Over the course of this paper information regarding John D Rockefeller creation of the Standard Oil company will be showcased. First, information about Rockefeller’s entry into the oil industry will be presented. Second, how Standard Oil became the largest oil company in the United States. Next, the innovative products and procedures that Standard Oil creates to keep the company relevant. Lastly, how the dissolution of Standard Oil paves the way for a diverse oil market with companies specializing in different productions. Now, John D Rockefeller may have been a cutthroat businessman; however, Rockefeller’s vision for Standard Oil creates a period of innovation and advancement of the none existent oil industry that remains today.
John Rockefeller
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Rockefeller knows that by having the controlling interest in the company that he can drive the direction of the refinery. As a result, the Standard Oil company came to fruition just a few short years after achieving majority control with the help of his brother and Henry Flagler ( ). Now, with these three men running the Standard Oil company, the plan to take over the oil industry went into full effect. Rockefeller begins to use his railroad connection to strike shipping deals to get crude goods to market a lower price than the competitor. As a result of this deal Standard Oil drops the price point of crude products well below standard market price. Now, while this lower price is great for merchants and consumers, it does not fare well for other oil companies. The only possible way the smaller oil companies could compete with Standard Oil is to take a profit loss ultimately leading to the mass selling of company stock. Standard Oil immediately swoops in to buy the controlling share of the majority of oil industry’s companies. Thus, Standard Oil now owns ninety percent of the nation’s oil industry and distribution pipelines ( ). Now, that information regarding Standard Oil’s growth into an oil powerhouse is covered, let’s look at how product innovation helps to keep Standard Oil in the …show more content…
However, that changes rapidly with the passing of the Sherman Anti-Trust Act. Now, in the true spirit of capitalism, the governmental sought to make the oil industry a market that any entrepreneur could enter. Nevertheless, with the industry’s current structure it was in possible for anyone to come into oil without going bankrupt. Consequently, the government invokes Sherman Anti-Trust Act forcing the Standard Oil company to dissolve its oil trust into thirty smaller companies ( ). Now, the dissolution of Standard Oil aids in the creation of competitive market pricing for crude products. Additionally, the dissolution of Standard Oil aid in creating a diverse market in which different refiners specialize in the development of different crude products, ultimately creating different commodities with the oil industry. Now, that the contributions of the dissolution of Standard Oil are shown, let’s move
The Gilded Age refers to a period in which things were fraudulent and deceitful; the surface was clinquant while underneath that lustrous coat laid corruption. During the Gilded Age companies recruited to corrupt methods to further increase profits, leading to an increase in power, rapid economic prosperity, and domination of industries, leading to monopolistic corporations. As a result, antitrust laws to regulate business began to emerge in the late 19th and early 20th century known as the Progressive Era. Among these companies was Standard Oil, which was founded in 1870 by John D. Rockefeller; in 1880, Standard Oil was responsible for refining 90 percent of America’s oil and between 1880-1910, dominating the oil industry (Marshall). The lack of intervention from the government and regulations impeding monopolistic practices allowed Standard Oil to
Rockefeller was the son of a trader, and began in the oil company when he was 20. He knew this was the area to invest in, because coal was being replaced by oil in the power industries. By 1870, he had his first oil business, called the Standard Oil Company. Like Carnegie, Rockefeller used horizontal integration and within two years, he had also created a monopoly. He made more money because he paid his workers extremely low wages and treated them poorly. Unlike Carnegie who offered his workers benefits and stock options, Rockefeller gave his workers poor conditions and even abused them at times. Even though Rockefeller was a philanthropist and gave a lot of his money away, that does not make up for how he treated other people and put people out of business to become wealthy. He is best known for a robber baron because he simply used his power to destroy other businesses. He did whatever he could to control the oil industry, even if that meant stepping on others on the way to his success. He reduced the costs of his company, and he was then able to drive other companies out of business, which is how he became one of the richest men in history.
Fifth Edition Vol 2, New York: Longman, 1999. Hidey, Ralph W. and Muriel E. "History of Standard Oil Company (New Jersey), Vol. 1" Pioneering in Big Business" " Taking Sides Clashing Views on Controversial Issues in American History" eds.
Many people consider Rockefeller a robber of industry because of his forcible ways of gaining his monopolies. Rockefeller was fond of buying out small and large competitors. If the competitors refused to sell they often found Rockefeller cutting the prices of his Standard Oil or in the worst cases, their factories mysteriously blowing up. Rockefeller was obsessed with controlling the oil market and used many of undesirable tactics to flush his competitors out of the market. Rockefeller was also a master of the rebate game. He was one of the most dominant controllers of the railroads. He was so good at the rebate that at some times he skillfully commanded the rail road to pay rebates to his standard oil company on the traffic of other competitors. He was able to do this because his oil traffic was so high that he could make or break a section of a railroad a railroad company by simply not running...
On January 10th 1901 the discovery of oil at Spindletop would lead to the greatest economy boom the world has ever encountered. The amount of oil that would be discovered across Texas would be more than enough to power America through the next several decades. The effects of having oil would completely change Texas culture, lifestyle, and business tremendously. In the book of Oil In Texas, will prove that America would change completely from agriculture nation to an industrial nation after the discovery of oil in Texas.
...mpanies, it eventually came to the point where they couldn’t keep up and eventually became a part of Standard Oil. By the time Rockefeller had reached the age of 40, his company had controlled all national oil refining by 90% and about 70% of international export of said oil.
Pratt, Joseph A. “Exxon and the Control of Oil.” Journal of American History. 99.1 (2012): 145-154. Academic search elite. Web. 26. Jan. 2014.
Rockefeller was America’s first billionaire, and he was the true epitome of capitalism. Rockefeller was your typical rags-to-riches businessman, and at the turn of the twentieth century, while everyone else in the working class was earning ten dollars max every week, Rockefeller was earning millions. There has been much discussion as to whether Rockefeller’s success was due to being a “robber baron”, or as a “captain of industry”. By definition, a robber baron was an industrialist who exploited others in order to achieve personal wealth, however, Rockefeller’s effect on the economy and the lives of American citizens has been one of much impact, and deserves recognition. He introduced un-seen techniques that greatly modified the oil industry. During the mid-nineteenth century, there was a high demand for kerosene. In the refining process from transforming crude oil to kerosene, many wastes were produced. While others deemed the waste useless, Rockefeller turned it into income by selling them. He turned those wastes into objects that would be useful elsewhere, and in return, he amassed a large amount of wealth. He sold so much “waste” that railroad companies were desperate to be a part of his company. However, Rockefeller demanded rebates, or discounted rates, from the railroad companies, when they asked to be involved with his business. By doing so, Rockefeller was able to lower the price of oil to his customers, and pay low wages to his workers. Using these methods,
John D. Rockefeller: Standard Oil Company The world’s first billionaire, John D. Rockefeller, was born on July 8, 1839 in Richford, New York, the second of six children. His father was mostly a cheat in business and in life, and he was not a sincere father either since he had raised other children and even had started a family somewhere else. Despite all that John had learned from his father to set high goals and dream big and never to settle for anything less. The family moved to Cleveland, Ohio, in 1853 where John graduated from high school and did pretty good at mathematics.
Roberts, Michael D. "Rockefeller and His Oil Empire." Northeast Ohio's Business Enthusiasts. Town Hall of Cleveland, July 2012. Web. 1 Feb. 2014. .
Numerous families living in small town America lost their income because of Standard Oil and forced hardship upon many. The legacy of John D. Rockefeller shall always live on as he has permanently shaped how this country looks. He has funded huge advancements in the fields of education and medicine along with starting the events to end lassiez-faire economics. The petroleum industry changed greatly during his career thanks to his research and completely new business methods were thought up of by him, some still in practice today.
Rockefeller was a leader who made an impact and was known for his devotion and intelligence. His impact towards the United States was shown to the countless citizens who paid their respect to him after his death. John D. Rockefeller was honored for his fortunes as a business man, and the importance of following through with each sector of the Standard Oil Company. It is known that there are several factors that led to the uprise of oil production in the United States, many of those relating to the works of Rockefeller. Even though it has been nearly 160 years since the Standard Oil Company was created, some of the questionable tactics and operations used by businesses are still present today.
In the United States Of America there was about 250 Competitors around. Standard oil was dropping the prices of their oil so that the other oil companies ran out of business or sold out to Standard oil. He bought up all the steel to make oil barrels that the other companies could not sell to the customers. By 1873 John D Rockefeller bought up to 80 percent of the refineries Standard Oil quickly took advantage of the situation to absorb refineries in the Pennsylvania oil region, Pittsburgh, Philadelphia and New York. By 1878 Rockefeller had attained control of nearly 90 percent of the oil refined in the U.S., and shortly thereafter he had gained control of most of the oil marketing facilities in the U.S.
finding new ways to drill for oil and also refine it more efficiently to ensure that
Seven levels of power are addressed in our text and Stanard Oil most prevalently possessed the economic, political, and legal power to control the oil industry (Steiner & Steiner, p.60-61). Standard Oil could acquire the competition and force those who resisted into bankruptcy. This consolidation was a detriment to the economy, but at the same time, Standard Oil built facilities and employed individuals that benefited the economy.