EPUB paragraph 35 · Text/Cher_9780307429773_epub_c16_r1.htm
When the Missouri railroad commissioner ordered uniform freight rates in 1888, Thompson advised Rockefeller, “We have reason to think that this order will be withdrawn. At any rate, the roads will pay no attention to it.”
Names: John D. Rockefeller, Sr. · W. P. Thompson · Missouri
EPUB paragraph 36 · Text/Cher_9780307429773_epub_c16_r1.htm
Such oral arrangements may have helped to pacify Standard Oil in the wake of the Interstate Commerce Act. Also, no governmental body could strip it of its giant tank-car fleet and the lucrative royalties they brought in; Standard Oil wasn’t compelled to supply tank cars to competitors. There were even unexpected dividends from the equality prescribed by the act. The new Interstate Commerce Commission said the railroads had to charge the same rate for oil in barrels (used by independents) and in tank cars (used by Standard Oil); as a result, the roads, for the first time, could charge for the weight of the barrels, penalizing independent shippers. For a brief period, the Interstate Commerce Act might have chilled collaboration between trusts and railroads, but they gradually figured out ways to evade the law and slip back into well-worn arrangements. The fight against the railroad rebate remained a hardy perennial of reform politics for a generation. In 1907, Standard Oil was briefly slapped with the largest fine in corporate history for a practice it had supposedly given up long before.
Names: Standard Oil · Interstate Commerce Commission · Interstate Commerce Act
EPUB paragraph 37 · Text/Cher_9780307429773_epub_c16_r1.htm
By the 1888 election, protests against the trusts—oil, whiskey, sugar, and a score of others—had broken out in so many places that the national platforms of both parties harshly condemned economic concentration. Agrarian reformers in the South and West agitated against the railroads as the midwives of monopoly. Protestant evangelicals deplored the moral crisis that accompanied industrialization and the lopsided distribution of wealth. There was a great upsurge of activity among organized labor as membership in the Knights of Labor soared to 700,000 in 1886. That year, policemen fired on picketers at the McCormick reaper plant in Chicago, provoking the protest at the Haymarket in which a bomb exploded, killing seven people. In 1888, Edward Bellamy published his best-selling utopian novel, Looking Backward, with its socialist version of the technocratic society overtaking America. The general public was of two minds and viewed the new entrepreneurs as alternately sinister and heroic. By 1888, Rockefeller began to pop up in fawning magazine features about rich Americans, but he was also singled out as a notorious trust king in Joseph Pulitzer’s World and other papers. The press kept up an editorial drumbeat against Standard Oil, demanding vigorous state and federal antitrust action.
Names: John D. Rockefeller, Sr. · Joseph Pulitzer · Standard Oil · Chicago · United States · South · Edward Bellamy · World · McCormick · West · Knights of Labor
EPUB paragraph 38 · Text/Cher_9780307429773_epub_c16_r1.htm
Amid this crescendo of criticism, Rockefeller again came under the scrutiny of government investigators. When a New York senate committee investigated Standard Oil in 1888, it learned just how elusive he could be. When a process server came to 26 Broadway, he was told that Mr. Rockefeller was out of town. When he went to 4 West Fifty-fourth Street, he was told that Mr. Rockefeller was at home but could not be seen. At this point, the process server spent the night dozing on Rockefeller’s stoop, lest the mogul attempt an early-morning departure. Ringing the doorbell shortly after daybreak, he was told Mr. Rockefeller had left. Blandly denying that he had fled the process server, Rockefeller later explained that he had been in Ohio and hastened back when notified of the investigation. In fact, Rockefeller had also kept his visit to Cleveland a secret because he feared being served there with a subpoena in a suit by local refiners.
