by H. W. Brands
Rockefeller spent much of his long life in denial about his early years. As they pertained to his father, the denial was direct; years before Bill died, John D. began referring to Eliza as his “widowed mother.” And the memories he related of his father were unaccountably fond. “He himself trained me in practical ways. He was engaged in different enterprises; he used to tell me about these things.… He taught me the principles and methods of business.… I knew what a cord of good solid beech and maple wood was. My father told me to select only solid wood … and not to put any limbs in it or punky wood. That was a good training for me.” Bill Rockefeller was more candid about his pedagogy. “I cheat my boys every chance I get,” he told a contemporary. “I want to make ’em sharp. I trade with the boys and skin ’em and I just beat ’em every time I can. I want to make ’em sharp.”7
Between his mother’s discipline and his father’s cheating, Rockefeller learned to fend for himself. He cultivated a reserve that would persist throughout his life. One of his high school teachers described him as “the coldest blooded, the quietest and most deliberate chap.” A young woman who occasionally tutored him declared, “I have no recollection of John excelling at anything. I do remember he worked hard at everything: not talking much, and studying with great industry.” She added, “There was nothing about him to make anybody pay especial attention to him or speculate about his future.” Yet a peer remembered something that was unusual: Rockefeller’s preoccupation with money. “Some day, sometime, when I am a man,” Rockefeller confided to this friend, “I want to be worth a hundred thousand dollars.” Another friend from Rockefeller’s youth was Mark Hanna, who would grow up to be a senator from Ohio and William McKinley’s closest adviser. A mutual acquaintance characterized the two: “Mark was of the virile type, always active, and took part in almost all forms of athletics, while John Rockefeller was reserved, studious, though always pleasant. No matter what the excitement, John retained his quietude and smiled on all occasions.” Hanna himself was quoted as saying of Rockefeller that he was “sane in every respect save one—he is money mad!”8
EDWIN DRAKE GAVE form to Rockefeller’s madness. In 1859 Drake drilled for oil near Titusville, Pennsylvania, and struck the greasy liquid. The discovery set off a boom to northwestern Pennsylvania that paralleled the gold rush to California a decade earlier, with the difference that the “black gold” was even more mysterious than the yellow stuff and its provenance more puzzling. Humans had known of oil since antiquity, encountering it where it seeped to the surface or tainted water wells. Such seeps were what inspired Drake to drill along Oil Creek, which got its name before the morning of August 28, 1859, when he woke to find that his seventy-foot hole had filled with oil overnight. But he couldn’t have said where the oil came from, why it was located in this place and not others, or what, precisely, it consisted of.9
Its usefulness was slightly better known. “Rock oil,” as it was called, to distinguish it from the oils of plants and animals, had been used medicinally for millennia. Whether it cured anything was hard to say, but that didn’t stop hucksters like Bill Rockefeller from making extravagant claims of its virtues or his customers from swallowing them and it. But Drake and his backers weren’t thinking of medicine when they sank their money into the Pennsylvania ground; they were thinking of light. For a thousand generations men and women had gone to sleep when the sun did and waked with its first light. Gradually they learned to push back the dark with hearth fires, torches, and candles. These last, rendered from animal fat, represented the state of the illuminating art till the nineteenth century. In the early part of that century whale oil filled the lamps of the wealthy, and by the century’s midpoint oil derived from coal was being similarly employed. But there were only so many fish (as Herman Melville and many others insisted on calling the cetaceans) in the sea, and coal clung tightly to its oil. If the mass of humanity depended on whale or coal oil, it would never be released from its bondage to the sun. This wasn’t simply a matter of social equality—the rich affording light, the poor doing without—but an issue of economic development. Farms might operate quite well by the sun, with the short days of winter being the time when farmers had little work to do. But factories had their own imperatives, and they couldn’t wait for the December sun to rise before their wheels whirred into motion. The man who provided cheap light would not merely let farmers read their almanacs after supper but allow the factory-working sons and daughters of farmers to tend looms and lathes before breakfast.
