Oil- Vicki G.

In 1855, a chemistry professor named Benjamin Sillian studied the content of a liquid called oil and realized after processing that it could serve several purposes and be less expensive than other fuel sources. Once that was made public, Sillian and others began digging for oil. Four years later, Mr. Sillian’s well produced over 1000 gallons a day. This was a bonus for oil producers at the rate of $20 a barrel in 1859. However, just 2 years later, oil was only 52 cents a barrel. Why all the fluctuation? People would buy a lot of oil from a well with lots of oil and then keep it until the cost of oil began to creep up.
John D. Rockefeller led Standard Oil to be an important and profitable corporation during this time. Part of John D. Rockefeller’s success in the oil business was his business practices. One thing he did was to have refiners who wanted to work with Standard Oil sign a contract stating that they would not tell how much money they made.
How jealous others might be if they knew his wealth. By 1880, Standard Oil controlled most of the refineries in the US and had cash in the amount of forty million dollars.

Rockefeller's Arguments to the Refiners;

"Three years ago I took over the Cleveland refineries. I have managed them so that to-day I pay a profit to nobody. I do my own buying I make my own acid and barrels, I control the New York terminals of both the Erie and Central roads, and ship such quantities that the railroads give me better rates than they do any other shipper. In 1873 I shipped over 700'000 barrels by the Central, and my profit on my capitalization,$ 2'500'000, was over $ 1'000'000. This was the result of combination in one city. ... Le us become the nucleus of private company which gradually shall acquire control of all refineries everywhere, become the only shippers, and consequently the master of the railroads in the matter of freight rates."

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