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|The History of The Standard Oil Company |
The richest and most fascinating oil history in the world
| A lengthy History that is definitely worth the read!|
John D. Rockefeller (July 8, 1839 – May 23, 1937) was the guiding force behind the creation and development of the Standard Oil Company, which grew to dominate the oil industry and became one of the first big trusts in the United States.John left high school in 1855 to take a business course at Folsom Mercantile College. He completed the six-month course in three months and, after looking for a job for six weeks, was employed as an assistant bookkeeper by Hewitt & Tuttle, a small firm of commission merchants and produce shippers. Rockefeller was not paid until after he had worked there three months, when Hewitt gave him $50 ($3.57 a week) and told him that his salary was being increased to $25 a month. A few months later he became the cashier and bookkeeper.In 1859, with $1,000 he had saved and another $1,000 borrowed from his father, Rockefeller formed a partnership in the commission business with another young man, Maurice B. Clark. In that same year the first oil well was drilled at Titusville in western Pennsylvania, giving rise to the petroleum industry. Cleveland soon became a major refining center of the booming new industry, and in 1863 Rockefeller and Clark entered the oil business as refiners. Together with a new partner, Samuel Andrews, who had some refining experience, they built and operated an oil refinery under the company name of Andrews, Clark & Co. The firm also continued in the commission business but in 1865 the partners, now five in number, disagreed about the management of their business affairs and decided to sell the refinery to whoever amongst them bid the highest. Rockefeller bought it for $72,500, sold out his other interests and, with Andrews, formed Rockefeller & Andrews.THE STANDARD OIL COMPANYRockefeller’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 38 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.
In the year 1904, it controlled 91% of oil production and 85% of final sales in the United States.As a result, an antitrust case was filed against the company in 1906 under the Sherman Antitrust Act, arguing that the company used tactics such as raising prices in areas where it had a monopoly, while price gouging in areas where it still faced competition.By the time the Standard Oil was broken up in 1911, its market share had eroded to 64%, and there were at least 147 refining companies competing with it in the United States. Meanwhile, John D. Rockefeller had left the company, yet the value of his stock doubled as a result of the split. This made him the world’s richest person at the time.Resulting Companies from Standard Oil The company was split into 34 separate entities, mainly based on geographical area in the USToday, the biggest of these companies form the core of the U.S. oil industry:Standard Oil of New Jersey: Merged with Humble Oil and eventually became ExxonStandard Oil of New York: Merged with Vacuum Oil, and eventually became MobilStandard Oil of California: Acquired Standard Oil of Kentucky, Texaco, and Unocal, and is now ChevronStandard Oil of Indiana: Renamed Amoco, and was acquired by BPStandard Oil of Ohio: Acquired by BPThe Ohio Oil Company: Became Marathon Oil, which eventually also spun-off Marathon PetroleumSources: Wikipedia, aoghs.org
Rockefeller’s $1.5 billion was about 1.6% of the economy in 1937. If he were to own the same percentage today, his fortune would be almost triple Jeff Bezos of Amazon.Source: Wikipedia
If you would like a copy of this chart, please let us know. It is pretty fascinating! In the next several weeks we will be breaking down the History of these separate entities that split off from Standard Oil Company. Stay tuned! Pictured is an original Standard Oil Products sign from our Garage Art Original Collection, measures 10 feet long x 10″ high and sits off the wall when hung 1.5″, painted metal. We offer a few different variations of Standard Oil Signs- small to large, satin style of vintage (patina) styles to choose from