The Rockefeller Files: Chapter Two by Gary Allen from archive.org

Chapter Two 

The Saintly Sinner 

^^Competition is a sin." 
-John D. Rockefeller 

Enough books have been written to fill a fair- sized library, detailing the incredible story 
of how Daddy Oilbucks started Standard Oil and built the Rockefeller fortune. Some of 
them even tell the truth! We will tiptoe through these shady tulips only long enough to 
understand the traits and tactics of the Rockefeller founding father, so we may recognize 
them as they bloom again in modern clan members. 

Everything about the Rockefellers seems to be controversial, even their family 
background. One story goes that the family descends from French Protestants, who 
changed their name from Roquefeuille to Rockefeller when they were driven from France 
into Germany. However, a genealogy compiled by the distinguished scholar, Dr. 
Malcolm Stern, entitled Americans of Jewish Descent, convincingly established the 
claims of many American Jews that the Rockefeller clan originally was one of their 
own.* 

* Birmingham, Stephen, The Grandees: America's Sephardic Elite, Harper & Row, N.Y., 
1971, p. 3. 

The controversy about the Rockefeller antecedents is probably not important. But it does 
highlight an accomplishment more difficult than threading a needle after six martinis (and 
one that is reported about as often). 

The family controls oil holdings worth hundreds of millions in Arab lands, yet Nelson 
has remained the darling of organized Jewry in New York City. Without such support he 
could never have been elected Governor of New York State four times. Just how the 
family manages this bit of wizardry boggles the mind. 

William Rockefeller, the father of John D., first became involved in the petroleum 
business when he peddled the oily stuff at $2.5 a pint as a cure for warts, snake bite, 
cancer and impotency. The wandering medicine man called himself "Doctor,"' even 
though he couldn't have entered medical school with a search warrant. In addition to 
being a quack, "Doc" Bill was a bigamist, horse thief and child molester. The good 
"Doctor" avoided prosecution in New York for raping a 15-year old girl by hightailing it 
for Cleveland. Once there, he deserted his wife and six children to marry a 20-year old. 



(At least when Nelson abandoned his wife of 3 1 years to marry Happy Fitler Murphy, he 
did not abandon his children. She abandoned hers.) 

Although no one ever nominated him for the father-of the-year award, the "Doc" did take 
the time to instruct his children in his own unique business ethics. Author William 
Hoffman reports:"The thing the children most remembered about their father was the 
delight he took in getting the better of them in business deals. He would con them out of 
something they considered important, then lecture them on the necessity of always being 
alert." 

The family's friendly biographer, Professor Allan Nevins, quotes "Old Bill" as boasting to 
a crony: 

/ cheat my boys every chance I get. want to make 'em sharp. I trade with the boys and 
skin 'em and I just beat em every time I can. I want to make 'em sharp. 

He did. 

The sharpest of the "Doc's" progeny was John D. Any psychiatrist worth a couch would 
trade several neuroses to have had a chance to learn what made him tick. He was full of 
more contradictions and paradoxes than a Charlie Chan flick. The main feature of his 
Jekyll-Hyde personality is that he was straighter than an arrow in his private life and 
deeply (some say fanatically) religious. At the same time he was totally and utterly 
ruthless in his grasping for money and power. Many of the old boy's victims were sure 
that his religion was a pretense, an act. But actually there is no evidence that his claims to 
piety were deliberately faked. 

Unlike his father, John D. was a nose-to-the-grindstone type who, before he was out of 
his teens, was a shrewd and successful commission broker in Cleveland. In 1859, his 
partners sent him over to Titusville, Pennsylvania to see if there was as much financial 
potential in the gushing black liquid as was rumored. Young Rockefeller liked what he 
saw. He decided that of the three phases of the burgeoning oil industry-production, 
transportation and refining-the last promised the greatest profits. 

John D. returned to Cleveland and launched what became the mighty Standard Oil 
Company. From the start of his business career, one thing that Rockefeller hated more 
than sin was competition. For John D the only efficient way to run anything was by a 
monopoly. Provided, of course, that the most qualified, most capable, and most deserving 
person-meaning himself-ran it. 

When John D. founded Standard Oil, it was just one of the 27 other refineries in the 
Cleveland area, and by no means the biggest. But the ambitious businessman-who once 
declared that -competition is a sin" -soon devised a plan to take on or destroy his 
competitors. The simplicity. Audacity, and ruthlessness of his scheme is breathtaking. 



He bribed and coerced the railroads serving the oil producing region (the Pennsylvania, 
Erie, and New York Central), to give him a kickback, or rebate, not only on his own 
shipments, but also on every barrel his competitors sent by rail. The more they shipped, 
the more he made! 

Rockefeller's rebate formula enabled him to reduce his own prices and drive the other oil 
refiners out of business using their own money! 

