John D. Rockefeller “Do you know the only thing that gives me pleasure? It's to see my dividends coming in.”

In 1859 oil was discovered in Titusville, Pennsylvania, touching off the growth of a new industry. Driven largely by the demand for kerosene for lighting. With the whale population depleted, other sources of fuel for lamps were needed. Rockefeller was immediately attracted to the oil business.

Cleveland, with its Great Lakes access, rail service and supply of immigrant labor, emerged early as a refining center. In 1870, Rockefeller teamed with his brother William, Henry M. Flagler and Samuel Andrews (inventor of an inexpensive means of refining crude oil) to establish the Standard Oil Company.

An oil refinery is an industrial process plant where crude oil is processed and refined into useful petroleum products. Raw or unprocessed ("crude") oil is not very useful in the form it comes in out of the ground. It needs to be broken down into parts and refined before use.

Standard Oil and its subsidiaries quickly managed to consolidate the refining business in the Cleveland area and then began to extend their control into Pittsburgh, Philadelphia and New York City. Rockefeller vertically integrated his business but was known for horizontal integration.

Horizontal integration occurs when a business expands its control over an industry by dominating the “strategic stage” in manufacturing. For example, an oil company would be horizontally integrated if it owned or controlled other oil refineries.

Beginning in the 1870s, Standard Oil employed a number of cutthroat business practices, including: Monopolization - Rockefeller is remembered for buying up all of the components needed for the manufacture of oil barrels in order to prohibit his competitors from getting their product on the market.

Rate Wars - the giant Standard Oil was able to withstand short term losses by cutting the price of oil; smaller competitors could not keep pace and either went out of business or sold out to Rockefeller

Rebates - Rockefeller was able to demand a refund on public rates offered by the railroads; the carriers agreed to this practice because of Standard's immense volume Intimidation - on more than one occasion Standard dispatched thugs to break up competitors' operations that could not otherwise be controlled

Rockefeller Foundation Rockefeller was also one of the most important philanthropists of his era. Rockefeller Foundation The endowment's assets were $3.7 billion at year-end 2006, and ranks 15th in total assets, out of all foundations in the United States.