December 1964 | Volume 16, Issue 1
The incredibly shrunken face of an animate mummy, grotesque behind enormous blackrimmed glasses; the old boy tottering around the golf course, benign and imperturbable, distributing his famous dimes; the huge foundation with its medical triumphs; the lingering memory of the great trust and the awed contemplation of the even greater company; and over all, the smell of oil, endlessly pumping out of the earth, each drop adding its bit to the largest exaction ever levied on any society by a private indiviclual—with such associations it is no wonder that the name has sunk into the American mind to an extraordinary degree. From his earliest days the spendthrih schoolboy is brought to his senses with: “Who do you think you are, John D. Rockefeller?”
Yet for all the vivid associations, the man himself remains a shadowy presence. Carnegie, Morgan, or Ford may not have entered so decisively into the American parlance, but they are full-blooded figures in our memory: Carnegie, brash, bustling, proselytizing; Morgan, imperious, choleric, aloof; Ford, shrewd, small-town, thing-minded. But what is John D. Rockefeller, aside from the paper silhouettes of very old age and the aura of immense wealth?
Even his contemporaries did not seem to have a very clear impression of Rockefeller as a human being. For forty years of his active career, he was commonly regarded as an arch economic malefactor—La Follette called him the greatest criminal of the age—and for twenty years, as a great benefactor—John Singer Sargent, painting his portrait, declared himself in the presence of a medieval saint—but neither judgment tells us much about the man. Nor do Ida Tarbell or Henry Demarest Lloyd, both so skillful in portraying the company, succeed in bringing to life its central figure; he lurks in the background, the Captain Nemo of Standard Oil. Similarly, in the reminiscences of his associates we catch only the glimmer of a person—a polite, reserved man, mild in manner, a bit of a stickler for exactitude, totally unremarkable for anything he says or for any particular style of saying it. Surely there must be more to John D. than this! What sort of man was this greatest of all acquisitors? What was the secret of his incredible success?
His mother came of a prosperous Scottish farming family, devout, strait-laced, uncompromising. She springs out at us from her photographs: a tired, plain face, deep-set eyes, and a straight, severe mouth announce Eliza Davison Rockefeller’s tired, straight, severe personality. Rockefeller later recalled an instance when he was being whipped by her and finally managed to convince her that he was innocent of a supposed misdemeanor. “Never mind,” she said, “we have started in on this whipping and it will do for the next time.” lier approach to HTc made an indelible impression—even in his old age Rockefeller could hear lier voire enjoining: “Willful waste makes woeful want.”
His father, William Avery Rockefeller, was cut from a different bolt of cloth Big, robust, and roistering, he treated his sons with a curious mixture of alfcction and contempt. “I trade with the boys,” he boasted to a neighbor, “and skin ’em and I just beat ’em every time I can. I want to make ’em sharp.” Sharp himself, he was in and out of a dozen businesses in John s youth and, we have reason to suspect, as many beds. Later, when his son was already a prominent businessman, we can still follow his father’s erratic career, now as “Doctor” William A. Rockefeller, “the Celebrated Cancer Specialist,” peddling his cures on the circuit. Still later, when John D. had become a great eminence in New York, the father drops into obscurity—only to materialize from time to time in the city, where he is shown around by an embarrassed Standard Oil underling. At the very end he simply disappears. Joseph Pulitzer at one time offered a prize of $8,000 for news of his whereabouts, and the rumor spread that for thirty-five years old William had led a double life, with a second wife in Illinois. No one knows.
It was an unpleasantly polarized family situation, and it helps us understand the quiet, sober-sided boy who emerged. His schoolmates called John “Old pleased-because-I’m-sad,” from the title of a school declamation that fitted him to perfection; typically, when the boys played baseball, he kept score. Yet, if it was subdued, it was not an unhappy boyhood. At home he milked the cow and drove the horse and did the household chores that were expected of a boy in upstate New York, but after hours he indulged with his brothers, William and Frank, in the usual boyhood escapades and adventures. A favorite pastime, especially savored since it was forbidden, was to go skating at night on the Susquchanna. Un one occasion William and John saved a neighbor’s boy from drowning, whereupon their evening’s sally had to be admitted. Eliza Rockefeller praised their courage—and whipped them soundly for their disobedience.
