From the start Rockefeller revealed a genius for organization and method.Thefirm prospered during the Civil War.With the Pennsylvania oil strike(1859)and thebuilding of a railroad to Cleveland,they branched out into oil refining with SamuelAndrews,who had technical knowledge of the field.Within two years Rockefellerbecame senior partner;Clark was bought out,and the firm Rockefeller and Andrewsbecame Cleveland’s largest refinery.A second refinery,the Standard Works,wasopened in 1 865 by another firm established by Rockefeller in his brother Williamsname;and a sales office was opened in New York City in 1866.
With financial help from S.V Harkness and from a new partner,H.M.Flagler,who also secured favorable railroad freight rebates,Rockefeller survived the bitter competition in the oil industry.The Standard Oil Company,chartered in Ohio in1 870 by Rockefeller,his brother,Flagler,Harkness,and Andrews,had a capital of$1 million and paid a dividend of 40 percent a year later.Standard Oil controlled one-tenth of American refining,but competitive chaos remained.The chief bottleneck was the transporting of the oil.Out of this situation came the controversial SouthImprovement Company scheme of 1872一a defensive alliance of Cleveland refiners to meet the bitter opposition of the oil producers of Pennsylvania.The sweepingfreight rebate agreements in this scheme brought pubfic opposition,and the plan was outlawed by the Pennsylvania Legislature.Meanwhile,a looser organization,a re finerspool,also failed(1873).
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