It was this property of oil that inspired the rush to Pennsylvania. Petroleum promoters broadcast its virtues. “As an illuminator the oil is without a figure,” one said. “It is the light of the age.… Those that have not seen it burn may rest assured its light is no moonshine, but something nearer the clear, strong, brilliant light of day, to which darkness is no party.… Rock oil emits a dainty light, the brightest and yet the cheapest in the world, a light fit for Kings and Royalists and not unsuitable for Republicans and Democrats.” Whatever oil did for the kings and royalists, those Republicans and Democrats, in their capacity as capitalists, poured themselves and their money into northwestern Pennsylvania. “The whole population are crazy almost,” an early arrival wrote home. “I never saw such excitement. The whole western country are thronging here, and fabulous prices are offered for lands in the vicinity where there is a prospect of getting oil.” Within months, dozens of wells punctured the landscape along Oil Creek; by the autumn of 1860 the rig count reached seventy-five. Speculators drove prices to levels unimagined just two years before. “They barter prices in claims and shares, buy and sell sites, and report the depth, show, or yield of wells, etc. etc.,” an observer explained. “Those who leave today tell others of the well they saw yielding fifty barrels of pure oil a day.… The story sends more back tomorrow.… Never was a hive of bees in time of swarming more astir, or making a greater buzz.”10
And then, quite fortuitously, a larger hive made a greater buzz that intensified the oil excitement still further. The secession of the South prompted the North to prepare for war. Besides being the light of the age, petroleum was the era’s best lubricant, not as fine as sperm oil, which would still be used in watches and delicate instruments, but far cheaper—and much cheaper also than coal oil. To keep the pistons in the steam engines of locomotives and factory power plants from seizing up, to prevent the bearings in push rods and wheel trucks and stamp presses from smoking, nothing beat rock oil. Few doubted that human mettle would ultimately determine the outcome of the war and the fate of the Union, but most acknowledged that metal of a different sort, and the lubricants that kept the metal sliding and rolling, would set the boundaries for the actions of muscle and bone.
JOHN D. ROCKEFELLER observed the commotion in the oil fields with far more enthusiasm than he did the excitement on the battlefields. Like Morgan and other capitalists of the era, Rockefeller reckoned that his time was worth more to himself than to the Union army, and he paid three hundred dollars to avoid the draft. He found two partners, Maurice Clark and Samuel Andrews, and engaged to exploit the resource that was gushing from the hillsides above Oil Creek. Whether by accident or inspiration, the three eschewed production for refining. The former required talents not given to Rockefeller, who quickly proved the driving force in the joint venture. Rockefeller lacked the gambling instinct to risk everything on wells that might turn up dry—and that might bankrupt their owners even if they struck oil. As production soared from nil in 1859 to three million barrels in 1862, prices plunged, leaving many producers with nothing but blackened palms and faces for their efforts. Rockefeller’s native caution and acquired puritanism recoiled from such chaos; he was willing to work—very hard, if necessary—but only in a field where the rewards were less subject to wayward chance and ruinous competition.
