Jump to content

John D. Rockefeller

From Wikipedia, the free encyclopedia

This is an old revision of this page, as edited by Jim Douglas (talk | contribs) at 23:49, 18 February 2007 (rv). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

John Davison Rockefeller
File:JDR1885.jpg
Born8 July 1839
Richford, New York U.S.A
Died23 May 1937
The Casements, Ormond Beach, Florida
Occupation(s)Chairman of Standard Oil Company; investor; philanthropist

John Davison Rockefeller, Sr. (July 8, 1839 – May 23, 1937) was an American industrialist and philanthropist. who played a pivotal role in the establishment of the oil industry, and defined the structure of modern philanthropy. Rockefeller strongly believed that his purpose in life was to make as much money as possible, and then use it wisely to improve the lot of mankind. In 1870, Rockefeller founded the Standard Oil company and ran it until he retired in the late 1890s. He kept his stock and as gasoline grew in importance, his wealth soared and he became the world's richest man and first billionaire.

His business career was controversial. He was bitterly attacked by muckraking journalists; Standard Oil was convicted in the Federal Court of monopolistic practices and broken up in 1911. Rockefeller spent the last forty years of his life creating the modern systematic approach of targeted philanthropy, creating foundations that had a major impact on medicine, education, and scientific research. His foundations pioneered the development of medical research, and was instrumental in the eradication of hookworm and yellow fever. He was a devout Northern Baptist and supported many church-based institutions throughout his life.

Always avoiding the spotlight, Rockefeller was remembered for handing dimes to those he encountered in public. Predeceased by his wife Laura Celestia ("Cettie") Spelman, the Rockefellers had four daughters and one son (John D. Rockefeller, Jr.). "Junior" was largely entrusted with supervision of the foundations.

Biography

Early life

John Rockefeller was born in Richford, New York to Eliza Davison Rockefeller and William Avery Rockefeller, an itinerant medicine peddler and bigamist who wandered in and out of his son's life. The son, by contrast, was straight-laced, devoutly religious, and was known for his ability to concentrate intensely on detail. John Davison Rockefeller attended country schools and spent a year at Owego Academy before his family moved to Ohio. He enjoyed playing poker and attended high school for two years in Cleveland. In 1855, he started his business career 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.

Standard Oil

Main article: Standard Oil
John D. Rockefeller ca. 1875

In the early 1870s, Cleveland had become established as one of the five main refining centers in the U.S. (besides Pittsburgh, Philadelphia, New York, and the region in northwestern Pennsylvania where most of the oil originated), and Standard Oil had established itself as the most profitable refiner in Cleveland. When it was found out that at least part of Standard Oil's cost advantage came from secret rebates from the railroads bringing oil into Cleveland, the competing refiners insisted on getting similar rebates, and the railroads quickly complied. By then, however, Standard Oil had grown to become one of the largest shippers of oil and kerosene in the country.

The railroads were competing fiercely for traffic and, in an attempt to create a cartel to 'stabilize' freight rates, formed the South Improvement Company. Rockefeller agreed to support this cartel if they gave him preferential treatment as a high volume shipper which included not just steep rebates for his product, but also rebates for the shipment of competing products. Part of this scheme was the announcement of sharply increased freight charges. This touched off a firestorm of protest, which eventually led to the discovery of Standard Oil's part of the deal. A major New York refiner, Charles Pratt and Company, headed by Charles Pratt and Henry H. Rogers, led the opposition to this plan, and railroads soon backed off.

Undeterred, Rockefeller continued with his self-reinforcing cycle of buying competing refiners, improving the efficiency of his operations, pressing for discounts on oil shipments, undercutting his competition, and buying them out. In six weeks in 1872, Standard Oil had absorbed 22 of its 26 Cleveland competitors. Eventually, even his former antagonists, Pratt and Rogers saw the futility of continuing to compete against Standard Oil, and in 1874, they made a secret agreement with their old nemesis to be acquired. Pratt and Rogers became Rockefeller's partners. Rogers, in particular, became one of Rockefeller's key men in the formation of the Standard Oil Trust. Pratt's son, Charles Millard Pratt (1858-1913) became Secretary of Standard Oil.

