An Accurate Account of the “Men Who Built America” Part 13

This is the thirteenth in my series of posts about the five businessmen the History Channel profiled in a terribly inaccurate and un-historical TV miniseries titled The Men Who Built America. I’m writing these posts in response to several comments and e-mails from TV viewers who have expressed interest in a more accurate version of the story. (Click here to see all Al’s columns on the program and its subjects.)

Post #13: John D. Rockefeller Gets His First Job

In 1855 John D. Rockefeller went looking for his first full time job. By training, talent, and inclination he was a bookkeeper, but few businessmen in 1855 Cleveland were willing to entrust their books to a sixteen year old. Times were tough, and older and more experienced applicants were available.

Every morning for six weeks the youth dressed up in his best suit and walked from one office to the next asking for work. He made a list of the larger companies in town and visited each one in turn. When all of them had rejected him he started at the top of the list and visited them again. “I was working every every day at my business,” said Rockefeller, “the business of looking for work. I put in my full time at this every day.”

The tenacity Rockefeller demonstrated at sixteen is one of the common threads that runs through all America’s great rags-to-riches stories. “The real genius,” as Thomas Edison once said, “is sticking to it.” In addition to hard work, decisiveness, vision, and an eye for the best human resources; all the great entrepreneurs had the tenacity to overcome rejection and failure, and Rockefeller was no exception.

On September 26 of 1855 Rockefeller’s persistence finally paid off. The partners of a smaller company called Hewitt and Tuttle agreed to let him help with their books on an un-paid, probationary basis, with the understanding that if his work was good enough he’d eventually start drawing a paycheck.

Rockefeller was thrilled. For the rest of his life he would always celebrate September 26 as “Job Day.” This, to him, was the day he started on the path of self-sufficiency. Today we use the term “menial labor” to describe entry level jobs, but in the eyes of the Andrew Carnegies and John D. Rockefellers of the world all honest work was something to be proud of.

After three months Hewitt and Tuttle agreed to start paying him for his labors, and even paid him retroactively for the time he had already put in at a rate of fifty cents a day (less than dollar an hour in today’s money). Going forward, his salary was to be $25 per month. The partners certainly got their money’s worth out of their young clerk; his workday started at 6:30 AM and often stayed at the office long after it closed. On one occasion he made a promise to himself to go at least thirty days without working past 10:00 PM, presumably because that had been a regular occurrence.

His new employer was brokerage that mostly handled shipments of foodstuffs like grains and fresh vegetables. While he was still working for Hewitt and Tuttle the teenager started making a few small transactions with his own money, buying and selling commodities in parallel with what his bosses were doing.

Before he’d even gotten his first paycheck Rockefeller invested ten cents in a small red notebook that he used to record, in meticulous detail, all his expenditures and income. He was familiar with Benjamin Franklin’s observation that “industry and thrift are a means to distinction,” and he made a point of being both industrious and thrifty. After three years with Hewitt and Tuttle Rockefeller’s wages had been raised to $50 a month, and he had already saved up an $800 dollar nest egg, after paying all his living expenses and giving generously to his church and other worthy causes.

Rockefeller left Hewitt and Tuttle after less than three years, and he would never work for a paycheck again. In 1858, a few months before his nineteenth birthday, he made an agreement with a twenty-eight-year produce broker named Maurice Clark. Each man would invest $2,000 in cash, and the two of them would go into the food brokering business as partners.

Clark was born in Britain, had little education, and had worked as a gardener until his boss pushed him too far and he responded with a punch to the face. He fled to the US, penniless, to avoid arrest, and got work as a teamster for a while before finding his place in the world trading commodities.

Rockefeller didn’t have the full two thousand dollars he needed on hand, so he had to borrow the balance at ten percent interest. The new company opened for business on April 1.

Despite his youth, Rockefeller turned out to be an effective salesman for the new company.  His earnestness, sobriety, and obvious dedication to details appealed to older businessmen. Soon he was traveling around two states modestly but confidently asking prospective new clients to give his company a try. “I found that old men had confidence in me right away,” said Rockefeller, “and after I stayed a few weeks in the country, I returned home and the consignments came in and our business was increased and it opened up a new world for me.”

When the Civil War started in 1861 it increased demand for the foodstuffs and other commodities Clark and Rockefeller were buying, transporting, and re-selling. The company steadily re-invested its profits, and the client list, revenues, and profits all grew steadily. It doesn’t appear likely that Rockefeller and Andrew Carnegie ever met during this period, but Clark and Rockefeller were undoubtedly good customers for the Pennsylvania Railroad, as well as for the shipping lines that transported their goods across the Great Lakes.

Rockefeller, like Carnegie and virtually every other great entrepreneur of that era, was a passionate opponent of slavery and a strong supporter of President Lincoln and the Union cause. From childhood Rockefeller had always been a vocal abolitionist. At fourteen he wrote an essay for school in which he said it was “a violation of the laws of our country and the laws of our God that man should hold his fellow man in bondage…How under such circumstances can America call herself free?” His little red notebook of personal expenditures, which survives today, shows that while still a teenager he donated money to various black charities and churches, and  in 1859 even gave money to help a black man buy his wife out of slavery.

(The woman he would eventually marry was an even more passionate abolitionist. Laura Celestia Spelman grew up in a home that was part of the underground railroad; escaping slaves were often sleeping in the house during her childhood.)

Rockefeller, again like Carnegie, was old enough to vote for a Presidential candidate for the first time in 1860, and proudly cast his vote for Lincoln. Before the war broke out he attended meetings with fellow abolitionists who railed against the evils of slavery.

When the war started Rockefeller, despite his Union sympathies, did not volunteer for military service. In explaining his reasoning later, he pointed out that he’d been the sole support for his mother and siblings at this time and that abandoning his business at this stage would have left them without financial resources. Like many other wealthy men he hired a soldier to fight in his place for the standard sum of $300, and in addition he gave generously to various war-related charities.

By 1862 Rockefeller and his partner were already making an annual profit of $17,000 from a company they had founded with only $4,000 in capital four years earlier. Both partners were willing to live relatively frugally and re-invest most of their profits in the business, although Clark was never as thrifty as Rockefeller.

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Developments in nearby Pennsylvania soon presented the partners with an opportunity to invest in something even more lucrative than foodstuffs. In 1859 Edwin Drake had drilled the first successful oil well in history, near a town called Titusville, Pennsylvania, about a hundred and fifty miles southeast of Cleveland. Soon oil wells were sprouting all around Titusville. (Around the same time Andrew Carnegie made some quick profits with a company that bought land and drilled for oil near Titusville, although he wasted some of the revenue with an ill-thought-out scheme to store oil in a reservoir to wait for higher prices.)

In 1863 a chemist named Samuel Andrews persuaded Rockefeller and Clark to put up $4,000 in capital to found an oil refinery. Soon Clark’s two brothers invested additional funds and became partners as well. Rockefeller put a great deal of thought into the location for the refinery, and chose a site on a river that ran into lake Erie, right next to the right-of-way on which a new railroad was soon to be built. With two transportation options available, the site gave the partners bargaining power for their negotiations with shippers.

Rockefeller soon gave the refining business precedence over commodity trading. Seeing the potential in the petroleum business, he spent most of his time at the refinery. He often showed up at the refinery at 6:30 AM to help with manual labor, helping to build barrels or hauling out refuse.

Always eager to operate efficiently, Rockefeller figured out a way to recycle waste chemicals for sale as fertilizer. This, as biographer Chernow puts it was “the first of many worthwhile and extremely profitable attempts to create by-products from waste materials.” Always his focus was on eliminating waste, streamlining operations, and making the business grow. Looking back later, his partner Maurice Clark said “John had abiding faith in two things – the Baptist creed and oil.”

Next week’s post will cover Rockefeller’s early years in the oil business.

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