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The Rise of the Standard Oil Company

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THE RISE OF THE STANDARD OIL COMPANY chief refining competitor of Oil Creek in 1872 was Cleveland, Ohio. Since 1869 that city had done annually more refining than any other place in the country. Strung along the banks of Walworth and Kingsbury Runs, the creeks to which the city frequently ban ishes her heavy and evil-smelling burdens, there had been since the early sixties from twenty to thirty oil refineries. Why they were there, more than 2oo miles from the spot where the oil was taken from the earth, a glance at a map of the railroads of the time will show: By rail and water Cleveland commanded the entire Western two trunk lines running to New botheager for oil traffic, and by Lake Erie and the canal it had for a large part of the year a splendid cheap waterway. Thus, at the opening of the oil business, Cleveland was destined by geographical position to be a refining center.

Men saw it, and hastened to take advantage of the opportu nity. There was grave risk. The oil supply might not hold out. As yet there was no certain market for refined oil. But a sure result was not what drew people into the oil business in the early sixties. Fortune was running fleet-footed across the country, and at her garment men clutched. They loved the chase almost as they did success, and so many a man in Cleveland tried his luck in an oil refinery, as hundreds on Oil Creek were trying it in an oil lease. By 1865 there were thirty refineries in the town, with a capital of about a million and a half dollars and a daily capacity of some 2,000 barrels. The works multiplied rapidly. The report of the Cleveland Board of Trade for i866 gives the number of plants at the end of that year as fifty, and it dilates eloquently on the advantages of Cleveland as a refining point over even Pitts burg, to that time supposed to be the natural centre for the business. If the railroad and lake transportation men would but adopt as liberal a policy toward the oil freights of Cleve land as the Pennsylvania Railroad was adopting toward that of Pittsburg, aided by her natural advantages the town was bound to become the greatest oil refining centre in the United States. By i868 the Board of Trade reported joyfully that Cleveland was receiving within 300,00o barrels as much oil as Pitts burg. In 1869 she surpasKd all competitors. "Cleveland now claims the leading position among the manufacturers of petro leum with a very reasonable prospect of holding that rank for some time to come," commented the Board of Trade report. "Each year has seen greater consolidation of capital, greater energy and success in prosecuting the business, and, notwithstanding some disastrous fires, a stronger tion to establish an immovable reputation for the quantity and quality of this most important product. The total capital

invested in this business is not less than four millions of dollars and the total product of the year would not fall short of fifteen millions." Among the many young men of Cleveland who, from the start, had an eye on the oil-refining business and had begun to take an active part in its development as soon as it was demonstrated that there was a reasonable hope of its being permanent, was a young_ firm of produce commission mer chants. Both members of this firm were keen business men, and one of them had remarkable commercial vision—a genius for seeing the possibilities in material things. This man's name was Rockefeller—John D. Rockefeller. He was but twenty-three years_old when he first went into the oilJusiness, but he had already got his feet firmly on the business ladder, and had got them there by his own efforts. The habit of driv ing good bargains and of saving money had started him. He himself once told how he learned these lessons so useful in money-making, in one of his frequent Sunday-school talks to young men on success in business. The value of a good bar gain he learned in buying cord-wood for his father: "I knew what a cord of good solid beech and maple wood was. My father told me to select only the solid wood and the straight wood and not to put any limbs in it or any punky wood. That was a good training for me. I did not need any father to tell me or anybody else how many feet it took to make a cord of wood." And here is how he learned the value of investing money: "Among the early experiences that were helpful to me that I recollect with pleasure was one in working a few days for a neighbour in digging potatoes—a very enterprising, thrifty farmer, who could dig a great many potatoes. I was a boy of perhaps thirteen or fourteen years of age, and it kept me very busy from morning until night. It was a ten-hour day. And as I was saving these little sums I soon learned that I could get as much interest for fifty dollars loaned at seven per cent. —the legal rate in the state of New York at that time for a year—as I could earn by digging potatoes for ioo days. The impression was gaining ground with me that it was a good thing to let the money be my slave and not make myself a slave to money." Here we have the foundation principles of a great financial career.

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