Titan
Page 33
By the time Rockefeller and Oliver Payne transferred to New York in late 1883 and early 1884, Henry Flagler had preceded them by two years. Though now immensely rich, John and Cettie possessed the low-key style and resolute sense of privacy of old money and searched for a house on a peaceful side street. They swapped nine parcels of Manhattan real estate, appraised at $600,000, for a four-story brownstone mansion at 4 West Fifty-fourth Street. Garlanded with ivy, flanked by lawns, the residence stood on a site that would later house the Museum of Modern Art sculpture garden. If roomy and comfortable, it was extremely modest for someone of Rockefeller’s wealth and, like his Cleveland residence, subtly masked the size of his fortune. For all its social cachet, Fifth Avenue was now a busy, nerve-jangling thoroughfare, as Junior remembered with dismay: “It was paved with cobblestones and I can still hear the noise of the steel tires rumbling along the street. It was fearfully noisy.”7 By contrast, West Fifty-fourth Street was a shady retreat, situated north of the Elgin Botanical Gardens, which later formed part of Rockefeller Center. Opposite the Rockefeller home stood Saint Luke’s Hospital, with lawns and gardens that spread a fragrant tranquillity over the street.
The home that the Rockefellers bought was the opulent boudoir of the beautiful Arabella Worsham, who had tried to pass herself off as a niece of railroad mogul Collis Huntington when she was actually his mistress. When Huntington’s wife died in late 1883, he decided to marry Arabella and make an honest woman of her. The sober brownstone that had sheltered their assignations went on the market, and it is amusing to think of the Rockefellers snapping up their love nest. A frugal man, John D. followed his accustomed practice of keeping the furnishings, even if the style in this case diverged ludicrously from his own. The interior contained touches of voluptuous sensuality, such as Arabella’s exotic Moorish salon on the ground floor and the Turkish bath upstairs. The sumptuous master bedroom was artistically designed in Anglo-Japanese style, with dark ebonized woodwork, a queen-size canopied sleigh bed, and a magnificent silver and gilt chandelier. The bay window provided an intimate Turkish corner, tantalizingly glimpsed through a stained-glass screen. Doubtless as a legacy of Arabella Worsham—one can’t picture the prudish Rockefellers shopping for such things—4 West Fifty-fourth Street had paintings by Corot, Meissonier, Daubigny, and other French painters then in vogue among local parvenus. The house also had the latest conveniences, including one of the city’s first elevators in a private residence. The only thing removed by Rockefeller were the worn carpets, which he donated to the needy through a local church.
Though West Fifty-fourth Street was a tree-lined oasis, the Rockefellers had chosen the most sybaritic precinct of New York society in the Gilded Age. Much of the wealth amassed in what Mark Twain called the “raging, tearing, booming nineteenth century” had now settled in Manhattan. The old New York aristocracy, huddled around Washington Square and Gramercy Park, shuddered at the pretentious uptown mansions, which paid tribute to postwar fortunes in railroads, steel, and oil. Along Fifth Avenue near the Rockefeller home, the palaces of the rich—notably the fantastic, turreted confections of William K. Vanderbilt at Fifty-first Street and Cornelius Vanderbilt II at Fifty-eighth Street—stretched uptown in gaudy profusion.
With Standard Oil moving its headquarters to New York, the neighborhood was becoming a colony of company directors. At one point in this corporate relocation, twenty-eight Standard Oil executives arrived in a single Pullman car from Cleveland and were taken straight to the Saint James Hotel, where William presided over their first breakfast and John their first dinner. The latter liked to greet new arrivals at the train station and help them to find houses. Soon, the Fifth Avenue strip near Rockefeller’s home was thickly populated with Standard Oil men, Henry Flagler occupying the southeast corner of Fifty-fourth Street and William Rockefeller the northeast corner, with Benjamin Brewster next door to William. William departed from his brother’s ascetic style and raised his children in a looser, freer atmosphere, causing envious pangs among John’s children. As Junior said, “We children didn’t have what those children had and we used to notice the difference. They had a gay kind of social life, with many parties which we used to wish we could have.”8 Since William refused to take on debt to build his house, he sold $50,000 of Standard Oil stock to John despite his brother’s heartfelt plea to retain the stock. William’s imprudent decision figured importantly in the enormous disparity in wealth that developed between the two brothers.
In New York, John D. did not acquire cosmopolitan interests but stuck with his old Cleveland pastimes, creating a large ice-skating rink every winter in a space adjoining his house. Each morning, curious pedestrians could glimpse the chief of the American oil industry, dressed in overcoat and top hat, ice skates strapped to his patent-leather boots, as he glided placidly around the horseshoe-shaped area. A great enthusiast for the sport, he created rows of shelves in his house on which dozens of guests could store their skates.
Though Rockefeller resisted the yacht-owning fad that swept New York society in the 1880s and owned neither a boat nor private railroad car, he spared no expense for fast-trotting horses in his large, heated stable at 21 West Fiftyfifth Street. Every afternoon after work, he took out his black gelding trotters and mingled with the pageant of fashionable carriages thronging Central Park, often racing against his brother William, with an excited Junior seated at his side. So keenly did Rockefeller relish trotting that at one point he told his son, “I drove four times yesterday making an aggregate in the two days of about eighty miles. Don’t you think I am an enthusiastic youth?”9 Junior left a description of his father’s racing style that seems a metaphor for his assertive but careful stewardship of Standard Oil:
Other drivers would often lose their tempers when a horse broke gait or pulled hard; Father never. If a horse was excitable or difficult he always kept his temper, and patiently, quietly worked with the animal until he steadied it. Frequently I have seen him driving at a very rapid pace through Central Park; in the middle of the roadway through two streams of traffic, pushing always a little to the left, as he explained to me, so as to open his way through, but keeping margin enough on the right so that if the approaching traffic did not swing over in time, he would still have room enough to pass. 10
Never dazzled by New York, Rockefeller was insulated from the beau monde that threw costly dinners and costume balls and frequented the theater, opera, and clubs. He had no interest in debauchery, and it is hard to picture him milling about with portly men smoking cigars or women wearing expensive furs and jewels. The newspapers noted his total boycott of social functions. As one periodical said, “He never entertains notables, his home is never given to entertainment, and he follows the policy of self-effacement at all times and in all places.”11 Although he joined the Union League Club, Rockefeller did not feel comfortable with the splendor of the Astors and Vanderbilts. When Cettie asked for a new four-wheeled carriage in 1882, John stared at her, aghast, and said they could scarcely afford it unless they traded in the old one. Abiding by his daily rituals, he still enjoyed bread and milk in the morning and a paper bag of apples in the evening. Each morning before work, a barber shaved him in his dressing room before he trotted down the brownstone stoop at exactly the same hour and for a nickel took the Sixth Avenue elevated train downtown. The wheels of his mind already turning, he jotted penciled notes on his shirt cuff as the train jolted toward Wall Street. Moving with spectral stealth, as if tiptoeing on a cushion of air, he slipped into the Standard Oil building at the stroke of nine. “I never knew anyone to enter an office as quietly as Mr. Rockefeller,” said his private secretary, George Rogers. “He seemed almost to have a coat of invisibility.”12
In late 1883, Standard Oil began to assemble real estate at the southern tip of Manhattan for new headquarters, destined to soar above Broadway at Bowling Green on the onetime site of Alexander Hamilton’s home. Having long outgrown William’s old offices at two different locations on Pearl Street, the firm
had operated for three years from modest, unprepossessing quarters at 44 Broadway. Now, on May 1, 1885, after spending nearly one million dollars on it, Standard Oil moved into its impregnable new fortress, a massive, granite, nine-story building. The combine’s name didn’t appear outside, just the building number. Twenty-six Broadway soon became the world’s most famous business address, shorthand for the oil trust itself, evoking its mystery, power, and efficiency. Standard Oil was now America’s premier business, with a reach that ramified into a labyrinth of railroads, banks, and other businesses. The purple prose aroused by the new building perhaps owed less to its imposing neoclassical architecture than to its symbolic heft. Said one reporter: “Many worthy men are convinced that No. 26 Broadway is the most perilous shelter on earth—a cave for pirates, a den for the cutthroats of commerce.”13 Otherwise sober writers seemed to swoon before the saturnine grandeur of Rockefeller’s seat of power:
At the lower end of the greatest thoroughfare in the greatest city of the New World is a huge structure of plain gray-stone. Solid as a prison, towering as a steeple, its cold and forbidding facade seems to rebuke the heedless levity of the passing crowd, and frown on the frivolity of the stray sunbeams which in the late afternoon play around its impassive cornices. Men point to its stern portals, glance quickly up at the rows of unwinking windows, nudge each other, and hurry onward, as the Spaniards used to do when going by the offices of the Inquisition. The building is No. 26 Broadway. 14
Reporters who managed to slip past the watchful guards found a world at odds with the grim exterior, a dignified place with mahogany rolltop desks and mustard-colored carpets. The subdued atmosphere—people instinctively conferred in hushed tones—mirrored Rockefeller’s own personality. Rockefeller’s office faced south and east, with a spectacular view of New York harbor. As one reporter commented, “There is an absence of bustle and noise. While transactions involving millions may be involved, the negotiations are conducted in a quiet methodical manner, apparently free from excitement.”15 The offices had some unusual security features, including ground-glass partitions that reached to the ceiling and obscured the proceedings within. In a quintessential Rockefeller touch, the doors were equipped with special secret-rim locks: One had to know how to twist the rim with thumb and forefinger before turning the knob, so that an intruder could find himself suddenly trapped in a maze of ostensibly locked doors.
In these new quarters, the Standard Oil mandarins preserved a tradition launched years before. Each day at noon, the executive committee gathered for lunch in a top-floor room decorated with hunting and fishing trophies and with a port view that suited their global empire. There was no surer proof of favor in the Standard Oil empyrean than to receive an invitation to dine at the long table. Arriving in silk hats, frock coats, and gloves, the directors always took the same assigned seats. In his deceptively self-effacing style, Rockefeller yielded the head of the table to his most frequent adversary, Charles Pratt, who was the group’s oldest member; Flagler sat to Pratt’s right, then Rockefeller, then Archbold. It says much about his managerial approach that Rockefeller sat indistinguishably among his colleagues, though the leveling arrangement scarcely disguised his unique status. As philosopher Herbert Spencer once said, “A business partnership, balanced as the authorities of its members may theoretically be, presently becomes a union in which the authority of one partner is tacitly recognized as greater than that of the other or others.”16
Few outsiders knew that one of Rockefeller’s greatest talents was to manage and motivate his diverse associates. As he said, “It is chiefly to my confidence in men and my ability to inspire their confidence in me that I owe my success in life.”17 He liked to note that Napoleon could not have succeeded without his marshals.18 Free of an autocratic temperament, Rockefeller was quick to delegate authority and presided lightly, genially, over his empire, exerting his will in unseen ways. At meetings, Rockefeller had a negative capability: The quieter he was, the more forceful his presence seemed, and he played on his mystique as the resident genius immune to petty concerns. As one director recalled, “I have seen board meetings, when excited men shouted profanity and made menacing gestures, but Mr. Rockefeller, maintaining the utmost courtesy, continued to dominate the room.”19 Sometimes, he dozed on a couch after lunch. “I can see him now,” one executive recalled, “lying back on a lounge at a directors’ meeting, eyes closed taking it all in. Now and then he’d open his eyes and make a suggestion.”20
Rockefeller placed a premium on internal harmony and tried to reconcile his contending chieftains. A laconic man, he liked to canvass everyone’s opinion before expressing his own and then often crafted a compromise to maintain cohesion. He was always careful to couch his decisions as suggestions or questions. Even in the early days, he had lunched daily with brother William, Harkness, Flagler, and Payne to thrash out problems. As the organization grew, he continued to operate by consensus, taking no major initiative opposed by board members. Because all ideas had to meet the supreme test of unanimous approval among strong-minded men, Standard Oil made few major missteps. As Rockefeller said, “We made sure that we were right and had planned for every contingency before we went ahead.” 21
Even though Rockefeller feuded sporadically with Charles Pratt, Henry Rogers, and others, the firm was free of the petulant bickering and bureaucratic jealousy that usually accompany vast power. At least to hear Rockefeller tell it, the directors—former foes who had banded together in corporate brotherhood—were bound by an almost mystic faith. For him, their belief in each other explained their cohesion and certified their virtue. “Crooked men cannot be held as these Standard Oil Company men were held for all this long term.”22 The continuity of leadership made the firm all but impervious to snooping reporters and government investigators, who could never penetrate the tight-knit phalanx of like-minded men who ran the oil empire for four consecutive decades.
The unity of the Standard Oil partners was especially impressive given the organization’s byzantine structure, a far-flung patchwork of firms, each nominally independent but in reality taking orders from 26 Broadway. In the absence of a federal incorporation law, Rockefeller, like other contemporary businessmen, had to cope with a tangle of restrictive laws that made it fiendishly difficult to run an interstate company. As he said, “Our federal form of government, making every corporation created by a state foreign to every other state, renders it necessary for persons doing business through corporate agency to organize corporations in some or many of the different states in which their business is located.”23 This handicap forced business leaders to devise cunning ways to circumvent laws and led them to corrupt politicians and legislatures; much of Rockefeller’s political cynicism issued from this source. For Standard Oil, a national operation from the start, the antiquated legal framework lured it into myriad legal adaptations. But if Rockefeller correctly considered the legal system an unfair impediment, it was also a spur to his ingenuity.
His first major improvisation came with an ingenious trust agreement that was executed privately in 1879. Under its charter, Standard Oil of Ohio couldn’t own companies outside the state, so it assigned three midlevel employees—Myron R. Keith, George F. Chester, and George H. Vilas—to serve as trustees who held stock in a score of subsidiaries outside the state. When they received dividends, they distributed them to the thirty-seven investors of Standard of Ohio as individuals, in amounts proportionate to their stakes in the parent company. (Of the 35,000 Standard shares, Rockefeller held nearly 9,000, or three times the amount of Flagler, Harkness, Pratt, or Payne.)24 This jerry-built structure enabled Rockefeller to swear under oath that Standard Oil of Ohio didn’t own property outside of Ohio, even though it controlled most of the pipelines and refineries in Pennsylvania, New York, New Jersey, and Maryland; technically speaking, the trustees owned these properties.
The 1879 agreement, a makeshift arrangement, lasted only three years. When the state of Pennsylvania tried in 1881 to tax the prop
erty of Standard of Ohio within its borders, Rockefeller feared that other states might copy this precedent and hold him hostage. At the same time, he had absorbed so many new pipelines and refineries that he was struggling to coordinate policy among many scattered units. The time had come to streamline operations, impose guidance, and attain new efficiencies. The brains behind this next stage of development was an affable, roly-poly lawyer and Presbyterian elder named Samuel C. T. Dodd, a man so fat that one wag claimed he was the same size in every direction. As general solicitor of Standard Oil from 1881 to 1905, he was its leading theoretician and publicist, as much ideologist as lawyer. A carpenter’s son from Franklin, Pennsylvania, and an amateur poet passionate about classical literature, he had been a vocal, high-minded resident of Titusville. Ironically, as a Democratic member of Pennsylvania’s constitutional convention in 1872, Dodd had won attention as a scourge of the railroads, excoriating Rockefeller and the South Improvement Company for taking advantage of rebates.
The way Dodd entered Standard Oil should have tipped him off to the depth of Rockefeller’s guile. In 1878, two refiners named Taylor and Satterfield hired him in a dispute against United Pipe Lines, which was ostensibly owned by Vandergrift and Forman. Since Dodd was also a lawyer for Captain Jacob J. Vandergrift, he found himself representing both sides in the case. At one point, Vandergrift made a shocking confession to him: United Pipe Lines actually belonged lock, stock, and barrel to Standard Oil. At the behest of his clients, Dodd journeyed to Cleveland to draw up a mutually satisfactory settlement. As he recalled: