EPUB paragraph 58 · Text/Cher_9780307429773_epub_c08_r1.htm
Nowadays, most people imagine that American businessmen have always favored free competition, at least in the abstract. But in the industrial boom after the Civil War, the most significant revolt against free-market capitalism came not from reformers or zealous ideologues but from businessmen who couldn’t control the maddening fluctuations in the marketplace. In an unregulated economy, they had to improvise the rules of the game as they went along. Pestered by overproduction in the early oil industry, Rockefeller tirelessly mocked those “academic enthusiasts” and “sentimentalists” who expected business to conform to their tidy competitive models. Like some of his contemporaries, he didn’t see how they could build vast, enduring industries in a volatile economy disrupted by recessions, deflation, and explosive boom-and-bust cycles, and he decided to subjugate markets instead of responding endlessly to their changing price signals. Thus, Rockefeller and other industrial captains conspired to kill competitive capitalism in favor of a new monopoly capitalism.
Names: John D. Rockefeller, Sr. · Civil War
EPUB paragraph 59 · Text/Cher_9780307429773_epub_c08_r1.htm
Economic historians often cite the exuberance of Gilded Age businessmen, their red-blooded faith in America’s future, without noting the constant uncertainty that lurked underneath. As Rockefeller’s story shows, many of the age’s most controversial business practices were forged in a desperate spirit of self-preservation. “It was forced upon us,” Rockefeller said of Standard Oil’s genesis. “We had to do it in self-defence. The oil business was in confusion and daily growing worse. Someone had to make a stand.” Though he foresaw the triumph of cooperation, its far-ranging ramifications weren’t yet clear to him. “This movement was the origin of the whole system of economic administration. It has revolutionized the way of doing business all over the world. The time was ripe for it. It had to come, though all we saw at the moment was the need to save ourselves from wasteful conditions.” Then he added, as if enunciating his economic credo: “The day of combination is here to stay. Individualism has gone, never to return”
Names: John D. Rockefeller, Sr. · Standard Oil · United States · Gilded Age
EPUB paragraph 60 · Text/Cher_9780307429773_epub_c08_r1.htm
Of course, companies had colluded to restrain the open play of market forces before. In Europe, guilds and state monopolies were of ancient provenance, and even Adam Smith had noted the alacrity with which businessmen hatched conspiracies against consumers. In 1872, Standard Oil was just one of many companies whose leaders had daydreams of controlling prices and production throughout their industry. When the SIC scheme surfaced, one newspaper observed, “This great monopoly is one of many now forming to control the commercial products of this great nation,” and it referred to the western grain and livestock trades as analogous situations. As his own inspiration, Rockefeller cited Western Union, then busily buying up small telegraph lines, and the New York Central Railroad, which had consolidated its trunk line from the Atlantic seaboard to Chicago. During the 1870s, pools and rings flourished among salt, rope, and whiskey concerns.
Names: John D. Rockefeller, Sr. · Standard Oil · South Improvement Company · New York Central · Chicago · Europe · Adam Smith · Atlantic · Western Union
EPUB paragraph 61 · Text/Cher_9780307429773_epub_c08_r1.htm
It was only fitting that someone with Rockefeller’s personality and values should have questioned the canons of free-for-all capitalism. If the most creative and dynamic of economic systems, capitalism can also seem wasteful and inefficient to those who endure its rocky transitions and violent dislocations. By bringing forth superior methods, capitalism renders existing skills and equipment outmoded and thus fosters unceasing turmoil and change. Such a mutable system violated Rockefeller’s need for stability, order, and predictability. Indeed, the sober, thrifty Puritan identified by Max Weber as the prototypical capitalist was almost certain to feel distressed by this unstable economy, which forced him to steer his orderly business through a maelstrom of incessant change.
