House, on
Friday evening, 7th inst., William Milford, Esq., was called to the chair and S. S. Coe appointed
secretary.
After a statement from the chair of the object of the meeting, it was on motion of Joseph L.
Weatherly, Esq.,
Resolved: that the merchants of this city now organize themselves into an association, to be
called the Board of Trade of the City of Cleveland, and that we now proceed to the election by
ballot of officers therefor.
708 -CLEVELAND AND ITS ENVIRONS - [Chap. XXXV
Whereupon, the following gentlemen were elected for the ensuing year:
President, Joseph L. Weatherly.
Vice President, William F. Allen, Jr.
Secretary, Charles W. Coe.
Treasurer, Richard T. Lyon.
A committee, consisting of Richard Hilliard, John B. Waring, William Milford, Jona. Gillett and
L. M. Hubby, were appointed to prepare and report at a subsequent meeting a constitution,
by-laws, etc., for the association and call a meeting when ready to report.
E. M. Fitch, William F. Allen, Jr., and A. Handy were appointed a committee to procure a
suitable room for the purposes of the association, and report at same meeting.
William Milford, President.
S. S. Coe, Secretary.
Cleveland, July 7th, 1848.
The incorporation of the Board of Trade dates from the fifth of April, 1866, when the certificate
was officially approved by the secretary of state. On the previous day, twenty leading citizens of
Cleveland appeared before J. F. Freeman, in the Atwater block, and acknowledged that they
signed the certificate of incorporation, which read as follows:
We, the undersigned citizens of the State of Ohio, and residents of the City of Cleveland, do
hereby associate ourselves together as a Board of Trade, under the name and title of the "Board
of Trade of the City of Cleveland," to be located and situated in the City of Cleveland, County of
Cuyahoga, and State of Ohio, where its business is to be transacted.
The objects of said Association are to promote integrity and good faith; just and equitable
principles of business; discover and correct abuses; establish and maintain uniformity in
commercial usages; acquire, preserve and disseminate valuable business statistics and
information; prevent or adjust controversies and misunderstandings which may arise between
persons engaged in trade; and generally to foster, protect and advance the commercial, mercantile
and manufacturing interests of the city, in conformity with an act of the General Assembly of the
State of Ohio entitled "An Act to authorize the incorporation of boards of trade and chambers of
commerce," passed April 3rd, 1866.
The incorporators were Philo Chamberlin, R. T. Lyon, J. C. Sage, A. Hughes, C. W. Coe, H. S.
Davis, S. E. White, J. H. Clark, S. W. Porter, H. D. Woodward, A. V. Cannon, E. D. Childs, W.
F. Otis, M. B. Clark, W. Murray, S. F. Lester, A. Quinn, George W. Gardner, E. C. Hardy, Geo.
Sinclair.
The incorporation and resuscitation of the old Board of Trade in 1866 comprised the second
distinct step in the history of the organization.
1892-1918] - COMMERCE AND INDUSTRY - 709
The third step, and that which led. directly to the Chamber of Commerce as an epitome of the
city of Cleveland, was the appointment of the Board of Trade of the committee on the Promotion
of Industry, of which Wilson M. Day was chairman, L. E. Holden, vice-chairman and George T.
McIntosh, secretary. That event occurred in 1892 and from it dated the birth of a new and broader
spirit within the body of the Board of Trade. Light dawned upon the business men of Cleveland,
at first shed abroad by a chosen few, that a business organization may appropriately concern itself
in matters which are not directly tied to dollars and cents. On the sixth of February, 1893, at a
special meeting held by the Board of Trade, its name was changed to the Cleveland Chamber of
Commerce. Three days afterward, the secretary of state approved such action, and that body has
since been known under the name indicated. A revised constitution had been adopted and a
complete reorganization effected. At that time, the membership of the Chamber of Commerce
was about one thousand; it has now an active membership of three times that number. In June,
1893, the new rooms in the Arcade building were occupied, and the land had already been
purchased on the north side of the Public Square (the site of the Western Reserve Historical
Society) for the erection of the present Chamber of Commerce building. From that time on, the
rule of the Chamber has been progress without a set-back.
OFFICIAL ROSTER, 1848-1918
Presidents: 1848, Joseph L. Weatherly ; 1864, S. F. Lester ; 1865, Philo Chamberlin; 1867, W. F.
Otis; 1868, George W. Gardner, 1869, R. T. Lyon; 1870, A. J. Begges; 1871, Thomas Walton ;
1872, Chas. Hickox ; 1873, B. H. York ; 1874, F. H. Morse; 1875, H. Pomerene ; 1877, B. A.
DeWolf ; 1879, Daniel Martin ; 1886, William Edwards; 1888, George W. Lewis; 1889, William
Edwards; 1893, Henry R. Groff; 1894, Luther Allen; 1895, Wilson M. Day ; 1896, John G. W.
Cowles; 1897, Worcester R. Warner ; 1898, Harry A. Garfield; 1899, M. S. Greenough; 1900,
Ryerson Ritchie; 1901, Charles L. Pack ; 1902, Harvey D. Goulder ; 1903, J. J. Sullivan; 1904,
Amos B. MeNairy ; 1905, Ambrose Swasey; 1906, Francis F. Prentiss; 1907, Lyman H.