Always in the Rockefeller home there was the stress on gainful work. Their father may have worked to make them sharp, but their mother worked to make them industiious. John was encouraged to raise turkeys, and he kept the money from their sale in a little box on the mantel until he had accumulated the sum of $50. A neighboring farmer asked to borrow the amount at seven per cent for a year, and his mother approved. During that summer John dug potatoes at thirty-seven and a half cents a day. When the farmer repaid the loan with $3.50 in interest, the lesson was not lost on John: the earning power of capital was much to be preferred to that of labor.
He was then only in his teens—he was born in 1839—but already, frugal ways, a deliberate manner, and a strong sense of planning and purposefulness were in evidence. As his sister Lucy said: “When it’s raining porridge, you’ll find John’s dish right side up.” But now the time for summer jobs was coming to an end. The family had moved from Moravia and Owego, where John had grown up, to Cleveland, where he went to the local high school in his fifteenth and sixteenth years. For a few months he attended Folsom’s Commercial College, where he learned the elements of bookkeeping—and then began the all-important search for the first real job.
That search was performed with a methodical thoroughness that became a hallmark of the Rockefeller style. A list of promising establishments was drawn up—nothing second-rate would do—and each firm was hopefully visited. Rebuffed on the first go-round, John wrent the rounds again undaunted, and then a third time. Eventually his perseverance was rewarded. He became a clerk in the office of Hewitt & Tuttle, commission merchants and produce shippers. Typically, he took the job without inquiring about salary, hung his coat on a peg, climbed onto the high bookkeeper’s stool, and set to work, ft was a red-letter day in his life; later, when he was a millionaire many times over, the flag was regularly hoisted before his house to commemorate September 26, 1855.
Work came naturally, even pleasurably to John Rockefeller. He was precise, punctual, diligent. “I had trained myself,” he wrote in his memoirs, “… that my check on a bill was the executive act which released my employer’s money from the till and was attended with more responsibility than the spending of my own funds.”
With such model attitudes, Rockefeller quickly advanced. By 1858 his salary (which turned out to be $3.50 a week) had more than tripled, but when Hewitt & Tuttle were unable to meet a request for a further raise, he began to look elsewhere. A young English acquaintance named Maurice Clark, also a clerk, was similarly unhappy with his prospects, and the two decided to form a produce-shipping firm of their own. Clark had saved up $2,000, and John Rockefeller had saved $900; the question was, where to get the last necessary $1,000. John knew that at age twenty-one he was entitled to a patrimony of this amount under his father’s will, and he turned to William Rockefeller for an advance. His father listened with mingled approval and suspicion, and finally consented to lend his son the money if John would pay interest until he was twenty-one. “And John,” he added, “the rate is ten.”
Rockefeller accepted the proposition, and Clark & Rockefeller opened its doors in 1859. The Cleveland Leader recommended the principals to its readers as “experienced, responsible, and prompt, and the venture succeeded from the start. In its first year the firm made a profit of $4,400; in the second year, $17,000; and when the Civil War began, profits soared. Rockefeller became known as an up-and-coming young businessman, a man to be watched. Even his father agreed. From time to time he would come around and ask for his loan back, just to be sure the money was really there, but then, unable to resist ten per cent interest, he would lend it back again.
Meanwhile an adult personality begins to emerge. A picture taken just before he married Laura Spclman in 1864 shows a handsome man of twenty-five with a long, slightly mournful visage, a fine straight nose, a rather humorless mouth. Everyone who knew him testified to his virtues. He was industrious, even-tempered, generous, kind; and if it was not a sparkling personality, it was not a dour one. Yet there is something not quite attractive about the picture as a whole. Charitable from his earliest days, he itemized each contribution—even the tiniest—in his famous Ledger A, with the result that his generosity, of which there was never any doubt, is stained with self-observance and an over-nice persnicketiness. Extremely self-critical, he was given to intimate “pillow talks” at night in which he took himself to task for various faults, but the words he recalled and later repeated—“Now a little success, soon you will fall down, soon you will be overthrown …” smack not so much of honest self-search as of the exorcising of admonitory parental voices. He was above all orderly and forethoughted, but there is a compulsive, and sometimes a faintly repellent quality about his self-control. He recounts that when he was travelling as a commission merchant, he would never grab a bite in the station and wolf it down, like the others on the train, but “if I could not finish eating properly, I filled my mouth with as much as it would hold, then went leisurely to the train and chewed it slowly before swallowing it.”
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.
From the beginning Rockefeller & Andrews, as the new firm was called, was a model of efficiency. Even before acquiring the firm, Rockefeller had become interested in the economics of plant operation. When he found thai plumbers were expensive by the hour, he and Sam Andrews hired one by the month, bought their own pipes and joints, and cut plumbing costs in half. When cooperage grew into a formidable item, they built their own shop where barrels tost them only forty per cent of the market price, and soon costs were cut further by the acquisition of a stand of white oak, a kiln, and their own teams and wagons to haul the wood from kiln to plant. The emphasis on costs never ceased; when Rockefeller & Andrews had long since metamorphosed into the Standard Oil Company and profits had grown into the millions, cost figures were still carried to three decimal places. One day Rockefeller was watching the production line in one of his plants, where cans of finished oil were being soldered shut. “How many drops of solder do you use on each can?” he inquired. The answer was forty. “Have you ever tried thirty-eight? No? Would yon mind having some scaled with thirty-eight and let me know?” A few cans leaked with thirty-eight, but with thirty-nine all were perfect. A couple of thousand dollars a year were saved.
The zeal for perfection of detail was from the beginning a factor in the growth of Rockefeller s firm. More important was his meeting in 1866 with Henry M. Flagler, the first of a half-dozen associates who would bring to the enterprise the vital impetus of talent, enthusiasm, and a hard determination to succeed. Hagler, a quick, ebullient, bold businessman who had fought his way tip from the poverty of a small-town parsonage, was a commission merchant of considerable prominence when Rockefeller met him. The two quickly took a liking to one another, and Rockefeller soon induced Flagler to join the fast-expanding business. Haglcr brought along his own funds and those of his father-in-law, Stephen Harkncss, and this fresh indnx of capital made possible even further expansion. Rockefeller, Andrews & Flagler—soon incorporated as the Standard Oil Company—rapidly became the biggest single refinary in Cleveland.
Flagler brought to the enterprise an immense energy and a playfulness that Rockefeller so egregiously lacked. The two main partners now had a code word in their telegrams—AMELIA—which meant “Everything is lovely and the goose hangs high.” And everything was lovely. One of Flagler’s first jobs was to turn his considerable bargaining skills to a crucial link in the chain of oil-processing costs. All the major refineries bought in the same market—the Oil Regions—and all sold in the same markets—the great cities—so that their costs of purchase and their prices at the point of sale were much alike. In between purchase and sale, however, lay two steps: the costs of relining and the costs of transportation. In the end it was the latter that was to prove decisive in the dog-eat-dog struggle among the refineries.
For the railroads needed a steady flow of shipments to make money, and they were willing to grant rebates to the refiners if they would level out their orders. Since there were a number of routes by which to ship oil, each refiner was in a position to play one road against another, and the Standard, as the biggest and strongest refiner in Cleveland, was naturally able to gain the biggest and most lucrative discounts on its freight. This was a game that Flagler played with consummate skill. Advantageous rebates soon became an important means by which the Standard pushed ahead of its competitors—and in later years, when there were no more competitors, an important source of revenue in themselves. By 1879, when the Rockefeller concern had become a giant, a government investigatory agency estimated that in a period of five months the firm had shipped some eighteen million barrels of oil, on which rebates ran from eleven per cent on the B&O to forty-seven per cent on the Pennsylvania Railroad. For the five months, rebates totalled over ten million dollars.
This is looking too far ahead, however. By 1869, a scant three years after Flagler had joined it, the company was worth about a million dollars, but it was very far from being an industrial giant or a monopoly. Indeed, the problem which constantly plagued Rockefeller and his associates was the extreme competition in the oil business. As soon as business took a downturn—as it did in 1871—the worst kind of cutthroat competition broke out: prices dropped until the Titusville Herald estimated that the average refiner lost seventy-five cents on each barrel he sold.
As the biggest refiner, Rockefeller naturally had the greatest stake in establishing some kind of stability in the industry. Hence he set about to devise a scheme—the so-called South Improvement Company—which would break the feast-and-famine pattern that threatened to overwhelm the industry. In its essence the South Improvement Company was a kind of cartel aimed at holding up oil prices—by arranging “reasonable” freight rates for its own members while levying far higher ones on “outsiders.” Since the scheme was open to all, presumably there would soon be no outsiders, and once all were within the fold, the refiners could operate as a single, powerful economic unit.
The plan might have worked but for the inability of such headstrong and individualistic groups as the railroads and the producers to co-operate for more than a passing moment. When the producers in the Oil Regions rose in wrath against a plan which they (quite rightly) saw as a powerful buying combination against them, the scheme simply collapsed.
The idea of eliminating competition did not, however, collapse with it. Instead, Rockefeller turned to a plan at once much simpler and much more audacious. If he could not eliminate competition, then perhaps he could eliminate his competitors by buying them up one by one—and this he set out to do. The plan was set in motion by a meeting with Colonel Oliver Payne, the chief stockholder in Rockefeller’s biggest competitor. Briefly Rockefeller outlined the ruinous situation which impended if competition were permitted to continue unbridled; equally briefly, he proposed a solution. The Standard would increase its capitalization, the Payne plant would be appraised by impartial judges, and its owners would be given stock in proportion to their equity. As for Payne himself, Rockefeller suggested he should take an active part in the management of the new, bigger Standard Oil.
Payne quickly assented; so did Jabez Bostwick, the biggest refiner in New York, and one after another the remaining refiners sold out. According to Rockefeller, they were only too glad to rid themselves of their burdensome businesses at fair prices; according to many of the refiners, it was a question of taking Rockefeller’s offer or facing sure ruin. We need not debate the point here; what is certain is that by the end of 1872 the Standard was the colossus of Cleveland. There remained only the United States to conquer.
Rockefeller himself was in his mid-thirties. The slightly melancholy visage of the young man had altered; a thick mustache trimmed straight across the bottom hid his lips and gave to his face a commanding, even stern, aspect. In a family portrait we see him standing rather stiffly, carefully dressed as befits a man in his station. For he was already rich—even his non-oil investments, as he wrote to his wife, were enough to give him independence, and his style of life had changed as his fortune had grown. He and his wife now lived in Forest Hill, a large, gaunt house on eighty acres just east of Cleveland. He had begun to indulge himself with snappy trotters, and on a small scale commenced what was to become in time a Brobdingnagian pastime—moving landscape around.
In town, in his business pursuits, he was already the reserved, colorless, almost inscrutable personality who baffled his business contemporaries; at home, he came as close as he could to a goal he sought assiduously—relaxation. His children were his great delight: he taught them to swim and invented strange and wonderful contraptions to keep them afloat; he bicycled with them; he played daring games of blindman’s buff—so daring in fact that he once had to have stitches taken in his head after running full tilt into a doorpost.
It was, in a word, the very model of a Victorian home, affectionate, dutiful, and, of course, rich. An air of rectitude hung over the establishment, not so much as to smother it, but enough to give it a distinctive flavor. Concerts (aside from the performances of their children), literature, art, or theatre were not Rockefeller amusements; in entertaining, their tastes ran to Baptist ministers and business associates. An unpretentious and earnest atmosphere hid—or at least disguised—the wealth; until they were nearly grown up the children had no idea of “who they were.”
And of course the beneficences continued and grew: $23,000 for various charities in 1878, nearly $33,000 in 1880, over $100,000 in 1884. But the nice preciseness of giving was maintained; a pledge card signed in 1883 for the Euclid Avenue Baptist Church reads:
How rich was Rockefeller by 1873, a mere ten years after Andrews, Clark & Company had opened its doors? We cannot make an accurate estimate, but it is certain that he was a millionaire several times over. In another ten years his Standard Oil holdings alone would be worth a phenomenal twenty million dollars—enough, with his other investments, to make him one of the half-dozen richest men in the country.
But now a legal problem began to obtrude. The Standard Oil Company was legally chartered in Ohio, and it had no right to own plants in other states. Not until 1889 would New Jersey amend its incorporation laws to allow a corporation chartered within the state to hold the stock of corporations chartered elsewhere. Hence the question: how was the Standard legally to control its expanding acquisitions in other states?
