Assessment of John D. Rockefeller, Capitalist & Philanthropist

We picture Rockefeller as the prototypical capitalist: greedy, corrupt, and always scheming. But that picture is only half the story, and even that half is not entirely accurate. In this post, I am going to go into detail on some of the things I found most fascinating about Rockefeller. He is so compelling because of the ambivalent feelings he evokes in others (though personally I mostly admire the man). He was the world’s richest man, but also its greatest philanthropist. He implemented disreputable business practices, but was also a deeply religious and righteous man. When he was lambasted in the media, he refused to respond. And, when he eventually opened up to journalists, they fell in love with him. How did all this come to be? I will do my best to explain. The facts about John D. Rockefeller’s life in this post are almost solely from Ron Chernow’s book Titan: The Life of John D. Rockefeller, Sr. The book is fantastic and this post obviously does not cover anywhere close to all of it so I highly recommend that you buy the book, but if you prefer to settle for a less well-written summary interspersed with the thoughts of someone who is not even a historian, then you have come to the right place. All quotes unless otherwise stated come from Chernow’s book.

Early Life

Understanding John D. Rockefeller Sr.’s childhood situation allows us to better understand how his personality developed. He was born in 1839, “sandwiched tightly between two illegitimate sisters, born into a situation steeped in sin.” His father, Bill, married his mother Eliza, but hired Nancy Brown, a woman he had a serious romance with before his marriage to Eliza, as a housekeeper. Within two years, their family had four children, two from each woman. John was the third child and the only male of the four. His father was an actual snake oil salesman who would abandon his family for months at a time to travel around and sell his fraudulent concoctions, leaving Eliza, a deeply religious and strict but loving mother, to raise the children herself. Bill moved his family from town to town, partly because townspeople would catch on to his cons and partly because of his philandering. Around 1852, Bill met Margaret Allen in Ontario, Canada; he adopted a new name and married her in 1855, becoming a bigamist, keeping each family a secret from the other.

Bill was filled with talents (great athlete, incredible at shooting, skilled animal trainer, amazing ventriloquist, etc.) and was immensely charismatic; he could charm anyone, and everyone around him would have a good time. As a result, John worshiped his father as a child, but as John became an adult he grew disenchanted. His personality would serve as a rejection of everything his father was, yet John still inherited some key traits from his father, such as his love of money. Depending on how you view John’s business ethics, you could argue that he also inherited his father’s unscrupulous behavior. From his mother, he inherited the bulk of his personality such as his puritanical nature, the ability to withstand immense burdens, and his famously unflappable demeanor. John had many siblings and as the oldest son, he was given adult responsibilities by Eliza and took on the role of father whenever Bill was away, instilling confidence in his own abilities. Chernow notes that John was not brilliant as a child, but was a hard worker. He also possessed unrivaled patience when he deliberated, but would act quickly and decisively when he reached a decision, a trait that would be on full display later on.

Early Career

At the age of 16, John went on a job search, one that would be mythologized later in his life. He created a list of big establishments that he wanted to work for and would visit each of them one by one, visiting many places more than once. After searching for six days a week for six straight weeks, he finally found a job as an assistant bookkeeper at Hewitt and Tuttle, a day he would celebrate every year for the rest of his life with more enthusiasm than his birthday. Rockefeller was able to shine in his job as he was always good with numbers and understood the power of company ledgers. Digging into the numbers illuminated the fraud and inefficiencies within a company, allowing him to make reasoned decisions based on the true performance of a company.

After a couple of years, John became chief bookkeeper, but, because he was being underpaid, he left in 1859 to form a commodities company with his friend Maurice B. Clark. John was an extremely diligent worker and would always be the first one in the office and the last to leave. The Civil War increased the demand of commodities and caused their company’s profits to boom. Rockefeller was resolutely antislavery but did not serve in the army because he was his family’s sole means of support. In 1863, he and Maurice Clark entered the refining business with Sam Andrews, and though John had some doubts at first, he soon embraced it wholeheartedly.

The oil industry was incredibly unstable at the time. New discoveries of oil caused its price to swing wildly and made the lucky few millionaires overnight. The refining business was more stable, but was still viewed as high-risk because many people believed the oil wells would run dry in a few years. Rockefeller’s succeeded because, unlike the others who looked to get rich quick, he believed in the long-term viability of the oil business.

Rockefeller’s partnership with Maurice Clark would not last. John and Sam Andrews wanted to take on more debt to expand the oil business, but Maurice Clark and his brothers had the majority of the votes in the partnership and felt that it was too risky to expand further. The Clark brothers treated John as a glorified bookkeeper and tried to intimidate him by threatening to dissolve the partnership whenever he proposed taking on more debt. Though he withstood these insults with equanimity, John was slowly plotting; he convinced Andrews to come to his side, and the next time the Clark brothers threatened to dissolve the partnership, John secured Andrews’ vote for the unanimous approval required to dissolve. He and Andrews outbid the Clark brothers at auction for the refining business, paying $72,500 ($1 million today) for it. The company was renamed Rockefeller & Andrews.