Treadway ; 1908, Charles S. Howe; 1909, Charles F. Brush ; 1910, George W. Kinney ; 1911,
Charles E. Adams; 1912, H. H. Johnson ; 1913, Warren S. Hayden; 1914, Morris A. Black; 1915,
Bascom Little; 1916, Ralph L. Fuller (resigned in office) ; 1916-18, Charles A. Otis.; and 1918,
Myron T. Herrick.
710 - CLEVELAND AND ITS ENVIRONS - [Chap. XXXV
From 1848 to 1865, inclusive, the following served as vice presidents : 1848, Wm. F. Allen, Jr.;
1849, P. Anderson; 1851, Levi Rawson ; 1854, Arthur Hughes; 1860, Levi Rawson; 1862, M. B.
Scott; 1864, H. Harvey; 1865, R. T. Lyon. Commencing with the reorganization of the old Board
of Trade and the incorporation of the Chamber of Commerce in 1866, there were six vice
presidents in annual service until 1889, and since the latter year, two.
Treasurers: 1848, R. T. Lyon ; 1865, J. H. Clark; 1867, J. F. Freeman; 1870, J. D. Pickands;
1871, A. Wiener; 1872, S. S. Gardner; 1879, Theo. Simmons, Sec.; 1844, X. X. Crum, Sec.;
1887, A. J. Begges, Sec.; 1893, A. J. Beggs; 1894, Geo. S. Russell; 1896, Samuel Mather ; 1897,
Geo. W. Kinney; 1898, Joseph Colwell; 1900, Thos. H. Wilson; 1901, H. C. Ellison; 1903, Geo.
A. Garretson ; 1904, Chas. A. Post; 1905, Demaline Leuty; 1906, F. A. Scott; 1907, Charles A.
Paine; 1909, Charles E. Farnsworth ; 1911, Stephen L. Pierce; 1912, Geo. A. Coulton ; 1914, J.
A. House; 1916, J. R. Kraus; and 1917-
Secretaries: 1848, Charles W. Coe; 1849, S. S. Coe; 1854, H. B. Tuttle; 1860, C. W. Coe; 1862,
H. B. Tuttle; 1864, Arthur H. Quinn; 1865, J. C. Sage; 1879, Theo. Simmons; 1884, X. X. Crum;
1887, A. J. Begges; 1893, Ryerson Ritchie; 1898, F. A. Scott; and 1905, Munson Havens.
The officers and directors of the Cleveland Chamber of Commerce for the term 1918-19 are as
follows: Myron T. Herrick, president; F. W. Ramsey, first vice president; Paul L. Feiss, second
vice president; F. H. Goff, treasurer ; Munson Havens, secretary ; E. E. Allyne, Amos N. Barron,
Alva Bradley, E. S. Burke, Jr., Alvah S. Chisholm, E. C. Henn, John G. Jennings, Arch C.
Klumph, J. R. Kraus, and Minot 0. Simons, directors ; Hoyt, Dustin, Kelley, McKeehan &
Andrews, legal counsel.
THE CHAMBER OF INDUSTRY
The Cleveland Chamber of Industry was incorporated on the twenty-eighth of January, 1907,
with the following charter members: Isaac P. Lamson, president of the Lamson & Sessions
Company ; the Hon. Paul Howland, attorney and congressman-elect; Chas. Rauch, president of
the Rauch & Lang Carriage Company ; William Grief, president of the Grief Bros. Company ;
the Hon. Thomas P. Schmidt, attorney and member of Ohio senate; the Hon. E. W. Doty, clerk of
Ohio house of representatives; George B. Koch, of Koch & Henke, furniture dealers; John
Meckes, dry goods merchant; A. F. Leo-
1907] - COMMERCE AND INDUSTRY - 711
pold, president of the Henry Leopold Furniture Company ; David McLean, president of the
Herrman-McLean Company ; John G. Jennings, treasurer of the Lamson & Sessions Company ;
the Rev. Dr. Francis T. Moran, pastor of St. Patrick's Church ; the Rev. Dan F. Bradley, pastor of
the Pilgrim Congregational Church; J. V. McGorray, sheriff; Herman C. Baehr, county recorder ;
E. Wiebenson, secretary of the United Banking and Savings Company; J. M. Curtiss, president of
the Curtiss-Ambler Realty Company ; E. E. Admire, president of the Metropolitan Business
College; Frank C. Case, vice-president of the Lamson & Sessions Company ; H. M. Farnsworth,
secretary of the Brooklyn Savings & Loan Company ; Chas. H. Miller, president of the
Champion Steel Range Company; G. A. Tinnerman, president of the Lorain Street Savings Bank
Company ; Henry Kiefer, secretary of the People's Savings Bank Company ; John M. Hirt,
secretary of the Lincoln Savings & Banking Company; J. M. Blatt, real estate dealer ; H.
Grombacher, secretary of the Ohio Savings & Loan Company ; John L. Stadler, president of the
J. L. & H. Stadler Fertilizer Company; F. V. Faulhaber, of the F. V. Haulhaber Insurance
Company ; E. L. Hessenmueller, attorney, etc.; and J. V. Chapek, of the Cuyahoga Abstract
Company.
