Titan: The Life of John D. Rockefeller, Sr.

by Ron Chernow
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Titan

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Last Updated on May 5, 2015, by eNotes Editorial. Word Count: 2107

Ron Chernow is a historian of business whose previous work dealt with banking. His first book, The House of Morgan (1990), won the National Book Award; his second, The Warburgs (1993), won the Eccles Prize of the Columbia Business School as the best business book of the year. His books are written in an easily understandable style and stress the cultural context in which the people and institutions he discusses operated.

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Titan is the first study of John D. Rockefeller, Sr., to be based on the voluminous company and family records collected by the Rockefellers and their charitable foundations since Allan Nevins published his massive John D. Rockefeller: The Heroic Age of American Industry (2 vols., 1940; revised under the title Study in Power: John D. Rockefeller, Industrialist and Philanthropist, 1953). Other than material dealing with family matters that was not yet open to the public in the 1940’s, Chernow uses little data that was unavailable to Nevins. Chernow, however, is much more impartial in his evaluation of Rockefeller’s behavior. Nevins, attempting to correct factual misstatements in critical studies of Rockefeller published during the Progressive and New Deal years, tended to defend Rockefeller’s business practices. Chernow is less willing to accept Rockefeller’s rationalizations concerning his business behavior. Where most biographers portray Rockefeller as either essentially good or essentially evil, Chernow depicts him as both. Chernow’s carefully balanced narrative makes Titan the best account of Rockefeller’s life and career available.

John Davison Rockefeller was born in 1839 in Richford, a small town in upstate New York. His father, William Avery Rockefeller, was an itinerant peddler who sold homemade medical nostrums in rural areas and country fairs across New York State and the upper Middle West. His mother, Eliza Davison Rockefeller, was a devout Baptist who raised her children in that faith. Her son never abandoned the Baptists for a denomination higher in the social scale and became the sect’s most influential layman. When Rockefeller was thirteen, the family moved to Cleveland, where he attended high school and became a full-fledged member of the Erie Street Baptist Church. As soon as he started to earn his own money, he began to contribute regularly to his church and to charitable causes.

Other biographers have viewed Rockefeller’s piety as hypocrisy, charging him with showily attending church on Sunday while conducting his everyday affairs with utter unscrupulousness. They considered his charitable donations merely an attempt to divert attention from his rapacious business behavior. Chernow insists that Rockefeller’s faith was sincere, that he had no trouble reconciling his business practices with his religion. The church of Rockefeller’s youth taught him that it was his duty to work hard, earn as much as he could, and give away as much as he could. “The church,” Chernow argues, “provided him with a stock of images and ideas that, instead of checking him, enabled him to proceed with a clear conscience. Religion validated his business misdeeds no less than his charitable bequests, buttressing his strongest impulses.”

At the age of sixteen, Rockefeller went to work as a clerk- bookkeeper for a Cleveland commission merchant. By April, 1858, he had saved enough to start his own firm in partnership with another young man. When the Civil War broke out, Rockefeller believed his responsibilities to his business and family excused him from joining the Army. Wartime demand for commodities produced substantial profits for the partnership, and Rockefeller, looking for investment opportunities, was attracted by the oil industry, which was expanding rapidly after the 1859 discovery of oil in western Pennsylvania. In 1863, he joined a partnership to build a refinery in Cleveland producing illuminating oil, or kerosene. By 1870, when Rockefeller’s various oil investments were incorporated as the Standard Oil Company of Ohio, with Rockefeller as president holding one-quarter of the stock, he controlled the largest and most efficient refinery in Cleveland.

The early oil industry suffered from a rapid alternation of booms and busts. Word about high profits enticed newcomers to build refineries or drill for oil, but the rapid increase in production drove prices down, bankrupting many. This process reduced supplies, leading to higher prices and increased profits, encouraging new entries into the industry and, consequently, a repetition of the previous cycle. Rockefeller’s refineries, where he installed the most efficient technology and vigilantly cut costs, could ride out the low-price periods that destroyed many of his competitors, but the uncertainty and loss of profits irritated him. Chernow stresses that Rockefeller, the most successful capitalist of his day, did not believe in free markets and competition but looked for ways to control the fluctuating business cycle. His opportunity came when Tom Scott, president of the Pennsylvania Railroad, asked him to join the South Improvement Company.

Railroads were also adversely affected by sharp swings in demand for transportation of crude oil and kerosene that made it impossible to plan shipments effectively. Scott proposed to bring together the three railroads serving the oil regions with the major refiners in Cleveland, Pittsburgh, and Philadelphia under the aegis of the South Improvement Company. Refiners would agree to divide their shipments in a regular manner between the railroads in return for secret rebates amounting to one-half the published shipping rate. Favored refiners would also receive the same rebate on all shipments made by their competitors. When word of the secret agreement leaked out, oil producers and refiners who were not part of Scott’s scheme reacted with such fury that the railroads abandoned the plan.

When he was criticized for his role in the scheme, Rockefeller protested that the agreement had never gone into effect. However, Chernow notes that in less than six weeks between February 17, 1872, when the first rumors about the plan began to circulate, and March 28, when it was abandoned, Rockefeller swallowed up twenty- two of his twenty-six Cleveland competitors. Creating a climate of fear among those outside the agreement that they faced certain bankruptcy allowed him to buy up plants for their scrap value, paying one-quarter of the original construction costs. Keeping only the most cost-effective refineries in Cleveland open, Rockefeller repeated his coup in city after city, selling kerosene below his rivals’ costs if they did not capitulate to Standard Oil. He offered his competitors a choice of cash or Standard Oil stock, assuring those who accepted stock that this would make them rich. Yet even those who reaped enormous profits did not necessarily abandon their resentment of Rockefeller’s tactics.

By 1877, Rockefeller controlled nearly 90 percent of the oil refining in the United States. In the 1880’s, Standard Oil began to integrate the industry vertically, buying up newly discovered fields and setting up distributors who sold kerosene directly to consumers. High-volume, low-cost production permitted lowering of prices to consumers, thereby discouraging new competition while generating enormous profits. Rockefeller boasted in 1890 that Standard Oil had cut the price of kerosene from twenty-three and a half cents a gallon to seven and a half cents a gallon since the company was founded in 1870. The profits were truly incredible: Rockefeller had an untaxed income of $58 million in 1902, which Chernow estimates as the approximate equivalent of one billion in 1996 dollars.

Standard Oil came under increasing attack in the 1890’s and early twentieth century. The sheer size of the company and its overwhelming dominance of a major industry frightened many people. The arrogant and sometimes brutal way in which Rockefeller and his subordinates treated those who opposed their plans made it the most hated monopoly in the country, inevitably attracting the attention of the antitrust movement. Chernow believes that Ida Tarbell’s best-selling History of the Standard Oil Company, published in 1904 after being serialized in McClure’s Magazine, was the most effective mobilizer of public opinion. Although not always accurate in every detail, Tarbell described the unethical operations of the corporation in clear prose that convinced many observers that it was time to break up the corporation. President Theodore Roosevelt in 1906 ordered the federal government to begin an antitrust suit that resulted in a 1911 Supreme Court decision forcing Standard Oil to reorganize its subsidiaries as separate corporations.

Rockefeller was the main target of Tarbell’s exposé, and as attacks mounted in the first decades of the twentieth century, many thought him personally responsible for the excesses of Standard Oil. Actually, he had in effect retired in 1897. Rockefeller tried several times to retire publicly, but his associates would not let him drop the title of president while so many court cases were being pressed against Standard and its leaders. One colleague was later quoted as saying that “we told him that if any of us had to go to jail, he would go with us!” Rockefeller finally dropped the title of president when the trust was broken up in 1911, but he held on to his stock in the successor companies, which quadrupled in value over the next two years. In 1913, his net worth reached its lifetime peak at $900 million—more than $13 billion in 1996 dollars. In 1917, when he was regularizing his finances and setting up a series of trusts for his children, he estimated that if he had kept and invested all his money he would then be worth $3 billion, or nearly $26 billion in 1996 dollars.

Throughout his life, Rockefeller continued the practice of charitable giving he had begun with the first pay he earned. He decided on each gift personally until the late 1880’s, by which time the volume of requests overwhelmed him, and he spent more time on his charitable bequests than he devoted to Standard Oil. Chernow suggests that Rockefeller’s solution evolved out of his experience in funding the University of Chicago in the 1890’s. He began to give in large amounts to institutions he believed could make a significant difference to society; he hired advisers he trusted and used them as an effective personal office to organize and supervise his bequests. When he was a young man, most, though not all, of his giving had gone to Baptist institutions. The Social Gospel movement of the 1890’s and early twentieth century provided a rationale that enabled Rockefeller to make a smooth transition to more secular causes. As attacks on him increased, he disbursed his gifts on an ever- increasing scale; Chernow believes these gifts were designed to demonstrate that he could handle his wealth in an honorable manner. Rockefeller gave away some $530 million in his lifetime, mostly to noncontroversial causes; more than 80 percent went directly or indirectly to medicine and education.

During his lengthy retirement Rockefeller and his son, John D. Rockefeller, Jr., deliberately tried to refurbish the family reputation. Junior took responsibility for directing the family philanthropy and oversaw gifts in excess of $1 billion, partly through the family foundations. Rockefeller hired a public- relations expert who publicized the gifts and helped create an image of Rockefeller as a harmless, wealthy eccentric. Rockefeller began to carry a pocket full of dimes and present one to every boy or girl he met on his walks. By the time he died in 1937, aged ninety-eight years, he had overcome his fearsome early reputation, and the newspaper obituaries focused more on Rockefeller’s philanthropies than on his business career.

Titan received rave reviews and soon rose high on the best-sellers lists. Jack Beatty in The New York Times Book Review hailed the work as “a triumph of the art of biography.” Booklist praised it as “a masterful job,” and Time called it “one of the great American biographies.” The book appeared while the U.S. Department of Justice was attacking Bill Gates’s Microsoft Corporation as a monopoly in restraint of trade, and several reviews pointed out parallels between the actions of Rockefeller described by Chernow and the ways Gates used his control of 90 percent of the software operating system market to prevent possible competitors from prospering. Beatty concluded that “the 20th century is ending as the 19th century did, with the representative corporation of the age seeking to escape the untamable risk of competitive capitalism.” John Cassidy writing in The New Yorker agreed with Chernow’s conclusion that free markets left on their own could easily wind up unfree and stated that the book provided “an object lesson in why forceful government intervention is sometimes necessary to maintain the healthful competition that business executives and editorial writers invariably claim to favor.”

Sources for Further Study

Columbia Journalism Review. XXXVII, July, 1998, p. 63.

Computerworld. XXXII, August 3, 1998, p. 36.

The Economist. CCCXLVII, April 18, 1998, p. S11.

Fortune. CXXXVII, June 22, 1998, p. 164.

Los Angeles Times Book Review. May 31, 1998, p. 12.

The New York Times Book Review. CIII, May 17, 1998, p. 10.

The New Yorker. LXXIV, May 11, 1998, p. 98.

Publishers Weekly. CCXLV, February 16, 1998, p. 191.

Time. CLI, June 15, 1998, p. 83.

The Washington Post Book World. XXVIII, June 7, 1998, p. 1.

Titan

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Last Updated on May 5, 2015, by eNotes Editorial. Word Count: 323

Ron Chernow treats his subject in an impartial manner, describing the seamier side of John D. Rockefeller’s business practices as well as his enormous philanthropies in TITAN: THE LIFE OF JOHN D. ROCKEFELLER, SR. He argues that there was no contradiction between the two activities, that the religion Rockefeller learned in his youth taught him to earn as much as he could and give as much as could and thus validated both his business misdeeds and his charitable instincts. Chernow notes that Rockefeller, the greatest capitalist of his day, did not believe in free markets or competition, and he describes the fearsome methods Rockefeller used to seize control of nearly ninety percent of the oil refining industry in the United States. For Chernow, Rockefeller’s career demonstrates that the unfettered play of free markets can result in the destruction of competition and thus raises the question of the role that government intervention should play in ensuring the full benefits of competition. The successful Standard Oil monopoly generated enormous profits; Chernow estimates that Rockefeller’s untaxed income of $58 million in 1902 was the equivalent of one billion in 1996 dollars.

Rockefeller had begun to donate to his church and to charity with the first money he earned; his wealth now permitted giving on an unprecedented scale. Chernow views the $530 million he donated during his lifetime as simply a continuation of a pattern he had begun at the age of sixteen. By his death at the age of ninety- eight he was remembered more as a benevolent philanthropist than as a ruthless businessman.

Sources for Further Study

Columbia Journalism Review. XXXVII, July, 1998, p. 63.

Computerworld. XXXII, August 3, 1998, p. 36.

The Economist. CCCXLVII, April 18, 1998, p. S11.

Fortune. CXXXVII, June 22, 1998, p. 164.

Los Angeles Times Book Review. May 31, 1998, p. 12.

The New York Times Book Review. CIII, May 17, 1998, p. 10.

The New Yorker. LXXIV, May 11, 1998, p. 98.

Publishers Weekly. CCXLV, February 16, 1998, p. 191.

Time. CLI, June 15, 1998, p. 83.

The Washington Post Book World. XXVIII, June 7, 1998, p. 1.

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