John D. Rockefeller
The man who eventually became the richest in America was the son of a con-man, philanderer, bigamist, and accused rapist who eventually abandoned his family after several moves, most of them to avoid debtors. Eventually John attended high school in Cleveland, Ohio and completed a course in bookkeeping at Folsom’s Commercial College. At the age of 16 Rockefeller began his business career as a bookkeeper’s assistant at a salary of fifty cents per day (about $13 today). Rockefeller quickly learned the practical aspects of calculating costs, especially those regarding the transportation of goods. It was 1855.
By 1859 Rockefeller had saved enough money to enter into a partnership, and he spent the Civil War years tending to his business, supporting the Republican Party, and hiring substitutes to avoid the draft. In 1863 Rockefeller and his partner shifted their business interests from produce to oil to take advantage of the hefty subsidies the government paid for oil. The partnership built an oil refinery. It was the general practice of the day to sell only the kerosene which resulted from refining, disposing the rest by dumping it into streams or lakes. Rockefeller and his partners sold everything, gasoline, kerosene, lubricating oil, paraffin, and tar.
By 1868 Rockefeller and his partners, his brother William and Henry Flagler, owned two refineries and a subsidiary company in New York for marketing their products. Together they comprised the largest oil refining operation in the world. Rockefeller established the procedure of borrowing for the purpose of investment and expansion and reinvestment of the profits from the steadily growing company. As other refiners also grew the supply of kerosene, then used chiefly for lighting, exceeded demand and profits began to decline. In 1870 Rockefeller dissolved the partnership and created a new company, Standard Oil of Ohio.
Rockefeller began purchasing smaller refineries which were operated less efficiently than his own and used his leverage as a major supplier of kerosene to control shipping rates. As kerosene became less expensive it became an affordable source of lighting for the masses. In 1872 there were 26 refineries in Cleveland which competed with Standard Oil, within four months Rockefeller acquired 22 of them. Eventually Standard Oil was producing more than 300 different oil based products, and owned its own rail cars, distribution pipelines, and delivery systems. Standard Oil of Ohio refined about 90% of the nation’s oil.
Eventually Rockefeller became the target of reformers and trust busters. Rockefeller expanded into the mining of coal and iron, and labor unrest at his many enterprises led to workers being killed by company security agents. Rockefeller fell into disrepute with much of the public. As electrification reduced the market for kerosene the automobile increased demand for gasoline and his fortune kept growing. His philanthropic activities have long been overlooked by those who condemned his monopolistic business practices but he gave $80 million to the University of Chicago, endowed the Rockefeller Foundation with $250 million, and gave millions more to other charities and schools.