Refining was more to his taste. Although the art of separating crude oil into its component compounds remained as much alchemy as science, it was an industrial process that might be rend
ered more efficient by the application of sound business practices. Rockefeller prowled the floor of the refinery the partners built in Cleveland, the urban gateway to the oil region, and constantly searched for waste and carelessness. When a plumber submitted a bill that seemed padded, Rockefeller decided to purchase pipe and other supplies himself. His cooper charged him $2.50 per oak barrel; Rockefeller was sure his own men could make the barrels cheaper, and soon they did, turning them out for less than a dollar each. Irked at having to throw away some sulfur-based byproducts of the refining process, he devised a scheme for converting the waste into fertilizer, which he then converted into cash.11
The more he learned about the oil refining business, the more it defined his life. His partner Clark later observed, “John had abiding faith in two things: the Baptist creed and oil.” Rockefeller’s sister grew tired of hearing John talk to Clark about refining. “I got sick of it and wished morning after morning that they would talk of something else,” she said. An associate from this period declared, “The only time I ever saw John Rockefeller enthusiastic was when a report came in from the creek”—Oil 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.”12
Rockefeller soon realized he took the business far more seriously than his partners did. Clark was a decade older than Rockefeller and resented the younger man’s assertiveness; by way of warning he regularly threatened to dissolve the partnership, supposing this would keep Rockefeller in line. Instead Rockefeller arranged the support of Andrews, and the next time Clark threatened dissolution, Rockefeller readily agreed. Too embarrassed to withdraw his bluff, Clark consented to an auction of the business to the partner or partners willing to pay the most. The bidding began at $500 but quickly escalated to many times that much. “Finally it advanced to $60,000,” Rockefeller recalled, “and by slow stages to $70,000.… 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.’ ”13
Rockefeller’s timing couldn’t have been better. Two months after he gained his independence, the Civil War ended, and while the war had been good for the oil business, the peace promised to be even better. Railroad construction was booming, with the Pacific railroad leading the way. The market for illuminating oil was certain to grow rapidly as more consumers discovered the convenience and value of oil-derived kerosene.
Nor could Rockefeller have improved on his location. Besides being the gateway to the oil fields, Cleveland was a place where railroads reached the Great Lakes. Petroleum arrived from the oil district in barrels (of forty-two gallons, which became and would remain the industry standard). It was refined in Rockefeller’s plant and the many others that sprang up nearby. The refined lubricating oil, kerosene, and lesser products like tar and paraffin were repackaged and shipped out by train and steamer. In time the oil business would become global, but in its American infancy it was strictly regional, and Rockefeller had the good luck—and good sense—to be at the center of the oil region.
In 1867 Rockefeller brought a new partner into the business. Henry M. Flagler couldn’t have been more different from Rockefeller in outward demeanor if he had been Rockefeller’s father—of whom Flagler reminded many of those who knew both John D. and Big Bill. Flagler was handsome, debonair, and funny. But the inner man was Rockefeller’s alter ego. He didn’t drink or swear, and he took his Protestant religion as seriously as Rockefeller did—which was to say, he read his Bible religiously but kept his ledger books in a different drawer. “I had scruples about the business and gave it up,” he remembered of a partnership that involved alcohol, “but not before I made $50,000.” On his desk he displayed a line from a popular novel of the day, which read: “Do unto others as they would do unto you—and do it first.” Like Rockefeller, Flagler saw an oily future for America and was determined to have a part in it. He brought to his partnership with Rockefeller a loan of $100,000 from a former associate, who stipulated that Flagler be made treasurer. Rockefeller tested Flagler’s cost-consciousness, found it almost equal to his own, and accepted the deal.14
With Flagler at his side, Rockefeller set out to conquer the Cleveland market for refined oil. The first part of the campaign was easy, for in the early days of the industry persons with neither expertise nor true passion for the business often took up refining. “All sorts of people went into it,” Rockefeller said. “The butcher, the baker, and the candlestick maker began to refine oil.” Many of these tyros were eliminated by a combination of Rockefeller’s efficiency and their own incompetence. Rockefeller relentlessly drove his costs down. He kiln-dried the wood for his barrels before transporting it to his refineries, to save the transport cost of the water that evaporated off. After the company switched to tin cans for kerosene, he tinkered with the equipment to reduce the number of drops of solder required to seal the cans. An employee described a Rockefeller epiphany:
He watched a machine filling the tin cans. One dozen cans stood on a wooden platform beneath a dozen pipes. A man pulled a lever, and each discharged exactly five gallons of kerosene into a can. Still on a wooden carrier, the dozen cans were pushed along to another machine, wherein twelve tops were swiftly clamped fast on the cans. Thence they were pushed to the last machine, in which just enough solder to fasten and seal the lid was dropped on each can.
