by Ron Chernow
The charter scandalized Attorney General George W. Wickersham, who was entrusted with prosecuting Standard Oil. He protested to President Taft in February 1911.
The power which, under such bill, would be vested in and exercised by a small body of men, in absolute control of the income of $100,000,000 or more, to be expended for the general indefinite objects described in the bill, might be in the highest degree corrupt in its influence. . . . Is it, then, appropriate that, at the moment when the United States through its courts is seeking in a measure to destroy the great combination of wealth which has been built up by Mr. Rockefeller . . . the Congress of the United States should assist in the enactment of a law to create and perpetuate in his name an institution to hold and administer a large portion of this vast wealth?13
Taft granted the point. “I agree with your . . . characterization of the proposed act to incorporate John D. Rockefeller.”14
Yet Taft saved these barbs for internal consumption and struck a more conciliatory tone with the Rockefellers in person. On April 25, 1911, Senator Aldrich shepherded Junior and Abby to the White House for a top secret lunch with the president. While this meeting was later interpreted as a gauche effort to sway the Standard Oil case, it was concerned exclusively with the Rockefeller Foundation charter. Petrified that the press might get wind of this lunch, Taft insisted that his guests bypass the main door and enter through a side door of the east entrance. The visitors’ names were never recorded in guest books or mentioned by White House staff. Taft’s trusted aide, Archie Butt, was amused by the president’s discomfiture. “It is strange how men in public office shudder at the names of Aldrich and Rockefeller,” he reflected.15 Over lunch, Taft speculated that the foundation charter would pass only if held in abeyance until after settlement of the antitrust suit. Junior, heartened, left the luncheon feeling that the president had been “most agreeable and kindly.”16
To appease the public, the Rockefeller camp volunteered some extraordinary concessions, including offering to base the new foundation in the nation’s capital. When Gates ran into Taft at a Bryn Mawr College luncheon, the president suggested that he send along ideas about how to install safeguards in the plan. In a follow-up memo, Gates said that Congress could, at any time, limit how the foundation money was spent. As to fears that the Rockefellers would wield undue power, Gates said that Rockefeller intimates would make up only five or more members of a board of up to twenty-five people. Gates then made an extraordinary proposal: that all, or a majority, of the following people would have the power to veto board appointments: the president of the United States; the chief justice of the Supreme Court; the president of the Senate; the speaker of the House; and the presidents of Harvard, Yale, Columbia, Johns Hopkins, and the University of Chicago.
Despite this almost unseemly eagerness to accommodate the government, the bill had a checkered career in Congress, even with Senator Aldrich’s high-powered patronage. It passed in the House then stalled in the Senate and kicked around, in various forms, for three years. After a point, legislators started to haggle with the Rockefellers, promising support only if certain foundation grants flowed to their districts. Aghast at this blackmail, Rockefeller asked his son in November 1911 whether it might not be better to seek a state charter. A federal charter, Junior rejoined, would be preferable, since states might require board members to live there, weakening the Rockefeller ties and holding them hostage to statehouse politics.
Nevertheless, the Rockefellers soon despaired of Washington and turned to New York State for a charter in 1913. Two years earlier, the state legislature had chartered the Carnegie Corporation, with a $125 million endowment. Now the Rockefeller charter was quickly approved with scarcely a whisper of protest. Between 1856 and 1909, Rockefeller had given $157.5 million for charitable purposes. Mindful of Gates’s admonition that his gifts must keep pace with his exploding wealth, Rockefeller gave $100 million to the Rockefeller Foundation in its first year, bolstered by another $82.8 million by 1919. In current dollars, that would translate into a $2 billion gift during the foundation’s inaugural decade. It also meant that by 1919 Rockefeller had already given away an amount roughly equal to the $350 million that Andrew Carnegie gave away in his entire lifetime; the titan would donate another $180 million before he died. Since his son gave away an additional $537 million directly and another $540 million through the Rockefeller philanthropies, Rockefeller far surpassed his great rival’s benefactions and must rank as the greatest philanthropist in American history.
By securing the Rockefeller Foundation charter in 1913, Rockefeller insulated a large portion of his wealth from inheritance taxes. That year also saw the ratification of the Sixteenth Amendment, which provided for the first federal income tax. Even though the top rate was only 6 percent to begin with, Rockefeller categorically denounced this innovation. “When a man has accumulated a sum of money, accumulated it within the law, the Government has no right to share in its earnings,” he complained to a reporter in 1914.17 As taxes became steeper and more progressive in the coming decades, it became a daunting task for any businessman to amass the money that Rockefeller had earned in a laissez-faire world devoid of antitrust laws. His own wealth, in fact, was the text for many sermons in favor of using taxation as a way to check the acquisition of huge fortunes, to redistribute wealth, and to reduce social tensions.
The birth of the Rockefeller Foundation coincided with the gradual retreat of Frederick T. Gates from Rockefeller’s business affairs after twenty years of tenacious attention. During the summer of 1909, the fifty-six-year-old Gates was suffering from nervous strain, likely from overwork, and wanted to spend more time with his wife and seven children. Around 1912, the once threadbare Minnesota preacher picked up at bargain prices twenty thousand acres of land near Hoffman, North Carolina, and set about growing cotton, corn, and oats and raising livestock on a thousand-acre farm with a peach orchard of seventeen thousand trees.
In August 1912, Gates tendered his resignation from the business side of the family office to devote himself solely to the philanthropies. Long reliant upon Gates’s sound judgment, Rockefeller tried to sweet-talk him into staying: “Shall we not, dear friend, continue along life’s pathway together, both of us recognizing the propriety for ourselves of increasing freedom from care, but, nevertheless, both continuing to give what time we wisely and appropriately can, to the large and important questions, old as well as new, which we find ourselves in a position to help to solve?” 18 By November, Rockefeller had capitulated and accepted his resignation. For the next five years, Gates chaired the GEB but ceased to draw a regular salary and performed only sporadic business missions for Rockefeller. For all his panegyrics about Rockefeller’s wisdom, Gates had some private grievances and was irked by what he saw as his skimpy compensation; the value of his services had been a sore point with him ever since the 1901 Mesabi-ore sale to U.S. Steel. In 1915, Gates undertook a long, tortuous negotiation for Rockefeller with the Consolidation Coal Company; afterward, he rejected as too meager Rockefeller’s $25,000 in compensation and held out for $60,000.
Although Gates had been the visionary behind the Rockefeller Foundation, he now became just one of nine trustees. When the foundation held its first meeting at 26 Broadway on May 19, 1913, Junior was elected president. He invited his father to attend but knew he would decline. Nominally a trustee for ten years, Rockefeller followed his usual practice and never sat in on a single meeting. He was now receding to a more distant supervisory role with his philanthropies and yielding more power to his son, although he never surrendered his veto power. Perhaps the congressional donnybrook over the foundation charter reminded him of the value of keeping a salutary distance from his foundations. Or perhaps it was just age.
Several features of the new foundation mocked the idea that it was a public trust and suggested instead a closely guarded Rockefeller preserve. Its governing structure conjured up a holding company for existing Rockefeller philanthropies instead of the autono
mous operation once promised so fervently to Congress. Of the nine trustees, two were family members (Senior and Junior), three were staffers (Gates, Starr Murphy, and Charles O. Heydt, Junior’s secretary), and four came from Rockefeller philanthropies (Simon Flexner and Jerome Greene from the RIMR, Harry Pratt Judson from the University of Chicago, and Wickliffe Rose from the Rockefeller Sanitary Commission). The Rockefeller philanthropies remained a self-contained universe, with the same faces rotated among the various boards.
The Rockefeller Foundation’s claim to autonomy was also undercut by Rockefeller’s retention of the right to allocate $2 million of its income yearly. Until this practice was abolished in 1917, these founder’s designations constituted up to a third of all grants and financed several of Senior’s pet projects, from Baptist missionary work to the Eugenics Record Office of Charles B. Davenport. In retrospect, Congress, by denying a charter to the foundation, had forfeited a chance to restrict Rockefeller’s influence over his money.
