The Oil Bussniess

By: Jessica McGee

Why The Oil Businesses Grew

The oil industry grew because the smashing process of unrefined oil was introduced, and it let different product such as kerosene, diesel, and gasoline to be marketed for different purposes, which increased profit! Rockefeller also created the horizontal integration which is combining competing firms into one corporation.

John D. Rockefeller

John D. Rockefeller made a fortune from oil. When he was 26 he and 4 other people set up a oil refinery in Cleveland, Ohio. In 1870 he organized the Standard Oil Company of Ohio and got most of the refineries in Cleveland and other cities. Rockefeller lowered his prices of oil, so other companies would go out of business. The control of the oil industry was increased when Rockefeller made trusts (a group of companies managed by the same board of directories). First he, got stock in many different oil companies. Then the shareholders exchanged there stocks with the Slandered Oil stock which paid higher dividends. Now they they have ownership of other companies stock and the right to manage those companies. Which is called a monopoly (almost total control by a single producer).

How and Why the Government Restricted the Oil Industry

The pressure for a federal law to forbid trusts and monopolies led to The Sherman Antitrust Act is a law saying "to protect trade and commerce against unlawful restraint and monopoly".