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The Origin Of Standard Oil Essay

1014 words - 5 pages

An important mark in history is a point when there is a change of great significance. Big business grew to sizes wielding incredible power during the late 19th century. The power of these businesses would be expressed in the form of monopolies that would allow them to dominate their specific area of the market, if not multiple areas of the market. John D. Rockefeller’s Standard Oil was a prime example of a large monopoly over oil and everything that was needed to produce it and distribute it. His control over oil would eventually lead to the need of enacting laws of regulation by the government. Standard Oil would initially draw the attention of the State of Ohio and eventually the Supreme Court. The dissolution of the companies that made up the monopoly of Standard Oil would come with the passage of the Sherman Anti-Trust Act of 1890 (The Editors of Encyclopædia Britannica).
The very origin of Standard Oil began with John D. Rockefeller himself. Rockefeller was born in Richford, New York in 1839 and he moved with his family to Cleveland, Ohio in 1853. By 1859, he established a business which dealt with hay, grain, meats, and other merchandise. He first saw a future in oil production in Pennsylvania in the early 1860s. He immediately established his own oil refinery in 1863 and became the largest refinery around the Cleveland area within two years (“John D. Rockefeller”).
In 1870, Rockefeller, along with Samuel Andrews and Henry M. Flager incorporated the Standard Oil Company (The Editors of Encyclopædia Britannica). Rockefeller’s Standard Oil began prospering and soon began buying out competitors. In 1872, the company had almost complete control over all the refineries in Cleveland. With such power, the company could negotiate better railroad rates than other companies for oil shipment (“John D. Rockefeller”). Once companies began to suspect, they started wondering, “Where was his advantage?” “There was but one place where it could be, and that was in transportation. He must be getting better rates from the railroads than they were. In 1868 or 1869 a member of a rival firm long in the business, which had been prosperous from the start, and prided itself on its methods, its economy and its energy, Alexander, Scofield and Company, went to the Atlantic and Great Western road, then under the Erie management, and complained.” "You are giving others better rates than you are us," said Mr. Alexander, the representative of the firm. "We cannot compete if you do that" (Tarbell).
Rockefeller then expanded the power of Standard Oil by purchasing terminal facilities, pipelines, and competing refineries around the U.S. The company was beginning to expand itself over the market of oil (“John D. Rockefeller”). In 1882, with Standard Oil and all affiliates combined in the Standard Oil Trust under nine trustees, Standard Oil had almost a complete monopoly over oil business in the United States. The monopoly would soon lead to enacting of anti-monopoly laws,...

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