Exxon Mobil Corporation (XOM), Chevron Corporation (CVX), BP plc (ADR) (BP): A History Lesson

A number of smaller Baby Standards would eventually go out of business or become acquisition targets of the larger post-split oil companies. Whether it was a result of competition or simply due to greater investor interest, the Baby Standards quickly boomed in value. At the end of 1911, the Baby Standards were worth a combined $600 million. A decade later, that value had swelled to $2.9 billion, representing an “unprecedented” quadrupling of value, according to a New York Times review of the companies’ performance published at the end of 1921. By this point in time, the Baby Standards had paid out an incredible $920 million in dividends. This would be the equivalent of a $38 billion company paying out $12 billion in dividends over a decade today. Small wonder, then, that both Socal/Chevron Corporation (NYSE:CVX) and Esso/Exxon Mobil Corporation (NYSE:XOM) joined the Dow Jones Industrial Average (Dow Jones Indices:.DJI) within the second decade of their dissolution — the former in 1924 and the latter in 1928.

And small wonder that Rockefeller, the Standard Oil magnate, enjoyed one of the greatest expansions of wealth in his lifetime following the breakup. Rockefeller’s soaring fortune led former President Theodore Roosevelt to later quip, “No wonder that Wall Street’s prayer now is: ‘Oh merciful Providence, give us another dissolution.'”

The article The Day Big Oil Was Broken originally appeared on Fool.com and is written by Alex Planes.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.The Motley Fool recommends Chevron.

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