Names: John D. Rockefeller, Sr. · Standard Oil · Cleveland · New York · 26 Broadway · Ohio · West Fifty-fourth Street
EPUB paragraph 39 · Text/Cher_9780307429773_epub_c16_r1.htm
To coach Rockefeller for the New York senate hearings, Standard Oil hired an eminent lawyer, Joseph H. Choate. Choate was slow to appreciate his unusual client, who greeted him cordially then stretched out on a couch with a languid air. When Choate tried to sound him out on several company matters, his tight-lipped client revealed nothing. Choate was frustrated by this seemingly indolent man who kept quizzing him. “I wonder how we shall make out with Mr. Rockefeller,” Choate asked Flagler in concern. “He seems so helpless. He is asking questions all the time.” Flagler was amused. “Oh, you will find that he can take care of himself,” he replied. “You needn’t worry about him.”
Names: John D. Rockefeller, Sr. · Henry M. Flagler · Standard Oil · Joseph H. Choate · New York
EPUB paragraph 40 · Text/Cher_9780307429773_epub_c16_r1.htm
Several years earlier, during testimony in Albany, Rockefeller had given identical replies to thirty consecutive questions, declining each time to answer on advice of counsel. This time, he knew he had to be, or at least seem, more forthcoming. On a frosty morning in February 1888, clad impeccably in frock coat and top hat, Rockefeller entered a packed hearing room of the superior court in New York City, flanked by Joseph Choate. Since he was fast becoming a mythical figure, his testimony drew extensive press coverage. Still handsome at forty-eight, with a full head of close-cropped hair and a neat reddish brown mustache, he strode in with a purposeful air. On closer inspection, however, one could detect lines around his eyes, and he seemed older and more tired than a few years earlier. He was now carrying a more onerous burden than he knew.
Names: John D. Rockefeller, Sr. · Joseph H. Choate · New York City · Albany
EPUB paragraph 41 · Text/Cher_9780307429773_epub_c16_r1.htm
Choate soon discovered that he didn’t need to worry about his client. Like many businessmen of his era, Rockefeller prided himself on his obfuscatory powers and excelled at fuzzy answers. Under oath, he turned into a vague and forgetful fellow, pleasant but slightly muddled, who wandered lost in the stupendous maze of Standard Oil. He was also a terrific showman, a trait he inherited from his father. When sworn in on the stand, he “kissed the Bible vehemently,” according to one reporter, underscoring which party had God on its side.
Names: John D. Rockefeller, Sr. · Standard Oil · Joseph H. Choate
EPUB paragraph 42 · Text/Cher_9780307429773_epub_c16_r1.htm
Rockefeller was interrogated by the committee counsel, Roger A. Pryor, a histrionic lawyer who paced back and forth, his lank black hair flying about his shoulders. He fixed Rockefeller with a penetrating eye and shook an accusatory finger at him. Rockefeller remained placid, accentuating the contrast between them in his favor. As one thunderstruck newspaper wrote of Rockefeller, “He seems the embodiment of sweetness and light. His serenity could not be disturbed.… In tones melodious, clear, and deliberate he gave his testimony.… At times his manner was mildly reproachful, at others tenderly persuasive, but never did he betray an ill temper or vexation.” As Choate watched in amazement, Rockefeller maintained an unruffled exterior: His client was not exactly the absent-minded rube he had pictured.
Names: John D. Rockefeller, Sr. · Joseph H. Choate · Roger A. Pryor
EPUB paragraph 43 · Text/Cher_9780307429773_epub_c16_r1.htm
Standard Oil’s strategy was to furnish as little information as possible. As Rockefeller’s associate Paul Babcock advised him in emphatic language, “I think this anti-Trust fever is a craze, which we should meet in a very dignified way and parry every question with answers which while perfectly truthful are evasive of bottom facts! I would avoid the preparation of any statistics.” True to this advice, Rockefeller economized with the truth, yet so little was known about Standard Oil that the most meager information produced sensational headlines. In his testimony, Rockefeller supplied for the first time the Standard Oil trust agreement that had been drawn up in 1882; named the eight current trustees; revealed that the trust now had seven hundred shareholders; and, most startling of all, listed forty-one companies that belonged to the trust—many of which had never publicly disclosed this association before. To refute the notion that Standard Oil was a monopoly, Rockefeller submitted a list of 111 competing refineries and gave his own stirring account of spirited competition from Russian oil.
