John D Rockefeller: The first billionaire

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New York City, 1871.

The Civil War is over, but its scars are fresh.

The nation is rebuilding, and behind the white marble facade of a grand hotel, powerful men are quietly plotting a bold new scheme.

You see, America is in the grip of an oil rush.

Fortunes are being made and lost.

Refineries are popping up fast, but with every new player, prices swing wildly.

It's chaos.

And for one man, owner of the largest refinery in Cleveland, that simply won't do.

He craves order, control, and above all, profit.

He believes that God wants him to accumulate money.

Lots of it.

In that hotel room, a plan is laid out.

A secret pact with the railroads, a shell company to crush the competition.

He listens, he calculates, and he sees it.

The chance not just to survive, but to dominate.

He won't just be part of the plan, he'll be the force that drives it.

That man, it's a name that comes up time and again in our show, is John D.

Rockefeller, the first ever billionaire.

Welcome to season four of Good Bad Billionaire from the BBC World Service.

Each episode, we pick a billionaire and we find out how they made their money.

Then this season, it's over to you to judge whether they are good, bad, or just another billionaire.

I'm Simon Jack, I'm the BBC's business editor.

And I'm Zing Sing, I'm a journalist, author, and podcaster.

And a slight change this time.

You might be thinking, wait a second, we are going back a lot further than we normally do.

And you'd be absolutely right.

So this new mini-season, Good, Bad, Dead Billionaire, we are bringing you five episodes about some of the titans of 20th century America.

Pioneers who may be long gone, but whose fingerprints are all over modern business.

Their wild careers helped build some of the industries that made the U.S.

the global powerhouse it is today, and it paved the way for our billionaires to get, well, filthy, rich.

But let's rewind.

Let's go back to the first one to hit the billion-dollar mark, John D.

Rockefeller.

Before Rockefeller, a billion was just a number, a big number.

He made it a lifestyle.

At his peak, his net worth hit $1.4 billion.

Now, you might think that's pretty modest next to the likes of some of the centi-billionaires, the 100-billionaire pluses we've covered, Bernard Arnaud, Jeff Bezos, for example.

But this was in the 19th century.

Adjusted for the size of the economy back then, he controlled 1.5%

of US GDP of the entire US economy.

You translate that to today, that's the equivalent of $631 billion.

No one's even come close.

So yes, you could say, Rockefeller's a good candidate, maybe to be the richest person of all time.

So I only really heard of Rockefeller in actually rap lyrics.

You know, Jay-Z constantly raps about being the Knicks Rockefeller.

Yeah.

Jay-Z being one of our other billionaires, of course.

Yeah, I mean, Rockefeller is a name that reverberates in America to this day.

There's the Rockefeller Plaza, Rockefeller Center.

If you go up to that tall building, it's called Going to the Top of the Rock.

You can see Central Park.

And, you know, he was a byword for being rich for a long time.

And I've personal recollection of this.

I had a friend who lived in New York and I used to visit him regularly.

He started dating someone called Rockefeller.

Wow.

And we started picking out our holiday homes in the Caribbean.

You were like, we're never going to work again.

Just stick with this one, my friend.

Anyway, sadly, well, I think happily for both, it didn't work out, but there was a moment of great excitement.

Yeah, well, I mean, I'm sure the yacht that you picked out is gathering dust in a marina somewhere.

But let's go back to how he became this byword for vast wealth, the richest man possibly who's ever lived in relative terms.

So he built his fortune refining oil and founding a company called Standard Oil, the first U.S.

business trust.

We'll talk a lot about that later.

So its structure is basically the blueprint for modern corporations.

And you can see his fingerprints everywhere in companies like Chevron, ExxonMobil, Conoco Phillips.

But in his lifetime, he was deeply polarizing.

So some people saw him as this ruthless robber baron, which is what they called people who became rich through ruthless, unscrupulous business practices.

Others described him as a visionary, as a real captain of American industry.

Interestingly, Mr.

Burns from The Simpsons is meant to be partly based on him.

Really?

Gosh, how interesting.

Yeah, you can see him steepling his fingers now and going, Simpson, you're an imbecile.

Exactly.

But why was he called the Jekyll and Hyde of American capitalism?

Because alongside his record-breaking wealth, he was a record-breaking philanthropist.

He was a devout Baptist.

Rockefeller gave away $540 million in his lifetime.

Remember what that is in today's money?

Saying, I believe it is every man's religious duty to get all he can honestly.

We'll question that.

And give all he can.

And really, you know, set a blueprint for philanthropists, which we saw from other U.S.

titans and we still see today.

People like Carnegie, Mellon, et cetera.

It's also not a million miles away from one of our other billionaires, the disgrace Sam Bankman-Freed, who was an adherent to effective altruism, if you remember that.

Yeah.

That philosophy where you should go into high-powered, high-earning businesses, make as much money, and then give back as much as you can.

Yeah, well, anyway, he died at 98, and his fortune was split between his family and his foundation.

Yeah, in fact, over 200 Rockefellers, one of whom your friend dated, share that legacy.

They have a combined net worth of around $10.3 billion.

Can't believe your mate walked away from that one.

Well, I'm not sure he had much choice.

But anyway, that name still rings out.

You've probably seen it, as I say, in the Rockefeller Center.

