olidation were so obvious as to need no
argument. If a single firm could do the business of five,--or fifty--it
increased its profit through larger and better plants, greater division
of labor, and a more careful use of its by-products. It could cut down
expenses by reducing the army of competing salesmen and by lessening the
duplication of administrative offices. The same economics in management
which had driven the Old South to the large plantation as a type drove
American industrial society toward economic consolidation and the
trusts.

The technical form of organization of the trust was unimportant.
Strictly speaking, it was a combination of competing concerns, in which
the control of all was vested in a group of trustees for the purpose of
uniformity. The name was thus derived, but it spread in popular usage
until it was regarded as generally descriptive of any business so large
that it affected the course of the whole trade of which it was a part.
The logical outcome of the trust was monopoly, and trusts appeared first
in those industries in which there existed a predisposition to monopoly,
an excessive loss through competition, or a controlling patent or trade
secret.

The first trust to arouse public notice was concerned in the
transportation and manufacture of petroleum and its products. Commercial
processes for refining petroleum became available in the sixties,
enabling improvements in domestic illumination that insured an
increasing market for the product. The industry was speculative by
nature because of the low cost of crude petroleum at the well and the
high cost of delivering it to the consumer. Slight rises in price caused
the market to be swamped by overproduction, and threw the control of the
industry into the hands of those who controlled its transportation.

Once above ground, the cheap and bulky oil had to be hauled first to the
refiner and then to the consumer. The receptacles were expensive, and
the methods of transportation that were cheapest in operation had the
greatest initial cost. Barrels were relatively cheap to buy, but were
costly to handle. Tank-cars were more expensive, but repaid those who
could afford them. Pipe-lines were beyond the means of the individual,
but brought in greater returns to the corporations that owned them.

It was inevitable that some of the dealers who competed in the
oil-fields of Ohio, Pennsylvania, and West Virginia in the sixties
should realize the strateg