Rockefeller: The World’s First Billionaire

there was a time when anyone would

tremble upon hearing the name John D

Rockefeller Not only was he the world's

first billionaire he's one of the

richest people in history his Empire

Standard Oil became the most dominant

Monopoly in the world by brutally

crushing competitors taking control of

multiple Industries bribing the

government into submission and treating

business as if it was war because of his

ruthless business practices and

secretive deals Rockefeller made many

enemies his career is filled with bitter

rivalries like with Andrew carnegi and

even ferocious battles against US

presidents but before he was the Titan

of the oil industry Rockefeller was at

the very bottom of society his story is

one of only a handful of cases where

someone manages to rise from the depth

of poverty to the absolute peak of

wealth and power rockefeller's story is

at times inspiring and at times chilling

it's an example of what happens when

greed and ambition go completely

unchecked so let me take you back to

1839 where a young John D Rock fella is

Born Into

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poverty in 1839 joh D rockerfeller was

the first child born into a family of

peasant Farmers with no cash to spare in

his small town of less than a thousand

the most mysterious character to be

found was undoubtedly Jon's father who

was known as devil Bill instead of

helping on the Family Farm Farm Bill did

just about anything else he was an

athlete ventriloquist Hunter hypnotist

and even an animal trainer once he won a

bear in a competition kept it as a pet

and taught it to do tricks Bill did a

little of this a little of that but not

much of anything bill would also

spontaneously ski town in the middle of

the night leaving johon and his siblings

to fend for themselves for weeks or even

months only to reappear in a luxurious

carriage and showered Jon and his

siblings with toys and gifts and this

confused JN because his family lived in

a rumbling Old House wore tattered

clothes and they were hungry and cold

every night they lived a pitiful life

with these occasional bouts of luxury

when his father returned and the reason

for that was because Bill lived a secret

double life as a con artist whenever he

disappeared Bill changed his name from

William Rockefeller to Dr William

levingston and traveled from town to

town selling useless Herbal Remedies and

potions to the sick and desperate

because Bill was usually far away

running scams Jon's mother enlisted

Jon's help working at the farm where she

instilled a strong religious faith and

sense of Duty in him while they plowed

the fields for a boy younger than 10

balancing school and farming was

backbreaking but it taught him the value

of discipline and hard work John was

proud to be helping his family out in

fact he even started coming up with

other ways to make money for example

John once followed a wild turkey into

the woods stole its eggs and raised the

hatchlings when they matured into

turkeys Jon sold some of them for a tidy

profit and kept the rest so he could get

more eggs and repeat the process despite

his young age John was now pitching in a

few every week and was making a serious

impact on the Family's finances it

looked like the Rockefellers might

finally have a decent and stable life

however when John was 10 his father bill

was accused of sexually assaulting a

young woman even though nothing was

proven the Rockefeller still faced

Public Disgrace and so they were forced

to pack their bags and find a new home

you'd think after this event bill would

dial back his schemes his infidelity and

focus on healing his relationships to

his family but instead he did the

complete opposite was using his fake

identity of Dr to William levingston

Bill married another woman in a

different state where no one recognized

him of course he kept this a secret and

neither John's mother nor the other

woman ever knew he had two wives but the

effect was evident bill was almost never

around so the Rockefellers moved from

town to town and John took on more

responsibility as The Unofficial head of

the household all us going to school he

kept finding ways to make money manage

the family's finances and he even

started giving out very small loans

finally the Rockefellers found a good

home in Cleveland Ohio but now that John

was 16 and nearly done with school he

wondered what the next phase of his life

would be John wanted to go to college

but by this point he had four siblings

and a fifth on the way and since Jon's

father was absent even more than normal

now that he had his secret other wife

Jon's mother relied on Jon to help pay

for their food housing and education

this meant College was out of the

question John had to get to work

immediately and so just 2 months before

his graduation John dropped out of

school and began looking for a job in

Cleveland he was after something big so

he made a list of all the the biggest

railroads Banks and wholesale merchants

in the city however every time John

showed up to an interview people laughed

in his face when they found out he was

only 16 years old John faced rejection

after rejection but no amount of

humiliation was going to stop him and

after six long weeks he got an interview

at a small firm that needed help with

bookkeeping when they saw John's

excellent penmanship they decided to

give him a chance and told him to get to

work immediately not even mentioning how

much he'd get paid John was ecstatic and

for the rest of his life he celebrated

September 26th as a personal holiday he

called job day to him it was even more

important than his own birthday even

though it was not a massive operation

Jon's first job taught him how to deal

with suppliers pay bills and see the

inner workings of a real business for

the first time one day his boss came in

with a check for $4,000 and put it

inside a safe John knew the safe's

combination so when his boss was gone he

opened it up just so he could hold the

note in his hands hypnotized by how much

it represented John dreamed of someday

making as much money as his bosses and

so every morning before heading off to

work he began repeating to himself I am

bound to be rich on the last day of 1855

John's bosses gave him his payment $50

which meant he'd only earned a little

over 50 cents a day it wasn't much but

since he'd done such a good job his boss

has raised his salary to $300 per year

the equivalent of around $11,000 today

the raise gave Jon something he deeply

wanted independence from his father now

with his mother's help he could finally

give his family the stable life they'd

yearned for and from early on in his

career John personally gave around 10%

of his salary to various charitable

causes but after 2 years of diligent

work a recession slowed the business

down and one of the founders quit the

firm all of his responsibilities fell

onto JN who became the company's lead

accountant however Jon knew the economic

downturn had caused a sharp decline in

the firm's revenues and he suspected

that soon The Firm may have to close

down completely and yet John wasn't

worried his 2 years of experience in the

job had given him a huge amount of

confidence and so Jon was already

planning his biggest move yet John D

Rockefeller was ready to start his own

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company during his first job JN had

become friends with Maurice Clark a

28-year-old chemist who worked down the

street from him even though John was

just 18 years old at this point he

developed a good reputation as a

bookkeeper in Cleveland and one day

Maurice told him he was planning on

starting a produce business and

suggested that they partner up together

after saving up a bit of money they

formed Clark and Rockefeller and got to

work buying and reselling grain fish

beans meat and other Foods it was tough

at first John and Maurice were often

exhausted from looking for customers out

on the road but owning their own

business gave them immense pride and

even though he was a bit shy and quiet

at first John was a capable salesman

because he was so mature everyone called

him Mr Rockefeller the older men in the

industry easily trusted him and the list

of clients at Clark and Rockefeller

quickly grew in fact their biggest

problem was that they didn't have the

capital needed to scale the business and

handle even more clients but JN Maurice

found a smart way to solve this problem

if they wanted to seek a $5,000 loan

they would go around Cleveland saying

their firm was looking to invest $10,000

very publicly giving the impression that

they had plenty of cash this simple

trick meant the banks were more willing

to give them money and the extra loans

they got put them in a great position

when the American Civil War broke out as

business picked up even more as a devout

Baptist John was very strongly opposed

to slavery so he wanted the union to win

the war however John was still

responsible for feeding his family of

six and if he stopped working they

wouldn't have any income so instead of

serving in the Army himself John paid

$300 for a substitute and even paid to

equip several more Union Soldiers the

war gave a huge boost to the economy of

the northern states and Cleveland became

an important strategic location for the

union local food prices were massively

inflated so John's produ business

quadrupled almost overnight in 1862 JN

and Maurice cleared a profit of

$177,000 over $500,000 in today's money

not bad for a 23-year-old but an

opportunity to multiply his wealth even

more soon came across John's desk you

see before electricity people used to

light their homes at Night by burning

oil inside of a lamp usually this oil

came from whale fat but finding and

hunting down whales was costly and

difficult and sadly some whales had been

hunted down to the point of Extinction

however in 1859 someone in Pennsylvania

discovered that by using a tall wooden

structure known as an oil Derek you

could extract industrial amounts of

crude oil by drilling straight into the

ground mining crude oil this way was

cheap and it was fairly easy profits

came quickly and since so many people

were made Rich by the oil boom crude oil

was given the nickname black gold and

that's when johon was introduced to

Samuel Andrews a young man who was

looking for investors to build a crude

oil refinery in Cleveland which was only

a day ride away from the Pennsylvania

Oil regions Andrews had a huge advantage

over most of the competition he

discovered that if you applied sulfuric

acid to crude oil it would essentially

purify it and turn it into kerosene when

burned kerosene lasted longer and shined

brighter than crude oil it was a simple

process but the secret was closely

guarded by the few who had discovered it

now that John and Maurice had plenty of

money to spare because of how successful

their produce business was they thought

it would be wise to diversify their

business unless they loaned Andrews

$4,000 to set up his oil refinery but to

begin they considered this as a side

Venture John and Maurice kept managing

their produce business and let Andrews

handle the refinery by himself setting

it up was remarkably simple and because

kerosene was a superior product to crude

oil began selling like crazy John

couldn't ignore the numbers anymore

within only a year the oil refinery had

become the most profitable side of the

business together JN and Maurice decided

to make a bold move they abandoned their

previous business and went all in on the

oil industry however their initial

enthusiasm was met by a massive

challenge the supply of oil was always

in an unpredictable State at this point

oil had only been found in one small

region of Pennsylvania so many people

thought that it would eventually run out

whenever someone struck a massive oil

field an entire town of oil miners would

suddenly form around the site drill

every last drop and then the town would

disappear just as quickly as it had

formed because of this there were

periods where Oil was overabundant and

prices would dip as low as 10 cents but

on the flip side if it seemed like the

oil was running out then prices would

suddenly rise all the way up to

$14 so to say that the oil Market was

turbulent would be an understatement to

mitigate this effect slightly John

decided to stay out of mining oil and

concentrate only on refining oil but for

JN and Maurice the situation was still

extremely stressful when oil was easy to

find they weren't as profitable as

prices Bel low and when the Welles were

running dry they feared that the last

drop had finally been found and they'd

soon have nothing to sell the

uncertainty was too much to handle from

aice and in 1865 he agreed to sell his

share of the business to John this was

the Tipping Point of his career scared

to his bones but with a calm exterior

John agreed to buy Maurice's share of

the company for $72,500 or 1.35 million

in today's money Maurice was cashing out

whilst John was doubling down and going

all in on the seemingly risky oil

business however it seemed like Jon's

daily affirmation that he was bound to

be rich was quickly becoming a reality

because just as the deal was going down

a gigantic new oil field was found in

the Pennsylvania Oil regions finally

undoing any doubts he had about oil

running out of course the market was

still very competitive so if johon truly

wanted to become as wealthy as he

desired he would have to brutally crush

his compet

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comptition the year before buying his

business partner Sheriff the company

John married a woman who shared his

religious devotion even though he was

now making good money John bought a

modest house in Cleveland where they

began to raise a family so with his home

life in order and the northern economy

boo in after the Union Army won the

Civil War everything was ready for Jon

to begin building his Empire now that

his partner was gone Jon rebranded the

company under a new name Standard Oil

and he got to work building a second

Refinery and began exporting kerosene to

Europe John was confident that the oil

industry would make him extremely rich

but it quickly became apparent that he

needed some help so Jon took on a new

partner to help him run the company a

man named Henry Flagler and the two men

were remarkably similar like John Henry

wasn't interested in making a money he

wanted to build an Empire that's why

when John told him about his ambitious

plans for Standard Oil Henry was all in

he was also just as religious

disciplined and determined as John in

fact perhaps the only difference was

that Henry was even more ruthless when

it came to doing business Henry

approached business the same way he

would approach War the only way to win

was to completely crush your enemy and

so John adopted this philosophy as well

you see competition in the oil refining

industry was quickly turning warlike now

that others had uncovered how simple the

refining process really was

rockefeller's product was no longer

unique new brands of kerosene were

popping up all over the market so John

and Henry began scheming and decided to

form strategic alliances that would not

only boost standard oil's profits but

also hurt their competitors at the same

time one example of this was when JN

secretly colluded with the railroads to

get better transportation costs than all

their competitors at the time oil was

transported from one place to the other

by an extensive network of trains mostly

dominated by three railroad companies

the New York Central the eie and the

most powerful company in America at the

time the Pennsylvania Railroad because

of the way their routs were laid out it

was beneficial for the New York Central

and the Erie railroads to carry oil to

refineries in Cleveland but for the

Pennsylvania Railroad it was more

profitable to carry oil directly to New

York City or Philadelphia so the

Pennsylvania Railroad declared that

Cleveland would be wiped out as a

refining Center and they pulled out of

the city completely after this news that

the largest railroad was leaving the

city many refineries Cleveland left the

city too this was a disaster for the New

York Central and eie railroads who had

made sizable investments in Cleveland

and they were now losing customers so

instead of joining the panicking crowd

and leaving Cleveland John saw that the

Eerie and New York Central railroads

were in dire need for business and he

decided to use their desperation to his

advantage in exchange for a consistent

flow of oil through their networks John

negotiated a deal with the Erie in which

Standard Oil would get a 75% discount on

the railroad's official shipping costs

and in exchange for a daily the order of

60 car loads of refined oil John

negotiated another deal with the New

York Central Railroad to pay $165 per

barrel shipped when the official rate

was $240 so with both railroads John now

had extremely favorable rate secured and

even though the railroads were reluctant

to accept these lower prices the

guaranteed consistent shipments were

irresistible to them in fact since these

railroads went from Shipping all sorts

of things to focusing just on oil they

could simplify their operations and

boost their profits so it was win-win

for everyone well except for the

Pennsylvania Railroad and standard oils

competitors because of the deal

Cleveland became the largest refining

Center in the country and since the

Pennsylvania Railroad had abandoned the

city it was at a steep disadvantage when

trying to revive their business there

and of course the discounts Sean had

negotiated with the railways known as

railroad rebates were kept a secret to

standard oils competitors and so all the

other oil businesses would have to pay

the full price to transport their oil on

the very same trains and here's the

thing because John knew for a fact that

his costs were now lower than his

competitors he was able to trigger a

price War John would lower the price of

his oil so that his competitors would

have to do the same in order to remain

competitive in the market but since John

knew his competitors were paying more

than him to transport the oil and thus

at higher costs even if they charged the

same price for their oil Jon was still

making more profit he knew his

competitors wouldn't be able to survive

so Jon kept slashing the prices and

eventually the price would go so low

that some competitors would go bankrupt

once they went bust Standard Oil would

have way less competition so JN could

bump up the price again and charge even

more than he did originally it was

brutal but it was extremely effective

now John knew these railroad rebates

were morally dubious they gave bigger

businesses hugely preferential treatment

over smaller ones however it would be

over a decade before any antitrust laws

were passed to prevent these kind of

monopolistic practices so legally John

wasn't doing anything wrong and thus in

the meantime this warlike strategy to

crush competitors was paying off and

standard oil raked in enormous profits

however there was one major problem the

massive surplus of oil meant oil prices

had fallen as low as $240 per barrel and

as more oil fields were found in

Pennsylvania it seemed that the price

would continue to fall the remaining

competition was barely hanging on in

fact John estimated that around 90% of

oil refiners were actually losing money

but John began to fear that his

individual success could be overshadowed

by a total collapse of the entire oil

industry John was convinced that if they

were facing a systemwide problem they

needed to find a system wide solution

for it and John's solution would be to

organize an even more dominant Monopoly

the likes of which had never been seen

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before by 1872 John and Henry were

