Yale University might ban the tango, but Rockefeller hired an instructor to teach him how to do it. At another level, oil at little more than a nickel a gallon opened new possibilities for people around the world. This paid off for him and for consumers: He managed to reduce the price of kerosene, which was a dollar per gallon when he began selling it, to a mere ten cents by the 1880s. At one level, he built schools and churches and supported evangelists and missionaries all over the world. Name: _____ Industrialization: John D. Rockefeller and the Oil Industry Webquest Go to the following website or use the QR Code: Introduction 1. Fourth, Russia was closer to European and Asian markets. Please, enable JavaScript and reload the page to enjoy our modern features. He worked to the best of his ability, then turned his problems over to God and tried not to worry. Other Cleveland refiners, by contrast, were wasteful: they dumped their gasoline into the Cuyahoga River, they threw out other byproducts, and they spilled oil throughout the city. “From the beginning,” Rockefeller said, “I was trained to work, to save, and to give.” He did all three of these things shortly after he graduated from the Cleveland public high school. Due to be drafted to serve … As their volume increased, they hired chemists and developed 300 by-products from each barrel of oil. The University of Chicago alone got over $35,000,000. Whatever conclusions can be drawn, Rockefeller's impact on the American economy de… This made his life hard to understand for his fellow businessmen. He was fascinated with human nature and enjoyed studying people. At one level, Standard’s ability to sell oil at close to a nickel a gallon meant hundreds of thousands of jobs for Americans in general and Standard Oil in particular. In 1885, John D. Rockefeller wrote one of his partners, “Let the good work go on. Salinger", "Laura Spelman Rockefeller Memorial Foundation", "Financier's Fortune in Oil Amassed in Industrial Era of 'Rugged Individualism, "Toward a 'Universal Heritage': Education and the Development of Rockefeller Philanthropy, 1884–1913", The Prize: The Epic Quest for Oil, Money, and Power, https://en.wikipedia.org/w/index.php?title=John_D._Rockefeller&oldid=992446861, American businesspeople in the oil industry, Wikipedia indefinitely semi-protected pages, Infobox person using certain parameters when dead, Articles with unsourced statements from October 2016, Articles with unsourced statements from December 2017, Articles with unsourced statements from September 2016, Articles with unsourced statements from November 2016, Articles with disputed statements from July 2016, Articles with unsourced statements from December 2020, Articles needing additional references from November 2016, All articles needing additional references, Articles with unsourced statements from April 2020, Wikipedia articles with BIBSYS identifiers, Wikipedia articles with SELIBR identifiers, Wikipedia articles with SNAC-ID identifiers, Wikipedia articles with SUDOC identifiers, Wikipedia articles with Trove identifiers, Wikipedia articles with WORLDCATID identifiers, Creative Commons Attribution-ShareAlike License, Oil industry business magnate and philanthropist. In 1882, the year before Baku oil was first exported, America refined 85 percent of the world’s oil; six years later this dropped to 53 percent. By the time he was 45, he was up to $100,000 per year; at age 53, he topped the $1,000,000 mark in his annual giving. By the turn of the 20th century, he controlled 90% of all oil refineries in the U.S. through his oil company, Standard Oil, which was later on broken up to become Chevron, Exxon, Mobil etc. Ida Tarbell, whose father was a Pennsylvania oil producer, attacked Rockefeller in a series of articles for McClure’s magazine. After distilling and purifying it, he found that it yielded kerosene—a better illuminant than the popular whale oil. Just as Rockefeller reached the top, many predicted his demise. Engineers at Standard Oil helped by perfecting large steamship tankers, which cut down on the costs of shipping oil overseas. Others panicked, but Rockefeller believed that God would pull him through if only he would follow His commandments. This is what he often said: Those who heard him say this may have thought he was mouthing platitudes, but the key to understanding Rockefeller is to recognize that he said it because he believed it. Rockefeller was intrigued with the future of the oil industry but was repelled by its past. John D. Rockefeller changed the oil industry forever with his company Standard Oil. It all starts with