Disturbing History - John D. Rockefeller Sr. The Man Who Bought the Story

Episode Date: August 5, 2026

In February of 1908, a reporter for Joseph Pulitzer's New York World walked into a drugstore in Freeport, Illinois, put a photograph on the counter, and finally closed a manhunt that had run for seven... years. The man in the picture had died there two years earlier under the name Doctor William Levingston. He had a wife in Illinois and a wife he had never divorced back in New York, and the son he walked away from was John Davison Rockefeller, the richest man in the world.This is part one of a two-part series, and it covers the father and the son who spent seventy years being his opposite in every visible way and identical to him in the one way that made him rich. We start with Devil Bill, the traveling con man who kept his mistress under his wife's roof, fathered children by both women in the same two years, sold cancer cures for twenty-five dollars a consultation, and was indicted for rape in Cayuga County in 1849 before running ahead of the sheriff.Then we follow his second son from a ten-cent account book called Ledger A to the Cleveland Massacre, where the fear of a secret railroad scheme emptied twenty-two of twenty-six refineries into his hands in six weeks.Along the way there is the drawback, the contract clause that made a competitor pay his own executioner every time he shipped a barrel.There is the war Rockefeller declared on the largest railroad in America and won in nine months. There is the paid informant network inside the freight offices that the Interstate Commerce Commission found still running twenty-eight years after it was exposed. There is the sabotage trial in Buffalo that most accounts get wrong, and I explain exactly how, including the part where Rockefeller stood up in that courtroom and shook his fist at the plaintiff.There are the Merritt brothers of Duluth, who found the Mesabi Range and were made to sign a paper saying they had been treated fairly as the price of the money they needed to live on.And there is the family nobody saw. A daughter dead at forty in Cannes. Another who went to Zurich to be analyzed by Carl Jung, stayed eight years, and quietly paid James Joyce a monthly stipend while he wrote Ulysses. A brother who dug his own children out of the family plot rather than leave them under his brother's monument.And a ranch bought in North Dakota in 1881 on one condition, which proves the richest man alive knew his father was a bigamist and managed that secret for twenty-seven years without saying a single public word about it.The episode ends where the Supreme Court broke Standard Oil into thirty-four companies in 1911 and made him the first billionaire in American history. Part two takes up his son, Ludlow, and the invention of public relations as a paid profession.Email BrianJoin Our FREE NewsletterGet Brian's Books Leave Us A VoicemailVisit Our WebsiteHave a forgotten historical mystery, disturbing event, unsolved crime, or hidden conspiracy you think deserves investigation?Send your suggestions to brian@paranormalworldproductions.com.Disturbing History is a dark history podcast exploring unsolved mysteries, secret societies, historical conspiracies, lost civilizations, and the shadowy stories buried beneath the surface of the past.Follow the show and enable automatic downloads so you never miss a deep dive into history’s most unsettling secrets.Because sometimes the truth is darker than fiction.

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Starting point is 00:00:00 Some stories were never meant to be told. Others were buried on purpose. This podcast digs them all up. Disturbing history peels back the layers of the past to uncover the strange, the sinister, and the stories that were never supposed to survive. From shadowy presidential secrets to government experiments that sound more like fiction than fact, this is history they hoped you'd forget. I'm Brian, investigator, author, and your guide through the dark corner.
Starting point is 00:00:30 of our collective memory. Each week I'll narrate some of the most chilling and little-known tales from history that will make you question everything you thought you knew. And here's the twist. Sometimes, the history is disturbing to us. And sometimes, we have to disturb history itself, just to get to the truth.
Starting point is 00:00:49 If you like your facts with the side of fear, if you're not afraid to pull at threads, others leave alone. You're in the right place. History isn't just written by the victors. victors. Sometimes, it's rewritten by the disturbed. In February of 1908, a reporter for Joseph Pulitzer's New York World walked into a drugstore in Freeport, Illinois, laid a photograph on the counter in front of the old druggist working there, and asked him whether he had ever seen the man in
Starting point is 00:01:27 the picture. The world had been hunting that face for the better part of seven years. Pulitzer had posted a reward of $8,000 for anybody who could say where the man was living, and he had sent his best people out across the country after him, and every one of them had come back with nothing. The dr. dr. dougist looked at the photograph and said that he knew him. He knew him as Dr. William Levingston, who used to winter in Freeport with his wife Margaret, and who had died there not quite two years before. Dr. Levingston had another name. He was William Avery Rockefeller, and he had a wife in Illinois and a wife he had never divorced back in New York. And the son he had walked away from more than 50 years earlier was John Davison Rockefeller, the richest man in the world.
Starting point is 00:02:10 I started this as one episode, but it quickly became something else. There's the father, the con man with the invented name and the criminal indictment. There's standard oil, which is not a story but a 20-year campaign of rebates and drawbacks and paid informants and sabotage trials and buyouts conducted at gunpoint, financially speaking. And then there's the family, which runs forward through the sun into a massacre in Colorado, into the invention of public relations as a paid profession, into medical research that saved a great many lives, into money that went to German eugenics laboratories in the 1920s,
Starting point is 00:02:47 and into a dynasty that shaped this country for another 80 years after the old man was in the ground. So we're doing two. Tonight is John D. Rockefeller Sr., from a farmhouse in Richford, New York, to the Supreme Court decision that broke his company into pieces and left him richer than he had ever been in his life. Next time is his son, and what this family did with the money and the name once they had both of them. And we're starting with the father, because almost nothing about the son makes sense until you know him. William Avery Rockefeller was a big, loud, good-looking man who made his living by moving,
Starting point is 00:03:24 and he turned up in the hill country of Tioga County, New York, sometime in the 1830s, with a wagon and a line of patter. He peddled notions and trinkets. He traded horses and he shot well, and he was free with money whenever he had any, which was part of what made him so hard for the neighbors to pin down. For stretches of those years, he also worked as a deaf and mute peddler,
Starting point is 00:03:49 carrying a slate and riding on it rather than speaking, and there's no evidence that anything was ever wrong with his hearing at all. The account comes from people in that country who knew him, and Ron Chernow, who did the deepest documentary work anybody has done on this family, treats it as settled. A man who cannot hear does not have to answer questions, and a man who cannot speak cannot be caught contradicting himself. And Bill Rockefeller understood that, before he was 30. Before he married, he had been courting a local girl named Nancy Brown, and a cousin of the family said flatly why he stopped. Nancy Brown was poor, and Eliza Davidson's father was a prosperous farmer
Starting point is 00:04:30 who intended to hand his daughter $500 on her wedding day. So Bill married Eliza in 1837 and took the money. And then he brought Nancy Brown into the house as a housekeeper. The arrangement that followed inside that farmhouse is one of the stranger things I've come across in American domestic life. Eliza gave birth to a daughter named Lucy in 1838. And a few months after that, Nancy Brown gave birth to a daughter named Clorinda. And on the night of the 8th of July, 1839, in a front bedroom that measured about 8 feet by 10, Eliza delivered a son they named after her own father, John Davis and Rockefeller. Several months later, Nancy Brown delivered a second daughter, Cornelia.