There's a Rockefeller University, there's a Rockefeller Foundation, all part of the legacy.

But let's rewind.

Let's go back to where it all began when accumulating billions was just a fantasy.

No one thought it was even possible.

Yeah, we're heading back to rural New York State, 1839, the birthplace of John D.

Rockefeller.

And we should say we're very grateful for Ron Chernow's brilliant biography, Titan, the Life of John D.

Rockefeller, Sr., as a source, among others, for this episode.

So picture, if you will, a sprawling, prosperous farmland community, close-knit, where a fervent religious revival known as the Second Great Awakening was taking root.

Rockefeller's mother, Eliza, was part of this.

She was a devout Baptist.

His father, not so devout, William Big Bill Rockefeller, also known as Devil Bill, was a smooth-talking con man who sold fake cancer cures and disappeared for months, like an original snake oil salesman, sometimes returning with cash, sometimes with his mistress, who moved in as the housekeeper.

So while Devil Bill was out there there scamming people out of their money, young John, as the eldest son in the family, became the man of the house.

He had this knack for making money, which is something we see a lot of with our early nares.

He sold sweets to his siblings at a mark-up, dug potatoes of pennies.

He even hatched and raised wild turkeys to sell.

Yeah, that kind of Tom Sawyer type ingenuity is something we've seen a lot in this series.

But when Devil Bill was home, he believed in tough love.

He once told toddler John to fall into his arms, but then didn't catch him, saying, Never trust anyone completely, not even me.

And when he lent his sons money, he charged them 10% interest.

God, I'm not sure that's how a trust for is meant to work.

Thankfully, however, Eliza instilled a very different attitude into her children.

Faith, discipline, and this is important, charity.

So Sundays meant Baptist church and dropping pennies into the collection plate that would go around, you know, asking people to donate towards the congregation.

So for John, money wasn't just for holding on to and keeping.

It was part of this moral cycle.

You earn it to give it away.

Eventually, they moved to Ohio.

And at 14, John enrolled at Central High in Cleveland.

He was decent at school, but brilliant with numbers and was very passionate about music.

He practiced the piano, it said, for six hours a day.

Pretty good.

Pretty obsessive.

And even then, you know, he had another obsession brewing, which was...

money.

So schoolmate Mark Hanna, who was later a U.S.

senator, said John was sane in every way but one.

He was money mad.

And Rockefeller, he once said he wanted to make hundred thousand dollars and live to be a hundred so let's see how that one plays out now back then there wasn't that many colleges to drop out of but at 15 rockefeller did indeed drop out of high school instead he signed up for a three-month bookkeeping course in 1855 and by 16 he was chasing a job with a big stable company so he used a business directory to find firms of strong credit ratings railroads banks merchants and for six weeks straight six days a week he hit the hot streets of cleveland in a suit asking to speak to the boss.

And once he'd been to every single office, he would start all over again.

And it worked.

September the 26th, 1855, the magnificently named Henry B.

Tuttle of Hewitt and Tuttle gave him a shot with a bookkeeping job.

No pay at first, just a promise.

Three months later, they backpaid him 50 cents a day, which back then wasn't that much.

But Rockefeller was thrilled.

He later said, All my future seemed to hinge on that day.

And for the rest of his life, he celebrated September the 26th as Job Day.

So he got to work, he paid bills, he collected rent and spotted even the tiniest of errors.

And he tracked every single penny, even his own personal spending in detailed ledgers.

In fact, he'd later criticised competitors who didn't do the same kind of thing, saying some of the brightest didn't even know when they were making money or losing it.

And just after three years on the job, Rockefeller was ready to move on and be his own boss.

So he teamed up with Maurice Clark, a fellow bookkeeping student, to start up a business.

And that's so interesting, isn't it?

Even then, saying, if I'm going to make money, I need to be on my own, to own the company, to have control.

We've seen lots of our billionaires who basically catapulted their wealth when they actually took control of their own destiny, their own name, their own publishing, their own songwriting, their own fragrance, their own whiskey brand.

Exactly.

So they each put in $2,000.

Rockefeller had saved about $800,000 his dad loaned in the rest, but remember that steep 10% interest, more than the banks were charging at the time.

Still, Rockefeller was all in.

So this business that they set up was mostly buying and selling food shipped through the Great Lakes, and it wasn't all smooth sailing.

So, some crops were ruined by frost.

There was a shipment of beans that showed up half full of dirt and rubbish.

Rockefeller and Clark ended up sifting it all out themselves.

So, you know, not a man afraid to get his hands dirty.

Yeah, and that mess forced Rockefeller to ask his dad for another loan.

By the end of their first year, they'd made a profit of $4,400.

That's a lot of money in the late 19th century.

But don't forget, within the late 19th century, also comes the Civil War in 1861.

So Rockefeller was anti-slavery.

He'd even written about it in school, he'd donated to related causes, but when he was drafted for the war in 1863, he didn't want to fight.

So he paid $300 to send a professional soldier in his place.

Now this might sound crazy, but this was not actually uncommon for people with his means.

Yeah, the war turned out to be good for business though.

With the Mississippi blocked in the south, Cleveland's canals became vital trade routes.

Rockefeller's firm took full advantage, and by the end of 1862, they'd made 17,000 in profit.