The problem was solved by one of Rockefeller’s most astute lieutenants—Samuel Dodd, a round little butter-ball of a man with an extraordinarily clear-sighted legal mind and an unusually high and strict sense of personal integrity. Because he believed that he could render the best advice to the Standard if he was above any suspicion of personal aggrandizement, he repeatedly refused Rockefeller’s offers to make him a director or to buy for him stock which would have made him a multimillionaire.
The sword which Dodd apI plied to the Gordian knot of interstate control was the device of the trust. In brief, he proposed a single group of nine trustees, with headquarters in New York, who would hold “in trust” the certificates of all Standard’s operating companies, including the major company in Ohio itself. In 1882 the Standard Oil Trust was formally established, with John and his brother William Rockefeller, Flagler, Payne, Bostwick, John D. Archbold, Charles Pratt, William G. Warden, and Benjamin Brewster as trustees. (Sam Andrews had sold the last of his stock to Rockefeller four years before, saying the business had grown too big.) In fact, though not in law, one enormous interstate corporation had been created.
Few people even at this time appreciated quite how great the company was. By the i88o’s the Standard was the largest and richest of all American manufacturing organizations. It had eighty-five per cent of a business which took the output of 20,000 wells and which employed 100,000 people. And all this before the advent of the automobile. The colossus of the Standard was built not on the internal combustion engine but on the kerosene lamp.
With the creation of the Trust the center of gravity of the concern moved to New York. Rockefeller himself bought a $600,000 brownstone on West Fifty-fourth Street, where the round of teas and dinners for temperance workers, church people, and Standard executives soon went on. The Trust itself occupied No. 26 Broadway, an eleven-story “skyscraper” with gay striped awnings shading its large windows. It was soon known as the most famous business address in the world. There Rockefeller appeared daily, usually in high silk hat, long coat, and gloves—the accepted costume for the big business executive of the time.
At 26 Broadway Rockefeller was the commanding figure. But his exercise of command, like his personality, was notable for its lack of color, dash, and verve. Inquiring now of this one, now of that, what he thought of such and such a situation, putting his questions methodically and politely in carefully chosen words, never arguing, never raising his voice, Rockefeller seemed to govern his empire like a disembodied intelligence. He could be, as always, a stickler for detail; an accountant recalls him suddenly materializing one day, and with a polite “Permit me,” turning over the ledger sheets, all the while murmuring, “Very well kept, very indeed,” until he stopped at one page: “A little error here; will you correct it?” But he could also be decisive and absolutely determined. “He saw strategic points like a Napoleon, and he swooped down on them with the suddenness of a Napoleon,” wrote Ida Tarbell. Yet even that gives too much of the impression of dash and daring. She was closer to the mark when she wrote: “If one attempts to analyse what may be called the legitimate greatness of Mr. Rockefeller’s creation in distinction to its illegitimate greatness, he will find at the foundation the fact that it is as perfectly centralized as the Catholic Church or the Napoleonic government.” It was true. By 1886 the Standard had evolved a system of committees, acting in advisory roles to the active management, which permitted an incalculably complex system to function with extraordinary ease. It is virtually the same system that is used today. Rockefeller had created the great Trust on which the eyes of the whole world were fastened, but behind the Trust, sustaining it, operating it, maintaining it, he had created an even greater Organization.
“It’s many a day since I troubled you with a letter,” wrote William Warden, a onetime independent Cleveland refiner who had been bought out and was now a trustee and major official in the Standard, “and I would not do so now could I justify myself in being silent. … We have met with a success unparalleled in commercial history, our name is known all over the world, and our public character is not one to be envied. We are quoted as representative of all that is evil, hard hearted, oppressive, cruel (we think unjustly), but men look askance at us, we are pointed at with contempt, and while some good men flatter us, it’s only for our money … This is not pleasant to write, for I had longed for an honored position in commercial life. None of us would choose such a reputation; we all desire a place in the honor & affection of honorable men.”
It was a cry of anguish, but it was amply justified. By the 1880’s the Standard was not only widely known—it was notorious. In part its increasingly bad business reputation originated in the business community itself. Stories began to circulate of the unfair advantage taken by the colossus when it bid for smaller properties: the case of the Widow Backus, whose deceased husband’s refinery was supposedly bought for a pittance, was much talked about. Many of these tales—the Backus case in particular—were simply untrue. But as the Standard grew in size and visibility, other business practices came to light which were true, and which were hardly calculated to gain friends for the company.