Starting point is 00:05:14 Four children under one roof inside of about two years. alternating between the wife and the housekeeper, which means the most famously self-controlled man in the history of American business, came into the world with an illegitimate half-sister on either side of him in the birth order. It ended the way those things usually end, which is that Eliza's brothers came down from Moravia and made Bill send Nancy Brown home to her parents at Harford Mills with both of her daughters, and in 1843 the family moved to Moravia themselves. So the boy came up in a house where his father, had kept a second woman under his mother's roof and vanished for months at a time and came home with money nobody could account for and where his mother held the entire operation together with schedules
Starting point is 00:05:58 and scripture and a birch switch there's a story he told about that switch for the rest of his life and he told it as a joke on himself his mother started whipping him for something and he explained that he had not done it and she stopped considered it and then finished the whipping anyway on the grounds that it would count toward the next time. On the 1st of May, 1848 in the town of Moravia, a young woman named Anne Vanderbeek accused William Avery Rockefeller of raping her, while she had been working in the Rockefeller household. On the 26th of July, 1849, a grand jury in Cayuga County indicted him, and the document is still in the courthouse at Auburn. The indictment says in the legal language of the time that he made an assault upon Anne Vanderbeek,
Starting point is 00:06:47 and that he did violently, and against her will, feloniously ravish and carnally know her. He was never tried, because he was gone out of the county before anybody could arrest him. The paperwork left behind by that flight is almost as damning as the indictment itself. Eliza's own father, John Davison, sued his son-in-law in the Supreme Court of Cayuga County over money he was owed, and in his filing he states that Bill had come to him asking for help making bail on the rape charge, and that he had not laid eyes on the man since. And Eliza herself went to the authorities and reported that her husband had absconded
Starting point is 00:07:23 and could not be found within the state. Bill sold the Moravia property and moved the family down to Owego. And in 1853, he sent them on to Ohio, first to Strongsville and then to Cleveland. And after that, his appearances at home got rarer and more theatrical, and his money got harder and harder to trace. Somewhere in there, he reinvented himself one more time. and this was the version of him that paid best.
Starting point is 00:07:48 He became a botanic physician. He printed up cards and handbills, and he grew his hair long, and he worked the small towns of the Midwest and Canada selling patent remedies out of a case, and he told people he could cure cancer. He charged as much as $25 for a consultation in an era when a working man might bring home a dollar a day, and he was always in the next county by the time anybody found out
Starting point is 00:08:11 whether the cure had taken. I spent 16 years in law enforcement, and I've read a lot of statements from people running that exact scheme, and the architecture never changes. You need a claim big enough that the mark will pay anything, a product nobody can disprove on the spot, and a travel schedule that puts you over the county line before the results come in. Bill Rockefeller had all three of those, and he was genuinely good at it, good enough to keep two households going at once.
Starting point is 00:08:39 He also sat his sons down and taught them, out loud, and on purpose, that money was a contest between people. He would lend them money and then call the loan in early without warning. He would make a bargain with one of them and then worked the terms against him. And a neighbor wrote down what Bill said about it, which was that he cheated his boys every chance he got, and that the whole point of it was to make them sharp. It worked. John D. Rockefeller became the sharpest man of his generation at precisely the thing his father
Starting point is 00:09:10 was describing, and at the same time, he was. He became the most rigid, most self-denying, most relentlessly respectable figure in American business. And I do not think those two things are unrelated. He spent 70 years being the opposite of his father in every way anybody could see, and identical to him in the one way that made him rich. John enrolled at Central High School in Cleveland, which was a genuinely good public school, and he was a slow and thorough and methodical student who was better with numbers than
Starting point is 00:09:40 with anything else. and he left before he graduated. In the spring of 1855, he took a 10-week course at Folsom's Commercial College learning bookkeeping and banking and commercial law. And then he went looking for work. And the way he went looking tells you who he already was at 16 years old.
Starting point is 00:09:58 He made a list of every firm in Cleveland he considered reputable, and he walked to each one of them in order. And when he got to the bottom of the list, he went back to the top and walked it again. He did that six days a week, for six weeks. On the 26th of September, 1855, the produce commission house of Hewitt and Tuttle told him to take off his coat and get to work, and nobody discussed what they were going to pay him. He worked more than three months before he saw any money at all, and he observed that anniversary,
Starting point is 00:10:29 the 26th of September, every single year for the rest of his life. He called it job day, and he flew a flag at the house, and he was still marking it when he was in his 90s, and he thought more of it than he did of his own birthday. Late in life, he said that he still trembled when he asked himself what would have become of him if he had not gotten that job. When you set that against what he had watched money do to his mother's household, it reads to me less like ambition, and more like a man who never stopped being relieved. He bought a little account book for 10 cents and wrote Ledger A on it, and he put down every penny that came in and every penny that went out, and he kept that book in a safe for the rest of his life
Starting point is 00:11:11 and would take it out to show visitors when he was an old man. Out of those first wages, he gave money to the Erie Street Baptist Mission Church and to a black man in Cincinnati who was buying his wife out of slavery, into a black congregation in Cleveland, and he recorded all of it in the same careful hand he used for the cost of his laundry. He was giving away something like 6% of what he earned at 16, and better than 10% by the time he was 20. He became a trustee of that church at 21,
Starting point is 00:11:44 and he stayed a hard-shell Baptist his entire life. He never drank and he never smoked. He was a serious temperance man, and he taught Sunday school for decades, and none of that was performance, because for the first 30 years of it, there was nobody watching. In 1864, he married Laura Celestia Spellman,
Starting point is 00:12:03 whom everyone called SETI, and whom he had known since Central High. Her father Harvey Spellman was an abolitionist who had worked the underground railroad in Ohio, and she was every bit as devout as her husband and considerably better educated, and the marriage lasted 51 years. People tend to describe that marriage as cold, and I think what they are actually describing is her religion, because the letters between those two do not read cold at all.
Starting point is 00:12:30 He went into business for himself in 1859, at 19 years old, with an Englishman named Morris Clark. Clark proposed the whole thing and put up $2,000, and Rockefeller had about $800 saved, so he went to his father for the rest, and his father lent him $1,000 at 10% interest, and then, entirely in character, called the loan in early, just to see what the boy would do. Their first full year in business was 1860, and their second was the first year of the Civil War. Rockefeller did not serve. He was 22 when it started, and he was supporting his mother and his younger brothers and sisters, which was the reason he gave, and when the draft came, he did
Starting point is 00:13:13 what a great many men with money did, and paid for substitutes to go in his place. He paid for more than one, and some accounts put the number as high as 20 or 30 across the length of the war. It was legal, and it was common, and it was also about as clear a demonstration as you could ask for, of what money could buy in that country. His younger brother Frank enlisted at 16 in Company A of the 7th Ohio infantry and was wounded twice. The second wound bad enough to send him home for good, and that difference sat between those two brothers for the next 50 years and got worse the whole time. We will come back to Frank, because the way it finally ended between them is one of the ugliest things in this entire story. The war made Clark and Rockefeller wealthy, because army contracts and
Starting point is 00:14:00 wartime inflation drove commodity prices up and the firm's commissions rose right along with them. And by 1862, the partners were looking for somewhere to put the profits. Meanwhile, something new had opened up in western Pennsylvania. In August of 1859 at Titusville, a former railroad conductor named Edwin Drake drilled a well specifically looking for oil and struck it at 69 feet. And within three years, the Oil Creek Valley was a solid chaos of derricks and boom towns and teamsters and speculators. And crude was selling for $20 a barrel one month and,
Starting point is 00:14:36 pennies the next. Rockefeller went down there and had a look and came home and did not put a dollar into drilling. He had just watched a business where a man's whole fortune turned on, where a drill bit happened to stop. And that was the one thing in the world he had no interest in owning. Refining was another matter entirely, because refining was a process, and a process could be measured and controlled and improved. Stay tuned for more disturbing history. We'll be back after these messages. In 1863, the partners went in with a mechanic named Samuel Andrews and built a refinery on Kingsbury Run down in the industrial flats of Cleveland, which was a shrewd place to put it, because the city sat on Lake Erie and had more than one rail line running east. And that meant a refiner in Cleveland could set shippers against each other in a way a refiner in Pittsburgh simply could not.
