Rockefeller wanted to expand Standard Oil into other states. However, companies were prohibited by federal law from being interstate corporations. To protect and utilize its property and facilities outside of Ohio, Rockefeller decided to circumvent legal restrictions.
Formation of the Trust
In 1882, Rockefeller led the formation of the trust, a combination of corporations that operated as one. He first established Standard Oil companies in multiple states under a board of trustees with Rockefeller as the largest shareholder. They held and exchanged the new corporations' stocks, which provided shares of ownership in multiple corporations; thus, the trustees owned all assets of Standard Oil, which by then operated in multiple states legally under the trust. Many companies adopted Rockefeller's brilliant method.
"...His [Rockefeller's] use of the 'trust' as a legal instrument to administer and protect his growing monopoly in the petroleum business set another national standard in terms of scale and effectiveness."
-John Grabowski, Case Western Reserve University History Professor
Standard Oil honorably provided oil to the first Ford car and the Wright brothers' plane.
Left: Car and Driver. Right: EDN Network.
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