1. Cornelius
Vanderbilt may be the richest
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2. and most powerful man
in the country,
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3. accustomed to getting
what he wants,
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4. but he has no idea what
he's about to encounter.
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5. -
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6. Do you play cards,
Mr. Rockefeller?
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7. No.
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8. Shame.
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9. You could learn a lot
about competition.
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10. I know all
I need to know.
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11. So. I'm looking to do a deal
with an oil refinery.
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12. And that could be you.
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13. I'm willing to do
an exclusive deal.
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14. A dollar sixty-five
a barrel.
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15. That's a discount
of more than a third.
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16. There are several
refineries in Cleveland.
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17. Why should I give
you such a deal?
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18. Because I'll fill all
your trains with my oil.
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19. And if you don't
do the deal,
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20. I'll fill someone
else's trains.
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21. Mr. Rockefeller.
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22. Do you trust him?
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23. I don't know.
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24. Rockefeller may
have gotten the rate
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25. he was looking for,
but in return,
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26. he's agreed to provide
Vanderbilt
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27. with over sixty train cars
of oil every day.
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28. The only problem is,
Rockefeller has
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29. no way to produce that
much kerosene.
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30. His capacity is less
than half of that.
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31. Rockefeller has
over-promised,
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32. but he knows the deal
with Vanderbilt
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33. will be the opportunity he's
been waiting for.
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34. He just needs to find
a way to produce more kerosene.
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35. It's a daunting task,
but John D. Rockefeller
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36. has been beating
the odds his entire life.
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37. Rockefeller is raised in a
poor Cleveland household,
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38. but even as a young man,
he yearns for something more,
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39. something bigger,
and he knows
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40. it isn't going to
be handed to him.
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41. As a young man, he shows
a strong entrepreneurial streak,
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42. starting his
own small business
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43. selling candy to
local children.
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44. Thank you very much.
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45. Here's three pieces.
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46. From an early age,
Rockefeller helps to support
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47. his family, mostly
because he was never able
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48. to rely on his father.
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49. It cures cancer.
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50. Folks, that is right,
it cures cancer.
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51. Now you're asking
yourself - Sir,
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52. I bet in your mind you're
saying, "Bill, is this true?"
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53. John Rockefeller's
father is a conman.
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54. ... Rebecca, I met
seven years ago.
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55. She had pneumonia.
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56. Better known around
Cleveland as "Devil Bill".
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57. Who would
like to buy some?
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58. A dollar twenty-five
a bottle. Yes, sir.
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59. He disappears for
months at a time,
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60. leaving his family without
money to support themselves.
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61. I'm only here
for one day.
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62. Once I'm gone, I am gone.
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63. I may not be back.
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64. Never trust anybody, son.
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65. Not even me.
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66. With his father
gone, Rockefeller is forced
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67. to quit school and get a job to
support his mother and siblings.
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68. His work ethic and
intuition will become
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69. the building blocks for
the American dream.
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70. - D.
- My great-grandfather,
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71. John D. Rockefeller,
was an absolutely
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72. brilliant businessman when
he started out.
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73. He wasn't even in
oil or anything.
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74. You know, he worked
at it very very hard,
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75. and there's an ethic in the
Rockefeller family of hard work.
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76. Stuck in a
dead-end job,
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77. he becomes fixated on
finding a big idea,
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78. and taking a chance.
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79. Be
therefore perfect,
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80. even as your father, which
is in Heaven, is perfect.
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81. Would you please rise?
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82. Let us sing Hymn 89.
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83. Get out!
It's gonna blow, get out!
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84. I think entrepreneurs,
and certain business people,
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85. just look at life,
and look at things
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86. that are changing, and are able
to see those things
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87. and say, "I can create a
business out of that."
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88. Rockefeller
realizes oil has the potential
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89. to change the world.
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90. And, make him rich
in the process.
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91. But Rockefeller knows
that drilling for oil
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92. is a gamble filled
with uncertainty.
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93. And since he doesn't
believe in luck,
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94. he starts looking for a
way to make money from oil
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95. without the risk.
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96. H.W. He had a
mind for efficiency.
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97. And there was probably
something in him
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98. that looked at the production
process and saw
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99. how wasteful that was.
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100. In the first place
you drill wells,
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101. and they turn up dry.
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102. And then you drill wells
and they hit a gusher,
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103. and half the oil
would be lost.
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104. And that offended his
sense of efficiency.
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105. Rockefeller knows
there's a better way.
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106. Today, everybody wants
to be an entrepreneur.
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107. They've heard these great
stories, you know, about Apple.
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108. But, you know what, when
you start a company,
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109. you can think what the
revenues are gonna be,
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110. how much it's gonna be
worth to shareholders,
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111. but you always need
a technical element.
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112. You need somebody who
knows how to do it
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113. and build the things.
You need the scientists.
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114. Refining oil turns
crude from the ground
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115. into kerosene, a clean-burning
fuel that can be used in lamps.
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116. Once the oil gets to
three-hundred and fifty degrees,
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117. the kerosene
starts to vaporize.
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118. Then once it's cooled,
you have a stable, pure product.
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119. How much to
produce a gallon?
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120. - Fifty, sixty cents.
- I don't know.
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121. Rockefeller's
insight puts him
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122. one step ahead
of his competitors.
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123. He believes that while
gamblers drill for oil,
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124. businessmen refine it.
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125. Whoever could control
the refining process
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126. could very well have the
whole industry.
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127. At twenty-four years old,
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128. Rockefeller invests
everything he has—
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129. about four thousand
dollars—
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130. into building his
first refinery.
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131. No, higher!
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132. Higher!
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133. But he struggles early on
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134. to find an edge in the
industry.
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135. That changes when the
most powerful man
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136. in the country comes calling.
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137. Mr. Rockefeller.
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138. The deal with
Vanderbilt gives him cheap
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139. shipping rates and
the chance
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140. to corner the U.S oil market.
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141. But he's over-promised,
agreeing to supply sixty
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142. barrels a day, when his
capacity is less than half that.
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143. And when you've made a deal
with the most powerful man
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144. in America, failure
is not an option.
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145. You
have to be smart,
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146. you have to have vision,
you have to have
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147. all these different things,
but the most successful people
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148. are the people that
had the right idea
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149. but never ever quit or gave up.
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150. The people that really
succeed in life
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151. are those that don't quit.
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152. Rockefeller needs
to quickly expand his company,
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153. and to do that,
he needs investors.
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154. The problem is, kerosene
is getting a bad name.
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155. Stories of the fuel
exploding and burning down
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156. homes are on the front
page of newspapers
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157. across the country, making
potential investors skeptical.
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158. Due to high demand, many
refiners are rushing
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159. to market with
dangerous kerosene
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160. that's extremely volatile.
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161. Rockefeller sees the
problem as an opportunity.
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162. He realizes that there's a
need to calm
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163. the public's fears and provide
them with a product
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164. they can rely on.
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165. Oil refining.
Warehouses. Barrel making.
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166. And shipping facilities.
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167. Why the name?
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168. Because Standard Oil
will be the only company
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169. in the industry to
guarantee a uniform
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170. quality of kerosene.
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171. The Rockefellers,
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172. and all these guys, they
were all great salesman.
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173. At the end of the day,
it's the salesmen
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174. who make the money.
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175. Well, you
can certainly understand
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176. how Rockefeller could've
named his oil company
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177. Standard Oil.
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178. Pretty ambitious,
organic name.
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179. He was creating a
standard, and, uh, it worked.
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180. Rockefeller's
Standard Oil quiets fears
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181. and immediately becomes the
most sought-after product
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182. in the country, bringing
in investor after investor.
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183. America is
expanding rapidly.
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184. Cornelius Vanderbilt's rail roads
have united the country,
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185. and commerce now
moves faster than ever.
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186. But America's newest
obsession is light—
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187. clean, safe light.
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188. The kind provided
by John D. Rockefeller.
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189. Oil is changing the world.
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190. And the Ohio refiner
is leading the charge.
