Standard Oil Company - Ohio 1870 Standard Oil Company - Ohio 1870 Product #: newitem1135976214 PRODUCT DESCRIPTION Beautiful SCARCE unissued certificate from the Standard Oil Company printed in 1870 when the company was founded. This historic document has an ornate border around it with a vignette of the U. S. Capitol and patriotic vignette of a woman brandishing a sword and a large American flag. This item is over 146 years old. The Standard Oil Company preceded the Standard Oil Trust Company. Issued certificates from the Standard Oil Company that are signed by Rockefeller sell for from $6000 to $10000 each. Certificate Vignette Certificate Vignette John. D. Rockefeller John Davison Rockefeller (July 8, 1839 - May 23, 1937) was the guiding force behind the creation and development of the Standard Oil Company, which grew to dominate the oil industry and became one of the first big trusts in the United States, thus engendering much controversy and opposition regarding its business practices and form of organization.

Rockefeller also was one of the first major philanthropists in the U.S., establishing several important foundations and donating a total of $540 million to charitable purposes. Rockefeller was born on farm at Richford, in Tioga County, New York, on July 8, 1839, the second of the six children of William A. and Eliza (Davison) Rockefeller. The family lived in modest circumstances. When he was a boy, the family moved to Moravia and later to Owego, New York, before going west to Ohio in 1853. The Rockefellers 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, 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 1859, with $1,000 he had saved and another $1,000 borrowed from his father, Rockefeller formed a partnership in the commission business with another young man, Maurice B. Clark. In that same year the first oil well was drilled at Titusville in western Pennsylvania, giving rise to the petroleum industry. Cleveland soon became a major refining center of the booming new industry, and in 1863 Rockefeller and Clark entered the oil business as refiners. Together with a new partner, Samuel Andrews, who had some refining experience, they built and operated an oil refinery under the company name of Andrews, Clark & Co.

The firm also continued in the commission business but in 1865 the partners, now five in number, disagreed about the management of their business affairs and decided to sell the refinery to whoever amongst them bid the highest. Rockefeller bought it for $72,500, sold out his other interests and, with Andrews, formed Rockefeller & Andrews. THE STANDARD OIL COMPANY Rockefeller�s stake in the oil industry increased as the industry itself expanded, spurred by the rapidly spreading use of kerosene for lighting. In 1870 he organized The Standard Oil Company along with his brother William, Andrews, Henry M. Flagler, S.V. Harkness, and others. It had a capital of $1 million. By 1872 Standard Oil had purchased and thus controlled nearly all the refining firms in Cleveland, plus two refineries in the New York City area. Before long the company was refining 29,000 barrels of crude oil a day and had its own cooper shop manufacturing wooden barrels. The company also had storage tanks with a capacity of several hundred thousand barrels of oil, warehouses for refined oil, and plants for the manufacture of paints and glue.

Standard prospered and, in 1882, all its properties were merged in the Standard Oil Trust, which was in effect one great company. It had an initial capital of $70 million. There were originally forty-two certificate holders, or owners, in the trust. After ten years the trust was dissolved by a court decision in Ohio. The companies that had made up the trust later joined in the formation of the Standard Oil Company (New Jersey), since New Jersey had adopted a law that permitted a parent company to own the stock of other companies. It is estimated that Standard Oil owned three-fourths of the petroleum business in the U.S. in the 1890s. In addition to being the head of Standard, Rockefeller owned iron mines and timberland and invested in numerous companies in manufacturing, transportation, and other industries. Although he held the title of president of Standard Oil until 1911, Rockefeller retired from active leadership of the company in 1896. In 1911 the U.S. Supreme Court found the Standard Oil trust to be in violation of the anti-trust laws and ordered the dissolution of the parent New Jersey corporation. The thirty-eight companies which it then controlled were separated into individual firms.

In his biography, Study in Power, John D. Rockefeller, Industrialist and Philanthropist, the historian Allan Nevins reports that Rockefeller at that time owned 244,500 of the company�s total of 983,383 outstanding shares. Henry M. Flagler Henry Morrison Flagler was born on January 2, 1830 in Hopewell, New York to Reverend Isaac and Elizabeth Caldwell Harkness Flagler. At the age of 14, after completing the eighth grade in 1844, Flagler decided to move to Bellevue, Ohio where he found work in the grain store of L.G. Harkness and Company at a salary of $5 per month plus room and board. By 1849, Flagler was promoted to sales staff of the company at a salary of $400 per month. Flagler became a partner in the newly organized D. M. Harkness and Company with his half-brother, Dan Harkness in 1852. The following year, on November 9, he married Mary Harkness.

On March 18, 1855, their first child, Jennie Louise, was born. Jennie Louise lived until 1889, when at the age of 34, she died following complications from child birth. A second child, Carrie, was born on June 18, 1858. She died three years later. On December 2, 1870, the Flaglers' only son, Harry Harkness Flagler, was born. Flagler founded the Flagler and York Salt Company, a salt mining and production business in Saginaw, Michigan in 1862 with his brother-in-law Barney York. By 1865, the end of the Civil War caused a drop in the demand for salt and the Flagler and York Salt Company collapsed. Heavily in debt, Flagler returned to Bellevue, Ohio. He had lost his initial $50,000 investment and an additional $50,000 he had borrowed from his father-in-law and Dan Harkness. The next year Flagler reentered the grain business as a commission merchant. Flagler had become acquainted with John D.

Rockefeller, who worked as a commission agent with Hewitt and Tuttle for the Harkness Grain Company. By the mid 1860s, Cleveland had become the center of the oil refining industry in America and Rockefeller left the grain business to start his own oil refinery. In 1867, Rockefeller, needing capital for his new venture, approached Flagler. Flagler obtained $100,000 from a relative on the condition that Flagler be made a partner. A Rockefeller, Andrews and Flagler partnership was formed with Flagler in control of Harkness' interest. On January 10, 1870, the Rockefeller, Andrews and Flagler partnership emerged as a joint-stock corporation named Standard Oil and by 1872, Standard Oil led the American oil refining industry, producing 10,000 barrels per day. Five years later Standard Oil moved its headquarters to New York City, and the Flaglers moved to their new home at 509 Fifth Avenue in New York City. By 1878, Flagler's wife, who had always struggled with health problems, was very ill.

On advice from Mary's physician, she and Flagler visited Jacksonville, Florida for the winter. Mary's illness grew worse, however, and she died on May 18, 1881 at age 47. Two years after Mary's death, Flagler married Ida Alice Shourds. Soon after their wedding, the couple traveled to St. Augustine, Florida where they found the city charming, but the hotel facilities and transportation systems inadequate. Flagler recognized Florida's potential to attract out-of-state visitors. Though Flagler remained on the Board of Directors of Standard Oil, he gave up his day-to-day involvement in the corporation in order to pursue his interests in Florida. He returned to St. Augustine in 1885 and began construction on the 540-room Hotel Ponce de Leon. Realizing the need for a sound transportation system to support his hotel ventures, Flagler purchased the Jacksonville, St. Augustine & Halifax Railroad, the first railroad in what would eventually become the Florida East Coast Railway. The Hotel Ponce de Leon opened January 10, 1888 and was an instant success. Two years later, Flagler expanded his Florida holdings. He built a railroad bridge across the St.

