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John D. Rockefeller Table of Contents Introduction 1. Economical and historical background 3 2. John D. Rockefeller as a personality 4 3. John D.
Rockefeller and his leadership skills... 8 Conclusion... 12 References 14 Introduction The 1860 s was one of the most economically wrenching decades in American history. The nation was moving from regional economic markets to ones that, thanks to the beginnings of the railroad revolution, were becoming national in scope. Therefore, when considering the rise of Rockefeller and his partners to dominance of the petroleum sector of the nation's economy, it may be more important for us to ask, "How did Rockefeller survive?" rather than merely, "How did he crush its competitors?" When John Rockefeller addressed that issue, he asserted that the general economic conditions were crushing his competition - a self-serving statement, but that does not make it any less true. 1. Economical and historical background In the post-Civil War "search for order, " as historian Robert Web so aptly phrased it, many pre-Civil War entrepreneurs involved in both old-line ventures and new get-rich-quick schemes went bankrupt, while others profited from risks associated with the early days of the oil industry.
Americans had already begun to use coal oil, a light-oil derivative of coal first manufactured in the early 1850 s. Over three-quarters of the country's homes, however, still relied on candies, lard, or whale oil for their lighting. Meanwhile, the only use Americans had found for surface crude oil was as an ingredient in patent medicines, which usually relied on alcohol for their "effectiveness. " In fact, John Rockefeller's father had been one of the purveyors of the "medicine" (Page 2001). The petroleum industry radically changed the way Americans and Europeans viewed the slimy product.
In the late 1850 s, researchers discovered that kerosene, a derivative of the ooze, could be used to light homes and businesses. That led "Colonel" Samuel Drake to sink a well in search of more crude oil. On August 27, 1859, Drake successfully drilled a well at Titusville, Pennsylvania. That area in the northwestern portion of the state, soon to be known as the Oil Regions (or simply the Regions), immediately began pumping out an annual production of 200, 000 barrels. By the time the Civil War had ended, over half the production of the nation's refineries was headed to the European market (Graubard 1999). During the early days of the oil industry, it was a rough-hewn business frontier.
Teamsters originally hauled most of the crude oil from the wells to refineries by wagon, a dangerous task with the highly volatile crude. When the water was high enough, oil barges could be floated down the Allegheny River to Pittsburgh. Early on, however, railroads began to dominate oil transportation. Cleveland's Atlantic & Great Western Railroad moved quickly to claim a portion of the Regions' crude for her refineries. While still being built, the Atlantic had begun in 1862 to connect with short line roads serving the Regions.
Then, on November 3, 1863, when the Atlantic opened its through service to New York City, with its connection via the New York Central, a transportation network providing Cleveland with connections with both the crude oil and the export markets was fully in place (Issues in Science and Technology). Along the Atlantic's tracks in Cleveland, a number of oil refining operations sprang up to take advantage of this location. John Rockefeller was one of these entrepreneurs. He and his grain merchandising partner Maurice Clark began their investment in Samuel Andrews's refining operation as a secondary venture.
When Rockefeller took a greater interest in the oil refinery, the Clark brothers (Rockefeller, Andrews and Maurice Clark having been joined by Clark's brothers James and Richard) would not go along with additional investment in such a risky enterprise. Rockefeller, only twenty-five years old, bought out the Clarks' interest in the oil partnership in 1865 and with Andrews formed the refining firm of Rockefeller & Andrews. 2. John D. Rockefeller as a personality Actually it was John D. Rockefeller who pounced on the new fuels provided by crude oil, achieving a temporary monopoly of as much as 80 percent of world production and refining.
No industry in history has ever profited so much as oil refining from economies of scale, or done so much for the ordinary consumer. Right at the outset of Rockefeller's empire-building, he was able to reduce by 70 percent the cost of kerosene, the staple of housewives throughout the nation. Even more important in the long run was the competition that cheap oil offered to solid fuel in the generation of electricity. The electrical age began in earnest around 1900, rapidly making California the richest state in the union and in time transforming the Far West into one of the world's most efficient industrial zones (Newer 2002). Cheap petroleum contributed still more to the automobile revolution. Thanks to vertiginous economies of scale, the sturdy, reliable, safely driven, and easily maintained car created by Ford soon became cheap, too.
