Random Reminiscences of Men and Events by John D. Rockefeller

[objectiveMan]

A book about one of the great industrialists of the era of American capitalism. I recommend this book to anyone who wants to read about the period in history where businessmen could operate with relatively little government intervention. I hope such a time will come again one day... until then, all we can do is read about the times when that was possible.

As you may know, he became the richest man in the world and afterward gave most of it to charity. The Standard Oil company was broken up by the government after this book was written.

Here is a link to the book (with different versions):

https://www.gutenberg.org/ebooks/17090

Of course, all the advice is still true today, as it was then:

The underlying, essential element of success in business affairs is to follow the established laws of high-class dealing. Keep to broad and sure lines, and study them to be certain that they are correct ones. Watch the natural operations of trade, and keep within them. Don't even think of temporary or sharp advantages. Don't waste your effort on a thing which ends in a petty triumph unless you are satisfied with a life of petty success. Be sure that before you go into an enterprise you see your way clear to stay through to a successful end. Look ahead. It is surprising how many bright business men go into important undertakings with little or no study of the controlling conditions they risk their all upon.

Study diligently your capital requirements, and fortify yourself fully to cover possible set-backs, because you can absolutely count on meeting set-backs. Be sure that you are not deceiving yourself at any time about actual conditions. The man who starts out simply with the idea of getting rich won't succeed; you must have a larger ambition. There is no mystery in business success. The great industrial leaders have told again and again the plain and obvious fact that there can be no permanent success without fair dealing that leads to wide-spread confidence in the man himself, and that is the real capital we all prize and work for. If you do each day's task successfully, and stay faithfully within these natural operations of commercial laws which I talk so much about, and keep your head clear, you will come out all right, and will then, perhaps, forgive me for moralizing in this old-fashioned way. It is hardly necessary to caution a young man who reads so sober a book as this not to lose his head over a little success, or to grow impatient or discouraged by a little failure.

The book is rather short. Let me know what you think if you bother to read it.

[turkeyfoot]

Ive been nursing an interest of pre Sherman Anti Trust era, For instance what was it that invited the scrutiny that led to the Act? Under corporate law, limited liability, provided a "privilege" extended by the state and what is not normally thought of as a natural right imo, allowing for reckless abandonment of fair play. Without the normal financial risk associated with ownership, did they gamble big and win big at the expense of anyone who didnt share their special economic class? Its difficult to see Rockefeller as a victim of govt coercion because I do wonder whether any of what he obtained in business was the result of ill gotten gains.

Your recommendation may provide a clue.

The book, Lords of Creation, written in 1935 provided a perspective thats leaves me unsatisfied.

In the oil industry the control of competition was provided by a severe young man named John D. Rockefeller, who had run his little refining business in Cleveland with such calculating efficiency, had bought out his immediate competitors with such boldness, and had wrung secret privileges from the railroads with such shrewdness, that shortly he was able to dictate to the industry. No impartial referee would have sanctioned some of the practices which had enabled Rockefeller to gain supremacy. Early in the eighteen-seventies his Standard Oil Company and a number of others had joined forces in setting up an association euphemistically known as the South Improvement Company, and had thus secured from a number of railroads (by threatening to take their freight business elsewhere) not only rebates on their was freight charges but what were known as “drawbacks”; in other words, the Rockefeller group had forced the railroads to hand back to them secretly not only a part of the freight charges which the Rockefeller group themselves had paid (in accordance with the published rates), but also a part of what their competitors had paid! No competitor could long exist under such a crushing handicap. The South Improvement Company was short-lived, for when its devices were discovered there arose a howl of protest which echoes to this day; but by that time the pious Mr. Rockefeller had become too mighty a force in the oil industry to be resisted. He had the market in his grip; presently he had a large number of refining companies at his mercy; and by 1879 he was ready to deal the principle of free competition a thumping blow. A lawyer named Samuel C. T. Dodd provided him with the means of doing it. Dodd invented a way of bringing forty separate oil companies into a compact group under unified management. The shareholders in all these forty companies turned their stock over to a group of nine trustees, consisting of Rockefeller and his associates, and received, in return, trust certificates which entitled them to their dividends. The nine trustees, thus having full voting power over each of the forty companies, could do exactly as they pleased with the direction of each, operating them as a gigantic but flexible unit and confronting their competitors with their colossal collective power. Ordinary trade agreements between business rivals on prices and on the division of markets were usually made only to be broken; as a big industrialist testified many years later, they often lasted only until one of the conferees could get to a telegraph office or a telephone; but the decisions of these trustees were unbreakable. The first trust had been born. Now if there was one thing which American public opinion, devoted as it was to the ideal of free competition, would not tolerate, it was monopoly; and when the truth about this trust leaked out— which of course it did, despite the bland statements of Rockefeller and his associates that they were not connected with any oil concern but the Standard Oil Company of Ohio— there was a great public outcry. The small business man saw with acute dread the possibility that some day he might be forced out of business by such a trust. Consumers realized that trusts might be able to force upward the prices of essential commodities and thus take toll of a helpless population. Lovers of fair play were outraged by the spectacle of an economic game in which one player appeared to be a giant equipped with brass knuckles. During the eighteen-eighties a great many other trusts were formed, for the instinct of self-preservation and the acquisitive instinct combined forces to draw men into such combinations; soon there appeared a sugar trust, a rubber trust, a butcher trust, a whiskey trust, a cottonseed oil trust, and many more; but the outcry grew to such volume that in 1888 all the political parties denounced the trusts in their platforms, and in 1890 Congress passed, with only slight opposition, an act prohibiting “combination in restraint of trade”— the famous Sherman Act. Shortly afterward the Standard Oil Trust was forced to dissolve (or rather, to appear to dissolve).

