The Oil Business
By: Mason Fisher
When John was 26 years old, he and four partners set up an oil refinery in Cleveland, Ohio. In 1870 he organized the Standard Oil Company and aggressively ran it until he retired in 1897. He acquired almost all of the oil refineries in and around Cleveland. Rockefeller used horizontal integration - which combines other competing businesses into one corporation. To strengthen Standard Oil's position, John lowered his prices, and pressured his customers not to deal with other rival companies. He persuaded railroads to grant him rebates in exchange for his business. He increased his control by forming a trust where a group of companies are managed by the same board directors. Rockefeller soon created a monopoly - almost total control of a single producer - of the oil industry.
The government began restricting trusts and monopolies. They did so by passing the "Sherman Antitrust Act" in 1890. This law sought "to protect trade and commerce against unlawful restraint and monopoly".