But if you're wondering to yourself, wait a second, Rockefeller isn't known for food, you're absolutely right.

He isn't.

In 1863, aged 24, he got into the business that would make his fortune.

oil.

And remember, it's hard to imagine a pre-oil era, but in the early 19th century, most people lit their homes with candles.

Whale oil was used for lamps or lubrication of machinery.

But in 1859, the first commercial oil well was struck in Pennsylvania and it sparked an oil rush.

Kerosene, which is refined from crude oil, became the new go-to for lighting.

One newspaper quipped, good news for Wales.

That's a very good line.

Now Cleveland, which was just 100 miles away from the action and very well connected by rail, quickly became a hub for refining oil.

So oil at the time was a low barrier business.

So drilling rigs cost under $1,000.

And by 1863, Cleveland had around 20 refineries.

And Rockefeller saw his chance here.

He teamed up again with Morris Clark, plus Samuel Andrews, a self-taught chemist with some experience in oil refining.

Together, they launched Clark, Andrews and Co.

And at first, Rockefeller viewed this as, you know, just a side-issue business to their food trading, a kind of side hustle.

But demand exploded because kerosene was even used on Civil War battlefields.

So Rockefeller would excitedly wake up his brother at night with new ideas.

He'd whoop for joy when he got a good deal on barrels.

He was officially hooked on the oil business.

Yeah, and by 1865, after a few years now in the oil game, Rockefeller was ready to bet big.

He took on serious debt to expand the business.

And he really did see the future, which is something that you'll find that many of our billionaires do.

He realized that railroads were replacing rivers for transport.

Now, Cleveland wasn't great for shipping food anymore, but it was perfectly placed for moving raw industrial goods between the East Coast and Chicago.

But Rockefeller's partners weren't sure.

They wanted to play it safe.

So Rockefeller made a bold move.

He bought them out for $72,500 that was more than he planned to spend but it gave him majority ownership going back to what I said before control all important later he said that was the day that determined my career so he's just 25 he's running Cleveland's biggest refinery it processes 500 barrels of crude oil a day double the output of his nearest competitor and big things were happening on the home front too he'd just married Laura Spellman a school teacher and despite their growing wealth they lived modestly even without servants That was pretty rare at that time for a couple of their status.

Now, Rockefeller, the man, is often remembered as a stern, serious guy.

His biographer called him the Protestant work ethic in its purest form.

But others who knew him say he had a sharp wit, he loved a good joke, and was a great listener.

But we're not here to talk about his jokes.

Let's go back to business.

Over the next few years, Rockefeller went full throttle.

He expanded his empire, chasing one goal to be the most efficient oil refiner out there.

He brought in his brother William to run the New York office and he teamed up with Henry Flagler, who is an oil man with Rockefeller's same eye for detail.

And they built everything themselves.

So barrels, wagons, even their own kilns.

Barrels dropped from $2.50 to just 96 cents as a result.

They even had their own plumber to save money.

So, you know, it reminds me of something we've talked about before, vertical integration.

Yeah, and it's interesting this, because there are two schools of thought on this.

Vertical integration is where you do all the different bits of the process.

So if you're making cars, you also get the leather for the seats.

All the bits of the chain, you own it all and you vertically integrate.

That was very popular around this era and for decades afterwards.

They sold everything, not just kerosene, but all the byproducts of oil.

Solvents, wax, asphalts, petroleum jelly, but gasoline, petrol, get this.

They had no use for it yet because petrol-fueled cars had only very recently been invented.

So sometimes they had gasoline left over.

This was the last bit.

And they dumped it in the river.

Wow.

Can you imagine?

That's history now, like pouring liquid gold down the river.

Then came a shady but strategic move.

So in 1868, Rockefeller made a secret deal with Jay Gold of the Erie Railroad, a 75% shipping rebate in exchange for locking in huge oil shipments.

So this gave Rockefeller the edge of his competitors without them even realizing it.

Because of the rebates, he could lower costs, he could undercut them, he could increase his dominance in the industry.

And this is fundamental to where we're going to end up with some of the legal ramifications of this, which you can feel in the world today.

Anyway, that deal with the railroad set the stage.

By 1870, Rockefeller, a few others launched what became known as Standard Oil with a jaw-dropping at that time $1 million.

The Empire was officially in motion.

It's such an interesting move because, you know, we talk about America having the Wild West, but this is really the wild west of business, right?

It sounds like you could just do anything and they hadn't even invented the laws to stop you yet.

Exactly.

I mean, what they did was they formed something called a trust.

And if you look at the newspapers this week, next week, last year, you will see one or another massive corporation being

sued under antitrust regulation.

And antitrust means going after a company because they are too dominant and they're snuffing out competition.

And that is to the detriment not only of the competition but of innovation and society as a whole.

A weird thing.

You can become successful, but not so successful that you're squashing the other guy.

And that drama is playing out right now with cases against Google, against Meta, against others.

The foundation is being laid here of that.

It's almost like financial toll poppy syndrome.

Yeah.

So when you nail vertical integration, controlling every step of that production process, what is next for someone who wants total industry domination, horizontal integration?

Wiping out the competition.

Brings us back to those secret meetings with the railroad owners, select oil refineries, including Standard Oil Naturally.

