Standard Oil and J.D. Rockafeller

J.D. Rockefeller had a difficult childhood. He was constantly torn between the influence of his mother and that of his father. His father spent most of his time on the road and his family lived in debt. Rockafeller became very religious and was embarrassed by his father. He was determined to grow up to be respected, unlike his father.

He decided to start his own trading company. In 1863 he decided to focus on the new commodity of oil. Rockafeller focused on refining rather than just drilling oil. He opened up his first refinery in 1863. It was the largest and most efficient refinery.  This set off a frenzy of production. Kerosene, which was used for lamps and such, was in high demand. Rockafeller wanted to be the only refiner- he wanted no competitors. He was a ruthless many He told his competitors to become part of Standard Oil, or else face his wrath. Those who didn't join Standard Oil suffered. He created artificial shortages to prevent his competitors from competing with him (today this would be illegal). He demanded from railroad companies a discount on his shipments and a kickback on shipments made by his competitors. This basically meant that every time someone shipped to his competitors the railroad companies would have to pay him. By doing this he ensured that the railroad would only buy oil from Standard Oil. When the automobile came along oil sales went up again. Everything was beginning to run and thus need oil which meant lots of business for Rockafeller. He controlled 1/3 of the oil and refined 90% of the world's oil. Because of his ruthless methods, he got a lot of bad press, but he just ignored it as he felt that he deserved all the money he made. At the age of 58, he ended up giving much of his money away and stepped away from many of his duties. He died with over 900 million dollars.

Teddy Roosevelt, a strong hater of monopolists like Rockafeller, broke up standard oil into 34 companies to stop the monopoly. To prevent monopolies like Standard Oil from existing many of the methods Rockafeller used to become a monopolist have been made illegal.