ruthlessly expanding Standard Oil but

oil prices had dropped another 25% they

knew if they didn't do something soon

the entire industry could collapse and

they would fall right along with it so

John decided to collaborate with the

president of the Pennsylvania Railroad

Tom Scott John and Scott had been Rivals

after the deal John made with the other

two main railroads but now Scott was

reaching out to make a similar secret

deal that was even more ambitious and

ruthless Scott proposed a secret

alliance between the largest railroads

and a very select group of the largest

refiners which of course included

Rockefeller and thus oil and the

Pennsylvania New York Central and eie

railroads all formed an alliance

together under the inconspicuous name of

the South improvement company or sic for

short the deal was that in exchange for

a secret 50% rebate on Transportation

costs John would transport all his oil

exclusively through these railroads but

John wasn't content with just getting

benefits for himself he designed the

deal to be devastating for his

competition for example when anyone

outside of this secret Alliance

transported kerosene through these

railroads Standard Oil would receive a

50% rebate from the cost of their

shipments as well these were known as

drawbacks and they meant that standard

oil's competitors would not only be

paying higher prices to transport their

oil on the same railroads but some of

that money would be going directly to

Rockefeller and to top it all off the

railroads would even secretly give Jon

detailed information about their

competitor shipments he would know every

detail of his Rivals businesses and so

he could undercut them by selling

kerosene for cheaper prices anyone

outside this Secret Alliance stood no

chance it was a death sentence for

anyone excluded from the club and the

worst of it was they didn't even know it

however what many of rockefeller's

critics call this whole Arrangement a

Shameless power grab to John he truly

believed it was the best way to save the

oil industry because as things stood

with so many competitors their product

was getting closer and closer to being

given away for free as there was so much

supply of oil readily available he

believed wiping out these smaller

refiners would help the oil industry

overall but either way it didn't matter

because rumors of a railroad and refiner

cartel soon began to spadge when people

read in the newspapers that the rates

for the three most important railroads

in the country had doubled overnight

they knew exactly who to blame Tom Scott

of the Pennsylvania Railroad and John de

Rockefeller of Standard Oil as rumors of

the alliance continued to spread

thousands of people took to the streets

to protest threatening Standard Oil and

the Pennsylvania Railroad with violence

vandalism and arson protesters hijacked

standard shipments and Spilled their oil

and they tore the Pennsylvania's train

track from the ground but the final blow

to the SIC came when the oil miners made

their counter move and boycotted the SIC

without a supply of crude oil John's

refineries were useless so 2 months

after it was formed the SIC had been

disbanded it was a humiliating event one

that brought a lot of negative attention

on John but johon wasn't phased by it he

simply decided if he couldn't control

the oil industry through Shady backro

deals then he would do it in public and

conquer the industry by force John

wanted to bring as many refineries

understanded oil as he could and to his

surprise the SIC Fiasco had actually

caused one important change in the

industry despite the very public Fallout

of the SIC Alliance there were still

Whispers of a secret Railroad and

refiner cartel with many people paranoid

that there must still be some kind of

secret deal in place between the big

railroads and the big refiners even

though there wasn't the rumor spread

everywhere oil refiners were scared that

if Standard Oil still had a secret deal

with the railroads they would get

crushed and John decided to leverage

this thre to his advantage in a period

of 6 weeks now known as the Cleveland

Massacre John managed to intimidate 22

out of the 26 all refining companies in

Cleveland into selling out for fractions

of what their businesses were actually

worth so even though the SIC hadn't gone

ahead the fear it had created pressured

many refiners into Panic selling their

companies to JN plus since many other

refiners were losing money anyway JN

would show them his company's finances

so they could see how well standard was

doing and to prove to them that he could

Outlast them all for most refiners the

choice between fighting a losing battle

and Cashing Out was obvious and whenever

anyone sold out John gave them only two

options they could either sign a damning

contract prohibiting them from ever

joining the industry again or they could

join Standard Oil since most competitors

chose to join standard Jon had the

brightest Minds in the industry working

for him all those entrepreneurs who'd

been running their own companies were

now brought under the Standard Oil

umbrella into one giant company also

when the new refineries came under

standards ownership they outfitted them

with the latest oil refining technology

which drastically cut costs by mid 1873

jum was in control of an Empire with a

growing number of Highly efficient

refineries that together could ship out

over 1 million barrels of kerosene every

year he now had a monopoly over the

Cleveland refineries however on

September 18th 1873 a day historians

called black Thursday a series of bank

failures plunged the US economy into a

national recession that lasted 6 years

for the first time oil prices dropped

not because there was too much Supply

but instead because of a total lack of

demand standard began operating only two

of their six main refining plants in

Cleveland and a year after black

Thursday a single oil barrel traded for

as little as 48 cents less than the cost

of an equal amount of water so everyone

from the miners to the railroads and the

refiners were dreading their seemingly

inevitable fate bankruptcy but thanks to

standard oil's careful management of

finances excellent credit with banks and

their modernized refineries Dr is one of

the only refiners in the country who was

able to still clear a profit and as

always John regarded every crisis as an

opportunity he smelled blood in the

water now John already dominated in

Cleveland at this point which was one of

the main refining centers in the country

but he knew the Bleak economic

conditions were a nationwide problem and

so refiners in the other refining

centers like Pittsburgh Philadelphia and

New York were all struggling badly and

thus John decided this was precisely the

right time to acquire as many of them as

he could so Jon initiated a nationwide

buyout campaign and whenever anyone was

reluctant to sell out John would resort

to indirect ways of pressuring them into

submission for example he would buy all

the available refining machinery and

barrels so competitors couldn't even

make or package their oil and if somehow

they managed to make any oil he would

Reserve every railroad for months so

they couldn't even ship it anywhere

another one of John's brutal business

tactics was to pressure the railroads to

raise prices for other refiners high

enough that they would soon face

bankruptcy since he had detailed records

of all his competitive shipments he

would wait for them to be on the verge

of Ruin and then he would offered to

save their business by buying them up

for pennies eventually everyone who

Standard Oil wanted to acquire was

either absorbed into the growing Giants

or crushed under its pressure by the

time the economy was starting to recover

standard controlled over half of

Pittsburgh's refining capacity the

largest refineries in Philadelphia and

they secured a dominant position in New

York as well to exert even more control

over the industry John built a network

of pipelines which brought crude oil

into their refineries and pumped out

refined oil in large cities the

pipelines meant standard relied Less on

the railroads to transport their oil and

thus it further reduced their unit costs

and with its pipelines covering the

Eastern Seaboard of the United States

like tentacles Standard Oil earned its

appropriate nickname the octopus despite

still only being in his 30s John D

Rockefeller was now the Undisputed king

of oil refining and one of the

wealthiest men in the country however by

now too many people had been victims of

standard oil's predatory business

practices the largest newspaper in

America at the time even called the

company the most cruel and stent piess

and grasping Monopoly that ever fastened

upon a country John's list of enemies

was growing dangerously

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long for the railroad companies the oil

