Theodore Roosevelt and Trust Busting

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You got rich guys getting richer than rich guys have ever gotten. Railroads. The U.S. government was basically fine with all of it just Let it go. That was the that was the attitude until early nineteen hundreds when there was this really Profound change when America, kind of all of a sudden, kind of not decided, you know what, there's like a little bit too much lessay and not in affair driver of this change of mindset The person who did as much as anybody to make it happen was a journalist, Hazar. A writer Her name was Ida Tarbet My name is Jakeob Goldstein My name is Robert Smith and you are listening to Business History. It's a show about the history of business. Thanks for asking. This is the second in our series. It's a three part series, a great number of parts for a series. We're calling it American genius. I just want to sing a song every time I hear. American genius. American genenius. What's our series about, Robert? It's about writers who change the way America thinks about money and about business Last week we talked about Ben Franklin, who created a model, an ethic reallyally a way of living that set America on a course to capitalistic success This week we're talking about the backlash And by the time Idaarbeel came along capitalists had succeeded so wildly that they threatened to destroy the very thing that made them great, the free market bedrock of capitalism And so Ida Tarbell, as a journalist, showed America problems with corporate power and capitalism. And I really think it's fair to say that she helped the country figure out how to solve some of those problems Ida Minerva Carbel Her middle name is not Minerva Billy said I didn't double check it. donon't need to. had a big world changing project at the heart of her career It was a series of articles in the early nineteen hundreds about John D Rockefeller and Standard Oil At the time John Rockefeller was about to become the richest man in the world Standard oil controlled something like ninety percent of oil refining in the United States And so before we get to Ida Tarbell and how she came to this project. Let's just like set the stage with a little bit of John D Rockefeller and Standardord eighteen sixty, John D. Rockefeller working as a merchant in Cleveland doesn't get any more business history than that And there is a boom in this new thing called kerosene. B way to light oil lamps. Other than whales? Rather than whale oil. Yes. whale oil was expensive and dirty. And you had to get whales. had to get the whales. I don't think people cared about the whales at the time, but whale oil was in fact very bad for whales. We care about whales now Terosene was better, brighter, cheaper than N tell the whales. So Rockefeller es this happening? And he gets into the petroleum business, specifically, he gets into the oil refining business to turn petroleum into kerosene And Cleveland where he was based, was a good place to be in this business I was close to Pennsylvania, where the big oil fields were at the time and the big rail lines went to Cleveland and also Cleveland was on Lake Erie.f course we know, because this is business history that there was an Eriere canal so you could ship kerosene out from Cleveland, out to the east coast into Europe And to New York, Yeahah, and to New York Johnny Rockefeller was both A very clever And a very ruthless. businessman do the clip ap partart first He vertically integrated for one thing built his own barrels instead of having to buy or rent barrels saved a lot of money U Also, most of his arrivals, the other refiners, would refine oil into kerosene, which was what everybody wanted. But then you still had a lot of like sludge left. Yeah, just so people know crude oil, you can fractionally refine all the different parts of the oil out of it. So you had very pure kerosene, what we call now jet fuel, and then we had sludge and regular gasoline, all this stuff. Yeah, yeah. And you know there was no internal combustion engine to speak of at this point, right? So there's not a lot of demand for things other than kerosene Part of Rockeveeller's cleverness was to see that he could gain efficiencies by refining more of it. So his rivals were dumping this sludge in the river or whatever. And of course, Rockvelly didn't care about the river, but he cared about saving money. And so he would refine more of the sludge and for example use it as gasoline that he could fuel his plant with And so he's doing well, he's running this efficient business. And in eighteen seventy Rockefeller and a few partners created Standard Oil of Ohio I guess American oil was taken. Standard. I mean, standard, it doesn't get any more standard than that, right It was already the biggest refiner in the country at this point, but it was a very fragmented market And it was a tough time to be in the oil refining business because it actually wasn't that hard to build refinery. Everybody was getting in on it. Rogockefeller's line was Butcher, the baker, and the candlestick maker began to refine oil. Very useful for the candlestick maker. That's