04 - Random Reminiscences of Men and Events by John D. Rockefeller

Dive into the insightful reflections of a prominent figure from the oil revolution of the 20th century. This compelling book embodies the essence of experience, as it chronicles the life of the second highest taxpayer in the U.S. during the 1920s. Though not included in the text, enjoy a glimpse of his wisdom through a poignant poem I was early taught to work as well as play, My life has been one long, happy holiday; Full of work and full of play- I dropped the worry on the way- And God was good to me every day. (Summary by sidhu177)

Episode Transcript

Speaker 1 (00:00):
Chapter three of Random Reminiscences of Men and Events by
John D. Rockefeller. This is a LibriVox recording. All LibriVox
recordings are in the public domain. For more information or
to volunteer, please visit LibriVox dot org. Recording by William

(00:21):
tom Coe, Random Reminiscences of Men and Events by John D. Rockefeller,
Chapter three, The Standard Oil Company. It would be surprising
if in an organization which included a great number of men,
there should not be an occasional employee here and there
who acted in connection with the business, or perhaps in

(00:42):
conducting his own affairs, in a way which might be criticized.
Even in a comparatively small organization, it is well nigh
impossible to restrain this occasional man, who is over zealous
for his own or his company's advancement. To judge the
character of all the members of a great organization or
the organization itself, by the actions of a few individuals

(01:05):
would be manifestly unfair. It has been said that I
forced the men who became my partners in the oil
business to join with me. I would not have been
so shortsighted if it were true that I followed such
tactics I ask, would it have been possible to make
of such men lifelong companions, would they accept and remain

(01:25):
for many years in positions of the greatest trust? And finally,
could anyone have formed of such men if they had
been so browbeaten? A group which has for all these
years worked in loyal harmony, with fair dealing among themselves
as well as with others, building up efficiency and acting
in entire unity. This powerful organization has not only lasted,

(01:49):
but its efficiency has increased. For fourteen years, I have
been out of business, and in eight or ten years
went only once to the company's office. In the summer
of nineteen o six seven, I visited again the room
at the top of the Standard Oil Company's building, where
the officers of the company and the heads of departments
have had their luncheon served for many years. I was

(02:11):
surprised to find so many men who had come to
the front since my last visit years ago. Afterward, I
had an opportunity to talk with old associates and many
new ones, and it was a source of great gratification
to me to find that the same spirit of co
operation and harmony existed unchanged. This practice of lunching together

(02:32):
a hundred or more at long tables in most intimate
and friendly association. Is another indication of what I contend
slight as it may seem to be at first thought.
Would these people seek each other's companionship day after day
if they had been forced into this relation? People in
such a position do not go on for long in

(02:52):
a pleasant and congenial intimacy. For years, the Standard Oil
Company has developed step by step, and I am convinced
that it has done well its work of supplying to
the people the products from petroleum at prices which have decreased.
As the efficiency of the business has been built up.
It gradually extended its services, first to the large centers,

(03:13):
and then to towns, and now to the smallest places,
going to the homes of its customers, delivering the oil
to suit the convenience of the actual users. This same
system is being followed out in various parts of the world.
The company has, for example, three thousand tank wagons supplying
American oil to towns and even small hamlets in Europe.

(03:35):
Its own depots and employees deliver it in a somewhat
similar way in Japan, China, India, and the chief countries
of the world. Do you think this trade has been
developed by anything but hard work. This plan of selling
our products direct to the consumer, and the exceptionally rapid
growth of the business bred a certain antagonism which I

(03:57):
suppose could not have been avoided. But this same idea
of dealing with the consumer directly has been followed by
others and in many lines of trade, without creating, so
far as I recall, any serious opposition. This is a
very interesting and important point, and I have often wondered
if the criticism which centered upon us did not come

(04:18):
from the fact that we were among the first, if
not the first, to work out the problems of direct
selling to the user on a broad scale. This was
done in a fair spirit and with due consideration for
everyone's rights. We did not ruthlessly go after the trade
of our competitors and attempt to ruin it by cutting
prices or instituting a spy system. We had set ourselves

(04:41):
the task of building up as rapidly and as broadly
as possible the volume of consumption. Let me try to
explain just what happened. To get the advantage of the
facilities we had in manufacture, we sought the utmost market
in all lands, we needed volume. To do this, we
had to create eat selling methods far in advance of

