John D. Rockefeller Sr. was a businessman who amassed one of the largest fortunes in history. While alive, he controlled 90% of the oil in the United States, and at the time of his death, his net worth was between $300 and $400 billion—all in spite of coming from nothing. This is the story of how a young boy who grew up in poverty worked hard enough, and smart enough, to become the richest man in the entire world.
GROWING UP IN THE SCHOOL OF HARD KNOCKS
John D. Rockefeller Sr. was born on July 8, 1839 in Richford, New York. John’s mother, Eliza Davidson, had a total of six children. His father, William Avery Rockefeller, was called “Big Bill”, because of his larger-than-life personality. He billed himself as a traveling “botanic physician”, when really he was a con artist who sold fake tonics purported to cure people of whatever ailed them. Big Bill traveled across the country and cheated on John’s mother, marrying a second woman named Nancy Brown, with whom he had several more children. When it was finally time to come clean, Bill convinced Nancy and Eliza to combine their families and all live together in Cleveland, Ohio.
If your only goal is to become rich, you will never achieve it.” -John D. Rockefeller Sr.
Even as a young boy, John D. Rockefeller Sr. was disappointed by his father’s behavior, and never wanted to grow up to be anything like him. Bill purposely mistreated John and his siblings, telling them that he wanted to teach them never to trust anyone. The family struggled with money, and they were always living in poverty. John helped his mother raise turkeys in their backyard to sell, and found odd jobs around the neighborhood to bring in some extra cash. Throughout these years, he put away as much money as he could in savings, and became a devout Baptist. Throughout his childhood, he eagerly looked forward to the day when he could grow up and finally start working to earn a living.
ENTERING THE WORLD OF BUSINESS
As a High Schooler, John D. Rockefeller Sr. said that his goal was to make $100,000 — $3 million today, adjusted for inflation. He also wanted to live to be 100 years old. While he couldn’t do much about the latter, his drive to become a legitimate businessman was enough to encourage him to drop out of High School and immediately begin business and accounting classes at the Folsom Mercantile College.
He completed the courses at the age of 16, and was then able to become an assistant bookkeeper for a merchant called Hewett & Tuttle. He was so proud of this job that he turned his first day—September 25th—into a holiday he called “Job Day”. He was only making 50 cents each day, but from the very beginning he was ecstatic to be learning how to run a business.
I do not think that there is any other quality so essential to success of any kind as the quality of perseverance. It overcomes almost everything, even nature.” -John D. Rockefeller Sr.
In his time at Hewett & Tuttle, Rockefeller was exceptionally happy and friendly with customers, earning him a great reputation. People had so much trust in his work ethic and good attitude, that a wealthy patron in town trusted him with a $4,000 loan to start his own business—the equivalent of $100,000 today. With that money, Rockefeller purchased goods like hay, meat, and grain, in order to open his own store. And once he open shop there, the customers followed him. He was so popular around town that he made $450,000 in the very first year. More than enough to pay back the $4,000 loan.
MAKING THE MOST OF THE OIL INDUSTRY
At 24 years old, John D. Rockefeller Sr. decided to start a new chapter in his career, and get involved in the Pennsylvania Oil Rush. Since he lived in Cleveland, Ohio, he was very close to Pennsylvania, and could take advantage of the railroad that passed through where he lived. So even though he had a profitable general store, he took a risk and struck out on his own again to start his own oil company. While running it, Rockefeller was always looking for ways to save money, like purchasing thousands of acres of trees to make his own oil barrels instead of paying a third party company to make them. In 1870, he and his business partner Henry M. Flagler incorporated, and the Standard Oil Company was born.
I believe that thrift is essential to well-ordered living.” -John D. Rockefeller Sr.
Together with Henry Flager, John D. Rockefeller Sr. began buying up small oil refinery companies throughout Cleveland. And those refineries that didn’t want to sell? Rockefeller had a solution for them too. Whenever a refinery refused to sell to him, Rockefeller started to sell his own oil at a loss. Customers went to Standard Oil for the best deal, which pressured the smaller companies to lower their prices too. Eventually, his competitors would lose so much money that they were forced to go out of business. His tactics were criticized as ruthless, and he was called a “Robber Baron” back then, but there are similarities to the modern day story of Amazon. They also ran at a loss for years in order to attract customers with the best price on the market. And, perhaps like Amazon, Rockefeller was always looking for ways to expand. First he bought out all the competitors in his local area, then he repeated this process going from state to state. Eventually, 90% of the oil in America was owned by John D. Rockefeller Sr.
FROM MILLIONAIRE TO BILLIONAIRE
When the Standard Oil Company became a massive national corporation, Rockefeller created a board of trustees of top experts in the field, which eventually became the model for how many other major corporations operated in the future. But Rockefeller’s business ventures were not always going off without a hitch. His partnership with The Pennsylvania Railroad Company was one such example.
In the beginning the railroad had offered Rockefeller a discount, but later reneged on their agreement and raised the price. After some disagreements back and forth, Rockefeller decided to create his own railroad to save money. This, the Pennsylvania Railroad Company resented. So in return they started their own oil refinery to compete with him on his turf. Employees feared that this squabble would lead to disaster—namely, them not getting paid. And that in turn led to the Great Railroad Strike of 1877.
I always tried to turn every disaster into an opportunity.”-John D. Rockefeller Sr.
In the end, the Pennsylvania Railroad Company ended up selling their oil refinery to Rockefeller for $3.4 million. And ten years later, in 1887, The Interstate Commerce Act prevented railroads from price gouging like they had been. But what the public took away from the situation was evidence that Rockefeller had far too much power over the industry. He went from being called a Robber Baron, to actually having cartoons illustrated that made him into a villain. It was true that he absorbed many smaller businesses, but what people were really focused on his wealth. With massive influence in the two biggest money-making businesses in the world, he was officially a billionaire, and most people couldn’t look past that to recognize how much his companies did to bring reliable fuel to people across the United States.
CHANGING THE WORLD, AND LEAVING A LASTING LEGACY
When Teddy Roosevelt came into office he did it by campaigning, in part, on Antitrust Law—laws that would prevent powerful business owners like Rockefeller from eating up all of the small businesses. Roosevelt’s win eventually led to the Sherman Antitrust Act in 1890, which prevented monopolies from being formed in the United States, and meant that Rockefeller had to split up his company. So he did, and he created BP, Exxon, Conocophillips, and Chevron.
In 1897, John D. Rockefeller Sr. retired from business, and left his company to his son and the board of trustees. Rockefeller’s net worth at that time was the modern-day equivalent of $300 to $400 billion, making him one of the richest men to ever have lived. As a Christian, Rockefeller had always given to the church through tithing since he was 16. But in retirement, he decided to invest in giving back to the community.
Charity is injurious unless it helps the recipient to become independent of it.”-John D. Rockefeller Sr.
One of his greatest philanthropic achievements that came as a result was the building of Rockefeller Center in New York City during the Great Depression. Not only did it become an iconic building, but it created 40,000 new jobs and helped to reignite the economy because it center had shops, apartments, and a movie studio as part of it. Rockefeller also gave $70 million of his fortune to the University of Chicago, and helped to fund and start Spelman College in Atlanta. The New York Times estimates that by the time of his death, he gave away a total of $550 million. He had made the $3 million he dreamed about in high school and then some — and when he passed away at the age of 97, nearly reached his goal to be 100, too.