Standard Oil was founded on January 10th, 1870, by John D. Rockefeller in Cleveland, Ohio. It quickly became one of the largest and most powerful corporations in the world, with a near monopoly on the United States' oil industry. Rockefeller's innovative business practices, which many perceived as ruthless, such as cutting costs through the purchase of less efficient competing refineries and negotiating for discounts on oil shipments, helped Standard Oil grow rapidly. By 1880, it controlled over 90% of the oil refining capacity in the United States.
Rockefeller had a strong work ethic and a desire for success from a young age. When he was 16, he obtained his first job as an assistant bookkeeper at Hewitt & Tuttle, a small produce commission firm in Cleveland. He was responsible for negotiating with barge canal owners, ship captains, and freight agents. He reportedly had two goals: to make $100,000 and to live to 100 years old. Rockefeller's charitable giving began early, as he donated 6% of his earnings to charity while working as a clerk. By the time he was 20, his charitable donations exceeded 10% of his income.
The origins of Standard Oil can be traced back to 1863, when John D. Rockefeller, William Rockefeller, Henry Flagler, Samuel Andrews, Stephen V. Harkness, and Oliver Burr Jennings formed a partnership in Ohio. Jennings had married the sister of William Rockefeller's wife. In 1870, Rockefeller dissolved the partnership of Rockefeller, Andrews & Flagler and established Standard Oil of Ohio.
As Standard Oil grew through acquisitions, many state legislatures made it difficult for the company to incorporate in one state and operate in another. Therefore, Rockefeller and his associates owned numerous separate corporations, each of which only operated in one state. This made it difficult to manage the entire enterprise. In 1882, Rockefeller's lawyers created the Standard Oil Trust to centralize the company's holdings and streamline management. However, this structure was challenged by state antitrust laws and the Sherman Antitrust Act of 1890, which was originally intended to control unions but later played a major role in the breakup of Standard Oil. In 1892, Ohio separated Standard Oil of Ohio from the rest of the company.
During the 1890s, John D. Rockefeller ventured into the iron ore and ore transportation industries, which put him in competition with steel tycoon Andrew Carnegie. He also secured leases for crude oil production in Ohio, Indiana, and West Virginia, as the original Pennsylvania oil fields were starting to decrease in production. In 1901, J. Pierpont Morgan's U.S. Steel, which had recently acquired Andrew Carnegie's steel assets, proposed purchasing Standard Oil's iron interests. A deal was made through the efforts of Henry Clay Frick, in which Standard Oil's iron interests were exchanged for U.S. Steel stock and Rockefeller and his son were given seats on the company's board of directors.
Under President Theodore Roosevelt, numerous suits were brought against Standard Oil under the Sherman Antitrust Act and reforms were implemented by Congress. In 1911, the U.S. Supreme Court ordered the breakup of Standard Oil into 34 separate companies, including Exxon-Mobil, Chevron, and BP. Despite the breakup, Standard Oil's legacy continued through the successful brands formed from its dissolution.
Rockefeller, who had rarely sold shares, held over 25% of Standard's stock at the time of the breakup. He and all the other stockholders received proportionate shares in each of the 34 companies. In the aftermath, Rockefeller's control over the oil industry was somewhat reduced, but over the next 10 years the breakup proved immensely profitable for him. The companies' combined net worth rose fivefold, and Rockefeller's personal wealth jumped to $900 million. By the time of his death in 1937, Rockefeller's remaining fortune, largely tied up in permanent family trusts, was estimated at $1.4 billion, while the total national GDP was $92 billion.
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Rockefeller established the Rockefeller Foundation in 1913, which continues to support projects in various fields including health, education, and social and economic development. Some of his notable charitable efforts include funding the construction of the University of Chicago and supporting the establishment of the Rockefeller Institute for Medical Research, which later became the prestigious Rockefeller University. He also donated generously to support the arts, and his philanthropy has had a lasting impact on various institutions and organizations around the world.