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Rich as Rockefeller

Where did the great tycoons of the Gilded Age get all their money? Carnegie's came from steel. For others, like the Vanderbilts, it was the railroads. For still others, it was oil. In 1858, a small-time prospector named Edwin Drake sank a hole into the ground near Titusville, Pennsylvania. Black slime—oil—soon filled the hole. When the news got out, people raced for the hills and gullies of western Pennsylvania. Before long that state was a wild place—a little like California in the gold rush a decade earlier. One day, a quiet young bookkeeper was sent to this disorganized area to see what was going on. "Is oil worth investing in?" His employers had sent him to find out. "No," he told them, and then went on to invest in it himself and to become one of the most successful businessmen the world has known. His name was John Davison Rockefeller.

John D. Rockefeller did not start out rich, but he became one of the wealthiest men in the world. He was born into a family of modest income in 1839. The family, with its six children, moved from one farm to another in Pennsylvania, and then settled in Ohio.

Rockefeller left high school in 1855 to take a six-month business course, which he completed in three months. He then took a job where he earned $3.57 a week. He did not even get paid for three months. But by 1859, he had saved $1000. He borrowed another $1000 from his father. What do you think he did with that money? Rockefeller used the $2000 as a seed to grow a huge, multimillion dollar fortune.

That year oil was discovered in western Pennsylvania. Rockefeller and a business partner became oil refiners. From this small start, grew the Standard Oil Company. Some say John D. Rockefeller was the greatest capitalist who ever lived. Others say he almost destroyedcapitalismfor everyone else. One thing is certain. He soon brought order to that disorderly oil business. With his efficient methods, it grew large. Rockefeller began buying competitors. By the 1890s, Standard Oil owned three-quarters of the oil industry in the United States. Rockefeller was not only head of this huge company, he also owned iron mines, forests, and shares in manufacturing and transportation companies. The problem was, his wealth and power grew through unfair methods—bribery, intimidation, and bullying all his competitors out of business.

If you have raw material to sell, two costs are important: the cost of the oil and the cost of transporting it to buyers. Because he was such a powerful oilman, Rockefeller could get the railroads to give him special prices to ship his oil. Actually what they did was give him back half of what he paid for transportation. And part of what others paid as well. They were calledkickbacks, and they weren't fair to his competitors. Soon he had put most of them out of business. His company, Standard Oil, became spectacularly rich.

John D. saw his competitors as buds to be nipped. "The American Beauty Rose can be produced in all its splendor only by sacrificing the early buds that grow up around it," he said. Rockefeller wasn't very popular with most Americans. Often he behaved as if he were a king.Crusadingjournalists called him a "robber baron."In 1911, as a result of Ida Tarbell's articles about Standard Oil Company, the Supreme Court ordered the company dissolved.

But there were two sides to Rockefeller, and they were bothexemplifiedright beside his bed. That was where he kept his safe, filled with money. But on top of that safe was his Bible. The Bible inspired him to be generous. He gave away vast sums. He once said, "I believe power to make money is a gift from God. I believe it is my duty to make money and still more money, and to use the money I make for the good of my fellow man according to the dictates of my conscience."

For the last forty years of his long life, Rockefeller spent much of his time giving away his money. On a personal level, he delighted in handing out dimes to children he met. Always orderly and precise, he gave away precisely half of his fortune—half a billion dollars—which went to create the University of Chicago, the Rockefeller Institute for Medical Research, and a foundation that exists just to give money to worthwhile causes. Rockefeller died in 1937, at the age of 97.

***Portions of reading obtained from http://www.pbs.org/wnet/historyofus/web10/features/bio/B11.html

and http://www.pbs.org/wnet/historyofus/web09/segment4_p.html ***

Captain of Industry vs. Robber Baron

Rockefeller and Carnegie

John D. Rockefeller / Andrew Carnegie
How he acquired his wealth?
(Which industry? how did he build his business?)
How did he, or his industry treat its workers?
Give examples
How did he spend his money?
What I think about this person.
Captain of Inudstry or Robber Barron?
Be sure to explain why.