Johns River to gain access to the southern half of the state and purchased the Hotel Ormond, just north of Daytona. His personal dedication to the state of Florida was demonstrated when he began construction on his private residence, Kirkside, in St. Augustine. Flagler completed the 1150-room Royal Poinciana Hotel on the shores of Lake Worth in Palm Beach and extended his railroad to West Palm Beach by 1894. The Royal Poinciana Hotel was at the time the largest wooden structure in the world. Two years later, Flagler built the Palm Beach Inn (renamed The Breakers in 1901) overlooking the Atlantic Ocean in Palm Beach. Flagler originally intended for West Palm Beach to be the terminus of his railroad system, but during 1894 and 1895, severe freezes hit the area, causing Flagler to rethink this original decision. Sixty miles south, the town today known as Miami was reportedly unharmed by the freeze.

To further convince Flagler to continue the railroad to Miami, he was offered land from private landowners, the Florida East Coast Canal and Transportation Company, and the Boston and Florida Atlantic Coast Land Company, in exchange for laying rail tracks. Flagler's railroad, renamed the Florida East Coast Railway in 1895, reached Biscayne Bay by 1896. Flagler dredged a channel, built streets, instituted the first water and power systems, and financed the town's first newspaper, the Metropolis. When the town incorporated in 1896, its citizens wanted to honor the man responsible for its growth by naming it "Flagler." He declined the honor, persuading them to use an old Indian name, "Miami". In 1897, Flagler opened the exclusive Royal Palm Hotel in Miami. Flagler's second wife, Ida Alice, had been institutionalized for mental illness since 1895. In 1901, the Florida Legislature passed a bill that made incurable insanity grounds for divorce, opening the way for Flagler to remarry.

On August 24, 1901, Flagler married Mary Lily Kenan and the couple soon moved into their Palm Beach estate, Whitehall. Built as a wedding present to Mary Lily in 1902 by architects John Carrere and Thomas Hastings, Whitehall was a 60,000 square foot, 55-room winter retreat that established the Palm Beach season for the wealthy of America's Gilded Age. By 1905, Flagler decided that his Florida East Coast Railway should be extended from Biscayne Bay to Key West, a point 128 miles past the end of the Florida peninsula. At the time, Key West was Florida's most populated city and it was also the United States's closest deep water port to the canal that the U.S. government proposed to build in Panama. Flagler wanted to take advantage of additional trade with Cuba and Latin America as well as the increased trade with the west that the Panama Canal would bring. In 1912, the Florida Overseas Railroad was completed to Key West. In 1913, Flagler fell down a flight of stairs at Whitehall.

He never recovered from the fall and died of his injuries on May 20 at 84 years of age. He was buried in St. Augustine alongside his daughter, Jennie Louise and first wife, Mary Harkness. Product #: newitem1135976214 John D. Rockefeller - Facts & Summary - HISTORY.com John D. Rockefeller A+E Networks Introduction John D. Rockefeller (1839-1937), founder of the Standard Oil Company, became one of the world’s wealthiest men and a major philanthropist. Born into modest circumstances in upstate New York, he entered the then-fledgling oil business in 1863 by investing in a Cleveland, Ohio, refinery. In 1870, he established Standard Oil, which by the early 1880s controlled some 90 percent of U.S. refineries and pipelines. Critics accused Rockefeller of engaging in unethical practices, such as predatory pricing and colluding with railroads to eliminate his competitors, in order to gain a monopoly in the industry. In 1911, the U.S.

Supreme Court found Standard Oil in violation of anti-trust laws and ordered it to dissolve. During his life Rockefeller donated more than $500 million to various philanthropic causes. Google John D. Rockefeller: Early Years and Family John Davison Rockefeller, the son of a traveling salesman, was born on July 8, 1839, in Richford, New York . Industrious even as a boy, the future oil magnate earned money by raising turkeys, selling candy and doing jobs for neighbors. In 1853, the Rockefeller family moved to the Cleveland, Ohio , area, where John attended high school then briefly studied bookkeeping at a commercial college. Did You Know? One of the charitable organizations established by John D. Rockefeller, Sr. was the Rockefeller Sanitary Commission, founded in 1909. Less than 20 years after its creation, the Commission had achieved its primary goals, the successful eradication of hookworm disease across the southern United States. In 1855, at age 16, he found work as an office clerk at a Cleveland commission firm that bought, sold and shipped grain, coal and other commodities.

(He considered September 26, the day he started the position and entered the business world, so significant that as an adult he commemorated this “job day” with an annual celebration.) In 1859, Rockefeller and a partner established their own commission firm. That same year, America’s first oil well was drilled in Titusville, Pennsylvania . In 1863, Rockefeller and several partners entered the booming new oil industry by investing in a Cleveland refinery. In 1864, Rockefeller married Laura Celestia “Cettie” Spelman (1839-1915), an Ohio native whose father was a prosperous merchant, politician and abolitionist active in the Underground Railroad . (Laura Rockefeller became the namesake of Spelman College, the historically black women’s college in Atlanta, Georgia , that her husband helped finance.) The Rockefellers went on to have four daughters (three of whom survived to adulthood) and one son. John D. Rockefeller: Standard Oil In 1865, Rockefeller borrowed money to buy out some of his partners and take control of the refinery, which had become the largest in Cleveland.

Over the next few years, he acquired new partners and expanded his business interests in the growing oil industry. At the time, kerosene, derived from petroleum and used in lamps, was becoming an economic staple. In 1870, Rockefeller formed the Standard Oil Company of Ohio, along with his younger brother William (1841-1922), Henry Flagler (1830-1913) and a group of other men. John Rockefeller was its president and largest shareholder. 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. Rockefeller’s enormous wealth and success made him a target of muckraking journalists, reform politicians and others who viewed him as a symbol of corporate greed and criticized the methods with which he’d built his empire.

As The New York Times reported in 1937: “He was accused of crushing out competition, getting rich on rebates from railroads, bribing men to spy on competing companies, of making secret agreements, of coercing rivals to join the Standard Oil Company under threat of being forced out of business, building up enormous fortunes on the ruins of other men, and so on.” 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). John D. Rockefeller: Philanthropy and Final Years Rockefeller retired from day-to-day business operations of Standard Oil in the mid-1890s.

Inspired in part by fellow Gilded Age tycoon Andrew Carnegie (1835-1919), who made a vast fortune in the steel industry then became a philanthropist and gave away the bulk of his money, Rockefeller donated more than half a billion dollars to various educational, religious and scientific causes. Among his activities, he funded the establishment of the University of Chicago and the Rockefeller Institute for Medical Research (now Rockefeller University). In his personal life, Rockefeller was devoutly religious, a temperance advocate and an avid golfer. His goal was to reach the age of 100; however, he died at 97 on May 23, 1937, at The Casements, his winter home in Ormond Beach, Florida . (Rockefeller owned multiple residences, including a home in New York City , an estate in Lakewood, New Jersey, and an estate called Kykuit, old Dutch for “lookout,” set on 3,000 acres near Tarrytown, New York.) He was buried at Lake View Cemetery in Cleveland.

Tags The Standard Oil monopoly, by the Linux Information Project (LINFO) The Dismantling of The Standard Oil Trust The saga of Standard Oil ranks as one of the most dramatic episodes in the history of the U.S. economy. It occurred at a time when the country was undergoing its rapid transformation from a mainly agricultural society to the greatest industrial powerhouse the world has ever known. The effects of Standard Oil on the U.S., as well as on much of the rest of the world, were immense, and the lessons that can be learned from this amazing story are possibly as relevant today as they were a century ago. Standard Oil Company was founded by John D. Rockefeller in Cleveland, Ohio in 1870, and, in just a little over a decade, it had attained control of nearly all the oil refineries in the U.S. This dominance of oil, together with its tentacles entwined deep into the railroads, other industries and even various levels of government, persisted and intensified, despite a growing public outcry and repeated attempts to break it up, until the U.S. Supreme Court was finally able to act decisively in 1911. John D.

Rockefeller John Davidson Rockefeller was born the second of six children into a working class family in Richford, (upstate) New York in 1839. In 1853, the family moved to a farm in Strongsville, Ohio, near Cleveland. Under pressure from his father, Rockefeller dropped out of high school shortly before commencement and entered a professional school, where he studied penmanship, bookkeeping, banking and commercial law. In 1859 Edwin Drake struck oil in Titusville, in western Pennsylvania. This triggered an oil rush to the region and marked the start of oil as a major industry in the U.S. Coincidentally, this was the same year that Charles Darwin's On the Origin of Species was published, a work that had a great influence not only on the sciences, but also on business and society in general. It was also in 1859 that Rockefeller started his first business. With $1,000 he had saved and another $1,000 borrowed from his father, and in partnership with another young man, Maurice B. Clark, he set up a commission business that dealt with a variety of products including hay, grain and meats.

After the outbreak of the Civil War in 1861, Rockefeller hired a substitute to avoid conscription, as was not uncommon among Northerners in those days. Although the war initially disrupted the economy, it soon began to stimulate development in the North, and this appears to have been an important factor in Rockefeller's sudden and spectacular success. The Titusville discovery led to the swift ascent of a major new industry based largely on the use of kerosene for lighting. Oil refining became largely concentrated in Cleveland because of its proximity to the oil fields of Western Pennsylvania, its excellent (and competitive) railroad service, its availability of cheap water transportation (on adjacent Lake Erie) and its abundant supplies of low cost immigrant labor. Rockefeller was immediately attracted to the oil business, and in 1863, at the age of 24, he established a refinery in Cleveland with Clark and a new partner, Samuel Andrews, a chemist who already had several years of refining experience. Fueled by the soaring demand for oil and Rockefeller's ambition, this refinery became the largest in the region within a mere two years, and Rockefeller thereafter focused most of his attention on oil for the next three decades.

Standard Oil Company In 1870, Rockefeller, together with his brother William, Henry M. Flagler and Samuel Andrews, established the Standard Oil Company of Ohio. This occurred while the petroleum refining industry was still highly decentralized, with more than 250 competitors in the U.S. The company almost immediately began using a variety of cutthroat techniques to acquire or destroy competitors and thereby "consolidate" the industry. They included: (1) Temporarily undercutting the prices of competitors until they either went out of business or sold out to Standard Oil. (2) Buying up the components needed to make oil barrels in order to prevent competitors from getting their oil to customers. (3) Using its large and growing volume of oil shipments to negotiate an alliance with the railroads that gave it secret rebates and thereby reduced its effective shipping costs to a level far below the rates charged to its competitors. (4) Secretly buying up competitors and then having officials from those companies spy on and give advance warning of deals being planned by other competitors. (5) Secretly buying up or creating new oil-related companies, such as pipeline and engineering firms, that appeared be independent operators but which gave Standard Oil hidden rebates.

(6) Dispatching thugs who used threats and physical violence to break up the operations of competitors who could not otherwise be persuaded. By 1873 Standard Oil had acquired about 80 percent of the refining capacity in Cleveland, which constituted roughly one third of the U.S. total. The stock market crash in September of that year triggered a recession that lasted for six years, and Standard Oil quickly took advantage of the situation to absorb refineries in Pennsylvania's oil region, Pittsburgh, Philadelphia and New York. By 1878 Rockefeller had attained control of nearly 90 percent of the oil refined in the U.S., and shortly thereafter he had gained control of most of the oil marketing facilities in the U.S. Standard Oil initially focused on horizontal integration (i.e., at the same stage of production) by gaining control of other oil refineries. But gradually the integration also became vertical (i.e., extended to other stages of production and distribution), mainly by acquiring pipelines, railroad tank cars, terminal facilities and barrel manufacturing factories.

Standard Oil Trust The company continued to prosper and expand its empire, and, in 1882, all of its properties and those of its affiliates were merged into the Standard Oil Trust, which was, in effect, one huge organization with tremendous power but a murky legal existence. It was the first of the great corporate trusts. A trust was an arrangement whereby the stockholders in a group of companies transferred their shares to a single set of trustees who controlled all of the companies. In exchange, the stockholders received certificates entitling them to a specified share of the consolidated earnings of the jointly managed companies. The concept of a trust was first proposed by Samuel Dodd, an attorney working for Standard Oil. In the case of Standard Oil, a board of nine trustees, controlled by Rockefeller, was set up and was given control of all the properties of Standard Oil and its numerous affiliates. Each stockholder received 20 trust certificates for each share of Standard Oil stock. The trustees elected the directors and officers of each of the component companies, and all of the profits of those companies were sent to the trustees, who decided the dividends. This arrangement allowed all of the companies to function in unison as a highly disciplined monopoly . Since its earliest days, the U.S.

oil industry had been well aware of the power of monopoly and its huge profits potential. Although the seemingly erratic fluctuations of oil prices had convinced many refiners to try to restrict output in a joint effort, these attempts never lasted long because the incentives to cheat were so great. However, the unified organization of the trust finally made the disciplined regulation of production levels possible, thereby giving its owners complete control over prices. The massive and unprecedented profits of Standard Oil were made possible by (1) this control over prices (and the consequent ability to set prices at levels that would maximize profits), (2) the huge economies of scale attained from the control of almost all oil refined in the U.S. and (3) the ability to pressure railroads and other suppliers of goods and services into giving them bargain rates. However, even this unprecedented wealth and power was not enough. Rockefeller and Standard Oil needed ever more. The company thus expanded into the overseas markets, particularly Western Europe and Asia, and after a while it was selling even more oil abroad than in the U.S. Moreover, Rockefeller, in addition to his role as the head of Standard Oil, also invested in numerous companies in manufacturing, transportation and other industries and owned major iron mines and extensive tracts of timberland.

The astonishing success of Standard Oil encouraged others to follow the Rockefeller business model, particularly in the booming final decades of the 19th century. Trusts were established in close to 200 industries, although most never came close to Standard Oil in size or profitability. Among the largest were railroads, coal, steel, sugar, tobacco and meatpacking. Public Disgust and Revulsion This trend went far from unnoticed by the general public. In fact, it led to widespread disgust and revulsion, not only among the many people who had their businesses or jobs wiped out by the ruthless predatory tactics of the trusts, but also by countless others who were affected by the increased costs and reduced levels of service that often resulted from the elimination of competition. The monopolization of the economy also became a major topic for the print media, which helped to create a widespread awareness not only of the effects of this consolidation but also of the techniques that were being used to attain it, including the extensive use of fraud, political corruption and physical violence.

For example, in 1881 the Atlantic Monthly published Story of a Great Monopoly by the well-known reformer Henry Demarest Lloyd, and the widespread popularity of this article resulted in Lloyd's publication in 1894 of Wealth against Commonwealth, a book-length attack on monopolies based largely on his study of Standard Oil. The media attack on monopolies and corruption reached a peak from 1902 to 1912, which is often referred to as the muckraking decade. That period saw the publication of more than a thousand articles providing detailed accounts of the economic and political corruption caused by big business, especially the trusts. This surge was facilitated by advances in printing technology, including the development of the halftone process, which made possible the low cost production of profusely illustrated magazines that were affordable (and irresistible) to the masses. Particularly noteworthy among the muckrakers was Ida M. Tarbell, whose 1902 series of articles detailed the ruthless business tactics of Standard Oil and its abuse of natural resources. This series was subsequently published in book form as the classic The History of the Standard Oil Company.