true. It's right there. I guess maybe he's getting into the lamp business But Robert Smith, what happens when suddenly everybody gets into a commodity business? Are we gonna do this at every episode? Every episode price falls Yes. Yes. the price falls. There is a glut. price falls by more than half It is wonderful if you're using kerosene to light your lamp out on the prairie, but it's terrible if you're selling kerosene Rockefeller called it ruinous competition. In other words competition. in other words, competition. You know, we've sort of touched on this a little bit, but You know what capitalists hate Competition? Capitalism. I hate market capitalism. There's a funny thing about that that like A market capitalism makes things better for a lot of people, but not for the people selling the stuff. They want to have a monopoly. Yes. And that is a tension, maybe the tension at the heart of this story and at the heart of this this backlash that we're going to get to And now we're going to do the ruthless Rockefeller He's got this problem competition that he's going to solve Cheap, cheap kerosene. come on. We can't let that happen. It's bad for America Let of the jobs. So his first big move is he makes a deal with the railroads, right? Transport costs are a big part of this business And he's already the biggest player. and he says to the railroads, okay Give St standard oil a bulk discount because We move so much oil and kerosene on your on your lines, right Oh and by the way pay for the discount you're giving us by charging extra to our arrivals to the other refineries News of the deal leaks out, and then Rockefeller goes to his competitors iss like, look You're screwed likeike here here. this is a version of the pitch. G it to us. You can't compete with the standard. We have all the large refineries now. If you refuse to sell, it will end in your being crushed Sx. And in eighteen seventy two, when this is happening, there were twenty six different Refineries in Cleveland Rockeveella goes out with these facts and in a six week span He buys up twentyw two of them called it. Cleveland massacre and He did give jobs to a lot of the executives at the companies he bought, you know, in his mind, he is being a sort of efficient businessman. illegal at this time or at least not enforced. Probably not illegal, certainly not enforced. Although importantly Wildly unpopular. This particular deal gets out in public, P go bananas and it gets canceled. This deal with the railroads doesn't go through By the time it gets canceled The Cleveland massacre has already happened. Rock Vveeller has done his roll up Interestingly, Ida Tarbell is fourteen years old this time. And she didn't know it at the time But John D Rockefeller and Standard Oil were already her They were already changing her life in a way she wouldn't fully understand for decades. So let's talk about our protagonist now I to tarbell Give her a middle, Chicka. Ida Minerva Tarbeel was born in a log cabin In rural Pennsylvania and she loved it. Robert Smith little bit from her autobiography. No home in which I've ever lived has left me with pleaster memories of itself turkeys and ducks and chickens and lambs and cololts and cals and kittens and puppies. Never could I be without playmates. There were trees and woods and flowers of the submer, a great fireplace with popcorn and maple candy in the winter I mean, wasn't it really that good? I don't know Maybe she certainly remembered it very fondly. It sounds awesome. It doest sound awesome. It was her grandmother's cabin And her dad, Franklin Tarbell, he was a carpenter and he went off to Iowa. The family was going to move to Iowa. He was going to build the house But there was a financial panic. Hanic of eighteen fifty seven. Not even one of my top three nineteenth century panics But things were terrible in Iowa. and Franklin Tarbell wound up walking back from Iowa to Pennsylvania. I guess that's what you did. Yeah, I'm sure And he moved the family from this idyllic cabin to the outskirts of a town called His home Hit hole, Pennsylvania. Did it sound bad at the time? because it sounds bad now. It doesn't sound like a place that has kittens and puppies and cals and popcorn and mitten hand. You know what it had? You know what it had, as the name kind of suggests oil Oil and eighteen fifty nine was The first oil boom in America, oil came out of the rocks in this part of Pennsylvania. It seeped up out of the rocks and people would like rub it on their bodies and whatever before kerosene was a thing. But in eighteen fifty nine People started to drill for it. They realized you could drill for oil And so You get this oil boom town pit hole in this town called Titusville, where Id ends up living when she gets a little older G me a description here from her autobiography of what it was like. Not as romantic Fountain wells, gushers, spoutters they called them, from the great streams, which rose straight into the air one to two hundred feet to fall in an oily green black spray over the surrounding landscape. Pitole is a little bit of a shame out was dirty with oil. They dumped a lot of it into the rivers. rivers