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"It has not only sought markets for its principal products but for all possible by-products, sparing no expense in introducing them to the public in every nook and corner of the world."

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"It has sought for the best superintendents and workmen and paid the best wages. It has not hesitated to sacrifice old machinery and old plants for new and better ones. It has placed its manufactories at the points where they could supply markets at the least expense."

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He made sure that his employees were paid well and that the oil he sent out to the public was of the highest efficiency

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John D. Rockefeller Comments on the Success of the Standard Oil Company, 1909

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The discovery of oil in Titusville, Pennsylvania, in 1859 led to unprecedented growth in western Pennsylvania and changed American industry. John D. Rockefeller soon realized that oil refining and transportation were the keys to success in the oil business. He established Standard Oil Trust in 1882, which later controlled more than 80 percent of U.S. oil production. Rockefeller's confidence, ambition, and ruthlessness made him the richest man in country. In the following excerpt from Random Reminiscences of Man and Events, Rockefeller describes the establishment and success of Standard Oil.

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The story of the early history of the oil trade is too well known to bear repeating in detail. The cleansing of crude petroleum was a simple and easy process, and at first the profits were very large. Naturally, all sorts of people went into it; the butcher, the baker, and the candlestick maker began to refine oil, and it was only a short time before more of the finished product was put on the market than could possibly be consumed. The price went down and down until the trade was threatened with ruin. It seemed absolutely necessary to extend the market for oil by exporting to foreign countries, which required a long and most difficult development, and also to greatly improve the processes of refining so that oil could be made and sold cheaply, yet with a profit, and to use as by-products all of the materials which in the less efficient plants were lost or thrown away.

These were the problems which confronted us almost at the outset, and this great depression led to consultations with our neighbors and friends in the business in the effort to bring some order out of what was rapidly becoming a state of chaos. To accomplish all these tasks of enlarging the market and improving the methods of manufacture in a large way was beyond the power or ability of any concern as then constituted. It could only be done, we reasoned, by increasing our capital and availing ourselves of the best talent and experience.

It was with this idea that we proceeded to buy the largest and best refining concerns and centralize the administration of them with a view to securing greater economy and efficiency. The business grew faster than we anticipated.

This enterprise, conducted by men of application and ability working hard together, soon built up unusual facilities in manufacture, in transportation, in finance, and in extending markets. We had our troubles and setbacks; we suffered from some severe fires; and the supply of crude oil was most uncertain. Our plans were constantly changed by changed conditions. We developed great facilities in an oil center, erected storage tanks, and connected pipe lines; then the oil failed and our work was thrown away. At best it was a speculative trade, and I wonder that we managed to pull through so often, but we were gradually learning how to conduct a most difficult business....

I ascribe the success of the Standard Oil Company to its consistent policy of making the volume of its business large through the merit and cheapness of its products. It has spared no expense in utilizing the best and most efficient method of manufacture. It has sought for the best superintendents and workmen and paid the best wages. It has not hesitated to sacrifice old machinery and old plants for new and better ones. It has placed its manufactories at the points where they could supply markets at the least expense. It has not only sought markets for its principal products but for all possible by-products, sparing no expense in introducing them to the public in every nook and corner of the world. It has not hesitated to invest millions of dollars in methods for cheapening the gathering and distribution of oils by pipe lines, special cars, tank-steamers, and tank-wagons. It has erected tank stations at railroad centers in every part of the country to cheapen the storage and delivery of oil. It has had faith in American oil and has brought together vast sums of money for the purpose of making it what it is and for holding its market against the competition of Russia and all the countries which are producers of oil and competitors against American products.

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The discovery of oil in Titusville, Pennsylvania, in 1859 led to unprecedented growth in western Pennsylvania and changed American industry. John D. Rockefeller soon realized that oil refining and transportation were the keys to success in the oil business. He established Standard Oil Trust in 1882, which later controlled more than 80 percent of U.S.

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In 1903, investigative journalist Ida M. Tarbell wrote a series of muckraking articles accusing John D. Rockefeller of resorting to predatory tactics that enabled his company, Standard Oil Trust, to gain a monopoly of the oil market. Published in McClure's Magazine, Tarbell's articles belied the popular notion that Rockefeller's success was a result of hard work and determination, leading to public outrage regarding the power of business trusts, particularly Standard Oil. In 1911, almost a decade after Tarbell's exposé, Standard Oil was ordered to break up into a number of smaller companies.

