John D. Rockefeller
John Davidson Rockefeller (July 8, 1839 – May 23, 1937) was an American capitalist most known for his role in the early petroleum industry and the founding of Standard Oil (ExxonMobil is the largest of its descendants). Through a number of widely-criticized business tactics, Rockefeller built Standard Oil into the largest oil refining business in the world, and was for a time himself the richest man in the United States—adjusting for inflation, some have measured him as the richest human being ever. [1] Much of this wealth was then given away, resulting in his legacy as a great philanthropist.
John Davidson Rockefeller was born in Richford, New York, the second of the six children to William Avery Rockefeller (November 13, 1810 - May 11, 1906) and his wife Eliza Davison (September 12, 1813 - March 28, 1889). When he was a boy, his family moved to Moravia and later to Owego, New York. In 1853 his family moved to Cleveland, Ohio, where the family bought a house in Strongsville, near Cleveland, and John entered Central High School in Cleveland. While he was a student he rented a room in the city and joined the Erie Street Baptist Church, which later became the Euclid Avenue Baptist Church. Active in its affairs, he became a trustee of the church at the age of 21.
He left high school in 1855 to take a business course at Folsom Mercantile College. He completed the six month course in three months, and after looking for a job for six weeks, he was employed as assistant bookkeeper by Hewitt & Tuttle, a small firm of commission merchants and produce shippers. Rockefeller was not paid until after he had worked there three months, when Hewitt gave him $50 (3.57 a week) and told him that his salary was being increased to $25 a month. A few months later he became the cashier and bookkeeper.
In 1858 he went into the produce commission business. His firm, Clark & Rockefeller, invested in an oil refinery with chemist Samuel Andrews in 1863, and in 1865 Rockefeller sold out his share to his partner Clark, paid $72,500 for a larger share in another refinery, and formed the partnership of Rockefeller & Andrews.
At about the same time Rockefeller's brother, William, started another refinery. In 1867 Rockefeller & Andrews absorbed this business, and Henry M. Flagler joined the partnership, forming Rockefeller, Andrews & Flagler. In 1870 the two Rockefellers, Andrews, Flagler, and a silent partner, Stephen V. Harkness, formed the Standard Oil Company, with John D. Rockefeller as president.
Standard Oil
In the early 1870s, Charles Pratt and Henry H. Rogers, two of the early pioneers of the emerging U.S. petroleum industry, became involved in conflicts with the infamous South Improvement Company, which was basically a scheme to obtain favorable net rates from the Pennsylvania Railroad (PRR) and other railroads through a secret system of rebates. Rockefeller and the South Improvement Company scheme outraged independent oil producers in western Pennsylvania and refineries there and afar alike.
The opposition to the South Improvement Company scheme among the New York refiners was led by Rogers. The New York interests formed an association, and about the middle of March, 1872, sent a committee of three independents. They managed to forge an agreement with the PRR and other railroads whose leaders eventually agreed to open rates to all and promised to end their shady dealings with South Improvement. The oil men were most exultant, but their joy was to be short-lived, for Rockefeller had already begun forming his Standard Oil organization and was busy trying another approach, which included frequently buying up opposing interests. With Standard Oil's rebate system, competing refiners found it extremely difficult to compete. So Standard oil gave them two choices; either to sell their company to Standard Oil, or to be forced out of business by the rebate system. This business practice made Standard Oil many enemies in the years to come.
Rockefeller approached Charles Pratt with his plans of cooperation and consolidation. Pratt talked it over with Rogers, and they decided that the combination would benefit them. Rogers formulated terms, which guaranteed financial security and jobs for Pratt and himself. John D. Rockefeller quietly accepted the offer on Rogers' exact terms. Charles Pratt and Company (including Astral Oil) became one of the important formerly independent refiners to join Rockefeller's organization in 1874. Pratt's son, Charles Millard Pratt (1858-1913) became Secretary of Standard Oil. Henry H. Rogers became one of Rockefeller's key men.
Monopoly
Standard Oil gradually gained virtual control of oil production in America. Its business methods, which brought immense wealth to the ownership, were widely and severely criticized. Its growth increased further in 1882, when separate companies were organized in each state; and in later years, as the first great American trust, the Standard Oil Company was hotly attacked during the anti-trust movement, especially after the publication of the 1904 book The History of the Standard Oil Company, by Ida Tarbell, whose father had been driven out of business by Rockefeller's business arrangement with the South Improvement Company.
Rockefeller himself retired from active business in 1895, though he retained his title as president until 1911. At one time he had large iron interests, including mines and ore-carrying ships, on Lake Superior. He sold those to U.S. Steel. He also played a key role in the Chase Manhattan Bank, as did some of his descendents. By 1901, he was worth about $900 million and is believed to have been the world's richest man at the time. His net worth when adjusted for inflation would put him in the top twenty modern-day billionaires; however, when adjusted for the size of the United States economy in his day, his net worth would dwarf that of any of today's billionaires. In 2001, it was estimated that in contemporary money Rockefeller would be worth $200 billion. Jay Gould once said a man of John D. Rockefeller's immense business knowledge was born once every 500 years.
On May 15, 1911, the Supreme Court of the United States held that Standard Oil, which held 64% market share, was a monopoly and ordered it to be broken up, resulting in the creation of approximately 37 new companies, including Continental Oil, which became Conoco; Standard of California, which became Chevron; Standard of New Jersey, which became Esso, and later, Exxon; Standard of New York, which became Mobil; and Standard of Ohio, which became Sohio. Rockefeller himself owned stock in all of them.
Private life
Rockefeller married Laura Celestia ("Cettie") Spelman (1839-1915), on September 8, 1864 in Cleveland. The couple had five children; four daughters and a son. The oldest daughter, Bessie (1866-1906), married Charles Strong. The second daughter, Alice (1869-1870), died in infancy. Alta (1871-1962), married E. Parmalee Prentice, and the youngest daugter, Edith (1872-1932), married Harold Fowler McCormick. The only son, John D., Jr. (1874-1960), inherited much of the family fortune and continued his father's philanthropic work.
Rockefeller died on the morning of May 23, 1937, at the Casements, his home in Ormond Beach, Florida. The next day all Standard oil companies all over the world stopped work for 5 minutes to honor his memory. He was 97 years old and was buried in Lake View Cemetery in Cleveland, the city he and his family considered home. After his father's death, his son John D. Rockefeller Jr. retained the (Jr) in his name, often saying there was only one John D. Rockefeller.
Legacy
While he had always given money to charities in accordance with his strong Baptist beliefs, his public reputation while he was active in business was strongly negative. On March 3, 1910 Rockefeller announced his retirement from managing his businesses and devoted his attention to philanthropy. By the time of his death he had given away an estimated $500 million (well over $5 billion in today's dollars), and his public image had become better. He was particularly notable as one of the earliest and largest private benefactors of scientific medical research. He founded the University of Chicago in 1890, the Rockefeller Institute for Medical Research (now Rockefeller University) in New York City in 1901, the General Education Board in 1902, the Rockefeller Foundation in 1913, and the Laura Spelman Rockefeller Memorial in 1918, as well as giving large gifts to other institutions. His gift of $5 million dollars helped found the Great Smoky Mountains National Park. Very late in life Rockefeller's publicists called him "The Man Who Gave Away Shiny New Dimes". He reportedly gave away about $10,000 worth of dimes before his death. People such as Harvey Firestone and president Hoover are said to be among those people who received them.
Rockefeller's image was sullied once again in 1914 because of the Ludlow Massacre. The massacre happened when men paid for by the Rockefeller-controlled Colorado Fuel & Iron company set fire to the tents, and burned to death, two women and eleven children who had peripheral involvement to a miner's strike going on in Ludlow, Colorado.
Rockefeller also made huge gifts to members of his family in the last decades of his life, especially to his son John D. Rockefeller, Jr., and his descendents remained among the richest and most influential families in the United States throughout the 20th century. He retained only a small fraction of the wealth he had made when he died in 1937.
Rockefeller's grandson, Nelson Rockefeller, was Vice President of the United States under Gerald Ford. Another grandson, Winthrop Rockefeller, served as Governor of Arkansas. His great-grandson, Jay Rockefeller (John D. Rockefeller IV), served as governor of West Virginia, and is currently a member of the U.S. Senate.
John D. Rockerduck, a Walt Disney Company character who is popular in Europe, is named after him, because of all of his good deeds. An example is his habit of giving away shiny new dimes to others on the street.
The Rockefeller family was one of the benefactors who funded the reconstruction effort in France after the First World War. As a consequence, Rockefeller (along with the Rothschilds) was considered in that country the canonical billionaire, and was used in comparisons as synonymous with extreme wealth (this usage somewhat receded now).
See also
Additional reading
- Chernow, Ron. Titan: The Life of John D. Rockefeller, Sr. New York: Random House, 1998. ISBN 0679438084.
- Burton W. Folsom, Jr., The Myth of the Robber Barons, Young America.
- The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American Supereconomy by Charles R. Morris Publisher: Times Books 2005 ISBN: 0805075992