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John D. Rockefeller: A Character Study by Ida M. Tarbell Author of "The History of the Standard Oil Company," "Life of Lincoln," ETC. Illustrated with Portraits Part One.
John D. Rockefeller is without question the most conspicuous type of our present dominating commercial man. "The most important man in the world" a great and serious newspaper passionately devoted to democracy calls him, and unquestionably this is the popular measure of him. His importance lies not so much in the fact that he is the richest individual in the world, with the control of property which that entails; it lies in the fact that his wealth, and the power springing from it, appeal to the most universal and powerful passion in this country — the passion for money. John D. Rockefeller, measured by our national ambition, is the most successful man in the world — the man who has got the most of what men most want. How did he get it, the eager youth asks, and asking, strives to imitate him as nearly as ability and patience permit. Thus he has become an inspirer of American ideals, and his methods have been crystallized into a great national commercial code. Nor is this all. Mr. Rockefeller distributes money in charity and in endowments. If not our first, he is certainly our second philanthropist; the amount of the money given being the standard. All over the land those who direct great educational, charitable and religious institutions are asking, "Can we not get something from him?" Receiving his bequests they become at least the tacit supporters of the thing for which he stands — that is, John D. Rockefeller exercises a powerful control over the very sources of American intellectual and religious inspiration. Now a man who possesses this kind of influence cannot be allowed to live in the dark. The public not only has the right to know what sort of a man he is; it is the duty of the public to know. How else can the public discharge the most solemn obligation it owes to itself and to the future, to keep the springs of its higher life clean? Who then is this John D. Rockefeller? Whence did he come? By what qualities did he grow to such power? Has he proved his right to the power? Does he give to the public whence he has drawn his wealth a just return in ideas, in patriotism, in devotion to social betterment, in generous living, in inspiring personal character? Has John D. Rockefeller made good? From time immemorial men who have risen to power have had to face this question. Kings, tyrants, chieftains, since the world began have stood or have fallen as they have convinced the public that they were giving or not giving a just return for the power allowed them. The time is here when Mr. Rockefeller must face the verdict of the public by which he lives. As to Mr. Rockefeller's origin it is typically American. He sprang from one of those migrating families which, coming to this country in the seventeenth century, has moved westward with each generation seeking a betterment of condition. He and his brothers were the first great product of a restless family searching a firm footing on new soil. The first word heard of the Rockefeller family in Richford, Tioga County, New York, where John D. Rockefeller was born, was in the early 1830's when his grandfather, Godfrey Rockefeller, moved to that community from Mud Creek, Massachusetts. There are still alive in Tioga County many men and women who remember Godfrey Rockefeller. It is not a pleasant description they give of him — a shiftless tippler, stunted in stature and mean in spirit, but held to a certain decency by a wife of such strong intellect and determined character that she impressed herself unforgettably on the community. Godfrey Rockefeller had not been long in Richford when he was followed by his eldest son — William A. Rockefeller — a man of twenty-three or twenty-four years of age. There seem to have been other Rockefellers, for the family was sufficiently numerous and conspicuous to cause the farm in West Hill near Richford, where they settled, to be dubbed "Rockefeller settlement" — a name it still bears. It is with William A. Rockefeller, father of John, that we have to do here. There is enough which is authentic to be gleaned about him to form a picture of a striking character. William A. Rockefeller was a tall and powerful man with keen straightforward eyes, a man in whom strength, and fearlessness, and joy in life, unfettered by education or love of decency, ran riot. The type is familiar enough in every farming settlement, the type of the country sport, who hunts, fishes, gambles, races horses and carouses in the low and mean ways which the country alone affords. He owned a costly rifle, and was famous as a shot. He was a dare-devil with horses. He had no trade — spurned the farm. Indeed he had all the vices save one — he never drank. He was a famous trickster, too; thus, when he first reached Richford he is said to have called himself a peddler — a deaf and dumb peddler, and for some time he actually succeeded in making his acquaintances in Richford write out their remarks to him on a slate. Why he wished to deceive them no one knows. Perhaps sheer mischief, perhaps a desire to hear things which would hardly be talked before a stranger with good ears. It was not long after he came to Richford that he began to go off on long trips — peddling trips some said. Later he became known as a quack doctor, and his absences were supposed to be spent selling a medicine he concocted himself. Irregular and wild as his life undoubtedly was, his strength and skill and daring, his frankness, his careful dress, for he paid great attention to his clothes, as well as the mystery surrounding the occupation which kept him looking so prosperous, made him a favorite with the young and reckless and, unhappily, with women. On one of his trips he met in Moravia, New York, the daughter of a prosperous farmer, Eliza Davison. It is said that the girl married him in the face of strong opposition of her family. However that may be, it is certain that about 1837, William A. Rockefeller brought Eliza Davison to the Rockefeller settlement as his wife, and here three children were born, the second of whom — the record of his birth is dated July 8, 1839 — was named John Davison. In 1843 William A Rockefeller moved his family to a farm near Moravia, Cayuga County. The reputation he had built up in Richford as a "sporting man" was duplicated in Moravia. He soon became the leader in all that was reckless and wild in the community, and was classed by the respectable and steady-going as a dangerous character on whom no doubt much was fastened that did not belong. It may be for this reason, as well as because of his frequent long and unaccounted for absences, that he is still classed popularly in Moravia as one of the gang who operated the "underground horse railroad" — and ran off horses from various parts of the country. There is absolutely no proof of this, but the conviction and sentence to the State prison, in 1850, of three of his closest pals for horse-stealing coupled with his bad reputation made many of his disapproving neighbors fix the crime equally on him, and to-day old men in Moravia nod their heads sagely and say, "He was too smart to be caught." There is an indictment against William A. Rockefeller for a more serious crime (rape) than horse-stealing in the records of the County, for 1849, and it is quite probable that he left Moravia under compulsion. At all events, about 1850 he again moved his family, which now consisted of his wife and five children, to Owego, New York. The family remained in Owego but