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John D. Rockefeller - The American Oil Magnate

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John D. Rockefeller was a businessman who
amassed one of the largest fortunes in history.
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He controlled 90% of the oil in the country,
and at the time of his death, he was worth
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between $300 and $400 billion.
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Today, the name “Rockefeller” is synonymous
with wealth for good reason, and his legacy
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has lived on long after his death.
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Today on Biographics, we tell the story of
how a seemingly ordinary boy grew up to be
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the most powerful man in the United States.
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Early Life and Career
John D. Rockefeller was born on July 8, 1839
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in Richford, New York.
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His mother, Eliza Davidson, had a total of
six children.
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His father, William Avery Rockefeller, called
himself a traveling “botanic physician”.
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This may sound impressive, but this was actually
just a fancy name for a snake oil salesman.
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His father earned the nickname “Big Bill”
for his larger-than-life personality.
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These types of salesmen knowingly sold fake
products to people, promising that their so-called
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elixirs could cure practically anything.
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They were usually charismatic showmen who
truly knew how to get people so excited about
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a product to the point where they were practically
begging to give their money away.
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While Big Bill was traveling across the country,
essentially stealing money from unsuspecting
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victims, he would spend some time in a each
town before catching the next train.
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He started a double life with a woman named
Nancy Brown, and had children with her.
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Despite being so good at his job, Big Bill
always seemed to struggle with money, and
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there never seemed to be enough to go around
when he came back to visit Eliza and their
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John D. Rockefeller was raised by his father
to never trust anyone.
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Big Bill opened his arms to catch John when
he was still just a toddler, but when the
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boy jumped, his father stepped back, and let
him fall on the floor to teach this lesson.
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Bill would also trick John and his brothers
by making promises he never intended to keep,
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just so he could get them to do extra chores.
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Big Bill once said, “I cheat my boys every
chance I get.
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I want to make 'em sharp.”
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John Rockefeller was the oldest son in his
family, so he was the “man of the house”
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when his father was gone.
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As a child, he would help his mother raise
turkeys in their backyard so that they could
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sell the meat.
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They did odd jobs for their neighbors, and
for the most part, were forced to fend for
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themselves without much help from his father.
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At one point, Bill decided to come clean to
both of his wives, and revealed that he was
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splitting his free time between two households
for years.
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He suggested that they all move in together
as one big happy family.
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This was bigamy, of course, but it was not
illegal in the United States at that time.
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The Morrill Anti-Bigamy Act was passed in
1862 after polygamy became more prevalent
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among members of The Church of Jesus Christ
of Latter Day Saints.
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But the Rockefellers weren’t a part of the
LDS Church.
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He truly must have been a smooth talker, though,
because he somehow convinced both Eliza and
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Nancy to agree to a Sister Wives situation.
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The family moved to Cleveland, Ohio, and they
told their new neighbors that Nancy Brown
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was their live-in housekeeper.
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Rockefeller was disgusted by his father’s
behavior, and he swore that he would never
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grow up to become that kind of man.
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He decided to save his money, and never waste
it on frivolous things.
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He also became very devoutly religious in
the Baptist church, and held himself to a
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high moral standard.
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This difficult family situation was most likely
why he chose to start working as quickly as
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possible, so he could move out and start an
independent life away from his parents, and
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his father's mistress.
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He often said that his goal was to make $100,000
(the equivalent of almost $3 million dollars
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today), and live to be 100 years old.
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Rockefeller attended Cleveland Central High
School.
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But he did not want to wait until after graduation
to become a businessman.
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So he dropped out of High School and took
just one business and accounting class at
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Folsom Mercantile College.
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This was enough experience to get him a job
as a assistant bookkeeper for local merchants
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called Hewett & Tuttle on September 25th,
1855, when he was just 16 years old.
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He gained a lot of valuable experience at
this job, but the only trouble was that his
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bosses only paid him 50 cents a day.
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Even after inflation, that’s still only
$13.36, which was nowhere near enough to make
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a full-time living.
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Even though they weren’t paying him much,
Rockefeller was always extremely proud of
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the day he got his first job.
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He made September 25th into his own holiday
called “job day”, and he celebrated the
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anniversary every year for the rest of his
life.
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Luckily for Rockefeller, he had been friendly
with the customers at Hewett & Tuttle.