This organization came into existence to foster and promote the general interests of the part of
the City of Cleveland that lies west of the Cuyahoga River. Ever since the days of Ohio City
there had remained a sort of Chinese Wall between the east and the west shores of the Cuyahoga
River and it was evident that this barrier should be broken down and a more cordial feeling
established if the city as a whole was to prosper as it should and especially the "West Side."
Public improvements west of the river had fallen behind those of the rest of the city and even
those that had been begun languished. Under these conditions the leading citizens of the West
Side recognized the necessity for combined effort to make their section of the city as desirable as
a place of residence and of business as was the East Side. With this as the master motive the
organization was formed and in a sane, but insistent manner set about its work. It has lived up to
the motto on its seal, "Industry, Progress, Achievement."
The Chamber has been fortunate in having for its officers and directors, men with broad and
progressive ideas. It has been animated with the constructive spirit, rather than with one of
carping criticism over conditions which were beyond the control of the various city
administrations. If a large improvement involving a
712 - CLEVELAND AND ITS ENVIRONS - [Chap. XXXV
great expenditure was needed, and a bond issue was proposed, the Chamber set about educating
the public and securing its cooperation and support. In this work, the Chamber found it very
important and useful to have an organ of publicity. From its incorporation, the Chamber has
issued a weekly newspaper, The Enterprise, which has become a power in the community and
promotes all of the best interests of the city.
The Chamber of Industry is truly democratic in its form of government and in its methods. Its
territory is divided into nine geographical districts, with two directors elected, one each year from
each district, and for a term of two years; i. e., nine new directors are elected each year. The
eighteen district directors elect one director-at-large. This form of government is perhaps unique
among civic bodies, but it prevents "the tail from wagging the dog" at any time. Officers are
elected by the board from their own number.
For three years, the organization maintained its offices and general headquarters on the fourth
floor of the United Banking & Savings Company's building, West Twenty-fifth Street and Lorain
Avenue. These were the acid test years. Many spasmodic "improvement" associations, leagues,
etc., had led the West Side public to look with distrust upon such efforts. However, never before
had so many influential business and industrial interests banded together for the general welfare
of all, rather than for the special purposes of the few. The organization began to achieve success
and its future was assured. Its membership was rapidly augmented by the best citizens and
expansion for the Chamber as well as the West Side was demanded. The completion of the
Carnegie West Branch of the public library gave the Chamber the opportunity to secure the
substantial building formerly occupied by the library on Franklin Avenue. This property was
purchased and altered to meet the requirements of the organization, the dedication taking place
on the twenty-fifth of October, 1910. Additions have since been made, giving today a complete
plant, consisting of ample room for the executive offices, an auditorium with a seating capacity
of 600, a stage well stocked with scenery, a large restaurant room and kitchens completely
equipped, a billiard room with seven tables, and an additional room containing four bowling
alleys. The Chamber occupies the entire building. The membership has grown to 1,200 and is of
the solid and enthusiastic character that counts when called upon to push.
While the membership is limited to residents of the West Side, the policy of the Chamber has
been to give its hearty support to all great city movements, and that aid is often asked. The
Chamber
1918] - COMMERCE AND INDUSTRY - 713
endeavors and succeeds in living up to its name, The Cleveland Chamber of Industry.
In a work of an historical character it is certainly proper to mention the presidents who have thus
far guided the organization. In chronological order they are : Thos. P. Schmidt, attorney ; Herman
C. Baehr, former mayor ; Capt. C. E. Benham, marine surveyor ; H. M. Farnsworth, attorney ; H.
E. Hackenberg, vice-president of the National Carbon Company ; E. A. Murphy, president of the
Cleveland Union Stock Yards ; F. D. Lawrence, auditor of the National Carbon Company ; C. J.
Neal, treasurer of the Neal Fireproof Storage Company ; L. Q. Rawson, attorney ; M. F. Fisher,
president of the Fisher Bros., grocers. Mr. A. E. Hyre, whose energy brought about the
incorporation of the Chamber, has annually been elected its secretary and still enjoys the usufruct
of that position.
The present officers (1918) are : President, Henry G. Schaefer, vice-president of the Gustav
Schaefer Wagon Company ; Vice-presidents, John H. Cox, attorney, and M. F. Bramley,
president of the Cleveland Trinidad Paving Company ; Treasurer, Chas. L. Wasmer, president of
the Cleveland Wrought Products Company ; Secretary, Alonzo E. Hyre. The Directors are W. C.
Astrup, W. R. Coates, F. M. Farnsworth, W. H. Fay, Geo. F. Hart, R. C. Heil, Wm. Hughes, F. T.
Kedslie, Chas. W. Lapp, Louis Meier, Wm. L. Meyer, Bernard Miller, Jas. T. Miskell, Dr. Jno.
Neuberger, and Henry Waibel.
The things accomplished by the Chamber of Industry range from the simplest affairs of every day
civic housekeeping to great bridge projects involving millions of dollars. Among the more
important and outstanding achievements may be mentioned the Detroit-Superior high level brige,
the Denison-Harvard bridge, the Brooklyn-Brighton bridge, the Lorain-Huron high level bridge;
the Clark Avenue bridge; the 'West Sixty-fifth Street extension and the street car belt line; the
removal of the Lake Avenue "Double Tunnels," the Bulkley and the West boulevards ; the
encircling county boulevard ; the completion of the monumental West Side market house ; three
large industrial expositions ; the increase of fire and police protection; the elimination of grade
crossings ; the extension of street railway lines; an improved mail delivery and collection ; the
West Technical high school and athletic field ; the completion of branch library buildings ; with
better paved and lighted streets, etc., etc. The work of the Chamber is carried on by committees,
regular and special, the labors of which are never ceasing ; results follow.