File:OILSTOCK.JPG
Standard Oil Trust Certificate 1896

For many of his competitors, Rockefeller had merely to show them his books so they could see what they were up against, then make them a decent offer. If they refused his offer, he told them he would run them into bankruptcy, then cheaply buy up their assets at auction. Most capitulated.

Monopoly

Standard Oil gradually gained almost complete control of all oil production in America. At that time, many legislatures had made it difficult to incorporate in one state and operate in another. As a result, Rockefeller and his partners owned separate companies across dozens of states, making their management of the whole enterprise rather unwieldy. In 1882, Rockefeller's lawyers created an innovative form of partnership to centralize their holdings, giving birth to the Standard Oil Trust. The partnership's size and wealth drew much attention. Despite improving the quality and availability of kerosene products while greatly reducing their cost to the public (the price of kerosene dropped by nearly 99% over the life of the company), Standard Oil's business practices created intense controversy. The firm was attacked by journalists and politicians throughout its existence, in part for its monopolistic practices, giving momentum to the anti-trust movement.

One of the most effective attacks on Rockefeller and his firm was the 1904 publication of The History of the Standard Oil Company, by Ida Tarbell. Tarbell was a leading muckraker. Although her work prompted a huge backlash against the company, Tarbell claims to have been surprised at its magnitude. “I never had an animus against their size and wealth, never objected to their corporate form. I was willing that they should combine and grow as big and rich as they could, but only by legitimate means. But they had never played fair, and that ruined their greatness for me.” (Tarbell's father had been driven out of the oil business during the South Improvement Company affair.)

JDR as industrial emperor, 1901 cartoon from Puck magazine

Ohio was especially vigorous in applying its state anti-trust laws, and finally forced a separation of Standard Oil of Ohio from the rest of the company in 1892, leading to the dissolution of the trust. Rockefeller continued to consolidate his oil interests as best as he could until New Jersey, in 1899, changed its incorporation laws to effectively allow a re-creation of the trust in the form of a single holding company. At its peak, Standard Oil had about 90% of the market for kerosene products.

By 1896, Rockefeller shed all of his policy involvement in the affairs of Standard Oil; however he retained his nominal title as president until 1911; he kept his stock.

In 1911, the Supreme Court of the United States held that Standard Oil, which by then still had a 64% market share, originated in illegal monopoly practices and ordered it to be broken up into 34 new companies. These included, among many others, Continental Oil, which became Conoco; Standard of Indiana, which became Amoco; Standard of California, which became Chevron; Standard of New Jersey, which became Esso (and later, Exxon); Standard of New York, which became Mobil; and Standard of Ohio, which became Sohio. Rockefeller, who had rarely sold shares, owned stock in all of them.

Philanthropy

From his very first paycheck, Rockefeller tithed ten percent of his earnings to his church. As his wealth grew, so did his giving, primarily to educational and public health causes, but also for basic science and the arts. He was advised primarily by Frederick T. Gates after 1891, and, after 1897, also by his son.

Rockefeller believed in the Efficiency Movement, arguing that

"To help an inefficient, ill-located, unnecessary school is a waste...it is highly probable that enough money has been squandered on unwise educational projects to have built up a national system of higher education adequate to our needs, if the money had been properly directed to that end."[1]
JDR philanthropy was attacked as "tainted money"; 1910 Puck cartoon shows him purifying it through a foundation

He and his advisors invented the conditional grant that required the recipient to "root the institution in the affections of as many people as possible who, as contributors, become personally concerned, and thereafter may be counted on to give to the institution their watchful interest and coöperation."[2]

In 1884, he provided major funding for a college in Atlanta for black women, that became Spelman College (named for Rockefeller's in-laws who were ardent abolitionists before the Civil War). Rockefeller also gave considerable donations to Denison University and other Baptist colleges.

