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The small batch of letters he wrote to Cettie at this time—among his few early, surviving letters to her—betray a surprisingly romantic sensibility, as if seven years of marriage hadn’t dimmed his ardor. Amid negotiations, he told her, “I dreamed last night of the girl Celestia Spelman and awoke to realize she was my ‘Laura.’ ” Repeatedly, Rockefeller complained about how lonely he felt in New York—“like a wandering Jew”—and reiterated his yearning to be at home. Far from being beguiled by the money, fashion, and power of New York, his Baptist soul recoiled from it. “The world is full of Sham, Flattery, and Deceptions,” he wrote, “and home is a haven of rest and freedom.” At this stage, Rockefeller still found his wealth wonderful and slightly unreal, telling Cettie that “we have been so prospered and placed in independent circumstances, it seems a fabulous dream but I assure you it is a solid and comforting fact—how different our condition from the multitudes, let us be thankful.” Perhaps this financial independence emboldened Rockefeller to undertake the risky SIC scheme, confident that it wouldn’t endanger his family’s security. And lest Cettie worry about his risky new venture, he reminded her, “You know we are independently rich outside investments in oil—but I believe my oil stock the very best.”
Names: John D. Rockefeller, Sr. · Laura Spelman Rockefeller · South Improvement Company · New York · Laura
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By late January 1872, as the conspirators drew up and signed the last contracts while trying to preserve total secrecy, rumors of an impending jump in freight rates began to filter through western Pennsylvania. On February 22, the Petroleum Centre Record alluded darkly to a “rumored scheme of gigantic combination among certain railroads and refiners to control the purchase and shipment of crude and refined oil from this region.” Definite word of the plot didn’t leak out until days later, when the local freight agent for the Lake Shore Railroad rushed off to visit a dying son and left in charge a subordinate who didn’t realize that the new freight rates hadn’t yet been enacted. Oblivious to the historic impact he would have, this minor functionary promulgated the staggering rates for outside refiners decreed by the SIC. On February 26, the stunned residents of Oil Creek read in the morning papers that freight rates had doubled overnight for everyone—everyone, that is, except a privileged group of refiners in Cleveland, Pittsburgh, and Philadelphia who belonged to a shadowy entity called the South Improvement Company.
Names: South Improvement Company · Cleveland · Oil Creek · Pittsburgh · Philadelphia · Pennsylvania · Lake Shore Railroad · Petroleum Centre Record
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For the horror-struck refiners in Titusville or Oil City, this wasn’t simply a new competitive threat: It was a death warrant, and they stopped work and poured into the streets, denouncing the action in strident tones. “The oil region was afire with all sorts of wild stories,” recalled Rockefeller. “There were meetings of protest, of bitter denunciation.” On the night of February 27, three thousand people stormed into the Titusville Opera House, waving banners that stated, “Down with the conspirators,” “No compromise,” and “Don’t give up the ship!” while Rockefeller and his cabal were denounced as “the Monster” and “the Forty Thieves.” Perhaps the most impassioned speaker was a short young refiner named John D. Archbold, the hard-drinking, poker-playing son of a circuit preacher. Though Peter Watson had tried to inveigle him into the SIC, Archbold had indignantly refused and now told the crowd, “We have been approached by the great anaconda, but do not desire to yield.” The Oil Creek refiners believed they had a God-given right to market the oil drilled in their backyards and Archbold—destined, ironically, to succeed Rockefeller at the Standard Oil helm—endorsed this view. “We believe this is the natural point for the business,” he told the cheering audience. “This is the last desperate struggle of desperate men.” After he was elected secretary of a new Petroleum Producers’ Union, the group agreed to retaliate by starving out the SIC conspirators, selling crude oil only to refiners along Oil Creek.
