by Paul R. Spitzzeri
After colorful oil promoter Courtney Chauncey (C.C.) Julian, whose oil wells at Santa Fe Springs were the subject of intense financial speculation starting in spring 1922, was arraigned in July 1923 on charges of selling stock (actually, units) without a license. Moreover, his aggressive prospecting at Santa Fe Springs was looking to be shaky until he brought in two wells that fall, which then led the ultra-confident producer to not only drill more wells, but to buy other lands for prospecting and refining, establish service stations, and seek more stock.
The difficulty with the state corporation commission concerning his selling stock (or “units”) in his projects without a license was held up by Julian’s initial refusal to turn over his books for review. Finally, early in 1924, he did so and, after a few months of review, the commission issued a permit, though with restrictions on how much could be issued, with what commissions to brokers, how the funds generated could be spent and so on.
Firing several shots into the windows of the C.C. Julian residence in Hollywood, an unknown assailant early today attempted to kill Julian, a well-known oil firm president . . . Julian said he was talking with a business associate when he heard to bark of a revolver outside his window, the bullets piercing the glass and lodging in the wall a few feet above his head.
According to Julian, he’d received a phone call the night before threatening his life and said the caller knew him. The matter, however, went unsolved.
A couple of weeks later, Julian and a group of friends descended on the Club Petrouschka in Hollywood when one of his party, bumped into someone at another table and fisticuffs ensued. Julian wound up being decked twice by a diminutive and agile opponent, none other than comedic film legend, Charles Chaplin.
According to the San Francisco Examiner, whose publisher William Randolph Hearst was a close friend of the film titan, Chaplin politely asked Julian to leave him and his party alone and was rewarded with some blows by the oil impresario while the comedian was seated. Chaplin then rose and used his considerable agility and boxing skills to send his opponent “to the mat.”
In February, it was reported that Julian was experiencing financial problems, even though he’d reputedly raked in over $8 million in stock subscriptions for his Julian Petroleum Company (commonly called “Julian Pete”) from nearly 50,000 persons. A group of six local business figures, including former Chamber of Commerce president William Lacy, banker Irving Hellman, and Judge William Rhodes Hervey were appointed to review the situation.
Apparently, they had recommendations on how to improve matters, because Julian, by May 1924, advertised his board of directors, of which there were recent governor William D. Stephens, the former president of the Board of Public Works, a man said to have been “born under a walking beam” (the meaning of which was not explained), and Jacob Berger, reputedly an oil prospector and capitalist from San Francisco.
As a side note, Julian waded into politics in the summer when he took out an ad for Asa Keyes, who’d been appointed district attorney in June 1923 after the resignation of Thomas Woolwine. Running for election the following year, Keyes was enthusiastically supported by the oil promoter, who stated that Keyes had “a reputation for ‘honesty’ and ‘ability’ that no man would dare question.” Julian claimed he was the best prosecutor California ever had and that Keyes’ name “drives fear into the heart of the most hardened criminal.”
Julian concluded with:
I estimate that I have some forty thousand shareholders in Los Angeles County, and I am asking that every mother, every father, every husband, every wife, every brother and every sister, “and your friends,” go to the polls today and exercise your citizen’s rights by casting your vote for “Asa Keyes for District Attorney” of this County.
Keyes did win the election and within a couple of years became involved in criminal matters concerning his avid supporter (more of which coming later!).
Problems continued to mount for Julian and his firm, however, and, in October, a federal grand jury cited him for contempt after he, other officers and some employees of Julian Petroleum were issued subpoenas to turn over company books as part of an ongoing investigation concerning possible mail fraud involving stock unit sales.
The embattled promoter claimed that many of them were personal, while bringing others to court with cameras snapping photos of him doing so. He claimed to be a victim of retribution because of a slander suit he filed against an assistant to the U.S. Attorney General, that man’s assistant, and a post office inspector, a case he lost not long afterward.
This bombshell was followed by an announcement at the end of 1924 that Julian Petroleum was being reorganized. The firm had a new slate of ten directors, all from out of California including Senator William H. King of Utah with only Julian and secretary O.S. Witherell (whose signature was on the agreement highlighted in yesterday’s first part of this post) retaining their positions.
More importantly, Julian sold his interest in the firm for a half million dollars to Sheridan C. Lewis, whose New York-based oil company with projects elsewhere in the United States and in Mexico and which had seventeen wells in Santa Fe Springs, Huntington Beach, and Torrance.
Merging the two together, Lewis announced plans to expand Julian service stations on the Pacific Coast and to complete the Julian refinery near Los Angeles Harbor from tank farms at Norwalk and Gardena so that oil could be taken by tanker to the Atlantic states as well as provide supply for the California market.
Julian spun the deal as a benefit for his shareholders, who were to be introduced to the deal at a mass meeting at the Hollywood Bowl in January 1925. In a statement, he asserted that “the corporation has been handicapped by the lack of sufficient funds to function its facilities for carrying out the program outlined.” The arrangement with Lewis, he went on, “practically solve[s] the troubles of the Julian Petroleum Corporation and give[s] the brightest possible outlook for the future.”
As for his situation, the promoter acknowledged that the deal “took a considerable part of the control of the corporation out of his hands, but [he] said he felt the step was necessary to bring about the desired results. Still, he did remain as the public face of “Julian Pete,” including the introduction of a new gasoline called “Lightning” early in 1925.
In a typically snappy ad with his name subscribed, the product was promoted as promising no carbon issues with engines, as delivering at least 20% more fuel economy, and giving more pep to vehicles. As he often did with his schemes, Julian claimed a scientific basis for the wonders of Lightning gas, but said that the product was the result of work that comprised “just a little secret that should be worth quite a few millions.”
The ad was a teaser because the firm was still working on the product “and when we feel we have enough on hand to supply the demand, we’ll turn it loose.” He concluded with “by the way, don’t forget our offices are remaining open every evening until nine o’clock for the convenience of those that have not yet brought their stock in for escrow, so please hurry.”
In mid-April 1925, however, came news that Julian resigned as a director of his own company, though it was said that he would remain “closely identified” with “Julian Pete.” In August, he was involved in another imbroglio with the federal government, this time involving income tax delinquencies.
It was reported that “federal authorities today [15 August] seized $250,000 in cash and securities” from Julian “as part of legal proceedings to compel payment of $792,000 alleged delinquent income tax.” A lien was filed ten days earlier by the Collector of Internal Revenue because of the failure of Julian to file his earnings for the years 1919-1923.
Of the quarter million dollars, $50,000 was in cash, but Julian’s lavish home, said to be worth about $100,000 and situated in the posh Los Feliz neighborhood, was not seized because he recently deeded it to his wife, Mary. Julian claimed in subsequent interviews that he had paid income taxes and that everything would be all cleared up.
As problematic as his tax woes were, however, matters would continue to get worse for Julian, his company’s shareholders, and for those who took control of “Julian Pete.” More on that tomorrow!