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John D. Rockefeller: Robber Baron
Transcript of John D. Rockefeller: Robber Baron
Rockefeller was born to a middle-class family in upstate New York in 1839.
In 1853, Rockefeller and his family moved to Cleveland, Ohio.
In 1863, Rockefeller entered the new oil business by investing in a Cleveland refinery with several partners.
In 1870, he created the Standard Oil Company with several other partners, including his brother William and Henry Flagler.
The Standard Oil Company
In 1870, Rockefeller formed the Standard Oil Company with a group of men.
However, Rockefeller became the company's president and was its largest shareholder.
By the early 1880s, the Standard Oil Company controlled 95% of U.S. oil refineries and pipelines.
At this time, it had an "almost" monopoly on the oil industry.
Why Rockefeller Was a Robber Baron
A "robber baron" was an American capitalist in the late nineteenth century who ruthlessly used force to succeed in business.
Several sketchy techniques that Rockefeller used to succeed include:
Monopolization — Rockefeller controlled the entire industry and no one else could become involved in the oil industry.
Rate Wars — The Standard Oil Company could lower their rates and take a loss so that new companies could not compete with them.
Rebates — Rockefeller demanded refunds on public rates offered by railroads and was given these rebates because of how often the Standard Oil Company used the railways.
Intimidation — Several times, the Standard Oil Company reportedly hired thugs to break up competitors' operations that they could not otherwise destroy.
These are several political cartoons of the late 1800s regarding John D. Rockefeller and his Standard Oil Company.
Why He Was a Robber Baron
Quotes by and about Rockefeller:
"I have ways of making money that you know nothing of."
"The way to make money is to buy when blood is running in the streets."
Reported by the New York Times in 1937: “He [Rockefeller] was accused of crushing out competition, getting rich on rebates from railroads, bribing men to spy on competing companies, of making secret agreements, of coercing rivals to join the Standard Oil Company under threat of being forced out of business, building up enormous fortunes on the ruins of other men, and so on.”
In 1890, the U.S. Congress passed the Sherman Antitrust Act, which was the first federal act that prohibited trusts and monopolies.
Two years later, in 1892, under the Sherman Antitrust Act, the Ohio Supreme Court dissolved the Standard Oil Trust. The company soon resurfaced as part of the Standard Oil Company of New Jersey. In 1911, the U.S. Supreme Court ruled that the Standard Oil of New Jersey violated the Sherman Antitrust Act and dismantled it into 30 smaller companies.