ipl-logo

The Standard Oil Company By John D. Rockefeller And Henry M.

1480 Words6 Pages

The Standard Oil Company headed by John D. Rockefeller and Henry M. Flagler is one of the most well known monopolies to have ever existed. Dominating the oil industry during the industrial revolution, Standard Oil was the first corporation to use the trust system and grew into a national oil corporation that eventually controlled a majority of the United States oil industry. Though no longer existing, the lasting impacts of Standard Oil and its founders can still be seen today.
Established in Ohio, in 1867, the Standard Oil Company grew from a small refinery into a monopoly controlling roughly 95% of the oil refining industry by 1878 (Montague, 1902). With the help of investors and the guidance of eventual firm partner Henry M. Flagler, Standard …show more content…

The United States economy, at the time, was prosperous but unstable due to its relatively new industrial presence. There was a lack of laws monitoring the competitive market places and Rockefeller and Flagler took advantage of that in order to grow their company into a dominant force in the oil refining businesses (Gordon, 2008). Prior to the establishment of Standard Oil, the oil refining business was a free market with many competitors and little opportunity to control prices. The industry itself was fragmented into several parts; those parts include drilling, transporting, containing, and distributing. Not wanting to venture onto other projects, Rockefeller emphasized his company’s focus on only the oil industry and its products and “by the turn of the twentieth century, he had consolidated large segments of the oil industry into a single vertically integrated company with overwhelming market power” (Pratt, 2012). Standard Oil’s monopolistic success can be largely attributed to its firm control over the transportation aspect of the oil industry. Before becoming a strong economic power, Standard Oil avoided high discriminatory freight rates that their competitors faced through negotiations made by Flagler and Rockefeller (Gordon, 2008). As their company expanded and became a corporation, they were able to continue manipulating freight prices and used this to obtain a clear advantage over any competitor (Pratt, 2012). Rockefeller knew that one of the largest cost components of oil was transportation, so he took control of railroads through his economic power and “demanded and received rebates on his posted railroad rates and drawbacks on those of his competitors, which meant that a portion of their rate secretly went to Standard Oil” (Pratt, 2012). In order

Show More
Related
1125 Words | 5 Pages

One of the greatest threats to the country was the establishment of monopolies in certain industries, and industrialists like John Rockefeller, founder of Standard Oil Company, worked with the specific goal in mind to create a monopoly. For example, with Standard Oil Company, Rockefeller colluded with the railroad industry to have them raise the price of rail shipping for his competitors and in turn give the extra money the railroad companies made to Rockefeller and his company. Therefore, Rockefeller monopolized his industry by having railroads hike their prices for his competitors' shipping which thus increased the price of oil, and at the same time, Rockefeller was able to lower his price with the rail revenue he received, therefore putting all of his competitors out of business and establishing a monopoly. Once a monopoly is established, the company can set the price and has no need to innovate with the absence of competitors, thus harming the country as a whole. While corruption occurred between industrialists, there were also acts of corruption between industrialists and the government itself.

Read More
180 Words | 1 Pages

The petroleum market rose in 1859 after former rail director Edwin Drake successfully unearthed an oil well with his own oil drill. After this breakthrough, investors realized that oil sites made more financial sense than whaling voyages. Whaling was dangerous, time-consuming, and expensive—while often yielding no profit. But oil drilling was generally risk-free, would not cost anyone’s life, and was more likely to yield something profitable with the reliability of Drake’s oil drill. Consequently, many whaling ports lost their funding to oil sites, and kerosene replaced whale oil as America’s leading natural resource.

Read More
559 Words | 3 Pages

The three top railroads that ran through Cleveland agreed to raise their shipping fees while paying rebates to Rockefeller .Small oil refiners were hurt from these brutal tactics and Ida decided to write “ The History Of Standard Oil Company” which exposed these harsh business practices

Read More
336 Words | 2 Pages

John D. Rockefeller was called a robber baron because many people believed he used unethical business practices to amass his extraordinary wealth. One of the most known was his practice of demanding rebates from railroads. Because Standard Oil shipped such large amounts of oil by rail, Rockefeller insisted that the railroads offer him rebates, or a discounted rate. This policy gave Standard

Read More
1617 Words | 7 Pages

In the gilded age of 1890’s and the early twentieth century. Four men had a negative and positive impact on the twenty-first century. John D. Rockefeller, Andrew Carnegie, J.P Morgan, and Cornelius vanderbilt were called robber barons. Robber barons were people who took over the economy by doing anything possible to take over. They did things like monopolizing railroads, banking industry , oil, and steel industries.

Read More
1640 Words | 7 Pages

With Standard Oil being the leading oil company, this limits other oil companies to sales because Standard Oil had the rights to many companies to produce and sell oil leaving very few businesses that other oil companies could sell to. This puts the little companies into a decrease in sales while Standard Oil makes a huge increase in sales. Small businesses worry about becoming bankrupt while Rockefeller becomes wealthy. Rockefeller was the reason why there were limits to big businesses because he was in control with oil companies not allowing others to succeed as

Read More
460 Words | 2 Pages

By the early 20th century, millions of Americans were engaged in oil-related industries; this increased employment. Rockefeller saw the vast potential of the industry, as he described: “We saw the vast possibilities of the oil industry, stood at the center of it, and brought our knowledge and imagination and business experience to bear in a dozen, in twenty, in thirty directions.” Much of Rockefeller’s whole life was characterized by various business-related controversies for his aggressive expanding desire but by the later parts of his life he became to be remembered as a philanthropist for his charitable efforts. The overall image of Rockefeller had varied significantly depending on who he was viewed, for example, his ex-competitors, politicians and critical biographizes.

Read More
114 Words | 1 Pages

John D. Rockefeller was the founder of the Standard Oil Company and became one of the wealthiest men of his time. His company was the major leader of the oil business in the United States during his reign. Standard Oil company served as a prime example of how companies should function, which helped to guide others to follow in his footsteps. He was a major philanthropist and used his large fortune to fund many philanthropic causes. His donations helped pay for the creations of the University of Chicago, the Rockefeller University, the establishment of Central Philippine University, and many others.

Read More
471 Words | 2 Pages

I believe that the government should break up Standard Oil’s Monopoly for the following reasons; First because John D. Rockefeller's acts are corrupt, secondly because it led business to bankruptcy and lastly because it could be considered as illegal business. For these reasons I believe that the government should break up Standard Oil’s Monopoly. John D. Rockefeller along with his brother created the Standard Oil Company, and became one of the world’s wealthiest men. In 1870, he established Standard Oil. It controlled 90% of the Country's refineries.

Read More
1415 Words | 6 Pages

Those who knew him personally described him as an "exact and honest" man. In 1864, Rockefeller had gotten married and dove into the oil refinery business one year later. It wasn't until the year 1870, however, that he and five other men founded the Standard Oil Company. Said company was able to make the price of oil drop a whopping 85%! In its first year, the company only controlled 2-3% of the nation's crude oil, but that drastically changed in a decade.

Read More
765 Words | 4 Pages

Rockefeller, who controlled the oil industry at the time, Cornelius Vanderbilt and George Pullman, they controlled the railroad industry, Andrew Carnegie, who controlled the steel industry and J.P Morgan a figure in the United States economy. Their industries later created monopolies, which is the complete possession or control of supply or trade in a raw material or service. John D. Rockefeller was the first monopoly. They created trusts in order to eliminate any competition. Workers noticed that they weren’t being treated equally.

Read More
1371 Words | 6 Pages

John D. Rockefeller Sr: How did John D. Rockefeller impact the Industrial Revolution John Davison Rockefeller Sr. once stated “If you want to succeed you should strike out on new paths, rather than travel the worn paths of accepted success” (John D. Rockefeller Quotes). John D. Rockefeller was the founder of Standard Oil in which then became one of the wealthiest men in the world. Rockefellers ongoing funding as a philanthropist and trust in oil is how the man's name still lives on to this day (The Rockefeller Archive Center). For thousands of years oil has been a main resource for human consumption, and remains the same.

Read More
815 Words | 4 Pages

People usually think of oil when they think of Texas. For many years, Texas oil had little value. In the early 1900s, lumber was still the leading industry in Texas. However, after oil was discovered at the Spindletop in 1901, it became the state’s number-one industry. The discovery of huge amount of oil in Texas affected the economy as well as many aspects of daily life.

Read More
864 Words | 4 Pages

But the profit of building the railroads was hit and the railway industry began to decline. Railway was an urgent need to operating the goods but there wasn’t enough traffic to sustain them. Oil was another lucrative business during the Gilded Age. John Rockefeller saw an opportunity that seemingly everything required oil during this era: factory, machines, ships, and, later, automobiles. The application of oil made the train speeded up.

Read More
459 Words | 2 Pages

Rockefeller: The Captain of Industry that has helped our country thrive “The best philanthropy” he wrote, is constantly in search of finalities- a search for a cause an attempt to cure evils at their source” - John D. Rockefeller John D. Rockefeller was the richest man of his time but, used his wealth to improve our country. Rockefeller entered the fledgling Oil industry in 1863, by investing in a factory in Cleveland, Ohio. In 1870 Rockefeller established the Standard Oil Company. With the establishment of the oil company Rockefeller controlled 90% of the oil business in America by 1880.

Read More

More about The Standard Oil Company By John D. Rockefeller And Henry M.

Related Topics

Open Document