John Rockefeller: Early Life, Family, Philanthropy, and More!

There is something to be said about those who made a lot of money in the early days of America. They were captains of industry, titans who knew no bounds. Many of them made shortcuts, plenty of those men were considered to be greedy robber barons, but hardly anyone can deny that without those magnates, America would not be the powerhouse that it is today. One such man started out small but would eventually go on to build the biggest oil company in the world. His name was John D. Rockefeller.

John Rockefeller’s Early Life, Family, and Education

John D. Rockefeller was an American industrialist and philanthropist, best known for his role in the early petroleum industry and for founding the Standard Oil Company in 1870. Born on July 8, 1839, he rose from modest beginnings to become one of the wealthiest individuals in history.

John D. Rockefeller started out in a relatively quiet family setting, born in the idyllic town of Richford, New York, where he would spend his days with his five other siblings and mother. His father, Bill, was a huckster, a con man and a cheat, who would often travel across the country, essentially selling snake oil. Bill was, more or less, a complete cheat and would often pop in and out of his children’s lives. He wasn’t kind nor was he a sincere man, for he had fathered many other children and had even started a second family far away from John. Yet Bill had influence on the young John, for he learned from his father how to desire the very best, instead of just settling for less.

Life for John was one of industry and hard work. In 1855, he took upon himself the task of getting a real job at the age of 16. He found work as an assistant bookkeeper, where he would assist with keeping records of shipments and calculating the cost of transportation. He had been previously enrolled in a ten-week course designed to teach bookkeeping, and pretty soon he was finding it easy enough to do the job well. His performance was noticed and he was eventually given a handsome raise to the tune of $25 a month. This amount of money was enough to help begin to fund his seedling ideas on how to work for himself.

In 1859, he had sufficiently managed to save $1,000 dollars and finagle his father into giving him a loan of the equal amount, giving John enough funds to be able to invest in the sale of produce. He was able to make sufficient money from the business since the Civil War had broken out in 1861 and this naturally caused the value of produce to skyrocket. Of course, the Civil War itself was a problem for John D. Rockefeller because he was scheduled to be drafted to serve the Union during the war. This was problematic. Although John Rockefeller believed in abolition and was a staunch supporter of Lincoln, he had no desire to leave his business behind and go fight in a war. So, he found a loophole through the Enrollment Act known as Substitution. 

Back then, a wealthy businessman could pay someone several hundred dollars in order to serve in the war on their behalf. So, Rockefeller did what most rich people back then did and paid someone to replace him in the draft, so that he could continue working on his business.

Notable Accomplishments

John D. Rockefeller is renowned for several notable accomplishments that significantly impacted American industry, philanthropy, and the broader economic landscape. These include:

1. Founding Standard Oil: Rockefeller founded Standard Oil in 1870, which rapidly became the world’s leading oil refining company. Under his leadership, Standard Oil innovated in refining techniques, distribution methods, and business strategies. It held a near-monopoly in the American oil industry by the early 20th century, profoundly shaping the energy sector.
2. Pioneering Modern Business Practices: Rockefeller was instrumental in developing modern business practices. He implemented strategies such as horizontal integration, where he bought out competitors, and vertical integration, controlling every aspect of production from extraction to distribution. These practices not only expanded his empire but also set a precedent for future business models.
3. Philanthropy and Charitable Works: Rockefeller was a pioneer in philanthropy, contributing a significant portion of his wealth to various causes. He established the Rockefeller Foundation, which focused on public health, medical training, and the arts. His donations led to the creation of the University of Chicago, Rockefeller University, and the Rockefeller Institute for Medical Research.
4. Influencing Public Health and Education: Through his foundations, Rockefeller had a lasting impact on public health and education. His funding helped in the fight against diseases like yellow fever and malaria, and his support for education reformed both school systems and higher education.
5. Economic Influence: Rockefeller’s control over the oil industry not only amassed him unprecedented wealth but also significantly influenced the American and global economies. His business practices contributed to the passage of antitrust laws, such as the Sherman Antitrust Act, aimed at regulating monopolies and maintaining fair competition.
6. Environmental Impact: Though not a focus during his lifetime, Rockefeller’s investment in oil exploration and refinement had a lasting impact on the energy industry and, by extension, the environment. His legacy is intertwined with the growth of the fossil fuel industry and its environmental consequences.

John D. Rockefeller’s life was a blend of immense business success, innovative corporate strategies, and transformative philanthropic efforts. His impact on the American industrial landscape, the rise of corporate America, and the field of philanthropy have left an indelible mark on history.

John D. Rockefeller’s Wealth

John D. Rockefeller amassed his immense wealth primarily through his strategic involvement in the burgeoning oil industry, a sector that was rapidly transforming the American economy. His entry into this industry coincided with a critical time when oil production was gaining momentum, particularly in Pennsylvania, and the government was encouraging the exploration and utilization of oil resources.

