John D. Rockefeller
gigatos | July 9, 2023
John Davison Rockefeller (born July 8, 1839 in Richford, New York, died May 23, 1937 in Ormond Beach, Florida) – American entrepreneur, philanthropist and founder of the University of Chicago. He is now considered the richest man in history, having amassed a fortune of $660 billion over his lifetime (according to a 2007 conversion rate). His wealth was inherited by his only son John D. Rockefeller Jr. followed by his grandchildren John D. Rockefeller 3rd, Nelson, Laurance, Winthrop, David and their eldest sister Abby.
In 1870 John D. Rockefeller, William Rockefeller, Henry Flagler, Jabez A. Bostwick, chemist Samuel Andrews and unofficially Stephen V. Harkness founded an oil company in Cleveland, Ohio known as the Standard Oil Company.
The company’s characteristic policy was vertical concentration, enabling it to reduce the cost of refining oil by buying it directly from producers, creating its own storage facilities and buying up transportation hubs (railroads, pipelines). J.D. Rockefeller sought to improve every aspect of his business. Sometimes he joined a brigade of workers, for a better understanding of their work. There is a well-known story when Rockefeller conducted an inspection at one of the plants, where kerosene was being bottled in tin canisters. He learned from one of the workers that 40 drops of tin were used to solder the canister. So he ordered to try it with 38 drops – leaks were appearing. In this situation, he decided to use 39 drops of tin – it turned out that this much was enough. From then on, these 39 drops became the norm at the Standard Oil plant. When questioned years later, the originator himself stated with a smile: We saved a fortune, really a fortune.
Rockefeller paid its employees more than its competitors and rewarded ideas that improved the running of the company, so the company did not experience the wave of strikes common at the time. Standard Oil conducted a very economical use of raw materials, all waste, including gasoline, was strictly used. When other companies were releasing gasoline into rivers as unnecessary waste, at Standard Oil it was used to power machinery. These measures reduced the cost of refining a gallon of oil from 3 cents (then) in 1869 to 0.3-0.5 cents in 1885. At the same time, kerosene prices fell from over 30 cents to 8 cents. By contracting with railroads to transport oil and obtaining discounts of up to 70% of the value of the freight price, it was possible to lower market prices.
As his fortune grew, Rockefeller’s charitable activities took an institutionalized form. In 1892, he aided the newly founded University of Chicago with what was then $600,000. Taking advice from Frederick Taylor Gates and Wiwekananda, he established the Institute for Medical Research and the Board of Education, which opened a series of schools in the poorest neighborhoods. In 1913, he created the Rockefeller Foundation, to which he allocated $250 million for its statutory purposes. In 1918, he established the Laura Spelman Memorial Foundation to support social research. The total amount he donated to charity is estimated at more than $500 million.
At its peak in 1880-1890, Rockefeller’s company processed more than 90% of the world’s oil production. At the time, the company employed more than 100,000 workers. Public opinion accused the company of acting to create a monopoly. In 1882, the Standard Oil Co. was transformed into the Standard Oil Trust, headquartered in New Jersey, bringing together under common management a number of corporations that were part of the former Standard Oil Company.
In 1890, Congress passed the Antitrust Act, sanctioning monopolistic activities. In 1911, under the Supreme Court’s ruling on the demonopolization of oil processing, Standard Oil Trust was split into thirty-four independent companies. The currently existing ones are Chevron and ExxonMobil.
John D. Rockefeller died at the age of 97 at his home in Ormond Beach and was buried at Lake View Cemetery in Cleveland.
He was the second child of six children and the eldest son of William Avery Rockefeller (b. 1810, d. 1906) and Eliza Davison (b. 1813, d. 1889). In addition to him, five more children were born in Richford, Lucy (1838-1878), William (1841-1922), Mary (1843-1925), twins Franklin (Frank) (1845-1917) and Frances (1845 – 1847). His father claimed to be a miracle doctor selling healing concoctions of his own making. He also pursued a profession as a lumberjack William Rockefeller was seen as an immoralist who favored a vagrant lifestyle. The mother of John D. Rockefeller’s mother, Eliza, a housewife and devout Baptist, tried to run the household with love and order while William constantly ventured out into the world to live his double life. Thrifty by nature and necessity, she taught her son to do the same, repeating to him the proverb, “willful waste makes willful want,” meaning that making good use of all one’s resources and not wasting them brings wealth and prosperity to every person.
At the age of 12, he saved his first $50 by doing small jobs for his neighbors and raising his own turkeys for his mother. At her insistence, he loaned that $50 to one neighboring farmer at 7%. After a year, the debt was repaid with interest. This made a huge impression on the young Rockefeller. From that moment on, he decided that the money would work for him on its own. In 1904 he described the event this way: The impression this event made on me convinced me that it was a good thing to let the money serve me rather than for me to be its slave. This was the result of the advice he received from his father, who often repeated the maxim “trade dishes for platters,” literally translated as “trade dishes for platters,” or simply “be ambitious.” “Big Bill” once confessed that at every opportunity he also tried to mislead his sons to make their minds more perceptive.
As a teenager, he often changed places of residence. When he was young, his family moved from Richford to the town of Moravia. In 1851, the Rockefeller family changed residence once again, settling in Owego, New York. There the future billionaire attended Owego Academy from 1852. Then in 1853 he settled in Strongsville, a suburb of Cleveland, where he graduated from Cleveland’s Central High School there. After graduating from the local high school at the age of 16, he enrolled in a 10-week accounting course at Folsom’s Commercial College in the spring of 1855. There he met his future wife Laura Spelman, the daughter of a merchant from Akron, Ohio. They married in 1864, when Rockefeller turned 25.
