54
The Sherman Anti-Trust Act was designed to restore competition, but it was
loosely worded enough in the definition of critical terms like “trust,” “monopoly,”
and “restraint of commerce” that armies of high-powered lawyers attacked it on the
details and weakened it considerably. The ineffective federal anti-trust law led a
number of states to try regulating trusts within their boundaries, which typically
failed. In a classic example, the Ohio Supreme Court ordered the Standard Oil Trust
to be dissolved in 1892. Rockefeller responded by downgrading the Standard Oil
Company of Ohio, the host of the Standard Oil Trust, into a smaller subsidiary company known as SOHIO that no longer produced and refined petroleum but only
distributed the finished products. The operations of the Trust were transferred to
New York City and elsewhere to remove them from the jurisdiction of the Ohio
court. Rockefeller and his Trustees then incorporated Standard Oil Company (New
Jersey) as a holding company in 1899, moving the assets and interests formerly
controlled under the Standard Oil Trust in Ohio to the New Jersey company. The
Trust had been taken apart and brazenly reconstituted in another state.
Despite the weaknesses in the Sherman Anti-Trust Act, President Theodore
Roosevelt was able to use it successfully in 1904 to dissolve Northern Securities
Company in Minnesota as part of his “trust busting” campaign. With a precedent
thus being set, President William Howard Taft invoked the Act in 1911 against both
the Standard Oil Company and the American Tobacco Company. The Standard Oil
Company (New Jersey) was ordered to divest itself of its major holdings—33 companies in all plus the original Standard Oil of New Jersey (Tarbell and Chalmers
1966). No one felt sorry for Rockefeller, however. He still held significant amounts
of stock in the resulting 34 newly independent companies, and as the petroleum
industry continued to grow, he became wealthier than ever.
Petroleum made John D. Rockefeller the country’s first billionaire, and for a time
the richest person in the world. After the sudden and unexpected death of wealthy
financier J.P. Morgan in 1913, both Rockefeller and his long-time nemesis Andrew
Carnegie decided to turn to charitable work to leave a more lasting legacy. The two
old rivals soon began competing against each other to see who could give away the
most money. Steel magnate Carnegie focused on education and the arts, while
Rockefeller became a benefactor of medical science. He created the Rockefeller
Foundation in 1913 to fund public health studies and support other charities. He had
founded the Rockefeller Institute for Medical Research in 1901, which he expanded.
It became Rockefeller University in 1965 (Hanson 2000). Rockefeller eventually
won the contest by out-living Carnegie, who died in 1919. Rockefeller survived
another 18 years and continued to support charitable work until his death in 1937 at
the age of 97.
Despite giving away considerable amounts of money in his later years,
Rockefeller’s assets at his death were still estimated to be US $1.4 billion, equivalent to 1.5% of the U.S. Gross Domestic Product (GDP) for that year (Hanson
2000). Today that percentage of the GDP would be worth some $32 billion, making
him one of the top ten wealthiest people in the nation. Even after all this time, he
remains a controversial figure. The young Rockefeller’s rapacious capitalism compared to his generous philanthropy in later years led one of his biographers to
3 The History of Oil & Gas Development in the U.S.
The Sherman Anti-Trust Act was designed to restore competition, but it was
loosely worded enough in the definition of critical terms like “trust,” “monopoly,”
and “restraint of commerce” that armies of high-powered lawyers attacked it on the
details and weakened it considerably. The ineffective federal anti-trust law led a
number of states to try regulating trusts within their boundaries, which typically
failed. In a classic example, the Ohio Supreme Court ordered the Standard Oil Trust
to be dissolved in 1892. Rockefeller responded by downgrading the Standard Oil
Company of Ohio, the host of the Standard Oil Trust, into a smaller subsidiary company known as SOHIO that no longer produced and refined petroleum but only
distributed the finished products. The operations of the Trust were transferred to
New York City and elsewhere to remove them from the jurisdiction of the Ohio
court. Rockefeller and his Trustees then incorporated Standard Oil Company (New
Jersey) as a holding company in 1899, moving the assets and interests formerly
controlled under the Standard Oil Trust in Ohio to the New Jersey company. The
Trust had been taken apart and brazenly reconstituted in another state.
Despite the weaknesses in the Sherman Anti-Trust Act, President Theodore
Roosevelt was able to use it successfully in 1904 to dissolve Northern Securities
Company in Minnesota as part of his “trust busting” campaign. With a precedent
thus being set, President William Howard Taft invoked the Act in 1911 against both
the Standard Oil Company and the American Tobacco Company. The Standard Oil
Company (New Jersey) was ordered to divest itself of its major holdings—33 companies in all plus the original Standard Oil of New Jersey (Tarbell and Chalmers
1966). No one felt sorry for Rockefeller, however. He still held significant amounts
of stock in the resulting 34 newly independent companies, and as the petroleum
industry continued to grow, he became wealthier than ever.
Petroleum made John D. Rockefeller the country’s first billionaire, and for a time
the richest person in the world. After the sudden and unexpected death of wealthy
financier J.P. Morgan in 1913, both Rockefeller and his long-time nemesis Andrew
Carnegie decided to turn to charitable work to leave a more lasting legacy. The two
old rivals soon began competing against each other to see who could give away the
most money. Steel magnate Carnegie focused on education and the arts, while
Rockefeller became a benefactor of medical science. He created the Rockefeller
Foundation in 1913 to fund public health studies and support other charities. He had
founded the Rockefeller Institute for Medical Research in 1901, which he expanded.
It became Rockefeller University in 1965 (Hanson 2000). Rockefeller eventually
won the contest by out-living Carnegie, who died in 1919. Rockefeller survived
another 18 years and continued to support charitable work until his death in 1937 at
the age of 97.
Despite giving away considerable amounts of money in his later years,
Rockefeller’s assets at his death were still estimated to be US $1.4 billion, equivalent to 1.5% of the U.S. Gross Domestic Product (GDP) for that year (Hanson
2000). Today that percentage of the GDP would be worth some $32 billion, making
him one of the top ten wealthiest people in the nation. Even after all this time, he
remains a controversial figure. The young Rockefeller’s rapacious capitalism compared to his generous philanthropy in later years led one of his biographers to
3 The History of Oil & Gas Development in the U.S.