Rockefeller: The World’s First Billionaire

there was a time when anyone would tremble upon hearing the name John D Rockefeller Not only was he the world's first billionaire he's one of the richest people in history his Empire Standard Oil became the most dominant Monopoly in the world by brutally crushing competitors taking control of multiple Industries bribing the government into submission and treating business as if it was war because of his ruthless business practices and secretive deals Rockefeller made many enemies his career is filled with bitter rivalries like with Andrew carnegi and even ferocious battles against US presidents but before he was the Titan of the oil industry Rockefeller was at the very bottom of society his story is one of only a handful of cases where someone manages to rise from the depth of poverty to the absolute peak of wealth and power rockefeller's story is at times inspiring and at times chilling it's an example of what happens when greed and ambition go completely unchecked so let me take you back to 1839 where a young John D Rock fella is Born Into [Music] poverty in 1839 joh D rockapella was the first child born into a family of peasant Farmers with no cash to spare in his small town of less than a thousand the most mysterious character to be found was undoubtedly Jon's father who was known as devil Bill instead of helping on the Family F Bill did just about anything else he was an athlete ventriloquist Hunter hypnotist and even an animal trainer once he won a bear in a competition kept it as a pet and taught it to do tricks Bill did a little of this a little of that but not much of anything bill would also spontaneously skip town in the middle of the night leaving John and his siblings to fend for themselves for weeks or even months only to reappear in a luxurious carriage and showered JN and his siblings with toys and gifts and this confused JN because his family lived in a crumbling Old House wore tattered clothes and they were hungry and cold every night they lived a pitiful life with these occasional bouts of luxury when his father returned and the reason for that was because Bill lived a secret double life as a con artist whenever he disappeared Bill changed his name from William Rockefeller to Dr William levingston and traveled from town to town selling useless Herbal Remedies and potions to the sick and desperate because Bill was usually far away running scams Jon's mother enlisted Jon's help working at the farm where she instilled a strong religious faith and sense of Duty in him whil they plowed the fields for a boy younger than 10 balancing school and farming was backbreaking but it taught him the value of discipline and hard work John was proud to be helping his family out in fact even started coming up with other ways to make money for example John once followed a wild turkey into the woods stole its eggs and raised the hatchlings when they matured into turkeys Jon sold some of them for a tidy profit and kept the rest so he could get more eggs and repeat the process despite his young age John was now pitching in a few every week and was making a serious impact on the Family's finances it looked like the Rockefellers might finally have a decent and stable life however when John was 10 his father bill was accused of sexually assaulting a young woman even though nothing was proven the Rockefeller still faced Public Disgrace and so they were forced to pack their bags and find a new home you'd think after this event bill would dial back his schemes his infidelity and focus on healing his relationships to his family but instead he did the complete opposite was using his fake identity of to William levingston Bill married another woman in a different state where no one recognized him of course he kept this a secret and neither John's mother nor the other woman ever knew he had two wives but the effect was evident bill was almost never around so the Rockefellers moved from town to town and johon took on more responsibility as The Unofficial head of the household all us going to school he kept finding ways to make money manage the family's finances and he even started giving out very small loans finally the Rockefellers found a good home in Cleveland Ohio but but now that John was 16 and nearly done with school he wondered what the next phase of his life would be johon wanted to go to college but by this point he had four siblings and a fifth on the way and since Jon's father was absent even more than normal now that he had his secret other wife Jon's mother relied on Jon to help pay for their food housing and education this meant College was out of the question John had to get to work immediately and so just 2 months before his graduation John dropped out of school and began looking for a job in Cleveland he was after something big so he made a list of all all the biggest railroads Banks and wholesale merchants in the city however every time John showed up to an interview people laughed in his face when they found out he was only 16 years old John faced rejection after rejection but no amount of humiliation was going to stop him and after six long weeks he got an interview at a small firm that needed help with bookkeeping when they saw Jon's excellent penmanship they decided to give him a chance and told him to get to work immediately not even mentioning how much he'd get paid John was ecstatic and for the rest of his life he celebrated September 26th as a personal holiday he called job day to him it was even more important than his own birthday even though it was not a massive operation Jon's first job taught him how to deal with suppliers pay bills and see the inner workings of a real business for the first time one day his boss came in with a check for $4,000 and put it inside a safe John knew the safe's combination so when his boss was gone he opened it up just so he could hold the note in his hands hypnotized by how much it represented johon dreamed of someday making as much money as his bosses and so every morning before heading off to work he began repeating to himself I am bound to be rich on the last day of 1855 John's bosses gave him his payment $50 which meant he'd only earned a little over 50 cents a day it wasn't much but since he'd done such a good job his boss has raised his salary to $300 per year the equivalent of around $111,000 today the raise gave Jon something he deeply wanted independence from his father now with his mother's help he could finally give his family the stable life they'd yearned for and from early on in his career John personally gave around 10% of his salary to various charitable causes but after 2 years of diligent work a recession slowed the business down and one of the founders quit the firm all of his responsibilities fell onto JN who became the company's lead accountant however Jon knew the economic downturn had caused a sharp decline in the firm's