Standard Oil

Rockefeller chose Cleveland as the center for their operations because of the transportation network there. From there, they could ship their oil by railroad or by water, giving them bargaining power over the railroads; at the time, railroad costs took a huge chunk out of refiners’ profits. In 1867, Henry Morrison Flagler joined the company as an equal partner. Flagler became the point man for the pivotal deal with the Lake Shore Railroad. Before this deal was struck, Rockefeller’s company was already the largest oil refiner in the world and equal in size to Cleveland’s next three largest refiners combined. The deal was only possible due to the company’s large size and widened the gap between it and its competitors. “Rockefeller and Flagler didn’t simply try to squeeze the railroads – they were much too shrewd and subtle for that – but offered compelling incentives. For instance, they agreed to assume legal liability for fire or other accidents and stop using water transport during the summer months. The biggest plum they dangled before Devereux was a promise to supply the Lake Shore with an astonishing sixty carloads of refined oil daily.” The Lake Shore deal not only gave Rockefeller’s company rebates that lowered its shipping costs below its competitors, but also tied the interest of the railroad to the success of his company. Ida Tarbell, Rockefeller’s most vociferous and well-known critic, later dubbed this his “original sin”.

In 1870, the partnership was abolished and Standard Oil, a joint-stock firm, was created. John had the largest stake in the firm with 2,667 shares of the original 10,000 and would increase his stake whenever one of the firm’s five other shareholders wanted to sell. His brother William, who John brought in to the business to manage the relationships with the bankers and exporters in New York, held 1,333 shares.

Between February 17th and March 28th, 1872, Rockefeller purchased 22 of his 26 competitors in Cleveland, starting with the largest and then working his way down (later dubbed the Cleveland Massacre). John believed he was doing them a service by buying their unprofitable businesses and offering them Standard Oil stock, but they viewed his negotiating tactics as naked threats. Because many were losing money and would’ve ended in bankruptcy, John was able to pay small amounts for their companies, sowing hatred in the owners who believed their businesses were worth more. When confronted with the decision of blaming the capriciousness of the oil market or Rockefeller for their failure, the owners of the conquered refineries chose the latter. This event would feature heavily in later criticism of Rockefeller as the press, exposed to only the point of view of the defeated, would portray Rockefeller as greedy and immoral.

Next, Rockefeller created an association of refiners to try and control the problem of low oil prices caused by excess supply. It sounded good in theory, but the union was plagued by two classic economic problems: the tragedy of the commons and the free rider problem. Firms that were part of the union were incentivized to cheat and exceed their quotas to make as much profit as possible and firms that weren’t a part of the union didn’t have to lower their supply yet still benefited from the higher prices. The association of oil producers was plagued by the same issues. The failure of the association convinced Rockefeller that it was inane to try and control the industry through voluntary associations and he instead decided to control it through acquisitions.

A six-year depression would begin in 1873 and during this time, Rockefeller would abide by the Buffett aphorism of being greedy when others are fearful. He purchased the largest refiners in Philadelphia and Pittsburgh and the preeminent export company in New York. His strategy was to purchase the largest, most reputable company in the region and have them purchase the smaller players. After his purchases in the major oil regions, he became “sole master of American oil refining.” By the end of 1877, “only five years after the Cleveland Massacre, the thirty-eight-year-old Rockefeller, with piratical flair and tactical brilliance, had come to control nearly 90 percent of the oil refined in the United States.” There were still hundreds of small refineries but they were not a threat to his business and actually served a political purpose, since Rockefeller could point to those companies as evidence of competition.

Rockefeller also took the opportunity to gain control over the railroads by offering to build custom-made facilities for handling oil and oil-tank cars when the railroads refused to do so. By building oil-tank cars, Rockefeller gained leverage over the railroads since he owned almost all of the tank cars and could threaten to pull them, allowing Standard Oil to receive cheaper shipping costs.

The key lessons to Rockefellers success are standard business lessons: buying when prices are low (or being greedy when others are fearful), using a dominant market position to extract better terms, and investing for the long-term instead of being focused on the short-term (custom-made oil handling facilities and oil-tank cars). When making many of these critical decisions, Rockefeller was hesitant at first, but after slowly and methodically thinking through the situation, he acted quickly and decisively. We have to avoid the fallacy of hindsight when looking at his decisions. Looking at the power of the oil behemoth today, Rockefeller’s actions might seem self-evident, but at the time, most believed that the oil industry was a flash in the pan and wanted to get rich quick and exit the industry. Look no further than all the unprofitable oil companies out there and the refusal of railroads to invest in oil-tank cars as proof. It was Rockefeller’s unwavering belief in oil that made him so immensely wealthy; he not only bought other companies when prices were low and risk high, but also bought shares of his own company from other shareholders whenever they got nervous and wanted to sell.