Names: John D. Rockefeller, Sr. · Max Weber
EPUB paragraph 62 · Text/Cher_9780307429773_epub_c08_r1.htm
From the three-year interview he gave privately to William O. Inglis in the late 1910s, it is clear that Rockefeller brooded for many years on a theoretical defense of monopoly. His comments are fragmentary and do not cohere into a full-blown system, yet they show that he gave the subject a great deal of intelligent thought, much more than one might have expected. He knew that he had latched on to a mighty new principle, and arose as the prophet of a new dispensation in economic history. As he said, “It was the battle of the new idea of cooperation against competition, and perhaps in no department of business was there a greater necessity for this cooperation than in the oil business.”
EPUB paragraph 63 · Text/Cher_9780307429773_epub_c08_r1.htm
Rockefeller’s logic deserves some scrutiny. If, as he asserted, Standard Oil was the efficient, low-cost producer in Cleveland, why didn’t he just sit back and wait for competitors to go bankrupt? Why did he resort to the tremendous expense of taking over rivals and dismembering their refineries to slash capacity? According to the standard textbook models of competition, as oil prices fell below production costs, refiners should have retrenched and padlocked plants. But the oil market didn’t correct itself in this manner because refiners carried heavy bank debt and other fixed costs, and they discovered that, by operating at a loss, they could still service some debt. Obviously, they couldn’t lose money indefinitely, but as they soldiered on to postpone bankruptcy, their output dragged oil prices down to unprofitable levels for everybody.
Names: John D. Rockefeller, Sr. · Standard Oil · Cleveland
EPUB paragraph 64 · Text/Cher_9780307429773_epub_c08_r1.htm
Hence, a perverse effect of the invisible hand: Each refiner, pursuing his own self-interest, generated collective misery. As Rockefeller phrased it, “Every man assumed to struggle hard to get all of the business … even though in so doing he brought to himself and the competitors in the business nothing but disaster.” In a day of primitive accounting systems, many refiners had only the haziest notion of their profitability or lack thereof. As Rockefeller noted, “oftentimes the most difficult competition comes, not from the strong, the intelligent, the conservative competitor, but from the man who is holding on by the eyelids and is ignorant of his costs, and anyway he’s got to keep running or bust!”
Names: John D. Rockefeller, Sr.
EPUB paragraph 65 · Text/Cher_9780307429773_epub_c08_r1.htm
What made an expeditious shutdown of outmoded rivals vital to Rockefeller was that he had borrowed heavily to build gigantic plants so that he could drastically slash his unit costs. Even his first partner, Maurice Clark, remembered that “the volume of trade was what he always regarded as of paramount importance.” Early on, Rockefeller realized that in the capital-intensive refining business, sheer size mattered greatly because it translated into economies of scale. Once, describing the “foundation principle” of Standard Oil, he said it was the “theory of the originators … that the larger the volume the better the opportunities for the economies, and consequently the better the opportunities for giving the public a cheaper product without … the dreadful competition of the late ’60’s ruining the business.” During his career, Rockefeller cut the unit costs of refined oil almost in half, and he never deviated from this gospel of industrial efficiency.
Names: John D. Rockefeller, Sr. · Maurice B. Clark · Standard Oil
EPUB paragraph 66 · Text/Cher_9780307429773_epub_c08_r1.htm
To service the outsize debt that made this possible, Rockefeller needed to smooth out the inordinate price fluctuations that made the oil business so hazardous. Realizing that the higher the economic peaks the deeper the subsequent troughs, Rockefeller feared booms no less than busts. “Neither the depressions nor the advances were profitable. The depressions gave occasion to the advances; so that the conditions of the depressions had to be offset by the advances. I concede that so far as the oil industry was concerned we were successful in preventing to an extent these extremes so trying and unprofitable.”Rockefeller preferred moderate growth purely as a matter of self-interest. His goal was to forestall potential competitors through low prices and thus minimize risk and chance disruptions. By this approach, Rockefeller believed, he could beneficently spare Standard Oil employees the plight of other industrial workers who “find themselves in each period of ten or fifteen years in destitute circumstances, with bankrupt employers, owing to the foolish and universal competitive methods accompanying the excessive production of any and all products.”