Names: John D. Rockefeller, Sr. · Standard Oil · Paul Babcock
EPUB paragraph 44 · Text/Cher_9780307429773_epub_c16_r1.htm
The most controversial exchange came when Pryor turned to the darkest episode of Rockefeller’s past: the South Improvement Company. Pryor misspoke and asked if he had ever belonged to the Southern Improvement Company; Rockefeller, quick to spot a slip, denied being a member of such a company. With his superb memory, he remembered that an unused charter had been granted for a Southern Improvement Company. Pryor reacted with disbelief:
Names: John D. Rockefeller, Sr. · South Improvement Company · Pryor · Southern Improvement Company
EPUB paragraph 45 · Text/Cher_9780307429773_epub_c16_r1.htm
“There was such a company?”
Names:
EPUB paragraph 46 · Text/Cher_9780307429773_epub_c16_r1.htm
“I have heard of such a company,” Rockefeller conceded.
Names: John D. Rockefeller, Sr.
EPUB paragraph 47 · Text/Cher_9780307429773_epub_c16_r1.htm
“Were you not in it?”
Names:
EPUB paragraph 48 · Text/Cher_9780307429773_epub_c16_r1.htm
“I was not.”
Names:
EPUB paragraph 49 · Text/Cher_9780307429773_epub_c16_r1.htm
Rockefeller’s later gloss on this testimony reveals his craftiness:
Names: John D. Rockefeller, Sr.
EPUB paragraph 50 · Text/Cher_9780307429773_epub_c16_r1.htm
I never undertake to instruct the man who asks me questions. I remember that incident as if it were this morning.… I did not stop to correct my questioner. There is the record to stand on. Of course, I knew what I was answering.… I did not testify like Mr. Brewster and Mr. Flagler, so hot-tempered that they would fly right into an argument with counsel. I was quiet and self-controlled. It was no part of my duty as a witness to volunteer testimony. While they thought they were leading me into a trap, I let them go into the trap themselves.
Names: Henry M. Flagler · Brewster
EPUB paragraph 51 · Text/Cher_9780307429773_epub_c16_r1.htm
The bane of interrogators, Rockefeller had an eerie gift for catching the subtle drift of a prosecutor’s questions. A distinguished twentieth-century lawyer, Samuel Untermyer, called Rockefeller the ablest mind he had ever encountered on the witness stand, a man with a sixth sense for a legal trap. “He could always read my mind and guess what the next six or seven questions were going to be,” said Untermyer, who cross-examined Rockefeller during litigation in the early 1900s. “I would start with questions intended to lay the foundation for questions far in the future. But I would always see a peculiar light in his eyes which showed that he divined my intention. I have never known a witness who equalled him in this clairvoyant power.” At the February 1888 hearing, Roger Pryor was so impressed by Rockefeller that at the close of questioning, he came to the railing, pumped his hand heartily, and asked if he could visit Standard Oil plants with Rockefeller. As for Joseph Choate, Rockefeller asked casually during the lunch break how he was doing. The chastened lawyer replied, “I could not ask for a better witness.” Choate said later that Rockefeller’s partners “seldom knew what he was thinking but he always knew what we were thinking.”
