New York, Lower Manhattan.
Felix was sitting inside a club box.
Around him sat several nervous-looking men.
They were the foremen who controlled the wagon transportation in the Oil Creek area.
"Mr. Argyle."
The leader, a man named MacGregor, was the owner of the largest wagon company in Titusville.
"We... we've heard about your rules." MacGregor's voice was tense.
"You plan to lay pipes in Oil Creek. All the drillers are preparing to pour oil into your pipes. Our wagons have been running empty for a week now."
"That's business, Mr. MacGregor."
Felix leaned back in his chair, his fingers gently tapping the table.
"Pipeline freight is five cents per barrel. Your wagons charge three dollars. If it were you, which would you choose?"
Another representative couldn't help but exclaim, "But you're destroying our livelihood! Those thousands of drivers will..."
"Will what?"
The figure standing in the shadows took a step forward, placing a hand on the gun handle.
The representative immediately shut his mouth, cold sweat breaking out on his forehead.
He had heard about the incident in Nebraska.
"Don't be nervous."
Felix waved his hand, signaling the figure to step back.
"I invited you here today to offer you a way out."
"A way out?" MacGregor looked up.
Felix pointed to the map.
"My pipeline can only reach the railway transfer station, but there is still some distance from the wellhead to the pipeline station. Furthermore, the pipes haven't been laid yet for some remote wells."
"Therefore, people are needed to collect that scattered oil," Felix said. "I plan to establish a transportation company and acquire all your wagons and barges."
"Acquire?"
"Correct." Felix named his price.
"At the current market price. Furthermore, all the drivers can stay and continue working. However, from now on, you will only transport goods for Standard Oil and receive wages from me."
The representatives exchanged glances.
This was a transaction, but also an annexation.
"What if we... don't sell?" MacGregor asked tentatively.
"That's fine too." Felix smiled and picked up his wine glass.
"However, I must warn you. Next month, my railway spur line will extend to the center of the oil field. By then, not only the pipelines, but also the trains, will drive directly beneath the derricks."
"At that time, your wagons will be too cumbersome even to use as firewood."
The room fell into dead silence.
This was a naked threat, but also the coldest reality. When the wheels of industry rolled over, manual laborers had no power to resist.
"We... will sell." MacGregor finally lowered his head. "But you must guarantee that no one will be laid off."
"As long as they follow the rules, don't steal oil, and don't cause trouble," Felix nodded, "I guarantee you'll have food."
...After sending off the dejected transporters, the side door of the room opened.
Peter Jenkins and Caleb walked in.
"Boss, is it settled?" Jenkins asked.
He was now the General Manager of Standard Oil, possessing a more refined demeanor.
"Settled." Felix took a sip of wine.
"This is the first step. Only by controlling the capillaries can we control the main arteries."
"What about the main arteries?" Caleb asked, referring to the railways.
"Call Scott in," Felix instructed.
A moment later, a well-dressed middle-aged man entered the private room. Tom Scott, the First Vice President of the Pennsylvania Railroad Company, and the actual operator under Becker's name.
Unlike the panic of the wagon drivers earlier, Scott respectfully took off his hat and bowed the moment he entered.
He knew very well that the young man before him was not just the owner of Standard Oil, but the absolute master holding a 52% stake in the Pennsylvania Railroad Company.
"Boss." Scott stood by the table. "Chairman Becker said you have new instructions."
"Sit, Tom." Felix pointed to a chair, his tone casual.
"Have you prepared the transportation plan I asked for?"
"Yes, it's ready."
Scott took a document from his briefcase.
"To accommodate Standard Oil's production capacity, we have added fifty specialized tank cars to the Oil Creek spur line. As long as your refinery is operating, we guarantee the ability to transport five thousand barrels daily."
"Not capacity, I'm talking about freight rates."
"Freight rates?" Scott paused.
"According to company regulations, major customers can enjoy a maximum discount of twenty percent. If you feel that's insufficient, I can apply to the board of directors..."
"No, Tom. You misunderstand me." Felix interrupted him, his voice deepening. "This isn't just about discounts."
He walked up to the map, his finger tracing the railway line running from Pennsylvania to New York.
"The Railway Company is mine, and Standard Oil is also mine," Felix said slowly. "Moving money from my left pocket to my right pocket is meaningless."
"I intend to use this railway to kill my competitors."
Scott's heart suddenly pounded.
"Boss, are you implying..."
"I am going to establish a new rule."
Felix turned around, a cold glint flashing in his eyes.
"Starting next month, the publicly announced oil freight rate for the Pennsylvania Railroad will double per barrel."
"Raise the price?" Scott was startled. "The other refineries will go crazy! They'll use the Erie Canal or approach Vanderbilt's New York Central Railroad!"