Rockefeller gave $80 million to the University of Chicago under William Rainey Harper, turning a small Baptist college into a world-class institution by 1900. He later called it "the best investment I ever made."[3] His General Education Board, founded in 1902, was established to promote education at all levels everywhere in the country. It was especially active in supporting black schools in the South. Its most dramatic impact came by funding the recommendations of the Flexner Report of 1910, which had been funded by the Carnegie Foundation for the Advancement of Teaching; it revolutionized the study of medicine in the United States.

Despite his personal preference for homeopathy, Rockefeller, on Gates's advice, became one of the first great benefactors of medical science. In 1901, he founded the Rockefeller Institute for Medical Research in New York. It changed its name to Rockefeller University in 1965, after expanding its mission to include graduate education. It claims a connection to 23 Nobel laureates. He founded the Rockefeller Sanitary Commission in 1909, an organization that eventually eradicated the hookworm disease that had long plagued the American South. The Rockefeller Foundation was created in 1913 to continue and expand the scope of the work of the Sanitary Commission, which was closed in 1915. He gave nearly $250 million to the foundation, which focused on public health, medical training, and the arts. It endowed Johns Hopkins School of Hygiene and Public Health, the first of its kind. It built the Peking Union Medical College into a great institution; it helped in World War I war relief, 1914-16; it employed William Lyon Mackenzie King of Canada to study industrial relations. Rockefeller's fourth main philanthropy, the Laura Spelman Rockefeller Memorial Foundation, created in 1918, supported work in the social studies; it was later absorbed in the Rockefeller Foundation. However, all told, Rockefeller gave away about $550 million.

Oddly enough, Rockefeller was probably best known in his later life for the practice of giving a dime to children wherever he went. He even gave dimes as a playful gesture to men like tire mogul Harvey Firestone and President Hoover. During The Great Depression, Rockefeller switched to giving nickels instead of dimes.

Legacy

File:John d rockefeller.jpg
John D. Rockefeller's painting by John Singer Sargent in 1917

As a youth, Rockefeller allegedly said that his two great ambitions were to make $100,000 and to live 100 years. He died on May 23, 1937, 26 months shy of his 100th birthday, at the Casements, his home in Ormond Beach, Florida. He was buried in Lake View Cemetery in Cleveland.

Rockefeller had a long and controversial career in industry followed by a long career in philanthropy. His image is an amalgam of all of these experiences and the many ways he was viewed by his contemporaries. These contemporaries include his former competitors, many of whom were driven to ruin, but many others of whom sold out at a profit (or a profitable stake in Standard Oil, as Rockefeller often offered his shares as payment for a business), and quite a few of whom became very wealthy as managers as well as owners in Standard Oil. They also include politicians and writers, some of whom served Rockefeller's interests, and some of whom built their careers by fighting Rockefeller and the "robber barons."

Biographer Allan Nevins, answering Rockefeller's enemies, concluded:

The rise of the Standard Oil men to great wealth was not from poverty. It was not meteor-like, but accomplished over a quarter of a century by courageous venturing in a field so risky that most large capitalists avoided it, by arduous labors, and by more sagacious and farsighted planning than had been applied to any other American industry. The oil fortunes of 1894 were not larger than steel fortunes, banking fortunes, and railroad fortunes made in similar periods. But it is the assertion that the Standard magnates gained their wealth by appropriating "the property of others" that most challenges our attention. We have abundant evidence that Rockefeller's consistent policy was to offer fair terms to competitors and to buy them out, for cash, stock, or both, at fair appraisals; we have the statement of one impartial historian that Rockefeller was decidedly "more humane toward competitors" than Carnegie; we have the conclusion of another that his wealth was "the least tainted of all the great fortunes of his day."[4]

