The Surprising Faith Story of the World’s 1st Billionaire—John D. Rockefeller

This is Lee Habib, and this is Our American Stories, the show where America is the star, and the American people.

John D. Rockefeller had a very unusual childhood. His father, dubbed Devil Bill, was a smooth-talking snake oil salesman, while his mother was a very devoted and disciplined Christian who taught John to work, save, and give to charities. This often-demonized, so-called robber baron reshaped America, creating an industry centered around the world’s most important resource: oil. Here to tell this story is Bert Folsom, author of The Myth of the Robber Barons. What you’re about to hear was shared before a live audience in Santa Barbara, California, for the Young America’s Foundation. Let’s take a listen.

Rockefeller is an entrepreneur of the late 1800s. And the two things that I would say—you know, we’re looking for bullet points—what should we know about Rockefeller? Above all, he’s the first billionaire in U.S. history. He did it in the oil industry. He had about a 70 percent market share in oil sales in the world in the 1880s and 1890s. And he did it with oil refining. He was in the refining, not the drilling business, but the refining business. And I know when you’re thinking of oil, you’re thinking, well, cars and all of this—they came in in the later part of Rockefeller’s generation. He mainly was kerosene, which was used for lamps to light your home. So it’s mainly kerosene, not so much oil as we think of in the way of gasoline. Second point: he was a Christian, and I mean a Bible-believing, serious Christian. The Bible taught him to tithe 10 percent. He tithed everything he ever earned and kept records of it. So, though we see his first record as a teenager, he earned 50 cents, and he tithed a nickel to his church, but he increased his tithes as the years went on, so he gave away more money than anyone in U.S. history up to then had ever earned. Well, that makes his life rather interesting in the oil business. I want to just say this because I want to focus on his character and his philanthropy a little bit, but I want to say this about his business: he was an innovator. He said, “Sometimes in life you need to take risks. You need to do the unexpected. You need to follow paths that other people aren’t taking.” And he did that in the oil industry. For example, the standard—if you would take a barrel of oil out of the ground—it’s 42 gallons in a barrel. And he shipped his product in barrels. And so he said, “If you get a barrel of oil, it’s about maybe 60 percent kerosene right there, and then the rest are byproducts, of which gasoline would be part of one of the byproducts.” So he wanted to be the best. He wanted to sell oil so that people could use it to light their homes. People were sunrise to sundown. People, up until Rockefeller’s oil, we had it, but it was very expensive. Only the rich could afford it. Rockefeller wanted poor people to also be able to afford to light their homes. This makes a difference. You can work late at night, but—I mean, put work aside—recreation. You could do a bowling league or something at night. You could go to school at night. The point is, you could do things at night because you had lighting. And therefore, that expanded your options in life. And he wanted to take advantage of it so that he had a product that everybody wanted to enjoy, and so, for one cent an hour, Rockefeller made it possible to light your home with the kerosene lamp. That was his goal: to get the cheapest oil. Now, to do that, he had to innovate. For example, he would take a barrel of oil, and he thought, “Okay, you get 50-60 percent kerosene.” He said, “Why don’t we try doing different things with it?” He was specialized in research and development more than anyone else before his time. He’s a research-and-development guy. Research and development says, “What can we do with this oil to get more kerosene out of a barrel?” Heating it was one thing he did; it was called cracking. Intense heat applied to that barrel of oil, and you got maybe 75 percent kerosene. Everybody else was doing 50 to 60. That gave him an immediate advantage. The second thing was the byproducts. Most of the other oil producers had the idea: you get the kerosene, and then that other stuff is a bunch of sludge. They dumped it. For example, he was in Cleveland. They dumped it in the Cuyahoga River. Yeah, they didn’t have any use for it. Get the kerosene, dumped the rest. Rockefeller, he was already an environmentalist because he was a save-the-whales guy. “Right? We’re not going to have to hunt whales if we’ve got kerosene.” So he also was an environmentalist, but he did it kind of. Again, his Christianity was framing his reference for how he approached life, how he approached his family, his employees, his philanthropy. And so he said, “Look, God doesn’t make something that does not have value.” Therefore, everything in that barrel has value; we just don’t know what that value is. Therefore, he hired chemists—again, research and development—to find out what God put that stuff in a barrel of oil for. Oh, okay. So they started experimenting with what was being thrown into the river, and they discovered, you know, waxes, paraffin, Vaseline, paint (great converted to paint), varnish, and tars that could be used to pave streets. Then he went into business selling the byproducts. And then he went to his competitors and said, “Don’t bother to throw that sludge in the river. I’ll just take it off your hands.” Not surprising: he had the cheapest product on the market. No one could compete with John D. Rockefeller. His company was Standard Oil Company. No one could compete with John D. Rockefeller.

And you’ve been listening to Bert Folsom, author of The Myth of the Robber Barons, sharing with us the story of John D. Rockefeller. I think almost everyone knows he was the first billionaire in America, but most people don’t know that he gave away more money in his lifetime than anyone had earned in U.S. history. And of course, tithing and his Christian faith had been a fundamental part of his life. From the first time he earned 50 cents, he was giving away 5 cents. And of course, the environmentalist at work: he essentially ended whaling. When we come back, more of this remarkable story: John D. Rockefeller’s life story continues here on Our American Stories. Here at Our American Stories, we bring you inspiring stories of history, sports, business, faith, and love; stories from a great and beautiful country that need to be told. But we can’t do it without you. Our stories are free to listen to, but they’re not free to make. If you love Our American Stories and America like we do, please go to OurAmericanStories.com and click the donate button. Give a little, give a lot; help us keep the great American stories coming. That’s OurAmericanStories.com. And we continue with Our American Stories and with Bert Folsom, author of The Myth of the Robber Barons. He’s telling the story of John D. Rockefeller. Let’s pick up where we last left off.

His workforce also benefited greatly from him. For example, he paid high wages—competitive wages. “I want to get a good staff of people working for me, and I want to pay them well, because if I pay them well, they’ll work well.” And if somebody didn’t, by the way, they would get canned; they would get fired. But he said, “People, if you pay them well and have confidence in them, will often work very well.” And I want to reward them with bonuses. You know, in the book The Myth of the Robber Barons, which Young America’s Foundation published, and I wrote, we went through Rockefeller. We have made sure we had a chapter on him, and just to give you this: this is again his business model. I’m reading from page 94. “Rockefeller treated his top managers as conquering heroes and gave them praise, rest, and comfort.” Says Rockefeller knew that good ideas were almost priceless. They were the foundation of the future of Standard Oil. To one of his oil buyers, Rockefeller wrote, “I trust you will not worry about the business. Your health is more important to you and to us than the business.” Long vacations at full pay were Rockefeller’s antidotes for weary leaders. Here’s another quote: after Johnson Camden consolidated the West Virginia and Maryland refineries for Standard Oil, Rockefeller said, “Please feel at perfect liberty to break away three, six, nine, twelve, fifteen months or months or more. Your salary will not cease, however long you decide to remain away from business.” Now, one point I want to make right off: this wasn’t a deal he extended to everyone, but it was a deal he extended to this guy because that person…