How did John Rockefeller monopolize the oil business?


Quick Answer

John D. Rockefeller was able to monopolize the oil industry in the 19th century by buying out smaller companies and working with the railroad companies to put his competitors at a disadvantage. At one point, Rockefeller controlled 90 percent of the United States oil industry.

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Full Answer

Rockefeller founded Standard Oil Company in 1870 following his purchase of a Cleveland oil refinery in 1863. Until Rockefeller's entrance, the oil business was still in its beginning stages. His company bought out any rivals in its way and created its own in-house companies to sell and market its products all over the world.

Standard Oil received rebates from the railroad industry on shipments of its competitors' oil and lowered its prices to a point where the company would take a loss and bully smaller companies to sell. All these techniques were used to force rival oil companies into a predicament where they would have to sell the company to Standard Oil or go bankrupt.

Additionally, Standard Oil purchased its own forest land for wood to make barrels. This lowered in-house costs, putting the company at an advantage. In 1911, the U.S. Supreme Court ruled that Standard Oil violated the country's anti-trust laws. Standard Oil dissolved, and its holdings were divided into 30 companies.

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