A habit of thrift

Historians, like reporters, enjoy unusual stories, so the tale of a lavish late-19th-century party with dogs dressed in tuxedos is familiar to many. Stories also get around of parties where guests drained hundreds of cases of champagne and hundreds of gallons of terrapin soup. Some among the rich were like Mrs. Leland Stanford, wife of a multimillionaire senator, who wore $250,000 in gems when she went out, kept 60 different diamond rings, and served tea from a pot of solid gold.

Journalist Frank Carpenter was rightly irritated: "We are lavishing fortunes on clothes. There is enough silk worn here every winter to carpet a whole state; there are pearls by the bushel, and diamonds by the peck. . . . The older the woman, the more giddy she seems to be. She cuts her dresses an inch lower at the bust for every extra ten years, and I blush for the fair sex when I look at the décolleté corsages and fat bare backs of the powdered old dames."

But many among the rich did not expose themselves to such ridicule. When John D. Rockefeller moved to New York City from Cleveland in 1884 at age 45, he maintained patterns of domesticity, leading family prayers at 7:30 sharp each morning. His children grew up wealthy but generally unspoiled. Once, when spending requests were too high, Rockefeller said, "Who do you think we are, Vanderbilts?"

Many reporters who came to interview Rockefeller were prepared to comment archly about the anticipated splendor of the industrialist's clothes, yet they ended up noting that he dressed neatly but wore no rings or necktie pins. Those who investigated further found that Rockefeller bought new suits when the old ones were getting shiny, and preferred cloth coats to fur. They found that his recreations were driving a buggy with his family, walking in the woods, and rowing, and that he preferred bread, milk, and apples to the creations of French chefs.

Rockefeller and many other captains of industry lived frugally when they could have been extravagant because habits of thrift were ingrained in them. As a young clerk Rockefeller avoided debt and bought inexpensive "clothing such as I could pay for, and it was a good deal better than buying clothes that I could not pay for." If Rockefeller had to run from a railroad station's dining room to catch a train, "before going I'd stuff my cheeks with food (I always had a good big mouth), then spend a long time after I got aboard the train eating what I had carried away."

The oil industry that began with a western Pennsylvania gusher in 1859 at first was notorious for extravagance. One farm owner, "Coal-Oil Johnnie," used the proceeds from oil wells on his property to load his shirt front with diamonds and his hands with hundred dollar bills for tips to chorus girls. In three years he tossed away half a million dollars (the equivalent of tens of millions today) and was virtually bankrupt.

Rockefeller, though, made millions in oil by not wasting pennies. When a refinery needed new installations and repairs, Rockefeller bought pipes and joints himself rather than contracting out to a plumber, and saved half the cost. When more barrels were needed, he had employees make top-notch, well-glued white oak barrels for $1 each rather than buying them for $2.50. When dozens of new barrels were needed quickly, Rockefeller himself came to the shop at 6:30 a.m. to help out. He wasted no food in traveling. He wasted nothing in his business.

Rockefeller scorned producers who kept no books and tossed aside expensive equipment that could have been fixed: "It has always been my rule in business to make everything count." His economy and efficiency made a huge difference in the lives of American consumers. Before 1870, nighttime meant bedtime for all but the rich. By 1880, though, with the lowered price of kerosene meaning that one cent per hour could dispel darkness, millions of people in rapidly growing cities could let there be light. Later, of course, came the mixed blessing of cars and gasoline.