In 1870, Ohio, John Rockefeller, William Rockefeller, Henry Flagler, chemist Samuel Andrews ), anonymous partner Stephen Harkness, established Standard Oil in partnership with William's brother-in-law, Oliver Jennings. Of the initial 10,000 shares, Rockefeller received 2,667 shares; William, Henry, and Samuel each received 1,333 shares; Stephen received 1,334 shares; and Oliver received 1,000 shares; Rockefeller, Andrews & Flagler received 1,000 shares. Through highly effective tactics that were later widely criticized, it annexed or destroyed most of its competitors in Cleveland within two months of 1872, and later swept across the northeastern United States.
In the early years, Rockefeller dominated the team because he was the only important figure shaping the new oil industry. Power is centralized at the company's headquarters in Cleveland, but decisions at headquarters are made in a collaborative manner.
State governments responded by trying to legislate limits on company size. Rockefeller and his associates developed new ways to organize their rapidly growing business. In 1882, they consolidated the state companies under a group of Trustees. According to the secret contract, the old 37 shareholders "entrusted" their shares to 9 trustees: William Rockefeller and his eldest brother, John Rockefeller, Oliver H. Payne (Oliver H. Payne), Charles Pratt Charles Pratt, Henry Flagler, John Archbold, William Warden, Jabez Bostwick and Benjamin Benjamin Brewster. This organizational form proved to be very successful, so later, other giant companies adopted this "trust" form.
The company grows not only by increasing sales, but also by acquiring competitors. After purchasing rival companies, Rockefeller closed those he considered inefficient and retained others. In a wonderful deal in 1868, the Lake Shore Railroad, a subsidiary of the New York Central Railroad, invited bids. As long as a company transported 60 gallons of oil per day and loaded and unloaded it itself, the company could transport oil at 71 of the original price, that is, One cent per gallon, 42 cents per barrel. Small companies have denounced the tender as unfair because they do not have the capacity to produce enough oil for the discount.
In 1872, Rockefeller joined the South Improvement Company, which allowed him to receive kickbacks on shipping and expose weaknesses to competitors. But the move was revealed, and rivals asked the Pennsylvania General Assembly to withdraw the Southern Promotion Company's compact.
Standard Oil's actions and secret shipping contracts caused the price of kerosene to fall from 56 cents in 1865 to 26 cents in 1870.
In 1885, Standard Oil of Ohio moved its headquarters from Cleveland to 26 Broadway in New York City. At the same time, Standard Oil of Ohio registered Standard Oil of New Jersey because New Jersey's corporate stock ownership laws were more lenient.
Similarly, in 1890, Congress passed the Sherman Antitrust Act, the ancestor of all antitrust laws in the United States. Although the definition of "inhibition of trade" is controversial, it prohibits all contracts, plans, transactions, and conspiracies that inhibit trade.
Standard Oil quickly attracted the attention of Ohio Attorney General David Watson.
From 1881 to 1906, Standard Oil earned $548,436,000 with a dividend of 65.4. As with a common strategy, part of the profits are plowed back into the business rather than as dividends. From 1882 to 1906, net profits were $838,783,800 and dividends were $290,347,800. In 1897, Rockefeller retired from the group's holding company, Standard Oil Company of New Jersey, but retained his stake in the company. Vice Chairman John Archbold oversees most of the company's operations. At the same time, the government attempted to restrict corporate growth through antitrust laws.
Standard Oil established its initial market position because of its high efficiency and responsibility. At the time, most companies poured gasoline into rivers, but Standard Oil used it to fuel its own machinery. At the time, most companies had mountains of waste from their refineries, but Rockefeller found a way to sell them.
For example, Standard Oil purchased the Chesebrough Manufacturing Company, which invented petrolatum, in 1908.
Journalist and author Ida Tarbell, whose father was an oil merchant defeated by Rockefeller, was one of the first "dung-raking reporters." She conducted extensive interviews with sympathetic senior Standard Oil executive Henry Rogers, and her investigations fueled public attacks on Standard Oil and all monopolies.
Starting in November 1902, McClure's magazine began serializing her research, which ended in October 1904 and was divided into 19 parts. In 1904, the book The History of the Standard Oil Company was compiled.
Control of the Standard Oil Trust is in the hands of a small group of families. In 1910, Rockefeller said: “I think that the majority of the shares in Standard Oil from its inception to the present have been owned by the Pratt family, the Payne-Whitney family, Harry Controlled by the Harkness-Flagler Family and the Rockefeller Family, these families reinvested most of their dividends in other industries, especially the railroads. They also invested heavily in the natural gas and electric lighting industries (including the giant Consolidated Gas Company of New York City). They bought large stakes in US Steel, Amalgamated Copper and even the Corn Products Refining Company.
China Standard: Standard Oil's production grew so fast that the U.S. market was quickly saturated, so the company began looking to overseas markets. In the late 1890s, the company began selling kerosene to China, a country of 400 million people, for use as fuel for oil lamps. Standard Oil's Chinese trademark uses "Mofu", which means beauty and reliability. It also uses the "Mobil" trademark on the tin lamps it produces at low prices to encourage Chinese people to abandon vegetable oil lamps and use kerosene lamps. The move received a positive response, and China became Standard Oil's largest market in Asia. Stanvac was the United States' only investment in Southeast Asia before Pearl Harbor.
Standard Oil builds oil storage tanks, warehouses and offices in major cities in China (restores bulk oil on tankers at 5 gallons per tank). Inland, it transports oil using tankers, trains and ships.
Steinvik North China Division, based in Shanghai, has hundreds of river vessels, including barges, steamships, small ships, tugboats and oil tankers. More than 13 companies’ tankers sail on the Yangtze River, the largest of which are Mei Ping (1,118 tons), Mei Hsia (1,048 tons) and Mei An (934 tons) ). They were both sunk in the USS Panay incident. Market America was commissioned in 1901 and was the first ship in the fleet. Other vessels in the fleet include: Mei Chuen, Mei Foo, Mei Hung, Mei Kiang, Mei Lu, Mei Tan, Mei Su), Mei Ying (Mei Ying), and Mei Yun (Mei Yun). Meixia is a tanker specially designed to sail on rivers and built with the latest shipbuilding technology in Shanghai. In 1912, the Mobil, built using the same technology, entered service. The Summer, which entered service in 1926, was capable of carrying 350 tons of bulk oil in three storage tanks. She was 206 feet long and 32 feet wide. She was designed overseas and built in Shanghai. Her oil-fueled burners were imported from the United States and her water-tube boilers from the United Kingdom.
Alleging lawsuit: In 1890, Standard Oil controlled 80% of U.S. oil. The state of Ohio successfully sued Standard Oil, and the trust was forced to dissolve in 1892. However, Standard Oil simply separated Standard Oil of Ohio and continued to control it. Later, New Jersey changed its corporate incorporation laws to allow a company to hold shares in any company in the United States. Therefore, in 1899, the Standard Oil Trust, based at 26 Broadway in New York City, was legally reorganized into a holding company, Standard Oil of New Jersey, which held shares in 41 companies, which in turn controlled many more Corporations, really only changed the methods of controlling them. The public viewed Standard Oil, controlled by a group of elected directors, as all-pervasive.
In 1904, 91% of oil production and 85% of final sales were controlled by Standard Oil. Most of its output is kerosene, 55% of which is exported around the world. After 1900, it no longer used price wars to squeeze out competitors. The federal Commissioner of Corporations studied Standard Oil's operations from 1904 to 1906 and stated that "there is no doubt... that Standard Oil's dominance of the petroleum refining industry was achieved through unfair tactics; manipulation Oil pipelines and railroads, and unfair competition by cutting the price of petrochemical products." Under the gradual encroachment of competitors, the company's market share was only 70% in 1906. That same year, an antitrust lawsuit against Standard Oil failed. By 1911, the company's market share had dropped to 64, and it had at least 147 competitors, including Gulf, Texaco, and Shell. The company is not trying to monopolize the exploration and extraction of oil. (In 1911, 11% of U.S. oil exploration and extraction was controlled by Standard Oil.)
In 1909, the U.S. Department of Justice sued the Standard Oil monopoly and the Sherman Antitrust Act of 1890. Suppressing interstate commerce:
Kickbacks, favoritism, and other discriminatory tactics in favor of railroad companies; unfair tactics to suppress competitors and achieve monopolies through control of pipelines, unfair strategies for pipelines owned by competitors; and competition Rivals signing contracts that impede trade; unfair competition methods, such as cutting local prices when necessary to suppress rivals; sending spies to rivals to gather intelligence and operating fake independent companies with the same intent to obtain kickbacks on oil payments .
For the last four years, both sides continued to argue in court about Standard Oil's monopoly tactics:
"The overall results of the investigation revealed that numerous crimes were conducted on behalf of Standard Oil and its affiliates, Blatant discrimination on the railroads, with the exception of a few large companies in California, Standard Oil profited from selling in such a discriminatory manner.
In every region of the country, companies enjoy some unfair advantage over competitors, and some of these discriminations are widespread. Standard Oil partially inherited the current name when the company was dissolved. Standard Oil of New Jersey is now part of Exxon Mobil. Standard Oil of New York is now part of Exxon Mobil. Standard Oil of California is now part of Chevron. Standard Oil of Indiana is now part of Chevron. Part of BP. Standard Oil of Kentucky is now part of Chevron. Continental Oil Company is now part of ConocoPhillips. Standard Oil of Ohio is now part of Marathon Oil. ).