Another equally influential classic was Upton Sinclair's The Jungle, which was released in 1906 and exposed the corrupt and highly unsanitary practices of the meatpacking industry. Among the many other topics covered by the muckrakers were patent medicines, corruption in the U.S. Senate and racial discrimination. The muckrakers helped bring about an unprecedented era of reform which included pioneering legislation aimed at restoring free competition to the economy and at protecting the food supply along with other measures designed to stop the excesses and abuses of corporate greed. Governmental Impotence In spite of the outraged public sentiment, it took the government a long time to take effective measures to deal with the abusive tactics by Standard Oil and other monopolies. The strong desire on the part of the monopolies for preventing government intervention together with their pervasive influence undoubtedly played a major role in this delay. As an example of the difficulties which the government faced, Standard Oil executives and their friends were extremely uncooperative at judicial inquiries (such as the Hepburn Committee, which investigated railroad rate discrimination and whose 1880 final report helped bring about the adoption of the federal Interstate Commerce Act in 1887).

In fact, they regularly contested the validity of such proceedings and frequently even refused to attend them. Their evasive and condescending responses to questions during the hearings confirmed their attitude of being above the rule of law, thereby further enraging the public. The vehement opposition to the trusts, especially among farmers who protested the high charges for transporting their products to the cities by railroad, finally resulted in the passage of the Sherman Antitrust Act in 1890. This was the first measure enacted by the U.S. Congress to prohibit trusts. Although several states had previously enacted similar laws, they were limited to intrastate commerce. The Sherman Antitrust Act, in contrast, was based on the constitutional power of Congress to regulate interstate commerce. It was passed by an overwhelming vote of 51-1 in the Senate and a unanimous vote of 242-0 in the House, and it was signed into law by President Benjamin Harrison. The Sherman Antitrust Act authorized the Federal Government to dissolve the trusts.

It began with the statement: "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." And it established penalties for persons convicted of establishing such combinations: ". . . shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court." However, the Act's effectiveness was at first limited because of loose wording together with intense political pressure from the trusts. Subsequently, in 1892 the Ohio Supreme Court declared the Standard Oil Trust to be an illegal monopoly and ordered its dissolution. Although the trustees superficially complied, this decree had little overall effect because they retained control through their positions on the boards of the component companies. Standard Oil was subsequently reorganized in 1899 as a holding company under the name of Standard Oil Company of New Jersey. That state had conveniently adopted a law that permitted a parent company to own the stock of other companies.

Philanthropy As is often the case even with the most heinous of human activities, there was another, starkly contrasting side to the unabashed greed and callousness of some of the great monopolists. It was perhaps most notably espoused by Andrew Carnegie in his 1889 article The Gospel of Wealth, in which he asserted that the wealthy have a moral obligation to serve as stewards for society. Carnegie had likewise become one of the richest people in the world through the domination of a U.S. industry (steel), although he managed to do so in a less ruthless manner than Rockefeller. Carnegie stated that the accumulation of great wealth by a few in any capitalist society was not only inevitable, but also necessary to maintain prosperity and for the survival of democracy itself. However, he was also convinced that those who amassed such wealth have a moral duty to donate most of it during their lifetime for the benefit of society. In accordance with this philosophy, Carnegie dispensed hundreds of millions of dollars for various philanthropic activities, the best known of which was the construction of several thousand libraries throughout the English speaking world. Rockefeller became another of the great American philanthropists.

To many this seemed to be a dramatic and puzzling contradiction for a ruthless monopolist who never hesitated to use any means, no matter how illegal or immoral, to crush his competitors. In fact, Rockefeller's belief in the importance of charitable activities actually started very early, with his regular donations of part of his income to his church and charities when he was earning money as a boy. He once wrote: "I believe it is every man's religious duty to get all he can honestly and to give all he can." Consistent with this conviction, Rockefeller began reducing his workload at Standard Oil in the 1890s in order to devote more of his time to philanthropy. Subsequently, in 1910 he announced his retirement so that he could devote full time to this activity, which he pursued with great passion for his remaining 26 years. Rockefeller gave away the bulk of his fortune in ways designed to do the most good as determined by careful study and with the assistance of expert advisers.

For example, he established several major charitable organizations (including the Rockefeller Institute for Medical Research, the General Education Board, the Rockefeller Sanitary Commission and The Rockefeller Foundation) and played a pivotal role in the establishing and funding of the University of Chicago (which remains one of the leading U.S. universities). The sum of his donations to these and other causes were more than $500 million (of an estimated peak net worth of nearly one billion dollars) during his lifetime, and the total of his and his son's donations was in excess of $2.5 billion by 1955. Several explanations have been proposed for the massive public service and charitable activities of the great corporate robber barons. Many contemporaries of Rockefeller and Carnegie believed that they were really just egotists who craved the favorable attention that they received from donating money and delighted in having prestigious institutions and thousands of buildings named after them. Another explanation is that these activities were largely a public relations ploy and thus a good business investment. That is, they were techniques for deflecting attention from the harmful effects of the monopolies and for staving off the increasingly serious attempts to curtail their power or even break them up.

Still another explanation is that such activities were a form of atonement for their feelings of guilt about their business activities. This is certainly consistent with the apparent religious convictions of Rockefeller and others and with their possible consequent fear of eternal punishment in an afterlife. Perhaps there is some truth to all of these explanations. The Roosevelt Administration's Trust-busting The Sherman Antitrust Act's effectiveness was at first limited because of loose wording and ferocious opposition from the big industrial combinations. However, the situation began to change starting in 1898 with President William McKinley's appointment of several senators to the U.S. Industrial Commission. The Commission's subsequent report to President Theodore Roosevelt laid the groundwork for Roosevelt's famous and feared trust busting campaign. Despite this reputation, Roosevelt, who became president in 1901, actually preferred regulation to dismantling, and he attempted to steer a middle course between the socialism favored by some reformers and the laissez faire approach advocated by the Republicans. His hand was strengthened by an increasingly outraged public, which, although leery of government intervention in the past, had become far more supportive of it because of the seemingly endless growth in the numbers and power of the monopolies.

And the highly publicized philanthropic activities of some of the industrial barons did little to stop this momentum for reform. Several steps were taken by Roosevelt during his first term that proved highly successful despite intensive efforts by big business to block them. They included: (1) Convincing Congress to establish a Department of Commerce and Labor, the first new executive department since the Civil War, in order to increase the federal government's oversight of the interstate actions of big business and to monitor labor relations. (2) Setting up the Bureau of Corporations in the new department in order to find violations of existing antitrust legislation. The Bureau soon began investigations into the oil, steel, meatpacking and other industries. (3) Instructing his attorney general to launch a total of 44 lawsuits against what were determined to be harmful business combinations, among which was the Standard Oil Trust. In a seminal decision, the U.S. Supreme Court in 1904 upheld the government's suit under the Sherman Antitrust Act to dissolve the Northern Securities Company (a railroad holding company) in State of Minnesota v. Northern Securities Company.

Then, in 1911, after years of litigation, the Court found Standard Oil Company of New Jersey in violation of the Sherman Antitrust Act because of its excessive restrictions on trade, particularly its practice of eliminating its competitors by buying them out directly or driving them out of business by temporarily slashing prices in a given region. Coincidentally, 1911 was also a pivotal year for the petroleum industry in another respect. It was the year in which the U.S. market for kerosene (until then the main product from oil refining) was surpassed by that for a formerly discarded byproduct of the refining process -- gasoline. In its historic decision, the Supreme Court established an important legal standard termed the rule of reason. It stated that large size and monopoly in themselves are not necessarily bad and that they do not violate the Sherman Antitrust Act. Rather, it is the use of certain tactics to attain or preserve such position that is illegal. The Court ordered the Standard Oil Trust to dismantle 33 of its most important affiliates and to distribute the stock to its own shareholders and not to a new trust.

The result was the creation of a number of completely independent (although eight of them retained the phrase Standard Oil in their names) and vertically integrated oil companies, each of which ranked among the most powerful in the world. This decision also paved the way for new entrants into the industry, such as Gulf and Texaco, which discovered and exploited vast new petroleum deposits in Texas. The consequent vigorous competition gave a big impetus to innovation and expansion of the oil industry as a whole. Conclusion The trusts presented a superficially strong case for their activities. They claimed that their consolidation actually provided a net benefit to the public by reducing costs, and thus prices, through the elimination of duplicate and inefficient facilities and through economies of scale attained from larger volumes of output. They also contended that the greater volumes of output made it possible to finance larger and more efficient production facilities and to devote more funds to research and development. Although there was some truth to these arguments, at least initially, they failed to take into consideration the huge detrimental effects on the economy and society resulting from the long-term (four decades in the case of Standard Oil) absence of free market competition (i.e., the market mechanism).

Monopolies often do reduce the prices and improve the quality of their products in their early stages when they are trying to eliminate the competition. But history has proven time and time again that they lose their incentive to do so after the competition gets exterminated; in fact, they then have a very powerful incentive to increase prices and reduce quality. Free competition, in contrast, serves to minimize prices and maximize quality over the long run, and it thus results, at least in many respects, in what economists term an efficient allocation of resources for the economy as a whole. Another major disadvantage of monopolies is their tendency to stifle innovation . Not only do they lose much of their motivation to develop and deploy new and improved technologies as a result of the loss of competition, but monopolies also often make vigorous efforts to prevent existing or potential competitors from bringing their innovations to market because of the threat that it poses to their dominance. Although it is easy for monopolists to create the illusion that they are major innovators, technological advance in monopolistic industries is often substantially less than what would occur in a more competitive environment.

Innovation is generally regarded as one of the keys (if not the key) to economic growth, and thus its suppression will likely have a deleterious effect on the economy as a whole, even though such effect might not be readily apparent to the general public. The argument has also been made that the excessive prices and other harmful effects of monopolies are justified because of the great charitable activities of monopolists-turned-philanthropists such as Rockefeller. However, there is scant evidence to support this. Although the scale of Rockefeller's charitable activities was certainly impressive, it was likely small in comparison to the total costs imposed on the economy and society from the anti-competitive business practices of Standard Oil. These costs were not all obvious because they were widely scattered, often hidden and difficult to quantify, in sharp contrast to the highly conspicuous and well publicized philanthropic activities. Historians of the future will likely continue to view the dissolution of the Standard Oil Trust as an important milestone in the unending struggle to restore and preserve free competition in the U.S. economy.

Yet, they might also be far more concerned than their predecessors about the failure of the market mechanism, and of society as a whole, to address an issue of at least equally great importance: namely, the inexorable rush to consume and deplete what increasingly appears to be a very finite resource virtually regardless of its consequences. Created May 21, 2004. Updated October 12, 2006. Copyright © 2004 - 2006 The Linux Information Project. All Rights Reserved. Standard Oil Company and Trust | American corporation | Britannica.com Standard Oil Company and Trust American corporation Alternative Title: Standard Oil Trust Related Topics Standard Oil Company and Trust, American company and corporate trust that from 1870 to 1911 was the industrial empire of John D. Rockefeller and associates, controlling almost all oil production, processing, marketing , and transportation in the United States . The former Standard Oil Building, lower Manhattan, New York City, constructed in 1921–28 atop … Library of Congress, Washington, D.C. The company’s origins date to 1863, when Rockefeller joined Maurice B.

Clark and Samuel Andrews in a Cleveland , Ohio , oil-refining business; in 1865 Rockefeller bought out Clark, and two years later he invited Henry M. Flagler to join as a partner in the venture. By 1870 the firm of Rockefeller, Andrews, and Flagler was operating the largest refineries in Cleveland, and these and related facilities became the property of the new Standard Oil Company, incorporated in Ohio in 1870. By 1880, through elimination of competitors, mergers with other firms, and use of favourable railroad rebates, it controlled the refining of 90 to 95 percent of all oil produced in the United States. Overview of the first oil pipeline (1879), which attempted to compete with Standard Oil Company and … Contunico © ZDF Enterprises GmbH, Mainz In 1882 the Standard Oil Company and affiliated companies that were engaged in producing, refining, and marketing oil were combined in the Standard Oil Trust, created by the Standard Oil Trust Agreement signed by nine trustees, including Rockefeller.

By the agreement, companies could be purchased, created, dissolved, merged, or divided; eventually, the trustees governed some 40 corporations, of which 14 were wholly owned. Founded in 1882, Standard Oil of New Jersey was one component of the trust; by design the Standard Oil Trust embraced a maze of legal structures, which made its workings virtually impervious to public investigation and understanding. As Ida Tarbell wrote in her History of the Standard Oil Company (1904), “You could argue its existence from its effects, but you could not prove it.” In 1892 the Ohio Supreme Court ordered the trust dissolved, but it effectively continued to operate from headquarters in New York City . Similar Topics John D. Rockefeller | Cleveland Historical By Heidi Fearing In 1863, John D. Rockefeller encouraged fellow business partner, M. B. Clark to agree to a decision which would eventually lead to the creation of the multimillion dollar company Standard Oil. The duo financed and joined with chemist Samuel Andrews in starting the oil refining business Andrews, Clark, and Co. Two years later, Rockefeller and Andrews bought out Clark's interest and became Rockefeller & Andrews.

The company was just one of thirty oil refineries in Cleveland when it was first formed in 1865, but it soon became the largest through a merger with O.H. Payne, another largely successful oil refinery owner. The company went on to join with other area competitors or buy them out. With control of Cleveland's refineries, the Rockefeller & Andrews Company chartered the Standard Oil Company in 1870. Standard Oil made Cleveland the center of American petroleum production. As a result, the city saw benefits in the form of both economics and humanitarianism. Rockefeller's company gave work to thousands, and Cleveland's wealth grew in relation to Standard Oil's expansion. Even during the Panic of 1873 Rockefeller continued to prosper. In fact, just six years later, he had control of 90 percent of America's oil. Rockefeller did not squander all of his wealth, but instead was well known for his generous but judicious charity to educational institutions, Baptist churches, the Children's Aid Society, hospitals, and the Women's Christian Temperance Movement to name only a few. Rockefeller also made several wise investments not related to oil, some of which are still visible in Cleveland.

The oil tycoon was one of the large stockholders for Arcade, which opened in 1890 and still exists on Superior Avenue. On the corner of West 6th Street and West Superior Avenue stands the Rockefeller Building. The man after whom the building is named bought the Weddell House property in 1903 and turned it into the headquarters of lake interests. John D. Rockefeller's successes and the subsequent imprints left on Cleveland because of them can be traced to three main factors. First, Rockefeller learned from childhood how to make wise business decisions. He was able to think ahead, see the success in budding industries, and use borrowing and lending to his advantage. Using these talents in his first business with M. B. Clark had given him a good reputation with Cleveland's primary lenders and helped him see the benefit of investing in oil refining. However, Rockefeller's brilliance in business may not have thrived to such a great extent had not the Civil War occurred during the inception of his career. The Civil War expedited Cleveland's economy, particularly in the steel and fabrics industries. Consequently, local bankers were able and willing to lend funds to Rockefeller for business purposes. The initial company M. B.

