Titan

by Ron Chernow

  As with Maurice, Rockefeller quarreled with James about business methods and was dismayed by his devious side deals in oil. When James boasted about swindling a former boss or cheating people on buying trips to Pennsylvania, it must have aroused Rockefeller’s innermost suspicions, for he closely audited his partner’s expenses. Like Maurice, James smarted at Rockefeller’s self-righteousness and branded him the “Sunday-school superintendent.”34 Already contemplating the future, Rockefeller wanted to be surrounded by trustworthy people who could inspire confidence in customers and bankers alike. He drew a characteristic conclusion: The weak, immoral man was also destined to be a poor businessman. “We were beginning to prosper and I felt very uneasy at my name being linked up with these speculators.”35 Later on, the Clarks fully reciprocated this contempt, with James describing Rockefeller’s sole contribution to Andrews, Clark as that of a “financial manipulator” and claiming that in 1863 Rockefeller had cheated him of several thousand dollars.36

  If their differences had been chiefly a clash of personalities, Rockefeller’s partnership with Maurice Clark might have lasted years, but they had sharply divergent views about oil’s future and the desirable pace of expansion. Despite the Civil War, the drills never stopped in Pennsylvania, except when General Lee invaded the state and producers had to defend it. As the export business in kerosene widened, Andrews, Clark banked solid profits in refining during every year of the war. Yet prices remained as volatile as the war itself, with the supply-demand equation shifting radically each time a single spouter or gusher came in. Amid the ruthlessly competitive conditions, it was never clear where prices would settle or what constituted a normal price. The price fluctuations in a single year were staggering, veering between 10¢ and $10 a barrel in 1861 and $4 and $12 in 1864. Undeterred by these extreme gyrations, both Rockefeller and Andrews wanted to borrow heavily and expand, while Clark favored a more circumspect approach.

  What likely clinched Rockefeller’s decision to break from the three Clarks was that they had the votes to override him and Andrews and didn’t hesitate to use their majority in a high-handed way. In later reminiscences, Rockefeller disclosed an incident that casts light on his relations with the Clarks: “[Maurice Clark] was very angry when I borrowed money to extend our business of refining oil. ‘Why, you have borrowed $100,000,’ he exclaimed, as if that were some sort of offense.”37 Rockefeller’s amazement seems somewhat disingenuous: It was a stupendous sum, but all Rockefeller could see was that Maurice Clark lacked his audacity. “Clark was an old grandmother and was scared to death because we owed money at the banks.” 38 One can forgive the Clarks if they found something overbearing about this bumptious young man who would risk all their capital, evidently without notifying them. Significantly, the Clarks were irked by both Rockefeller’s frugality and his prodigality—his tightfisted control of details and advocacy of unbridled expansion. Daring in design, cautious in execution—it was a formula he made his own throughout his career.

  By 1865, Rockefeller, age twenty-five, decided it was time for a showdown with the Clarks. He wasn’t the sort to persist in a flawed situation, and he was now prepared to clear away the encumbrances that had thwarted his early career.

  For Rockefeller, success in the oil business required a bullish, nearly glandular faith in its future. Before deciding to enter the business on a large scale, he needed one last God-given proof that the oil wouldn’t disappear—decisive evidence that came in January 1865 at a place called Pithole Creek. The nearby rocks and chasms had always emitted sulfur gas and attracted the notice of oilmen. One day, a group of eccentric producers, waving a witch-hazel twig serving as a divining rod, drilled on the spot where the twig dipped down. When a tremendous gusher spouted up days later, another madcap chapter in the oil industry commenced, with speculators, drillers, and business agents converging on the spot. Within a few months, the sleepy frontier settlement with four log cabins was transformed into a hectic little metropolis of twelve thousand people. Overnight, fifty hotels sprang up, along with a theater that seated one hundred and was lit by crystal chandeliers. So improbable was Pithole’s rise that it seemed a phantom city, a conjurer’s trick. “It was more than a city,” says one chronicler, “it was a state of postwar euphoria.”39 Even by the sordid standards of the Oil Regions, it was a disreputable place. “Every other shop is a liquor saloon,” said one journalist. “It is safe to assert that there is more vile liquor drunk in this town than in any other of its size in the world.”40

  One eyewitness to the whole Pithole lunacy was an observant eight-year-old girl named Ida Minerva Tarbell, who lived ten miles away in Rouseville and saw hordes of eager men streaking to the boomtown. When her father built an oil-tank shop there, he made the fastest money of his life. Unfortunately, Pithole’s ebullient heyday was short-lived, and within a few years its wells were exhausted from fire and overproduction. Before the town reverted back to sylvan peace, people began to scavenge for scrap. For $600, Ida Tarbell’s father bought the fancy Bonta House hotel, constructed a few years earlier for $60,000, and carried off its lumber, doors, and windows to erect a home for the Tarbell family in Titusville. By 1874, the moment of its greatness having flickered, Pithole counted just six voters.

  In hindsight, Pithole was a cautionary fable of blasted hopes and counterfeit dreams, renewing fears of the industry’s short life span. But in January 1865, it suggested that there were many undiscovered pockets of oil, and it probably acted as a catalyst that hastened Rockefeller’s break with the Clarks. This parting was vintage Rockefeller: He slowly and secretly laid the groundwork, then moved with electrifying speed to throw his adversaries off balance. That January, Maurice Clark had openly fumed when Rockefeller asked him to sign yet another note. “We have been asking too many loans in order to extend this oil business,” Clark said. Undaunted, Rockefeller shot back: “We should borrow whenever we can safely extend the business by doing so.”41 Trying to intimidate Rockefeller, the Clark brothers threatened to dissolve the partnership, which required the unanimous consent of all the partners.

  Determined to break loose from the Clarks and the commission business, Rockefeller sounded out Sam Andrews privately and told him:

  Sam, we are prospering. We have a future before us, a big future. But I don’t like Jim Clark and his habits. He is an immoral man in more ways than one. He gambles in oil. I don’t want this business to be associated with a gambler. Suppose I take them up the next time they threaten a dissolution. Suppose I succeed in buying them out. Will you come in with me?42

  When Andrews agreed, they shook hands on the deal.

  A few weeks later, just as Rockefeller expected, he quarreled with Maurice Clark, and the latter threatened to dissolve the partnership. “If that’s the way you want to do business we’d better dissolve, and let you run your own affairs to suit yourself,” Clark warned. 43 Moving swiftly to implement his scenario, Rockefeller invited the partners to his home on February 1, 1865, and vigorously expounded a policy of rapid refinery expansion—a policy he knew was anathema to the Clarks. Playing right into Rockefeller’s hands, James Clark tried to browbeat him. “We’d better split up,” he declared.44 In conformity with the partnership agreement, Rockefeller got everyone to state publicly that he favored dissolution, and the Clarks left imagining they had cowed Rockefeller. In fact, he raced to the office of the Cleveland Leader and placed a notice in the morning paper dissolving the partnership. The next morning, when the Clarks saw it, they were stunned. “Do you really mean it?” an incredulous Maurice Clark asked Rockefeller. He hadn’t realized before that Rockefeller had lined up Andrews on his side. “You really want to break it up?” “I really want to break it up,” replied Rockefeller, who had sounded out sympathetic bankers in the preceding weeks. 45 It was agreed that the firm would be auctioned to the highest bidder.

  Even as a young man, Rockefeller was extremely composed in a crisis. In this respect, he was a natural leader: The more agitated others became, the calm
er he grew. It was an index of his matchless confidence that when the auction occurred, the Clarks brought a lawyer while Rockefeller represented himself. “I thought that I could take care of so simple a transaction,” he boasted.46 With the Clarks’ lawyer acting as auctioneer, the bidding began at $500 and quickly rose to a few thousand dollars, then inched up slowly to about $50,000— already more than Rockefeller thought the refining business worth. Since this auction was a turning point on his road to industrial supremacy, let us quote his account of the historic moment as he related it in his memoirs:

  Finally it advanced to $60,000, and by slow stages to $70,000, and I almost feared for my ability to buy the business and have the money to pay for it. At last the other side bid $72,000. Without hesitation I said $72,500. Mr. Clark then said: “I’ll go no higher, John; the business is yours.” “Shall I give you a check for it now?” I suggested. “No,” Mr. Clark said, “I’m glad to trust you for it; settle at your convenience.” 47

  Rockefeller knew the moment was fraught with consequences. “It was the day that determined my career. I felt the bigness of it, but I was as calm as I am talking to you now,” he told William O. Inglis. 48 He paid a lofty price for his freedom, surrendering to Clark his half interest in the commission business along with the $72,500. (The purchase price would be equivalent to $652,000 today.) Yet he had captured a tremendous prize. At age twenty-five, he had won control of Cleveland’s largest refinery, which could treat five hundred barrels of crude oil daily—twice the capacity of its nearest local rival—and ranked as one of the world’s largest facilities. On February 15, 1865, the Cleveland Leader printed the following item: “Copartnership Notice—The undersigned, having purchased the entire interest of Andrews, Clark & Co. in the ‘Excelsior Oil Works,’ and all the stock of barrels, oil, etc., will continue the business of the late firm under the name of Rockefeller & Andrews.”49 Rockefeller savored his revenge against the Clarks, who were shocked that their junior partner had lined up, on the sly, financing for such a large deal, and Rockefeller gloated at the older men’s complacent naïveté. “Then [the Clark brothers] woke up and saw for the first time that my mind had not been idle while they were talking so big and loud.”50 All of Rockefeller’s Baptist contempt for vanity, show, and loose talk is condensed in that single observation. On March 2, 1865, Clark and Rockefeller was also dissolved, and Rockefeller eliminated the three fractious Clark brothers from his life forever.

  For Rockefeller, the harrowing memory of the Clarks stayed with him, and he talked as if he had survived a nightmare. “The sufferings I went through in those years, the humiliation and the anguish, I have not words to describe. And I ever point to the day when I separated myself from them by paying this large bonus as the beginning of the success I have made in my life.”51 It’s hard to know whether Rockefeller exaggerated the Clarks’ haughtiness, but the important points are that he was proud and sensitive and that their barbed words reverberated deeply in his mind. Having emerged as his own boss, he would never again feel his advancement blocked by shortsighted, mediocre men.

  The demise of Clark and Rockefeller unfolded against the waning days of the Civil War. By December 1864, General Sherman had reached Savannah and swung north through the Carolinas. About two months after Rockefeller won the refining business, Robert E. Lee surrendered to Ulysses S. Grant at Appomattox Courthouse. As a town that had sheltered many runaway slaves before the war, Cleveland was especially grieved by the subsequent news of Lincoln’s assassination. On April 27, the funeral train brought his body to lie in state for several hours in a special mortuary pavilion, with women in spotless white robes gathering by the railroad tracks to sing choral dirges to the slain president.

  By this point, the new firm of Rockefeller and Andrews had been installed on the second floor of a brick building on Superior Street, several blocks from the Cuyahoga River, in an office complex known as the Sexton Block. From his new command post, the young entrepreneur could stare out the window and follow the progress of barges drifting by laden with oil barrels from his refinery. Already a mature businessman, he relied on Andrews only as a technician and assumed control of all other aspects of the business. Having discarded several older partners, the young man had no real business mentors, heroes, or role models and was beholden to no one. John D. Rockefeller was not only self-made but self-invented and already had unyielding faith in his own judgment.

  For all his resoluteness as a young businessman, Rockefeller tarried in settling his private life. Yet he had already fathomed his own needs and sought a woman who would be pious and loving, dedicated to the church, and strongly supportive of his career. Because of his easy, affectionate way with his mother, Rockefeller felt comfortable with women, took genuine pleasure in their company, and, unlike the caddish Bill, treated them with respect.

  During his brief period at Central High School, Rockefeller had befriended two bright, literate sisters, Lucy and Laura Celestia Spelman, and taken a special fancy to Laura, or “Cettie,” as she was called. Though he still had an awkward manner with girls, the sisters saw a warm, likable side to him. Unlike most other girls at the school, the practical-minded Cettie was taking commercial courses to master business principles, and she applauded John in his storied 1855 job search. As a friend of Cettie’s later noted, “She saw that he was ambitious, and she thought that he was honest, which probably appealed to her more than anything else.” 52 Clearly, she transmitted to John the message that his chances of winning her would be materially enhanced if his economic prospects improved.

  There seems little doubt that in courting Cettie, John was held back by the disparity in their socioeconomic status, which accounts for the nine-year hiatus between their first meeting in high school and their 1864 marriage. The Spelmans were high-toned people, a blue-ribbon family living in a fine house. A friend of Laura’s recalled, “Perhaps Cettie wasn’t exactly rich and beautiful, but her father was as well off as any of the girls in our class, a member of the Ohio legislature, and somewhat known for his philanthropic work, so—you know how those things are among children—we thought that it was strange for her to rather show a leaning toward Johnny.”53 It’s easy to see what drew John to Laura aside from patent compatibility, for the Spelmans signified the respectability that had so frustratingly eluded his own family.

  Civic-minded, stirred to action by social injustice, the Spelmans offered more than entrée into the local gentry and were a family of genuine substance. Born in Massachusetts, Harvey Buel Spelman, a direct descendant of the Puritans, and Lucy Henry met in Ohio and were married in 1835, giving birth to Laura Celestia on September 9, 1839. When they moved to Akron in 1841, they lived humbly at first, with Mrs. Spelman taking in washing to extend their income; Cettie, as a little girl, sometimes yanked a small red wagon around town to deliver laundry. Even when Harvey Spelman opened a dry-goods store and amassed considerable wealth, he and Lucy didn’t retreat into private pleasures but redoubled their militant reform efforts. As a member of the local board of education, Harvey Spelman spearheaded the creation of a progressive public-school system, a crusade that propelled him into the Ohio state legislature in 1849. Also busy in church causes, the Spelmans helped to found a Congregational church in Akron. Their religious beliefs buttressed their secular activism, and they were pledged to root out evil as part of both their religious and political agendas.

  With his broad forehead, tufty brows, and pugnacious beard, Harvey Buel Spelman was a man of burning fundamentalist convictions and apocalyptic musings. He frequently discerned God’s hand smiting the American people for their wicked extravagance, and he issued flaming diatribes against demon rum: “The widespread and excessive use of rum is the tinder which inflames the worst passions in human nature, fosters riots, Communism and strikes, promotes ignorance, vice and crime, and more than any other cause, threatens the stability of our free institutions,” he said in 1879.54 Lucy Henry, his dignified, industrious wife, enjoyed singing hymns and had little time for
small talk, though she could be jolly with her daughters. “At any reference to the Bible, to temperance, to education, to the widening sphere of women, her eyes flashed with old-time fire, and her face was aglow with conviction,” a preacher said, with pardonable hyperbole, at her funeral.55

  As an outgrowth of their church involvement—and this was true of many evangelicals after the Second Great Awakening—Harvey and Lucy were uncompromising abolitionists and temperance activists. With their home serving as a station on the Underground Railroad, they shepherded many slaves from Tennessee and Kentucky to freedom, and Sojourner Truth, the former slave, abolitionist, and itinerant preacher, spent several days with them. According to Cettie, the only time she ever saw her mother cooking on the Sabbath was to prepare hot meals for slaves in flight to Canada. The Spelmans felt no less ardently about drink. The crusading Mrs. Spelman not only marched in the streets but stormed the saloons, dropped to her knees in prayer, and pleaded with sinners at the bar stools to mend their ways, while Mr. Spelman carried on a parallel campaign to shut down rum shops.

  The Spelmans’ prosperous life in Akron ended in 1851 when Mr. Spelman’s business went bankrupt, the casualty of a bank panic. The family then moved to Cleveland, where Mr. Spelman’s fortunes revived, but a dark edge of economic uncertainty always shadowed the family. So while the Spelmans occupied a higher social rung than young Rockefeller, they were haunted by the prospect of economic misfortune and inclined to look favorably upon an up-and-coming suitor with a proper Christian pedigree. Cettie needed to find a husband who could safeguard her family’s security, so it is not surprising that she championed John’s career and eagerly coached him to succeed from the start.