Financial History 25th Anniversary Special Edition (104, Fall 2012) - Page 42

Museum of American Finance Standard Oil stock certificate signed by Henry Flagler and John D. Rockefeller, 1878. Cornelius Vanderbilt, and the New York Central, owned by Jay Gould. Flagler took advantage of the oil glut and price war to ink a deal with the Lake Shore Railroad. The railroad agreed to cut shipping rates to $1.65 a barrel from $2.40 in exchange for guaranteeing Lake Shore the shipment of 60 carloads of refined oil daily to New York. However, Standard Oil failed to produce enough oil to meet its 60 barrel-aday obligation. So Flagler arranged for Standard Oil to broker the oil of other Cleveland refiners to meet that quota. Meanwhile, their other Standard Oil partner, Andrews, was based in New York to handle exports. Rockefeller and Flagler next sought to eliminate competition. In 1872, they had increased the company’s capitalization from 10,000 shares to 25,000 shares at $100 per share. Rockefeller purchased 3,000 shares and Flagler bought 1,400 shares. The remaining shares were used to acquire or buy out competing refiners. It is estimated that $440,000 was spent in their quest. In one key move, they gave Peter H. Watson, pr \