Names: John D. Rockefeller, Sr. · Standard Oil
EPUB paragraph 67 · Text/Cher_9780307429773_epub_c08_r1.htm
At times, when he railed against cutthroat competition and the vagaries of the business cycle, Rockefeller sounded more like Karl Marx than our classical image of the capitalist. Like the Marxists, he believed that the competitive free-for-all eventually gave way to monopoly and that large industrial-planning units were the most sensible way to manage an economy. But while Rockefeller had faith in such private monopolies, the Marxists saw them as merely halfway houses on the road to socialism.
Names: John D. Rockefeller, Sr. · Karl Marx
EPUB paragraph 68 · Text/Cher_9780307429773_epub_c08_r1.htm
The most tantalizing question in Rockefeller’s story—and one that allows no final answer—is whether Standard Oil stimulated or retarded the oil industry’s growth. Rockefeller’s foremost academic supporter, Allan Nevins, believed that after the Civil War it was so cheap and easy to enter oil refining that only a monopoly could have curbed surplus capacity and brought order to the industry. Without Standard Oil, he argued, the business would have fragmented into small, antiquated units, and oil gluts, with their accompanying low prices, would have persisted indefinitely. Rockefeller believed that only a firm with the strength of Standard Oil could have attained the necessary economies of scale at that stage of the industry’s development.
Names: John D. Rockefeller, Sr. · Allan Nevins · Standard Oil · Civil War
EPUB paragraph 69 · Text/Cher_9780307429773_epub_c08_r1.htm
Long after Rockefeller had exited the industrial scene, various economists, while espousing the general superiority of competition, conceded the economic wisdom of trusts under certain conditions. The conservative, Austrian-born economist Joseph A. Schumpeter, for example, contended that monopolies might prove beneficial during depressions or in new, rapidly shifting industries. By replacing turmoil with stability, a monopoly “may make fortresses out of what otherwise might be centers of devastation” and “in the end produce not only steadier but also greater expansion of total output than could be secured by an entirely uncontrolled onward rush that cannot fail to be studded with catastrophes.” Schumpeter imagined that entrepreneurs wouldn’t commit large sums to risky ventures if the future seemed cloudy and new competitors could easily spoil their plans. “On the one hand, largest-scale plans could in many cases not materialize at all if it were not known from the outset that competition will be discouraged by heavy capital requirements or lack of experience, or that means are available to discourage or checkmate it so as to gain the time and space for further developments.” As we shall see, Rockefeller keenly felt a need to freeze the industry’s size, stymie new entrants, and create an island of stability in which expansion and innovation could then occur unimpeded.
Names: John D. Rockefeller, Sr. · Joseph A. Schumpeter · Schumpeter
EPUB paragraph 70 · Text/Cher_9780307429773_epub_c08_r1.htm
When Rockefeller took over competing refiners, he retained plants with up-to-date facilities and shuttered obsolete ones. It would have been impossible to shrink the industry and steady prices, however, if those who sold their outmoded plants took the money only to open new refineries. Unencumbered by antitrust laws, Rockefeller forced these refiners to sign restrictive contracts that prohibited them from sneaking back into the oil business. Rockefeller regarded these agreements—which would today be outlawed as in restraint of trade—as sacred obligations. For the most part, they were faithfully honored, though on several occasions Rockefeller hauled violators into court.
Names: John D. Rockefeller, Sr.
