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The Gentlewoman And The Robber Baron
When Ida Tarbell set out to probe the operations of John D. Rockefeller’s Standard Oil Trust, it seemed like David against Goliath all over again
April 1970 | Volume 21, Issue 3
There was no more faithful Baptist in Cleveland than he. Every enterprise of that church he had supported liberally from his youth. He gave to its poor. He visited its sick. He wept with its suffering. Moreover, he gave unostentatiously to many outside charities of whose worthiness he was satisfied. He was simple and frugal in his habits. He never went to the theatre, never drank wine. He gave much time to the training of his children, seeking to develop in them his own habits of economy and charity. Yet he was willing to strain every nerve to obtain for himself special and unjust privileges from the railroads which were bound to ruin every man in the oil business not sharing them with him.
Rockefeller’s next tactic, Ida explained, was to form a national Refiners’ Association to force oil producers to sell their output to a united front of refiners. To offset the power of the refiners, drillers organized a Producers’ Association. The producers realized that overproduction was their curse. If they agreed to stop drilling new wells for six months and shut down their pumps for thirty days, supplies of crude oil would dwindle, and prices would rise. To the producers’ surprise, Rockefeller and his fellow refiners offered them a contract for 200,000 barrels of oil at $3.25 a barrel. They signed. But when 50,000 of the 200,000 barrels had been shipped, the refiners’ association broke its contract, declaring that the producers had failed to limit production and that plenty of oil was available at 82.50 a barrel. Ida placed the blame on Rockefeller for “leading them into an alliance, and at the psychological moment throwing up his contract.”
One producer told Ida what it had been like to negotiate with Rockefeller, who during one meeting sat and rocked with his hands covering his eyes.
I made a speech which I guess was pretty warlike. Well, right in the middle of it, John Rockefeller stopped rocking and took down his hands and looked at me. You never saw such eyes. He took me all in, saw just how much fight he could expect from me, and I knew it, and then up went his hands and back and forth went his chair.
Month by month Ida pressed her indictment, picturing Rockefeller as a sinister conspirator obsessed with a passion to control the entire oil industry for the “holy blue barrel,” as his competitors called it, of Standard Oil. He arranged for Standard to receive even more favorable rebates from major railroads. When independent operators developed a revolutionary new means of transporting oil by pipelines, the canny Rockefeller realized that this method was the shipping trend of the future. He moved into the pipeline business, driving out rivals until he controlled the entire pipeline system of the oil regions. He set up a nationwide network, paying spies to report on rival shipments, deliberately underselling his competitors, and then, having driven his rivals out of a territory, set any price he pleased.
Summarizing Rockefeller’s goal, Ida wrote:
Briefly stated, his argument was this: “Controlling all refineries, I shall be the only shipper of oil. Being the only shipper, I can obtain special rates of transportation which will drive out and keep out competitors; controlling all refineries, I shall be the only buyer, and can regulate the price of crude [oil] as I can the price of refined.”
The charge of spying, published in a chapter titled “Cutting to Kill,” abruptly ended Ida’s harmonious interviews with Henry Rogers. To substantiate her charges, McClure’s reproduced records sent to Ida secretly by a young shipping clerk in a Standard plant. They were undercover reports from railroad agents, listing oil shipments by rival producers. On her next visit to 26 Broadway, Ida found Rogers “by no means cordial.” When he asked where she got “that stuff,” she replied boldly: “You know very well that I could not tell you where I got that stuff, but you know very well that it is authentic.” It was their last interview.
Although the doors of Standard Oil closed to Ida, she was invited to meet an even more unexpected source of information. Frank Rockefeller summoned her secretly to Cleveland to hear his grievances against his successful brother. To help finance a shipping business, Frank had borrowed money from John D. and put up his Standard Oil stock as collateral. During the Panic of ’93, when Frank was unable to meet his obligations, John D. foreclosed and took over the stock. Frank, observed Ida, was more frivolous than his brother, more generous, “not a safe man to handle money. … So it was a kind of obligation to the sacredness of money,” she wrote, “that John Rockefeller had foreclosed on his own brother.”
After chastising Rockefeller for many months, Ida produced an installment called “The Legitimate Greatness of the Standard Oil Company” in which she freely acknowledged its leader’s business efficiency. Rockefeller’s passion for detail and for plowing profits back into the company, she said, had resulted in a masterpiece of organization. Even the dust on the floors of his tin factories was sifted to save filings and bits of solder.