Titan
Choate soon discovered that he didn’t need to worry about his client. Like many businessmen of his era, Rockefeller prided himself on his obfuscatory powers and excelled at fuzzy answers. Under oath, he turned into a vague and forgetful fellow, pleasant but slightly muddled, who wandered lost in the stupendous maze of Standard Oil. He was also a terrific showman, a trait he inherited from his father. When sworn in on the stand, he “kissed the Bible vehemently,” according to one reporter, underscoring which party had God on its side.40
Rockefeller was interrogated by the committee counsel, Roger A. Pryor, a histrionic lawyer who paced back and forth, his lank black hair flying about his shoulders. He fixed Rockefeller with a penetrating eye and shook an accusatory finger at him. Rockefeller remained placid, accentuating the contrast between them in his favor. As one thunderstruck newspaper wrote of Rockefeller, “He seems the embodiment of sweetness and light. His serenity could not be disturbed. . . . In tones melodious, clear, and deliberate he gave his testimony. . . . At times his manner was mildly reproachful, at others tenderly persuasive, but never did he betray an ill temper or vexation.” 41 As Choate watched in amazement, Rockefeller maintained an unruffled exterior: His client was not exactly the absent-minded rube he had pictured.
Standard Oil’s strategy was to furnish as little information as possible. As Rockefeller’s associate Paul Babcock advised him in emphatic language, “I think this anti-Trust fever is a craze, which we should meet in a very dignified way and parry every question with answers which while perfectly truthful are evasive of bottom facts! I would avoid the preparation of any statistics.”42 True to this advice, Rockefeller economized with the truth, yet so little was known about Standard Oil that the most meager information produced sensational headlines. In his testimony, Rockefeller supplied for the first time the Standard Oil trust agreement that had been drawn up in 1882; named the eight current trustees; revealed that the trust now had seven hundred shareholders; and, most startling of all, listed forty-one companies that belonged to the trust— many of which had never publicly disclosed this association before. To refute the notion that Standard Oil was a monopoly, Rockefeller submitted a list of 111 competing refineries and gave his own stirring account of spirited competition from Russian oil.
The most controversial exchange came when Pryor turned to the darkest episode of Rockefeller’s past: the South Improvement Company. Pryor misspoke and asked if he had ever belonged to the Southern Improvement Company; Rockefeller, quick to spot a slip, denied being a member of such a company. With his superb memory, he remembered that an unused charter had been granted for a Southern Improvement Company. Pryor reacted with disbelief:
“There was such a company?”
“I have heard of such a company,” Rockefeller conceded.
“Were you not in it?”
“I was not.”43
Rockefeller’s later gloss on this testimony reveals his craftiness:
I never undertake to instruct the man who asks me questions. I remember that incident as if it were this morning. . . . I did not stop to correct my questioner. There is the record to stand on. Of course, I knew what I was answering. . . . I did not testify like Mr. Brewster and Mr. Flagler, so hot-tempered that they would fly right into an argument with counsel. I was quiet and self-controlled. It was no part of my duty as a witness to volunteer testimony. While they thought they were leading me into a trap, I let them go into the trap themselves.44
The bane of interrogators, Rockefeller had an eerie gift for catching the subtle drift of a prosecutor’s questions. A distinguished twentieth-century lawyer, Samuel Untermyer, called Rockefeller the ablest mind he had ever encountered on the witness stand, a man with a sixth sense for a legal trap. “He could always read my mind and guess what the next six or seven questions were going to be,” said Untermyer, who cross-examined Rockefeller during litigation in the early 1900s. “I would start with questions intended to lay the foundation for questions far in the future. But I would always see a peculiar light in his eyes which showed that he divined my intention. I have never known a witness who equalled him in this clairvoyant power.” 45 At the February 1888 hearing, Roger Pryor was so impressed by Rockefeller that at the close of questioning, he came to the railing, pumped his hand heartily, and asked if he could visit Standard Oil plants with Rockefeller. As for Joseph Choate, Rockefeller asked casually during the lunch break how he was doing. The chastened lawyer replied, “I could not ask for a better witness.”46 Choate said later that Rockefeller’s partners “seldom knew what he was thinking but he always knew what we were thinking.” 47
However well Rockefeller handled his testimony, the committee report threw a lurid light on the workings of Standard Oil, calling it “the most active and possibly the most formidable moneyed power on the continent.” 48 “This is the original trust,” the report stated. “Its success has been the incentive to the formation of all other trusts and combinations. It is the type of a system which has spread like a disease through the commercial system of this country. ” 49 The trust floated free of legal restraints, the forty-one constituent companies having “turned their affairs over to an organization having no legal existence, independent of all authority, able to do anything it wanted anywhere, and to this point working in absolute darkness.” 50 While absolving the trust of charges of rapacity, it also dissented from Rockefeller’s portrait of lively competition, calling Standard Oil “almost the sole occupant of the field of oil operations, from which it had driven nearly every competitor.”51 Standard Oil stood out as the great test case in the growing national debate on antitrust legislation. When the House Committee on Manufactures issued its report on trusts that spring, it dedicated 1,000 of 1,500 pages to the oil trust, five times the space given to the sugar trust and ten times that given to the whiskey trust.
