John D. Rockefeller, Americas First Billionaire

John D. Rockefeller, America's First Billionaire John D. Rockefeller (July 8, 1839–May 23, 1937) was an astute businessman who became America’s first billionaire in 1916. In 1870, Rockefeller founded Standard Oil Company, which eventually became a domineering monopoly in the oil industry. Rockefeller’s leadership in Standard Oil brought him great wealth as well as controversy, as many opposed Rockefeller’s business practices. Standard Oil’s nearly complete monopoly of the industry was eventually brought to the U.S. Supreme Court, which ruled in 1911 that Rockefeller’s titanic trust should be dismantled. Though many disapproved of Rockefeller’s professional ethics, few could devalue his substantial philanthropic endeavors, which led to him to donate $540 million (more than $5 billion today) during his lifetime to humanitarian and charitable causes. Fast Facts: John D. Rockefeller Known For: Founder of Standard Oil and Americas first billionaireBorn: July 8, 1839 in Richford, New YorkParents: William â€Å"Big Bill† Rockefeller and Eliza (Davison) RockefellerDied: May 23, 1937 in Cleveland, OhioEducation: Folsom Mercantile CollegePublished Works: Random Reminiscences of Men and EventsSpouse: Laura Celestia â€Å"Cettie† SpelmanChildren: Elizabeth (Bessie), Alice (who died in infancy), Alta, Edith, John D. Rockefeller, Jr.Notable Quote: I was early taught to work as well as play, My life has been one long, happy holiday; Full of work and full of play- I dropped the worry on the way- and God was good to me every day. Early Years John Davison Rockefeller was born on July 8, 1839, in Richford, New York. He was the second of six children born to William â€Å"Big Bill† Rockefeller and Eliza (Davison) Rockefeller. William Rockefeller was a traveling salesman peddling his questionable wares across the country. As such, he was often absent from the home. John D. Rockefeller’s mother essentially raised the family on her own and managed their holdings, never knowing that her husband, under the name of Dr. William Levingston, had a second wife in New York. In 1853, â€Å"Big Bill† moved the Rockefeller family to Cleveland, Ohio, where Rockefeller attended Central High School. Rockefeller also joined the Euclid Avenue Baptist Church in Cleveland, of which he would remain a long-time active member. It was under his mother’s tutelage that the young John learned the value of religious devotion and charitable giving, virtues he practiced regularly throughout his life. In 1855, Rockefeller dropped out of high school to enter Folsom Mercantile College. After completing the business course in three months, 16-year-old Rockefeller secured a bookkeeping position with Hewitt Tuttle, a commission merchant and produce shipper. Early Years in Business It didn’t take long for John D. Rockefeller to develop a reputation as an astute businessman: hardworking, thorough, precise, composed, and adverse to risk-taking. Meticulous in every detail, especially with finances (he even kept detailed ledgers of his personal expenditures from the time he was 16), Rockefeller was able to save $1,000 in four years from his bookkeeping job. In 1859, Rockefeller added this money to a $1,000 loan from his father in order to invest in his own commission merchant partnership with Maurice B. Clark, a former Folsom Mercantile College classmate. Four years later, Rockefeller and Clark expanded into the regionally booming oil refinery business with a new partner, chemist Samuel Andrews, who had built a refinery but knew little about business and the transporting of goods. However, by 1865, the partners, which numbered five including Maurice Clark’s two brothers, were in disagreement about the management and direction of their business, so they agreed to sell the business to the highest bidder amongst them. The 25-year-old Rockefeller won it with a bid of $72,500 and, with Andrews as a partner, formed Rockefeller Andrews. In short order, Rockefeller studied the nascent oil business in earnest and became savvy in its dealings. Rockefeller’s company started small but soon merged with O.H. Payne, a large Cleveland refinery owner, and then with others as well. With his company growing, Rockefeller brought his brother (William) and Andrews’ brother (John) into the company. In 1866, Rockefeller noted that 70% of refined oil was being shipped to overseas markets. Rockefeller set up an office in New York City to cut out the middleman, a practice he would use repeatedly to cut expenses and increase profits. A year later, Henry M. Flagler joined the group and the company was renamed Rockefeller, Andrews, Flagler. As the business continued to succeed, the enterprise was incorporated as the Standard Oil Company on January 10, 1870, with John D. Rockefeller as its president. The Standard Oil Monopoly John D. Rockefeller and his partners in the Standard Oil Company were rich men, but they strove for even greater success. In 1871, Standard Oil, a few other large refineries, and major railroads secretly joined together in a holding company called the South Improvement Company (SIC). The SIC gave transportation discounts (â€Å"rebates†) to the large refineries that were part of their alliance but then charged the smaller, independent oil refineries more money (â€Å"drawbacks†) to shuttle their goods along the railroad. This was a blatant attempt to economically destroy those smaller refineries and it worked. In the end, many businesses succumbed to these aggressive practices; Rockefeller then bought out those competitors. As a result, Standard Oil obtained 20 Cleveland companies in one month in 1872. This event became known as â€Å"The Cleveland Massacre,† ending the competitive oil business in the city and claiming 25% of the country’s oil for Standard Oil Company. It also created a backlash of public contempt, with the media dubbing the organization â€Å"an octopus.† In April 1872, the SIC was disbanded per the Pennsylvania legislature but Standard Oil was already on its way to becoming a monopoly. A year later, Rockefeller expanded into New York and Pennsylvania with refineries, eventually controlling nearly half of the Pittsburgh oil business. The company continued to grow and consume independent refineries to the point that Standard Oil Company commanded 90% of America’s oil production by 1879. In January 1882, the Standard Oil Trust was formed with 40 separate corporations under its umbrella. To increase the financial gain from the business, Rockefeller eliminated middlemen like purchasing agents and wholesalers. He began manufacturing the barrels and cans needed to store the company’s oil.  