Despite his father’s constant absences and moves, young John was laid back, serious and hardworking. His peers described him as reserved, religious, methodical and discreet. He was an excellent conversationalist and knew how to express himself with precision. He was in love with music and thought about a career in this field. His talent for numbers and detailed calculations was also revealed early on.
As a teenager, Rockefeller, speaking to a friend, was said to have had only two dreams: to earn $100,000 and to live to be 100. On September 26, 1855, the sixteen-year-old Rockefeller finds his first job as an assistant accountant at a small commercial brokerage and freight forwarding agency, Hewitt&Tuttle. Working from dawn to dusk with the puritanical perseverance instilled in him from a young age by his mother during this time he savors, as he later put it, in “all the methods and systems of office work.” He spent most of his time exploring in detail methods of reducing transportation costs, a skill that would later help him in his career as an oil tycoon. Working at a daily rate of 50 cents, his first salary after three months on the job was $50 ($1,000.
In 1859 Rockefeller became a partner in a company founded by Maurice B. Clark, a company whose share capital was the equivalent of $4,000 (equivalent to $100,000 in 2015 dollars). The enterprise was a broker of agricultural products. This activity gave Rockefeller more opportunities for growth than his previous position as a law clerk in a small commission and shipping company. After leaving the finance and food business, in 1863 the partners decided to build a refinery “in the fields” of Cleveland (The Flats), the city’s growing industrial district. This was a strategic response by the partners to the outbreak of “oil fever” in Cleveland. The refinery was directly controlled by the partnership of Andrews, Clark & Company, which included Clark & Rockefeller, chemist Samuel Andrews and the two brothers of M. B. Clark. At the time, the oil business was still in its infancy, but it had many prospects ahead of it. Oil extracted from whale fat became too expensive to sell at retail. The industrial development of the U.S. in the second half of the 19th century created a demand for a cheaper product needed to light homes, farm buildings and factories. The problem of thinning whale stocks was also not insignificant. In the first half of the 19th, the voyage of a whaling ship lengthened from 9 months to a period of 2-3 years.
While Frank, the brother of John D. Rockefeller, fought in the Civil War, he himself continued in business, thanks to the hiring of several mercenaries as replacements. He supported the Union Army with his funds, as did many citizens of the northern states who wanted to avoid the obligation to serve at the front. Rockefeller was essentially an abolitionist. He voted for the election of Abraham Lincoln as US president and became a member of the Republican Party. During this time, he helped buy back two slaves, thus giving them their freedom. As he said: “God gave me the money,” so he wasn’t going to apologize to anyone for it either. With ease and after justice, but also with American nonchalance, he adopted as his life motto, the maxim of the Methodist, John Wesley: “gain all you can, save all you can, give all you can” (“gain all you can, save all you can, give all you can”).
On February 14, 1865, Rockefeller bought out the Clark brothers’ stake in the company at auction for $72,500 (equivalent to $1 million in 2015 dollars). Rockefeller took personal possession of the Cleveland refinery. As a result of the share sale agreement, the brothers received a shipping and storage house in return. As he later described the event, it was a day that determined his entire subsequent career. The existing company was renamed Rockefeller&Andrews. John Davison Rockefeller arranged additional funds for development and in 1866 also invited his brother William, who, like John, was an able adept at his father’s art of influencing other people. William opened a second refinery, Standard Works in Cleveland, whose name was a promise to provide customers with a product maintained at a consistently good level of quality. He then opened an office in Manhattan to encourage the country’s largest banks to cooperate and to better manage the company’s share of the growing export business. The Rockefellers’ company closed 1865 with a turnover of $1.2 million in oil throughput value, which translated to a daily throughput of 500 barrels of 42-gallon oil. The brothers often used code to keep secrets. John referred to this method of communication as Murky or Murkily, trying to catch all useful information and not have it leak from his side. As he used to say, success comes through open ears and closed mouths. In this way, Rockefeller prepared for himself the best starting position for expansion in the post-war economic reality of the United States, which was written for growth thanks to the steady colonization of the western areas of the US by incoming settlers from all over the world. At the same time, rail transportation and the oil-fueled economy coupled with it began to play a not inconsiderable role. Rockefeller, following these trends, took out gigantic loans, reinvested profits and quickly adapted his enterprise to changing market conditions by hiring people with the right experience, in the right place, with only one task – to keep track of current developments in the fast-growing oil-rail sector and report on everything with the speed of a King Oil telegram.
In 1867 also Henry M. Flagler became a partner of the Rockefellers. This is how the firm of Rockefeller, Andrews & Flagler was formed. Throughout 1868, Rockefeller continued to borrow and reinvest profits, while controlling costs and processing the byproducts of oil refining into a form that allowed them to be resold on the market. Rockefeller’s company owned two refineries in Cleveland and had a dealership in New York. At the time, it was already the largest oil company in the world. Rockefeller, Andrews & Flagler was the predecessor of the soon-to-be Standard Oil Company.
At the end of the Civil War, Cleveland was one of the largest oil production centers in the United States (outside Pittsburgh, Pennsylvania, New York). At the end of 1869, the U.S. experienced a phenomenon of overproduction of kerosene, whose technological production capacity exceeded market demand by more than three times. This market trend continued for many years to come.
On January 10, 1870, Rockefeller liquidated Rockefeller, Andrews & Flagler, establishing a separate organization, Standard Oil of Ohio, which immediately became the most profitable refinery in Ohio. Standard Oil thus became the largest supplier of heating oil and kerosene in the country. At the time, railroads competed with each other for the number of shipments. To reduce the negative effects of the market struggle, they formed the Southern Improvement Company cartel to stabilize freight rates for companies like Standard Oil and other mining companies outside the main oil basin. The rail cartel obtained a preferential trade agreement as a bulk supplier, which not only included high freight discounts of up to 50% for their products, but also doubled the discounts for carrying the products of companies previously served by non-cartel companies. Part of this agreement was the announcement of a sharp increase in freight charges. This situation caused a storm of protest from previously prosperous independent refinery owners, resulting in a rolling wave of boycotts, acts of vandalism. It also led to the discovery of personal ties between the founders of the Southern Improvement Company and Standard Oil. New York State’s main refinery, Charles Pratt & Company, which was owned by Charles Pratt and Henry H. Rogers entered into opposition to the plan, causing the railroad to have to back down from its position. The state of Pennsylvania
Undaunted, despite the harassment of the press, Rockefeller continued in the self-perpetuating machine of his power to buy up rival refineries, increase production and sales efficiencies, maintaining constant pressure on the railroads to obtain freight discounts and gain distance from competitors’ shipments, to which the scale of Rockefeller’s company’s shipments was growing at geometric speed, the norm in this situation being secret meetings and deals, the creation of new areas of investment and the buyout of rivals. In less than four months of 1872, what was later referred to as “The Cleveland Conquest” or “The Cleveland Massacre,” Standard Oil bought out 22 of its 26 local rivals. Eventually, even its earlier competitor, Pratt and Rogers, found it fruitless to continue the fight against Standard Oil. In 1874, the company signed a secret agreement with Rockefeller. Pratt and Rogers became Rockefeller’s partners. Rogers, in particular, later became one of the main architects of the Standard Oil Trust. Pratt’s son, Charles Millard Pratt became secretary of Standard Oil & Co. For many of his competitors, Rockefeller had only to show his book, where they could see in black and white who they were dealing with, and to offer a first, decent bid. If the offer was rejected, Rockefeller warned them of bankruptcy and buying up the assets of their companies at auction. He saw himself as a rescuer of an industry that had been in crisis since the onset of overproduction. It was not uncommon for companies to pour excess production and oil refining byproducts into rivers, destroying the environment. Rockefeller turned this wasteful policy into a business transforming all the by-products of oil refining into commercially usable goods. Being a kind of “providential husband” by buying off the weak and bending the others to his vision of the market, he created the standards that gave the American petrochemical industry the dynamism, efficiency and international competitive advantage still present today. Standard Oil was an example of an organization pursuing both a policy of vertical and horizontal concentration of capital, combining various uncoordinated business units into a single entity. Standard Oil had its own warehouses, pipelines, tankers and a network of sales outlets. It covered the entire production cycle from the extraction of raw material to its sale in the form of finished product keeping prices at levels unattainable by competitors and offering a product available to every citizen, sometimes, in order to penetrate the market more deeply, using dumping prices. During this time, Standard Oil chemists invented more than 300 petroleum-based products ranging from roofing tar to cosmetic petroleum jelly to chewing gum. The late 1870s was a time for Standard Oil to completely dominate the US market
“He instinctively came to the conclusion that order in the market could only be achieved through the centralized control of large aggregate structures, composed of land and capital, whose only task is the well-organized flow of products from producers to consumers. This well-organized, economic and efficient flow is what we today, after so many years, refer to as vertical integration. I don’t know if Mr. Rockefeller ever used the word “integration.” All I know is that he created the idea.” Rockefeller’s successor as chairman of Standard Oil of Ohio.
In 1877 Standard Oil came into conflict with Thomas A. Scott, president of the Pennsylvania Railroad, whose company was the main carrier of the company’s products. At the same time, John D. Rockefeller invented an alternative system for transporting kerosene in the form of pipelines and began campaigning for their construction and widespread use. The railroads, seeing Rockefeller’s company’s incursion into the transportation business and into the pipeline land market, responded by forming subsidiary companies to purchase and build their own refineries and pipelines. Standard Oil came out against these actions and halted all transportation, and with the help of other railroad companies, started a price war that drastically reduced freight rates and led to massive strikes by railroad workers. Rockefeller won, the railroads sold off their oil market share to the Cleveland giant. However, the aftermath of the fight between the two companies was that the Pennsylvania state government accused Standard Oil of monopolizing the oil trade. That was 1879, and this precedent set off a flurry of similar accusations from subsequent states, starting a national debate over Standard Oil & Co.’s business practices. The 1970s and 1980s were a time of great stress for Rockefeller, in which he had to cope with carrying out his intention to integrate and consolidate the business structures he had created, under additional attack from the press and government administration. Insomnia, stress and fighting for every area of the market strained his health, which he later commented with the words: All the wealth I accumulated during this time cannot compensate me for the trepidation I experienced at the time.
