John D. Rockefeller: A Life From Beginning to End (Biographies of Business Leaders Book 4) by Hourly History

Author:Hourly History [History, Hourly]
Language: eng
Format: azw3
Publisher: Hourly History
Published: 2017-10-23T16:00:00+00:00

Chapter Five

Monopoly!

“I never had an animus against their size and wealth, never objected to their corporate form. I was willing that they should combine and grow as big and wealthy as they could, but only by legitimate means. But they had never played fair, and that ruined their greatness for me.”

—Ida Tarbell

The age of the robber barons had galvanized the American economy and men of extreme wealth were no longer an anomaly. Thomas Jefferson’s long-ago hopes for America to remain a pastoral idyll in the midst of a money-grubbing world were dashed, as the United States became synonymous with wealth that came from manufacturing, not agriculture. The Gilded Age, when businessmen like Rockefeller, Andrew Carnegie, Henry Clay Frick, John Jacob Astor, Jay Cooke, Jay Gould, James Fisk, Cornelius Vanderbilt, and others redefined business practices to suit their industries and their particular concept of ethics marked an era of phenomenal wealth and commercial power.

But just as these intrepid businessmen were acquiring wealth, the reform movement was growing as well, and the progressives didn’t like what they saw. Journalists and politicians alike tasked themselves with the moral mission of bringing change to what they regarded as a corrupt system which allowed powerful men to trample competition in the name of avaricious capitalism.

The year 1887 saw the creation of the Interstate Commerce Commission, which was assigned to oversee the rates charged for all railroad freight to make sure that the costs were equal for all. Then, in 1890, the Sherman Antitrust Act was passed to address the encroaching reach of monopolies in American business.

Any arrangement that restrained trade was forbidden, and while it was not immediately apparent just what constituted restraint of trade, it didn’t take long before Standard Oil was in the crosshairs of a lawsuit brought by the Attorney General of Ohio. Ohio sued Standard Oil, which by 1890 controlled 88 percent of all the refined oil in the United States, and the lawsuit successfully forced the Trust to dissolve in 1892. Standard’s solution was to separate Standard Oil of Ohio in order to maintain control. In 1899, after New Jersey revised its incorporation laws and permitted a company to own shares in companies located in any other state, the Standard Oil Trust legally re-named itself the Standard Oil Company of New Jersey, a holding company which held stock in 41 other companies.

Muckraking journalist Ida Tarbell’s 1904 expose of Rockefeller’s dealings, The History of the Standard Oil Company, reported on the firm’s tactics, which included spying, price wars, dubious marketing practices, and courtroom antics which kept the company from being charged. The public response was swift. Tarbell may have had a personal motive for her efforts to bring Standard Oil to retribution, as her father had been one of those rivals who had been a victim of the South Improvement Company scheme to provide Standard Oil with advantageous freight rates.

Rockefeller, eager to present a more benign image of his actions, insisted that he had only done what the market permitted. But skeptics were not convinced that his public statements matched his private business dealings.

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