Thursday, August 20, 2015

Black Gold, Texas Tea: the hidden corporate headquarters in Flemington

For many years, New Jersey had the reputation of being the home for corporate headquarters. It seemed that if you were a Fortune 500 company, you either located your CEO here or had a major installation somewhere in the state. Some of them moved here from more expensive digs in New York City, finding good transportation routes and pleasant suburbs to attract employees. In any case, it wasn't hard to pick out the corporate HQs dotted along our highways, with their sprawling lawns and low-slung buildings. 

Curiously, as I discovered recently, one of the largest and most famous among them had much more modest digs on a small lot in Flemington. You might know that corporation as ExxonMobil. Back then, it was Standard Oil of New Jersey.

To say that the history of Standard Oil is complicated is a vast understatement, and I couldn't hope to explain it all in a readable blog post. For the purposes of today's story, what you really need to know is that at one point in the 1930s, the corporation's headquarters technically was a lawyer's safe on Main Street in the Hunterdon County seat. John D. Rockefeller's oil behemoth was broken up in a 1911 Supreme Court antitrust ruling, with Standard Oil of New Jersey (or Jersey Standard) being the largest of the resulting "baby Standards." Operating refineries at Bayonne and Linden, it continued to evolve after the mandated breakup, making several acquisitions and eventually becoming the world's largest oil producer.     

Flemington has never been known to be a big oil town, nor has there ever seemed to be a potential for anyone to strike black gold somewhere off Route 31. And, in fact, there doesn't seem to have ever been a Standard Oil office anywhere in town, except maybe for a desk and chair at a filling station. This was not a traditional arrangement by any means.

As you might have already guessed, the company's reasons were purely economic. In one word, taxes. New Jersey law at the time stated that a company was headquartered where its incorporation papers were housed. By moving its headquarters from Linden to Flemington in 1937, Standard Oil was able to shave its tax bill by 80 percent. The company's operations continued without missing a beat.

Exxon corporate histories say nothing about this move to the heart of New Jersey's farm country, though I guess it's not surprising. The fact that the company had previously moved its headquarters to Linden from Newark to save a half-million dollar tax payment leads me to believe that the stay in Flemington was a relatively brief one, lasting only until a more attractive tax haven could be identified.

Despite Standard Oil's penchant for bending the rules, it's likely that its new neighbors in Hunterdon County wouldn't have minded a bit that the company had done this bit of corporate legerdemain, if they even knew the move had occurred. The boost in revenue to the county meant their own tax bills would decrease. While no new jobs were created, nor was there any additional burden placed on local roads and utilities. Maybe they hadn't struck oil, but who ever complained about lower taxes?

No comments:

Post a Comment