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The Two Mr. Rockefellers

<< Back to Robb Report, Robb Report September 2014

The U.S. landscape has certainly had many architects, but no single family has more visibly changed the terrain than the Rockefellers. New York’s Museum of Modern Art, the Grand Teton National Park, and Rockefeller Center—not to mention the less ambitious but imaginative resorts featured in this month’s issue—all count among that clan’s contributions. Yet these and other useful institutions are not the sole legacy of this dynasty, whose name, for earlier generations, conjured somewhat darker associations. The founder of the fortune that made possible all of this largesse, after all, was more apt to inspire dread than optimism among his contemporaries. 

God and the devil, it has been said, are one, and traits of both mingled in John Davison Rockefeller Sr. (pictured). The nonagenarian who smilingly dispensed nickels to children before the news cameras during the Great Depression had conspired decades before to take control of the emerging oil industry through illicit means. A lifelong Baptist who neither drank nor smoked, he was untroubled by his deeds: Financial success, he believed, was an outward manifestation of divine favor. “God gave me my money,” he asserted.

The source of this curious casuistry can be found, in part, with his parents. Born in 1839 to Eliza Davison and William Avery Rockefeller, the future oil baron was forged in a domestic crucible that pitted his prudish mother’s religious fervor and thrift against his father’s money schemes and blatant disregard for moral conventions. Known as “Devil Bill,” the older Rockefeller was a con man who made his living through a variety of deceptions. Eliza, the daughter of a well-to-do landowner in Richmond, N.Y., was beguiled by his charm, and Devil Bill, himself charmed by the prospect of her dowry, broke off his engagement to his housekeeper in order to woo his new intended bride. Though the marriage to Eliza took place in 1837, Devil Bill maintained his liaison with his former fiancée, siring children with both women. 

Rockefeller’s father took every opportunity to cheat his sons to sharpen their wits, and he unexpectedly called in loans to teach them to keep cash in reserve. The lack of ready cash—and the hardships it imposed on his mother—doubtless fueled Rockefeller’s youthful ambition. “Someday,” he told a friend, “I want to be worth a hundred thousand dollars.”

Rockefeller developed the habit of recording every transaction, however insignificant, in his personal ledger—a discipline derived from his mother’s careful economy. He began his career as an assistant bookkeeper and relished counting every coin. He made a religion of numbers and was less interested in the commercial activities behind the accounting figures than in the abstract sums themselves. In 1863, he invested in a Cleveland plant and, paying for substitute soldiers to serve in his stead during the Civil War, reaped the rewards of conflict; several years later, this concern—the largest refinery in the city—became the basis for Standard Oil of Ohio.

Standard Oil’s dominance derived from a scheme worthy of Devil Bill. Rockefeller secretly partnered with the railroads to raise transportation costs on independent producers; at the same time, he received not only steep discounts but also rebates on the fees that his smaller competitors paid. This arrangement enabled him to buy up smaller operations cheaply. By 1880, Standard Oil—an organization consisting of 41 companies in different states—produced 90 percent of the refined oil in the United States. “The day of combination is here to stay,” Rockefeller declared. “Individualism has gone, never to return.”

In 1911, when the Supreme Court ruled that Standard Oil was in violation of the Sherman Antitrust Act of 1890 and Rockefeller’s life’s work was dismantled, the man who as a youth dreamed of $100,000 became the world’s first billionaire thanks to the greater valuation of the more than 30 newly created companies. But his beloved numbers were catching up to him. “Your fortune is . . . like an avalanche!” warned an adviser. “You must distribute it faster than it grows! If you do not, it will crush you and your children and your children’s children!”

In 1913, the tycoon yielded to his better nature, forming the Rockefeller Foundation “to promote the wellbeing of mankind throughout the world.” Still, a measure of his father, the confidence man, lingered. When asked about his tactics, he answered slyly. “We were all in a sinking ship,” he said, “if existing cutthroat competition continued, and we were trying to build a lifeboat to carry us all to the shore. You don’t have to threaten men to get them to leave a sinking ship in a lifeboat.”