EPUB paragraph 71 · Text/Cher_9780307429773_epub_c08_r1.htm
For all the uproar about Rockefeller’s predatory tactics, many refiners continued to defy him, and dozens of small independents survived outside of Standard Oil. Rockefeller lured many of them into his tent with an intermediate step that he called “running arrangements,” in which Standard Oil guaranteed them a certain level of profits if they accepted a ceiling on their output. This allowed Standard Oil to restrict the output of rivals and made Rockefeller, a hundred years before the Organization of Petroleum Exporting Countries (OPEC), the chief administrator of a sweeping oil cartel. Much like OPEC leaders, Rockefeller had to arbitrate demands for increased quotas among restive members and cope with the immemorial problem of cartels: how to prevent cheaters. Whenever refiners with running arrangements exceeded their assigned allotment, Standard Oil, as the swing producer, curtailed its own output to maintain prices—exactly the dilemma faced by Saudi Arabia as the world’s largest oil exporter in the 1970s. This situation steeled Rockefeller in his determination to own his competitors instead of just presiding over a confederation of perennially warring members.
Names: John D. Rockefeller, Sr. · Standard Oil · OPEC · Saudi Arabia · Organization of Petroleum Exporting Countries
EPUB paragraph 72 · Text/Cher_9780307429773_epub_c08_r1.htm
Where Rockefeller differed most from his fellow moguls was that he wanted to be both rich and virtuous and claim divine sanction for his actions. Perhaps no other businessman in American history has felt so firmly on the side of the angels. Critics were quick to spy an oily sanctimony in this servant of God and Mammon and wonder why his religious beliefs didn’t trammel his acquisitive nature. They converted him into a wily Machiavellian or a stock figure from a Balzac novel—the pious, cunning hypocrite who showily attends church on Sunday then spends the rest of the week trampling rivals underfoot. More generous critics argued that he simply led parallel lives, with a complete separation of his public and private selves. Rockefeller himself felt no such discontinuity and always insisted that his private and commercial activities should be judged by the same exacting standards. Many years later, William O. Inglis read to him John Milton’s stern denunciation of King Charles I: “For his private virtues they are beside the question. If he oppress and extort all day, shall he be held blameless because he prayeth night and morn?” In response, Rockefeller exclaimed, “That’s well put! And the oil men have got to stand the test of that.”Clearly, he felt that his business conduct could withstand the most rigorous scrutiny.
Names: John D. Rockefeller, Sr. · William O. Inglis · John Milton · Pratt. Charles, Sr. · King · Mammon · Balzac
EPUB paragraph 73 · Text/Cher_9780307429773_epub_c08_r1.htm
It is too glib to say that Rockefeller was a hypocrite who used his piety as a cloak for greed. The voice that reverberated in his ears was one of burning zeal, not low, devious cunning. He was a sincere if highly self-serving churchgoer and, however deluded, extremely devout. From an early age, he had learned both to use and to abuse religion, to interpret and to misinterpret Christian doctrine to suit his purposes. The church provided him with a stock of images and ideas that, instead of checking him, enabled him to proceed with a clear conscience. Religion validated his business misdeeds no less than his charitable bequests, buttressing his strongest impulses. If religion made him great, it also armed him with theological justification for his actions and may have blinded him to their brutal consequences.
Names: John D. Rockefeller, Sr.
EPUB paragraph 74 · Text/Cher_9780307429773_epub_c08_r1.htm
To reiterate an earlier point, John D. regarded God as an ally, a sort of honorary shareholder of Standard Oil who had richly blessed his fortunes. Consider this impassioned outburst he made to a reporter:
Names: John D. Rockefeller, Sr. · Standard Oil
EPUB paragraph 75 · Text/Cher_9780307429773_epub_c08_r1.htm
I believe the power to make money is a gift from God—just as are the instincts for art, music, literature, the doctor’s talent, the nurse’s, yours—to be developed and used to the best of our ability for the good of mankind. Having been endowed with the gift I possess, I believe it is my duty to make money and still more money, and to use the money I make for the good of my fellow man according to the dictates of my conscience.