At this point, Rockefeller and Standard Oil’s dominance became somewhat of a foregone conclusion, so I think it makes sense to shift the discussion. There’s still interesting stories in there such as when Standard Oil shifted from railroads to pipelines or when a major oilfield of lesser quality oil was discovered in Lima Ohio, but those recycle the same lessons. Before covering the press criticism of Rockefeller, I want to go deeper into his personality as it dictated how he would respond (or not respond) to the criticism that had such an outsized impact on how we perceive him.

Religion and Personality

As I’m trying to keep this as short as possible, the description of Rockefeller’s personality in this section is his personality in early and mid-life. He lived until he was 97 years-old, and as he grew older and older, he grew more lively and more playful, thus more like the father that he spent so long trying to be the antithesis of.

Since his birth, John Rockefeller’s life was steeped in religion. His mother was deeply religious and raised him and her other children to uphold the puritanical virtues she held dear. As a result, his personality is deeply intertwined with his religion. He attended a Baptist church and did whatever he could to help out, whether it be sweeping the floors of the church or helping raise funds to keep it running. His Baptist doctrine drove his ambition; Rockefeller believed he was given his talent for making money by God and was determined to make as much money as possible so that he could give it away to benefit society. This unwavering belief was also what enabled him to take on enormous risk and keep investing in the oil industry when others were hesitant.

Devotion to the church and his honest nature illustrated Rockefeller’s trustworthiness and allowed him to secure massive loans to grow his company; he never distorted the truth or tried to conceal his company’s problems, and always repaid his loans on time. Even after becoming rich, Rockefeller never traded up to a wealthier church and instead stayed with the Euclid Avenue Baptist Church which had a lower-middle-class congregation. Unlike most people, the Rockefellers grew more religious as they grew wealthier, hiding how rich they actually were from their kids and instilling puritanical values in them. Their houses and estates (especially the later ones), though massive compared to the average house, were still far smaller than they could afford. When their family moved to New York, for example, they kept the furniture left from their house’s previous owner. Rockefeller’s stinginess, unlike that of other enormously wealth people, wasn’t to accumulate wealth for its own sake, but to accumulate wealth so that he could give it away to the benefit of society. One anecdote illustrates both his stinginess and his business acumen:

“In the early 1870s, Rockefeller inspected a Standard plant in New York City that filled and sealed five-gallon tin cans of kerosene for export. After watching a machine solder caps to the cans, he asked the resident expert: ‘How many drops of solder do you use on each can?’ ‘Forty,’ the man replied. ‘Have you ever tried thirty-eight?’ Rockefeller asked. ‘No? Would you mind having some sealed with thirty-eight and let me know?’ When thirty-eight drops were applied, a small percentage of cans leaked – but none at thirty-nine. Hence, thirty-nine drops of solder became the new standard instituted at all Standard Oil refineries. ‘That one drop of solder,’ said Rockefeller, still smiling in retirement, ‘saved $2,500 the first year; but the export business kept on increasing after that and doubled, quadrupled – became immensely greater than it was then; and the saving has gone steadily along, one drop on each can, and has amounted since to many hundreds of thousands of dollars.’”

Rockefeller was unfairly characterized by critics as a cold and malignant employer; in reality, many employees talked about how he remembered all his employees and was always friendly to them. As noted earlier, he was preternaturally calm and extremely courteous. Employees talked about how he never raised his voice, lost his temper, or used any profane words. Contrary to the stereotype of the domineering tycoon, his employees generally gave him excellent reviews and thought of him as a fair and benevolent employer who gave deserving employees a lot of responsibility. Chernow recounts a funny story. Rockefeller was into fitness and put a machine in the accounting department that he pushed and pulled for exercise. When he came in one morning to workout, a junior accountant who didn’t recognize him complained about what a nuisance the machine was and demanded it be taken away. Rockefeller simply responded “All right” and had the machine removed. The employee was later horrified when he realized who he had scolded, but “never endured one word of reprimand.”

In business, Rockefeller distanced himself from his subordinates’ unscrupulous behavior so that he did not have direct involvement and could feign innocence when asked about the acts despite being briefed in detail about all the actions. Although Rockefeller’s business behavior was a relic of his times, and an argument could be made that he behaved better than his competitors, it still doesn’t excuse the fact that he fostered a culture where such unethical behavior was permitted or even tacitly encouraged; distancing himself from the behavior is proof that, at some level, he knew it was wrong.

