Titan: The Life of John D. Rockefeller, Sr. by Ron Chernow

Titan

Summary

  1. Rob Chernow dives into the lives of one of the world’s most famous businessmen. John D. Rockefeller is often deified or vilified and it is because he draws out these extreme emotions in people that this biography is so appealing.

Key Takeaways

  1. General description of JDR – cold, tight-lipped, ruthless, huge donations to research, cunning, villainous in business, richest man in the world from founding Standard Oil (At its height standard oil controlled 84% of the petroleum market) and most popular man in America while he was alive. Everything he said and did was scrutinized, was often distant from his family, and he wrote and did everything to reveal as little about himself as possible as he valued secrecy. However, Rockefeller is often deified or vilified more than he deserves
  2. Two men have helped transform the modern state – Bismarck and Rockefeller
  3. One of the largest philanthropic donors in the history of the world focusing mostly on medicine
  4. Had a “powerfully selective memory” – chose to believe and remember whatever served his needs best
  5. JD had a modest childhood and his father was gone for months at a time.
  6. Father was money crazy and pretty flashy with his money. Quite successful even though shady. Moved his family several times probably due to business deals gone wrong. Finally he would say his mother was a widow even though his father was alive. Distanced himself as much as possible from his dad
  7. Quite religious and drawn to church life. Played a large role in his life and he performed many duties for his Baptist congregation
  8. Huge attention to detail and tough. Kept a ledger with all his expenses and later this would become one of his lost prized possessions. He donated about 6% to charity early on and later much more
  9. Believed his career was blessed and his money came from God. Religious a boost and not a hindrance to his wealth
  10. Civil War was a huge boost to Rockefeller’s new company as inflation rose the price of all the commodities he was selling and this gave him the capital he needed to get into the area where he would truly make his money – oil. Started in the refining business and chose his location wisely so that he could ship his oil by land or water. The oil industry at first was like the Wild West – rules had not been written yet. He was successful because he was able to control himself and as much as he could during these wild times
  11. Negotiated momentous deal with train companies. Would ship such vast quantities of oil that the trains could run their business by just transporting oil. This lowered the amounts of carts they needed and also the time it would take to transport to everything as there would only be one stop. This created an incentive for trains to want a monopoly in oil (lake shore deal). Rebates from railroads a very hot topic and instrumental in Rockefeller building his empire
  12. Lived in a modest house for a long time and was very serious about keeping his kids innocent of their wealth. They never visited his office or his refinery unless accompanied. They earned pocket money from doing chores
  13. When others panicked is when he would be most level headed. When pushed he would stand his ground
  14. Soon started buying and incorporating rivals into Standard Oil which would soon become the largest company of all time
  15. Was meticulous and never did anything haphazardly. Signed his name perfectly on each of the thousands of business letters he wrote
  16. Started controlling pipelines along with railroads and refining and therefore ha a stranglehold on pretty much every stage of oil. Standard Oil even monopolized foreign markets for some time until the Nobel family got in the game and helped Russia lower their prices and compete. Rockefeller slashed European prices and started a whisper campaign about the safety of Russian oil. Rothschilds (French banking family) also got in the game and lent the Nobels a lot of money
  17. Was extremely generous with friends by lending them huge sums of money during their darkest hours. His motto – make as much as you can, save as much as you can, give as much as you can
  18. His good side was just as good as his bad side was bad. Why he inspires such strong feelings from people
  19. Never donated his money directly to get people out of poverty (such as social welfare) rather to programs which would provide skills to people
  20. Opened one of the first medical research centers which soon became one of the most successful and prominent research centers which discovered many cures
  21. Had strange diets and routines and became obsessed with his health and trying to live forever . Died in 1937 just a couple weeks shy of his 98 and missing his goal of living to 100
  22. Exxon and Chevron are the two biggest descendants of Standard Oil
  23. At his peak, JDR was worth ~$237B in today’s money

What I got out of it

  1. While JDR’s ruthless persona is quite fair, he had a softer and more pragmatic side to him as well. He is one of the greatest, if not the greatest, philanthropist of all time and America owes a lot to this one man. Amazing what a big, audacious goal, determination and guts can create.

Buy Titan

  • Born 1839
  • From 1917-1920 JDR did hundreds of hours of interviews around his early years at the request of his son to cleanse the family name. A lot of the information in this book  comes from these interviews
  • Spurned Adam Smith’s free market for “cooperation” also referred to as cartels and monopolies
  • His father was a snakes oil salesman and had “every vice but drinking.” Con man and peddler but very good looking and charming
  • His father’s side were hard drinking hillbillies. His dad fathered 4 kids in 2 years. 2 with his wife and 2 with a mistress who all lived in the same house in upstate NY. JD had a modest childhood and his father was gone for months at a time. Not known if JD knew about his half sisters but moved soon from Richford to Be with his moms sides family. Interesting dichotomy – mom was very strict and religious and his dad was a wanderer, con man, wild, a big drinker
  • High school papers showed he was a democrat and against slavery
  • Looked for his first job at 16 in Cleveland. 6 days per week for 6 weeks until he was hired. His first job as a bookkeeper was the beginning of JDR.
  • Quit his job at Hewitt and Tuttle and started his own firm selling produce
  • Was always averse to borrowing money but when me needed it he was an excellent negotiator
  • He quarreled so much with his partners, Clark brothers, that he bought them out and with that gained control of the largest refiner in Cleveland (getting oil from PA)
  • His wife Laura was thrifty and quiet and a perfect match for JD
  • Said Jay Gould was the best businessman in America
  • Cleveland soon surpassed Pittsburgh as largest refiner.
  • Rockefeller demanded that Vanderbilt, the head of the railroad empire would have to come to Cleveland f he wanted to negotiate. Rockefeller in a nutshell
  • Extremely competitive and he often became obsessed with his hobbies – horse racing for one
  • JDR and Gould never drank, smoked or gallivanted with women
  • There were way too many refiners and overproduction that oil prices slumped for years leading JD to create a cartel to raise prices. Created standard oil at this point so he could sell shares without relinquishing control of his company
  • Figured out what he wanted and what others wanted and would then come up with terms that would be mutually advantageous. This led him to be able to create a double cartel with oil and trains
  • There was a huge rebellion when freight rates were jacked up and competitors signed petitions to not sell to JD (1872). Eventually fright rates were made uniform
  • Southern Improvement Company (SIC) a type of holding company which seems to have done a lot of the shady work that standard oil didn’t want to do
  • “I know ways to make money that you know nothing about”
  • Used 1873 recession to grow his business tremendously and buy out competitors
  • JD took a great liking to Archibald who would end up succeeding him at Standard Oil
  • His employees loved working for him as he never lost his temper and was benevolent
  • Was vehemently against unions
  • Standard Oil eventually resorted to out right bribery of government officials when need be
  • One of the richest most powerful men by his 40th birthday (1879)
  • Moved to NY in 1884
  • Pioneer of modern corporations and management
  • Once he had pondered over how to solve a problem and started to take action he could not be stopped
  • Very committed to charity and took it seriously where his money went and how it was being used – often to religious and education purposes. Often helping blacks which was unusual at this time
  • Even though Rockefeller always took the moral high ground in life and in business, we now know that he was the master puppeteer and knew everything that was going on
  • To destroy competition they sometimes opened up grocery stores to sell kerosene and other household items at or below cost
  • Always looked to get largest part of market at times by sacrificing profitability
  • Rockefeller brought a scientific and logical method to the oil industry
  • Sherman Anti-Trust act was passed in response to Standard Oil but was quite ineffective
  • Donated a lot to the University of Chicago
  • A lot of Standard Oil’s partners had to be liquidated or shifted around since someone figured out that standard oil controlled trusts in different states. Nothing changed except titles and names of companies tho. Rockefeller still controlled everything (1892)
  • Terrible depression in 1893 kept Rockefeller from retiring but eventually retired around 1895. Had digestive and anxiety issues
  • Invention of light bulbs hurt kerosene sales but the invention and spread of cars beginning in the 1890s was a huge boon for Standard Oil
  • In 1890s received $3 million per year ($50 million in 1996 $) and redirected to outside investments from real estate to tail roads to orange groves. Self perpetuating wealth at this point
  • Flagler was a big part of standard oil and was responsible for developing almost all of Florida. Very close with Rockefeller but his multiple wives and high style drove the two apart a little as they grew older
  • JD Jr went to Brown  and was smart but not too social and lacked the confidence of his father. He really looked up to his father and felt like he was in his shadow
  • Jr lost over $1 million in the stock market and was so nervous to tell his father but his father didn’t yell or react emotionally at all – gaining his sons trust forever
  • Frederick Gates was in charge of how Rockefeller would spend his money philanthropically. Often to education, medicine and religion but never social welfare and JD claimed he was one of the best businessman he had ever met
  • Found that JD was quite easily persuaded when it came to the stock market – investing in many “smoke and mirror” companies and lost a good deal of money in them
  • Rockefeller and progeny heavily involved with Chase and Citi
  • Formed US Steel which was the first billion dollar company and first trust to over take Standard Oil in size
  • Was able to transfer his mindset to other walks of life – bikes, civil engineering and golf. Became a big health proponent and enjoyed a long and healthy life. Exercised a lot and didn’t eat or drink
  • Big corporations did not like Teddy Roosevelt as he was seen as a trust buster
  • Ida Tarbell was a journalist for McClure who wrote one of the most influential business pieces in history about standard oil and their deceptive practices. Slandered JD and his family
  • JD and his brother Frank had very tense relations and went for years hardly talking or seeing each other
  • Power is consuming society – men sell their souls for it and women their bodies
  • Education for blacks was another big focus of JDs charity
  • Johns Hopkins was founded by JD and was to be te prototype for all new medical schools
  • Donated close to $550 M in today’s money to the University of Chicago
  • Had an extremely regimented routine that he never deviated from once he retired
  • Exchanged very modest gifts with his family and was quite austere
  • JD Jr always doubted his abilities and deified his father
  • Ludlow massacre – Colorado coal miners striked and it turned heated and the guards eventually opened fire and killed about 25 people. Biggest scandal to rock the Rockefellers and caused Jr to break from his father and teamed up with McKinsey King
  • Jr broke out after this incident and became a great leader
  • As JD retired and got older he relaxed and became more approachable – he became a living American legend
  • Clayton Anti-Trust and FTC broke up Standard Oil
  • The 3 year long interview with William O Inglis was quite therapeutic for JD as he finally got to defend himself and speak openly
  • Jr became fond of art and porcelain and spent a lot of money on it. JD was not a fan but lent him money to pursue. Jr created the cloisters and colonial Williamsburg
  • Started transferring money to his son in 1917. Had given $275M to charity and $35M to his kids at this point. He said that if he kept it all he would’ve been worth at that point around $40B in today’s money. His daughters got much less but got around $140M vs ~$5B for Jr
  • JDR Jr donated a lot to restore Versailles and became an avid art collector. His wife established MoMA

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