Rockefeller, John D.
Record Information
Source: Library of Congress. Prints and Photographs Division.
Record Type: Photograph or Illustration
Date: b. 1839–d. 1937
Description:
In 1870 John D. Rockefeller founded Standard Oil with three partners; by 1878, the company
controlled 90 percent of U.S. oil refineries. Standard Oil continued to dominate the petroleum market
until it was ruled a monopoly by the U.S. Supreme Court in 1911 and forced to sell off most of its
holdings. Rockefeller, however, had given day-to-day control of business operations to the board
members of the Standard Oil Trust in 1897, and was primarily concerned with philanthropic works.
He founded the University of Chicago with a $600,000 pledge in 1890, and created the Rockefeller
Institute for Medical Research—now Rockefeller University—in New York in 1901. In 1913, he
started the Rockefeller Foundation, the world's largest grant-making foundation, "to promote the
well-being of mankind throughout the world." The Laura Spelman Rockefeller Memorial, an
organization that funds child welfare and social science programs, was founded in memory of
Rockefeller's wife in 1918.
Born in Richford, New York, to Eliza Davison Rockefellerand William
Avery Rockefeller, an itinerant medicine peddler, John D. Rockefeller attended country
schools and spent a year at Owego Academy before his family moved to Ohio. He
attended high school for two years in Cleveland and started his business career there in
1855, when he obtained a bookkeeping job after three months' training at a commercial
college. When he was only 18, he became a partner in a commission house. In 1863, four
years after oil was first tapped by a well in Pennsylvania, Rockefeller and two partners
bought into the oil refining business. In 1865 Rockefeller and his partners established
their own refinery, where Rockefeller could be "daring in design" and "cautious in
execution," a formula he used throughout his career. From the beginning, he kept
careful records of costs and profits that informed him where his business stood.
Setting out to monopolize the petroleum industry, the partners added a second
refinery. In 1870 they replaced their partnership with a joint-stock firm, the Standard
Oil Company (Ohio). In 1882 it became the Standard Oil Trust, with 40 allied firms
controlling 90 percent of American refineries. Its monopoly was declared illegal by the
Ohio Supreme Court in 1892. Starting that year and ending in 1899, Standard Oil
operated as a community-of-interest combination of 20 firms. From then until 1911
when the Supreme Court declared it in violation of antitrust laws, Standard Oil acted as
a holding company, the Standard Oil Co. of New Jersey. Through the years, Standard Oil
acquired its own warehouses, shipping facilities, tank cars, pipelines, and barrel-making
plant and managed to cut the unit costs of refining oil almost in half, while extending
the market for petroleum by-products.
The guiding genius behind Standard Oil, John D. Rockefeller pioneered the
modern corporation. He has been called the "greatest business administrator America
has produced." Although he often forced competitors to sell or to join his alliance, he
seldom bankrupted them and occasionally treated them leniently. He paid his
employees well and ruled his operation by consensus.
Efficient and benign within Standard Oil, Rockefeller's passion to bring order out
of chaos in the infant oil industry made him ruthless in eliminating competitors.
Although well informed, he often feigned ignorance of the tactics of terror and
espionage employed against rivals by his underlings. Rebating was the most effective
weapon Standard Oil used to force competitors to join it or be ruined. The huge volume
of its shipments enabled it to secure from competing railroads discounts of up to 50
percent of the published freight rates. At times it even got "drawbacks," or rebates, on
oil shipped by some competitors. Rockefeller's marketing practices ranged from shrewd
to unscrupulous. By the 1890s the company marketed 84 percent of all petroleum
products sold in America and produced a third of its crude oil. Later those percentages
were reduced by new oil fields, stronger competitors, and more effective federal antimonopoly legislation.
Rockefeller was a man of contradictions. He was determined to be both rich and
virtuous. He was both a predatory businessman, trying to prove he was the fittest by
surviving his competitors, and a church-going Baptist who aimed "to promote the wellbeing of mankind throughout the world." He was devoted to his wife, Laura Celestia
Spelman, whom he married in 1864, and to their children, four of whom lived to
adulthood.
Tooth and claw business practices, however, made Rockefeller extremely
unpopular, and his reputation and that of Standard Oil was further damaged by Henry
Demarest Lloyds Wealth Against Commonwealth (1894) and even more by muckraker
Ida Tarbell in her 1902–03 series on Standard Oil, first published in McClure's
Magazine. Having ignored hostility and been anonymous in his giving (for example, he
established the University of Chicago and gave it $35 million with no strings
attached), Rockefellerhired a publicist to broadcast his good works and tag his gifts with
his name.
No longer active in his company's decisions after 1895, Rockefeller concentrated
on his philanthropic work, giving away $550 million in his lifetime ($450 million of
which went for medical research). Believing that the prevention of disease was more
important than its relief, he was willing to fund pure research for generalized future
benefits. In 1891 he endowed the Rockefeller Institute for Medical Research; the next
year the General Education Board, which became the world's foremost educational
foundation; in 1913 the Rockefeller Foundation, the world's largest grant-making
foundation and the country's main sponsor of medical science, medical education, and
public health; and in 1918 the Laura Spelman Rockefeller Memorial. Many of these
programs were later consolidated in the Rockefeller Foundation. The benefits
of Rockefeller-funded research were mind-boggling, even surpassing those of the later
World Health Organization. Among them were the actual elimination of hookworm, the
virtual eradication of yellow fever, and the revitalization of medical schools and medical
research throughout the world. Rockefeller outlived his enemies and his reputation
improved when his giving became public knowledge. He distributed over a billion and a
half dollars, making Rockefeller the greatest philanthropist in American history.
Further Information/References
Ron Chernow, Titan: The Life of John D. Rockefeller, Sr. (New York: Random House,
1998).