Clark and Rockefeller formed in 1859 as produce commission merchants also saw an influx of business at wartime, and this also helped Rockefeller and Clark extend their business to oil. Third, Cleveland's excellent Lake Erie and railroad transportation made it possible for Rockefeller to easily bring in crude oil, transport his refined oil and expand Standard Oil. Images John D. Rockefeller at age 87 Rockefeller was born on July 8, 1839 in Richford, New York. At age 14, he and his family moved to Cleveland where he enrolled in Central High School and then E. G. Folsom's Commercial College. After graduating in 1855, the young Rockefeller got his first job as a bookkeeper for Hewitt & Tuttle. Although the work paid little and was difficult, it was in this job that he began to establish himself as an intelligent and reliable businessman. Because he had spent three years building this reputation, Rockefeller was able to start his first business with Maurice B. Clark at the young age of 19. Image Courtesy of Cleveland State University. Michael Schwartz Library. Special Collections.

View File Details Page Standard Oil in 1889 The Standard Oil Company was founded in 1870 by John D. Rockefeller, William Rockefeller, Henry M. Flagler, Samuel Andrews, and Stephen V. Harkness. It was located in the Flats, a region along the Cuyahoga River. Standard Oil, along with many other manufacturers, chose this location for the convenience of Great Lakes and railroad transportation. Image Courtesy of the Western Reserve Historical Society. View File Details Page Rockefeller at Coit Road Station, East Cleveland in 1912 During the beginning of his oil enterprise, Rockefeller took advantage of Cleveland's many railroads to bring crude oil from Pennsylvania and western Ohio to his refineries in Cleveland. He later went further, using railroad rebates to keep his prices down. Another method that skyrocketed Standard Oil's success was the creating of the Standard Oil Trust. Rockefeller organized the trust in January of 1882, but it was dissolved by the State of Ohio in 1892. Image Courtesy of the Western Reserve Historical Society. View File Details Page John D.

Rockefeller ready for an auto ride 1911 In 1911, automobile popularity caused the sale of gasoline to exceed kerosene. At that time the Standard Oil enterprise was in control of 85% of Ohio's gasoline. Image Courtesy of Cleveland State University. Michael Schwartz Library. Special Collections. View File Details Page Standard Oil Company, ca. 1937 After the State of Ohio successfully won a lawsuit against the Standard Oil Trust, Standard Oil of Ohio was formed. Also called "Sohio," the corporation was bought by BP in 1987. Image Courtesy of Cleveland State University. Michael Schwartz Library. Special Collections. View File Details Page The Rockefeller Home Rockefeller purchased his house on Millionaires' Row on Euclid Avenue in 1868. His three children were born there and the family resided there for 16 years before moving to New York City. Image Courtesy of Cleveland State University. Michael Schwartz Library. Special Collections. View File Details Page Rockefeller Monument in Lake View Cemetery Rockefeller - a true Cleveland Hall of Famer - passed away in Ormond Beach, Florida on May 23, 1937.

The 98 year old was buried four days later in Cleveland at Lake View Cemetery. A nearly 70 foot family monument towers over his grave. Image Courtesy of Cleveland State University. Michael Schwartz Library. Special Collections. View File Details Page Monument by Carabelli In 1914, Cleveland's famed monument makers proudly advertised that they had erected one of the largest granite obelisks ever in the United States for the Rockefeller family. The monument was placed at Lake View Cemetery in 1899. View File Details Page The Rockefeller obelisk at Lake View Cemetery was not erected to memorialize the death of John D. Rockefeller in 1937. Instead, it went up at the family grave site in 1899, attended by much press coverage. It was believed at the time to be the largest monument ever erected in the United States for a private individual. Tweet this factoid Monopoly in America Monopoly in America Snippet 1: John D. Rockefeller's Standard Oil Company, Monopoly in Action The term monopoly describes a market situation where one seller controls the supply of a product or service and thereby inhibits competition.

Monopolies have an ancient history with two of the first being granted in ancient China, when China's Emperor gave out monopoly rights on salt and iron. Like the Chinese Emperor, America's early industrialists also liked the idea of monopolies, none more so than John D. Rockefeller, the head of Standard Oil. When Rockefeller founded Standard Oil in 1870, there were at least 250 other oil refineries. Yet by 1878 Rockefeller had gained control of nearly 90 per cent of the oil refined in the United States. His success was based on brains, hard work, luck, and what seems to have been a complete lack of conscience. One of Rockefeller's favorite business maneuvers was to buy up or create oil-related companies, like the makers of tanks, barrels, and pipelines, and then jack up the prices for competing companies. He would also secretly buy competing companies and then use officials from these companies to spy on the activities of competitors. The sheer size of Standard Oil made it possible for Rockefeller to bully the railroads into granting him big rebates on shipping. The rebates made his shipping costs much lower than that of any other competitor and worked to defeat the entry of new oil companies into the market.

The source of this paragraph is Ed Rosenthal, poet, broker, and economist; also this very interesting site, which focuses on Standard Oil and the federal government's long struggle to regulate it and other American monopolies. You can also go here to see a famous cartoon depicting Standard Oil as an octopus with other industries and congress already in its clutches as it reaches out for the White House. For contrast, you can also find a defense of Rockefeller's tactics here. I don't agree with the author's interpretation of the facts and events surrounding Rockefeller's practices or the public's reaction to them. However, you should know that the point of view exists and you can evaluate it for yourself.

Snippet 2: Monopoly and the Muckrakers "This corporation [Standard Oil] has driven into bankruptcy, or out of business, or into union with itself, all the petroleum refineries of the country except five in New York, and a few of little consequence in Western Pennsylvania....America has the proud satisfaction of having furnished the world with the greatest, wisest, and meanest monopoly known to history." — Henry Lloyd Demarest, "The Story of a Great Monopoly" Atlantic Magazine, March 1881 As products like oil, steel and coal came under the control of single companies, many Americans became anxious about the lack of competition within the industries producing such essential products. That anxiety was particularly high where Standard oil was concerned because no one was better than John D. Rockefeller at figuring out how to take and keep control of a market while squashing all competition. In response to the public's fears, a number of investigative journalists began to delve into monopoly practices. Among the first was Henry Demarest Lloyd who published his article, "The Story of a Great Monopoly" in 1881.

In the article, published in Atlantic Magazine, Demarest took on monopolies in general but focused, in particular, on the practices of Rockefeller's Standard Oil company. Especially revealing is Demarest's account of how officers of the railroad and Standard Oil simply refused to respond to questions from state investigators because their answers might implicate them in criminal activity: Just who the Standard Oil Company are, exactly what their capital is, and what are their relations to the railroads, nobody knows except in part. Their officers refused to testify before the supreme court of Pennsylvania, the late New York Railroad Investigating Committee, and a committee of Congress. The New York committee found there was nothing to be learned from them, and was compelled to confess its inability to ascertain as much as it desired to know 'of this mysterious organization, whose business and transactions are of such a character that its members declined giving a history or description, lest their testimony be used to convict them of crime.' " But if state and federal committees couldn't gain traction when it came to their investigations, the same was not true of Ida Minerva Tarbell. Tarbell was a journalist with firsthand experience of Rockefeller's tactics.

