Drilling for Black Gold: A Letter for the Temple Lease at Montebello, 15 June 1917

by Paul R. Spitzzeri

It was an extraordinary stroke of good fortune for the Temple family when, in April 1914, nine-year old Thomas, the eldest of the four surviving children of Walter and Laura Temple, ran home to tell his father that he’d found oil on their 60-acre ranch near Montebello.

The following year, the Temples executed a lease with Standard Oil Company of California (now Chevron) to drill for the black gold that Thomas found indications of when playing on the steep hillside on the northeast corner of the Montebello Hills.  One of the remarkable aspects of the discovery was that the land had been owned by the Temple family for a quarter of a century from the early 1850s to the mid 1870s and then lost in the catastrophic failure of the Temple and Workman bank in Los Angeles in 1876.

Also incredible was that the land passed by foreclosure to Elias J. “Lucky” Baldwin, who’d loaned the stricken bank funds to reopen after a financial panic and then added the Temple portion of Rancho La Merced to many other holdings from the Workman and Temple families to his rapidly growing portfolio.

In 1909, Baldwin died, leaving the Montebello Hills land to his two daughters.  Three years later, Temple, represented by his friend, Milton Kauffman, approached the executor of the Baldwin estate, Lucky’s nephew, H. A. Unruh about buying some of the land.  Temple didn’t have the money to buy the property outright, so borrowed the sum from the Baldwin estate!

Obviously, once it was known there was oil in “them thar hills,” the Baldwin daughters, already fabulously wealthy, became even more so.  They also benefited from oil found in the Baldwin Hills near Inglewood–land, by the way, formerly owned by the Temples and Workmans and lost in the bank loan foreclosure.

Standard Oil drilled a test well on the Baldwin portion of the Montebello Hills land and successfully brought crude in at the end of 1916.  With that fine showing, the company then moved to the Temple lease and began work on the first well there.  By mid-June, when the well was nearing completion, it was time to for the Temples to agree to the terms of royalties on the proceeds of the petroleum pumped out of the well.

Temples to Hillman letter 15June17

Today’s “Drilling for Black Gold” entry spotlights a document in the Homestead’s collection dated this date in 1917, written by Walter Temple, signed by him and his wife, Laura Gonzalez, and delivered to Standard’s Vice-President Fred H. Hillman.  The message is short and simple and responded to a letter sent by Hillman three days previously from his office at company headquarters in San Francisco and referring “to oil production and sale of same on Temple No. 1 well.  The answer was:

You are hereby authorized to handle and sell our proportion (1/8) of the oil produced on the Temple lease at the most advantageous price that the market may afford.

The one-eighth royalty was standard (pardon the pun) for leases and though 12 1/2% sounds like a small figure, when Standard wound up drilling some two dozen wells on the Temple lease and brought in a number of producers, including some substantial gushers, the income derived by the family was more than ample.

It turned out that the heyday of the Montebello field, for the Temple lease, the Baldwin lease and others was relatively short, though in the late 1910s and early 1920s, it was highly productive.  By mid-decade, though, oil yields tapered off sharply.  Walter Temple used his oil revenue to move into real estate and plowed much of his wealth into the development of office buildings, movie theaters, post offices and other structures in Los Angeles, Alhambra, San Gabriel, and El Monte, while founding the Town of Temple (renamed Temple City late in the decade) in 1923.

As can often be the case in speculation, Temple poured funds into his real estate projects while the source of that revenue began to drop.  As is also common, boom periods can generate tremendous enthusiasm, excitement and energy as fast money can be made, but the inevitable busts can be devastating when speculators are over-leveraged.   This is what happened to Walter Temple, whose fortune rapidly dissipated by 1930 (this is reflected in yesterday’s post).

Still, in mid-June 1917, the future looked bright and the Temples’ prospects especially rosy.  Signing the letter authorizing Hillman and Standard to sell oil, even at an 1/8 royalty, must’ve been heady stuff for a family that had often struggled to make ends meet before Thomas Temple’s lucky strike!


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