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This gave him a great reputation around town.
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He was always paying close attention to how
everything worked, and he eventually learned
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all of the skills necessary to start his own
business.
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Since everyone in town knew him, he managed
to get a $4,000 loan, which is worth over
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$100,000 today.
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This was more than enough to start trading
in goods like hay, meat, and grain.
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His business managed to earn $450,000 in the
very first year.
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He didn't get to keep that money for himself,
of course, because a lot of that had to go
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back into repaying the loan and business expenses.
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But this was a great start to what would be
a long and prosperous career in business.
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John said, "God gave me money", and he did
not apologize for it.
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In 1861, the United States broke out into
Civil War, and Rockefeller felt very strongly
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about being an Abolitionist.
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Rockefeller's younger brother Frank became
wounded in battle very early in the war.
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When John was drafted, he actually paid a
professional soldier to go in his place.
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That way, he was able to continue running
his business and contribute to the war effort
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at the same time.
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He said, “I wanted to go in the army and
do my part, but it was simply out of the question.
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There was no one to take my place.
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We were in a new business, and if I had not
stayed it must have stopped—and with so
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many dependent on it.”
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Believe it or not, this was actually a common
practice back then, at least for the men who
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could afford to do so.
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And by staying home, he was able to profit
from selling supplies to the war effort.
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Black Gold
Today, the oil industry is concentrated in
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the Middle East.
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But for years, it was readily available in
the United States.
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In 1849, a man named Samuel Kier discovered
crude oil on his property in Titusville, Pennsylvania.
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By the 1850’s and 60’s, word spread, which
caused a huge boom known as the Pennsylvania
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Oil Rush.
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Men were moving to Pennsylvania hoping to
make it rich by setting up oil rigs and tapping
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the ground for their liquid black gold.
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At that time, people needed oil for their
lamps to see at night.
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The only alternative was to process oil from
whale fat, but taking it from the ground was
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obviously a much easier process.
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However, the crude oil that is found in the
ground still needs to be refined before it
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was ready to be used by consumers.
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Crude oil was being transported by train from
Pennsylvania to various oil refineries around
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the country.
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John D. Rockefeller had the brilliant idea
to take advantage of the rush by building
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an oil refinery in Cleveland, Ohio.
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He was 24 years old at this point, and he
decided that instead of continuing to be a
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merchant, he should devote all of his time
and energy to growing his new oil business.
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Rockefeller was still very frugal, so he tried
to save money by cutting out the middleman
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whenever possible.
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Instead of buying wooden barrels from a third
party company, he bought thousands of acres
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of land so that his employees could cut down
trees and make the barrels themselves.
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In 1870, he met a man named Henry M. Flagler
who was interested in investing in Rockefeller’s
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So, they incorporated The Standard Oil Company.
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With Flagler’s help, Rockefeller began to
buy up all of the smaller oil refineries in
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the Cleveland area so that he no longer had
any competitors.
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Whenever any refinery refused to sell their
company to him, Rockefeller would begin selling
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his oil at a loss, so that customers would
flock to him, instead of the competition.
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This would put the small companies out of
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But he didn’t stop there.
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Standard Oil began to spread to other states,
and soon enough, they were refining 90% of
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America’s oil.
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He was now a millionaire.
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At this point, the company was so huge, it
was impossible for one man to oversee the
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operations of the entire country.
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So he decided to allow the former heads of
the oil companies he purchased to become his
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new board of trustees.
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This created a super squad of the smartest
oil experts in the country, and he made himself
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the head of the so-called “trust.”
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This sounds typical for large companies today
who put a CEO as the figurehead.
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But back then, this kind of empire was unheard
of, and Rockefeller was setting the stage
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for other American businesses as a leading
example on how to acquire wealth and power.
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The Battle Of The Railroads
In the 1800’s, railroads were helping to
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aid America through the Industrial Revolution.
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For the first time in history, large cargo
could be shipped across the country at record
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speeds.
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By the 1860’s, the two biggest businesses
in the United States were the railroads, and
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oil.
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So it only made sense that Rockefeller wanted
to be involved in both.
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He was actually plotting to create a railroad
trust, and do exactly what he had done with
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the oil businesses.
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He was already cooperating with the Vanderbilt
family, and he was going after the owners
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of various railroads to purchase their stock
and strike deals with the Presidents of each
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one.
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Rockefeller needed to be on good terms with
railroads, because he needed them to transport
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his barrels of oil by train.
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Since he had such a massive quantity of product,
he negotiated with the Pennsylvania Railroad
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to get a discounted rate on shipping.
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At first, this was working out really well,
and The Pennsylvania Railroad went on a spending
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spree to expand the railroad.
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Before long, the discount they gave Rockefeller
was no longer enough to cover their costs,
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and it would potentially bankrupt the company.
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So they had to go back on their promise, and
raise the price.
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Instead of giving in, Rockefeller responded
by laying his own underground pipelines, and
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he reached out to work with other railroad
companies.
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Now, The Pennsylvania Railroad had lost its
biggest client, and main source of income.
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In 1877, The Pennsylvania Railroad started
building their own oil refinery, so that they
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could put their trains to good use.
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After all, the oil industry was their bread
and butter, whether it came from Rockefeller
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or not.
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Since Rockefeller felt entitled to control
all of the oil, he was outraged.
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He stormed in to speak to speak to the executives
of the railroad, saying, “Why, it is nothing
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less than piracy!”
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To make matters worse, the railroad employees
began to strike across the nation, because
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they were not getting paid.
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This became known as the Great Railroad Strike
of 1877.
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They finally buckled under the pressure, and
sold their oil refinery to Rockefeller for
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$3.4 million.
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Ten years later, in 1887, the US Government
would pass the Interstate Commerce Act, which
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forced regulations on the prices charged by
railroads.
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This prevented those companies from gouging
the price for transportation.
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From an outsider’s perspective, people did
not see a railroad that broke a contract.
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They saw Rockefeller as the villain, instead.
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People believed that he had far too much power.
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Everyone could see the writing on the wall-
If Rockefeller wasn’t stopped, he may take
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over the railroad industry completely, and
after that, there would be no stopping him
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from taking more, and more, until there was
nothing left for anyone else.
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Public Outcry
The general public strongly disapproved of
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Rockefeller's tactics, and they believed that
he was like a shark gobbling up small businesses.
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It had already happened in the oil industry,
and he was making moves in the railroad industry.
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People were terrified that he would eventually
be so rich and powerful, he just might take
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over the world.
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Newspapers bashed Standard Oil, and political
cartoons featured Rockefeller on a regular
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basis.
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Even President Teddy Roosevelt was very vocal
about being “Antitrust”, and promised
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Americans that he was going to do something
to stop it.
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The state of Ohio planned to create new Antitrust
laws specifically to stop Rockefeller and
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Standard Oil from having a monopoly over the
entire industry.
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Since it was only a state law at that point,
Rockefeller was able to reincorporate in New
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Jersey in 1882 before they even had a chance
to sue him.
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He opened his new headquarters on Broadway
in New York City.
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Reincorporating in another state did not protect
him for long, because in the year 1890, US
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Congress passed the Sherman Antitrust Act,
which made it illegal in every state.
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Two years later, the Supreme Court declared
that Standard Oil was violating this new law.
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So, how did Rockefeller deal with dissolving
his monopoly?
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Well...He didn’t.
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He figured out a legal loophole, of course.
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The board of trustees divided up Standard
Oil amongst themselves, and created smaller
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companies so that- technically- they would
no longer be considered a monopoly.
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In 1899, these new companies were all brought
back under the umbrella of Standard Oil.
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These are called “subsidiaries”, which
is when a small company is under the control
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of a larger corporation.
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Just a few examples of these smaller companies
were BP, Exxon, Conocophillips, and Chevron.
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They’re all still around to this very day.
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At that time, there was a group of writers
and journalists called the “muckrakers”,
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and they took it upon themselves to uncover
corruption in American businesses.
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One such journalist, Ida Tarbell, wrote a
book in 1904 called The History of the Standard
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Oil Company, where she went through the story
of Rockefeller’s ruthless rise to power.
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She wrote, “Rockefeller and his associates
did not build the Standard Oil Co. in the
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boardrooms of Wall Street banks.
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They fought their way to control by rebate
and drawback, bribe and blackmail, espionage
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and price cutting, by ruthless ... efficiency
of organization.”