As for the recipients of grants, buffeted by the uproar over the federal charter, the Rockefeller Foundation refrained from anything that smacked of controversy. Having had more than enough public criticism, the Rockefellers wanted everything to be simon-pure. Like the family’s other philanthropies, the Rockefeller Foundation was attuned to the optimistic, rational spirit of the Progressive era and drew on its new class of technocrats. (Woodrow Wilson, a political scientist, had been elected to the White House in 1912.) Science would be the magic wand waved over any project to show that it was sound and objective, free of favoritism or self-interest. For a long time, the Rockefeller Foundation shunned the humanities, social sciences, and the arts as areas too subjective or fraught with political peril. In 1917, when advising his father to pump another fifty million dollars into the RIMR, Junior explained his preference for medicine: “This is a field in which there can be no controversy, so that I think the possibility of criticism as regards the use of the fund or its potential dangers would be almost nothing. There is no limit to the development of medical work.”19
In its first decade, the Rockefeller Foundation focused on public health and medical education both at home and abroad. As founder of one of the first multinational corporations, Rockefeller applauded the unique global range of his new philanthropy, a feature that would always distinguish it. In its maiden action in June 1913, the new board decided to take the superb work of the Rockefeller Sanitary Commission’s antihookworm campaign and apply it around the globe. To accomplish this, it created a new International Health Commission under the leadership of Wickliffe Rose, who exported his campaign to fifty-two countries on six continents, treating millions of people.
In the future, Rose would engage in battles to subdue malaria, tuberculosis, typhus, scarlet fever, and other scourges, but he registered his most spectacular success with yellow fever, once tagged “the terror of the Western Hemisphere.” During the Spanish-American War, Major Walter Reed had shown that mosquitoes transmitted yellow fever, knowledge used by Colonel W. C. Gorgas to control the disease in Panama during the building of the canal through mosquito-infested jungles. Touring the Far East in 1914, Rose heard fears from public-health officials that a fresh outbreak of yellow fever could result from ships passing through the new canal. Back in the United States, Rose consulted Colonel Gorgas, who asserted that yellow fever could be “eradicated within a reasonable time and at a reasonable cost” if a systematic campaign was mounted to stamp out seedbeds in the Western Hemisphere.20 Hired by Rose to accomplish just that, Gorgas achieved such triumphant results that the disease was nearly wiped out in South and Central America by the late 1920s. When it flared up again, the Rockefeller Foundation sponsored a team of scientists to develop and manufacture a vaccine to fight it, a dramatic effort that yielded a vaccine by 1937 but also claimed the lives of six researchers, who contracted the disease. Millions of doses of the vaccine were distributed worldwide and saved innumerable American soldiers during World War II.
These moving crusades to eliminate infectious diseases generated one troubling afterthought: What if these diseases returned for lack of trained government personnel in the affected areas? It soon became evident that the best way to safeguard Rose’s work was to assist governments in establishing public-health machinery. It was an auspicious moment for such an approach, for pure science had now begun to outstrip applied medicine, which meant that enormous gains could be made simply by implementing existing knowledge. With this in mind, the Rockefeller Foundation gave six million dollars to Johns Hopkins for a new school of hygiene and public health that opened in 1918, a newfangled institution to train public-health professionals in such emerging disciplines as sanitary engineering, epidemiology, and biostatistics. In 1921, the foundation made a similar gift to Harvard to start a public-health school and finally spent twenty-five million dollars to create such schools from Calcutta to Copenhagen, along with numerous fellowship programs. Through its catalytic role, the Rockefeller Foundation played an integral part in the rise of American medicine to the pinnacle of world leadership.
While Rockefeller Foundation largesse was distributed across many continents, China was a special beneficiary, receiving more money than any country except the United States. As Rockefeller scaled back involvement with the University of Chicago in 1909, Gates fancied that they might replicate this feat with a great Chinese university. Like many Baptists of his era, Rockefeller was interested in China because of the extensive missionary efforts there. Though the political unrest in China gave him pause, Gates sent a study mission there to investigate. Two groups stoutly opposed the project: local Christian missionaries, who feared the heathenish secularism of the proposed university, and government officials, who feared foreign subversion. So the interest in China turned to that old Rockefeller standby: medicine. In 1915, the Rockefeller Foundation set up the China Medical Board, which constructed the Peking Union Medical College and opened it in 1921. One of Rockefeller’s most ambitious projects, the medical complex contained fifty-nine buildings, roofed with jade-green tiles (it would be dubbed the Green City) scattered across a twenty-nine-acre site. Later nationalized by the Communists, the school introduced a generation of Chinese doctors to modern medicine.
