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A SELF STARTER
John D Rockefeller started his business career in a very modest way with a total capital
of $4,000. He and his partner Maurice Clark, began business as commission merchants in
agricultural products. Rockefeller’s stake in Clark & Rockefeller was
$2,000. Established in 1859, in the first year they grossed $450,000 and made a profit of
$4,400 and $17,000 in 1860 and 1861 respectively. The Civil War expanded their business
enormously bulging their commissions as the grain prices skyrocketed. Rockefeller was a
planner and not a gambler. He was very precise and calculative. He always planned his
strategy before he ventured into any business. He was also very hard working. He would
travel extensively throughout Ohio to propagate his business. He would borrow money from
the banks if he did not have enough to handle the shipments. It was this aggressive style
that helped him build-up the Rockefeller Empire.
| By the early 60s, Rockefeller realized that there was no future in commission merchant business. His assumption was based on a conviction that in future, agricultural commodities would be mainly transported by railroads. Cleveland was an important lake port and so it would lose its advantage. Moreover, he realized that the Midwest and Northwest had increased their grain output and would soon become the main players in this business. He foresaw Cleveland as a major collection and shipment center of raw industrial materials and goods – it was mid-way between the Eastern seaboard and Chicago and had access to both rail and water transportation. He soon found the opportunity he was waiting for and formed Andrews, Clark & Company in 1863 and started business in oil refining (Samuel Andrews had experience with Shale-oil refining). |
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DEVELOPING OIL REFINING TECHNIQUES
The technology for drilling and as also for refining oil was already exsisting. Until now,
drilling was either for water or urine (which was refined to get salt). It was not
uncommon, especially in Pennsylvania, to find oil seeping into salt wells. It was
generally regarded as a nuisance rather than anything else. The technique of refining oil
was also known since 1850s, but it was primitive. It just involved cooking the oil and
purifying it to a certain extent. It left behind a lot of waste too. One barrel of
Pennsylvania oil, which was of high quality, yielded 60-65 per cent of illuminating oil,
10 per cent gasoline and 5 to 10 per cent benzyl or naphtha (a volatile, inflammable
liquid) used as a solvent in dry cleaning, varnish making, wax preparations, paint making,
burning fluid for illumination, fuel for motors, etc. The rest was tar and waste.
Rockefeller who hated waste of any kind, spent a lot of energy in trying to increase the
efficiency of refining, thereby minimizing the waste.
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