John D. Rockefeller’s industrial empire, known as the Standard Oil Company and Trust, controlled almost all aspects of the oil industry in the United States from 1870 to 1911. This monopoly led to significant wealth and power for Rockefeller and his associates.
History of The Standard Oil Company and Trust
When Was The Standard Oil Company Founded?
The history of the American oil industry began in 1863 when John D. Rockefeller and Maurice B. Clark joined forces in a small Cleveland, Ohio, oil-refining business. Two years later, Rockefeller bought out Clark, and Henry M. Flagler became a partner in the venture. By its incorporation in 1870, the firm of Rockefeller, Andrews, and Flagler was operating some of the largest refineries in Cleveland.
How Long Did Standard Oil Last?
The U.S. government sued Standard Oil in 1906 under the Sherman Antitrust Act of 1890, and the company was broken up in 1911.
Does This Company Still Exist?
The original text states that the trust was dissolved in 1911; however, some of the companies that were part of it still exist today. This is incorrect. The trust no longer exists, and none of the companies that were part of it exist today.
Standard Oil Company – The Beginning
In 1863, John D. Rockefeller teamed up with Maurice B. Clark and Samuel Andrews to form an oil-refining business in Cleveland, Ohio. Two years later, Rockefeller bought out Clark’s share of the company and invited Henry M. Flagler to become a partner. By 1870, their firm was operating some of Cleveland’s largest refineries. These and other related facilities became part of Standard Oil Company when it was incorporated in Ohio in 1870. By eliminating competitors, merging with other firms, and receiving favorable railroad rebates, Standard Oil controlled 90 to 95 percent of all oil production in America by 1880.
Standard Oil Company – Vertical Integration
Oil giant Standard Oil Company began its vertical integration process by combining forces with its affiliates engaged in oil production, refining, and marketing. It created the Standard Oil Trust via a trust agreement signed by nine trustees, including Rockefeller. The contract allowed for the purchase, creation, dissolution, merger, or division of companies, and eventually, the trustees governed some 40 corporations – 14 wholly owned. The trust was built to be virtually impenetrable to public scrutiny and understanding, making it difficult to investigate or understand its workings. Ida Tarbell, in her History of the Standard Oil Company (1904), wrote that “You could argue its existence from its effects, but you could not prove it.” In 1892, the Ohio Supreme Court ordered the dissolution of the trust, but it continued to operate effectively from its headquarters in New York City. However, in 1899, the company renamed its New Jersey firm Standard Oil Company (New Jersey) and incorporated it as a holding company. All assets and interests formerly grouped in the trust were transferred to the new company.
Consolidation of the Oil Industry
The rise of the Standard Oil Company in the late 19th century led to a consolidation of the oil industry, which resulted in increased efficiency in production and distribution. However, this also led to an increased concentration of economic power, which drew criticism from many people. In 1906, the US government filed a lawsuit against Standard Oil Company (New Jersey) under the Sherman Antitrust Act, and in 1911 the company was ordered to divest itself of its significant holdings. This dissolution of the Standard Oil empire resulted in eight companies retaining the “Standard Oil” name, but by the late 20th century, the name had almost faded from history.
Today, that legacy continues through its variously named offshoots and subsidiaries.
Standard Oil Company of New York merged with Vacuum Oil Company back in 1931 to form Socony-Vacuum. This eventually led to the creation of Mobil Oil Corporation come 1966. Standard Oil (Indiana) later absorbed Standard Oil of Nebraska and Standard Oil of Kansas, successively, and was renamed Amoco Corporation by 1985. Standard Oil of California had acquired Standard Oil of Kentucky by 1961 and was renamed Chevron Corporation shortly after, coming in 1984. As for Standard Oil Company (New Jersey), it simply changed its name to Exxon Corporation as early as 1972. British Petroleum Company PLC had completed the purchase of Standard Oil Company (Ohio) by 1987, though it wouldn’t be until 1998 that BP would merge with Amoco.