This post originally comes from BrainFeed.co.
“JD” Rockefeller (1839-1937) was an American business tycoon, philanthropist, and the richest person in modern history. He earned his wealth by founding Standard Oil, the largest oil refiner in the early 20th century. Although the company was ultimately broken up, its successor entities still dominate the oil industry.
An Auspicious Youth
Rockefeller began his career as a bookkeeper in Cleveland, Ohio at age 16. Four years later, he set out on his own and founded a merchant business that grossed $450,000 within a year. That same year—1959— an oil rush began in the neighboring state of Pennsylvania. Rockefeller avoided the speculative oil drilling business, and instead, established a refinery that processed raw oil to kerosene in 1963. At the time, kerosene was rapidly becoming an economic staple, used to illuminate homes.
The Rise of Standard
Through thrift and cost-cutting, Rockefeller led the refinery to rapid growth. In 1870, Standard Oil was incorporated. While Standard’s competitors processed only 60% of their oil into kerosene and dumped the waste into rivers, Rockefeller hired a team of chemists to increase the efficiency of the process and to discover uses for the byproducts of oil refinement. The firm manufactured benzine (used as a cleaning fluid), paraffin (used for making candles and preservative coatings), and naphtha (used as a fuel for motors). When affordable automobiles became available in the early 1900s, Standard Oil was ready to provide gasoline.
The company’s profitability allowed it to acquire refineries, pipelines, and railroads across the Northeastern US. By 1980, Standard refined over 90% of the United States’ oil production.
Rockefeller’s Legacy
In 1896, Rockefeller retired to focus on philanthropy. He believed in the Baptist dictum “gain all you can, save all you can, and give all you can”, and from his first paycheck onwards, he donated a portion. Rockefeller’s net worth peaked at around $418 billion dollars in inflation-adjusted dollars. For comparison, that is around double Amazon CEO Jeff Bezos’ fortune, as of 2020. By the time of Rockefeller’s death, he had given away over half of his wealth to educational, scientific, and spiritual causes.
Despite Rockefeller’s donations, many Americans loathed the immense wealth he acquired from his monopolization of the oil industry. Rockefeller became a symbol of corporate greed, and public outcry led to the enactment of antitrust legislation. In 1911, the US Supreme Court found Standard Oil guilty of anticompetitive practices, and Standard was broken into 34 entities. Today, these successors are largely consolidated as ExxonMobile, Chevron, and BP.
Did You Know?
- At Rockefeller’s peak net worth (in 1913), his personal wealth amounted to almost 3% of US GDP.
- By age of 12, the young John had saved $50 by working for neighbors. He loaned these savings to a local farmer, and was paid back with 7% interest the following year. Rockefeller later said of the experience: “The impression was gaining ground with me that it was a good thing to let the money be my servant and not make myself a slave to the money”.
Further Learning
- A Day in the Life of John D. Rockefeller- a short film from 1924
- How the modern economy was shaped by four men (including JD Rockefeller)
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