revenues and he suspected that soon The Firm may have to close down completely and yet John wasn't worried his 2 years of experience in the job had given him a huge amount of confidence and so Jon was already planning his biggest move yet John D Rockefeller was ready to start his own [Music] company during his first job JN had become friends with Maurice Clark a 28-year-old chemist who worked down the street from him even though JN was just 18 years old at this point he developed a good reputation as a bookkeeper in Cleveland and one day Maurice told him he was planning on starting a produce business and suggested that they partner up together after saving up a bit of money they formed Clark and Rockefeller and got to work buying and reselling grain fish beans meat and other Foods it was tough at first John and Maurice were often exhausted from looking for customers out on the road but owning their own business gave them immense pride and even though he was a bit shy and quiet at first John was a capable salesman because he was so mature everyone called him Mr Rockefeller the older men in the industry easily trusted him and the list of clients at Clark and Rockefeller quickly grew in fact their biggest problem was that they didn't have the capital needed to scale the business and handle even more clients but JN Maurice found a smart way to solve this problem if they wanted to seek a $5,000 loan they would go around Cleveland saying their firm was looking to invest $10,000 very publicly giving the impression that they had plenty of cash this simple trick meant the banks were more willing to give them money and the extra loans they got put them in a great position when the American Civil War broke out as business picked up even more as a devout Baptist John was very very strongly opposed to slavery so he wanted the union to win the war however John was still responsible for feeding his family of six and if he stopped working they wouldn't have any income so instead of serving in the Army himself John paid $300 for a substitute and even paid to equip several more Union Soldiers the war gave a huge boost to the economy of the northern states and Cleveland became an important strategic location for the union local food prices were massively inflated so John's produ business quadrupled almost overnight in 1862 JN and Maurice cleared a profit of $177,000 over $500,000 in today's money not bad for a 23-year-old but an opportunity to multiply his wealth even more soon came across John's desk you see before electricity people used to light their homes at Night by burning oil inside of a lamp usually this oil came from whale fat but finding and hunting down whales was costly and difficult and sadly some whales had been hunted down to the point of Extinction however in 1859 someone in Pennsylvania discovered that by using a tall wooden structure known as an oil DK you could extract industrial amounts of crude oil by drilling straight into the ground mining crude oil this way was cheap and it was fairly easy profits came quickly and since so many people were made Rich by the oil boom crude oil was given the nickname black gold and that's when JN was introduced to Samuel Andrews a young man who was looking for investors to build a crude oil refinery in Cleveland which was only a day ride away from the Pennsylvania Oil regions Andrews had a huge advantage over most of the competition he discovered that if you applied sulfuric acid to crude oil it would essentially purify it and turn it into kerosene when burned kerosene lasted longer and shined brighter than crude oil it was a simple process but the secret was closely guarded by the few who had discovered it now that John and Maurice had plenty of money to spare because of how successful their produce business was they thought it would be wise to diversify their business unless they loaned Andrews $4,000 to set up his oil refinery but to begin they considered this as a side Venture John and Maurice kept managing their produce business and let Andrews handle the refinery by himself setting it up was remarkably simple and because kerosene was a superior product to crude oil began selling like crazy John couldn't ignore the numbers anymore within only a year the oil refinery had become the most profitable side of the business together JN and Maurice decided to make a bold move they abandoned their previous business and went all in on the oil industry however their initial enthusiasm was met by a massive challenge the supply of oil was always in an unpredictable State at this point oil had only been found in one small region of Pennsylvania so many people thought that it would eventually run out whenever someone struck a massive oil field an entire town of oil miners would suddenly form around the site drill every last drop and then the town would disappear just as quickly as it had formed because of this there were periods where Oil was overabundant and prices would dip as low as 10 cents but on the flip side if it seemed like the oil was running out then prices would suddenly rise all the way up to $14 so to say that the oil Market was turbulent would be an understatement to mitigate this effect slightly John decided to stay out of mining oil oil and concentrate only on refining oil but for JN and Maurice the situation was still extremely stressful when oil was easy to find they weren't as profitable as prices were low and when the wells were running dry they feared that the last drop had finally been found and they'd soon have nothing to sell the uncertainty was too much to handle for Maurice and in 1865 he agreed to sell his share of the business to John this was the Tipping Point of his career scared to his bones but with a cal exterior John agreed to buy Maurice's share of the company for $772,500 or 1. 35 million in today's money Maurice was cashing out whil John was doubling down and going all in on the seemingly risky oil business however it seemed like Jon's daily affirmation that he was bound to be rich was quickly becoming a reality because just as the deal was going down a gigantic new oil field was found in the Pennsylvania Oil regions finally undoing any doubts he had about oil running out of course the market was still very competitive so if Jon truly wanted to become as wealthy as he desired he would have to brutally crush his [Music] [Music] competition the year before buying his business partner share of the company John married a woman who shared his religious devotion even though he was now making good money John bought a modest house in Cleveland where they began to raise a family so with his home life in order and the northern economy booming after the Union Army won the Civil War everything was ready for Jon to begin building his Empire now that his partner was gone John rebranded the company under a new name Standard Oil and he got to work building a second Refinery and began exporting