Names:
EPUB paragraph 76 · Text/Cher_9780307429773_epub_c08_r1.htm
For Rockefeller, there was a perfect fusion of Christianity and capitalism and, given his extensive church involvement, it would have been odd if his career hadn’t been saturated with his own version of evangelical Protestantism. Even the business of drilling and refining oil was wrapped for him in religious mystery. “The whole process seems a miracle,” he once said. “What a blessing the oil has been to mankind!” In pleading for his oil monopoly, Rockefeller always exhibited many qualities of the Baptist missionary. He needed to endow his aggressive business tactics with transcendent purpose and elevate his material designs into holy crusades. When faced with the squalid disorder of the oil business in the early 1870s, he converted Standard Oil, in his own mind, into the moral equivalent of the Baptist Church. His career as a trust king would be for him a Christian saga, a pilgrim’s progress, where he was the exemplary man, rescuing sinful refiners from their errant ways.
Names: John D. Rockefeller, Sr. · Standard Oil · Baptist Church
EPUB paragraph 77 · Text/Cher_9780307429773_epub_c08_r1.htm
What’s most striking, both in the extensive Inglis interview and elsewhere, is that every time Rockefeller explained the rationale for Standard Oil, he resorted to patently religious imagery. “The Standard was an angel of mercy, reaching down from the sky, and saying, ‘Get into the ark. Put in your old junk. We’ll take all the risks!’ ” He referred to Standard Oil as “the Moses who delivered them [the refiners] from their folly which had wrought such havoc in their fortunes.” Charged with destroying competition, Rockefeller was indignant: “I repeat again, it was not a process of destruction and waste; it was a process of upbuilding and conservation of all the interests … in our efforts most heroic, well meant—and I would almost say, reverently, Godlike—to pull this broken-down industry out of the Slough of Despond [for which] we are charged with criminal proceedings.” Far from being an outlaw band, Standard Oil had “rendered a missionary service to the whole world. Strong as this statement is, it is the Gospel truth.” Further, “Faith and work were the rocks upon which Standard Oil was built.” He credited Standard Oil with “the salvation of the oil business and making it a reputable pursuit instead of a disgraceful, gambling, mining scheme.” While he and his partners were “missionaries of light” and tried to treat weaker competitors with compassion, there were limits to their tolerance since they could not “stop the car of salvation in their great enterprise which meant so much to the consuming public the world over.” If his stewardship of Standard Oil exposed him to vitriolic persecution, it was exactly the martyrdom he expected.
Names: John D. Rockefeller, Sr. · William O. Inglis · Standard Oil · Strong · Moses
EPUB paragraph 78 · Text/Cher_9780307429773_epub_c08_r1.htm
Rockefeller has often been described as a social Darwinist who viewed the harsh struggle of capitalism as a salutary process that rewarded the industrious and punished the lazy. And it is true that he adamantly opposed any government program or private charity that sapped the frontier spirit of self-reliance. Yet Rockefeller could hold contradictory views on essential matters, and his philosophic justification of cooperation rested heavily upon a direct refutation of social Darwinism:
Names: John D. Rockefeller, Sr.
EPUB paragraph 79 · Text/Cher_9780307429773_epub_c08_r1.htm
The struggle for the survival of the fittest, in the sea and on the land the world over, as well as the law of supply and demand, were observed in all the ages past until the Standard Oil Company preached the doctrines of cooperation, and it did cooperate so successfully and so fairly that its most bitter opponents were won over to its views and made to realize that rational, sane, modern, progressive administration was necessary to success.
Names: Standard Oil
EPUB paragraph 80 · Text/Cher_9780307429773_epub_c08_r1.htm
Standard Oil was thus presented as the antidote to social Darwinism, a way to bring universal brotherhood to a fractious industry. Without Standard Oil, said Rockefeller, “there would have been the survival of the fittest—and we had proved ourselves to be the fittest, and we could have picked up the wrecks as the less fortunate brethren went down. This we did not do, but tried to call a halt and avert the impending disaster.” Standard Oil would be a cooperative commonwealth, open to refiners who renounced their selfish ways to join the faithful. It would be for Rockefeller a unique case of the strong showing mercy to their weaker brethren by inviting them to participate in a common effort to save the industry.
