The Standard Oil Company founded by

John D. Rockefeller and the U.S. Steel Company

founded by Andrew Carnegie. The Standard Oil

Company and U.S. Steel Company were made

successful in different ways due to the actions

of their different owners. The companies differed

in their labor relations, market control, and

structural organization.

In the steel industry, Carnegie developed a system

known as vertical integration. This means that

he cut out the middle man. Carnegie bought his

own iron and coal mines because using independent

companies cost too much and were inefficient.

By doing this he was able to undersell his

competetors because they had to pay the competitors

they went through to get the raw materials. Unlike

Andrew Carnegie, John D. Rockefeller integrated

his oil business from top to bottom, his

distinctive innovation in movement of American

industry was horizontal. This meant he followed

one product through all its stages. For example,

rockrfeller controlled the oil when it was

drilled, through the refining stage,

and he maintained control over the refining process

turning it into gasoline. Although

these two powerful men used two different methods

of management their businesses were still very

successful (Conlin, 425-426).

Tycoons like Andrew Carnegie, "the steel king,"

and John D. Rockefeller, "the oil baron," exercised

their genius in devising ways to circument

competition. Although, Carnegie inclined to be

tough-fisted in business, he was not a monopolist and

disliked monopolistic trusts. John D.

Rockefeller came to dominate the oil industry. With

one upward stride after another he organized

the Standard Oil Company, which was the nucleus

of the great trust that was formed.

Rockefeller showed little mercy.

He believed primitive savagery prevailed in

the jungle world of business, where only

the fittest survived. He persued the policy

of "ruin or rule." Rockefeller's oil monopoly

did turn out a superior product at a

relatively cheap price. Rockefeller belived in ruthless

business, Carnegie didn't, yet they both had

the most successful companies in their industries.

(The American Pageant, pages 515-518)

Rockefeller treated his customers

in the same manner that Andrew Carnegie

treated his workers: cruel and harsh. The

Standard Oil Company desperately wanted every

possible company to buy their products. Standard

Oil used ruthless tactics when Rockefeller

threatenedto start his own chain of grocery

stores and put local merchants out of business

if they did not buy oil from Standard Oil Company.

Carnegie dealt with his workers with the same cold

lack of diplomacy and consideration.

Carnegie would encourage an unfriendly

competition between two of his workers and he goaded

them into outdoing one another. Some of his

employees found working under Carnegie unbearable.

These rivalries became so important to the

employees that somedidn't talk to each other

for years (McCloskkey, page 145). Although

both Carnegie and Rockefeller created extermely

successsful companies, they both used unscrupulous

methods in some aspect of their corporation

building to get to the top.

The success of the Standard Oil Company and U.S. Steel

company was credited to the fact that their owners

ran them with great authority. In this very

competetive time period, many new businesses

were being formed and it took talented businessmen

to get ahead and keep the companies running and make

the fortunes that were made during this period.

BIBLIOGRAPHY

Conlin, Joseph R. History of the U.S.: Our Land,

Our Time. pp. 425-426. 1985.

Bailey, Thomas A. and David M. Kennedy: The

American Pageant. pp. 515-518. 1987.

Latham, Earl: John D. Rockefeller; Robber Baron Or

Industrial Statesman? (Problems in American

Civilization Series). pg. 39. 1949.

McCloskey, Robert Green: American Conservatism In

The Age Of Enterprise 1865-1910. pg. 145. 1951.