kerosene to Europe John was confident that the oil industry would make him extremely rich but it quickly became apparent that he needed some help so Jon took on a new partner to help him run the company a man named Henry Flagler and the two men were remarkably similar like John Henry wasn't interested in making a little money he wanted to build an Empire that's why when John told him about his ambitious plans for Standard Oil Henry was all in he was also just as religious disciplined and determined as John in fact perhaps the only difference was that Henry was even more ruthless when it came to doing business Henry approach business the same way he would approach War the only way to win was to completely crush your enemy and so John adopted this philosophy as well you see competition in the oil refining industry was quickly turning warlike now that others had uncovered how simple the refining process really was rockefeller's product was no longer unique new brands of kerosene were popping up all over the market so John and Henry began scheming and decided to form strategic alliances that would not only boost standard oil's profits but also hurt their competitors at the same time one example of this was when Jon secretly colluded with the railroads to get better transportation costs than all their competitors at the time oil was transported from one place to the other by an extensive network of trains mostly dominated by three railroad companies the New York Central the eie and the most powerful company in America at the time the Pennsylvania Railroad because of the way their routs were laid out it was beneficial for the New York Central and the Erie railroads to carry oil to refineries in Cleveland but for the Pennsylvania Railroad it was more profitable to carry oil directly to New York City or Philadelphia so the Pennsylvania Railroad declared that Cleveland would be wiped out as a refining Center and they pulled out of the city completely after this news that the largest railroad was leaving the city many refin iies in Cleveland left the city too this was a disaster for the New York Central and eie railroads who had made sizable investments in Cleveland and they were now losing customers so instead of joining the panicking crowd and leaving Cleveland John saw that the Eerie and New York Central railroads were in dire need for business and he decided to use their desperation to his advantage in exchange for a consistent flow of oil through their networks John negotiated a deal with the Erie in which Standard Oil would get a 75% discount on the railroad's official shipping costs and in exchange for a daily order of 60 car loads of refined oil John negotiated another deal with the New York Central Railroad to pay $165 per barrel shipped when the official rate was $240 so with both railroads John now had extremely favorable rate secured and even though the railroads were reluctant to accept these lower prices the guaranteed consistent shipments were irresistible to them in fact since these railroads went from Shipping all sorts of things to focusing just on oil they could simplify their operations and boost their profits so it was win-win for everyone well except for the Pennsylvania Railroad and standard oils competitors because of the deal Cleveland became the largest refining Center in the country and since the Pennsylvania Railroad had abandoned the city it was at a steep disadvantage when trying to revive their business there and of course the discounts Sean had negotiated with the railways known as railroad rebates were kept a secret to standard oils competitors and so all the other oil businesses would have to pay the full price to transport their oil on the very same trains and here's the thing because John knew for a fact that his costs were now low lower than all his competitors he was able to trigger a price War John would lower the price of his oil so that his competitors would have to do the same in order to remain competitive in the market but since John knew his competitors were paying more than him to transport the oil and thus at higher costs even if they charged the same price for their oil Jon was still making more profit he knew his competitors wouldn't be able to survive so Jon kept slashing the prices and eventually the price would go so low that some competitors would go bankrupt once they went bust Standard Oil would have way less comp competition so John could bump up the price again and charge even more than he did originally it was brutal but it was extremely effective now John knew these railroad rebates were morally dubious they gave bigger businesses hugely preferential treatment over smaller ones however it would be over a decade before any antitrust laws were passed to prevent these kind of monopolistic practices so legally John wasn't doing anything wrong and thus in the meantime this warlike strategy to crush competitors was paying off and standard oil raked an enormous profit however there was one major problem the massive surplus of oil meant oil prices had fallen as low as $240 per barrel and as more oil fields were found in Pennsylvania it seemed that the price would continue to fall the remaining competition was barely hanging on in fact John estimated that around 90% of oil refiners were actually losing money but John began to fear that his individual success could be overshadowed by a total collapse of the entire oil industry John was convinced that if they were facing a systemwide problem they needed to find a systemwide solution for it and John's solution would be to organize an even more dominant Monopoly the likes of which had never been seen [Music] [Music] before by 1872 John and Henry were ruthlessly expanding Standard Oil but oil prices had dropped another 25% they knew if they didn't do something soon the entire industry could collapse and they would fall right along with it so John decided to collaborate with the president of the Pennsylvania Railroad Tom Scott John and Scott had been Rivals after the deal John made with the other two main railroads but now Scott was reaching out to make a similar secret deal that was even more ambitious and ruthless Scott proposed a secret alliance between the largest railroads and a very select group of the largest refiners which of course included Rockefeller and thus Standard Oil and the Pennsylvania New York Central and eie railroads all formed an alliance together under the inconspicuous name of the South improvement company or sic for short the deal was that in exchange for secret 50% rebate on Transportation costs John would transport all his oil exclusively through these railroads but John wasn't content with just getting benefits for himself he designed the deal to be devastating for his competition for example when anyone outside of this secret Alliance transported kerosene through these railroads roads Standard Oil would receive a 50% rebate