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John D. Rockefeller
He was America's first billionaire. Overcoming humble beginnings, Rockefeller had the vision
and the drive to become the richest person in America. At the turn of the century, when
the average worker earned $8 to $10 per week, Rockefeller was worth millions.
What was his secret? Is he to be placed on a pedestal for others as a “Captain of
Industry?” Or should he be demonized as a "robber baron." A robber baron, by
definition, was an American capitalist at the turn of the 19th century who enriched
himself upon the sweat of others, exploited natural resources, or possessed unfair
government influence. Whatever conclusions can be drawn, Rockefeller's impact on the
American economy demands recognition.
Rockefeller was born in 1839 in Moravia, a small town in western New York. His
father practiced herbal medicine, professing to cure patients with remedies he had
created from plants in the area. John's mother instilled a devout Baptist faith in the boy,
a belief system he took to his grave. After being graduated from high school in 1855,
the family sent him to a Cleveland business school.
Young John Rockefeller entered the workforce on the bottom rung of the ladder as a clerk in a
Cleveland shipping firm. Always thrifty, he saved enough money to start his own business in produce
sales. When the Civil War came, the demand for his goods increased dramatically, and Rockefeller
found himself amassing a small fortune. When Edwin Drake discovered oil in 1859 in Titusville,
Pennsylvania, Rockefeller saw the future. He slowly sold off his other interests and became convinced
that refining oil would bring him great wealth.
Rockefeller introduced techniques that totally reshaped the oil industry. In the mid-19th
century, the chief demand was for kerosene. In the refining process, there are many by-products when
crude (raw) oil is converted to kerosene. What others saw as waste, Rockefeller saw as gold. He sold
one byproduct paraffin to candlemakers and another byproduct petroleum jelly to medical supply
companies. He even sold off other "waste" as paving materials for roads. He shipped so many goods
that railroad companies drooled over the prospect of getting his business.
Rockefeller demanded rebates, or discounted rates, from the railroads. He used all these methods to
reduce the price of oil to his consumers. His profits soared and his competitors were crushed one by
one.
Rockefeller forced smaller companies to surrender their stock to his control, an arrangement
known as a trust. A trust is a combination of firms formed by legal agreement. Trusts often reduce fair
business competition. As a result of Rockefeller's shrewd business practices, his large corporation, the
Standard Oil Company, became the largest business in the land.
As the new century dawned, Rockefeller's investments grew rapidly. With the rise of the automobile,
gasoline replaced kerosene as the number one oil product. Rockefeller was the first billionaire. Critics
charged that his labor practices were unfair. Employees pointed out that he could have paid his workers
a fairer wage and settled for being a half-billionaire.
Before his death in 1937, Rockefeller gave away nearly half of his fortune. Churches, medical
foundations, universities, and centers for the arts received hefty sums of oil money. Whether he was
driven by good will, conscience, or his devout faith in God is unknown. Regardless, he became a hero to
many enterprising Americans.
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Document #1: George Rice, “How I Was Ruined by Rockefeller,” New York World, October 16,
1898.
I am but one of many victims of Rockefeller’s colossal combination,” said Mr. [George] Rice, “and my
story is not essentially different from the rest. … I established what was known as the Ohio Oil Works.
… I found to my surprise at first, though I afterward understood it perfectly, that the Standard Oil
Company was offering the same quality of oil at much lower prices than I could do — from one to three
cents a gallon less than I could possibly sell it for.”
“I sought for the reason and found that the railroads were in league with the Standard Oil concern at
every point, giving it discriminating rates and privileges of all kinds as against myself and all outside
competitors.”
Document #2: Excerpt from Ida Tarbell, The History of the Standard Oil Company, 1904.
Note: Ida Tarbell was born in Pennsylvania in 1857. Her father was an oil producer whose business failed—
and he blamed Rockefeller. Her brother also worked for another oil company that competed with
Rockefeller. In the late 1800s, Ida Tarbell became a journalist for McClure’s Magazine, and she wrote
articles criticizing Rockefeller and his business. These were later published as a book, The History of the
Standard Oil Company.
In the fall of 1871, [Rockefeller and some other oil refiners developed] a remarkable scheme, the gist of
which was to bring together a secretly large enough body of refiners and shippers to persuade all the
railroads handling oil to give to the company formed special rebates on its oil, and drawbacks on that
of other people. If they could get such rates it was evident that those outside of their combination could
not compete with them long and that they would become eventually the only refiners. They could then
limit their output to actual demand, and so keep up prices. This done, they could easily persuade the
railroads to transport no crude for exportation, so that the foreigners would be forced to buy American
refined. They believed that the price of oil thus exported could easily be advanced 50%. The control of
het refining interests would also enable them to fix their own price on crude. As they would be the only
buyers and sellers, the speculative character of the business would be done away with.
