John D. Rockefeller incorporates Standard Oil in Cleveland

Background. Before 1870, Rockefeller's firm, Rockefeller, Andrews & Flagler, had expanded significantly. By 1868, it owned two Cleveland refineries and was the largest oil refinery in the world. The firm benefited from favorable railroad rates, including a 71% discount from the Lake Shore Railroad granted in 1868 in return for shipping commitments. The market was oversupplied, with triple the necessary refining capacity by 1869.

Incorporation. On January 10, 1870, Rockefeller abolished the partnership and incorporated Standard Oil in Ohio. The new entity was co-founded by Rockefeller, his brother William, Henry Flagler, Samuel Andrews, and silent partner Stephen V. Harkness. The name "Standard Oil" was chosen to symbolize reliable quality standards. Shares were distributed with Rockefeller receiving 2,667, Harkness 1,334, William Rockefeller, Flagler, and Andrews 1,333 each, Jennings 1,000, and the firm of Rockefeller, Andrews & Flagler 1,000.

Context. The incorporation occurred in a market where kerosene refining capacity exceeded demand by 1869. Prior to 1870, oil light was primarily for the wealthy via expensive whale oil. Standard's actions, including secret transport deals, helped drop kerosene prices from 58 to 26 cents between 1865 and 1870, setting the stage for the new corporate entity.