BOSSSummer'11#7:Layout 1 6/27/11 10:13 AM Page 26 DIXON 1916-2011 PUTTIN’ ON THE BY MIKE FIELD WHEN JOHN D. ROCKEFELLERrwas a youngiAmertican historz y. man, a minister once offered him the following And certainly, he was the richest: When guidance: “Earn all you can. Give all you can.” Forbes compiled its list of the richest men in It was advice that Rockefeller followed the history, Rockefeller easily topped the charts rest of his long life. In his earning, throughout with an amassed wealth equal to $338 billion the latter half of the 1800s, he created the mod - in today’s dollars. By way of comparison, con - ern petroleum business. Through his giving, he sider that Bill Gates, the Microsoft founder and revolutionized philanthropy. Together, those computer pioneer, comes in 31st on the list two industries in countless ways with a measly $54 billion or so. shaped America in the 20th In these matters it’s important to century. keep all the zeros in those figures in Oil tycoon J. Paul Getty Rockefeller their proper perspective. On Sept. famously had this succinct 29, 1916, The New York Times gave advice for how to become easily topped front-page coverage to a run-up in wealthy: “Rise early. Work late. the charts with the price of oil stocks sparked by a Strike oil.” John D. Rockefeller 10-cents-a-barrel increase in the amassed his wealth—at one an amassed price of crude petroleum. Five years point his net worth was estimat - wealth equal to earlier the Supreme Court had ed to be equal to roughly 2 per - ruled that Standard Oil was effec - cent of the country’s GNP— $338 billion in tively a monopoly made illegal without ever striking a gusher. under the Sherman Antitrust Act. In fact, even though his name is today’s dollars. The Court ordered the company forever associated with Big Oil, broken up into 34 smaller compa - it was only later in his career nies, many of which are familiar that Rockefeller owned oil wells. His initial names today: Conoco, Amoco, Chevron, foray into the industry was through petroleum Exxon, Mobil and others. refining, a straightforward industrial process Rockefeller, as the holder of 25 percent of that has fixed costs and relatively restrained all Standard Oil stock, was given the same per - and predictable profits. From the start, he was centage of stock in each of the new companies. content to let others take the big risks (and Anyone who thought the court decision was a potentially make the big fortunes) drilling for form of financial punishment aimed at Standard oil. Rockefeller’s particular genius was in inno - Oil’s founder clearly missed this fine print. Now, vating new technologies and new business tech - in 1916, trading at a combined price (when you niques that enabled him to consolidate the added the value of the stock of each of the 34 business and eventually create a monopoly— companies) of more than $2,000 a share, the the Standard Oil Trust—that helped make him stock prices made Rockefeller the world’s first (depending on whom you asked) the most billionaire. This was at a time when a first-class respected, or the most reviled, businessman in stamp cost 2 cents, and even more tellingly, the 26 BOSS ᔢ SUMMER 2011 BOSSSummer'11#7:Layout 1 6/27/11 10:13 AM Page 27 THE STORY OF JOHN D. ROCKEFELLER’S GETTING AND GIVING AND HOW IT CHANGED AMERICA WWW . DIXONVALVE . COM SUMMER 2011 ᔢ BOSS 27 BOSSSummer'11#7:Layout 1 6/27/11 10:13 AM Page 28 John D. Rockefeller in a 1917 portrait by John Singer Sargent; Standard Oil Refinery No. 1 in Cleveland, Ohio, 1899; a political cartoon from 1904 demonstrates American fears about the Standard Oil Company's vast and growing power over the American government. NO ONE QUITE KNEW WHAT TO MAKE OF ONE MAN HAVING THAT MUCH MONEY. MANY WERE OUTRAGED. entire federal government budget was also noted that now the combined stock a tenth of all he earned—to his Baptist only about $710 million. No wonder value of all the Standard Oil spin-off church. His two main ambitions as a then that the expression “rich as companies was equal to twice the entire youth, he once confided, were to earn Rockefeller” came into everyday use for debt of the United States. $100,000 and to live to be 100. In the describing extreme wealth. All in all, it was an impressive end, he nearly achieved both. No one quite knew what to make achievement for a man born to modest As a boy, Rockefeller and his family of one man having that much money. circumstances who started out his busi - moved to Cleveland, where he graduat - Many were outraged. Even the staid ness career as a wholesale greengrocer. ed from high school and then briefly Gray Lady herself, the usually reserved Born on July 