John D. Rockefeller and the power of oil

When we talk about monopoly or oligopoly of oil we must inevitably refer to the companies drawn of the old Standard Oil, a company created after the American Civil War by John D. Rockefeller I.

Rockefeller, in a very short time, became a tacit monopoly of the US oil industry. He came to concentrate in their hands 95% of the exploration, exploitation, distribution and retailing of gasoline in the US He always thought that the oil business should be integrated vertically, that is, the same firm must control all stages of production. And the key business itself was to have under its orbit the distribution process, so he came to get an agreement with significant discounts with the railroads that controlled JP Morgan, agreed that turned to the ruinous dessert for all competitors, to which one to one was moving market, often by applying compulsive methods. That business actions, devoid of moral precepts, or codes, was common in the dozen entrepreneurs who began to control the US economy after the death of Abraham Lincoln.

The Rockefeller clan rose to become a hub in the economy and politics of the United States. Who in the past century were brilliant winners of money, in the 20th century were characterized as the brightest spenders.

But who was really Rockefeller, what its origin was and how he managed to get his wealth:

John D. Rockefeller was born on July 8, 1839 and just missed him three years to reach live a century, he died at 97 years old. This is something that men fail at a rate of one in a million. Being very young, her family moved to the city of Cleveland and the boy reached there as collector potatoes go on vacation, so they paid 4 cents an hour. His mother paid him a dollar to help him raise turkeys and memories of his childhood, when he was already a millionaire, always had a turkey farm on his estate. Then, as a teenager, he was employed on a farm where he was paid 37 cents a day.

Finished their basic studies, John D. would have none of University. He joined a good business school and after a few months of study, their teachers said it was able to be used. They helped him enter as a subordinate employee in a broker firm, where he soon prospered, he became cashier and later in counter. At that time and for the rest of his life, John D. was always interested in the affairs of the Church, so that Sundays were spent teaching doctrine in the Church of the town.

In 1859, when he was 20, he formed a brokerage firm with his friend Maurice B. Clark, but the money he earned not invested in loans, which was a very slow way to make money. John D. had a nose for fast business and decided to get into the oil business. The year was 1862 and there was room for everyone.

In 1866, the company was expanded. Later the younger brother, William Rockefeller and Samuel Andrews joined, and the firm was called William Rockefeller and Company. In 1870, the company became a corporation under the name of Standard Oil Company of Ohio, which joined other partners who contributed $ 1 million.

In early 1872, Rockefeller helped create the South Improvement Company, a partnership that included the major oil refiners Cleveland, reaching agreements with railway undertakings to obtain large discounts for members of the association. This agreement was annulled legal way three months later, over the protests of the people, but by then almost all competitors Rockefeller had been forced to sell or to associate with him. In 1878 Rockefeller controlled 90% of the oil refineries in the US and soon after had a monopoly of distribution channels.

Massachusetts Tercentenary Celebration_John D. Rockefeller_american financial titan_patrick dwyer merrill lynch
Image courtesy of Boston Public Library at Flickr.com

In just over 10 years, the young John D. had become a businessman and drove millions. A truly meteoric career that could only happen in those times. By 1873, almost all oil companies that refine it had joined Standard Oil, whose capital had increased to 3 and a half million dollars. The new company had to appoint trustworthy people who will take care of handling properties that could not be incorporated into the Standard Oil Company of Ohio, but in 1882, all of these properties were combined into a giant Standard Oil Trust, which was dissolved ten years later to form the Standard Oil Company of New Jersey, which also had to leaving office in 1911 because the Antitrust Commission of the United States considered monopolistic. At that time, it was estimated that the Standard Oil Company owned three quarters of the oil states. For many people it had become the symbol of the concentration of US commercial power.

To read more about John D. Rockefeller, visit my post: Rockefeller: from America’s most hated to America’s greatest donor.

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