the beginnings of the modern oil industry -- 11/10/15

Today's selection -- from Titan by Ron Chernow. With the discovery of oil in northwestern Pennsylvania in 1859, a colossal new American industry was born, and Civil War veterans flocked there in the late 1860s in a manner beyond even the California Gold Rush of a decade earlier:

"By the end of the Civil War, the preconditions existed for an Industrial economy of spectacular new proportions. Before the war, the federal government had only twenty thousand employees and shied away from attempts to regulate business. Unlike Europe, America had no tradition of political absolutism or ecclesiastic privilege to quench entrepreneurial spirits, and the weak, fragmented political system gave businessmen room to flourish. At the same time, America had the legal and administrative apparatus necessary to support modern industry. There was respect for private property and contracts; people could get limited corporate charters or file for bankruptcy; and bank credit, while not yet plentiful, was everywhere available in a highly fragmented banking system. In time, the government redefined the rules of the capitalist game to tame trusts and preserve competition, but as John D. Rockefeller set about building his fortune, the absence of clear-cut rules probably aided, at first, the creative vigor of the new Industrial economy.

"Perhaps no industry so beguiled the Civil War veterans with promises of overnight wealth than the oil industry. In astonishing numbers, a ragtag group of demobilized soldiers, many still in uniform and carrying knapsacks and rifles, migrated to northwest Pennsylvania. The potential money to be made was irresistible, whether in drilling or in auxiliary services; people could charge two or three times as much as they dared to ask in the city. Ida Tarbell speculated that 'this little corner of Pennsylvania absorbed a larger portion of men probably than any other spot in the United States. There were lieutenants and captains and majors -- even generals -- scattered all over the field. ' They brought with them a military sense of organization and a bellicose competitive spirit, but they were eager for quick killings and betrayed little sense of how to fashion a stable, lasting business, providing an opening for the organization-minded Rockefeller.

A collection of early Pennsylvania oil wells haphazardly constructed.

"The war had stimulated growth in the use of kerosene by cutting off the supply of southern turpentine, which had yielded a rival illuminant called camphene. The war had also disrupted the whaling industry and led to a doubling of whale-oil prices. Moving into the vacuum, kerosene emerged as an economic staple and was primed for a furious postwar boom. This burning fluid extended the day in cities and removed much of the lonely darkness from rural life. The petroleum industry also furnished lubricants to grease the wheels of heavy industry. Though the world oil industry was squeezed into western Pennsylvania, the repercussions were felt everywhere. In 1865, Congressman James Garfield alluded to the oil craze in a letter to a former staff officer: 'I have conversed on the general question of oil with a number of members who are in the business, for you know the fever has assailed Congress in no mild form ... Oil, not cotton, is King now, in the world of commerce.' Soon John D. Rockefeller would reign as the undisputed king of that world. ...

"At the time, refiners were tormented by fears that the vapors might catch fire, sparking an uncontrollable conflagration. Fire had already taken many lives in the industry -- Edwin Drake's well, for example, was destroyed by fire in the autumn of 1859. During the Civil War, there were so many spectacularly destructive blazes along Oil Creek that producers posted signs warning. 'Smokers Will Be Shot.' Mark Hanna, who later managed President McKlnley's campaign, recalled how one morning in 1867 he woke up and discovered that his Cleveland refinery had burned to the ground, wiping out his investment, and such fears kept refiners on tenterhooks around the clock. 'I was always ready, night and day, for a fire alarm from the direction of our works.' said Rockefeller. 'Then proceeded a dark cloud of smoke from the area, and then we dashed madly to the scene of the action. So we kept ourselves like the firemen, with their horses and hose carts always ready for immediate action.'

"Such was the perpetual fire menace posed by the new industry that refineries were soon banned within the Cleveland city limits, hastening the growth of Kingsbury Run. In those years, all tanks weren't hemmed in earthen banks as they later were, so if a fire started it quickly engulfed all neighboring tanks in a flaming inferno. Before the automobile, nobody knew what to do with the light fraction of crude oil known as gasoline, and many refiners, under cover of dark, let this waste product run into the river. 'We used to burn it for fuel in distilling the oil,' said Rockefeller, 'and thousands and hundreds of thousands of barrels of it floated down the creeks and rivers, and the ground was saturated with it, in the constant effort to get rid of it. The noxious runoff made the Cuyahoga River so flammable that if steamboat captains shoveled glowing coals overboard, the water erupted in flames. Each time a black cloud billowed up in the sky, people assumed another refinery had exploded, and kerosene prices soared. At least in retrospect, Rockefeller sounded philosophic about this omnipresent danger. 'In those days, when the fire bell rang, we would all go to the refinery and help put it out. When the fire was burning I would have my pencil out, making plans for the rebuilding of our works.' "


Ron Chernow


Titan: The Life of John D. Rockefeller


Vintage Books


Copyright 1998 by Ron Chernow


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