8, 1839, the second of studied bookkeeping. Starting his own New York Times , struck a tone halfway six children in a small town not far wholesale produce company with a between breathless excitement and from Ithaca, N.Y., young Rockefeller business partner in 1859, Rockefeller stern moral disapprobation on the day displayed a sobriety and seriousness at was ideally situated at the confluence of following its announcement of an early age—in direct contrast to the two important discoveries. Rockefeller’s billionaire status. notorious dalliances and escapades that The first was made by Pennsylvania Apparently that story only stoked the earned his father the nickname “Devil businessman Samuel Martin Kier. In flames of the Wall Street feeding frenzy, Bill.” His mother, Eliza, was a devout 1851, he developed a method of heating causing stocks to race even further Baptist and instilled in her son a dedi - and distilling the crude petroleum oil ahead, and adding a cool eight mil to cation to hard work and charitable giv - that had been seeping into area salt Rockefeller’s wealth: ROCKEFELLER ing. From his first days he gave a por - wells; Kier produced a clear com - GETS $8,028,000 IN DAY shouted the tion of all his earnings to charity and by bustible liquid that he sold under the Times’ front page headline. The paper the age of 20 he was tithing—donating name of “Carbon Oil” —today com - 28 BOSS ᔢ SUMMER 2011 BOSSSummer'11#7:Layout 1 6/27/11 10:13 AM Page 29 monly known as kerosene. It was a purchased 22 of 26 competitors in his tion to eliminating competitors, timely discovery, as the last of the whal - hometown—and he worked tirelessly Standard also eliminated many of the ing grounds were being depopulated to improve efficiency and economy in resellers and middlemen that inflated and the price of whale oil was skyrock - his refineries. The size of his operation the final cost of kerosene. eting; people needed something to fuel enabled him to demand, and receive, To further increase efficiency, the their lamps. substantial discounts and kickbacks corporation standardized product, con - Then, in the summer of the same on the railroad shipping costs of his tainers and shipping. Moreover, year Rockefeller opened his business, kerosene, which he then used to under - Standard Oil was agile enough to with - Edwin Drake drilled 70 feet into the cut his competitors. stand the invention of the electric light ground in a Pennsylvania farmstead and the steady decline for kerosene and produced the world’s first oil well. used for lamps that resulted. Around (Until the discovery of oil in Texas in this time a former waste product of the 1901, Pennsylvania would produce half distillation process—gasoline—took on the world’s oil supply.) new importance, and Standard was Need and resource and technology quick to capitalize on the nation’s had all come together to create a new growing thirst for it. As the years industry and John D. Rockefeller, advanced, the value of Standard Oil showing the innate business savvy that stock—and Rockefeller’s millions— was to define his entire life, was quick seemed to multiply endlessly. to recognize the opportunity. In 1863, And yet, probably owing to his Rockefeller and his business partners strict evangelical Baptist upbringing, built an oil refinery in Cleveland’s Rockefeller was noticeably lacking in industrial area, near the railroad tracks the usual millionaire vices. He did not that would enable them to ship the new drink, smoke, dance or, apparently, commodity kerosene all over the keep mistresses. Always physically United States. Within two years he was active and a keen sportsman, near the able to buy out his partners for $72,500 age of 60 he stumbled into golf and at auction; it was, he later recounted, thereafter played nearly every day for “the day that determined my career.” the rest of his life. He lived, dressed, ate It was around this time that and recreated as you would expect of a Rockefeller began life as a family man. Rockefeller was a man with a multi-millionaire; but unlike the great He married Laura Celestia Spelman in vision, but surprisingly, it may not have robber barons of his age, he did not 1864 (about whom he would later say, been as simple as wanting to be the collect yachts or castles or Renaissance “Her judgment was always better than richest man in the world. He set his paintings. When he retired from the mine. Without her keen advice, I mind on greater accomplishments. “I daily management of his business would be a poor man.”) The two would had no ambition to make a fortune,” he around the turn of the century (he was go on to have five children: four later recalled.