Finally, while concrete achievements of great value and benefit
714 - CLEVELAND AND ITS ENVIRONS - [Chap. XXXV
may be "pointed to with pride," the greatest and most valuable result of the life and labors of the
Chamber has been the arousing of the proper civic and unselfish spirit of the people, a spirit
democratic in the wide scope of its sympathies and cooperation for whatever goes to make a
bigger, better and brighter city for the comfort, convenience and progress of its inhabitants.
THE STANDARD OIL COMPANY
By P. C. Boyle, Editor of the Oil City (Penna.) Derrick
The Standard Oil Company was incorporated in January, 1870, with $1,000,000 capital. Mr. John
D. Rockefeller, the leading spirit in the interests comprising the corporation, was elected its
president. This was the parent corporation, and the nucleus of the vast aggregation of interests
and capital known as the Standard Oil Company.
At the time of its incorporation, the Standard was the largest single manufacturing concern in the
oil business. Its trade position naturally was a leading one. Before any consolidations had taken
place, its capital was increased to $3,500,000. From its beginning, the Standard was an industrial
leader. Its corporate form of organization was made necessary by a rapidly developing
world-wide trade. A manufacturing corporation from the outstart, it soon became necessary to
create ways and to provide means for the prosecution of its large business. The sale and
distribution of its products involved transportation, and called for facilities of a nature unknown
to commerce. These in due course were devised and provided.
The production of crude petroleum by artesian process began in 1859. In the following year, Mr.
John D. Rockefeller made his first investment in oil. By 1862 he was trading under the firm name
of Rockefeller & Andrews. In 1865 the firm was expanded by the accession of Mr. William
Rockefeller. A connecting house in New York being desirable, it was established, and Mr.
William Rockefeller was placed in charge. The Standard by this step was the first among the
western refiners to locate permanently in New York.
Success crowned the efforts of the young firm. To secure additional capital, in 1867 Mr. S. V.
Harkness and Mr. H. M. Flagler were admitted as partners, and the firm style became
Rockefeller, Andrews and Flagler. Mr. Flagler proved to be a fortunate acquisition, not only to
his firm, but to the trade at large. For the rapid and wide expansion of the oil trade much is due to
Mr. Flagler. The growing demands of the firm's business making additional capital
716 - CLEVELAND AND ITS ENVIRONS - [Chap. XXXV
imperative, having reached the reasonable limit for safety of a business conducted as a
partnership, it was decided as the next step to incorporate. The large profits secured by refineries
in the early days of the industry attracted capital and stimulated enterprise. Oil commanded high
prices, and the business as a whole was prosperous and profitable even as then conducted by
wasteful methods.
But overproduction was slowly yet surely reducing the value of the crude oil at the wells, and a
refining capacity had grown three times as great as was necessary to supply the demand. Ruinous
competition was depressing refiners' profits to the vanishing point. The railroads were competing
sharply for the oil trade without profit. This was the condition in 1872, soon after the Standard
was incorporated. The situation was one demanding immediate relief. In its extremity, the
industry sought relief through combinations to effect economies and to place the trade on a
paying basis. Producers had considered the desirability of a combination to restrain the output to
regulate prices. Pipe lines on the verge of bankruptcy were casting about for some form of
combination that would' stop rate cutting and rebates, which had proved destructive to profit.
Refiners were entering combinations to regulate the trade. Railroads were seeking means for an
agreement upon a division of the freight on a basis that left some profit to the carrier for the
service.
Previous to the reorganization of the industry in the later '70s, the Rockefeller interest was
confined to manufacturing. Necessities forced it into other branches of the business, such as the
operation of pipe lines and steamships. The ownership of oil wells followed in due course of
time.
When the Standard Oil Trust was formed in 1882, forty persons had associated themselves as
stockholders in fifteen corporations, besides holding stock in a number of others. They were the
men who, through their individual enterprise, had come to the front by sheer merit in the vast
body of those who had engaged in the industry.
The actual cost of refining was reduced from 1872 to 1892, about sixty-six per cent. "This has
been accomplished," said Mr. S. C. T. Dodd, "partly by the discovery and use of better processes
and better machinery, partly by the elimination of the waste once incident to the business, and
partly by the refiners manufacturing for their own purposes, and cheapening the cost of the
materials used in manufacturing oils."
When the Standard Oil Trust was formed in 1882 it was capitalized at $70,000,000. Later the
capital was increased to $95,000,000, and within seven or eight years the trust came into
possession of the
1870-92] - COMMERCE AND INDUSTRY - 717
companies controlling the greater part of the petroleum refining business in the United States.
In March, 1892, the supreme court of the state of Ohio decided that the Standard Oil Trust was
illegal, and it was dissolved, the business being conducted by the separate companies that had
composed the trust.
From 1870 to 1880 was the period of regulation and combination, and bringing of the chaotic
conditions which surrounded the oil industry into something systematic. It required an immense
amount of detail work to accomplish this. The pipe lines which took the crude petroleum from
the tanks of the producers had different systems and different methods; producers were not
satisfied that they received all they should, and refiners were not always satisfied with the
condition of the oil when it was received. It might contain residuum, or part of the run might be
water.
There was then no way of safeguarding oil in transit. When the oil reached the pipe lines a record
was made at once. But when the oil was transported by teams it was possible by collusion for a
dishonest teamster to appropriate by wagonloads. With the crude system of checks and balances
it was not possible to keep track of the oil, as a single shipper might have scores of teams on the
road at one time. If there was a shortage, it was supposed the team had not yet reached its
destination. The quotation of the dump men not infrequently
718 - CLEVELAND AND ITS ENVIRONS - [Chap. XXXV
made the market, precisely as the speculative operations of the brokers subsequently made prices
in the oil exchange. When the seller was in doubt about values and the buyer unwilling to
enlighten him by naming a price, the nearest "dump" man was appealed to, and his quotation
made a price governing the transaction. The same process was repeated again and again in the
course of a business day. The purchasing agents of the refiners were migratory. They would meet
on the cars or in hotel lobbies and discuss trade conditions.
That out of all this a system was finally developed which has stood the test of time and been
adopted in the oil fields over the whole world, is a credit to John D. Rockefeller and his
associates. Confidence was restored in pipe line certificates, and they were accepted at their
market value by the banks, and were available for collateral. This assured the producers that they
were being given a square deal by the pipe line transportation system, and they soon became
content to accept the statements as shown on the books of the pipe lines.
It has always been the claim of the Standard that it has spared no expense in securing the best
results in the conduct of its business. The elements of economy that have entered into the
production, transportation and marketing of petroleum and its products are numerous. Sufficient
skill and capital to develop new markets, and to adopt any form of improvement in manufacture
and transportation in serving the trade, are among the chief factors in securing and maintaining a
steady market for petroleum. A steady market has encouraged the production of crude oil on a
basis of a fair return on the capital invested. The thousands of producers need only raise their oil
to the earth's surface to sell it at a remunerative price at the tanks into which they pump it. From
that moment until it is delivered at the door of the consumers all over the world, the most
economical methods are used in its handling.
The Standard Oil Company has not claimed any exclusive credit as an inventor of devices for
cheapening the processes incident to its business, but it has fostered inventive genius by adopting
any device that involved an element of economy or an improvement of commercial value. Above
all, it has placed oil at the door of all the inhabitants of the globe, and made it so cheap that few
are unable to purchase it. Others might have done the same thing, but others did not do it. So
world-wide an industrial organization had never before been formed. The best evidence that it
has served the public well is the volume of its business. It has won its way to its present trade
position because of the quality and price of its product. The worth of its methods is attested by
the fact that its opponents have aban -
1870-1900] - COMMERCE AND INDUSTRY - 719
doned their former business ideas and, as far as possible, have faithfully copied the organization
and distributing system of the Standard.
In this connection, the words of John D. Rockefeller in the Report of the Industrial Commission.
(1900, vol. 1, p. 796), are illuminating as revealing the idea which was uppermost in the mind of
the founder of the Standard Oil Company. He said :
I ascribe the success of the Standard to its consistent policy to make the volume of the business
large through the merits and the cheapness of its products. It has spared no expense in finding,
securing and utilizing the best and cheapest methods of manufacture. It has sought for the best
superintendents and workmen and paid the best wages. It has not hesitated to sacrifice old
machinery and old plants for new and better ones. It has placed its manufactories at the points
where they could supply markets at the least expense. It has not only sought markets for its
principal products, but for all possible by-products, sparing no expense in introducing them to the
public. It has not hesitated to invest millions of dollars in methods for cheapening the gathering
and distribution of oils by pipe lines, special cars, tank steamers and tank wagons. It has erected
tank stations at every important railroad station, to cheapen the storage and delivery of its
products. It has spared no expense in forcing its products into the markets of the world among
people civilized and uncivilized. It has had faith in American oil, and has brought together
millions of money for the purpose of making it what it is, and holding its market against the
competition of Russia and all the many countries which are producers of oil, and competitors
against American Oil.
When at times the overproduction of crude petroleum caused prices to decline until they reached
a very low figure, the producers attempted to regulate the supply by shutting down pumping
wells and stopping the drill. The first of these was in 1862. This was followed by another in
1866. Neither of these was successful. In 1872 the producers agitated a suspension of operations,
and this had some slight effect, but in 1873 flowing wells had so reduced the price that small
wells were abandoned. In 1874 a local shut-down originated in Clarion County, but the region at
large did not join. In 1876 a plan for pooling surplus oil was started, but this failed because
conditions improved so rapidly that the price reached $4 by the end of the year. This advance
caused such rapid development that again the market was flooded and the price dropped. In
1877-1879 the Producers' Protective Union was started, and maintained its efforts to control the
output for two years. Similar movements occurred in 1881-82 and 1884, but were only partially
successful. Then came the shut-down of 1887, the most successful movement of the kind
undertaken in the oil regions, yet it failed to realize the expectations of the producers. Natural
causes
720 - CLEVELAND AND ITS ENVIRONS - [Chap. XXXV
contributed to that failure, such as flowing wells and the uncontrollable energy of the producers.
This movement was assisted by the Standard Oil Company, which, at the request of a committee
of the producers, set aside 6,000,000 barrels of crude oil at 62 cents a barrel, to be sold at the
highest prices to result from the shut-down, and the proceeds to go for the benefit of the
producers, drillers, pumpers and others who became idle as a result of the shutting down of the
wells. The first contract, on November 1, 1887, between the producers' committee and the
Standard, called for 5,000,000 barrels, of which the profits on 4,000,000 barrels were to go to the
producers; the profits on 1,000,000 barrels were to be distributed to the drillers, pumpers, etc.
Later the Standard agreed to set aside an additional 1,000,000 barrels for the workers.
The action of the producers in bringing about a shut-down indicated their realization of the fact
that the price of oil was dependent upon the law of supply and demand. Their action did increase
the price from 62 cents when they signed the contract to 90% cents. At the same time the
Standard; in providing a cheap distribution of oil throughout the world, made possible the
disposition of the enormous production, and prevented it from being clogged in the oil region and
disorganizing the market. It was in 1888 that the Standard Oil Company first began to purchase
oil properties, as it found the producers were inclined to deny the company the petroleum
necessary for their refineries.
The shut-down movement of 1887 was largely instrumental in showing that the speculation on
the oil exchanges was detrimental to the producer. This speculation was opposed by the Standard
and by the large body of producers who desired good prices for their product, and were
embarrassed by the speculative movements. The Standard found it necessary to protect itself
from the manipulations of the market, and on January 22, 1895, there was posted in the various
offices of the Seep Purchasing Agency throughout the oil region the following notice :
The small amount of dealings in certificate oil on the exchanges renders the transactions there no
longer a reliable indication of the value of the product. This necessitates a change in my custom
of buying credit balances. Hereafter in all such purchases the price paid will be as high as the
markets of the world will justify, but will not necessarily be the price bid on the exchange for
certificate oil. Daily quotations will be furnished from this office.—Joseph Seep.
This closed the exchanges within a few months, and there came a more healthy condition for the
trade, to the advantage of both the
1870-1918] - COMMERCE AND INDUSTRY - 721
producers who were interested in securing a stable price and to the refiners who had the same
purpose in view.
Previous to 1889, the Standard's interest in the production of crude oil was small. When it was
decided to extend its activities to production, that branch of the industry had been long suffering
from low prices, extending practically from 1872. The depression had been relieved temporarily
in 1876, when prices recovered, only to resume a downward course at the close of that year, and
go lower for than ever before. The depression continued with little variation for twenty years. It
was the result of increasing activities on the part of the producers, diligently maintained
throughout the long period, and the successive discoveries of new fields of supply, while the
older fields, still productive, were far from being exhausted. These conditions culminated in the
discovery in 1891 of the rich McDonald pool, which added for a limited period 80,000 barrels
daily to a production already unwieldy and topheavy. The operations of the Standard being small,
were without special bearing on values, and prices being fixed by open transactions in the oil
exchanges, it was without influence on the market.
In 1890, the Standard produced 24.44 per cent and, in 1894, 28 2.1 per cent of all the crude
petroleum of Pennsylvania and Ohio. Its production in 1890 was chiefly in Ohio, although in
1894 it was about the same in Ohio and Pennsylvania.
Vol. I-46
722 - CLEVELAND AND ITS ENVIRONS - [Chap. XXXV
From the time the Standard acquired a considerable interest in production territory the tendency
of prices was downward. In 1889 the average price of Pennsylvania oil was 94 cents per barrel.
The Standard's interest in oil was then insignificant. In 1890, when it produced 8.71 per cent of
the oil of Pennsylvania grade, the price went to 87 cents. In 1891 its interest had increased to
13.74 per cent and the average price fell to 67 cents. The year following it went down to 56 cents.
In 1895 its interest was 21.45 per cent of the Pennsylvania production, yet oil maintained an
average price of but 64 cents. In 1894 the Standard's production was 23.49 per cent, and the price
was 84 cents. These were lower average prices than in the preceding five years.
In 1894, the petroleum production of the United States was 49,344,516 barrels. In 1916 it was
302,000,000 barrels, and in 1917 it will exceed that figure and probably reach over 320,000,000
barrels. These figures show a remarkable growth of the producing industry; one which can hardly
be appreciated, since the amounts are so large and beyond the grasp of the ordinary human mind.
A better idea can be obtained by saying that from less than a million barrels a week in 1894, the
output has reached nearly a million barrels a day, or that for each one barrel brought to the
surface in 1894 there are now seven barrels recovered. It must be evident, therefore, that the
refining, transporting and marketing facilities must have also been increased more than seven
times, since they have had to care for the surplus of 1894, as well as the increased production.
This has been accomplished through following the system inaugurated by the Standard at its
inception, a system which has been imitated by all its competitors. The Standard carried into the
producing branch of the industry the same careful attention to details that it applied to the other
branches. It entered new fields, and followed the trend of production towards the West, until it
reached the Pacific. And in each field it took its part in adding to the world's supply. At the same
time it was extending the markets for petroleum products everywhere over the globe. But for the
Standard's persistent development of fresh territories for consumption, the energy of the
producers would have swamped the market again and again with crude oil. The low prices which
followed the opening of gusher fields helped to enlarge the market for the refined products, and
to this the Standard contributed by having agents in all parts of the world.
The same energy, the same carefully considered system that established the great corporation and
made it the wonder of the business world, is still maintained. Its methods are praised by others
through
1825] - COMMERCE AND INDUSTRY - 723
their imitation of them, and its conservative yet energetic business policy shows no change
except such as is called for by the increasing demands of the business.
THE CANAL PERIOD IN CLEVELAND'S HISTORY
By John A. Album,
Formerly Attorney for the Public Works of Ohio
While it seems preposterous today to suggest that the great City of Cleveland has been aided in
its growth and development by the old canals constructed by the State of Ohio about a century
ago, an investigation into the history of our city and state will convince us that Cleveland owes
much to this ancient mode of transportation, which was of vital importance to our community
during the first half of the last century.
When we recall that in 1825, when the building of canals was undertaken in Ohio, the total real
estate of Ohio amounted to only $45,000,000 and the total personal property to less than
$14,000,000, while almost $16,000,000 was spent by the state upon the construction of the Ohio
Canal and the Miami and Erie Canal, we can appreciate the relatively tremendous undertaking in
those early days of small things when canal transportation at three to four miles an hour was the
predecessor of the great railway transportation systems which have, since 1850, succeeded the
older and slower modes of transportation.
When Ohio was admitted to the Union, she had a population of only 50,000, widely scattered and
almost without means of communication. Agriculture was the main and practically the sole
occupation, but access to markets was so difficult that farm products were necessarily consumed
locally and, for like reasons, few products of manufacture were sold to our people. As late as
1820, Cincinnati, Ohio's largest city, contained 9,642 inhabitants, while the population of
Cleveland in 1820 was only 606. Cleveland's rapid growth from 1830 to 1860, was due in a great
measure to its being the terminus of the Ohio Canal.
The attention of Ohio people was first called to the matter of canals by the creation of the Erie
Canal Commission in New York in 1810, with DeWitt Clinton at its head. New York attempted
to procure federal aid for the construction of the Erie Canal. Failing in this, she sought
co-operation from Ohio and Ohio thus became interested in a public way in this question. While
Ohio urged federal
724 - CLEVELAND AND ITS ENVIRONS - [Chap. XXXV
aid to New York as to the Erie Canal, she soon came to the conclusion that Ohio as well as New
York needed better means of transportation ; and, after the completion of the Erie Canal,
legislation began to take form in Ohio, resulting in the passing of an act of the legislature in
February, 1825, committing the state to the construction of canals.
The reasons why Ohio entered upon this great enterprise, in view of her small wealth and
population, were many. Ohio was logically situated for better means of transportation than oxen
and teams of horses. Many canal routes were available. Land was cheap, much of it worth only
$1 per acre. The Federal government was generous with its donations of hundreds of thousands
of acres for such purposes. On the other hand, roads were poor and infrequent, railroads and
steam locomotives undreamed of. The cost of transporting crops or products of manufacture was
so great as to be prohibitive. For example, it cost $3 to haul a cord of wood twenty miles and $5
to transport a barrel of flour 150 miles, and other costs were in proportion. The only important
market for Ohio products at this time was New Orleans and by the time our products reached this
market, prices for such products were so reduced as to make their sale unprofitable. In view of
this and other conditions, we can readily see why the people of Ohio in these pioneer days were
so intent upon, creating arteries of communication which would develop the agriculture and
commerce of our people locally, and also give them access to the eastern markets and the
benefits to be derived from the products of the eastern states. With these ideas in view, the
construction of the Ohio Canal, extending from Cleveland, through what is now Akron (a city
that was founded by the laborers on this canal), thence through Newark to Columbus, and down
the Scioto River to Portsmouth, was begun in 1825. Two years later the northern section of this
canal from Cleveland to Akron was completed and the first canal boat arrived in Cleveland from
Akron on the fourth of July, 1827. How important this event was to our early citizens is set out in
a description of the event in Governor Trumbell's message to the general assembly the following
December, when he states that his boat "was cheered in her passage by thousands of our
delighted fellow-citizens who had assembled from the adjacent country at different points on the
Canal to witness the novel and interesting sight."
In 1833, 400 miles of the Ohio Canal, including its branches, had been completed and it was not
long after that date when the Ohio Canal had a length of over 500 miles and it was possible to
navigate it from Cleveland to Columbus and Portsmouth.
1827-1850] - COMMERCE AND INDUSTRY - 725
After the construction of the Ohio Canal was well under way, the state began at Cincinnati to
construct the Miami and Erie Canal through Dayton to Toledo ; this canal was later built to a
length of 300 miles, while, during the same period of canal development, about 200 miles of
private canals were constructed in Ohio.
