John D. Rockefeller
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John Davison Rockefeller
John D. Rockefeller in 1885
Born July 8, 1839(1839-07-08)
Richford, New York, USA
Died May 23, 1937 (aged 97)
The Casements, Ormond Beach, Florida, USA
Occupation Chairman of Standard Oil Company; investor; philanthropist
Net worth ▲$318.3 billion, according to Wealthy historical figures
2008, based on information from Forbes - February 2008.
John Davison Rockefeller (July 8, 1839 – May 23, 1937) was an
American industrialist and philanthropist. Rockefeller revolutionized
the petroleum industry and defined the structure of modern philanthropy.
In 1870, he founded the Standard Oil Company and ran it until he
officially retired in 1897.[1] Standard Oil began as an Ohio partnership
formed by John D. Rockefeller, his brother William Rockefeller, Henry
Flagler, chemist Samuel Andrews, and a silent partner Stephen V.
Harkness. Rockefeller kept his stock and as gasoline grew in importance,
his wealth soared and he became the world's richest man and first
American billionaire, and is often regarded as the richest person in
history.[2][3][4][5]
Standard Oil was convicted in Federal Court of monopolistic practices
and broken up in 1911. Rockefeller spent the last 40 years of his life
in retirement. His fortune was mainly used to create the modern
systematic approach of targeted philanthropy with foundations that had a
major effect on medicine, education, and scientific research.
His foundations pioneered the development of medical research, and were
instrumental in the eradication of hookworm and yellow fever. He is also
the founder of both The University of Chicago and Rockefeller
University. He was a devoted Northern Baptist and supported many
church-based institutions throughout his life. Rockefeller adhered to
total abstinence from alcohol and tobacco throughout his life.[6]
He married Laura Celestia ("Cettie") Spelman in 1864. They had four
daughters and one son; John D. Rockefeller, Jr. "Junior" was largely
entrusted with the supervision of the foundations.
Contents [hide]
1 Early life and business career
2 Standard Oil
2.1 Monopoly
3 Philanthropy
3.1 Poem about his life
4 See also
5 Bibliography
6 References
7 External links
Early life and business career
Rockefeller was the second of six children born in Richford, New York,
to William Avery Rockefeller (November 13, 1810–May 11, 1906) and
Eliza Davison (September 12, 1813–March 28, 1889). Genealogists trace
his roots back to French Huguenots who later fled to Germany in the
1600s.[7][8] His father, a traveling salesman who the locals referred to
as "Big Bill", was a sworn foe of conventional morality who had opted
for a vagabond existence. Throughout his life, William Avery Rockefeller
expended considerable energy on tricks and schemes to avoid plain hard
work.[9] Eliza, a homemaker and devout Baptist, struggled to maintain a
semblance of stability at home as William was frequently gone for
extended periods. Young John D. Rockefeller's contemporaries described
him as articulate, methodical, and discreet.
When he was a boy, his family moved to Moravia, New York and, in 1851,
to Owego, New York, where he attended Owego Academy. In 1853, his family
bought a house in Strongsville, a town close to Cleveland. In September
1855, when Rockefeller was 16 he got his first job as an assistant
bookkeeper. Working for a small produce commission firm called "Hewitt &
Tuttle", the full salary for his first three months' work was $50. At
that time he promised when he retired he would give one tenth of his
money to charity.
In 1859, Rockefeller went into the produce commission business with a
partner, Maurice B. Clark. Their firm, Clark & Rockefeller, built an oil
refinery in 1863 in "The Flats", then Cleveland's burgeoning industrial
area. The refinery was directly owned by Andrews, Clark & Company, which
was composed of Clark & Rockefeller, chemist Samuel Andrews, and M. B.
Clark's two brothers. In February 1865, in what was later described by
oil industry historian Daniel Yergin as a "critical" auction,
Rockefeller bought out the Clark brothers for $72,500, and established
the firm of Rockefeller & Andrews.
In 1866, John D. Rockefeller's brother, William, built another refinery
in Cleveland and he was brought into the partnership. In 1867, Henry M.
Flagler became a partner, and the firm of Rockefeller, Andrews & Flagler
was established. By 1868, with Rockefeller borrowing heavily and
reinvesting most of the profits while controlling cost and utilizing his
refineries' waste, the company owned two Cleveland refineries and a
marketing subsidiary in New York, and it was the largest oil refiner in
the world.[10][11] Rockefeller, Andrews & Flagler was the predecessor of
the Standard Oil Company.
Standard Oil
Main article: Standard Oil
John D. Rockefeller ca. 1875By the end of the Civil War, Cleveland was
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). In January 1870, Rockefeller formed
Standard Oil of Ohio, which rapidly became the most profitable refiner
in Ohio. When it was found 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 fighting fiercely for traffic and, in an attempt to
create a cartel to control 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 less than two months in 1872, in what was later
known as "The Cleveland Conquest", 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: 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 became Secretary
of Standard Oil.
Standard Oil Trust Certificate 1896For 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.
Monopoly
Standard Oil gradually gained almost complete control of oil refining
and marketing in the United States through horizontal integration. At
that time, many legislatures had made it difficult to incorporate in one
state and operate in another. As a result, Rockefeller and his
associates owned separate corporations across dozens of states, making
their management of the whole enterprise rather unwieldy. In 1882,
Rockefeller's lawyers created an innovative form of corporation to
centralize their holdings, giving birth to the Standard Oil Trust. The
"trust" was a corporation of corporations, and the entity'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 80% 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, 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 wealthy 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.)
Rockefeller as an industrial emperor, 1901 cartoon from Puck
magazineOhio 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 1909, 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 found Standard Oil
Company of New Jersey in violation of the Sherman Antitrust Act and 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, now part of ConocoPhillips; Standard of
Indiana, which became Amoco, now part of BP; Standard of California,
which became Chevron; Standard of New Jersey, which became Esso (and
later, Exxon), now part of ExxonMobil; Standard of New York, which
became Mobil, now part of ExxonMobil; and Standard of Ohio, which became
Sohio, now part of BP. Rockefeller, who had rarely sold shares, owned
substantial stakes 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."
He and his advisers 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 cooperation."[12]
In 1884, he provided major funding for a college in Atlanta for
African-American women that became Spelman College (named for
Rockefeller's in-laws who were ardent abolitionists before the Civil
War). The oldest existing building on Spelman's campus, Rockefeller
Hall, is named after him. 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. 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. Rockefeller also provided financial
support to Yale, Harvard, Columbia, Brown, Bryn Mawr, Wellesley and
Vassar.
Rockefeller and his son John D. Rockefeller, Jr. in 1915.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, helped in World War I war relief, and 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 into the Rockefeller Foundation. However,
all told, Rockefeller gave away about $550 million.
Oddly enough, Rockefeller became well known in his later life for the
practice of giving dimes to adults and nickels to children wherever he
went. He even gave dimes as a playful gesture to men like tire mogul
Harvey Firestone.[13]
John D. Rockefeller's painting by John Singer Sargent in 1917As a
youth, Rockefeller allegedly said that his two great ambitions were to
make $100,000 and to live 100 years. Rockefeller died of
arteriosclerosis on May 23, 1937, two months shy of his 98th
birthday[14], 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 the 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."[15]
”
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.[16] ”
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 GDP of $101 billion
then.[citation needed] His wealth continued to grow significantly (in
line with U.S. economic growth) after as the demand for gasoline soared,
eventually reaching about $900 million on the eve of WWI, including
significant interests in banking, shipping, mining, railroads, and other
industries. According to the New York Times obituary, “it was
estimated after Mr. Rockefeller retired from business that he had
accumulated close to $1,500,000,000 out of the earnings of the Standard
Oil trust and out of his other investments. This was probably the
greatest amount of wealth that any private citizen had ever been able to
accumulate by his own efforts.”[17] 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. According to some methods of
wealth calculation, Rockefeller's net worth over the last decades of his
life would easily place him as the wealthiest known person in recent
history. As a percentage of the United States' GDP, 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 part of
JPMorgan 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 a former governor of West
Virginia, and another, Winthrop Paul Rockefeller, served ten years as
Lieutenant Governor of Arkansas.
John D. Rockefeller rests at Cleveland, Ohio's Lake View Cemetery.
Poem about his life
Wikiquote has a collection of quotations related to: John D.
Rockefeller
Rockefeller, at the age of eighty-six, penned the following words that
best describe himself and sums up his entire life[18]:
“ I was early taught to work as well as play,
My life has been one long, happy holiday;
Full of work and full of play-
I dropped the worry on the way-
And God was good to me everyday.
”
See also
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