John D. Rockefeller’s Standard Oil Company is…
May 1879 CE
John D. Rockefeller’s Standard Oil Company is growing horizontally and vertically, adding its own pipelines, tank cars, and home delivery network.
It keeps oil prices low to stave off competitors, makes its products affordable to the average household, and to increase market penetration, sometimes sells below cost if necessary.
It has developed over three hundred oil-based products from tar to paint to Vaseline petroleum jelly to chewing gum.
In collusion with other Rockefeller companies, Standard Oil controls eighty-five percent of the US oil industry by 1878.
By the end of the 1870s, Standard is refining over 90% of the oil in the U.S.
Rockefeller has already become a millionaire.
Standard had clashed in 1877 with the Pennsylvania Railroad, its chief hauler.
Rockefeller had envisioned the use of pipelines as an alternative transport system for oil and had begun a campaign to build and acquire them.
The railroad, seeing Standard’s incursion into the transportation and pipeline fields, had struck back and formed a subsidiary to buy and build oil refineries and pipelines.
Standard had countered and held back its shipments, and with the help of other railroads, started a price war that had dramatically reduced freight payments and caused labor unrest as well.
Rockefeller eventually prevailed and the railroad sold all its oil interests to Standard, but in the aftermath of that battle, in 1879, the Commonwealth of Pennsylvania indicts Rockefeller on charges of monopolizing the oil trade, starting an avalanche of similar court proceedings in other states and making a national issue of Standard Oil’s business practices.