Narrator: WHEN OIL IS DISCOVERED IN AMERICA IN 1859...
GENTLEMEN, WE'RE GONNA BE RICH!
...IT TRIGGERS AN EXPLOSIVE CHAIN OF EVENTS...
THERE WERE ENORMOUS OPPORTUNITIES TO MAKE MONEY.
Narrator: ...THAT SETS THE WORLD ON FIRE.
TWO AMERICAN TITANS, THOMAS A. SCOTT...
WE'RE IN THE PRIME SPOT. WE NEED TO STAY THAT WAY.
Narrator: ...AND JOHN D. ROCKEFELLER...
GENTLEMEN, I SEE A GREAT FORTUNE AHEAD OF US.
Narrator: ...BATTLE FOR CONTROL.
Nelson: IT'S ASTONISHING WHAT HAPPENS.
IT'S THE BLOODIEST LABOR CONFLICT IN AMERICAN HISTORY.
Narrator: ONE WILL BE DESTROYED.
THE OTHER BECOMES THE WORLD'S RICHEST MAN.
TAKE STANDARD OIL STOCK,
AND YOUR FAMILY WILL NEVER KNOW WANT.
THESE ARE THE EPIC STORIES
OF MEN STRUGGLING FOR SUPREMACY, BUILDING EMPIRES,
AND CHANGING THE COURSE OF AMERICAN HISTORY FOREVER.
-- Captions by VITAC -- www.vitac.com
CAPTIONS PAID FOR BY DISCOVERY COMMUNICATIONS
¶¶
IN THE HILLS OF TITUSVILLE, PENNSYLVANIA,
EDWIN DRAKE IS ON A MISSION...
[ AIR HISSING ]
...DRILLING FOR CRUDE OIL.
¶¶
AFTER MONTHS OF TOIL, HE STRIKES IT RICH.
[ LAUGHS ]
[ WHISTLE BLOWS ]
[ LAUGHING ]
Yergin: WHEN EDWIN DRAKE STRUCK OIL, IT WAS LIKE A GOLD RUSH.
BUT IT WAS EVEN MORE THAN A GOLD RUSH.
YEAH!
IT WAS SOMETHING THAT WOULD TRANSFORM THE WORLD.
Man: CAN I SEE IT AGAIN?
GENTLEMEN, WE'RE GONNA BE RICH.
[ MEN CHEERING ]
WHAT EDWIN DRAKE DID WAS REVOLUTIONARY, 'CAUSE HE PROVED
THAT YOU COULD DRILL FOR THIS SUBSTANCE CALLED ROCK OIL,
AND YOU COULD TURN IT INTO A PRODUCT
THAT THE WHOLE WORLD WANTED.
[ MEN CHEERING, LAUGHING ]
Narrator: THE PRODUCT THAT WILL CHANGE EVERYTHING IS KEROSENE.
UP UNTIL KEROSENE, THE ONLY LIGHT PEOPLE HAD
WAS EITHER FROM A FIREPLACE OR FROM VERY FAINT CANDLES.
¶¶
SUDDENLY, YOU HAD THIS RELIABLE, STEADY LIGHT.
AND IT LIT THE PEOPLE'S LIVES,
AND IT REALLY PUSHED BACK DARKNESS.
¶¶
Narrator: IN CLEVELAND, A YOUNG ENTREPRENEUR
SEES FIRSTHAND THE POTENTIAL OF DRAKE'S DISCOVERY.
HIS NAME IS JOHN D. ROCKEFELLER.
Nelson: ROCKEFELLER IS IN THE COMMISSION BUSINESS.
THE COMMISSION BUSINESS MEANS
SHIPPING ANYTHING THAT AN ARMY NEEDS
OR ANYTHING THAT A MERCHANT NEEDS IN A COUNTRY STORE.
[ INDISTINCT CONVERSATIONS ]
Yergin: BUT BY THEN THE WORD WAS GETTING OUT
THAT THERE WAS THIS NEW BUSINESS CALLED OIL.
AND THAT'S WHAT CAUGHT HIS IMAGINATION.
¶¶
Narrator: IN PITTSBURGH, THOMAS A. SCOTT HAS BECOME
ONE OF AMERICA'S MOST POWERFUL BUSINESSMEN
THROUGH CLEVER INVESTING.
Nelson: TOM SCOTT HAS COPPER MINES AND GOLD MINES.
HE'S INTERESTED IN OIL. HE'S INTERESTED IN WHEAT.
HE'S INTERESTED IN COAL, ALL OF THESE THINGS.
Narrator: SCOTT IS ALSO VICE PRESIDENT OF THE PENNSYLVANIA RAILROAD,
AMERICA'S BIGGEST COMPANY.
Nelson: TOM SCOTT'S VISION IS TO MAKE THE PENNSYLVANIA RAILROAD
THE THROUGH POINT FOR ALL OF THESE GOODS.
HE WANTS TO MAKE SURE THAT THINGS ARRIVE IN PITTSBURGH
AND THEN GET FINISHED IN PITTSBURGH...
WE'RE IN THE PRIME SPOT. WE NEED TO STAY THAT WAY.
Nelson: ...THEN MAKE IT AS EXPENSIVE AS POSSIBLE
FOR THOSE GOODS TO FLOW FROM PITTSBURGH ELSEWHERE.
AND THAT'S HOW HE'S GONNA MAKE HIS PROFIT.
¶¶
Narrator: IN TITUSVILLE,
DRAKE'S DISCOVERY SPARKS A FULL-BLOWN OIL RUSH.
SENSING AN OPPORTUNITY,
JOHN D. ROCKEFELLER COMES TO THE OIL REGION IN THE EARLY 1860s.
¶¶
Drake: MORE BUCKETS, MEN.
Man: MR. DRAKE, THERE ARE NO MORE BUCKETS.
[ INDISTINCT CONVERSATIONS ]
EMPTY THE ASH CAN.
Narrator: ROCKEFELLER DOESN'T LIKE WHAT HE SEES.
HE LOOKED AT THE OIL REGION AND WAS REPELLED BY THE CHAOS OF IT.
¶¶
[ SIGHS ]
WHAT WASTE.
Yergin: HE WAS ALSO REPELLED BY THE AMORALITY OF IT --
THE ALCOHOL, THE PROSTITUTES,
THE SENSE OF THE WILD UP-AND-DOWN BEHAVIOR.
McElwee: HE DID NOT CONSIDER THESE MEN WELL-EDUCATED.
THEY WEREN'T. THEY WERE DRIFTERS.
THEY WERE PEOPLE LOOKING FOR A FORTUNE.
¶¶
Narrator: ROCKEFELLER WANTS TO CASH IN ON THE BOOM.
IT MAY NOT AFFECT THEIR BOTTOM LINE,
BUT IT CERTAINLY AFFECTS MINE.
BUT INSTEAD OF SEEING PROFITS, HE SEES PROBLEMS.
IF I AM TO INVEST IN OIL, I'LL DEVISE A FAR BETTER METHOD
OF TRANSPORTATION FROM THE FIELDS.
THE BIGGEST HURDLE FACING THE INDUSTRY
IS MOVING OIL FROM ONE PLACE TO ANOTHER.
¶¶
TOM SCOTT KNOWS THE SOLUTION...
[ INDISTINCT CONVERSATIONS ]
...RAIL.
COME, NOW!
BE QUICK ABOUT IT.
