John D. Rockefeller (July 8, 1839-May 23, 1937) remains one of the richest people in modern times. He is still one of the great figures on Wall Street—he is called a villain, praised as an innovator, but is generally regarded as one of the most powerful people in history.
F. Scott Fitzgerald famously said: “The test of first-class intelligence is the ability to keep two opposing ideas in your mind at the same time and still maintain the ability to operate.” According to this standard, Rockefeller may be one of the smartest people ever. one.
This article will detail Rockefeller’s life and his unforgettable achievements.
JD Rockefeller: Son of a Hawker
Rockefeller’s father, William Avery Rockefeller, lived a nomadic life, selling goods across the country, while his mother raised children. After his family finally took root in Cleveland, Ohio, Rockefeller received an exceptional education at the time and found a job as a committee clerk at the age of 16. But he left this position in order to establish a business partnership with oil driller Morris Clark, who later became Rockefeller, Andrews and Flagler, a company that focused on oil refineries rather than drilling.
Rockefeller: Oil Refinery
In the early days, Rockefeller had a keen understanding of how to manage risk. Although he knows that oil speculators may make huge profits if they deposit a deposit, he also knows that if their efforts fail, they will face huge economic losses. To this end, he strategically focused his attention on the refining business, which has smaller but more stable profits. Through vigorous research and development, he discovered a way to use traditionally discarded petroleum by-products and use them to make lubricants, paints, and other useful items.
JD’s road to oil monopoly
Rockefeller regarded the cruel competition in the oil industry as a devastating effect and began to eliminate it in an orderly manner. By 1890, his company, Standard Oil of Ohio, was enjoying huge profits, which he used to acquire competitors. Although Rockefeller’s proposal is usually easy to accept, he has methods to persuade and insist, including the following measures:
- The purchase of all oil barrels led to shortages and put small companies into trouble.
- Planning a price war between wholly-owned subsidiaries, forcing adherents to sell at a loss.
- Secretly bribe legislators.
- Use his close relationship with the railway company to limit the number of trains available for transportation.
- Purchase all equipment and equipment suppliers, and then refuse to sell replacement parts to adherents.
From oil to railway
Due to inconsistent support from competing railway companies, Rockefeller supported the creation of the Southern Improvement Company in a strategic effort to increase the company’s transportation costs. He also agreed to help the company acquire all railways in exchange for large rebates, but competitors in the railway and oil sectors eventually lobbied the government to curb this monopoly.
Rockefeller Standard Oil Trust
After failing to reorganize the railway industry, Rockefeller decided to reorganize his huge empire. He and his partners created the first trust, and they exchanged personally held shares for trust shares. Rockefeller now has centralized control and veto power over the boards of all companies in his corporate group. Direct benefits include lower costs, lower kerosene prices, and standardization of the entire industry. Rockefeller’s company now has the assets and funds to build pipelines and other infrastructure, the scale of which was unimaginable before.
Standard Oil also hired chemists who developed methods to increase the type and quality of combustible fuels and created methods to convert waste into usable substances. Petroleum extracted from the ground is refined into various products such as diesel, varnish and hair spray. As the production costs of new products decrease, the company has expanded its global economies of scale.
Standard Oil is involved in many auxiliary industries, such as iron, copper, steel, and coal, but it has also expanded its business in more unexpected areas (such as grocery stores). Rockefeller wisely forced the store to sell his products separately, where he was able to use the empire’s war funds to cut prices, thereby bankrupting non-compliant store owners. Standard Oil also purchased newspapers to promote its version of the event. It also owns its own ships, railway cars and warehouses, and also manufactures its own sulfuric acid.
Antitrust litigation against JD
The government did not like the near-complete monopoly of the oil industry, so it broke the trust in 1892. In response, Standard Oil’s legal team quickly transformed the trust into a holding company. Its function was similar to a trust but beyond the legal definition. The government adjusted its legislative offensive accordingly and dissolved the holding company in 1911.
Under government supervision, Standard Oil is divided into smaller but still quite large parts. Although their names have changed over the years, Chevron (CVX), Exxon Mobil (XOM), and ConocoPhillips (COP) all have standard oil pedigrees. These companies have the R&D and infrastructure advantages of Standard Oil, so when Edison’s invention of the electric light bulb leads to a decline in kerosene sales, they can easily transition to gasoline producers.
After retiring in 1896, Rockefeller devoted his energy to charity, donating hundreds of millions of dollars in his later years. With the help of his son, he created the Rockefeller Foundation to continue his work after his death. Although Rockefeller was at fault in the radical way of accumulating wealth, his business practices and philanthropy still benefit millions.