Random Reminiscences of Men and Events

It was my good fortune to help to bring together the efficient men who are the controlling forces of the organization and to work hand in hand with them for many years, but it is they who have done the hard tasks.

One of Rockefeller’s clear skills is his ability to hire incredible talent and, most importantly, get them to cooperate with each other.

It is not always the easiest of tasks to induce strong, forceful men to agree. It has always been our policy to hear patiently and discuss frankly until the last shred of evidence is on the table, before trying to reach a conclusion and to decide finally upon a course of action.

I completely agree. In fact, in my Core Values talk, I call out this exact thing. You need to disagree until you understand the other side’s perspective so well that you could argue on their behalf. Once that point has been reached, it is time to commit, regardless of which way you go.

It’s a pity to get a man into a place in an argument where he is defending a position instead of considering the evidence.

This is the type of saying that makes me think he has very high EQ. He knows how to work a group and how to push people into doing the right thing.

It was to be expected of such a man that he should fulfil his destiny by working out some great problems at a time when most men want to retire to a comfortable life of ease.

Rest when you’re dead. The path to greatness lies through work. Relentless work.

Every one was so afraid that the oil would disappear and that the money expended in buildings would be a loss that the meanest and cheapest buildings were erected for use as refineries. This was the sort of thing Mr. Flagler objected to. While he had to admit that it was possible the oil supply might fail and that the risks of the trade were great, he always believed that if we went into the oil business at all, we should do the work as well as we knew how; that we should have the very best facilities; that everything should be solid and substantial; and that nothing should be left undone to produce the finest results.

Anything worth doing is worth doing well. Anything worth doing is worth doing to excess. Rockefeller and his team were unique in that they did not treat the oil business as a completely disposable one. Everyone simply assumed oil was going to run out, so why bother invest in anything? The problem, of course, is that with that attitude there is no compounding to be had.

I know of nothing more despicable and pathetic than a man who devotes all the waking hours of the day to making money for money’s sake.

Say what you will, he legitimately believed his purpose on this Earth was to make money and give it away in charities.

I have spent many delightful hours, studying the beautiful views, the trees, and fine landscape effects of that very interesting section of the Hudson River, and this happened in the days when I seemed to need every minute for the absorbing demands of business. So I fear after I got well started, I was not what might be called a diligent business man.

Does every great man want to garden?

…people of modest means lead a closer family life than those who have plenty of servants to do everything for them. I count it a blessing that I was of the former class.

This is the thing that makes America great, unironically - the faith and belief that anyone, regardless of their present station, can be great. Rockefeller absolutely believes this.

My mother was a good deal of a disciplinarian, and upheld the standard of the family with a birch switch when it showed a tendency to deteriorate. Once, when I was being punished for some unfortunate doings which had taken place in the village school, I felt called upon to explain after the whipping had begun that I was innocent of the charge. “Never mind,” said my mother, “we have started in on this whipping, and it will do for the next time.” This attitude was maintained to its final conclusion in many ways. One night, I remember, we boys could not resist the temptation to go skating in the moonlight, notwithstanding the fact that we had been expressly forbidden to skate at night. Almost before we got fairly started we heard a cry for help, and found a neighbour, who had broken through the ice, was in danger of drowning. By pushing a pole to him we succeeded in fishing him out, and restored him safe and sound to his grateful family. As we were not generally expected to save a man’s life every time we skated, my brother William and I felt that there were mitigating circumstances connected with this particular disobedience which might be taken into account in the final judgment, but this idea proved to be erroneous.

Rockefeller had a hard childhood and it’s very clear. Even if you save a man’s life, a violation is a violation. The whippings will continue.

