How Did John D. Rockefeller Get So Rich? Standard Oil, Its Breakup, and a Giant Fortune Given Away

John D. Rockefeller (1839–1937) got rich by building Standard Oil, founded in 1870, into a company that by 1900 controlled about 90 percent of the American oil business, using relentless cost-cutting, mergers with rivals and secret discounts from railroads. In 1916 he became the first American billionaire. His story has two very different halves: a ruthless businessman whose company was broken up by the Supreme Court, and one of the most influential philanthropists in history.

A bookkeeper at sixteen

Rockefeller was born on 8 July 1839 in Richford, New York. His family moved several times, eventually settling near Cleveland, Ohio. At 16 he got a job as an assistant bookkeeper at a Cleveland produce firm.

Bookkeeping shaped him for life. He loved precise numbers, tracked every expense, and later ran his giant company with the same attention to detail, famously looking for waste in the smallest processes.

Into oil

In the 1860s, after oil was discovered in western Pennsylvania, a chaotic boom began. Hundreds of small producers and refiners competed, prices swung wildly, and many businesses failed. Rockefeller decided the money was not in drilling, which was risky, but in refining crude oil into kerosene for lamps. He invested in a refinery, and in 1870 he and his partners founded Standard Oil.

How Standard Oil took over

Rockefeller's strategy combined efficiency with aggressive tactics:

• Scale and efficiency. Standard Oil built large, efficient refineries and used every by-product, cutting costs below its competitors.
• Railroad rebates. It negotiated secret discounts from railroads for shipping oil, an advantage smaller rivals could not get.
• Consolidation. It bought out or merged with rival refiners, often after undercutting their prices.

By 1900 the company controlled about 90 percent of the US oil business. Supporters said Standard Oil brought order and cheap kerosene; critics said it crushed competition. Rockefeller is reported to have said that "competition is a sin".

Ida Tarbell and the backlash

Public anger grew. In 1904 the journalist Ida Tarbell published The History of the Standard Oil Company, a detailed exposé of the company's methods that became one of the most famous works of investigative journalism in American history. Her own father had been an oil producer hurt by Standard's tactics.

The breakup of 1911

The US government sued Standard Oil under antitrust law. In 1911 the Supreme Court ordered the company broken into 34 separate companies. Several of those pieces grew into major oil companies that still exist, including the predecessors of ExxonMobil and Chevron.

Ironically, the breakup made Rockefeller even richer, because he held shares in all the new companies, and their combined value rose.

Giving it away

Rockefeller was a devout Baptist who did not drink or smoke and who had given part of his income to charity since his first job. As his fortune grew, he turned giving into a large, organised enterprise, guided by advisers who aimed to tackle the root causes of problems rather than just relieve suffering.

He funded the University of Chicago, created the Rockefeller Institute for Medical Research in 1901 and the Rockefeller Sanitary Commission in 1909, and established the Rockefeller Foundation in 1913. The sanitary commission's campaign helped nearly eradicate hookworm, a parasitic disease that was widespread in the American South. In total, his giving is estimated at about $530 million.

He died on 23 May 1937, at 97.

A double legacy

Rockefeller remains a symbol of both the dangers of monopoly and the possibilities of large-scale philanthropy. Modern antitrust law and modern foundations both carry his imprint. Whether you see him as a "robber baron" or a builder depends on which half of his life you emphasise; the honest answer is that he was both.

Learn with Rockefeller: English phrases about business

Phrase	Meaning	Example
to corner the market	to control most of the supply of something	The company tried to corner the market.
to cut corners	to do something cheaply or badly to save time or money	Don't cut corners on safety.
to give back	to help society after you succeed	She gives back by mentoring students.
a household name	something everyone knows	Rockefeller became a household name.
to break up	to split into separate parts	The court broke up the company.

Try this: Rockefeller tracked every expense in a notebook. Track how many minutes you spend on a language this week, then write three English sentences about it using "cut corners" and "give back".