three years, and then moved to Strongsville, Ohio, twelve or fifteen miles southwest of Cleveland. A year later they left Strongsville for a country settlement, about seven miles south of Cleveland, called Parma; and from there they went, in 1857, to Cleveland, moving into a comfortable brick house, which William A. Rockefeller had built for them. In the Ohio communities where he lived the legends of "Old Bill," as he is popularly spoken of to-day by his former acquaintances, are identical with those in Richford, Moravia, and Owego. They all remember him as a man who came home but rarely, who was supposed to sell some kind of medicine — a "cancer doctor," is the opinion of one, a "quack doctor," of another, and there are those who declare he was a gambler. In Ohio, as in New York, he always created a profound impression on his visits home, by his clothes, his good horse, and his crack shooting. "He was a rippin' good one," an old associate in Parma declares. "How he would shoot — bang-e-tee-bang — you'd thought there was a whole army around!" There are many sly winks at the occupations and morals of William A. Rockefeller by his old neighbors, but there is a universal verdict that he was a "good fellow," jolly, generous, and kindly. When William A. Rockefeller took his family to Ohio, his oldest son, John Davison, was a lad of fourteen years. A quiet, grave boy by all accounts, doing steadily and well the thing he was set at. Up to this time his training had been that of the ordinary country boy. He had gone to a district school a few months of the year, and the rest of the time had worked and played as a boy ordinarily does in a country settlement, chopping wood, caring for a horse, milking cows, weeding garden, raising chickens and turkeys. Nowhere does he seem to have made an impression, save by his silence and gravity. "He never mixed much with the rest of us," one old man tells you. "He seemed to be always thinking," says another. "He was different from his brothers and different from the rest of us," says a third. No doubt his mother had had much to do in shaping the boy's mind to serious living. Dominated as this daughter of a prosperous farmer probably was by a spirit of narrow and stern New England conventionality, she must have come to hate the lawless and suspicious ways of this likeable sinner, this quack-doctor horse-jockey, this loose-tongued rake she had married, and all the arrogant respectability within her must have risen in a fierce effort to save appearances, and to force these children of his into good and regular standing. There is a something in the fine, keen face of John D. Rockefeller's mother which recalls the face of Lætitia Ramolino, mother of Napoleon Bonaparte, and convinces one that she could not but have been a power with her boys, though there is little enough to go on in trustworthy tradition and records. That she kept her children in school and church is certain. Old friends of hers at Strongsville and Parma, Ohio, speak of her with profound respect — a good woman who made her boys do right, who did not allow them to read novels on Sunday, who "worried over saloons" in her vicinity. It is quite probable that it was her influence which persuaded her husband to send John to school in Cleveland soon after the family moved to Ohio. The boy spent a quiet year in the town studying diligently, so his former schoolmaster has testified, his only outside interest being in the Baptist Church and Sunday-school — to which he had been directed by a wise landlady. In 1855, after a year of study, young Rockefeller left school and began to look for work. It was a hard time in the West, the year of 1855, and it is quite possible that William A. Rockefeller had not been so successful as formerly in his wandering trade or trades, whatever they may have been, and that he felt it time for his son John to do something for himself. At all events, in the summer of that year, John D. Rockefeller made his first attempt to get a footing in business. The struggle and discouragement of the days
he spent walking the streets of Cleveland looking for work made a deep
impression on Mr. Rockefeller. Again and again in his later years he has
referred to the experience in the little talks he has given at Sunday-school
and church gatherings. Again and again he has expressed his lasting gratitude
that finally he did find a position. It was a modest enough one, that
of a clerk in a warehouse on the Cleveland docks. How modest, Mr. Rockefeller
has frequently explained using as authority one of the few "documents"
of his early life which he has seen fit to reveal to the public. This
document is his first account book, "Ledger A" he calls it.
It is not too much to say that this book has been more conspicuous than
the Bible itself in the religious instruction which John D. Rockefeller
has given for years to Baptist Sunday-schools. This is not strange, for
in Mr. Rockefeller's own judgment its brief entries explain his success.
The little book is most significant. No wonder, as he once told his Sunday-school
class, holding up "Ledger A" to their attentive eyes: "You
could not get that book from me for all the modern ledgers in New York,
nor for all that they would bring. It almost brings tears to my eyes when
I read over this little book, and it fills me with a sense of gratitude
I cannot express." "I know some people, especially some young men," he said in the same talk, "find it difficult to keep a little money in their pocket-book. I learned to keep money, and, as we have a way of saying, it did not burn a hole in my pocket. I was taught that it was the thing to do to keep the money and take care of it. Among the early experiences that were helpful to me that I recollect with pleasure, was one of working a few days for a neighbor digging potatoes — an enterprising and thrifty farmer who could dig a great many potatoes. I was a boy perhaps thirteen or fourteen years of age, and he kept me busy from morning until night. It was a ten-hour day. "And as I was saving these little sums, I soon learned I could get as much interest for $50 loaned at seven per cent — the legal rate in the state of New York at that time for a year — as I could earn by digging potatoes ten days. The impression was gaining ground with me that it was a good thing to let money be my slave and not make myself a slave to money. I have tried to remember that in every sense." It was these two principles, then, Get the worth of your money, Let your money work for you, that he applied to his income in 1855. One must live, but how frugally it can be done! Young John boarded himself, and from November 24, 1855 to April, 1856, he spent $9.09 for clothing. "It is true," Mr. Rockefeller explained to his Sunday-school in calling their attention to these figures, " I could not secure the most fashionable cut of clothing. I remember I bought mine then of a cheap clothier. He sold me clothing cheap, clothing such as I could pay for, and it was a great deal better than buying clothing that I could not pay for." Satisfactory as his expenditures in 1855 and '56 appear, on the whole, to Mr. Rockefeller, he is obliged to condemn himself to-day for one item on the little ledger, made in this first winter of his breadwinning. "I see also here another item which I am inclined to think is extravagant, because I used to wear mittens. The item is a pair of fur gloves for which I paid $2.50." The little income was not only made honorably and cheerfully to suffice for Mr. Rockefeller's support, it was stretched to cover the obligations to church and charity which the boy seems to have felt as forcibly and as early as he did the need of good bargains and of saving. In a period of four months in which his earnings were perhaps $100, he gave away, according to "Ledger A," $5.58. The items as Mr. Rockefeller once read them at a church gathering are interesting: "I begin on the 25th day of November," he said: "Missionary cause, ten cents; Mr. Downie, one of our young ministers, ten cents. . . 'Slip rent' — pew rent — one dollar. December 16th, Sabbath-school, five cents. Present for Mr. Farrar, the superintendent, twenty-five cents. Five Points Mission, New York, twelve cents. The Macedonian, a little religious paper, ten cents. Present to teacher, Deacon Sked, twenty-five cents. January 16th I had something left over for benevolence: 'Missionary cause, six cents; the poor in the church, ten cents' — all on one Sunday! February 3d I gave ten cents more to the same cause; the same day ten cents for foreign missions. March 2d, foreign missions again, ten cents more. . . Then, on the 2d day of March, ten cents for the poor of the church; March 3d, pew rent one dollar. March 6th, foreign missions, ten cents. Then I went outside of our church, and on the 21st of March gave one dollar to the Young Men's Christian Association." And so "Ledger A" goes on with a painstaking record of every cent received and expended for a period of several years. Every cent earned could be accounted for, not a loose thread in his weaving, and one cannot help but feel that each particular penny was spent only after deliberation, and perhaps prayer. And all this time, as the little ledger shows, Mr. Rockefeller was saving money. He was soon to have a place for it. Two years after he took this first position, a difference arose between him and his employer on the question of salary. Mr. Rockefeller thought he ought to have $800 a year. His employer was willing to give but $700. "Meanwhile," to quote from Mr. Rockefeller himself, "the opportunity was offered to engage in business with a young man who was ten years older than myself. I had saved a little money and, accordingly on April 1st, with $800 or $900 that I had saved up and a few thousands which my father loaned me at ten per cent until I should become of age, I contributed my part of the capital, which was $4,000. "We were prosperous from the beginning. We did a business of $500,000 produce commission for the first year. Our profits were not large — I think $4,400 — but I think it was better for me than the $800 which I had asked." And so Mr. Rockefeller was doing an independent business and was making money. With each succeeding year his business and his profits grew, and these profits he handled as he had handled the money he earned as a boy chopping wood. He put them away to work for him. He spent as he had spent when his income was $25.00 a month, with minute attention to every cent. Watching what it cost to eat and drink and clothe himself, calculating what it cost to marry, estimating the proportion he could afford to give to the church and to charity — and always putting a little aside. But this was not all, he was demonstrating that he possessed other qualities even more essential than the fundamentals with which he had started out — he was showing he had the instinct for opportunities, the courage to seize them though they might be far bigger than the means at his command, the power to persuade men to lend him money — the patience to stick by enterprises until they had justified his faith. This, then, was the man in 1860 — frugal, calculating, money-bent — cautious in trade yet daring, quick to seize yet ready to wait, and withal "good —" that is a steady attendant at church and Sunday-school, serious — that is eschewing all amusements which might be called frivolous, the theater, cards, the dance. As time went on, these characteristics became more conspicuous. They led him to new lines of business — one in particular — the refining of oil — a new industry in which it was plain that there were great profits. He gave himself to this venture, body and soul one may truthfully say, working with a persistency which put day laborers to shame. He watched details with a hawk's eye — not a cent must go astray — not a pint of oil be lost — not a rivet or bung be wasted. "Pay a profit to nobody," he began to say, and it was he and his partners who, themselves, went to Oil Creek for oil, and so saved commissions; he who made his own barrels and so saved a middleman's profits; he who hauled and loaded, bought and sold. Nobody but him must make a cent on his oil, from the well to the lamp. It was combine, save, watch. A sort of mania for saving seemed to possess him. It was over this he brooded from morning to night, and it was the realization of this alone which awakened in his face, already grave with incessant reflections, a sign of joy. Indeed, the men who worked there in Cleveland at his elbow will tell you to-day that the only signs of hilarity John D. Rockefeller ever showed in those days were over a good bargain. This would make him clap his hands. Let it be a very good bargain, and he would throw up his hat — kick up his heels, hug his informant. This was joy for him, this was the satisfaction of passion — this good bargain. And as he succeeded his desire for wealth seemed, to his friends, to grow even more rapidly than his business. "I am bound to be rich, BOUND to be rich, BOUND to be rich," they report him as saying. His conviction that it was the duty of a man to get and keep all the money he could, a conviction which seems to have been born in him, was becoming a passion for wealth. By 1870 he was a rich man; his friends said he would go far. The city histories began to pay him profound respect. "He occupies a position in our business circles second to but few," said the biographer in "Cleveland Past and Present" in 1869. "Close application to one kind of business, an avoidance of all positions of honorary character that cost time, keeping everything pertaining to his business in so methodical a manner that he knows every night how he stands with the world." This was the man at thirty as he appeared to his admiring townsmen — a very logical development he appears of the boy who kept "Ledger A." But there was something going on in the head of this man of thirty, of which his Cleveland biographer did not know, or knowing discreetly passed by. It was the enlargement of his youthful faculty for driving a good bargain. It is quite probable that Mr. Rockefeller, natural trader that he was, learned early in his career that unless one has some special and exclusive advantage over rivals in business, native ability, thrift, energy, however great they may be, are never sufficient to put an end to competition. Mr. Rockefeller certainly saw by 1868 that he had no legitimate superiority over those competing with him in Cleveland which would ever enable him to be anything more than one of the big men in his line. He must have seen clearly by this time that nothing but some advantage not given by nature or recognized by the laws of fair play in business could ever make him a dictator in the industry to which he was giving his attention. But he was beginning to see there was such an advantage to be had if one were wily and patient enough. It lay in transportation, in getting his carrying done cheaper than his neighbors could. It was a very seductive idea to a man with a passion for wealth. There were difficulties in the way. Men generally held then, as now, that it was not fair for the railroads to allow one shipper a better rate than another. The common law was known to disapprove the practice. The theory that the railroad held its right of way from the people, and