John D. Rockefeller was born in upstate New York on July 8, 1837. His father was a lumberman who later became a traveling salesman, calling himself a “botanic physician.” A conman man nicknamed “Devil Bill” who had been indicted for rape, he was rarely with his family, as he lived the life of a vagabond.
Childhood Home of John D. Rockefeller (Photo by Library of Congress/Corbis/VCG via Getty Images). Colorized.
Because of his father’s frequent absences, his mother took responsibility for his upbringing, instilling his moral compass, which would lead to his later philanthropy. The family moved several times before ending up in Cleveland, Ohio.
Before Becoming An Oil Magnate
Childhood Home of John D. Rockefeller (Photo by Library of Congress/Corbis/VCG via Getty Images)
At 16, he worked as an assistant bookkeeper, and at 20, he entered business partnerships. He was an abolitionist and in 1860, he voted for Abraham Lincoln. In Cuyahoga County, where Cleveland is located, 10,000 of the 50,000 men joined the Union army, but Rockefeller did not. His younger brother was injured, and because of his father’s behavior, he was the primary support for his mother and younger siblings. He had started a shipping business before the war broke out, and if he had joined the fighting, the business would have failed, leaving the family in poverty. The war pushed the shipping of crops from the Midwest to the East, and Rockefeller profited from this. With the profits from his business, at the age of 23, he started to look towards other opportunities. He focused on oil refining.
The Lure Of Black Gold
UNSPECIFIED - CIRCA 1900: John D, Rockefeller surrounded by journalists and photographers at his arrival in New York, Photography, Around 19000 (Photo by Imagno/Getty Images)
Colonel Edmund Drake had been sent to oil fields near Titusville, Pennsylvania, to devise a method to extract large quantities of oil from the ground and on August 28, 1859, he did. Because of Titusville’s proximity to Cleveland, it became a natural location for refineries. Rockefeller and his neighbor, Maurice Clark, entered the refining business, and were joined by Samuel Andrews (who had knowledge of refining) and Clark’s brother. In 1863, the draft was instituted, and Rockefeller paid a substitute to fight for him.
Buying Out His Partner
UNSPECIFIED - CIRCA 1900: John D, Rockefeller surrounded by journalists and photographers at his arrival in New York, Photography, Around 19000 (Photo by Imagno/Getty Images)
Meanwhile, Rockefeller was having difficulties with his partner, Maurice Clark. Clark wanted to operate on a cash-only basis and pocket the profits rather than reinvest them. He also had some moral differences with his one time partner, as his brother James bragged about scams he had pulled. And so, in 1863, Rockefeller started to plan to buy out the Clark brothers. In 1865, he had convinced Clark to auction off his share of the company; Rockefeller was present at the auction, and purchased Clark’s shares. He then formed Rockefeller & Andrews, and at the age of 24, expanded the business, poured his profits back into it, and expanded the business. By 1866, Rockefeller’s brother, William, came on board to handle the export business and manage the New York City office.
Founding Standard Oil
One of Rockefeller's first refineries. Source: (americanhistoryusa.com).
Because entry costs were low, there was a glut of oil on the market, and the small inefficient companies drove prices below the production costs. So, in 1870, with his brother William, Samuel Andrews, Henry Flagler, Stephen Harkness, and O. B. Jennings, he formed Standard Oil, a large company to control all aspects. By 1872, Standard Oil controlled almost all of the refining firms in Cleveland. In 1882, Standard Oil and its properties merged to become the Standard Oil Trust. Rockefeller instituted corporate and technological innovations which revolutionized the oil industry, as they were able to make oil widely available and to reduce production costs.
The importance of oil was increasing during this time, and Rockefeller, who controlled 90% of the oil in the U.S. at the time, became the wealthiest individual in the country. Because trains transported oil around the country, he also came to have significant influence over the rails.
Spending His Money Wisely
John Davidson Rockefeller (1839-1937), the American oil magnate and philanthropist sits writing at his desk. (Photo by © Hulton-Deutsch Collection/CORBIS/Corbis via Getty Images). Colorized.
Rockefeller stopped running the day-to-day business of Standard Oil in 1896, choosing to focus on philanthropy. Throughout his life, he had tithed 10 percent of his earnings to his church. In 1911, Standard Oil was dismantled for violation of anti-trust laws, and he became the first American billionaire, with a fortune that constituted two percent of the American economy. As a philanthropist, he endowed the Rockefeller Foundation, which contributed to the development of a yellow fever vaccine and the eradication of hookworm disease in America. He also gave money to the University of Chicago, the Atlanta Baptist Female Seminary (which would become Spelman College, named after his wife, Laura’s, family), and numerous other causes. In the end, he donated more than $500 million dollars.