occasionally burst into flames I'd actually tells this one story of one day when everybody's sitting around and somebody runs up and it's like Oil, there's a gusher. there's a fresh strike on the edge of town. And so everybody runs to see the gusher I guess a lot of people are smoking like, I don't know, corn cob pipes or little mini cigars or something. Robert Smith. What's gonna to happen? Read us from the autobiography? The eararth was rocked by a mighty explosion. A careless light had ignited the gas, which had spread from the flowing oil until it had enveloped everything in the vicinity Before my father reached the place, nineteen men. among them his friend, the well owner had been burned to death. Not quite the end of this little story A few hours later, Tarbeels are back at their house And they hear something outside, they realize that somebody's stumbling around in the dark So I as parents go to Cck it out They saw before them a terrible sight, a man burned and swollen beyond recognition and yet alive. My mother took him in for weeks. thanks to her care the man lived. So Fit whole not so idyllic in fact, as one suspected is Boomy It is booming. You can say for it, the economy is good, and Franklin Tarbell Ida's dad prospered. Sure, time is money. Time is money And he is working. he starts out building barrels because he's a carpenter gets into the oil business himself, builds a nice little house for the family in a town called Titusville And this is when Tarbell crosses paths with John D. Rockefeller and Standard Ole eighteen seventy two, you're the Cleveland massacre and the news of that Standard oil, sweetheart deal with the railroads leaks Everybody in Titusville suddenly sees, oh, there is this new Force, this new power in the market in our industry and they freak out. You know, obviously, if there's only one buyer for their oil That's to be very bad for. Ida doesn't know all this at the time, but she sees her father. She sees, you know, she's a teenager. She sees her father completely transformed. I remember a night when my father came home with a grim look on his face and told how he with scores of other producers had signed a pledge not to sell to the Cleveland Ogre gre He no longer told of the funny things he had seen and heard during the day. He no longer sang to my little sister on the arm of the chair, the verses we had all been brought up on. But it's important to say that Standard Oil didn't put her dad out of business. Like he did pretty well for himself. He could still take Ida on trips to big cities He still buy her books, which she loved. And when she graduated from high school, she was able to go off to college, to Allegheny College. And you know, not that many people period went to college in this era Much less a woman, much less a woman, much less a woman. She was in fact, the only woman in her class at college and, you know, it was hard being the only woman. There's this day she talks about where she goes to sit under a tree and somebody's like, No, no, you only men can sit under that tree But she loved it. She described this moment as a yeasty time bubbly ferment, you know? Yeah And her dream was to become a biologist. L rememember how much she loved the woods at her grandmother's cabin But that was too much for a woman at that time. can't be a biologist She briefly became a schoolteacher. is a job a woman can do. It didn't really suit her. And she ended up going to work for a magazine called The Chitauquin started out just annotating articles, like kind of providing extra little facts. got onto writing articles, became the managing editor But even that left her restless. She was this profoundly ambitious intntellectual journalist curious about the world, wanted to do more, see more so she thinks Maybe I'll go Terrace Paris Yeah Fr Pit Hole to Paris. Fr Pit Hole to Paris, very good. And you know, Paris, this is like Bellipook, Paris, right? late eighteen hundreds.' the intellectual, cultural, scientific, arguably hub of the world. She figures she can be a freelance writer But you know, she's an unmarried woman. It's eighteen ninety one. This is like a wild thing for her to do in this kind of cultural context So she touched to her editor at the magazine about it. Editor is famously supportive. Especially when a reporter wants to go to Paris. I've tried this gambit before. Well, did your editor say to you what hers said to her? You're not a writer, you'll starve. something similar something similar. yeah. Her father, to his credit was more encouraging. He said If you think you can do it So she did She moved to Paris She researched a book on one Madame Rooland, an overlooked figure from the French Revolution. She started freelancing for newspapers and magazines from back home And you know, she got really into it. She worked in a soup kitchen to report on how the poor people of Paris lived. She talks about essentially following her curiosity, which Robert' your ss as because it reminds me of your life as a general assignment reporter on the streets of New York. And this description, her description of what it was like is It really reminded me of you. I'm jealous