THE
STANDARD OIL COMPANY
Rockefeller’s stake in the oil industry increased as the industry itself
expanded, spurred by the rapidly spreading use of kerosene for lighting. In
1870 he organized The Standard Oil Company along with his brother William,
Andrews, Henry M. Flagler, S.V. Harkness, and others. It had a capital of
$1 million.
By 1872 Standard Oil had purchased and thus controlled nearly all the refining
firms in Cleveland, plus two refineries in the New York City area. Before
long the company was refining 29,000 barrels of crude oil a day and had its
own cooper shop manufacturing wooden barrels. The company also had storage
tanks with a capacity of several hundred thousand barrels of oil, warehouses
for refined oil, and plants for the manufacture of paints and glue.
Standard prospered and, in 1882, all its properties were merged in the Standard
Oil Trust, which was in effect one great company. It had an initial capital
of $70 million. There were originally forty-two certificate holders, or owners,
in the trust.
After ten years the trust was dissolved by a court decision in Ohio. The
companies that had made up the trust later joined in the formation of the
Standard Oil Company (New Jersey), since New Jersey had adopted a law that
permitted a parent company to own the stock of other companies. It is estimated
that Standard Oil owned three-fourths of the petroleum business in the U.S.
in the 1890s.
In addition to being the head of Standard, Rockefeller owned iron mines
and timberland and invested in numerous companies in manufacturing, transportation,
and other industries. Although he held the title of president of Standard
Oil until 1911, Rockefeller retired from active leadership of the company
in 1896. In 1911 the U.S. Supreme Court found the Standard Oil trust to be
in violation of the anti-trust laws and ordered the dissolution of the parent
New Jersey corporation. The thirty-eight companies which it then controlled
were separated into individual firms. In his biography, Study in Power, John
D. Rockefeller, Industrialist and Philanthropist, the historian Allan Nevins
reports that Rockefeller at that time owned 244,500 of the company’s total
of 983,383 outstanding shares.