Tom Scott of the Pennsylvania Railroad created a shell company called the South Improvement Company or SIC.

But it was just a front.

The railroads would raise freight rates, but big refiners who are members of the SIC, like Rockefeller, would get special sweetheart deals, major rebates, and access to competitors' shipping data, which meant they could undercut them.

They'd even earn a profit from competitors' shipments.

And the goal of all this, crush the smaller players.

It's considered one of the most ruthless business schemes in American history, and Rockefeller was right at the heart of it.

So, with his unfair advantage locked in, Rockefeller launched what became known as the Cleveland Massacre, buying out 22 of 26 local competitors in just six weeks.

At one point, he bought six refineries in just 48 hours, quite the shopping spree.

So he kind of pitched it to people like a rescue mission, like his kind of Noah's Ark.

So climb aboard, we'll take the risk, we'll protect you from the flood.

But, you know, let's be real, his competitors had no choice.

He offered stock and standard oil as compensation, which helped, you know, smooth things over.

But fear of being sent under did the rest.

Yeah, and any illusion of kindness that he was doing everyone a favor cracked when the secret deal that he'd been hatched leaked.

Outraged independent oilmen took to the streets in protest.

Journalist Ida Tarbell, whose own father was ruined by the deal, described banners reading, down with the conspirators and don't give up the ship.

So the mysterious South Improvement Company was known as the Monster, the 40 Thieves and the Great Anaconda.

So the backlash was really fierce.

Yeah, and one refiner recalled, if we didn't sell out, we would be crushed out.

It shook Cleveland's business world.

Some went bankrupt, others sold for pennies.

Rockefeller brushed it off.

He said, we had to do it in self-defense.

The oil business was in confusion and daily growing worse.

And by the late 1870s, Standard Oil had jumped from controlling 10% of U.S.

refining to nearly one-third.

There was also a long depression in the 1870s that wiped out even more rivals.

And as the company grew, Rockefeller kept dividends low and borrowed heavily, reinvesting everything.

In 1874, he commissioned a new oil pipeline to reduce dependence on the railroads.

And that's another interesting trait, and one I would make a direct comparison with Amazon.

Because Amazon didn't make a profit for the first 15 years of its life, because any money it made, it reinvested in servers, in marketing, in whatever.

It takes a lot of confidence and a lot of long-term vision to basically have money rolling in and not take it, but to put it back and keep it for another date.

But not everyone agreed with increasing their debt and taking on more financial obligations to expand.

Sam Andrews, one of the original partners, wanted out.

He wanted a million dollars.

That was a massive ask, but Rockefeller didn't hesitate for a moment.

He wrote a check immediately.

He knew letting those shares hit the open market could tank confidence and their ability to raise credit.

Because if you've got splitters and saying this guy's showing lack of confidence in the future, maybe your lenders will start having those kind of doubts as well.

It's like the lemming effect, isn't it?

Yeah, exactly.

And also, if you flood the market with new shares, like anything, it can drive down the price, the value, the perceived value anyway, of the company.

So clearly, Rockefeller is a savvy guy.

And by the late 1870s, he has an estimated net worth of over $5 million.

So it's safe to say say John D.

Rockefeller is officially a millionaire, but public anger is brewing, and eventually Rockefeller would have to face his day in court.

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So let's go from a million to a billion.

Now, you might think all that money would turn Rockefeller into a big spender, but no.

True to his devout Baptist roots, he avoided flashy displays of wealth.

Reminds me of one of our other billionaires, Warren Buffett.

Yeah.

Still lives in the same house he bought in the 1950s.

And enjoys a good old McDonald's.

He does.

So he lived on Cleveland's Millionaire's Row, but he lived quietly with his wife and five kids.

He had a pretty modest four-bedroom house compared to others.

He didn't drink.

He thought the opera was too racy.

He had to be reminded to change his suit when it got shiny from overuse.

And Rockefeller was lean and athletic at a time when other rich men really powered on the pounds to prove that they were living that decadent A-star lifestyle.

He did have one indulgence, though, trotters.

Now, these are little horses, not galloping, but sort of trotting really fast, pulling racing carts.

He loved these things.

And in fact, the stables he built his horses were fancier in many ways than his own house.

So quite an idiosyncratic guy.

and he also made some pretty idiosyncratic game-changing moves, including one that set the blueprint for the structure of modern multinational corporations.

Yeah.

So on January the 2nd, 1882, age 43, Rockefeller and his partners created the first business trust.

Until then, trusts were mostly used to manage money for widows and orphans.

What Rockefeller did was revolutionary.

Here's why.

Standard Oil owned businesses across several states, each with its own rules and taxes.

Back then, corporations couldn't own stock in other corporations, couldn't have cross holdings, and states would tax outsiders doing business on their turf.

You've got to remember that the state-by-state nature of the United States is something that still baffles people.

To this day, if you want to open a business, you have to go to the commissioner in each state to do it.

However, the trust centralized everything.

It pulled together 40 companies with a board of trustees.

They issued certificates of trust, which enabled Rockefeller and his fellow trustees to make production and investment decisions on behalf of each partner in exchange for a guaranteed share of the profits.

And that meant that they could operate on a much more federal way rather than state-by-state basis.

They could centralize decision-making.

And it's the first time it's ever been done.

I suppose you would describe the East India Company of centuries before as the first well, it was the first joint stock holding company, the first one that was made like this.

But in the US, we had such fractious relationships because of the Civil War, for example.

It had never been possible to do this on a more than a state-by-state basis.

So they measured every single inch of pipeline, every brick, every asset.

It was meticulous.

And, you know, while this all sounds very egalitarian, remember that out of 700,000 total shares, Rockefeller had a whopping 191,700 of them.

Flagler was next with just 60,000.

And with that, Standard Oil was officially a monopoly.

It controlled 14,000 miles of pipeline and about 90% of U.S.

refining and 90% of any market share.

Well, again, let's compare it to Google.

Yeah.

85% of the search market.

Imagine having a stranglehold on a commodity that was becoming into its own, like oil, same way that Google had a monopoly on search, the emergence of internet search and internet commerce.

It's an amazingly powerful position.

Yep.

And, you know, despite all that control, the public didn't seem to mind that much yet because prices of oil kept dropping.

So, if the public's happy, you know, there's no kind of public pressure on legislators to intervene.

Exactly, the argument that modern companies use.

We give our services away for free, what's the problem?

So, Rockefeller, though, wasn't a dictator.

He did let his board weigh in, but he seemed to make bold calls when it counted.

Like when there was a triple threat of Russia ramping up oil production, US fields drying up, and electric lighting starting to replace kerosene, everyone was panicking.

But Rockefeller saw opportunity.

Yeah, his trustees didn't want to touch oil from Ohio's lemur field.

It was full of sulphur, smelled like rotten eggs, it burned dirty.

But Rockefeller ignored the doubters and bought it anyway.

Millions of dollars worth stockpiling it and funding research to figure out how to clean that oil.

And that gamble paid off.

So Rockefeller's chemists cracked the code and suddenly Standard had a new steady oil supply just when they needed it most.

And now Standard Oil may have pioneered the trust, but soon everyone wanted it.

And so by the late 1880s, trust controlled everything from whiskey to sugar to salt.

So Rockefeller really had just opened the floodgates.

Yeah, and banking as well, as we'll see.

His longtime lieutenant, John Archbold, put it best.

Rockefeller always sees a little farther than the rest of us, and then he sees around the corner.

But the tide was turning.

So critics were saying trusts crushed competition, they kept wages low, they could hike prices.

And in the 1888 election campaign, both the Democrats and the Republicans went after the monopolies hard.

Yeah, that same year, the New York Senate launched an investigation into Standard Oil.

Rockefeller was called to testify.

Facing accusations of monopolistic practices, he listed 111 of his competitors and pointed to Russian oil as another.

Reminds me a bit of Zuckerberg saying, well, there's TikTok, there's Snapchat, Snapchat, there's, you know, there's plenty of others out there.

Yeah.

It didn't, however, convince the public.

So two years later, President Harrison signed the Sherman Antitrust Act, outlawing trusts and threatening fines and jail time.

Now, this sounds tough, but in practice, nobody actually enforced it.

Rockefeller and many others just carried on business as usual, but that was all about to change.

Yeah, it was going to bite it.

And in 1892, it really did.

Ohio won a case against Standard Oil.

The company was officially declared a monopoly.

Other states were ready to parlon, but Rockefeller and his board moved fast.

They dissolved the trust.

They transferred its assets to companies in other states.

So on paper, it looked like all change, but the the same nine guys still pulled the strings.

Yeah, so the structure may have changed.

The power and the decision-making stays the same.

Outwardly, it seemed business as usual, but behind the scenes, the pressure took a toll on him.

Stress hit hard.

There were reports of a partial nervous breakdown.

He developed digestive issues, alopecia.

He lost all his hair, including his eyebrows.

He aged fast and looked far older than his years.

Okay, but his wealth was still in rude health.

By 1892, Standard Oil still controlled two-thirds of the world's oil, all the oil in the entire world.

The press crowned him the richest man in America, worth $150 million and pulling in $25,000 a day.

And he wasn't just sitting on that cash.

In the 1890s, Rockefeller started spreading those bets.

He diversified his portfolio.

He invested millions in railroads, steel, real estate, banks, ships, even orange groves.

I mean, these are the the primary industries of a growing capitalist democracy.

And John D.

Rockefeller was about to make a dramatic pivot from building his fortune to giving it all away.

So in 1895, at the age of 56, he began quietly stepping back from standard oil.

By 1897, without telling the press, he handed day-to-day control to his protégé, John D.

Archbold.

Rockefeller still offered the odd bit of advice, but his sights were elsewhere.

This is interesting.

Not everyone, when they get to their late 50s, I'm thinking of Rupert Murdoch here.

Exactly.

Wants to relinquish control quite so quickly.

No, but clearly something was weighing on him because he was setting his sights on philanthropy.

So this wasn't a new instinct.

He tithed a tenth of his wages from his first job to the Baptist church, aged 16.

Now, tithing is where you give a proportion of your income to the church, but he didn't just want to hand out money.

Yeah, no, he worried about creating dependency.

He believed in giving people the tools, the jobs, the education, the opportunity, not handouts.

He also wanted institutions he supported to grow stronger and not be reliant on him.

