Who was John D. Rockefeller and how much was his fortune?


John Davison Rockefeller Sr. (July 8, 1839 – May 23, 1937) was an American business magnate and philanthropist. He is considered to be the richest American of all time and the richest person in modern history.

Rockefeller was born into a large family in upstate New York who moved several times before finally settling in Cleveland, Ohio. Rockefeller became an accounting assistant at age 16 and joined various business partnerships from the age of 20, concentrating his business on oil refining. John Rockefeller founded the Standard Oil Company in 1870. He ran it until 1897 and remained its largest shareholder until his death.

Rockefeller’s wealth skyrocketed as kerosene and gasoline grew in importance as a source of energy, making him the richest person in America controlling 90% of all the oil in the country at his peak. Oil was used throughout the country as a source of light until the introduction of electricity and as a fuel after the invention of the automobile.

John Rockefeller also gained enormous influence over the railroad industry that transported his oil across the country. The Standard Oil Company was the first large corporate trust in the United States. Rockefeller revolutionized the oil industry and, through corporate and technological innovations, was instrumental in both spreading widely and dramatically lowering the cost of producing oil. His company and his business practices were criticized, particularly in the writings of author Ida Tarbell.

The Supreme Court ruled in 1911 that Standard Oil should be dismantled for violating federal antitrust laws. The company was divided into 34 separate entities, including companies that became ExxonMobil, Chevron Corporation and others, some of which still have the highest income level in the world in the energy sector.

Following the company’s split, it turned out that the individual segments of the company were worth more than the entire company when it was a single entity (the sum of the parts was worth more than the whole), as shareholders saw their share double and triple in value. value of their shares in the early years of the companies as independent entities.

Rockefeller spent much of the last 40 years of his life in retirement at his estate in Westchester County, New York, defining the fabric of modern philanthropy, along with other key industrialists such as steel magnate Andrew Carnegie. His fortune was used primarily to create the modern systematic approach to directed philanthropy through the creation of foundations that had a major effect on medicine, education, and scientific research. His foundations pioneered the development of medical research and were instrumental in the near eradication of hookworm and yellow fever in the United States.

John Rockefeller was also the founder of the University of Chicago and Rockefeller University and financed the establishment of the Central Philippine University in the Philippines. He was a devout Northern Baptist and supported many church-based institutions. He adhered to total abstinence from alcohol and tobacco throughout his life. When it came to advise, he relied heavily on his wife, Laura Spelman Rockefeller, with whom he had five children. He was a faithful parishioner of the Erie Street Baptist Mission Church, teaching Sunday school and serving as a trustee, secretary, and occasional janitor. Religion was a guiding force throughout his life and he believed it was the source of his success. Rockefeller was also considered a supporter of capitalism based on a Social Darwinist perspective, and was often quoted as saying, “The growth of a large company is simply the survival of the fittest.”

Early years

Rockefeller was the second son born in Richford, New York, to con man William Avery “Bill” Rockefeller and Eliza Davison. He had an older sister named Lucy and four younger siblings: William Jr., Mary, and twins Franklin (Frank) and Frances. His father was of English and German descent, while his mother was of Ulster-Scottish descent. Bill was first a logger and then a traveling salesman who identified himself as a “botanical doctor” selling elixirs, described by locals as “Big Bill” and “Devil Bill”. Without the shackles of conventional morality, he led a wandering existence, returning to his family infrequently. Throughout his life, Bill was known for his shady plans. Between the births of Lucy and John, Bill and his mistress and housekeeper Nancy Brown had a daughter named Clorinda who died young. Between the births of John and William Jr., Bill and Nancy had another daughter, Cornelia.

The influence of their parents

Eliza was a homemaker and devout Baptist who struggled to maintain a semblance of stability at home, as Bill was frequently away for extended periods. She also put up with her women and her double life, which included bigamy. She was thrifty by nature and by necessity, and she taught her son that “deliberate waste creates regrettable necessity.” John did his share of the usual housework and earned extra money raising turkeys, selling potatoes and candy, and eventually lending small sums to neighbors. He followed his father’s advice to “play big in business” and always get the best of any deal. Bill once boasted, “I cheat on my boys every chance I get. I want to make them ready.” However, John Rockefeller’s mother was more influential in his upbringing, while his father grew more and more distant as his life progressed. Rockefeller later declared, “From the beginning, I was trained to work, save, and give.”

