Drilling for Black Gold: A Letter from West Whittier Oil Company to Walter P. Temple, 5 January 1921

by Paul R. Spitzzeri

As noted here previously, the Temple family had oil drilling operations in two periods during the Homestead’s interpretive era of 1830-1930.  The first was when F.P.F. Temple engaged in early explorations in the 1870s at the first oil field in greater Los Angeles, working at least two locations in the San Fernando field in the mountains to the west of modern Interstate 5 in Santa Clarita.

He was on the cusp of some success, apparently, as modest production from one of these projects was realized.  The failure of the Temple and Workman bank in 1876, however, swiftly curtailed further efforts and, later that year, Star Oil Company brought in a major well that launched the region’s oil industry.

Unbeknownst to Temple, part of his own home ranch, La Merced, was on a significant field of oil waiting to be tapped.  Nearly four decades after the bank failure and, after that portion of the ranch was lost by foreclosure on a loan from Elias J. “Lucky” Baldwin, Temple’s son, Walter, purchased sixty acres at the northeastern edge of the Montebello Hills and flat land along the west bank of the Río Hondo from the Baldwin estate.

Los_Angeles_Evening_Express_Thu__Sep_9__1920_ (1)
Los Angeles Express, 9 September 1920.

This transaction in October 1912 was arranged with Baldwin’s executor and nephew, Hiram A, Unruh, even though Walter did not have the funds to buy the property, so Unruh allowed Temple to pay for the land in installments.  Why this was done is unknown, though, after Baldwin’s death three years earlier, Walter helped Unruh secure some signatures for documents needed in a dispute over land held by the estate.  Perhaps this favor was part of Unruh’s decision concerning the La Merced deal.

In any case, Temple sold his nearby home property, owned and occupied by his family since the early 1850s, and moved with his wife, Laura Gonzalez, and their four children to the Basye Adobe, an 1869 structure where his sister, Lucinda, lived some years before.  About a year-and-a-half later, the oldest Temple child, Thomas, who was then nine years of age, made an astounding discovery of oil on the nearby hills, leading to a lease with Standard Oil Company of California and the first well was drilled in 1917, leading to a solid producer by summer.

Startlingly propelled into significant wealth from this auspicious accident and resulting producing wells, including some bonafide gushers, Walter Temple soon became an oil operator and investor.  He formed the Walter P. Temple Oil Company and one of his first projects was on a lease in Whittier, a little north and west of downtown.

Los Angeles Times, 14 September 1920.

While drilling on a lease at the intersection of today’s Beverly Boulevard and Norwalk Boulevard/Workman Mill Road (fittingly, perhaps, there is a Chevron gas station on that corner—Chevron used to be Standard Oil), Temple decided to sell his interest in the lease in September 1920 to the West Whittier Oil Company.

That firm, based in San Francisco, was formed a few months prior with capital stock of $1 million.  Its president was A.B. Hammond and the secretary was Isaac Kauffman, a long-time prominent merchant in El Monte and whose son, Milton, assisted him in running the store.  Milton also was the West Whittier Oil Company’s manager, overseeing its drilling operations and Walter became one of the firm’s stockholders.  West Whittier’s field representative, Fred Hammer, had worked for another major Montebello oil firm, Red Star, and he advertised that, while most West Whittier stock was reserved for Red Star shareholders to buy, a limited amount was to be released to the public.

A “Notice of Intention to Drill New Well” for Turley lease well #1 filed by Milton Kauffman as manager of West Whittier Oil Company to the Calfornia State Mining Bureau’s Department of Petroleum and Gas, 10 November 1920.

Milton Kauffman, who also worked in local real estate, including the development of the new town of Baldwin Park when it launched around 1909, became a friend and then business adviser for Temple.  He may have recommended and helped negotiate the purchase of the Montebello oil property and was Temple’s manager for other oil investments, including at Whittier.

Kauffman and Temple also leased, by 1920, some property in Huntington Beach near the Bolsa Chica wetlands belonging to Stephen and Marie Turley.   It looks as if Temple was going to try to drill a well on the property, which had been planted to lemons when acquired by Turley several years before, through his own company, but then assigned the lease to the new West Whittier firm.  After fending off a lawsuit by another party, who claimed he had an earlier lease worked out with Turley, West Whittier went to work on the first well, with the rigging up by Thanksgiving.

Los Angeles Express, 6 January 1921

Occasional news reports indicated that drilling was going smoothly and making good time through the remainder of the year.  In its edition of 6 January 1921, the Los Angeles Express reported “the West Whittier Oil Company is now drilling at close to 2500 feet, the formation is sandy shale showing gas and some colors.”

The prior day, the firm’s secretary, Milton Kauffman and Temple’s business manager, sent Temple a letter, now part of the Homestead’s artifact collection, with a detailed report on progress at Turley #1.  It began with, “regarding our operations on the Turley lease at Huntington Beach, I want to report that our well No. 1 is now a depth of 2627 feet.”  About 500 feet before that, the sandy shale was hit and “which checked up with the Standard Oil Company’s well No. 4, located 200 feet southwest of our well No. 1.”

Part of a letter from the museum’s holdings and from Kauffman and the West Whittier firm to Walter P. Temple, 5 January 1921.

The reason this reference to the Standard well was so important was because that well was because that major player in the oil industry opened up the Huntington Beach field with a small producer in 1919, though its Bolsa Chica #1 was a major gusher when it was brought into production in early November 1920.  Standard’s success was why Temple and Kauffman selected the Turley lease as close to the oil giant’s holdings, some 700 feet from the Bolsa Chica.

Kauffman continued “passing thru this formation, which showed considerable oil, we encountered another tar sand at 2240 feet, extending to 2246 feet, which also showed considerable oil.”  When Standard did a test for water on its #4, West Whittier halted work to see the results and consulted with Irving Augur (there’s a surname you’d like to have in a highly speculative field like oil prospecting!) of the California State Mineral Bureau on the next step.

The end of the letter with reference to the potential of the booming Huntington Beach field.

Augur, who advised Standard to keep drilling beyond the major pools of water in hopes of finding a second “oil horizon,” suggested the same to Kauffman, with the result that “we have passed thru a great amount of shale and hard sand until we have reached the depth above stated.”  Every fifteen feet, the crew was “pulling out our pipe to take bit samples so that we are keeping an absolute check on the formation thru which we are passing.”

Kauffman continued that the progress of Standard would be closely monitored with the hope that West Whittier could get to a depth at which they could cement the casing at its well, closing off any water above that and then use rotary or cable tools in the expected oil sand “at whatever depth it may be found.”  He added that by following Standard’s lead, West Whittier saved between $12,000 and $15,000.

Note the address–apparently Temple was well known enough in the rapidly growing Alhambra that the letter could be delivered without a house number or street name.

Mention was also made that “the holdings of the Argonaut Oil Company and the West Whittier Oil Company, southeast of the Turley lease are becoming more valuable as developments progress.  Argonaut, formed in January 1920, was headed by B.L. Thane, an experienced mining developer in Alaska and whose general manager was William H. Taylor, formerly the manager of the estate of Anita Baldwin, heiress of “Lucky” Baldwin and owner of the Santa Anita Ranch after his death.  Taylor was also associated with Red Star.

When news of the creation of Argonaut was reported in the La Habra Star in its 28 January edition, it was added that “Walter P. Temple is also interested in the new company,” which quickly assumed leases in Whittier near Temple’s lease and others in the Quaker City, Yorba Linda and in the Rosecrans field in the Gardena area.

La Habra Star, 28 January 1920.

Kauffman noted that the Argonaut’s nearby Huntington Beach well supplied West Whittier with $23,000 worth of casing and expended $35,000 in cash for “drilling operations and other necessary expenditures in connection with our well . . . and in keeping up rentals paid by us on the various other holdings we have acquired.”

Summarizing for Temple, Kauffman stated that

Taking the situation as a whole, the Huntington Beach Field, for a field in its infancy, shows every indication of becoming a successful and valuable oil field, but, as in all new fields, there are more or less experiments which the different companies have to make first in determining the different depths of the oil horizons and re-checking the various oil conditions as to water and hard and soft formations and other conditions, which could only be explained in detail by a geological survey, but on the whole, we feel very confident that within a reasonable time we can expect to have a successful well as the result of our operations.

He noted that there were over thirty wells in operation in the field, which was in the full throes of an oil bonanza of the highest order (Santa Fe Springs, Signal Hill, and other major fields were soon to be the locations of frenzied booms in the not-too-distant future) and the new leased were made by “some of the larger companies.”

The report of Kauffman to the state mining bureau noting the pipe problems that plagued the project, 26 January 1921.

While Kauffman, ended by writing that “as matters progress, I expect to make reports of operations from time to time to the stockholders,” the experimentation he referred to led to a major problem at the Turley well.  In his report to the state mining bureau at the end of January 1921, Kauffman noted that, on the 13th, the well reached 2,861 feet, but a reamer

was stuck in the hole, and, in trying to pull it out, the cable broke.  After four hours’ delay, in again attempting to pull out the drill pipe, said pipe parted at 1880 feet.  We then put in a shot to separate the reamer from the drill pipe and attempted to pull the same, but were unable to do so.  After several attempts of shooting, we finally put in a shot through the open hole at the top of the drill pipe then in the hole, and are now side-tracking from the depth of 1880 feet.

On 3 March, the Los Angeles Express reported that “the interests and holdings of the West Whittier Oil Company has [have] passed into the hands of the Argonaut Oil Company.”  In his first report to the state mining bureau, the Argonaut’s manager, Taylor, restated the problem with the well and added commentary about further work undertaken after the transfer from West Whittier to Argonaut.

 A follow-up report to the bureau from new manager William H. Taylor of the Argonaut Oil Company, restating the issues with the well, attempts to redress the problem, and the decision to “skid” or move the derrick and redrill a few dozen feet away, 22 February 1921.

This involved shooting through the drill pipe on several occasions and side-tracking for nearly a month during which about 40 feet of progress was made before hitting the frozen drill pipe.  He ended his report by stating that it was “decided to skid derrick and re-drill on January 20, 1921.”   This was referred to in the Express article, as well, when it noted that “the Argonaut skidded the rig and is starting drilling on a new hole 24 feet east of the original location.”

By May, a stockbroker advertising for another nearby company, the Huntington-Hawthorne, proclaimed that the Argonaut was “The Next Sensation” and “will bring in a big well this week” of about 2,500 barrels per day.  The broker breathlessly broadcast that Argonaut “knows how to bring in oil wells” and that Taylor was “a very rich oil man” with impressive results from “owning big production in the Montebello Field.”  A photo showed the H-H derrick very close to the Argonaut and producers from Texcal and the Standard’s numbers 3 and 4.

Express, 3 March 1921.

As a side-note, the ad stated “the impression has been—among those who do not know—that the ARGONAUT WELL was owned by the West Whittier Company—this is not so—the West Whittier Company—as we understand it—formerly owned the lease—which was taken over later by the giant ARGONAUT OIL COMPANY.”  Why this seemed to matter can only be conjectured—perhaps the broker wanted to assure possible buyers in Huntington-Hawthorne stock that Argonaut’s reputation was so stellar that any prior association with Turley #1 with West Whittier was not to be a deterrent for investment.

It turned out that the decision to relocate Turley #1 was eventually a sound one.  Argonaut managed to hit oil twice at greater depths, the last at 3,350 feet, though production was limited in terms of commercial viability.

Argonaut, however, despite being proclaimed a “giant” with a great track record, experienced severe financial problems during 1922 and sold off its holdings, including the Turley lease, which was assumed by the Holly Development Company.  In March 1923, Holly was able to drill deeper and, at about 4,500 feet, hit a pool that yielded 3,300 barrels of high-quality crude per day.

Times, 20 May 1921.

Long Beach Press article noted that the well “has had quite a checkered career” with “a lot of hard luck experienced, including a skidding job” to the new site.  As for West Whittier it “threw up the sponge, which was caught by the Argonaut Oil company” which then had its interest in the well taken over by Holly just a few months prior to the completion of the gusher.  Stephen Turley, three years after arranging for the lease, stood to make $500 a day at current production.

As for Temple, this “hard luck” and “checkered career” marked his general oil prospecting experience, whether it was in Huntington Beach, Whittier, Signal Hills, Ventura or elsewhere, including efforts in Alaska, Texas and Mexico.  There were some modest successes, but also a great deal of failures, and his original Montebello lease with Standard suffered rapidly decreasing production and resulting returns.

His aggressive move into another speculative field, real estate, escalated, as well, with projects in Los Angeles, Alhambra, El Monte and, especially, his own Town of Temple (renamed Temple City in 1928.)  Moreover, his expenditures on the Homestead, notably the building of La Casa Nueva, added to his growing debt, which he tried to manage by taking out bonds for both the Temple Townsite Company and his real estate projects under the Temple Estate Company.

Long Beach Press, 11 March 1923.

By the end of the decade, as the Great Depression began, he sold off most of his property, trying desperately to hold on to the Homestead by leasing it to a military academy in 1930.  Two years later, amid a massive wave of bank failures and a worsening of the Depression, that, too, was lost to foreclosure.  The heady days of oil speculation embodied in this latter were, within about a decade, replaced by a financial freefall—all too often a result of speculation during boom periods and a story experienced by many others at the time.

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