Rockefeller’s eventual success was determined by his fastidious work ethic, his incredible ability to stay calm, and his unwavering resoluteness after painstakingly thinking through a decision. His belief in himself and the oil industry gave him a long-term approach and was the reason he purchased Standard Oil stock from any executive that wanted to sell some shares. His accumulation of shares equaled almost a third of all shares and was the reason his wealth was so much greater than his other partners’. Of course, as with all exceptionally successful people, luck played a big role in his career. He openly wondered how his career would have turned out had he not gotten his first job after the six-week search. He clearly benefited from getting into the oil business when it was a budding industry and from being able to operate in an unregulated economy (though to be fair, his actions, and those of other contemporary industrialists, were why regulations were written).

Wealth and power both corrupt and reveal a person’s nature. I wanted to dive into Rockefeller’s personality before getting to the press criticism he received because so much of our perception of Rockefeller is colored by myth instead of reality. The popular perception of Rockefeller is that of the prototypical capitalist, especially given how synonymous Rockefeller’s name is with capitalism, in the pejorative sense. We picture Rockefeller (and most other ultra-wealthy businessmen) as a lonely person sitting by the fireplace on his rocking chair, with a pipe in his mouth, scheming of another way to cheat the ordinary citizen in order to accumulate more wealth. I hope that by going deeper into what Rockefeller’s personality was actually like and by providing anecdotes that illuminate his personality, we’re able to remove some of our biased preconceptions. Understanding Rockefeller’s philanthropy will allow us to even better understand him, but since the criticism of him focuses solely on his business practices, I think it makes sense to cover that first.

Contextualizing the Press Criticism

Standard Oil operated in a completely different business environment than the one we have today. I recently read Mary Beard’s SPQR and saw a similarity, so I want to draw an analogy to the Romans. In SPQR, Beard disproves the conventional myth that Romans were an especially belligerent people who conquered and massacred peaceful tribes/towns. Instead, the Romans were a product of their time. It was a dog-eat-dog world and their neighbors were just as belligerent as they were. It doesn’t excuse Roman atrocities, but gives us the proper context to view those atrocities. Similarly, Rockefeller and Standard Oil came from a business environment that makes ours look like peewee flag football. Their business practices were what allowed regulators to create the regulations that govern our economy today.

“In a sense, John D. Rockefeller simplified life for the authors of antitrust legislation. His career began in the infancy of the industrial boom, when the economy was still raw and unregulated. Since the rules of the game had not yet been encoded into law, Rockefeller and his fellow industrialists had forged them in the heat of combat. With his customary thoroughness, Rockefeller had devised an encyclopedic stock of anticompetitive weapons. Since he had figured out every conceivable way to restrain trade, rig markets, and suppress competition, all reform-minded legislators had to do was study his career to draw up a comprehensive antitrust agenda.”

As with the Romans, Rockefeller and Standard Oil’s business practices shouldn’t be excused. But, they should be understood and examined not with our modern lens, but in the context of their time. Much of Standard Oil’s power came from its dominant market position. Its competitors would have done the same thing if they could; in fact, there are many examples in the book of when they used the exact same anti-competitive practices.

Another aspect that must be understood is business-media relations at the time. Corporations now have massive PR teams and relationships with the media that allow them to issue big news and push back against criticism. But, this was not the case in Rockefeller’s time. It was in this crucial time, before companies understood how to properly handle or discredit criticism, that Rockefeller’s reputation was tarnished.

From 1894 to 1897, Rockefeller started the transition to retirement from Standard Oil and by 1897, he had walked away from the corporation. It’s inconceivable for us to not know about the retirement of Steve Jobs, Elon Musk, Mark Zuckerberg, or Bill Gates but that is exactly what happened in regards to Rockefeller’s retirement. His retirement was never publicly announced and he retained the title of president to avoid panic, but he almost never stepped foot on the company’s grounds over the next 15 years and was not involved in the company’s day-to-day activities. Stewardship was handed over to John D. Archbold who made questionable decisions that only invited more criticism of Rockefeller. Reporters knew that he no longer came to work, but they didn’t believe that he had given up control, as he still owned almost 30% of the company, and so continued to criticize him. But, the biggest impact to Rockefeller’s reputation was done by Ida Tarbell’s series for McClure’s, and it criticized not Standard Oil’s current practices, but its past ones.

Ida Tarbell’s series was one of the most influential pieces of journalism in the 20th century and utterly devastated Rockefeller’s reputation, but had it been published today, it would’ve been far less effective. Her series had many crucial errors and she was heavily biased. Chernow does a marvelous job explaining her criticism, its impact, and why it doesn’t hold water:

“She went back to the early Cleveland days and laid out his whole career for careful inspection. All the depredations of a long career, everything Rockefeller had thought safely buried and forgotten, rose up before him in haunting and memorable detail. Before she was done, Ida Tarbell turned America’s most private man into its most public and hated figure.”