from the cost of their shipments as well these were known as drawbacks and they meant that standard oil's competitors would not only be paying higher prices to transport their oil on the same railroads but some of that money would be going directly to Rockefeller and to top it all off the railroads would even secretly give Jon detailed information about their competitor shipments he would know every detail of his rival's businesses and so he could undercut them by selling kerosene for cheaper prices anyone outside this secret Alliance stood no chance it was a death sentence for anyone excluded from the club and the worst of it was they didn't even know it however what many of rockefeller's critics call this whole Arrangement a Shameless power grab to John he truly believed it was the best way to save the oil industry because as things stood with so many competitors their product was getting closer and closer to being given away for free as there was so much supply of oil readily available he believed wiping out these smaller refiners would help the oil industry overall but either way it didn't matter because rumors of a railroad and refiner cartel soon began to spread when people read in the newspapers that the rates for the three most important railroads in the country had doubled overnight they knew exactly who to blame Tom Scott of the Pennsylvania Railroad and John de Rockefeller of Standard Oil as rumors of the alliance continued to spread thousands of people took to the streets the protest threatening standard oil on the Pennsylvania Railroad with violence vandalism and arson protesters hijacked standard shipments and Spilled their oil and they tore the Pennsyvania train tracks from the ground but the final blow to the SIC came when the oil miners made their counter move and boycotted the SIC without a supply of crude oil John's refineries were useless so 2 months after it was formed the SIC had been disbanded it was a humiliating event one that brought a lot of negative attention on John but John wasn't phased by it he simply decided if he couldn't control the oil industry through Shady back room deals then he would do it in public and conquer the industry by force John wanted to bring as many refin refineries under understanded oil as he could and to his surprise the SIC Fiasco had actually caused one important change in the industry despite the very public Fallout of the SIC Alliance there were still Whispers of a secret Railroad and refiner cartel with many people paranoid that there must still be some kind of secret deal in place between the big railroads and the big refiners even though there wasn't the rumors spread everywhere oil refiners were scared that if Standard Oil still had a secret deal with the railroads they would get crushed and John decided to lever this threat to his advantage in a period of 6 weeks now known as the Cleveland Massacre John managed to intimidate 22 out of the 26 oil refining companies in Cleveland into selling out for fractions of what their businesses were actually worth so even though the SIC hadn't gone ahead the fear it had created pressured many refiners into Panic selling their companies to JN plus since many other refiners were losing money anyway John would show them his company's finances so they could see how well standard was doing and to prove to them that he could Outlast them all for most refiners the choice between fighting a losing battle and Cashing Out was obvious and whenever anyone sold out John gave them only two options they could either sign a damning contract prohibiting them from ever joining the industry again or they could join Standard Oil since most competitors chose to join standard Jon had the brightest Minds in the industry working for him all those entrepreneurs who' been running their own companies were now brought under the Standard Oil umbrella into one giant company also when the new refineries came under standards ownership they outfitted them with the latest oil refining technology which drastically cut costs by mid 1873 jum was in control of an Empire with a growing number of Highly efficient refineries that together could ship out over 1 million barrels of kerosene every year he now had a monopoly over the Cleveland refineries however on September 18th 1873 a day historians called black Thursday a series of bank failures plunged the US economy into a national recession that lasted 6 years for the first time oil prices dropped not because there was too much Supply but instead because of a total lack of demand standard began operating only two of their six main refining plants in Cleveland and a year after black Thursday a single oil barrel traded for as little as 48 cents less than the cost of an equal amount of water so everyone from the miners to the railroads and the refiners were dreading their seemingly inevitable fate bankruptcy but thanks to standard oil's careful management of finances excellent credit with banks and their modernized refineries Dr is one of the only refiners in the country who was able to still clear a profit fair and as always John regarded every crisis as an opportunity he smelled blood in the water now John already dominated in Cleveland at this point which was one of the main refining centers in the country but he knew the Bleak economic conditions were a nationwide problem and so refiners in the other refining centers like Pittsburgh Philadelphia and New York were all struggling badly and thus John decided this was precisely the right time to acquire as many of them as he could so JN initiated a nationwide buyout campaign and whenever anyone was reluctant to sell out John would resort to indirect ways of pressuring them into submission for example he would buy all the available refining machinery and barrels so competitors couldn't even make or package their oil and if somehow they managed to make any oil he would Reserve every railroad for months so they couldn't even ship it anywhere another one of John's brutal business tactics was to pressure the railroads to raise prices for other refiners high enough that they would soon face bankruptcy since he had detailed records of all his competitive shipments he would wait for them to be on the verge of ruin and then he would offer to save their business by buying them up for pennies eventually everyone who Standard Oil wanted to acquire was either absorbed into the growing Giants or crushed under its pressure by the time the economy was starting to recover standard controlled over half of Pittsburgh's refining capacity the largest refineries in Philadelphia and they secured a dominant position in New York as well to exert even more control over the industry John built a network of pipelines which brought crude oil into their refineries and pumped out refined oil in large cities the pipelines meant standard Rel Less on the railroads to transport their oil and thus it further reduced their unit costs and with its pipelines covering the Eastern Seaboard of the United States like tentacles Standard Oil earned its appropriate nickname the octopus despite still only being in his 30s John D Rockefeller was now the Undisputed king of oil refining and one of the wealthiest men in the country however by now too many people had been victims of standard oil's predatory business practices the largest newspaper in America at the time even called the company the most cruel impudent piess and grasping Monopoly that ever fastened upon a country John's list of enemies was growing dangerously [Music] [Music] long for the railroad companies the oil industry was a tremendous source of business as miners needed to get oil from Wells to refineries and refiners then needed to get it to the big cities however when Standard Oil began laying a vast network of pipelines all across America's Eastern Shore the railroad companies were faced with the fact that one of their most important customers was making the mobs elad so Tom Scott the owner of the Pennsylvania Railroad decided to lay his own pipelines but he also did something he knew John wouldn't like he started building his own oil refineries now Scott was in direct competition with John so John interpreted this as declaration of war he decided to launch an allout attack against America's most powerful company first John canceled all his business with the Pennsylvania Railroad and redirected all that oil to other railroads instead then John lowered the price of Standard Oil kerosene which meant that competitors had to do the same thus reducing their profit margins and decreasing the shipment orders on the Pennsylvania Railroad and finally John convinced the New York Central and eie railroads to lower their shipping fees drastically for everyone to make sure the Pennsylvania Railroad lost even more business these strategies most definitely worked to compete with all this the Pennsylvania Railroad literally had to pay refiners to transport oil for them Scott also had to to lay off hundreds of his employees and reduce the salaries of those who stayed by 20% but John's attack didn't just affect the Pennsylvania Railroad another Big Railroad the bno had to make similar layoffs and wage cuts and thus John's attack on the Pennsylvania Railroad inadvertently caused one of the most violent labor strikes in American history dozens of people died in the commotion and in Pittsburgh alone the Pennsylvania Railroad lost 500 Freight cars 120 locomotives and 27 buildings after they were torched by protesters even JN started to get cons eared by the chaos that was unfolding before long the Pennsylvania Railroad a Goliath once thought to be Invincible had lost the battle against Standard Oil and Tom Scott was more than ready to surrender Scott was in a desperate position and John's business partner Henry who saw business as War saw this as an opportunity to crush him totally but Jon had a better idea and instead moved to coordinate a massive deal with the railroads Jon agreed to help the Pennsylvania Railroad Survive by guaranteeing 47% of standard traffic to them the New York Central that Erie and the bno got the rest of it in exchange for the steady source of shipments John demanded a very large secret rebate on the Pennsylvania's official rates he demanded even more detailed information about their competitor shipments and he wanted 20 cents for every single barrel that passed through any of the railroads as well a lot of this was similar to the secret Alliance that had been proposed before but this time Jon was the one who held the balance of power and could basically demand what he wanted the railroads had little choice and thus the deal effectively made Jon one of the most powerful men in America John basically now owned the railroads he essentially controlled the oil industry and had an allseeing eye into every one of his competitors he completely dominated Cleveland Pittsburgh and Philadelphia and there were only a few scattered refineries in New York that weren't his Standard Oil was now in control of about 90% of the entire oil refining industry however as for John's rival Tom Scott even though John had technically now struck up a deal with his company the Pennsylvania Railroad never regained its footing and Scott personally never recovered from his humiliating defeat s just a year later Scott suffered from a stroke and died shortly after what's interesting here is that many years earlier Tom Scott had been the mentor to a young Andrew caragi who was to the steel industry what John was to the oil industry Cari blamed the death of his beloved mentor and John and thus a rivalry was born between carnegi and Rockefeller the king of oil versus the king of Steel the Rivalry between these two Titans of Industry would intensify as time went on but for now both men were determined to become wealthy than the other in the midst of all this John was becoming quite a notorious public figure the fight with the Pennsylvania Railroad his rivalry with Kani and his tremendous wealth and power had all taken JN from a mysterious Oil Man in Cleveland Ohio to now one of the most controversial figures in American newspapers and yet for all his wealth Fame and power Jon didn't indulge in the extravagant lifestyle that many of his peers did when he moved to New York John spent his free time playing with his children instead of seeking the company of wealthy Bankers or celebrities and he rarely bought expensive clothes or luxuries silently managing his army of Puppets from their new office in New York John was enriched by a 90% dominance of the oil refining industry it seemed like he could now just sit back and enjoy the fruits of their labor but actually the opposite was true even though he had achieved total dominance the state of the industry was changing and fast a few years earlier Thomas Edison patented a light bulb that gave off a powerful white light for 100 hours and he was pushing to light the country with electricity instead of oil then in 1885 a huge deposit of crude oil was found in Northern Ohio these two events meant many Standard Oil Executives started to panic fearing a massive oil Surplus that would take the industry back to the days when oil was priced at 10 cents per barrel but whil this company was panicking John was calm as ever by now he was a master at turning chaotic situations into opportunities and this was exactly the crisis he'd been waiting for but before we get to that let let's talk about an opportunity for you because it's been said that attention is the new oil the people who understand how to get their message across and build an audience are the ones currently dominating in business and that's where today's sponsor school can help you school is a platform where you can create your own Community or discover new ones and having your own community means that you'll have a group of