Foremost among these practices was an evil device called the drawback. Not content with enjoying a large competitive advantage through its special rebates, Standard also forced the railroads to pay it a portion of the freight charges paid by non-Standard refiners! Thus Daniel O’Day, a particularly ruthless Standard official, used his local economic leverage to get a small railroad to carry Standard’s oil at ten cents a barrel, to charge all independents thirty-five cents, and to turn over the twenty-five-cent differential to a Standard subsidiary . Another Standard agent, finding that a competitor’s car had slipped through without paying the Standard exaction, wrote the road to collect the amount owing, adding: “Please turn another screw.”
Such incidents and practices—always denied by the company and never admitted by Rockefeller—plagued the Standard for years. And the impression of highhandedness was not much improved by the behavior of the Standard’s officials when they went on public view. John D. Archbold, a key executive called to testify before New York State’s Hepburn Committee in 1879, was a typical bland witness. When pressed hard, he finally admitted he was a stockholder of the Standard. What was his function there? “I am a clamorer for dividends. That is the only function I have in connection with the Standard Oil Company.” Chairman Alonzo Hepburn asked how large dividends were. “I have no trouble transporting my share,” answered Archbold. On matters of rebates he declined to answer. Finally Hepburn asked him to return for further questioning the next day. “I have given today to the matter,” replied Archbold politely. “It will be impossible for me to be with you again.”
Not least, there was the rising tide of public protest against the monopoly itself. In 1881 Henry Demarest Lloyd, a journalist of passionate reformist sentiments, wrote for the Atlantic Monthly an article called “The Story of a Great Monopoly.” Editor William Dean Howells gave it the lead in the magazine, and overnight it was a sensation (that issue of the Atlantic went through seven printings). “The family that uses a gallon of kerosene a day pays a yearly tribute to the Standard of $32 … ,” wrote Lloyd. “America has the proud satisfaction of having furnished the world with the greatest, wisest, and meanest monopoly known to history.”
Standard’s profits were nothing so great as described by Lloyd, but that hardly mattered. If the article was imprecise or even downright wrong in detail, it was right in its general thrust. What counted was Lloyd’s incontrovertible demonstration that an industrial concern had grown to a position of virtual impregnability, a position which made it in fact no longer subordinate to the states from which it drew its legal privilege of existence, but their very peer or better in financial strength and even political power. Before Lloyd wrote his article, the Standard was the source of rage or loss to scattered groups of producers, businessmen, or consumers. When he was through with his indictment, it was a national scandal.
That it should be a scandal was totally incomprehensible to John D. The mounting wave of protest and obloquy perplexed him more than it irritated him. Ida Tarbell’s famous—and generally accurate— History of the Standard Oil Company he dismissed as “without foundation.” The arrogance of an Archbold he merely chuckled at, recounting the Hepburn testimony in his Random Reminiscences of Men and Events with the comment that Archbold had a “well-developed sense of humor.” With his own passion for order, he understood not a whit the passions of those whose demise was required that order might prevail. On one occasion when he was testifying in court, he spied in the courtroom George Rice, an old adversary (against whom, as a matter of fact, the famous screw had been turned, and whom Rockefeller had once offered to buy out). As he left the witness stand, Rockefeller walked over to Rice and, putting out his hand, said: “How do you do, Mr. Rice? You and I are getting to be old men, are we not?”
Rice ignored the hand. “Don’t you think, Mr. Rice,” pursued Rockefeller, “it might have been better if you had taken my advice years ago?”
“Perhaps it would,” said Rice angrily. “You said you would ruin my business and you have done so.”
“Pshawl Pshaw!” rejoined Rockefeller.
“Don’t you pooh-pooh me,” said Rice in a fury. “I say that by the power of your great wealth you have ruined me.”
“Not a word of truth in it,” Rockefeller answered, turning and making his way through the crowd. “Not a word of truth in it.”
