Random Reminiscences of Men and Events
John D. Rockefeller, 1909
How did a former bookkeeper’s assistant build the largest oil company of his time, and why did newspapers call it an octopus? In 1909 John D. Rockefeller told his version himself. You will learn his rules about numbers, trust, partners and money for others, and see where his account should be checked.
Who it is for
For people who run their own business or are about to start one, who work with partners and other people’s money, and for anyone curious how the richest man of his time explained his own path.
I know of nothing more contemptible and pitiful than a man who gives every waking hour to getting money for the sake of money.
The Boy Who Did Not Ask About Pay
Cleveland, autumn 1855. Sixteen-year-old John spends weeks walking the streets and asking every merchant whether he needs a boy. No one needs a boy. At last a man in an office by the wharf tells him to come back after lunch. John returns, afraid of missing his only chance, and hears: “We will let you try.” Not a word is said about pay.
Half a century later that boy was the richest man in America, and newspapers called his company, Standard Oil, an octopus. In 1909, almost seventy years old, John D. Rockefeller published this small book and explained why: if even a tenth of what is said about him is true, dozens of his loyal companions are guilty of serious wrongdoing, and while he is alive he can testify to some of it.
So read it with your eyes open. This is Rockefeller’s own account, and wherever he defends the company, he defends himself. Others judged differently: in 1911 the US Supreme Court ordered Standard Oil broken up into separate companies.
But besides the defence, the book holds the rules of a former bookkeeper. You will learn why to check every line of an account, how to keep a principle when your best client is at stake, how to win over a stubborn partner, why Rockefeller hired a competitor, and why he called giving money away a difficult art.
A Bill a Yard Long
Rockefeller’s first job was in the office of a trading firm, and soon he was entrusted with checking all the bills. Once, in the office next door, he saw a local plumber bring in a bill almost a yard long, that is, nearly a metre. The owner, a very busy man, barely glanced at the paper and told his bookkeeper: “Pay it.”
Meanwhile, in those same days, Rockefeller checked that same plumber’s bills line by line, even when only a few cents were at stake, and the firm benefited from it. He regarded his signature on a bill as a decision that releases the owner’s money from the till, and he was stricter about answering for it than about his own spending. That was when he decided that a business run so carelessly would not survive.
From this habit grew his main rule: know your numbers and do not hide from them. Many shrewd businessmen of his time, he writes, kept their books so that they did not know which operations earned money and which lost it. When things go badly, a person least of all wants to open the books and face the truth. In his company, by his account, they knew from the start where they were winning and where they were losing, and tried not to deceive themselves.
The truth is often unpleasant. When Rockefeller had acquired shares in various enterprises, he asked an acquaintance, Frederick Gates, who travelled the country on his own business, to look in at several plants. Rockefeller called Gates’s report exemplary: it contained only facts, and nearly all of them bad. An enterprise people said was swimming in money was in fact heading for disaster.
What to take away? Before you sign a bill for other people’s or shared money, check it line by line. And sit down with your numbers exactly when you least want to: that is the very moment Rockefeller warned about.
About the author
John Davison Rockefeller (1839-1937) started work at sixteen as an assistant bookkeeper in Cleveland, founded Standard Oil with partners, and stepped back from business in the mid-1890s. He spent the rest of his life on philanthropy: he supported the University of Chicago, medical research and education.
All books by this author: John D. Rockefeller
Terms from the book
- Gates
- Cleveland
- Clark
- Gardner
- Standard Oil: The oil company Rockefeller founded with partners in Ohio in 1870. It became the largest in the United States; in 1911 the Supreme Court ordered it split into separate companies.
- Supreme Court: The highest court of the United States. Its 1911 ruling in the Standard Oil case became one of the best-known applications of antitrust law.
- Handy: T. P. Handy, a Cleveland bank president who had known Rockefeller since school. He gave him his first bank loan of two thousand dollars and supported him for many years afterwards.
- warehouse receipts: Documents a warehouse issues to the owner of goods as proof that the goods are held in storage. They can be handed to a bank as collateral.
- Flagler: Henry Flagler, one of Rockefeller’s first partners in the oil business, who drew up the company’s contracts. Later he built a railway along Florida’s east coast to Key West.
- Great Lakes: Five interconnected lakes on the border of the United States and Canada. Iron ore was shipped across them from northern mines to the mills.
- Mather: Samuel Mather, a Cleveland businessman, a major carrier of iron ore on the Great Lakes and a rival of Rockefeller. He oversaw the building of his ore carriers.
- Bowers: L. M. Bowers from Broome County in New York. With no seafaring experience, he ran Rockefeller’s ore fleet, and later became vice president of a coal and iron company in Colorado.
- by-products: Everything obtained when raw material is processed, besides the main product. For oil refiners of the time the main product was kerosene, and the by-products included, for example, lubricating oils and paraffin.
- rebates: Discounts from the official freight rate that railways secretly paid back to individual shippers. Only the parties to the deal knew the size of the discount.
- Backus: Mrs. Backus, the widow of the Cleveland businessman F. M. Backus. In 1878 she sold part of her husband’s firm, which made lubricating oils, to Standard Oil, and later accused Rockefeller of having cheated her.
- antitrust law: The Sherman Act, passed in the United States in 1890. It bans conspiracies and combinations that restrain trade and competition.
- University of Chicago: A private university opened in 1892 with money from Rockefeller and the citizens of Chicago. Rockefeller made large donations to it for many years.
- Harper: William Rainey Harper, a Yale professor and the first president of the University of Chicago. He raised millions for the university from residents of Chicago and the Midwest.
All terms
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