Making a Statement With a Temple Estate Company Year-End Financial Statement, December 1926

by Paul R. Spitzzeri

Thanks to donations from Workman and Temple family members over more than four decades, the Museum has material in its collection that helps us understand much about their history during our interpretive period of 1830 to 1930, including the dramatic and illustrative rises and falls of fortune that characterized a good deal of their experiences.

The “Making a Statement” series has been one way for us to determine the economic conditions of Walter P. Temple and his three businesses—the Temple Estate Company, the Temple Townsite Company and the Walter P. Temple Oil Company—during the 1920s, as he invested the proceeds from the miraculous oil lease on his Montebello-area ranch in endeavors that involved real estate development in several cities (the Estate Company), that of the Town of Temple (the Townsite Company), and oil prospecting in several fields in greater Los Angeles and southern California (the oil firm.)

This latest post features the year-end financial statement of the Temple Estate Company for 1926, which was a critical turning point of Temple’s fortunes. Prior posts have discussed important aspects of his business endeavors during this period, including the completion of the Temple Estate Building; the beginning of his last building project, the Edison Building in Alhambra and his pursuit of oil projects, such as in Long Beach; and, most importantly, the taking out of bonds to raise funds for those real estate projects, but which also entailed long-term debt and the payment of interest in intervals.

Moreover, work continued, albeit slowly and with costs ever-rising, on the family’s substantial Spanish Colonial Revival house, La Casa Nueva, at the Homestead. Having hired architect Roy Seldon Price (whose name, the family sardonically noted, certainly matched the amounts o his invoices and those of the contractors he brought in), the Temples edged closer to completion on the dwelling, but with increasingly strained finances.

Another important aspect was the decision to send the Temple sons to Massachusetts, the family’s ancestral home state, to further their educations. Thomas entered the Harvard Law School to work towards his juris doctorate degree, while Walter, Jr. and Edgar attended high school at the Governor Dummer Academy. This entailed further expenditures, while their sister, Agnes, who was expected to go to Wellesley or another college in the Bay State, chose to stay in the Bay Area in northern California, specifically Dominican College in San Rafael, which she began attending in fall 1925.

So, with the end-of-year financial statement of the Estate Company, we find that the firm’s assets were of four types: “Current,” bonds, stocks and real property. The former included cash of not quite $4,500; mortgages and notes receivable of more than $350,000, though these were not itemized; accounts receivable of some $46,000; returnable deposits of under $500, a Farmers and Merchants Bank bond interest fund of north of $12,000, a building fund of just over $50,000 for company projects; and, the December royalties from Standard Oil Company for the Temple lease at Montebello totaling a bit over $11,000.

The bonds were mainly federal government ones of some $41,000, with $5,000 issued by the Mission Play Association, and few thousand in the San Gabriel Country Club, of which Temple was a member, and a $100 gold note issued by the Los Angeles Chamber of Commerce. More than half the stock was in the Temple Townsite Company and about 30% with the Central Finance Building Company, which constructed the Great Republic Life Building in downtown Los Angeles.

There was not quite $18,000 in the Talbert and Argonaut oil companies, which prospected at Huntington Beach and the rest were small amounts over not far over $2,000 in Southern California Edison, Samson Tire and Rubber (which built what is now The Citadel shopping complex in the City of Commerce, Temple National Bank, San Gabriel Country Club and the El Monte Plunge (community swimming pool) Association.

Exhibit A provided the “Description of Real Property” including not quite 60 acres embracing the Montebello oil lease with the land valued at $2,500 an acre and the one-eighth interest in royalties valued at 30 times the current amount “according to present practice” and this at just north of $330,000, so the total was not far above $475,000. Five properties in downtown Alhambra, on which were the Utter and Sons Mortuary, the Temple Theatre, the post office and Temple Hotel, the Temple Estate Building and the Edison Building collectively were valued at about $600,000.

Fourteen lots on which three structures were built in San Gabriel across the Mission and adjacent to the City Hall, which property Temple donated to the the municipality, were valued at some $85,000. At El Monte, the post office property of 83,000 square feet on Main Street and which also included the Rialto Theatre, was adjudged to be worth a bit below $51,000. The Puente, or Rowland, Hotel in Puente and three lots in that town and a half interest in land at Owensmouth, now Canoga Park, came in at under $30,000.