In a sense, John D. Rockefeller simplified life for the authors of antitrust legislation. His career began in the infancy of the industrial boom, when the economy was still raw and unregulated. Since the rules of the game had not yet been encoded into law, Rockefeller and his fellow industrialists had forged them in the heat of combat. With his customary thoroughness, Rockefeller had devised an encyclopedic stock of anticompetitive weapons. Since he had figured out every conceivable way to restrain trade, rig markets, and suppress competition, all reform-minded legislators had to do was study his career to draw up a comprehensive antitrust agenda.
Standard Oil had taught the American public an important but paradoxical lesson: Free markets, if left completely to their own devices, can wind up terribly unfree. Competitive capitalism did not exist in a state of nature but had to be defined or restrained by law. Unfettered markets tended frequently toward monopoly or, at least, toward unhealthy levels of concentration, and government sometimes needed to intervene to ensure the full benefits of competition. This was particularly true in the early stages of industrial development. This notion is now so deeply embedded in our laws that it has become all but invisible to us, replaced by secondary debates over the precise nature or extent of antitrust enforcement.
During the antitrust agitation of the late 1880s, Standard Oil consistently underestimated the ability of critics to marshal public support. Small businessmen, alleging that the great corporations thwarted individual opportunity, formed a particularly potent lobby for reform. When both Grover Cleveland and Benjamin Harrison inveighed against the trusts in the 1888 presidential campaign, Archbold wrote dismissively to Rockefeller that these strident speeches were just for show. “We do not think that much will come of the talk at Washington regarding Trusts,” he reported that summer. “The demagogues are simply trying to outtalk each other for political effect. ” 52
Archbold proved a poor prognosticator. In a legislative flurry, many states enacted antitrust laws in the late 1880s, while fifteen or sixteen bills circulated in Congress. From Standard Oil’s viewpoint, the most threatening bill was introduced in December 1889 by Ohio senator John Sherman, brother of G
eneral William Tecumseh Sherman. A few years earlier, Rockefeller tried to buy his way into the senator’s good graces. In August 1885, soliciting a campaign contribution for Sherman, Mark Hanna had told Rockefeller that “John Sherman is today our main dependence in the Senate for the protection of our business interests.”53 Dubious at first, Rockefeller finally sent a check for six hundred dollars. Before long, the protector of business interests proved a turn-coat, flailing Standard Oil as a corporation so rich that it bought entire railroads. In debates over the senator’s antitrust bill, Standard Oil was constantly held up as a prime example of the problem to be remedied. Flushed into the open, Rockefeller took the unusual step of publicly rebuking Sherman’s legislation. “Senator Sherman’s bill is of a very radical and destructive character, proposing to fine and imprison all who directly or indirectly participate in organizations over which it is even doubtful whether Congress holds any jurisdiction.”54
The opposition of the trusts only hastened passage of the law. On July 2, 1890, President Harrison signed the Sherman Antitrust Act, which outlawed trusts and combinations in restraint of trade and subjected violators to fines of up to $5,000 or a year’s imprisonment or both. President William Howard Taft later identified Standard Oil as the chief reason for the law’s passage. To its proponents, the law proved a severe disappointment, a stillborn piece of legislation. It was vague in meaning and poorly enforced and so riddled with loopholes that it was popularly derided as the Swiss Cheese Act. By outlawing cooperative efforts through trade associations, it forced many companies into mergers to curb excess capacity in their industries, spurring further concentration and subverting the act’s intention. As for the main target of the law, the Standard Oil juggernaut was not deflected by this nuisance. For many years, the Sherman Act was a dead letter, and big business happily went on as usual.
Rockefeller was never tempted to reconsider the issues raised by the Sherman Act. As far as he was concerned, practical, hardheaded businessmen had long ago resolved these issues to their satisfaction, and only fanciful scribblers and tendentious rabble-rousers saw the need to tamper with current practice, which had served the country well. He remained an unreconstructed believer in trusts. Never one to hold grudges in business, unfazed by the new law, Rockefeller supported the reelection of Senator Sherman in 1891.