Starting point is 00:15:32 Within two years, the refinery was earning more than the produce business, and Rockefeller wanted to borrow heavily and expand, while the Clark brothers wanted to go carefully. And in February of 1865, they agreed to settle the argument by auctioning the refinery between themselves. The bidding opened at $500 and climbed past $60,000, and Rockefeller took it at $72,500, which was a great deal more money than he had. He got it anyway. He was 25 years old, and he said later that his career began that day. After that, he started assembling something nobody in this country had ever built. He brought in his brother William to run a second refinery and then the New York Export Office, and he brought in Henry Flagler, who had a whiskey distiller named Stephen Harkness standing behind
Starting point is 00:16:20 him with Capitol, and Flagler turned out to be the most important hire of Rockefeller's life. What Flagler understood was railroads. The trunk lines in the 1860s were locked in a rate war and desperate for guaranteed tonnage. And Flagler worked out that a shipper who could promise a railroad a steady and enormous and entirely predictable stream of freight was in a position to demand a discount off the published rate. That discount is a rebate.
Starting point is 00:16:47 It was perfectly legal at the time. It was not unusual. And Standard was hardly the only firm getting them. But nobody else on Earth could deliver volume the way Rockefeller's operation could. So nobody else got rebates the way he did. On the 10th of January, 1870, the partners incorporated as the Standard Oil Company of Ohio, with a capital of $1 million, and the Cleveland Works alone accounted for roughly a tenth
Starting point is 00:17:15 of all the refining capacity in the United States. Two years later, the company had a quarter of the industry, and it got there in about six weeks. The mechanism underneath the next six weeks is the thing most accounts get wrong. In the fall of 1871, Rockefeller and a group of Allied refiners took over a dormant Pennsylvania corporate charter belonging to an outfit called the South Improvement Company, and that charter was written unusually broadly. In January of 1872, they signed contracts with the three great trunk lines, the Pennsylvania under Tom Scott, the Erie and the New York Central, and the standard men took 900 of the 2,000 shares issued. The arrangement had two halves, and the first half was ordinary enough. The railroads would publicly raise their first
Starting point is 00:18:02 freight rates on oil, roughly doubling them, and then quietly refund a large piece of that back to South Improvement members. Refiner's had seen rebates before and understood them. The second half had never been done by anybody. The railroads also agreed to hand South improvement members a cut of the freight money collected from refiners who were not members. So if a competitor in Cleveland shipped a barrel of oil east, the railroad would take that man's money and pass a portion of it to Rockefeller. They called it a drawback. Follow the arithmetic on that and it gets genuinely vicious. A rival could not compete by cutting his costs because his costs were now being set by his enemy. Every barrel he shipped put money in the pocket of the company working to destroy him.
Starting point is 00:18:47 And the harder he worked and the better he ran his shop, the more he earned for standard oil. There was no version of running a good business that got that man out from underneath it. The contracts were supposed to be secret, and they leaked almost immediately, and by the middle of February, the independent refiners of Cleveland understood exactly what was coming for them. What Rockefeller did with the following six weeks is what that city has called the Cleveland Massacre ever since. Between the 17th of February when the rumors started moving, and the 28th of March, when the railroads canceled the rate increases, Standard Oil bought 22 of Cleveland's 26 independent refineries.
Starting point is 00:19:26 He went to them one at a time and he was courteous and quiet about it. He showed them standards books, which were extraordinary, and he explained that the business as they had known it was finished, and that consolidation was coming whether they liked it or not, and then he offered them a choice between selling out for cash or taking payment in standard oil stock and coming along with him. Isaac Hewitt, one of the partners in Hewitt and Tuttle, the same firm that had given Rockefeller his first job 17 years earlier,
Starting point is 00:19:55 was one of the men who sold. Hewitt testified about that conversation afterward. He said he told Rockefeller he wanted to keep his interest, and that Rockefeller told him he had ways of making money that Hewitt knew nothing about. Rockefeller's own brother Frank was in the oil business at the time, and Frank testified that John told the Cleveland refiners, there was no hope for any of them.
Starting point is 00:20:19 And any man who thought he might hold out ran straight into a second wall, because when he went to the Cleveland banks looking for, for credit. He found the doors shut, and the reason the doors were shut was that Rockefeller had made a point of offering every important banker in that city a chance to buy standard oil stock. A refiner in that position was not negotiating with anybody. He was choosing between a check and a receivership. One of the firms that sold was Hannah, Baslington and Company, and one of its partners was Mark Hanna, who would go on to be the most powerful political operator of the 1890s and the man who put William McKinley in the White House.
Starting point is 00:20:56 Hannah never forgot what was done to him in 1872, and Mark Hanna was nobody's idea of an enemy of big business. Now, two things are true here at once, and I am not going to hide either one. The Cleveland refiners who took standard oil stock instead of cash, and then held on to it, ended up generationally rich, and Rockefeller spent the remaining 65 years of his life pointing that out. And about the ones who held, he was right.
Starting point is 00:21:23 But none of them knew that at the time. What they were being handed was paper in a private company run by the man who had just crushed them, in an industry that had collapsed three separate times in ten years, and several of them sold that stock within a few years, just to be free of him and died ordinary men. Whether a Cleveland refiner got rich in 1872 came down to temperament rather than judgment, and Rockefeller counted every one of the lucky ones in his defense afterward, as though he had made them wealthy on purpose.
Starting point is 00:21:56 The oil regions of Pennsylvania went up like a struck match. The producers formed themselves into the petroleum producers' union, and 3,000 men packed a hall in Titusville, and they laid an embargo on the whole combination and refused to sell South Improvement members a single barrel of crude at any price. There were night attacks on rail shipments and on the property of men suspected of dealing with standard. Effigies burned.
Starting point is 00:22:21 somebody printed the membership list and passed it around as a blacklist. All of that worked faster than anybody expected. Congress opened an investigation, and the railroads watched their oil traffic evaporate and canceled the contracts. And in April of 1872, the Pennsylvania legislature repealed the South Improvement Company's charter outright. The scheme had lasted roughly 11 weeks and had never moved one barrel of oil under its terms. By then, Rockefeller owned a quarter of a quarter of a quarter of,
Starting point is 00:22:51 the refining industry of the United States. And for the rest of his life, he insisted that South improvement had been a failure, that the railroads had thought it up rather than standard, and that since no oil ever shipped under those contracts, nobody ever paid the higher rates and nobody ever suffered a drawback. Every one of those statements is literally true. Put together they are a lie, because they carefully step around the only thing that actually happened,
Starting point is 00:23:18 which is that the fear of that scheme emptied Cleveland into a, his hands in six weeks. That gap between literally true and honest is the country John D. Rockefeller lived in for his entire professional life. What he took away from 1872 was not caution, but method. The public scheme with the printed charter and the traceable contracts had been an error. Everything after this would be done privately, through arrangements nobody could subpoena. Inside a corporate structure, nobody could even describe. Five years later, he went to war, with a railroad, and this is a fight almost nobody outside the oil histories knows about, and it shows you what he was willing to spend.
Starting point is 00:24:00 The Pennsylvania Railroad decided to quit being standards carrier and start being standards competitor. Through a subsidiary called the Empire Transportation Company, run by a capable man named Joseph Potts, the railroad moved into refining, an empire was already a serious operation. It owned 5,000 railroad cars, 1,500 of VIII. them tank cars and better than 500 miles of pipeline and it hauled something like three million barrels of oil a year most of it for independence in 1877 Potts bought a refinery on Long Island and started building another one in Philadelphia and
Starting point is 00:24:37 Tom Scott who ran the Pennsylvania and was probably the most powerful corporate executive alive in America that year stood behind him Rockefeller went to Philadelphia and told Scott to choose if the Pennsylvania wanted standard oil's freight, Empire was getting out of the refining business. They refused, and so he made war on a railroad. He canceled standards contracts and pulled every barrel of the company's freight off Pennsylvania track, and he built 600 new tank cars so he could move his oil over other lines, and he cut the price of refined oil in the market's empire was trying to break into. Refinery hands in Pittsburgh, which sat right on Pennsylvania track, went out of work because
Starting point is 00:25:19 Rockefeller had decided that a railroad needed teaching. The Pennsylvania cut rates back at him, and the two of them bled through the spring and into the summer. And then in July, the Great Railroad strike broke out, touched off by wage cuts on the Baltimore and Ohio, and running across the country like fire in a dry field. Pittsburgh got the worst of it. Militia fired into a crowd, and the city answered by burning railroad property on a scale that has few equals in American history. And when it was over the roundhouses and shops were gone, along with more than a thousand Pennsylvania railroad cars, and dozens of people were dead. The railroad's losses ran into the millions at the exact moment it was losing an oil war. That autumn, Tom Scott folded and the Pennsylvania
Starting point is 00:26:05 sold Empire's refineries and pipelines and tank cars to standard oil, and Rockefeller had taken on the largest corporation in the United States and beaten it inside of nine months. He picked up the Columbia Conduit Company and its pipelines the same year. He had no way of knowing the strike was coming and he did not cause it. What I will say is that when the biggest railroad in the country went down on its knees for reasons that had nothing whatsoever to do with him, he was standing in exactly the right place to take everything it owned in his industry, and he took it. The pipeline war two years later ran on the same principles. A group of independents built the Tidewater pipeline, and it was an engineering achievement that most people in the business had said
Starting point is 00:26:49 could not be done at all. It carried crude over the Allegheny Mountains by pump, better than a hundred miles, from the Bradford Field east to a Redding Railroad connection at Williamsport, and it went around Standard's system entirely, and in the spring of 1879 it worked. Standards answer covered every angle at once. The company bought land along every plausible route to block rights of way, and leaned on the railroads to refuse Tidewater's freight, and hired away Tidewater's men, and bought into Tidewater's debt so it could squeeze from the inside, and built its own competing trunk lines fast with better capital, and cut rates until Tidewater's finances came apart. By 1883, Tidewater had signed an agreement dividing the trade with
Starting point is 00:27:37 standard taking the overwhelming majority of it, and the Rebel Pipeline was a junior partner in everything but name. Then came the structure itself, which I would argue is Rockefeller's real invention, and the thing that outlived him longest. The problem was legal. Ohio corporations could not own stock and corporations chartered by other states, which meant standard oil of Ohio had no lawful way to own the dozens of companies it actually controlled, and for years the whole arrangement had been held together with handshakes and with stock parked in the personal names of trusted men, which was unstable and getting harder to manage every year. A standard lawyer named Samuel Dodd solved it. On the 2nd of January 1882, the shareholders of some 40 standard
Starting point is 00:28:23 controlled companies signed an agreement handing their stock to nine trustees who would hold it and vote it and issue trust certificates back in exchange, and the trustees were Rockefeller and his inner circle. What Dodd had built was a functioning national corporation at a moment when no state in the union permitted such a thing, and he built it entirely out of existing law by reading the statutes more carefully than anybody else had bothered to. Every trust in American history comes out of that one document. The Sugar Trust and the Whiskey Trust and the Tobacco Trust and the Beef Trust all followed it, and the entire vocabulary of antitrust law exists because a lawyer in Cleveland wrote a workaround for an Ohio incorporation statute. The headquarters moved to a building at 26
Starting point is 00:29:10 Broadway in Manhattan, where the executive committee took to meeting every day over lunch, running an operation that touched every state in the country and generating almost no records that could ever be used against it. In 1885, somebody drilling for natural gas near Lima, Ohio, hit oil instead, and an enormous field opened across northwest Ohio and Indiana that dwarfed anything in Pennsylvania. The trouble was that the oil stank of rotten eggs from the sulfur in it, and the kerosene you could get out of it, fouled lamp chimneys black with soot, and most of the industry wrote it off as close to worthless.
Starting point is 00:29:48 Rockefeller bought it anyway, cheap, and then he kept buying. He poured money into tanks and pipelines and land around Lima while his own board told him he was shoveling it into a hole, and they were alarmed enough that John Archbold, one of his most senior men, quietly started selling off some of his trust shares. Stay tuned for more disturbing history. We'll be back after these moments.