Names: John D. Rockefeller, Sr. · Standard Oil · Joseph H. Choate · Samuel Untermyer · Roger Pryor
EPUB paragraph 52 · Text/Cher_9780307429773_epub_c16_r1.htm
However well Rockefeller handled his testimony, the committee report threw a lurid light on the workings of Standard Oil, calling it “the most active and possibly the most formidable moneyed power on the continent.” “This is the original trust,” the report stated. “Its success has been the incentive to the formation of all other trusts and combinations. It is the type of a system which has spread like a disease through the commercial system of this country.” The trust floated free of legal restraints, the forty-one constituent companies having “turned their affairs over to an organization having no legal existence, independent of all authority, able to do anything it wanted anywhere, and to this point working in absolute darkness.” While absolving the trust of charges of rapacity, it also dissented from Rockefeller’s portrait of lively competition, calling Standard Oil “almost the sole occupant of the field of oil operations, from which it had driven nearly every competitor.” Standard Oil stood out as the great test case in the growing national debate on antitrust legislation. When the House Committee on Manufactures issued its report on trusts that spring, it dedicated 1,000 of 1,500 pages to the oil trust, five times the space given to the sugar trust and ten times that given to the whiskey trust.
Names: John D. Rockefeller, Sr. · Standard Oil · House Committee on Manufactures
EPUB paragraph 53 · Text/Cher_9780307429773_epub_c16_r1.htm
In a sense, John D. Rockefeller simplified life for the authors of antitrust legislation. His career began in the infancy of the industrial boom, when the economy was still raw and unregulated. Since the rules of the game had not yet been encoded into law, Rockefeller and his fellow industrialists had forged them in the heat of combat. With his customary thoroughness, Rockefeller had devised an encyclopedic stock of anticompetitive weapons. Since he had figured out every conceivable way to restrain trade, rig markets, and suppress competition, all reform-minded legislators had to do was study his career to draw up a comprehensive antitrust agenda.
Names: John D. Rockefeller, Sr.
EPUB paragraph 54 · Text/Cher_9780307429773_epub_c16_r1.htm
Standard Oil had taught the American public an important but paradoxical lesson: Free markets, if left completely to their own devices, can wind up terribly unfree. Competitive capitalism did not exist in a state of nature but had to be defined or restrained by law. Unfettered markets tended frequently toward monopoly or, at least, toward unhealthy levels of concentration, and government sometimes needed to intervene to ensure the full benefits of competition. This was particularly true in the early stages of industrial development. This notion is now so deeply embedded in our laws that it has become all but invisible to us, replaced by secondary debates over the precise nature or extent of antitrust enforcement.
Names: Standard Oil
EPUB paragraph 55 · Text/Cher_9780307429773_epub_c16_r1.htm
During the antitrust agitation of the late 1880s, Standard Oil consistently underestimated the ability of critics to marshal public support. Small businessmen, alleging that the great corporations thwarted individual opportunity, formed a particularly potent lobby for reform. When both Grover Cleveland and Benjamin Harrison inveighed against the trusts in the 1888 presidential campaign, Archbold wrote dismissively to Rockefeller that these strident speeches were just for show. “We do not think that much will come of the talk at Washington regarding Trusts,” he reported that summer. “The demagogues are simply trying to outtalk each other for political effect.”
Names: John D. Rockefeller, Sr. · John D. Archbold · Standard Oil · Grover Cleveland · Benjamin Harrison · Washington
EPUB paragraph 56 · Text/Cher_9780307429773_epub_c16_r1.htm
Archbold proved a poor prognosticator. In a legislative flurry, many states enacted antitrust laws in the late 1880s, while fifteen or sixteen bills circulated in Congress. From Standard Oil’s viewpoint, the most threatening bill was introduced in December 1889 by Ohio senator John Sherman, brother of General William Tecumseh Sherman. A few years earlier, Rockefeller tried to buy his way into the senator’s good graces. In August 1885, soliciting a campaign contribution for Sherman, Mark Hanna had told Rockefeller that “John Sherman is today our main dependence in the Senate for the protection of our business interests.” Dubious at first, Rockefeller finally sent a check for six hundred dollars. Before long, the protector of business interests proved a turncoat, flailing Standard Oil as a corporation so rich that it bought entire railroads. In debates over the senator’s antitrust bill, Standard Oil was constantly held up as a prime example of the problem to be remedied. Flushed into the open, Rockefeller took the unusual step of publicly rebuking Sherman’s legislation. “Senator Sherman’s bill is of a very radical and destructive character, proposing to fine and imprison all who directly or indirectly participate in organizations over which it is even doubtful whether Congress holds any jurisdiction.”
