Rockefeller

“Titan: The Life of John D. Rockefeller, Sr.”

What is the first thing that comes to mind when you hear the name, Rockefeller?

Money? Extreme wealth? Massive success? Monopolist? Philanthropist?

As you are most likely aware, John D. Rockefeller is commonly noted as the wealthiest individual in American history.

On a personal note, I proposed to my wife in front of Rockefeller Center at the Christmas tree (many years ago). Therefore, the name Rockefeller reminds me of not only a relentless entrepreneur but also the place where my family started.

Well, if you find yourself longing to learn more about John D. Rockefeller, you need to check out the amazing book, “Titan: The Life of John D. Rockefeller, Sr”, authored by award-winning Ron Chernow. This fantastic book offers insight into the remarkable life of John D. Rockefeller.

John D. Rockefeller certainly lived a fascinating life. From humble beginnings as a child, to monopolizing the oil industry, to becoming America’s richest business man, to being demonized by the press, and then finally becoming one of the one the most generous philanthropists in American history.

“As architect of the first great industrial trust, he proved the ultimately fragile nature of free markets, forcing the government to specify the rules that would ensure competition and fair play in the future. The fiercest robber baron had turned out to be the foremost philanthropist. Rockefeller accelerated the shift from the personal, ad hoc charity that had traditionally been the province of the rich to something both more powerful and more impersonal.”

Being a history fanatic as well as having numerous customers in the oil industry made “Titan: The Life of John D. Rockefeller, Sr” an extremely interesting read. Especially since being located within an hour of the original U.S. oil fields in northwestern Pennsylvania.

“Titan” Author Ron Chernow

At 832 pages (750 pages on Kindle Mobile), author Ron Chernow goes into extensive detail on the intriguing life of John D. Rockefeller.

Having also read Ron Chernow’s “House of Morgan”, the author presents well written biographies and paints a clear picture of his subjects.

For example, Chernow’s “House of Morgan” is considered a business classic. The book was awarded the 1990 National Book Award for Nonfiction and selected by the Modern Library as one of the 100 Best Nonfiction Books of the Twentieth Century.

In addition, while reading Chernow, make sure to keep your dictionary and thesaurus handy. His books present a strong reminder that I definitely need to work on expanding my vocabulary.

Chernow explicitly describes his characters where you actually feel like you know them. His exhaustive research goes deep in the personal lives of his topics.

While reading “Titan: The Life of John D. Rockefeller, Sr”, you actually feel like Rockefeller is speaking directly to you. You can actually imagine the tycoon sitting in front of a group of children at his church teaching a Sunday school class.

John D. Rockefeller in Upstate NY

Rockefeller was raised in an extremely unstable home in upstate New York. His birthplace, Richford N.Y.,  is located just a few hours east of our facility. Born on July 8, 1939 to William and Eliza Rockefeller.

According to the book, his father, William “Bill” Rockefeller was a philandering bigamist who also pretended to be a medicine man. Bill traveled constantly selling unsuspecting victims (“customers”) his potions (“medicine”) that would “heal” their ailments. He would leave his family for months at a time with no communication. Yet, he would then suddenly appear with a pocket full of cash.

Furthermore, Bill married a second wife while still married to Eliza and started another family. Bill’s charisma and handsome good looks allowed him to live his illustrious and scandalous lifestyle. Right up until his death in 1906.

Rockefeller: The Young Entrepreneur

The irony runs deep that John D. Rockefeller was the complete opposite of his father. For example, he served as a dedicated and loyal husband. Attended church religiously. He was also a loving father who provided a stable home. Finally he eventually became the wealthiest man in American History as well as one of the most generous.

The Rockefeller family moved to Cleveland where John D. Rockefeller started his business career as a teenager. By the age of 20, John D. was already a successful entrepreneur selling meat, grain and other dry goods.

“Thus, by the end of the Civil War, John D. Rockefeller had established the foundations of his personal and professional life and was set to capitalize on the extraordinary opportunities beckoning him in postwar America. From this point forward, there would be no zigzags or squandered energy, only a single-minded focus on objectives that would make him both the wonder and terror of American business.”

Rockefeller Enters the Oil Industry

Having incredible foresight, Rockefeller wisely made a career move into the oil industry during the Civil War. Those flourishing in the young oil industry at the time had no idea what was ahead. In particular, that an extremely ambitious entrepreneur in his early 20’s  new to the oil market would soon become a dominant force.