Starting point is 00:30:09 messages. At a board meeting, the directors outvoted him. Rockefeller told them that in that case he would risk his own money instead, and he did exactly that. And by 1888, Standard was sitting on a stockpile of roughly 40 million barrels of oil that nobody on earth wanted to buy. While that pile grew, he went after the chemistry. A German-born chemist named Herman Frosch had been working the sulfur problem on his own, at his own small company, and had found that running the oil across copper oxide would strip the sulfur out of it and standard hired frash in 1886 at a salary reportedly higher than any chemist in the country was drawing bought his company and his patent and set him up at its solar refinery in Lima the early results were disappointing by October of 1888 the
Starting point is 00:31:03 process was turning out kerosene a customer would actually burn the moment that worked the worthless lake of oil in Rockefeller's tanks became the largest cheap crude supply in the world, and Standard held a patent monopoly on the only method of using it. He was right and nearly everybody around him was wrong, and he was right because he had backed a chemist for two years while his own partners called it a folly. That is not the behavior of a man who only knew how to squeeze, and it is a good part of why the squeezing worked so well. He also built the most efficient industrial operation on the planet and drove the price of kerosene down by something like 80% over the course of his career, which put light into farmhouses that
Starting point is 00:31:47 had gone dark at sundown since the country was founded. Those things sit in the same career as everything else in this episode, and neither one cancels the other out. The spying is the part that looks least like 1875 and most like something out of a modern federal indictment. Standard oil paid railroad freight agents and clerks to report on the shipments of rival refiners, and I do not mean rumors, I mean the actual waybills. Standard knew what its competitors were shipping, and how much of it, and to which city, and to which customer, sometimes before, the barrels had even arrived. With information like that, the company could do something surgical. Standards salesman would turn up at that customer's door and undercut the rival's price
Starting point is 00:32:32 by whatever it took, in that one town, paid for out of profits from everywhere else, and when the rival gave up and cleared out of the market, the prices went right back up. The company also ran what everybody eventually called bogus independence, which worked exactly the way it sounds. Standard would buy a competitor and leave the original name on the building and on the letterhead and go on operating it as though it were still independent, so that a buyer who deliberately went looking for a non-standard supplier was doing business with Standard Oil and had no idea.
Starting point is 00:33:06 And the watching went all the way down to the corner grocery, because standards marketing men kept files on individual retailers and towns all over the country, noting which ones had bought a barrel from an independent jobber, and a grocer who tried a competitor's oil, could find his own supply arrangements had quietly changed by the following month. None of that is my inference. Most of it came out in 1879 when the New York State Legislature convened what became known as the Hepburn Committee to look into railroad practices,
Starting point is 00:33:35 with a very sharp lawyer named Simon Stern running the questioning. Standards witnesses were evasive to the point of comedy, with officers claiming they could not say who owned companies they personally ran. But the committee got the essential facts anyway, and the number that came out of those hearings stunned the country. Standard oil was refining somewhere between 90 and 95% of the oil in the United States, and none of it stopped once it was exposed, which is the detail that tells me what kind of operation this really was.
Starting point is 00:34:09 In January of 1907, 28 years later, the Interstate Commerce Commission reported that Standard Oil was still secretly taking rebates, still spying on its competitors, still setting up bogus subsidiaries, and still pricing predatorily. Rockefeller himself was called before the Hepburn Committee and answered essentially nothing. He was polite and unhurried and completely useless as a witness, and he would give that same performance, refined a little more each time, for the next 30 years. He had a technique of long pauses, of qualifying every statement until it meant nothing at all, and of being unable to recall decisions he had personally made. Anybody who has sat across a table from a skilled subject
Starting point is 00:34:51 will recognize every bit of it, and I will say plainly that he was better at it than most people I ever interviewed. Not everything said about him holds up, though, and there is one story that deserves an honest accounting, because if I only hand over the material that makes him look worst, then I am doing the same thing to you that the muckrakers occasionally did to their own readers. In 1878, a Cleveland lubricating oil works belonging to the widow of a man named Fred Bacchus was sold to standard oil for $79,000. And Mrs. Bacchus said afterward that she had been led to believe the property was worth far more, that she was a widow with children and no leverage at all. and that Rockefeller had personally promised she would be treated fairly and then turned his
Starting point is 00:35:38 subordinates loose on her. Ida Tarbell published that account and it became the single most damaging thing ever said about Rockefeller as a man. It is the story that turned him from a monopolist into a villain in the public mind, and it did that because it was not about freight rates. It was about a widow. The record underneath it is a good deal messier than Tarbell's telling. Mrs. Bacchus negotiated and had asked for a higher figure.
Starting point is 00:36:05 The physical plan appraised well below what she claimed it was worth. The $79,000 was more than the book value of the works. Chernow went through the correspondence and concluded she had not been defrauded, and other historians have landed in the same place. So I am not going to tell you the Bacchus sale was a crime, because I do not believe the evidence supports it. What I will tell you is that Rockefeller was privately furious, about that story for years and never once answered it effectively in public and a man who has
Starting point is 00:36:36 spent his whole life refusing to explain himself to anybody is in a poor position to be believed on the one occasion he actually wants to be the indictment out of clarion county is a very different matter in 1879 a grand jury in clarion county Pennsylvania indicted john d rockefeller along with eight other standard men among them henry flagler and john archbold and day Daniel O'Day and William Warden and Charles Lockhart on charges of criminal conspiracy, and the allegations included conspiring to secure a monopoly, to control prices, to extort unlawful rebates, and to injure competitors. Rockefeller was in New York, and he stayed in New York.
Starting point is 00:37:19 Getting him into a Pennsylvania courtroom meant the governor of Pennsylvania had to formally request his surrender from the governor of New York, and the producers spent months trying to get that requisition signed while the case was continued from term to term. The president of the Producers Council finally wired Harrisburg to say he was tired of addition, division, and silence, and threatened to take the whole business to the newspapers, and was told the Attorney General was ill. In 1880, the charges were withdrawn as part of a broader settlement in which Standard made some concessions to the producers, which means that the second criminal indictment in this family's history also ended with the defendant simply never appearing.
Starting point is 00:38:02 The father managed it by changing his name and the son managed it by hiring lawyers and staying north of a state line. And the second method is a great deal more respectable, and was, from the point of view of the men trying to prosecute him, exactly as effective. In May of 1887, John D. Rockefeller sat for eight days in a packed courtroom in Buffalo, New York, watching three of his executive stand trial over a deliberate explosion. And this one deserves care, because it gets told wrong constantly, and I got it wrong myself the first time,
Starting point is 00:38:35 through the research. There was a small outfit called the Buffalo lubricating oil company put together by a man named Charles Matthews, and Matthews hired away a skilled still man named Albert Miller from the vacuum oil works of Rochester, which Standard had bought into in 1879, and which was run by Hiram Everest and his son Charles. The Everest took it badly.
Starting point is 00:38:58 They sued and they threatened. And then they sat down with Miller. And what came out later was that they had counseled him to arrange the machinery so that it would smash up and that money had changed hands. On the 15th of June 1881, a still at the buffalo plant was fired in a way that blew the head clean off it. Miller's story was that he only ever meant to give them a scare. Matthew spent six years chasing it, asking a quarter of a million dollars in damages. and eventually got a criminal conspiracy case in front of a Buffalo jury. And alongside the Everest, he named the three standard oil men who sat on the vacuum board,
Starting point is 00:39:36 Henry Rogers and John Archbold, and Ambrose McGregor. John D. Rockefeller was not one of the defendants. He had never met Albert Miller and had nothing directly to do with the Rochester end of that business. And Matthew subpoenaed him as a prosecution witness, which Rockefeller regarded as a publicity stunt and which it largely was. That is worth saying clearly, because you will find plenty of accounts that put him in the dock, and he was in the room rather than on trial. The three standard men were acquitted, and on the evidence, that looks right to me.
Starting point is 00:40:10 The prosecution never established that the explosion had done what was claimed, or even that a high flame was necessarily dangerous when a still was starting up. And when the verdict came in, Rockefeller rose out of his seat in that courtroom, told Rogers he had no congratulations to offer him, asked out loud what ought to be done with people who bring an action against men in that way, shook his fist at Charles Matthews, and walked out. From a man who spent his entire life refusing to react to anything in public, that is about as close to detonation as he ever got.