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Tarbell is remembered for being one of the
most successful investigative journalists
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of her time, and many credit her and the other
muckrakers with helping to dismantle the Rockefeller
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monopoly.
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But, of course, people in the general public
did not realize that those new oil companies
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were not due to small businesses making a
comeback.
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Rockefeller truly was still pulling the strings,
and for him, a rose of another name was just
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as sweet.
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Personal Life
Even though there is plenty of information
00:14:31.510 --> 00:14:36.299
out there about the financial success of John
D. Rockefeller, he was a fiercely private
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person, and he tried his best to keep his
family out of the newspapers.
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What we do know is that when he was 25 years
old in 1864, he married a woman named Laura
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Spelman.
00:14:45.740 --> 00:14:48.790
She was a devout Christian who worked as a
school teacher, and they were very much in
00:14:48.790 --> 00:14:49.940
love with one another.
00:14:49.940 --> 00:14:52.990
He said of her, "Her judgment was always better
than mine.
00:14:52.990 --> 00:14:55.839
Without her keen advice, I would be a poor
man."
00:14:55.839 --> 00:14:59.150
He wrote her beautiful love letters when he
had to travel for business.
00:14:59.150 --> 00:15:03.370
He once wrote “What a blessing that I have
such a good and true wife.
00:15:03.370 --> 00:15:06.230
How much I would give for wings to reach you
tonight.”
00:15:06.230 --> 00:15:10.870
All of this romance lead to the creation of
their children together; Elizabeth, Alice,
00:15:10.870 --> 00:15:15.260
Alta, Edith, and John Jr. Sadly, Alice died
during infancy.
00:15:15.260 --> 00:15:18.350
Even though he was very busy, he always made
time to be with his family.
00:15:18.350 --> 00:15:21.930
He was a loving father and a devoted husband
who never took them for granted.
00:15:21.930 --> 00:15:26.850
All his life, Rockefeller had a very impressive
mustache, but during the 1890s, he began suffering
00:15:26.850 --> 00:15:29.140
from a condition called alopecia.
00:15:29.140 --> 00:15:33.230
He began to lose all of the hair from his
entire body, including his eyebrows.
00:15:33.230 --> 00:15:38.560
At first, he tried to hide it by wearing toupees,
but as he grew older, he decided to let people
00:15:38.560 --> 00:15:41.600
see him in public after he had lost all of
his hair.
00:15:41.600 --> 00:15:45.799
In the 1990’s, a biographer named Ron Chernow
got permission from the Rockefeller family
00:15:45.799 --> 00:15:47.130
to write a biography.
00:15:47.130 --> 00:15:50.830
He learned by speaking to his children and
grandchildren that Rockefeller never spoke
00:15:50.830 --> 00:15:55.320
much about his father, and he never allowed
“Big Bill” to be apart of their lives.
00:15:55.320 --> 00:15:59.370
They also never met his half-sisters, and
they were never given any of the fortune,
00:15:59.370 --> 00:16:03.380
because Rockefeller did not consider them
to be apart of his real family.
00:16:03.380 --> 00:16:08.370
After digging through a mountain of paperwork,
Ron Chernow finally found William Avery Rockefeller’s
00:16:08.370 --> 00:16:11.230
grave in a small cemetery in Freeport, Illinois.
00:16:11.230 --> 00:16:15.240
He was buried under an alias called “Dr.
William Levingston.”
00:16:15.240 --> 00:16:19.531
It would seem that even in death, John D.
Rockefeller wanted the memory of his father
00:16:19.531 --> 00:16:22.949
to be forgotten.
00:16:22.949 --> 00:16:30.220
Retirement, Philanthropy, and Legacy
In 1897, John D. Rockefeller chose to retire
00:16:30.220 --> 00:16:34.100
from his position at Standard Oil, and left
the control of the business to his board of
00:16:34.100 --> 00:16:37.310
trustees and his son, John D. Rockefeller
Jr.
00:16:37.310 --> 00:16:42.069
In 1911, Standard Oil was sued once again
for violating the Antitrust Act, and they
00:16:42.069 --> 00:16:45.230
were forced to split up into dozens of different
corporate entities.
