John D. Rockefeller’s Standard Oil Company of Ohio held about 4 percent of US refining in the early 1870s. Rockefeller saw refining, not drilling, as the bottleneck of a boom-and-bust Pennsylvania oil trade, and used his shipping volume to win secret railroad rebates. He showed rival Cleveland refiners his account books and offered them Standard Oil stock or ruin; by early 1872 he controlled about 25 percent of the national market, and by 1879 more than 90 percent. Through the 1880s Standard integrated backward into oil lands, pipelines and even timber for its own barrels, and forward into tank cars, distribution and retail, while using predatory pricing and threats against independent distributors.

In November 1906 the Justice Department sued Standard Oil of New Jersey, the holding company over the empire, under the Sherman Antitrust Act. The case moved under the Expediting Act through the Circuit Court for the Eastern District of Missouri, where a 15-month trial ended in a 1909 decree of dissolution. In 1911 the Supreme Court under Chief Justice Edward D. White upheld the breakup but read the law to ban only unreasonable restraints of trade, the rule of reason. Justice John Marshall Harlan agreed with the result and dissented from that reasoning as judicial legislation. The decree split the company into 43 independent firms, pieces of which became ExxonMobil, Chevron and part of BP.

• Rival refiners were offered a fair price in Standard Oil stock or a fight against Rockefeller’s lower freight costs.
• Standard cut kerosene prices below cost in one town, funded by monopoly profits elsewhere, then raised them after rivals failed.
• The Court named three monopoly harms: higher prices, reduced output and lower quality without fear of losing customers.
• The rule of reason drew on an 1899 circuit court opinion written by William Howard Taft.
• Harlan noted the Sherman Act banned every contract in restraint of trade and recalled 1890 fears of a new kind of slavery to corporate capital.