Starting point is 00:40:45 The Everest's were another story. The judge refused to dismiss the case against them, because it had been proved that they threatened at the outset to ruin the new company, and that they had advised Miller to wreck the machinery. And they were convicted of conspiracy and fined $250 a piece, a figure that reflected the jury's belief that they had meant to frighten rather than to destroy. So the honest version comes out like this. The managers of a standard subsidiary did counsel the sabotage of a competitor's plant and were convicted for it.
Starting point is 00:41:17 And the punishment for that was a fine smaller than a month's wages for the men who ran the place. Whether anybody at 26 Broadway knew about it is a question the trial did not answer, and I'm not going to answer it for them. If somebody asked me for the one case that shows the whole method with the oil taken out of it, I would give them the Merit Brothers of Duluth. They were a family of Minnesota prospectors, four brothers and three of their sons, and up there they are still called the Seven Iron Men. In 1890 they found the thing everybody else had failed to find, which was a little bit of the same. was the great soft hematite of the Masabi range, the richest iron deposit ever discovered on this continent and lying close enough to the surface that it could be shoveled out of open pits instead of mined. They had the ore and no money. They needed a railroad to move it down to Lake
Starting point is 00:42:10 Superior, and they built one, and then their outside financing collapsed, and in 1892 and 93, they went looking for capital and reached Rockefeller through his own business and philanthropic agent, a Baptist minister named Frederick Gates. Remember that name, because Gates is going to reappear later in this episode as the architect of the largest charitable enterprise in American history. And this is what he was doing first. Rockefeller lent them money and took mortgages in stock as security. And the merits kept building, and their debt kept climbing.
Starting point is 00:42:44 Then the panic of 1893 came down and credit vanished across the country. And the merits could not meet what they owed. and Rockefeller, sitting on cash at a moment when almost nobody in America had any, was in a position to take the collateral. He took it. Inside of about two years, the family that discovered the Masabi range had been squeezed out of it entirely, and the Rockefeller interests held one of the great mineral properties on earth, and it went out on lease to Andrew Carnegie, and from there into United States Steel.
Starting point is 00:43:15 Alfred Merritt sued for fraud, arguing that Rockefeller had misrepresented the value of what he brought into the merger, and in 1895, a federal jury in Duluth found for the merits and awarded them $940,000. Rockefeller appealed, the verdict was thrown out, and the family, broke by then and worn through, could not pay for another round. One of the brothers, Cassius, died during the fight. In 1897, they settled out of court for $525,000, and the condition of that settlement was that the Merritt brothers sign a statement retracting their accusations, declaring that Rockefeller had dealt honorably with them and agreeing to bring no further action. That signature is what I keep coming back to. He did not only want the or, and he did not only want the lawsuit gone. He wanted the men he had
Starting point is 00:44:08 taken it from to put their own names to a document saying he had been fair to them, and he made that document the price of the money they needed to go on living. It is the identical instinct that would build the greatest philanthropic machine in the world. And Rockefeller understood before almost anybody else in America that the story people tell about you is a thing that can be purchased outright. The political end of it operated in the open in a way that would be unthinkable now. Henry Demarest Lloyd published a piece in the Atlantic Monthly in March of 1881 called The Story of a Great Monopoly, which was the first serious national exposure standard had ever gotten.
Starting point is 00:44:49 The issue sold out and had to be reprinted, and it produced the line that trailed the company for the next 40 years, which was that Standard Oil had done everything with the Pennsylvania legislature except refine it. Stay tuned for more disturbing history. We'll be back after these messages. That was not a figure of speech, by the way. Standards men held the legislatures of Pennsylvania and Ohio through direct payments, through retained lawyers who happened also to be legislators,
Starting point is 00:45:21 and through the plain fact that in an oil state, the company was the economy. It reached the Senate. In 1908, William Randolph first got hold of and published private letters between John Archbold, who by then was running standards daily operations, and Senator Joseph Foraker of Ohio. And those letters showed payments to Foraker running into the tens of thousands of dollars, while he was in office and voting on matters that touched the history. company. Similar correspondence surfaced involving other men in Congress. Forrecker's career ended.
Starting point is 00:45:53 Rockefeller was not on those letters, because Rockefeller was almost never on anything. But Archbold was his man, running his company and spending its money, and nobody at Standard Oil appears to have been disciplined over any of it. All the while that man was living a life at home that the public knew nothing whatsoever about, and parts of it were bad. He and said he had five children. Bessie came in 1866 and Alice in 1869, who died before her second birthday, and Alta in 1871, who had significant hearing loss, and Edith in 1872, and finally John Jr. in 1874, the only son on whom the entire weight of the thing would eventually come down. They were raised inside SETI's system, which was austere enough that visitors remarked on it.
Starting point is 00:46:44 The children shared a single bicycle between them. They earned pocket money doing household chores at fixed rates and kept ledgers of it in imitation of their fathers. They were kept away from other wealthy children and told almost nothing about the family's money, and John Jr. wore his sisters hand-me-down dresses as a small boy. Dancing and theater and cards were forbidden, and the girls were educated largely at home. The consequences of all that did not fall evenly. Bessie was the eldest and the most intellectually serious of them, And she studied at Vassar in the 1880s, which was unusual for a woman of her class.
Starting point is 00:47:21 And in 1889, she married a philosopher and psychologist named Charles Strong and went to live in Europe with him. And they had one daughter. For years before her death, she was seriously ill with something the family never named in public. And on the 12th of November, 1906, at Cannes, she suffered a paralytic stroke and died two days later at the age of 40. Her body came home to the United States, and the family said almost nothing at the time and almost nothing afterward. Edith is the one who ended up furthest from her father, and her life is remarkable on its own terms. She married Harold McCormick of the Chicago Harvester family in 1895, and on the 2nd of January, 2001, their four-year-old son, John Rockefeller McCormick, died of scarlet fever at the family's Pocantico place,
Starting point is 00:48:12 and a daughter named Aditha died in infancy three years after that. Edith and Harold answered the first of those losses by founding an institute in the boy's name devoted to infectious disease, and the researchers it paid for were part of the work that eventually identified the organism behind Scarlet Fever, which I think is worth saying, because it is easy to file Edith away as an eccentric, and she was a good deal more than that. In 1913, she went to Zurich to be treated by Carl Jung, and she stated by Carl Jung, and she stated, eight years. She trained as an analyst herself and built a practice of more than 50 patients. She gave young money on a scale that helped make his reputation. And while she was over there,
Starting point is 00:48:53 she paid a monthly stipend to a struggling Irish writer named James Joyce, who was in the middle of writing Ulysses at the time. She came back to Chicago in 1921, divorced and kept spending, and told people at one stage that she was the reincarnation of the wife of Tutankhamun, and died of cancer in 1932 at 59 with most of her fortune gone her father was still alive at 93 and the two of them had been estranged for long stretches of her adult life and then there's frank frank rockefeller the brother who enlisted at 16 and came home shot twice spent his adult life in his brother's shadow and in his brother's debt he went into oil against standard and then into cattle out in kansas and he lost john lent him
Starting point is 00:49:41 money and held his stock as collateral. And when Frank came up short, John enforced the terms, which is precisely what their father had trained him to do. Frank testified against standard oil to investigators, and he denounced his brother in public whenever anybody would print it. And in 1898, when John erected an obelisk over the Rockefeller family plot at Lakeview Cemetery in Cleveland, Frank had the caskets of his two dead children dug out of that ground and moved to another section of the cemetery because he would not leave them lying under his brother's monument. John's recorded response to that was silence, which was his recorded response to nearly everything, including his own family. Frank died in 1917 and was buried outside the family plot.