Names: John D. Rockefeller, Sr. · John D. Archbold · Standard Oil · South Improvement Company · Peter H. Watson · Titusville · Oil City · Oil Creek · Titusville Opera House · Petroleum Producers’ Union
EPUB paragraph 29 · Text/Cher_9780307429773_epub_c08_r1.htm
Amid this frenzied hue and cry, the local citizenry created a small army of roving protesters who moved from town to town, organizing torchlight rallies and picking up new adherents. On the night of March 1, refiners and producers jammed another tumultuous meeting at the opera house in Oil City. One featured speaker was a young producer, Lewis Emery, Jr., who supported a proposal by Archbold to cut existing production by 30 percent and suspend new drilling for thirty days. With this speech, the indefatigable Emery launched a crusade against Standard Oil that would persist for decades. By the end of the meeting, a thousand men stood ready to besiege the state capitol in Harrisburg and demand relief from the SIC.
Names: John D. Archbold · Lewis Emery, Jr. · Standard Oil · South Improvement Company · Oil City · Harrisburg
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In this warlike atmosphere, the Oil City Derrick printed a daily blacklist of the conspirators—Peter Watson, followed by Rockefeller and six other directors—in a black-bordered box on the front page. Each day, a new inflammatory caption was supplied, such as “Behold ‘The Anaconda’ in all his hideous deformity.” It was in the context of such hysterical emotion that the world first learned the name of John D. Rockefeller. As if his foes already intuited his special power, he was singled out for abuse, one newspaper crowning him “the Mephistopheles of Cleveland.” As people learned of his central place in the SIC, vandals defaced the blue Standard Oil barrels with skulls and crossbones. Two Standard employees on Oil Creek, Joseph Seep and Daniel O’Day, barricaded themselves in their offices and fended off marauding mobs. “It was a tense situation,” said Seep. “Some of my friends were actually afraid to be seen talking with me in the street. There were threats of violence. Captain John W. Jones, a big producer, wanted the people to burn the Standard Oil Company’s tanks.” Saboteurs attacked the railroads, raiding oil cars and spilling their contents on the ground or tearing tracks apart. A local lawyer, Samuel C. T. Dodd, said that if the protests had continued indefinitely, “there would not have been one mile of railroad track left in the County of Venango. The people had come to that pitch of desperation.” Few residents of Oil Creek imagined that their dread adversary was a clean-cut, churchgoing young man. This nightmarish period left an especially deep imprint upon a flabbergasted fourteen-year-old schoolgirl named Ida Tarbell. “I remember a night when my father came home with a grim look on his face and told how he with scores of other producers had signed a pledge not to sell to the Cleveland ogre that also had profited from the scheme—a new name, that of the Standard Oil Company, replacing the name South Improvement Company in popular contempt.”
Names: John D. Rockefeller, Sr. · Daniel O’Day · Samuel C. T. Dodd · Ida M. Tarbell · Standard Oil · South Improvement Company · Peter H. Watson · Cleveland · Oil Creek · Jones · Joseph Seep · Oil City Derrick · Venango · John
EPUB paragraph 31 · Text/Cher_9780307429773_epub_c08_r1.htm
Far from giving Rockefeller pause, the vandalism only confirmed his view of Oil Creek as a netherworld of rogues and adventurers who needed to be ruled by stronger men. He was always quick to impugn the motives of enemies while regarding his own as somehow beyond reproach. “The Standard Oil Company were a very orderly body, and these producers were a rabble of wild, excitable men, waiting for a war-cry to rush into the arena with a suitable noise.” Clad in the armor of self-righteousness, Rockefeller felt no need to explain his actions and turned away reporters at his door. After Flagler told reporters that Standard Oil’s opponents were “a few soreheads,” Rockefeller advised silence, and Flagler desisted from further comment. With threats being made on his life, Rockefeller posted a special detail of policemen outside both office and home and kept a revolver by his bed for good measure.
Names: John D. Rockefeller, Sr. · Henry M. Flagler · Standard Oil · Oil Creek
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Only in the twilight of life did Rockefeller realize how poorly his taciturnity had served him in business battles. This was especially true during the SIC furor, which evolved into a political and public-relations battle. By remaining silent in the face of criticism, he thought he would seem confident and secure in his integrity—in fact, he seemed guilty and arrogantly evasive. Throughout his career, Rockefeller endured abuse with so much equanimity that Flagler once shook his head and said, “John, you have a hide like a rhinoceros!” He had an early Christian’s fierce defiance of critics, his boyhood with Big Bill having also taught him to disregard the malicious gossip of neighbors. He had a great general’s ability to focus on his goals and brush aside obstacles as petty distractions. “You can abuse me, you can strike me,” Rockefeller said, “so long as you let me have my own way.”
Names: John D. Rockefeller, Sr. · William Avery Rockefeller · Henry M. Flagler · South Improvement Company · John
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As always, the greater the tumult, the cooler Rockefeller became, and a strange calm settled over him when his colleagues were most disconcerted. When pushed, he always stood his ground. The SIC episode showed that Rockefeller was now developing exalted faith in his own judgment. Like all revolutionaries, he saw himself as an instrument of higher purpose, endowed with a visionary faith. He knew that his actions would at first be resisted and misunderstood by the myopic crowd, but he believed that the force and truth of his ideas would triumph in the end.
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When the petroleum producers embargoed the sale of crude oil to members of the SIC, Rockefeller professed a lack of concern. Yet this impromptu coalition, welded together by the overwhelming threat, responded with impressive unity, creating sixteen districts, each with a separate committee, that blocked oil sales to the cabal. By moonlight, the producers patrolled Oil Creek on horseback to guard against any clandestine drilling that would subvert their cause. Ida Tarbell recalled how her father had proudly spurned a lucrative contract to ship oil to the conspirators for a tempting $4.50 a barrel. In the meantime, the producers busied themselves on the legislative front, lobbying in Harrisburg to annul the SIC charter and submitting to the U.S. Congress a scroll-like, ninety-three-foot petition, demanding an industrywide investigation. While Rockefeller dodged the press, producers handed out thirty thousand copies of a polemical tract about the SIC so that “enemies of freedom of trade may be known and shunned by the honest men.”
Names: John D. Rockefeller, Sr. · Ida M. Tarbell · South Improvement Company · Oil Creek · U.S. Congress · Harrisburg
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The uproar didn’t weaken Rockefeller’s resolve, yet for all his bravado the boycott exacted a grave toll on his operations. Ninety percent of his employees had to be temporarily laid off, leaving a skeletal staff at his refineries. In letters to Cettie in March 1872, he tried to reconcile his actions with his conscience as he became the bugbear of Oil Creek. As he wrote from New York on March 15,
Names: John D. Rockefeller, Sr. · Laura Spelman Rockefeller · New York · Oil Creek
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It is easy to write newspaper articles but we have other business. We will do right and not be troubled about what the papers say. By and by when all are through possibly we may briefly respond (though it is not our policy) and leave future events in the business to demonstrate our intentions and plans were just & warranted—I want to act perfectly conscientiously and fearlessly in the matter and feel confident of good results.… I am hopeful [we] can get at least a good fraction of the N.Y. Refiners to join at an early day.
Names: N.Y. Refiners
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Further, he wrote on March 21, “I am still persevering and hopeful, remember our side have not yet been in the papers. We know a few things the people generally may not, at all events we know our own intentions, and they are right and only so—but please say nothing only you know your husband will stand by and stick to the right.”
Names:
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The conspirators committed a major strategic gaffe by omitting the New York refiners, who therefore sided with the Oil Creek refiners to pressure the railroads. To head their liaison committee, the New York refiners appointed a suave thirty-two-year-old named Henry H. Rogers, who had the flashing eyes and confident air of a young buccaneer. When Rogers met Tom Scott at a Philadelphia hotel on March 18, the railroad chief struck a conciliatory note, admitting that the SIC contract was unfair and offering a similar deal to the excluded New York and Pennsylvania refiners. While Scott was backpedaling and angling for peace, Rockefeller remained uncompromising, telling his wife on March 22, “I assure you it is not my pleasure to remain all this time but a stern sense of duty to this cause—I haven’t any idea giving up ship or letting go my hold.”