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191. The titans of that day
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192. revolutionized
business in America.
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193. We became the sort of
dominant economic force
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194. in the world because
we could make stuff,
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195. we could create stuff,
we could build stuff,
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196. we could power stuff.
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197. John Rockefeller's
Standard Oil is now
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198. the largest producer of
refined kerosene in the country.
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199. And his exclusive deal
with Vanderbilt allows him
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200. to ship his project to
homes throughout
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201. the country at incredibly
cheap rates.
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202. But for Rockefeller,
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203. it isn't enough.
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204. He's outgrown his
deal with Vanderbilt.
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205. Once unable to fill
Vanderbilt's trains,
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206. now he has more oil than
the Commodore can possibly ship,
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207. and Vanderbilt's
biggest competitor knows it.
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208. Tom Scott is the president
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209. of one of the largest train
lines in the country.
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210. He wants to take
Vanderbilt's place
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211. as King of the Railroads,
and he knows a deal with
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212. Rockefeller is the key.
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213. Scott heads to Cleveland
with his protege,
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214. a young up-and-comer
named Andrew Carnegie.
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215. As Scott's most
trusted lieutenant,
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216. Carnegie has helped
craft the pitch.
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217. What's I'm proposing
is an alliance between—
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218. You want a cartel
between oil and rail roads.
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219. I prefer to
call it by its—
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220. Give me the numbers.
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221. Standard Oil will
receive a forty percent
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222. rebate for every
barrel it ships.
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223. We'll send
papers over in the morning.
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224. No.
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225. A verbal contract is fine.
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226. Rockefeller
gets a better deal from Scott
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227. than he ever could've
gotten from Vanderbilt.
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228. The shyster.
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229. The Commodore
has lost his competitive edge.
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230. J.S.To the great
frustration of Vanderbilt,
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231. Rockefeller very
skillfully played
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232. those rail roads against
each other.
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233. Oil was something
the rail roads
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234. couldn't afford to let go,
and so they fought very hard
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235. to get that traffic.
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236. With
the rail roads in his pocket,
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237. Rockefeller can supply
every home in the nation
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238. with Standard Oil kerosene,
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239. and with all that profit,
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240. Rockefeller begins to
buy out his competitors.
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241. We
need to stand together.
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242. I'm offering all
of you a way out,
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243. so you can hold
your heads high.
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244. The opportunity to sell
to Standard Oil
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245. will be a godsend
to you all.
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246. If you take
Standard Oil stock,
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247. you and your loved ones
will never know want.
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248. His intent is simple:
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249. he wants to own
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250. every refinery in the country.
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251. It's a concept that's been
impossible to execute.
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252. Today, we know it
as a "monopoly".
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253. But Rockefeller isn't just
expanding his company,
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254. he's also looking to
maximize profit—
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255. by any means necessary.
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256. We've got
another refinery.
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257. One more into the fold.
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258. Do you want me to
take a look at it?
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259. No. I want you
to shut it down.
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260. The business of
creating monopolies,
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261. crushing opposition—
part of me says he did that
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262. because it was
there to be done,
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263. and he could do it better
than anybody else
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264. and he made a bloody
fortune out of it.
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265. By the time
he's finished,
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266. Rockefeller controls
ninety percent
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267. of the North American
oil supply.
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268. His company, Standard Oil,
is the country's first monopoly.
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269. At thirty-three,
the Ohio oil man
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270. is now the most powerful man
in the country.
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271. The Commodore has
created a monster.
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272. He realizes that the only
way to combat Rockefeller
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273. is for the rail roads to
start working together.
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274. He forms an unlikely
alliance with his biggest rival,
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275. Tom Scott, and together,
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276. they agree to pull all
of Rockefeller's deals.
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277. Thank you.
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278. To Rockefeller, the move
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279. is nothing short
of a declaration of war.
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280. America is emerging as one of
the mightiest nations on earth.
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281. The country is now crowded
with rail lines
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282. and kerosene lights
most homes.
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283. The amazing evolution has
been led by two men driven
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284. by a desire to create a
world that few imagined.
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285. "Commodore" Cornelius Vanderbilt
and John D. Rockefeller
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286. have sparked the modernization
of the country.
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287. But the former partners'
interests are no longer aligned.
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288. Vanderbilt has formed
an unlikely alliance
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289. with Tom Scott, aimed at
forcing their biggest client
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290. to pay going rates.
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291. John Rockefeller sees
their actions
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292. as a declaration of war,
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293. and he's not going down
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294. without a fight.
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295. H.W. John Rockefeller
had the ruthlessness
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296. that sometimes come
from utter conviction
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297. that what he was doing was
right, and not just correct,
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298. but divinely inspired, and
the people who opposed him
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299. weren't really entitled
to their point of view,
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300. because their point
of view was wrong.
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301. It was almost as though they
had turned aside God's grace.
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302. Well, if you turn aside
God's offer of grace,
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303. then expect no mercy.
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304. Rockefeller is
determined to find
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305. another way to
transport his oil.
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306. He knows if he can't,
the rail roads will win.
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307. Rockefeller's solution
again comes
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308. from the most unlikely
of places.
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309. So we can increase the
yield of the kerosene,
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310. but then we get more
of the volatile waste.
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311. We can burn some of it off
as fuel in the refinery,
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312. but its high flammability
creates a storage problem.
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313. When we get to higher
temperatures
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314. we can start creating
the lubing oils.
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315. I'll need to reconfigure
the refinery.
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316. Oil in the refinery
is moved using large pipes,
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317. and Rockefeller realizes
if those pipes can transport
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318. oil over
short distances,
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319. they could also be used
over longer distances.
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320. If Rockefeller can build
a pipeline large enough,
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321. he'll be able to cut
the rail roads
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322. out of the oil business,
for good.
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323. The pipeline will require
a massive investment,
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324. and incredible risk.
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325. But if he gets it right,
Rockefeller will be able
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326. to do what he loves
to do most, win.
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327. It probably comes early
in an entrepreneur's life
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328. where you realize you're
willing to do things
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329. in the business world that other
people aren't willing to do.
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330. Everybody has got ideas,
and everybody's got
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331. ambitions, but most people
aren't willing
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332. to cross that line, and
I think an entrepreneur
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333. that's successful,
that's your nature.
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334. Wherever there's change,
wherever there's uncertainty,
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335. there's opportunity.
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336. Rockefeller's
workers labor around the clock—
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337. —blasting
through the countryside,
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338. and laying over a mile and
a half of pipeline every day.
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339. Business, in the end,
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340. is understanding
the playing field.
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341. Tell me who's on it,
what their strengths are,
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342. what their weaknesses are,
and what is your checkmate play,
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343. to top 'em, and nail 'em.
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344. And so you're always in
that competitive game.
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345. You're looking
at innovation.
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346. You're looking
at leap-frogging,
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347. trying to get
ahead of them.
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348. You're never complacent.
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349. You're semi-paranoid
about what they're doing.
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350. That's what the
game is all about.
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351. By the time the
pipeline is complete,
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352. it's over four
thousand miles long,
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353. stretching across
Ohio and Pennsylvania,
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354. and connecting thousands
of the world's most
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355. lucrative oil wells directly
to Rockefeller's refineries.
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356. John Rockefeller has
finally found his way
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357. to eliminate the rail roads
from the oil business,
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358. and in the process, he's
forever revolutionized
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359. the way oil is transported.
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360. For twenty-five
years, the rail roads have been
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361. the biggest industry
in the country,
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362. the backbone of the
American economy.
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363. No one has ever had the nerve
to take them on, until now.
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364. Rockefeller knows
that without his oil,
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365. the rail roads will
struggle to stay alive.
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366. It's a colossal blow
to the industry,
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367. and with all
that leverage,
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368. Rockefeller has Vanderbilt
and the rail roads
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369. right where he wants them.
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370. The United States of
America is changing
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371. like never before.
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372. In just a decade, the
country has become
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373. one of the most advanced
on earth,
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374. and darkness no longer
means the end of the day.
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375. Two men have driven this
remaking of the country.
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376. John D. Rockefeller and
Cornelius Vanderbilt
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377. are locked in a
battle of wills.
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378. Commodore.
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379. Mr. Rockefeller.
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380. Vanderbilt and his
competitors are in drastic
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381. search of passengers and
cargo to fill the trains
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382. running on their lines.
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383. In the 1870s, the
country needed to be connected
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384. via rail roads,
and what happens
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385. then is everybody who thinks
they have an edge
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386. in the rail road business goes
out and raises money
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387. and they start
their own rail road.
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388. And what happened then
is we've seen happen
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389. many of times since then, is
it created a huge bubble.
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390. John D. Rockefeller's oil
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391. makes up nearly forty percent
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392. of the cargo shipped
on the rails.
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393. But when Vanderbilt teams
with his biggest rival
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394. to push for a rate increase,
Rockefeller takes it
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395. as a declaration of war.
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396. He builds a pipeline
in response,
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397. and begins to pull
his shipments.
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398. And since the rail roads
have been drastically overbuilt,
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399. losing cargo
means losing money.
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400. Stocks plummet as
investors run scared.
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401. When prices get
out of control,
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402. and smart people decide,
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403. "Wow, this thing is a bubble,
I want out",
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404. then you can get a
collapse very quickly.
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405. By the time the
Panic is through,
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406. one-third of the country's
360 rail road companies
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407. have gone bankrupt.
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408. Every
crisis of this type,
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409. whether it's 2008,
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410. or 1873,
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411. has got the same roots.
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412. Namely, that it
was unanticipated.
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413. So a necessary condition for a
crisis is nobody expects it.
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414. The crash
is the worst America has seen
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415. in its short history.
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416. Unsure how to prevent
a complete collapse,
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417. the stock exchange shuts
down and stays closed
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418. for ten straight days.
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419. H.W. The Panic of
1873 triggered
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420. the first full-blown national
depression,
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421. and nobody quite knew
what to do about it.
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422. For the first time,
large—very large—
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423. numbers of American workers
were without jobs.
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424. Workers got laid
off, but the owners,
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425. they still lived
in the style
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426. that they were
accustomed to.
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427. But no one was shedding any
tears for John D. Rockefeller.
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428. People were saving their
tears for themselves,
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429. when they found
themselves out of work,
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430. out of their homes, out
of food, out of hope.
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431. While many
of the biggest companies
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432. in the country
struggle to survive,
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433. Rockefeller sees opportunity,
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434. his belief in the survival
of the fittest kicking in.
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435. As his competition
collapses,
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436. Rockefeller
picks them off,
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437. buying out bankrupt oil
companies for next to nothing.
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438. I find
that I do better in bad markets.
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439. I buy things
in bad markets.
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440. And, you can't do that
in a great economy.
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441. You can't buy it.
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442. Either you're gonna buy it
very expensively
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443. or not be able to buy
it at all.
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444. So there's a lot of
opportunity, I find,
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445. in the bad times.
Copy !req
446. By the time the
depression is through,
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447. Rockefeller has created
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448. the largest corporate empire
in America.
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449. H.W. He was playing
the game of industry,
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450. and he was simply better
at it than everybody else.
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451. He saw the industrial
marketplace
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452. as a place for the survival
of the fittest,
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453. and he was fitter
than anybody else,
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454. therefore he survived.
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455. Not only that, therefore
he deserved to survive,
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456. and they didn't.
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457. While Rockefeller
expands his company,
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458. his adversaries
at the rail roads
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459. are struggling to survive.
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460. Then, at the height
of the depression,
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461. the king of the
American rail roads,
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462. Cornelius Vanderbilt,
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463. dies, at the age of 82.
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464. Vanderbilt leaves
his empire,
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465. worth over one hundred
million dollars,
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466. to his son, William.
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467. Rockefeller knows that
without Vanderbilt,
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468. he would've never been
able to build his empire.
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469. But Rockefeller's
last remaining adversaries
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470. refuse to go down
without a fight.
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471. Tom Scott, and his
protégé, Andrew Carnegie,
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472. have managed to survive.
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473. And since Rockefeller's
pipeline doesn't extend
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474. to Pittsburgh, he's forced
to continue to use their trains.
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475. But Scott knows if he and
Carnegie don't diversify,
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476. they won't survive.
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477. Scott devises an
aggressive plan
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478. to expand his empire.
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479. One that's sure to catch
Rockefeller's attention.
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480. He's going to break
into the oil business
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481. by building a pipeline
of his own.
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482. But if there's one thing
John Rockefeller
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483. hates more than anything
else, it's competition.
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484. Tom Scott is in for war.
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485. I've tried to be
friendly to the Pennsylvania.
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486. I've given you plenty
of business, have I not?
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487. And now, I find that
you're invading my field.
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488. And that, my
friend, is piracy.
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489. We'll take your
feelings into account,
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490. Mr. Rockefeller.
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491. Two thirds of the oil
you carry comes from me.
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492. If you don't retreat, I'll take
it to the other rail roads.
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493. As far as I'm aware,
there isn't another rail road
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494. that runs from
Pittsburgh to New York.
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495. America's growth
after the Civil War is driven
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496. by rail roads uniting
the country,
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497. and oil lighting the way.
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498. No one has capitalized
on the growth
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499. more than
John D. Rockefeller,
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500. who now
controls ninety percent
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501. of the U.S oil market.
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502. With the death of
Cornelius Vanderbilt,
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503. only one man stands in
the way of Rockefeller's
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504. complete control of oil,
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505. Tom Scott.
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506. H.W. There was a sort
of mutual admiration
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507. among the big capitalists, but
it was an admiration
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508. that was accompanied
by deep suspicion.
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509. The big capitalists of the
day eyed each other very warily.
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510. Rockefeller looked
on Tom Scott,
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511. of the Penn Railroad,
as a competitor.
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512. Tom Scott's trains
transport oil to
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513. and from Rockefeller's
refineries in Pittsburgh,
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514. where the Standard Oil
pipeline doesn't reach.
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515. With all that leverage,
Scott is confident
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516. he has the ammunition to
take on Rockefeller.
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517. But Rockefeller isn't one
to back down from a fight.
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518. I don't want one drop
of our oil traveling
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519. on the Pennsylvania.
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520. But what about
the Pittsburgh refineries?
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521. Shut them down.
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522. Shutting down
his refineries will cost
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523. Standard Oil a fortune
in lost revenue,
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524. but for Rockefeller,
crushing his competition
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525. matters more than
anything else.
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526. Without Rockefeller's oil,
Scott loses nearly
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527. half of his business,
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528. forcing him to lay off
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529. tens of thousands of workers,
and drastically cut wages.
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530. Those workers take to
the streets in protest.
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531. And as darkness
falls on Pittsburgh,
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532. they turn violent.
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533. A fire is set
in Tom Scott's train yards.
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534. Before
the night is over,
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535. more than thirty-nine
buildings
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536. and over twelve hundred
train cars are destroyed.
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537. Tom Scott's company
lays in ruin.
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538. H.W. This is how
capitalism works.
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539. The rail roads had been
the big suppliers
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540. of transportation in
the oil industry,
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541. and so the rail roads
quite naturally resisted.
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542. They dug in their heels
whenever they could.
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543. Eventually they lost.
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544. Come on.
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545. Let's go.
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546. John D. Rockefeller
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547. has replaced
Cornelius Vanderbilt
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548. as the richest
man in America.
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549. His net worth is now
over $150 million,
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550. or $225 billion today.
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551. - D.
- It's dazzlingly amazing
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552. that one individual was able to
corner about ninety-eight
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553. percent of all the
kerosene and eventually
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554. all production
in the world.
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555. He was a brilliant
business person.
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556. I can only give him
credit for that.
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557. I don't have to give
him credit for
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558. the way that he became
that powerful.
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559. But all titans are targets.
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560. And now Rockefeller is
about to come face to face
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561. with his biggest
challenge ever.
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