Standard Oil Company was first incorporated in 1870 by John D. Rockefeller and William Rockefeller. Standard Oil handled all aspects of their product, which included production, transportation, refining and marketing. In a few short decades, Standard Oil had become one of the world’s largest corporations; by 1904, the company controlled 88% of refined oil production and 85% of oil sales in the United States. The unprecedented dominance of Standard Oil caused the United States government to intervene in the apparent monopolization of the oil industry.
On this day, May 15th, 1911, Standard Oil was broken up by a Supreme Court decision. Standard Oil’s monopolistic practices were brought to the public eye after a study by the federal Commissioner of Corporations was conducted from 1904-1906. The study found that Standard Oil was abusing control of pipe-lines, taking part in railroad discriminations and conducting unfair methods of competition. This discovery led the US Department of Justice to begin a lawsuit in 1909, using the the Sherman Antitrust Act of 1890 as grounds for legal action. The Supreme Court ruled that Standard Oil had an unreasonable advantage over its competitors and subsequently had to be broken up into 34 companies.
The 1911 Supreme Court decision had a great effect on the future of oil companies in the United States. Some of today’s most recognized oil companies, such as Exxon, Mobil and Chevron were all created in the antitrust aftermath. It is believed that without the decision to break up the company, Standard Oil could possibly have been worth $1 trillion today.