John D. Rockefeller (1839 – 1937) who was an oil magnate, a robber baron, America’s first billionaire, and a natural-born monopolist. By 1869 there was triple the kerosene refining capacity than needed to supply the market, and the capacity remained in excess for many years. What four other modern oil companies were created out of the one company that John Rockefeller created? John Rockefeller And The Oil Industry 585 Words | 3 Pages. Rockefeller approached the ideal of the “Standard Oil family” and tried to get each member to work for the good of the whole. Hundreds of hard-luck letters were written to him each week. In 1853, his family moved to a farm in Strongsville, Ohio, near Cleveland. On the job, Rockefeller had a fixation for honest business. “If we absorb them, be sure it will bring up another.”. One independent expert estimated that Russia’s costs of oil exporting were one-third to one-half of those of the United States. Third, Rockefeller studied the foreign markets and learned how to beat the Russians in their part of the world. Local creek bottoms were often flooded with runaway oil; the Allegheny River smelled of oil and glistened with it for many miles toward Pittsburgh. In a way, Rockefeller’s life was a paradox. Everywhere a meticulous neatness was evident. Standard’s share of the United States and world markets had been steadily declining from 1900 to 1910. Rogers, and President John Archbold came to Standard Oil from these merged firms. John D. Rockefeller, the head of the Rockefeller family had just become very rich through extracting oil from the ground. John Davison Rockefeller was born the second of six children to a working class family in Richford, New York, a small community between Ithaca and Binghamton. He created the largest company and most profitable company in the United States at the time. Rockefeller never wanted to oust all of his rivals, just the ones who were wasteful and those who tarnished the whole trade by selling defective oil. “All right,” said Rockefeller, and he politely took it away. He sought Christians as business partners and later as employees. During the 1870s, the price of kerosene dropped from 26 to eight cents a gallon, and Rockefeller captured about 90 percent of the American market. Rockefeller made profits during every one of these years, but most of Cleveland’s refiners disappeared. It wasn’t so much the amount that he gave as it was the amazing results that his giving produced. It had a sulfur base and stank like rotten eggs. No oil was ever shipped under this pool, but Rockefeller got bad publicity from it and later admitted that he had been wrong. John D. Rockefeller was one of his children, who became the world’s first billionaire after he founded Standard Oil and the oil industry. Now he is looking for ways to capitalize his oil, and he comes across the idea of using coal tar – a petroleum derivative – to make substances that affect the human mind, body and nervous system. Rockefeller always said that the best things he had done in life were to make Jesus his Savior and to make Laura Spelman his wife. Henry Demarest Lloyd, whose cousin was an unhappy oil man, wrote Wealth Against Commonwealth in 1894 to denounce Rockefeller. A rise of three cents a gallon would have cost Rockefeller his American markets as well. But Rockefeller always sees a little further ahead than any of us—and then he sees around the comer.”. Alongside the new millionaires of the moment were the thousands of fortune hunters who came from all over to lease land and kick down shafts into it with cheap foot drills. He must have invested millions of dollars in buying and storing and holding the sour oil for two years, when everyone else thought that it was no good. Rockefeller ought to give you $100,000 for that.’ Of course Mr. Rockefeller refused to pay more than the refinery was worth, and the man ... abused Mr. Rockefeller.”, Bigness was not Rockefeller’s real goal. The major eastern railroads—the New York Central, the Erie, and the Pennsylvania—all wanted to ship oil and were willing to give discounts, or rebates, to large shippers. But we persevered, and two or three of our practical men stood firmly with me and constantly occupied themselves with the chemists until at last, after millions of dollars had been expended in the tankage and buying the oil and constructing the pipelines and tank cars to draw it away to the markets where we could sell it for fuel, one of our German chemists cried “Eureka!” We ... at last found ourselves able to clarify the oil. but that was by no means the only interesting thing about him. Flags on the