John D. Rockefeller

John D. Rockefeller

The industrialization of America was impacted greatly by John D. Rockefeller. Rockefeller was able to establish a large majority of the petroleum industry with his foundation of Standard Oil. Rockefeller would employ ruthless tactics to make the most money as possible from his oil business. He would create the Standard Oil trust which would influence all big businesses in the country.

Following the Civil War, the petroleum business would boom into "black gold." The kerosene derived from petroleum would produce a much brighter light than the currently used whale oil. However, when Thomas Edison's light bulbs were in use, kerosene oil became obsolete to the lighting industry. The invention of the automobile would select the gasoline-burning internal combustion engine over the steam or electricity engines to run their cars. With this use of gasoline, the oil industry would become a profitable industry through the present day.

John D. Rockefeller would found Standard Oil company in 1870. This company was founded in Cleveland, Ohio, which would become the base of all his operations. Cleveland would become a top five refining center and Standard Oil would become the most profitable oil business. Rockefeller had some unorthodox means of doing business with competitors. He was once called "Reckafellow" by Carnegie which symbolizes how far Rockefeller would go to increase the wealth of his business. One of his illegal means of getting a cost advantage came from secret rebates from the railroads bringing oil into Cleveland. Other competing refiners wanted similar rebates but by the time they were recognized, Standard Oil would become one of the largest shippers of oil and kerosene in the country. By 1877, Rockefeller would control 95 percent of all the oil refineries in the United States.

Any competition in Rockefeller's way would be shown no mercy. After the railroad formed the South Improvement Company to stabilize freight rates, Rockefeller demanded special treatment as a high volume shipper. Not only would he get steep rebates from the railroads for the shipment of his oil, he would also reap the benefits of competing companies' shipments. He would employ spies in rivaling refiners and make his move when the refinery was vulnerable. His normal business cycle included buying competing refiners, improving efficiency of the operations, obtaining higher discounts on oil shipment, severely undercutting his competition then buying them out. Rockefeller would show his competition some records of recent business transactions so they could see what they were up against and make them a reasonable offer. If they declined, he would run them into bankruptcy, then cheaply buy up whatever was left of their company at