Mr. Rockefeller listened in silence while an expert told all about the various machines used to save time and expense in the process. At last Mr. Rockefeller asked: “How many drops of solder do you use on each can?”
“Forty.”
“Have you ever tried thirty-eight? No? Would you mind having some sealed with thirty-eight and let me know?”
The experiment was tried, and a small portion of the cans leaked. The number of solder drops was increased to thirty-nine. This time none leaked. Rockefeller had his economic savings and his moral triumph over waste.
His accountants knew he was always watching. A random check of barrel stoppers turned up a discrepancy. “Your March inventory showed 10,750 bungs on hand,” Rockefeller informed the man in charge. “The report for April shows 20,000 new bungs bought, 24,000 bungs used, and 6,000 bungs on hand. What became of the other 750 bungs?”15
ANDREW CARNEGIE WOULD never have joined the capitalist revolution in America had his father not been a casualty of the British version. Will Carnegie was a talented artisan, a weaver of linen, but the new steam-powered looms produced cloth that, if not so fine as that of the weavers, was far less expensive. Will might have become a power-loom tender, but the mill owners favored the quick, young hands of girls who worked cheaply, arrived promptly, and accepted their fate meekly. Day after day Will searched for alternative employment; night after night he came home to the family cottage more discouraged than when he left. Half a century later, Andrew recalled the defeat in his father’s voice as he said, “Andra, I can get nae mair work.”16
Others had suffered the same problem in that part of Scotland and done what millions before them had done when life in the Old World turned bad: they fled to the New. Will’s wife, Margaret, had siblings in America. “This country is far better for the working man than the old one,” her brother explained in a letter home. Will wouldn’t believe it, but Margaret couldn’t let herself not. Her family was falling apart in Scotland; perhaps America could save it. “I’ll make a spoon or spoil the horn,” she vowed, in a phrase whose tone required no translating even if the particulars did (Scots stirred their porridge with spoons carved from cow horns). She borrowed the money the passage to America required. The Carnegies reached New York in the summer of 1848 and were greeted at the wharf
by fellow Scots who guided them through the city and pointed the way to Allegheny, Pennsylvania, where Margaret’s sister lived.17
Andrew was twelve years old, with four years of school behind him and none ahead. Margaret, reading the despair in her husband’s eyes, understood that he’d never adjust to the new life, which meant that Andy must. He went to work at once, in a textile mill owned by a Scotsman who was happy to employ his compatriots, especially if they were young. Andy was paid $1.20 per week for tending the bobbins on the steam looms. “I have made millions since,” he wrote afterward, “but none of those millions gave me such happiness as my first week’s earnings. I was now a helper of the family, a breadwinner.”18
He was also ambitious. A higher-paying job came open in a factory that made the bobbins; Andy dipped the bobbins in oil and kept the boiler stoked. He hated the work, as the smell sickened him and the responsibility for the boiler gave him nightmares about blowing up the factory and killing all the workers. But for two dollars a week he put up with it—until something better appeared. His boss had a shaky hand and required help keeping the company records. Andy seemed quick, and the man asked him if he could write a fair hand. The boy’s penmanship passed the test, and he moved from shop floor to office.
He nonetheless kept looking. His uncle told him of a telegraph office in Pittsburgh, across the river from Allegheny, that required a messenger. Andy put on his one suit, crossed the water, and landed the job. His daily rounds introduced him to the leading men of Pittsburgh: the railroad managers, the factory owners, the bankers, the merchants, the lawyers. He learned their names and faces and heard their conversations. To improve his prospects still further, he taught himself Morse code, which enabled him to fill in when the regular telegraphers were sick, and to read the business correspondence that came down the wires. He soon advanced to full-time keyman, and astonished his fellows and bosses by becoming one of the first operators in the country to be able to read the incoming messages by ear (most operators transcribed them one letter at a time).