Standard Oil gradually gained almost total control of the oil processing industry and the distribution channels for kerosene and petroleum products throughout the United States. This was made possible through a strategy of horizontal integration. In the oil industry, Standard Oil replaced the old distribution system with its own vertically organized system. It delivered kerosene to local markets via road tankers. The rail tankers were to deliver the product to wholesale customers, bypassing the existing distribution networks. In addition to improving the quality and availability of kerosene products, market prices were also reduced. For example, the price of kerosene has dropped by 80% since Standard Oil’s inception. Standard Oil’s business practices, however, have created numerous controversies among the public. The most over-the-top competitive weapons for Standard Oil have been selling below production costs, price differentiation and making attractive deals with railroads for transportation discounts. The company was attacked by the press and politicians throughout its history, laying the groundwork for the anti-trust movement. Around 1880, an article appeared in an issue of the New York World, in which Standard Oil was described as a fierce, bold, unmerciful, monopolist, the likes of which no one had ever known before as far as the country long and wide. Rockefeller responded: In a business as big as ours … some things can happen that we don’t approve of. We correct them t
At the time, many legislatures placed restrictions on corporations operating in other states. As a result, Rockefeller and his associates came to own dozens of other separate companies, where each operated in only one state. Managing such a large enterprise was unwieldy, so in 1882 Rockefeller’s lawyers created an innovative new type of corporation to centralize the holding companies created earlier. This is how the Standard Oil Trust was created. “Trust” was a corporation of corporations whose size and assets caught the eye even more by creating a board of nine members, including Rockefeller, controlling 41 companies. Public opinion and the press adopted a suspicious attitude toward Rockefeller’s new legal creation from the very beginning rekindling old resentments. Standard Oil gained an aura of invincibility, always being one step ahead of competitors, critics and political opponents. It became the richest, largest business in the world, feared by everyone and the only one to remain resilient in the face of economic fluctuations, making profits continuously year after year.
Standard Oil’s U.S. empire included 20,000 wells, 4,000 miles of pipelines and 5,000 road tankers, and provided employment for more than 100,000 workers. Standard Oil’s share of global oil processing established itself above 90% at the time, only to fall to around 80% by the early 20th century. Despite the creation of the trust and the perceived resistance to the actions of all competition, the late 1880s was a time when Standard Oil’s market power reached its maximum. Rockefeller eventually abandoned his dreams of controlling all of the world’s oil processing, as he expressed in his own words: We came to the conclusion that public opinion could turn completely against us if we actually processed all oil production. Over time, foreign competition and new oil fields discovered outside the United States undermined Standard Oil Trust’s dominance in world markets. In the early 1880s, Rockefeller created many of its most important innovations. Instead of trying to influence oil prices directly, Standard Oil developed a method of indirectly controlling prices by varying storage rates for petroleum products to match market conditions. Then, Rockefeller mandated the issuance of certificates for oil stored in its oil pipelines. These certificates became traded for speculators, thus creating the first derivatives market with oil prices as the underlying instrument. The emergence of this type of market had the effect of making spot market prices more efficient. In 1882 came the opening of the first oil exchange, the National Petroleum Exchange, in Manhattan to facilitate the trading of derivatives created on the basis of oil prices.
Although 85% of the world’s oil production still came from Pennsylvania oil wells in the 1880s, oil from new wells located in Russia and other Asian countries began to reach world markets. Robert Nobel opened his own refinery by drilling in the rich and cheaper to exploit fields located just in the Russian Empire. As part of his business, he was the first in the region to lay pipelines and launch the world’s first tanker. Robert Nobel’s enterprise was credited with funds from the bank of the Paris Rothschild family. In addition, more oil deposits were discovered in Burma and Java. Moreover, the invention of the light bulb gradually began to supplant kerosene as the only type of lighting. Standard Oil Trust began to adapt its business profile to the new conditions, expanding its presence in European markets, entering the natural gas extraction business in the United States, and later into the sale of gasoline for automobiles, a product that was, until the invention of the diesel engine, a waste product of the oil refining process.
With the establishment of the Standard Oil Trust, the company took possession of its new headquarters in New York City on Broadway located at number 26, and Rockefeller became a central figure of New York business socialite. Two years later, in 1884, he purchased a mansion on 54th Street next to the residence of another famous industrial magnate William Henry Vanderbilt. In 1887, Congress created the Interstate Commerce Commission to push for equal rates for railroads, but by this time Standard Oil had already begun to make extensive use of pipeline transportation. More dangerous to Standard Oil’s power proved to be the law known as the Sherman Antitrust Act of 1890, originally created to control corporate mergers, it eventually contributed to the liquidation of the Standard Oil Trust. Authorities in the state of Ohio were extremely active in applying this legislation to their territory and eventually led to the exclusion of Standard Oil of Ohio from the rest of the Trust in 1892. This was the first step towards the complete liquidation of the Standard Oil Trust.
In the 1890s, Rockefeller began expanding into the iron and ore transportation business, creating a collision of interests with steel magnate Andrew Carnegie. Their struggle for dominance over this section of American industry became prime fodder for tabloids and cartoonists. Rockefeller also embarked on a frenzied campaign to lease oil parcels in Ohio, Indiana and West Virginia, due to the fact that deposits in Pennsylvania were gradually drying up. Rockefeller, in the midst of this wild expansion, began to contemplate a well-deserved retirement. The day-to-day management of the Trust was entrusted to John Dustin Archbold, and Rockefeller purchased a new property north of New York City away from the hustle and bustle of his previous home, Pocantico Hills, spending more time relaxing and enjoying new sports such as cycling and golf.
Early in his presidency, Theodore Roosevelt initiated a series of amendments to the Sherman Antitrust Act and pushed his reforms through Congress. In 1901, U.S. Steel, formerly controlled by John Pierpont Morgan, bought out Andrew Carnegie’s stock, also offering to buy Rockefeller’s stake in the steel industry. Henry Clay Frick brokered the deal, selling Standard Oil’s steel industry shares to U.S. Steel and giving Rockefeller and his son membership in the board of directors. At the age of 63, Rockefeller fully retired with a dividend of $58 million. The year was 1902.