already. There were a multitude of things I thirsted to know And if I could get my bread and butter finding out, what luck? What luck? Just living in the dream It is the king's life to be a reporter. So she writes an article about the guy who had recently paved the streets of Paris. Oh, come on. You're killing me here. What a great profile. What a great profile. Apparently it was a great profile because it got published in America and landed on the desk of an editor who read it and loved it. This is a great article. Who is this gal? G her to me? That's essentially what happened. although he went himself to find her. I thought it was so good. His name was Sam McClw about to start a magazine called McCure's. It's going to be very important in our story And not long after he reads her article, he's in Paris on business And he manages to find Ida Tarbeel, who's living in this little apartment. He goes up the eighty steps to the apartment. I've rented that apartment in Paris. Yes. He gets to the top of the stairs. He's out of breath He says, I can only stay ten minutes. I got to catch a train. They wind up talking for hours and Ida is captivated by him. giveive us this line from her autobarra. His utter simplicity, outrightness, his enthusiasm and confidence captivated me. So they're talking. It's great And then Sam jumps up and says I must go. couldould you lend me forty dollars You're not joking him. No this is literally what he said. And of course you're like, don't, what no? He's scamming you. What no? don't do it. But she doesn't. This is like all the money she has saved up since she's been in Paris And she hands him the money and he runs down the stairs. and as soon as he's gone, like the spell is broken Here she she gives her reflection at this moment I'll never see that money serves me right. Fortunately, for history of America. And our story, she was wrong McClure paid her back agreed to become the first staff writer for his new magazine, McCLure's And at that magazine, she would do the work that would change business in America L Talk about that in just a minute If your business runs on five different apps, twelve browser tabs, and one spreadsheet that everyone's afraid to touch It's probably time for Odu. OdU is an all in one business management software that connects every part of your business into one powerful, easy to use platform So instead of wasting time switching between disconnected systems, your entire business works together in real time Your team moves faster, your data stays accurate And you can actually focus on growing your business Let one unified system run your entire business From the first opportunity to the final payment, everything works together in one place Whether you're a small business or managing a large operation Odu gives you one flexible platform built to grow with you Try for free today at odoo. com slash iheart radio. O d oo d. com slash iheart radio and we're back from the break Ida Tarbell is going to work for this new magazine McClws And Clurus is I mean, A, it's an important institution in the history of business in America, but it is also something that I love, which is a place where a bunch of talented people come together and do creative work. I find stories like this exxciting and inspiring, frankly You like the Ernest Hemingway, right Yeah, mean this yeah, sure. even the beats, I'll admit it, I got a soft spot in my heart for the beats. This is like a journalistic version of that. So the magazine launches in eighteen ninety three. And this is a moment when the big magazines your Harpers, here' Atlantic. cost thirty five cents an issue Which means they're too expensive for the middle class. They're like a kind of quasi luxury item. They cost a lot to make because you have these wood cut illustrations apparently that are very labor intensive. Yeah. But there's this new technology coming along that lets you guess, do some kind of an engraving out of a photo. And so McClure is like, oh, I can lower my costs and I can sell a cheaper magazine which is important to him not just because he wants to sell more at a lower price, but because he wants to reach that overlooked middle class. He has this social ambition that the magazine is going to, you know influence the thinking of a broader swath of Americans that have read magazines to this point little similar to the Benjamin Franklin story. Yeah, it really is, it really is. And in the way that you know, Franklin is coming along at just the very beginning of the Industrial Revolution and at this moment when there's more economic mobility than there's been Plur and Ida Tarbell are coming along In the secondcond Industrial Revolution, Thomas Edison. Thomas Edison, electricity, oil and the internal combustion engine are about to come along And they are transforming the world, transforming work creating vast fortunes, inequality is rising and you're starting to see early part of the backlash to this from farmers and from basically poor industrial workers who sort of see this accumulation of money and power and the way it is harming them But there is this vast middle class of Small business owners and tradesmen