For his first array into the oil industry, Rockefeller pledged a $4,000 investment into a new venture:

 “…placing the twenty-four-year-old Rockefeller squarely in the oil business in 1863, the year of the Emancipation Proclamation and the stunning Union victories at Gettysburg and Vicksburg. Of the initial $4,000 investment, he said dryly, “It seemed very large to us, very large.” Scarcely dreaming that oil would ever supersede their main commodity business, they considered it “a little side issue, we retaining our interest in our business as produce commission merchants.” As a commission agent distant from the oil wells, stationed at the commercial crossroads of Cleveland, Rockefeller naturally entered the industry as a refiner. As a middleman, he belonged to a new breed of people in the emerging industrial economy who traded, refined, or distributed products in the widening chasm that separated raw-material producers in the countryside from their urban consumers.”

The Standard Oil Company

Eventually the vast profit potential that the oil industry offered led Rockefeller to leave his commission commodity business behind to exclusively pursue oil riches.

Rockefeller formed the Standard Oil Company in 1870.

You truly need to read the book to capture the entirety of Rockefeller’s business savvy during this period. Most of all, Rockefeller was an extremely sophisticated business man laser focused on profit as well as a fierce competitor.

Rockefeller saw huge waste throughout the oil industry. He loathed the instability. Prices severely fluctuating. Competitors selling below production costs attempting to capture market share. Unskilled business types ruining the market.

Rockefeller strove for efficiency, stability and profitability. He eventually founded the Standard Oil Company in 1870.

“During his career, Rockefeller cut the unit costs of refined oil almost in half, and he never deviated from this gospel of industrial efficiency.”

Rockefeller the Motivator

One point of particular interest in the book alludes to Rockefeller’s management and motivational skills. Chernow describes how one of the many strengths that Rockefeller possessed included the ability to motivate his executive staff:

“Few outsiders knew that one of Rockefeller’s greatest talents was to manage and motivate his diverse associates. As he said, “It is chiefly to my confidence in men and my ability to inspire their confidence in me that I owe my success in life.” He liked to note that Napoleon could not have succeeded without his marshals. Free of an autocratic temperament, Rockefeller was quick to delegate authority and presided lightly, genially, over his empire, exerting his will in unseen ways….”

Cleveland Massacre

Rockefeller’s dedication to efficiency and profitability eventually drove many competitors out of business. Rockefeller built a massive company with the Standard Oil Company. He also accumulated staggering wealth in the process.

For Example, Rockefeller swept in and started purchasing all of his competitors. He explained to them that they could either sell out or risk an unstable future. He offered them to take Standard Oil Company in stock and become wealthier beyond their imagination. Otherwise, they would suffer severely and eventually go out of business. Even bankrupt.

During a six week period in 1872, Rockefeller purchased 22 of 26 Cleveland competitors. Critics labeled this purchasing spree the “Cleveland Massacre”.

“…he could beneficently spare Standard Oil employees the plight of other industrial workers who “find themselves in each period of ten or fifteen years in destitute circumstances, with bankrupt employers, owing to the foolish and universal competitive methods accompanying the excessive production.”

Ida Tarbell

Impact on Pennsylvania Refineries

The “Cleveland Massacre” also heavily impacted the refineries of Pennsylvania, including teenage Ida Tarbell’s father who refused to sell the the “evil” and monopolistic Rockefeller. As a teenager, Tarbell witnessed firsthand the extreme damage to her community. Especially in her own home where hatred ran deep toward the Standard Oil Company. Ida Tarbell described the damage done to her father as he lost his sense of humor and became grim-faced. Frank’s business partner eventually killed himself over the financial ruin. This forced Frank to mortgage his home to cover company’s debts.

“Rockefeller paid them a pittance, typically a quarter of their original construction costs, or what the plants might have fetched if auctioned off for scrap; he paid little or nothing for goodwill—that is, the intangible value in a thriving business, such as its reputation or client list. If this was hard policy, it wasn’t necessarily unscrupulous. “No, the good will of a business which is losing money is not worth much,” said Rockefeller.”

Due to the overwhelming success and market domination that the Standard Oil company enjoyed, company executives served as a lightning rod of harsh criticism from the public as well as the press.

In particular, John D. was the prime target. He was accused of collusion, unfair business practices and creating a monopoly that wiped out any competitor that stood in his way.

Particularly in Northwestern Pennsylvania oil field communities such as Titusville, Oil City and Bradford.

“Rockefeller’s overwhelming influence on the oil industry stemmed from the conflict between his overmastering need for order and the turbulent, unruly nature of the infant industry. In the overheated memories of his enemies, Rockefeller became an omnipresent bogeyman who first appeared in the Oil Regions.”