industry was a tremendous source of

business as miners needed to get oil

from Wells to refineries and refiners

then needed to get it to the big cities

however when Standard Oil began laying a

vast network of pipelines all across

America's Eastern Shore the railroad

companies were faced with the fact that

one of their most important customers

was making the mobs a lead so Tom Scott

the owner of the Pennsylvania Railroad

decided to lay his own pipelines but he

also did something he knew John wouldn't

like he started building his own oil

refineries now Scott was in direct

competition with Jon so JN interpreted

this as declaration of war he decided to

launch an allout attack against

America's most powerful company first

John canceled all his business with the

Pennsylvania Railroad and redirected all

that oil to other railroads instead then

John lowered the price of Standard Oil

kerosene which meant that competitors

had to do the same thus reducing their

profit margins and decreasing the

shipment orders on the Pennsylvania

Railroad and finally John convinced the

New York Central and eie railroads to

lower their shipping fees drastically

for everyone to make sure the

Pennsylvania Railroad lost even more

business these strategies most

definitely worked to compete with all

this the Pennsylvania Railroad literally

had to pay refiners to transport oil for

them Scott also had to lay off hundred

hundreds of his employees and reduced

the salaries of those who stayed by 20%

but John's attack didn't just affect the

Pennsylvania Railroad another Big

Railroad the bno had to make similar

layoffs and wage cuts and thus Jon's

attack on the Pennsylvania Railroad

inadvertently caused one of the most

violent labor strikes in American

history dozens of people died in the

commotion and in Pittsburgh alone the

Pennsylvania Railroad lost 500 Freight

cars 120 locomotives and 27 buildings

after they were torched by protesters

even JN started to get concerned by the

chaos that was unfolding before long the

Pennsylvania Railroad a Goliath once

thought to be Invincible had lost the

battle against Standard Oil and Tom

Scott was more than ready to surrender

Scott was in a desperate position and

John's business partner Henry who saw

business as War saw this as an

opportunity to crush him totally but Jon

had a better idea and instead moved to

coordinate a massive deal with the

railroads Jon agreed to help the

Pennsylvania Railroad Survive by

guaranteeing 47% of standard traffic to

them the New York Central the eie and

the B know got the rest of it in

exchange for the steady source of

shipments John demanded a very large

secret rebate on the Pennsylvania's

official rates he demanded even more

detailed information about their

competitor shipments and he wanted 20

cents for every single barrel but passed

through any of the railroads as well a

lot of this was similar to the secret

Alliance that had been proposed before

but this time Jon was the one who held

the balance of power and could basically

demand what he wanted the railroads had

little choice and thus the deal

effectively made Jon one of the most

powerful men in America John basically

Bally now owned the railroads he

essentially controlled the oil industry

and had an allseeing eye into every one

of his competitors he completely

dominated Cleveland Pittsburgh and

Philadelphia and there were only a few

scattered refineries in New York that

weren't his Standard Oil was now in

control of about 90% of the entire oil

refining industry however as for Jon's

rival Tom Scott even though JN had

technically now struck up a deal with

his company the Pennsylvania Railroad

never regained its footing and Scott

personally never recovered from his

humiliating defeats just a year later

Scott suffered from a stroke and died

shortly after what's interesting here is

that many years earlier Tom Scott had

been the mentor to a young Andrew caragi

who was to the steel industry what John

was to the oil industry Cari blamed the

death of his beloved mentor and John and

thus a rivalry was born between carnegi

and Rockefeller the king of oil versus

the king of Steel the Rivalry between

these two Titans of Industry would

intensify as time went on but for now

both men were determined to become

wealthier than the other

in the midst of all this John was

becoming quite a notorious public figure

the fight with the Pennsylvania Railroad

his rivalry with Cari and his tremendous

wealth and power had all taken John from

a mysterious Oil Man in Cleveland Ohio

to now one of the most controversial

figures in American newspapers and yet

for all his wealth Fame and power Jon

didn't indulge in the extravagant

lifestyle that many of his peers did

when he moved to New York Jon spent his

free time playing with his children

instead of seeking the company of

wealthy Bankers or celebrities and he

rarely bought expensive clothes or

luxuries silently managing his army of

Puppets from their new office in New

York John was enriched by his 90%

dominance of the oil refining industry

it seemed like he could now just sit

back and enjoy the fruits of their labor

but actually the opposite was true even

though he had achieved total dominance

the state of the industry was changing

and fast a few years earlier Thomas

Edison patented a light bulb that gave

off a powerful white light for 100 hours

and he was pushing to light the country

with electricity instead of oil then in

188 5 a huge deposit of crude oil was

found in Northern Ohio these two events

meant many Standard Oil Executives

started to panic fearing a massive oil

Surplus that would take the industry

back to the days when oil was priced at

10 cents per barrel but whilst this

company was panicking John was calm as

ever by now he was a master at turning

chaotic situations into opportunities

and this was exactly the crisis he'd

been waiting

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[Music]

up until this point Standard Oil had

only focused on refining oil John had

been pursuing horizontal integration

taking over other refining companies who

did the same thing he did but John knew

that the discovery of oil in Ohio would

change the oil industry and he wanted to

ensure his company profited from Ohio's

new oil fields so this was just the

excuse he needed to begin radical plans

for vertical integration where Standard

Oil would now be involved in every step

of the supply chain JN essentially

wanted to cut out any middleman and

control the entire oil industry himself

from oil wells to refineries to

Transportation storage and distribution

and thus John doubled down on every step

of the business turning standard into

its own supplier transporter producer

and retailer standard oil's existing

operation had the strong base of

industrial infrastructure it needed to

make sure it kept making money whil drum

figured out how to profit from Ohio's

new oil fields he began buying up land

in the area building hundreds of Dereks

to drill for oil and laying new

pipelines to transport a however it

quickly became clear that Ohio's oil had

one glaring problem even after it was

refined it had such a terrible smell

that people called it skunk oil and so

nobody wanted to buy it and it traded

for as low as 15 cents per barrel almost

everyone else gave up trying to sell the

skunk oil immediately but instead John

hired a team of chemists to study the

skunk oil and within a year they'd found

a way to remove the sulfur in the oil

but had been causing the terrible smell

standard was now the only company

selling this new cheaper form of oil and

this gave johon a massive head start

when a few years later oil began

breaking out in immense quantities in

Oklahoma Texas Kansas and California it

was now evident that America was sitting

on an ocean of petroleum and the company

best Poise to take complete advantage of

it was Standard Oil it was also around

this time the automobiles were beginning

to replace the horse and carriage and

luckily for John the process of refining

crude oil produces one key waste product

gasoline with wealthy consumers being

introduced to the automobile standard

found a reason to transform a material

they typically discarded into an

immediate source of extra profits this

meant that even when the United States

was thrust into another economic

depression in 1893 and 600 Banks had to

close their doors Jon was once again

prospering amidst even the worst

economic conditions with Jon's Fortune

growing larger than ever Jon took more

of a backseat in day-to-day operations

at Standard Oil and began to think more

about investing Elsewhere for a man as

capable in business as John you'd expect

he'd probably also be a decent investor

but if you took a look at Jon's personal

Investments at the time you'd find most

of them were deep in the red John knew

if he wanted to keep the generational

wealth he'd acquired up to this point

that he needed to get his investments in

order so he hired a Baptist Minister

called Frederick gates to help him now

it's impossible to know what John was

thinking when he hired a former priest

to administer his fortune but years

later when John was asked who was the

greatest businessman he'd ever met he

pointed to Frederick and there's no

doubt Frederick helped Gro Jon's Fortune

much larger with a series of strategic

Investments it was also around this time

that John's son John junor graduated

from University and John thought it

would be a good idea to have Junior

learn from Frederick Frederick taught

Junior how to invest how to negotiate

and before long the two of them had

turned Jon's laughable portfolio into a

wealth multiplication machine it was at

this point that johon told them to start

making huge investments in other

Industries like buying up railroad

companies which would come in handy

later but the most critical of these

Investments was a long strip of land in

Minnesota known as the massabi mountain

range in this territory was 120 M long

vein of the highest quality Iron Ore

founded dat potentially the largest in

North America now iron is the main

ingredient needed to produce another

important material steel so when Andrew

Cari the steel King heard this news he

feared that Jon was planning to compete

against him in the steel business and in

fact John had been planning to do this

for a long time up until now Rockefeller

and kani's rivalry had really only been

about who was wealthier but now now they

were in an open battle in cari's

territory JN was no longer content

dominating the oil industry he was now

coming after the steel

[Music]

industry John told Frederick and Junior

to commence mining operations in the

masabi range and they undercut coni by

selling their higher quality or to his

competitors at dirt cheap prices as they

built up their mining operations a rumor

started to spread that John was planning

to further infiltrate kani's Niche and

build a huge steel mill now over on

kani's side he had a head start of a few

decades in the steel industry which gave

him considerable leverage over John but

he also had two big problems firstly Jon

had a source of iron that was more

plentiful and of a higher quality than

cari's and secondly caragi had made the

mistake of assuming that iron would

always be cheap and easy to find so he

hadn't made any investments in iron

mines during the last few years his

blind Fai had been proven wrong over

time and now his supply of the most

important mineral he needed was running

out and so hoping to save his business

caragi approached John Frederick and

junor to make a deal by the time the

negotiations concluded the two sides had

reached an agreement Kani agreed to buy

a minimum of 600,000 tons of ore from

John's mine every year and transport all

of it plus an additional 600,000 tons

from his own mine exclusively through

John's railroads which John now owned a

few of in exchange Cari would get a

secret rebate from Jon for supplying his

railroad with so much business it was

the exact same sort of mutually

beneficial secret agreement that John

was used to making with railroad

companies for his oil Transportation

except now he was the one giving Cari a

secret rebate and to seal the deal

carnegi agreed to never buy land around

the massabi range and JN agreed never to

build a steel mill the partnership was

win-win for both men and so it seemed

they were willing to overlook their

differences if it meant they'd both

profit hugely and of course at the same

time her both of their competitors the

agreement between these two former

Rivals soon made news headlines

provoking a craze on Wall Street

investors hoped to get rich by investing

in John's iron mines and carnegi steel

mills which both looked Unstoppable now

they were working together rather than

competing however there was one man who

had a bit more imagination than simply

investing separately in their two

companies and that man was JP Morgan JP

Morgan realized that if he could unite

Jon's investment with cari's business

under a single name he could create a

steel Monopoly that was more profitable

and Cari steel and even larger than

Standard Oil JP Morgan called it us

steel and if it all worked out it could

be the most valuable company in history

so JP Morgan approached John and asked

him how much he would sell the masabi

iron mines for but to his surprise John

said that Morgan should talk with his

27-year-old son John Jr JP Morgan

assumed he'd be dealing with the rookie

how much could this 27-year-old really

know but when JP Morgan met Junior and

bluntly asked him what's your price

Junior was not intimidated by wall

Street's wealthiest Banker he calmly

responded Mr Morgan I think there must

be some mistake I did not come here to

sell I understood you wish to buy Junior

insisted that JP Morgan had to set the

price for the massabi territory which

meant Junior had all the power in the

negotiation Morgan was so surprised that

he had to step out of his office and

rethink his strategy eventually he made

his offer in exchange for total

ownership of the masabi mines and the

existing mining operation in it JP

Morgan offer a grand total of 88.5

million in US Steel stock just over 3.1

billion today later on Morgan B cari's

entire steel business and Incorporated

it into US steel and it became the

world's first billion dollar Corporation

but remember John now owned a huge chunk

of that company and his us Steel stock

soon appreciated to over 200 million

plus thanks to the automobile boom and

the need for gasoline Standard Oil was

growing into an even more powerful

Monopoly than it had been before not to

mention that thanks to Frederick John's

Investments were now in order too with

all of this combined Jon's wealth

continued to grow to unimaginable levels

it was now spread across multiple

Industries and John was finally ready to

step back from the business World

completely however Jon never publicly

announced his retirement which was a

crucial mistake as the public still

closely associated him with standard oil

and that would soon come back to haunt

him as John was about to be involved in

the most public Scandal of his

[Music]

[Music]

