Rockefeller: The Richest American Who Ever Lived

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Oct 4, 2015

Was America's first billionaire, John D. Rockefeller, a greedy robber baron, a generous philanthropist, or both? And did the oil tycoon exploit America's poor or give them access to much-needed energy? Historian and Hillsdale College professor Burt Folsom, author of "The Myth of the Robber Barons," reveals the truth about the Rockefeller empire.

MYTH: Rockefeller was a greedy “robber baron.” In fact, Rockefeller maintained a reputation for scrupulous honesty and great generosity.

  • John D. Rockefeller’s first partner praised him for his honesty, saying, “If there was a cent due a customer he wanted the customer to have it.”View Source
  • Rockefeller gave away over half of his fortune to charity, used his money to build schools (such as the University of Chicago) and churches, and to support missionaries around the world.View Source
  • Related reading: The Myth of the Robber Barons - Burt FolsomView Source
  • Related reading: Titan: The Life of John D. Rockefeller, Sr. – Ron ChernowView Source
  • Related reading: New Deal or Raw Deal? - Burt FolsomView Source

By the time he died in 1937, John D. Rockefeller had given away about $550 million—more than any other American ever possessed.

  • John D. Rockefeller accumulated great wealth because he kept the best interest of his customers at heart, providing much-needed kerosene and oil that was “cheap and good.”View Source
  • John D. Rockefeller gave away over half of his fortune to charity, used his money to build schools (such as the University of Chicago) and churches, and to support missionaries around the world.View Source
  • Related reading: The Myth of the Robber Barons - Burt FolsomView Source
  • Related reading: Titan: The Life of John D. Rockefeller, Sr. – Ron ChernowView Source
  • Related reading: New Deal or Raw Deal? - Burt FolsomView Source

The great secret to Rockefeller’s success: he provided people a product they wanted at a price they could afford.

  • John D. Rockefeller accumulated great wealth because he kept the best interest of his customers at heart, providing much-needed kerosene and oil that was “cheap and good.”View Source
  • Rockefeller reduced his barrel costs from $2.50 to $0.96 by purchasing his own timber tracts, nearly halved the cost of labor, pipes, and plumbing materials by building his own refineries, and developed new products from the oil he was collecting.View Source
  • Related reading: The Myth of the Robber Barons - Burt FolsomView Source
  • Related reading: Titan: The Life of John D. Rockefeller, Sr. – Ron ChernowView Source
  • Related reading: New Deal or Raw Deal? - Burt FolsomView Source

He was called “the most hated man in America.” Yet the New York Times described him as “the world’s greatest giver.” He was America’s first billionaire. And he gave half of it away. He was the quintessential so-called “Robber Baron” of the Gilded Age. But he was probably more responsible than any other single individual for the creation of the American middle class and the development of America as a great industrial power. He lived in a splendid mansion. But was so worried about spoiling his children that he dressed them in hand me down clothes. Song lyrics were written about him. But he rarely went to social events.

His name was John D. Rockefeller. And his story is uniquely American.

Born in upstate New York in 1839, he did not have an easy childhood. His father was a part time salesman and a full time philanderer. Rockefeller’s mother assured John that God was the father who would never let him down. Rockefeller absorbed that message. It guided his life. Deeply religious, he put into practice the spiritual law “Give and it shall be given unto you.” From his teenage years to his dying day, Rockefeller always gave a portion of his income to charity.

Rockefeller’s special gift to the world was kerosene, cheap kerosene, cheap enough that anyone could buy it. Before the formation of his signature company, Standard Oil, people lit their homes with candles and heated them with coal or wood. The candles were dim and the coal was dirty. Rockefeller’s affordable kerosene -- processed crude oil -- made the world brighter, warmer, cleaner, and better -- for everyone. “We must ever remember,” Rockefeller wrote to one of his partners in 1885, “we are refining oil for the poor man and he must have it cheap and good.”

Rockefeller loved the business of business. He attended to every detail -- always with the same goal, saving the customer money. That he made so much of it himself was a byproduct. He was also scrupulously honest. His first partner, Maurice Clark said, “If there was a cent due a customer, he wanted the customer to have it.”

Rockefeller displayed genius at getting creative ideas from his employees at Standard Oil. He paid them well -- and rarely had labor problems. He generously rewarded his chemists and engineers when they found new ways to get more kerosene out of a barrel of oil.  Other oil refiners dumped oil waste into nearby rivers. That repulsed Rockefeller who was perhaps the greatest environmentalist of his age. Not only was he a great lover of nature, he was the ultimate recycler. He believed there was a God-given use for every particle in a barrel of oil and he was determined to find it.

After the kerosene had been removed, Rockefeller’s staff found uses for the remaining components: the gasoline as fuel, some of the tars for paving, and other by-products to manufacture paint, varnish, and even anesthetics.

It’s hard to imagine that the automobile industry would have even come into existence without the availability of Rockefeller’s cheap oil. When Henry Ford was ready with his Model-T, Rockefeller was ready to supply the gas.

By the early decades of the new century, millions of Americans had jobs in oil-related industries. Those jobs helped to build the American middle class. As Rockefeller said, “We saw the vast possibilities of the oil industry, stood at the center of it, and brought our knowledge and imagination and business experience to bear in a dozen, in twenty, in thirty directions.”

Rockefeller was an oddity -- the first billionaire in U.S. history, but no one could out-give him. From the time of his first job, earning 50 cents a day, the sixteen-year-old Rockefeller gave to his local Baptist church, to missions in New York City, and to the poor -- black or white. He believed in the biblical admonition that not money, but “the love of money” was “the root of all evil.”

Rockefeller supported churches and missionaries all over the world; lavishly endowed colleges like the University of Chicago and Spelman College, a black women’s college, named after his wife, Laura; and gave millions to medical research. Before he died in 1937 in his 98th year, he had given away about $550,000,000, which was more than any other American had ever possessed.

So, if he did so much good during his life, why is he most commonly remembered today as the paradigm of a greedy capitalist? The answer to that question, I’m afraid, has much more to do with our educational system than with Rockefeller himself. Maybe it’s time to take a fresh look at both.

I’m Burt Folsom, professor of History at Hillsdale College, for Prager University.

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