Standard Oil Company was one of the richest and most powerful businesses in the world during the late 1800’s and early 1900’s. The United States Supreme Court dissolved the company in 1911, charging it with unfair business practices. Today, several companies stemming from the original are among the world’s leaders, including the Exxon Mobil Corporation—the world’s largest petroleum company—and Chevron Corporation.
The original Standard Oil Company, also called the Standard Oil Company of Ohio, was established in 1870. The company developed out of a refinery run by American businessman John D. Rockefeller, his younger brother William, and their partners. After 1870, Rockefeller and his business associates bought most of the refineries in Cleveland and many in other cities. They built tank cars, developed a pipeline system, purchased oil-producing lands, and created an organization to market their products.
In 1882, they transferred the stock of all their companies to the newly formed Standard Oil Trust (see Antitrust laws ). This transfer of control helped unify the management of the organizations and lessened legal difficulties. The Standard Oil Trust immediately became the biggest business in the oil industry. It controlled more than 90 percent of the country’s refining capacity, and almost as much of its pipelines.
Since 1870, competitors, journalists, and government agencies had accused Rockefeller and Standard Oil of following illegal practices damaging to other companies. In 1892, the Supreme Court of Ohio ordered Standard Oil Company of Ohio to separate from the trust. The trustees broke up the combination. But many of the same people stayed in control through their positions on the boards of directors of the corporations.
The firms operated independently until 1899, when Standard Oil Company (New Jersey) took control. Standard Oil (New Jersey) exchanged stock in its company for stock in the other corporations of the dissolved Standard trust. It became the holding company for 37 subsidiaries (smaller corporations). This reorganization made Standard Oil (New Jersey) one of the richest and most powerful holding companies in the world.
In 1906, the U.S. government brought suit against the combination under the Sherman Antitrust Act. In 1911, under the provisions of the act, the U.S. Supreme Court ordered the company to dissolve. This ruling forced 33 subsidiaries of Standard Oil (New Jersey) to become separate companies. They could have no business connections with one another or with Standard Oil (New Jersey). For years, some of the companies continued to use the well-known Standard name. Only a few still use it in certain areas of the world.
See also Exxon Mobil Corporation ; Rockefeller, John D. .
