by Paul R. Spitzzeri
With F.P.F. Temple being among the earliest oil drillers in greater Los Angeles during the first half of the 1870s and his son Walter, some forty years later, benefitting hugely from the discovery of black gold on land formerly owned by the senior Temple and then going into business on his own as an independent prospector, the oil industry during our interpretive period of 1830-1930 is one of notable interest for the Homestead.
Accordingly, the 4 October 1923 issue of California Oil World, which billed itself as “the only newspaper in the world devoted exclusively to oil.” from the Museum’s collection, has some notable items in its pages. This is true with the front page headline in red ink blaring “FEDERAL OIL CONTROL MEAN S UNIONIZATION” and with the opening of the article asserting that,
Autocratic control of the coal industry, by and from Washington, equal if not superior to that exercised during the [First World] war, has been recommended to Congress and President Coolidge by the United States Coal Commission . . . it would appear that something will probably be done which will alter the present scheme of things . . .
Whatever may be proposed to Congress as a result of the recommendations of the coal commission for the regulation of the coal industry, it is morally certain will be proposed for the oil industry by Senator [Robert] LaFollette. The Wisconsin solon [lawmaker] takes the view that the two industries should be coupled in regulation.
The piece continued that the proposal called for a division of the Interstate Commerce Commission (ICC) to be established to establish “a system of licensing and zoning, giving the present railroad regulating body the power of business life or death over persons, corporations and associations.” In turn, claimed the paper, “in view of what the railroad labor unions have done to make the people of the United States jump through a hoop,” though this went unexplained, it could only mean that the recommendations meant “control [of the coal industry] by the United Mine Workers.”
Naturally, if what was known as the “Hammond Plan” for the coal industry as well as LaFollette’s idea for the petroleum sector were to be carried out, “unionization of the oil industry will soon be an accomplished fact” and nothing that those in that realm in California and southern California could do would alter the situation.
Sounding much like the “open shop” Los Angeles Times, California Oil World informed readers that labor organizations insisted in an appropriation bill for anti-trust legislation that no funds could be used under that law for prosecuting unions. Moreover, when the eight-hour workday law was passed, lobbying effectively blocked provisions recommended by President Woodrow Wilson “for the control of the labor end of the bargain.” Lastly, a railroad bill was cited in which labor leaders eliminated any penalty for dispensing with a labor board’s orders.
It was deemed to be unacceptable that the Hammond Plan would allow “for the forcible collection of statistics on production, costs, stocks . . . wages hours of labor, etc.,” as if making such information available was somehow against the public interest, though it was acknowledged that the ICC was successful in dealing with freight rates for “the better economic good of the country.” It was assumed that “similarly strength will given to the LaFollette scheme for oil regulation” if it was also to come to fruition—as it turned out, neither proposal was actually implemented.
The other major front page piece of news concerned the death of Lyman Stewart, the powerful head of Union Oil Company, who died on 28 September from acute bronchitis and bronchial pneumonia at age 83. The paper observed that,
Basking in the sunlight of the greatest prosperity in its history, the oil industry of California stood this week with bowed head and saddened heart as old timers and young, members of drilling crews as well as the executives in the business recounted the news of the day—that Lyman Stewart is dead.
The passing of “the best-loved of western oil pioneers” whose “gentle soul was called to the mystic beyond” ended some 64 years of activity in the industry, the first two dozen in Pennsylvania, where oil was first produced in the country, and the remaining four decades in the Golden State, specifically the south. It was noted that services were conducted at the Bible Institute of Los Angeles (BIOLA), of which Stewart was the key founder.
Reviewing that forty-year career in which Stewart was accounted the “dean of western oil operators,” the paper described him as “fighting shoulder to shoulder with the hardiest of pioneers” in building the state’s oil industry so that “in the reflected light of a great business firmly established, a vast territory developed with the aid of his vision and labor.” It was eight years before that he retired “to devote more of his time to the spreading of the deep-rooted religious beliefs he had always clung steadfastly to.”
When Stewart came to the region in 1883, it was stated that “Los Angeles was scarcely more than a Spanish pueblo, and when a few struggling wells whose daily aggregate did not equal the production of one four hundred barrel producer of today.” The building of what became, in 1890, Union Oil with Wallace L. Hardison was undertaken by a man who “fought adversity with dogged persistency until assured success of the company was evident.”
In 1923, Union operated on 700,000 acres with 600 wells producing 80,000 barrels daily and the firm capitalized at $100 million. Four decades prior, however, the investment of $135,000 in five wells led to a total failure of all of them and a $10,000 loan by Isaias W. Hellman, the powerful head of The Farmers’ and Merchants’ Bank of Los Angeles (and former partner of William Workman and F.P.F. Temple during those days when the Angel City “was scarcely more than a Spanish pueblo”) kept the enterprise afloat, though it took years for success to be accomplished.
The paper concluded by remarking that among Stewart’s and his company’s achievements were operating the first oil tanker in the west; constructing the first modern oil refinery in the state; having, in the late 1880s, the first locomotive to burn oil for its fuel source; having the nation’s largest gusher well to date, the Lakeview, brought into production in 1910; and having, in Santa Fe Springs, “the greatest high gravity oil field in the history of the world,” when it was opened by Union in 1919.
Another front-page item of significance concerned oil production in the southern part of the state with California Oil World averring that, “whether or not the peak of production has been reached in the three major oil fields of the south [Huntington Beach, Long Beach and Santa Fe Springs], there will be no backward movement in the oil industry in the south. Decline in production will mean more drilling, both in the south and in the San Joaquin Valley.”
