Titan
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The spot chosen for the new refinery tells much in miniature about Rockefeller’s approach to business. He exercised an option on a three-acre parcel on the sloping, red-clay banks of a narrow waterway called Kingsbury Run, which flowed into the Cuyahoga River and thus provided passage to Lake Erie. A mile and a half from downtown Cleveland, it seemed at first glance an inauspicious site for the new refinery, christened the Excelsior Works. In these bucolic outskirts beyond the city limits, cows browsed peacefully, and trees still shaded the waterway. But for Rockefeller, the inconvenience was outweighed by the fact that it would soon adjoin new railroad tracks. On November 3, 1863, proudly flying the Union colors, a gleaming locomotive of the Atlantic and Great Western Railroad pulled into a Cleveland station decked with bunting and launched a new era, giving the town access to New York City via the Erie Railroad and to a valuable direct route to the Pennsylvania oil fields. Able to ship by water or over land, Rockefeller gained the critical leverage he needed to secure preferential rates on transportation—which was why he agonized over plant locations throughout his career.
Before long, a string of other refineries had sprouted along Kingsbury Run. With a population of about 44,000, Cleveland was full of dynamic young men struggling to get ahead, and oil refining presented a rare chance to parlay a small investment into a huge fortune. It cost a pittance—as little as $1,000, or less than the cost of opening a well-stocked store—to construct a small refinery and hire hands to run it. By mid-1863, twenty refineries operated in the Cleveland area and shipped a quarter of their kerosene abroad. At first, the profits came in so thick and fast that everybody—big and small, clever and inept— made handsome profits without the fierce winnowing of adversity, the stern lash of marketplace discipline. Rockefeller sarcastically alluded to these palmy days as “the harvest time in which such large profits were reaped by the saloon-keepers and preachers and tailors and men from all the walks of life who were fortunate enough to find an oil still.”6 Oil was put to myriad uses during the Civil War, treating the wounds of Union soldiers and serving as a substitute for turpentine formerly supplied by the South. Even on the battlefield, the use of kerosene refined from crude oil spread, and Ulysses S. Grant often sat in his tent, drafting dispatches by the flicker of a kerosene lamp.
Later on, Rockefeller became so embittered toward Sam Andrews that he denigrated him, quite unjustly, as the expendable figure in the Standard Oil saga. “Samuel Andrews was taken into the business as a poor workingman with little or nothing in the early stages when it was difficult to find men to cleanse the oil. . . . He had too much conceit, too much bull-headed English obstinacy and so little self-control. Was his own worst enemy.”7 This verdict, rendered much later, was darkly tinged by intervening events, but in the beginning Andrews enjoyed cordial relations with Rockefeller. Andrews knew nothing of business but was content to let Maurice Clark and Rockefeller mind the office while he acted as refinery boss. Reversing Rockefeller’s harsh judgment, Ida Tarbell went so far as to label Andrews “a mechanical genius” who had improved the quality of the kerosene and the percentage of it yielded by each barrel of crude oil.8
In the early days, Rockefeller wasn’t so detached from the practical side of refining as when his empire later grew and he withdrew into the impregnable fortress of his office. Devoid of superior airs, he was often seen at Kingsbury Run at 6:30 A.M., going into the cooper shop to roll out barrels, stack hoops, or cart out shavings, reflecting the thrift inculcated by his mother and his puritanical religious upbringing. Since a residue of sulfuric acid remained after refining, Rockefeller drew up plans to convert it to fertilizer—the first of many worthwhile and extremely profitable attempts to create by-products from waste materials. Shaped by a childhood of uncertainty, he aspired to be self-sufficient in business no less than in life and reacted to a perpetual shortage of barrels by deciding to build his own. Disgusted by a suspicious error in a plumber’s bill, he told Sam Andrews, “Hire a plumber by the month. Let us buy our own pipes, joints, and all other plumbing material.” 9 The refinery also did its own hauling and loading. Such was Rockefeller’s ingenuity, his ceaseless search for even minor improvements, that within a year refining had overtaken produce as the most profitable side of the business. Despite the unceasing vicissitudes of the oil industry, prone to cataclysmic booms and busts, he would never experience a single year of loss.