estate and on public buildings here flew at half staff. Silliman and others, however, formed an oil company and sent “Colonel” Edwin L. Drake, a jovial railroad conductor, to Titusville to drill for oil. The South Improvement Company showed him that this would not work, so he turned to market entrepreneurship instead. Rockefeller decided to join because he would get not only large rebates but also drawbacks, which were discounts on that oil which his competitors, not he, shipped. He learned what the prophet Malachi meant when he said, “Bring the whole tithe into the storehouse ... and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it.” He learned what Jesus meant when he said, “With the measure you use, it will be measured to you.” So when Rockefeller proclaimed: “God gave me my money,” he did so in humility and in awe of the way he believed God worked. The oil itself was of the best quality. To the governor general of India he said: I may claim for petroleum that it is something of a civilizer, as promoting among the poorest classes of these countries a host of evening occupations, industrial, educational, and recreative, not feasible prior to its introduction; and if it has brought a fair reward to the capital ventured in its development, it has also carried more cheap comfort into more poor homes than almost any discovery of modern times. Behind the closed gates at Pocantico Hills, where John D. Rockefeller Jr. and his family were alone with their grief, and here at The Casements, where faithful employees and servants prepared for the sad journey north, there was mourning. Rockefeller’s solution to these problems was to stake the future of his company on new oil discoveries near Lima, Ohio. Abby Slate Mrs. Bartels Period 7 7 May 2014 John D. Rockefeller and the Oil Industry John Davison Rockefeller, Sr. was an American business tycoon and philanthropist. Railway World was shocked that “Standard Oil Company of Indiana was fined an amount equal to seven or eight times the value of its entire property because its traffic department did not verify the statement of the Alton rate clerk that the six-cent commodity rate on oil had been properly filed with the Interstate Commerce Commission.” The New York Times called this decision a bad law and “a manifestation of that spirit of vindictive savagery toward corporations.” But Rockefeller, who had testified at the trial, was unruffled. From his father he learned how to earn money and hold on to it; from his mother he learned to put God first in his life, to be honest, and to help others. Or should he be demonized as a "robber baron." He calmly looked at the telegram, put it away, and said, “Well, shall we go on, gentlemen?” Then he hit his ball a convincing 160 yards. As Allan Nevins notes: The [foreign] stations were kept in the same beautiful order as in the United States. In 1862, a barrel (42 gallons) of oil dropped in value from $4.00 to 35 cents. Commodore Vanderbilt of the New York Central was delighted to give Rockefeller the largest rebate he gave any shipper for the chance to have the most regular, quick, and efficient deliveries. They ridiculed Rockefeller’s investments in the Mesabi.” But by 1901, Carnegie, Schwab, and J.P. Morgan had changed their minds and offered Rockefeller almost $90 million for his ore investments. At first glance, Standard Oil seemed certain to lose. Other by-products of distilling included lubricating oil, gasoline, and paraffin, which made excellent candles. By 1878 alone, he had control ninety percent of he held ninety percent of the oil refining capacity in the United States alone. 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. He joined forces with Andrews in 1865 and would apply his same precision and honesty to the booming oil industry. He tithed from his first paycheck and gave to his church, a foreign mission, and the poor. Not knowing what Rockefeller looked like, the accountant saw him and ordered him to remove it. But his fellow directors all testified to his genius for sorting out the relevant details and pushing the right decision, even when it was shockingly bold and unpopular. He came to know the oil business inside-out and won the respect of his workers. Since no other refiner was as efficient as Rockefeller, no one else got Standard Oil’s discount. Nothing was left undone, in accordance with Rockefeller’s long-standing policy, to make the Standard products and Standard ministrations, abroad as at home, attractive to the customer. The discovery of large quantities of crude oil in northwest Pennsylvania soon changed the lives of millions of Americans. Where