by Ron Chernow
Like J. P. Morgan, Grover Cleveland, Theodore Roosevelt, Sr., and other well-heeled young men, Rockefeller hired a substitute for $300 and ended up outfitting a small army. One morning, Levi Scofield, a captain in the Union army and a friend of Rockefeller’s, marched thirty raw recruits into his River Street office. They evidently passed muster, for Rockefeller dug into his safe and handed a ten-dollar bill to each of them. “God, but he must be rich,” gasped one young man, causing another to reply, “Yes, they say he is a rich man—that he is worth as much as $ 10,000!” 33 For the first time, Rockefeller had triggered fantasies of riches. Allan Nevins has suggested that Rockefeller exaggerated when he claimed to have financed between twenty and thirty soldiers, noting that Rockefeller’s ledger itemizes only $138.09 for war purposes. Yet a historian of Rockefeller’s Cleveland years, Grace Goulder, pointed out that by 1864, Rockefeller was giving about $300 per year to substitutes and their families besides his general donations to wartime charities.
Since Rockefeller’s commodity business depended upon market intelligence and a rapid flow of telegrams from various sections of the country, his office became a clubhouse for the latest battlefield bulletins. He and Maurice Clark tacked up two large, detailed maps and tracked the war’s progress with rapt attention. “Our office became a great rallying-place,” said Rockefeller. “We were all deeply interested. Men used to drop in often, and we followed the war keenly, reading the latest dispatches and studying the maps.”
While Rockefeller’s brother William also managed to duck service and keep on working, the youngest brother, Frank, was both physically and psychologically wounded during the war. Not yet sixteen when the war started, Frank was hot-blooded and temperamental. With a wide face, broad forehead, and handlebar mustache, he was very much in his father’s mold. Where John had a tidy, inner-directed nature, Frank was quick to yield to impulses both base and noble. A much better mixer than John, an outgoing backslapper, he could be kindhearted and generous toward friends.
Frank had an adolescent yearning for battlefield glory but was initially thwarted in this storybook aspiration by his family. George Gardner, who always took a jaundiced view of John, claimed that John had coldly declined his brother’s request for $75 to enlist in the Union army. In Gardner’s telling, John gave his brother a tongue-lashing: “You would be a wild, foolish boy to go away and waste youthful years that you might utilize in getting a start and making money.”34 When John remained adamant, Gardner advanced Frank the $75— the first of innumerable loans that Frank, professing good intentions all the while, incurred but never repaid. This altercation was the first of many rancorous feuds that poisoned relations between John and Frank through the years.
While Gardner might have accurately reported John’s words, he omitted some important mitigating circumstances. Frank had already tried to slip off and furtively enlist and had been reprimanded by his father for his secrecy. “Young man,” said Bill, “when you go to war you will say goodbye to the family and go out the front door in broad daylight.” 35 (It took a certain gall for Bill to get on his high horse on the subject of secrecy and family responsibility.) Another factor probably swaying John was that Frank had already been rejected as underage and would need to resort to deception to join the army. To aid his memory, Frank now chalked the number eighteen on his soles, and when the recruiting station sergeant asked for his age, he piped up, “I’m over eighteen, sir.” 36 In the end, John relented and paid for his brother’s clothing, rifle, and accessories during his three years of military service.
As a private in the Seventh Ohio Volunteer Infantry, Frank was wounded twice during the war, at Chancellorsville and Cedar Mountain, which didn’t help his already strained relations with John. It must have seemed terribly unjust to Frank that while he waded through bloody battlefields, his eldest brother was raking in the money at home. He always felt that he had paid a severe price for heroism while John was rewarded for his self-aggrandizement. Ineffectual and full of self-pity, feeling cursed by bad luck, Frank envied his remarkable older brother, who seemed to succeed at every assignment and moved through his charmed business life with icily inexorable efficiency.
The Civil War accelerated the North’s economic development, setting the stage for its postwar industrial prowess. It greatly enlarged its industrial capacity, broadening the infrastructure of railroads and telegraphs, coal mines and iron mills as the economy became more mechanized to meet the unprecedented demand for materials. Sewing machines stitched uniforms for soldiers while reapers harvested grain to feed them. As both sides swiftly conveyed huge armies from one theater of battle to the next, the railroad network had to be modernized and expanded accordingly. To encourage further development, the federal government began to provide land grants, with a dozen railroads ultimately taking title to a staggering 158 million acres. This pell-mell growth played a pivotal role in Rockefeller’s career, for the proliferation of railroads enabled him to extract discounts from them by playing one off against the other.