Allen, Frederick Lewis (2014-06-10). The Lords of Creation (Forbidden Bookshelf) (Kindle Locations 270-274). Open Road Media. Kindle Edition.

[Brant Gaede]

"until then all we can do . . . . "

Whoa, Nellie!

--Brant

[objectiveMan]

Ive been nursing an interest of pre Sherman Anti Trust era, For instance what was it that invited the scrutiny that led to the Act? Under corporate law, limited liability, provided a "privilege" extended by the state and what is not normally thought of as a natural right imo, allowing for reckless abandonment of fair play. Without the normal financial risk associated with ownership, did they gamble big and win big at the expense of anyone who didnt share their special economic class? Its difficult to see Rockefeller as a victim of govt coercion because I do wonder whether any of what he obtained in business was the result of ill gotten gains.

Your recommendation may provide a clue.

I understand he used lots of questionable tactics against his competitors. Still, at least for me, he and other exceptional men of that age are the closest living examples of those heroic businessmen Ayn Rand talks about.

Ayn Rand seems to have been very outspoken against the Sherman Act. I listened to her lecture entitled "America's Persecuted Minority: Big Business" in which she talks about it. Here is what she said:

If I were asked to choose the date which marks the turning point on the road to the ultimate destruction of American industry, and the most infamous piece of legislation in American history, I would choose the year 1890 and the Sherman Act.

"until then all we can do . . . . "

Whoa, Nellie!

--Brant

I have no idea what that means.

[Selene]

Let's all have a common fact to work from...this is the extremely broad: 15 U.S. Code § 1 - Trusts, etc., in restraint of trade illegal; penalty, now you know where Ayn got her inspiration for the Directives:

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.

The rest of this noxious act. This marked the real beginning of the "progressives."

https://www.law.cornell.edu/uscode/text/15/chapter-1

[turkeyfoot]

Yes, ObjectiveMan, its clear to me the reaction AR had to the Sherman Anti Trust Act. We seem to hold similar romantic ideals about self made men to the point they become heroes because of our reactions towards govt intrusion into the marketplace that attempted to "right" the "wrongs" of what was perceived at the time as being unfair advantage. The front of Rockefeller building with the scupture of Atlas Shrugging symbolizes the greatness of the man whose inscription reads in part, "“I believe in the supreme worth of the individual and in his right to life, liberty, and the pursuit of happiness."

What happened prior to the Act that signaled the advent of govt intrusion in the marketplace is what is important to me at this time.

At the heart lies a difficult subject if one is to delve into the how Rockefeller accomplished his deeds, what it says about his intentions and the consequences. What I hate about bios is the self pious nature people maintain about themselves, so we must look at the facts before we judge.

A young girl named Ida Tarbell, the daughter of a refiner who was almost ruined by the South Improvement Company wrote a 19 part series and book, The History of the Standard Oil Company, (1904) based in part on interviews of Rockefellers partner, Henry Rogers, who also provided documentation -

after he went on record defending the efficiency of current Standard Oil business practices, “his face went white with rage” to find that Tarbell had uncovered documents that showed the company was still colluding with the railroads to snuff out its competition.

“Where did you get that stuff?” Rogers said angrily, pointing to the magazine. Tarbell informed him that his claims of “legitimate competition” were false. “You know this bookkeeping record is true,” she told him. She said, "They had never played fair, and that ruined their greatness for me."

Its a tendency towards a conclusion about Rockefeller being one of the great ones so lets cut to the chase and what followed that bothers me. I want to know in detail if he is deserving of this reputation. Its much easier for me to take note of Henry Bessemers process, or Tesla for example, who created a thing that changed the world. Its important to me to assign blame or credit in equal measure. What did Rockefeller do that changed the world prior to making his billions?

[Brant Gaede]

The role of LLC in trust building doesn't seem to have been examined historically. If a LLC helped build a trust it's natural enough for government to get into the trust-busting business. Where in libertarian or Objectivist poitical theory is there any role for the LLC?