"They won't be able to." Felix sneered.
"The Erie Canal freezes in winter, and as for Vanderbilt... I will go talk to him. But before that, I need you to implement a secret agreement within the Pennsylvania Railroad."
"What agreement?"
"South Improvement Company." Felix uttered the name. "Standard Oil will be the sole shareholder of this company."
"First, although the freight rate paid by Standard Oil to the Pennsylvania Railroad has nominally increased the same as for everyone else, you must secretly return fifty percent of it in the form of a 'rebate'."
Scott swallowed hard.
While this was common in the railway industry, a fifty percent rate was practically unheard of.
"Second..."
Felix held up a second finger; this was the real killer move.
"All other oil transporters—that is, the independent refineries and drilling companies—must pay the doubled freight rate in full."
"Furthermore, fifty percent of that high freight payment they make must be secretly transferred to Standard Oil as a 'drawback'."
The room instantly became so quiet that you could hear a pin drop.
Scott's eyes widened, his face filled with disbelief.
This was no longer commercial competition.
This was... this was bloodsucking.
This meant that for every barrel of oil Felix's competitors shipped, they not only had to pay a high price but also hand over half of that money to Felix, their sworn enemy.
This was equivalent to using the competitors' money to subsidize Standard Oil, helping Standard Oil eliminate them.
"Boss..."
Scott wiped the cold sweat from his forehead, his voice slightly hoarse.
"This is too... ruthless. If this gets out, the oil merchants in Pennsylvania will riot. Even the state legislature..."
"You are my Vice President, Tom."
Felix looked at him, his tone calm yet full of pressure.
"I am not negotiating with you. I am telling you what to do."
"As for rioting?" Felix smiled.
"Let them cause trouble. Once they go bankrupt, they will naturally quiet down."
"Also, in exchange, Standard Oil commits to guaranteeing a minimum daily shipment of two thousand barrels, all transported via the Pennsylvania Railroad. This will ensure your rail cars are never empty. This represents stable income for the Railway Company's reports. The other directors won't object."
Scott looked at the young Boss before him, a deep sense of awe rising in his heart.
He finally understood why even a figure like Thomson had been defeated by this man.
It wasn't just capital.
It was also the complete disregard and reshaping of the rules.
"I understand, Boss." Scott lowered his head. "I will arrange it immediately. I will set up a dedicated secret account to handle this drawback."
Felix nodded in satisfaction... After Scott left, Caleb, who had remained silent, couldn't help but speak.
"Boss, this move is brilliant. If those independent refineries don't join us, their freight costs will be more than double ours. Every barrel of oil they sell will be earning money for us."
"This is the art of monopoly, Caleb," Felix said flatly.
"Once this agreement goes into effect, those thousands of small refineries will die off one by one."
"At that time, you just need to take your checkbook and collect their corpses."
"At scrap metal prices."
Jenkins pushed up his glasses, a hint of fanaticism flashing in his eyes.
"I will prepare the acquisition contracts, Boss."
Titusville, Pennsylvania.
MacGregor, the owner of Titusville's largest cartage company, was now a regional manager for Standard Transport Company.
He stood in the muddy freight yard, watching his drivers laboriously load heavy oak barrels of oil onto the carts.
Although his fleet had been bought by that New Yorker, life didn't seem to have gotten any easier.
"Hurry up!" MacGregor roared.
"The train won't wait. If we miss the Pennsylvania Railroad Company's afternoon train, this oil will have to sit out overnight. If that damned inspector says the barrels are leaking, we'll all lose pay!"
A young driver wiped the oil and mud from his face.
"Boss, I heard the freight rates on the railway are going up again? Those independent drillers are complaining bitterly."
"Shut up and do your job." MacGregor glared at him.
"Whether the freight rates rise or not is none of our concern. We work for Mr. Argyle now."
The convoy struggled forward on the muddy road, the wheels crushing the mire, making squelching sounds.
A few miles away, Oil Creek Railway Transfer Station.
This was the choke point of the entire oil field.
Dozens of simple railway spurs converged here, and massive crude oil storage tanks stood beside the tracks like silent guards.
Charlie Happ, an independent driller who had been extracting oil in this valley for three years, was furiously slapping the dispatch office window.
"Two dollars?!"
Happ's roar caused the surrounding oil merchants waiting for shipment to turn their heads.
"This is robbery! It was one dollar a barrel last month. Why did it suddenly double?"
Behind the window, the Pennsylvania Railroad Company dispatcher emotionlessly organized the manifests.
"This is an order from the head office, Mr. Happ."