The war’s psychological impact was equally consequential as it afforded opportunities for commercial gain on a scale never seen before. The outsize profits garnered from government contracts contributed to a money delirium that long outlasted the war. The Civil War not only generated new fortunes but bred in countless people an insatiable appetite for riches. As farm boys in uniform were exposed to cities and given titillating glimpses of luxury goods and urban sophistication, consumerism received a huge impetus. Even many men who didn’t enter the army abandoned farms and villages during the war and flocked to populated areas with flourishing munition plants.
The war enhanced Cleveland’s strategic importance for a simple logistical reason: As North-South fighting severed freight routes on the Mississippi River, the east-west routes through the rivers and Great Lakes gained a corresponding amount of traffic. Though Rockefeller and his associates secured no lucrative government contracts, they profited from the enormous inflation in commodity prices and the general business surge. Selling mostly on commission, they dealt in numerous foodstuffs and farm implements. By 1862, their annual profits had soared to $17,000, or almost four times what they had earned during their only prewar year. One of their 1863 advertisements listed the bountiful produce now heaped in their bulging warehouse: 1,300 barrels of salt, 500 bushels of clover seed, 800 bushels of timothy seed, and 200 barrels of pork.
At the end of 1862, Rockefeller eliminated a major irritant when he banished George Gardner from the firm. He later obliterated all traces of Gardner from the oral and written accounts of his life, burying him forever with silence. On December 1, 1862, the Cleveland Herald ran the following item: “M. B. Clark and John D. Rockefeller, late of Clark, Gardner and Company, will continue the produce business under style and firm of Clark and Rockefeller, at warehouse recently occupied by Clark, Gardner and Company, Nos. 39, 41, 43, and 45 River Street.” That the firm had now swelled to occupy four separate numbers on River Street attests to its runaway success. While he was still in his twenties, the Civil War had converted Rockefeller into a wealthy man, giving him the funds to capitalize on a new industry then flowering in the northwest corner of Pennsylvania. For all the substantial profits booked by Rockefeller during the war, they would prove mere pocket change compared to the profits flowing from the rivers of black gold now gushing from wells around Titusville.
CHAPTER 5
The Auction
Long before oil was struck in western Pennsylvania by Colonel Edwin Drake, it had oozed from subterranean springs into Oil Creek (the name dated from the eighteenth century), mantling the surface with an iridescent scum. The slimy liquid was so ubiquitous that it tainted well water and plagued local contractors drilling for salt. Already in the eighteenth century, the Seneca and Cornplanter Indians devised manifold uses for it, employing it for soothing skin liniment, medicine, and even war paint. To extract oil from the creek, they floated blankets or flannel rags on the water, then wrung the oil from the saturat
ed material. Even before Drake’s find, Seneca Oil had become known as a sovereign remedy for stiff joints, headaches, and other ailments. Around 1850, Samuel Kier gathered unwanted oil from his father’s salt wells, bottled it in little half-pint bottles, and marketed it as Kier’s Rock Oil. With a touch of the charlatan, Kier touted the all-purpose medicinal properties of this elixir, contending it would cure liver complaints, bronchitis, and consumption—and that was just for starters. One wonders whether Doc Rockefeller flogged Kier’s Rock Oil from the back of his buggy.
In the 1850s, the whale fisheries had failed to keep pace with the mounting need for illuminating oil, forcing up the price of whale oil and making illumination costly for ordinary Americans. Only the affluent could afford to light their parlors every evening. There were many other lighting options—including lard oil, tallow oil, cottonseed oil, coal oil refined from shale, and wicks dipped in fat—but no cheap illuminant that burned in a bright, clean, safe manner. Both urbanization and industrialization sped the search for an illuminant that would extend day into night, breaking the timeless rhythm of rural hours that still governed the lives of farmers and city folk alike.