Names: John D. Rockefeller, Sr. · John D. Archbold · Mark Hanna · Standard Oil · John Sherman · Ohio · Sherman · William Tecumseh Sherman
EPUB paragraph 57 · Text/Cher_9780307429773_epub_c16_r1.htm
The opposition of the trusts only hastened passage of the law. On July 2, 1890, President Harrison signed the Sherman Antitrust Act, which outlawed trusts and combinations in restraint of trade and subjected violators to fines of up to $5,000 or a year’s imprisonment or both. President William Howard Taft later identified Standard Oil as the chief reason for the law’s passage. To its proponents, the law proved a severe disappointment, a stillborn piece of legislation. It was vague in meaning and poorly enforced and so riddled with loopholes that it was popularly derided as the Swiss Cheese Act. By outlawing cooperative efforts through trade associations, it forced many companies into mergers to curb excess capacity in their industries, spurring further concentration and subverting the act’s intention. As for the main target of the law, the Standard Oil juggernaut was not deflected by this nuisance. For many years, the Sherman Act was a dead letter, and big business happily went on as usual.
Names: William Howard Taft · Standard Oil · Sherman · Antitrust · Harrison · Sherman Act
EPUB paragraph 58 · Text/Cher_9780307429773_epub_c16_r1.htm
Rockefeller was never tempted to reconsider the issues raised by the Sherman Act. As far as he was concerned, practical, hardheaded businessmen had long ago resolved these issues to their satisfaction, and only fanciful scribblers and tendentious rabble-rousers saw the need to tamper with current practice, which had served the country well. He remained an unreconstructed believer in trusts. Never one to hold grudges in business, unfazed by the new law, Rockefeller supported the reelection of Senator Sherman in 1891.
Names: John D. Rockefeller, Sr. · Sherman · Sherman Act
EPUB paragraph 1 · Text/Cher_9780307429773_epub_c17_r1.htm
y the late 1880s, it seemed as if half the country wanted to lynch John D. Rockefeller, while the other half only wanted to cadge a loan from him. He was assailed by journalists, reform politicians, and embittered rivals but also besieged by a growing legion of flatterers and schemers with designs on his fortune. This national ambivalence must have confirmed Rockefeller’s view that his critics were just envious hypocrites. The press fed this fascination with him. One 1889 newspaper article showcased Rockefeller as America’s richest man, with a net worth of $150 million—an estimate he regarded as much too high, pegging forty to sixty million as the correct range. (That would translate into between $635 and $950 million in contemporary money.) Another article clocked his income pouring in at $750 an hour. Whenever such articles appeared, hordes of supplicants emerged, making bad publicity in many ways less troublesome than favorable coverage. “I have been run down by adventurers during the last few days, owing to some foolish newspaper article,” Rockefeller complained after one flattering piece. He mused, “Great wealth is a great burden, a great responsibility. It invariably proves to be one of two things—either a great blessing or a great curse.”
Names: John D. Rockefeller, Sr. · United States
EPUB paragraph 2 · Text/Cher_9780307429773_epub_c17_r1.htm
Wherever he went, he was now trailed by a small army of petitioners. For someone of Rockefeller’s private nature, it was disconcerting to be approached in the street by strangers seeking money. “Mr. Rockefeller was constantly hunted, stalked and hounded almost like a wild animal,” said Frederick T. Gates, the Baptist minister who would soon help to alleviate the problem. “Neither in the privacy of his home nor at his table, nor in the aisles of his church, nor during his business hours, nor anywhere else, was Mr. Rockefeller secure from insistent appeal.” Supplicants breakfasted with him, rode to and from work with him, dined with him in the evening, then retired with him to the privacy of his study. “The good people who wanted me to help them with their good work seemed to come in crowds,” Rockefeller moaned. “They brought their trunks and lived with me.”
EPUB paragraph 3 · Text/Cher_9780307429773_epub_c17_r1.htm
Rockefeller had always required rest and solitude, but by the late 1880s these petitioners had stolen from his daily schedule those all-important intervals of relaxation:
Names: John D. Rockefeller, Sr.
EPUB paragraph 4 · Text/Cher_9780307429773_epub_c17_r1.htm
At dinner they talked to me and, after dinner, when a little nap and a comfortable lounge, or a restful chair and a quiet family chat seemed about the most desirable occupations until bedtime, these good people would pull up their chairs and begin, “Now, Mr. Rockefeller—.” Then they would tell their story.… There was only one of me and they were a crowd—a crowd increasing in numbers every day. I wanted to retain personal supervision of what little I did in the way of giving, but I also wanted to avoid a breakdown.
Names: John D. Rockefeller, Sr.
EPUB paragraph 5 · Text/Cher_9780307429773_epub_c17_r1.htm
Mountains of mail tumbled in from around the globe, and by 1887 Rockefeller was so oppressed by appeals that he grumbled to brother Frank, “I have been overwhelmed with this sort of thing of late and want to shut down brakes a little until I can catch breath.” The begging letters—many scarcely literate, often scrawled in pencil in foreign tongues—typically pleaded for money to relieve some personal misfortune. People wrote to Rockefeller the way small children pray to God for presents. In 1887, a distraught lady told him, “I wish I could see you and talk with you as I can with God but it seems harder,” while another woman confessed, “Last night as I lay thinking (for I could not sleep for the anxiety) asking the Lord for deliverance you came to me in a way that I could not banish it.”
EPUB paragraph 6 · Text/Cher_9780307429773_epub_c17_r1.htm
The volume of mail defied the imagination. One steamer alone brought five thousand begging letters from Europe. After the announcement of one large educational gift, Rockefeller received fifteen thousand letters during the first week and fifty thousand by the end of the month. He needed a staff just to sift through these appeals. His overtaxed subordinates opened each envelope and tried to identify genuine cases of need, but they could gratify only a tiny fraction of such hopefuls. Many requests were frankly selfish, as Rockefeller tartly noted. “Four-fifths of these letters are, however, requests of money for personal use, with no other title to consideration than that the writer would be gratified to have it.”
Names: John D. Rockefeller, Sr. · Europe
EPUB paragraph 7 · Text/Cher_9780307429773_epub_c17_r1.htm
Although Rockefeller didn’t recognize it at first, brewing here was a personal crisis more debilitating than anything he had encountered in business. As early as 1882, he lamented to the Reverend Edward Judson that he was swamped by charitable appeals, many from Baptist causes. “I am about leaving Cleveland and have a regular deluge of calls from every hand.… I was up until eleven o’clock last night and the night before on this general character of work trying to help to devise ways and means.” Personal charity had long been his pleasure, his pride, his recreation, not something delegated to underlings, and he found it hard to break these honorable habits, especially in the midst of so much controversy about his business methods. As Gates noted of his early years, “He used to meet people, read letters, weigh appeals, send checks and receive grateful replies, all in his own person.” For such a perfectionist, giving money away was fraught with far more nervous tension than making it. He valued money too highly to dispense it lightly and wanted to investigate all requests before acting upon them. As the Lord’s fiduciary, he was responsible for seeing the money well invested. As he said in 1886, “I haven’t a farthing to give to this or any other interest unless I am perfectly satisfied it is the very best I can do with the money.”
Names: John D. Rockefeller, Sr. · Frederick T. Gates · Cleveland · Edward Judson
EPUB paragraph 8 · Text/Cher_9780307429773_epub_c17_r1.htm
John D. Rockefeller striding briskly across the University of Chicago campus with William Rainey Harper. (Courtesy of the University of Chicago Library)
Names: John D. Rockefeller, Sr. · William Rainey Harper · University of Chicago
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