This left the “Workman Homestead Ranch” of 93 acres with the land value “in Bearing Walnuts and including 3 Pumping Plants,” these latter to irrigate and provide water for residential and farming purposes, listed as worth $232,500, while the improvements, including the Workman House, La Casa Nueva, El Campo Santo and a variety of outbuildings, were set at $75,000 for a total of $307,000. The asset total was stated as just above $2.3 million, a handsome amount in isolation.

For liabilities, notes payable totaled almost $236,000, while trade acceptances and miscellaneous contracts comprised about $106,000 and all of these ere listed on Exhibit B. The notes included a quartet set up at the end of June with the California Bank as part of the aforementioned bond issue and totaling just above $100,000, including some payable at $4,000 monthly. Two more notes, issued on 29 October, and for $84,000 may have been for La Casa Nueva’s construction and were to be paid off at $3,000 per month.

A dozen other notes were listed, including $11,000 to the First National Bank of Alhambra, these issued in mid-June and mid-December 1926 and likely for construction of the office buildings in that city, while other notes came from the Bank of Italy (soon to be Bank of America), the Monterey Park Community and Savings Bank and the First National Bank of Puente, totaling $8,000.

The Mission Play Association had a note for $12,500 against that stock subscription mentioned above and most of the remainder look to have been for building projects, including the architects Walker & Eisen, the Llewellyn Iron Works (which supplied elevators for the Edison Building) and the Anderson Pump Company among others. A doctor also held a note for $500 and which was executed in June 1924, the earliest of the set.

Llewellyn had a $5,000 trade acceptance, while two other firms, Heffley and Ahonen and Patten and Davies had smaller ones for a combined $2,500. For the miscellaneous contracts, one for a tractor, perhaps for the Homestead, was owned to Edward Keasbey for $595, while Walker and Eisen as designers of the Edison Building were owed almost $3,300 and the edifice’s contractor Herbert M. Baruch was due not quite $95,000.

So, in all, the liabilities were determined to be almost $730,000 against the $2.3 million in assets, so that the net worth was shown to be close to $1.6 million. Of course, this has to be looked at in terms of what was liquid and what values would be in subsequent years, especially with real estate and the Montebello oil field royalties, especially as there was declining production there since the earlier years of the decade.

References were located in regional newspapers to Walter Temple’s activities with the issuance of the bonds and their sale by Los Angeles stock brokerage firms, the eastern trip the family took to enroll the sons in their respective schools, the construction of the Edison Building (which was completed in April 1927), and his purchase of $15,000 in stock issued by the Mission Play Corporation for the construction (also finished the following year) of an elaborate new venue at San Gabriel, where Walter had extensive real estate interests, for the performance of the long-running Mission Play.

The vast majority of the material found, though, concerned the efforts of the Walter P. Temple Oil Company with some references to Ventura, but the lion’s share dealing with intensive efforts in Long Beach. There were, however, two pertaining to Montebello, one being in the 2 January issue of the Whittier News, in which it was reported that the Walter P. Temple Oil Company, trying to extend the limits of the field for a year, had an outpost well at nearly 4,800 feet and had some fifteen barrels of oil and the same of water in it.

The 8 June edition observed that Standard brought in well 17 “on the famous Walter P. Temple property” and it was added that the 120-barrel producer “is not a bad well for 3425 feet of hole in a field that has been producing for eight years.” Not only that, but, as was stated earlier, Montebello was long declining in production, though Standard had two other wells come in during the previous two weeks.

As to Ventura, the Los Angeles Times of 9 February reported that,

A syndicate of Los Angeles men, known as the Temple Estate Company has leased the Percy property in the Ventura-avenue field . . . the lease includes eighteen acres, and adjoins the [Ventura] avenue school house, and is only about 300 yards from the wildcat [geologically unproven site] well which the E[dward] L. Doheny interests are drilling . . .

The area is north of Ventura with the road running parallel to today’s State Route 33 heading towards Ojai and the terms of the lease included a provision that a well had to be drilled within a year or, if the Doheny well was successful, a month from the time that was put into production.

In August, the Walter P. Temple Oil Company, with headquarters in Los Angeles, filed its incorporation papers in Ventura County with the Ventura Press of the 4th reporting that the five directors were Temple’s business manager, Milton Kauffman; Estate Company manager Elmer Potter; Sylvester Dupuy, a partner in the Town of Temple project, and his son Henry; and William Harmon Taylor, whose oil company was mentioned above.