Names: John D. Rockefeller, Sr. · Standard Oil
EPUB paragraph 81 · Text/Cher_9780307429773_epub_c08_r1.htm
In a critical distinction, he viewed competitive capitalism—and not capitalism per se—as producing a vulgar materialism and rapacious business practices that dissolved the bonds of human brotherhood. In a state of ungoverned competition, selfish individuals tried to maximize their profits and thereby impoverished the entire industry. What the American economy needed instead were new cooperative forms (trusts, pools, monopolies) that would restrain grasping individuals for the general good. Rockefeller thus tried to reconcile trusts with Christianity, claiming that cooperation would end the egotism and materialism abhorrent to Christian values. It was an ingenious rationalization. While religion did not lead him to the concept of trusts, it did enable him to invest his vision of cooperation with a powerful moral imperative.
Names: John D. Rockefeller, Sr.
EPUB paragraph 82 · Text/Cher_9780307429773_epub_c08_r1.htm
From the outset, Standard Oil was permeated by an us-versus-them attitude that emanated from the top. At moments, Rockefeller made it sound as if he and his colleagues were a band of early Christians, misunderstood by the pagans. In this moralistic frame of mind, he was bound to see his opponents as benighted, misguided people, “governed by their narrow jealousies and unwarranted prejudices” and unaware that the old gods were now obsolete.Rockefeller developed an inverted worldview, accusing his critics of exactly the same sins of which they accused him. Far from seeing himself as a rascal or bully, the Standard Oil chieftain presented himself as a respectable gentleman who attempted in vain to reason with wicked independents. In his correspondence, Rockefeller betrayed a characteristic manner of referring to his rivals: They were selfish people forever stirring up trouble or creating annoyances, like so many mischievous children who needed a good stiff spanking from father. Never conceding any legitimacy to dissent, Rockefeller denigrated his critics as blackmailers, sharpsters, and crooks. He was now dangerously impervious to criticism.
Names: John D. Rockefeller, Sr. · Standard Oil
EPUB paragraph 83 · Text/Cher_9780307429773_epub_c08_r1.htm
Charles Pratt, Sr., Rockefeller’s colleague and frequent adversary. (Courtesy of the Rockefeller Archive Center)
Names: John D. Rockefeller, Sr. · Charles Pratt · Rockefeller Archive Center
EPUB paragraph 1 · Text/Cher_9780307429773_epub_c09_r1.htm
resh from the South Improvement Company brouhaha and the bruising struggle over the Cleveland refineries, Rockefeller didn’t pause to catch breath. Anybody else might have consolidated his gains and proceeded cautiously, but Rockefeller, a man in a hurry, launched a new offensive instead. The SIC contretemps had stranded him in an untenable spot. Since Cleveland refiners paid the same freight rates as other refining centers, they labored under a huge competitive handicap, paying fifty cents a barrel just to ship crude oil to Cleveland before sending on the refined oil to New York; by contrast, a Titusville refiner shipped straight to the seaboard. In April 1872, Henry Flagler again extracted concessions from the Lake Shore Railroad but not enough to appease Rockefeller. Because the Pittsburgh refiners shared a similar cost disadvantage, Rockefeller decided to make common cause with them and press the railroads for new discounts.
Names: John D. Rockefeller, Sr. · Henry M. Flagler · South Improvement Company · Cleveland · New York · Titusville · Pittsburgh · Lake Shore Railroad
EPUB paragraph 2 · Text/Cher_9780307429773_epub_c09_r1.htm
With unmitigated cheek, Rockefeller decided that if the Oil Regions couldn’t tolerate a small, secret consortium such as the SIC, he would confront them with a giant public consortium of refiners. In mid-May 1872—scarcely more than a month after the railroads scrapped the SIC—Rockefeller and Flagler journeyed to Pittsburgh to meet with the city’s three foremost refiners, William G. Warden, William Frew, and O. T. Waring. The group then went by train to Titusville, bearing a plan for a new National Refiners’ Association, which would be popularly dubbed the Pittsburgh Plan. This venture envisioned a new refiners’ cartel, headed by a central board that would negotiate advantageous terms with the railroads and maintain prices by assigning refining quotas to members. Eschewing subterfuge, the confederation was thrown open to all refiners, but with John D. Rockefeller serving as president.
