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John D. Rockefeller

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John D. Rockefeller was born July 8, 1839, in Richford, New York. He built his first oil refinery near Cleveland and in 1870 incorporated the Standard Oil Company, a dominating force in the American economy that propelled its founder to become the world’s richest man. Rockefeller revolutionized the petroleum industry with his oil refinery. One of the wealthiest men of all times also used his wealth to help society.

His fortune was mainly used to define the structure of targeted philanthropy through the creation of foundations that had a major effect on education, medicine and scientific research.

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Son of William Avery Rockefeller and Eliza, John D. Rockefeller moved to Cleveland with his family when he was 16. As a Teenager, he was hired for his first office job as an assistant bookkeeper for Hewlett & Tuttle, commission merchants and produce shippers. “The full salary for his first three months’ work was $50 (50 cents a day).

From the beginning, he donated about 6% of his earnings to charity, which increased to 10% by the age of twenty, when he tithed to his Baptist church.

As a youth, Rockefeller reportedly said that his two great ambitions were to make $100,000 and to live 100 years. ” (Chernow, 1998, p. 50) By the age of 20, Rockefeller, who’d prospered at his job, ventured out his own with another business partner, Maurice B. Clark, working as commission merchants in hay, meats, grain and other goods, they raised $4,000 in capital.

At the close of the company’s first year in business, it had grossed $450,000. Rockefeller went steadily ahead in business from there, making money each year of his career. In 1863, the partnership went on to a different market, they build an oil refinery. “The commercial oil business was in its infancy, and it was there because whale oil had become too expensive for the masses, and a cheaper, general-purpose lighting fuel was needed” (Chernow, 1998, pp. 73–74).

Less than a decade later, Rockefeller, founder of Standard oil Company, had near-total control of the region’s refineries. “In February 1865, at the age of 24, Rockefeller bought out the Clark brothers (Maurice Clark had brought his brothers into the refining business) for $72,500 and gained complete control of the business. The Clarks had resisted borrowing money to expand and Rockefeller was convinced of the correctness of his course, so he bought them out. He immediately moved to greatly extend his enterprise.

He borrowed heavily and plowed all his profits back into the business in order to expand it further, and took decisive steps to strengthen and increase the efficiency of all aspects of the firm”(Poole) Rockefeller never seemed to be satisfied and, after absorbing his partner’s portion of standard oil company and gained complete control of it, he build another oil refinery. “In 1866 John D. brought his brother William Rockefeller into the partnership and they built another refinery in Cleveland which they named the Standard Works.

They also opened a New York City office with William Rockefeller in charge, to handle the export business, which eventually became larger than the domestic business” (Poole). His path to dominating the whole oil business in the country was not yet over. “Rockefeller continued with his self-reinforcing cycle of buying competing refiners, improving the efficiency of his operations, pressing for discounts on oil shipments, undercutting his competition, making secret deals, raising investment pools, and buying rivals out.

In less than four months in 1872, in what was later known as “The Cleveland Conquest” or “The Cleveland Massacre”, Standard Oil had absorbed 22 of its 26 Cleveland competitors” (Segall). Mr. Rockefeller was practically the only oil refiner in Cleveland, Ohio, where three months before there had been twenty-six, his competitors started to see that compete against him would not take them anywhere but to bankruptcy, and so, some of them decided to join him as a partner and sell him their business.

Eventually, even his former antagonists, Pratt and Rogers, saw the futility of continuing to compete against Standard Oil: in 1874, they made a secret agreement with their old nemesis to be acquired. Pratt and Rogers became Rockefeller’s partners. Rogers, in particular, became one of Rockefeller’s key men in the formation of the Standard Oil Trust. Pratt’s son, Charles Millard Pratt became Secretary of Standard Oil. For many of his competitors, Rockefeller had merely to show them his books so they could see what they were up against, then make them a decent offer.

If they refused his offer, he told them he would run them into bankruptcy, then cheaply buy up their assets at auction. He saw himself as the industry’s savior, “an angel of mercy”, absorbing the weak and making the industry as a whole stronger, more efficient, and more competitive” (Segall, p. 46). About to control every single oil industry in the United States, in 1877 Standard bought the Columbia Conduit Co. of PA and gained control of its pipelines and refineries. Columbia had tried to bypass the Pennsylvania Railroad by uilding a pipeline from the Oil Regions down to the new B&O railroad line near Pittsburgh. The Pennsylvania Railroad used armed guards to prevent them from laying a pipeline under its right-of-way north of Pittsburgh. The Standard gained control of most of the property of the Empire Transportation Company — a subsidiary of the Pennsylvania Railroad that had its own fleet of tank cars, pipelines, lake steamers, and terminals in New York harbor. The Empire had briefly threatened the Standard, but Rockefeller built 600 new tank cars, cut prices, and cancelled all his shipments over the Pennsylvania Railroad.

The railroad capitulated and sold Rockefeller the Empire’s assets. In 1878, the Standard forced the railroads to pay a drawback of 20-35 cents a barrel of crude oil shipped by any other party. In effect, this was a tax levied by the Standard upon its competitors. This combination of rebates and “taxes” (some authors dub this a “drawback” — but that term is also used to refer to a specific type of rebate) is what forced the remaining independent refiners to capitulate to the Standard. Production increased in the Pennsylvania Oil Regions because of a large discovery in the Bradford area.

Standard was forced to frantically build as many large holding tanks as possible to hold the market glut of oil. “Standard Oil gained a monopoly in the oil industry by buying rival refineries and developing companies for distributing and marketing its products around the globe. In 1882, these various companies were combined into the Standard Oil Trust, which would control some 90 percent of the nation’s refineries and pipelines. In order to exploit economies of scale, Standard Oil did everything from build its own oil barrels to employ scientists to figure out new uses for petroleum by-products” “In 1890, the U.

S. Congress passed the Sherman Antitrust Act, the first federal legislation prohibiting trusts and combinations that restrained trade. Two years later, the Ohio Supreme Court dissolved the Standard Oil Trust; however, the businesses within the trust soon became part of Standard Oil of New Jersey, which functioned as a holding company. In 1911, after years of litigation, the U. S. Supreme Court ruled Standard Oil of New Jersey was in violation of anti-trust laws and forced it to dismantle (it was broken up into more than 30 individual companies). In 1895 the 56-year-old Rockefeller retired from his day-to-day involvement of Standard Oil and turned his focus toward philanthropic endeavors. His new direction did little to quell the attacks on Rockefeller and his business. In 1911, the corporation was found to be in violation of the Sherman Act and ordered to dissolve. “Rockefeller, who had rarely sold shares, held over 25% of Standard’s stock at the time of the breakup. He, as well as all stockholders, received proportionate shares in each of the 34 companies.

In the aftermath, Rockefeller’s control over the oil industry was somewhat reduced but over the next ten years, the breakup also proved immensely profitable for him. The companies’ combined net worth rose fivefold and Rockefeller’s personal wealth jumped to $900,000,000” (Segall, p. 93) From the mid-1890s until his death in 1937, Rockefeller’s activities were philanthropic. Rockefeller’s fortune peaked in 1912 at almost $900,000,000, but by that time he had already given away hundreds of millions of dollars. His son, John D. Rockefeller Jr. , in 1897 joined Gates in the full time management of the fortune.

John D. Rockefeller’s charity proved considerable. In total he gave away more than $530 million to various causes. His money helped pay for the creation of the University of Chicago as well as the Rockefeller Institute for Medical Research (later named Rockefeller University) in New York, as well as the Rockefeller Foundation. “Rockefeller passed away on May 23, 1937 in Ormond Beach, Florida. His legacy, however, lives on: Rockefeller is considered one of America’s leading businessmen, and is credited for helping to shape the nation into what it is today”.

Work Cited

Chernow, Ron. Titan: The Life of John D. Rockefeller, Sr. Warner Books. (1998). “John D. Rockefeller. ” 2012. The History Channel website. Nov 5 2012, 12:38 http://www. history. com/topics/john-d-rockefeller. “John Davison Rockefeller. ” 2012. Biography. com 29 Out 2012, 11:01 http://www. biography. com/people/john-d-rockefeller-20710159 Poole, Keith. “People & Events: John D. Rockefeller Senior, 1839-1937. ”1999/2000. Psb. org 4 Nov 2012, 7:12 http://www. pbs. org/wgbh/amex/rockefellers/peopleevents/p_rock_jsr. html Segall, Grant (2001). John D. Rockefeller: Anointed With Oil. Oxford University Press.

Cite this John D. Rockefeller

John D. Rockefeller. (2017, Jan 22). Retrieved from https://graduateway.com/john-d-rockefeller/

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