The Times of 8 November reported that “another outpost drilling job in the Ventura district, which takes the form of a wildcat” meaning that geologically unproven type of well on the fringes of the established oil field lines, ” . . . is about to be started by the Walter Temple interests.” A derrick was about finished and drilling to follow very soon after on the 160-acre lease area, while the account added that another 43 acres was just leased by the Temple company, though expectations that it would bid on another property were not realized.

On 1 December, the paper observed that “The Walter P. Temple Oil Company is preparing to start a wildcat well” on a lease some 2,500 feet north of the known producing limits of the Ventura Avenue Field. It was added that “Temple interests have leased about 200 acres . . . which, in the opinion of some geologists, holds possibilities of deep production.” As a prior post here discussed, work continued on this project for the next few years, but with no apparent success for Temple.

Temple had a penchant for pursuing projects on property personally invested for him. His remarkable turn of fortune at Montebello came when he bought land, with financing, that his father, F.P.F., lost to “Lucky” Baldwin after the failure of the Temple and Workman bank in the 1870s. When he decided to establish the Town of Temple (renamed Temple City in 1928), this was also on property sold in October 1875 as the bank badly needed capital to Baldwin by F.P.F. Temple, William Workman and Lewis Wolfskill.

In the case of Temple’s Long Beach oil prospecting, this was in the Los Cerritos field and on lots just a mile-and-a-half southeast of what is now the Rancho Los Cerritos historic site, where the 1840s adobe headquarters for the 27,000-acre rancho was built by Walter’s uncle, Jonathan. Oil columnist Ellwood Munger, whose pieces appeared in many newspapers, wrote in the 8 January edition of the Whittier News that, among frenzied activity at Los Cerritos, Temple recently acquired town lots in the field.

The Long Beach Press Telegram later in the month identified an address on Linden Avenue west of Atlantic Avenue between 35th and 36th streets for Temple’s area of operation and this was considered a northwest extension of the Signal Hill field, which was discovered in 1921 and became a phenomenal production area in a class with Huntington Beach and Santa Fe Springs, both of which were developed around the same time.

A previous post here has detailed the Walter P. Temple Oil Company’s intensive and laborious efforts with five wells on Linden and Atlantic in the same block with some apparent production realized for the first two in May and June 1926. In fall, a good deal of attention was given to well 5 as the firm believed that it had another producer just in reach, but, by mid-November, it gave up the effort.

Months earlier, however, Munger made a trenchant observation about the work in that section, as reported in the Los Angeles Express of 7 May:

Will it pay to drill 4800 and 4900 foot holes in the Los Cerritos extension for the purpose of developing a deep-sand production that has an appearance of yielding [only] 250 and 300 barrels? That is the question the oil operators of the famous town lot area have under consideration now.

By late August, Munger was noting that “Los Cerritos, the wonder extension oil field of the famous Long Beach-Signal Hill area, is on the decline and rapid decline at that.” With no new wells reported and production dropping by 2,000 barrels per week, as town lot producers incurred great expense to tap into a pool that could only yield so much crude, the columnist flatly concluded, “in a word the development of the Los Cerritos area is over.” While Temple expressed hope that this was not the case, Munger was prescient as Temple abandoned work there by the end of the year and turned to Ventura in hopes of success.

Those rising expenses, interest payments on the bonds, softening of the real estate market at the Town of Temple, and declining production of oil at Montebello, were causing increasing anxiety and desperation, which seem to have animated the efforts of Temple to pursue those “outpost wells” and “wildcats” in areas that were hoped to be extensions of successful producing fields. Munger’s essential question of “will it pay?” was the fundamental issue given the highly speculative and up-front capital intensive nature of petroleum prospecting.

As 1927 dawned, the two-dimensional financial statement looked solid in terms of Temple’s assets and liabilities, but the three-dimensional realities were increasingly and unremittingly looking more troublesome and problematic for his economic well-being. By summer 1929, Temple Estate Company properties were being sold. The following spring, with the early stages of the Great Depression underway, the Homestead was vacated and leased. In July 1932, amid a worsening of the depression and waves of bank failures, the ranch, Temple’s last real estate holding, was lost.

His, however, was a situation repeated by many Americans and on varying levels during this period and is instructive for our understanding not just of Temple’s individual circumstances but broader regional and national conditions as the Roaring Twenties came to a sudden and shocking end.