Oil and Oil Refining Industry
During and after the Civil War, oil became a very important industry in
northwestern Pennsylvania. In 1859, Edwin Drake’s first oil well initially
produced 10 barrels a day. Later, the well increased to 400 barrels a day.
By 1864, petroleumgrew to be a $15million business. After the Civil
War, asmuch as 30million barrels were pumped from the ground in one
year. Until 1890, Pennsylvania led the nation and the world in the
production of oil.
Because of the rapid growth of the oil industry, boomtowns sprang up
all over northwestern Pennsylvania. By 1864, Pithole City had grown into
a community of 15,000 people. By 1870, when the nearby oil wells dried
up, the city had become a “ghost town.”
During the Age of Big Business,
John D. Rockefeller
earned the
nickname “King of Oil.” There was not much use for oil in its crude form.
However, he became involved in a new industry called
oil refining
. In this
new industry, crude oil pumped from the ground was processed or refined
into useful products, such as kerosene and grease. Rockefeller
named his business the Standard Oil Company.
By 1877, Rockefeller ownedmost of the oil
refineries in Philadelphia, Pittsburgh, Cleveland, and
New York. By 1878, he owned nine out of 10 oil
refineries in the United States. He had acquired a
monopoly on the oil refinery market. In 1911, the
United States Supreme Court decided that his
company was too large and powerful.
Rockefeller’s business was to be divided into
smaller companies. In the same year, he retired
frombusiness. He had earned about one billion
dollars fromhis oil refining business.
JohnD. Rockefeller owned 90%of the oil refineries
in our country at one point. He was criticized for the
monopolistic operatingmethods of his company, Standard
Oil. But Rockefeller was a great
philantropist.
He gave
10%of his earning to his church fromhis earliest years,
and gavemore as his wealth grew, eventually donating
half of his earnings to education, medical research, and
other scientific endeavors.
92
Understanding Pennsylvania