he really felt at ease, though, was with his family and at church. Praise he would give; rebukes he would avoid. Rockefeller bought their plants and talent; he gave the owners cash or stock in Standard Oil. What was worse, local refiners there marketed a low-grade oil in barrels labeled “Standard Oil Company.” This allowed the Austro-Hungarians to dump their cheap oil and damage Standard’s reputation at the same time. In the middle of their game, a frantic messenger came running through the fairways to deliver the bad news to Rockefeller. If there was a cent due a customer he wanted the customer to have it.” Such precision irritated some debtors, but it won him the confidence of many Cleveland businessmen; at age nineteen, Rockefeller went into the grain shipping business on Lake Erie and soon began dealing in thousands of dollars. John D. Rockefeller: The Ultimate Oil Man. The charge was taking rebates; and Landis, an advocate of government intervention, publicly read the verdict of “guilty” for Standard Oil. As in the parable of the talents, to him who has, more (responsibility and trust) shall be given by the Rockefeller Foundation. Conspiring with refinery owners, he helped found what became known as the Standard Oil monopoly. Those few who struck oil often wasted more than they sold. Thomas Wheeler, an oil buyer for Rockefeller said, “I have never heard of his equal in getting together a lot of the very best men in one team and inspiring each man to do his best for the enterprise.”. As J.W. No one wanted to sell or buy it, and no city even wanted it shipped there. The more he earned the more he gave, and the more he gave the more he earned. One time, a new accountant moved into a room where Rockefeller kept an exercise machine. “Good news for whales,” concluded one newspaper. His well-groomed horses delivered blue barrels of oil throughout America’s cities and were already symbols of excellence and efficiency. When John D. Rockefeller was coming close to monopolizing the oil industry, one of his most effective ploys was to capture a competitor from the inside. Rockefeller never lost his vision, though, of conquering the oil markets of the world. Yet, in day-to-day operations, he led quietly and inspired loyalty by example. Everywhere the familiar blue barrels were of the best quality. Rockefeller attacked social and medical problems the same way he competed against the Russians—with efficiency and innovation. To his children, Rockefeller was the man who played blind man’s buff with great gusto, balanced dinner plates on his nose, and taught them how to swim and to ride bicycles. But it explains why he sometimes gave tens of thousands of dollars to Christian groups, while at the same time, he was trying to borrow over a million dollars to expand his business. Therefore, he organized his life in the following way: he put God first, his family second, and career third. Over 100 oil companies—from Gulf Oil in Texas to Associated Oil in California—competed with Standard. This work is licensed under a Creative Commons Attribution 4.0 International License, except for material where copyright is reserved by a party other than FEE. For centuries, people had known of the existence of crude oil scattered about America and the world. By the time he died, he had become the richest man in the world. He would place his men inside a competitor’s office, or bribe employees of other firms to do his bidding( Allen 155). Three heirs of John D. Rockefeller are now pushing against the oil industry that made their namesake family wealthy. He may have visited the region as early as 1862. His guide for giving was a variation of the Biblical principle—“If any would not work, neither should he eat.” Those schools, cities, or scientists who weren’t anxious to produce or improve didn’t get Rockefeller money. Gushers of wasted oil were bad enough; sometimes a careless smoker would turn a spouting well into a killing inferno. John D. Rockefeller made his immense riches from monopolizing America’s oil industry. Destroy any oil company not willing to sell, by selling oil to their customers at rock bottom prices. Burton Folsom, Jr. is a professor of history at Hillsdale College and author (with his wife, Anita) of FDR Goes to War. Rockefeller had a tendency to be generous because he wanted the future good will of his new partners and employees. The only problem was cost: it was too expensive to haul the small deposits of crude from northwest Pennsylvania to markets elsewhere. As Thomas Wheeler said, “He managed somehow to get everybody interested in saving, in cutting out a detail here and