By the time Standard Oil was in business, Cleveland had become one of the five major refining centres in the country. By getting secret rebates from the railroads and supporting a new cartel aimed at stabilizing freight railroad rates in return for preferential treatment, Rockefeller was able to give his company an edge.
Rockefeller also began a campaign to buy out as many as possible of his competing refiners. In just six weeks in 1872, Rockefeller had overtaken 22 of his 26 competitors in Cleveland. Standard Oil was becoming so large that even the most ardent of competitors had little choice but to capitulate. If a competitor refused his offer, Rockefeller promised to run them into bankruptcy.
By buying out his competition, improving his company’s own efficiency, and continuing to fight for discounts from the railroads, Rockefeller was able to grow Standard Oil into one of the most powerful corporations in the country. In little time, the company had become one of the largest shippers of oil and kerosene in the U.S.
From Cleveland to the rest of the country, Standard Oil had attained a complete monopoly over oil production in less than ten years. In order to consolidate his cross-country holdings, Rockefeller created the Standard Oil Trust in 1882. It was at this point that Rockefeller began attracting much attention. The Trust’s immense size was worrying for many observers.
Under Rockefeller, the price of kerosene dropped almost 80%, making it more widely available. But, the Trust’s strong monopoly was a cause for concern amongst journalists, activists, and politicians alike. Rockefeller himself became the target for much public criticism. In 1892, anti-trust laws in Ohio even forced the separation of Standard Oil of Ohio from the rest of the company.
From 1896 to 1911, Rockefeller’s involvement in the company he had created gradually decreased. While he maintained his presidential title as well as his stock, he disengaged himself in the daily running of the company and its policy decisions. It was in 1911 that the company was dealt a huge blow. While not as powerful as it was at its peak, Standard Oil by that point still controlled 64% of the market. The U.S. Supreme Court then decided that because the company had originated from illegal monopolistic practices, it had to be dismantled in 34 smaller companies. The remnants of these new companies can still be found today in the likes of Chevron, Exxon, and Mobil.
Throughout his career, Rockefeller was also committed to certain charitable causes that were close to his heart. He gave 10% of every paycheck to his church. As his wealth grew, he increased his giving to educational and health causes, including $80 million to the University of Chicago, and creating Rockefeller University and the Rockefeller Foundation. In total, Rockefeller gave away over $550 million of his $1.4 billion fortune.
Rockefeller’s legacy lives on today. No other American – including Bill Gates – has ever achieved a similar level of wealth as a percentage of the nation’s economy.
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