Reminds me a bit of Bill Gates, who didn't want to just write checks.

He wanted to try and develop, you know,

programs, educational things,

medical breakthroughs, all that kind of stuff, rather than just, you know, buy a big building and stick your name on it.

Yeah, so in many ways, Rockefeller is providing the blueprint for billionaires to come.

And with guidance from Frederick T.

Gates, a former Baptist minister, Rockefeller helped found a university in the Midwest.

You may know it today as the University of Chicago.

Very famous University of Chicago, absolutely pivotal and central to the development of modern shareholder value philosophy.

The School of the University of Chicago is one that basically preaches a mantra of maximizing shareholder value.

So it's still got its fingerprints on, you know, if you talk about the School of Chicago, that's what you mean.

Basically, you look after the shareholders, everything else will take care of itself.

Rockefeller would be proud.

Frederick Gates also helped him launch the General Education Board, which supported education without distinction of race, sex, or creed, and funded 800 public high schools in the South and transformed medical education.

Big stuff.

He even bankrode efforts to wipe up Hookworm, which is a parasite that plagued the southern US, which caused anemia and breathing problems.

Rockefeller wasn't the only tycoon with a philanthropic streak.

Steel magnate Andrew Carnegie famously said, the man who dies rich dies disgraced.

The press loved that rivalry.

They would keep a score of who gave more.

Carnegie often edged ahead.

He even beat Rockefeller to launch a charitable foundation in 1911.

Rockefeller followed two years later.

You also get massive tax breaks for charitable donations in the US, so that can help a little bit.

Yeah, and you also get to put your name on lots of shiny buildings and foundations.

That's true, that's true.

But what's going on in the business?

Although behind the scenes Rockefeller had left standard oil, he still kind of was taking the heat of the press criticism in the 1900s.

So he really was taking the fallout for his successors' decisions.

Because Archbold played things differently from his mentor.

Rockefeller had largely avoided using the company's monopoly to hike prices, but Archbold did raise prices sharply.

Profits soared, so did public anger.

Even President Theodore Teddy Roosevelt called the Rockefeller family a malefactor of great wealth.

Yeah, there's also a great kind of newspaper comic from the time in 1904, which shows Standard Oil as this octopus spreading its tentacles all across America.

And remember Ida Tarbell, that journalist whose father was one of the Cleveland refiners burned by Rockefeller's tactics, and how she reported on the protests back then.

Well, she wasn't done.

So she spent years investigating the company.

In 1902, she started publishing this blistering 19-part exposé in a magazine called MacClears.

She accused Rockefeller of ruthless, unethical tactics, and she wrote, National life is poorer, uglier, meaner for the kind of influence he exercises.

I think you could apply that to quite a few billionaires today.

And that reporting made waves.

So published two years later as the history of the Standard Oil Company, it is considered a landmark of investigative journalism.

And like great journalism, it did have an impact.

It had real consequences.

In 1906, the U.S.

Department of Justice sued Standard Oil under the Sherman Antitrust Act, accusing it of conspiring to monopolize the oil trade.

And by 1911, it was all over.

The Supreme Court ruled that Standard Oil had to be broken up within six months.

Yeah, we could be talking about stuff we've been hearing about in the last week or two.

You know, the possibility of breaking up massive, powerful companies, in particular, for example, Meta is going through this process right now.

I mean, it's funny because you never think, you know, these companies are so huge and they're so powerful.

You don't think, oh, yeah, they could just get broken up just like that.

But that's exactly what happened to Standard Oil.

Yeah, it's like you said, it's sort of the corporate equivalent of the tall poppy syndrome.

You like people to be successful, but when their success starts impinging on other people's ability to compete, to innovate, that's when the American sensibilities for enterprise and innovation begins to start feeling a little bit sweaty and they just don't like the look of that.

It's so interesting because I think we think of companies like Meta or Google and the stuff that they're doing and going through right now as being uniquely 21st century because it's all tech.

But actually, in 1911, this stuff was happening and it was talked about in the press in much the same way.

So people were angrier about the trust's dominance of certain industries like steel, railroad, banking, et cetera, than people are right now about the dominance of tech companies.

It was was a big thing.

It was a political movement.

It dominated talk at that time about, you know, how do you stop the robber barons, these titans, basically controlling entire industries, their own enrichment.

That dominance attacks the fundamentals of the American dream

that any person who's got a better gumption has got a chance of making it.

And everyone buys into that.

And literally, that's why people tolerate rich people because they think that that might be me tomorrow.

I've got a ticket in the same lottery of life.

And that if you are damaging my chances of succeeding, that gets right to the fundamental aspiration at the heart of American society, really.

Yeah, it offends something that's a really particularly American kind of sentiment.

What about everyone has the same chance to succeed?

And if you succeed, you've done it fair and square.

Well, because also, you know, pioneering, if you like, is at the heart of the American, you know, to much the chagrin of First Nation Americans who basically saw everyone come in and carve up the country.

But that idea of going out and driving a stake into the ground and saying, I'm going to drill for oil, pan for gold,

till the land, that antitrust movement, taps into that sense that you are basically shutting off the chances for the next pioneer on this land.

Well, Standard Oil certainly fell foul of that.

Standard Oil was broken up into 34 separate companies.

The goal was to cut Rockefeller down to size, but it didn't exactly work.

No, because Rockefeller owned about about a quarter of Standard Oil.

That meant he now owned a quarter of each of the new companies, including the biggest Standard Oil of New Jersey.

Yeah, so while the share price took a hit during the legal battle, by the time trading resumed in December of 1913, prices were climbing, and timing couldn't have been better.

Because the age of the automobile had arrived.

The Model T Ford was rolling off assembly lines, and it was powered by petrol.

Standard Oil was ready to fill the tanks of Mr.

Ford's cars, and we will be discussing him in a later episode.

By the end of 1913, Rockefeller's net worth had surged to $900 million.

And did the breaking up of Standard Oil really increase competition?

Not quite.

These new companies still worked together.

They divided territories.

They used the same branding and didn't compete on price.

Banker John Pierpoint Morgan, you'll name better as J.P.

Morgan, famously said, how the hell is any court going to compel a man to compete with himself?

By 1916, Rockefeller's fortune hit $1 billion,

and the New York Times officially dubbed him the world's first ever billionaire.

Now, there's some debate over whether anyone else got there first, but most agree that Rockefeller was very much the first billionaire in history.

Yes, so thank you, John D.

Rockefeller.

This series would not exist without you.

But let's go beyond a billion.

By the mid-1900s, John D.

Rockefeller was openly retired.

He was focusing on his philanthropy.

He'd moved between his estates in Westchester County, New York, Lakewood, New Jersey, and spend the winters puttering around golf courses in Almond Beach, Florida, where he'd bought a simply furnished three-story house.

But even in retirement, he kept a strict daily routine because, you know, he's a man of discipline.

He'd start his day at 6 a.m.

reading the papers for an hour.

At 7, he'd walk through his home and garden, handing out coins to each new employee and a nickel to every veteran.

By eight, it was time for breakfast.

8.45, he played Numerica, a numbers game, which is a bit like Solitaire to help him digest.

And he also loved reminding dinner guests to chew each mouthful 10 times, even liquids, which he would swirl around his mouth.

Weird.

Yeah, weird.

But also not completely unlike kind of some advice you hear on TikTok nowadays.

I know, but it's so funny, isn't it?

The reason I'll never be a billionaire is that I'd be out having a, you know.

You wouldn't be awake at 7 a.m.

unless you were awake from the night before.

Yeah, I'd have pushed on through from a big part of the night before, probably.

Anyway, on May the 27th, 1937, Rockefeller passed away at his home in Florida.

He was 97, just shy of his childhood goal to reach 100, if you remember.

The New York Times reported he'd given away most of his fortune to family and through philanthropy.

By the time he died, his estate was estimated at $25 million.

So that is where Rockefeller's story ends.

But on this show, we also rate our billionaire on a number of categories.

We've got wealth, controversy, giving back, and power and legacy.

On absolute wealth, given he was the richest man, controlled 90% of the U.S.

oil industry, I think that's a solid 10.

I think that is a 10.

You know, he didn't splash the cash.

You know, he's far too religious for that.

But, you know, I think the fact that he

kind of set the blueprint for the modern-day billionaire counts in his favor.

No, he's a 10 all day long.

So we have a new category, controversy.

Basically, how how controversial were their business practices and what their businesses built.

So Rockefeller believed in creating a monopoly and no matter the route he took to get there, it was the right thing for all, guided by God even.

He once said competition is a sin and that Standard Oil had, in his words, rendered a missionary service to the whole world.

Strong as this statement is, he said, it is the gospel truth.

Wow.

It's convenient how business completely aligns with what God wants to do.

Exactly.

What do they say?

Easier for a camel to pass through the eye of a needle than a rich man to enter the kingdom of heaven.

Something along those lines.

I wonder what Rockefeller made of that particular verse.

Yeah, so he thought he was on a mission from God to be rich and stamped out competition.

And as a result, he clearly had detractors in his lifetime, the most famous being journalist Ida Tarbell, as we've discussed, and indeed President Teddy Roosevelt.

Yeah, in fact, there was a governor of Wisconsin, a guy called Robert LaFollet, who famously commented that Rockefeller was the greatest criminal of his age.

Even his biographer, Ron Cherno, who had access to Rockefeller's private archive and an unpublished interview with him from 1911, and it said, Rockefeller was the great corporate criminal of his age.

Rockefeller always claimed that much of what happened with Standard Oil had either never happened or had been done by underlings.

I was able to show that he masterminded it.

To that extent, he comes off worse.

This is an interesting one because I have to admit that when you look at Rockefeller's story with the eyes of today, you think to yourself, Oh, this just always happens now, doesn't it?

Yeah, yeah, people get away with this stuff all the time.

The Cleveland massacre, I think, is an important moment because that's when he realized that if he was going to have a stranglehold on this, he needed to buy what he bought twenty-two out of the twenty-six companies, something like that.

That was a very naked grab for monopoly.

And he listened, he's unapologetic about it, right?

Yeah, you know, competition is a sin after all.

So there we go.

So, yeah, I mean, that is controversial.

And by the way, you know, his behavior and those of his trust colleagues, that is why we have the legislation we have today.

So he basically, you know, his movement actually inspired the legislative response to it.