One of the most effective attacks on Rockefeller and his company was the 1904 publication by Ida Tarbell, The History of the Standard Oil Company, a columnist specializing in investigative journalism (am. Muckracker). She documented dozens of pieces of evidence about Standard Oil’s economic espionage, price wars, ruthless marketing tactics and stalling court hearings. Although her work, in its expression, had a negative impact on Standard Oil’s image, she was surprised by the scale of the irregularities that occurred. I never had a negative view of the size and wealth of their organization, nor did I ever question the concept of their corporate governance. I wanted them to prosper and grow as much as possible, but only within and respecting the legitimacy of the law. With that said, they, never played fair and that led to their greatness in my opinion. Ida Tarbell’s father lost his shares in the oil industry during the South Improvement Company scandal.
Rockefeller referred to her privately as Miss Tarbarrel (Miss Tarbarrel), however, in public he toned down his emotions by expressing unequivocal distance from her activities. In response to Ida Tarbell’s publication, Rockefeller launched a campaign to restore his company’s good image. Although for a long time he maintained a policy of suppressing any leaks to the press about himself, he eventually decided to become more responsive to the public, publishing in his memoirs, published in full in 1909, content like capital and labor are two wild forces that require reasonable legislation to keep them in check.
Critics accused Rockefeller of a kneejerk and disingenuous tone, singling out statements such as how a fundamental and necessary element of business success is adherence to principles deemed unshakeable in any exclusive trade agreements as contradictory to his company’s actual methods.
Rockefeller, along with his son, continued to consolidate his oil business until the state of New Jersey changed its corporation laws in 1909 allowing the Trust to be transformed into a single holding company. Rockefeller remained the nominal chairman of the company until 1911 and retained all of the stock. Finally, in 1911, the U.S. Supreme Court proved the Standard Oil Company of New Jersey had violated the Sherman Antitrust Act. By then, the Trust still held 70% of the refined oil market, but only 14% of the total US oil reserves. The court issued a verdict accusing the Trust of initiating illegal monopoly practices and ordered it to split into 34 new companies. Among the better-known ones that have survived in the market to the present day are: Continental Oil, later known as Conoco, now part of ConocoPhilips; Standard of Indiana, later known as Amoco, now part of BP, Standard of California, later known as Chevron; Standard of New Jersey, later known as Esso (Standard of New York, later known as Mobil, now part of ExxonMobil; Standard of Ohio, later known as Sohio, now part of BP. Pennzoil and Chevron have remained independent companies to this day.
Rockefeller, having rarely sold his shares, held more than 25% of their value at the time the Trust was split. He and the other co-owners received pro rata shares in all 34 new companies. In conclusion, Rockefeller’s control of the US oil industry was reduced, however, over the next 10 years the measures taken by the government proved to be extremely profitable for him. All of the companies saw their value increase a total of fivefold, and with this trend, Rockefeller’s personal wealth rose to $900 million.
In 1902, as a result of his company’s liquidity problems, John Ceveland Osgood turned to George Jay Gould, one of the major shareholders of the Denver & Rio Grande Western Railroad, for a loan. At the time, Colorado Fuel and Iron Corp. held 75% of the state of Colorado’s coal production market, employing 10% of its population potential. Gould, through Frederick Taylor Gates, who was a financial advisor to John D. Rockefeller, convinced him to help finance the loan. An analysis of Osgood’s business by the son of John D. Rockefeller showed that the amount of the loan provided by the Colorado and Wyoming Railway Company, the Crystal River Railroad Company and possibly the Rocky Mountain Coal and Iron Company in exchange for the acquisition of the Colorado Fuel and Iron Corp. was insufficient. Control of the company passed from the Iowa Group to Gould and Rockefeller in 1903, with Frederic Taylor Gates representing the interests of minority shareholders in this arrangement. Osgood left the company in 1904 and focused all his efforts on the competitive business of coal mining and coke production.
The strike called in September 1913 by the United Mine Workers over the issue of union representation was directed against mine managers at Huerfano and Las Animas in southern Colorado, where CF&I’s major industrial facilities and mines were located. The strike was fought by the mine management, through a delegated executive committee headed by Welborn, CF&I’s president, who held talks with the strikers on behalf of the entire company board. Lamont Montgomery Bowers, a Rockefeller man, remained in the shadows of these talks. A few of the board members joined the strikers and supported their claims to form unions, but most were opposed. The situation was tense and at times the breakers used force against the protesters. Both sides were supplied with some weapons and live ammunition. The striking miners were forced to leave their homes in the mining settlement and took up residence in tent cities built by the unions. One such tent city was set up in Ludlow, a train station north of the city of Trinidad.
Under the protection of the National Guard, some of the miners returned to work, and some of the breakers, brought in for the unrest from the eastern coalfields, also joined them while protective troops patrolled their movements. In February 1914, a significant number of troops were withdrawn, but most remained deployed in Ludlow. On April 20, 1914, a decisive clash took place between the strikers and the security troops. As a result, a fire broke out in the tent city, killing 15 women, including an unspecified number of children.
The costs on both sides of the conflict were high. As a result of the reduced demand for coal following the onset of the recession in the U.S. economy, some of the mines were never opened again. As a result of the strike, many workers were thrown out of work. The miners’ union was forced to retract its previous gains in February 1915. In the coalfield, the specter of poverty threatened a large population as a result of unemployment. With the help of the Rockefeller Foundation, numerous unemployment relief programs were set up, the execution of which was overseen by the Colorado State Committee on Unemployment and Relief. This was a government organization, created by Governor Carlson, offering jobs to unemployed miners, building roads and performing many other public benefit projects.
The Ludlow incident brought with it the aftermath of the mobilization of public opinion, blaming the Rockefellers and the entire coal industry for leading to the massacre. A hearing conducted by the United States Commission on Industrial Relations on John D. Rockefeller Jr. revealed the Rockefellers’ special ties to Bower. Bower was removed, and in his place Welborn regained control of the company in 1915. This event greatly improved the mood of the industry.
Immediately after the massacre, Rockefeller rejected accusations of his responsibility in the case and minimized the seriousness of the situation. During the investigation of the Ludlow massacre, when asked what action he would have taken as director of the company, he replied: I would have taken none. I would have deplored the necessity that forced the company’s management to use its own resources to supplement the state’s forces in maintaining law and order. Rockefeller admitted that he had not taken any steps to bring justice to the members of the law enforcement agencies guilty of the massacre.
The person who developed the strategy to improve Rockefeller’s corporate image immediately after the events in Colorado was Ivy Lee, who was hired in 1914 by John D. Rockefeller Jr. to manage Standard Oil’s image. Lee warned the Rockefellers about the company’s loss of public support and prepared a strategy that John D. Rockefeller Jr. began to implement. It was important for the young Rockefeller to show his embarrassment at the situation that had arisen and to arrange a meeting with the miners and their families to consider housing and workplace conditions. Essential to the program that was developed was the participation of John D. Rockefeller Jr. to attend mass meetings and, above all, to listen carefully to complaints. This was an innovative idea that attracted press attention and helped resolve the conflict and present a more humanistic image of the Rockefellers to the public.
John D. Rockefeller, turning 50, suffered from moderate depression and had gastric problems. A time of public accusations and government action against his company falling in the 1890s led to the development of alopecia areata, a condition that caused him to lose all of his body hair by 1901. His hair never grew back, and his other conditions subsided after his workload was reduced. Rockefeller died of arteriosclerosis on May 23, 1937, less than two months before his 98th birthday at his home The Casements, in Ormond Beach, Florida. He was buried at Like View Cemetery in Cleveland.
For a number of years, genealogists speculated on the family’s French roots. The Rockefeller family was said to trace its ancestry to French Huguenots named Rochefeuille or Rocquefeuille, who emigrated from Languedoc in 1685 and settled in Germany near Koblenz. In 1720, an ancestor of John D.’s father. Rockefeller emigrated from there to North America. Later research showed the German origin of the surname going all the way back to the 17th century. Then Johann Peter Rockenfeller (baptized on September 27, 1682 in the Protestant church in Rengsdorf) emigrated in 1723 from Altwied (now part of Neuwied in Rhineland-Palatinate) with his three children and settled in Germantown, Pennsylvania. The name Rockenfeller (German for Rockenfeld) refers to the village of Rockenfeld in the Neuwied district. To this day, there are many residents in the area who bear the surname Rockenfeller.
John D.’s mother. Rockefeller, Eliza Davison was said to be of Scots-Irish descent.
In 1864 Rockefeller married Laura Celestia “Cettie” Spelman (1839-1915), daughter of Harvey Buell Spelman and Lucy Henry. John D. Rockefeller once said, Her judgment was always better than mine. Without her wise counsel, I would be a poor man.
They had four daughters and one son:
The wealth amassed by Rockefeller over his lifetime influenced the business and political aspirations of the entire family throughout the 20th century. John’s son. D. Rockefeller Jr., David Rockefeller was CEO of Chase Manhattan Bank (now part of JPMorgan Chase) for 20 years. His second son, Nelson Aldrich Rockfeller, was governor of New York for the Republican Party and 41st Vice President of the United States. Fourth son Winthrop Aldrich Rockefeller was governor of the state of Arkansas, also as a member of the Republican Party. His grandsons, Abigail Aldrich “Abby” Rockefeller and John Davison Rockefeller III became philanthropists. A grandson, Laurance Spelman Rockefeller became an activist in the conservation movement. Great-grandson John Davison “Jay” Rockefeller IV held the office of senator from the state of West Virginia on behalf of the Democratic Party from 1985 to 2015, and before that was governor of that state. Winthrop Paul Rockefeller served as deputy governor of the state of Arkansas for 10 years.
John D. Rockefeller was born in Richford, New York. The town was part of an area of the United States that was called the burned-over district. This was an area of New York State in which the new evangelical movement, to which the history of Protestantism gave the name of the Second Great Awakening, made its presence strongly felt. This movement resulted in a shift away from the traditional Protestant creeds formed in the U.S. in an earlier period, in favor of new movements preaching even more the need for an individual feeling of faith, such as Baptists, Mormons or Adventists, and exhorting believers to follow such ideals as hard work, prayer and doing good deeds, which in conclusion were to lead to the building of the Kingdom of God on Earth.
From his early years, John D. Rockefeller attended services with his mother and siblings at a local Baptist church – Erie Street Baptist Church (later renamed Euclid Avenue Baptist Church). It was an independent church that in time became part of the Northern Baptist Convention from 1907 to 1950, and is now part of the Association of American Baptist Churches USA. Eliza Davison, being a deeply believing and disciplined woman, had a not inconsiderable influence on the formation of her son’s religious views. During the service, she encouraged him to donate part of his money to the church. Thus, in the local Baptist community, he began to be associated with his charity. On one occasion the preacher encouraged him with the words, make as much money as you can, then you can give away as much as you want. Later in his life, Rockefeller replied: This was the moment when the whole financial plan of my life became a reality. The ability to make money was seen by him as a gift from God.
A staunch Northern Baptist, Rockefeller read the Bible daily, attended services twice a week and conducted his own Bible studies with his wife. Burton Folsom Jr. noted, he sometimes gave tens of thousands of dollars to Christian communities, at the same time applying for loans worth more than $1 million to expand his business. His philosophy of life stemmed from purely biblical principles. He sincerely believed in the words recorded in Luke’s Gospel (A good measure, pressed down, shaken together and flowing over, shall be poured into your pans. For they will measure you with the measure that you measure. Rockefeller supported Baptist missions, funded universities and was heavily involved in the life of his church in Cleveland. While traveling in the southern states, he supported churches belonging to the Southern Baptist Convention, churches of the Black population (am. Black churches) and other Christian religious communities with large sums. There is also a well-known story about how he bought the freedom of several slaves and supported a Catholic orphanage. As his wealth increased, his donations became more generous, especially when it came to the local Cleveland church, which received a new home in 1925.
At a time when the media coverage of the person of John D. Rockefeller reached its peak. Rockefeller as the most powerful entrepreneur in the US, information about the multimillionaire’s family secrets began to appear in the press. Joseph Pulitzer offered an $8,000 reward for providing information about John D.’s father. Rockefeller, Bill a.k.a. “Doc Rockefeller,” who was only known to live under an assumed name. Journalists, despite the stipulated reward, could not obtain any detailed information about him. It was not until two years after his death that the whole story came to light.
Bill, traveling the country as a charlatan, sometimes as a gold-digger or occasional herbalist, with no formal medical training, left his proper family around 1855. Being uninterrupted until his death in a legal marriage to Eliza Davison, he took the name William Levingston and married Margaret L. Allen (1834 – 1910) in Norwich, Ontario, Canada. He died in 1906, and his monument was built with funds from his second wife.
Rockefeller’s charitable activities began when he found his first job as an accountant at the age of 16. As he noted in his diary, he decided to donate 6% of his earnings to charity. That figure rose to 10% by the time he turned 20. Much of his charitable spending was related to the religious community to which he belonged. His church, which was later incorporated into the Northern Baptist Convention, which was formed out of the American Baptists in the North, was linked to earlier missions to establish common schools and universities for the African-American population that gained civil rights in the southern states after the end of the Civil War. Rockefeller attended services every Sunday. While on the road, he visited African-American Baptist churches, giving them occasional financial support. Over time, as his wealth grew, the areas that received his financial support also expanded. He supported education, health care, science and the arts. Initially, he was advised in ways to institutionalize his philanthropy by Frederick Taylor Gates), and after 1897 also by his son.
In a meeting with the Indian guru, Swami Vivekananda, they discussed the need for greater involvement in helping poor and afflicted communities.
Rockefeller believed in the American Efficiency Movement, known in management science as Taylorism, arguing that in his words, helping inefficient, misplaced and unnecessary schools is a waste … it is highly likely that much money has been embezzled for unwise educational projects that could have been used to build a national system of higher education adequate to our needs if the money had been properly allocated at each stage of implementation. Rockefeller and his advisors set up a system of conditional grants to educational institutions to allocate funds more efficiently. The institutions receiving them were expected to demonstrate how they affected their direct beneficiaries and how they were used for the benefit of those institutions.
In 1884 Rockefeller made major donations to an Atlanta college for black women, which took the name Spelman College (named after his father-in-law, who was a staunch abolitionist before the Civil War). The oldest existing building on the school’s grounds, Rockefeller Hall is named in honor of its founder. Rockefeller also made significant contributions to Denison University, which was founded by farmer William S. Denison. Other Baptist schools also received assistance during this time.
Rockefeller also supported the University of Chicago with $80 million, which, under the leadership of William Rainey Harper, transformed from a small Baptist college into a world-class educational institution by 1900. He supported the American Baptist Foreign Mission Society’s initiative to establish Central University in the Philippines in 1905, as the first Baptist and second American university in Asia.
Established by Rockefeller in 1903, the General Education Commission was tasked with promoting education in the country at all levels. Being ideologically aligned with the historic Baptist missions, it worked to advance education among the African-American population living in the South. Rockefeller also supported education on the East Coast, subsidizing Yale University, Harvard University, Columbia University, Brown University, Bryn Mawr College, Wellesley College and Vassar College. Following Gates’ advice, Rockefeller became one of the first philanthropists to support the development of medicine. In 1901, he established the Institute for Medical Research in New York. The institute was renamed in 1965, receiving the name Rockefeller University, after it expanded its mission to include higher education. Scientists affiliated with Rockefeller University have won 23 Nobel prizes. In 1909 Rockefeller established the Sanitary Commission, an organization whose main achievement was to eradicate outbreaks of hookworm disease in rural areas of the southern US states. The General Education Commission had a huge impact on the dissemination of the 1910 Flexner Report by funding its recommendations. The study, developed under the aegis of the Andrew Carnegie Foundation for the Advancement of Education, had a revolutionary impact on the organization of medical studies in the US.
In 1913, Rockefeller created his own foundation to continue and expand the activities spelled out by the Sanitary Commission. The Sanitary Commission worked for two more years and was closed in 1915. During this time, Rockefeller allocated $250 million for the foundation’s statutory purposes. The new organization was to focus on supporting the development of such fields as public health care, medical instruction and the arts. The foundation’s funds were used to establish a college, the Johns Hopkins School of Hygiene and Public Health. The foundation expanded its activities outside the United States, establishing a Medical College in Beijing It also helped abolish the effects of World War I. Rockefeller hired William Lyon Mackenzie King, a Canadian politician, as a business relations advisor to the foundation. In the 1920s, the Rockefeller Foundation launched an international campaign against the disease transmitted by hookworm of the duodenum through the creation of the International Health Division. The campaign engaged government officials and medical professionals to work together.
Rockefeller’s fourth charity was the Laura Spelman Rockefeller Memorial Foundation, established in 1918. Through it, Rockefeller supported social research. It was later incorporated into the Rockefeller Foundation. In total, John D. Rockefeller donated about $550 million to charity.
Later in his life, Rockefeller was known to hand out coins to passersby – silver coins to adults, nickel coins to children. An amusing story is known when he gave some coins to one of the more wealthy passersby, Harvey Firestone.
Henry Flagler, one of the co-founders of Standard Oil Co. together with Rockefeller, bought the Ormond Hotel in 1890 in Ormond Beach, Florida. This happened two years after it opened. Flagler expanded it to accommodate 600 guests. The hotel soon became part of a series of Gilded Age hotels that provided catering services for travelers on Flagler’s railroad, the Florida East Coast Railway. One of the guests at his hotel was actually John D. Rockefeller, who visited the Ormond Hotel for the first time in 1914. Rockefeller liked Ormond Beach so much that after four seasons at the hotel, he decided to purchase a house there for himself, “The Casements.” It was his winter estate for his quiet retirement. However, the house was sold by Rockefeller’s heirs in 1939, and was later bought by the city in 1973. It now serves as a cultural center and is the city’s most recognizable historical landmark.
The long and controversial career of John D. Rockefeller’s career in the oil industry went hand in hand with his equally long and significant career in philanthropy for the development of American education and science. His character is an amalgam of the experiences of opponents as well as supporters of his methods of operation and the momentum with which he brought American society into the 20th century. Many people who had direct contact with him went bankrupt, many, thanks to his vision of managing business organizations, amassed fortunes and became co-creators of the power of the Standard Oil Company as managers or shareholders. Rockefeller usually offered shares in his company as payment for taking over stranded businesses that could not afford to apply economies of scale to their operations, as Rockefeller’s companies did. On the other side were a slew of politicians and journalists. Some of them supported Rockefeller’s interests, while others, coming out as muckrakers, referred to all the industrial tycoons of the time as robber barons, bringing their characters closer to medieval German robber knights than to pious individuals applying honorable principles to economic life.
Biographer Allan Nevins, responding to Rockefeller’s opponents, concluded:
The rise to great wealth of the people associated with Standard Oil, did not result from poverty. The event had nothing of the suddenness of the appearance of a meteor in the sky, it was the result of more than 25 years of courageous work in a business environment full of risks that the large majority of capitalists of the time tried to avoid, strenuous efforts, and above all it was the result of wise and far-sighted planning later applied to every other field of American industry. The fortunes built through oil in 1894 did not exceed those amassed at the same time through steel, banking operations or railroads. With that said, it is still maintained that the oil magnates amassed their fortunes by appropriating “other people’s property,” which is what gets our attention so much. We have ample evidence that it was Rockefeller’s consistent policy to offer, within reason, fair terms to buy out competing companies for cash, stock or both. One independent historian concluded, after all, that Rockefeller was definitely “more humane toward competitors” than Andrew Carnegie. Another concluded that his wealth was the least tarnished of all the great fortunes of his era.
Biographer Ron Chernow wrote of Rockefeller: What makes him problematic, and why he continues to elicit ambivalent reactions, is that his good side was as good as his bad side was bad. Rarely does history produce such contradictory personalities.
Despite both the positive and negative aspects of his public life, Rockefeller can be definitively remembered as the richest man in world history. In 1902, auditors showed that his wealth was worth about $200 million. By comparison, the total value of the U.S. gross national product at the time was $24 billion. The value of his wealth grew year after year, especially after the demand for gasoline increased dramatically, reaching about $900 million on the eve of World War I. This sum consisted of shares in banks, shipyards, mines, railroads and other sectors of the economy. Going by the information he posted in his obituary in the New York Times, it is estimated that Mr. Rockefeller, when he retired, had $1,500,000,000 in profits earned by the Standard Oil Trust and other investments. This was probably the largest amount of wealth that a single citizen of the country had ever managed to accumulate through his own efforts. Since his death in 1937, Rockefeller’s fortune remaining in the hands of his heirs in the form of various shares in companies spun off from the Trust was estimated at $1.38 billion, while the total US gross national product at the time was $92 billion. The total value of Rockefeller’s wealth in the last decades of his life made him the wealthiest person in recent world history. No modern American fortune, including that of Bill Gates or Sam Walton, can compare with the share of Rockefeller’s wealth in the US gross national product, which reached 1.5% in 1937.
Rockefeller, turning 86, wrote in rhyming form a summary of his long and event- and people-rich life:
I was familiar with work as well as games at an early age, My life was a long, happy vacation; Lots of work and sea games, I abandoned my worries somewhere along the way; And God was good to me every day.
- John D. Rockefeller
- John D. Rockefeller
- Cytat z Nowego Testamentu na podstawie Biblii Tysiąclecia.
- I was early taught to work as well as play, My life has been one long, happy holiday; Full of work and full of play – I dropped the worry on the way – And God was good to me everyday. .
- a b Fortune (2012). «Fortune Magazine lists the richest Americans». Rockefeller is credited with a Wealth/GDP of 1/65. (en inglés). Archivado desde el original el 17 de octubre de 2012. Consultado el 25 de septiembre de 2012.
- a b «John D. Rockefeller; american industrialist». Encyclopedia Britannica (en inglés). Consultado el 19 de octubre de 2019.
- A revista Fortune (2007) lista os estadunidenses mais ricos não pelo valor mutável do dólar mas pela percentagem do PIB: Rockefeller teve riqueza/PIB de 1/65.