"Effective June 1st, the crude oil shipping rate for all non-agreement customers has been uniformly adjusted to two dollars per barrel. If you find it expensive, you can use the waterway or hire your own carts to haul it to Cleveland."
"Waterway?" Happ's face turned red with anger.
"It's the dry season now; barges on the Erie Canal can't even get in! And as for carts... damn it, all the carts have been cornered by that 'Standard Transport Company'! Where am I supposed to hire one?"
"That is your problem."
The dispatcher posted a new price list on the window glass.
"Either pay, or take your oil back. There are others waiting behind you."
"Wait."
Happ suddenly pointed to the line of black tank cars being loaded nearby.
"Whose oil is that? They look like they're loading happily. Do they also pay two dollars?"
The words "Standard Oil" were prominently printed on that train.
"Of course."
The dispatcher finally looked up, a hint of mockery in his eyes. "Standard Oil Company not only guarantees a daily volume of two thousand barrels, but they also provide their own tank cars. If you can do the same, perhaps we could discuss a discount for you."
Happ was stunned.
Two thousand barrels? His small derrick could only extract fifty barrels a day even working flat out.
"This isn't fair..."
Happ muttered to himself, feeling a profound sense of helplessness.
He looked back at his mountain of wooden barrels.
If those barrels weren't shipped out, they would soon leak empty, or even catch fire due to the warming weather.
Happ gritted his teeth and pulled a wrinkled checkbook from his pocket.
"Fine, ship it for me."
The dispatcher smiled as he accepted the check... Meanwhile, Newark Bay, New Jersey.
Standard Oil Company's No. 1 Refinery had officially started production.
Jenkins walked between the massive distillation towers. Although the air still carried a faint scent of oil, compared to the crude oil production sites, this place was as clean as a park.
The ground was paved with neat cement, and the pipes were painted different colors to distinguish the flow direction.
Huge storage tanks were lined up like soldiers in formation.
"What is today's input volume?" Jenkins asked the technical supervisor beside him.
"Five thousand barrels, sir," the supervisor replied.
"It all arrived last night from Pennsylvania. Those new steel tank cars are fantastic; the loss rate is virtually zero. When we used wooden barrels before, at least ten percent leaked from every carload."
"And the yield rate?"
"According to Dr. Thorne's process, the current kerosene yield is stable at fifty-five percent. Lubricating oil is twenty percent. The remaining naphtha and asphalt have also been stored separately as you instructed."
Jenkins nodded and walked to the packaging workshop.
This was the busiest part of the entire factory.
Sheets of thin, tin-plated iron were fed in, and with a "clank," they were transformed into square iron cans with handles.
"This is our weapon." Jenkins picked up a can that had just been sprayed with blue paint.
"Standard Blue Can."
In the future, whether in a grocery store in New York or on a dock in Boston, as long as people see this shade of blue, they will know it contains good oil that won't explode and burns steadily.
"Starting today, increase output by another twenty percent. The Boss said that as the 'net' tightens in Pennsylvania, more and more crude oil will flow to us. We must be ready to swallow it all."
"But the warehouse..."
"No buts," Jenkins said, pointing to the empty lot outside. "Keep building cans. As long as the oil comes, we must have the capacity to hold it."
...Fifth Avenue, New York.
Felix was sitting in his study, listening to Tom Hayes's report.
"The noose has been tightened, Boss."
Hayes held a glass of red wine, looking relaxed.
"Scott sent a telegram. During the first week of the new rates, although the independent oil merchants complained fiercely, most of them obediently paid up. They have no other choice."
"What about the commission?" Felix asked.
"The first payment has arrived."
"Thirty thousand dollars. It's what our competitors 'sent' us this week."
This amount of money meant little to Felix; he cared about the significance behind it.
"How much longer can they last?"
"The small ones won't last a month," Hayes analyzed.
"The large ones... like the group in Cleveland, might hold out for a while. They can use water transport via Lake Erie, or find other railway companies."
"Cleveland..." Felix stood up and walked to the map.
It was the choke point connecting the East and the West, and another important refining center besides Pennsylvania.
"What is that Rockefeller doing?"
"Very quiet." Hayes frowned.
"It's abnormally quiet. Normally, he should be running around negotiating with railway companies or uniting other refiners to oppose us. But he hasn't done anything. He's just sitting in that small office doing accounts."
"Perhaps he's fortune-telling," Felix chuckled. "Calculating how long he has left to live."
"Send him an invitation," Felix suddenly said.
"Invite him to New York?"
"No." Felix shook his head. "I want to go to Cleveland myself to see what kind of dance he can perform under my noose."
"And while we're at it, it's time to let the people at the Atlantic and Great Western Railway know who really calls the shots when it comes to shipping oil in this country."