Names: John D. Rockefeller, Sr. · Henry H. Rogers · Thomas A. Scott · South Improvement Company · New York · Oil Creek · Philadelphia · Pennsylvania · Rogers · Scott
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On March 25, the Rogers group held a climactic meeting with wavering railroad officials at the Erie Railroad’s offices in the ornate Grand Opera House in New York. While they conferred, an edgy Rockefeller and Peter Watson tapped at the door and asked to enter. While Watson was admitted, Rockefeller was barred and so anxiously paced the corridor. For the first time, Rockefeller appeared in The New York Times—his name was misspelled as “Rockafellow”—with the reporter noting that, excluded from the talks, Rockefeller had finally gone off looking “pretty blue.” The meeting dealt a blow to Rockefeller and Watson, for the railroads agreed to abrogate the SIC contract, end rebates and drawbacks, and institute uniform rates for all shippers. The serpent had been killed in the egg.
Names: John D. Rockefeller, Sr. · William Avery Rockefeller · South Improvement Company · Erie Railroad · Peter H. Watson · New York · Rogers · Watson · Times · Grand Opera House
EPUB paragraph 40 · Text/Cher_9780307429773_epub_c08_r1.htm
Far sooner than Rockefeller, the railroads had foreseen the political reaction and inevitable defeat. In this era before railroad regulation and antitrust legislation, the SIC contract didn’t violate any obvious laws, only a universal sense of fair play. In early April, the Pennsylvania legislature canceled the SIC charter, while a congressional committee, a month later, branded the scheme the “most gigantic and daring conspiracy” ever to confront a free nation. On April 8, 1872, Rockefeller capitulated and wired the oil producers that all contracts between the SIC and the railroads were now void. In his own defense, he added: “I state unqualifiedly that reports circulated in the Oil Region and elsewhere, that this company, or any member of it, threatened to depress oil, are false.” On this last count, Rockefeller was probably sincere, for what he envisioned was less a conspiracy against producers than against consumers, a united effort to ensure steady prices and adequate returns on investment. Till the very end, he saw the producers’ outrage against him as shot through with envy and hypocrisy. “The producers … held to the view that rebates were wrong unless the rebates were given to them.”
Names: John D. Rockefeller, Sr. · South Improvement Company · Oil Regions · Pennsylvania
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It always mystified Rockefeller that people made such a fuss about a phantom company. “There never was a shipment made or a rebate or drawback collected under the South Improvement plan.” Though only a latent threat, the scheme acquired lasting infamy for two reasons. First, Rockefeller’s fiercest critics regarded it as a dress rehearsal for the grand pageant, the place where he first revealed his master plan, to be implemented in a thousand secret, disguised, and indirect ways. The second reason for all the later attention was that during the brief interval while the SIC was alive, Rockefeller engineered his most important coup: the swift, relentless consolidation of Cleveland’s refineries, which gave him irresistible momentum. The threat of the SIC, critics alleged, was the invisible club that he had waved over Cleveland refiners, forcing them to submit to his domination. Between February 17 and March 28, 1872—between the first rumors of the SIC and the time it was scuttled—Rockefeller swallowed up twenty-two of his twenty-six Cleveland competitors. During one forty-eight-hour period alone in early March, he bought six refineries. As one refiner, John H. Alexander, recalled:
Names: John D. Rockefeller, Sr. · South Improvement Company · Cleveland · South · John H. Alexander
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There was a pressure brought to bear upon my mind, and upon almost all citizens of Cleveland engaged in the oil business, to the effect that unless we went into the South Improvement Company we were virtually killed as refiners; that if we did not sell out we should be crushed out.… It was said that they had a contract with railroads by which they could run us into the ground if they pleased.
Names: South Improvement Company · Cleveland
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Since petroleum output promised to shatter records in 1872 and keep prices depressed, Rockefeller increasingly sought to own as large a portion of the industry as possible and didn’t think he could afford to wait for the marketplace to prune out weak refiners by attrition. “We had to do it in self-defense,” he said of the Cleveland takeovers. “The oil business was in confusion and daily growing worse.”
Names: John D. Rockefeller, Sr. · Cleveland
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Another businessman might have started with small, vulnerable firms, building on easy victories, but Rockefeller started at the top, believing that if he could crack his strongest competitor first, it would have a tremendous psychological impact. His major rival was Clark, Payne and Company, and conquering it would give Rockefeller special satisfaction, since he had already tangled with one partner, James Clark, early in his career and now coveted his Star Works refinery. The firm also had social cachet in Cleveland: Colonel Oliver H. Payne—a Yale graduate, honored Civil War colonel, and son of politician Henry B. Payne—was extremely wealthy, lived in a Euclid Avenue mansion, and was descended from one of Cleveland’s founding families. (Commodore Matthew Perry, who opened Japan to commerce in 1854, came from a collateral branch of the family.) With an erect, military bearing and coolly formal manner, many people found the young bachelor pompous—Flagler dubbed him the “kin of God”—but Rockefeller always paid tribute to Payne as a stalwart and capable ally.
Names: John D. Rockefeller, Sr. · James Clark · Henry M. Flagler · Oliver H. Payne · Henry B. Payne · Yale University · Cleveland · Euclid Avenue · Clark · Payne · Japan · Payne and Company · Star Works · Civil War · Matthew Perry
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One afternoon in December 1871, Rockefeller asked Payne, an old high-school friend, to meet in the parlor of a downtown Cleveland bank, where Rockefeller outlined his plan for a vast, efficient industry under Standard Oil control. Telling Payne about the impending capital increase at Standard Oil, he asked point-blank: “If we can agree upon values and terms do you want to come in?” As Clark, Payne’s largest shareholder, Colonel Payne gave his qualified approval, but he first wanted to examine Rockefeller’s books before selling his company. That afternoon, when he surveyed Standard Oil’s ledgers, he was thunderstruck by the profits. Whether he was impressed by the railroad rebates or operating efficiencies is unclear, but he eagerly told Rockefeller, “Let us get the appraisers in and see what the plant is worth.” After conferring with his partners, Payne consented to a $400,000 price for his refinery. Rockefeller knew that he was overpaying but couldn’t resist a deal that would certify his position as the world’s largest oil refiner at age thirty-one. Though Rockefeller stipulated that James Clark wasn’t welcome at Standard Oil, he wanted to enlist Payne’s services, and the latter soon shared a private office with Rockefeller and Flagler. James Clark later told Ida Tarbell that he sold out only from fear of the SIC contract. As Tarbell’s assistant reported, “He stated positively that Clark, Payne & Co. did not sell out before the organization of the SIC, and that it never considered selling out to the Standard before the SIC was formed.”
Names: John D. Rockefeller, Sr. · James Clark · Henry M. Flagler · Oliver H. Payne · Ida M. Tarbell · Standard Oil · South Improvement Company · Cleveland · Clark · Payne · Clark, Payne & Co.
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According to later lawsuits, whenever Rockefeller suggested that rivals sell out to him, the SIC formed the burden of his appeal. Some old Cleveland refiners told Ida Tarbell that his menacing pitch ran as follows:
Names: John D. Rockefeller, Sr. · Ida M. Tarbell · South Improvement Company · Cleveland
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You see, this scheme is bound to work. It means an absolute control by us of the oil business. There is no chance for anyone outside. But we are going to give everybody a chance to come in. You are to turn over your refinery to my appraisers, and I will give you Standard Oil Company stock or cash, as you prefer, for the value we put upon it. I advise you to take the stock. It will be for your good.
Names: Standard Oil
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Stung by charges that he had used coercion, Rockefeller retorted that he had been unfailingly friendly and courteous and never mentioned the SIC in negotiations. Strictly speaking, this was probably true, yet the timing of his twenty-two takeovers suggests strongly that the SIC was a prime factor and that the deals were done amid an atmosphere of well-timed intimidation. Several rivals alleged that Rockefeller orchestrated a chorus of terrifying rumors about his secret pact with the railroads. Even without direct threats, he knew his opponents’ imaginations would embellish these stories and conjure up a conspiracy of unfathomable scope. “In 1872 reports were purposely circulated to the effect that the Standard Oil Company had entered into agreement with the railroads, whereby no outside refiner could bring crude oil to Cleveland and manufacture it without a loss,” rival refiner J. W. Fawcett of Fawcett and Critchley told Ida Tarbell in the early 1900s. “The refiners became prematurely alarmed at the reports of destructive competition and inability to secure crude oil, and they ‘fell over each other’ in their haste to sell out. Had they refused to be coerced, and had they held together, there never would have been a Standard Oil Company.” When Fawcett received word that he should see the Standard people and dispose of his refinery, he was told “that they had the railroads in a position where they would control the rates, that Fawcett and Critchley would not ever ship any oil.” Like many vanquished refiners, Fawcett surrendered his independence and went to work for Rockefeller, but he never quite overcame his anger at what he perceived as clever manipulation.
Names: John D. Rockefeller, Sr. · Ida M. Tarbell · Standard Oil · South Improvement Company · Cleveland · J. W. Fawcett · Critchley
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Rockefeller dismissed as “an absolute lie” the idea that he had stampeded the Cleveland refiners and added that the vast majority of those refiners “were already crushed by the competition which had been steadily increasing up to this time” and were staring at ruin. For these concerns, he insisted, the opportunity to sell to Standard Oil and receive stock instead “was a godsend to them all.”Had Standard Oil not existed, he asserted, these refiners would simply have gone bust—which would have been true for many of them. Even Fawcett conceded that “at that time some of the refineries were not making money, and they were the first to ‘run to cover’ and sell out. Eventually all sold out.”
Names: John D. Rockefeller, Sr. · Standard Oil · Cleveland · J. W. Fawcett
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Several Cleveland refiners claimed that Rockefeller had directly threatened them. John H. Heisel of Bishop and Heisel remembered telling Rockefeller that he wasn’t afraid of him, to which Rockefeller supposedly replied, “You may not be afraid to have your hand cut off, but your body will suffer.” Yet it seems unlikely that Rockefeller menaced refiners quite so blatantly, for it didn’t serve his purpose. Gifted with persuasive powers, he preferred to talk earnestly to his rivals, tapping them on the knee or gesturing with his hands, reasoning with them in richly cadenced, evangelical tones. As one refiner said of Rockefeller, “He knew that he and his associates had a better knowledge of the business and a better command of the business than anyone else. You never saw anyone so confident as he was.” He liked to make Standard Oil sound like a philanthropic agency or an angel of mercy, come to succor downtrodden refiners. “We will take your burdens,” he remembered telling his weaker brethren in 1872. “We will utilize your ability; we will give you representation; we will unite together and build a substantial structure on the basis of cooperation.”Similarly, he said, “We here at Cleveland are at a disadvantage. Something should be done for our mutual protection. We think this plan of ours is a good scheme. Think it over. We would be glad to consider it with you if you are so inclined.” Sure of his mission, Rockefeller castigated those who resisted Standard Oil as foolish and shortsighted. “Take Standard Oil stock,” he urged them, “and your family will never know want.”