CHAPTER 17
Captains of Erudition
By the late 1880s, it seemed as if half the country wanted to lynch John D. Rockefeller, while the other half only wanted to cadge a loan from him. He was assailed by journalists, reform politicians, and embittered rivals but also besieged by a growing legion of flatterers and schemers with designs on his fortune. This national ambivalence must have confirmed Rockefeller’s view that his critics were just envious hypocrites. The press fed this fascination with him. One 1889 newspaper article showcased Rockefeller as America’s richest man, with a net worth of $150 million—an estimate he regarded as much too high, pegging forty to sixty million as the correct range. (That would translate into between $635 and $950 million in contemporary money.) Another article clocked his income pouring in at $750 an hour. Whenever such articles appeared, hordes of supplicants emerged, making bad publicity in many ways less troublesome than favorable coverage. “I have been run down by adventurers during the last few days, owing to some foolish newspaper article,” Rockefeller complained after one flattering piece.1 He mused, “Great wealth is a great burden, a great responsibility. It invariably proves to be one of two things—either a great blessing or a great curse.” 2
Wherever he went, he was now trailed by a small army of petitioners. For someone of Rockefeller’s private nature, it was disconcerting to be approached in the street by strangers seeking money. “Mr. Rockefeller was constantly hunted, stalked and hounded almost like a wild animal,” said Frederick T. Gates, the Baptist minister who would soon help to alleviate the problem. “Neither in the privacy of his home nor at his table, nor in the aisles of his church, nor during his business hours, nor anywhere else, was Mr. Rockefeller secure from insistent appeal.”3 Supplicants breakfasted with him, rode to and from work with him, dined with him in the evening, then retired with him to the privacy of his study. “The good people who wanted me to help them with their good work seemed to come in crowds,” Rockefeller moaned. “They brought their trunks and lived with me.”4
Rockefeller had always required rest and solitude, but by the late 1880s these petitioners had stolen from his daily schedule those all-important intervals of relaxation:
At dinner they talked to me and, after dinner, when a little nap and a comfortable lounge, or a restful chair and a quiet family chat seemed about the most desirable occupations until bedtime, these good people would pull up their chairs and begin, “Now, Mr. Rockefeller—.” Then they would tell their story. . . . There was only one of me and they were a crowd—a crowd increasing in numbers every day. I wanted to retain personal supervision of what little I did in the way of giving, but I also wanted to avoid a breakdown.5
Mountains of mail tumbled in from around the globe, and by 1887 Rockefeller was so oppressed by appeals that he grumbled to brother Frank, “I have been overwhelmed with this sort of thing of late and want to shut down brakes a little until I can catch breath.”6 The begging letters—many scarcely literate, often scrawled in pencil in foreign tongues—typically pleaded for money to relieve some personal misfortune. People wrote to Rockefeller the way small children pray to God for presents. In 1887, a distraught lady told him, “I wish I could see you and talk with you as I can with God but it seems harder,” while another woman confessed, “Last night as I lay thinking (for I could not sleep for the anxiety) asking the Lord for deliverance you came to me in a way that I could not banish it.”7
The volume of mail defied the imagination. One steamer alone brought five thousand begging letters from Europe. After the announcement of one large educational gift, Rockefeller received fifteen thousand letters during the first week and fifty thousand by the end of the month. He needed a staff just to sift through these appeals. His overtaxed subordinates opened each envelope and tried to identify genuine cases of need, but they could gratify only a tiny fraction of such hopefuls. Many requests were frankly selfish, as Rockefeller tartly noted. “Four-fifths of these letters are, however, requests of money for personal use, with no other title to consideration than that the writer would be gratified to have it.”8
Although Rockefeller didn’t recognize it at first, brewing here was a personal crisis more debilitating than anything he had encountered in business. As early as 1882, he lamented to the Reverend Edward Judson that he was swamped by charitable appeals, many from Baptist causes. “I am about leaving Cleveland and have a regular deluge of calls from every hand. . . . I was up until eleven o’clock last night and the night before on this general character of work trying to help to devise ways and means.” 9 Personal charity had long been his pleasure, his pride, his recreation, not something delegated to underlings, and he found it hard to break these honorable habits, especially in the midst of so much controversy about his business methods. As Gates noted of his early years, “He used to meet people, read letters, weigh appeals, send checks and receive grateful replies, all in his own person.”10 For such a perfectionist, giving money away was fraught with far more nervous tension than making it. He valued money too highly to dispense it lightly and wanted to investigate all requests before acting upon them. As the Lord’s fiduciary, he was responsible for seeing the money well invested. As he said in 1886, “I haven’t a farthing to give to this or any other interest unless I am perfectly satisfied it is the very best I can do with the money.”11
John D. Rockefeller striding briskly across the University of Chicago campus with William Rainey Harper. (Courtesy of the University of Chicago Library)
Now, as the sheer magnitude of his wealth rendered his accustomed approach obsolete, he was frustrated that he couldn’t give money away quickly enough to keep pace with his mounting income. It
took several years before he learned to donate money in the systematic, scientific fashion that befit the scale of his fortune. He needed to forge a new set of working principles for his charity, and it was in his creation of the University of Chicago that he came to define his future style as a philanthropist.
Rockefeller’s involvement in the university started in a roundabout fashion through his friendship with the Reverend Augustus H. Strong, an eminent Baptist theologian and exponent of the social gospel. For seven years after the Civil War, Dr. Strong had served as pastor of the First Baptist Church of Cleveland, where he officiated at the funeral of Rockefeller’s second child, Alice, who died in infancy. In 1872, he headed east to assume the presidency of Rochester Theological Seminary, the citadel of Baptist orthodoxy. Awed by the erudite piety of this Yale graduate, Rockefeller supplemented his income, paid his vacation expenses, and, heeding his entreaties, gave $500,000 to his seminary over the years. A fine-looking man with a bushy mustache, Strong was grave, witty, and charming but tightly buttoned up and incapable of levity. An autocrat by nature, he didn’t become convinced by an idea so much as possessed by it to an extent that other people could find insufferable.