therefore must be just to the people, treating them without discrimination, was familiar enough, so familiar that the railroads never dared show favoritism save secretly. But under threats of loss of business, under promise of larger or more regular shipments, under chances of sharing in the profits of the enterprises they favored, they did do it secretly. That is, rebate giving then, as now, was regarded as one of those lower business practices which characterize commerce at all periods, and against which men of honor struggle, and of which men of greed take advantage. Naturally, one would expect Mr. Rockefeller to spurn such an advantage. The one thing for which he was conspicuous outside of his zeal for business was his devotion to the church, one of whose cardinal teachings is "whatsoever ye would that men do to you do ye even so to them." Naturally, one demands a man of his profession to be keenly alive to degrading business practices and keen to overthrow them. But, although Mr. Rockefeller no doubt heard weekly from the pulpit that the "law and the prophets" were all summed up in doing as you would be done by, it is quite probable he had never seen any connection between the doctrine and railroad rebates. He was not an educated man. He had evidently never thought seriously of anything but making money. His religious training seems to have been purely formal, awakening him merely to the duty of attending to devotional exercises and giving to the church. So, when he realized that the rebate was the means by which he could gain control of the oil industry in Cleveland, he went after it, ignorant of, or indifferent to the ethical quality of the act. His beginnings in discrimination seem to have been small — but their effect in increasing his business and in decreasing that of his rivals was large — and as Mr. Rockefeller saw in increased profits the effect of the advantages gained, he became eager to increase these advantages, eager to secure them by permanent contracts. The question became one of the chief concerns of his business life. Finally he and certain of his friends whose ambitions were similar to his own, and who appreciated as he did the power the railroad rebate had to destroy a competitor's property, hit on a scheme familiar to readers of this magazine, but repeated here because so vital in the development of Mr. Rockefeller's character. These gentlemen proposed to certain high railroad dignitaries, W. H. Vanderbilt, Thomas Scott, Jay Gould, H. W. Clarke, and General McClellan, to allow them a rebate on all the freight they shipped and to allow nobody else one. They proposed not only that they be allowed to ship cheaper than anybody else, but that the extra money their rivals paid to the railroads be not kept by the roads but paid over to them! They also asked to be allowed to examine weekly the shipping books of the transportation lines that they might know how much and to whom their competitors shipped. It was a strong scheme even for the strong stomachs of the men to whom it was presented. Old Commodore Vanderbilt told "Billy," as he called his son, to let it alone. Even Tom Scott balked at it from the first. But the men who had devised the Southern (or
South) Improvement Company, as the plan was called, were in earnest. They
knew that if they could get the contracts they asked, they could control
one of the richest industries of the country, and they turned their whole
force to overcome the objections raised by the railroad presidents. And
to do it they hesitated at no misrepresentation, found no falsehood too
big to swallow. "This makes you a monopoly," the railroads objected.
"It will ruin everybody outside of your combination." "But
we have already the great bulk of the business and we are going to take
all in," which was untrue. The gentlemen had in their company only
about one-tenth of the manufacturing end of the industry they aimed to
control. "It puts the producer at your mercy," objected Mr.
Scott. "But the producers want the business regulated and are going
to join." Again untrue, for the producers knew nothing of what was
afoot. Now, as already intimated, it is supposable that Mr. Rockefeller when he went into the above scheme had never considered the moral and public questions involved in it. But if he went into it without thought, immediately consideration of its ethical meaning was forced upon him by a hundred throats. Scarcely had he become master of the industry in Cleveland, when the nature of the contracts he had made became public, and a frightful uproar broke out. The men injured pointed out the unfairness of railroad discriminations, the dishonesty of the railroad in collecting from them and actually paying the money over to Mr. Rockefeller. The newspapers lashed the scheme. The State legislatures of Ohio and Pennsylvania both hurried to introduce clauses into their constitution forbidding such practices as those contemplated. Congress stripped the company for the public to see its meaning, and called it a conspiracy. At the same time the railroads, frightened by the uproar made, signed written contracts with the oil producers to abolish forever the rebate system from the oil industry.1 Mr. Rockefeller received enough instruction, in the fundamental principle of fair play and in the duties of the common carrier, in the spring of 1872, to have convinced his moral sense of wrong-doing and his reason of the injustice of the rebate system if he had been open to conviction. He knew now, if he had not before, that the scheme he had gone into was bound to ruin men, that by it he enriched himself at the expense of others. Now what did Mr. Rockefeller do? Did he say, "Here, I went into that without realizing its injustice. I had never thought of the railroad as anything but a private business. I supposed I had the same right to bargain for transportation that I had for barrels. I see now that the railroad is a public servant, bound to treat everybody alike. I see that there is an ethical question, and, of course, I want to be on the right side. I withdraw, and I will join the men of the oil country in these contracts they have made with the railroads stopping forever this whole vicious business?" No, Mr. Rockefeller said nothing of the kind. He went to Mr. Vanderbilt and, by a series of arguments and threats easy enough to divine, he obtained a secret rebate on his shipments, not so sweeping as he had planned, but sufficient to give an advantage over other men; and he did not cease his efforts until he had not only a rebate on his shipments over all the oil-carrying roads but a drawback on all the oil his competitors shipped over those roads. That is, at the moment when Mr. Rockefeller had such a chance of rendering valuable service to the public as rarely comes to a man, he deliberately refused it. While the whole body of men in his trade were allied openly to put an end to a vicious and unjust practice, he bent all his great energies to perpetuating it for his own benefit. Did it cost him a struggle — a struggle with what men call conscience? Nobody knows. There is a tradition in Cleveland that it was at this time of great anxiety that Mr. Rockefeller laid the foundation of a stomach difficulty, which for years limited him to the diet of the monk and the pauper. It may have been a moral struggle which made him walk the floor nights. It may have been fear, for threats of violence rained upon him from an outraged industry. It may have been the consideration of new plans for getting the privileges which an indignant public had stripped from him. However that may be, it is certain that Mr. Rockefeller's conscience and courage withstood both public disapproval and public education, and that the principles of getting rich by the use of privileges contrary to the public good and to the spirit of the laws became a cardinal one with him from that date. This episode of the South Improvement Company may probably be called the turning point in the character of John D. Rockefeller — the point at which he faced, as probably every man does some day, the necessity of a conscious life-choice between the thing which is good and that which is bad — and he chose, knowingly (to believe it was not knowingly is to believe he was not intelligent), the thing which was bad. But what could have induced him so to defy public sentiment and the common law of his country? What could have induced him to break the "law and the prophets" of that faith which he pretended ruled his life? There seems to have been nothing but the size of the stakes for which he was playing. Mr. Rockefeller had seen the oil industry of Cleveland fall into his hands by the panic which the contracts with the South Improvement Company had caused. He saw clearly enough that if the essential features of those contracts could be put into force, that is, if he could ship cheaper than his competitors, could get back part of what they paid, and could establish a system of espionage on their business, the oil industry of the country would be his in time. And then and there he began deliberately to put into effect his plans for driving all men out of the oil business whom he did not need in it, in order to perfect the great organization which we now know as the Standard Oil Company. But when a man deliberately decides to build up his fortune by taking advantage of practices against which the moral sense of his day has pronounced, as in 1872 it had loudly pronounced against railroad discriminations, of practices to which he knows the moral law is opposed, he must have the courage of his decision, he must be prepared to sustain his determination by any or all of those practices which are essential in supporting a deed which society declares contrary to her good. He must be prepared to conceal, to spy, to threaten, to bribe, to perjure himself, and he must be prepared to harden his heart to the sufferings of those who fall in his path. This is what it has always cost to do a thing of which the moral sense of the world disapproves. This is what it always will cost. There is no evidence whatever that Mr. Rockefeller has ever hesitated once, in thirty-two years, at the price demanded. He has faced the need with unwavering courage. He has paid, like a man who has weighed the price of wrong-doing and decided to pay it. From the first, concealment was the very key to the game. Mr. Rockefeller's skill in concealing the truth was masterly. His is not a frank nature. He was a silent boy — a silent young man. With years the habit of silence became the habit of concealment. It was not long after the Standard Oil Company was founded, before it was said in Cleveland that its offices were the most difficult in the town to enter, Mr. Rockefeller the most difficult man to see. If a stranger got in to see any one he was anxious. "Who is that man?" he asked an associate nervously one day, calling him away when the latter was chatting with a stranger. "An old friend, Mr. Rockefeller." "What does he want here? Be careful. Don't let him find out anything." "But he is my friend, Mr. Rockefeller. He does not want to know anything. He has come to see me." "You never can tell. Be very careful, very careful." This caution gradually developed into a Chinese wall of seclusion. This suspicion extended, not only to all outsiders but most insiders. Nobody in the Standard Oil Company was allowed to know any more than was necessary for him to know to do his business. Men who have been officers in the Standard Oil Company say that they have been told, when asking for information about the condition of the business, "You'd better not know. If you know nothing you can tell nothing." As the business developed and its practices
became more hostile to public good, one of its chief aims was to protect
itself from publicity. It became the practice to conceal whatever advantages
it gained and whatever relations it formed — if charged with them,
to deny them even under oath. "You were a member of the Southern
Improvement Company?" he was asked once by an investigating committee.
"I was not," he said. Yet Mr. Rockefeller was a member of this
company, owned 180 shares of its stock — was one of the two men
who stood by it until public indignation overthrew it.2 "The Standard
Oil Company owns and operates its refineries at Cleveland, Ohio, and its
refinery at Bayonne, New Jersey; it has no other refineries nor any interest
in any other refineries, nor does the Standard Oil Company operate or
control in the United States any other refineries of crude petroleum,"
he swore in 1880, when for five years the Standard Oil Company had owned
by direct purchase the largest refineries in New York, Philadelphia, and
Pittsburg [sic]. Along with concealment of his own affairs went watchfulness of other people's affairs. From the beginning he saw how useful it is to know what your neighbors are doing. It was not difficult to learn. Business men in Cleveland in those days were openly loquacious. It was a frank, expansive period. What was the fun if you could not talk? Mr. Rockefeller was a good listener. He helped his friend to full confession by his gentle and respectful attention and his occasional friendly questions. As time went on he did more than listen to those who were willing to talk. He set his employees to finding out things. He began to tabulate what they learned. But this was not enough. He began to employ men in the concerns whose business interested him to give him information — and this information was tabulated. In time he developed a system so perfect that its results are to-day actually a matter of elaborate and expensive bookkeeping. It is something Napoleon never achieved in the palmiest days of his cabinet noir. The knowledge he obtained he used with rare skill in working on men. He knew men — whether they were the kind he wanted in his concern — or whether he preferred they go out of the business. If he wanted them, he treated them as one treats the man he wants, generously — if he did not want them he drove them from the industry; if possible he did this by frightening or bullying them. Creating a panic in his opponent's mind became, indeed, one of his chief commercial weapons. The success he had had in Cleveland, in 1872, in putting an end to competition by creating panic, had strengthened into a conviction his instinct that this sort of practice was effective. To all who approached him in the early years to consult about conditions, he took a hopeless view. "There is no hope for any of us, but the weakest must go first," he told a hard-pressed visitor one day in 1873, a year when he made about thirty-three and one-half per cent on his capital. And if the unhappy victim of the condition he was fighting to perpetuate did not yield to his depressing news and sell, he had a still more forcible argument. "We have ways of making money of which you know nothing. The oil business belongs to us, we have money laid aside to fight anybody who gets in our way." It is hard to overestimate the psychological effect this arrogant assumption that the oil business belonged to the Standard Oil Company, has had for thirty years on Mr. Rockefeller's fortunes. This declaration, coming from him and gradually accepted and announced by the whole machine he was creating, grew in importance as he made it good — for he made it good. A time came when Mr. Rockefeller and his colleagues practically owned the great industry to which he had laid siege, and all who lived by it outside of his dominion felt that their tenure of life was at his mercy. And if those who had what he wanted refused to yield to panic, there was the machine devised expressly for such cases. It worked as regularly, as faultlessly, as irresistibly as that Chamber of the Inquisition, the walls of which slowly closed upon the doomed prisoner until he was forced into the pit of unknown horrors. It cut down his supply, it interrupted his transportation, it crowded him from the market. He was not to share in the bounty of Nature — not to know the freedom of the road, not to stand in the marts to trade. The industry belonged to Mr. Rockefeller. Now, it takes time to secure and to keep that which the public has decided it is not for the general good that you have. It takes time and caution to perfect anything which must be concealed. It takes time to crush men who are pursuing legitimate trade. But one of Mr. Rockefeller's most impressive characteristics is patience. There never was a more patient man, or one who could dare more while he waited. The folly of hurrying, the folly of discouragement, for one who would succeed, went hand in hand. Everything must be ready before he acted, but while you wait you must prepare, must think, work. "You must put in, if you would take out." His instinct for the money opportunity in things was amazing, his perception of the value of seizing this or that particular invention, plant, market, was unerring. He was like a general who, besieging a city surrounded by fortified hills, views from a balloon the whole great field, and sees how, this point taken, that must fall; this hill reached, that fort is commanded. And nothing was too small; the corner grocery in Browntown, the humble refining-still on Oil Creek, the shortest private pipe line. Nothing, for little things grow. These are not pleasant practices, but Mr. Rockefeller had conceived a great purpose, and had set himself resolutely to realize it. The man who is bent on big accomplishment often gives scant scrutiny to the means he employs; the end is the thing. It becomes a sort of fetich [sic] — to which, as to Moloch, one sacrifices even his own flesh and blood. But, while one can conceive how Mr. Rockefeller's vision might have become so distorted that he was willing to sacrifice all the commands of his religion to achieve his ambition, one would rather expect that in his private dealings he would seek relief by generous — even quixoticly [sic] generous — dealings. But business never ceases to be business with Mr. Rockefeller, whether he is building a corporation or dealing with a friend. That is, the end with him is not the completion of a great idea, it is money. Take the incident of his acquisition, in 1895, of 2500 shares of Standard Oil stock which had belonged to one of his boyhood friends, James Corrigan, of Cleveland. The tale is public property, being all written in legal documents. Mr. Corrigan was one of the many enterprising young men who, like Mr. Rockefeller, took advantage in the '60's of the discovery of petroleum, to build up a plant for its refining. He brought to the business something even Mr. Rockefeller himself never was able to give it — the ingenuity and resourcefulness of the born inventor. The processes he devised made him prosperous — so prosperous that he attracted the attention of the Standard Oil Company, and about 1877 he began to have trouble. He could not get the crude oil he bought on Oil Creek shipped to Cleveland. The railroads refused him cars — delayed to run them, even if they were loaded. It was not only getting oil which began to trouble him, it was disposing of his product. At last, tired of opposition, he leased his works to the Standard Oil Company, and went to Europe to look up the oil business there. In 1883 he returned and sold his plant for 3000 shares of the Standard Oil Trust certificates. After selling his oil property, Mr. Corrigan embarked in the iron business. He and Mr. Frank Rockefeller, a brother of John D., bought the Franklin Mine in the Lake Superior region — a mine rich in Bessemer ore. He put $300,000 into a fleet of lake propellers and schooners, and he went into other similar enterprises, all of which were prospering when, early in the '90's, the hard times in the iron business came on. Mr. Corrigan saw himself obliged to have money. What more natural than that he should apply to his old friend, John D. Rockefeller, the brother of his principal partner? Mr. Rockefeller seems to have loaned freely — first $46,000, then $80,000, then $45,000. It was a good investment, for Mr. Corrigan paid him seven per cent interest, and secured him with shares of Standard Oil Trust certificates and a mortgage on his vessels; so good that when Mr. Rockefeller learned that Mr. Corrigan had borrowed $125,000 from the Citizens' Savings and Loan Association of Cleveland, giving 1200 shares of Standard Oil Trust certificates as collateral, he offered to take up the loan. The result was that he soon had all of Mr. Corrigan's interest in the trust in his hands. About the same time Frank Rockefeller found it necessary to borrow money from his brother, and Mr. Corrigan was asked to endorse the note he gave and a little later to secure this indorsement [sic] by depositing 4936 shares of Franklin Mining stock, the sum total of his holdings in that property. Mr. Corrigan did so, not reflecting at the time, probably, that this put all the property he owned under Mr. Rockefeller's control. The hard times of 1893 became a panic. Mr. Corrigan was terribly pushed. In October he had no money with which to meet the interest on his notes, none to pay the note for $46,000 now due. In his stress he laid his case frankly before his friend, Mr. Rockefeller. "I owe you, with accrued interest, $402,000," he wrote in substance. "You have fully $700,000 as collateral in my Standard and shipping stock. Surely that is enough to cover the loan. Can you not release my Franklin Mining stock (held as collateral for his indorsement [sic] of the loan to Mr. Rockefeller's brother), in order that I may meet my outside obligations? If you do not, I fear I must make a personal assignment." And Mr. Corrigan claimed, in the letter he wrote Mr. Rockefeller making this request, that it had been stipulated that he could get this collateral at any time that he needed it; that his leaving it with Mr. Rockefeller was a wise precaution in Mr. Corrigan's own interest! Mr. Rockefeller's reply was entirely businesslike. He could do none of the things Mr. Corrigan requested. He could not release the mining stock. Nobody at 26 Broadway remembered that any arrangement for releasing it had ever been made. Besides, he must also have the dividends on the Standard Oil certificates. Mr. Corrigan's case was desperate. He felt that his property much more than covered his debts. Iron ore in the ground and good boats in a dock may temporarily lose value, but their intrinsic value cannot be destroyed. There were already signs that values were recovering. If he could but get hold of his mining stock! Mr. Rockefeller was firm and he began gently to hint that there was one way out of the trouble, if Mr. Corrigan would sell him his Standard Oil Trust certificates, that would wipe out whatever of the debt was due, give him the ready money he needed and enable Mr. Rockefeller to give time on his other loans. Mr. Corrigan would not listen to the idea. The Standard holding represented the work of his early manhood. It was his largest dividend earner; that he could not give up. He called in Frank Rockefeller to plead for him. The interview broke up without a decision, but as Frank Rockefeller left the room John called him back. "Corrigan is going to the wall, Frank," he said. "I might as well have his stock as anybody. Persuade him to sell it, and you get his mining stock." By the fall of 1894, Mr. Corrigan was desperate. He must have money, would not Mr. Rockefeller help him? There were interviews, pleadings, promises, but always they ended in the same impasse — "sell me your Standard Oil Trust certificates and that will help you," and to further his plan Mr. Rockefeller now began to apply his favorite process of creating panic. After all Standard Oil was very uncertain in its value. One could never tell what would happen. Beside, the mining stock was of little value. According to Mr. Rockefeller all of Corrigan's property was doubtful. Nevertheless he would buy the Standard holdings to help an old friend! Now, some time before this, Mr. Corrigan had made an assignment of the equities in his Standard Oil Trust certificates and shipping interests to Judge Stevenson Burke of Cleveland, his counsel, and an associate in business. Judge Burke believed that the property in Mr. Rockefeller's hands was ample to extricate Corrigan, and he decided to try to negotiate a loan upon his equities in the securities. To do so, however, it was necessary to be able to show to lenders of money what the Standard stock was really worth. Mr. Corrigan was unable to give him any definite information on that point; he had no report showing its property, its earning power, or its investments, and hence it was a mere guess as to what the property ought to sell for. Accordingly, Judge Burke wrote Mr. Rockefeller asking a "definite statement as possible, first, of the total amount of stock outstanding; second, its assets, including all its investments, its earnings gross and net for, say the last five years, and any other information which will enable any one to understand definitely the value of the property." Judge Burke got no answer to his letter. He wrote a second time: I must now ask you as President of the Company to furnish me with a definite and specific statement of the assets and liabilities of that Company, together with any facts which may enable me to negotiate a sale or pledge of the stock, or the equity in the stock, in your hands. You know full well that it is in my power to obtain this information, but I trust that your own good business sense and judgment, and your sense of fairness and right, is such that you will not force me to resort to any other measures than application to yourself for that to which I am so clearly entitled. But still no answer. He and Corrigan twisted and turned, came to New York, begged for a valuation on the Standard stock, a chance to save it, but Mr. Rockefeller was firm. Finally putting some of his own collateral with that of Corrigan, Burke secured a promise of enough money from a New York Bank to pay the entire debt to Mr. Rockefeller, and thus free the collateral. Mr. Rockefeller refused to accept the money! The greater part of the debt was not due. He never did business in that way! He had Corrigan in his grip and in February, 1895, the 2500 shares of Standard Oil stock were sold to Mr. Rockefeller for $168 a share. But the fact that he had been obliged to part with what was his most profitable possession — with stock which was the first fruit of his early struggles as a refiner, with the results of the processes he had developed, and the benefit of which the Standard Oil Company had been reaping for fifteen years, made Corrigan bitter in the extreme and his bitterness was increased by the rise in the value of the stock which immediately followed the sale. Before a month had passed Standard Oil stock was selling at $185. Judge Burke was particularly incensed and it was under his advice that some weeks after the sale Corrigan raised a question as to Mr. Rockefeller's right to buy the stock after refusing repeatedly to give an accounting which would allow him to judge of its value: "You have been the trustee of my property, my representative," he wrote Mr. Rockefeller in substance. "You have always held my proxy. It was your duty to advise me of all matters pertaining to the company which should show the value of my property. I want an accounting, showing the value of the property — its surplus, etc.," and he added, "When I have received the accounting asked for, I will then decide whether to annul our last deal or allow it to stand." Mr. Rockefeller's reply was plausible: "The affairs of the Standard Oil Trust have been presented at the public meetings held from time to time at which meetings all share-holders had a right to be present. . . As to surplus there was none, all the funds had been paid out in dividends. Mr. Corrigan knew very well how much a stock-holder learned at the public meetings of the Standard Oil Trust. He knew that ever since the trust had been formed Mr. Rockefeller's policy was to let nobody know what was doing. Both he and Mr. Frank Rockefeller say that they repeatedly asked in the years between 1882 and 1894 for accountings of the property, and they had repeatedly been told that it was better for them not to know anything about the inside workings of the Trust. "Congress and the state legislature are after us. You may be subpœned [sic]. If you know nothing, you can tell nothing. If you know about the business you might tell something which would ruin us." Mr. Corrigan also doubted Mr. Rockefeller's statement that there was no surplus, as he was right in doing. The balance sheet of the Standard Oil Company for December, 1894, less than two months before Mr. Corrigan sold his stock, showed total undivided profits of $35,989,903.94, and at the end of this year, in which Mr. Rockefeller wrote Mr. Corrigan there was no surplus, the total undivided profits amounted to $44,840,371.02. Mr. Corrigan was not satisfied. He still insisted on seeing the balance sheet. Mr. Rockefeller was deeply hurt by his insistence. "Is it possible," he wrote, "that Jim Corrigan should be willing to write me such a letter, after my uniform kindness to him for a life time?" Mr. Corrigan's answer was very much to the point: I shall always be ready to recognize gratefully any act of kindness which you have extended to me. But I am obliged to say in regard to the matter in hand, that I am unable to see that you have been either kind or fair. From my standpoint it appears that you have taken advantage of your position and knowledge, to take from me my stock at much less that its value. You were my agent and representative in regard to this stock. You know its value and you concealed from me all useful knowledge in respect to it. You not only were my agent, by the fiduciary relation which you sustained to the trust, but you were also my agent especially appointed to represent my interest in dealing with the trust after the decision in Ohio and New York. It was, therefore, your legal as well as moral duty to take no advantage of your situation to my detriment. No one understands better than yourself the duty of an agent to his principal, and you know that in dealing with me you have not supplied me with information which put me upon an equality with yourself. Mr. Rockefeller was face to face with a very disagreeable legal question, but he was not disposed to give up his stock, particularly now when it was going up by leaps and bounds; and when dividends of twelve per cent it carried, when Mr. Corrigan parted with it, rose to seventeen per cent in 1896, to thirty-three per cent in 1897! he