Under the terms of the proposed pact, the railroads would sharply raise freight rates for all refiners, but refiners in the SIC would receive such substantial rebates—up to 50 percent off crude- and refined-oil shipments—that their competitive edge over rivals would widen dramatically. In the most deadly innovation, the SIC members would also receive “drawbacks” on shipments made by rival refiners—that is, the railroads would give the SIC members rebates for every barrel shipped by other refiners. On shipments from western Pennsylvania to Cleveland, for instance, Standard Oil would receive a
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