(05:01):
what then existed. We had to dispose of two or
three or four gallons of oil where one had been
sold before, and we could not rely upon the usual
trade channels then existing to accomplish this. It was never
our purpose to interfere with a dealer who adequately cultivated
his field of operations. But when we saw a new

(05:22):
opportunity or a new place for extending the sale by
further and effective facilities, we made it our business to
provide them. In this way, we opened many new lines
in which others have shared. In this development, we had
to employ many comparatively new men. The ideal way to
supply material for higher positions is, of course, to recruit

(05:43):
the men from among the youngest in the company's service,
but our expansion was too rapid to remit this. In
all cases that some of these employees were over zealous
in going after sales, it would not be surprising to
learn but they were acting in violation of the expressed
and known wish of the company. But even these instances,
I am convinced occurred so seldom by comparison with the

(06:07):
number of transactions we carried on that they were really
the exceptions that proved the rule. Every week in the year.
For many, many years, this concern us brought into this
country more than a million dollars gold, all from the
products produced by American labor. I am proud of the record,
and believe most Americans will be when they understand some

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things better. These achievements, the development of the great foreign trade,
the owning of ships to carry the oil in bulk
by the most economical methods, the sending out of men
to fight for the world's markets, have cost huge sums
of money, and the vast capital employed could not be
raised nor controlled except by such an organization. As a

(06:48):
standard is to day. To give a true picture of
the early conditions, one must realize that the oil industry
was considered a most hazardous undertaking, that altogether unlike the
speculative mining undertakings we hear so much of to day.
I well remember my old and distinguished friend, Reverend Thomas
w Armitage, for some forty years pasture of a great

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New York church, warning me that it was worse than
folly to extend our plants and our operations. He was
sure we were running unwarranted risks that our oil supply
would probably fail, the demand would decline, and he with
many others. Sometimes I thought almost everybody prophesied ruin. None

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of us ever dreamed of the magnitude of what proved
to be the later expansion. We did our day's work
as we met it, looking forward to what we could
see in the distance, and keeping well up to our opportunities,
but laying our foundations firmly. As I have said, capital
was most difficult to secure, and it was not easy
to interest conservative men in this adventurous business. Men of

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property were afraid of it, though in rare cases capitalists
were induced to unite with us to a limited extent
if they bought our stock at all. They took a
little of it now and then as an experiment, and
we were painfully conscious that they often declined to buy
new stock, with many beautiful expressions of appreciation the enterprise

(08:16):
being so new and novel. On account of the fearfulness
of certain holders in reference to its success, we frequently
had to take stock to keep it from going begging.
But we had such confidence in the fundamental value of
the concern that we were willing to assume this risk.
There are always a few men in an undertaking of
this kind who would risk all under judgment of the

(08:37):
final result, And if the enterprise had failed, these would
have been classed as visionary adventurers, and perhaps with good reason.
The sixty thousand men who are at work constantly in
the service of the company are kept busy year in
and year out. The past year has been a time
of great contraction, but the Standard has gone on with

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its plans on checked, and the new works and buildings
have not been delayed on account of lack of capital
or fear of bad times. It pays its workmen well,
It cares for them when sick, and pensions them when old.
It has never had any important strikes. And if there
is any better function of business management than giving profitable
work to employees year after year, in good times and bad,

(09:23):
I don't know what it is. Another thing to be
remembered about this so called octopus is that there has
been no water introduced into its capital. Perhaps we felt
that oil and water would not have mixed. Nor in
all these years has anyone had to wait for money
which is Standard owed. It has suffered from great fires
and losses but it has taken care of its affairs

(09:44):
in such a way that it has not found it
necessary to appeal to the general public to place blocks
of bonds or stock. It has used no underwriting syndicates
or stock selling schemes in any form, and it has
always managed to finance new oil field operations when called upon.
It is a common thing to hear people say that

(10:06):
this company has crushed out its competitors. Only the uninformed
can make such an assertion. It has, and always has had,
and always will have hundreds of active competitors. It has
lived only because it has managed its affairs well and economically,
and with great vigor. To speak of competition for a minute,
consider not only the able people who compete in refining oil,

