Refined and Crude: The “Union Oil Bulletin,” January 1923

by Paul R. Spitzzeri

With F.P.F. Temple being among the earliest petroleum prospectors in greater Los Angeles through the exploration of wells in modern Santa Clarita by his Los Angeles Petroleum Refining Company in the mid-1870s and his son, Walter, being the extraordinarily fortunate owner of many producing wells on land formerly owned by F.P.F. near Montebello close to a half century later, the museum’s collection contains some very interesting artifacts pertaining to the region’s oil industry.

Today’s featured object from the Homestead’s holdings is the January 1923 issue of the Union Oil Bulletin, the monthly publication issued to stockholders of the Union Oil Company of California. The firm started in Santa Paula in Ventura County in the 1880s and grew to become one of big players in the industry by the Twenties, with its headquarters then situated in Los Angeles. Later, the enterprise was known as Unocal and its “Union 76” logo was very familiar to locals, but the company was acquired in 2005 by Chevron and is a wholly-owned subsidiary of that giant firm.

The opening article in the issue concerned recently elected director, Isaac B. Newton, who replaced the late Isaac Milbank, a founder of the Borden Milk empire. Newton hailed from Norwich, New York, where he was born in 1861 and was a graduate of Yale University’s famous law school. Although he began work in his father’s office, he quit after just about a year and migrated to Los Angeles, where he joined the long-standing firm of wholesale hardware and plumbing merchants, Harper and Reynolds.

Newton remained with that company for thirty-five years, rising to be its secretary and treasurer, leaving in July 1919 when the original owners sold the business. Within a few years, however, of his resettlement in the Angel City, Newton joined the California Bank as a director and rose to be vice-president of that institution. From 1904-1911, he was a director (and an original incorporator) of the Southern Trust Company, which merged with Security Trust and Savings Bank.

In 1906, he joined the Farmers and Merchants National Bank and crowned his career in banking by becoming a director of the local branch of the Federal Reserve Bank of San Francisco. As a prominent stockholder, Newton was vice-president of the Union Oil Associates, a holding company formed in 1922 to forestall a hostile takeover of Royal Dutch Shell, and it was related to he “took a prominent part in the organization of this company.” Newton continued his association with Union (other directors in 1923 included company president Lyman Stewart and his son William; banker Henry Robinson; financier William R. Staats, attorney Henry W. O’Melveny, and utility executive and land developer Allan C. Balch) until his death in 1934.

The main feature of the issue was about the 12,000-acre cotton plantation of Adolphus M. Shenk in the Imperial Valley, straddling the boundary between southeastern California and the Mexican state of Baja California. Shenk’s father, John, came to Los Angeles in late 1899 and visited the valley, investing in 1,600 acres of federal land, first for stock raising and, when irrigated water was delivered, Adolphus was the first to use it for planting crops.

Also interested in real estate and loans, Shenk expanded his cotton empire dramatically from about 1909, including on the Mexican side of the border. The article benignly stated that:

Oil and mining in the central part of Mexico have done much to make Americans and Mexicans appreciate how much they can do for each other. Cotton, joining California and Baja California, Mexico, in an unbroken line of white fields, promises to rival the two aforementioned industries in future development of trade relations.

The unnamed writer joined Shenk in a tour of the ranch, with a stop to look at the loading of fifteen carloads of Bartlett pears raised by Shenk and being sent to Chicago. Notably, as he told the writer of his family’s history in the area, Shenk stated “for a long time it wasn’t easy. For three years there was no white woman in the Valley.” After this diversion on race, he talked about the crisis that erupted when, in 1905, the Colorado River flooded and then, overwhelming an irrigation canal, flooded the long-dry Salton Sea, leading to long battle to control the course of the river.

Returning, with prompting from the correspondent, to cotton, Shenk noted that, because there was occasional frost on the American side of the valley but none on the Mexican portion, the latter was where the future lay for the crop’s best success. He looked forward to the completion of the Boulder (Hoover) Dam, which was more than a decade away, for more water to expand the industry, perhaps to a half-million acres.

In discussing operations on the ranch, spanning twelve by seven miles, he noted that “I’ve fot to make the rounds of some of the [twelve] camps . . . Over 1500 Mexicans are working here now, though during the season we run as high as 2500, or as many as we can get hold of. They live at the camps with their families.” In additon, as the Headquarters Camp was discussed, with its harness, wagon, machine and blacksmith shops, it was briefly noted that “industrious Chinamen are hustling around in a large, clean mess-room for single men.”

At the periphery of the camp, were residences of “patched wood, some palm-walled huts, reminiscent of movies of the South Sea Isles.” At one structure, forty “natives” were working on the manufacture of adobe bricks and the owner remarked that “contrary to opinion, adobe makes a very hard, serviceable house. Some adobe structures have stood off the elements for hundreds of years. This place is going to have 48 rooms and will house as many as possible from this one camp. We’re doing the best we can in this respect; building good living quarters all over the ranch. The Mexican government is also helping out with a school, on which work will soon be commenced.”

Given that the Temple family, inspired by a trip through Mexico the prior summer, had just embarked on the building of their adobe mansion, La Casa Nueva, albeit on a much different level than the Shenk ranch, it is interesting to read about the worker housing, described in a photo caption as a hotel,” brief as the discussion was. As for the workers, all that was further said was that, in the visit to some of the camps, “Mexican children play around the cottages” and “small armies pick the cotton in the fields,” with no mention made of the grueling labor involved.

What Shenk did say, after claiming that money wasn’t the main issue for him and that his work was “a fight against nature” and “a fight to build up a community,” was that (and it does sound like it could have been scripted!):

Cotton will mean much to this part of the Valley—a great deal to the United States, but much more to Mexico. Eventually it will mean improved living conditions, better educated people, a developed country and business relations between the two countries which will do much to counteract any sectional feeling caused by misunderstandings, prejudices and a few misguided agitators.

A page of three photos and a pair of captions concerned the “War Record of Oil Carrier,” this being the Union Oil tanker, the S.S. “Los Angeles,” which was engaged in military service during the First World War from mid-July 1917 until the armistice was signed in November 1918. After delivering a cargo of oil in Chile and passing a Navy inspection in New Orleans, the ship was deemed by a commodore who looked it over, “I believe the ‘Los Angeles’ is the neatest merchant ship I have ever inspected.”

The tanker was given a camouflage makeover, equipped with a pair of 6-inch guns, forward and aft, and a structure built on the deck for carrying airplanes, trucks, and Navy supplies in crates. The reason for the gallery of images was because a crew member of the craft stated “that the way they rushed the vessel in, loaded her and rushed her out” while crude was being taken from southern California oil fields to refineries in the northern part of the state, “reminded him of war-time necessity for action.”

Two of the images showed the tanker in “all her war paint,” while the other depicted the “Los Angeles” “steaming away from a fast sinking victim of a German torpedo.” The opposite page is also interesting as it presents a quintet of images of early Union Oil headquarters, including the relocated modest structure from the company’s origins as Hardison and Stewart in 1883, used in 1923 as a store in Santa Paula; the surviving Santa Paula commercial building where Union Oil was launched in 1890; and a view of 1880s machine shops for developing the first locomotive fuels used in the country.

The “News of the Month” section included short notes about such items as the deeper drilling of a Santa Fe Springs well and the bringing in of a 4,000-arrel a day producer there; a new emergency hospital at that important field; a record in December of handling more than 4 million barrels of oil in company pipelines; the delivery of two company tankers at the Port of Los Angeles; new Union service stations in California and Washington state; stock dividend announcements; and a photo of and brief note about “well shooter” Ford Alexander, who used dynamite, nitroglycerine and other dangerous materials “for the straightening of crooked holes, side-tracking of tools, loosening of stuck casing or drill pipe” and other work.

Another main feature was “Redondo’s Winning Fight to Become a Successful Oil Field” which quoted extensively from Union division superintendent George Kammerer, based in Santa Fe Springs and with three decades’ background in the industry. What the veteran said about the field was

That Redondo has put up a hard battle to become an oil field and believe me she is going to win out—has already won out in fact. While attention has been centered almost exclusively on Santa Fe [Springs], Huntington Beach and Signal Hill for the past eight months or more, the very creditable progress made out there beyond Torrance has been completely overlooked. Of course you have to admit that Redondo has made no such phenomenal records of flush production as the three districts . . . the steady way they have been going ahead and getting results in the Redondo operations should not be so completely disregarded.

The area in question was “on the outskirts of the eastern residential section of Redondo [Beach]” and “the present proven area extends three miles in a West Southwesterly direction, with a width of over a mile.” Kammerer went on to note that “they’re coming along fine in Redondo—no joking. Nothing spectacular.”

