The Hepburn Committee was created in 1879 by an act of the

New York State Legislature The New York State Legislature consists of the Bicameralism, two houses that act as the State legislature (United States), state legislature of the U.S. state of New York (state), New York: the New York State Senate and the New York State Assem ...

. A. Barton Hepburn was directed by the State Legislature to investigate the railroads' practice of giving freight rate rebates (as much as 25%) to certain of their largest corporate clients, creating what were in effect much higher freight rates for smaller companies and an unfair advantage for some of the largest corporations in the nation - like

John D. Rockefeller John Davison Rockefeller Sr. (July 8, 1839 – May 23, 1937) was an American businessman and philanthropist. He was one of the List of richest Americans in history, wealthiest Americans of all time and one of the richest people in modern hist ...

Standard Oil Company Standard Oil Company was a corporate trust in the petroleum industry that existed from 1882 to 1911. The origins of the trust lay in the operations of the Standard Oil Company (Ohio), which had been founded in 1870 by John D. Rockefeller. The ...

. Merchants without ties to the oil industry had pressed for the hearings. Prior to the committee's investigation, few knew of the size of Standard Oil's control and influence on seemingly unaffiliated oil refineries and pipelines - Hawke (1980) cites that only a dozen or so within Standard Oil knew the extent of company operations. The committee counsel, Simon Sterne, questioned representatives from the

Erie Railroad The Erie Railroad was a railroad that operated in the Northeastern United States, originally connecting Pavonia Terminal in Jersey City, New Jersey, with Lake Erie at Dunkirk, New York. The railroad expanded west to Chicago following its 1865 ...

and the

New York Central Railroad The New York Central Railroad was a railroad primarily operating in the Great Lakes region, Great Lakes and Mid-Atlantic (United States), Mid-Atlantic regions of the United States. The railroad primarily connected New York metropolitan area, gr ...

and discovered that at least half of their long-haul traffic granted rebates, and that much of this traffic came from Standard Oil. The committee then shifted focus to Standard Oil's operations.

John Dustin Archbold John Dustin Archbold (July 26, 1848 – December 5, 1916) was an American businessman and one of the United States' earliest oil refiners. His small oil company was bought out by John D. Rockefeller's Standard Oil Company. Archbold rose rapidly ...

, as president of Acme Oil Company, denied that Acme was associated with Standard Oil. He then admitted to being a director of Standard Oil. The committee's final report scolded the railroads for their rebate policies and cited Standard Oil as an example. This scolding was largely moot to Standard Oil's interests since long-distance oil pipelines were now their preferred method of transportation. The committee found that

stock watering Watered stock is an asset with an artificially-inflation, inflated value. The term most commonly refers to a form of securities fraud in which a company issues stock to someone before receiving at least the par value in payment.Dodd, David L. ''Sto ...

was prevalent in the rail industry, as stock was frequently issued for speculative purposes.

References

External links

Proceedings of the Special Committee on Railroads, Appointed under a resolution of the Assembly to investigate alleged abuses in the Management of Railroads chartered by the State of New York (Vol. I, 1879)
{{Portal, New York (state), Politics, Law Hepburn Committee Hepburn Committee Hepburn Committee Hepburn Committee Hepburn Committee Hepburn Committee

See also

References

External links