Starting point is 00:50:27 And then, in February of 1908, at the absolute height of the public campaign against him, the New York world finished the job it had been working at for seven years and printed the story of his father. The paper laid out that William Avery Rockefeller had lived for decades under the name Dr. William Levingston, and that while he was still legally married to Eliza, he had married a woman named Margaret Allen over in Ontario around 1855, and that he had gone on turning up at his first family's houses for years afterward, playing the violin for his grandchildren and borrowing money from his wealthy son, and then disappearing again, and that he had died on the 11th of May, 1906. in Freeport, Illinois, and been buried in Oakland Cemetery there under the invented name.
Starting point is 00:51:15 John D. Rockefeller had known all of it for a very long time, and so had his brother William, and there is one detail that puts that beyond any argument. In 1881, John bought his 71-year-old father a 160-acre ranch out at Park River, North Dakota, on a single condition, which was that Margaret Allen never set foot on the property. A friend of bills explained the arrangement. afterward in plain language, saying that John had learned early that his father was a bigamist, and that the ranch was meant to pull the old man away from the second wife, so that if anybody ever did find him out there, there would be no second wife standing next to him.
Starting point is 00:51:53 That is a son managing an exposure risk for 27 years, and he never said one public word about any of it in his life. His mother, Eliza, had died back in 1889, still legally married to a bigamist living under an assumed name three states away, and her son buried her with a great deal of dignity and no explanations at all. Ida Minerva Tarbell was born in 1857 in a log house in Erie County, Pennsylvania, and grew up in the oil regions, where her father Franklin Tarbell built wooden storage tanks for crude and later got into producing and refining on his own account. And for a while, the Tarbells were doing well. Then 1872 happened, and Ida was 14 years old and watched the men of the oil country come to her family's house at night to argue about
Starting point is 00:52:41 what was being done to them. She watched her father's business fail. He mortgaged the family home to cover his debts and never really recovered from it, and everything that household had expected of its future got smaller and stayed smaller. She went to Allegheny College as the only woman in her class, and taught, and then wrote, and then went to Paris and kept herself alive on freelance journalism and came home to write serialized biographies for McClure's magazine, where her lives of Napoleon and Lincoln made that magazine circulation. Samuel McClure wanted a series on the trusts, and Tarbell proposed Standard Oil, and she spent years on it. She read the court transcripts from every state case standard had ever been
Starting point is 00:53:24 involved in, and the Hepburn testimony, and the federal investigations, and thousands of pages of exhibits. And she got herself a source inside the company, which nobody had ever managed, because Henry Rogers, one of Standard's most senior man and one of the acquitted defendants at Buffalo, agreed to sit down with her. Rogers talked to her for two years. He had known her family's world in the oil regions, and I suspect he believed he could handle her. He confirmed structures and corrected details and gave her the internal logic of the company, and the relationship ended the day she brought him documents about standards spying on arrival, handed over by a whistleblower, and he would not see her again after that. The history of the Standard Oil Company ran in McClure's
Starting point is 00:54:09 in 19 installments, starting in November of 1902, and came out as two volumes in 1904. And it is an extraordinary piece of work, methodical and documented and built on records rather than on interviews with the aggrieved. Most of it is about freight rates and corporate structure and it held a mass audience for two solid years anyway. It also has a hole in it, and the whole is her father. Tarbell was writing about the men who ruined Franklin Tarbell, and she never told her readers so. She was scrupulous on the documents, and merciless on the man. She wrote that his philanthropy was tainted money. She published a two-part character study that dwelt on his physical appearance, including what the alopecia had done to him, and wondered in print
Starting point is 00:54:57 whether it might be some sort of punishment. Rockefeller's answer to five years of that was to say nothing and to instruct his people to say nothing. In private he called her Miss Tar Barrel and told his golf partners that she was a woman with a grievance, which was true and which was also not a rebuttal. My own thoughts on Tarbell comes out split. Her account of what Standard Oil actually did is substantially correct
Starting point is 00:55:21 and has held up for 120 years under hostile examination by people who badly wanted to break it. Her account of who Rockefeller was is a portrait painted by somebody carrying a personal wound, and it is the portrait that stuck. Both of those are true, and neither one cancels the other, and in my experience, that is usually how the best investigative work turns out, including some of my own.
Starting point is 00:55:45 By the time Tarbell was writing, the man had largely stopped running the company. He withdrew from daily management in the middle 1890s, and stayed on as president in name. only until 1911. And Archbold effectively ran standard oil from then until his own death, which means a good deal of what was done in Rockefeller's name in those years, was done without consulting him. His health had broken down. He had digestive trouble severe enough that he lived on a restricted diet for years, and in his 50s he developed alopecia and lost every hair on his
Starting point is 00:56:20 body. And from about 1901 he wore wigs and rotated them by length, so that it would look as though he were getting haircuts. What he did with the rest of his life was give the money away, and he did it at a scale nobody had ever attempted. The central figure in that is Frederick Gates, the same Baptist minister who had brokered the merit loans. Gates was blunt and aggressive and had hold of an idea that changed philanthropy permanently. He told Rockefeller that the money was piling up faster than he could possibly dispose of it
Starting point is 00:56:52 and would crush his children and his grandchildren unless he moved it. and that giving it away retail to the thousands of individual beggars writing to him every day was worse than doing nothing. What Gates wanted was to go after causes instead of symptoms through permanent institutions run by experts. What came out of that partnership would be the entire legacy of any other man who ever lived. There was the University of Chicago, re-founded in 1890, into which Rockefeller poured tens of millions of dollars, and which became a first-rank research university inside of about 15 years. There was the Rockefeller Institute for Medical Research in 2001, the first institution of its kind in this country,
Starting point is 00:57:37 which did foundational work on meningitis and syphilis and yellow fever and the nature of the gene, and which is Rockefeller University today. There was the General Education Board in 1903, which put enormous sums into southern schools, including black schools across the segregated South, at a time when almost nobody else in America would put a dollar into them. And there was the Rockefeller Sanitary Commission for the eradication of Hookworm disease in 1909, which is the one I would point to if somebody asked me to name the best thing this man ever paid for.