By the 1920s, the Rockefeller Foundation was the largest grant-making foundation on earth and America’s leading sponsor of medical science, medical education, and public health. John D. Rockefeller, Sr., had established himself as the greatest lay benefactor of medicine in history. Of the $530 million he gave away during his lifetime, $450 million went directly or indirectly into medicine. He had dealt a mortal blow to the primitive world of nineteenth-century medicine in which patent-medicine vendors such as Doc Rockefeller had flourished. He had also effected a revolution in philanthropy perhaps no less far-reaching than his business innovations. Before Rockefeller came along, rich benefactors had tended to promote pet institutions (symphony orchestras, art museums, or schools) or to bequeath buildings (hospitals, dormitories, orphanages) that bore their names and attested to their magnanimity. Rockefeller’s philanthropy was more oriented toward the creation of knowledge, and if it seemed more impersonal, it was also far more pervasive in its effect.
CHAPTER 29
Massacre
In his philanthropies, John D. Rockefeller had ascended into the pure air of good works, high above the clash of partisan politics and industrial strife. With the advent of the Rockefeller Foundation, the Rockefeller name, so besmirched by association with Standard Oil, took another long step toward redemption. And by serving on the white-slavery jury, Junior had tested a brand-new image as a social reformer. It was at this happy juncture that news reached New York of terrible bloodshed in the southern Colorado coalfields and the worst nightmare in Rockefeller history—surpassing anything ever related to Standard Oil—descended upon the family with terrible swiftness.
The Rockefellers’ ill-fated involvement in Colorado dated back to 1902, when Senior was flush with windfall profits from the specta
cular sale of Mesabi iron ore to U.S. Steel. At George Gould’s urging, Frederick Gates visited the properties of Colorado Fuel and Iron (CFI), the state’s largest employer, which owned twenty-four coal mines that provided coke for its own steel mills. If the Rockefellers controlled the company, Gould fancied, his railroads might receive lucrative coal-carrying contracts. Inspired by his Mesabi triumph, Gates had a hunch that a CFI investment might be a bonanza on an equivalent scale. In November 1902, Rockefeller paid $6 million for 40 percent of its stock and 43 percent of its bonds, gaining uncontested supremacy over the Colorado company. Only later did Gates learn that Gould had been tipped off by a trusted aide that the company management was “rotten” and that its top executives were a pack of “liars,” “swindlers,” and “thieves.”1
To strengthen CFI, Gates convinced Rockefeller in 1907 to import a new management team, and he had an ideal candidate in mind: his sixty-year-old uncle, LaMont Montgomery Bowers, whose consumptive wife might benefit from the Colorado mountain air. Because of Bowers’s demonstrated proficiency in running the Great Lakes ore fleet, the Rockefellers reposed extraordinary— and ultimately misplaced—trust in the abilities of this former wholesale grocer from upstate New York who became vice president of the Colorado company and the Rockefellers’ chief liaison with it.
Despite this fresh leadership, the Colorado investment seemed as misbegotten as the Mesabi investment had been charmed, and for years CFI did not pay a penny on its stocks or bonds. Hobbled with a money loser, the Rockefellers took an intransigent tone with union organizers. As early as October 1903, Junior sent fighting words to CFI’s president on the subject: “We are prepared to stand by in this fight and see the thing out, not yielding an inch. Recognition of any kind of either the labor leaders or union, much more a conference such as they request, would be a sign of evident weakness on our part.”2 In his decades in business, Senior had learned never to budge on the prerogatives of capital, especially when it came to unions. In 1903, Standard of New Jersey had truculently broken a strike for union recognition at its Bayonne, New Jersey, refinery. So when Bowers came on board, he had an understanding with the Rockefellers that he would be assertive in blocking unionization.