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Business partnership and Civil War service

In 1859, Rockefeller went into the produce commission business with two partners, Maurice B. Clark and George W. Gardner, under Clark, Gardner & Company, and they raised $4,000 ($ 135,644 in 2023 dollars) in capital. Clark initiated the idea of the partnership and offered $2,000 towards the goal. Rockefeller had only $800 saved up at the time and so borrowed $1,000 from his father, "Big Bill" Rockefeller, at 10 percent interest. Rockefeller went steadily ahead in business from there, making money each year of his career. In their first and second years of business, Clark, Gardner & Rockefeller netted $4,400 (on nearly half a million dollars in business) and $17,000 worth of profit, respectively, and their profits soared with the outbreak of the American Civil War when the Union Army called for massive amounts of food and supplies. During the second year of the American Civil War, Gardner withdrew from the business, and the firm became Clark & Rockefeller.

When the Civil War was nearing a close and with the prospect of those war-time profits ending, Clark & Rockefeller looked toward the refining of crude oil. While his brother Frank fought in the Civil War, Rockefeller tended his business and hired substitute soldiers. He gave money to the Union cause, as did many rich Northerners who avoided combat. "I wanted to go in the army and do my part," Rockefeller said. "But it was simply out of the question. There was no one to take my place. We were in a new business, and if I had not stayed it must have stopped—and with so many dependent on it."

Rockefeller was an abolitionist who voted for President Abraham Lincoln and supported the then-new Republican Party. As he said, "God gave me money", and he did not apologize for it. He felt at ease and righteous following Methodist preacher John Wesley 's dictum, "gain all you can, save all you can, and give all you can." During the Civil War, military consumption of oil drove the price up from $.35 a barrel in 1862 to as high as $13.75. This created an oil-drilling glut, with thousands of speculators attempting to make their fortunes. Most failed, but those who struck oil did not even need to be efficient. They would blow holes in the ground and gather up the oil as they could, often leading to creeks and rivers flowing with wasted oil in the place of water.

A market existed for the refined oil in the form of kerosene. Coal had previously been used to extract kerosene, but its tedious extraction process and high price prevented broad use. Even with the high costs of freight transportation and a government levy during the Civil War (the government levied a tax of twenty cents a gallon on refined oil), profits on the refined product were large. The price of the refined oil in 1863 was around $13 a barrel, with a profit margin of around $5 to $8 a barrel. The capital expenditures for a refinery at that time were small – around $1,000 to $1,500 and requiring only a few men to operate. In this environment of a wasteful boom, the partners switched from foodstuffs to oil, building an oil refinery in 1863 in " The Flats ", then Cleveland's burgeoning industrial area. The refinery was directly owned by Andrews, Clark & Company, which was composed of Clark & Rockefeller, chemist Samuel Andrews, and M. B. Clark's two brothers. The commercial oil business was then in its infancy. Whale oil had become too expensive for the masses, and a cheaper, general-purpose lighting fuel was needed.

While other refineries would keep the 60% of oil product that became kerosene, but dump the other 40% in rivers and massive sludge piles, Rockefeller used the gasoline to fuel the refinery, and sold the rest as lubricating oil, petroleum jelly and paraffin wax, and other by-products. Tar was used for paving, naphtha shipped to gas plants. Likewise, Rockefeller's refineries hired their own plumbers, cutting the cost of pipe-laying in half. Barrels that cost $2.50 each ended up only $0.96 when Rockefeller bought the wood and had them built for himself. In February 1865, in what was later described by oil industry historian Daniel Yergin as a "critical" action, Rockefeller bought out the Clark brothers for $72,500 (equivalent to $ 1 million in 2023 dollars) at auction and established the firm of Rockefeller & Andrews. Rockefeller said, "It was the day that determined my career." He was well-positioned to take advantage of postwar prosperity and the great expansion westward fostered by the growth of railroads and an oil -fueled economy. He borrowed heavily, reinvested profits, adapted rapidly to changing markets, and fielded observers to track the quickly expanding industry.