would reap largely on the oil they owned. The producers would, as usual, be standing all the loss.
The upshot of the council was that the Producers' Protective Association took hold of the shut-down movement, its representative seeking an interview with the Standard officials as to their willingness to share in the cost of reducing the production. Here was a chance for Mr. Rockefeller to apply his theory of handling the oil producers—conciliate them when possible—encourage them in limiting their production. The oil men's representatives were met half-way, and an interesting and curious plan was worked out; the producers were to agree to limit their production by 17,500 barrels a day. They were to do this by shutting down their producing wells a part or all of the time and by doing no fresh drilling for a year. If they would do this the Standard agreed to sell the association 5,000,000 barrels of oil at sixty-two cents, and let them carry it at the usual rates as long as they wanted to. Whatever advance in price came from the shut-in movement the producers were to have on their oil, and it was to be shared by them according to the amount each shut in his production. Mr. Phillips, before agreeing to this arrangement, demanded that provision be made for the workingmen who would be thrown out of employment by the shut-down, and he proposed that the association set aside for their benefit 1,000,000 barrels of the oil bought from the Standard, and that the Standard set aside another million; all the profits above sixty-two cents and the carrying charges on the 2,000,000 barrels were to go to the workingmen. A memorandum covering the above points of the agreement was drawn up, and it was accepted by the two interests represented.[1]
Mr. Rockefeller's reason for signing the contract he gave
- ↑ See Appendix, Number 55. Agreement of 1887 between the Standard Oil Company and producers.
[ 160 ]