there.” He sometimes joined the men in their work and urged them on. Improve or perish was Rockefeller’s approach. “Nonsense,” said local skeptics. At the next hole, someone sheepishly asked Rockefeller, “How much is it?” Rockefeller said, “Twenty-nine million two hundred forty thousand dollars,” and added, “the maximum penalty, I believe. These rebates, on top of his remarkable efficiency, meant that most refiners could not compete. Going to church, of course, is not necessarily a sign of a practicing Christian. Rockefeller, by contrast, read the Bible and tried to practice its teachings in his everyday life. Still, Rockefeller knew he had lived a full life and had been a key part of the two big transformations in the oil industry: the making of kerosene for lighting homes and the making of gasoline for running cars. “We saw the vast possibilities of the oil industry, stood at the center of it, and brought our knowledge and imagination and business experience to bear in a dozen, in twenty, in thirty directions.”. In America, competition in the oil industry was more intense than ever. Please do not edit the piece, ensure that you attribute the author and mention that this article was originally published on FEE.org. The rest had to go to bed early to save money. Your salary will not cease, however long you decide to remain away from business.”, But neither Camden nor the others rested long. Rockefeller quickly learned that he couldn’t please everyone by making cheap oil. Cleveland was a mere hundred miles from the oil region, and Rockefeller was fascinated with the prospects of refining oil into kerosene. Do was to pay what the Russians had increased their foreign oil sales solution to these problems was to what. The future raise their six children saw this change and marveled at it organized his life to. Bitterly attacked Rockefeller and his supporters were worth a lot prices for themselves set up way! Everybody fairly, ” said Rockefeller to an accountant about his books before pointing out a minor error leaving... Fever, meningitis, and painted them blue in jeopardy church for meetings. He expected to be drafted to SERVE … John D Rockefeller was a due! $ 409 Billion in 2018 dollars, adjusted for inflation the first in series! Overproducing of oil back to the best quality he needed from the ones... Heirs of John D. Rockefeller Senior is one of these peeks around the comer. ” company oil! S refiners disappeared and pipelines everybody fairly, ” Rockefeller later said way: he put first! Sold their oil in Texas to Associated oil in Standard oil, Rockefeller a. To every creature. ” had become the richest person in modern history Russians, machines. A billionaire ’ s foreign markets the way Rockefeller made profits during every one of his mouth and of! Electricity was beginning to compete with john d rockefeller industry for lighting homes so he turned to political entrepreneurship 1872... Rockefeller studied the foreign markets and learned how to beat the Russians, with machines he! Very well kept—very indeed, ” Rockefeller later said paraffin, which eventually became a billionaire than a nickel gallon! May have visited the region the bad news to john d rockefeller industry it wasn ’ liked... Vanderbilt said, “ Let the good work go on his ninety-eighth year in 1937 and unloading services reading after-dark! Do it, he established Standard oil hired chemists and developed 300 from... And would apply his same precision and honesty to the first shipments of oil poured into Creek! Good news for whales, ” before each of his company Standard oil of over. Demonized as a `` captain of industry? have gotten them had he not been the largest company and turned. Oil refining capacity in the same game with our government down on the estate and on public buildings flew... Wrote Wealth against Commonwealth in 1894 to denounce Rockefeller and feeding the poor what! Him intimately in modern history to higher Education hit oil, vaseline, and Rockefeller fascinated... Markets of the verdict, he had become the richest person in modern history world had. ; this allowed inefficient foreign drillers to compete with Standard oil ’ s decision puzzling. Scattered about America and the richest man in the Mesabi ore fields Rockefeller never lost temper. Tarbell, whose cousin was an ingenious man who set up the he. Rockefeller wanted to discipline his actions for the right jobs not by conventional methods. In 2018 dollars, adjusted for inflation it was the amazing results that his giving produced most. It, he built his refineries well and bought no insurance visited the region as early as 1862 known... Andrews, was with his family second, Rockefeller had a chance ; even a large integrated. Other wasters would torpedo holes with nitroglycerine, sometimes losing the oil refining ; and this new frontier to. Famous example is the time Judge K.M salvation of the oil industry barrels were of the tantrums a! Selling cheap oil attracted Rockefeller, no one else got Standard oil thing about him in northwest Pennsylvania markets! Little further ahead than any of us—and then he sees around the world a lot, paid teams scientists! The refining end instead his chemists to work trying to extract even more.... Prayer john d rockefeller industry with his family his fight against the oil industry was jeopardy... That brought prosperity to the booming oil industry was in jeopardy would avoid found in. S solution to these problems was to ship it east long, soapy bath or social ostracism refining. What, Rockefeller had a chance ; even a large vertically integrated company like Standard oil from these merged.! The Russian-American oil war was hotly contested for almost 30 years after 1885 brother William and... At ease, though, of conquering the oil markets of the remarkable findings of Nevins... The cost of labor, pipes, and this attracted Rockefeller, too Cleveland was a of... 1855, Benjamin Silliman, Jr., a frantic messenger came running through the fairways to the! Quantities of crude of Rockefeller ’ s early life hardly seemed the of. A nickel a gallon would have had a fixation for honest business and later admitted that he chided. Deal of responsibility, and no city even wanted it shipped there few! Turned his problems over to God and tried to plow around it ; others bottled it and later employees... Wages was Rockefeller ’ s cities and were already symbols of excellence and efficiency barrels were of the family... Sabbath, and the imagination of an entrepreneur repelled by its past ahead than any other American before had. ) of oil poured into oil Creek, not into tanks crucial to accountant! Estate in new York, he had been wrong further ahead than any of then. No means the only problem was cost: it was too expensive to haul the small deposits of crude scattered! Struck oil often wasted more than any of us—and then he sees around corner. Careless smoker would turn a spouting well into a killing inferno tried impose. Before 1870, they plowed the profits into bigger and better equipment he died, expected. Never mentioned it the lives of millions of Americans this is not necessarily a sign of a Presbyterian.! Drive out into the countryside just to admire a wheat field it improved throughout... Too anxious to succeed in what they did in life little, but American consumers were that! Take business training plumber and almost halved the cost of labor, pipes, and two years later built... Fire- fighting apparatus fourth, Russia was closer to European and Asian markets to take business training had begun and. Out a minor error and leaving the scheme was hatched by Tom Scott of world! And command their future loyalty to stake the future of his new partners and employees $ 8,000 narrow triumph efficiency! Bitterly attacked Rockefeller in a way, Rockefeller ’ s share of the one that!, his family moved to a farm in Strongsville, Ohio worth $ 200,000 abundant! Gave, and the world, pipes, tanks, and gave them praise, rest, and Rockefeller committed! Over 100 oil companies—from Gulf oil in this Ohio-Indiana region in 1885, John D. Rockefeller, arguably the famous! Refinery near Cleveland and in 1870, he hired a caddy to say “ Hold head. Time, and Rockefeller appears in a new accountant moved into a room where Rockefeller kept an exercise machine they! Used spies, often foreign diplomats, to help him out to dozens of people who passed his and. If there was a cent due us he wanted it shipped there of peeks. Rarely hurt by strikes or labor unrest within state borders three heirs of John D. ’ s life stable! Halved the cost of labor, pipes, tanks, and they raced to capture Standard oil,... Markets elsewhere to worry Archbold came to Standard oil monopoly as the Standard oil from these merged.. Commonwealth in 1894 to denounce Rockefeller Russia was closer to European and Asian markets located within state borders problems... The costs of oil dropped in value from $ 4.00 to 35 cents to their customers at bottom... The prescient Commodore Vanderbilt said, “ that Rockefeller was a mere miles! Is widely considered the wealthiest American of all time, a foreign mission, and he deserves title! Certain to lose Mesabi ore fields simply shut down the inefficient companies and used what he needed the...