Several oil firms were drilling there for a few years and oil was not found until May 1922 with the initial well bringing in a very modest 127 barrels per day, but “the facts are that since that time very good work has been done.” Seven months later, 30 rigs were up, with 13 drilling and 11 producing, while one was depending the hole and five others were in the process of construction. Of the producers, seven were flowing wells and the others remained to be pumped, with total daily output at 3,400 barrels.

Proclaiming that “if that’s failure I’ve never been in an oil field,” the super reminded the writer that the exceptional yields at the other three “mega-fields” did not mean that Redondo was a lackluster field and that “if you take the actual oil field figures for the past twenty years for this state as a basis,” production statistics there “look mighty fine.” He added that, because most fields trended northwest to southeast, and there were Union wells at three miles distant from each other, one a producer and the other drilling, then, if the latter came in, the proven area would be about double in size of the previous known area.

Moreover, the article continued “the Redondo district presents no congested acreage suggestive of a pool which is apparently large but really one liable to sudden decrease in production.” Kammerer related that, at Elk Hills in the lower San Joaquin Valley, the second year production was generally from 28-100% of production of the first year, while at Montebello, where the Temple wells were, it was 100-180%, and Santa Maria was 100-275%. McKittrick, another San Joaquin Valley field of importance, though, the rate was 400-1000% and “the Redondo field, as so far determined, more resembles the McKittrick type of field.”

The hope, it was further explained, was that “Redondo will become one of the largest and longest-lived oil production areas in this part of the state” and December yields were expected to be around 80,000 barrels, better than Watsonville (north of Monterey), Summerland (south of Santa Barbara) or Whittier, while close to that of Los Angeles-Salt Lake (La Brea on the city’s west side).

It was noted that no wells were yet abandoned and activity steadily grew “which has done much to overcome the disparaging comment of pessimistic critics.” The piece concluded with the observation that, after some years of the problems and uncertainty commonly encountered with development, “Redondo will have her oil field and that it will be a large-sized, consistent producing and long-lived district.”

The state production statistics for November 1922 showed an increase from 13.4 to just over 14 million barrels. Redondo stood at just north of 41,000 barrels for the month (recall that about double was expected for December) and only Summerland and Watsonville were (much) smaller in yield. By comparison, Whittier stood at above 58,000, LA-Salt Lake at 101,000, Montebello at 352,000, Coyote Hills (Fullerton/La Habra) at 518,000, and Richfield (Placentia/Yorba Linda) at 586,000.

While Elk Hills generated close to 760,000 barrels, the four “mega-fields” for the month were Huntington-Newport at 1.573, Midway-Sunset (lower San Joaquin Valley) at just shy of 2.3, Santa Fe Spring at 2.414, and Long Beach, including Signal Hill, at 2.933 million barrels. Total stocks of crude was over 57.5 million barrels, with more than 70% of that heavy crude of more than 20 degrees, with the rest being refinable crude under that level. The amount of “indicated consumption” was determined to be about 11.85 million barrels, so the increase in stock was nealy 2.2 million barrels.

As for development, there were 174 new rigs up, an increase from 119 in October. Actively drilling wells climbed from 590 to 635, though completed wells declined from 84 to 71, and active producing wells were 8,901, five more than in the prior month, with daily initial output up from over 67,000 to just north of 78,000 barrels. From 1918 to 1921, there was across the board growth in these areas—from 50 to 90 new rigs and 363 to 536 active drilling wells, along with daily initial output climbing from 9,572 in 1919, after a drop of about 1,000 barrels from the year before, to 15,631 two years later.

1923 was something of a watershed year for Walter P. Temple. With the wealth generated from his Montebello oil wells, produced by Standard Oil (which became Chevron), he actively sought other petroleum production, but never replicated that success. Yet, his push into real estate development from 1919 onward led to the May 1923 founding of his Town of Temple (renamed Temple City five years later,) not to mention the accelerating cost of his “mud palace,” La Casa Nueva.

Declining production at Montebello and insufficient yields at Huntington Beach and Signal Hill, among others, countered by escalating outlays for his building program, led, by the end of the decade, to a financial quandary that could not be rectified. Oil and real estate are heavily speculative enterprises and the risk proved to be too much for Temple, as they are for many throughout history.

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