As Standard was bestriding the earth like a colossus, however, a new question was arising: Did America want a colossus? How disciplined should the economy be? Efficiencies created lower prices, but they also could lead to decreased workforces. Most Americans approved the trade-off because those whose work was rendered superfluous could find other jobs where they would be more productive—but those left out complained.
Rockefeller, winning worldwide, began having serious trouble at home in 1878, when a Clarion County, Pa., grand jury indicted him and eight other Standard officials for conspiring to achieve a monopoly. Specially, Standard was accused of working out secret rebates with railroads so it could ship product more cheaply than competitors could. Standard settled the case out of court in 1880 by agreeing to full publicity for all rates and an end to rebates.
The great journalistic attack commenced in 1881 when Chicago writer and lawyer Henry Demarest Lloyd blistered Rockefeller in an Atlantic Monthly lead article. The article had many factual errors, but its major indictment was chilling to those who believed government should promote the survival of endangered species of companies. “How seldom I had an unbroken night’s sleep, worrying about how it all was coming out,” Rockefeller said in 1906. “Work by day and worry by night, week in and week out, month after month. If I had foreseen the future I doubt whether I would have had the courage to go on.”
Lloyd began his attack on showing how major railroads secretly granted lower rates to Standard and other large corporations. He went on to detail how the competitive advantage allowed by those rates enabled Standard to knock out smaller competitors and establish a virtual monopoly. Lloyd then charged Standard and similar companies with holding onto their power by bribing journalists and legislators. He also attempted to show state governments to be so corrupt that only Washington’s intervention could set things right.
Rockefeller agreed with only one part of Lloyd’s analysis: Yes, Standard had battered its competitors. To use today’s language, Rockefeller acknowledged that a heavyweight boxer had roughed up a bantamweight—not a pretty sight. But, Rockefeller insisted, Standard did not hit below the belt. It broke no laws. It did throw around its economic weight, but the only reason it could do so was because Standard stressed efficiency and frugality.
Rockefeller also noted he was the victor and others could have been. He emphasized that Standard itself had faced a squeeze from the Pennsylvania Railroad and associated freight lines in the 1870s but had moved quickly to develop new pipeline technology and lay down lines. Others that were agile could have done the same, acquiring a fortune considered outrageous but nevertheless earned through hardworking days and sleepless nights. Why should they now suffer slings and arrows?
This was Rockefeller’s question—Bill Gates might ask similar ones now—but cold logic did not make winners popular among the envious or fearful. Rockefeller denied he had used the power of government to suppress potential competitors. He differentiated Standard from corporations that were always asking government for special favors such as tariff increases, subsidies, land grants, and tax underassessments. Standard, he pointed out, merely wanted to be left alone to throw its weight around—and why not, since each pound of muscle was hard-earned? To maintain independence, Standard used lobbying tricks, sure, but its goal in relation to government was defense, not offense.
Rockefeller also noted Standard’s need to protect itself from legislators who had found out that blackmail could pay, and pay well. Other testimony from the time supports this concern. When Theodore Roosevelt was in the New York legislature during the early 1880s, he estimated a third of his colleagues were corrupt. He cited bills corporate backers had paid them to sponsor, with ambiguous wording that could confuse honest legislators. But Roosevelt also noted that for every rotten bill invented by corporate interests at least 10 attempted to restrict those interests. Their sponsors even received favorable publicity for introducing them, but “had not the slightest intention of passing them: [they] wished to be paid not to pass them.”
A public relations expert might have found a way to have Rockefeller phrase his argument in politically potent, Jeffersonian language: Government, hands off our yeoman handiwork! But Rockefeller could not honestly play that game, because, in his experience, small business was not the hero. Given international competition, he believed concentration in the oil industry was inevitable. He saw Standard, with its quality control and frequent lowering of prices, as a public servant.
Rockefeller, above all, had a vision of efficiency. From childhood through old age, in business and in church activities, he wanted to show in his records that nothing was wasted, much was constructed, and the bigger the better: “Mere money-making has never been my goal … an ambition to build” motivated him. In building, Rockefeller’s goal was never to beggar his neighbor, but to buy him out on the road to maximum production discipline.
Editor’s note: Read Part 2 of Marvin Olasky’s biography of John D. Rockefeller.