She had seen her father's wooden oil tank business destroyed by Rockefeller's expert use of "vertical integration." He would buy companies at every stage in the oil production process, including the building of tanks, and then, for a while at least, undersell all his competitors until they folded. Having personally witnessed the power of Standard Oil, Tarbell was determined to bring the oil giant down. In particular, she was after John D. Rockefeller. While Ida Tarbell certainly didn't destroy Rockefeller's empire—Ironically by the time Tarbell wrote, Rockefeller was the head of Standard Oil in name only. He had retired in 1897—her nineteen-part series, "The History of the Standard Oil Company, " which ran between 1902 and 1904 in McClure's magazine, set the stage for President Theodore Roosevelt to break the stranglehold Standard Oil had on the industry. Tarbell had done her homework carefully, and she detailed Rockefeller's tactics in a straight-forward way that left her reading public as furious as she was. Public outrage was so great, Roosevelt had to respond forcefully. However, he never forgave Tarbell, or investigative journalists like her, for their exposés of corruption.

He nicknamed them "muckrakers," claiming they liked nothing better than raking up society's dirt, while ignoring everything else positive. Sources: For an altogether negative view of Rockefeller's business practices see Linux's information project . For a somewhat milder interpretation, see this PBS site. Demarest's complete article is available here Snippet 3: Teddy Roosevelt, Trust Buster Teddy Roosevelt in a 1906 cartoon captioned, "The infant Hercules and the Standard Oil Serpents" Source: Wiki Media The Sherman AntiTrust Act of 1890 was the first Congressional measure that attempted to limit the growth of monopolies. Its language was forceful and much less vague than its critics have claimed: "Every person who shall monopolize, or attempt to monopolize...any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony." Enforcement, however, was weak, despite the growing public outcry against the practices of monopolies in general and Standard Oil in particular. Enforcement, however, got a lot tougher when Theodore Roosevelt became president in 1901.

In office when Tarbell's series was the talk of the nation, President Roosevelt, who would have preferred regulating rather than dismantling monopolies, was forced to take a hard stand or risk losing his reputation as a champion of political reform.* Roosevelt rose to the occasion and took measures to limit the grip of monopolies on the country. He persuaded Congress to establish a Department of Commerce and Labor. Its job was to oversee interstate commercial transactions and monitor labor conditions of workers. He also set up the Bureau of Corporations and instructed the bureau to make sure no corporation violated the Sherman Anti-Trust Act. Perhaps most importantly, he set in motion 44 law suits against companies considered to be engaged in practices profitable for the country but harmful to U.S. society. Among those companies was Standard Oil. Even without Rockefeller at the helm, the company fought hard to maintain its control of the oil industry. It wasn't until 1911 that the Supreme Court found in favor of the government and against Standard Oil. Perhaps most importantly, the court set a precedent, or pattern for future cases to follow. It issued in its decision, the "Rule of Reason," which said that monopolies in themselves are not necessarily bad and do not violate the Sherman Antitrust Act.

Instead, what the court considered illegal was Standard Oil's use of unethical tactics to gain and preserve control of the market. As part of the ruling, the Supreme Court ordered the Standard Oil Trust to dismantle 33 of its most important affiliates and to distribute the stock to its own shareholders. The 1911 decision paved the way for new companies like Gulf and Texaco to enter the industry. It also paved the way for the discovery and exploitation of new petroleum deposits in Texas, suggesting that where monopolies weaken, innovation thrives. Joseph R. Conlin, the author of the best American history textbook I have ever read,The American Past, offers an interesting comment from Roosevelt. It sheds some light on why he might have found investigative jouranlists like Tarbell and Demarest to be such nuisances:" How I wish I wasn't a reformer. Oh Senator![Chauncey Depew,senator from New York}. But I suppose I must live up to my part." (p.575, 9th edition) No wonder Roosevelt despised the muck rakers! Perpetually stirring up the public over injustices that needed to be reformed, they gave him no peace.

The quotation from the Sherman Anti-Trust Act comes from Tim Wu's wonderful book The Master Switch , which explains, in detail, how historically information technologies, like radio and movies, have started out as free-wheeling and wide open as the oil industry was before Rockefeller came on the scene, only to be consumed by large companies that eliminated the more progressive aspects of the new technology. And yes, he does worry that the same thing might happen to the Internet. Unless otherwise identified as coming from an outside source, all the content on this page is © Ulrich and Laraine Flemming Last change made to this page: June 16 2011 John D. Rockefeller - The First American Billionaire John D. Rockefeller Founder of Standard Oil Company and America's First Billionaire American industrialist and philanthropist John D. Rockefeller (circa 1900). (Photo by Hulton Archive/Getty Images) By Janet Ogle-Mater, Contributing Writer Updated July 30, 2016. Who Was John D. Rockefeller? John D. Rockefeller was an astute businessman who became America’s first billionaire in 1916.

In 1870, Rockefeller founded Standard Oil Company, which eventually became a domineering monopoly in the oil industry. Rockefeller’s leadership in Standard Oil brought him great wealth as well as controversy, as many opposed Rockefeller’s business practices. Standard Oil’s nearly complete monopoly of the industry was eventually brought to the U.S. Supreme Court, who ruled in 1911 that Rockefeller’s titanic trust should be dismantled. Though many disapproved of Rockefeller’s professional ethics, few could devalue his substantial philanthropic endeavors, which led to him donating $540 million (over $5 billion today) in his lifetime to humanitarian and charitable causes. Dates: July 8, 1839 – May 23, 1937 Also Known As: John Davison Rockefeller, Sr. Rockefeller as a Young Boy John Davison Rockefeller was born July 8, 1839, in Richford, New York. continue reading below our video Test Your General Science Knowledge He was the second child of six to the marriage of William “Big Bill” Rockefeller and Eliza (Davison) Rockefeller.

William Rockefeller was a traveling salesman peddling his questionable wares across the country, and as such, was often absent from the home. John D. Rockefeller’s mother essentially raised the family on her own and managed their holdings, never knowing that her husband, under the name of Dr. William Levingston, had a second wife in New York. In 1853, “Big Bill” moved the Rockefeller family to Cleveland, Ohio , where Rockefeller attended Central High School. Rockefeller also joined the Euclid Avenue Baptist Church in Cleveland, where he would remain a long-time active member. It was under his mother’s tutelage that a young John learned the value of religious devotion and charitable giving; virtues that he practiced regularly throughout his life. In 1855, Rockefeller dropped out of high school to enter Folsom Mercantile College. After completing the business course in three months, 16-year-old Rockefeller secured a bookkeeping position with Hewitt & Tuttle, a commission merchant and produce shipper. Early Years in Business It didn’t take long for John D. Rockefeller to develop a reputation as an astute businessman: hardworking, thorough, precise, composed, and adverse to risk-taking.

Meticulous in every detail, especially with finances (he even kept detailed ledgers of his personal expenditures from the time he was 16), Rockefeller was able to save $1000 in four years from his bookkeeping job. In 1859, Rockefeller added this money to a $1000 loan from his father in order to invest in his own commission merchant partnership with Maurice B. Clark , a former Folsom Mercantile College classmate. Another four years later, Rockefeller and Clark expanded into the regionally booming oil refinery business with a new partner, chemist Samuel Andrews , who had built a refinery but knew little about business and the transporting of goods. However, by 1865, the partners, which numbered five including Maurice Clark’s two brothers, were in disagreement about the management and direction of their business, so they agreed to sell the business to the highest bidder amongst them. The 25-year-old Rockefeller won it with a bid of $72,500 and, with Andrews as a partner, formed Rockefeller & Andrews. In short order, Rockefeller studied the nascent oil business in earnest and became savvy in its dealings. Rockefeller’s company started small but soon merged with O.H.

Payne, a large Cleveland refinery owner, and then with others as well. With his company growing, Rockefeller brought his brother (William) and Andrews’ brother (John) into the company. In 1866, Rockefeller noted that 70% of refined oil was being shipped overseas to markets; so Rockefeller set up an office in New York City to cut out the middleman -- a practice that he would use repeatedly to cut expenses and increase profits. A year later, Henry M. Flagler joined the group and the company was renamed Rockefeller, Andrews, & Flagler. As the business continued to succeed, the enterprise was incorporated as the Standard Oil Company on January 10, 1870 with John D. Rockefeller as its president. The Standard Oil Monopoly John D. Rockefeller and his partners in the Standard Oil Company were rich men, but they strove for even more success. In 1871, Standard Oil, a few other large refineries, and major railroads secretly joined together in a holding company called the South Improvement Company (SIC).

The SIC gave transportation discounts (“rebates”) to the large refineries that were part of their alliance but then charged the smaller, independent oil refineries more money (“drawbacks”) to shuttle their goods along the railroad. This was a blatant attempt to economically destroy those smaller refineries and it worked. In the end, many businesses succumbed to these aggressive practices; Rockefeller then bought out those competitors. As a result, Standard Oil obtained 20 Cleveland companies in one month in 1872. It became known as “The Cleveland Massacre,” ending the competitive oil business in the city and claiming 25% of the country’s oil for Standard Oil Company. It also created a backlash of public contempt, with the media dubbing the organization “an octopus.” In April 1872, the SIC was disbanded per the Pennsylvania legislature but Standard Oil was already on its way to becoming a monopoly. A year later, Rockefeller expanded into New York and Pennsylvania with refineries, eventually controlling nearly half of the Pittsburgh oil business. The company continued to grow and consume independent refineries to the point that Standard Oil Company commanded 90% of America’s oil production by 1879.

In January 1882, the Standard Oil Trust was formed with 40 separate corporations under its umbrella. Desiring to make every financial gain from the business, Rockefeller eliminated middlemen like purchasing agents and wholesalers. He began manufacturing the barrels and cans needed to store the company’s oil. Rockefeller also developed plants that produced petroleum by-products like petroleum jelly, machine lubricants, chemical cleaners, and paraffin wax. Ultimately, the arms of the Standard Oil Trust eradicated the need for outsourcing entirely, which devastated existing industries in the process. Beyond Business On September 8, 1864, John D. Rockefeller married the valedictorian of his high school class (though Rockefeller did not actually graduate). Laura Celestia “Cettie” Spelman , an assistant principal at the time of their marriage, was a college-educated daughter of a successful Cleveland businessman. Like her new husband, Cettie was also a devoted supporter of her church and like her parents, upheld the temperance and abolition movements. Rockefeller valued and often consulted his bright and independently-minded wife about business manners.

Between 1866 and 1874, the couple had five children: Elizabeth (Bessie), Alice (who died in infancy), Alta, Edith, and John D. Rockefeller, Jr. With the family growing, Rockefeller bought a large house on Euclid Avenue in Cleveland, which became known as “Millionaire’s Row.” By 1880, they also purchased a summer home overlooking Lake Erie ; Forest Hill , as it was called, became a favorite home for the Rockefellers. Four years later, because Rockefeller was doing more business in New York City and did not like being away from his family, the Rockefellers acquired yet another house. His wife and children would travel each fall to the city and stay the winter months in the family’s large brownstone on West 54th Street. Later in life, after the children were grown and grandchildren came, the Rockefellers built a house in Pocantico Hills, a few miles north of Manhattan. They celebrated their golden anniversary there and the following spring in 1915, Laura “Cettie” Rockefeller passed away at age 75. Media and Legal Woes John D.

Rockefeller’s name had first been associated with ruthless business practices with the Cleveland Massacre, but after a 19-part serial exposé by Ida Tarbell , titled History of Standard Oil Company, began in McClure’s Magazine in November 1902, his public reputation was proclaimed to be one of greed and corruption. Tarbell’s skillful narrative exposed all elements of the oil giant’s efforts to squash competition and of Standard Oil’s overbearing domination of the industry. The installments were later published as a book of the same name and quickly became a bestseller. With this spotlight on its business practices, the Standard Oil Trust was attacked by state and federal courts as well as by the media. In 1890, the Sherman Antitrust Act was passed as the first federal antitrust legislation to limit monopolies . Sixteen years later, the U.S. Attorney General under Teddy Roosevelt’s administration filed two dozen antitrust actions against large corporations; chief among them was Standard Oil. It took five years, but in 1911, the U. S. Supreme Court upheld the lower court’s decision that ordered Standard Oil Trust to divest into 33 companies, which would function independently from each other.

However, Rockefeller did not suffer. Because he was a major stock holder, his net worth grew exponentially with the dissolution and establishment of new business entities. Rockefeller as Philanthropist John D. Rockefeller was one of the wealthiest men in the world during his lifetime. Though a tycoon, he lived unpretentiously and kept a low social profile, rarely attending the theatre or other events typically attended by contemporaries. Since childhood, he had been trained to give to church and charity and Rockefeller had routinely done so. However, with a fortune believed to be worth more than a billion dollars after the dissolution of Standard Oil and a tarnished public imagine to rectify, John D. Rockefeller began to give away millions of dollars. In 1896, 57-year-old Rockefeller turned over the day-to-day leadership of Standard Oil, though he held the title of President until 1911, and began to focus on philanthropy. He had already contributed to the establishment of the University of Chicago in 1890, giving $35 million over the course of 20 years. While doing so, Rockefeller had acquired confidence in Rev. Frederick T.

Gates, the director of the American Baptist Education Society, which established the university. With Gates as his investment manager and philanthropic adviser, John D. Rockefeller founded the Rockefeller Institute of Medical Research (now Rockefeller University) in New York in 1901. Within their laboratories, causes, cures, and various manners of prevention of diseases were discovered, including the cure for meningitis and the identification of DNA as the central genetic matter. A year later, Rockefeller established the General Education Board. In its 63 years of operation, it distributed $325 million to American schools and colleges. In 1909, Rockefeller launched a public health program in the effort to prevent and cure hookworm , a problem particularly bad in the southern states, through the Rockefeller Sanitary Commission. In 1913, Rockefeller created the Rockefeller Foundation , with his son John Jr. as president and Gates as a trustee, to foster the well-being of men and women around the world. In its first year, Rockefeller donated $100 million to the foundation, which has provided assistance to medical research and education, public health initiatives, scientific advancements, social research, the arts, and other fields all over the continents.

A decade later, the Rockefeller Foundation was the largest grant-making foundation in the world and its founder deemed the most generous philanthropist in U.S. history. Last Years Along with donating his fortune, John D. Rockefeller spent his last years enjoying his children, grandchildren, and his hobby of landscaping and gardening. He was also an avid golfer. Rockefeller hoped to live to be a centenarian, but died two years before the occasion on May 23, 1937. He was laid to rest between his beloved wife and mother at Lakeview Cemetery in Cleveland, Ohio. Though many Americans scorned Rockefeller for making his Standard Oil fortune through unscrupulous business tactics, its profits aided the world. Through John D. Rockefeller’s philanthropic endeavors, the oil titan educated and saved an untold number of lives and aided medical and scientific advancement. Rockefeller also forever changed the landscape of American business.

Question: Who founded the Standard Oil Company in 1870?
Answer: J D Rockefeller