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| | But the first modern oil well was in Pennsylvania, when Colonel Edwin L. Drake drilled down 72 feet near Titusville (just east of Pittsburgh) and struck "Oil Creek." Oil production there started in 1859. That oil sold for $40 a barrel (note that a dollar was worth far more then), so it was even more expensive to buy than oil is today! It was used for medicine, as there were no cars then.<ref name="Oil"/> | | But the first modern oil well was in Pennsylvania, when Colonel Edwin L. Drake drilled down 72 feet near Titusville (just east of Pittsburgh) and struck "Oil Creek." Oil production there started in 1859. That oil sold for $40 a barrel (note that a dollar was worth far more then), so it was even more expensive to buy than oil is today! It was used for medicine, as there were no cars then.<ref name="Oil"/> |
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| − | A devout Christian who abandoned public school before finishing, John D. Rockefeller, had just started his first job a few years earlier. He had a tremendous work ethic, and was immediately attracted to the discovery of oil in 1859. He quickly entered the business and hooked up with an inventor who knew how to cheaply refine the oil into something useable. By 1870 Rockefeller founded Standard Oil Company, and then began pursuing cutthroat business tactics to drive out competitors and consolidate his control (monopolize the industry).<ref name="Rockefeller">http://www.u-s-history.com/pages/h957.html</ref> | + | A devout Christian who abandoned public high school before finishing, John D. Rockefeller, had just started his first job a few years earlier. He developed a tremendous work ethic, and was immediately attracted to the discovery of oil in 1859. He quickly entered the business and hooked up with an inventor who knew how to cheaply refine the oil into something usable. By 1870 Rockefeller founded Standard Oil Company, and then began pursuing highly aggressive business tactics to drive out competitors and consolidate his control (monopolize the industry).<ref name="Rockefeller">http://www.u-s-history.com/pages/h957.html</ref> |
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| − | In 1882, Rockefeller formed a new type of business entity called the "trust", and named it the Standard Oil Trust. But ten years later a decision by the Ohio Supreme Court decision forced him to break up his Trust into 20 smaller businesses. In 1899 he formed a holding company for all his businesses in the name of Standard Oil Company of New Jersey. In 1911, the U.S. Supreme Court forced him to break up that monopoly too. Rockefeller then retired and devoted the remainder of his long life to philanthropy (giving away his money to charitable causes).<ref name="Rockefeller"/> | + | In 1882, Rockefeller formed a new type of business entity called the "trust", and named it the Standard Oil Trust of Ohio. But ten years later a decision by the Ohio Supreme Court decision forced him to break up his Trust into 20 smaller businesses. In 1899 he formed a holding company for all his businesses in the name of Standard Oil Company of New Jersey. By 1911 it controlled an astounding 95% of the entire oil industry, but then the U.S. Supreme Court forced Rockefeller to break up it up into smaller pieces and separately controlled companies, one of which became Exxon. Rockefeller then retired and devoted the remainder of his long life to philanthropy (giving away his money to charitable causes).<ref name="Rockefeller"/> |
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| | + | Rockefeller became perhaps the wealthiest man in the history of the world. Predictably, people became jealous and his competitors sometimes lost their businesses. Many politicians became determined to break up his huge company, and many critics accused him or his employees in engaging in illegal activities, even bribes, to build his business empire. But other industries began to follow his example, as large industrial companies began to form to control sugar, lead, beef and even whiskey. |
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| − | monopolized the oil industry at this time, becoming perhaps the wealthiest person ever. After he formed the Standard Oil Trust of Ohio in 1881 to run his empire, it became a goal of government to break his empire up. Meanwhile, other industries began to follow his example, as large industrial companies began to form to control sugar, lead, beef and even whiskey. Rockefeller, in turn, allegedly bribed public officials to advance his business goals. Congress ultimately passed the Sherman Antitrust Act to prohibit “restraint of trade” or interference with competition, in 1890, named after Senator John Sherman of Ohio (General William Sherman’s brother). Rockefeller’s oil company was ultimately broken up by the courts. The Sherman Antitrust Act is a big area of the law today.
| + | Congress ultimately passed the Sherman Antitrust Act to prohibit monopolization and "restraint of trade," or interference with competition, in 1890, named after Senator John Sherman of Ohio (a candidate for the Republican presidential nomination in 1880 and the brother of General William Sherman). The Sherman Antitrust Act was not what broke up Rockefeller's oil empire, because in 1895 the Supreme Court weakened the law by upholding a powerful Sugar Trust, in ''U.S. v. Knight Co.'' The Sugar Trust controlled 98% of the sugar market, and the Supreme Court allowed it to continue. Despite being weakened, the Sherman Antitrust Act remains a very important law that is used every day now. |
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| − | Monopolies are a topic that divides free enterprise thinkers. Some advocate that the free market will deal with monopolies adequately. Others say that monopolies are an opponent to the free market and should be broken up.
| + | The issue of Rockefeller and monopolies divides free enterprise thinkers. Some advocate that the free market will deal with monopolies adequately. Others say that monopolies are an opponent to free market competition and should be broken up. |
| − | In sum: economic issues dominate the period after Reconstruction (1877) through 1900. It’s a period of great economic growth in our Nation, when our “gross domestic product” increased greatly. “Gross domestic product” is the total output (in dollars) of all the good and services produced by labor and property located our country. It is basically how much our entire country is producing, valued in dollars. When we are prosperous it increases, and when we are in a depression it goes down or does not increase as much.
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| − | Sherman Antitrust Act "1890: prohibited companies from having monopolistic behavior, but failed in goal to break up huge trusts"
| + | '''Debate: Should government break up monopolies?''' |
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| − | John Sherman "Ohio Congressman who sponsored the Sherman Antitrust Act, brother of General Roger Sherman"
| + | Good or bad, Rockefeller was part of a huge economic boom that began before the end of Reconstruction in 1877 and continued through 1900. There was an increase in America's "gross domestic product," which is the total output (in dollars) of all the good and services produced by labor and property located our country. It is basically how much our entire country is producing, valued in dollars. When we are prosperous it increases, and when we are in a depression it goes down or does not increase as much. |
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| − | "Williamsport, Pennsylvania" late 1800s: wealthiest city in the U.S. because as center of the lumber industry; now hosts Little League
| + | By the late 1800s the wealthiest city in the United States was Williamsport, Pennsylvania, which was the center of the profitable lumber industry. Now it is best known for hosting the Little League World Series! |
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| − | U.S. v. Knight Co. "1895: weakens power of Sherman Antitrust Act by upholding powerful Sugar Trust, which held 98% of mkt"
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| − | Standard Oil Trust "1879-1911: America's biggest monopoly, it controlled almost 95% of the oil industry until broken up by S.Ct."
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| | == Economics == | | == Economics == |