Names: John D. Rockefeller, Sr. · Standard Oil · Cleveland · John H. Heisel
EPUB paragraph 51 · Text/Cher_9780307429773_epub_c08_r1.htm
If these refiners had surrendered faith in oil’s future, as Rockefeller insisted, then why did they so bitterly resent him after he bought them out? Why didn’t they regard him as their savior, as he preferred to depict himself? The answer lies partly in the way their plants were appraised. Since so many refiners were losing money, Rockefeller paid them a pittance, typically a quarter of their original construction costs, or what the plants might have fetched if auctioned off for scrap; he paid little or nothing for goodwill—that is, the intangible value in a thriving business, such as its reputation or client list. If this was hard policy, it wasn’t necessarily unscrupulous. “No, the good will of a business which is losing money is not worth much,” said Rockefeller. “If there isn’t work for an oil refinery to do, it has less value than ships or railroad property, which can be used on other lines.” One must also remember that Rockefeller was in the anomalous position of taking over many plants not to operate them but to shut them down and eliminate excess capacity. He ridiculed many of the refineries he bought as “old junk, fit only for the scrap heap.” Rockefeller probably paid a fair price for many antiquated plants, but it was a bitter pill for the ruined owners to swallow. And he operated in a climate of fear that gave his rivals little choice in the matter.
Names: John D. Rockefeller, Sr.
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Whether by chance or design, Rockefeller’s 1872 business papers have vanished, and we aren’t privy to his thoughts during these crucial negotiations. But in later years, he was a fair-minded bargainer who often paid too much for properties that served a strategic purpose. Indeed, his papers are chock-full of lamentations about how he overpaid for properties. When it came to mergers, he didn’t fight for the last dollar and tried to conclude matters cordially. Since he aimed to convert competitors into members of his cartel and often retained the original owners, he preferred not to resort to naked intimidation. As Rockefeller said, he and his colleagues weren’t “so short-sighted as to antagonize these very men whom they were eager to have come into a close and profitable relationship with them.” He wasn’t a sadistic man, but he had a hard, unyielding sense of purpose that brooked no opposition. If Rockefeller expressed elation, it was behind closed doors. According to one legend, after taking over a new refinery, he would rush into the office, perform a little dance, and shout joyously to Sam Andrews, “We’ve got another refinery, Sam. One more in the fold!”
Names: John D. Rockefeller, Sr. · Samuel Andrews
EPUB paragraph 53 · Text/Cher_9780307429773_epub_c08_r1.htm
During the Cleveland Massacre, Rockefeller savored a feeling of sweet revenge against some of the older men who had patronized him when he started in business. This was especially true of his negotiations with Alexander, Scofield and Company, whose partners included his original boss, Isaac L. Hewitt. After Hewitt came to Rockefeller’s Euclid Avenue home to plead for mercy, they strolled down Euclid Avenue together, and Rockefeller told him his firm would never survive if it didn’t sell out to Standard Oil. He made a cryptic statement to Hewitt that entered into Rockefeller folklore: “I have ways of making money you know nothing about.” Disconcerted by such assertions, Hewitt and his partners finally sold out for $65,000, though they believed their business was worth $150,000. Rockefeller felt merciful toward Hewitt and loaned him money to buy Standard stock, but he despised Hewitt’s partner, John H. Alexander, who still viewed him, he thought, as Hewitt’s former clerk. As Rockefeller put it, “How could this conceited Englishman ever conceive it possible that a young man who had been a bookkeeper, and especially at a time when he had been employed in an oil refinery, be qualified to lead in a movement of this kind?”
