Titan: The Life of John D. Rockefeller, Sr.

Nonfiction | Biography | Adult | Published in 1998

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Summary

Background

Chapter Summaries & Analyses

Prelude and Chapters 1-4

Chapters 5-8

Chapters 9-12

Chapters 13-16

Chapters 17-20

Chapters 21-24

Chapters 25-28

Chapters 29-32

Chapters 33-35

Key Figures

Themes

Index of Terms

Important Quotes

Essay Topics

Tools

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Discussion Questions

Chapters 9-12Chapter Summaries & Analyses

Chapter 9 Summary: “The New Monarch”

Now loathed among oil producers in northwest Pennsylvania, Rockefeller stops traveling to the Oil Regions. Instead, he embarks on “an unrelenting campaign of national consolidation” (161). He takes advantage of the 1873 financial panic to buy up rivals’ refineries at discount prices. In many cases, however, Rockefeller uses gentler tactics. He nearly always maintains existing management teams in the companies he purchases, and in some cases he overpays simply for the purpose of turning a competitor into a collaborator. In one instance, he invites a Pittsburgh refiner to take a close look at the Standard Oil books, and the result is a sale that allows Rockefeller to become that industrial city’s major refiner. In “lightning offensives” (164), Rockefeller swoops in on Philadelphia and New York refiners as well.

During this time, Rockefeller brings into the Standard Oil fold two of its former enemies, Henry H. Rogers and John D. Archbold, both of whom will emerge as major figures in the trust’s future leadership; Archbold, in fact, will eventually succeed Rockefeller as head of day-to-day operations. Significantly, when Rockefeller purchases existing refineries, he offers payment in cash or Standard Oil stock. Those who take payment in stock end up much wealthier than those who do not. Rockefeller cements his dominance in the oil business by purchasing a major refinery in West Virginia, and then forcing the Baltimore and Ohio Railroad (B&O), the lone holdout of significance among transporters of oil, to play his game of rebates in exchange for guaranteed freight. Finally, having subdued the railroads, Rockefeller turns his attention to the business of building pipelines, which eventually will diminish the importance of rail. He enlists Daniel O’Day to take the lead in a new venture called United Pipelines.

Chapter 10 Summary: “Sphinx”

In public life, Rockefeller cultivates an image of secrecy. His stony silence often leaves associates baffled as to his true intentions. A man of severe discipline, he values punctuality, sticks to a rigid daily schedule, and admires people who have the ability to concentrate on the task at hand. Thanks to his legendary self-control, Rockefeller never erupts in rage and approaches every situation with near-perfect equanimity. This makes him an ideal manager, respected and admired by employees. Rockefeller’s steady disposition fosters a harmonious atmosphere, and the early history of Standard Oil reveals no labor squabbles of significance.

When disputes arise, they usually revolve around Rockefeller’s reluctance to pay high dividends on Standard Oil shares. Some stockholders, including a few company executives, resent Rockefeller’s practice to reinvest spectacular profits in the company. Samuel Andrews, Rockefeller’s early associate in the Cleveland refining business, makes the mistake of selling his shares for immediate cash, a decision that cost him hundreds of millions of dollars by the early 1930s.

Chapter 11 Summary: “The Holy Family”

With Cettie’s health beginning to decline, the Rockefeller family spends summers at Forest Hill, their new 79-acre estate on the rural outskirts of Cleveland. Rockefeller enjoys the open air of Forest Hill, where he constructs a horse-racing track and takes up biking. The Rockefeller children grow up isolated and sometimes “melancholy as they drifted alone about the huge estate, cut off from worldly temptation by their parents” (186).

Meanwhile, the Euclid Avenue Baptist Church continues to occupy an important place in the Rockefellers’ lives. Rockefeller draws strength from the church. It is the only place he allows himself to be seen in public. Religion, however, merely buttresses Rockefeller’s ideas about business. Because he views everything in terms of providential design, he suffers no apparent qualms about income inequality. Drawing on the reformist ideals of her younger days, Cettie joins the Women’s Christian Temperance Union. Rockefeller’s mother Eliza’s health also begins to fail, most likely due to the death of her daughter Lucy, Rockefeller’s older sister, at age 40. Rockefeller’s father Bill continues to appear in Cleveland unannounced at infrequent intervals. Frank’s animus toward his rich older brother continues to fester.

Chapter 12 Summary: “Insurrection in the Oil Fields”

Chapter 12 shows Rockefeller as a ruthless monopolist in dealings with crude-oil producers, railroads, and rival pipelines. When a new oil strike at Bradford, Pennsylvania, leads to overproduction, Rockefeller announces that Standard Oil will no longer provide temporary storage facilities and then offers to purchase the glut of oil for 20 percent less than the going rate. Pennsylvania producers are outraged by this brazen attempt to capitalize on excess supply, which threatens to ruin them.

