Titan: The Life of John D. Rockefeller, Sr.

Modern readers might associate oil with gasoline, but Rockefeller’s Standard Oil made its fortune first by refining crude oil into kerosene, an illuminant with a global market in the days before electric light bulbs became commonplace.

In the late-19th and early-20th centuries, the muckrakers were a group of reform-minded journalists who exposed everything from deplorable social conditions to political corruption. Ida Tarbell, author of the scathing 19-part exposé on Standard Oil that appeared in McClure’s Magazine beginning in 1902 and was eventually published as The History of Standard Oil (1904), ranks among the most influential of the muckrakers.

The Oil Regions included Titusville, Oil City, and other parts of northwest Pennsylvania to which Edwin Drake’s 1859 oil strike attracted thousands of fortune-seekers. Rockefeller entered the oil business on the refining side in Cleveland, not as a driller in the fields. However, as he came to dominate all aspects of the oil industry—refining, transportation, storage, marketing, etc.—his name and presence became anathema in the Oil Regions, where smaller producers, including Ida Tarbell’s father, resented Standard Oil’s heavy-handed tactics.

What modern economists call a recession or depression was called a panic in the 19th century. Both the Panic of 1873 and the Panic of 1893, which coincided with Rockefeller’s active tenure at Standard Oil, had such severe economic consequences that each would qualify as a depression by modern standards. Significantly, Rockefeller continued to prosper during these panics, which further convinced him that his cooperation-over-competition approach to the oil industry had rendered him immune to capitalism’s wild market fluctuations.

The rebate was a discount on shipping costs that railroads granted Rockefeller in exchange for a guaranteed high volume of freight. Whereas smaller refiners had to pay a higher public rate, Rockefeller, whose business the railroads craved, received a lower rate, which strengthened his advantage over a dwindling number of competitors. These rebates usually came in the form of secret deals—a form of collusion that made them particularly egregious in the eyes of Rockefeller’s many critics.

This Act, sponsored by Ohio Senator John Sherman (brother of famed Union General William Tecumseh Sherman) and signed into law by President Benjamin Harrison, outlawed industrial combinations in restraint of trade. Although the Act is often remembered as a landmark piece of legislation, Chernow notes that it “was vague in meaning and poorly enforced and so riddled with loopholes that it was popularly derided as the Swiss Cheese Act” (298). Standard Oil made a show of complying with the Act but continued to operate for more than 20 years until dissolved by the US Supreme Court in 1911.

Rockefeller founded Standard Oil in 1870. Under his leadership, the company grew to a position of unparalleled dominance in American industry. Driven by the belief that economic cooperation is superior to cutthroat competition, Rockefeller brought nearly every component of the oil industry—refining, transportation, storage, marketing, etc.—under the Standard Oil umbrella. In 1882, Rockefeller and his associates formed the Standard Oil trust, an innovation in the history of American business, and a model for consolidation in other industries.

Standard Oil also became notorious for anti-competitive and unethical business practices. Ida Tarbell’s The History of Standard Oil (1904) is one of the most scathing and influential journalistic exposés in American history. It led directly to the US Supreme Court’s 1911 decision to dissolve the Standard Oil trust. In fact, after the 1911 Supreme Court ruling, the stock values of Standard Oil’s constituent companies skyrocketed. As a result, Rockefeller’s personal wealth reached a peak of $900 million in 1913. The anti-Standard trustbusters, therefore, accomplished little more than the further enrichment of America’s richest man.

In Titan, Chernow is far more critical of Standard Oil’s unsavory methods than its consolidated structure.