Names: John D. Rockefeller, Sr. · Standard Oil · Isaac L. Hewitt · Cleveland · Euclid Avenue · John H. Alexander · Alexander, Scofield and Company
EPUB paragraph 54 · Text/Cher_9780307429773_epub_c08_r1.htm
Rockefeller’s most controversial purchase—and one that resulted in a bitter lawsuit—was the takeover of Hanna, Baslington and Company. When Robert Hanna, the uncle of Mark Hanna, was summoned to Standard Oil’s offices, he bluntly told Rockefeller that he wouldn’t sell. In response, Rockefeller sighed and wearily shrugged his shoulders, as if expressing regret that this benighted sinner hadn’t seen the light. “You will stand alone,” he warned Hanna. “Your firm can never make any more money in Cleveland. No use trying to do business in competition with the Standard Oil Company. If you do it will end in your being wiped out.” What seemed a barefaced threat to Hanna was later interpreted by Rockefeller as a timely warning and sincere advice.
Names: John D. Rockefeller, Sr. · Mark Hanna · Standard Oil · Cleveland · Robert Hanna · Baslington
EPUB paragraph 55 · Text/Cher_9780307429773_epub_c08_r1.htm
Irate over the rebates enjoyed by Standard Oil, Hanna pleaded with executives of the Lake Shore Railroad to grant his refinery equal treatment. They defended Standard Oil’s freight rates as the privilege due to a big bulk shipper and promised to give Hanna the same rates if he delivered the same volume of oil—which he couldn’t. The railroads employed this as an all-purpose defensive tactic, since nobody could ever match Standard Oil’s voluminous shipments. In the end, Hanna accepted $45,000 for a refinery that he believed was worth $75,000.
Names: Mark Hanna · Standard Oil · Lake Shore Railroad
EPUB paragraph 56 · Text/Cher_9780307429773_epub_c08_r1.htm
It is interesting to note that Rockefeller perjured himself in an affidavit he submitted for the lawsuit brought jointly by William S. Scofield and Hanna, Baslington. Not only did he state that “but few persons who were stockholders in the Standard Oil Co. of Cleveland, Ohio were subscribers to stock in the South Improvement Company,” but he added that “P. H. Watson, Pres. of the South Improvement Co.… was not a stockholder in nor was he in any way connected with the Standard Oil Company.” As mentioned, Standard Oil executives controlled almost 50 percent of the SIC shares and issued five hundred shares of Standard to Watson sub rosa in the January 1872 recapitalization. Although Rockefeller professed that he never lied under oath, the claim doesn’t bear up under close examination.
Names: John D. Rockefeller, Sr. · Mark Hanna · Standard Oil · South Improvement Company · Cleveland · South · William S. Scofield · Watson · Baslington · P. H. Watson
EPUB paragraph 57 · Text/Cher_9780307429773_epub_c08_r1.htm
The oil wars of 1872 turned Cleveland society upside down. Many who had made easy fortunes in oil refining and built splendid mansions on Euclid Avenue found themselves bankrupt and forced to sell. Whether it was Rockefeller or the slumping oil market that forced them to sell their refineries at distress-sale prices, they chose to see Rockefeller as the author of their woes. It is likely that in many cases the marketplace would eventually have closed their unprofitable firms, but Rockefeller certainly speeded up the winnowing. Though several independent refiners held on for a few years, in most cases this merely postponed the day of reckoning. Ella Grant Wilson, a social chronicler of nineteenth-century Cleveland, recalled how her father, a partner in the refinery of Grant, Foote and Company, had befriended Rockefeller in various Baptist causes but refused to join Standard Oil, convinced it would fail. When it became impossible to compete with this leviathan, his refinery went bankrupt, and he surrendered his life savings. “Father went almost insane over this terrible upset to his business. He walked the house night and day.… [He] left his church and never entered a church afterward. His whole life was embittered by this experience.” With so many losers in the struggle—and one shrewd, gigantic winner—it comes as no surprise to learn that John D. Rockefeller had made his first group of implacable enemies.
Names: John D. Rockefeller, Sr. · Standard Oil · Cleveland · Euclid Avenue · Ella Grant Wilson · Grant, Foote and Company
Source: Ron Chernow, Titan. Names and relationships retain the full atlas’s extraction limits. Map points are references; historical sites and regions can be approximate. Open the full interactive atlas.