Within a year, his competitors had capitulated. 

Lewis Corey, in his book The House of Morgan, comments on the ploys that provided 
the coups de grace to Rockefeller's competitors: 

... the battle of competition was waged by means of intrigues, discriminatory railroad 
rates, business blackmail and expropriating competitors' property .... 

In spite of public condemnation, Standard Oil persisted in extorting discriminatory rates 
from railroads, afterward secured by John D. Rockefeller becoming a power himself in 
the railroads, particularly New York Central, Erie and Pennsylvania. Rate discrimination 
was general and infuriated small businessmen to revolt ... 

John D. did not get his bag of tricks from his daily reading of Matthew, Mark, Luke and 
John. The rebate game was powerful, but it was only one of his cunning schemes. In the 
early days, "lucky- competitors were offered cash or stock in Standard Oil, in return for 
selling their firms to Rockefeller at the rock-bottom prices he offered. The smart ones 
took stock. Later, things got rougher. Matthew Josephson describes in The Robber 
Barons what happened to one stubbornly independent company: 

.... where the Standard Oil could not carry on its expansion by peaceful means, it was 
ready with violence; its faithful servants knew even how to apply the modern weapon of 
dynamite. In Buffalo, the Vacuum Oil Co., one of the"dummy-creatures of the Standard 
Oil system, became disturbed one day by the advent of a vigorous competitor who built a 
sizable refinery and located it favorably upon the waterfront. The offices of Vacuum 
conducted at first a furtive campaign of intimidation. Then emboldened or more 
desperate, they approached the chief mechanic of the enemy refinery, holding whispered 
conferences with him in a rowboat on Lake Erie. 

He was asked to "do something. "He was urged to "go back to Buffalo and construct the 
machinery so it would bust up ... or smash up, to fix the pipes and stills so they cannot 
make a good oil ... And then if you would give them a little scare, they not knowing 
anything about the business. You know how . . .- In return the foreman would have a life 
annuity which he might enjoy in another part of the country. So in due time a small 
explosion took place in the independent plant. 

Ferdinand Lundberg, in his study The Rich and Super-Rich, has observed: 



"As the history of Standard Oil by any author, pro or con, clearly shows, Rockefeller w as 
of a deeply conspiratorial, scheming nature, always planning years ahead with a clarity 
of vision that went far beyond anything any of his associates had to offer. " 

John D. specialized in operating through others, just as the family does today. He hired 
agents everywhere; among competitors', politicians and in the media. He found plenty of 
people who could be bought. "The ability to deal with people is as purchasable a 
commodity as sugar or coffee .... I pay more for that ability' than for any under the sun 
the Standard Oil founder once admitted. Rockefeller's industrial espionage system was by 
far the most elaborate, most sophisticated and most successful that had ever been 
established. William. Manchester tells us in Rockefeller Family Portrait: 

The trouble with fighting John D. was that you never knew where he was. He ran his 
company as though it were a branch of the CIA All important messages were in code- 
Baltimore was "Droplet," Philadelphia "Drugget", refiners were "Douters," the Standard 
itself "Doxy." Shadowy men came and went by his front door, shadowy companies used 
his back door as a mailing address. For a long time the public didn't realize how powerful 
he was because he kept insisting he was battling firms that he secretly owned outright. 
His real rivals were forever discovering that their most trusted officers were in his pocket. 

The tentacles of the octopus were everywhere. 

One Cleveland oil refiner made a last ditch effort to save his company from a Rockefeller 
takeover by going to Peru for oil. He found it had all been bought by a company which 
was a subsidiary of a corporation owned by the Anglo-American Company of England- 
which belonged to Standard. Soon, his firm was just another satellite in the Rockefeller 
oil empire. 

It was not for nothing that newly impoverished former competitors referred to the 
Standard Oil biggie as John D. Reckafellow. A lot of bitter, broken men would have liked 
to have had a piece of that Rock. 

In later years the Wizard of Oil tried to disguise his piratical business operations with the 
protective coloration, of his religious practices.-" God gave me my money," he piously 
proclaimed. Many wryly mused that if true, God had a very strange code of ethics. 

By 1890, Standard was refining 90 % of all crude oil in the United States and its 
worldwide operations were expanding rapidly. Many have been led to believe that the 
federal government finally broke up Standard's near monopoly. The truth is that when oil 
was discovered in, Louisiana, Oklahoma and California, Standard Oil, big as it was, was 
unable to seize complete control of the mushrooming oil business. In the big oil boom 
that followed, too many small producers and refiners prospered for John D. to bribe, 
blackmail, or bomb all of them. In a sense, it was God, - not Uncle Sam, who blocked 
John D.'s Monopolistic plans. 

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Chapter Three 

The Family That Preys Together