How did john D Rockefeller have an impact on America?

Answer 1

Not sure when this question is from but I'll answer it anyways... Following the Civil War, America experienced massive industrialization. By the 1880s, businesses began to combine their companies into much larger organizations. There large companies became known as trusts. In 1881, John D. Rockefeller established the first trust, the Standard Oil Company. He pioneered many of the aggressive business practices he used by trusts. Standard Oil and other trusts used their size advantage to hold down prices and drive competitors out of business. By the turn on the century, nearly 80% of the US industry was controlled by trusts. In 1890, Congress passed the Sherman Anti-trust Act to protect fair competition. The law regulated trusts and outlawed monopolies. Federal courts were empowered to break monopolies into smaller, less powerful companies. However, the courts narrowly applied the new law. For example, in 1895, the Supreme Court ruled that the Sherman Act did not apply to trusts that controlled 98% of the country's sugar refineries.

The courts were not alone to blame for the government's failure to control trusts. Presidents sympathetic to business did not enforce the Sherman Act, like Grover Cleveland and William McKinley. By 1900, Standard Oil controlled nearly 95% of the US oil industry. The company set its price for oil below the price of production. Other oil companies could not compete. In affect Standard Oil drove them out of business. Once free of competition, Rockefeller could then raise prices. Rockefeller also forced oil transport companies to secretly pay for the privilege of hauling Standard Oil's products. The transporters paid the fees because they could not afford to lose the business of a company that so dominated the industry. These fees, called rebates, helped Standard Oil reduce costs to levels that drove its competitors out of business.

Standard Oil provided an easy target for muck-raking journalist, Ida Tarbell. From 1901 to 1904, she published a popular series of articles attacking Standard Oil. Her allegations ranged from secret rebates to accusations that Rockefeller once cheated a widow of her inheritance. Tarbell's Standard Oil series coincided with the rise to the presidency of progressive reformer, Theodore Roosevelt. The new President resolved once a for all that government would regulate trusts. Thus, he began to enforce the Sherman Act as it was originally intended. Tarbell's magazine stories and Roosevelt's anti-trust campaign caused widespread criticism of some of Standard Oil's business practices. The government now faced a difficult decision: should it break up Standard Oil's monopoly?