Nelson: TOM SCOTT SEES THE RAILROAD IN EVERYTHING.
FOR HIM, THE RAILROAD
IS THE BEGINNING AND THE END OF THE WORLD.
Narrator: IN THE EARLY 1860s, CRUDE OIL TRAVELS BY BARGE
TO THE EPICENTER OF THIS EXPLODING INDUSTRY --
PITTSBURGH.
THERE, IT'S REFINED INTO KEROSENE
AND HEADS OUT TO MARKET ON TOM SCOTT'S TRAINS.
[ INDISTINCT CONVERSATIONS ]
Nelson: HE'S GONNA MAKE IT AS CHEAP AS POSSIBLE
TO GET ALL THE GOODS TO COME TO PITTSBURGH,
AND THEN MAKE IT AS EXPENSIVE AS POSSIBLE
FOR THOSE GOODS TO FLOW FROM PITTSBURGH ELSEWHERE.
AND THAT'S HOW HE'S GONNA MAKE HIS PROFIT.
McElwee: WANTED IT TO REMAIN THAT WAY
BECAUSE HE'S THE ONLY RAILROAD WHO SERVED PITTSBURGH.
HE HAD IT LOCKED UP.
¶¶
Narrator: IT'S A BATTLE BETWEEN SCOTT IN PITTSBURGH...
AND ROCKEFELLER IN CLEVELAND.
GET THESE OIL BARRELS LOADED, MEN.
-GOT IT? -YEP.
ONE, TWO, THREE.
Nelson: ROCKEFELLER UNDERSTANDS THAT CHEAP LIGHT
IS THE THING THAT HE'S GONNA BRING TO THE REST OF THE WORLD.
MAURICE, OIL IS TREATING US BETTER
THAN ANY OF OUR OTHER COMMODITIES.
OH, AND HE THINKS THAT OIL, JUST OIL,
IS GONNA MAKE A FORTUNE FOR HIM.
Narrator: THEN, ON APRIL 12, 1861,
AN EVENT THAT CHANGES EVERYTHING.
¶¶
FORCES FROM THE SOUTHERN STATES
FIRE ON FORT SUMTER, SOUTH CAROLINA,
IGNITING THE CIVIL WAR.
EVEN WHILE THE CIVIL WAR WAS RAGING,
YOU HAD THIS BOOM ACTIVITY GOING ON
IN WESTERN PENNSYLVANIA AT THE SAME TIME.
[ GUNSHOTS ]
[ MEN SHOUTING, HORSE NEIGHS ]
Narrator: AS THE NATION DESCENDS INTO TURMOIL,
TWO INDUSTRIES EXPLODE --
OIL AND RAIL.
Nelson: TOM SCOTT IMAGINED THE PENNSYLVANIA RAILROAD
AS A WORLD-GIRDLING ENTERPRISE.
ONCE THE CIVIL WAR STARTS,
HE SEES IT AS SOMETHING THAT'S GONNA CONNECT
THE MISSISSIPPI RIVER TO THE EAST COAST
AND THEN THE EAST COAST TO THE WEST COAST.
HIS VISION IS THAT THE PENNSYLVANIA RAILROAD'S
GONNA BE THE CENTER OF THE WORLD,
THE KIND OF MAIN LINE OF AMERICA.
[ TRAIN WHISTLE BLOWING ]
¶¶
Narrator: ROCKEFELLER SEES THINGS DIFFERENTLY --
THAT THE REAL MONEY WILL FLOW FROM A NEW INDUSTRY,
THE DARK ART OF OIL REFINING.
¶¶
IN 1863, THE OPPORTUNITY HE'S BEEN WAITING FOR ARRIVES.
Andrews: GENTLEMEN, GENTLEMEN, MAY I HAVE A WORD?
SAMUEL ANDREWS CAME INTO ROCKEFELLER'S LIFE
WHEN ROCKEFELLER WAS A PARTNER
OF THE CLARK BROTHERS IN CLEVELAND.
GENTLEMEN, I'VE SUCCEEDED IN TURNING CRUDE OIL
INTO A KEROSENE MORE STABLE AND CLEAN-BURNING THAN ANY OTHER.
ANDREWS KNEW HOW TO REFINE CRUDE
AND MAKE A MARKETABLE PRODUCT OUT OF IT.
INVEST WITH ME,
AND TOGETHER, WE WILL REVOLUTIONIZE
THE OIL REFINERY BUSINESS.
HE WAS CRITICAL TO THE ORGANIZATION.
HE HAD THE KNOWLEDGE.
THEY DIDN'T HAVE IT, AND THEY NEEDED IT.
INTERESTING. TELL ME MORE, MR. ANDREWS.
ROCKEFELLER HAD A KIND OF VISION OR A SENSE OR INTUITION
OR A CONVICTION ABOUT THE FUTURE THAT THE CLARKS DIDN'T HAVE.
NO CHANCE.
JOHN AND I TOGETHER DO NOT HAVE MORE THAN $250.
Yergin: ROCKEFELLER WAS FULL OF CONFIDENCE
AND WANTED TO AGGRESSIVELY BUILD THE BUSINESS,
PUT MONEY IN IT, BORROW MONEY, KEEP BUILDING.
OH, I THINK WE CAN SPARE MORE THAN THAT, MAURICE.
PEOPLE LIKE ROCKEFELLER WERE BIG RISK-TAKERS.
WE SHALL PLEDGE $4,000
FOR HALF OF THE WORKING CAPITAL OF THIS NEW REFINING VENTURE.
ROCKEFELLER WAS WILLING TO BET BIG
IN HOPES THAT HE COULD WIN BIG.
WELL, IF JOHN WILL GO IN, I WILL.
¶¶
Narrator: ROCKEFELLER HAS ONE BIG PROBLEM --
HE HAS TO RELY ON RAILWAYS TO BRING THE CREW
TO HIS NEW REFINERY IN CLEVELAND.
[ TRAIN BELL DINGING ]
TOM SCOTT HAS HIS OWN AGENDA.
HE WANTS REFINING TO STAY IN PITTSBURGH
SO HIS RAILWAY REAPS ALL THE PROFIT.
SCOTT AND ROCKEFELLER ARE NOW ON A DIRECT COLLISION COURSE
OVER OIL.
SLASH THE RATES.
¶¶
Narrator: IN THE 1860s, GREAT FORCES ARE SHAPING AMERICA.
[ GUNFIRE ]
[ MEN SHOUTING ]
AS A BLOODY CIVIL WAR TEARS THE NATION APART...
RAILROADS EXPAND FROM EAST TO WEST.
OIL IS CREATING AN INDUSTRY THAT WILL TRANSFORM THE PLANET.
GENTLEMEN, I SEE A GREAT FORTUNE AHEAD OF US.
TWO MEN PLANNING THEIR FORTUNES ARE DESTINED TO CLASH.
I'LL WIPE 'EM OFF THE MAP.
¶¶
West: THE RELATIONSHIP BETWEEN OIL AND RAIL
WAS ABSOLUTELY CRUCIAL IN THE 19th CENTURY,
BECAUSE OIL REFINERS NEEDED RAILROAD LINES
IN ORDER TO TRANSPORT THEIR PRODUCT.
[ TRAIN BELL DINGING ]
Narrator: ROCKEFELLER'S PLAN TO TAKE OVER THE WORLD HAS ONE FLAW --
NO DIRECT RAILROAD TO THE OIL FIELDS.
IN 1863, ONLY MONTHS AFTER HE OPENS
HIS FIRST REFINERY IN CLEVELAND,
ROCKEFELLER GETS A BIG BREAK WHEN HE MEETS THE PRESIDENT
OF THE ATLANTIC AND GREAT WESTERN RAILROAD.
BRIGHT YOUNG MAN. GOOD FAMILY.
SIR, MY NAME IS JOHN D. ROCKEFELLER.
INITIALLY, THE ATLANTIC AND GREAT WESTERN RAILROAD
IS BUILT TO CONNECT THE ATLANTIC COAST TO THE AMERICAN WEST.
ALMOST BY ACCIDENT, THE LINE GOES THROUGH
THE OIL REGIONS OF TITUSVILLE TO THEN JOIN UP WITH CLEVELAND.
I'VE HEARD OF YOU, ROCKEFELLER. TELL ME MORE.
WHEN THE ATLANTIC AND GREAT WESTERN REACHED CLEVELAND
IN 1863, IT OPENED ENORMOUS OPPORTUNITIES
FOR OIL MEN LIKE JOHN D. ROCKEFELLER.
WELL, SIR, I LOOK FORWARD TO FUTURE MEETINGS.
AS DO I.
¶¶
[ TRAIN BELL DINGING ]
[ TRAIN WHISTLE BLOWS ]
Narrator: THE NEW ATLANTIC AND GREAT WESTERN LINE
THREATENS SCOTT'S PLAN
TO KEEP PITTSBURGH AS THE CENTER OF OIL REFINING.
Nelson: FOR TOM SCOTT, PITTSBURGH'S GOT TO BE THE CENTER OF THE WORLD.
ALL THE RAW MATERIALS ARE GOING TO BE BROUGHT INTO PITTSBURGH.
THEY'LL BE REFINED IN PITTSBURGH AND THEN DELIVERED OUT.
CHEAP DELIVERY TO PITTSBURGH, EXPENSIVE DELIVERY OUT.
THAT'S HOW THE PENNSYLVANIA RAILROAD'S
GONNA MAKE ITS FORTUNE.
Narrator: TO STAY COMPETITIVE, SCOTT TALKS STATE OFFICIALS
INTO ALLOWING THE PENNSYLVANIA TO TAKE OVER A SMALL LINE THAT
LEADS INTO THE HEART OF THE OIL REGIONS.
MR. SCOTT, I BELIEVE WE HAVE A DEAL.
AS THE ONLY COMPANY WITH TWO RAIL ROUTES
BETWEEN THE OIL FIELDS AND THE EAST COAST,
THE PENNSYLVANIA RAILROAD WAS NOW IN A VERY POWERFUL POSITION,
ABLE TO STRONGLY INFLUENCE RAILROAD RATES.
AND TO THE HEALTH OF THE GREAT PENNSYLVANIA CENTRAL RAILROAD.
INDEED, SIR.
Narrator: AS SCOTT REGAINS THE UPPER HAND...
ROCKEFELLER'S AGGRESSIVE MOVE INTO OIL
WORRIES HIS PARTNERS, MAURICE CLARK AND HIS BROTHER, JAMES.
WHY, YOU HAVE BORROWED $100,000 WITHOUT EVEN CONSULTING US.
WE HAVE BEEN ASKING TOO MANY LOANS
IN ORDER TO EXTEND THIS OIL BUSINESS.
THE OIL INDUSTRY WAS PART OF A BOOM-AND-BUST ECONOMIC CYCLE.
IT WAS AN EXTRAORDINARILY RISKY BUSINESS.
IF WE ARE PLANNING TO MAKE THIS BUSINESS OUR OWN,
WE MUST EXPAND OUR OPERATION.
THAT TAKES MONEY.
THERE WAS OBVIOUSLY A DIFFERENCE OF OPINION
BETWEEN THE CLARK BROTHERS AND JOHN D. ROCKEFELLER
ON HOW YOU MANAGE THIS ENTERPRISE THAT THEY HAD.
WE SHOULD BORROW
WHENEVER WE CAN SAFELY EXTEND THE BUSINESS BY DOING SO.
WE DO NOT WANT TO OVEREXTEND OUR CREDIT WITH THE BANKS.
¶¶
HE WAS VERY LOW-KEY IN HIS DEMEANOR, HIS PERSONALITY --
COOL, ICY COOL, TOO COOL.
MOST PEOPLE WERE UNCOMFORTABLE WITH IT,
BUT THAT WAS HIS NATURE.
SOMETIMES, MAURICE, AS BUSINESSMEN,
YOU MUST BE PREPARED TO TAKE RISKS,
CALCULATED AS THEY MAY BE,
BUT RISKS THAT WE ARE FOLLOWING THE RIGHT PATH.
ROCKEFELLER IS QUITE PROUD
OF THE FACT THAT HIS PULSE IS 52 BEATS PER MINUTE.
HE WILL NOT LOSE HIS TEMPER.
IF THIS IS THE WAY YOU'D LIKE TO DO BUSINESS,
THEN WE'D BETTER DISSOLVE
SO YOU CAN RUN YOUR OWN AFFAIRS TO SUIT YOURSELF.
¶¶
Narrator: ON FEBRUARY 1, 1865,
ROCKEFELLER INITIATES THE FIRST OF HIS MANY TAKEOVERS.
ROCKEFELLER HAD AN ABILITY TO SEE A BIGGER PICTURE
AND TO SEE THE FUTURE IN A WAY THAT OTHERS COULDN'T.
Narrator: THEY AGREE TO AN IMMEDIATE PRIVATE AUCTION
FOR SOLE CONTROL OF THE ENTIRE BUSINESS.
THE BIDDING BEGINS AT $500 BUT QUICKLY CLIMBS.
WHAT SAY YOU TO $50,000?
$55,000.
$60,000.
$70,000.
¶¶
$72,000.
$72,500.
¶¶
McElwee: ...WHICH WAS A LOT OF MONEY.
$72,500 WAS A LOT OF MONEY.
I GO NO HIGHER, JOHN.
THE BUSINESS IS YOURS.
¶¶
Rockefeller: TODAY IS THE DAY THAT DETERMINES MY CAREER.
I FEEL THE BIGNESS OF IT.
Yergin: WHEN ROCKEFELLER BOUGHT OUT THE CLARKS,
HE KNEW WHAT HE WAS BUYING, BECAUSE HE BUILT UP
WHAT BECAME THE BIGGEST REFINERY IN CLEVELAND,
WHICH GAVE HIM A DOMINATING POSITION IN THAT CITY.
Narrator: ROCKEFELLER COULD NOT HAVE TIMED HIS TAKEOVER BETTER.
¶¶
TWO MONTHS LATER, IN APRIL 1865,
THE CIVIL WAR ENDS
WHEN ROBERT E. LEE SURRENDERS TO GRANT.
OIL IS ABOUT TO BECOME VERY BIG BUSINESS.
¶¶
ROCKEFELLER AND SCOTT
TURN TO CUTTHROAT TACTICS AND BACKROOM DEALS...
NO CONTRACTS.
...TO COMPETE FOR INDUSTRIAL DOMINATION.
¶¶
Narrator: AFTER THE END OF THE CIVIL WAR,
THE AMERICAN ECONOMY FORGES AHEAD.
