Thursday, January 17, 2013

A Brief History of John D. Rockefeller & Standard Oil

 John D. Rockefeller of Standard Oil

John Davison Rockefeller was born into a poor family on July 8, 1839.  His father did not provide well for the family and the young Rockefeller was forced to help with its support.  At the age of 16, was hired as a grocery store accountant and began to learn the value of hard work. 

He founded Standard Oil in 1870 and eventually built one of the largest companies in the world.   At that time, there was no electricity and people burned kerosene lamps for light.  Much of the oil on the market was unstable and, after multiple fires and deaths, many people were afraid to use it.  Rockefeller spent time and money on making lamp oil “stable” and standardizing it. Thus the name Standard Oil - consumers knew exactly what they bought.

He shipped the new oil via Cornelius Van der Bilt’s railroad to New York, but soon was able to cut costs and the middle man by building his own pipelines. He went on to destroy, buy out, and take over his competitors.  At the end of the 1800’s, he had a virtual monopoly.  The US Government wanted to break up Standard, but Rockefeller was an astute businessman and always managed to stay one step ahead of the government. 
The Sherman Antitrust Act in 1911 broke Standard Oil into 34 smaller independent companies.  However, after many years of mergers and acquisitions, the original company is almost back together doing business as Exxon-Mobile. Another lasting legacy of Standard Oil is its former New York headquarters at 26th Broadway. He constructed this grandiose signature building during the 1920’s (1920-1928) just before the big stock market crash of 1929. 

Other fun tidbits:

On a trip to Yellowstone National Park, Rockefeller took his sons to a diner.  His sons left early, leaving him along at the table.  The waitress came over and inquired, “Mr. Rockefeller, your sons always tip me a dollar, but you only tip ten cents, ” to which  Rockefeller replied, “They have a rich old man. I don’t.”

It is said that Rockefeller had fulfilled his two biggest life’s ambitions - make $100,000 and live to be 100. He died at age 97 and made well over his financial goal.