“From the perspective of nearly a century later, Ida Tarbell’s series remains the most impressive thing ever written about Standard Oil – a tour de force of reportage that dissects the trust’s machinations with withering clarity. She laid down a clear chronology, providing a trenchant account of how the combine had evolved, and made the convoluted history of the oil industry comprehensible. In the dispassionate manner associated with McClure’s, she sliced open America’s most secretive business and showed all the hidden gears and wheels turning inside it. Yet however chaste and clearly reasoned her prose, it was always informed by indignation that throbbed just below the surface. It remains one of the great case studies of what a single journalist, armed with the facts, can do against perhaps seemingly invincible powers.”

She correctly surmised that Standard Oil received kickbacks from the railroads and even underestimated the kickbacks received. But, her series had many key errors:

“To begin with, the SIC was initiated by the railroads, not Rockefeller, who doubted the plan’s efficacy. And for all its notoriety, the SIC did not cause the oil crisis of the early 1870s but was itself a response to the glut that forced almost everybody to operate at a loss. It is also true that, swayed by childhood memories, Tarbell ennobled the Oil Creek drillers, portraying them as exemplars of a superior morality. As she wrote: ‘They believed in independent effort – every man for himself and fair play for all. They wanted competition, loved open fight.’ To support this statement, she had to overlook the baldly anticompetitive agreements proposed by the producers themselves. Far from being freemarketeers, they repeatedly tried to form their own cartel to restrict output and boost prices. And, as Rockefeller pointed out, they happily took rebates whenever they could. The world of the early oil industry was not, as Tarbell implied, a morality play of the evil Standard Oil versus the brave, noble independents of western Pennsylvania, but a harsh dog-eat-dog world.”

Tarbell also focuses solely on Rockefeller instead of on Standard Oil as a whole:

“Though billed as a history of Standard Oil, the Tarbell series presented Rockefeller as the protagonist and center of attention. Tarbell made Standard Oil and Rockefeller interchangeable, even when covering the period after Rockefeller retired. Sometimes it is hard to tell whether Rockefeller is a real person or a personification of the trust.”

“This great-man approach to history gave a human face to the gigantic, amorphous entity known as Standard Oil but also turned the full force of public fury on Rockefeller. It did not acknowledge the bureaucratic reality of Standard Oil, with its labyrinthine committee system, and stigmatized Rockefeller to the exclusion of his associates. So Flagler came off relatively unscathed, even though he had negotiated the secret freight contracts that bulk so large in the McClure’s exposé.”

And lastly, she was about as far from neutral as a person could be:

“Although Tarbell pretended to apply her scalpel to Standard Oil with surgical objectivity, she was never neutral and not only because of her father. Her brother, William Walter Tarbell, had been a leading figure in forming the Pure Oil Company, the most serious domestic challenger to Standard Oil, and his letters to her were laced with anti-Standard venom.”

“As Pure Oil’s treasurer in 1902, Will steered legions of Rockefeller enemies to his sister and even vetted her manuscripts. Far from cherishing her neutrality, Tarbell in the end adhered to the advice she had once received from Henry James: ‘Cherish your contempts.’ Amazingly enough, nobody made an issue of Tarbell’s veritable partnership with her brother in exposing his chief competitor.”

Her father was also one of the countless oil businesses out there ruined by Rockefeller. Here is Chernow’s ultimate conclusion of her work:

“However pathbreaking in its time and richly deserving of its accolades, the Tarbell series does not, finally, stand up as an enduring piece of history. The more closely one examines it, the more it seems a superior screed masquerading as sober history. In the end, Tarbell could not conquer her nostalgia for the Titusville of her girlhood, that lost paradise of heroic friends and neighbors who went forth doughtily to do battle with the all-devouring Standard Oil dragon.”

And, the “most celebrated and widely quoted charge that Tarbell made against Rockefeller was the least deserved: that he had robbed Mrs. Fred M. Backus – forever known to history as ‘the Widow Backus’ – blind when buying her Cleveland lubricating plant in 1878. If every melodrama needs a poor, lorn widow, cheated by a scheming cad, then Mrs. Backus perfectly fitted Tarbell’s portrait of Rockefeller.” In reality, her plant was poorly run and outdated. She valued her plant at $150,000 to $200,000 and was ultimately paid $79,000 by Rockefeller which would seem extremely unfair except for two crucial facts. The first was that when Rockefeller offered to return the company at the same price or give her stock in the company at the same price paid by Standard Oil, Mrs. Backus indignantly threw the offer in the fire. The second fact was that it was three times more than the plant was actually worth! The plant would’ve been bankrupt had she kept operating it, a fact acknowledged by Mrs. Backus’s brother in law when he sent Rockefeller a letter thanking him for saving them from ruin and paying such a steep price. To add insult to injury, Mrs. Backus invested the money she received from the sale  in real estate and ended up becoming extremely wealthy, yet still slandered Rockefeller whenever she got a chance.

Tarbell’s series would have never had such an impact today as PR experts could have hurt her credibility by pointing out all her factual mistakes and her clear bias for the other side. They could have also threatened McClure’s with a lawsuit. But, at the time, there was no playbook for combating such criticism and Rockefeller did what he thought best: to stay quiet and not draw any more attention to the controversy as he would ultimately be vindicated by the truth. Unfortunately, that was the worst thing to do as his silence led people to think that all of Tarbell’s criticisms were true (though of course many of them were true, silence was still the worst way to handle the situation). Chernow summarizes the reputational damage done by the Tarbell series and Rockefeller’s conviction nicely:

“Had John D. Rockefeller died in 1902, at the outset of the Tarbell series, he would be known today almost exclusively as a narrow man of swashbuckling brilliance in business, a man who personified the acquisitive spirit of late-nineteenth-century American industry. But just as the muckrakers were teaching the public that Rockefeller was the devil incarnate, he was turning increasingly to philanthropy. What makes him so problematic – and why he continues to inspire such ambivalent reactions – is that his good side was every bit as good as his bad side was bad. Seldom has history produced such a contradictory figure. We are almost forced to posit, in helpless confusion, at least two Rockefellers: the good, religious man and the renegade businessman, driven by baser motives. Complicating this puzzle is the fact that Rockefeller experienced no sense of discontinuity as he passed from being the brains of Standard Oil to being the monarch of a charitable empire. He did not see himself in retirement as atoning for his sins, and he would have agreed emphatically with Winston Churchill’s later judgment: ‘The founder of the Standard Oil Company would not have felt the need of paying hush money to heaven.’ He was also insistent that his massive philanthropy paled in importance beside the good he had done in creating jobs and furnishing affordable kerosene at Standard Oil.”

Before transitioning to his philanthropy, I think it’s important to note that Rockefeller would later develop very good relations with the press. The catalyst was a trip to visit his daughter in France. On the ship, Rockefeller met and befriended a reporter named Hoster. Hoster only knew the Rockefeller portrayed by the press and was shocked to discover a completely different man. Upon Rockefeller’s return to the US, he started to open up to the press. In short time, the press fell in love with him, charmed by his courteousness and light-heartedness. Rockefeller even became friends with many in the press and invited them to hang out with him. As it turns out, Rockefeller was naturally great with the press; had he opened up to them earlier, the narrative in the press would’ve been completely different, another example of the lack of understanding of the media at the time.


Ever since his first job, Rockefeller recorded all of his expenses in meticulous fashion in a small red book that he called Ledger A. Decades later, Ledger A would disprove the accusation that he was a greedy man who tried to cleanse his guilty conscience by donating his “tainted” fortune to charity. In Ledger A, we can see that he donated 6% of his wages to charity in his first job, at a time when he still had to support his mother and siblings, and was light-years away from being wealthy. By the time he was 20, he was donating more than 10% of his wages, shaming those of us who are firmly middle/upper-middle class yet do not donate a penny to charity, like me.

By the 1880s, letters were flooding in begging him for money, and there were so many requests that he could no longer handle them all by himself, causing him enormous stress because he wanted to both personally handle all requests and still make sure that all the money was being given away to worthwhile causes. From the book:

“Personal charity had long been his pleasure, his pride, his recreation, not something delegated to underlings, and he found it hard to break these honorable habits, especially in the midst of so much controversy about his business methods. As Gates noted of his earlier years, ‘He used to meet people, read letters, weigh appeals, send checks and receive grateful replies, all in his own person.’ For such a perfectionist, giving money away was fraught with far more nervous tension than making it. He valued money too highly to dispense it lightly and wanted to investigate all requests before acting upon them. As the Lord’s fiduciary, he was responsible for seeing the money well invested.”

As mentioned earlier, Rockefeller’s unparalleled success in the oil industry, even more than his partners, came from his unwavering belief in the industry. Religion fed that belief as Rockefeller felt like he was bestowed with god-given talents to make money and had a duty to make as much as he could to then give that back. Therefore, to Rockefeller, a man of deep faith, philanthropy was much more important that business. Succeeding in business was just a means to accumulate money for his ultimate purpose, giving to those in need. As scrupulous and methodical as he was in business, Rockefeller was even more so in philanthropy; properly giving away his fortune was of the utmost importance to him. He not only wanted to give to worthy causes, but also wanted to ensure that any institution he gave to did not dependent on his wealth alone to function.

