Rockefeller Essay, Research Paper
Famous for his Standard Oil Company, John D. Rockefeller, born in 1839 was a businessman, industrialist, and philanthropist who was often called the captain of industry . Rockefeller was born to William Avery Rockefeller and Eliza (Davison) Rockefeller in Richford, NY. He was one of six siblings.
Rockefeller and his family moved to Strongville, Ohio when John was fourteen years old. John first started showing signs of business when he was buying candies wholesale as a kid and reselling the candies to his siblings for a profit. (Michloud,1) In the spring of 1855 Rockefeller spent 10 weeks at Folsom s Commercial College. He learned single and double-entry bookkeeping, penmanship, commercial history, mercantile customs, banking and exchange. His father also showed him how to draw up notes and other business papers.
After mandatory schooling, Rockefeller worked his first job at age sixteen, as an accountant for a grocer called Hewitt and Tuttle in Cleveland, OH. (Chernow, 58)
In March on 1859, Rockefeller went into business with a neighbor of his, Maurice Clark. They each put in two thousand dollars and formed Clark & Rockefeller. They were commission merchants in grain, hay, meats, and other goods. At the end of the first year of business, they had grossed $450,000 and made a profit of $4400 in 1860 and a profit of $17,000 in 1861. The commission merchant business was very competitive and Clark & Rockefeller s success was due in large part to Rockefeller s natural business abilities. (Chernow, 61)
Although the commission merchant business was doing well, Rockefeller then
decided to go into the oil refining business. Rockefeller joined with Samuel Andrews and operated two oil refining businesses in Cleveland, OH.
In 1866 John brought his brother William Rockefeller into the partnership and they built another refinery in Cleveland 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.
The next year Henry M. Flagler joined the partnership and Rockefeller, Andrews, and Flagler was formed.
By 1868 Rockefeller, Andrews & Flagler were the largest refiners in the world. Flagler and Rockefeller understood that the only way to make profits consistently in oil refining was to make the business as large as possible and to utilize all their “waste” products. (Michloud, 2)
On January 10, 1870 the Standard Oil Company of Ohio was created by John D. Rockefeller, William Rockefeller, Henry Flagler, Samuel
Flagler and Rockefeller soon started the South Improvement Company to pool oil transportation on railroads and let the people that take part in the scheme to get cheaper rates.
In December 1871, during the dust-up over the South Improvement Scheme, Rockefeller and Flagler set their plan to bring together the industry. They began by buying up all their competitors in Cleveland. The strategy and tactics were Rockefeller s and he handled the negotiations with the rival refiners personally. He began with the strongest refineries first. He believed that if he had bought up the weak refineries first then he would be faced with higher prices later and stiffer resistance. Consequently, he approached the strongest first and bought them out. (Michleoud, 4)
Rockefeller s technique was always the same. The merger would be effected by an increase in the capitalization of The Standard Oil. The rival refinery would be appraised and the owners would be given Standard Oil stock in proportion to the value of their property and good will and they would be made partners in Standard Oil. The more talented owners would also be brought into the Standard Oil management. If they insisted upon cash they received it.
By 1879 The Standard Oil did about 90 percent of the refining in the United States with almost 70 percent being exported overseas.
The Standard Oil Company s only serious competitor was the Tidewater Pipe-Line Company. Tidewater emerged in 1879-1883. Taking Rockefeller by surprise, it succeeded in building a pipeline from the Oil Regions east across northern Pennsylvania to Williamsport where the oil was transferred to the Reading railroad. The Reading then took the oil down to a refinery at Chester, Pennsylvania on the Delaware Bay. Rockefeller tried his hardest to gain control of Tidewater but he failed to and, Standard Oil only had about ten percent of the market in 1888.
In result to his wealth, Rockefeller would pass out dimes to children and donated over five hundred million dollars to many different charitable organizations. Toward his last years of his life many Americans began to appreciate him and his good deeds a lot more than they did in the past days.
By 1900, The Standard Oil Company controlled more than ninety percent of the refined oil in the U.S. Rockefeller being the worlds wealthiest man at the time, reached his fortune of about nine-hundred million dollars. Other oil refining companies went downhill fast. Eventually, in 1911, the Supreme Court decided to break up the Standard Oil Company into smaller, competing companies.