Rockefeller, John D. (1839–1937)

JOHN D. Rockefeller, founder of the Standard Oil Trust, was the archetypal robber baron of late 19th-century America. The label signalled public provaldisap of the business methods and attitudes of Rockefeller and fellow industrialists and financiers such as Andrew Carnegie, William Vanderbilt, Jay Gould and J. Pierpont Morgan. Political demagogues and muck-raking journalists criticized Rockefeller and Standard Oil for colluding with railroad companies on freight rates, making covert company acquisitions, and predatory price-cutting or threatening to cut prices.

Rockefeller, born in Richford, New York on July 8, 1839, was the son of William Avery Rockefeller and Eliza Davison. His father was a travelling salesman dealing in horses, timber, salt, patent medicines, and herbal remedies, and was an occasional[Page 697] money lender. The family moved several times during Rockefeller's childhood before settling in Cleveland, Ohio. Rockefeller attended Cleveland Central High School (1853–55) before studying business at Folsom's Commercial College.

On leaving Folsom's in 1855, Rockefeller took a job as a clerk and bookkeeper in Isaac Hewitt and Henry Tuttle's wholesale produce commission house. In the spring of 1859, Rockefeller left his first job because he was unhappy with his salary. He went into partnership with Maurice Clark to establish their own commission house after borrowing $1,000 at 10 percent interest from his father. The new business flourished during the Civil War.

In 1863, Clark and Rockefeller entered the oilrefining business after forming a partnership with Samuel Andrews. Andrews had experience in oil refining and handled the technical operations, leaving finance, marketing, and distribution to Clark and Rockefeller. The new company Andrews, Clark & Company was a commercial success, owning and operating the largest oil refinery in Cleveland. In 1865 Rockefeller bought out Clark after a dispute over Rockefeller's expansion plans. Not long after the formation of Rockefeller & Andrews, Clark and Rockefeller dissolved their partnership. Rockefeller & Andrews proceeded to build a second refinery and formed a second company to handle marketing and distribution in New York.

In 1867, the company was renamed Rockefeller, Andrews & Flagler after Henry Flagler and Stephen Harkness invested in the company. Flagler negotiated reduced rail freight rates for the company due to the high volume of the company oil transported by the railroad companies. This accorded with Rockefeller's ambition to increase the company's market share and form an alliance of oil refiners. In 1870, the company was reorganized as the Standard Oil Company, a joint stock company with Rockefeller as president.

Under Rockefeller's guidance, Standard grew through acquisition, and the company participated in the ill-fated National Refiners Association to allocate crude oil between refiners, thus controlling production and pricing. The company successfully defeated attempts to challenge its market dominance and integrated vertically, acquiring assets. Standard's attempts to gain and maintain a monopoly over the U.S. oil industry fell foul of Ohio state law. To circumnavigate the statutory limitations on Ohio companies owning property in other states or stock in non-Ohio companies, Standard Oil adopted a system whereby company officials held stock in other companies as trustees. This was the first and the largest of the “trusts.” In 1879, the system was simplified so that only three people acted as trustees. Three years later, the trust was reorganized again.

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