Starting point is 00:58:11 Hookworm was endemic through the rural South, and it caused the anemia and the exhaustion that had been explained away for generations as laziness and as racial character. and the commission put a million dollars into dispensaries across 11 states and examined and treated people by the hundreds of thousands. And it worked. That campaign is one of the great public health successes in American history, and it changed how an entire region was understood. And in 1913 came the Rockefeller Foundation,
Starting point is 00:58:42 chartered by the state of New York only after Congress refused to charter it. Because a substantial number of members of Congress had concluded that a perpetual private institution controlled by the Rockefeller family was itself a danger to the Republic. That objection has not aged badly at all, and it is the doorway into the next episode. Not everybody wanted the money either.
Starting point is 00:59:05 In 1905, the American Board of Commissioners for Foreign Missions, which ran the Congregational Church's overseas missionary work, accepted $100,000 from Rockefeller. The moderator of the Congregational Church at that moment, was a minister from Columbus, Ohio, named Washington Gladden, one of the leading voices of the social gospel movement. And about a decade earlier, he had coined a phrase that he now turned on his own denomination. He called it tainted money, and demanded the board send it back. Gladden's argument was not that Rockefeller was a sinner, because every donor who ever lived
Starting point is 00:59:40 is a sinner. His argument was that making money within the letter of the law did not absolve the people who took it afterward, that standard oil had done business with what he called utter disregard for the ordinary principles of business morality, and that no gift was ever large enough to make up for the blurring of consciences that accepting it required. The question he kept asking was simply whether this was clean money. He lost. Only 25 of the 189 members of that board sided with him, and most of the religious press lined up against him too. And what made the whole thing worse was a detail that surfaced during the fight,
Starting point is 01:00:20 which was that the gift had not come floating and unbidden from a pious donor at all. The board had gone and asked for it, knowing exactly whose money it was. Rockefeller said nothing in public, which by this point in the episode will not surprise anybody. He had given his answer years earlier in Sunday school talks, where he said that the power to make money was a gift from God, And as far as I can tell, he believed that completely, and considered the matter closed the moment he had said it. That fight in 1905 is the first time this country argued out loud about whether philanthropy can launder a fortune. And that argument has never ended since. And it started with $100,000 and a preacher in Ohio.
Starting point is 01:01:02 And alongside every bit of it, there were the dimes. Rockefeller carried rolls of coins in his pocket and handed them out to people he met. dimes to the adults and nickels to the children, thousands of them over the last decades of his life, on golf courses and street corners and to reporters who came to look at him. It was a small and strange and entirely personal habit, and it was also the most effective piece of public relations of the 20th century, because a monopolist is an abstraction,
Starting point is 01:01:31 and a very old man putting a nickel in your child's hand is a memory that lasts 60 years. The federal government finally moved in 1906, when the Roosevelt administration filed suit under the Sherman Antitrust Act, which had been on the book since 1890 and had been used against labor unions considerably more often than against trusts. Standard had already lost once. In 1892, the Ohio Supreme Court ordered the trust dissolved, and the company complied by breaking itself into 20 nominally separate companies
Starting point is 01:02:04 that went right on being run by exactly the same men in exactly the same way. And then in 1899, New Jersey obligingly rewrote its corporation law to permit holding companies, and Standard Oil of New Jersey became the holding company for the whole apparatus. The trust had been dissolved and reassembled in a friendlier state. The federal case took five years, and Rockefeller sat for a deposition, and gave one of the great non-performances in American legal history, courteous and vacant and unable to recall the details of decisions he had personally made. On the 15th of May, 1911, the Supreme Court of the United States held that standard oil was an unlawful monopoly and ordered it broken into 34 separate companies.
Starting point is 01:02:48 And John D. Rockefeller and his brother William were both named as individual defendants in that case. There is a story that he heard the news out on a golf course and told his playing partner to go buy standard oil stock. I cannot verify that exchange and I would treat it as folklore. But the financial fact underneath it is solid and it is solid and it is. is the best documented irony in American business history. The breakup made him vastly richer. The successor companies had been carried at conservative valuations inside the combination, and once they traded independently, the market reprised them, and the shares climbed steeply, and Rockefeller held about a quarter of the entire thing. Those 34 companies became Exxon,
Starting point is 01:03:30 mobile, Chevron, Sohio, and Atlantic, to name a few. And several are still among the largest corporations on the planet today. His fortune peaked around 1912 at close to $900 million, and by 1916, the newspapers were announcing that he had become the first billionaire in the history of the United States. Measured against the size of the economy he lived in, nobody since has come anywhere near him. The most aggressive thing the government of the United States ever did to that man was also the most profitable thing that ever happened to him. In 1902, the Rockefeller interests bought a controlling position in the Colorado Fuel and Iron Company, which worked coal mines in the southern part of that state and housed its miners in company towns. Senior bought it,
Starting point is 01:04:17 and he never once went to look at it, and he handed management of the family's stake to his son. Twelve years later, on the 20th of April, 1914, the Colorado National Guard and Company guards fired on a tent colony of striking miners and their families at a place called Ludlow, and among the dead were two women and 11 children who suffocated in a pit that had been dug beneath one of the tents when the tents caught fire. The killing that spread across southern Colorado over the 10 days that followed brought the toll to something near 75. The response to Ludlow is where John Jr. hired a former newspaper man named Ivy Lee, and it is where the public relations industry begins as a paid profession in this country. That story and what the family did with the family.
Starting point is 01:05:04 foundation over the following 30 years, including where some of its research money ended up in Germany in the 1920s and 30s, is where we pick up next time. John Davison Rockefeller died on the 23rd of May, 1937, at the casements, his winter house at Ormond Beach, Florida, at the age of 97. As a young man, he had said that he intended to make $100,000 and to live to be 100 years old, and he missed the second one by a little under two years and beat the first first. one by roughly 10,000 times over. They took his body up to Cleveland and buried him at Lakeview Cemetery beside SETI, under the same obelisk that had made his brother dig up two children's coffins rather than leave them in that ground. His estate came to $26,410,837, because by then he had already
Starting point is 01:05:56 moved nearly everything he owned to the foundation and to his son. There are two graves at the two ends of this story. One of them is in Freeport, Illinois, and it holds a man who was indicted for rape and left the county ahead of the sheriff, who kept a second woman under his wife's roof and fathered children by both of them in the same two years, who sold cancer cures to dying people for $25 a consultation, and who married a second wife while the first one was still alive and waiting for him in Ohio. He went into that ground under a name he made up, and the marker that eventually went over him was paid for out of the second wife's estate, because his son would not put the family name anywhere near it. The other is in Cleveland under a monument, and it holds a man who ran a
Starting point is 01:06:40 documented espionage operation against his competitors for 30 years, and never stopped even after the federal government caught him at it, who took a mountain of iron ore away from the family that found it, and then made those men sign a paper saying he had been fair to them, who was indicted for criminal conspiracy in Pennsylvania, and never stood true. trial, who bought his father a ranch in North Dakota to keep the second wife out of the frame, and who is remembered by most Americans today as a kindly old man who handed out dimes and beat hookworm. The father hid the story by running from it. The son bought the story, kept it, and had it carved into granite. And every single thing I've told you tonight sits in a court record,
Starting point is 01:07:23 or in sworn testimony, or in the company's own documents, which means the machine this family built to manage its reputation was already working on you and me before either one of us was born. It is still working right now. And next time, we are going to take it apart.

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