Where did the great tycoons of the Gilded Age get all their money? Carnegie's came from steel. For others, like the Vanderbilts, it was the railroads. For still others, it was oil. In 1858, a small-time prospector named Edwin Drake sank a hole into the ground near Titusville, Pennsylvania. Black slime—oil—soon filled the hole. When the news got out, people raced for the hills and gullies of western Pennsylvania. Before long that state was a wild place—a little like California in the gold rush a decade earlier. One day, a quiet young bookkeeper was sent to this disorganized area to see what was going on. "Is oil worth investing in?" His employers had sent him to find out. "No," he told them, and then went on to invest in it himself and to become one of the most successful businessmen the world has known. His name was John Davison Rockefeller.

Some say John D. Rockefeller was the greatest capitalist who ever lived. Others say he almost destroyed capitalism for everyone else. One thing is certain. He soon brought order to that disorderly oil business. In 1863—he was twenty-four—he and a partner bought a small refinery. With his efficient methods, it grew large. Rockefeller began buying competitors.

If you have raw material to sell, two costs are important: the cost of the oil and the cost of transporting it to buyers. Because he was such a powerful oilman, Rockefeller could get the railroads to give him special prices to ship his oil. Actually what they did was give him back half of what he paid for transportation. And part of what others paid as well. They were called kickbacks, and they weren't fair to his competitors. Soon he had put most of them out of business. His company, Standard Oil , became spectacularly rich.