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It was inevitable that under the pressure of their indignation and resentment some person or persons should be fixed upon as responsible, and should be hated accordingly. Before the lifting of the embargo this responsibility had been fixed. It was the Standard Oil Company of Cleveland, so the Oil Regions decided, which was at the bottom of the business, and the "Mephistopheles of the Cleveland Company," as they put it, was John D. Rockefeller. Even the Cleveland Herald acknowledged this popular judgment. "Whether justly or unjustly," the editor wrote, "Cleveland has the odium of having originated the scheme." This opinion gained ground as the days passed. The activity of the president of the Standard in New York, in trying to save the contracts with the railroads, and his constant appearance with Mr. Watson, and the fact brought out by the Congressional investigation that a larger block of the South Improvement Company's stock was owned in the Standard than in any other firm, strengthened the belief. But what did more than anything else to fix the conviction was what they had learned of the career of the Standard Oil Company in Cleveland. Before the oil war the company had been known simply as one of several successful firms in that city. It drove close bargains, but it paid promptly, and was considered a desirable customer. Now the Oil Regions learned for the first time of the sudden and phenomenal expansion of the company. Where there had been at the beginning of 1872 twenty-six refining firms in Cleveland, there were but six left. In three months before and during the oil war the Standard had absorbed twenty plants. It was generally charged by the Cleveland refiners that Mr. Rockefeller had used the South Improvement scheme to persuade or compel his rivals to sell to him. "Why," cried the oil men, "the Standard Oil Company has done already in Cleveland what the South Improvement Company set out to do for the whole country, and it has done it by the same means."

By the time the blockade was raised, another unhappy conviction was fixed on the Oil Regions-the Standard Oil Company meant to carry out the plans of the exploded South Improvement Company. The promoters of the scheme were partly responsible for the report. Under the smart of their defeat they talked rather more freely than their policy of silence justified, and their remarks were quoted widely. Mr. Rockefeller was reported in the "Derrick" to have said to a prominent oil man of Oil City that the South Improvement Company could work under the charter of the Standard Oil Company, and to have predicted that in less than two months the gentleman would be glad to join him. The newspapers made much of the following similar story reported by a New York correspondent:

A prominent Cleveland member of what was the South Improvement Company had said within two days, "The business now will be done by the Standard Oil Company. We have a rate of freight by water from Cleveland to New York at 70 cents. No man in the trade shall make a dollar this year. We propose so manipulating the market as to run the price of crude on the Creek as low as two and a half. We mean to show the world that the South Improvement Company was organized for business and means business in spite of opposition. The same thing has been said in substance by the leading Philadelphia member."

"The trade here regards the Standard Oil Company as simply taking the place of the South Improvement Company and as being ready at any moment to make the same attempt to control the trade as its progenitors did," said the New York Bulletin about the middle of April. And the Cleveland Herald discussed the situation under the heading, "South Improvement Company alias Standard Oil Company." The effect of these reports in the Oil Regions was most disastrous. Their open war became a kind of guerrilla opposition. Those who sold oil to the Standard were ostracized, and its president was openly scorned.

Mr. Rockefeller Begins All Over Again

If Mr. Rockefeller had been an ordinary man the outburst of popular contempt and suspicion which suddenly poured on his head would have thwarted and crushed him. But he was no ordinary man. He had the powerful imagination to see what might be done with the oil business if it could be centered in his hands-the intelligence to analyze the problem into its elements and to find the key to control. He had the essential element to all great achievement, a steadfastness to a purpose once conceived which nothing can crush. The Oil Regions might rage, call him a conspirator and those who sold him oil traitors; the railroads might withdraw their contracts and the legislature annul his charter; undisturbed and unresting he kept at his great purpose. Even if his nature had not been such as to forbid him to abandon an enterprise in which he saw promise of vast profits, even if he had not had a mind which, stopped by a wall, burrows under or creeps around, he would nevertheless have been forced to desperate efforts to save his business. He had increased his refining capacity in Cleveland to 10,000 barrels on the strength of the South Improvement Company contracts. These contracts were annulled, and in their place was one signed by officials of all the oil-shipping roads refusing rebates to everybody. His geographical position was such that it cost him under these new contracts 50 cents more to get oil from the wells to New York than it did his rivals on the Creek. What could he do?

Mr. Rockefeller Gets A Rebate

He got a rebate. In spite of the binding nature of the contracts signed in New York on March 25th by representatives of all the railroads, before the middle of April the Standard Oil Company was shipping oil eastward from Cleveland for $1.25-this by the sworn testimony of Mr. H.M. Flagler before a commission of the Ohio State Legislature, in March, 1879. How much less a rate than $1.25 Mr. Rockefeller had before the end of April the writer does not know. Of course the rate was secret, and he probably understood now, as he had not two months before, how essential it was that he keep it secret. His task was more difficult now, for he had an enemy active, clamorous, contemptuous, whose suspicions had reached that acute point where they could believe nothing but evil of him-the producers and independents of the Oil Regions. It was utterly impossible that he should ever silence this enemy, for their points of view were diametrically opposed.

They believed in independent effort-every man for himself and fair play for all. They wanted competition, loved open fight. They considered that all business should be done openly-that the railways were bound as public carriers to give equal rates-that any combination which favored one firm or one locality at the expense of another was unjust and illegal.

Mr. Rockefeller's Opinions And Character

Mr. Rockefeller's point of view was different. He believed that the "good of all" was in a combination which would control the business as the South Improvement Company proposed to control it. Such a combination would end at once all the abuses the business suffered. As rebates and special rates were essential to this control, he favored them. Of course Mr. Rockefeller knew that the railroad was a public carrier, and that its charter forbade discrimination. But he knew that the railroads did not pretend to obey the laws governing them, that they regularly granted special rates and rebates to those who had large amounts of freight. That is, you could bargain with the railroads as you could with a man carrying on a strictly private business depending in no way on a public franchise. Moreover, Mr. Rockefeller knew that if he did not get rebates somebody else would; that they were for the wariest, the shrewdest, the most persistent. If somebody was to get rebates, why not he? This point of view was no uncommon one. Many men held it and felt a sort of scorn, as practical men always do for theorists, when it was contended that the shipper was as wrong in taking rates as the railroads in granting them.

Thus, on one hand there was an exaggerated sense of personal independence, on the other a firm belief in combination; on one hand a determination to root out the vicious system of rebates practised by the railway, on the other a determination to keep it alive and profit by it. Those theories which the body of oil men held as vital and fundamental Mr. Rockefeller and his associates either did not comprehend or were deaf to. This lack of comprehension by many men of what seems to other men to be the most obvious principles of justice is not rare. Many men who are widely known as good, share it. Mr. Rockefeller was "good." There was no more faithful Baptist in Cleveland than he. Every enterprise of that church he had supported liberally from his youth. He gave to its poor. He visited its sick. He wept with its suffering. Moreover, he gave unostentatiously to many outside charities of whose worthiness he was satisfied. He was simple and frugal in his habits. He never went to the theater, never drank wine. He was a devoted husband, and he gave much time to the training of his children, seeking to develop in them his own habits of economy and of charity. Yet he was willing to strain every nerve to obtain for himself special and illegal privileges from the railroads which were bound to ruin every man in the oil business not sharing them with him. Religious emotion and sentiments of charity, propriety and self-denial seem to have taken the place in him of notions of justice and regard for the rights of others.

Unhampered, then, by any ethical consideration, undismayed by the clamor of the Oil Regions, believing firmly as ever that relief for the disorders in the oil business lay in combining and controlling the entire refining interest, this man of vast patience and foresight took up his work. The day after the newspapers of the Oil Regions printed the report of the Congressional Committee on Commerce denouncing the South Improvement Company as "one of the most gigantic and dangerous conspiracies ever attempted," and declaring that if it had not been checked in time it "would have resulted in the absorption and arbitrary control of trade in all the great interests of the country," Mr. Rockefeller and several other members of the South Improvement Company appeared in the Oil Regions. They had come, they explained, to present a new plan of cooperation, and to show the oil men that it was to their interest to go into it. Whether they would be able to obtain by persuasion what they had failed to obtain by assault was now an interesting uncertainty.

Source Citation

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Ida M. Tarbell: "The Oil War of 1872," 1903

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In 1903, investigative journalist Ida M. Tarbell wrote a series of muckraking articles accusing John D. Rockefeller of resorting to predatory tactics that enabled his company, Standard Oil Trust, to gain a monopoly of the oil market.

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"Moreover, Mr. Rockefeller knew that if he did not get rebates somebody else would; that they were for the wariest, the shrewdest, the most persistent."

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Since his company shipped such large amounts of oil by rail, he demanded that the railroads offer him rebates (a discounted rate)

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"'The trade here regards the Standard Oil Company as simply taking the place of the South Improvement Company and as being ready at any moment to make the same attempt to control the trade as its progenitors did,' said the New York Bulletin about the middle of April."

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Many believed he used unethical business practices to amass his extraordinary wealth