By putting the automobile within the means not only of most farmers but of the workers who produced it, Rockefeller and Ford ended the isolation of the farming families who made up half the nation and set industrial workers on the road to comfort and even affluence. The methods employed by men like Rockefeller to achieve their temporary monopolies were ruthless -- and they were resented. As Elliot-Meisel faithfully reports, Rockefeller was none too gentle in putting inefficient producers out of business. One of his victims was the father of Ida Tarbell, the first "investigative journalist, " and she took her revenge by spending most of her life exposing and denouncing the excesses of Standard Oil. In an image that persists, she branded Rockefeller a monster (Weinberg 2001). The hostile journalists soon stirred up the politicians, among them old-money grandees like Theodore Roosevelt, who, taking a particular objection to Edward Harriman, denounced him as a "malefactor. " Thus was detonated a populist revolution that fed off a sore spot in the American character, the conflict between bigness and democracy.
Loving the advantages of bigness, Americans have also always wanted the voices of the "people" to be heard above its uproar. Rockefeller's quest for a large-scale oil industry genuinely scared many Americans, not all of whom, like Tarbell, were parti pris. In 1879, a grand jury in Pennsylvania indicted Rockefeller for conspiracy and extortion. For 30 years, he became, in strict law, a fugitive from justice, and had to be extremely careful to avoid extradition from the states where he lived, made his money, or enjoyed himself. If he built and sustained an empire, and became the richest man in the world, he did so against a constant campaign of political and legal opposition, much of it bitter and highly personal. I would guess that more legal actions were taken, and (later on) more corrective laws passed, against him than against any other man in history.
That, of course, is one reason why his business crimes, real or imaginary, have been brought so thoroughly to light. Suspiciousness of bigness was not confined to "little people. " It also loomed large in the demonology of intellectuals, not least in the legal profession. When chain stores were created by huge entrepreneurs, pushing smaller and less efficient competitors to the wall while driving down retail costs, progressive legal minds challenged the idea that large-scale enterprises would benefit ordinary families. Their view was given for all time by Supreme Court Justice Louis D. Brandeis, who was speaking with both the chain stores and Standard Oil in mind: I have considered and do consider that the proposition that mere bigness cannot be an offense against society is false, because I believe that our society, which rests upon democracy, cannot endure under such conditions (cited in Gary 1999). This was not so much an argument, however, as an article of political faith, and one more likely to be held by a well-paid judge than by a working-class housewife on a tight budget.
But Brandeis's doctrine did and no doubt still does find favor among lawyers and professors. Rockefeller was the first major victim of the antitrust legislation to which this doctrine gave birth: Standard Oil, in its pristine form, was broken up. Of course, the legal progressives were never able to defeat such people as Rockefeller and their disciples and descendants, for another forensic groundwork had been laid down early in the 19 th century by the first great Chief Justice of the Supreme Court, John Marshall. His rulings, which made large-scale capitalist enterprise in the U.
S. not only possible but profitable, were graven in granite. What the progressives were able to do was to put big business perpetually on its guard, to force it to watch its step, to calculate legal consequences at every stage, and to muster the resources to fight court battles as part of routine operations. Over the decades, all this has proved mightily beneficial to the legal profession; since the costs have naturally been written into retail prices, whether consumers have benefited is another question altogether (Graubard 1999).
Some historians consider John D. Rockefeller as a complicated human being, one who mixed low cunning and sharp practice with high purposes, even idealism, and who certainly saw himself as a public benefactor unjustly assailed by pygmies. In those respects and others, he bears a certain resemblance to other huge entrepreneurs. Yet, like the Pilgrims and Founders before them, these men were hardly all of one type. In addition to Carnegie, Rockefeller, and Ford - and in contrast to them - was J.
Pierpont Morgan. There was an even more important difference: a difference of temperament or one might even say of philosophy. The others took a naturalistic view of competition and believed in the survival of the fittest. They pushed individualism almost to extremes. By contrast, Morgan strove for the health of business society as a whole; he saw the need for the protection of endangered economic species, and took steps to preserve the capitalist environment in which all could flourish. 3.
John D. Rockefeller and his leadership skills To investigate thoroughly the nature of Rockefeller as a leader let us examine his leadership skills and talents as well as his appealing to hospitality standards on definite examples. Rockefeller's firm expanded as rapidly as his credit line at the local banks would allow. By 1867, he had reached his credit limit and was looking for new sources of capital. From business relationships established during the previous decade and conversations with Flagler, he knew of the immense fortune that Lamon Harkness and his kin, especially Stephen Harkness, had accumulated.
More than likely, Stephen or Lamon Harkness loaned Flagler the money to buy into the Rockefeller partnership. Stephen Harkness also came in as a silent partner, with Flagler voting...
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Research essay sample on John D Rockefeller Economies Of Scale