Throughout the early and mid-1890s, Rockefeller desired retirement but stayed on to help steward Standard Oil through crises it faced. He started spending less and less time at Standard Oil until 1897, when he stopped going to the office completely and started to devote his full time to his philanthropy. Ironically, because of the advent of cars, Rockefeller became far richer in retirement than when he was working; when he retired in 1897, he was worth ~$200 million whereas by 1913, he was around ~$1B.

Frederick T. Gates was hired as the point man for Rockefeller’s philanthropy and he, more than anyone else, was responsible for executing Rockefeller’s vision until Rockefeller’s son, Junior, inherited the fortune. Together they transformed the art of giving away one’s wealth. They founded the University of Chicago, the Rockefeller Institute for Medical Research, Spelman College, and more.

Everybody knows that the University of Chicago is one of the best colleges in the midwest. But what they don’t know is that it was founded because of Rockefeller and he was the pivotal figure in getting it off the ground. In a few short years after its founding, it became the best college in the region and among the best in the U.S. He not only spent massive amounts of money attracting first-class staff to the institution but also made sure that his name wouldn’t be plastered throughout the college. Later on, he even severed personal ties with the college and turned it over to the public.

Another one of Rockefeller’s projects was The Rockefeller Institute, a revolutionary place for its day; it was the first to be devoted solely to biomedical research and the first to place scientists, not trustees, in charge of expenditures. At the time, skeptics thought it would be “relegated to ivory-tower irrelevance” but a few years after its founding, it saved hundreds of lives from an outbreak of cerebrospinal meningitis. And today, it is still the preeminent research institution with numerous Nobel Laureates.

Rockefeller’s money also went to overlooked aspects of medicine and public health. For example, Charles Wardell Stiles had a fix for hookworm but was being laughed out of the room by government officials and physicians. Rockefeller’s foundation provided him the money and attention to establish connections with the U.S. government, allowing Stiles to cure half a million people of hookworm within five years and ultimately, millions abroad. Another example was in changing the state of medical schools in America. At the time, Johns Hopkins was a fantastic institution; other medical schools however, not so much. Out of 155 medical schools in the U.S. and Canada visited by a man named Abraham Flexner, only 23 required more than a high school education. And many of their labs were a complete farce, even by the standard of the day. Rockefeller provided money to shape medical education, using Johns Hopkins as a model.

Rockefeller, unlike the people of his time, had a desire to improve the lives of black people, donating to many charities since the beginning that helped them. He also gave the money to help build Spelman Seminary (named after his wife) which eventually became Spelman College, one of the best colleges in America for black women. In light of this, it makes what happened with the General Education Board (GEB) so sad. It was started by Rockefeller and his son, John Jr. to help educate poor black people in the south (and was originally supposed to be called the Negro Education Board). However, the people that were hired to the foundation were men of their times and believed that black people should be educated but still subservient to white people. The GEB ended up doing great things for southern education, but didn’t succeed in its original intention: helping educate poor black people.

A theme throughout all of Rockefeller’s philanthropy is changing education at its roots, whether it be medical education, public health, or colleges. From the book:

“By the 1920s, the Rockefeller Foundation was the largest grant-making foundation on earth and America’s leading sponsor of medical science, medical education, and public health. John D. Rockefeller, Sr., had established himself as the greatest lay benefactor of medicine in history. Of the $530 million he gave away during his lifetime, $450 million went directly or indirectly into medicine. He had dealt a mortal blow to the primitive world of the nineteenth-century medicine in which patent-medicine vendors such as Doc Rockefeller [his father] had flourished. He had also effected a revolution in philanthropy perhaps no less far-reaching than his business innovations. Before Rockefeller came along, rich benefactors had tended to promote pet intuitions (symphony orchestras, art museums, or schools) or to bequeath buildings (hospitals, dormitories, orphanages) that bore their names and attested to their magnanimity. Rockefeller’s philanthropy was more oriented toward the creation of knowledge, and if it seemed more impersonal, it was also far more pervasive in its effect.”

He gave away $530 million in his lifetime and his son, John Jr. gave away an additional $537 million directly and $540 million through their various philanthropies. According to Chernow, the $1.6 billion given away makes Rockefeller the greatest philanthropist in American history. On a side note, reading this makes me think about what a sham the Rockefeller Foundation is today. I haven’t done much research into it, so I could totally be wrong, but from what I know about most foundations, which give away the minimum amount, and a quick look at the foundation’s 2016 Annual report ($4B in assets but only $174M in grants and direct charitable activities), I’d say the Rockefeller Foundation is like most other ones that give away as little as possible. John Sr.’s intention was to give away all of his wealth carefully and responsibly. Considering how large that wealth was, he could be forgiven for not giving away all of it in his lifetime. The same applies to his son. But the foundation now is a perversion of what it used to be; it’s giving away the minimum so that its trustees can continue to have a job. It has shifted from prioritizing the needy to prioritizing its current stewards.