But how to get a job—that was the question. I tramped the streets for days and weeks, asking merchants and storekeepers if they didn’t want a boy; but the offer of my services met with little appreciation. No one wanted a boy, and very few showed any overwhelming anxiety to talk with me on the subject. At last one man on the Cleveland docks told me that I might come back after the noonday meal. I was elated; it now seemed that I might get a start. I was in a fever of anxiety lest I should lose this one opportunity that I had unearthed. When finally at what seemed to me the time, I presented myself to my would-be employer: “We will give you a chance,” he said, but not a word passed between us about pay. This was September 26, 1855. I joyfully went to work. The name of the firm was Hewitt & Tuttle.

Fun fact, for the rest of his life he would celebrate this as ‘Job Day’, a day more important than his own birthday. That’s the level of desparation Rockefeller felt even early on.

When January, 1856, arrived, Mr. Tuttle presented me with $50 for my three months’ work, which was no doubt all that I was worth, and it was entirely satisfactory.

He’s eternally grateful - it’s clear he knows he doesn’t deserve anymore. There is none of that entitlement you see in so many people today.

…my duties were vastly more interesting than those of an office-boy in a large house to-day. I thoroughly enjoyed the work. Gradually the auditing of accounts was left in my hands. All the bills were first passed upon by me, and I took this duty very seriously.

The job he’s given is not prestigious or even fun. But he does it to the absolute best of his abilities. And his efforts start to compound.

He merely glanced at this tiresome bill, turned to the bookkeeper, and said: “Please pay this bill.” As I was studying the same plumber’s bills in great detail, checking every item, if only for a few cents, and finding it to be greatly to the firm’s interest to do so, this casual way of conducting affairs did not appeal to me. I had trained myself to the point of view doubtless held by many young men in business to-day, that my check on a bill was the executive act which released my employer’s money from the till and was attended with more responsibility than the spending of my own funds. I made up my mind that such business methods could not succeed.

One of the greatest quotes from Rockefeller. He is a serious person when it comes to business. The details matter.

…my father, who told me that he had always intended to give $1,000 to each of his children when they reached twenty-one. He said that if I wished to receive my share at once, instead of waiting, he would advance it to me and I could pay interest upon the sum until I was twenty-one. “But, John,” he added, “the rate is ten.” At that time, 10 per cent. a year interest was a very common rate for such loans.

Rockefeller has a very complicated relationship with his father. His father clearly recognized John’s ability to make money and would frequently charge him insane interest rates and make money off of him. In the writing itself, we cannot see any animosity about this, but it’s clear Rockefeller vowed to never borrow money from his father unless it was a truly exceptional case, and even then, he wanted to pay it back as soon as possible. It would shape his attitudes towards going into debt for the rest of his life. My suspicion is that he did not love his father, but in true Rockefeller fashion, you will never hear him complain or whine about it.

It was a great thing to be my own employer. Mentally I swelled with pride—a partner in a firm with $4,000 capital!

Nothing like the joy of being self employed!

“How much do you want?” he said. “Two thousand dollars.” “All right, Mr. Rockefeller, you can have it,” he replied. “Just give me your own warehouse receipts; they’re good enough for me.”

Even from an early age, due to his diligent working nature, Rockefeller established a reputation for extreme trusworthiness. People would often just take his word for it.

Mr. Handy trusted me because he believed we would conduct our young business on conservative and proper lines, and I well remember about this time an example of how hard it is sometimes to live up to what one knows is the right business principle.

From the earliest days, he would be honest about everything, even if it was just a matter of a few cents.

I decided to go personally to see if I could not induce our customer to relent. I had been unusually fortunate when I came face to face with men in winning their friendship, and my partner’s displeasure put me on my mettle. I felt that when I got into touch with this gentleman I could convince him that what he proposed would result in a bad precedent.

[sic]

…he was very much disturbed at the possibility of losing our most valued connection, but I insisted and we stuck to our principles and refused to give the shipper the accommodation he had asked. What was our surprise and gratification to find that he continued his relations with us as though nothing had happened, and did not again refer to the matter. I learned afterward that an old country banker, named John Gardener, of Norwalk, O., who had much to do with our consignor, was watching this little matter intently, and I have ever since believed that he originated the suggestion to tempt us to do what we stated we did not do as a test, and his story about our firm stand for what we regarded as sound business principles did us great good.

He sticks to his principles even when it may cost him his most valuable customer because in the long run, a reputation for trustworthiness is worth far more than any single customer.

“Now a little success, soon you will fall down, soon you will be overthrown. Because you have got a start, you think you are quite a merchant; look out, or you will lose your head—go steady.” These intimate conversations with myself, I am sure, had a great influence on my life. I was afraid I could not stand my prosperity, and tried to teach myself not to get puffed up with any foolish notions.

He rehearses this to himself at night before he sleeps. His inner dialog is absolutely brutal. The modern ‘wisdom’ of being kind to one’s self is, at least for a certain type of person, vastly overrated at best and counter productive at worst.

Occasionally he would come to me and say that if I needed money in the business he would be able to loan some, and as I always needed capital I was glad indeed to get it, even at 10 per cent. interest. Just at the moment when I required the money most he was apt to say: “My son, I find I have got to have that money.” “Of course, you shall have it at once,” I would answer, but I knew that he was testing me, and that when I paid him, he would hold the money without its earning anything for a little time, and then offer it back later. I confess that this little discipline should have done me good, and perhaps did, but while I concealed it from him, the truth is I was not particularly pleased with his application of tests to discover if my financial ability was equal to such shocks.

This is the closest we get to hearing about Rockefeller’s true feelings about his father.

Many people protested that the rate of 10 per cent. was outrageous, and none but a wicked man would exact such a charge. I was accustomed to argue that money was worth what it would bring—no one would pay 10 per cent., or 5 per cent., or 8 per cent. unless the borrower believed that at this rate it was profitable to employ it. As I was always the borrower at that time, I certainly did not argue for paying more than was necessary.

But despite whatever feelings he may have had, he chooses to interpret it as an impersonal matter. This is a monetary transaction; no need to bring feelings into it. His father is doing it because it is a profitable exchange. A very, very level-headed approach. One that inspires me.

It has been said that I forced the men who became my partners in the oil business to join with me. I would not have been so short-sighted. If it were true that I followed such tactics, I ask, would it have been possible to make of such men life-long companions? Would they accept, and remain for many years in positions of the greatest trust, and finally, could any one have formed of such men, if they had been so browbeaten, a group which has for all these years worked in loyal harmony, with fair dealing among themselves as well as with others, building up efficiency and acting in entire unity? This powerful organization has not only lasted but its efficiency has increased.

A note on recruiting - life is a long-term game, and Rockefeller was extremely long-term oriented. Why force people to get into something? They won’t willingly spend decades of their life on a mission they are not motivated by.

…nor in all these years has any one had to wait for money which the Standard owed. It has suffered from great fires and losses, but it has taken care of its affairs in such a way that it has not found it necessary to appeal to the general public to place blocks of bonds or stock; it has used no underwriting syndicates or stock-selling schemes in any form, and it has always managed to finance new oil field operations when called upon.

Standard Oil, like Rockefeller himself, took on a reputation of treating its vendors and its people right. You would always get your money on time, and often early.

The Standard is always fighting to sell the American product against the oil produced from the great fields of Russia…

He’s referring to the Nobels, known as the Russian Rockefellers. They ran arguably the greatest oil operation in the world, and consistently beat Rockefeller in Europe.

One of our greatest helpers has been the State Department in Washington. Our ambassadors and ministers and consuls have aided to push our way into new markets to the utmost corners of the world.

The US government absolutely helped Standard Oil grow. We’ll never know how much, since Rockefeller burned most of his letter and this was written after the fact, but I suspect at some point the government decided to make this quasi state-owned.

…the corporation in form and character has come to stay—that is a thing that may be depended upon. Even small firms are becoming corporations, because it is a convenient form of partnership.

He predicted the era of corporations quite early on.

Two persons in partnership may be a sufficiently large combination for a small business, but if the business grows or can be made to grow, more persons and more capital must be taken in. The business may grow so large that a partnership ceases to be a proper instrumentality for its purposes, and then a corporation becomes a necessity.

I wonder if this changes with the age of AI. Perhaps we see a return to smaller companies and partnerships make a comeback. It did for venture capital and law firms, but not yet other major industries.

Our Federal form of government making every corporation created by a state foreign to every other state, renders it necessary for persons doing business through corporate agency to organize corporations in some or many of the different states in which their business is located. Instead of doing business through the agency of one corporation they must do business through the agencies of several corporations.

Canada operates this way still to this day! Thankfully in the US this is no longer necessary, but it’s crazy to me that even up until the 1910’s this was still the case.

The men of this generation are entering into a heritage which makes their fathers’ lives look poverty-stricken by comparison. I am naturally an optimist, and when it comes to a statement of what our people will accomplish in the future, I am unable to express myself with sufficient enthusiasm.

The greatest are usually optimists!

I have no sympathy with the idea so often advanced that our basis of all judgments in this country is founded on money. If this were true, we should be a nation of money hoarders instead of spenders. Nor do I admit that we are so small-minded a people as to be jealous of the success of others. It is the other way about: we are the most extraordinarily ambitious, and the success of one man in any walk of life spurs the others on. It does not sour them, and it is a libel even to suggest so great a meanness of spirit.

Perhaps the best defense of capitalism and human nature. Those who are most envious are rarely the most successful. Greed, absent of envy, is clearly a force for good.

In my early days men acted just as they do now, no doubt. When there was anything to be done for general trade betterment, almost every man had some good reason for believing that his case was a special one different from all the rest. For every foolish thing he did, or wanted to do, for every unbusiness-like plan he had, he always pleaded that it was necessary in his case.

Human nature does not change.

…we Americans think we can find a short road to success, and it may appear that often this feat is accomplished; but real efficiency in work comes from knowing your facts and building upon that sure foundation.

Lasting success is never achieved by taking the short road.

I ascribe the success of the Standard Oil Company to its consistent policy of making the volume of its business large through the merit and cheapness of its products. It has spared no expense in utilizing the best and most efficient method of manufacture. It has sought for the best superintendents and workmen and paid the best wages. It has not hesitated to sacrifice old machinery and old plants for new and better ones. It has placed its manufactories at the points where they could supply markets at the least expense. It has not only sought markets for its principal products, but for all possible by-products, sparing no expense in introducing them to the public in every nook and corner of the world. It has not hesitated to invest millions of dollars in methods for cheapening the gathering and distribution of oils by pipe-lines, special cars, tank-steamers, and tank-wagons. It has erected tank-stations at railroad centres in every part of the country to cheapen the storage and delivery of oil.

Especially relative to the competitors of the day, who treated it as a get rich quick scheme, Rockefeller and company were extremely prescient. They continually reinvested profits back into the business to improve infrastructure and ultimately leverage that technological advantage to drive prices lower.

We devoted ourselves exclusively to the oil business and its products. The company never went into outside ventures, but kept to the enormous task of perfecting its own organization. We educated our own men; we trained many of them from boyhood; we strove to keep them loyal by providing them full scope for their ability; they were given opportunities to buy stock, and the company itself helped them to finance their purchases.

This is the way. Vertical integration in all things, down to the recruitment and training of its employees. They remained focused on the oil business and never got side tracked with distractions.

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I really like Rockefeller as a character. He was a visionary, utterly ruthless, and a mastermind of business. But you could not pay me enough to read his writing. He is the Lebron James of robber barons. This guy is an absolute killer on the field but he writes like a corny, middle-aged dad who is trying way too much to be cool. Just read Titan by Ron Chernow instead.