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Standard Oil

Standard Oil was an oil refining company founded by John D. Rockefeller and partners in 1863. Borrowing heavily to expand his business, he drew five big refineries including the business concern of Henry Morrison Flagler into one firm, Rockefeller, Andrew & Flagler. By 1868 he headed the world's largest oil refinery.

On January 10, 1870 he formed the Standard Oil Company of Ohio and started his strategy of buying up the competition and consolidating all oil-refining under one company. By 1878 Standard Oil held about 90% of the refining capacity in the U.S. In 1881 the company was reorganised as the Standard Oil Trust. The three main men of "Standard Oil" were Henry H. Rogers, William Rockefeller, and, the most important, John D. Rockefeller.

This attracted attention from antitrust authorities in the 1890s, the Ohio Attorney General filed and won an antitrust suit in 1892 and the company was broken up after the United States Supreme Court declared the company to be an "unreasonable" monopoly under the Sherman Antitrust Act on May 15, 1911. However, the owners remained in charge of the smaller companies.

Standard Oil was not a loved company. Through a series of dubious business practices it either subdued competitors or engaged in illegal transportation deals with the railroad companies to ensure it could undercut its competitors' prices. Standard Oil, formed well before the discovery of Spindletop and a demand for oil other than for heat and light, was well placed to control the growth of the oil business. It did this by ensuring it owned and controlled all aspects of the trade.

Perhaps the most infamous action of Standard Oil occurred during a massive strike by employees of the Rockefeller-owned Colorado Fuel and Iron Company. What was referred to as the Ludlow Massacre occurred on April 20, 1914 when the state militia fired on a tent city inhabited by workers and their families, causing numerous deaths and a public relations disaster. John D. Rockefeller Jr. was forced to take action to bolster his public image to avert large-scale market losses. [1]

The following quotation (from journalist Thomas Lawson's 1905 book, Frenzied Finance) perhaps epitomises the company as perceived by the public.

"Standard Oil" has from its birth to present writing been responsible for more hell than any other trust or financial thing since the world began. Because of it the people have sustained incalculable losses and have suffered untold miseries.

There were eight distinct groups of individuals and corporations which made up the big "Standard Oil":
  1. The Standard Oil, seller of oil to the people, which was made up of many sub-corporations either by actual ownership or by ownership of their stock or bonds;
  2. Henry H. Rogers, William Rockefeller, and John D.Rockefeller, active heads, and included with them their sons;
  3. A large group of active captains and first lieutenants, men who conducted the affairs of the different corporations or sections of corporations in which some or all of the "Standard Oil" were interested;
  4. A large group of captains retired from active service in the Standard Oil army;
  5. The estates of deceased members of the wonderful "Standard Oil" family, which were still largely controlled by some or all of the prominent "Standard Oil" men;
  6. "Standard Oil" banks and banking institutions, and the system of national banks, trust companies, and insurance companies, of which "Standard Oil" had, by ownership and otherwise, practically absolute control;
  7. The "Standard Oil" army of followers, capitalists, and workers in all parts of the world;
  8. The countless hordes of politicians, statesmen, lawmakers and enforcers -- political structure -- and judges and lawyers.

Table of contents
1 Governing rules
2 Successors
3 External link

Governing rules

"Standard Oil's" governing rules were as rigid as the laws of the Medes and Persians, yet so simple as to be easily understood by anyone:

  1. Keep your mouth closed, as silence is gold, and gold is what we exist for;
  2. Collect our debts today. Pay the other fellow's debts tomorrow;
  3. Keep the seller waiting; the longer he waits, the less he'll take. Hurry the buyer, as his money brings us interest;
  4. Make all profitable bargains in the name of "Standard Oil," chancey ones in the names of dummy corporations;
  5. Never forget our Legal Department is paid by the year, and our land is full of courts and judges;
  6. As competition is the life of trade (our trade), and monopoly the death of trade (our competitor's trade), employ both judiciously;
  7. Never enter into a "butting" contest with the Government. Our Government is by the people and for the people, and we are the people, and those people who are not us can be hired by us;
  8. Always do "right." Right makes might, might makes dollars, dollars make right, and we have the dollars.

The success of "Standard Oil" was largely due to two things -- to the loyalty of its members to each other and to "Standard Oil," and to the punishment of its enemies. Each member before initiation knew its religion to be reward for friends and extermination for foes. The "Standard Oil" man was constantly reminded in a thousand and one ways that punishment for disloyalty is sure and terrible, and that in no corner of the earth can he escape it, nor can any power on earth protect him from it. Standard Oil also helped to pioneer the use of advertising to create brand loyalty. Even though its products were not particularly romantic or otherwise conducive to advertising, Standard Oil became known for its bright red packaging.

"Standard Oil" was never loud in its rewards nor its punishments. It did not care for the public's praise nor for its condemnation, but endeavored to avoid both by keeping its "business" to itself.


Successor companies to Standard Oil include: Other Standard Oils:

External link