and office clerks, really the Benjamin Franklin types who are still like not really tuned in. You know, they are aware that they're benefiting from these new technologies. they have electric lights, if they're lucky, if not they have kerosene, which is way better than whale oil. and This is McClure's audience, right? He wants to tell them sort of the bigger story. What is the big world historical arc that is happening now. And you know, it's not like a luxury pure political magazine. He publishes Arthur Conan Doyle, you know, Sherlock Hmes stories. He publishes Jack London, he publishes Mark Twain covers science. In fact, Ida Tarbell starts out writing about science for him, interviews Louis Pasteure in France. Rad we to do that. So Ida starts out doing that science writing. She moves back to the U.S and winds up writing these extremely popular multip part series about the lives of Napoleon and Lincoln eople always they love. Oh People read so many biographies. Yeah. a publishing person once said, like, if you want to write a best selling book, it should be Lincoln's. Doct's dogs But really the core of McClure's magazine is this theme of Money and power and corruption taking a more and more important role in American And so there are articles about corrupt local governments. There are stories about union thugs beating up non union workers But clearly the biggest money and power story of this era is the story of the trusts, right? of these monopolistic roll ups of different industries. You know, there's a beef trust, and there's a sugar trust, and there's US steel and genereneral electric. And of course There is Stard oil. It's like a list of our episodes Yes that we've done and that are yet to come. Yes. And so Ida Tarbell and Sama Clure are looking out at this world. She is the star writer. This is the essential subject And Ida Tarll thinks well Maybe I should go back to my childhood You know, maybe I should tell the story of John D. Rockefeller and Standard Ois. As she's thinking about this, she goes and talks to her father about this idea. He's still in the oil business. But it has been a struggle for him H his partner several years earlier had actually gotten into some kind of business trouble and killed himself. And Id' dad inherited the partner's debts and had to mortgage the family's house And so when Ida told her dad, she was thinking of, you know, digging into this story of what's really going on with John D. Rockefeller and Standard Oil He said, donon't do it they'll destroy the magazine. They won't let you publish like they are too big and too powerful. Yeah. It'll be a journalistic massacre instead of the Cleveland massacre. She didn't listen And in nineteen oh one She set out to tell the story of John D. Rockefeller and the rise of Standard Oil. And she knew that she wanted to tell it as a story, as a narrative. you know, the narrative of how this man and his company rose to power used power And she knew that her narrative had to be extremely solid, you know based on unambiguous documentary evidence. And she was an incredibly meticulous reporter. You know, she'd wanted to be a scientist. And she started out sort of annotating articles. She was a very rigorous journalist So our first move is she knows that Standard Oil had faced government investigations for a long time. Nothing had ever really come of them The government hadn't done anything to standard oil, but there were these investigations and the investigators wrote reports. You know, you want to look like you're doing something without really doing something? Yeah. Write a report And she knew there was a report on that early deal between Standard Oil and the raailroads, the one that you know made her dad get so offset when she was fourteen years old. She goes to look for this report And she can't find a copy Hm Eventually somebody tells her, Ohh yeah, that report. Railroad presidents paid a bounty. They'd pay people like a hundred dollars to turn in copies of a report. So people are taking them taking them out of libraries, they're fighting them at home. Yeah It' like, take it. Yeah. ye, there is a market for those reports. And a big bonfire outback. And a big bonfire outback. She did manage to find one copy the Nework Public Lbrary Shall Ray for the libraries. Yeah And so, you know, she's working on this story. And she's working for months and months before before an article even publishes Ray for magazines And of course, Stard Oil, which knows everything about everybody at this point, That is their whole game, finds out she's working on the story They hire a PR crisis firm. They have a guy. There are no PR crisis firms yet, but they have a guy. His name's Henry Rogers. He's a vice president at the company And he's friends with Mark Twain actually. Of course he is. Of course he is. And Mark Twain has written for McLureures. and so this guy, Henry Rogers, this standard oil exact tells Mark Twain, he wants to talk Ada Tarbell about whatever she's working on, and Mark Twain tells Mclure and McClure tells Adarbell. And so Ida Tarbell goes to see Henry Rogers, vice president of Standard Oil at his mansion on East fifty seventh Street. What does she say in her autobiography about this moment I'd have said She was a bit scared Was I putting my head into the lion's mouth? She was not It went great Weirdly, they kind of loved each other. Henry is like How'd you get interested in oil? And I just like I grew up in the oil country in Pennsylvania And Henry says, Of course, Tarbeel's tank shops, I knew your father. They figure out they were neighbors. He's like, I probably saw you gathering flowers over at your side of the ravine Ida, here here's what she said about him. She called Henry as fine a pirate as ever flew his flag in Wall Street. So wait, is Henry just like doing the PR thing where he's like Cosing up to her. Well Yes. And Part of the PR thing, I think, is this company has a story to tell. The company has a side of the story. They believe in what they are doing. It's not purely cynical. I think smart PR and I think Henry was basically smart PR is, well, if this story is going to happen, let's tell our side of the story and that is what Henry is going to do In fact, Ida is going to go back to him again and again, and Henry's going to keep talking to her for a long time She spends about a year before she publishes anything. She travels through Washington, Pennsylvania, Ohio, he's reading court documents and government statistics and she's talking to everybody she can talk to. And there's one little story that I think captures a lot about the depth of her report And it's this There was office boy who worked at Standard Oil. He was a teenager And his job included feeding documents into a furnace The shredder of its day. We have a document furnace out of the basement. sureure. And one day I guess he has something he's about to throw in the fire or something I don't know exactly, but Bots a familiar name on one of these documents. that's about to go into the furnace It was his old Sunday school teacher whose day job was being an independent operator in the oil business. Standard oil is not like a independent operator They really don't. And so what the office boy sees on this document that he's supposed to burn is that The local railroad office was secretly sending information about this Sunday school teacher's oil shipments to standard oil. and then Stard oil was giving orders to the railroad office. spepecifically, they sent a letter about a shipment of this independent guy's oil that said that shipment is This is what Stard oil is doing? So to be clear, standard Oil is communicating with the railroads to interfere with their competitor. Yes. In an instance like this, they're probably Oh bribing the local railroad agent, Like there were a lot of ways that they worked with the railroad. That's an incentive structure. It is a very rational incentive structure The kid, the office boy, the burner of documents Six this doesn't seem entirely on the level. And so instead of putting these particular documents into the furnace, he gives them to his Sunday school teacher On the slide, one presumes And the Sunday school teacher Gives the documents And Ida sees that As standard oil got bigger and bigger control of more and more of the oil business. The company came to have more and more power over the railroads in small ways like this, right? bribing local the railroad workers, but also in big ways, right? Eventually Stard Oil got railroads to give it a discount on shipping. alsoso, to charge its competitors extra and kick that money. back to standard oil wild And she brings this information to her buddy, Henry Rogers, vice president of Standard Oil And she s like what is going on with these with these with these rebates in the railroads? What's he say Oh I'd da Somebody would have taken them if we had not. And then she's like, yeah but Nobody else could have. Standard Oil is the giant. You set the rules, you dominate the business. Like if you wanted to make the railroads give the same rightates to everybody You could, You could make it so oil companies are just competing on the merits And Henry Rogers says there was always somebody without scruples and competition. However small that somebody might be He might grow This for Ida is the essence of the worldview of standard O you need to smother competition in the cradle. Yes, very good, very good. She She actually says in her autobiography, she says that there was this obsession of the standard oil company that danger lurked in small as well as great things notothing, however trivial must live outside of its control Obsessive control Not just of the market of everything. Oh everything. And everybody So in nineteen oh two, she publishes her first article. aboutout standard oil in McClure's It'll eventually turn into a nineteen part series Wow. Wow. People actually read in those days. They really did as we'll see. The series will include Everything we've been talking about and more Robert, it will include widows who are forced to sell to standard oil below market prices Oh, investigative journalists love a widow. Love a widow. It'll include the card catalog that Standard Oil kept to monitor every little store that sold oil. Surveillance, surveillance. It'll include the ways that Standard Oil harassed the stores that sold other companies oil And to be clear, it'll include a lot of the clever and efficient things that Standard Oil did as well There's actually an article called The Legitimate Greatness of the Standard Oil Company. Very fair of her They're fair. att least somewhat fair. And It is It is a massive hit. The magazine is selling out faster than usual on the newsstands. suubscriptions are growing Newspapers are writing editorials about it. There's a play on Broadway that opens called The Lion and the Mouse. That is an allegory of Ida Tarbell and John D. Rockefeller And you know, it's this long series. So the stories are coming, it's building Clare tells I to Tarbell You are today the most famous woman in America In nineteen oh four. The series is published as a book called the history of the Standard Oil compomany And you can see the whole idea, you know, the whole story in one place. And the basic picture is company run by a truly brilliant businessman. He used every new technology and efficiency gain he could to build his company and who also used threats and bribery and coercion to drive his competitors out of business so he could gain complete control of the oil industry in America One have to bring the other? Did Idatar Bell think that if you are going to master an industry, you will inevitably cross the line don't think she did think that. L she was not anti business. She wanted business to be a moral pursuit. and there was a real kind of moral quality think of the children to her writing that I haven't talked about here, but she thought that this strangle the competitors in the cradle was a dishonorable part of what should be an honorable part of of American life And so her book closes with a call to action. and it's not anti business annti monopoal. What are we going to do about it? For it is our business. We, the people of the United States and nobody else must cure whatever is wrong in the industrial situation typified by this narrative of the growth of the Standard oil company. So it's nineteen oh four when the book comes out presidential election year. Nice timing by a publicist. True. And one of the candidates had an idea for what the people of the United States should do about standard oil and monopoly power in America I'll give you a clue It was not the Democratic nominee Marton B. Parker. Ooh, it was the guy he was running against Destin you got famous You'll know after the ad. Ladies and gentlemen, we are back from the brake Please give a warm business history welcome T the twenty sixth presresident of the United States Theodore Roosevelt Rsevelt Roosevelt was the other Huge important figure in this American pivot we've been talking about of the early nineteen hundreds, in the backlash to the power of Standard Oil and the other trusts. And Roosevelt had An extremely interesting relationship with Ida Tarbell and the other investigative journalists of the air And you know if you know one thing about Theore Roosevelt and the journalist, you know about this speech he gave happen to be at a moment when he was frustrated with an article that attacked the U S. Senate. Roosevelt compared investigative journalists to a guy who was always looking down and just raking the muck beneath his feet He said, The Muckwaker typifies the man who in this life consistently refuses to see aught that is lofty and fixes his eyes with solemn intentness only on that which is vile and debasing. Of course, the journalist loved this proudly calling themselves the muck Rkers. Sure, happy to look through the muck for embarrassing things. And there is this moment kind of in the similar vein when Ida Tarbeell and another McLlure's journalist meet with Roosevelt at the White House And he tells them They're impractical I had a wrote later that Theodore Roosevelt was afraid that we were adding to the not inconsiderable revolutionary fervor abroad driving people into socialism. Yeah, And remember, Roosevelt was president because an anarchist assassinated President McKinley. Of course he's worried about agitation. This was the age of anarchism, and so journalists What are they? but anarchists with pens? Strong take So this is the famous side of Roosevelt's relationship with Tarbell and the other journalists of the era. But there was another side to it. There's a book that really helped me think about this. It's by Doris Karns Goodwin. It's called The Bully Pulpit Theodore Roosevelt, William Howard. Tft and the Goldenge ofournalis Another topic for biographies that anyone will buy. Yes. one hundred percent. And Doris Karns Goodwin talked about the way that Theodore Roosevelt Needed needed Ida Tarbell and her colleagues because He wanted to take on the trust when he took office in nineteen oh one, the politics were not really in his favor. because of that divide I was talking about earlier, you know, you had the farmers and the radicals who were anti trust, who were fighting the trusts And then you had the moneyed interests Trust JP Morgan, who were profiting from the trusts, But then there was this vast basically indifferent middle class, peopleople who just didn't care