John D.
Rockefeller Defends his Business Practices
For decades,
the name John D. Rockefeller [1839-1937] was almost synonymous with wealth,
power, and business practices of American capitalism. The son of a peddler,
Rockefeller began as a clerk. By the time he was 31, he had transformed a
highly successful produce business into the Standard Oil Company, the largest
refining company in the world. By 1882, the Standard Oil Trust controlled
nearly all oil refining and distribution in America. In 1899, Rockefeller made
this statement to a government commission.
Question. To what advantages,
or favors, or methods of management do you ascribe chiefly the success of the
Standard Oil Company?
Answer. I
ascribe the success of the Standard to its consistent policy to make the volume
of its business large through the merits and cheapness of its products. It has
spared no expense in finding, securing, and utilizing the best and cheapest
methods of manufacture. It has sought the best superintendents and workmen and
paid the best wages. It has not hesitated to sacrifice old machinery and old
plants for new and better ones. It has placed its [factories] at the points
where they could supply markets at the least expense. It has not only sought
markets for its principal products, but for all possible by-products. . . . It
has not hesitated to invest millions of dollars in methods of cheapening the
gathering and distribution of oils by pipe lines, special cars, tank steamers,
and tank wagons. It has erected tank stations at every important railroad
station to cheapen the storage and delivery of its products. It has spared no
expense in forcing its products into the markets of the world. . . .
Question. What are . . . the
chief advantages [of] industrial combinations . . .?
Answer. All the
advantages which can be derived from a cooperation of persons and aggregation
of capital. . . It is too late to argue about advantages of industrial
combinations. They are a necessity. And if Americans are to have the privilege
of extending their business in all the states of the Union, and into foreign
countries as well, they are a necessity on a large scale, and require the
agency of more than one corporation. Their chief advantages are: