A 25-Year-Old Rockefeller Won His First Refinery With a Newspaper Notice
His partners thought $72,000 was too much. The next year, the refinery did $1.2 million in sales.
Founders · #437 The Tycoons: Carnegie, Rockefeller, Gould & MorganHis partners kept threatening to end their refinery partnership. John D. Rockefeller, then 25 and running his first oil refinery, asked whether they really meant it.
They said they did. The next day they opened the local newspaper and found a dissolution notice Rockefeller had placed. They also learned that Samuel Andrews, another partner in the business, had sided with Rockefeller.
That newspaper notice set up the bid that gave Rockefeller full control. After the friction over the future of the firm, the partners agreed to settle ownership with an auction. Rockefeller won it with a bid of $72,000. The next year the same plant recorded $1.2 million in sales, in 1860s money.
Control mattered to Rockefeller because he had a plan his partners resisted. He wanted to take on debt, grow quickly, and bring order to the messy early oil trade. He pushed the plant to handle more oil while watching spending closely, and the business earned money more steadily than others like it.
At the auction, the bidding rose until $72,000 stopped the other partners. They thought the price had grown too high and stepped aside. Rockefeller stayed calm, made the high bid, and took the refinery.
He had been willing to bet big from the start without making a show of it. The account holds this episode up as his early pattern. He liked to decide quickly, say little about his plans, and adjust when the facts changed.
The men who walked away at $72,000 watched that same refinery record $1.2 million in sales the next year.
Questions people ask
What did an 1860s oil refinery actually sell?
Mostly kerosene for lamps. In the 1860s, before electric light and cars, refined oil was sold mainly as lamp fuel, with other petroleum liquids sold as lubricants and for other uses. A refinery heated crude oil and separated it into those usable products.
How big was that money at the time?
It was a fortune. In the mid-1860s, a typical working man might earn a few hundred dollars in a year, so $72,000 was far beyond what most Americans would see in a lifetime. The $1.2 million in sales the next year was an astonishing sum for a single young firm.
What happened to Andrews after he sided with Rockefeller?
Andrews stayed with Rockefeller as his partner in the refinery business. He had broken with the other partners before the auction to join Rockefeller, and he shared in the expansion that followed.