that much. And Roosevelt knew that in order to Really to have Congress on his side, to take real action against the trust. he needed to bring that middle class over onto his side. And he needed Idat Tar Bells nuance business is not bad. Some monopolies are not bad but you can abuse the monopoly this would be the thing that he could hold ono. Yes. And And in fact, that is what happened. You know, that is what her stories Stard oil showed America. And you know As I was saying, the magazine was targeted at exactly that kind of tuned out middle class. that Roosevelt needed and They read Ida Tarbells stories and they started thinking differently about Monopoly power and the trust and the meaning of business in America. And Roosevelt uses that momentum to start changing things In nineteen oh three, he actually signs three important bills into law, kind of one after the other. One of them makes it harder for railroads to pay rebates, Rebates, quote unquote, like those ones Standard Oil has been getting Another one is supposed to actually expedite antitrust prosecutions. and the third one mayaybe the biggest one, creates this Department of Cmerce and Labor that has legal power to investigate companies engaged in interstate commerce But standard oil by this point was so big and so powerful These laws were not going to be enough. Robert, I know you love an old timey political cartoon. And I love to read cartoons on the radio. I love to read cartoons on the radio. So here is one published in the magazine puck. In the year nineteen oh four, which is the year Idas standandard Oil book came out. and also the year Theodore Roosevelt is running for election or reelection. Okay, I have to zoom in here because if you remember political cartoons at the time had like a million things going on in them. they were' complicated.. So right in the middle is an octopus body of the octopus is an oil tank that says standard oil. So this is standard oil, the octopus. And what does the octopus have its tentacles around? Well Congress abbsolutely. This looks like the state House over there. It looks like it's crushing the middle class here. It's crushing rich guys and lots of people over here. And then over in the corner is the White House and tentacle of the standard Oil octopus is about to reach out and crush the last remaining building that it has not crushed the White House itself. The cartoon was called nextext Oh That's the White House was. Yes. I under, you know, they write the names on all the cartoons. It's very clear. It' very clear. No subtlety. Roosevelt is running this campaign on what he calls The three C's. Conservation, consumer protection and control of corporations. or secondount for if you corporations. yeah. The last one is the one we care about today or the last two, I guess, control of corporations. And Roosevelt won, of course And so now push his busting campaign further In nineteen oh six His Department of Justice Sue's standard oil under the Sherman Antitrust Act, which has been around for a long time, but largely unused and the case lays out a lot of what Ida Tarbell talked about in her stories in her book there's this actually incredible kind of paragraph that lists the allegations against the company Rebates, preferences, and other discriminatory practices, restraint and monopolization by control of pipelines and unfair practices against competing pipelines, contracts with competitors in restraint of trade, unfair methods of competition, such as local price cutting at the points where it's necessary to suppress competition and espionage of the business of competitors and the operation of Bogus independent. But other than that, it's a fine company. Beautiful institution Chase wound its way through the courts. They always wind. They say they wind. they bounce around went all the way, as we have to say, to the Supreme Court And the government won, United States of America won Standard Oil was forced to split into dozens of separate companies And Rockefeller got the news when he was playing golf on his personal golf course I don't know how they gave him the news, but there's a story about what happened when he got the news. He was playing golf I believe with a Catholic priest sounds like a joke, but I think it's true And he gets the news And he says to the guys playing golf with, Have you any money? And the guy says no, why And Rockefeller says By standard oil felt he was going to be just fine And he was right. He was right because shareholders in Stard oil got shares in all of the newly formed thirty some companies that spun out of it, which included Standard Oil of New Jersey cameame a little company called Exon and Standard Oil of New York, which went on to become mobile So Rockevelleller lost in court, but he just kept getting richer. But of course, after that, you could have lots of scrappy oil companies come up and compete. Yeah, I mean, Iitar Bells goal wasn't to make Rockefeller go broke, right? It was to make the public Ustand Companies like Standard Oil weren't competing on a level playing field. They weren't trying to win market share by selling a better product or selling at a lower price