A Standard Oil Company was organized in Pittsburg for the same purposes as the one organized in Cleveland, and the stocks of these two companies were eventually owned by the same persons. These individuals thereafter continued actively, individually as well as through the agency of several corporations, to extend and increase their petroleum business. They established agencies in different States for the sale of their products, and when the business of such agencies became of sufficient importance to warrant it, they organized corporations under the laws of the proper States in order that the industry might be carried on under corporate agencies. They located manufactories at the seaboard for the export trade, which rapidly became enormous. They began the manufacture of crude materials, barrels, cans, paints, glue, acids, etc., necessary in their business, and in some cases organized corporations for the purpose of such manufacture. They became particularly interested in the matter of transportation, and the stockholders of the various companies, as individuals, constructed pipe lines for carrying petroleum to the seaboard at the expense of millions of dollars, and held their interest as partners until corporations were established. It was the aim of these men to open markets for American petroleum. In order to introduce it into home and foreign markets, their energies and capital were directed to the making of safe and efficient illuminating oils and to the cheapening of the manufacture not only of the products of petroleum, but also of all the materials used in its manufacture and transportation.

On the 2d day of January, 1882, the number of persons thus associated in carrying on the oil business in its different branches through the agency of corporations organized by themselves for that purpose was forty. They owned the entire capital of fifteen corporations and part of the stocks of a number of others, the latter being principally small companies engaged only in trading in oil. Of the stocks thus held, nine persons owned a majority, and in consequence could cast the controlling vote in each corporation. These persons entered into an agreement by which all their stocks were placed in the hands of the nine persons owning the majority as trustees. The trustees issued certificates showing the extent of each person's interest in the stock so surrendered, and agreed to endeavor to have the business of the several corporations conducted for the best interests of all concerned.

It will readily be seen that this trust did not unite competing corporations, for the corporations were largely organized as contributory agencies for the same business. The stocks were owned by persons

who had long been united in building up and carrying on this business, and the voting power was then held, and continued to be held until the dissolution of the trust on March 21, 1892, by the persons named as trustees by right of absolute ownership of a majority of the stocks. One effect of this trust is apparent in the fact that during the ten years of its existence the number of persons holding its certificates increased from forty to two thousand. Every clerk, agent, and employee in the various corporations who could save a few hundred dollars purchased trust certificates, and thus became interested in the business and profits. If it is desirable to multiply the number who enjoy the profits of production, how better can it be done than through ownership of stocks in industrial associations? The problem of profitsharing can and will be solved in this way. Hundreds and thousands of employees and persons of small capital are by this means participating in the profits of the great industries of our land.

Until 1872 but little progress had been made in the oil business; the methods of transportation and manufacture were expensive, and the product poor even at the high prices obtained. The business of refining was not financially successful. It was about that time that the men in control of the Standard Oil Company began to enlarge their business, to enter into association with refiners at other places, and to use the greater capital, experience, and instrumentalities thus obtained in improving and cheapening the methods of manufacture, the quality and cost of the products, the system of transportation, and in opening markets in foreign countries. The effect upon the business was soon apparent. In 1872 refined oil at wholesale averaged 23.5 cents per gallon. The output was about 248,000,000 gallons, and the value of the exports at that price $34,000,000. The improvement in production and price from that date has been gradual and marked. In 1890 the output was 13,027,000,000 gallons, the average price 7.3 cents per gallon, and the value of exports at that low figure $51,500,000. The reduction in price between 1872 and 1891 was 16.2 cents per gallon, which shows $215,000,000 per year saved to the public by reduction of price. Crude petroleum averaged $4.00 per barrel of 42 gallons in 1872 and $0.87 per barrel in 1890; so that $99,000,000 of this annual saving is attributable solely to the reduction in the crude product consequent upon its enormous production. The remaining $116,000,000 per annum of saving is the result solely of cheapening the price of the manufactured products.

This reduction has been accomplished in various ways. At first

oil was barrelled and transported from the wells to the refineries or railroads in wagons and then by rail to the seaboard. The system of transporting by pipe lines was introduced prior to 1872, but it was expensive and inefficient. The Standard interest systematized and enlarged the local system and continued the lines to the principal cities of the seaboard. Thousands of tanks were erected to hold the surplus production, and as much as 1,500,000,000 gallons of surplus oil have been stored in these tanks at one time. Pipe lines have been built to New York, Philadelphia, Baltimore, Buffalo, Pittsburg, Cleveland, and Chicago, and a network of feeding lines reaches from the wells to connect with the main lines. If these lines were laid continuously, they would encircle the globe. When the producer of oil puts down a well, he notifies the pipe-line company, and immediately a pipe line is laid to connect with his well. The oil is taken from the tank at the well, whenever requested, into the large storage tanks of the company, and is held for the owner as long as he desires. it. A certificate is given for it, which can be turned into cash at any time; and when sold, it is delivered to the purchaser at any station on the delivery lines. A new oil-field was discovered last summer near Pittsburg, and in three months the production was 70,000 barrels per day. Yet pipe lines and storage tanks were built so rapidly that this enormous product was handled with scarcely any waste.