Document #3: Ida Tarbell, “John D. Rockefeller: A Character Study,” McClure’s Magazine, July
1905.
But when a man deliberately decides to build up his fortunate by taking advantage of practices against
which the moral sense of the day has pronounced….he must have the courage of his decision, he must
be prepared to sustain his determination by any or all of those practices which are essential in
supporting a deed which society declares contrary to her good. He must be prepared to conceal, to spy,
to threaten, to bribe, to perjure himself, and he must be prepared to harden his heart to the sufferings
of those who fall in his path. This is what it has always cost to do the thing of which the moral sense of
the world disapproves. This is what it always will cost. There is no evidence that Mr. Rockefeller has
ever hesitated once, in thirty-two years, at the price demanded. He has faced the need with unwavering
courage. He has paid, like a man who has weighed the price of wrong-doing and decided to pay it.
Document #4: Excerpt from John D. Rockefeller’s memoirs
In the year 1867 the firms of William Rockefeller &. Co., Rockefeller and Andrews, Rockefeller and Co.,
and S. V. Harness and H. M. Flagler united in forming the firm of Rockefeller, Andrews, and Flagler.
The cause leading to the formation of this firm was the desire to unite our skill and capital in order to
carry on a business of greater magnitude with economy and efficiency in place of the smaller business
that each had heretofore conducted separately. As time went on, we interested others and organized
the Standard Oil Company, with a capital of $1,000,000. As the business grew, and more markets were
obtained at home and abroad, more persons and more capital were added to the business, and new
corporate agencies were obtained or organized, the object being always the same -- to extend our
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operations by furnishing the best and cheapest products.
I ascribe the success of the Standard Oil Company to its consistent policy of making the volume of its
business large through the merit and cheapness of its products. It has not only sought markets for its
principal products, but for all possible by-products, sparing no expense in introducing them to the
public in every nook and corner of the world. The 60,000 men who are at work constantly in the service
of the company are kept busy year in and year out. Standard pays its workers well, it cares for them
when sick, and pensions them when old. It has never had any important strikes, and if there is any
better function of business management than giving profitable work to employee year after year, in
good times and bad, I don’t know what it is.
Document #5: History of the Rockefeller Foundation
http://www.rockefellerfoundation.org/about-us/our-history
John Davison Rockefeller embraced philanthropy early in life. In his teens, he was regularly donating
money from his first job to his Sunday school and other activities of his Baptist church. As his personal
wealth grew, so did his generosity. Impressed by an 1889 essay by Andrew Carnegie, Rockefeller wrote
to the philanthropist, “The time will come when men of wealth will more generally be willing to use it
for the good of others.” It was that year that Rockefeller began his own philanthropic work in earnest,
making the first of what would become $35 million in gifts, over a period of two decades, to found the
University of Chicago.
In 1901 he established the Rockefeller Institute for Medical Research, now Rockefeller University. In
1903 he created the General Education Board at an ultimate cost of $129 million to promote education
in the United States “without distinction of sex, race, or creed.”
The Rockefeller Foundation began its work in 1913 with the founder’s 39-year-old son, John D.
Rockefeller Jr., as its president. The first grant, of $100,000, went to the American Red Cross to
purchase property for its headquarters in Washington, DC. and for “a memorial to commemorate the
services of the women of the United States in caring for the sick and wounded of the Civil War."
Support for scholarship and educational opportunity—to colleges, schools, research institutions, and
libraries—has been a part of the Foundation’s work in virtually every year of its existence. It supported
some of the earliest and most substantial efforts to open the doors of higher education to African
Americans. From supporting Peking Union Medical College and schools of public health across the
globe to co-founding the Partnership for Higher Education in Africa, the Foundation has implemented
positive change through the increase of knowledge.
This was the genius of Rockefeller and his Foundation successors. They saw conditions that needed to
change. They did their homework. They invested in cutting-edge research. They called on experts and
put many of them on the payroll.
When a young Albert Einstein sent a request for $500 to John D. Rockefeller's top lieutenant,
Rockefeller instructed his deputy, "Let's give him $1,000. He may be onto something." They
experimented, adapted, and changed course when necessary. They didn't use the word innovation
then; they called it "scientific philanthropy." But innovation was their game. It was bold and daring,
intrepid and risk-taking.
Since its inception, John D. Rockefeller’s foundation has given more than $14 billion in current dollars to
thousands of grantees worldwide.
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Document #6: John D. Rockefeller Political Cartoons
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