The petroleum industry was hatched in a very modern symbiosis of business acumen and scientific ingenuity. In the 1850s, George Bissell, a Dartmouth College graduate in his early thirties who had enjoyed a checkered career as a reporter, Greek professor, school principal, and lawyer, had the inspired intuition that the rock oil plentiful in western Pennsylvania was more likely than coal oil to yield a first-rate illuminant. To test this novel proposition, he organized the Pennsylvania Rock-Oil Company, leasing land along Oil Creek, a tributary of the Allegheny River, and sending a specimen of local oil to be analyzed by one of the most renowned chemists of the day, Professor Benjamin Silliman, Jr., of Yale. In his landmark 1855 report, Silliman vindicated Bissell’s hunch that this oil could be distilled to produce a fine illuminant, plus a host of other useful products. Now the Pennsylvania Rock-Oil Company faced a single, seemingly insurmountable obstacle: how to find sizable quantities of petroleum to turn Professor Silliman’s findings into spendable cash.
It took nearly three years for Bissell’s company (which soon evolved into the Seneca Oil Company) to dispatch someone to Pennsylvania to hunt for large, marketable pools of oil. To this end, an investor in the project, a New Haven banker named Townsend, enlisted a boarder in his rooming house, Edwin Drake, to travel to Titusville in December 1857. A former conductor on the New Haven Railroad, Drake was a thirty-eight-year-old widower who was solemn, rather courtly, and disabled by neuralgia of the spine. Photos present a dashing figure with a full beard, broad forehead, and bright, heavy-lidded eyes. Though he made only a nominal investment in the venture, he was dressed up with the fancy title of president to dazzle the gullible yokels and was conveniently endowed (and permanently entered the history books) with the honorific title of colonel.
When Drake arrived in Titusville, Oil Creek Valley was still an idyllic place of dense pine and hemlock forest, rich in game. In his stovepipe hat and somber black clothes, the pallid Drake formed a picturesque contrast with this wilderness setting. Despite the enticing traces of oil that stained the creek’s surface, the search for significant oil deposits, without geological knowledge of underground oil structures, proved a long and frustrating one. While the locals found Drake charming and sociable and supplied with a good repertoire of stories, they also mocked him as a harebrained dreamer, seized by a wild obsession. When he tried to dig for oil, the walls caved in. Then, borrowing a method used for salt wells, he started to drill for oil. In this inhospitable setting, choked with underbrush, it was a feat just to assemble the necessary machinery and erect a strange, tall, wooden structure known as a derrick. On Sunday, August 28, 1859, Drake’s folly was rewarded when oil bubbled up from a well drilled a day earlier. It was less a matter of Drake discovering oil—its existence was scarcely a secret—than of his figuring out a way to tap commercial quantities in a controlled process so that it could be pumped from the earth in systematic fashion.
Laura Celestia Spelman, always known to friends as “Cettie.” (Courtesy of the Rockefeller Archive Center)
Drake’s feat touched off pandemonium as bands of fortune seekers streamed into Titusville and its pastoral surroundings. Speculators scrambled over the greasy slopes of the creek, leasing acreage from unsophisticated, often unlettered, owners; one farmer turned down an offer of a one-quarter royalty and stubbornly held out for a one-eighth share. Pretty soon derricks sprouted everywhere along the dark, narrow valley, the drilling scarring and denuding the once lush forest slopes. Drilling was the first step in an extended production chain. Within a year of Drake’s discovery, a dozen ramshackle refineries sprang up along the creek’s steep, secluded banks. Inevitably, this tumultuous activity attracted notice in Cleveland, which had the advantage of proximity to northwest Pennsylvania. Even in those days of slow transport, one could travel from Titusville to Cleveland in a day. Several Cleveland businessmen were already refining illuminating oil from bituminous coal and were naturally interested in a rival method. On November 18, 1859, nearly three months after Drake’s find, the Cleveland Leader reported on the mad hubbub around Titusville, saying that “the oil springs of northern Pennsylvania were attracting considerable speculation” and that there was “quite a rush to the oleaginous locations.” Among the first Clevelanders descending upon the area was a produce merchant named James G. Hussey, who was a former boss of Rockefeller’s partner, Maurice B. Clark, and he came home with ecstatic stories about the riches to be made.