(10:29):
but all the competition in the various trades which makes
and sell by products a great variety of different businesses.
And perhaps of even more importance is a competition in
foreign lands. The standard is always fighting to sell the
American product against the oil produced from the great fields
of Russia, which struggles for the trade of Europe, and

(10:50):
the Burma oil which largely affects the market in India.
In all these various countries, we are met with tariffs
which are raised against us, local prejudice, and strange customs.
In many countries. We had to teach the people, the Chinese,
for example, to burn oil by making lamps for them.
We packed the oil to be carried by camels or

(11:11):
on the backs of runners. In the most remote portions
of the world. We adapted the trade to the needs
of strange folk. Every time we succeeded in a foreign land,
it meant dollars brought to this country, and every time
we failed it was a loss to our nation and
its workmen. One of our greatest helpers has been the
State Department in Washington. Our ambassadors and ministers and consuls

(11:35):
have aided to push our way into new markets to
the utmost corners of the world. I think I can
speak thus frankly and enthusiastically because the working out of
many of these great plans has developed largely since I
retired from the business fourteen years ago. The standard has
not now and never did, have a royal road to supremacy,

(11:56):
nor is its success due to any one man, but
to the multitude of able men who are working together.
If the present managers of the company were to relax
efforts allow the quality of their product to degenerate or
treat their customers badly. How long would their business last?
About as long as any other neglected business. To read

(12:17):
some of the accounts of the affairs of the company,
one would think that it had such a hold on
the oil trade that the directors did little but come
together and declare dividends. It is a pleasure for me
to take this opportunity to pay tribute to the work
these men are doing, not only for the company they serve,
but for the foreign trade of our country. For more
than half of all the product that the company makes

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is sold outside of the United States. If in place
of these directors the business were taken over and run
by anyone but experts, I would sell my interest for
any price I could get. To succeed in a business
requires the best and most earnest men to manage it,
and the best men rise to the top of its
origin and early plans. I will speak later the modern

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corporation beyond question. There is a suspicion of corporations. There
may be reason for such suspicion very often, for a
corporation may be moral or immoral, just as a man
may be moral or the reverse. But it is folly
to condemn all corporations because some are bad, or even
to be unduly suspicious of all because some are bad.

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But the corporation in form and character has come to stay.
That is a thing that may be depended upon. Even
small firms are becoming corporations because it is a convenient
form of partnership. It is equally true that combinations of
capital are bound to continue and to grow, and this
need not alarm even the most timid If the corporation,

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or the series of corporations is properly conducted with due
regard for the rights of others. The day of individual
competition in large affairs is past and gone. You might
us as well argue that we should go back to
hand labor and throw away our efficient machines. And the
sober good sense of the people will accept this fact
when they have studied and tried it out. Just see

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how the list of stockholders in the great corporations is
increasing by leaps and bounds. This means that all these
people are becoming partners in great businesses. It is a
good thing. It will bring a feeling of increased responsibility
to the managers of the corporations, and will make the
people who have their interests involved study the facts impartially
before condemning or attacking them. On this subject of industrial combinations,

(14:38):
I have often expressed my opinions, and as I have
not changed my mind, I am not averse to repeating
them now, especially as a subject seems again to be
so much in the public eye. The chief advantages from
industrial combinations are those which can be derived from a
corporation of persons and aggregation of capital. Much that one

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man cannot do alone, two can do together. And once
admit the fact that cooperation, or what is the same
thing combination is necessary. On a small scale, the limit
depends solely upon the necessities of business. Two persons in
partnership may be a sufficiently large combination for a small business,
but if the business grows, or can be made to grow,

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more persons and more capital must be taken in. The
business may grow so large that a partnership ceases to
be a proper instrumentality for its purposes, and then a
corporation becomes a necessity. In most countries, as in England,
this form of industrial combination is sufficient for a business
co extensive with the parent country, but it is not

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so in America. Our federal form of government, making every
corporation created by a state foreign to every other state,
renders it necessary for persons doing business through corporate agency
to organize corporations in some or many of the different
from states in which their business is located. Instead of
doing business through the agency of one corporation, they must

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do business through the agencies of several corporations. If the
business is extended to foreign countries, and Americans are not
today satisfied with home markets alone, it will be found
helpful and possibly necessary to organize corporations in such countries.
For Europeans are prejudiced against foreign corporations, as are the

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people of many of our states. These different corporations thus
become cooperating agencies in the same business and are held
together by common ownership of their stocks. It is too
late to argue about advantages of industrial combinations. They are
a necessity, and if Americans are to have the privilege

(16:47):
of extending their business in all the states of the
Union and into foreign countries as well, they are a
necessity on a large scale and require the agency of
more than one corporation. The dangers are that the power
or conferred by combination may be abused, that combinations may
be formed for speculation in stocks rather than for conducting business,

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and that for this purpose prices may be temporarily raised
instead of being lowered. These abuses are possible, to a
greater or less extent in all combinations, large or small.
But this fact is no more of an argument against
combinations than the fact that steam may explode is an
argument against steam. Steam is necessary and can be made

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comparatively safe. Combination is necessary, and its abuses can be minimized. Otherwise,
our legislators must acknowledge their incapacity to deal with the
most important instrument of industry. In the hearing of the
Industrial Commission in eighteen ninety nine, I then said that
if I were to suggest any legislation regarding industrial combinations,

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it would be first federal legislation under which corporations may
be created and regulated, if that be possible. Second, in
lieu thereof state legislation as nearly uniform as possible, encouraging
combinations of persons and capital for the purpose of carrying
on industries, but permitting state supervision that of a character

(18:15):
to hamper industries, but sufficient to prevent frauds upon the public.
I still feel as I did in eighteen ninety nine
the new opportunities. I am far from believing that this
will adversely affect the individual. The great economic era we
are entering will give splendid opportunity to the young man
of the future. One often hears the men of this

(18:37):
new generation say that they do not have the chances
that their fathers and grandfathers had. How little they know
of the disadvantages from which we suffered. In my young manhood,
we had everything to do and nothing to do it with.
We had to hew our own paths along new lines.
We had little experience to go on. Capital was most

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difficult to get, yet credits were mysterious things, whereas now
we have a system of commercial ratings. Everything was then haphazard,
and we suffered from a stupendous war and all the
disasters which followed. Compare this day with that, our comforts
and opportunities are multiplied a thousandfold. The resources of our

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great land are now actually opening up and are scarcely touched.
Our home markets are vast, and we have just begun
to think of the foreign peoples. We can serve the
people who are years behind us in civilization. In the East,
a quarter of the human race is just awakening. The
men of this generation are entering into a heritage which

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makes their fathers lives look poverty stricken by comparison. I
am naturally an optimist, but when it comes to a
statement of what our people will accomplish in the future,
I am unable to express myself with sufficient enthusiasm. There
are many things we must do to attain the highest
benefit from all these great blessings, and not the least

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of these is to build up our reputation throughout the
whole world. The great business interests will, I hope, so
comport themselves that foreign capital will consider it a desirable
thing to hold shares in American companies. It is for
Americans to see that foreign investors are well and honestly treated,
so that they will never regret purchases of our securities.

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I may speak thus frankly because I am an investor
in many American enterprises, but a controller of none, with
one exception, and that a company which has not been
much of a dividend payer. And I, like all the rest,
am dependent upon the honest and capable administration of the industries.
I firmly and sincerely believe that they will be so

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managed the American business man. You hear a good many
people of pessimistic disposition say much about greed in American life.
One would think, to hear them talk that we were
a race of misers in this country. To lay too
much stress upon the reports of greed in the newspapers
would be folly, since their function is to report the

(21:09):
unusual and even the abnormal. When a man goes properly
about his daily affairs, the public prints say nothing. It
is only when something extraordinary happens to him that he
is discussed. But because he is thus brought into prominence occasionally,
you surely would not say that these occasions represented his
normal life. It is by no means for money alone

(21:32):
that these active minded men labor. They are engaged in
a fascinating occupation. The zest of the work is maintained
by something better than the mere accumulation of money. And
as I think I have said elsewhere, the standards of
business are high and are getting better all the time.
I confess I have no sympathy with the idea so

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often advanced that our basis of all judgments in this
country is founded on money. If this were true, we
should be a nation of money hoarders instead of spenders.
Nor do I admit that we are so small minded
a people as to be jealous of the success of others.
It is the other way about. We are the most
extraordinarily ambitious, and the success of one man in any

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walk of life spurs the others on. It does not
sour them. And it is a liable even to suggest
so great a meanness of spirit in reading the newspapers,
where so much is taken for granted in considering things
on a money standard, I think we need some of
the sense of humor possessed by an Irish neighbor of mine,
who built what we regarded as an extremely ugly house,

(22:39):
which stood out in bright colors as we looked from
our windows. My taste in architecture differed so widely from
that affected by my Irish friend that we planted out
the view of his house by moving some large trees
to the end of our property. Another neighbor, who watched
this work going on, asked mister Foley, why mister Rockefeller
moved all these big trees and cut off the view

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between the houses fully with a quick wit of his
country responded instantly, it's envy. They can't stand looking at
the evidence of me prosperity. In my early days, men
acted just as they do now, no doubt. When there
was anything to be done for general trade betterment, almost
every man had some good reason for believing that his

(23:24):
case was a special one, different from all the rest.
For every foolish thing he did or wanted to do,
for every unbusinesslike plan he had, he always pleaded that
it was necessary in his case. He was the one
man who had to sell at less than cost to
disrupt all the business plans of others in his trade.
Because his individual position was so absolutely different from all

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the rest. It was often a heart breaking undertaking to
convince those men that the perfect occasion which would lead
to the perfect opportunity would never come, even if they
waited until the crack of doom. Then again, we had
the type of man who really never knew all the
facts about his own affairs. Many of the brightest kept

(24:07):
their books in such a way that they did not
actually know when they were making money on a certain
operation and when they were losing. This unintelligent competition was
a hard matter to contend with. Good old fashioned common
sense has always been a mighty rare commodity. When a
man's affairs are not going well, he hates to study
the books and face the truth. From the first the

(24:30):
men who managed the Standard Oil Company kept their books
intelligently as well as correctly. We knew how much we made,
and were we gained or lost. At least we tried
not to deceive ourselves. My ideas of business are no
doubt old fashioned, but the fundamental principles do not change
from generation to generation. And sometimes I think that our

(24:52):
quick witted American business men, whose spirit and energy are
so splendid, do not always sufficiently study the real underlying
foundation of business management. I have spoken of the necessity
of being frank and honest with one's self about one's
own affairs. Many people assume that they can get away
from the truth by avoiding thinking about it, but the

(25:13):
natural law is inevitable, and the sooner it is recognized,
the better one hears. A great deal about wages and
why they must be maintained at a high level by
the railroads, For example, a laborer is worthy of his
hire no less, but no more, and in the long
run he must contribute an equivalent for what he has paid.

(25:33):
If he does not do this, he is probably pauperized.
And you at once throw out the balance of things.
You can't hold up conditions artificially, and you can't change
the underlying laws of trade. If you try, you must
inevitably fail. All this may be trite and obvious, but
it is remarkable how many men overlook what should be

(25:55):
the obvious. These are facts we can't get away from.
A business man must adapt himself to the natural conditions
as they exist from month to month and year to year.
Sometimes I feel that we Americans think we can find
a short road to success, and it may appear that
often this feat is accomplished. But real efficiency in work

(26:17):
comes from knowing your facts and building upon that sure foundation.
Many men of wealth do not retire from business, even
when they can. They are not willing to be idle,
or they have a just pride in their work and
want to perfect the plans in which they have faith,
or what is of still more consequence, they may feel
the call to expand and build up for the benefit

(26:38):
of their employees and associates, and these men are the
great builders up in our country. Considered for a moment
how much would have been left undone if our prosperous
American business men had sat down with folded hands when
they had acquired a competency. I have respect for all
these reasons. But if a man has succeeded, he has

(26:59):
brought upon corresponding responsibilities, and our institutions devoted to helping
men to help themselves need the brain of the American
business man as well as part of his money. Some
of these men, however, are so absorbed in their business
affairs that they hardly have time to think of anything else.
If they do interest themselves in a work outside of

(27:20):
their own office and undertake to raise money, they begin
with an apology, as if they are ashamed of themselves.
I am no beggar, I have heard many of them say,
to which I could only reply, I am sorry you
feel that way about it. I have been this sort
of beggar all my life, and the experiences I have
had were so interesting and important to me that I

(27:43):
will venture to speak of them in a later chapter.
End of chapter three recording by William tom Co