BY DAVID PALMER

John D Rockefeller

Early Life

John D Rockefeller was born on July 8,1893 in Richford New York near Ithaca.

Rockefeller studied at Owego Academy inOwego New York which was his highschool education.

He then studied for ten weeks at Folsom’scommercial College in Cleveland Ohiowhere he took business oriented coursesthat helped him excel later in life as abusinessman.

His first real job was at Hewitt & Tuttle,which was a produce company, as anassistant bookkeeper. Before long he hadbeen able to work his way up the ranks tomanage all of the shipping the companydid because he was so skilled at business.

Early Business Career

Shortly after he became 20 he quit his jobwith Hewitt & Tuttle and started his owngrocery supply business with his friendMaurice Clark.

Their business was very successful in acompetitive market mainly because ofRockefeller’s natural business skills.

The peak of business was during the civilwar when food was greatly needed to feedtroops.

Rockefeller soon realized that his future inthe grocery business was very limitedbecause of the location of Cleveland onLake Erie and the fact that most food wasnow being transported by railroad.

The Start of Oil

After realizing groceries were not going totake him far he began investigating othermore profitable paths. That’s when he sawthe potential of oil and began to make hisown refinery.

Rockefeller thought that the key tobeating your competition was efficiencyand attention to detail, so he basicallybuilt the refinery himself and to insure itsefficiency.

One key to his early success was the factthat he exported most of his oil because ofthe demand in other parts of the world.Although he still had a large domesticbusiness as well.

Rockefeller and Flagler

Rockefeller’s oil business really took offwhen he partnered with Henry Flagler.The two men had very similar ambitionsand both saw the potential of oil.

They used a few basic principles to takeover the industry.

1. They built high quality and larger refineries using the best materialsavailable.

2. They made their own barrels and cut the cost from $3 to $1.50.

3. They made their own refining chemicals and found ways to recyclethe chemicals for re-use.

4. They owned their own transportation (wagons, boats).

5. They owned their own storage facilities (warehouses).

6. They were the first to use tank cars on the railroad which they alsoowned.

7. They owned huge holding tanks that stored crude and refined oiland made it easy to put oil in tank cars.

8. They used and reused every part of oil that couldn’t be sold to helprun their refineries.

This was really the start of the process ofvertical integration and they left nothingto chance making them very successful.

Standard Oil

The Standard Oil company was a firm or trust ofmultiple businessmen but Rockefeller owned about athird.

His goal with Standard Oil was to control and calm avery chaotic oil business. He thought that the prices ofoil and the other small inefficient refineries did nothelp anyone.

Rockefeller proceeded to buy up all the refineriesaround Cleveland and then he dismantled the badones and upgraded the better ones to his standards.

Then Standard had control of over 90% of oil by 1880.This happened largely because of the way Rockefellerwas able to control the railroads and negotiate veryfavorable prices for Standard because he was such alarge part of all the shipping the railroads did.

Standard imposed it’s will on businesses which madethem successful but also disliked by the public whichhurt them in the long run.

Post Oil Rockefeller

He retired from the oil business in 1897 atthe age of 58.

The only challenge he had was finding outwhat to do with all of his money now.

Rockefeller then found something thatworked to relieve his surplus of money incharity.

He basically created the University ofChicago.

He started the Rockefeller institute formedical research.

He donated 50,000,000 to schools toraise teacher’s salaries after WWI.

He also donated to many other charitiesand spent most of his fortune for charityby the time that he died.

Why Rockefeller is Important

Rockefeller is important because of theway in which he revolutionized business.

He pioneered the use of verticalintegration which controls all assetsinvolved in the process of a company.

He basically made the oil industry all thatit is today.

He showed that hard work, efficiency andattention to detail were the best way torun a business and be successful at it.

Rockefeller also donated most of hismoney to charity throughout the course ofhis life especially after he was done withbusiness.

Citations

InformationFoner, Eric, and John A. Garraty. "Rockefeller, John D." The Reader's Companion to American

History Dec. 1 1991: n.p. SIRS Researcher. Web. 09 February 2010.

"Rockefeller, John D. (1839-1937)." DISCovering Biography. Online ed. Detroit: Gale, 2003.Discovering Collection. Web. 9 Feb. 2010.

Nevins, Allan. "Standard Oil Company." Dictionary of American History. Ed. Stanley I. Kutler.3rd ed. Vol .7. New York: Charles Scribner's Sons, 2003. 520-521. Gale VirtualReference Library. Web. 9 Feb. 2010.

"People & Events: John D. Rockefeller Senior, 1839-1937." American Experience. PBS, 1999.Web. 09 Feb. 2010<http://www.pbs.org/wgbh/amex/rockefellers/peopleevents/p_rock_jsr.html>.

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