refused to consider the matter. Corrigan refused to acknowledge him owner of the stock, and thus matters went for three years until finally, in 1898, it came to trial before a board of arbitrators, and then it was that the letters quoted above were brought out. Judge Burke's whole argument in this trial was that Mr. Rockefeller had betrayed his trusteeship. That Mr. Rockefeller was Mr. Corrigan's trustee was easy to show, much as the defendant's counsel might quibble over it. Now, Mr. Rockefeller could not legally barter with stock he held in trust, and again, he must, according to law, keep the man whose property he held informed of its value. He had not done this — more, he had even attempted to depreciate the stock in Mr. Corrigan's mind — at least so Mr. Corrigan claimed, and at this point came one of the rare episodes we have in which Mr. Rockefeller plays a dramatic part. Mr. Corrigan had told of an interview with Mr. Rockefeller in which the latter had told him that the trust was earning no money, that they were having the worst competition they ever had, that the certificates were not worth $125 — that they had no surplus funds. Mr. Rockefeller denied saying anything of the kind — denied having an interview on the date mentioned — denied having ever had more than one interview in the period in question. Judge Burke tried to refresh his memory. He knew the interview had taken place, had a witness to it to fall back on in case of need, but Mr. Rockefeller could not or would not remember, and when pressed he sprang to his feet and, drawing himself to his full height, with uplifted hand he cried: "I call God, as my judge, that I never did have an interview with him after the 29th. I call God to witness that." Yet later, when Judge Burke mentioned the name of a person present in the ante-room to that interview, Mr. Rockefeller remembered. Mr. Corrigan lost his suit. The arbitrators did not deny Mr. Rockefeller's trusteeship — that is they acknowledged he had no right to take advantage of Mr. Corrigan's ignorance of the value of the property and the earning power of the Standard Oil Trust to buy his holdings at less than their value — had no right to refuse him information about the condition of the concern, but they gave Mr. Rockefeller the suit, because Mr. Corrigan had not elected promptly, after he sold his stock, whether to rescind or not, because, as they asserted, he had "played fast and loose." This story has not been told to prove that the arbitrators were wrong in their decision. That is a matter for the learned to decide. One who has only the ordinary equipment of common-sense and common morality should not presume to venture to decide on legal matters. The arbitrators were all men of experience and learning — the Hon. William G. Choate, William D. Guthrie, William A. Lynch. This decision was, no doubt, in accordance with the rules of the game they play. The tale has been told merely to illuminate Mr. Rockefeller's ideas of business. There can be no manner of doubt that Mr. Rockefeller could, without loss, have carried Mr. Corrigan through his crisis. There can be no manner of doubt that Mr. Corrigan could, with Mr. Rockefeller's help, have extracted himself and saved his Standard Oil stock — even with the sacrifice he had to make he has been able to recoup, and is, to-day, several times a millionaire. But to spare a man's property, even if that man be your life-long friend, to spare a man's property which, by squeezing, you can get and make money from is not business in the sense John D. Rockefeller understands it. That is, in Mr. Rockefeller's practice, mutual helpfulness has nothing to do with trade. "Might makes right," not generosity, not justice, not humanity. It is a far cry indeed from this creed to the one of that religion which Mr. Rockefeller holds up to the world as his most priceless possession — the religion whose very essence is in bearing one another's burdens. Mr. Corrigan's case is not exceptional. It is typical. Stories like his are current in every community in which Mr. Rockefeller does business. The man who in Cleveland, Ohio, allows himself to become a debtor to Mr. Rockefeller is a laughing-stock to the initiated. Even in his own church men say of him: "He's a good Baptist, but look out how you trade with him!" "I have been in business with John D. Rockefeller for thirty-five years," one of the ablest and richest and earliest of Mr. Rockefeller's colleagues once told me in a moment of forgetfulness, "and he would do me out of a dollar to-day; that is," he added with a sudden reversion to the school of cant in which he had been trained — "that is, if he could do it honestly!" These then are the tactics which for thirty-five years John D. Rockefeller has been applying to business. Is it strange that he has grown richer and richer as the years went by until to-day he is called the richest man in the world? How rich he is nobody knows — perhaps he does not know himself. Twelve years ago, in 1892, when the Standard Oil Trust was dissolved, Mr. Rockefeller owned certificates for 256,854 shares of the stock, between one-fourth and one-third of the entire trust. His dividends on this amount were in that year over three million; in 1896 nearly eight million; in 1900 over twelve million. How much more stock he has now nobody knows, for nobody knows how often the Corrigan manoeuvre [sic] has been repeated. And his Standard Oil stock is only one of his dividend earners. Mr. Rockefeller's personal property in Cleveland, Ohio, outside of Standard Oil interests amounts probably to $10,000,000, and includes mortgages from $200 up to $500,000, real estate from remote city lots to his beautiful Forest Hill park of over 400 acres, beside stocks and bonds of all sorts. Mr. Rockefeller has not squandered his income. He has applied it for thirty-five years to accumulating not only oil property but real estate — railroad stock, iron mines, copper mines, anything and everything which could be bought cheap by temporary depressing and made to yield rich by his able management. For thirty-five years he has worked for special privileges giving him advantages over competitors, for thirty-five years he has patiently laid net-works around property he wanted, until he had it surely corralled and could seize it; for thirty-five years he has depreciated values when necessary to get his prey. And to-day he still is busy. In almost every great financial manoeuvre [sic] in the country is felt his supple, smooth hand with its grip of steel, and while he directs that which is big, nothing is too small for him to grasp. Why does he do it? What does he want an income of $25,000,000 and more for? Not to spend like some splendid old Venetian in palaces and galleries, for none of the glories of the fine old-world life are known to him. Not to squander in riot. So far as the world knows, he is poor in his pleasures. Not to give away — his charities and bequests are small compared to his wealth. For what then? Why this relentless, cruel, insistent accumulation of money when you are already buried in it. There seems to be only one explanation, that Mr. Rockefeller is the victim of a money-passion which blinds him to every other consideration in life, which is stronger than his sense of justice, his humanity, his affections, his joy in life, which is the one tyrannous, insatiable force of his being. "Money-mad, money-mad! Sane in every other way, but money-mad," was the late Senator Hanna's comment on John D. Rockefeller. And the late Senator Hanna could not be accused of holding money in light regard. The article concludes in the August
1906 issue of McClure's Magazine. |