Ida Tarbell the Social Journalist

As a little girl who spent her youth on the oil fields in Pennsylvania, she eventually grew up to despise John D. Rockefeller.

Ida Tarbell wrote a scathing series on Rockefeller than completely demonized his character and reputation.

As an investigative journalist for McClure’s Magazine, Tarbell conducted a 19 part series called “History of the Standard Oil Company” which also became a book.

The public became captivated by the extreme wealth generated during the Gilded Age of the late 19th century. No one better represented the accumulation of wealth than Rockefeller.

Tarbell exposed in great detail the secret deals, intimidation, collusive schemes and unregulated business activities conducted by the Standard Oil Company.

Though oil was drilled in northwestern Pennsylvania, the refineries were primarily located in Cleveland including Rockefeller’s Standard Oil Company.

In a quest to stabilize oil prices as well as railroad rates, Rockefeller and the railroads connecting the oil fields and the Cleveland refineries established a “rebate” program. This secret dealt a fatal blow to the oil producers around Titusville and Oil City. Including Ida Tarbell’s father.

Frank Tarbell was a producer and refiner of oil. Once the railroads announced exorbitant shipping rates, the small producers were placed in a severe price disadvantage. They would either no longer be price competitive and continue operations at a loss.

Trust Busted

The famous Standard Oil break up occurred on May 15, 1911. The Supreme court eventually forced the Standard Oil Company to dissolve due to cutthroat and monopolistic business practices.

Without going into great detail here in this review, the Standard Oil monopoly finally came to an end. Thanks to Ida Tarbell’s series of articles, President Teddy Roosevelt’s drive to bust the trusts during his presidency as well as the public fury towards Rockefeller, the Supreme Court finally ruled that Standard Oil needed to be broken up.

The irony? John D. Rockefeller’s wealth exploded after the break up. The three contributing factors?

First, Rockefeller ended up with a significant number of shares from each company that evolved out of the Standard Oil break up. Investors flocked to the individual companies driving up stock prices. Thus, driving up Rockefeller’s wealth as well.

Secondly, thanks to Henry Ford and other Detroit auto manufacturers, consumers purchased automobiles at a fast pace. Americans were now free to travel at will. Therefore the demand for gasoline also exploded.

Third, the Roaring 1920’s saw investors flocking to the stock market in unprecedented numbers. This also dramatically increased his investments.

Rockefeller’s estimated wealth reached nearly a billion dollars thanks to the Standard Oil split. Though one billion dollars today wouldn’t even land you on the Forbes 400 Richest List, this was CRAZY money at the time.

Companies that trace their roots to the Standard Oil Company?

  • Exxon
  • BP
  • Chevron
  • Marathon Oil
  • ConocoPhillips

John D. Rockefeller the Philanthropist

Many characteristics of John D. Rockefeller, Sr. that you may not be aware of include:

  • Devout Baptist
  • Sunday School teacher
  • Dedicated husband
  • Loving father
  • Wicked sense of humor
  • Became an avid golfer in his 60’s after retirement
  • Helped found and funded several top universities
  • Donated millions in medical research

With the same drive and relentlessness as an entrepreneur, Rockefeller donated hundreds of millions of dollars to colleges, universities and for medical research.

“John D. Rockefeller, Sr., had established himself as the greatest lay benefactor of medicine in history. Of the $530 million he gave away during his lifetime, $450 million went directly or indirectly into medicine. He had dealt a mortal blow to the primitive world of nineteenth-century medicine in which patent-medicine vendors such as Doc Rockefeller had flourished. He had also effected a revolution in philanthropy perhaps no less far-reaching than his business innovations. Before Rockefeller came along, rich benefactors had tended to promote pet institutions (symphony orchestras, art museums, or schools) or to bequeath buildings (hospitals, dormitories, orphanages) that bore their names and attested to their magnanimity. Rockefeller’s philanthropy was more oriented toward the creation of knowledge, and if it seemed more impersonal, it was also far more pervasive in its effect.”

Universities and Organizations Founded with Rockefeller Funds

Below includes a list of organizations that Rockefeller founded:

Wrapping It Up

Well we could go on and on about the life of John D. However, we know you need to get back to work to make your own fortune.

On that note, if you are looking for an excellent business book to help build your business, purchase a copy of “Titan: The Life of John D. Rockefeller, Sr.” Grab a highlighter or take notes.

Author Ron Chernow does an amazing job with this book. Especially for entrepreneurs. Read closely and follow the blueprints on how to dominate an industry. Great stuff!

For myself, hopefully after reading this book I now have a better chance of beating my 11 year old daughter in the board game Monopoly. In reality, probably not.

 

 

 

 

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