- Historic Sites
The Grand Acquisitor
When it was raining porridge, Lucy Rockefeller said, John D.’s dish was always right side up
December 1964 | Volume 16, Issue 1
Yet the faults, far from constituting major traits in themselves, were minor Haws in an essentially excellent character. Rockefeller forged’ ahead by his merits, not by meanness—and among his merits was a well-developed capacity to sixe up a business situation coolly and rationally. Living in Cleveland, he could scarcely fail to think about one such situation virtually under his nose. Less than a clay’s journey by train were the Oil Regions of Pennsylvania, one of the most fantastic locales in America. A shambles of mud, dying horses (their skins denuded by petroleum), derricks, walking beams, chugging donkey engines, and jerry-built towns, the Regions oo/.ed oil, money, and dreams. Bits of land the size of a blanket sold on occasion for three and four hundred dollars, pastures jumped overnight into fortunes (one pasture rose from $25,000 to $1,600,000 in three months), whole villages bloomed into existence in a matter of months. Pithole, Pennsylvania, an aptly named pinprick on the map, became the third largest center for mail in Pennsylvania and boasted a $65,000 luxury hotel. Within a few years it was again a pinprick, and the hotel was sold for $50.
It is uncertain whether Rockefeller himself visited the Oil Regions in the halcyon early i86o’s. What is certain is that he sniffed oil in Cleveland itself, where the crude product was transported by barge and barrel for distillation and refining. In any event, the hurly-burly, the disorganization, and above all the extreme riskiness of the Oil Regions would never have appealed to Rockefeller’s temperament. Let someone else make a million or lose it by blindly drilling for an invisible reservoir—a surer and far steadier route to wealth was available to the refiner who bought crude oil at thirtyone or thirty-two cents a gallon and then sold the refined product at eighty to eighty-five cents.
The chance to enter the refining business came to Clark and Rockefeller in the person of an enterprising and ingenious young engineer named Sam Andrews. Andrews, recently come from England (by coincidence, he was born in the same town as Clark), was restive in his job in a lard refinery and eager to try his hand at oil refining. He talked with his fellow townsman and through Clark met Rockefeller. The three agreed to take a fling at the business. Andrews, together with Clark’s brothers, took on the production side, and Maurice Clark and Rockefeller the financial side. Thus in 1863 Andrews, Clark & Company was born. Rockefeller, content behind the anonymity of the “Company,” had contributed, together with his partner, half the total capital, but he retained his interest in the produce business. The investment in oil was meant to be no more than a side venture.
But the side venture prospered beyond all expectation. The demand for refined oil increased by leaps and bounds. As Allan Nevins has written: “A commodity that had been a curiosity when Lincoln was nominated, had become a necessity of civilization, the staple of a vast commerce, before he was murdered.” And the supply of oil, despite a thousand warnings, auguries, and dire prophecies that the mysterious underground springs would dry up, always matched and overmatched demand.
As the business boomed, so did the number of refineries. One could go into the refinery business for no more capital than it took to open a well-equipped hardware store, and Cleveland’s location with its favoring rivers and fortunately placed rail lines made it a natural center for the shipment of crude oil. Hence by i H(W, only two years after Andrews, Clark & Company had opened its doors, there were over thirty refineries along the Cleveland Flats, and twenty more would be added before the year was out.
The Rockefeller refinery was among the largest of these. In Sam Andrews had been found the perfect plant superintendent: in Clark and Rockefeller, the perfect business management. From half-past six in the morning, when Andrews and Clark would burst in on their partner at breakfast, until they parted company just before supper, the three talked oil, oil, oil. Slowly, however, Andrews and Rockefeller found themselves at odds with Clark. They had become convinced that oil was to be a tremendous and permanent business enterprise; Clark was more cautious and less willing to borrow to expand facilities. Finally, in iSGß, it was decided to put the firm up for auction among themselves, the seller to retain the produce business. “It was the day that determined my career,” Rockefeller recalled long afterward. “I felt the bigness of it, but I was as calm as I am talking to you now. When at last Maurice Clark bid $72,000, Rockefeller topped him by $500. Clark threw up his hands. “The business is yours, he declared.