Cited as important in recent local developments were activities at Torrance, Lomita, and Fullerton [actually the Olinda field in Brea], while the paper added that readers should “keep an eye on the deep drilling going on at Montebello.” This connects to Walter P. Temple, whose lease there, handled by Standard Oil Company of California, now Chevron, had large yields from shallow wells bringing him substantial income in the late Teens and early Twenties, but with a substantial decline subsequently—even as he expended large sums in real estate development in Los Angeles and the San Gabriel Valley, including the new Town of Temple, as well as at the Homestead.
As prior posts here have note, a decrease in production was actually wanted as “less oil is what is desired for the present, so that a decline in the flow from the three major fields is not to be regretted,” so that a glut in the market did not mean precipitous price drops in the value of oil per barrel. It was concluded that smaller fields building more slowly in production, but considered of long life and longer term significant yields, “will replace them and supply the constantly growing demands of the market.”
Elsewhere it was noted that early reports for September indicated total statewide production at almost 25.7 million barrels, a daily average of not too far about 3,000 per day more than in August. It was added, however, that the gain was for the first two weeks of the month and there was a drop in yields during the last half—it was cautioned, however, that these were estimates pending final reports. Nationally, it looked like September brought just about 67.7 million barrels into production.
For the rest of the eight-page edition, there was some national news, including an assessment by Harry F. Sinclair of his namesake oil firm who observed “a spirit of pessimism in the petroleum industry” nationally, though, he added, not “so bad as the public has been led to believe.” He cited two important recent development as California’s decline in production after an unsustainable (and undesirable, as noted above) peak and an “increase in consumption [that] has been greater in volume than ever before.”
The first point involved the fact that, while “wells are delivering 100 per cent of their actual capacity,” production at those major local fields would “drop to almost nothing” because “water is now appearing in many sections of the three fields.” As to the second, Sinclair asked “without the flush production of California, how will this tremendous consumption be met?” with the total number of barrels used jumping by 130 million barrels over a year.
Finally, the executive reminded that “present conditions are temporary” and that the conditions of 1915 were considered similar, yet, since then, consumption leapt by 160% with inventories of crude grew by under half that. While output was staying in line with demand, “the production is coming from so few wells that it cannot be considered reliable.”
Speaking of reliability, Sinclair was a key figure in the Teapot Dome scandal, which led him to be convicted of contempt of court and of the United States Senate for his role in the bribing of Secretary of the Interior Albert B. Fall and the serving of 6 1/2 months in federal prison, while Edward L. Doheny, oil tycoon of Los Angeles, escaped the consequences of his actions through an acquittal.
On national oil production, a separate article included a table showing August production at 65.7 million barrels, of which 40% was from California and 44% from the “Mid-Continent” region, including Texas and Oklahoma. The first eight months of 1923 saw nearly 470 million barrels produced with the percentages from those two regions comprising 36% and 47%, respectively, showing California’s surge in recent months was significant.
While most of the reports were specific to production, possible government intervention and other items of industry import, there is a section noting that the prior Sunday, the last day of September, a “semi-final championship” baseball game at Signal Hill (where Temple later drilled extensively) between the Shell Oil nine and their counterparts from the Anaheim Elks lodge led to a 9-3 victory for the latter.
The Shell shortstop, apparently a member of the prominent Santa Barbara Californio family, the de la Guerras, homered, while the third-basemen smacked a pair of triples and its pitcher fanned seven Anaheim batters. In other contests, the Associated Oil squad blanked the Wilmington Cubs, 4-0 and Union Oil’s Tool Club shellacked the Redondo Boosters, 17-4.
Other notable content included experiments on fuel for airplanes involving “a high explosive mixture of gasoline and air” but in which one of these caused the death of four scientists on21 September at the national Bureau of Standards laboratory. An altitude chamber used for the experiment “was completely wrecked” and its door was sent through a window and on the body of one of the men, who was also blown through a window by the explosion. A leak between the motor and exhaust pipe causing a fire leading to the detonation was thought to be the source of the tragedy, while it was also thought there was a problem with the chamber’s construction contributing to the incident, as well.
Then, there is a piece in which it was reported that a “preliminary report on the pollution of coastal waters by oil has ben submitted by a committee representing the U.S. Bureau of Mines, the American Petroleum Institute and the American Ship Owners’ Association.” Though the Pacific Coast was included in the study, the report only addressed the Atlantic and Gulf coastal regions. Remedies studied involved having separation devices for oil and water on watercraft; harbor facilities for collecting and disposing of oil waste; and better apparatuses for dealing with “oil-water wastes” from plants on land, with the first deemed most important to start.
The article continued by commenting,
Marine life and aquatic birds . . . have suffered seriously from pollution of waters; but other industrial wastes than oil are undoubtedly responsible for much of the damage done. This is a serious problem primarily because of the vital importance of aquatic life as a source of food.
The possible effects of oil pollution on the public health can not be ignored. The loss of the use of bathing beaches as a result of oil contamination must be regarded a more or less serious factor, depending upon the extent to which the public is deprived of this means of recreation.
Also discussed were fire hazards from heavy oils and tar on structures and water surfaces and it was suggested that “the fire hazard resulting from oil pollution therefore lies primarily in the spreading rather than in the starting of fires,” because of lower volatility in the material, though if a fire from another source reached those “their inflammability is thereby greatly increased” and “will probably serve to propagate the fire.” These are notable remarks given that this was a century ago and given recent revelations of what oil companies and associations knew about deleterious environmental effects back in the 1950s.
We’ll continue to feature more issues of California Oil World, of which there are two dozen in the Museum’s collection, in future posts, so check back for those.