In 1863, Rockefeller, leveraging his financial acumen and foresight, decided to capitalize on this opportunity. He had successfully accumulated substantial capital through his work as a bookkeeper and later as a merchant in the produce business, especially benefiting from the heightened demand during the Civil War. With the necessary resources and business experience, he made the pivotal decision to establish an oil refinery in Cleveland.

The problem with oil production back then was that a significant amount of oil would get wasted due to inefficient extraction methods. A company would dredge up a large amount of oil, collect as much as it could, and then allow for the runoff to be dumped into bodies of water since that part of the product didn’t have any use for fuel. Rockefeller saw a different opportunity with such runoff and began to sell it as all sorts of different products. They would develop paraffin wax, lubricating oils, and petroleum jellies with the runoff and sell it for a hefty profit. This would eventually lead to many railroad companies taking an interest in the sheer amount of product that Rockefeller’s refiner was moving.

READ MORE: Who Invented the Railroad? Exploring the Fascinating History of Railroads 

John had owned the refinery with several other parties, including two gentlemen known as the Clark Brothers, whom he chose to buy out in 1865, gaining him significant control of the refinery and putting most of his wealth into the oil business. This left him and his partner, a chemist by the name of Samuel Andrews, to be the only ones left controlling the refinery. They started their business up, calling themselves Rockefeller and Andrews and it was the day that John’s legacy would begin.

Rockefeller’s dedication to using the crude oil refinement process byproduct set him apart from his competition and enabled him to gain dominance in the oil refinery world. The money coming in was extremely good and soon he was able to build another refinery and would go on to own the largest refinery in the world. He was able to gain a strong market dominance due to the Cleveland area’s capacity to produce kerosene oil and his efforts at improving the refinement process yielded better and better results.

The Standard Oil Company

In 1870, Rockefeller decided that his partnership with Andrews and Flagler (another oil tycoon) had run its course and that he was ready for more than just a partnership. He wanted to run his own operation and so he started Standard Oil Company, a corporation. He issued shares to his partners but established himself as chairman. He had seen the immense opportunity in oil, but there was a problem: competition. The barriers to entry for the oil business weren’t particularly high — all one needed was just enough money to purchase a refinery and they could start their business — meaning there would be plenty of competition for Standard Oil; competition that Rockefeller did not want to have to deal with.

So, John chose to push for a hard campaign of absorbing competitors through any means necessary. Standard Oil was like a shark, prowling across the nation and looking for refineries to purchase, absorbing them into Standard Oil. Rockefeller’s blitz was unheard of at the time and moved so fast that within two years, the majority of Cleveland’s refineries belonged to Standard Oil.

Rockefeller was a determined man and had the sales skills to back up his desires, so he worked on secret deals, sweetheart bargains, and other incentives with his rivals in order to convince them to join his side. This massive amount of product that Standard Oil was shipping caused even more of a frenzy amongst the railroad companies, as they all competed with one another to earn Rockefeller’s favor, leading to even more special dealings in which Rockefeller would receive rebates for his business, making the price of kerosene oil even lower than before. This led to an abundance of oil hitting the American market and it was affordable enough to be used in many homes.

Many might believe that Rockefeller was acting ruthlessly with the way that he absorbed other companies, but he saw it differently. The man had always been extremely focused on processes and systems, going so far as to be obsessed with tracking every single expense that he had made (whether personal or professional) within a little book he called Ledger A. When he focused on consuming the weaker refineries and underperforming businesses, he considered himself to be doing them a favor, as the reason they were failing wasn’t because they didn’t have a good product, but rather because they had poor business processes. Indeed, Rockefeller’s focus on the process was so extremely pressing, that it was the sole reason that Standard Oil was doing so well. The company continued to grow simply because Rockefeller understood the logical underpinnings of the business and knew what was necessary for the company to do well.

Yet, although Standard Oil had quickly gained control over 90% of the domestic oil market, there was a growing hatred stemming from the public toward Rockefeller’s actions. The press treated him bitterly, looking at his backroom deals, secret bargains, and transportation arrangements with the railroads as being unethical and unfair. They pointed their finger at his growing wealth and claimed Standard Oil workers were being exploited. To make matters worse, even though Standard Oil had made kerosene cheap enough to be used in just about every home, it was growing clear that the government didn’t want Standard Oil to be so big. This was a big problem.

Creating a Monopoly

The company functioned as a near-monopoly in the American oil industry for approximately four decades. From its inception in 1870 until its dissolution in 1911, Standard Oil’s dominance was unparalleled. The company’s control over the oil market was not just a testament to Rockefeller’s business acumen but also a reflection of the era’s industrial and economic conditions.

Standard Oil was, more or less, the first real monopoly within America. It had worked hard to gain market dominance and had firm control over the oil market. The vilification of the company was intense, even though it had employed over 100,000 employees Americans and created industry across the country.

It didn’t help that during the height of his company’s power, a book was released documenting all of the practices that Rockefeller had engaged in whilst building this corporation. There was a lot of pressure at that point, and it was starting to get to Rockefeller’s head. He grew ill from the stress and began losing his hair, he suffered from severe insomnia and depression at times. He had worked very hard to create a massive company that was changing the way America did business, but in the end, was hated by those he tried to serve.

These factors led to Rockefeller making the decision to reduce his role within Standard Oil. It had, for a brief time, been the biggest oil company in all the world, but the problem was that he found himself entirely unable to seize control of the foreign markets as he had once dreamed of. As pressure from the public and scrutiny from the government increased, it was becoming clear that he wouldn’t reach his dream of owning all the oil on the planet.

Losing a Monopoly

Eventually, the government ruled that Rockefeller’s company violated the Sherman Anti-Trust Act, a bill designed to prevent companies from colluding, and ordered that Standard Oil be broken up into smaller companies. This was ruled in 1911 and Rockefeller was given six months to get their affairs into order. Standard Oil was eventually broken into 34 companies and as the major shareholder of Standard Oil, Rockefeller was awarded shares in those 34 companies as well. This inadvertently ended up increasing his fortune as each of those 34 companies began to flourish. That year, his wealth increased to 900 million dollars.

With Standard Oil having been broken up, Rockefeller found himself no longer working as hard with big oil. His health had suffered and he found himself beginning to focus more on his philanthropy. While he was a ruthless businessman, a shrewd dealer, and a tough, no-nonsense negotiator, he was also a deeply religious man. He was Baptist and followed the Christian principles of giving to those who were in need. One such principle that he took very seriously was the idea that when a man is to give to others, he is to do it in secret, a principle espoused by Jesus Christ. So, while many people in America reviled him for his role in Big Oil and the practices that many considered to be exploitative, most did not know about the charitable efforts.

Philanthropy

John D. Rockefeller’s philanthropic endeavors were as impactful as his business ventures. His contributions to various fields have left a lasting legacy.

• The University of Chicago (Founded in 1890): Supported by John D. Rockefeller’s substantial financial contributions, it became a premier institution for higher education and research, emphasizing rigorous standards and intellectual advancement.
• Corporate Philanthropy: Rockefeller pioneered corporate philanthropy, integrating it into his business model as a form of corporate social responsibility (CSR), promoting the idea that corporate success should contribute to societal welfare.
• The Rockefeller Institute for Medical Research (Founded in 1901): America’s first biomedical research center, it contributed significantly to medical advancements, particularly in combating diseases like yellow fever and malaria, and later evolved into Rockefeller University.
• The General Education Board (1902-1965): Aimed at improving educational standards and access across the U.S., especially in the South, by funding schools, supporting educational research, and aiding public school system reforms.
• Rockefeller Sanitary Commission (1909-1915): Focused on eradicating hookworm disease in the Southern United States through public health education, sanitation improvements, and medical treatment, significantly improving public health in the region.
• The Rockefeller Foundation (Founded in 1913): A major international philanthropic foundation addressing global challenges in health, science, education, and humanitarian aid, it has funded medical research, supported educational reforms, and contributed to arts and culture.
• Other Philanthropic Support: Arts and conservation, social welfare programs, medical research, education, public health, international efforts, cultural institutions, and rural development, showcasing Rockefeller’s commitment to diverse areas of public welfare.

John D. Rockefeller’s Legacy and Final Years

John Rockefeller was a man that most historians are forced to puzzle over. While he was a brilliant magnate and a genius when it came to managing companies, many of his practices were considered to be unethical by the general public. His penchant for secret deals, backroom discussions, kickbacks, and rebates, contributed to this image of him being a cruel robber baron, taking as much money as he could for himself and giving nothing back.

Yet at the same time, we are forced to deal with the fact that he lived a relatively modest life, often buying one suit per year and wearing it until it was completely ragged before purchasing another. His family was taken care of but were not spoiled as he was extremely cautious with handing money to those whom he loved.

His focus on philanthropy was intense and he ended up giving away nearly 540 million dollars before passing away at the age of 98 in 1937. He was, more or less, a man of his time and a man of paradoxes who greatly changed the trajectory of American business forever.

The Bottom Line

John D. Rockefeller’s life was marked by remarkable success in business, innovative corporate practices, and transformative philanthropy. Despite controversy surrounding his business methods, his immense contributions to education, healthcare, and social welfare have left a lasting legacy. Rockefeller’s impact on American industry, philanthropy, and society is undeniable, shaping the nation’s history and business landscape. His story serves as a testament to the complex nature of success and the enduring influence of philanthropy in making a difference.