Names: John D. Rockefeller, Sr. · Henry M. Flagler · William G. Warden · South Improvement Company · Titusville · Oil Regions · Pittsburgh · William Frew · Pittsburgh Plan · O. T. Waring · National Refiners’ Association
EPUB paragraph 3 · Text/Cher_9780307429773_epub_c09_r1.htm
Before long, Rockefeller was so detested in the Oil Regions that he ceased to visit and retreated to the status of a dim, shadowy legend; no authenticated photo shows him in the rural backwater to which he owed his fortune. Though the National Refiners’ Association theoretically embraced all comers, the Titusville refiners saw the group as the old SIC in disguise, and local newspapers admonished oilmen to beware of the slippery, smooth-talking men from Cleveland. On the Titusville streets, Rockefeller was greeted with the somber respect accorded a new monarch. As always, he presented a cordial façade that disarmed people and in one office after another reassured wary refiners, “You misunderstand our intention. It is to save the business, not to destroy it that we are come.” At two turbulent public meetings, Flagler was hooted and jeered while Rockefeller stared impassively at the audience. One refiner left an indelible portrait of Rockefeller’s aloof, cryptic manner at a private meeting:
Names: John D. Rockefeller, Sr. · Henry M. Flagler · South Improvement Company · Cleveland · Titusville · Oil Regions · National Refiners’ Association
EPUB paragraph 4 · Text/Cher_9780307429773_epub_c09_r1.htm
One day several of us met at the office of one of the refiners, who, I felt pretty sure, was being persuaded to go into the scheme which they were talking up. Everybody talked except Mr. Rockefeller. He sat in a rocking chair, softly swinging back and forth, his hands over his face. I got pretty excited when I saw how those South Improvement men were pulling the wool over our men’s eyes, and making them believe we were all going to the dogs if there wasn’t an immediate combination to put up the price of refined and prevent new people coming into the business, and I made a speech which, I guess, was pretty warlike. Well, right in the middle of it John Rockefeller stopped rocking and took down his hands and looked at me. You never saw such eyes. He took me all in, saw just how much fight he could expect from me, and I knew it, and then up went his hands and back and forth went his chair.
Names: John D. Rockefeller, Sr. · John Rockefeller · South Improvement
EPUB paragraph 5 · Text/Cher_9780307429773_epub_c09_r1.htm
At a second big public meeting, the Pittsburgh Plan was defeated resoundingly by local refiners, yet Rockefeller still gained ground, having enlisted influential local defectors, especially his erstwhile foe, young John D. Archbold. During the following months, in a divide-and-conquer policy, Rockefeller tried to isolate the Oil Creek refiners by successfully recruiting into his Pittsburgh Plan refiners from the other major centers.
Names: John D. Rockefeller, Sr. · John D. Archbold · Oil Creek · Pittsburgh Plan
EPUB paragraph 6 · Text/Cher_9780307429773_epub_c09_r1.htm
But before long, this cartel was bedeviled by cheaters exceeding their quotas. It also grappled with what economists call the “free rider” problem—that is, opportunistic refiners stayed outside the plan and enjoyed the higher prices it produced without being bound by its production limits. As Rockefeller later said in a comparable situation, “These men who claimed that they had been ‘crushed’ and ‘ruined’ by the Standard Oil Company were existing under its shelter and protection.” And he was besieged by problems closer to home. After Standard Oil bought decrepit old refineries in Cleveland to cut back on capacity, many sellers violated their covenants and started up new plants with improved equipment. They were drawn back, Rockefeller argued, only because he had markedly improved conditions and boosted prices. To complicate matters, new refiners now entered the business expressly to blackmail him into buying them out.
Names: John D. Rockefeller, Sr. · Standard Oil · Cleveland
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