00:16:45.230 --> 00:16:49.771
But he decided to invest in all of these new
companies, and ironically, it only made him
00:16:49.771 --> 00:16:51.579
more money on the stock market.
00:16:51.579 --> 00:16:56.850
Estimates of John D. Rockefeller Sr.’s true
net worth vary anywhere from $300 to $400
00:16:56.850 --> 00:16:57.850
Billion dollars.
00:16:57.850 --> 00:17:02.730
To put that into perspective, the founder
of Amazon.com, Jeff Bezos is the current richest
00:17:02.730 --> 00:17:07.110
man in the world today, and yet he is only
worth $100 Billion.
00:17:07.110 --> 00:17:11.660
It's probably not a coincidence that Bezos
also practiced the same exact method that
00:17:11.660 --> 00:17:15.890
Rockefeller once did, by buying out smaller
online bookstores during the expansion of
00:17:15.890 --> 00:17:16.890
Amazon.com.
00:17:16.890 --> 00:17:21.620
Now, most people try to vilify John D. Rockefeller,
but he wasn’t all bad.
00:17:21.620 --> 00:17:25.410
He believed in the Christian tradition of
“tithing”, so he had been giving a portion
00:17:25.410 --> 00:17:28.069
of his income to charity since he was 16 years
old.
00:17:28.069 --> 00:17:32.880
He gave $70 million towards the founding of
the University of Chicago, and he also helped
00:17:32.880 --> 00:17:37.270
to fund the Spelman College in Atlanta, Georgia,
which was an all-black women’s school.
00:17:37.270 --> 00:17:42.250
According to the New York Times, Rockefeller
gave away $550 million in charitable donations
00:17:42.250 --> 00:17:46.610
to scientific research, education, and the
Baptist church.
00:17:46.610 --> 00:17:50.950
Rockefeller became well known in his later
life for the practice of giving dimes to adults
00:17:50.950 --> 00:17:53.410
and nickels to children wherever he went.
00:17:53.410 --> 00:17:58.650
He even gave dimes as a playful gesture to
wealthy men, such as tire mogul Harvey Firestone.
00:17:58.650 --> 00:18:02.760
One of the best examples of his generosity
also doubled as his legacy.
00:18:02.760 --> 00:18:06.120
In the year 1930, Americans were suffering
after the Great Depression.
00:18:06.120 --> 00:18:10.890
John D. Rockefeller was already in his 90’s,
so he decided to use a huge chunk of his fortune
00:18:10.890 --> 00:18:13.310
to build the Rockefeller Center in New York
City.
00:18:13.310 --> 00:18:17.120
It was called a “city within a city”,
because it had dining, shopping, apartments,
00:18:17.120 --> 00:18:18.530
and even a movie studio.
00:18:18.530 --> 00:18:23.420
The project created 40,000 new jobs during
construction, and people were gainfully employed
00:18:23.420 --> 00:18:26.130
once all of the businesses inside of the Center
were opened.
00:18:26.130 --> 00:18:30.590
The project was complete in 1933, and today,
the Rockefeller Center has become an iconic
00:18:30.590 --> 00:18:33.780
part of Manhattan, especially during Christmas
time.
00:18:33.780 --> 00:18:37.490
Biographer Ron Chernow wrote of Rockefeller,
“What makes him problematic—and why he
00:18:37.490 --> 00:18:42.860
continues to inspire ambivalent reactions—is
that his good side was every bit as good as
00:18:42.860 --> 00:18:44.960
his bad side was bad.
00:18:44.960 --> 00:18:47.770
Seldom has history produced such a contradictory
figure.”
00:18:47.770 --> 00:18:52.880
John D. Rockefeller died just one year after
the completion of his center, in 1934.
00:18:52.880 --> 00:18:57.200
He often told people that his goal was to
live to be 100 years old, but he didn’t
00:18:57.200 --> 00:18:58.940
make it past 97.
00:18:58.940 --> 00:19:03.580
Perhaps the best way to summarize his life
was a poem Rockefeller wrote himself, at age
00:19:03.580 --> 00:19:07.180
86:
I was early taught to work as well as play,
00:19:07.180 --> 00:19:11.550
My life has been one long, happy holiday;
Full of work and full of play—
00:19:11.550 --> 00:19:29.880
I dropped the worry on the way—
And God was good to me everyday.

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