So it is by definition controversial because it spawned law.

Yeah, that is true.

I think I'm going to give him an 8 out of 10.

Yeah, no, solid 8 from me as well on controversy.

Giving back.

Well.

Well, he did a lot to give back.

And, you know, it's kind of funny when you hear the way that people like him and Carnegie talk about the importance of giving back to society you don't really hear many people talk about wealth in that way anymore no I wonder whether because Carnegie was quite a religious man as well I wonder whether it's a kind of an absolution of sorts for amassing that kind of wealth it's your way of going into the confessional and saying, really sorry, I've got so rich.

Yeah, well, it reminds me of one of our other billionaires from the first series, Chuck Feeney, who came from an Irish Catholic background, so also religious, and ended up giving away all of it.

Yeah, God is watching.

Yeah, well, interestingly, Rockefeller was famous for handing out dimes to children, and people think he gave out $35,000 in dimes to kids on the street.

And Rockefeller, along with Carnegie, Andrew Carnegie, they revolutionized the model for philanthropy, and billionaires have followed ever since.

Rockefeller's approach is slightly different to Carnegie's.

Carnegie donated directly to institutions or buildings, libraries, sports halls, music, venues.

Rockefeller funded education and medical research that would lead to generalised benefits.

So much more of a Bill Gates kind of approach.

He scorned any charity that smacked of social welfare.

Instead of giving alms to beggars, if anything can be done to remove the causes which lead to the existence of beggars, then something deeper and broader and more worthwhile will have been accomplished, he said.

But, you know, let's also acknowledge the fact that Rockefeller believed that the rich were rich because they had superior intelligence and enterprise.

Interestingly, he said, the failures that a man makes in his life are due almost always to some defect in his personality.

That is fascinating.

So the more Rockefellers we can create, the richer society will be.

Not only that, but being poor is your fault.

It's a personal failing.

It is actually a sign of failing either morally, intellectually, spiritually, and to this day, in a way, being poor is a sin in America.

So giving back, I'm going to have to give him at least a nine.

Yeah, I think Chuck Feeney was maybe the first and only 10 we've ever given.

Okay, because he gave it all away.

Yes.

Nine for me on giving back.

Yeah, I mean nine for me.

He really sort of redeems himself here, I think.

Power and legacy is another of our categories.

Obviously, he wielded almost ultimate power over corporate America in his lifetime by controlling 90% of the oil industry at the time when it was emerging all its power.

He led to the creation of antitrust laws.

So I would say his legacy is absolutely massive.

Yeah, it's huge.

I mean, he wasn't actually that involved in politics, but you have to think, would there be the shape of American business as it is now without John D.

Rockefeller?

And I don't think there would.

I think he was definitely a trailblazer for how America thought about corporate power, how they responded to overweening corporate power.

And I mean, if he didn't get involved in politics, I mean, that was his own choice.

What did one of his classmates say?

He was sane in most regards, but he was money mad.

Money was more important to him than power yeah and also you know arguably he didn't need politics no like he was plenty capable of dominating just on his own yeah um so power and legacy it's another high mark isn't it rockefeller plazi he's still with us in many ways so i'm going to give him an eight for power and legacy oh really i would actually give him i think i would give him a 10 you know

i'm just trying to think yeah and of all of those people, you know, you think of Vanderbilt, Carnegie, Mellon.

Rockefeller's the king of them all.

So, all right, I'm going to give him a nine for legacy.

Yeah, you don't get Jay-Z shouting out Carnegie in his songs, I'm afraid.

Rockefeller, it's got swag, it's got beat, it's got rhythm.

Okay, so good, bad, or just another billionaire.

Well, now for the first time ever, it's over to you, dear listeners.

We want to know how you would judge John D.

Rockefeller or any of the other billionaires we've covered on Good, Bad, Billionaire and any of the other American pioneers we'll be covering on this mini-season.

We've got Motorman Henry Ford, original eccentric billionaire Howard Hughes, and Walmart founder Sam Walton.

So please share your thoughts, your judgments with us by emailing goodbadbillionaire or one word at bbc.com.

Or drop us a text or WhatsApp or voice note to 001-917-686-1176.

Let me give you that again.

001-917-686-1176.

So let us know know what you think about John D.

Rockefeller and the rest of our billionaires in this special mini-season.

Good, bad, dead billionaire.

We might feature your voice note or comment, so don't forget to share your name with us.

We've already been getting some emails in.

We've had some great ones.

Dear Good, Bad Billionaire, I'm Karen and I'm 14.

I'm from India.

I've been listening since I was 13.

I adore your podcast.

And Mr.

Simon Jack's Cluelessness and Pop Culture Sing is Wonderful.

Thanks, Karen.

I love this podcast.

More emails emails like that, please.

Who have we got next episode?

So, we've got a man who is really on the cutting edge of a brand new piece of technology, something that we all take for granted today.

The humble four-wheeled car.

That's Henry Ford, the motorman, the man who, 99 years into the 20th century, was named the businessman of the century by Fortune magazine.

And not only did he put America on four wheels, he changed manufacturing processes forever.

He invented or perfected the assembly line with huge results for manufacturing not just in the US but around the world.

That's Henry Ford on Good Bad Billionaire.

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