When John Rockefeller was a child, his family moved to Moravia, New York, and to Owego, New York, in 1851, where he attended Owego Academy. In 1853, his family moved to Strongsville, Ohio, and he attended Cleveland’s Central High School, the first high school in Cleveland and the first free public high school west of the Alleghenies. He then took a ten-week business course at Folsom Business College, where he studied accounting. He was an educated, serious and studious boy despite the absences of his father and his frequent family moves. His contemporaries described him as reserved, serious, religious, methodical and discreet. He was an excellent debater and expressed himself accurately. He also had a deep love for music and dreamed of it as a possible career.

Life of John Rockefeller before the Standard Oil Company

as an accountant

In September 1855, when Rockefeller was sixteen, he got his first job as an assistant bookkeeper for a small farm produce commission firm in Cleveland called Hewitt & Tuttle. He worked long hours and took delight, as he would later recall, in “all the methods and systems of the office.”

Rockefeller was particularly adept at calculating transportation costs, which served him well later in his career. Much of Rockefeller’s duties involved negotiating with barge canal owners, ship captains, and freight forwarders. In these negotiations, he learned that published freight rates that were believed to be fixed could be changed based on conditions and time of shipment and through the use of rebates to preferred shippers.

Rockefeller was also assigned the responsibility of collecting debts when directed to do so by Hewitt. Instead of using his father’s present method to collect debts, Rockefeller relied on a persistent nuisance approach. Rockefeller received $16 a month for his three-month apprenticeship. During his first year, he received $31 a month, which increased to $50 a month. In his last year as an accountant, he earned USD 58 a month.

As a young man, Rockefeller said his two greatest ambitions were to earn $100,000 (the equivalent of $2.74 million in 2019 dollars) and to live to be 100 years old.

At the age of twenty, having saved a lot of thanks to his salary as an accountant, John Rockefeller decided to venture into his own business and set up a business trading hay, meat, grain and other agricultural goods. The company was so successful that by the end of its first year it had generated $450,000 in the capital. Rockefeller’s early predisposition to business shows us that the Protestant ethic of the Baptist faith played an important role in his life, clearly aligning his values ​​with the purpose of making money from his youth.

Starting in the oil business

In 1866, taking advantage of the fact that the United States government was subsidizing oil production, William Rockefeller Jr., John’s brother, built a refinery in Cleveland and incorporated John into the company. In 1867, Henry Morrison Flagler became a partner, and the firm of Rockefeller, Andrews & Flagler was established. By 1868, with Rockefeller’s continuing practices of borrowing and reinvesting profits, controlling costs, and using refinery tailings, the company owned two Cleveland refineries and a marketing subsidiary in New York; the Rockefellers’ oil refinery quickly became the largest in the world. Rockefeller, Andrews & Flagler was the predecessor to the Standard Oil Company.

At the end of the American Civil War, Cleveland was one of the top five refinery centers in the United States (in addition to Pittsburgh, Pennsylvania, New York, and the northwestern region of Pennsylvania where most of the oil originated). By 1869 there was triple the kerosene refining capacity needed to supply the market, and the capacity remained in excess for many years.

The Standard Oil Company

The Standard Oil Company owes its name to the technological and industrial conditions of the time. At that time there were many complaints about kerosene, as it was unstable and flammable. John Rockefeller was concerned with creating a more stable and standardized formula, giving his oil the character of “standard” or normal oil. The company’s ability to supply a new “normal or standard” oil earned it recognition as a producer of standard oil, hence its name. The Standard Oil Company was also the first company to discover the use of gasoline as a source of energy for vehicle engines.

