In California’s Silicon Valley, the key to a successful startup is what’s known as an “unfair competitive advantage.” In this case, the word “unfair” is meant to be positive, but back in 1870, when John D. Rockefeller co-founded the Standard Oil Company in Cleveland, Ohio, “unfair” simply meant “unfair.” For Standard Oil, its unfair competitive advantage came courtesy of the sweetheart-deal shipping rates it enjoyed from numerous railroads. How unfair was Standard Oil’s advantage? Within two years of its founding, 21 of Ohio’s 26 oil refiners had been pressured to sell out, giving the upstart company a full fifth of the United States’ refining capacity almost overnight.
That, it turned out, was just the tip of a very large iceberg. By 1892, what had become the Standard Oil Trust was forced to dissolve itself, although those who still owned its technically illegal shares were still able to cash their dividend checks. Ironically, these dividends were no longer taxable since the Trust had been liquidated (now that’s a business model most Silicon Valley firms could get behind!). To help sort out this mess, in 1911 the U.S. Supreme Court forced Standard Oil to break itself into 34 competing companies, which, naturally, only enlarged Rockefeller’s sizable fortune. Not coincidentally, perhaps, 1911 was also the year that production of gasoline surpassed that of kerosene.
For the most part, it’s the gasoline and motor-oil signs, oil bottles, oil cans, and other examples of petroliana advertising that interest collectors of Standard Oil. Spinoffs from the 1911 breakup of Standard Oil include Esso, Amoco, Socony, and Chevron, while Marathon, ARCO, and Mobil all have Standard Oil roots.