We don’t know what Rockefeller thought of Drake’s breakthrough at the time, but years later, having harvested his unparalleled fortune from oil, John D. Rockefeller saw a large and providential design in the discovery of Pennsylvania oil, stating that “these vast stores of wealth were the gifts of the great Creator, the bountiful gifts of the great Creator.” He expressed his gratitude that “Colonel Drake and the Standard Oil Company and all others connected with this industry had the opportunity for useful work in preparing and distributing this valuable product to supply the wants of the world.”1 As we shall see, Rockefeller always viewed the industry through this rose-tinted spiritual lens, and it materially aided his success, for his conviction that God had given kerosene to suffering mankind gave him unswerving faith in the industry’s future, enabling him to persist where less confident men stumbled and faltered.
For all his later evangelical fervor about oil, John D. Rockefeller didn’t behold its potential in a sudden revelatory flash but made an incremental transition from produce to oil. Clark and Rockefeller might have taken on consignment some of the first crude-oil shipments that reached Cleveland in early 1860, but it was the friendship between Maurice Clark and Samuel Andrews, an Englishman from Clark’s hometown in Wiltshire, that drew Rockefeller into the business. A hearty, rubicund man with a broad face and genial manner, Andrews was a self-taught chemist, a born tinkerer, and an enterprising mechanic. Arriving in Cleveland in the 1850s, he worked in a lard-oil refinery owned by yet another Englishman, C. A. Dean, and acquired extensive experience in making tallow, candles, and coal oil. Then, in 1860, Dean got a ten-barrel shipment of Pennsylvania crude from which Andrews distilled the first oil-based kerosene manufactured in Cleveland. The secret of “cleansing” oil with sulfuric acid— what we now term refining—was then a high mystery, zealously guarded by a local priesthood of practical chemists, and many curious businessmen beat a path to Andrews’s door.
An expert on illuminants enthralled by the unique properties of kerosene, Andrews was convinced it would outshine and outsell other sources of light. Finances were tight in the Andrews household—his wife took in sewing to supplement his income—but by 1862, Sam was plotting to leave Dean and strike out on his own. On the lookout for backers, he frequently dropped by the offices of Clark and Rockefeller. In another instance of the worldly advantages of his religious affiliations, Rockefeller knew Andrews and his wife
from the Erie Street Baptist Mission Church. When Andrews started talking about oil refining, the dubious Clark cut short his perfervid talk: “I told him there was no chance, that John and I together did not have more than $250 we could spare out of our business; we simply had enough working capital, together with our credit at the banks, to enable us to make advances to consignors, paying insurance and rent. ”2 Stymied by one partner, Andrews barged into Rockefeller’s office and resumed his sales pitch. Already so flush that he had invested in his first railroad stock, with cash to spare for the firm, Rockefeller was far more receptive. After one chat with Rockefeller, Andrews went back into the warehouse to badger Clark. “I started to shut him off,” recalled Clark, “but when he said, ‘Mr. Rockefeller thinks well of it,’ I impulsively replied, ‘Well, if John will go in I will.’ ”3 With becoming modesty, Rockefeller later interpreted his own role as more passive, even skeptical toward the fateful oil venture and said that Maurice Clark’s two brothers, James and Richard, were such oil enthusiasts that he had been railroaded into refining by the combined pressure of the three Clarks and Sam Andrews.
Whatever the truth, Rockefeller and Maurice Clark pledged $4,000 for half the working capital of the new refining venture, Andrews, Clark and Co., placing the twenty-four-year-old Rockefeller squarely in the oil business in 1863, the year of the Emancipation Proclamation and the stunning Union victories at Gettysburg and Vicksburg. Of the initial $4,000 investment, he said dryly, “It seemed very large to us, very large.” 4 Scarcely dreaming that oil would ever supersede their main commodity business, they considered it “a little side issue, we retaining our interest in our business as produce commission merchants.”5 As a commission agent distant from the oil wells, stationed at the commercial crossroads of Cleveland, Rockefeller naturally entered the industry as a refiner. As a middleman, he belonged to a new breed of people in the emerging industrial economy who traded, refined, or distributed products in the widening chasm that separated raw-material producers in the countryside from their urban consumers.