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
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
In one key move, they gave Peter H.
Watson, pr \