CHAPTER 27

Judgment Day

On November 18, 1906, the federal government filed suit in Missouri to dissolve Standard Oil under the Sherman Antitrust Act, naming as defendants Standard Oil of New Jersey, sixty-five companies under its control, and a pantheon of chieftains, including John and William Rockefeller, Henry Flagler, Oliver Payne, John Archbold, and Henry Rogers. They were charged with monopolizing the oil industry and conspiring to restrain trade through a familiar litany of tactics: railroad rebates, the abuse of their pipeline monopoly, predatory pricing, industrial espionage, and the secret ownership of ostensible competitors. The proposed remedy was sweeping: to break up the massive combine into its component companies. As a government report documented in 1907, the Standard Oil leviathan still refined 87 percent of all kerosene, handled 87 percent of exported kerosene, marketed 89 percent of domestic kerosene, and was more than twenty times the size of its most serious competitor, Pure Oil. After the suit was filed, Standard officials tried to sound sanguine and could not subdue their now delusional sense of invincibility. In a letter marked “Strictly confidential,” Rockefeller told Archbold of reports that the Justice Department had scant confidence in its own case and that it was just a flimsy vendetta worked up by Roosevelt. “This program is the usual topic of his present day talk with friends and he shows a disposition that is vindictive. If his suit fails, he means to urge legislation, if he can have it framed, aimed at the same target.”¹

There seems little doubt that Standard Oil seriously misplayed its cards with Roosevelt. In January 1907, the president tangled with one of his nemeses, Ohio senator Joseph B. Foraker, before a crowded dinner at the Gridiron Club in Washington. A stout ally of Standard Oil, Senator Foraker stiffly resisted measures to regulate business. With patent indignation, Roosevelt excoriated Foraker and the “malefactors of great wealth” behind him. As he pronounced the classic phrase, some reporters thought his gaze traveled to J. P. Morgan, whereas Morgan’s friends insisted that the president eyed Henry H. Rogers, then sitting next to Morgan. The latter were probably right, for Morgan and his client firms had handled relations better with the White House. If Roosevelt treated the Morgan interests (U.S. Steel, International Harvester, et al.) more leniently than he did Standard Oil, it was partly because they had submitted to guidance from the Bureau of Corporations and worked out informal arrangements to correct violations. In briefing his father on the antitrust case, Junior relayed rumors that U.S. Steel had pushed Frank Kellogg to target Standard Oil so as to deflect heat from itself. He also mentioned that several Standard Oil executives, including Charles M. Pratt and Edward T. Bedford, thought that U.S. Steel had wisely placated the government while Archbold had been foolishly antagonistic. Senior preferred to view Standard Oil as vengefully singled out for abuse and claimed that “other large corporations went scot free who were regarded by these ablest attorneys in the land as far more vulnerable than was the Standard Oil Company.”²

By the summer of 1907, the political fight against Standard Oil had spread across a vast, bloody battlefield, with seven federal and six state suits (Texas, Minnesota, Missouri, Tennessee, Ohio, and Mississippi) in progress against the embattled trust. New legal skirmishes seemed to crop up weekly. That year, an Ohio grand jury brought in 939 indictments against Rockefeller and other Standard Oil officers; a bill was introduced in Tennessee to oust the trust on antitrust grounds; Missouri fined and expelled the Waters-Pierce Company; and so on and so forth.

Approaching his sixty-eighth birthday, Rockefeller had never imagined that his twilight years would be so eventful. His fortune had failed to purchase him even a poor man’s mite of tranquillity. As nominal president of Standard Oil, he was in a bind, responsible for actions he had not approved. In a July 1907 letter that betrayed considerable anguish, Rockefeller again pleaded with Archbold to accept his resignation and release him from his torment. During the next two weeks, he repeatedly proffered his resignation, telling Archbold this would free him from several subpoenas. Though he owned 27.4 percent of Standard Oil stock—three times the amount held by Flagler, the next largest shareholder—Archbold turned him down flat, and Rockefeller bowed to his protégé’s wishes. But the decision did not sit well with him.

One thing evident amid the spate of lawsuits was that railroad rebates had not faded as an issue, even though pipelines had governed the oil business for more than a generation. When rebates were again forbidden by the Elkins Act of 1903 and the Hepburn Act of 1906, the public naively assumed they had ended. Then the Interstate Commerce Commission reported in January 1907 that Standard Oil was still secretly accepting rebates, spying on competitors, setting up bogus subsidiaries, and engaging in predatory pricing—the same deadly sins patented by Rockefeller back in the 1870s. Roosevelt and his cabinet thirsted for a test case that would prove Standard Oil’s collusion with the railroads and dramatize the twin evils of abusive trusts and scheming railroads.

The issue was duly highlighted in a 1907 case in Chicago in which Standard Oil of Indiana was accused of taking illegal rebates from the Chicago and Alton Railroad. The shipments in question had passed between Whiting, Indiana, and East Saint Louis, Illinois,after such rebates were outlawed by the Elkins Act. (Rockefeller, we recall, always insisted that Standard Oil took no rebates after they were banned in 1887.) The presiding figure in the Chicago courtroom was a gaunt, outspoken judge with premature white hair named Kenesaw Mountain Landis who, at forty-one, was newly appointed to the federal bench and later served as the first baseball commissioner.

Eager to levy an eye-popping fine against the trust, Landis asked its attorneys for figures on its capitalization and earnings between 1903 and 1905. The Standard lawyers, Landis knew, were in a tight spot: If they furnished the true figures, they might invite a punitive fine; if they withheld them, they would look guilty. On June 26, 1907, the federal district attorney tried to pry loose from Standard counsel John S. Miller a list of employees privy to those numbers. “I’ll see you in hell first” was Miller’s cordial reply. This riposte backfired: Landis assigned U.S. marshals to subpoena several Standard Oil officials, including Rockefeller. Flouting the judge’s request, Rockefeller again fled and stayed with Alta and Parmalee in Pittsfield, Massachusetts. He instructed the bedridden Cettie, by now a battle-hardened veteran, to keep quiet about his whereabouts and send him mail only under the Prentice name. For several days, as the press guessed at Rockefeller’s whereabouts, Landis’s process server tried to track the titan through the New England countryside.

When Teddy Roosevelt and his attorney general heard that Landis wanted to haul Rockefeller into court, they were greatly dismayed, for if Rockefeller testified in the Chicago case, he might win an “immunity bath” from possible criminal prosecution in the more important federal antitrust suit. They sent an emissary to Chicago to plead with Landis. “I’d like to oblige Mr. Roosevelt,” he said. “I’d do anything in reason to oblige him. But Rockefeller is making a monkey out of my process server, and I’m going to bring him before this court to vindicate its dignity.” ³ Rockefeller must have discovered the legal advantages of testimony, because he suddenly contacted Judge Landis from Pittsfield and voluntarily accepted a subpoena from a deputy marshal.

On July 5, 1907, arriving by private railroad car, John and William Rockefeller and Henry Flagler conferred with lawyers at the spacious new offices of Standard Oil of Indiana in Chicago. Instead of cooperating with Landis, Rockefeller counseled defiance and opposed revealing the balance sheets. “But, Mr. Rockefeller, times have changed,” Flagler said. “The old maxim, silence is golden, doesn’t work so well.” “Well,” Rockefeller drawled, “it did when I was at the helm.”⁴ Though he had agreed to travel to Chicago, Rockefeller hesitated to appear in court, and when he canvassed the lawyers present, they seemed to side with him. Then he sounded out the youngest lawyer, Robert W. Stewart, who said, “Mr. Rockefeller, in view of the opinion rendered by the distinguished legal talent present, I hesitate to express an opinion.” “Young man,” Rockefeller said, “I’m paying you to give me your opinion.” Summoning up his courage, Stewart said, “Mr. Rockefeller, you are no different from any other citizen before the law, and if I were you, I would appear.”⁵ For all his tough talk, Rockefeller was smart enough to abide by the young man’s advice.

On the sultry morning of July 6, 1907, John and William Rockefeller arrived at the federal building and found streets teeming with hundreds of spectators. When Rockefeller was spotted in a straw hat, grasping a slender cane, somebody shouted, “Here he comes!” The crowd surged forward in such close ranks that it took a squad of twenty club-wielding detectives to clear a path. Rockefeller grinned when a street urchin called out, “There’s a man who got his picture in the paper.”⁶ Some zealous onlookers tore buttons from Rockefeller’s coat. By the time the Rockefeller brothers reached the sixth-floor courtroom, a red-faced William, sweating profusely, muttered, “An outrage! I never heard of such treatment.” ⁷ By contrast, John D. exhibited his usual cool demeanor before an unruly mob. When he entered the sweltering courtroom, with electric fans slicing overhead, he even imitated a reporter trying to take notes in the crush of people. Once the doors were closed, the hum of spectators outside was still so loud that policemen had to clear the corridor.

After the marshal brought down his gavel, Rockefeller began fifteen minutes of unforgettable testimony. A virtuoso of evasive testimony, he was the tranquil eye of the storm. As one reporter noted, “Mr. Rockefeller was the coolest looking man in the room. Every motion he made was slow and dignified. His step was slow. His replies to the questions of the court were even slower.”⁸ Judge Landis, itching to interrogate Rockefeller, had not reckoned on his incomparable mastery of prevarication and selective memory loss. Once again, in the halls of justice, Rockefeller turned himself into a confused old dotard. The most modest question seemed to pose insurmountable challenges to his mind.

To start things off, Judge Landis asked, “Mr. Rockefeller, what is the business of the so-called Standard Oil Company of New Jersey?” “I believe, your Honor . . .” Rockefeller began, then appeared to lose his way. He paused, fiddled with his cane, crossed his legs, then made a second stab at an answer. “I believe, your Honor . . .” Here again, his mind wandered as Judge Landis tapped his spectacles on his desk in frustration. Finally, Rockefeller concentrated his faculties and replied, “I believe, your Honor, they operate an oil refinery in New Jersey.”⁹ To all questions, Rockefeller responded in this same slow, disconnected style, making his testimony worthless. In exchange, Landis had to give Rockefeller the one thing he dearly wanted: immunity from criminal prosecution. This testimony was not only a fiasco for the judge but a public-relations victory for Rockefeller. How, people wondered, could this sweet, bumbling old man have been the evil wizard of the trust? His testimony even received plaudits from the press. As he told Archbold afterward, “My experience at Chicago and with the newspaper people generally of late has been very satisfactory.”¹⁰

A month later, Judge Landis took his revenge. On the morning of August 3, 1907, as more than a thousand people sought entrance to his courtroom, Landis read aloud his decision in the Standard Oil case. (Possibly in anticipation, Rockefeller had just announced a $32 million gift to the General Education Board.) Once again, with difficulty, the marshals shut the great doors to keep out waves of spectators. Pale and edgy, Judge Landis called Standard Oil no better than a common thief and castigated its lawyers for their “studied insolence.”¹¹ As spectators guffawed at these insults, the bailiffs repeatedly had to rap for order. Then, Landis delivered his bombshell: a fine against Standard Oil of Indiana that dwarfed any other in American corporate history up until that time: $29.24 million ($457 million in 1996 dollars). This was the maximum penalty: $20,000 for each of 1,462 carloads of oil cited in the indictment. Reporters struggled to convey the magnitude of this fine. That money could build five battleships; fill 177 flatcars with silver dollars; employ 48,730 city-street workers each year. It amounted to slightly more than half the money coined annually by the federal government. Since it represented nearly 30 percent of Standard Oil’s $100 million capitalization, Rockefeller’s theoretical share of the fine worked out to $8,011,760. Asked about the penalty, Mark Twain said it reminded him of the bride’s words the next morning: “I expected it but didn’t suppose it would be so big.” ¹²

Rockefeller used the record fine to put on a characteristic show of aplomb. He was in the middle of a golf foursome in Cleveland when a messenger came sprinting across the fairway, clutching a yellow envelope. Taking it and handing the boy a dime, Rockefeller read the verdict without even a twitch. Finally, he put the message in his pocket and said to his golf partners, “Well, shall we go on gentlemen?”¹³ Then he hit an excellent drive of about 160 yards down the fairway. At first, nobody dared to ask the question on their minds, but then one person screwed up his courage: “How much is it?” “Twenty-nine million, two hundred and forty thousand, the maximum penalty, I believe,” Rockefeller answered coolly. Then he gestured toward the tee and said, “It is your honor. Will you gentlemen drive?”¹⁴ By all reports, Rockefeller was in superb form that day and completed nine holes in fifty-three shots, his best score ever. The next day, in relating the incident, one Cleveland paper said: “Not by Change of Countenance or Movement Did the Standard’s Founder Betray the Fact That He Might Have Been Annoyed or Angered by the Sentence Handed Down in Chicago.”¹⁵

Of course, Rockefeller’s poker face concealed deep rage. The Landis fine supported the thesis that the Standard Oil empire was based on unethical, even illegal, rebates, not on the business acumen of its founders. Before the day was over, Rockefeller issued a statement upbraiding the court: “A great injustice has been done the company. It was from ignorance on how the great business was founded. For all these years no one has known and no one seems to have cared how it came into existence.”¹⁶ Descrying Teddy Roosevelt’s influence, Gates told Rockefeller that he had lost his admiration for the man and hoped that “this amazing and reckless robbery and plunder under the forms of law, may awake the business interests of the country and thoughtful men, to the perils into which we have drifted.” ¹⁷

At one point during that famous golf game of August 3, 1907, Rockefeller had remarked, “Judge Landis will be dead a long time before this fine is paid,” and his prediction proved accurate.¹⁸ He seldom spoke so harshly in public. Many observers saw the Landis fine as more of a political statement and a publicity stunt than sound jurisprudence. In July 1908, a federal appeals court not only revoked the fine but severely reprimanded Landis for considering each carload of oil as a separate offense. Judge Peter S. Grosscup, calling Landis’s act an “abuse of judicial discretion,” ordered a retrial, in which Standard Oil was subsequently found not guilty. ¹⁹ Teddy Roosevelt was hopping mad at the appeals court. While he had thought the Landis fine excessive, he had thought the trial itself fair. The day after the fine was thrown out, Roosevelt announced that the government would again prosecute Standard Oil for accepting rebates, since “there is absolutely no question as to the guilt of the defendant nor of the exceptionally grave character of the offense.” Dismayed, he said with a touch of bombast that the decision had “hurt the cause of civilization.”²⁰

By the early fall of 1907, many Wall Street soothsayers were predicting a savage downturn in financial markets in response to the Landis fine and the antitrust suits. “It must be that these persecutions against business interests will not always continue,” Senior warned his son in late August. “If so, we must be prepared for very disastrous results to our commercial fabric. I think we better increase our reserves of money with our income.” ²¹ In the week after the Landis fine, Standard Oil shares skidded from 500 to 421, leading a stock-market slump.

For reform-minded critics, the ensuing panic originated with the misbehavior of the business fraternity itself. For several years, the stock market had coasted on a tide of easy money, low interest rates, and manic speculation in copper, mining, and railroad shares. In this euphoric mood, stock promoters had flogged unsound companies, and investors had gorged themselves on watered stock. Among the most flagrant speculators were trust companies that exploited legal loopholes to speculate heavily in the stock market while also lending excessively against securities as collateral. Roosevelt inveighed against “an era of over-confidence and speculation” that would lead to a severe purgative reaction. ²²

As money tightened that September, Rockefeller deposited in several New York banks bonds that could be pledged as security for government loans—a rescue operation for which he reaped a handsome 2 percent commission. As panic overtook Wall Street in late October 1907, throngs of petrified depositors lined up in front of banks to empty their accounts, and J. P. Morgan rushed back to New York from an Episcopal convention in Richmond. On October 22, after his aides examined the books of the Knickerbocker Trust, Morgan decided that it was hopelessly insolvent and had to be shut. That night, in an extraordinary pledge of faith in a private citizen, Treasury Secretary George Cortelyou met with Morgan in a Manhattan hotel and placed at his disposal twenty-five million dollars in government funds to stem the panic. While Morgan was the impresario of the salvage operation, Rockefeller provided more private money than anybody else.

When Gates got wind of the Knickerbocker’s collapse, he telephoned Rockefeller at Pocantico in the early morning and said a public statement from him might restore confidence. Rockefeller stood there in his bathrobe, mulling over the matter, then decided to call Melville E. Stone, general manager of the Associated Press. He told Stone, for quotation, that the country’s credit was sound and that, if necessary, he would give half of all he possessed to maintain America’s credit. It was an unprecedented statement: A single citizen had promised to bail out Wall Street. The next morning, as these sedative words were reprinted across America, reporters spilled onto the golf course at Pocantico. When asked if he would really give half his securities to stop the panic, Rockefeller replied, “Yes, and I have cords of them, gentlemen, cords of them.”²³ It was a rare case of Rockefeller boasting about his wealth, but it was clearly meant to lift public morale. Because Rockefeller deposited ten million dollars there, National City Bank had the deepest gold reserves and cash resources of any bank during the panic. “They always come to Uncle John when there is trouble,” Rockefeller noted with pride.²⁴ When J. P. Morgan decided to save the shaky Trust Company of America on October 23, he received three million dollars in rescue funds from George F. Baker of First National Bank and James Stillman of National City Bank, the latter drawing on Rockefeller money.

For the first time in several years, John D. Rockefeller, Sr., strode through the portals of 26 Broadway on October 24 and took up his command post. “I was 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 cooperation and harmony existed unchecked.”²⁵ Rockefeller offered his services to J. P. Morgan, and his millions formed part of the twenty-fivemillion-dollar fund that Morgan marshaled that day to keep the stock market open, averting the bankruptcy of at least fifty brokerage houses. Whatever his personal distaste for Morgan, Rockefeller generously praised his leadership during the 1907 panic. “His commanding personality served a most valuable end,” he wrote in his memoirs. “He acted quickly and resolutely when quickness and decision were the things most needed to regain confidence.” ²⁶

Several family members sought Rockefeller’s help to withstand the storm. He bought $4.5 million of International Harvester stock from the cash-strapped McCormicks and extended a huge $7 million loan to his brother William, who was hip-deep in stock-market maneuvers. Even with a brother, Rockefeller could not suspend standard business practices—Frank had already learned that—and he asked William to furnish a list of securities as collateral. But when Rockefeller’s adviser Henry E. Cooper demanded more, it prompted an ironic reminder from Rockefeller: “Well, Mr. Cooper, don’t be too rigorous. Remember, William is a very rich man.”²⁷

With full-blown panic raging around him, Rockefeller refused to depart from his daily schedule for long and, after his one day at the office, he returned to Pocantico to play golf. During his morning game, he was interrupted repeatedly by urgent messages, and each time he pedaled his bike back to the carriage house and made another enormous pledge to stave off trouble. He then resumed his game with his usual sangfroid and air of unconcern.

During the 1907 panic, Rockefeller, for the first time, appeared civic-minded to the general public and garnered lavish praise. As he told a relative, the newspapers had “spoken very kindly and favorably, and all have shown great appreciation of what we have tried to do to save the ship.”²⁸ For a time, it seemed this goodwill might moderate the antitrust zeal against Standard Oil, but this hope soon evaporated when Rockefeller told a reporter, “The runaway policy of the past administration can have but one result. It means disaster to the country, financial depression, and chaos.”²⁹According to Rockefeller, he made this statement off-the-record and professed pity for the errant reporter who published it in violation of his solemn oath. The comment aggravated the hostility that President Roosevelt already felt toward Rockefeller, especially since Rockefeller kept pleading ill health as his reason for not coming to the White House to discuss Standard Oil. Privately, Roosevelt said that Rockefeller felt wounded because the government had published the plain truth about Standard Oil.

After the Landis fine was announced, Standard Oil tried to alter its strategy and negotiate a government compromise. That September, it held out a tempting deal to investigators: It would open its books and abide by any recommendations to guarantee compliance with the antitrust laws if the government withdrew its suit. Government officials were caught off guard by this peace offering. “A really astonishing proposal,” James R. Garfield wrote in his diary.³⁰ But Roosevelt was no longer in the mood for a truce. “If we have a criminal case against these men,” he told Attorney General Charles Bonaparte, “I should be very reluctant to surrender it.”³¹

Archbold should have persisted in his conciliatory approach, but he was too accustomed to heavy-handed politics. He was openly contemptuous of all political attacks against the combine. During the spring and summer of 1908, he held several confidential meetings wih President Roosevelt arranged by Senator Jonathan Bourne of Oregon. The president expressed an earnest wish to see the Standard Oil case settled out of court. While Archbold believed in his sincerity, he also knew that Roosevelt had vacillated on this issue. Archbold then resorted to a typically tactless maneuver. In late October 1907, he had Senator Bourne suggest to the president that if the government struck a deal, Standard Oil would help Roosevelt win renomination in 1908. A horrified Garfield called this brazen offer “stupidly corrupt.” ³²

Because of Rockefeller’s helpful intervention in the Panic, Roosevelt observed a brief moratorium in attacking Standard Oil then made up for lost time in January 1908. In a special message to Congress, he complained that “the speculative folly and flagrant dishonesty of a few great men of wealth” had engendered the loss of fiscal confidence, and he condemned the “bitter and unscrupulous craft” of the Standard Oil leadership in fighting reform measures.³³ The antitrust suit would proceed as planned.

Since Rockefeller had created the largest business empire of the late nineteenth century, it was only fitting that he should face the most massive antitrust suit of his day. Some 444 witnesses delivered 11 million words of testimony; swollen by 1,374 exhibits, the proceedings filled 12,000 pages in 21 thick volumes. Before it was over, Standard Oil also contested some 21 state antitrust suits from Texas to Connecticut, leading one historian to comment, “Never before in the history of the United States had there been so far-reaching a struggle between industry and government.” ³⁴ To supplement its legal staff, Standard Oil retained John G. Milburn and M. F. Elliott of Wall Street, D. T. Watson of Pittsburgh, Moritz Rosenthal of Chicago, and John G. Johnson of Philadelphia. For its part, the Justice Department brought in Charles B. Morrison, a federal district attorney from northern Illinois, and Frank B. Kellogg, a Saint Paul attorney whose success in the case catapulted him to the post of secretary of state in the late 1920s.

Throughout the case, the public fancied Rockefeller to be the all-powerful wire-puller who manipulated Archbold and the other pliant marionettes. If this was sheer fantasy, what then was his actual influence? He did exert limited influence on Standard Oil strategy through the medium of Henry Clay Folger, a Standard Oil director. A thin, bearded man, Folger was diplomatic and extremely diligent in his duties. Unlike the rugged Standard Oil businessmen of an earlier day, Folger had graduated Phi Beta Kappa from Amherst and then attended Columbia Law School. A cultured man, he left to posterity America’s foremost collection of Shakespeare First Folios as well as a splendid library. Far more important to Rockefeller was that Folger played excellent golf and joined him on the links every Wednesday morning.

In memos to Folger about the suit, Rockefeller never touched on political or legal tactics but mostly addressed arcane calculations of profitability. Rockefeller wanted to prove that Standard Oil’s profits had never been excessive or extortionate. Many other companies watered their stock—that is, issued them at inflated capitalization—so that their dividends appeared deceptively modest. To save on taxes and conform to Ohio law, Standard Oil had kept its capitalization low, which produced misleadingly high dividends of 40 or 50 percent per year. Rockefeller pegged the real dividend rate at something closer to 6 or 8 percent.

Folger performed statistical analyses showing that with its capitalization more accurately stated to reflect retained earnings, Standard Oil had paid average dividends twice as high as Rockefeller had surmised. “I am surprised to find the average dividends for twenty-five years 13.86%,” the company founder confessed sheepishly to Folger. Rockefeller now had to rationalize the higher figure and suddenly found it within an acceptable range, noting the larger profits of “many other large businesses with less risk, including the United States Steel Company.”³⁵ “Business men will not regard the earnings . . . which you present as excessive,” he told Folger.³⁶ Afraid that militant trustbusters might see things differently, he promised to destroy this incriminating data. He also reminded Folger that Standard Oil had not kept prices low out of altruism but to deter competition and “keep our profits on such a basis that others would not be stimulated to enter the field of competition with us.” ³⁷ This belied his frequent claim that his motive was to bequeath cheap oil to the working people.

During his Standard Oil tenure, Rockefeller had mollified the public by generally keeping kerosene prices low. But when Archbold took control in the mid-1890s, he kept domestic prices high while depressing foreign prices to diminish overseas competition. During the dozen years before Rockefeller’s retirement, the trust’s return on assets ranged from 11 to 17 percent. With Archbold at the helm, returns soared from 21 to 27 percent between 1900 and 1906. This might have been smart business but it was very poor politics: The trust was booking record profits just when it could least afford to enrage public opinion. It is no coincidence that Ida Tarbell’s series and Teddy Roosevelt’s trust-busting coincided with Archbold’s more grasping regime. He was a much less clever monopolist than his mentor.

When Frank Kellogg grilled Rockefeller in November 1908 at the customs house in New York, much of the testimony concerned Standard Oil’s pricing policy. Standing by maps showing the operational areas of Standard marketing units, Kellogg tried to entrap Rockefeller into admitting that the cartel had divided America into exclusive sales territories. “Does the Standard Oil of Ohio have a limited territory?” he asked. “It has not,” said Rockefeller calmly. “Has it not in the last five years?” asked Kellogg. “Not to my knowledge,” Rockefeller replied. “Its field is the world. That is its mission, to light the world with the cheapest and best.”³⁸ Smiling and imperturbable, Rockefeller kept glancing for guidance to his lawyers, who continually raised objections to Kellogg’s questions.

Kellogg tried to show that Standard Oil routinely engaged in predatory pricing, eliminating competitors and then hoisting prices to exorbitant levels. He estimated that true competition prevailed in fewer than 10 percent of all petroleum markets and noted that kerosene prices had risen unreasonably from 1895 (when Archbold took charge) to 1906, creating widespread consumer discontent. To justify Standard’s plush earnings, Rockefeller cited everything from fire hazards to the vagaries of drilling to the need to invest in new fields. To which Kellogg responded with sarcasm: “But Standard Oil has been paying enormous dividends right along.” Lifting his eyes heavenward, Rockefeller replied, “And we were grateful for it.”³⁹

Once again, the press found it hard to believe that this amiable old gent with his sudden memory lapses and fuzzy logic was the fearsome raptor of Standard Oil. “Now that Mr. Rockefeller has emerged from his seclusion and is seen in the fierce light of a public inquiry, he appears no such monster as the public fancy has painted,” observed one paper. “He is affable to the point of cordiality.”⁴⁰ Said another: “If Rockefeller has been playing a part, he has done so in a way that would do credit to Uriah Heep. If not, it is barely possible that the curious old man has been misrepresented . . . and that the world owes him an apology.” ⁴¹ Perhaps if Rockefeller had made himself available at the beginning of his career as he now did at the end, he might not have been sitting in the witness stand.

In anointing Archbold as his successor, Rockefeller had made him the chief potentate in the world oil industry for the next twenty years. Round-faced, bright-eyed, and peppery, with a tiny body and big head, Archbold, the son of a poor Baptist minister, often bounded down the corridor whistling “Onward Christian Soldiers.” But a violent temper lurked beneath the vivacity. Nevertheless, he and Rockefeller always traded compliments about each other. “You know, when John Rockefeller dies,” Archbold said, “the world is going to be surprised to learn what a very great man he has been in every way.”⁴² Rockefeller responded in kind: “[Archbold] was a man of imagination, of courage, of great persuasiveness, with a genius for reading men and dealing with them.”⁴³

Yet as chief executive of Standard Oil, Archbold stooped to a far rougher style of combat than Rockefeller had, and he freely bribed elected officials. Rockefeller, of course, was no stranger to such skulduggery, but he engaged in payoffs more reluctantly, if only because he so disliked politicians. Archbold had fewer scruples, and as government regulation intruded deeper into business, he decided that the trust needed permanent representation in the U.S. House and Senate.

The first documented instance of Archbold suborning an official occurred in 1898, during Frank Monnett’s suit against Standard of Ohio, when Archbold placed Senator Joseph B. Foraker of Ohio on the payroll. He started with a payment of $15,000, then made another of $14,500 three weeks later, winding up with a total of $44,000 in a six-month period. A corporate lawyer from Cincinnati and former Ohio governor, Foraker was a formidable speaker who earned the nickname of “Fire Alarm Joe” for his rousing oratory. Archbold got excellent value for his money. In February 1900, he wrote to the senator, apropos of a proposed bill hostile to Standard Oil: “It is so outrageous as to be ridiculous, but it needs to be looked after and I hope there will be no difficulty in killing it.”⁴⁴When Foraker helped to dispatch the bill, Archbold sent congratulations: “I enclose you a certificate of deposit to your favor for $15,000. . . . I need scarcely express our great gratification over the favorable outcome of affairs.” ⁴⁵ The certificate of deposit was more difficult to trace than a check and was the instrument of choice for political bribery.

Another favorite recipient of Standard Oil largesse was Senator Matthew Quay of Pennsylvania, who received $42,500 between 1898 and 1902. In one lighthearted note, Archbold told Quay that he was enclosing a $10,000 certificate of deposit as a reward for the senator’s “enticing ways.” ⁴⁶Evidently, Archbold felt more at ease with small, scattered payments, for he advised Quay on another occasion, “Please ask for payments as needed from time to time, not all at once.”⁴⁷ Another true friend of the trust from western Pennsylvania was Representative Joseph C. Sibley, later called “a political procurer for Archbold, an agent for the seduction and corruption of public men by the Standard Oil.” ⁴⁸ In official Washington, Sibley acted as a conduit for Standard Oil money, once writing to Archbold, “A Republican United States Senator came to me today to make a loan of $1,000. I told him I did not have it but would try and get it for him in a day or two. Do you want to make the investment?” ⁴⁹

The trust’s Washington operations might never have surfaced had it not been for a kind act by Archbold. At his Tarrytown mansion, he employed a valued black butler, James Wilkins, who had a twenty-four-year-old ne’er-do-well son named Willie. Out of sympathy for Wilkins, Archbold hired Willie as an office boy at Standard Oil at a time when few if any blacks were employed there. Willie liked to play the ponies and was chronically short of cash. Hoping to take advantage of the political backlash against Standard Oil, he teamed up with Charles Stump, a nineteen-year-old white office boy, to scout out incriminating evidence on Archbold’s desk. In December 1904, the two young men pinched a couple of telegrams and contacted Fred Eldridge, an editor at William Randolph Hearst’s New York American, who studied the loot and said it was worthless. But he expressed a special interest in letters from Archbold to senators or congressmen and gave the two enterprising young men two hundred names that might interest readers. Armed with Eldridge’s wish list, Stump and Wilkins began to scour Archbold’s correspondence after hours, and when they spotted letters to Sibley and Foraker, they took them to Eldridge and haggled over prices. On several occasions, when they reached an impasse, the editor would say he had to “see Mr. Hearst.” ⁵⁰ This espionage lasted from December 1904 until February 1905, when Archbold discovered the missing political documents, accused Stump and Wilkins of theft, then fired them. With the $20,500 that they had received from Hearst, the two young entrepreneurs were able to open their own saloon in Harlem.

For months, Archbold dreaded publication of the purloined letters and must have been puzzled when they did not appear. Hearst had stored the incriminating documents in his safe and awaited a propitious moment to unveil them. By attacking the trusts, Hearst had created a hybrid role for himself as the people’s tribune, who would advance his own imperial ambitions by exposing those of his fellow empire builders. By the 1930s, Hearst became fiercely reactionary, yet in the early 1900s he was still a populist champion. Showing exceptional self-control, Hearst did not publish the letters when he ran against Charles Evans Hughes, a friend of Rockefeller’s, for the New York governorship in 1906. “Charles, I do hope you beat that man Hearst!” Rockefeller told Hughes that year.⁵¹

But in the election of 1908, Hearst backed the Independence League Party, which nominated Massachusetts’s Thomas L. Hisgen, a manufacturer of axle grease, as its presidential candidate. Hisgen had once spurned a bid from Standard Oil to buy him out for $600,000, and when the trust retaliated by slashing prices and trying to ruin him, Hisgen became an implacable foe. Hearst picked him as the party’s candidate with the Archbold letters in mind. On September 17, 1908, Hearst gave a pro-Hisgen speech in Columbus, Ohio, in which he claimed that just before the talk a stranger had appeared in his hotel room and handed him copies of correspondence between Archbold and several politicians. “I am now going to read copies of letters written by Mr. John Archbold, chief agent of the Standard Oil, an intimate personal acquaintance of Mr. Rockefeller and Mr. Rogers,” Hearst announced with great fanfare.⁵² He then created a national sensation by reading aloud letters written by Archbold to Senator Foraker and Congressman Sibley. Later, in a Saint Louis speech, he recited two more specimens, with the correspondence prominently reproduced in Hearst papers.

Realizing that he could not deny the authenticity of the letters, Archbold tried to finesse the charges by claiming that the correspondence was “entirely proper.”⁵³ At first, Foraker pretended that the payments were strictly lawful and aboveboard. “That I was employed as counsel for the Standard Oil Company at the time and presumably compensated for my services was common knowledge,” he insisted. “At least I never made any effort to conceal it.”⁵⁴ When the public refused to buy this, Foraker and Sibley were hounded from public life. Archbold survived as head of Standard Oil, however, and the following year, perhaps to mend his increasingly tattered image, he gave one million dollars to Syracuse University.

The Archbold scandal convinced Junior that the doubts he had entertained about Standard Oil had not been the product of an overactive imagination. Many years later, he admitted to having been “sickened” by the Hearst exposé. “It was the political contributions that focussed the whole thing” as to whether or not he should resign from Standard Oil.⁵⁵ For more than a decade, ever since leaving Brown, Junior had been poised uneasily between business and philanthropy. He had never warmed to commerce, and the Archbold scandal pushed him toward his proper career: that of a full-time philanthropist.

The decision to leave Standard Oil was so sensitive that Junior discussed it only with his wife and father. He had to figure out how to extricate himself without hurting his father or the organization. To live with his own conscience, he told his father, he had to resign from the trust and devote his life to philanthropy. He also advocated Archbold’s ouster, but Senior thought it impossible to fire Archbold in the midst of the antitrust suit. As for his son’s departure, he reacted with surprising equanimity: “I want you to do what you think is right.”⁵⁶ That his father honored his wish to leave Standard Oil only deepened the bond between them.

Whether as a concession to his father or to Archbold, Junior waited more than a year to depart from the company. At the January 11, 1910, board meeting, he quietly retired as a director of Standard Oil: thus, the active, daily involvement of the Rockefeller dynasty with the trust had lasted only slightly more than one generation. Two months later, when a bill was introduced in Washington to incorporate the Rockefeller Foundation, Junior’s resignation was first revealed to the public, helping to separate the family’s charitable efforts from Standard Oil. To purify himself of all business ties, Junior also retired at the same time from U.S. Steel. He had ended his relations with every company except for American Linseed and the one company, ironically, that would defile his name: the Colorado Fuel and Iron Company.

It seems odd that Junior’s disenchantment with Archbold did not diminish his reverence for his father. We know that Archbold had studied corruption at the master’s feet, but Senior made no effort to disabuse his son. Clearly, he did not want to forfeit the love of this young man whose goodness validated his own life. Perhaps he did not think Junior could live with the moral ambiguities of a fortune extracted by dubious methods. Perhaps he felt he was sparing his son disturbing knowledge. Or perhaps he had so thoroughly rationalized his own behavior that he saw himself in the same glowing, virtuous light as his son did. This last theory would seem to be the one most consistent with the rest of his career.

In the last analysis, it took a stupendous leap of faith for Junior to believe that his father was blameless and that Archbold had inaugurated corruption at Standard Oil. It is almost inconceivable that he did not suspect at moments that Archbold had learned some of his tricks from Senior. And how did Junior know that his father was innocent? By instinct, by blind faith, by knowledge of his father’s private character—by everything but detailed knowledge of his business career, which Senior did not care to discuss. If Junior harbored any unspoken doubts about his father’s ethics—doubts only whispered to Abby in the dead of night—the Archbold scandal gave him a convenient cover to slip away from Standard Oil without blaming his father’s past.

The scandal coincided with a formative phase in Junior’s life, as he caught the bracing spirit of Progressive reform. Soon after graduating from college, Junior had joined the movement to clean up tenements, making contact with reformers such as Jacob Riis and Lillian Wald and proposing to Gates an attack on tuberculosis in the slums. The Progressive movement favored peaceful, incremental change and was infused with unimpeachable ideals: that people should be healthier and better educated and that government should operate in a businesslike manner. The Progressives conjured up an antiseptic world of public administration in which decisions would be made rationally by scholars, scientists, and experts. For someone like Junior, who shrank from venomous words and violent confrontation, such clean government promised to transcend the bruising partisan politics that had sullied his father’s reputation. Best of all, Progressives were well-bred, educated, upstanding types whom you could invite home to dinner without embarrassment.

In the early 1900s, the movement latched on to an ideal issue: the New York brothels then flourishing under Tammany Hall protection. During the 1909 mayoral campaign, a debate arose over something called white slavery—the traffic in young women forcibly drafted into a life of sin. After the election, a special grand jury was impaneled to weigh the matter, and in January 1910 Judge Thomas C. O’Sullivan picked Junior as its foreman. Protesting that he had never patronized the ladies and was achingly ignorant of the subject, Junior tried to beg off, only to have the judge snap: “You owe it as a duty to the city to do your part in crushing out the vile practices that are said to exist.”⁵⁷

The choice of Junior was a setup. Tammany bosses figured that he would be weak and spineless, too prudish to explore the demimonde, and that his grand jury would sit for a month and issue harmless recommendations. Instead, Junior plunged into his work with fanatic energy. “I never worked harder in my life,” he said. “I was on the job morning, noon, and night.”⁵⁸ The cause enlisted his deepest sympathies, for he yearned to overcome a crippling sense of amateurism and become an expert in something. The white-slavery jury gave him a chance to graduate from being his father’s factotum and to acquire a separate identity. Emerging from Senior’s shadow, Junior re-created himself as a reformer, placing himself alongside the Ida Tarbells and Henry Demarest Lloyds of the world.

Junior explored the murky realm of Manhattan bordellos at arm’s length, as if afraid to expose himself to their forbidden allure. He later made an astonishing confession: “When I was investigating vice in New York I never talked to a single prostitute.”⁵⁹ But behind the protective shield of scientific inquiry, he questioned countless experts and became extremely knowledgeable. Because he refused to settle for superficial answers, his grand jury extended its work from one to six months. When he handed up a presentment with fifty-four indictments, Judge O’Sullivan, aghast, quarreled hotly with him. “When O’Sullivan found out what I intended to do he was thoroughly frightened because it meant that the plans of Tammany Hall had miscarried,” Junior recalled.⁶⁰ The grand jury’s work was, sadly, nullified when Mayor William Gaynor—himself now at war with Tammany Hall—failed to act on the findings, and most of the indictments ended in acquittal. Despite this denouement, Junior emerged as something brand-new in Rockefeller annals: a civic hero. Not some rich patsy to be pushed around by party bosses, he now stood forth as a formidable personage in his own right.

The white-slavery jury had a lasting impact on him. When the city did not follow up on the jury recommendations, Junior consulted one hundred experts on how to solve the problem. (Among those who most impressed him was the young Raymond B. Fosdick, who had rooted out municipal corruption under two mayors; Fosdick later became president of the Rockefeller Foundation and Junior’s official biographer.) In May 1913, Junior set up and personally financed the Bureau of Social Hygiene, which for twenty-five years studied urban ills ranging from venereal disease to lack of birth control to drug addiction. Cettie proudly sent him $25,000 to promote instruction in sexual hygiene for female students around the country. Junior also worked with Jacob Schiff and Paul Warburg to protect young Jewish women on the Lower East Side from procurers. The young Rockefeller heir, so long kept in limbo, was now showing a new willingness to tackle controversial social issues and place his money behind it. The more evil that people attributed to his father, the harder he worked to achieve an impossible purity.

As he awaited the verdict in the antitrust case against Standard Oil, John D. Rockefeller, Sr., gave way to uncharacteristic melancholy. While working on Random Reminiscences, he toted up the names of more than sixty former colleagues who had died. Henry Rogers died in May 1909, following a stroke, leaving an estate appraised at $41 million, and his memorial service was probably the last occasion that lured Rockefeller back to 26 Broadway. The titan was now one of the last veterans of the early days on Oil Creek and had to contemplate the fact that the government was about to undo his decades of work.

In trying to predict the verdict, Rockefeller, usually a tough-minded realist, fell back on the most feathery hopes. After the 1908 election, he was relieved to be free of Teddy Roosevelt, who handed over the Republican nomination to his corpulent secretary of war, William Howard Taft. On October 29, 1908, in a cameo appearance at 26 Broadway, Rockefeller endorsed Taft for president. “He is not a man, I judge, to venture with rash experiments or to impede the return of prosperity by advocating measures subversive of industrial progress.” Annoyed by this implicit dig at him, Teddy Roosevelt mocked Rockefeller’s endorsement: “It is a perfectly palpable and obvious trick on the part of the Standard Oil people to damage Taft.”⁶¹

After Taft’s election victory over William Jennings Bryan—who had said that Rockefeller should be sent to prison—Rockefeller understandably wired his congratulations to the president-elect. When the press hinted that Taft might be hostile toward Standard Oil, Rockefeller demurred, telling Henry Folger that “I cannot believe this is anything more than an idle rumor.”⁶² Actually, Taft liked Rockefeller personally but loathed the trust. He later wrote, “It was indeed an octopus that held the trade in its tentacles, and the few actual independent concerns that kept alive were allowed to exist by sufferance to maintain the appearance of competition.” ⁶³ While many industrialists hoped that antitrust prosecutions would slacken under Taft, he in fact initiated sixty-five antitrust actions, even more than the forty-four brought by Roosevelt. Throughout the antitrust case, Rockefeller woefully underestimated public animosity against Standard Oil, and as late as August 1909 he told Harold McCormick that he had stopped granting interviews for a while because “the sentiment has greatly changed in our favor.”⁶⁴

Three months later, a federal circuit court in Saint Louis ruled unanimously that Standard Oil of New Jersey and thirty-seven affiliates had violated the Sherman Antitrust Act; the holding company was given thirty days to divest itself of its subsidiaries. Taft praised Frank Kellogg for his “complete victory,” while Teddy Roosevelt, on safari in Africa, where he was butchering a small zoo’s worth of animals, conveyed his elation, terming the verdict “one of the most signal triumphs for decency which has been won in our country.”⁶⁵

Although the trust appealed instantly to the Supreme Court, a deep sense of gloom settled over 26 Broadway as the final verdict approached. Meanwhile, one government decision after another went against the stigmatized monopoly. In 1909, Congress largely repealed the duty that had protected the trust from foreign competition; the secretary of war halted purchase of petroleum products from it; and the president set aside petroleum-rich territory for conservation purposes. When Rockefeller crossed paths with Taft in 1910 during his stay at the Hotel Bon Air in Augusta, Georgia, they agreed to golf together, but Mrs. Taft, fearing bad publicity, got the president to cancel his game. On another occasion—doubtless when the first lady was not looking—Rockefeller asked the president to greet his five-year-old granddaughter, Mathilde McCormick. To Rockefeller’s delight, the huge Taft hoisted the lovely little girl with the long curls high into the air.

By the spring of 1911, the wait for the Supreme Court’s decision began to seem interminable, and even the president grumbled about the court’s glacial pace. Because the court’s composition changed after the death of one justice, the arguments had to be heard twice. On April 25, 1911, Junior passed along to his father Senator Aldrich’s wily prediction: “He was disposed to believe that the decision will be adverse to the company, but thinks the Court will clearly define the law and hopes that it will point out a legal way for the conduct of large corporations.”⁶⁶ The senator must have had excellent sources.

When the end came for Standard Oil after forty-one years of existence, it was swift, sudden, and irrevocable. At 4 P.M. on May 15, 1911, Chief Justice Edward White told a sleepy courtroom, “I have also to announce the opinion of the Court in No. 398, the United States against the Standard Oil Company.”⁶⁷ At once, the room quivered with expectation as senators and congressmen streamed in to hear the verdict. For the next forty-nine minutes, White read aloud the twenty-thousand-word opinion, speaking in such a low, monotonous voice that other justices had to lean over and ask him to speak louder. In his mumbled, momentous words, White upheld the decision to dismantle Standard Oil, which was given six months to spin off its subsidiaries, with its officers forbidden from reestablishing the monopoly. Thus ended the longest running morality play in American business history.

Rockefeller reacted with studied nonchalance. He was golfing at Pocantico with Father J. P. Lennon from the Tarrytown Catholic church when he learned of the decision, and he did not seem particularly perturbed. “Father Lennon,” he asked, “have you some money?” The priest said no, then asked why. “Buy Standard Oil,” Rockefeller said—which turned out to be sound advice.⁶⁸ To his former partners, he sent a sad, whimsical obituary that began, “Dearly beloved, we must obey the Supreme Court. Our splendid, happy family must scatter.” ⁶⁹ Intent as always on ignoring bad news, Rockefeller refused to read the celebrated opinion that broke up his empire—exactly what one would have expected.

The antitrust suit against Standard tested whether the American legal system could cope with the new agglomerations of wealth and curb their excesses. The paradoxical lesson learned was that government intervention was sometimes necessary to ensure unfettered competition. Regulation did not inevitably harm business but could also aid it. The 1911 decision was not an undiluted triumph for reformers by any means, and many of them considered it a shameful betrayal. Senator Robert La Follette, who stood in the courtroom as Judge White read the verdict, told reporters afterward, “I fear that the court has done what the trusts wanted it to do, and what Congress has steadily refused to do.”⁷⁰ Echoing this, William Jennings Bryan asserted that Chief Justice White had “waited 15 years to throw his protecting arms around the trusts and tell them how to escape.” ⁷¹

For fifteen years, White had vainly advanced a doctrine called the “rule of reason,” which would not outlaw every combination in restraint of trade but only those that were unreasonable and violated the public interest. This doctrine vastly expanded judicial discretion and opened a loophole large enough to tolerate many trusts. In the lone dissent, Associate Justice John Harlan angrily protested this new principle, banging the bench and accusing his fellow justices of having put “words into the antitrust act which Congress did not put there.”⁷² He added mockingly, “You may now restrain commerce, provided you are reasonable about it; only take care that the restraint is not undue.”⁷³ The decision tallied in many ways with Teddy Roosevelt’s belief that the government should rein in irresponsible trusts but not meddle with good ones. The more militant reformers were right to consider it, at best, a partial victory.

As so often happens with politics and markets, by the time of the Supreme Court’s 1911 decision, evolutionary changes in the marketplace had already eroded the trust’s dominance. With the final amalgamation of Royal Dutch and Shell in 1907, Standard Oil at last faced a worthy competitor abroad, while the Anglo-Persian Oil Company was tapping rich new fields in the Middle East. At home, more oil poured forth from Texas, Oklahoma, California, Kansas, and Illinois, providing an opening wedge for assertive newcomers. Where the trust had pumped 32 percent of American crude oil in 1899, its share had slumped to 14 percent by 1911. Even Standard’s historic strength in refining dipped from an 86 percent market share to 70 percent in the five years before the breakup.

The automobile was also radically recasting the industry: In 1910, for the first time, gasoline sales surpassed those of kerosene and other illuminating oils. In 1908, William C. Durant launched the General Motors Corporation, and that year Henry Ford brought out his first Model T. Auto ownership soon exploded, reaching 2.5 million cars by 1915 and then 9.2 million by 1920. Though Standard Oil of California introduced the first filling station in 1907, the trust was not a pioneer in this area, and the national network of gas stations would be too extensive to be monopolized by any one company.

Those who had seen the Standard Oil dissolution as condign punishment for Rockefeller were in for a sad surprise: It proved to be the luckiest stroke of his career. Precisely because he lost the antitrust suit, Rockefeller was converted from a mere millionaire, with an estimated net worth of $300 million in 1911, into something just short of history’s first billionaire. In December 1911, he was finally able to jettison the presidency of Standard Oil, but he continued to hold on to his immense shareholdings. As the owner of about one quarter of the shares of the old trust, Rockefeller now got a one-quarter share of the new Standard Oil of New Jersey, plus one quarter of the thirty-three independent subsidiary companies created by the decision. And that did not include the oil shares he had given to the GEB, the University of Chicago, and other recipients of his largesse.

At first, investors did not know how to value the shares of these Standard Oil components, since Rockefeller had resisted a New York Stock Exchange listing and the old trust never issued reports to shareholders. As one Wall Street publication warned on the eve of trading, the value of the new companies was “the merest guesswork.”⁷⁴ What quickly grew apparent, however, was that Rockefeller had been extremely conservative in capitalizing Standard Oil and that the split-off companies were chock-full of hidden assets. Two other factors encouraged a veritable feeding frenzy in the stocks. For years, the shares of Standard Oil of New Jersey had been depressed by the antitrust litigation, but with the litigation ended, they bounced back to a more normal level. And the explosion of the automobile industry created euphoria about the endless growth prospects of the petroleum industry, which had been shadowed for fifty years by warnings of doom.

When trading started on December 1, 1911, the public exhibited an insatiable appetite for the new companies, especially after they declared dividends averaging 53 percent of the old capital value of Standard Oil stock. As if rejoicing in the chance to tweak trustbusters, investors bid up the shares to insane levels. Between January and October 1912, Standard Oil of New Jersey zoomed from 360 to 595; Standard of New York went from 260 to 580; and Standard of Indiana from 3,500 to 9,500. Thanks to this staggering appreciation, Rockefeller’s net worth reached a lifetime peak of $900 million in 1913—more than $13 billion in 1996 dollars. (To put that $900 million in perspective, the total accumulated national debt of the United States stood at $1.2 billion that year, equivalent to 3 percent of the gross national product; federal spending was a mere $715 million.) As Junior later explained, his father never had a billion dollars at any one moment, although much more than that passed through his hands. During the ten years after Standard Oil’s 1911 dismantling, the assets of its constituent companies quintupled in value. Beyond his talents as a businessman, Rockefeller benefited from a large dollop of luck in his life, making more money in retirement than on the job.

The soaring fortunes of the Standard companies made it seem as if the cagey Rockefeller had outwitted the country again. Newspapers began running daily box scores of his wealth—not exactly the chastening sequel Washington had envisioned. As former J. P. Morgan partner George Perkins told a friend, Wall Street was “laughing in its sleeve at what has been going on.” ⁷⁵ Nobody felt more frustrated than Teddy Roosevelt, who returned to the presidential fray with his third-party Bull Moose candidacy in 1912. Lashing out at Standard Oil again, he roared, “The price of stock has gone up over one hundred percent, so that Mr. Rockefeller and his associates have actually seen their fortunes doubled. No wonder that Wall Street’s prayer now is: ‘Oh Merciful Providence, give us another dissolution.’ ” ⁷⁶

In the eternal race for the title of the world’s richest man, Rockefeller now left Andrew Carnegie far behind and probably had at least twice as much money as Carnegie did. (Exact comparisons are difficult since both men had given away so much.) Nonetheless, Rockefeller and Carnegie still enjoyed cordial if rather distant relations. In 1912, en route to Washington to give testimony, Carnegie dropped by Kykuit and found Rockefeller “tall and spare and smiling, beaming.” Carnegie still savored his belief that he had outfoxed Rockefeller on their old Mesabi ore deal, for he afterward wrote a friend, “Positively it is a delight to meet the old gentleman. But I did not refer to the ore purchase I made from him.”⁷⁷

It was hard to convince a skeptical public that the thirty-four new companies, with their seventy thousand employees, would not reconstitute a new conspiracy. J. P. Morgan, upon hearing of the 1911 decision, asked, “How the hell is any court going to compel a man to compete with himself?”⁷⁸ Many of the newly independent companies were powerful enough to inspire fear as freestanding entities. Standard Oil of New Jersey remained the world’s largest oil company, second only to U.S. Steel in size among American enterprises and retaining 43 percent of the value of the old trust. Five of the newly divested companies stood among the country’s two hundred largest industrial firms. Since all the companies had identical owners, it was hard to foresee vigorous competition. As Roosevelt complained, “All the companies are still under the same control, or at least working in such close alliance that the effect is precisely the same.”⁷⁹

Rockefeller made all the right noises about obeying the 1911 decision. As he told Archbold on September 8, 1911, “We will do the best we can to comply with every requirement of the government, and if as much is required of others it does seem as though it must bring about a reform.” ⁸⁰ Yet he quietly worked to undermine the dissolution, suggesting that officials of the Standard Oil companies meet at 26 Broadway at ten-thirty each morning to maintain amicable relations and swap information. (For legal reasons, everyone was cautioned not to exchange thoughts on paper.) That both Standard Oil of New Jersey, headed by Archbold, and Standard Oil of New York, headed by Folger, kept their headquarters in the same old building said much about their relationship.

For the next decade, the divestiture often seemed a sham. The Standard companies continued to divide the country into eleven marketing territories, selling the same brand names and not competing on prices. It took a long time for former colleagues to view each other as competitors and raid each other’s territories. Many critics thought that, to avert this complicity, the government should have done one of three things: keep the trust intact and regulate it; force shareholders to take stock in only one of the thirty-four companies; or create fully integrated companies that did not need to rely on other Standard companies. Standard of New Jersey, for instance, inherited a vast refining system without the crude oil to service it, forcing it into close collaboration to remedy the imbalance.

While the old guard at 26 Broadway mourned the trust’s passage, some Young Turks at the operating companies were overjoyed. Many Standard Oil directors had been over sixty. This had given the organization a geriatric tone, stifling young, imaginative men at a time that demanded rapid adaptation to the auto age. One of these extraordinary mavericks, Dr. William M. Burton of Standard Oil of Indiana, thought that Roosevelt and Taft had performed an inestimable service. After the 1911 dismemberment, he said, “It was felt all along the line—younger men were given a chance.” ⁸¹ Free of top-heavy bureacracy, Burton patented an exceptionally valuable process in 1913 for “cracking” crude oil—that is, for refining it so as to yield a far higher percentage of gasoline. This discovery permitted Standard of Indiana to reap windfall royalties from other oil companies. Maintaining full control of this technology until 1921, Standard of Indiana required its cousin companies to restrict sales of “cracked” gasoline to their pre-1911 marketing territories, helping to extend the trust structure for another decade.

It is an enduring tribute to Rockefeller that so many Standard Oil companies prospered during the remainder of the century, controlling a significant fraction of both the American and world oil industry. Rockefeller’s stepchildren would be everywhere: Standard Oil of New Jersey (Exxon), Standard Oil of New York (Mobil), Standard Oil of Indiana (Amoco), Standard Oil of California (Chevron), Atlantic Refining (ARCO and eventually Sun), Continental Oil (Conoco), today a unit of DuPont, and Chesebrough-Ponds, which had begun by processing petroleum jelly. Three offspring—Exxon, Mobil, and Chevron— would belong to the Seven Sisters group that would dominate the world oil industry in the twentieth century; a fourth sister, British Petroleum, later took over Standard Oil of Ohio, then known as Sohio. It was certainly not their intention, but the trustbusters helped to preserve Rockefeller’s legacy for posterity and unquestionably made him the world’s richest man.

Henry H. Rogers and Mark Twain sailing together in Bermuda in 1908. (Courtesy of the Mark Twain Project, the Bancroft Library)