Bill Gates Comparison

When I read Chernow’s biography of Rockefeller, I could not help but compare him to Bill Gates. I haven’t done research into Microsoft’s meteoric rise, so correct me if I’m wrong anywhere. Using generalizations, both Rockefeller and Gates benefited from operating in a new and booming industry, crushed competitors, became synonymous with money, and spent the later years of their life giving it all away. In fact, one could argue that Rockefeller behaved “better” that Gates did, yet suffers a worse reputation today.

Standard Oil operated in a dog-eat-dog world, before there was any anti-trust legislation; in fact, anti-trust legislation was built by analyzing the actions of Standard Oil. Gates doesn’t have that same excuse. Rockefeller also tried to be very gracious whenever he bought a competitor, purposely overpaying at times, and always offering Standard Oil stock, which he believed would be very valuable (the companies he acquired always took cash, to Rockefeller’s chagrin). Their performance under questioning by the government also could not be more different. Rockefeller came across as witty and charming, and Chernow described him as being smart enough to see many steps ahead of the questions being asked to avoid any traps. Gates, meanwhile, came across as arrogant, leading many Americans at the time to view him as a villain. Lastly, Rockefeller has his “Ledger A” to disprove the notion that he was giving away his fortune to cleanse his conscience. I do not think Bill Gates is giving away his fortune to wipe away any guilt from his business actions, and I applaud everything he and his foundation have done, but I do not think he has anything similar to Rockefeller’s Ledger A, which proves a long track record of charitable contribution from the time before he was anywhere close to being rich.

So why do their reputations differ so much? I think there are many reasons. The biggest is that Rockefeller is not understood. Unless you decide to do research on his life, your conception of him as a man is going to be entirely wrong. How we view Rockefeller is bundled together with how we view the other robber barons of the time. We view them as the epitome of corruption and anti-trust behavior, as people who accumulate money for its own sake. And we view Rockefeller, who is probably the most famous of them all, as the prime culprit. Another reason for Rockefeller’s poor reputation is because of the lack of press understanding at the time. The Ida Tarbell series completely ruined his reputation, and though his reputation slowly recovered as his philanthropy became more well known, that series forever left a blemish. As mentioned earlier, the series got a lot about Standard Oil right, but it also got many things wrong, especially its assessment of Rockefeller the person. With our understanding of press relations today, the series would have never had the impact it did and Tarbell would have been immediately discredited. Today, we rightly view Bill Gates as a great man, one who is at the forefront of doing everything he can to save the world. Yet, we do not view Rockefeller, arguably an even greater man, in the same lens. I am not saying that Rockefeller is a more moral or righteous person than Gates, because frankly I do not know enough about either to make those judgments, but I definitely do not see a reason to label him a worse man.


I personally disagree with Chernow’s assessment of Rockefeller’s legacy, but here it is:

“In truth, John D. Rockefeller, Sr., had left behind a contradictory legacy. An amalgam of godliness and greed, compassion and fiendish cunning, he had personified the ambiguous heritage of America’s Puritan ancestors, who had encouraged thrift and enterprise but had also spurred overly acquisitive instincts. He had extracted mixed messages from his religious training as well as from his incongruously matched parents. Not surprisingly, he had served as an emblem of both corporate greed and philanthropic enlightenment.”

My opinion of Rockefeller’s legacy is intertwined with my opinion of Bill Gates’ legacy. I feel like Chernow is offering a false balance by presenting Rockefeller as a neutral figure who balances “so much evil” with “so much good”. At the time of his death, Rockefeller was eulogized by everybody, including his critics, who chose to focus on his philanthropy. Since then, he has either been lauded or lambasted, based on the times. He was criticized for his greed during the time of the Great Depression, but praised for everything he built during the patriotic fervor of WWII, when there was “a renewed appreciation of the iron men of American industry who had bequeathed such military might to the country”. Today, during times of greater wealth inequality, we again start to focus on his avarice. I view him as a great, but complicated man. I will leave it up to you to read Chernow’s fantastic biography of him to decide.

Interesting things that I didn’t cover (just a few among many): relationship with Frank, his estranged brother; oil in Lima, Ohio; breakup with Andrews, his long-time partner; fight with the Pennsylvania Railroad; Rockefeller’s wife Cettie; John D. Jr.; later personality and improved relations with the press; the isolation of money