Rockefeller also developed plants that produced petroleum byproducts like petroleum jelly, machine lubricants, chemical cleaners, and paraffin wax. Ultimately, the arms of the Standard Oil Trust eradicated the need for outsourcing entirely, which devastated existing industries in the process. Marriage and Children On September 8, 1864, John D. Rockefeller married the valedictorian of his high school class (though Rockefeller did not actually graduate). Laura Celestia â€Å"Cettie† Spelman, an assistant principal at the time of their marriage, was a college-educated daughter of a successful Cleveland businessman. Like her new husband, Cettie was also a devoted supporter of her church and like her parents, upheld the temperance and abolition movements. Rockefeller valued and often consulted his bright and independently-minded wife about business manners. Between 1866 and 1874, the couple had five children: Elizabeth (Bessie), Alice (who died in infancy), Alta, Edith, and John D. Rockefeller, Jr. With the family growing, Rockefeller bought a large house on Euclid Avenue in Cleveland, which became known as â€Å"Millionaire’s Row.† By 1880, they also purchased a summer home overlooking Lake Erie; Forest Hill, as it was called, became a favorite home of the Rockefellers. Four years later, because Rockefeller was doing more business in New York City and did not like being away from his family, the Rockefellers acquired yet another house. His wife and children would travel each fall to the city and stay for the winter months in the family’s large brownstone on West 54th Street. Later in life after the children were grown and grandchildren came, the Rockefellers built a house in Pocantico Hills, New York, a few miles north of Manhattan. They celebrated their golden anniversary there but during the following spring in 1915, Laura â€Å"Cettie† Rockefeller passed away at age 75. Media and Legal Woes John D. Rockefeller’s name had first been associated with ruthless business practices with the Cleveland Massacre, but after a 19-part serial exposà © by Ida Tarbell titled History of Standard Oil Company, started appearing in McClure’s Magazine in November 1902, his public reputation was proclaimed to be one of greed and corruption. Tarbell’s skillful narrative exposed all elements of the oil giant’s efforts to squash competition and of Standard Oil’s overbearing domination of the industry. The installments were later published as a book of the same name and quickly became a bestseller. With this spotlight on its business practices, the Standard Oil Trust was attacked by state and federal courts as well as by the media. In 1890, the Sherman Antitrust Act was passed as the first federal antitrust legislation to limit monopolies. Sixteen years later, the U.S. attorney general during President Teddy Roosevelt’s administration filed two dozen antitrust actions against large corporations; chief among  them was Standard Oil. It took five years, but in 1911, the U.S. Supreme Court upheld the lower court’s decision that ordered Standard Oil Trust to divest into 33 companies, which would function independently from each other. However, Rockefeller did not suffer. Because he was a major stockholder, his net worth grew exponentially with the dissolution and establishment of new business entities. Rockefeller as Philanthropist John D. Rockefeller was one of the wealthiest men in the world during his lifetime. Though a tycoon, he lived unpretentiously and kept a low social profile, rarely attending the theatre or other events typically attended by his peers. Since childhood, he had been trained to give to church and charity and Rockefeller had routinely done so. However, with a fortune believed to be worth more than a billion dollars after the dissolution of Standard Oil and a tarnished public image to rectify, John D. Rockefeller began to give away millions of dollars. In 1896, 57-year-old Rockefeller turned over the day-to-day leadership of Standard Oil, though he held the title of president until 1911, and began to focus on philanthropy. He had already contributed to the establishment of the University of Chicago in 1890, giving $35 million over the course of 20 years. While doing so, Rockefeller had acquired confidence in Rev. Frederick T. Gates, the director of the American Baptist Education Society, which established the university. With Gates as his investment manager and philanthropic adviser, John D. Rockefeller founded the Rockefeller Institute of Medical Research (now Rockefeller University) in New York in 1901. Within their laboratories, causes, cures, and various manners of prevention of diseases were discovered, including the cure for meningitis and the identification of DNA as the central genetic matter. A year later, Rockefeller established the General Education Board. In its 63 years of operation, it distributed $325 million to American schools and colleges. In 1909, Rockefeller launched a public health program in the effort to prevent and cure hookworm, a serious health issue in the southern states, through the Rockefeller Sanitary Commission. In 1913, Rockefeller created the Rockefeller Foundation, with his son John Jr. as president and Gates as a trustee, to foster the well-being of men and women around the world. In its first year, Rockefeller donated $100 million to the foundation, which has provided assistance to medical research and education, public health initiatives, scientific advancements, social research, the arts, and other fields around the world. A decade later, the Rockefeller Foundation was the largest grant-making foundation in the world and its founder deemed the most generous philanthropist in U.S. history. Death Along with donating his fortune, John D. Rockefeller spent his last years enjoying his children, grandchildren, and his hobby of landscaping and gardening. He was also an avid golfer. Rockefeller hoped to live to be a centenarian but died two years before the occasion on May 23, 1937. He was laid to rest between his beloved wife and mother at Lakeview Cemetery in Cleveland, Ohio. Legacy Though many Americans scorned Rockefeller for making his Standard Oil fortune through unscrupulous business tactics, its profits aided the world. Through John D. Rockefeller’s philanthropic endeavors, the oil titan educated and saved an untold number of lives and aided medical and scientific advancement. Rockefeller also forever changed the landscape of American business. Sources â€Å"John D. Rockefeller: The Ultimate Oil Man.† John D. Rockefeller: The Ultimate Oil Man.â€Å"John D. Rockefeller.† Biography.com, AE Networks Television, 16 Jan. 2019.The Rockefeller Archive Center.