If Rockefeller entered the refining business with some reservations, he soon embraced it as the big, bold opportunity he had craved. Never one to do things halfway, he plunged headlong into the business, and his enthusiasm overflowed into his home life. Sharing a room with brother William, he often nudged him awake in the dead of night. “I’ve been thinking out a plan to do so and so,” he would ask. “Now, what do you think of this scheme?”10 “Keep your ideas till morning,” Will would sleepily protest. “I want to sleep.”11 In the predawn dark, John usually chatted with Maurice Clark and Sam Andrews at Cheshire Street, where they talked interminably of oil. As John’s sister Mary Ann observed, the older men deferred to him instinctively. “They did not seem to want to go without him. They would . . . walk in and visit in the dining room while John was at breakfast.” She found the infatuation with oil repugnant, screening out the dreadful carnage of the Civil War. “I got sick of it and wished morning after morning that they would talk of something else.”12
Rockefeller leaped into oil with a zest reminiscent of his absorption in the Baptist Church. He lovingly tended his refinery much as he had swept the chapel floor, a parallel not lost on contemporaries. Said Maurice Clark: “John had abiding faith in two things—the Baptist creed and oil.”13 This very old, very young man found boyish pleasure in doing business, and when he captured a large contract, he strutted and whooped with a buoyant step or cut a small comic caper. As one early associate remarked, “The only time I ever saw John Rockefeller enthusiastic was when a report came in from the creek that his buyer had secured a cargo of oil at a figure much below the market price. He bounded from his chair with a shout of joy, danced up and down, hugged me, threw up his hat, acted so like a madman that I have never forgotten it.” 14 These isolated joyful outbursts only underscored the usual constriction of his personality.
Rockefeller’s overwhelming influence on the oil industry stemmed from the conflict between his overmastering need for order and the turbulent, unruly nature of the infant industry. In the overheated memories of his enemies, Rockefeller became an omnipresent bogeyman who first appeared in the Oil Regions—the name given to the area along Oil Creek that encompassed Titusville, Oil City, and Franklin—not long after Drake’s discovery. One legend, rehashed by several early biographers, was that Rockefeller went to Titusville in 1860 to represent a group of Cleveland capitalists and advised them to refrain from the business, citing the uncertain flow of oil. In truth, Rockefeller testified, “I was engaged in the business when I took the trip; that was why I took the trip, to see about a supply of oil for my refinery.” 15
To reach his destination, he had to travel first by rail and then by stagecoach to penetrate the dark forests and wooded hills along Oil Creek. Despite the spot’s isolation—news of Fort Sumter’s fall took four days to arrive—so many adventurers descended upon the area that train aisles were jammed with newcomers while others squatted on the roof. It was no place for the squeamish. To reach the railroad, oil had to be carted in barrels across more than twenty miles of rough backcountry, a trade serviced by thousands of brawling, swearing teamsters with shaggy beards and slouch hats who charged extortionate rates. (The Pennsylvania barrel, equal to forty-two gallons, remains the industry standard to this day.) Sometimes oil-laden wagons stretched in interminable caravans along the rutted roads. Many barrels tipped over and smashed, making the hills treacherous. During wet seasons, the mud grew so thick that teamsters often took two horses, one to pull the other out when it invariably got stuck. Horses were routinely lashed to death with heavy black whips as they pulled enormous loads through t
he black muck. Left to die by the roadside, their hides and hair were eaten away by petroleum chemicals, leaving ghastly, corroded carcasses strewn across the landscape. Transport by water was no less revolting. Oil Creek flowed into the Allegheny River, where hundreds of flatboats and steamers handled the cargo traffic. Sometimes oil barrels were loaded on barges and floated down to Pittsburgh on man-made freshets produced by suddenly releasing water stored behind floodgates. “Lots of oil was lost by the capsizing of barges and smashing of barrels in the confusion and crush of the rafts,” said Rockefeller.16 By 1863, the Allegheny, befouled with oil, actually caught fire and burned a bridge in Franklin.
Tramping the banks, Rockefeller beheld the satanic new world bequeathed by the oil boom, an idyllic valley blackened with derricks and tanks, engine houses and ramshackle huts, thickly crowded together in a crazy-quilt pattern. Boomtowns appeared briefly, witnessed frantic activity, then vanished as abruptly as they had appeared. Rockefeller saw something slapdash about the industry. “You will remember that the business in its early years was a sort of gold-field rush,” he reminisced. “Great fortunes were made by some of the first adventurers, and everything was carried on in a sort of helter-skelter way.”17 Rockefeller represented the second, more rational stage of capitalist development, when the colorful daredevils and pioneering speculators give way, as Max Weber wrote, to the “men who had grown up in the hard school of life, calculating and daring at the same time, above all temperate and reliable, shrewd and completely devoted to their business, with strictly bourgeois opinions and principles.” 18
By the time Rockefeller arrived in the Oil Regions, it looked as if the oil would be more than a transient phenomenon. In September 1861, two Clevelanders brought in the Empire Well, the first mighty gusher, which rose “higher than steeples,” in the evocative words of one observer, yielding three thousand barrels of oil per day.19 To onlookers, there was something uncanny about this towering jet of oil. So fast did the Empire Well flow that its owners could scarcely find barrels to carry it off, and people came running with pails, dippers, cups, and buckets to scoop up the black gold. A sudden oil glut sent prices skidding to ten cents a barrel even as teamsters continued to charge $3 or $4 per barrel to ship it to the railroads. From its first days, the industry tended to oscillate between extremes: gluts so dire that prices plummeted below production costs, or shortages that sent prices skyward but raised the even more troubling specter of the oil running dry.
Among the many tales of Rockefeller’s first trip to the oil fields, one told by Franklin Breed, a Titusville producer, has a ring of authenticity. He and Rockefeller rode on horseback through the valley to reach Breed’s well, then negotiated the final half mile on foot. As Breed later wrote:
It was necessary to cross a bayou of five or six feet in width and probably four feet deep. This bayou contained sediment which the oil men took from the bottom of the tanks. This, with mud in the bayou, resembled tar. Spanning the bayou was a six inch log. . . . I was used to crossing on it but Rockefeller declared he could not walk on it. He did, however, and he fell off. . . . He looked up at me with a smile and said, “Well, Breed, you have got me into the oil business head and ears.” 20
In talking to the hard-bitten wildcatters, Rockefeller must have seemed standoffish and self-possessed, but he professed to enjoy their company, calling them “pleasant fellows, the same type we meet in the mining regions, jolly, good-natured, happy-go-lucky. ”21 The description is not without a note of condescension. But he listened closely to what people said and filed away as much information as he could, repeating valuable information to himself until it was memorized. There was humility in this eagerness to learn. As he said, “It is very important to remember what other people tell you, not so much what you yourself already know.”22
However stimulated by the money to be made, Rockefeller was appalled by the loose morals of a place infested with cardsharpers and prostitutes and already dubbed “Sodden Gomorrah.”23 The wildcatters were so rowdy, said a visitor, that throughout the area you could hear “the slap of cards on whiskey-stained tables of groggeries.”24 Another visitor marveled at the universal dissipation and reported, “The orgies in Petroleum Centre sometimes eclipsed Monte Carlo and the Latin Quarter combined.”25 For a sober, pious Christian such as Rockefeller, this world of brawny men addicted to vice must have seemed infernal. The oilmen walked around in tall boots, leaving black footprints in the brothels, taverns, and gambling houses of Titusville and Oil City. Many flaunted their nouveau-riche excesses, wearing high silk hats, diamond stickpins, and gold watch chains. In travelers’ reports, it is striking how frequently people resorted to hellish imagery to capture the mood. Rockefeller’s trips to the Oil Regions must have strengthened his belief that he stood foursquare for virtue in a godforsaken place. As an ardent temperance advocate, he was extremely uncomfortable around drinkers—perhaps one reason why he seldom visited the oil fields.
Two stories, both of uncertain authenticity, convey Rockefeller’s disdain for the morals prevalent among many producers. One night in Rouseville, a local committee of vigilantes crept up to a flatboat moored to a bank and filled with ladies of easy virtue and whiskey salesmen; at the height of a bacchanal, they cut the boat loose and sent the sinners twenty miles downriver. It is said that Rockefeller “thoroughly approved” of the action. 26 Another story tells of the time he stayed in Franklin, where he boarded at the Exchange Hotel and liked to have bread and milk for supper. Occasionally, he donned a dingy old suit to help his men load barrels. One Sunday, an employee came rushing in to tell Rockefeller that the river was rising dangerously and might sweep away their barrels. Rockefeller, preparing for church, put on his hat with aplomb, said he had to go to prayer, and refused to attend to business. Perhaps Rockefeller really did have God on his side, for his barrels survived the flooding intact. 27
Drilling for oil often seemed less an industry than a lottery: Nobody knew if oil would prove a lasting benefit to mankind or an evanescent wonder. If the Oil Regions created many millionaires, they left many more paupers. Instead of building up an industry, most producers preferred to drain their wells as quickly as possible in this harum-scarum atmosphere. Under the so-called rule of capture, people could drill diagonally and siphon off a neighbor’s oil, adding to their haste to pump. Rockefeller succeeded because he believed in the long-term prospects of the business and never treated it as a mirage that would soon fade. Rockefeller’s first visit to Pennsylvania must also have persuaded him that he had picked the right entry point to the business. Searching for oil was wildly unpredictable, whereas refining seemed safe and methodical by comparison. Before too long, he realized that refining was the critical point where he could exert maximum leverage over the industry.
John D. Rockefeller had an unfailing knack for knowing who would help or hinder him in his career, an instinct only sharpened by time. Sensitive to patronizing behavior, he bridled when anyone tried to lord it over him, and he wanted to be dealt with as a peer even by senior men. Recoiling at what he saw as the Clark brothers’ pomposity, he eventually grew as censorious of them as he had been of George Gardner. The Clarks were the first of many business partners to underrate the audacity of the quietly calculating Rockefeller, who bided his time as he figured out how to get rid of them.
All along, crosscurrents had ruffled his relationship with Maurice B. Clark, whom he dismissed as “an ignorant, conceited Englishman.” 28 A tall, bluff man with a fiery temper and shadowy past, Clark had started out as a gardener in his native Wiltshire, chafing under a tyrannical boss. One day in 1847, he reared up and flattened the man. Fearing arrest, he fled to Boston as a penniless, uneducated fugitive from justice. He migrated west to Cleveland and worked as a woodchopper and teamster before entering the produce business. More of a free spirit than Rockefeller, Clark smoked, drank, and swore freely in the warehouse and showed scant religious interest. The personality profile didn’t appeal to Rockefeller, who bristled at Clark’s pr
ofanity, but he praised him as a smart, hustling businessman.
Because Rockefeller had such respect for ledgers, Clark, nearly ten years older, looked down on him as a mere clerk, a rigid, blinkered man without vision. “He did not think I could do anything but keep accounts and look after the finances,” said Rockefeller.29 “You see, it took him a long time to feel that I was no longer a boy.” 30 He thought Clark envious of his success in soliciting business on the road, perhaps because this undercut Clark’s image of him as an expendable clerk. At first, Rockefeller swallowed his anger and stoically endured this injustice. “He tried almost from the beginning of our partnership to dominate and override me,” he said of Clark. “A question he asked several times in our discussion of business matters was, ‘What in the world would you have done without me?’ I bore it in silence. It does no good to dispute with such a man.”31 Rockefeller had no doubt who was contributing the lion’s share of business. “I was the one who made the firm’s success. I kept the books, looked out for the money.”32 As part of Rockefeller’s silent craft and habit of extended premeditation, he never tipped off his adversaries to his plans for revenge, preferring to spring his reprisals on them.
The investment in oil refining had brought Maurice’s brother James into the office, and Rockefeller came to detest him. An ex-prizefighter, James Clark was a powerful, bullying young man, and he tried to intimidate Rockefeller, who responded with great sangfroid and courage. One morning, James burst into his office and started swearing violently at Rockefeller, who put his feet up on the desk with imperturbable poise and showed no sign of upset; a fine actor, he always had masterful control of his facial muscles. When James finished, Rockefeller said evenly, “Now James, you can knock my head off but you might as well understand that you can’t scare me.” 33 This fearless young man couldn’t be intimidated. After that confrontation, James Clark didn’t rant and bluster as much around Rockefeller, but it was clear that they were incompatible colleagues.