--Brant

[objectiveMan]

The front of Rockefeller building with the scupture of Atlas Shrugging symbolizes the greatness of the man whose inscription reads in part, "I believe in the supreme worth of the individual and in his right to life, liberty, and the pursuit of happiness."

According to Wikipedia, these principles are from Rockefeller Jr. (not Sr.). The first one that you have quoted sounds good, as if John Galt himself had said it. But what kind of inconceivable evil has spawned this next one? How can these two "principles" be from the same man?

I believe that the rendering of useful service is the common duty of mankind and that only in the purifying fire of sacrifice is the dross of selfishness consumed and the greatness of the human soul set free.

To anyone who is interested, I would also recommend a TV series "The Men Who Built America" which tells the story of Rockefeller, Carnegie, Vanderbilt, Morgan and Ford. It is short (only 4 episodes), so it remains pretty superficial in depth, but does go over the most important accomplishments of these men.

http://www.history.com/shows/men-who-built-america

[turkeyfoot]

I've read Tarbells' account and parts of your recommendation - Reminescences along with Vindicating Capitalism by Alex Epstein and bits of John D. Rockefeller by Dalzell. You can find the stuff of the man, Sr and Jr therein.

I would attribute the seeming contradiction to faith and a staggering inherited sum that the family felt needed to be disbursed. Sr was saddled with philanthropic concerns.

My research reveals a reliance in the whole on emotional appeal rather than the facts which imo, put him in good stead in my book. He deserves a place of greatness in the pantheon of American business and the Atlas sculpture is a good way to display that. He was probably the shrewdest person in the right geographic area and in the right century. Alas, the system that gave rise to his achievements went under appreciated, was derided and so misunderstood that in its place mediocrity has taken hold. It's fortunate we have an such an excellent example of Capitalism at work!

An old rags to rags adage my fil mentioned once in regard to wealth is also apropos to Philosophy. The first generation creates wealth, the second squanders it, (not appreciating the value)and the third has to start from the beginning.

[turkeyfoot]

The role of LLC in trust building doesn't seem to have been examined historically. If a LLC helped build a trust it's natural enough for government to get into the trust-busting business. Where in libertarian or Objectivist poitical theory is there any role for the LLC?

--Brant

I don't know Brant. I discovered Rockefeller was a value creator not a wild speculator. He didn't need a corporate shield to hide behind.

[Brant Gaede]

I'm not talking about liability and I'm not saying he needed a corporate shield. I'm talking about the trust-busting business of government and suggesting legal corporate entities are essentially fascist. As for Rockefeller driving someone out of business that's the nature of a free economy. Everybody gets to do what they want if they aren't named Rockefeller, who gets to be screwed because he ended up on top of the heap? Somebody is going to be up there, Rockefeller in this case of the trust busters. During the rapid industrialization of the late 19th century, economic dislocations came like a waterfall. The government was mixed up in a lot of it, especially the railroads, but the basic impulse was free market with little in the way of tax liabilities.I don't see how any "monopoly" hindered any economic growth. Trust busting back then was really small potatoes compared to those progressives getting the country into The First World War. The Randian esthetic, however, made poor old (SOB?--who gives a damn?) Rockefeller some kind of a victim. Well, we all get to be victims if we want to be, even if we cry all the way to the bank.

--Brant

no, they shouldn't have busted up Standard Oil; market forces would have eventually done the job, especially on a mature company

[objectiveMan]

The Randian esthetic, however, made poor old (SOB?--who gives a damn?) Rockefeller some kind of a victim. Well, we all get to be victims if we want to be, even if we cry all the way to the bank.

He was well off financially after the breakup, if that is what you are referring to. I would still consider him a victim morally, as in being persecuted for being successful, but I would propose the real victim was capitalism. Not just in that trial as such, but maybe it was somekind of a turn in the road if you will for America.

[turkeyfoot]

I don't see how any "monopoly" hindered any economic growth.

It was said anyone could destill kerosene from rock oil for a $300 equipment purchase and make the initial investment back on the first sale. The intelligent refiners became convinced by a look at his books that they hadnt a chance and either sold out, got on board or sought a productive endeavor.

Tarbell had a juvenile reaction to someone "hurting" her father. 26 yrs later wrote "one of the best 20 investigative pieces in journalistic history" that resonated with the public. It was the ole, cant do as well as Johnnie or Janie no matter how hard you try so you nurse hatred or petty feelings because of it. She wrote but didnt say much. She even opined about Forest Hill, his residence not being as extravagant as it could be and ventured it was bad taste. That was really below the belt. )

Much the same in MS vs DOJ.

Its not the power of businessmen that worry me. Its the arbitrary concentration of power and the state monopoly on the use of force in the hands of politicians.

Anti Trust; A Greespan. "the entire petroleum industry amounted to less than one percent of the Gross National Product and was barely one-third as large as the shoe" industry....