OIL, STEEL, AND RAILROADS ARE DRIVING A REVOLUTION.
THE PERIOD RIGHT AFTER THE CIVIL WAR
WAS THE ERA OF INDUSTRIALIZATION.
WE WERE BUILDING THE RAILROADS.
THE COUNTRY WAS EXPANDING OUT TO THE WEST COAST.
THERE WERE ENORMOUS OPPORTUNITIES TO MAKE MONEY.
Narrator: JOHN D. ROCKEFELLER IS PERFECTLY PLACED TO BUILD A FORTUNE.
PEOPLE WANT THE LUXURY OF LIGHT.
KEROSENE IS NOW A HOUSEHOLD COMMODITY.
Yergin: YOU'D GET OIL OUT OF THE GROUND,
BUT YOU COULDN'T USE IT IN A LAMP.
YOU HAD TO REFINE IT INTO SOMETHING
AND REFINE IT INTO KEROSENE.
TO DO THAT, YOU HAD TO BUILD A REFINERY.
Narrator: IN 1865, ROCKEFELLER'S CLEVELAND REFINERY ROLLS OUT 500 BARRELS
OF HIGH-QUALITY REFINED OIL EVERY DAY,
THANKS TO CHEMIST SAM ANDREWS,
WHOSE KEROSENE STANDS OUT FROM ALL THE REST.
Nelson: THE KEROSENE DOES NOT BREAK DOWN.
EVERY OTHER KIND OF REFINER
PRODUCES SOMETHING THAT'S PARTIALLY NAPHTHENE,
PARTIALLY THIS OTHER VISCOUS SUBSTANCE.
IT'S ALL MIXED TOGETHER AND THEN SOLD AS A LANTERN.
THAT'S A RECIPE FOR DISASTER. ONCE THAT THING FALLS OVER,
IF IT'S LIT, IT'LL SET A HOUSE ON FIRE.
JOHN D. ROCKEFELLER HAS A BETTER PRODUCT
THAN ANY OTHER OF THE REFINERS IN PITTSBURGH.
Narrator: IN 1867, ROCKEFELLER BRINGS HENRY FLAGLER
TO INSPECT HIS BUSINESS.
COME MEET SAM ANDREWS, OUR CHIEF CHEMIST.
Narrator: LIKE ROCKEFELLER, FLAGLER IS AN ENTREPRENEUR.
ONE OF HIS EARLIEST VENTURES WAS DISTILLING ALCOHOL.
REMARKABLE.
THIS IS QUITE AN OPERATION YOU BOTH HAVE.
I'M IMPRESSED.
MR. FLAGLER, IF I MAY, AFTER WE CONDENSE...
Nelson: REFINING OIL IS JUST DISTILLING IT,
THAT YOU HEAT UP CRUDE OIL,
AND YOU BREAK IT OFF INTO THESE VARIOUS FRACTIONS.
AND THAT'S HOW YOU GET KEROSENE.
AND FLAGLER, COMING FROM A DISTILLERY,
KNOWS THAT BUSINESS WELL.
Narrator: FLAGLER SEES THE POTENTIAL.
HE INVESTS $100,000.
EFFICIENCY, HENRY. YOU KNOW ME.
AND WITH YOUR HELP, THIS ONE REFINERY
WILL BECOME THE BUILDING BLOCK OF AN EMPIRE.
Narrator: ROCKEFELLER, ANDREWS, AND FLAGLER ARE OPEN FOR BUSINESS.
¶¶
AS ROCKEFELLER'S BUSINESS GROWS, SCOTT GOES ON THE ATTACK.
Scott: IT'S QUITE SIMPLE, REALLY.
REFINERS THAT SET UP IN THE OIL REGIONS HAVE ALL THE POWER.
IN 1868, SCOTT STARTS A SMEAR CAMPAIGN
AGAINST CLEVELAND'S REFINERS.
HOW'S THAT, MR. SCOTT?
THEY NEED ONLY SHIP THEIR KEROSENE EAST.
CLEVELAND REFINERS HAVE NOTHING.
HIS PLAN -- TO PAINT CLEVELAND AT A GEOGRAPHICAL DISADVANTAGE.
THEY MUST PAY FOR BOTH THE SHIPMENT OF CRUDE
AND KEROSENE OVER A GREATER DISTANCE.
Nelson: TOM SCOTT LETS IT BE KNOWN
THAT HE BELIEVES THAT CLEVELAND OIL REFINERS WILL FAIL,
THAT THEY CAN'T SUCCEED.
SURELY, THEY WILL BE WIPED OUT AS A REFINING CENTER
AS WITH A SPONGE.
WELL, PERHAPS SO, SIR.
AND HE BELIEVES THAT THEIR RESPONSE TO THIS
IS TO ABANDON CLEVELAND.
[ TRAIN BELL DINGING ]
Scott: THE NEWSPAPERS WILL STRIKE FEAR INTO THE HEARTS
OF THE CLEVELAND REFINERS AND THE RAILROADS THAT SERVE THEM.
I WILL TAKE BACK THE OIL TRAFFIC AND CONTINUE TO EXPAND.
WHAT IT ACTUALLY DOES IS PRECISELY THE OPPOSITE.
McElwee: WHEN ROCKEFELLER HEARD ABOUT TOM SCOTT'S COMMENT
THAT HE WAS GONNA WIPE CLEVELAND OFF THE MAP
AS A REFINING CENTER,
HE DID WHAT MOST RED-BLOODED MEN WOULD DO.
[ CHUCKLES ] HE SAID, "OH, YEAH?"
HE TOOK IT AS A CHALLENGE, WHICH IT WAS.
¶¶
Narrator: ROCKEFELLER USES SCOTT'S THREATS AGAINST HIM
AND GOES TO HIS MAIN COMPETITORS.
HOW DARE THEY THREATEN US LIKE THIS!
JAY GOULD IS THE OWNER OF THE ERIE RAILROAD
AND RELIES ON REFINERS PAYING TO SHIP OIL FROM CLEVELAND.
MR. GOULD, THIS COULD BE AN OPPORTUNITY FOR THE ERIE
LIKE NO OTHER.
Churella: JAY GOULD HAD JUST TAKEN CONTROL OF THE ERIE RAILROAD.
AND IN 1868, THE ERIE LEASED THE ATLANTIC AND GREAT WESTERN,
PAYING EXORBITANT CHARGES TO DO SO.
Narrator: THE LAST THING HE CAN AFFORD NOW IS TO LOSE BUSINESS.
OPPORTUNITY?
IT STANDS YOU IN HAND TO BETTER MIND OUR BUSINESS, ROCKEFELLER.
Churella: GOULD WAS DESPERATE FOR TRAFFIC
AT THE SAME TIME THAT ROCKEFELLER WAS DESPERATE
TO SECURE FREIGHT RATES LOW ENOUGH
TO PREVENT CLEVELAND FROM BEING WIPED OFF THE MAP LIKE A SPONGE.
IF THE CLEVELAND REFINERS MOVE TO OIL CREEK,
WE WILL LOSE ALL THEIR FREIGHT BUSINESS TO THE PENNSYLVANIA.
ROCKEFELLER WAS VERY GOOD AT NEGOTIATING WITH OTHER PEOPLE
AND SIZING THEM UP.
NOT IF WE CAN AGREE TO A DEAL
WHEREBY I GUARANTEE THE ERIE ENOUGH OIL TRAFFIC
THAT YOU WILL NEED NO OTHER REFINERS.
HE COULD WALK INTO A ROOM, START TALKING WITH SOMEONE,
AND IMMEDIATELY GET A GOOD SENSE
OF WHO THEY ARE AND WHAT MOTIVATED THEM.
PERHAPS WE COULD COME TO SOME SPECIAL AGREEMENT.
¶¶
HE COULD NEGOTIATE VERY EFFECTIVELY...
GOOD DAY, MR. GOULD.
...BECAUSE HE UNDERSTOOD WHAT THE OTHER PERSON NEEDED
IN ORDER TO GET THE DEAL.
¶¶
VICE PRESIDENT OF THE LAKE SHORE RAILROAD, J.H. DEVEREUX,
ALSO FEELS THREATENED BY SCOTT'S COMPETING RAILROAD.
-BUT I HAVE A PLAN -- -HOW CAN WE POSSIBLY COMPETE?
CLEVELAND IS FURTHER FROM THE OIL FIELDS THAN PITTSBURGH
AND FURTHER STILL FROM THE EAST COAST.
OUR PLAN IS TO CONSOLIDATE THE REFINERIES AND SAVE CLEVELAND.
BUT WE MUST BEAT TOM SCOTT AT HIS OWN GAME.
Churella: DEVEREUX OFFERED ROCKEFELLER EXCEEDINGLY LOW RATES.
AND IN EXCHANGE, ROCKEFELLER OFFERED DEVEREUX
A GUARANTEED SOURCE OF TRAFFIC, A HUGE VOLUME OF TRAFFIC.
IF WE CAN AGREE ON A FAIR RATE,
I WILL GUARANTEE 60 CARLOADS OF REFINED OIL DAILY.
GUARANTEED?
THEN I BELIEVE WE CAN DO BUSINESS.
Narrator: ROCKEFELLER COMPLETELY OUTMANEUVERS TOM SCOTT.
I WILL DO YOU $1.65 FOR CRUDE OR REFINED.
Nelson: HE ENDS UP HAVING TO BUY FINISHED OIL
FROM HIS COMPETITORS.
BUT WHAT THIS ALLOWS HIM TO DO
IS TO GET THE BEST DEAL YOU CAN IMAGINE.
OUR PEOPLE DO NOT THINK IT WOULD BE BEST
IF LAKE SHORE ROAD OR US HAD A CONTRACT.
Churella: NEITHER ROCKEFELLER NOR THE RAILROADS
WANTED TO KEEP WRITTEN RECORDS
OF THE REBATES THAT THEY OFFERED.
NO CONTRACTS.
IF OTHER SHIPPERS FOUND OUT ABOUT THEM,
THEY COULD DEMAND SIMILAR REBATES
AND EVEN THREATEN TO GO TO COURT.
¶¶
Narrator: WITH HIS SECRET DEAL IN PLACE,
ROCKEFELLER TURNS TO HIS NEXT PROBLEM --
VOLATILE OIL PRICES.
Yergin: AT THE END OF THE 1860s,
THE OIL INDUSTRY WAS IN BIG TROUBLE.
IT WAS SUFFERING FROM OVERPRODUCTION
SO THAT THE PRICE OF OIL HAD COLLAPSED.
AND THERE WAS ALSO AN INCREDIBLE OVERBUILDING OF REFINERIES.
¶¶
Narrator: AS A RESULT, ROCKEFELLER'S PROFITS ARE SUFFERING.
WE NEED TO DO SOMETHING TO SAVE THE OIL INDUSTRY FROM ITSELF.
HE NEEDS A NEW STRATEGY.
THE OVERDEVELOPMENT OF THE REFINING INDUSTRY
HAS CREATED RUINOUS COMPETITION.
HE SAW GREAT OVERCAPACITY, GREAT INEFFICIENCY.
WE NEED TO BUY UP THE MANY REFINERIES
THAT ARE A SOURCE OF OVERPRODUCTION AND CONFUSION.
AND BASICALLY, THE REFINERS WERE KILLING EACH OTHER,
UNDERCUTTING EACH OTHER, BECAUSE THEY WEREN'T MAKING ANY MONEY.
AND ONCE WE CONTROL THEM, WE CAN CONTROL PRODUCTION LEVELS.
WHAT WE NEED IS A GREAT DEAL OF MONEY.
¶¶
Narrator: FLAGLER SHOWS HIS BUSINESS BRILLIANCE.
WE SHALL INCORPORATE.
Yergin: ONE OF THE IDEAS THAT, REALLY, FLAGLER HELPED TO BRING FORWARD
WAS TO MOVE BEYOND A PARTNERSHIP AND CREATE A COMPANY WITH STOCK,
BUT MAINTAIN WHAT ROCKEFELLER WANTED, WHICH WAS CONTROL.
I WISH I HAD THE BRAINS TO THINK OF IT.
¶¶
Narrator: ONCE INCORPORATED, THEY CAN SELL SHARES TO RAISE THEIR CAPITAL.
THEY NAME THE COMPANY STANDARD OIL.
West: THE CORPORATION WAS AN IMPORTANT CONCEPT FOR WEALTH CREATION,
BECAUSE IT ALLOWED PEOPLE TO POOL THE MONEY
AND POOL THE RISK TO A CERTAIN EXTENT,
BUT STILL ENABLE A LOT OF WEALTH CREATION IN THE PROCESS.
Yergin: IT TURNED OUT THAT THIS IDEA OF ISSUING STOCK WORKED VERY WELL.
HERE, THIS GENTLEMAN IS PURCHASING 50 SHARES!
WITHIN 2 YEARS, THE VALUE OF STANDARD OIL
WENT FROM $1 MILLION TO $3.5 MILLION...
I HAVE ONE WANTING 70 SHARES.
...WHICH, IN THOSE YEARS, WAS A LOT OF MONEY.
¶¶
Narrator: NOW ROCKEFELLER IS POISED TO TAKE OVER THE ENTIRE INDUSTRY.
TOM SCOTT HAS OTHER IDEAS.
SLASH THE RATES.
¶¶
Narrator: IN 1870, JOHN D. ROCKEFELLER INCORPORATES
AND FORMS THE JUGGERNAUT STANDARD OIL.
MONEY ROLLS IN.
ROCKEFELLER'S DEALS WITH THE RAILROADS
HAVE MADE CLEVELAND A REFINING CENTER.
¶¶
IN PITTSBURGH, TOM SCOTT IS LOSING MONEY
FROM OVER-COMPETITION.
Churella: TOM SCOTT WAS DESPERATE TO END THE CYCLE
OF RISING AND FALLING RAILROAD RATES
AND THE CYCLE OF CREATING CARTELS
ONLY TO SEE THEM TORN APART BY EXCESS COMPETITION.
¶¶
[ TRAIN WHISTLE BLOWS ]
Narrator: IN 1871, TOM SCOTT MASTERMINDS AN ELABORATE SCHEME
TO END THE FREIGHT RATE WARS AND STABILIZE OIL PRICES.
TOM SCOTT STARTS TO UNDERSTAND
THAT JOHN D. ROCKEFELLER IS A FORCE TO BE RECKONED WITH.
HE'S GOT A CORPORATION THAT'S CAPITALIZED IN MILLION DOLLARS.
HE'S GOT INVESTORS FLOWING IN.
AND TOM SCOTT REALIZES
THAT HE HAS TO CHANGE THE WAY THAT HE WORKS WITH ROCKEFELLER.
Narrator: SCOTT INVITES THE RAILROADS, STANDARD OIL,
AND SELECT REFINERS TO JOIN A SECRET ALLIANCE
CALLED THE SOUTH IMPROVEMENT COMPANY.
Churella: OIL REFINERS WHO WERE INVITED TO JOIN,
PRINCIPALLY THOSE IN CLEVELAND AND IN PITTSBURGH,
BUT NOT IN THE OIL REGIONS,
WOULD RECEIVE PREFERENTIAL RATES ON THE RAILROADS.
SO WE CONTROL THE RATES.
WE CONTROL THE NUMBER OF CARS. WE CONTROL THE SHIPMENTS.
IF WE CAN DO THAT,
WE CAN CONTROL THE FUTURE OF RAILROAD
IN THIS PART OF THE COUNTRY FOR DECADES.
Narrator: IT'S THE ULTIMATE GAME OF PREFERENTIAL TREATMENT.
Yergin: ROCKEFELLER DIDN'T WASTE ANY TIME
DURING THE SOUTH IMPROVEMENT SCHEME.
WHILE IT WAS GOING ON,
HE WAS VERY BUSY BUYING UP THE REFINERIES IN CLEVELAND.
Narrator: WITH THE DISCOUNTED SHIPPING RATES INTACT,
ROCKEFELLER BUYS UP 22 OF CLEVELAND'S 26 REFINERIES.
HE SWINGS THE SOUTH IMPROVEMENT COMPANY LIKE AN AX.
IT'S KNOWN AS THE CLEVELAND MASSACRE.
YOU SEE, THE SOUTH IMPROVEMENT SCHEME IS BOUND TO WORK.
IT MEANS AN ABSOLUTE CONTROL BY US OF THE OIL BUSINESS.
THERE IS NO CHANCE FOR ANYONE ON THE OUTSIDE.
BUT WE WILL GIVE EVERYBODY A CHANCE TO COME IN.
¶¶
I WILL GIVE YOU STANDARD OIL COMPANY STOCK OR CASH,
AS YOU PREFER, FOR THE VALUE WE PUT UPON IT.
I ADVISE YOU TO TAKE THE STOCK.
¶¶
TAKE STANDARD OIL STOCK,
AND YOUR FAMILY WILL NEVER KNOW WANT.
VERY WELL, MR. ROCKEFELLER. YOU HAVE A DEAL.
YOU MAY BUY MY REFINERY
IN EXCHANGE FOR STOCK IN STANDARD OIL.
EXCELLENT.
West: HE UNDERSTOOD THAT IF YOU BOUGHT UP A LOT OF YOUR COMPETITORS,
BUILT MONOPOLY POWER, YOU COULD THEN SET THE PRICE.
AND SO THAT WOULD ALLOW HIM TO MAXIMIZE HIS PROFITS.
THANK YOU, SIR.
AND THAT REALLY PROPELLED HIS WEALTH.
¶¶
Narrator: BY MARCH 1872,
OIL REFINING IN CLEVELAND BELONGS TO ROCKEFELLER.
¶¶
WHEN WORD ABOUT THE SOUTH IMPROVEMENT COMPANY GETS OUT,
THINGS TURN DARK AND DANGEROUS.
Yergin: WHEN THE SOUTH IMPROVEMENT COMPANY BECAME KNOWN,
IT CREATED MASSIVE COMMOTION IN TITUSVILLE.
ALL THE PRODUCERS CONVERGED,
DENOUNCING THE SOUTH IMPROVEMENT COMPANY,
BUT DENOUNCING, IN PARTICULAR, JOHN D. ROCKEFELLER.
THEY'RE INCREDIBLY ANGRY AT THIS INSTITUTION.
Narrator: A DAILY BLACKLIST IS PUBLISHED
NAMING ALL THE SOUTH IMPROVEMENT CONSPIRATORS.
McElwee: AND ANYBODY WHO APPEARED ON THAT BLACKLIST,
YOU WERE SUBJECT TO AT LEAST VANDALISM OF YOUR PROPERTY.
AND IF YOU WERE THE TYPICAL PRODUCER IN THOSE DAYS,
YOU OWED THE BANK FOR THOSE.
THAT RUINED YOU.
HERE'S YOUR OIL, MR. ROCKEFELLER.
Narrator: ANGER IN THE OIL FIELDS FLARES INTO VIOLENCE.
HOPE YOU GET A GOOD PRICE FOR IT.
IT WAS THE RAILROADS THAT CAME UP WITH THE IDEA
OF THE SOUTH IMPROVEMENT COMPANY.
AND THIS IS WHAT INFLAMED THE OIL REGIONS.
BUT IT WAS ROCKEFELLER WHO WAS BLAMED FOR IT.
Narrator: ROCKEFELLER BECOMES A HOUSEHOLD NAME...
BUT IS SEEN AS ENEMY NUMBER ONE.
[ ALL CLAMORING ]
West: ROCKEFELLER BECAME A TARGET.
LIKE, PEOPLE WERE UPSET WITH HIS BUSINESS PRACTICES.
THERE WERE A LOT OF NEGATIVE PRESS STORIES ABOUT HIM.
[ CLAMORING CONTINUES ]
Nelson: TOM SCOTT ENDS UP SMELLING LIKE A ROSE.
AND JOHN D. ROCKEFELLER ENDS UP WITH A BLACK EYE.
Narrator: DESPITE HIS IMAGE TAKING A BEATING,
ROCKEFELLER IS ABOUT TO BE GIVEN A HUGE OPPORTUNITY.
¶¶
IN 1873, AMERICA'S ECONOMY IS BOOMING.
[ TRAIN WHISTLE BLOWS ]
33,000 MILES OF NEW TRACK
ARE LAID ACROSS THE COUNTRY BETWEEN 1868 AND 1873.
BUT TROUBLE IS BREWING.
EXTRA, EXTRA! READ ALL ABOUT IT!
WHAT STARTED OUT AS A CASH CRISIS IN EUROPE
QUICKLY SPREADS TO AMERICA.
BY SEPTEMBER, BANKS START FAILING.
BUSINESSES GO UNDER.
THE ECONOMY GOES BUST.
West: THE PANIC OF 1873
WAS ONE OF OUR COUNTRY'S WORST ECONOMIC DEPRESSIONS.
IT LASTED FOR SIX YEARS
AND ALMOST BROUGHT AMERICAN CAPITALISM TO ITS KNEES.
¶¶
Narrator: RAILROADS GO BANKRUPT.
OIL'S CHEAPER THAN WATER.
REFINERIES ACROSS THE COUNTRY ARE UP FOR GRABS.
Yergin: EVERYBODY'S FINANCES WERE IN PERILOUS CONDITION
EXCEPT ROCKEFELLER.
AND ROCKEFELLER PUT THAT CRISIS TO VERY GOOD USE BY USING IT
TO CONTINUE TO CONSOLIDATE REFINERIES IN OTHER CITIES,
BUILDING UP TO HIS GOAL OF CONTROLLING AMERICAN REFINING.
Rockefeller: THE WAY TO MAKE MONEY
IS TO BUY WHEN BLOOD IS RUNNING IN THE STREETS.
Narrator: ROCKEFELLER GOES ON A BUYING SPREE.
PROBLEM WAS THAT IT WAS ILLEGAL TO OWN REFINERIES IN OTHER STATES.
SO WHAT HE WOULD DO IS SECRETLY ACQUIRE CONTROL
OF THE LARGEST OR ONE OF THE BEST REFINERIES IN THE CITY,
USE THAT REFINERY TO BUY UP OTHER REFINERIES IN THAT CITY,
BUT THE REAL OWNERSHIP OF EVERYTHING
WOULD SECRETLY GO BACK TO STANDARD OIL.
¶¶
Narrator: STANDARD OIL NOW HAS A MONOPOLY IN REFINING,
BUT ROCKEFELLER WANTS EVEN MORE.
West: WHAT ROCKEFELLER DID WAS TO SPECIALIZE
IN BOTH HORIZONTAL AS WELL AS VERTICAL INTEGRATION.
HE WOULD DIVERSIFY INTO OIL PIPELINES,
OIL CARS ON THE RAILROADS, AND TRANSPORTATION.
THAT'S THE RECIPE FOR WEALTH CREATION.
Narrator: THE MONEY IS IN PIPELINES.
MOVING OIL THROUGH PIPELINES INSTEAD OF OVER RAILS
THREATENS TOM SCOTT,
WHO RELIES HEAVILY ON PROFITS FROM RAIL SHIPMENTS OF OIL.
Scott: DAMN ROCKEFELLER.
GETTING INTO THE OIL TRANSPORT BUSINESS
WILL ONLY GIVE HIM YET MORE POWER TO DICTATE RATES.
I MUST STOP HIM.
¶¶
Narrator: SCOTT PULLS OUT THE BIG GUNS.
LOOKING GOOD, MEN!
JOSEPH POTTS, OWNER OF EMPIRE TRANSPORTATION,
IS A TITAN EQUAL IN POWER TO ROCKEFELLER.
WHOA, WHOA. RIGHT HERE, RIGHT HERE. BRING IT DOWN.
IN 1877, POTTS OWNS THOUSANDS OF TANK CARS, STEAMSHIPS,
AND OIL TERMINALS.
THERE ARE THREE GREAT DIVISIONS IN THE PETROLEUM BUSINESS --
DRILLING, TRANSPORTATION, AND REFINING.
WHEN NEW OIL FIELDS OPEN UP, SCOTT WANTS POTTS
TO BUILD UP REFINERIES AND SQUEEZE ROCKEFELLER OUT.
HE COULD WIPE US OUT.
SO, WHAT DO YOU PROPOSE?
WE SHALL FORCE THIS TYRANT TO HIS KNEES AND MAKE HIM BEG.
Nelson: TOM SCOTT AND POTTS UNDERSTAND
THAT ROCKEFELLER IS HATED, IS DESPISED ON THE OIL FIELD.
AND SO THEY BELIEVE THAT BY APPROACHING THE DRILLERS,
THAT THEY CAN GET THEM TO TURN AGAINST STANDARD OIL.
WE CANNOT ALLOW STANDARD TO BE THE ONLY SHIPPER OF OIL.
YOU MUST BUILD UP YOUR REFINERIES
IN COMPETITION WITH STANDARD.
THE PENN WILL SUBSIDIZE YOU.
AGREED.
HE TRIES TO CLOSE STANDARD OIL OUT.
THE DRILLERS WILL COME IN WITH US.
THEY WOULD TAKE GREAT JOY
IN TURNING MR. ROCKEFELLER'S MONEY AWAY.
POTTS REASONED THAT HE COULD BUY OIL FROM THE INDEPENDENTS
AND MOVE IT TO THE EAST COAST FOR REFINING
INDEPENDENT OF ROCKEFELLER'S DRILLING, REFINING,
AND TRANSPORTATION NETWORKS.
Narrator: JOSEPH POTTS AGREES TO START BUILDING REFINERIES
BECAUSE HE AND SCOTT FEAR STANDARD OIL
BECOMING THE NATION'S ONLY REFINERY.
¶¶
ROCKEFELLER DEMANDS A MEETING.
McElwee: ROCKEFELLER SAW IT AS A THREAT TO WHAT HE HAD BEEN DOING.
HERE, I HAVE GONE OUT OF MY WAY
TO BE FRIENDLY TO THE PENNSYLVANIA
IN THE ALLOTMENT OF OIL SHIPMENTS.
ROCKEFELLER CALLS POTTS A PIRATE.
AND NOW YOU ARE PERMITTING YOUR ASSOCIATE, COLONEL POTTS,
ACTUALLY TO INVADE THE CENTRAL ASSOCIATION'S FIELD.
WHY, IT'S NOTHING LESS THAN PIRACY.
STANDARD OIL HAS GOT THE FINANCIAL POWER
TO DESTROY THE PENNSYLVANIA RAILROAD,
AND HE'S READY TO MAKE IT HAPPEN.
YOU MUST CALL OFF YOUR POACHER POTTS.
YOUR WORDS SURPRISE ME, ROCKEFELLER.
THE EMPIRE OPERATES OF ITS OWN ACCORD
AND NOT BY THE DICTATES OF THE PENNSYLVANIA.
Narrator: IT'S A DECLARATION OF WAR.
WELL, THEN, YOU LEAVE ME NO CHOICE.
GOOD DAY, MR. SCOTT.
¶¶
VERY WELL, THEN.
Nelson: JOHN D. ROCKEFELLER'S RESPONSE IS DRASTIC.
IT IS TO CLOSE DOWN, TO STOP REFINING IN PITTSBURGH.
YOU, ARE YOU THE FOREMAN?
-I WANT THIS PLACE SHUT DOWN. -SIR?
DID I MINCE MY WORDS? I SAID SHUT DOWN THE REFINERY.
DO NOT SHIP ONE BARREL OF KEROSENE OUT OF HERE.
YES, SIR.
Narrator: WITHOUT ROCKEFELLER'S REFINERIES SHIPPING ANY OIL,
SCOTT'S ABOUT TO LOSE BIG PROFITS.
McElwee: ALL OF THAT REVENUE WAS TAKEN AWAY FROM SCOTT.
IT WAS DEVASTATING.
Narrator: SCOTT'S PLOY BACKFIRES BIG TIME.
NOW HIS RAILROAD IS IN SERIOUS TROUBLE.
Nelson: THE RESPONSE ON THE PART OF SCOTT
IS TO DOUBLE THE SIZE OF THE TRAINS.
HE MAKES PEOPLE WORK EXTRA HOURS.
HE'S FACING A CASH CRUNCH,
AND SO HE CUTS RAILROAD WORKERS' PAY BY 10%.
HOW MANY HOURS IN A DAY?
[ ALL GRUMBLING ]
Narrator: WORKERS STRIKE.
¶¶
THE STAGE IS SET
FOR THE BLOODY SHOWDOWN BETWEEN THESE TWO TITANS.
[ MEN SHOUTING, GUNSHOT ]
¶¶
Narrator: BY 1877,
THE GILDED AGE IS TRANSFORMING AMERICAN INDUSTRY.
ONLY THE CHEAPEST AND BEST SURVIVE.
SO, WHAT DO YOU PROPOSE?
TOM SCOTT ENCOURAGES TRANSPORT BARON JOSEPH POTTS
TO GO HEAD-TO-HEAD WITH ROCKEFELLER.
WE SHALL FORCE THIS TYRANT TO HIS KNEES AND MAKE HIM BEG.
ROCKEFELLER RESPONDS WITH VENGEANCE.
YOU, I WANT THIS PLACE SHUT DOWN.
FIRST THING HE DID, HE SHUT DOWN THE PITTSBURGH REFINERIES.
AND BY SHUTTING DOWN THE PITTSBURGH REFINERIES,
HE DENIED ALL THAT OIL FREIGHT BUSINESS
TO THE PENNSYLVANIA RAILROAD.
[ TRAIN WHISTLE BLOWS ]
IT WAS HUGE!
Narrator: WITHOUT OIL TO SHIP, SCOTT LOSES MILLIONS.
Scott: DAMN ROCKEFELLER.
Narrator: ROCKEFELLER MOVES IN FOR THE KILL.
BUY UP ALL THE OIL ON THE MARKET.
PAY WHATEVER IS NECESSARY,
BUT DO NOT LET ONE DROP BE SOLD TO EMPIRE.
IN THE END, THE BATTLE BETWEEN TOM SCOTT AND THE EMPIRE LINE
AND ROCKEFELLER AND STANDARD OIL
CAME DOWN TO WHO HAD THE DEEPEST POCKETS.
POTTS WILL BE BROUGHT TO HIS KNEES.
[ MEN GRUMBLING ]
Narrator: IN 3 MONTHS, THE PENNSYLVANIA LOSES $1 MILLION IN REVENUE.
SCOTT FIRES HUNDREDS OF WORKERS AND SLASHES SALARIES.
THINGS GET UGLY.
[ MEN SHOUTING ANGRILY ]
Churella: THE PENNSYLVANIA RAILROAD HEMORRHAGED MONEY.
IT WAS FORCED TO CUT WAGES,
ALL OF WHICH CONTRIBUTED TO GROWING WORKER UNREST
THAT CULMINATED IN A MASSIVE STRIKE IN THE SUMMER OF 1877.
[ SHOUTING CONTINUES ]
AND OVER THE NEXT FEW DAYS,
THERE WAS WIDESPREAD LOOTING, ARSON ATTACKS,
THE BURNING OF PENNSYLVANIA RAILROAD FACILITIES.
Man: LET'S BURN THE RAILROAD! DAMN SCOTT!
THEY WERE ANY NUMBER OF PEOPLE WHO HAD BEEN MADE ANGRY
BY THE ECONOMIC CONDITIONS.
[ SHOUTING ]
Narrator: THE GREAT RAILROAD STRIKE OF 1877
BECOMES ONE OF THE BLOODIEST LABOR BATTLES
IN AMERICAN HISTORY.
AND IT WAS REALLY DIRECTLY CONNECTED
TO TOM SCOTT'S WAR WITH JOHN D. ROCKEFELLER,
TRYING TO SQUEEZE THE WORKERS JUST A LITTLE BIT TOO MUCH
IN HIS BATTLE WITH ROCKEFELLER.
[ MEN SHOUTING ]
[ GUNSHOTS ]
¶¶
Narrator: BY THE TIME IT'S OVER, 20 MEN ARE DEAD...
THE DAMAGE, IN THE MILLIONS.
Churella: THE RIOTS OF 1877 COST THE PENNSYLVANIA RAILROAD
SOMETHING IN THE ORDER OF $5 MILLION IN PHYSICAL DAMAGE
AND IN LOST REVENUE FROM THE LINES BEING CLOSED.
¶¶
THERE WAS NO CHOICE
BUT FOR THE PENNSYLVANIA RAILROAD TO CAPITULATE.
Narrator: DESPERATE FOR FUNDS,
SCOTT DECIDES TO LIQUIDATE POTTS' EMPIRE LINE.
ROCKEFELLER IS THE ONLY BUYER.
Churella: AND SO TOM SCOTT STRUCK A DEAL WITH JOHN D. ROCKEFELLER.
Flagler: OH, I DO NOT IMAGINE THIS WILL SIT WELL WITH MR. POTTS.
SCOTT IS DEMANDING THAT ALL OF EMPIRE'S HOLDINGS ARE SOLD.
Nelson: AND THE DEAL IS THAT JOHN D. ROCKEFELLER
HAS TO BUY ALL OF EMPIRE TRANSPORTATION COMPANY,
ALL THE CARS, ALL THE TUGBOATS, ALL THE DOCKS,
ALL THE STEAMSHIPS THAT RUN ACROSS THE ATLANTIC,
THE WHOLE KIT AND KABOODLE FOR $3.4 MILLION.
BUT I SEE SCOTT IS NOT MAKING IT EASY ON THE PAYMENT AGREEMENT.
IT WILL TAKE SOME DOING TO RAISE THE NECESSARY CAPITAL.
¶¶
Narrator: SCOTT HAS ONE CARD LEFT TO PLAY.
ROCKEFELLER MUST MAKE THE FIRST PAYMENT
OF $2.5 MILLION IN JUST 24 HOURS.
NOBODY THOUGHT THAT ROCKEFELLER COULD RAISE THE MONEY.
MR. JENKINS. MR. JENKINS!
YOU CANNOT DAWDLE HERE. I NEED IT ALL.
IT'S A TESTAMENT TO THE FAITH THAT THE BANKERS
OF CLEVELAND PARTICULARLY HAD IN JOHN D. ROCKEFELLER.
GIVE ME WHAT YOU HAVE. I MUST CATCH THE NOON TRAIN.
YOU CAN COUNT ON US.
HE RAISED $3 MILLION IN SOMETHING LIKE 24 HOURS,
$3 MILLION IN CASH.
THANK YOU.
Narrator: ROCKEFELLER'S ABILITY TO RAISE SUCH A HUGE SUM
STUNS THE BUSINESS WORLD.
Churella: BY 1877,
ROCKEFELLER WAS POISED TO BE
NOT JUST THE DOMINANT OIL MAN IN THE UNITED STATES,
BUT THE DOMINANT OIL MAN IN THE WORLD.
Narrator: ROCKEFELLER NOW CONTROLS 90% OF AMERICA'S REFINED OIL BUSINESS.
AT THE AGE OF 40, HE'S AMONG THE NATION'S 20 RICHEST MEN.
Churella: AT THE SAME TIME,
SCOTT'S CAREER WAS NEARLY AT ITS END,
AND HE WAS IN ILL HEALTH.
HE RESIGNED THE PRESIDENCY IN 1880
AND DIED THE FOLLOWING YEAR A MAN STILL IN HIS 50s.
McElwee: THERE WAS NO ONE WHO DID WHAT ROCKEFELLER DID
ON THE SCALE THAT HE DID,
CREATED WHAT BECAME THE BASIS OF THE MODERN GLOBAL OIL INDUSTRY
AND TURNED IT INTO A GLOBAL ENTERPRISE.
¶¶
Narrator: IN THE 1880s, ELECTRICITY AND THE LIGHT BULB
CAUSE KEROSENE SALES TO PLUMMET.
FORTUNATELY FOR ROCKEFELLER, THE AUTOMOBILE INDUSTRY
IS ABOUT TO MAKE OIL REFINING EVEN MORE PROFITABLE.
GASOLINE WILL TRANSFORM THE PLANET
AND SEND ROCKEFELLER'S FORTUNE INTO OVERDRIVE.
AT THE AGE OF 97, JOHN D. ROCKEFELLER DIES
AS THE WORLD'S RICHEST MAN.