Why did Rockefeller create a monopoly?

Answer 1

The key was vertical integration. The Rockefellers were able to control all upstream and downstream activities. From production to treatment to distribution. Their railroads could refuse to carry competitors' oil, etc.

The long answer can be found by searching "Rockefeller Antitrust."

Answer 2

Rockefeller was a poor boy in his family, then when he grew up, Rockefeller made his own company called Standard Oil, he also had his own monopolies which he can sell his items at higher or lower prices. He was the richest men in history.

Answer 3

The ascent of John D. Rockefeller to the level of monopolist did not begin with oil. From his base in Cleveland, Ohio, he began in the commodity industry. During the US Civil War he sold various grains, meats and other foodstuffs. The war's demands made the price of these commodities to skyrocket.The war also shutdown the Mississippi River for commercial purposes and his grain profits soared. He and his partner (s) were making over $17,000 per year, a large sum for the 1860's. For "side" profits he invested in oilfields. The oil produced kerosene for lamps and for treating infections. Rockefeller's profits expanded and in Cleveland he built the largest oil refinery in the US, some say the largest facility in the world. With that said, he was one step up towards his "monopoly", which as they say was "under the radar" as the US expanded west and all types of industries caught the attention of other investors.

From his Cleveland offices he used the telegraph system connected to New York City to stay abreast of price changes in all types of commodities. His "up to date" information to keep track of prices and make profitable buys and sales. The friendly Federal government helped Western Union with the spread and improvement of its telegraph communications. This helped Rockefeller.

Through various means of operations, still quite legal, he began to control, or at least influence oil prices to his benefit. By owning so many oil wells and refineries, he was able to slash oil prices and competitors could not follow in kind, costing them profits.

Soon he had an empire, but not as yet a monopoly. That would follow as his company grew larger and he was able to influence the price of oil from oil fields to their final markets. The more profits he made were used to create subsidiaries that produced barrels, pipes, and pumps. His crude oil or refined products from the crude were loaded onto tankers and rail cars. He thus produced what economists call vertical integration. He would not stop there, nor were there any laws to inhibit him. Rockefeller's next move was to create a horizontal system of integration. He began to buy competing oil companies and using his money and influence to play one railroad company against another.

If Rockefeller could not buy out his competitors, he had another plan. Based on the huge business his oil tank cars gave to various railroads, he, apparently, "under the table" demanded and received large rebates from the railroads. If they hesitated, he would threaten to cut them off and use another railroad to transport his oil and oil by products. He then had what was and still is, called a comparative advantage. ( still is because public utilities are granted this legally for elctricity and water for example )

Against such power, oil companies who refused to be bought out had to declare bankruptcy.

Only by the resolve and power of US President Teddy Roosevelt, did Senators ( believed to be receiving funds under the table ) agree to Roosevelt's anti-trust legislation and reforms. "Teddy" had enough power to expose any congressional corruption, and the Federal government was forced to concede to the President's reforms. Roosevelt soon earned the nickname of "trust buster".

Answer 4

He wanted to control 100% of the oil refining business, but he bought his competitors out at fair prices or otherwise asked them to merge with his business (Standard Oil).

Answer 5

He knocked out all the competion and invented oil transported by pipeline.

Answer 6

He bought up oil refineries, cut costs, and reinvested his profits in other refineries