CHAPTER 18
Even as Rockefeller tried to shift his attention away from business in the 1890s, the political backlash against him gained fresh momentum, making it impossible for him to sever himself from his brilliant but tarnished record. As he tried to move ahead, his past loomed ever larger in the public imagination. During the next twenty years, it kept returning to haunt him, like an inescapable shadow.
The Sherman Antitrust Act had proved an ineffectual piece of legislation. The real threat to Standard Oil arose in an improbable spot: a small bookstore in Columbus, Ohio. In 1889, the state’s young Republican attorney general, David K. Watson, wandered into the shop one evening and happened upon a slim volume by William W. Cook, cheaply bound in imitation leather and bearing the title Trusts: The Recent Combinations in Trade. He took the book home and perused it late into the night. In the appendix, Watson was fascinated to discover Standard Oil’s trust deed, which he had never seen before. He was aghast to learn that for the past seven years Standard Oil of Ohio had violated its state charter by transferring control of the organization to mostly out-of-state trustees in New York. Capitalizing on this discovery, Watson filed a quo warranto petition against Ohio Standard in the state supreme court in May 1890, seeking nothing less than the dissolution of Standard Oil.
Standard Oil executives reacted, as always, by denigrating such measures as transparent harassment by their business enemies. Frank sent a letter to John saying that he was “not sure as to who the instigators are but believe Cleveland refiners have a hand in it” and conjectured that Watson was feeding off information from John Sherman.1 In rebutting the charges, Standard’s attorney, Samuel C. T. Dodd, offered the same legal fig leaf that the combine had exploited for years: that Ohio Standard shares had been transferred by individual stockholders, not the company itself, to its New York trustees. By now, the ruse was wearing thin.
Ironically, this sortie against Standard Oil came in a conservative, industrial state where its influence was pervasive. As a rock-ribbed Republican contributor, Rockefeller felt betrayed by such ingratitude and protested to a Cleveland friend that “we have not received fair treatment from the Republican party.”2 Never one to mince words, Mark Hanna, the party kingpin, sent a strongly worded message to Watson, telling him that “the Standard Oil Company is officered and managed by some of the best and strongest men in the country. They are pretty much all Republicans and have been most liberal in their contributions to the party, as I personally know, Mr. Rockefeller always quietly doing his share.”3 Although Hanna urged him to drop the suit, Watson would not relent. While Rockefeller blandly denied knowledge of Hanna’s action, his memory was conveniently faulty, for on April 7, 1891, Hanna had written to him, “I caught our distinguished Attorney General Watson here the other day and gave him a piece of my mind.”4 Watson’s successor, Frank Monnett, alleged that on six occasions Watson was offered bribes to terminate the case—in one instance as much as $100,000 in cash—but Monnett never provided corroborating evidence, perhaps fearing Standard Oil reprisals against his sources.
Such intimidation, if it did occur, only stiffened Watson’s resistance to pressure. On March 2, 1892, he won a famous victory when the Ohio Supreme Court ruled that Standard Oil of Ohio was indeed controlled by trustees at 26 Broadway and had to renounce the trust agreement. The trust was also accused of trying to monopolize every phase of the petroleum business. One enterprising reporter who rushed to 26 Broadway was assured that the decision would in no way affect the trust. When a reporter showed up on Samuel Dodd’s doorstep, the Standard counsel was a model of urbanity: “The [trust] agreements were not really necessary,” he said. “They were simply made as a matter of conscience. The only effect of the decision will be to inconvenience us a little.”5
This insouciance was only partly studied. In responding to legal challenges, the combine had reconstituted itself many times, like some mythical, protean creature that could metamorphose into infinite shapes to elude lawmakers. For several years, Dodd and Rockefeller had studied possible responses in case the trust had to be dissolved in an antitrust suit. They had taken note of an 1889 New Jersey law that permitted corporations resident in the state to hold stock in other corporations. This revolutionary development opened the possibility of forming holding companies that could operate nationwide and provided a critical escape hatch for embattled trusts. As a result, Standard Oil calmly greeted the 1892 Ohio decision less as a mortal threat than an opportunity for a long-overdue reorganization.
For several days, Standard executives tried to figure out how best to comply with the ruling. Their minds were focused by the knowledge that if they didn’t act, the New York attorney general was poised to file antitrust papers. On March 10, 1892, one week after the Ohio decision, Samuel Dodd announced that the trust would be dissolved. The next day, a mailing went out to all holders of Standard Oil trust certificates, summoning them to a March 21 meeting and inviting them to exchange their certificates for proportionate shares of twenty constituent companies. The distribution of power, money, and dividends within the Standard Oil empire would remain exactly the same, a deft maneuver that would be copied by other corporations harried by antitrust laws.
As the holder of 256,854 of 972,500 outstanding shares of the Standard Oil trust, John D. Rockefeller chaired the March 21 meeting. Even though 300 people were jammed into a room designed to hold only 200, the stage-managed event was brief and businesslike; the unanimous vote to dissolve the trust was a foregone conclusion. Though designated one of eight liquidating trustees, Rockefeller had just recuperated from the breakdown in his health and wanted to transfer the burden of reorganization to his colleagues. He was spared a terrible ordeal, since the liquidation proved highly contentious. Small shareholders balked at trading in trust certificates for fractional shares that paid no dividends and could not be redeemed in any secondary market. In the eyes of Standard’s detractors, the exchange dragged on for a suspiciously long time.
Aided by changes in New Jersey’s incorporation law, Standard Oil of New Jersey took on a unique status in the transformed company. Renamed Standard Oil (New Jersey), it bought in whole or in part huge blocks of stock in the other Standard companies and thus legally held stock in properties from coast to coast, functioning as both an operating and holding company. Standard of New York also attained new status in a reorganization that initiated the seven-year period of the so-called Standard Oil Interests.
The 1892 overhaul was mostly shadow play, a charade to appease the courts. The executive committee at 26 Broadway was formally dissolved, but the members lost only their titles and were soon converted, by the nicest legal cunning, into the presidents of twenty affiliated companies. In Standard parlance, these men were now the “gentlemen upstairs” or the “gentlemen in Room 1400.” Nobody had to switch seats at the lunch table, and Rockefeller and his coterie ruled as absolutely as before. Seventeen individual stockholders—almost all Standard Oil executives or family members—controlled a majority of stock in the twenty companies and elected their directors. This legal legerdemain again frustrated lawmakers who felt that the combine was so vast, slippery, and elusive that it could never be tamed or held accountable.
Standard Oil executives saw the major threat to the company in 1892 as the aging of their leadership. The organization was still piloted by the same sturdy souls who had steered it since the 1870s and were now beginning to die off or retire. The alarm bells must have sounded when Rockefeller sought retirement, a decision postponed temporarily by the economic crisis of 1893. The panic showed him functioning less as a Standard Oil executive than as a sovereign power, endowed with resources rivaling those of government. He continued, however, to operate in the shadows, a spectral figure whose presence was mostly felt, not seen.
The depression heralded by the June 1893 stock-market crash was one of such excruciating length, such grinding and unrelieved misery, that economic historians labeled it the Great Depression until that title was usurped in the 1930s. During the troubled summer of 1893, the Erie and Northern Pacific railroads failed, followed by many others bloated with debt and riddled with fraud. Mass unemployment across the nation sharpened class tensions. During the sanguinary clash a year earlier at the Homestead, Pennsylvania, steel mill, Henry Clay Frick had ordered Pinkerton detectives to fire at workers—a step that drew a rousing congratulatory telegram from John D. Such corporate truculence provoked calls by the new Populist Party for a graduated income tax, government ownership of railroad and telegraph companies, and tougher safeguards for trade unions. Rockefeller stood high on the list of bogeymen regularly berated by Populists, and legend has it that he began to sleep with a revolver by his bed. As the country grew more polarized, many people wondered whether America had paid too dear a price for the industrialization that had so quickly propelled it from an agrarian society to a world economic power.
By early 1894, the slump had toppled six hundred shaky banks, and an almost palpable threat of insurrection hovered in the air, prompting financial writer Alexander Dana Noyes to observe that “there were periods when industrial unrest seemed to assume the proportions of anarchy.” 6 In the spring of 1894, General Jacob Coxey of Ohio led his bedraggled Army of the Commonwealth of Christ in a doomed march on Washington to entreat Congress for legislative relief. Two months later, workers at the Pullman Palace Car Company struck to reverse massive layoffs and wage cuts, triggering a sympathy strike by the American Railway Union under Eugene V. Debs. When President Cleveland sent troops to Chicago, Debs was jailed, and seven strikers were gunned down. All the pent-up frustrations produced by the accelerated change of the late nineteenth century were vented in spontaneous, often violent dissent.
To the dismay of critics, Standard Oil and other trusts fared quite well during the prolonged downturn. Demand for illuminating oil and lubricants—now necessities of life—remained healthy, leading Standard Oil to prosper amid the general austerity. Meanwhile, a new source of future profits beckoned in the middle distance. In the early 1880s, Gottlieb Daimler strapped light gasoline engines onto bicycles, tricycles, and other vehicles, experiments that culminated in the motorcar, while another German inventor, Karl Benz, patented a three-wheeled automobile with a single-cylinder engine in 1886. In 1892, the Duryea brothers were tinkering with their first automobile. Recognizing a fantastic market in the offing, Standard Oil sent a representative to attend the test of a new gasoline engine for a streetcar motor. The next year, Henry Ford tested a two-cylinder auto that sped along at thirty miles an hour, resuscitating fears that existing oil supplies might fall short of needs—an anxiety somewhat assuaged by oil discoveries in Los Angeles and elsewhere in California in the 1890s. So remarkable was this West Coast boom that it soon furnished more oil than the old Pennsylvania and Ohio fields that had formed the basis of Rockefeller’s wealth. The advent of the automobile was a godsend for Standard Oil, for the more lightbulbs shone across America, the more kerosene was relegated to remote rural areas without access to electric power.
Standard Oil again benefited from hard times to extend its powerful reach. For several years, the trust had watched the exploits of Pittsburgh’s Mellon family with apprehension, and Archbold was under strict orders from Rockefeller to grab any of their oil properties that came on the market. As the Mellons emerged as a worrisome threat in the export market, Rockefeller feared they might strike an alliance with the French Rothschilds. In August 1895, having borrowed heavily against Pittsburgh real estate to build their budding oil empire, the Mellons were forced to sell their Crescent Pipe Line Company and other properties to Standard—a huge windfall that yielded 14,000 acres and 135 producing wells. It now seemed that Standard Oil owned the entire industry, lock, stock, and barrel. When the Geodetic Association announced plans to measure the earth, the World opined that the information would “enable the Standard Oil Trust and other trusts to learn the exact size of their property.”7
Soon thereafter, to everyone’s amazement, the independents, after so many hapless drubbings, rallied one last time and made a successful run at the trust. Through a new company, the Producers’ and Refiners’ Oil Company, a thousand well owners agreed to supply crude oil to fifteen independent refineries, linked by a new network of local pipelines. In the fall of 1892, that perennial Standard scourge, Lewis Emery, Jr., had organized United States Pipe Line, which now promised to give the rebels a vital pipeline to the seaboard. To lay the pipe, Emery’s men had to ward off savage harassment from the railroads; locomotives would roar by and douse them with scalding steam, boiling water, and glowing coals. Despite these obstructive tactics, independent oil began to flow in 1893. Shifting tactics, the trust then engineered a steep decline in kerosene prices—no mean trick in a period of rising crude prices. Squeezed by dwindling profit margins, three large independent refineries finally submitted to the trust’s suzerainty, but the Producers’ and Refiners’ Oil Company miraculously survived. In 1895, emboldened by a new sense of Rockefeller’s vulnerability, thirty independent refiners coalesced into the Pure Oil Company—the first enduring domestic competitor of Standard Oil. To preserve their autonomy, they sequestered half their voting stock in the hands of five men eternally sworn to keep it free of Standard influence. Thus, several years before federal trustbusters mobilized to smash the Rockefeller monopoly, serious competition had already taken root in the marketplace.
Despite this setback, Rockefeller was not hurting in the 1890s. There was now a self-perpetuating quality to his wealth. Whether he was gardening, eating, or just lying in bed, his prolific savings quietly grew around the clock. He was receiving about $3 million yearly in Standard Oil dividends (more than $50 million in 1996 dollars) and redirecting that into a vast portfolio of outside investments that made him a one-man holding company. With $24 million now invested outside the oil and gas business, he held sizable stakes in 16 railroad companies, 9 real-estate firms, 6 steel companies, 6 steamship companies, 9 banks and financial houses, and even 2 orange groves.
The oil trust’s resilience during the depression of the 1890s, its tested immunity from market fluctuations, cheered Rockefeller, who attributed this to Standard’s large cash reserves and conservative dividend policy. The panic seemed to offer irrefutable proof to Rockefeller that cooperation was superior to the vagaries of cutthroat competition. It certainly allowed him the luxury of a benevolent paternalism at a time of labor strife in other industries. “We held things together so steady that our fortunate laboring men got their pay, though in other concerns many of them were compelled to go, and without bread,” he later told William O. Inglis. “It was a matter of congratulation with us that we could look into the happy faces of our workmen in these perilous times and hand them the wages they had earned.”8
Since the early 1880s, Standard Oil had been self-financing, very liquid at all times, and free from the thrall of Wall Street bankers. As a result, no other industrial corporation was so fearless or independent. It was one of Rockefeller’s proudest boasts that unlike other trusts, he had not needed a J. P. Morgan to forge his combine. Standard Oil anticipated a major feature of the twentieth-century economy: the tendency of sophisticated, cash-rich corporations to outgrow their traditional bankers and become financial-service giants in their own rights. As journalist John Moody perceptively wrote, “The Standard Oil Trust was really a bank of the most gigantic character—a bank within an industry, financing this industry against all competition and continually lending vast sums of money to needy borrowers on high class collateral, just as the other great banks were doing.” 9
It was Standard Oil of New York that functioned as the main banker for the affiliated companies, governing what was arguably the most stupendous cash flow ever produced in American industry. To maximize its leverage over Wall Street, it scattered its gigantic balances among many banks; a single Standard Oil entity, the National Transit Company, sometimes kept as much as $40 million on deposit. Standard Oil of New York also made large loans to banks, brokerage houses, railroads, and steel companies. So rich in cash, Standard Oil wielded a make-or-break power over Wall Street houses, which defied it at their peril. Standard directors often took out prodigious loans from the trust. On the eve of the 1893 panic, John D. had a $1.36 million loan outstanding while brother William owed $865,000.
As president of New York Standard, William Rockefeller parlayed his position into one of exceptional prominence on Wall Street. For John, the street might be a sinful haunt, but it had its own sulfurous charms for William. In 1884, while they both served as directors of the Chicago, Milwaukee, and St. Paul Railroad, William had met James Stillman, the youngest director of National City Bank. In an inspired move, Stillman recruited William as a director. By the time Stillman became the bank’s president in 1891, National City had been so enriched by the Standard Oil bounty that it was nicknamed the Oil Bank.
When the 1893 panic struck, John D. was just emerging from the seclusion occasioned by his medical problems. He raced back to New York from Cleveland to orchestrate a massive salvage operation. In the course of the panic, he provided almost $6 million to fifty-eight individuals and firms who were turned down by banks and desperately needed his intervention. To bail out these borrowers, Rockefeller had to borrow almost $4 million, and nearly $3 million of that came from Standard of New York. This was a tricky balancing act, since he was borrowing on the collateral of securities then collapsing in value. In October 1893, the Standard Oil treasurer, William T. Wardwell, having decided that Rockefeller had reached the permissible limit, did the unthinkable: He shut down the lending window on the company founder. A stupefied George Rogers relayed this verdict to his boss: “He has refused to give me any more money, because he had no assurance of getting it back when he wanted.” 10 After frantic negotiations, Wardwell boosted Rockefeller’s credit line to $2.8 million in exchange for a lien on his quarterly dividend of $775,000 from Standard Oil stock. Some of Rockefeller’s letters reflect tragicomic confusion as he struggled to collect loans from debtors in order to pay off his own debt to Standard Oil. In early September, he wrote to Cettie from New York that he had settled his debts, with $550,000 to spare. “We are steadily emerging from the panic, but I hope never to go through with another such experience.”11
When it came to old friends, his generosity could be dazzling. When Captain Vandergrift telegraphed from Pittsburgh that a trust company he directed stood in mortal peril, Rockefeller telegraphed promptly, “How much do you want?” “One million dollars,” came the response to which Rockefeller replied, “Check for one million is on the way.” 12 But he was so inundated with pleas that many more people were spurned than saved, generating unavoidable bitterness. Frederick T. Gates referred to these painful quandaries in an October 1893 letter: “I have today on my desk urgent imperative appeals to save old friends [of Mr. Rockefeller’s] amounting to many hundreds of thousands of dollars. I have incurred the enmity of many important business enterprises because I have had to decline to assist them in the last few days.”13 More than one person who was refused later accused Rockefeller of having ruined him.
During the panic, Rockefeller awakened to the public responsibilities attending great wealth. Having long been reflexively hostile to government, he now found himself cooperating with Washington to calm the jitters in financial markets. In 1894, the U.S. Treasury, alarmed by the outflow of gold that legally backed the gold standard, turned to J. P. Morgan for a rescue operation. After telling John G. Carlisle, the Treasury secretary, that this was impossible, Morgan conferred hastily with Stillman—a measure of Stillman’s new stature on Wall Street. “He was greatly upset and overcharged,” recalled Stillman, “nearly wept, put his head in his hands and cried: ‘They expect the impossible!’ So I calmed him down and told him to give me an hour and by that time I cabled for ten millions from Europe for the Standard Oil and ten more from other resources.” When Stillman walked into Morgan’s office to report the $20 million, Morgan grew giddy and triumphant. “He took the pose of savior of his country and assumed all the credit,” Stillman observed archly, crediting the real success to himself and Standard Oil. “But then you see, he is a poet; Morgan is a poet.” 14 Rockefeller never claimed credit for his action and preferred no publicity.
Stillman’s behavior during the panic had a deleterious effect on his relationship with Rockefeller, who had given him $5 million amid multiple demands. Rockefeller believed that the crafty Stillman had not only held his money longer than necessary but employed it to buy stocks at bargain prices instead of using it to shore up his bank. Under any circumstance, Rockefeller would have been critical of an alliance between Standard Oil and a Wall Street bank, but after the 1893 panic his disenchantment with Stillman gave him extra misgivings about William’s policy of placing large balances in his bank. One of Rockefeller’s financial advisers, Henry E. Cooper, indignantly told him, “You ought to get after him hard!” “No, Mr. Cooper, we will do nothing,” said Rockefeller evenly. “But we shall not forget it!”15
In November 1887, as he listened to Rockefeller testify before the new Interstate Commerce Commission, Henry Demarest Lloyd saw the witness as the prince of darkness, evil incarnate. Afterward, he furiously scribbled notes that he headed “Fanatic Standard Oil,” and had this to say about Rockefeller:
He is . . . a depredator . . . not a worshipper of liberty . . . a Czar of plutocracy, a worshipper of his own Money Power over mankind. He will never sacrifice any of his plans for the restraints of law or patriotism or philanthropy. . . . His greed, rapacity, flow as a Universal solvent wherever they can, melting down into gold for him, private enterprise, public morals, judicial honor, legislative faith, gifts of nature. He will stop when he is stopped—not before. Not a tiger but a lynx . . . a make-up like that of the “gentleman pirate” of romance, think cold ruthless. 16
Convinced that Standard Oil was the archetypal trust, Lloyd embarked on a book-length study two years later, and by the time Wealth Against Commonwealth appeared in 1894, he was sure that the public was ripe for his revelations. As he wrote on the eve of publication, “the sky seems full of signs that the time for the appearance of such information has come.” 17
Known as “the Millionaire Socialist,” the natty Lloyd had longish hair, wire-rimmed spectacles, and a flowing mustache, which gave him a vaguely artistic air. Among his friends he included Clarence Darrow, Jane Addams, Eugene Debs, and Booker T. Washington. He was toasted by many literary figures, and Robert Louis Stevenson called him a “very capable, clever fellow,” asserting that “he writes the most workmanlike article of any man known to me in America.”18 A foppish reformer, Lloyd attended trade-union meetings wearing pince-nez on a gold chain, a gray top hat, and glossily polished boots. When he supported anarchists blamed for the Haymarket Square riot in Chicago in 1886, his outraged father-in-law, a co-owner of the Chicago Tribune, disinherited him and placed his estate in trust for Lloyd’s children. To maintain his existence as a dapper millionaire and literary troubadour for radical causes, Lloyd relied on his wife’s income.
Lloyd’s politics became more radical over time. With a messianic outlook, he had promiscuous sympathy for every crusade. Starting out as a free-market liberal, he then turned to socialism, trade unions, worker cooperatives, and utopian communities. He once referred to himself as “a socialist-anarchist-communist-individualist-collectivist-cooperative-aristocratic-democrat”—and that was just for starters.19 Scarcely a cause in the Progressive panoply—from attacking tariffs to favoring municipal ownership of utilities to combating sweatshops— escaped his wide-ranging vision. Like Karl Marx, he believed in the inevitable collapse of capitalism, which he thought corrupt and predatory. Also like Marx, he imagined that competition led to monopoly—a welcome step since it was “a necessary and indubitable step toward national and international cooperation.” 20
Lloyd returned to Standard Oil—the subject of his 1881 story in the Atlantic Monthly—for several reasons. Dismayed by the failure of the Sherman law to curb monopolies, he ridiculed it as “The Anti-Trades Union Law,” a mere ruse perpetrated by “a world-wide concert of action of a money power, crazy with greed, and fanatical to the hilt, to re-enslave the working people.”21 He could also now draw upon a wide body of material churned up by government investigations against Standard Oil. Drawing on a small army of Rockefeller haters, including George Rice, Lewis Emery, and Roger Sherman, he gathered court records and trial transcripts, which he stuffed into pigeonholes at his home in Winnetka, outside Chicago. When one acquaintance visited him there, Lloyd told him, “I will prove that John D. Rockefeller is the most selfish usurper that ever lived.”22 With Dostoyevskian passion, he filled notebooks with flaming diatribes against the American plutocracy, describing the Rockefellers and Vanderbilts as members of a “cruel, selfish, carnivorous, short-sighted herd.”23 The lists of sensational titles he compiled for his Standard Oil book—includingSlime in Genesis, Fountains of Pitch, and Barbarians of Business—said as much about his overheated imagination as they did about the trust.24 In fact, Lloyd spouted so much fustian that it made it easy for businessmen to dismiss him despite his often accurate insights.
Wealth Against Commonwealth had no kind words to spare for Standard Oil. Lloyd marshaled every wispy allegation made against the trust and printed it as gospel truth. Where Ida Tarbell later portrayed Rockefeller and his cohorts as superb if immoral businessmen, Lloyd presented them as brazen criminals who owed everything to diabolical deeds. Later on, speaking privately of the “criminal character” of the Standard Oil executives, he insisted that they “ought to be in the penitentiary.” 25 Like his Atlantic Monthly piece, his book was chockablock with errors and egregious misrepresentations—for instance, he described the Rothschilds as Standard Oil’s agents abroad. Accusing Rockefeller of rigging artificial shortages to drive up kerosene prices, Lloyd failed to see that the trust maintained its dominance by keeping prices low and selectively engaging in predatory pricing. He ennobled any businessman, however greedy or inept, who opposed Rockefeller.
Yet for all its weaknesses, the book had a profound and lasting impact and ranks as a classic of muckraking literature. Lloyd was a superb stylist whose mellifluous prose captivated readers. Every paragraph was a call to arms.26 Whatever the holes in his argument, he gave a clear, intelligent shape to a complex story, especially when it came to the importance of railroad rebates in the rise of Standard Oil. When he argued that the South Improvement Company never died but became Rockefeller’s master blueprint, he laid down a line of argument followed by Ida Tarbell. What also gave the book its force was Lloyd’s political message: “Liberty produces wealth, and wealth destroys liberty.”27 As the trusts’ power rippled through society, he said, it corrupted every corner of American life. The noble experiment of American democracy was being undermined by businessmen who had grown more powerful than the state and controlled its elected representatives. “Our system, so fair in its theory and so fertile in its happiness and prosperity in its first century, is now, following the fate of systems, becoming artificial, technical, corrupt.” 28
In Wealth Against Commonwealth, Lloyd omitted all names, even though Rockefeller, Flagler, and others were all too recognizable. Standard Oil was never mentioned and was usually referred to as the “oil combination” or some other euphemism. This technique protected Lloyd from libel prosecution, though he fell back upon a highfalutin explanation for it. “It seems of the highest importance that the book should retain its character of an illustration of the motives and results of our commercial civilization, not an attack on a particular corporation or body of men.”29
Lloyd’s manuscript found a publisher with difficulty. Mark Twain, who then had his own publishing venture, turned it down in deference to his close friendship with Henry H. Rogers. As Twain told his wife, “I wanted to say [to Lloyd] the only man I care for in the world; the only man I would give a damn for; the only man who is lavishing his sweat and blood to save me & mine from starvation and shame, is a Standard Oil fiend . . . but I didn’t say that. I said I didn’t want any book; I wanted to get out of the publishing business.”30 Luckily for Lloyd, he won the passionate sponsorship of another literary luminary, his former Atlantic Monthly editor, William Dean Howells, who was bowled over by his indictment of Rockefeller. “I think that the monstrous iniquity whose story you tell so powerfully, accomplished itself in our time, is so astounding, so infuriating, that I have to stop from chapter to chapter, and take breath.”31 Howells steered Lloyd to Harper and Brothers, who agreed to issue the book if the author substantially condensed it, paid for publication, and guaranteed a sale of fifteen hundred copies—a deal only a rich radical could afford.
Published in 1894, the book passed through four printings within a year and sold a respectable eight thousand copies in its first decade. Some sour notes were heard amid the praise. The Nation began its scathing review by saying, “This book is a notable example of the rhetorical blunder of overstatement,” and it branded the book “five hundred pages of the wildest rant.”32 Yet the work was praised widely by many reformers, including Louis Brandeis, and Edward Everett Hale called it the most important American book since Uncle Tom’s Cabin. Since Lloyd distributed free copies to politicians, it became the bible of Washington trustbusters.
With his penchant for melodrama, Lloyd claimed he had been tailed by Standard Oil detectives and told friends that he “expected to be crushed by the Standard people.” He seemed half disappointed when 26 Broadway reacted to his book with stern silence. Although colleagues informed him of the book’s accusations, Rockefeller did not read it and said Standard Oil “paid no more attention to all this nonsense than an elephant might be expected to pay to a tiny mosquito.” 33 Rockefeller now declined almost weekly requests to sit for magazine profiles, including one from a new magazine being launched by Samuel S. McClure, who was then in Paris trying to sign up an obscure young writer from Pennsylvania, Ida Minerva Tarbell.
Even after the publication of Wealth Against Commonwealth, Lloyd regaled friends with scurrilous gossip about Rockefeller, telling one correspondent, with cynical relish, that the mogul had recently gone abroad, ostensibly to recuperate from the strain of his charities. Sure that Rockefeller had left the country to divide up global oil markets with the Russians, Lloyd guffawed at reports that Rockefeller’s health had broken down under the crushing weight of his beneficence. “The wonder is that he expects people to believe that sort of thing, and that they do believe it!” Lloyd told a friend.34 The irony, of course, is that Rockefeller spoke the unvarnished truth. Lloyd was always as blind to Rockefeller’s virtues as he was sensitive to his glaring vices.
By 1895, Rockefeller, age fifty-six, had begun to fade by imperceptible degrees into retirement. That year, he sat for a haunting portrait by Eastman Johnson that was commissioned by the board of the University of Chicago and that shows him toward the close of his business career. Set against a dark backdrop, the titan sits on a simple wooden chair, fixing the viewer with a fiery stare. His long, tapered fingers are delicately interlaced and his legs urbanely crossed, but there is a blazing intensity, an inextinguishable fire, in his eyes. Rockefeller still looks powerful and surprisingly youthful, but there is a sadness about him, as if he were stooped under a great weight and enveloped in unfathomable gloom.
Since he dated his retirement as early as 1894 and as late as 1897, there is some uncertainty as to when Rockefeller officially left 26 Broadway, but 1895 and 1896 are the likely watershed years. Though he was still suffering from sporadic digestive problems and nervous strain, the 1893 panic had forced him to postpone his departure several times. In explaining his retirement, the Rockefeller literature has always stressed his health and the heavy burden of his charities, though another factor contributed as well: He had perfected the gleaming machinery of Standard Oil, and, his appointed task done, he felt he should pass the reins to younger men. As Gates put it, the business “had ceased to amuse him, it lacked freshness and variety and had become merely irksome and he withdrew.”35 By 1896, Rockefeller was skipping the daily lunch meetings at 26 Broadway and only occasionally exchanged memos with other executives. By June 4, 1896, he had already relinquished most of his duties, for he ended a letter to Archbold, “I shall be very pleased at any time to hear anything new that is important in the business, if it will not trouble you too much, or if you will kindly call Mr. Rogers.”36
In September 1897, Rockefeller suffered another medical setback, apparently related to circulatory problems, and his doctors insisted that he promptly transfer more day-to-day decisions to his representatives. “I do not call myself sick,” Rockefeller commented to one relative, “but this little warning I will promptly heed, as health is of the first importance.” 37 So in 1897—the year his son graduated from Brown—Rockefeller walked away from the empire that had consumed his energies for more than thirty years, and during the next fifteen years he scarcely appeared at 26 Broadway. He was succeeded by John D. Archbold, his jovial, pugnacious protégé, who gave a more defiant and combative tone to the trust in its duels with government investigators, committing a public-relations blunder of no small magnitude.
In a grave misstep, Rockefeller never publicly announced his retirement and retained the titular presidency of Standard Oil of New Jersey. As a result, he remained an inviting target for critics and was personally held liable for many of the questionable judgments made by Archbold, who was nominally vice president of New Jersey Standard.
In our age of an assertive business press, when corporate secrets are readily ferreted out by reporters, it is scarcely conceivable that the world’s richest man, running the world’s largest business, could have drifted away from business without public knowledge. Yet much of the press—to Rockefeller’s later chagrin—swallowed the cover story whole. While some reporters knew that he no longer reported to work, they doubted that he had really surrendered supervisory power. The misconception was understandable. He owned nearly 30 percent of Standard Oil stock—far more than anyone else—and did not hesitate to proffer advice as the urge seized him. Small groups of company lawyers and executives periodically briefed him, and Archbold made regular weekend pilgrimages to consult him at his Westchester estate. As trustbusters took dead aim at the company, Rockefeller was driven to develop a common defense with current executives, pulling him back into the past even as he tried to move on to new pursuits.
Rockefeller entered retirement just at the birth of the American automobile industry. As he noted, “When I retired from business . . . we had just begun to hope that some day [autos] would be practical.” 38 That year, Frank and Charles Duryea produced thirteen two-cylinder runabouts in Springfield, Massachusetts—the first time a car company had produced several cars from a standardized model—and Henry Ford put the finishing touches to the quadri-cycle, his first horseless carriage. The automobile would make John D. Rockefeller far richer in retirement than at work. When he stepped down from Standard Oil, he was probably worth about $200 million—$3.5 billion today—whereas, thanks to the internal-combustion engine, his fortune soared to $1 billion by 1913—surely history’s most lucrative retirement, and one that must have softened the sting of press vituperation.
In 1897, Joseph Pulitzer’s World showcased John D. Rockefeller and Henry M. Flagler as two of the five chief overlords of the Standard Oil trust, yet Flagler had now ranged even farther afield than Rockefeller. A man with many cronies but few close friends, Rockefeller reserved warm praise for Flagler. “You and I have been associated in business upwards of thirty-five years,” Rockefeller wrote to him in 1902, “and while there have been times when we have not agreed on questions of policy I do not know that one unkind word has ever passed or unkind thought existed between us. . . . I feel that my pecuniary success is due to my association with you, if I have contributed anything to yours I am thankful.”39 Flagler repaid the compliment, telling one Baptist preacher that “if he would spend the remainder of his life in praising Mr. Rockefeller he could not say too much nor more than was actually deserved.”40
But these high-flown, touching tributes masked a certain froideur that had crept into their relationship as they neared retirement. Although Rockefeller never said so outright, one senses that he thought Flagler had become a slave to fashion and ostentation, a traitor to the austere puritanical creed that had united them. Though his hair and mustache were now dusted with gray, Flagler had a lean, handsome face and was highly susceptible to female charm. He had suffered many personal misfortunes in marriage and exercised woefully bad judgment. His consumptive first wife, Mary, had become a professional invalid. When doctors recommended an extended winter stay for her in 1878, Henry joined her in Florida, but, itching to get back to Standard Oil, he bolted for New York after a few weeks. Unwilling to stay alone, Mary followed him back instead of taking time to recuperate properly. When she died in May 1881, Henry felt profoundly guilty. At that point, he took stock of his life and decided he had sacrificed too much to business, telling one reporter, “I have been giving all my days to the Lord hitherto, and now I’m taking one for myself.”41During the winter of 1882–1883, he was hospitalized with a liver ailment and began to pore over newspaper articles about Florida land deals. In 1883, at age fifty-three, Flagler married Ida Alice Shourds, thirty-five, a former actress who had nursed Mary during her illness. A short woman with red hair, electric blue eyes, and an incendiary temper, Ida Alice seemed determined to run through Flagler’s money, gathering an expensive wardrobe and trying to buy her way into New York high society.
Whatever his reservations about the match, Rockefeller visited Henry and Ida Alice on their honeymoon in Saint Augustine, Florida, during the winter of 1883–1884. No less prophetic in his business hunches than at Standard Oil, Flagler had faith that Florida would someday be converted from a pestilential, mosquito-ridden jungle into a place of wonder, recreation, and exotic beauty. The next winter, when the Rockefellers and Flaglers again traveled to Saint Augustine, Henry bought several acres of orange grove as the site for the future Ponce de Leon Hotel. To cater to a less-affluent clientele, he added the Alcazar Hotel across the street, its façade patterned after the Alcazar Palace of Seville. As the resident railroad expert of Standard Oil, Flagler saw that Florida’s development had been retarded by inadequate transport, and in the late 1880s he bought two railroads that opened for settlement a coastal stretch around Ormond and Daytona beaches. Buying a large hotel on the Halifax River, he re-modeled it, grafted on an eighteen-hole golf course, and renamed it the Ormond Beach Hotel. Years later, John D. Rockefeller’s winter home, The Casements, stood directly across the street.
Driven by his faith in Florida’s future, Flagler merged his railroads in 1892 and conceived a master plan for a railroad that would snake down the length of Florida’s Atlantic coast to Key West, with Flagler resorts dotting the route—a vision he realized in 1912. Each time Flagler pushed the railway farther south, it opened more swamp to development, triggering another land boom.
As always when infected with development fever, Flagler ran up bills that taxed even his massive fortune. In 1890, he sold 2,500 shares of Standard Oil stock to Rockefeller for $375,000 and made further stock sales to him for several years—right on the verge of the auto boom that would send those shares soaring. Rockefeller followed Flagler’s business adventures in Florida with sympathy but at a distance. “Henry did a great job in Florida,” he said. “Think of pouring out all that money on a whim. But then Henry was always bold.”42 Yet he turned a deaf ear to his friend’s repeated entreaties to visit again. “I believe this country would be a revelation to you, if you would take a week to look into it,” Flagler pleaded with him in 1889.43 Yet Rockefeller still stayed away from the state after his 1884–1885 visit. “It is marvelous what Mr. Flagler has wrought in that southern country,” Rockefeller told William Rainey Harper in 1898, “and I regret not to have paid him a visit long ago.”44
Why this sudden distance in so singular a friendship? When they did see each other, Rockefeller and Flagler were always nostalgic, yet they seldom contrived to meet. One suspects that John and Cettie were scandalized by the showy airs and sybaritic indulgence of Ida Alice Flagler. Bowing to his second wife, Henry had bought a private railroad car and a 160-foot yacht (both tellingly named the Alicia), and the Flaglers behaved more and more like the gaudy arrivistes the Rockefellers abhorred. Then Ida Alice began to show incipient signs of the mental illness that overtook her in later years. Out of the blue she began to chatter about her husband’s adultery—a real enough situation, but one magnified in Ida Alice’s fevered mind. In 1891, Henry became infatuated with Mary Lily Kenan, a beautiful, gifted twenty-four-year-old from a prominent North Carolina family who offered him respite from his moody, unstable wife, and Ida Alice became pathologically obsessed with this relationship.
During the summer of 1893, Ida Alice’s manic behavior worsened when she obtained a Ouija board. Closeted in her room, she spent hours communing with astral spirits, convinced the czar of Russia had fallen madly in love with her. When she threatened to kill Flagler in October 1895 and accused him of trying to poison her, she was committed to a sanatorium in Pleasantville, New York. In the spring of 1896, after the doctors declared Ida Alice cured, she returned to live with Henry at their large estate, Satan’s Toe, in Mamaroneck, New York. For a few happy weeks, they rode bikes together and read aloud to each other, suggesting a tenuous return to happier times. Then Ida Alice bribed a servant to smuggle in a Ouija board and promptly succumbed to old demons. Once back at the board, she relapsed into her paranoid dreamworld. When she flew at one doctor, wielding a pair of scissors, she was returned to the Pleasantville sanatorium in March 1897. There she renamed herself Princess Ida Alice von Schotten Tech and never saw Henry again.
After the courts ruled Ida Alice Flagler insane in 1899, Henry set up a trust fund for her, stocked with $2 million in Standard Oil shares, which would appreciate to more than $15 million by her death in July 1930. Henry, meanwhile, was in a bind: New York state law would not permit divorce on grounds other than adultery, and he could not prove adultery against a woman confined to an asylum. Never deterred by restrictive laws, Flagler switched his legal residence to Florida and applied his influence with state legislators. On April 9, 1901, a special law was enacted permitting divorce on grounds of incurable insanity—a law known as the Flagler divorce law. Within two weeks, Flagler married Mary Lily Kenan. The wedding was performed in high style, Flagler bringing friends down from New York in a private railroad car, but Rockefeller did not attend. He must have felt Flagler was making a spectacle of himself, especially when he was named correspondent in a divorce suit in Syracuse, New York, one month after his marriage. That the Rockefellers had drifted away from Flagler is suggested by a note Cettie wrote her son in August 1900. “We have the announcement of Mr. Flagler’s marriage to a Miss Kenan, of N. Carolina. She is thirty-six, he, seventy-two.” 45 Cettie expresses no pleasure at the marriage, but only cites, with implicit disapproval, the difference in age. Mary Kenan was actually thirty-three at the time.