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How John D. Rockefeller dominated the Oil Industry for 50 years


6.6 Price policy

.the quality of the Standard Oil's operations and its efficient methods to get the lowest price from its suppliers and from the railroads made it the lowest cost refiner in the world. This allowed the company to launch a price war on a given market (a city or a whole region) to wipe out all the competitors.

The Standard thus regularly lowered its prices in a given area to eradicate a smaller competitor, who could not resist selling at loss for long enough.

But if this strategy was often used, globally the idea was to maintain price as high as possible to insure a steady, high profit, but not too high.  As already mentioned, too high prices would have attracted new competitors, and  prices fluctuating with crude oil production would have attracted the general public's attention on what made the price what it was.

Rockefeller the control freak

The following legend was to be heard among the men of the Standard Oil : Rockefeller, who started as an accountant is supposed to have sent the following memo to the manager of one of his barrel factories :

« Last month you reported on hand, 1119 bungs. 1o,ooo were sent you beginning this month. You have used 9,527 this month. You report 1092 on hand. What has become of the other 500?»

(a bung is a little cork used to close barrels)

6.7 Other methods

Sabotage was sometimes used, as for example in 1887, when the Standard Oil paid a mechanic working for the Vacuum Oil Company in Buffalo to tamper the still so as to make it explode.

In the fight against  independents pipelines, armed men defended land bought par Rockefeller on the planned way of the pipelines.

Numerous examples of bribery of judges and politicians are also known.

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