The “Cleveland Massacre”: how John D. Rockefeller created a monopoly and Ida Tarbell helped bust it

Ida in fur coat around 1925

 

John D. Rockeller, the founder of the Standard Oil Company, was one of the most powerful men of the Gilded Age.* Yet he was no match for journalist Ida Tarbell, the “muckraker“** who discovered and revealed Standard Oil’s unethical business practices.

The last 30 years of the 19th century in the United States (the “Gilded Age”) saw a huge growth of industry and wealth. But that growth was fueled by economic and political corruption.  No one represented both the highs and the lows of the Gilded Age better than Rockefeller and Standard Oil.  And not even Rockefeller could predict that his worse nemesis would turn out to be not his competitors, but a woman — and one born in a log home .

The Tarbells lived in Hatch Hollow, Pennsylvania.  Ida’s father, Frank Tarbell, built wooden oil storage tanks for a living.  Eventually, he moved into oil production and refining.  But his success was short-lived.  In 1872, Pennsylvania’s three largest railroads entered into a secret pact with the South Improvement Company(SIC), a conglomerate of oil refiners in which Standard Oil held a controlling interest.

Under the secret agreement, the railroads agreed to raise their rates, but issue rebates and “drawbacks” to SIC.  In exchange, SIC guaranteed the railroads a certain volume of business.

The scheme came to the attention of the Pennsylvania legislature, which quickly repealed SIC’s charter. But it was already too late for Standard Oil’s competitors in Cleveland, Ohio. The mere threat of an alliance between big oil and the railroads had scared them badly. So when Rockefeller presented them with a Hobson’s Choice — sell their companies to Standard Oil or face financial ruin — 22 out of 26 of Cleveland’s refiners chose to sell.

John D. Rockefeller

John D. Rockefeller

The event was later dubbed the “Cleveland Massacre.” Rockefeller followed it with similar deals in other major eastern cities. A small number of independent producers – Frank Tarbell among them – found the courage to turn Rockefeller down.  But such resistance came at a price. Frank Tarbell had to mortgage his family’s home to meet his company’s debts. His partner committed suicide.

Ida Tarbell would later write that she was devastated by the “hate, suspicion and fear” that engulfed the oil-producing community.  But it would be another two decades before she was in a position to do anything about it.  She attended Allegheny College, where she was the only woman in her class.  After graduating, she moved to Ohio and taught science.

Tarbell found teaching unsatisfying. She resigned and moved to Paris to become a writer. By 1894, she had enough experience to be hired as a writer and editor for McClure’s magazine.  After her biographies on Abraham Lincoln and Napoleon Bonaparte nearly doubled the magazine’s circulation, she decided to write a three-part series on Standard Oil.

Tarbell began by interviewing Henry H. Rogers. Rogers — like Tarbell’s father — had been an independent oil producer in Pennsylvania.  Following the Cleveland Massacre, he had gone to work for Standard Oil. Rogers apparently thought Tarbell planned to write a favorable piece.  In interviews with Tarbell, he was overly candid, disclosing Standard Oil’s use of drawbacks.  Worse, he provided her with internal documents that revealed that the company was still colluding with the railroads.

Tarbell spent the next two years poring through public and private documents about Standard Oil and its founder. The three-part piece became a 19-part series, The History of the Standard Oil Company, which was later reprinted as a two-volume book.  Tarbell managed to describe Standard Oil’s complicated and unethical practices, in a straightforward narrative that was easy for the average reader to understand.

The revelations contributed to a public outcry.  Rockefeller insisted he had done nothing wrong, and labelled Tarbell a “poisonous woman.”  The U.S. Supreme Court, however, sided with Tarbell and the public.  In 1911’s Standard Oil Co. of New Jersey v. United States, the court held that Standard Oil was a monopoly engaged in the illegal restraint of trade in violation of the Sherman Antitrust Act.  The result was the breakup of the company into “baby Standards” (including ExxonMobil and Chevron).

While Rockefeller may have disliked Tarbell, history has viewed her more kindly.  In 1999, The New York Times named The History of the Standard Oil Company the fifth most important work of journalism in the 20th century.  The following year, Tarbell was inducted into the National Women’s Hall of Fame and, in 2002, was honored with her own postage stamp.

Tarbell remained humble to the end, not even writing her autobiography, “All in the Day’s Work,” until she was 82. And just as in earlier times she had refused to let her gender define her, so did she refuse to be defined by old age.  In a draft commencement address for the Allegheny College class of 1913, Tarbell wrote:

“Each period of life offers the unexpected. It is a fresh chest of treasures. But the treasures are only visible and usable by those who have seen and used the content of the chests which belong to earlier periods.”

Fortunately for us, Ida Tarbell had some precious gems in her chest.

*The term “Gilded Age” comes from the novel The Gilded Age: A Tale of Today by Mark Twain and Charles Dudley Warner.  The authors used the phrase to satirize the glittering appearance of the era, which was merely a thin veneer covering up corruption and social ills.

**”Muckraker” comes from a fictional character in John Bunyan’s Pilgrim’s Progress, who was consigned to rake filth endlessly. In his 1906 speech, “The Man with the Muck Rake,”Theodore Roosevelt use the term to refer to journalists he believed had gone too far in their attacks on American business.

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