S.C.T. DODD and THE ORIGINAL TRUST

(March 2002) Given all the furor over corporate finances and ethically impaired big businessmen, now seems a good time to revisit a man who, in many ways, may be the most important to ever come out of Venango County.
We all have a vague impression of a “trust” being some sort of Bad Thing, highly illegal, somehow related to monopolies. But the legal construct of a Trust was invented by Franklin native S C T Dodd.
His backwoodsman grandfather built his cabin 12 miles from the nearest neighbor; he didn’t want his garden disturbed by his neighbor’s chickens. SCT’s father was born in 1799 and eventually settled in Venango County, taking up carpentry. He served in the militia, was a school director, and helped found the Presbyterian Sunday School (with Rev. Timothy Alden, a founder of Allegheny College).
Samuel C. T. Dodd was born on February 20, 1836. He learned the printing trade early on, but also pursued formal education, graduating from Washington and Jefferson College with honors in 1857. He came back to Franklin, studied law with James K. Kerr, and joined the bar in 1859.
Dodd had a gift for writing; he was an amateur poet and participated in the framing of the Pennsylvania constitution in 1872, where he spoke against the collusion of oil and railroad companies.
When acting as lawyer for both sides in an 1878 dispute between refiners and the United Pipe Lines company, he learned that the pipeline company was secretly owned by Standard Oil. This led to his first meeting with John D. Rockefeller. “Do you often act for both sides in a case?” asked Rockefeller.
“Not often… but I am always ready to do so when both sides want an honest lawyer,” replied Dodd. Rockefeller hired him the following year.
Going to work for Standard Oil did not make Dodd any new friends in this county. But he made other new friends soon enough.
It was Dodd who figured out how to unite a wide web of businesses in a technically legal unit. The corporations themselves could not be combined. But if their stockholders handed their stocks over to trustees in return for trust shares, no law was broken. The Standard Oil trust agreement was set up January 2, 1882, creating a board of nine men who didn’t have the authority to sign contracts, hire or fire, but who in effect owned the complex of businesses worth $70 million dollars and controlling 90% of the entire oil business.
When this set-up was revealed six years later, Dodd was called on often to defend it, which he did in person and in print. The crux of his argument seems to have been that trusts were not bad because they did not squeeze the customers, but created a more efficient industry. He wrote that the men who possessed the great integrity and knowledge to be entrusted with great wealth of capital would be the first to realize “that the policy that succeeds is that which accords fair treatment to all.”
The Sherman Anti-trust Act passed in 1890 left Standard Oil shaken, but not hurt (and only made illegal trust-making a misdemeanor).
All of this would lead you to imagine SCT as a slick 19th century shark, but he was anything but. He’s described as “rotund,” “genial,” and “roly-poly.” In a memoir that he wrote for his descendants, he is charming and pleasant, and devotes considerable space to explaining his ideas about faith and God. In an 1874 address to the Presbyterian Sunday School, he shows flashes of humor, saying of his father, “He emigrated to Mercer County, Pa, some two months after [his birth]. It may be proper to state his parents accompanied him.”
After he moved to New York in 1881 (the same year Levi died) his neighbors presumed that he was rich. He was not. Despite Rockefeller’s insistence, he never accepted any Standard Oil stock or a seat on any Standard Oil board, saying that such a stake in the company might cloud his legal judgment. He reportedly made only around $25,000 annually for serving as chief counsel for the richest business in the country.
In his final months, Dodd suffered from “decay of the nerves”. He died in January of 1907. The Franklin newspaper spoke of his stainless character, unfailing generosity and pure and kind heart. Rockefeller later said, “A more just man never lived…He was a lovable, loyal man.” Dodd never lived to see the Supreme Court dismantle Standard Oil in 1911. In 1920, Standard Oil of California built a tanker named the SCT Dodd. All in all, not bad for a small town boy.