Company beginnings

On January 10, 1870, Rockefeller abolished the partnership of Rockefeller, Andrews & Flagler, forming Standard Oil of Ohio.. Continuing to apply his work ethic and efficiency, Rockefeller rapidly expanded the company to become the most profitable refiner in Ohio. Also, he became one of the largest oil and kerosene carriers in the country. The railroads competed fiercely for traffic, and in an attempt to create a cartel to control freight rates, they formed the South Improvement Company which offered special deals to bulk customers like Standard Oil, outside of the major oil hubs. The cartel offered preferential treatment as a high-volume shipper, including not only deep discounts/rebates of up to 50% for their product but also rebates for shipping competing products.

Over time, however, Rockefeller would see the advantage of having his own transportation systems, leaving him completely unreliant on the railroads.

Company Expansion

In 1877, Standard Oil took on Thomas A. Scott, the president of the Pennsylvania Railroad, Standard’s main carrier. Rockefeller envisioned pipelines as an alternative transportation system for oil and began a campaign to build and acquire them. The railroad, seeing Standard’s foray into the shipping and pipeline fields, struck back and formed a subsidiary to buy and build oil refineries and pipelines.

Standard responded, withheld its shipments and, with the help of other railroads, started a price war that slashed freight payments and led to labor unrest. Rockefeller prevailed, and the railroad sold its oil holdings to Standard. In the aftermath of that battle, the Commonwealth of Pennsylvania charged Rockefeller in 1879 with monopolizing the oil trade, sparking a spate of similar court proceedings in other states and turning Standard Oil’s business practices into a national issue. Rockefeller was under great stress during the 1870s and 1880s when he was carrying out his plan for consolidation and integration and was attacked by the press. He complained that he couldn’t fall asleep most nights. Rockefeller later commented:

Monopolistic practices

Although it always had hundreds of competitors, Standard Oil gradually gained dominance of oil refining and sales market share in the United States through horizontal integration, coming to dominate approximately 90% of the US market. In the kerosene industry, the company replaced the old distribution system with its own vertical system. It supplied kerosene via tank cars that brought the fuel to local markets, and then the tank cars were delivered to retail customers, bypassing the existing network of wholesale middlemen.

Despite improving the quality and availability of kerosene products while greatly reducing their cost to the public (the price of kerosene fell nearly 80% over the life of the company), Standard Oil’s business practices created intense controversy. Standard’s strongest weapons against its competitors were underselling differential pricing and secret freight rebates.

The firm was attacked by journalists and politicians throughout its existence, in part for these monopolistic methods, fueling the antitrust movement. In 1880, according to the New York World, Standard Oil was “the cruelest, brazen, ruthless, and greedy monopoly that ever took hold of a country.” To critics, Rockefeller responded: “In a business as big as ours…some things are likely to be done that we cannot approve of. We correct them as soon as they come to our attention.”

At the time, many legislatures had made it difficult for a company to incorporate in one state and then operate in another. As a result, Rockefeller and his associates owned dozens of separate corporations, each operating in a single state; managing the whole company was quite complicated. In 1882, Rockefeller’s lawyers created an innovative form of corporation to centralize their holdings, giving rise to the Standard Oil Trust. The “trust” was a corporation of corporations, and the size and wealth of the entity attracted a lot of attention. Nine trustees, including John Rockefeller, ran the 41 trust companies. The public and the press were immediately suspicious of this new legal entity, and other companies seized on the idea and emulated it,

The Standard Oil Company thus had earned an aura of invincibility, always prevailing against competitors, critics, and political enemies. It had become the richest, the largest and most feared company in the world, seemingly immune to the boom and bust of the business cycle, consistently making a profit year after year.

The Standard Oil Company’s vast American empire included 20,000 domestic wells, 4,000 miles of pipeline, 5,000 tank cars, and more than 100,000 employees. Its share of world oil refining exceeded 90%, but slowly fell to around 80% during the rest of the 19th century.

Despite the formation of the trust and its perceived immunity from all competition, by the 1880s Standard Oil had passed its peak of power in the world oil market. Rockefeller finally gave up on his dream of controlling all of the world’s oil refining; he later admitted, “We realized that public opinion would be against us if we really refined all the oil.” Over time, foreign competition and new finds abroad eroded his dominance.

In the early 1880s, John Rockefeller created one of his most important innovations. Instead of trying to directly influence the price of crude oil, Standard Oil had been exercising indirect control by modifying oil storage charges to match market conditions. Rockefeller then ordered the issuance of certificates for the oil stored in his pipelines. These certificates went on to be traded by speculators, thus creating the first oil futures market that effectively set spot market prices from then on. The National Oil Exchange was opened in Manhattan in late 1882 to facilitate oil futures trading.

Attacks on the Standard Oil Company

One of the most effective attacks on Rockefeller and his company was the 1904 publication of The History of the Standard Oil Company, by Ida Tarbell, a noted journalist. She documented the company’s espionage, price wars, heavy-handed marketing tactics, and courtroom dodges.

Although Tarbell’s work caused a huge backlash against the company, she said she was surprised by the scale of what the company was doing. “I never had a grudge against its size and wealth, I never objected to its corporate form. She was willing to let them combine and grow as big and rich as they could, but only by legitimate means. But they had never played fair, and that’s why I was disappointed in their greatness.” Rockefeller disparagingly called her “Miss Tarbarrel” in private, but held back in public by saying only “not a word about that wrong woman.”

John Rockefeller then began a publicity campaign to put his company and himself in a better light. Although he had long maintained a policy of active silence with the press, he decided to make himself more accessible, responding with conciliatory comments such as “capital and labor are savage forces that require intelligent legislation to keep them in check.” He wrote and published his memoirs beginning in 1908. Critics found his writing sanitized and untrue and thought that statements such as “the central and fundamental element of success in business is to follow the established laws of upper-class dealing” seemed to be untrue. at odds with their true business methods.

Company dissolution

John Rockefeller and his son continued to consolidate their oil interests as best they could until New Jersey in 1909 changed its incorporation laws to effectively allow recreation of the trust in the form of a single holding company. Rockefeller retained his nominal title as president until 1911 of the Standard Oil Company and kept his stock. Finally, in 1911, the United States Supreme Court found that the Standard Oil Company of New Jersey violated the Sherman Antitrust Act. By then, the trust still had a 70% share of the refined oil market, but only 14 percent. % of US crude oil supply court ruled that the trust originated from illegal monopoly practices and ordered that it be broken up into 34 new companies. These included, among many others, Continental Oil, which became Conoco, now part of ConocoPhillips; Standard of Indiana, which became Amoco, now part of BP; California Standard, which became Chevron; Standard of New Jersey, which became Esso (and later Exxon), now part of ExxonMobil; Standard of New York, which became Mobil, now part of ExxonMobil; and Standard of Ohio, which became Sohio, now part of BP. Pennzoil and Chevron remain separate companies.

Rockefeller, who had rarely sold shares, owned more than 25 percent of Standard stock at the time of the breakup. He and all other shareholders received proportional shares in each of the 34 companies. As a consequence, Rockefeller’s control over the oil industry was somewhat reduced, but for the next 10 years, the breakup also paid off immensely for him. The combined net worth of the companies increased fivefold and Rockefeller’s personal wealth jumped to $900 million.

Illness and death

At age 50, Rockefeller suffered from moderate depression and digestive problems; during a stressful period in the 1890s he developed alopecia, so in 1901 he began wearing toupees. His hair never grew back, but his other health problems subsided as he lightened his workload.

Rockefeller died of arteriosclerosis on May 23, 1937, less than two months shy of his 98th birthday, at his home in Ormond Beach, Florida. He was buried in Lake View Cemetery in Cleveland.

Religious perspectives and philanthropy

John Rockefeller was a highly committed evangelical Baptist. His mother was deeply religious and disciplined and had a great influence on him in religious matters. In his childhood, during church service, his mother urged him to contribute his few cents to the congregation. Rockefeller came to associate the church with charity. A Baptist preacher once encouraged him to “earn as much money as he could, and then give away as much as he could.” Later in his life, Rockefeller recalled: “It was at this moment that the financial plan of my life was formed.” He considered making money a “gift from God.”

Rockefeller read the Bible daily, attended prayer meetings twice a week, and even led his own Bible study with his wife.

Burton Folsom Jr. has noted: He would sometimes give tens of thousands of dollars to Christian groups, while at the same time trying to borrow more than a million dollars to expand his business. His philosophy of giving was based on biblical principles. He truly believed in the biblical principle found in Luke 6:38: “Give to others, and God will give to you. He will give you in his bag a good measure, pressed down, shaken, and full. In the same measure that you give to others, God will give back to you.”

Rockefeller would support Baptist missionary activity, fund universities, and become heavily involved in religious activities at his church in Cleveland, Ohio. While traveling in the South, he donated large sums of money to churches belonging to the Southern Baptist Convention, various black churches, and other Christian denominations. Once, he paid for the freedom of a slave and donated it to a Roman Catholic orphanage. As he grew richer, his donations became more generous, especially to his church in Cleveland; however, this was demolished in 1925 and replaced by another building.

John Rockefeller’s philanthropic activities would include funding Protestant churches, orphanages, scholarships, universities, and health. Rockefeller created the Rockefeller Foundation to carry out great health work in the United States. Today the foundation has numerous interests including psychiatry, social sciences, innovation and economic development, and is one of the world’s leading philanthropic institutions with more than $4 billion in assets.

Legacy of John Rockefeller

John Rockefeller had a long and controversial career in the oil industry followed by a long career in philanthropy. The image of him is an amalgamation of all these experiences and the many ways in which he was seen by his contemporaries. These contemporaries include his former competitors, many of whom were driven out of business, but many others who were sold at a profit (or a profitable stake in Standard Oil, as Rockefeller often offered his shares as payment for a deal) , and quite a few of whom became very wealthy as managers and owners of Standard Oil. These include politicians and writers, some of whom served Rockefeller’s interests, and some of whom built their careers fighting Rockefeller and the robber barons.

Biographer Allan Nevins, responding to Rockefeller’s enemies, concluded:

The rise of the Standard Oil men to great wealth was not due to poverty. It was not a spectacular ascent, but was achieved over more than a quarter of a century by a brave venture into a field so risky that most of the great capitalists avoided it, by hard work and by planning more astute and far-sighted than the that had been applied to every other American industry… The oil fortunes of 1894 were no greater than the steel fortunes, banking fortunes, and railroad fortunes made in similar periods. But it is the claim that the Standard Oil tycoons made their wealth by appropriating “other people’s property” that most defies our attention. We have abundant evidence that Rockefeller’s consistent policy was to offer fair terms to competitors and buy their companies, for cash, stock, or both, at fair appraisals; we have the statement of an unbiased historian that Rockefeller decided “more humane with competitors.” more than Andrew Carnegie; we have the conclusion of another that his wealth was “the least polluted of all the great fortunes of his age.”

Hostile critics often portrayed Rockefeller as a villain with a number of bad traits—ruthless, unscrupulous, and greedy—and as a thug plotting his cruel way to dominance. Economic historian Robert Whaples warns against ignoring the secrets of his entrepreneurial success: [He developed…] Relentless cost-cutting and efficiency improvements, audacity to gamble on the industry’s long-term prospects while others were willing to make quick profits, and skills awesome for spotting and rewarding talent, delegating tasks and managing a growing empire.

Biographer Ron Chernow wrote of Rockefeller: “What makes him problematic, and why he continues to inspire ambivalent reactions, is that his good side was just as good as his bad side was bad. Rarely has history produced such a contradictory figure.”

Rockefeller remains in history as a contradictory figure, mixing the Protestant ethic with an excessive ambition in business, leading his company to questionable practices such as labor exploitation, unfair competition and monopolistic activities. At the same time, John Rockefeller is a benchmark for modern philanthropy because of the immense amount of money he donated to charity. Being such a powerful figure led him to become the center of dark legends such as conspiracy theories about a new world order and being a power after power in the United States. These legends also accompanied his heirs, which in more recent times would be wielded over his grandson, the banker David Rockefeller.

Fortune of John Rockefeller

John Rockefeller is famous in history for his enormous fortune and has become a symbol of economic power. At the time of his death in 1937 at age 97, he had an estimated net worth of $1.5 billion, equivalent to 1.6% of the US economy at the time. Said percentage extrapolated in the current GDP represents about $418 billion dollars – or about 295,365 million euros –, according to figures cited by the Bloomberg News media.

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