Meanwhile, the Pennsylvania Railroad tries to challenge Standard Oil’s dominance by expanding into the pipeline business by way of the Empire Transportation Company, which Rockefeller views “as a declaration of war” (201). When the Pennsylvania Railroad cuts employees and wages as part of this broader challenge to Standard Oil, and as the B&O Railroad does likewise amidst the decade’s general economic downturn, railroad workers respond in 1877 with a strike that turns violent and bloody, ushering in “a new age of labor militance in American industry” (202). When the besieged Pennsylvania Railroad and its constituent Empire Transportation Company cave, Rockefeller once again prevails. Rockefeller then targets the Columbia Conduit Company, which pumps crude oil bound for shipment over the B&O lines. Rockefeller thereby guarantees that the region’s major railroads will remain dependent on Standard Oil.

Finally, in its most elaborate and least ethical act of transportation-related subterfuge, Standard Oil goes great lengths to smother the Tidewater Pipeline Company’s efforts to construct pipelines that would carry crude oil from northwest Pennsylvania directly to Baltimore. This prolonged conflict involves outright bribery of legislators in multiple states. Meanwhile, Rockefeller and other Standard Oil executives face lawsuits and accusations of conspiracy. The Tidewater saga ends when Rockefeller abandons his plan to crush the rival and instead strikes a deal that leaves Standard Oil in control of 88.5 percent of Pennsylvania’s pipeline traffic.

Chapters 9-12 Analysis

The key to understanding Rockefeller’s business practices lies in the titan’s inveterate Hostility to Wasteful Competition. Chernow shows how this hostility played out. After buying up rival refineries, first in Cleveland, and then in other major cities, Rockefeller knew that to create an effective monopoly he needed to control the means of transportation as well. Hence his aggressive dealings with the railroads and his early interest in pipelines. Significantly, at least for the broader story of Standard Oil, those who took payment in Standard Oil stock instead of cash in exchange for their refineries realized a long-term financial windfall. This proves that Rockefeller’s monopolistic theories had some validity, at least from the perspective of those who were enriched by industrial combinations. Samuel Andrews’s decision to take cash in exchange for his Standard Oil stock, on the other hand, shows that “Standard Oil was never kind to skeptics who doubted its bright future” (182).

Although Rockefeller’s monopolistic practices had some basis in sound economic reasoning, there is no question that Standard Oil regularly behaved in an unethical manner in its dealings with oil producers, railroads, and pipelines. In the case of the producers, it was a matter of simple exploitation made possible by the fact that the Standard Oil behemoth was “all but immune to the vagaries of the marketplace” (200). With the pipelines, however, it was a matter of political payoffs. In fact, Rockefeller repeatedly lied about his involvement in such matters, and his papers show that “Standard Oil entered willingly into a staggering amount of corruption” (209).

Chernow’s character sketch of Rockefeller as an employer refutes later “accusations that he was a cold, malignant personality” (176). This is important because Chernow establishes in the book’s foreword that he never would have agreed to write a Rockefeller biography in the first place had the voluminous surviving evidence confirmed this harsh characterization. Likewise, Chernow shows that Rockefeller, while presiding over Standard Oil, exhibited many of the same qualities that had served him so well since the moment he entered the business world as an unpaid teenage intern. Many of these virtues, of course, sprang from his Baptist faith, which Chernow views as “a necessary complement to his buttoned-up business life” (189)—virtues which would be developed as Rockefeller tried to redeem his public standing with his Philanthropic Transformation later in life.

For all of his virtues as a business leader, however, Rockefeller “never acknowledged the legitimacy of organized labor” (177). Chernow notes that Standard Oil enjoyed fairly smooth relations with its employees, but this was due in large part to the fact that “oil refining was a capital-intensive industry without the seething discontents that afflicted the coal mines or steel mills” (177). Chernow later shows that Rockefeller never overcame this prejudice against unions.

Chernow describes Rockefeller’s domestic life during these years as a characteristic quest for peace and sobriety amidst periodic scenes of tragedy and dysfunction. The most important women in his life, with whom he maintains loving and respectful relationships, had terrible health problems; indeed, nervous disorders and other related ailments constitute a significant element of the Plight of the Rockefeller Women. Chernow also introduces John, Jr. (“Junior”) who, as a child, finds himself “bathed in female love, almost suffocated by it” (186). Junior is surrounded by a pious mother, two equally pious grandmothers, and three older sisters. This will be significant in later years as Junior struggles to find his way in a male-dominated business world while carrying the weight of his father’s legacy.