The lines to New York deliver to the refineries at Long Island City and Bayonne 1,250,000 gallons per day. This is manufactured into a great variety of products, the principal one being illuminating oil. Some of the illuminating oil is barrelled for local trade, some is shipped to other points in tank cars made for the purpose, some is placed in tin cans boxed in pine for the oriental markets; but the greater part is pumped directly from the refineries into steamers carrying oil in bulk, and thus shipped to European ports, there to be pumped into huge tanks for further distribution by tank cars and tank wagons. The capital invested in this system of pipe lines, tank cars, and tank steamers is more than $50,000,000. By this system oil can be placed at the seaboard and on tank steamers at less than the cost of a few miles of wagon transportation under the old system.

The importance of this method of transportation cannot be overestimated at the present time. In Russia wells pour forth petroleum in almost unlimited quantities, and its price at the well is less than five cents per barrel. Their system of refining and marketing is copied from ours. The capital employed is large, and Russia is striving for

the markets of Europe and the East. They already dispose of 1,200,000,000 gallons of the crude product per annum. Were it not for our pipe-line system, our tank-steamer system, our cheap methods of refining and of manufacturing all necessary materials, we could not hold the export trade for a single year. This system could not have been built up without a combination of persons and capital.

The actual cost of refining has been reduced since 1872 about sixty-six per cent. This has been accomplished 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. Residuum was formerly used for fuel; now it is made into paraffine wax and lubricating oils. Naphtha was once little better than a waste product; now, as a component of gas, it lights the great cities of the land. Sulphuric acid is largely used in refining, and formerly cost $1.25 per hundred pounds; the Standard manufactures its own at a cost of eight cents per hundred pounds. In 1872 barrels cost the trade $2.35 each; the Standard manufactures them now at a cost of $1.25 each. As 3,500,000 barrels are used per annum, this item of saving amounts to $4,000,000 per year. Tin cans are now manufactured by the Standard at fifteen cents less per can than they cost in 1874. Thirty-six million cans are used per year, and this saving amounts to $5,400,000 annually. Thus I might speak of paint, glue, tanks, stills, pumps, and pipes.

Almost everything used in the oil business is manufactured by some of the corporations which were created for the particular purpose. While the price of oil has thus been lowered, competition has not been destroyed, but is vigorous and effective. Thousands of workmen and persons of small capital are sharing the profits of the business, the wages paid are above the average, and American petroleum is holding its place in foreign markets. Association was necessary to accomplish these results. It is necessary to accomplish any great business end. Wise legislation and wise judicial exposition will strive to lessen and eradicate any real evils resulting from association without destroying an instrumentality capable of such beneficial results. Even men not accustomed to clear thinking should be able to detect a difference between combinations designed to repress business and combinations for the purpose of carrying on business.

S. C. T. DODD.

THE TRUE PURPOSE OF THE HIGHER EDUCATION.

THE higher education: How are we to understand its significance? By what means shall we determine its extent? To whom ought it to be given? What should be our outlook respecting it in the near future the new century which is just about to open upon us? As I venture to offer a few thoughts on this subject which has so much interest for all educated men, I desire to move along the line of these questions, and to answer them as I best may from the standpoint of my own thinking. If what I have to say shall commend itself to the thoughtful readers of the FORUM, I shall be glad to have said it, because of their kindly reception of the words.

I. The higher education, as I view it—and thus I would answer the first of the four questions-should have as its end and purpose the culture and development of the thinking mind. Its aim should be serious thought. These expressions, indeed-the thinking mind, and serious thought-set forth what lies at the basis of all education and what is essential to the true idea of education of every degree. The proper design of all education is and must be to build up and build out the mind. All other things which may be thought of are secondary to this.

Let us look at the subject through the use of an illustrative example, which we may take at a point very near to the beginning of the work. The youth who is moving towards the higher educated life opens one of the gateways to it by undertaking the study of a foreign or ancient language. As he takes his first book into his hand, he tries to determine for himself, we will suppose, the meaning of certain words which form some sentence and the relations of these words to one another. This is the step which carries him just within the opening gate. What is its significance? Surely it is not that, in his feeble way, he is making a beginning for himself in the matter of the accurate observation of the framework of sentences, or of the acquisition of the knowledge of rules as a mere thing of memory. Rules must be learned, indeed, and the framework must be noticed and un