career even though he was now retired

Jon still owned around 30% of Standard

Oil stock and because of the tremendous

growth of the Auto industry he was

actually getting wealthier in retirement

than money was working however because

of their brutal business practices

standard now had such a Negative Public

Image that US president Theodore

Roosevelt saw it as the perfect Target

to fight against in his rise to power

now this wasn't the first time he tried

previously Roosevelt passed a bell that

punished railroad rebates but it really

wasn't enough to get the public excited

and the end of his first presidential

term was coming up so Roosevelt detected

that the public opinion of John and

standard oil was quickly turning from a

mere dislike to a passionate hatred and

that was largely thanks to a journalist

called Ida Tarbell you see tarbell's

father was one of the oil refiners who

were bankrupted by John's ruthless

business tactics a long time ago her

father's business partner even took his

own life after their wealth was

destroyed by John now Tarbell was

publishing monthly articles that told an

in-depth story about the company and the

man who had bankrupted her father and

made her childhood Miserable as you'd

expect she didn't have many nice things

to say tbell managed to break through

Jon's wall of secrecy and so the dark

history of the once mysterious Standard

Oil was now in full view with Jon as its

protagonist his back room deals with

railroads his intimidation tactics the

politicians they bribed everything was

fully revealed and the American public

devoured the story the series even

exposed Jon's father's history of scams

his sexual abuse accusation and they

eventually discovered his second

marriage which took a heavy emotional

toll on Jon and his family needless to

say John never responded to anything

Tarbell wrote and so his Public Image

was contaminated as she publicly

condemned him and his silence only

angered the public further so in a few

years John went from one of the most

private and mysterious members of the

American Elite to the National

embodiment of corruption and greed now

the public was dying to see JN and

standard oyle pay for their crimes so as

President Roosevelt approached the end

of his first presidential term he saw an

opportunity to use the public sentiment

to his Advantage by making Standard Oil

his enemy in his presidential campaign

Roosevelt promised to take down the

monopolies and thus when he won the

re-election it was time to make good on

that promise and wage war on

rockefeller's Empire he launched a

full-fledged investigation into Standard

Oil and now the antimonopoly laws that

corrupt politicians always ignored got

used to their full potential Roosevelt

announced that the government would

prosecute standard with the full force

of the United States government in a

historic allout attack standard was

charged with monopolizing the oil

industry predatory pricing negotiating

railroad rebates corporate Espionage and

Secret ownership of competitors apart

from having to fight 21 lawsuits in

individual states the federal government

hit standard with the largest lawsuit in

history up to that point there were over

a th000 exhibits 444 testifying

Witnesses and over 12,000 pages of

damning evidence the Standard Oil was

indeed a monopoly the lawsuit was so

vast that it continued years Beyond

Roosevelt's presidency but his ambition

to defeat Standard Oil would eventually

be satisfied the evidence that standard

oil was a full-fledged Monopoly came

when standard profits were examined

because they were in control of 87% of

oil refining in America 100% in some

places standard was taking full

advantage of their Monopoly status and

overpricing their kerosene in order to

make outrageous profits and apart from

being confirmed as a monopoly evidence

proved that standard had systematically

bribed hundreds of politicians and

knowingly broken multiple antitrust laws

on May 15th 1911 after being found

guilty of the crimes they'd been accused

of it was ordered by the federal

government to dissolve Standard Oil and

reorganize its subsidiaries into

separate unaffiliated companies after 41

years John's Empire had finally been

dealt a fatal blow and was being split

up now of course you'd think breaking up

an Empire of Standard Oil scale would be

a losing situation for John many of his

enemies like Ida Tarbell and President

Roosevelt certainly thought this event

was a cause for celebration but what

they didn't expect was that the

dissolution of Standard Oil would be the

most profitable event in Jon's career

you see from the outside it may have

looked like standard had been ruined by

the dissolution but actually it was a

pretty convenient time for the company

to be broken up as a lot of important

changes were happening in the industry

as a whole as more oil fields were found

in places like Texas and California

independent refiners were starting to

find their footing in New Markets faster

than standard could absorb them the

Middle East and Russia were now looking

like their first worthy International

competitors as well and at the year

before the verdict gasoline had

surpassed kerosene sales and so the

entire focus of the industry was

changing and because John still owned

around a quarter of Standard Oil when it

was broken up into 34 different

companies he got his share of stock in

all of them and after they were open to

public trading investors nearly tripled

the value of his shares so John became

even richer by the end of 1911 the same

year that standard oil was dissolved

drum was getting close to becoming the

world's first billionaire Andrew Ki was

now left far behind in the fight for the

title of world's richest man but now

that John had achieved such unimaginable

wealth just one question remained what

was he going to do with all that

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[Music]

John was the wealthiest man in the world

and now that he was retired and that his

old company had been dissolved he

decided to dedicate the rest of his life

to philanthropy and even though he was

over 70 years old at this point John's

sense of Duty meant that he was as

energetic about charity work as he was

in business throughout his life John

told people that he was a soldier of God

sent to Earth and given money for the

benefit of mankind and John really did

want to make an impact on the world and

to be fair ever since John got his first

paycheck johon had given various

organizations at least 10% of the money

he made and even when his sizable

donations were publicly labeled as just

ways to improve his image Jon continued

to give away a lot of money anonymously

as well however Jon wanted to make his

philanthropy a well- old machine that

continued his legacy so in 1913 he

started the Rockefeller foundation with

the two people who were previously

responsible for managing his personal

Investments Frederick Gates and his son

John Jr by now John had given away

almost 150 million and in the future he

would personally give a grand total of

540 million to add to that Frederick and

Junior went on to give away 537 million

more through the foundation and Junior

personally gave away an additional 540

million of the wealth he inherited from

his father in its over 100e history the

Rockefeller Foundation has given

countless billions of dollars in total

and it's still making donations today

calculating the total amount and

adjusting it for inflation is

complicated but it's safe to say that

the amount is well into the tens of

billion

ranking John amongst the most generous

philanthropists in history the

Rockefeller Foundation focused on two

main issues in its Inception medicine

and education and it's undoubtedly made

a meaningful contribution to Society on

the side of medicine Jon's donations to

the Laboratories and medical research

facilities helped spur an era of

scientific innovation that saved

hundreds of thousands of lives from

diseases like hookworm malaria and

menitis on the side of Education John's

money helped save the Southern United

States from abject poverty and built

hundreds of schools all around the world

including two of the world's most

prestigious research institutions today

the Rockefeller Foundation contributes

even more to many other causes and it

all started with a 16-year-old who had

to go into business to help feed his

family however this of course all raises

an interesting moral debates on what

should we really think about Rockefeller

clearly John's Legacy has two sides to

it as the author of his biography writes

what makes him so problematic is that

his good side was every bit as good as

his bad side was bad it's almost as as

if there were two completely different

John D Rockefellers there's undeniably a

charitable and beautiful side to him but

there's also a corrupt unforgiving and

brutal side both sides are true but

whatever you think of John D Rockefeller

the fact remains that he's one of the

most fascinating businessmen in history

maybe that's why after John died at 97

years old his son who had the same name

said there was only ever one John D

Rockefeller but if you think

rockefeller's story was controversial

wait until you see the scandals Andrew

Cari was was involved with just click

the thumbnail on screen now and I'll see

you there in a second cheers