He could not in fact bring himself to believe that there was a word of truth in any of it. There was nothing to argue about concerning the need for giant enterprise, or “industrial combinations” as they were called. They were simply a necessity, a potentially dangerous necessity admittedly, but a necessity nonetheless. All the rest was ignorance or willful misunderstanding. “You know,” he wrote to a university president who offered to prepare a scholarly defense of Standard’s policies, “that great prejudice exists against all successful business enterprise—the more successful, the greater the prejudice.”
It was common, during the early 1900’s, to read thunderous accusations against the Standard Oil Company and its sinister captain, but the fact was that John D. Rockefeller had severed all connection with the business as early as 1897. When news came to him, ten years later, that the great Trust had been heavily fined by the government, he read the telegram and without comment went on with his game of golf. At the actual dissolution of the Trust in 1911, he was equally unconcerned. For already his interests were turning away from business management toward another absorbing role—the disposition of the wealth which was now beginning to accumulate in truly awesome amounts.
Here enters the last of those indispensable subordinates through whom Rockefeller operated so effectively. Frederick T. Gates, onetime minister, now a kind of Baptist minister-executive, met Rockefeller when Gates played a crucial role in the studies that established the need for a great new university in Chicago (see “The Memoirs of Frederick T. Gates,” AMERICAN HERITAGE , April, 1955). Shortly he became the catalytic figure in instituting the university with a Rockefeller gift of $600,000. (Before he was done, Rockefeller would give it 80 million dollars.) Then one morning in 1889, when the two were chatting, Rockefeller suddenly said: “I am in trouble, Mr. Gates.” He told him of the flood of appeals which now came by the sackful, and of his inability to give away money with any satisfaction until he had made the most thorough investigation into the cause. Rockefeller continued: “I want you to come to New York and open an office here. You can aid me in my benefactions by taking interviews and inquiries and reporting the results for action. What do you say?”
Gates said yes, and it was under his guidance, together with that of Rockefeller’s son, John D., Jr., that the great philanthropies took root: the General Education Board, which pioneered in the educational, social, and medical development of our own South; the Rockefeller Institute for Medical Research, quickly famous for its campaign against yellow fever; the Rockefeller Foundation with its far-ranging interests in the promotion of research. Not that the giving was done hastily. Gates had a meticulousness of approach which suited his employer perfectly. It was not until 1900 that more than 2 million dollars was given away, not until 1905 that the total of annual giving exceeded 10 million dollars, not until 1913 that the great climactic disbursements began to be made: 45 million dollars that year and 65 million the next, to establish the Rockefeller Foundation; finally 138 million dollars in 1919 to support the philanthropies already endowed.
Gates took his philanthropic duties with ministerial zeal and profound seriousness. Raymond Fosdick, president of the Rockefeller Foundation, recalls Gates’ last meeting as a trustee. Shaking his fist at the startled board, he boomed: “When you die and come to approach the judgment of Almighty God, what do you think He will demand of you? Do you for an instant presume to believe He will inquire into your petty failures or your trivial virtues? No! He will ask just one question: ‘ What did you do as a Trustee of the Rockefeller Foundation? ’”
Gates was more than just a philanthropic guide. Rapidly he became a prime business agent for Rockefeller in the large business deals which inevitably continued to arise. When Rockefeller came into immense iron properties along the Mesabi Range, it was Gates who superintended their development and the creation of a giant fleet of ore carriers, and it was Gates who carried through their eventual sale to Morgan and Frick at the huge price of 88.5 million dollars. It was the only time in Gates’ long association with John D. that he indicated the slightest desire to make money for himself. When the immense iron deal was complete and Gates had made his final report, Rockefeller, as usual, had no words of praise, but listened attentively and without objection and then said, with more emphasis than usual, “Thank you, Mr. Gates!” Gates looked at him with an unaccustomed glint in his eye. “Thank you is not enough, Mr. Rockefeller,” he replied. Rockefeller understood and promptly saw to it that Gates was remunerated handsomely.
John D. was becoming an old man now. His face, sharper with age, took on a crinkled, masklike appearance, in the midst of which his small eyes twinkled. Golf had become a great passion and was performed in the deliberate Rockefeller manner. A boy was hired to chant: “Keep your head down,” useless steps were saved by bicycling between shots, and even when he was playing alone, every stroke was remorselessly counted. (John D. was once asked to what he owed the secret of the success of Standard Oil; he answered: “To the fact that we never deceived ourselves.”)