members who are naturally paying attention to your message as they engage each day on school you can create your own Community within minutes and customize it how you want your members can join for free or by paying for membership and you can share access to courses events bring people together and keep your members highly engaged using schools built-in leaderboards and gamification so if you want a place to connect with your audience school is perfect for this and if you're wanting to check out a new community to find people like you you can easily do this too school is the ideal way to discover communities or create your own just click the link in the description below to check it out for yourself [Music] up until this point Standard Oil had only focused on refining oil John had been pursuing horizontal integration taking over other refining companies who did the same thing he did but John knew that the discovery of oil in Ohio would change the oil industry and he wanted to ensure his company profited from Ohio's new oil fields so this was just the excuse he needed to begin radical plans for vertical integration where Standard Oil would now be involved in every step of the supply chain JN essentially wanted to cut out any middleman and control the entire oil industry himself from oil wells to refineries to Transportation storage and distribution and thus John doubled down on every step of the business turning standard into its own supplier transporter producer and retailer standard oil's existing operation had the strong base of industrial infrastructure it needed to make sure it kept making money while drum figured out how to profit from Ohio's new oil Fields he began buying up land in the area building hundreds of Dereks to drill for oil and laying new pipelines to transport a however it quickly became clear that Ohio's oil had one glaring problem even after it was refined it had such a terrible smell that people called it skun coil and so nobody wanted to buy it and it traded for as low as 15 cents per barrel almost everyone else gave up trying to sell the skun coil immediately but instead John hired a team of chemists to study the skun coil and within a year they'd found a way to remove the sulf in the oil which had been causing the terrible smell standard was now the only company selling this new cheaper form of oil and this gave John a massive head start start when a few years later oil began breaking out in immense quantities in Oklahoma Texas Kansas and California it was now evident that America was sitting on an ocean of petroleum and the company best Poise to take complete advantage of it was Standard Oil it was also around this time the automobiles were beginning to replace the horse and carriage and luckily for John the process of refining crude oil produces one key waste products gasoline with wealthy consumers being introduced to the automobile standard found a reason to transform a material they typically discarded into an immediate source of extra profits this meant that even when the United States was thrust into another economic depression in 1893 and 600 Banks had to close their doors John was once again prospering amidst even the worst economic conditions with Jon's Fortune growing larger than ever JN took more of a backseat in day-to-day operations at Standard Oil and began to think more about investing Elsewhere for a man as capable in business as John you'd expect he'd probably also be a decent investor but if you took a look at Jon's personal Investments at the time you'd find most of them were deep in the red John knew if he wanted to keep the generational wealth he' acquired up to this point that he needed to get his investments in order so he hired a Baptist Minister called Frederick gates to help him now it's impossible to know what John was thinking when he hired a former priest to administer his fortune but years later when John was asked who was the greatest businessman he'd ever met he pointed to Frederick and there's no doubt Frederick helped grow John's Fortune much larger with a series of strategic Investments it was also around this time that John's son John Jor graduated from University and John thought it would be a good idea to have Junior learn from Frederick Frederick taught Junior how to invest how to negotiate and before long the two of them had turned Jon's laughable portfolio into a wealth multiplication machine it was at this point that Jon told them to start making huge investments in other Industries like buying up railroad companies which would come in handy later but the most critical of these Investments was a long strip of land in Minnesota known as the masabi mountain range in this territory was 120 M long vein of the highest quality Iron Ore found to date potentially the largest in North America now iron is the main ingredient needed to produce another important material steel so when Andrew carnegi the steel King heard this news he feed that Jon was planning to compete against him in the steel business and in fact JN had been planning to do this for a long time up until now Rockefeller and kani's rivalry had really only been about who was weal but now they were in an open battle in cari's territory John was no longer content dominating the oil industry he was now coming after the steel [Music] industry John told Frederick and junor to commence mining operations in the masabi range and they undercut Kani by selling their higher quality a to his competitors at dirt cheap prices as they built up their mining operation a rumor started to spread that John was planning to further infiltrate kani's Niche and build a huge steel mill now over on Kani side he had a head start of a few decades in the steel industry which gave him considerable leverage over John but he also had two big problems firstly JN had a source of iron that was more plentiful and of a higher quality than cari's and secondly carnegi had made the mistake of assuming that iron would always be cheap and easy to find so he hadn't made any investments in iron mines during the last few years his Blind Faith had been proven wrong over time and now his supply of the most important mineral he needed was running out and so hoping to save his business caragi approached John Frederick and Junior to make a deal by the time the negotiations concluded the two sides had reached an agreement kaniki agreed to buy a minimum of 600,000 tons of ore from John's mine every year and transport all of it plus an additional 600,000 tons from his own mine exclusively through John's railroads which John now owned a few of in exchange Cari would get a secret rebate from John for supplying his railroad with so much business it was the exact same sort of mutually beneficial secret agreement that John was used to making with railroad companies for his oil Transportation except now he was the one giving carnegi a secret rebate and to seal the deal carnegi