When the 20th Century began, a single company controlled the lighting market for kerosene lamps and gas lighting. The electric light bulb won in urban areas by the beginning of World War I. Standard Oil was split into many separate companies as a result of an anti-trust suit decided by the U.S. Supreme Court. It is interesting to read about the psychology of power, which doesn’t seem to have changed in the past 100 years.

Thomas William Lawson, a Boston stockbroker and author, wrote a series of articles called “Frenzied Finance”, about Standard Oil Company, which at one stage of its existence, controlled more than 80% of the oil refining and distribution business in the United States. Lawson had been, at different times, both an ally and an adversary to Standard Oil. His exposure of Standard Oil appeared in Everybody’s Magazine. Here is his description of the Standard Oil “System”.

First, there is a fundamental law, from which no one— neither the great nor the small—is exempt. In substance it is: “Every Standard Oil’ man must wear the Standard Oil’ collar.”

This collar is riveted on to each one as he is taken into “the band,” and can only be removed with the head of the wearer.

Here is the code. The penalty for infringing the follow¬ing rules is instant “removal.”

1. Keep your mouth closed, as silence is gold, and gold is what we exist for.

2. Collect our debts to-day. Pay the other fellow’s debts to-mor¬row. To-day is always here, to-morrow may never come.

3. Conduct all our business so that the buyer and the seller must come to us. Keeps the seller waiting; the longer he waits the less he’ll take. Hurry the buyer, as his money brings us interest.

4. Make all profitable bargains in the name of “Standard Oil,” chancy ones in the names of dummies. “Standard Oil” never goes back on a bargain.

5. Never put “Standard Oil” trades in writing, as your memory and the other fellow’s forgetfulness will always be re-enforced with our organization. Never forget our Legal Department is paid by the year, and our land is full of courts and judges.

5. As competition is the life of trade—our trade, and monopoly the death of trade—our competitor’s trade, employ both judiciously.

6. Never enter into a “butting ” contest with the Government. Our Government is by the people and for the people, and we are the people, and those people who are not us can be hired by us.

Always do “right.” Right makes might, might makes dollars, dollars make right, and we have the dollars.

The enumerated “rules” seem familiar in 2013, as they were in 1905. However there is one umbrella rule that shades the others. Know the rules of the arena and game in which you are playing. When playing an unfamiliar game, you can more easily be trapped by what you don’t know, than what you do know.
In the arena of taxation, employing a competent tax counselor can help you avoid some of the hidden tax traps.