The aim of this discussion is to elucidate the evolution of the management concepts, organizational patterns, and policies of the Standard Oil Company (New Jersey). In point of fact, these topics are discussed primarily with reference to the origin and development of the Standard Oil combination under its various legal titles prior to 1911. The policies and practices, both sound and unsound, of the men who administered the Jersey Company in its early years were largely those of the men who created the combination.

The policies of the Standard Oil Company (New Jersey) are headline news. The fact that Standard's policies are not spoken of as “public” policies is little more than an accident of terminology; certainly they are public in their sweep and import, and certainly in their impact upon the public mind. The policies and actions of Standard (New Jersey) are not alone in these respects. Standard is a giant corporation; there are other giant corporations and there are more in the making.

I am going to begin by asking a theoretical question or, if this term appears too ambitious, I am going first to circumscribe by way of generalization the role of business administration in economic development. In the second instance the hypotheses so gained will be tested through application to the history of American banking administration between 1780 and 1914. However, before starting on this task we must agree about the terminology to be used, since the word “administration” may connote either a series of actions, namely, the practice of administering something, or the personnel which professionally administers, say, a business enterprise or a public agency or the like. The same holds true mutatis mutandis of the term “management” which in this paper will have a specific meaning. I am going to apply both connotations to the terms administration and management, but in such a way that no misunderstanding is possible.

One of the major centrifugal forces in American economic history is the industrial revolution which has been taking place for the past 150 years. Corollary to it are the agricultural revolution and the transportation revolution. Most of the investment capital and working capital for the expanding enterprises involved in these revolutions came from plowing back profits, but a sizable amount had to be borrowed or obtained from outside investors. Mobilizing this capital was a major undertaking, especially in a new nation in which capital was relatively scarce. Its successful accomplishment involved a financial revolution.