agreed to never buy land around the massabi range and John agreed never to build a steel mill the partnership was win-win for both men and so it seemed they were willing to overlook their differences if it meant they'd both profit hugely and of course at the same same time hurt both of their competitors the agreement between these two former Rivals soon made news headlines provoking a craze on Wall Streets investors hoped to get rich by investing in John's iron mines and carnegi steel mills which both looked Unstoppable now they were working together rather than competing however there was one man who had a bit more imagination than simply investing separately in their two companies and that man was JP Morgan JP Morgan realized that if he could unite Jon's investment with cari's business under a single name he could create a steel Monopoly that was more profitable than caragi steel and even larger than Standard Oil JP Morgan called it us steel and if it all worked out it could be the most valuable company in history so JP Morgan approached John and asked him how much he would sell the masabi iron mines for but to his surprise John said that Morgan should talk with his 27-year-old son John Jr JP Morgan assumed he'd be dealing with the rookie how much could this 27-year-old really know but when JP Morgan met Junior and bluntly asked him what's your price Junior was not intimidated by Wall Street wealthiest Banker he calmly responded Mr Morgan I think there must be some mistake I did not come here to sell I understood you wish to buy Junior insisted that JP Morgan had to set the price for the massabi territory which meant Junior had all the power in the negotiation Morgan was so surprised that he had to step out of his office and rethink his strategy eventually he made his offer in exchange for total ownership of the massabi mines and the existing mining operation in it JP Morgan offered a grand total of 88.5 million in US Steel stock just over 3.1 billion today later on Morgan B kani's entire steel business and Incorporated it into US steel and it became the world's first billion dollar Corporation but remember John now owned a huge chunk of that company and his us Steel stock soon appreciated to over 200 million plus thanks to the automobile boom and the need for gasoline Standard Oil was growing into an even more powerful Monopoly than it had been before not to mention that thanks to Frederick John's Investments were now in order to with all of this combined Jon's wealth continued to grow to unimaginable levels it was now spread across multiple Industries and John was finally ready to step back from the business World completely however Jon never publicly announced his retirement which was a crucial mistake as the public still closely associated him with standard oil and that would soon come back to haunt him as John was about to be involved in the most public Scandal of his [Music] career even though he was now retired Jon still owned around 30% of Standard Oil stock and because of the tremendous growth of the Auto industry he was actually getting wealthier in retirement than when he was working however because of their brutal business practices standard now had such a Negative Public Image that US president Theodore Roosevelt saw it as the perfect Target to fight against in his R to power now this wasn't the first time he tried previously Roosevelt passed a bell that punished railroad rebates but it really wasn't enough to get the public excited and the end of his first presidential term was coming up up so Roosevelt detected that the public opinion of John and standard oil was quickly turning from a mere dislike to a passionate hatred and that was largely thanks to a journalist called Ida Tarbell you see tarbell's father was one of the oil refiners who were bankrupted by John's ruthless business tactics a long time ago her father's business partner even took his own life after their wealth was destroyed by John now tbell was publishing monthly articles that told an in-depth story about the company and the man who had bankrupted her father and made her childhood Miserable as you expect she didn't have many nice things to say tbell managed to break through Jon's wall of secrecy and so the dark history of the once mysterious Standard Oil was now in full view with Jon as its protagonist his back room deals with railroads his intimidation tactics the politicians they bribed everything was fully revealed and the American public devoured the story the series even exposed Jon's father's history of scams his sexual abuse accusation and they eventually discovered his second marriage which took a heavy emotional toll on Jon and his family needless to say John never responded to anything Tarbell wrote and so his Public Image was contaminated as she publicly condemned him and his silence only angered the public further so in a few years John went from one of the most private and mysterious members of the American Elite to the National embodiment of corruption and greed now the public was dying to see JN and standard oyle pay for their crimes so as President Roosevelt approached the end of his first presidential term he saw an opportunity to use the public sentiment to his Advantage by making Standard Oil his enemy in his presidential campaign Roosevelt promised to take down the monopolies and thus when he won the re-election it was time to make good on that promise and wage war on rockafeller's Empire he launched a full-fledged investigation into Standard Oil and now the antimonopoly laws that corrupt politicians always ignored got used to their full potential Roosevelt announced that the government would prosecute standard with the full force of the United States government in a historic allout attack standard was charged with monopolizing the oil industry predatory pricing negotiating railroad rebates corporate ESPN Ag and secret ownership of competitors apart from having to fight 21 lawsuits in individual states the federal government hit standard with the largest lawsuit in history up to that point there were over a th000 exhibits 444 testifying Witnesses and over 12,000 pages of damning evidence the Standard Oil was indeed a monopoly the lawsuit was so vast that it continued years Beyond Roosevelt's presidency but his ambition to defeat Standard Oil would eventually be satisfied the evidence that standard oil was a full-fledged Monopoly came when standard's profits were examined because they were in control of 87% of oil refining in America 100% in some places standard was taking full advantage of their Monopoly status and overpricing their kerosene in order to make outrageous profits and apart from being confirmed as a monopoly evidence proved that standard had systematically bribed hundreds of politicians and knowingly broken multiple antitrust laws on May 15th 1911 after being found guilty of the crimes they'd been accused of it was