To the outside world the old man more and more presented a quaint and benevolent image. By the 1920’s the antitrust passions of the 1890’s and early 1900’s had been transmuted into sycophancy of big business; there were no more cries of “tainted money,” but only a hopeful queuing up at the portals of the great foundations. The man who had once been denounced by Theodore Roosevelt and Tolstoy and William Jennings Bryan was now voted, in a popular poll, one of the Greatest Americans. Cartoonists and feature writers made the most of his pith helmet and his paper vest, his monkishly plain food, his beaming, almost childlike expression. To the outside world he seemed to live in a serene and admirable simplicity, which indeed he did, in a purely personal sense. But the reporters who told of his afternoon drives did not report that the seventy miles of road over his estate at Pocantico Hills were built by himself, that the views he liked so well were arranged by moving hills around as an interior decorator moves chairs. The perfection of Pocantico became an obsession: some railway tracks that were in the way were relocated at the cost of $700,000, a small college that spoiled a view was induced to move for $1,500,000, a distant smokestack was camouflaged. It was, to repeat George Kaufman’s famous line, an example of what God could have done if He’d only had the money.
In the midst of it all was the never-failingly polite, always slightly disengaged old man, somehow disappointing in close view, somehow smaller than we expect. There are mannerisms and eccentricities, of course, which, when viewed under the magnification of 900 million dollars, take on a certain prominence, but they are peccadilloes rather than great flaws. There is the enormous industrial generalship, to be sure, but it is a generalship of logic and plan, not of dash and daring. There is the generosity on a monumental scale, but then again, not on such a scale as to cut the Rockefeller fortune by ninety per cent, as was the case with Carnegie. Rockefeller gave away over half a billion, but probably he kept at least that much for his family.
In short, the more we look into the life of John D. Rockefeller, the more we look into the life of an incredibly successful—and withal, very unremarkable—man. It is a curious verdict to pass on the greatest acquisitor of all time, and yet it is difficult to avoid the conclusion that John Flynn has perfectly phrased: “Rockefeller in his soul was a bookkeeper.” We can see the bookkeeperishness in unexpected but telling places, such as in his Random Reminiscences , where he dilates on the importance of friendship, but cites as a dubious friend the man who protests, “I can’t indorse your note, because I have an agreement with my partners not to …”; or again, when he expands on the nonmaterial pleasures of life, such as gardening, but adds as a clincher: “We make a small fortune out of ourselves, selling to our New Jersey place at $1.50 and $2.00 each, trees which originally cost us only five or ten cents at Pocantico.” Whether he turns to friendship or to nature, money is the measure.
These are surely not the sentiments of greatness—but then John D. was not a great man. Neither was he, needless to say, a bad man. In most ways he was the very paragon of the business virtues of his day, and at the same time the perfect exemplar of the unvirtues as well. It is likely that he would have made his mark in any field, but unlikely that any commodity other than oil would have offered such staggering possibilities for industrial growth and personal aggrandizement. He personified in ideas the typical business thought of his day—very Christian, very conventional, very comfortable.
Yet as the image of John D. recedes, we realize the pointlessness of such personal appraisals. We study Rockefeller not so much as a person but as an agent—an agent for better and worse in the immense industrial transformation of America. Viewed against this stupendous process of change, even the largest lives take on a subordinate quality, and personal praise and blame seem almost irrelevant. And Rockefeller was not one of the largest lives—only one of the luckiest.
In the end there was only the frail ghost of a man, stubbornly resisting the inevitable. His son, John D., Jr., whom he had fondly called “my greatest fortune,” had long since taken over the reins of the great foundations and had begun to refashion the Rockefeller image in his own way: Rockefeller Center, The Cloisters, the restoration of Williamsburg. His grandsons, among them one who would one day aspire to the Presidency of the United States, were already young men, carefully imbued with the family style: determination, modesty on the grand scale, a prudent balance between self-interest and altruism. And the Standard itself, now split and resplit into a handful of carefully noncollusive (and equally carefully noncompetitive) companies, was bigger and more powerful than ever. All in all, it was an extraordinary achievement, and the old man must have enjoyed it to the hilt. For it had indeed rained porridge, and his dish had surely been kept right side up.