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John D. Rockefeller

John D Rockefeller

John D. Rockefeller was the wealthiest person in history.

At the time of his death, John D. Rockefeller was worth $340 billion dollars (adjusted for today). That is four times more than Bill Gates’ current fortune.

Early Life

John D. Rockefeller was born July 8, 1839, in Richford, New York in a family of modest means. He had three brothers and two sisters: William Jr., Franklin, Frances, Mary, and Lucy. His father, William Avery “Bill” Rockefeller, owned a small farm and was a salesman of somewhat ill-repute who fathered eight children between his wife and mistress.

Bill would leave the family intermittently and taught his sons that they must get the best of any deal they made with anyone. John’s mother, Eliza Davison, did the best she could to keep a stable and strict home for her children. She taught John to not be wasteful and to be giving. [1]

John D. Rockefeller
Young John D. Rockefeller

John was a serious and fastidious boy. He saved $50 at the age of 12, which was a good amount of money in 1851, and he loaned it to a nearby farmer with a 7% interest payment. He learned from an early age to let money work for him and never be a slave to money. [5]

John D. Rockefeller
John’s childhood home

The family moved to Cleveland, Ohio in 1853 where John did well in mathematics and graduated from Cleveland Central High School.

He was hard-working and industrious and landed his first job when he was 16 years old as a bookkeeper for a produce brokerage called Hewitt & Tuttle. He was hired for 50 cents a day.

Every year from that point forward, John celebrated what he called “Job Day” to commemorate his entrance into the business world. It was also around this time that he began a life-long commitment to donating 10% of his earnings to charity, something that would mean a great deal later in life, both to him and the public. [5]

Beginnings: Business

After two years at Hewitt & Tuttle, John became frustrated at what he deemed was too low a wage, and so he quit. He took his savings and a bank loan and partnered with Maurice B. Clark to start his own produce business. They sold just about everything in the Cleveland area and were highly successful. In their first year of operation they purportedly earned $500,000. [2]

The Oil Boom 

John D. Rockefeller
First oil well

In 1859, oil was discovered in Titusville, Pennsylvania. The Oil Boom had begun. Kerosene was the new lighting source during this time and there was great demand for this new commodity called oil.

Prices were subsidized by the government and drew prices up from 30 cents a barrel to over $13 a barrel. There was a mad rush to drill and bring oil to market but most people failed and were horribly inefficient.

There just wasn’t the technology or experience to effectively extract oil. In some cases, there were wells left seeping openly into creeks. [2]

John soon realized his time and capital were best focused in this new industry. Financing oil wells and the drilling process was deemed too risky so John decided to focus his business strategy on oil refineries.

So in 1863 he built an oil refinery in Cleveland’s industrial area and partnered with Samuel Andrews and two of Maurice Clark’s brothers.

Other companies were only utilizing 60% of the oil for kerosene and throwing out the remaining oil in rivers and dumps. Ever the fastidious businessman, John pushed for new ways to use the remaining oil for wax, lubricants, petroleum jelly, etc. [2]

In 1865, he bought out the Clark brothers and brought in a new partner, Henry Flagler to form Rockefeller, Andrews & Flagler. 

Standard Oil

In 1870, John disbanded Rockefeller, Andrews & Flagler and founded Standard Oil of Ohio. He was aggressive and quick with his business moves and acquisitions.

He bought out nearly everyone in the Cleveland area and sought to control every aspect of the oil business in-house. By the early 1880s, Standard Oil was a true monopoly. It controlled 90% of the oil in the United States and each sector of the oil business was consolidated under its’ name. [2]

John D. Rockefeller
Standard Oil Refinery 1889

Rockefeller strove to drive out all competition.

He would buy dozens of refineries in a matter of weeks, make back-room deals with railroad companies and even totally buy out resources to starve his smaller competition into selling their place in the market.

He was ruthless but did not view it that way. He saw himself as the single best option for American consumers of oil and its’ derivative products. He thought competition was a sin.

It is no wonder then that by the 1880s, his business tactics and Standard Oil’s dominance were being decried by many around the country. [5]

John D. Rockefeller

Sherman Antitrust Act

The U.S. government and the public took notice of Standard Oil’s monolithic takeover and passed the Sherman Antitrust Act of 1890. The State of Ohio followed suit and decided Standard Oil violated the law.

John saw the writing on the wall and broke apart the company into smaller pieces and relegated their leadership to others. However, this did not effectively change anything except keep the government at bay. [2]

Nine years later, John decided to bring the company together again in a holding company but a 1911 decision by the U.S. Supreme Court citing the Sherman Antitrust Act, forced the company to again break apart.

This only made John D. Rockefeller wealthier as the 34 entities that resulted from the dissolution would become more valuable separately than as a whole. [3]

A remarkable commercial legacy would follow. Some of the companies that came from Standard Oil: Esso, ExxonMobil, Imperial Oil, Socony, Chevron, Amoco, ARCO, and Marathon. [4]

John D. Rockefeller Quotations

-It is wrong to assume that men of immense wealth are always happy.

The impression was gaining ground with me that it was a good thing to let the money be my slave and not make myself a slave to money.

The most important thing for a young man is to establish a credit — a reputation, character.

The day of combination is here to stay. Individualism has gone, never to return.

The way to make money is to buy when blood is running in the streets.

Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.

I do not think that there is any other quality so essential to success of any kind as the quality of perseverance. It overcomes almost everything, even nature.

If your only goal is to become rich, you will never achieve it.

Philanthropic Legacy

John D. Rockefeller

During his life he gave over $500 million dollars to various causes both educational and scientific. The prestigious University of Chicago as well as Spelman College sprung directly from his pockets.

Most famously perhaps was the formation of the Rockefeller Foundation which strives to “promote the well-being of humanity throughout the world”. [3]


 

 

 

 

 


[1] https://en.wikipedia.org/wiki/John_D._Rockefeller

[2] https://www.biography.com/people/john-d-rockefeller-20710159

[3] http://www.history.com/news/10-things-you-may-not-know-about-john-d-rockefeller

[4] https://en.wikipedia.org/wiki/Standard_Oil#Successor_companies

[5] https://thehustle.co/the-history-of-john-d-rockefeller-standard-oil