THE WORLDS RICHEST MEN, and how they are all interconnected - Part 2. Previously we saw how Vanderbilt grew a business of the biggest shipping industry in the US, only to sell everything and go into the railroad business, growing it to become the biggest railraod company, making him the richest man in America. When he was flawwed out of millions by buying waterdowned stock of his competitors company he searched for new ways to stay on top. Oil was refined into kerosene which was a light source to homes and a struggeling refiner, Rockerfeller, had a refinery right next to one of his railroad lines. ROCKERFELLER Vanderbilt invited struggeling oil refiner Rockerfeller to his home for a meeting. Rockerfeller however misses his train and that train had a huge accident which would have caused his death. He now felt that he was special in Gods eyes and went to see Vanderbilt as a changed man. Previously a struggeling oil refiner, he now was determined and aggressive feeling he had God behind him. Vanderbilt offer him an opportunity to transport all his oil. Rockerfeller accepted an exclusive deal where he promissed to fill 60 train carts of Vanderbilt everyday. He however over promissed, as he could only produce half of that. He needed to expand his business and get investors but kerosene had a bad name because of its high flamability. He changed his oil company name to Standard Oil and softened the fears of the public. He realised that by heating oil until it vapourises and then cools it down, Kerosene becomes stable. He got huge investments and grew so big that not even Vandebilt could transport all his oil. Vandebilts competitor, Tom Scott from the Pennsylvania Railroads, wanted to take Vandebilts place as the king of the railroads and he knew the only way to do that was to do what Vanderbilt did, and get into bed with Rockerfeller. Tom Scott then headed to Rockerfeller with his righthand, Carnegie (remember his name, as he becomes the next richest person) They reached an agreement whereby Rockerfeller got a better deal from Scott than he got from Vanderbilt. Rockerfeller played the big players in railroad against each other. He could now supply every houshold in america with Kerosene which lights homes. He soon bought out all the refineries he could lay his hands on, creating a manopoly. When he was finished he owned 90% of all the oil refineries in the US. At 33 he was the most powerful man in America The Comodore (Vanderbilit) realised he created a monster, and a realised the only way to combat Rockerfeller was to get the two big railroad companies to work together (Vanderbilt and Scott). He forms a unlikely rival with his biggest competitor Scott, and together they tried to manupilate Rockerfellers prices down. To Rockerfeller this was a decleration of war. He was determined to find another way to tranport his oil, otherwise the railroads would win. He then then decided to build his own pipelines to transport his oil, and cut the railroads out of business. They laid a mile and a half op pile lines per day to eventualy cover over 4000 miles. For 25 yrs the rail roads was the back bone of america economy and no ever had the nerve to take them on, except Rockerfeller. His pipe lines was devestating to the railroad industry. Stock plummeted and people started to sell their shares in railroads, creating a panic. By the end of the panic a third of the 360 railroad companies have gone bankrupt. The crash was the worst america has seen. The stock exchage closed down. It triggered the first depression. The american people quickly found themselves out of work, food, money and hope. During this depression Rockerfeller bought out every bankrupt refinery for next to nothing. Whilst Rockerfeller was on top of the world, Vanderbilt was going down. He soon died and left his railroad business to his son. Scott and Carnegie from the Pennsylvania Railroads, survived but realised the only way they would make it in the future was to diversify also into the oil business and they started to build their own oil pipe line. Rockerfeller was furious, saying that he gave good business to the Pennsylvania railroads and now they are stealing his ideas. He threatened to take the remainder of his oil per railroads to other companies, but Scott told him that they had the only line from Pittsburgh to NY. A route the Standard Oil pipeline didn’t reach. Rockerfeller is not one to back down and he decided to hit Scott and Carnegie hard, by closing down the Pittsburgh refineries thereby not producing any oil for Scott to transport to NY. It cost him a fortune in lost revenue but crushing an enemy meant more to him. Without Rockerfellers oil, Scott lost half his business forcing him to cut salaries and lay off 1000s of workers. These workers went to the streets and went violent, burning down 39 buildings and 1200 train carts of Scott. Scotts business lay in ruins. Rockerfeller replaced Vanderbilt as the richest man in America. His net worth was now over $150m ($225 billion today) But all titans are targets and Rockerfeller was about to come face to face with his biggest challenge - the man who swore revenge - Scotts partner, Carnegie NEXT...watch this space for the life of Carnegie. Now u know when it comes to big business, the role players dont care about the man in the street or even if they create a depression. Winning is everything and making more money is winning.
Posted on: Fri, 18 Oct 2013 12:23:04 +0000
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