ordered by the federal government to dissolve Standard Oil and reorganize its subsidiaries into separate unaffiliated companies after 41 years John's Empire had finally been dealt a fatal blow and was being split up now of course You' think breaking up an Empire of Standard Oil scale would be a losing situation for John many of his enemies like Idabel and President Roosevelt certainly thought this event was a cause for celebration but what they didn't expect was that the dissolution of Standard Oil would be the most profitable event in Jon's career you see from the outside it may have looked like standard had been ruined by the dis solution but actually it was a pretty convenient time for the company to be broken up as a lot of important changes were happening in the industry as a whole as more oil fields were found in places like Texas and California independent refiners were starting to find their footing in New Markets faster than standard could absorb them the Middle East and Russia were now looking like their first worthy International competitors as well and at the year before the verdict gasoline had surpassed kerosene sales and so the entire focus of the industry was changing and because John still owned around a quarter of Standard Oil when it was broken up into 30 four different companies he got his share of stock in all of them and after they were open to public trading investors nearly tripled the value of his shares so John became even richer by the end of 1911 the same year that standard oil was dissolved John was getting close to becoming the world's first billionaire Andrew Kani was now left far behind in the fight for the title of world's richest man but now that Jon had achieved such unimaginable wealth just one question remained what was he going to do with all that money but before we get to the next chapter if you sell anything online you're going to want to know about today's sponsor shipstation shipstation software makes e-commerce so much easier and saves you both time and money firstly ship station integrates everywhere you sell online including Amazon Etsy eBay Shopify and lots more and it lets you manage all your orders in one simple dashboard secondly ship station lets you easily automate shipping tasks they have robust automations and Reporting which makes scaling your business so much easier and thirdly when you use ship station you get access to industry-leading shipping rates from USPS UPS DHL and global Post and we're talking discounts of up to 84% off the normal price over 130,000 companies have grown their e-commerce businesses with ship station already and if you use my link you can literally get a free trial to test it out risk-free it's really quick to get started so set your business up for holiday season success with ship station go to shipstation.com magnates today and sign up for your free 60-day trial that's shipstation.com slm magnate [Music] John was the wealthiest man in the world and now that he was retired and that his old company had been dissolved he decided to dedicate the rest of his life to philanthropy and even though he was over 70 years old at this point John's sense of Duty meant that he was as energetic about charity work as he was in business throughout his life John told people that he was a soldier of God sent to Earth and given money for the benefit of mankind and John really did want to make an impact on the world and to be fair ever since John got his first paycheck John had given various organizations at least 10% of the money he made and even when his sizable donations were publicly labeled as just ways to improve his image Dron continued to give away a lot of money anonymously as well however John wanted to make his philanthropy a well old machine that continued his legacy so in 1913 he started the Rockefeller foundation with the two people who were previously responsible for managing his personal Investments Frederick Gates and his son John Jr by now John had given away almost 150 million and in the future he would personally give a grand total of 540 million to add to that Frederick and Junior went on to give away 537 million more through the foundation and Junior personally gave away an additional 540 million of the wealth he inherited from his father in its over 100e history the Rockefeller Foundation has given countless billions of dollars in total and it's still making donations today calculating the total amount and adjusting it for inflation is complicated but it's safe to say that the amount is well into the tens of billions ranking John amongst the most generous philanthropists in history the Rockefeller Foundation focused on two main issues in its Inception medicine and education and it's undoubtedly made a meaningful contribution to Society on the side of medicine John's donations to the Laboratories and medical research facilities helped spur an era of scientific innovation that saved hundreds of thousands of lives from diseases like hookworm malaria and menitis on the side of Education John's money helped save the Southern United States from abject poverty and built of schools all around the world including two of the world's most prestigious research institutions today the Rockefeller Foundation contributes even more to many other causes and it all started with a 16-year-old who had to go into business to help feed his family however this of course all raises an interesting moral debate on what should we really think about Rockefeller clearly John's Legacy has two sides to it as the author of his biography writes what makes him so problematic is that his good side was every bit as good as his bad side was bad M it's almost as if there were two completely different John D Rockefellers there's undeniably a charitable and dutiful side to him but there's also a corrupt unforgiving and brutal side both sides are true but whatever you think of John D Rockefeller the fact remains that he's one of the most fascinating businessman in history maybe that's why after John died at 97 years old his son who had the same name said there was only ever one John D Rockefeller but if you think rockefeller's story was controversial wait until you see the scandals Andrew kaniki was involved with just click the thumbnail on screen now and I'll see you there in a second cheers

Channel: MagnatesMedia

Views: 4,503,348

Keywords: John D Rockefeller, Rockefeller, rockefeller, business, business magnate, magnate, magnates, magnatesmedia, business titan, robber barron, titans of industry, richest man in the world, richest man in history, richest self made man ever, billionaire, billionaires, worlds first billionaire, world's first billionaire, rockefeller documentary, rockefeller story, the story of rockefeller, how rockefeller got rich, standard oil, businesses, wealth, money, rich, richest, wealthy, invest

Id: fNh_GyRbJDA

Length: 49min 32sec (2972 seconds)

Published: Sun Nov 19 2023