Biographer Ron Chernow wrote of Rockefeller:

What makes him problematic—and why he continues to inspire ambivalent reactions—-is that his good side was every bit as good as his bad side was bad. Seldom has history produced such a contradictory figure."[5]

Notwithstanding these varied aspects of his public life, Rockefeller may ultimately be remembered simply for the raw size of his wealth. In 1902, an audit showed Rockefeller was worth about $200 million—compared to the total national wealth that year of $101 billion. His wealth grew significantly after as the demand for gasoline soared, eventually reaching about $900 million, including significant interests in banking, shipping, mining, railroads, and other industries. By the time of his death in 1937, Rockefeller's remaining fortune, largely tied up in permanent family trusts, was estimated at $1.4 billion. Rockefeller's net worth over the last decades of his life would easily place him among the very wealthiest persons in history. As a percentage of the United States economy, no other American fortune—including Bill Gates or Sam Walton—would even come close.

The Rockefeller wealth, distributed as it was through a system of foundations and trusts, continued to fund family philanthropic, commercial, and, eventually, political aspirations throughout the 20th century. Grandson David Rockefeller was a leading New York banker, serving for over 20 years as CEO of Chase Manhattan (now the retail financial services arm of JP Morgan Chase). Another grandson, Nelson A. Rockefeller, was Republican governor of New York and the 41st Vice President of the United States. A third grandson, Winthrop Rockefeller, served as Republican Governor of Arkansas. Great-grandson, John D. "Jay" Rockefeller IV is currently a Democratic Senator from West Virginia, and another, Winthrop Paul Rockefeller, served ten years as Lieutenant Governor of Arkansas.

Rockefeller has passed into popular culture as the embodiment of wealth. Oysters Rockefeller was named for him because the dish was so 'rich'. The Rockefeller family was a major benefactor in funding the reconstruction effort in France after World War I. As a consequence, Rockefeller (along with the Rothschilds) was considered in that country the canonical billionaire—synonymous with extreme wealth. John D. Rockerduck is a Disney character popular in Europe who is a foil to other well-known rich duck, the avaricious Scrooge McDuck.

Quotations

Wikiquote has quotations related to John D. Rockefeller.
  • "I had no ambition to make a fortune; mere moneymaking has never been my goal. I had an ambition to build." - John D. Rockefeller.
  • "Two men have been supreme in creating the modern world: Rockefeller and Bismarck. One in economics, the other in politics, refuted the liberal dream of universal happiness through individual competition, substituting monopoly and the corporate state, or at least movements toward them" - Bertrand Russell, Freedom Versus Organization, 1814 to 1914, as quoted in Ron Chernow, Titan (1998), preface.
  • "The way to make money is to buy when blood is running in the streets." - John D. Rockefeller.
  • When asked once, "How much money is enough money?" He replied, "Just a little bit more." - John D. Rockefeller.
  • "Mr. Rockefeller your fortune is rolling up, rolling up like an avalanche! You must keep up with it! You must distribute it faster than it grows! If you do not, it will crush you and your children and your children's children" - Frederick T. Gates in 1906, quoted in the PBS documentary: American Experience, The Rockefellers (Part 1).
  • "On one occasion, Rockefeller met in Pittsburgh with a group of refiners. After the meeting, several of the refiners went off to dinner. The talk centered on the taciturn, ungregarious, menacing man from Cleveland. 'I wonder how old he is,' a refiner said. Various other refiners offered their guesses. 'I've been watching him,' one finally said. 'He lets everybody else talk, while he sits back and says nothing. But he seems to remember everything, and when he does begin he puts everything in its proper place... I guess he's 140 years old - for he must have been 100 years old when he was born'" - Quoted from Daniel Yergin's book, The Prize (1991) (p47).
  • "Let us prey." -- John D. Rockefeller


See also

Bibliography

  • Chernow, Ron. Titan: The Life of John D. Rockefeller, Sr. Warner Books. (1998). ISBN 0-679-43808-4. online review
  • Collier, Peter, and David Horowitz. The Rockefellers: An American Dynasty. Holt, Rinehart and Winston. (1976)
  • Folsom, Jr., Burton W. The Myth of the Robber Barons. (1996)
  • Fosdick, Raymond B. The Story of the Rockefeller Foundation. Transaction Publishers. (1989)
  • Goulder, Grace. John D. Rockefeller: The Cleveland Years. Western Reserve Historical Society. (1972)
  • Harr, John Ensor, and Peter J. Johnson. The Rockefeller Century: Three Generations of America's Greatest Family. Charles Scribner's Sons. (1988)
  • Harr, John Ensor, and Peter J. Johnson. The Rockefeller Conscience: An American Family in Public and in Private. (1991)
  • Hawke, David Freeman. John D: The Founding Father of the Rockefellers. Harper and Row. (1980)
  • Hidy, Ralph W. and Muriel E. Hidy. Pioneering in Big Business, 1882-1911: History of Standard Oil Company (New Jersey) (1955)
  • Jonas, Gerald. The Circuit Riders: Rockefeller Money and the Rise of Modern Science. W.W.Norton and Co. (1989)
  • Josephson, Matthew. The Robber Barons. London: Harcourt. (1962)
  • Kert, Bernice. Abby Aldrich Rockefeller: The Woman in the Family. Random House. (1993)
  • Knowlton, Evelyn H. and George S. Gibb. History of Standard Oil Company: Resurgent Years 1911-1927 (1956)
  • Latham, Earl ed. John D. Rockefeller: Robber Baron or Industrial Statesman? (1949)
  • Manchester, William. A Rockefeller Family Portrait: From John D. to Nelson. Little, Brown. (1958), popular history
  • Morris, Charles R. The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American Supereconomy 2005
  • Nevins, Allan. Study in Power: John D. Rockefeller, Industrialist and Philanthropist. 2 volumes. Charles Scribner's Sons. (1953), standard scholarly biography
  • Pyle, Tom, as told to Beth Day. Pocantico: Fifty Years on the Rockefeller Domain. Duell, Sloan and Pierce. (1964)
  • Rockefeller, John D.; Random Reminiscences of Men and Events. New York: Sleepy Hollow Press and RAC. (1984) [1909]
  • Rose, Kenneth W. and Stapleton, Darwin H. "Toward a "Universal Heritage": Education and the Development of Rockefeller Philanthropy, 1884-1913" Teachers College Record 1992 93(3): 536-555. ISSN 0161-4681 Fulltext online at Ebsco
  • Sampson, Anthony. The Seven Sisters: The Great Oil Companies and the World They Made. Hodder & Stoughton. (1975)
  • Stasz, Clarice. The Rockefeller Women: Dynasty of Piety, Privacy, and Service. St. Martins Press. (1995)
  • Tarbell, Ida M. The History of the Standard Oil Company 2 vols, Gloucester, Mass: Peter Smith , (1963) [1904].
  • Williamson, Harold F. and Arnold R. Daum. The American Petroleum Industry: The Age of Illumination, 1859-1899 (1959), also vol 2, American Petroleum Industry: the Age of Energy 1899-1959. (1964)
  • Yergin, Daniel. The Prize: The Epic Quest for Oil, Money, and Power. New York: Simon & Schuster. (1991)

References

  1. ^ [Rockefeller, 168]
  2. ^ [Rockefeller p 183]
  3. ^ "A Brief History of the University of Chicago". The University of Chicago. 2000. Retrieved 2006-04-30.
  4. ^ [Latham p 104]
  5. ^ [Chernow, Ron. Titan: The Life of John D. Rockefeller, Sr. 1998]
Retrieved from "https://en.wikipedia.org/w/index.php?title=John_D._Rockefeller&oldid=109178714"