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: