The 50th Law (with 50 Cent)

partners in the oil business. He bragged of the limitless potential in oil
—the lucrative series of products that could be made out of the
material and the cheapness of producing them. With just a little capital
they could start their own refinery and make a fortune.
Clark’s response was lukewarm—it was a business that experienced
tremendous ups and downs, prices continually rising and falling, and
with the Civil War now raging, it seemed a bad time to commit so fully.
It would be better to get involved on some lower level. But then
Andrews gave his pitch to Rockefeller, and something seemed to spark
to life in the young man’s eyes. Rockefeller convinced Clark that they
should fund the refinery—he would personally ensure its success. Clark
had never seen Rockefeller so enthusiastic about anything. It must
mean something, he thought, and so he relented to the pressure from
the two men. In 1863 they formed a new refining business called
Andrews, Clark and Company.

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That same year, twenty other refineries sprouted up in Cleveland,
and the competition was fierce. To Clark, it was quite amusing to watch
Rockefeller in action. He spent hours in the refinery, sweeping the
floors, polishing the metal, rolling out barrels, stacking hoops. It was
like a love affair. He worked well into the night trying to figure out
ways to streamline the refinery and squeeze more money out of it. It
had become the principal generator of profit for their firm, and Clark
could not help but be pleased that he had agreed to fund it. Oil,
however, had become Rockefeller’s obsession, and he constantly
bombarded Clark with new ideas for expansion, all at a time when the
price of oil was fluctuating more than ever. Clark told him to go more
slowly; he found the chaos in the oil business unnerving.
Increasingly, Clark found it hard to hide his irritation: Rockefeller
was getting a bit puffed up with the success of the refinery. Clark had
to remind the former bookkeeper of whose idea it had been all along to
start their business. Like a refrain, he kept telling Rockefeller, “What in
the world would you have done without me?” Then he discovered that
Rockefeller had borrowed $100,000 for the refinery without
consulting him, and he angrily ordered Rockefeller to never go behind
his back again and to stop looking to expand the business. But nothing
he said or did seemed to stop him. For someone so quiet and
unassuming, Rockefeller could be annoyingly relentless, like a child. A
few months after Clark had berated him, Rockefeller hit him with
another request to sign for a big loan, and Clark finally exploded: “If
that’s the way you want to do business, we’d better dissolve, and let
you run your own affairs to suit yourself.”
Clark had no desire to break up the partnership at this point—it was
too profitable, and despite the qualities that grated on his nerves, he
needed Rockefeller as the man to look after the dull details of their
growing enterprise. He simply wanted to intimidate Rockefeller with
this threat, which seemed to be the only way to get him to back off on
his tireless quest to quickly grow the refinery business. As usual,
Rockefeller said little and seemed to defer.
Then, the following month, Rockefeller invited Clark and Andrews
to his house to discuss future plans. And despite all of Clark’s previous
admonitions, Rockefeller outlined even bolder ideas for expanding the
refinery, and once again Clark could not control himself. “We’d better
split up!” he yelled. Then something odd happened—Rockefeller
agreed to this and got Clark and Andrews to affirm that they were all in

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favor of dissolving the partnership. He did this without the slightest
trace of anger or resentment.
Clark had played a lot of poker, and he felt certain Rockefeller was
bluffing, trying to force his hand. If he refused to budge on the young
man’s desire to expand the business, Rockefeller would have to back
down. He could not afford to be on his own; he needed Clark more
than the other way around. He would be forced to realize his rashness
and ask to resume the partnership. In doing so, Rockefeller would be
humbled. Clark could set the terms and demand that Rockefeller
follow his lead.
To his amazement, however, the next day Clark read in the local
newspaper the announcement of the dissolution of their business, the
notice obviously placed there by Rockefeller himself. When Clark
confronted him later that day, Rockefeller calmly replied he was
merely putting into action what they had agreed upon the day before,
that it had been Clark’s idea to start with, and that he thought Clark
was right. He suggested they hold an auction and sell the company to
the highest bidder. Something about his dull, businesslike manner was
infuriating. At this point, agreeing to the auction was not the worst
option. Clark would outbid him and be rid of this insufferable upstart
once and for all.
On the day of the auction in February 1865, Clark used a lawyer to
represent his side, while Rockefeller represented himself, yet another
sign of his arrogance and lack of sophistication. The price kept ticking
upward, and finally Rockefeller bid $72,500, a rather ridiculous and
shocking price to pay, a sum that Clark could not possibly afford. How
would Rockefeller have so much money, and how could he possibly run
this business without Clark? He clearly had lost any business sense
that he had had. If that was what he was willing to pay, and he had the
funds, let him have it and good riddance. As part of the sale,
Rockefeller got the refinery but had to let go of the produce business
with no compensation. Clark was more than satisfied, although it
bothered him that Andrews had decided to go along with Rockefeller
and remain his partner.
In the months to come, however, Maurice Clark began to reassess
what had happened: he started to have the uneasy feeling that
Rockefeller had been planning this for months, perhaps more than a
year. Rockefeller must have courted bankers and secured bank loans

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well before the auction, to be able to afford the high price. He must
have also secured Andrews to his side in advance. He could detect a
gloating look in Rockefeller’s eye the day the refinery became his,
something he had never seen before in the sober young man. Was that
quiet and dull appearance of his merely an act? As the years revealed
the immense wealth Rockefeller would accumulate through this first
move, Clark could not help but entertain the thought he had somehow
been played.
—
Colonel Oliver H. Payne was the equivalent of Cleveland aristocracy.
He came from an illustrious family that included one of the founders of
the city itself. He had attended Yale University and had become a
decorated Civil War hero. And after the war he had started several
successful business enterprises. He had one of the finest mansions in
town on Euclid Avenue, nicknamed Millionaire’s Row. But he had
larger ambitions, perhaps politics; he thought of himself as
presidential material.
One of his thriving businesses was a refinery, which was the second
biggest in town. But toward the end of 1871, Payne began to hear
strange rumors of some kind of agreement between a few refinery
owners and the largest railroads: the railroads would lower their rates
for the particular refineries that had joined this secret organization, in
exchange for a guaranteed volume of traffic. Those outside this
organization would find their rates rising, making business difficult if
not impossible. And the chief refinery owner, and the only one in
Cleveland, behind this agreement was apparently none other than
John D. Rockefeller.
Rockefeller had expanded to two refineries in Cleveland and had
renamed the company Standard Oil. Standard Oil was now the
country’s largest refining business, but the competition remained stiff,
even within Cleveland and its now twenty-eight refineries, including
those of Standard Oil. Because of this booming business, more and
more millionaires had built their mansions on Euclid Avenue. But if
Rockefeller controlled entrée into this new organization, he could do
great damage to his competitors. It was in the midst of these rumors

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that Rockefeller arranged for a very private meeting between him and
Payne at a Cleveland bank.
Payne knew Rockefeller well. They had been born two weeks apart,
had gone to the same high school, and lived near each other on Euclid
Avenue. He admired Rockefeller’s business savvy but also feared him.
Rockefeller was the kind of man who could not stand to lose in
anything. If someone passed him by in a horse-drawn carriage,
Rockefeller would have to whip his horses and overtake it. They
worshipped in the same church; Payne knew he was a man of high
principle, but he was also quite mysterious and secretive.
In their meeting, Rockefeller confided in Payne: he was the first
outsider to be told of the existence of this secret organization, to be
called the Southern Improvement Company (SIC). Rockefeller claimed
it was the railroads that had come up with the idea of the SIC to
increase their profits, and that he had really had no choice but to enter
into the agreement. He did not invite Payne to join the SIC. Instead he
offered to buy out Payne’s refinery at a very nice price, to give Payne a
hefty amount of Standard Oil stock that would certainly mint him a
fortune, and to bring him in as a high-level executive with an
illustrious title. He would make far more money this way than by
trying to compete with Standard Oil.
Rockefeller said all of this in the politest tone. He was going to keep
expanding and bring some much-needed order to the anarchic oil
industry. It was a crusade of his, and he was inviting Payne to be a
fellow crusader from within Standard Oil. It was a compelling way to
present his case, but Payne hesitated. He had moments of exasperation
in dealing with this unpredictable business, but he had not thought of
selling the refinery. It was all so sudden. Sensing his indecision,
Rockefeller gave him a look of great sympathy and offered Payne the
chance to examine Standard Oil’s ledgers, to convince him of the
futility of resistance. Payne could hardly turn that down, and what he
saw in a few short hours astounded him: Standard Oil had
considerably higher profit margins than his own. Nobody had
suspected to what extent Standard Oil was outpacing its rivals. For
Payne, it was enough, and he accepted Rockefeller’s offer.
News of the sale of Payne’s refinery, as well as the growing rumors
of the existence of the SIC, completely rattled the other refinery owners

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in town. With Payne’s refinery in his pocket, Rockefeller was in a very
strong position.
Within weeks, J. W. Fawcett of Fawcett and Critchley, another
major refinery in town, received a visit from Rockefeller. His pitch was
ever so slightly more ominous than what he had delivered to Payne:
the business was too unpredictable; Cleveland was farther away from
the oil-producing towns, and the refiners had to pay more for crude oil
to be shipped there; they were at a continual disadvantage; with the
prices of oil continuing to fluctuate, many of them would go bust;
Rockefeller was going to consolidate them and give Cleveland some
leverage with the railroads; he was doing them all a favor, relieving
them of the tremendous burdens of the business and giving them
money before they went broke, which with the SIC was certain to
happen.
The price he offered for Fawcett’s refinery was certainly less
generous than what he had paid Payne, as were the shares and the
position within Standard Oil that went along with the proposition, and
Fawcett was quite reluctant to sell, but a glance at Standard Oil’s books
overwhelmed him, and he surrendered to Rockefeller’s terms.
Now more and more refinery owners received a visit from
Rockefeller, and one after another succumbed to the pressure, since
holding out put them in a weaker negotiating position, as the price
Rockefeller offered for their refineries kept getting lower. One holdout
owner was Isaac Hewitt, Rockefeller’s former boss when he was a
fledgling bookkeeper. Selling the refinery at such a low price could ruin
Hewitt. He begged Rockefeller for mercy and to be left alone with his
business. Rockefeller, ever gentle and polite, told him that he could not
possibly compete with Standard Oil moving forward. “I have ways of
making money you know nothing about,” he explained. Hewitt sold his
refinery for more than half the price he had wanted.
By the middle of March, the existence of the SIC had become public
and the pressure had mounted for such an organization to be
disbanded or suffer legal consequences. The railroads relented, and so
did Rockefeller, who did not seem all that upset at this news. The
matter was settled, the SIC disappeared, but in the months to come
some people in Cleveland began to wonder if all was not what it had
appeared to be. The SIC had never really taken effect; it had remained
just a rumor, and Standard Oil, it seemed, was the principal source of

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that rumor. In the meantime, Rockefeller had effected what had
become known as the Cleveland Massacre—in just a few months, he
had bought out twenty of the twenty-six refineries outside his control.
Many elegant mansions of former millionaires on Euclid Avenue were
now being sold or boarded up, as Rockefeller had carefully knocked
them out of the business. He had acted as if the railroads were calling
all the shots with the SIC, but perhaps it had been the other way
around.
—
In the years to come, those in the railroad business began to greatly
fear the growing power of Standard Oil. After the Cleveland Massacre,
Rockefeller applied the same tactics to refineries in Pittsburgh,
Philadelphia, and New York. His method was always the same: aiming
first for the biggest refineries in the respective town, showing them his
books, which were now even more impressive, getting a few big fish to
surrender, and instilling panic in the others. Those who held out he
would ruthlessly undersell and drive out of the market. By 1875,
Rockefeller controlled all of the major refining centers in the United
States and virtually monopolized the worldwide market for kerosene,
the principal product used for lighting.
Such power gave him far too much leverage over railroad rates, but
to make matters worse, Rockefeller had begun to dominate the
pipeline business, the other way of transporting oil. He built up a
whole series of pipelines throughout Pennsylvania and had gained
control of several railroads that helped ship the oil the rest of the way
to the East Coast, giving him his own transportation networks. If he
continued unimpeded in this campaign, his position would be
impregnable. And nobody was more afraid of this prospect than Tom
Scott, president of the Pennsylvania Railroad, at the time the largest
and most powerful corporation in America.
Scott had led a most distinguished life. During the Civil War, he had
served as Lincoln’s assistant secretary of war, in charge of ensuring the
smooth functioning of the railroads in aiding the North’s effort. As
head of the Pennsylvania Railroad, he had ambitions of endlessly
expanding the company’s reach, but Rockefeller stood in the way, and
it was time to do battle with Standard Oil.

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Scott had all the necessary resources to take on Rockefeller, and he
had a plan. For the past few years, anticipating Rockefeller’s
maneuvers, he had built up his own enormous network of pipelines
that would work in conjunction with his railroad to move oil to
refineries. He would ramp up the construction of new pipelines and
purchase new refineries that sprang up, creating his own rival network,
ensuring his railroad enough business to check Rockefeller’s progress,
then work to weaken him further. But as it became clear what he was
up to, Rockefeller’s response was totally unexpected and rather
shocking: Standard Oil shut down almost all its Pennsylvania
refineries, giving Scott’s pipelines and railroads virtually no oil to ship.
If they managed to get their hands on some oil, Rockefeller rigorously
undersold them to any refineries outside his system, and he seemed to
not care how low the price would go. He also made it hard for Scott to
get his hands on the oil the company needed to lubricate train engines
and wheels.
Pennsylvania Railroad had overextended itself in this campaign and
was losing money at a rapid rate, but Rockefeller had to be losing just
as much. He seemed to be aiming for mutual suicide. Scott was in too
deep to back out of this war, and so he was forced to cut costs by firing
hundreds of railroad workers and reducing wages for those who
remained. Scott’s workers retaliated with a general railroad strike that
quickly turned violent and bloody, as workers spread throughout the
state destroying thousands of Pennsylvania Railroad freight cars. Scott
retaliated brutally, but the strike persisted and the shareholders in the
Pennsylvania Railroad were growing quite nervous. All the while,
Rockefeller seemed unperturbed and continued with his pressure
campaign, as if he had nothing to lose.
Scott had had enough. Somehow Rockefeller could absorb these
huge losses, but he could not. He had literally run out of money. Not
only did he agree to put a stop to his campaign, but he had to sell to
Rockefeller the lion’s share of his refineries, storage tanks, steamships,
and pipelines. Scott would never recover from this humiliating and
rather sudden defeat: a year later he suffered a stroke, and within a few
years he died at the age of fifty-eight.
—

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Although it appeared that Rockefeller’s control of the oil business was
now complete, a businessman and engineer named Byron Benson had
an idea about how to poke a hole in his expanding empire. Rockefeller
could call the shots with his immense resources, but he could not
compete with technological progress. What gave Rockefeller an
advantage was that pipelines were relatively short, at most thirty miles
long. He could dominate by creating pipeline networks all across
Pennsylvania and by controlling many of the railroads operating
between the refineries and the pipelines. Even if someone had an
independent pipeline, at some point he would depend on Standard Oil
to transport the oil the rest of the way.
What if, however, Benson could design something new—one long,
continuous pipeline that would run from the oil fields of western
Pennsylvania to the Eastern Seaboard? In that way he could deliver oil
directly to the few independent East Coast refineries that remained
and guarantee low prices for them, bypassing Rockefeller’s network.
This would halt Rockefeller’s momentum, and with more of these long-
range pipelines, rivals to Standard Oil could begin to compete on fairer
terms.
It would not be easy. The pipeline would require some novel
engineering to make the oil flow upward over the hills and mountains
that would inevitably be in the way, but Benson had been working on
this. And because Rockefeller had made so many enemies and so many
feared his growing monopoly, Benson was able to raise very large sums
of money from investors, more than enough to cover the high cost of
building such a pipeline.
Benson named his enterprise the Tidewater Pipeline Company, and
in 1878 construction began. But almost immediately he had to deal
with an insidious campaign to halt the work on the pipeline. Benson
depended on railroad tank cars to transport the heavy materials to the
construction site, but it seemed that over the years Rockefeller had
bought up the lion’s share of such cars and had virtually cornered the
market. Wherever he turned to find tank cars, Benson ran into
Standard Oil subsidiaries that controlled them. Benson had to find
other means of moving the material, and this added to his costs and
wasted valuable time. All of this only made him more determined to
finish the job and outwit Rockefeller.

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This, however, was only the beginning. Benson needed to make his
route to the sea as easy as possible, to save money, and that would
mean running it through Maryland. But now word reached him that,
through lots of generous bribes, Rockefeller had gotten the Maryland
legislature to give an exclusive pipeline charter to Standard Oil. This
meant Tidewater would have to pass through the hillier and even
mountainous areas farther north in Pennsylvania, making the route
more circuitous and the job more expensive.
Then, however, came the most threatening blow of all: Rockefeller
suddenly went on a real estate buying spree, purchasing large tracts of
farmland in Pennsylvania, right in the way of Tidewater’s advance to
the sea. No price seemed too high for Standard Oil to pay. Benson did
what he could to fight back and buy his own land, but rumors began to
spread among the farmers in the area of the danger if they sold parts of
their land to Tidewater—being so long, the pipeline would be subject to
leaks that could ruin their crops. Clearly, Standard Oil was the source
of the rumors, and they had an effect.
To Benson, Rockefeller was like a relentless, invisible demon
attacking him from all directions, ratcheting up the costs and the
pressure. But Benson could be just as relentless. If Rockefeller bought
out an entire valley, Benson made the pipeline change course, even if it
meant going over more hills. The route became a ridiculous zigzag, but
the pipeline kept inching its way east and finally reached the coast in
May of 1879.
Once the pipeline went into operation, however, no one could
predict if its elaborate pumping system could move the oil up steep
climbs. Slowly the first flow of crude oil made its way through the
pipeline, ascending even the highest mountain, and after seven days
the first drops reached the end point. The Tidewater Pipeline was
considered one of the great engineering feats of the day, and Benson
became an overnight hero. Finally someone had outwitted and
outfought Standard Oil.
To Benson’s amazement, however, Rockefeller now only ratcheted
up the pressure. Tidewater had bled money and had little left in
reserve, but here was Rockefeller drastically reducing rates on
Standard Oil’s own pipelines and railroads, transporting oil virtually
for free. Tidewater could not find a drop of oil to ship, and this was
bringing the company to its knees. By March of 1880 Benson had had

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enough, and he struck a deal with Standard Oil on the most favorable
terms he could get, joining the two companies. But this was only a
preliminary move. In the months to come, Rockefeller bought up more
and more shares in Tidewater, bringing it completely under his
control. Like so many others before him, in trying to fight against
Rockefeller, Benson had only made him stronger and more invincible.
How could anyone hope to fight against such an indomitable force?
—
In the 1880s the demand for kerosene to light houses and offices
exploded, and Rockefeller controlled the market. And in cities and
towns across America, local grocers and retailers began to notice a
revolutionary new system introduced by Standard Oil. The company
had set up storage tanks in all corners of the country and financed tank
wagons to transport the kerosene to almost every town. Not only would
Standard Oil salesmen personally sell the company’s kerosene to
stores, but they would also go from house to house, selling heaters and
stoves directly to homeowners, at the lowest prices.
This threatened the business of many local retailers, and when they
protested, Standard Oil representatives would tell them that they
would stop the practice if the retailers sold exclusively Standard Oil
products. For those who refused, Standard Oil would start its own
grocery store in the area and, with cheap prices, drive the rebellious
store owners out of business. In some areas, furious retailers would
turn to a rival company, such as Republic Oil, which specialized in
selling to retailers who hated Rockefeller. Little did they know that
Standard Oil had secretly set up and owned Republic Oil.
With all of these practices Rockefeller had created a growing
number of enemies, but none of them was as dogged and fanatical as
George Rice, a man who had managed to maintain a small,
independent refinery in Ohio. He tried to get lawmakers to investigate
the company’s practices. He published a newsletter called Black Death,
which compiled all the muckraking articles on Rockefeller. And to
somehow find a way to make a profit and snub his nose at Rockefeller,
he decided he would personally travel and sell his own oil in several
towns, bypassing the new system that had cornered the market.

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It was hard to imagine that Standard Oil could possibly care about
him; the amount of oil he was trying to sell was miniscule and his
success was quite limited. But when he managed to sell a mere seventy
barrels of kerosene to a retailer in Louisville, suddenly he learned that
the railroad that had agreed, while he was on the road, to ship his oil to
him now refused to carry his product. He knew who was behind this,
but he managed to find other, more expensive means to get shipments
of oil.
He moved to another town near Louisville, only to find Standard Oil
salesmen there who had anticipated his presence and carefully kept
underselling him. He found himself pushed to ever-smaller towns
farther south, but once again there were the Standard Oil men blocking
his way, and soon he could not sell a drop of oil. It was as if they had
spies everywhere and were tracking his progress. But more than
anything, he felt the ubiquitous presence of Rockefeller himself, who
clearly knew of his little campaign and was out to crush this tiniest of
competitors at all costs. Finally realizing what he was truly up against,
Rice gave up the fight and returned home.
—
In the early 1900s, after Rockefeller had resigned as head of Standard
Oil, he began to fascinate the American public. He was by far the
wealthiest man in the world, the first billionaire on the planet, but the
stories of the way he had conducted his battles and the monopoly he
had forged made them wonder about his character. He was a notorious
recluse, and few knew anything concrete about him. Then some among
his many enemies initiated a series of court cases to break up the
Standard Oil monopoly. Rockefeller was forced to testify, and to the
public’s amazement, he was not at all like the devil they had imagined.
As one newspaper writer reported: “He seems the embodiment of
sweetness and light. His serenity could not be disturbed. . . . At times
his manner was mildly reproachful, at others tenderly persuasive, but
never did he betray an ill temper or vexation.”
As he emerged as the world’s most generous philanthropist, and as
the public came to appreciate the cheap oil he provided, they changed
their opinion of him. After all, as the major shareholder in Standard
Oil he had immense influence, and he had agreed to the breakup of the

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Standard Oil monopoly. Little did they know that behind the scenes he
operated as he always had done: finding loopholes in the law, keeping
the monopoly together through secret agreements, and maintaining
his control. He would not allow anyone to block his path, and certainly
not the government.
• • •