The net receipts above expenditures from the Ohio canals from tolls, which were relatively small,
rose from $800 in 1828 to $227,000 in 1838, and to a half-million dollars in 1848; these figures
reflect the general growth and development of the state along its canal systems. By 1850,
however, the competition of the railroads began to be felt and, in 1856, for the first time since the
construction of the canals, the receipts fell below the expenditures. At the time of the civil war,
the competition of the railroads had become so great and the state had become so intensely
interested in the prosecution of the war, that lack of public confidence in the canals caused the
leasing of them to private parties for a period of ten years, which lease was subsequently
renewed. The lessees, operating the canal solely for private profit, failed to maintain their
efficiency, and abandoned their lease about the year 1877, at which time the state took back the
canals in a dilapidated condition, in which they continued until 1904, when a great public
movement resulted in the appropriation of large sums of money to rebuild the Ohio and the
Miami and Erie canals. After the expenditure of several million dollars upon this work and at a
time when both canals were nearly ready for navigation, political issues, railroad competition,
and other causes resulted in preventing their completion in such a way that canal boats could be
operated upon them or the public could feel justified in building canal boats and making business
arrangements for their operation. The question before the state during the past few years with
reference to the canals has been whether the canals should be completed for navigation purposes,
or whether the canal system should be maintained for the purpose of providing water facilities for
mills and manufacturers, or whether canal lands, with the exception of the reservoirs, which are
now used as public parks, should be abandoned and sold.
Coming now to some of the more important influences of these canals upon the City of
Cleveland, we should consider first the general benefits to the state, which were shared in a large
measure by the City of Cleveland. The state gained in the first instance by the energy and
enterprise required in the construction and management of a transportation system of such
relative importance, compared with the other property of the state. The state gained further in the
abolishment of sectional feeling and in the more frequent exchange of
726 - CLEVELAND AND ITS ENVIRONS - [Chap. XXXV
products and ideas, by reason of the increased transportation facilities. Whereas it had been
impossible for Ohio to exchange its agricultural products for the products of other states, this
exchange readily increased upon the development of the canal system, and Ohio benefited in this
increase in a financial way, because its people were enabled to receive larger net prices for their
products, and, on the other hand, to buy products of other states, at much less than their previous
cost. This resulted in stimulating local industry, raising the value of Ohio real estate, and making
Ohio more desirable for settlement. Such influences to some extent were responsible for the
growth of population in Ohio from 900,000 in 1830 to 1,500,000 in 1840, and to 2,000,000 in
1850, during the period of greatest canal activity. During a like period, from 1826 to 1859, the
real estate of thirty-seven canal counties in Ohio increased in value from $25,000,000 to
$350,000,000. That a large part of this increase in wealth and population was due to the canals is
indicated by the fact that, during the canal period, hundreds of flour mills were erected along the
canals, that canal water and water power were used by hundreds of small manufacturing plants,
that such canal cities as Cleveland, Akron, Dayton, Columbus, Toledo and Cincinnati increased
in wealth and population far in excess of other cities of the state, and that the beginnings of these
cities, as centers of importance, are largely due to the influence of the canals in making such
cities terminals for the receipt and shipment of the various products of the farm on the one hand
and the manufacturing and mining industries on the other.
With more particular reference to our city, we find that Cleveland was the most favorably located
of all the cities on the canal system, with the possible exception of Cincinnati, which was at the
southern terminus of the Miami and Erie Canal and an important transhipment city with
reference to Ohio River navigation. Cleveland, on the other hand, was the most important city
upon the Ohio Canal, which extended for over 500 miles through the state; that terminus of the
Ohio Canal, at a point in the Cuyahoga River only a few feet from the site of the Superior
Avenue viaduct, was exceedingly advantageous in connection with lake transportation and
transportation facilities by the Erie Canal to New York City. No little of Cleveland's growth in
population from 1830 to 1850 was due to the facilities afforded Cleveland as an important
transportation terminal connected with the canal system. Cleveland derived considerable revenue
as a place for the interchange of products of the farm, the mine, and the factory. Further than this,
the accessibility of Cleveland to the agricultural and mining districts of Ohio, as well as to the
1850-79] - COMMERCE AND INDUSTRY - 727
manufacturing sections of other states, made it a favorable city in which both products for home
consumption could be had at reasonable prices as compared with other localities, and these
advantages had much weight in increasing the industrial growth of the city.
Among the products arriving in Cleveland via the canal as early as 1833, were 387,000 bushels
of wheat, 75,000 bushels of corn, 49,000 bushels of coal, 98,000 barrels of flour and 23,000
barrels of pork. On the other hand, there were shipped from Cleveland on the canal, in the same
year, 28,000 barrels of salt and 10,000,000 pounds of merchandise. In later years, the shipments
to Cleveland rose as high as 3,000,000 bushels of wheat, 1,500,000 bushels of corn, 4,000,000
bushels of coal, 750,000,000 barrels of flour, and 50,000 barrels of pork, while the exports of salt
in 1839 amounted to 110,000 barrels.
It is interesting to note that in the period from 1833 to 1860, Cleveland received by canal forty
times as much wheat as Cincinnati and shipped more than twice as much merchandise, whereas,
Cincinnati far outdistanced Cleveland in the number of barrels of whiskey received.
After the decadence of the canal systems, Cleveland received a railroad, largely by the reason of
the abandonment of a part of the Ohio Canal extending from the Superior Avenue viaduct about
three miles up the right bank of the Cuyahoga River. This part of the canal was deeded to the
City of Cleveland for certain purposes and was, in 1879, leased by the city to the Valley Railway
Company, later the Cleveland Terminal and Valley Railway Company ; this railway property is
now a part of the Baltimore and Ohio system.
Whatever the future may be as to the Ohio Canal, whether it shall be abandoned, or sold, or
transformed into a deeper canal, we may rest assured that Cleveland owes many of its beginnings
and much of its strength to the various influences of this old canal system, which laid the
foundations of her commercial and industrial supremacy.