George H. (George Henry) Thurston.

Allegheny county's hundred years online

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force the introduction of petroleum as an illuminator upon the greater propor-
tion of the civilized world.

The following from "Pittsburgh's Industries, Resources and Progress," as giving
the mineral facts of its early history are here quoted in preference to re-writing
what would be but a repetition of the same facts, and while generally known, are
necessarily repeated as are other facts in all histories :

" From very early days this then called singular substance was known by the
merchants of Pittsburgh and the people of Venango and Clarion counties to exist



212 ALLEGHENY COUNTY'S '

in those localities, but was considered as one of the curiosities of nature rather
than an available article for the purposes of commerce. Found oozing from the-
ground in very small quantities, or lying on the surface of water standing in small
pits, evidently made by the Indians with reference to its collection ; a few gallons-
was occasionally gathered by a process of skimming or absorption with blankets-
and brought to Pittsburgh by the timber men on their trips down the Allegheny
with their rafts of timber. It had acquired an halt-accepted, half-fabled reputa-
tion as a remedy for bruises, burns, sprains, and rheumatism, and was occasionally
burnt in its crude state as lamp oil in the vicinity of the pits from whence it was
gathered. The dense black smoke produced from the burning of petroleum in its
natural form, however, presented an obstacle to its use as an ilhiminator, save
where necessity required an occasional resort to it. The principal uses to which
the small quantities which were then gathered were put, was a species of patent
medicine in the same rank as 'Seneca' and 'British Oil,' as a similar substance
was called. In 1858, Samuel M. Kier, deceased, began experimenting in the refin-
ing of this oil. Mr. Kier was at that time, and previously, engaged in the making
of salt on the Allegheny river.

"More or less of tbis oil was always found in the salt wells, and in those early
days was considered a detriment to the wells, and the effort then was made to shut
out the oil as much as it is now to case out the salt water. 'What fools these
mortals be,' is the pithy sentence Shakespeare puts into the mouth of Puck. Yea^
verily ! Mr. Kier, in reflecting on and examining this oil, became impressed with
the belief that it had great medical and healing properties. He accordingly ex-
perimented with it for some time and then opened an office in Pittsburgh, and
commenced bottling and introducing it throughout the country under the name of
* Kier's Petroleum and Pock Oil.' Many of our readers will remember the mag-
nificently decorated wagons which, nearly thirty years ago, where to be seen in
every city and town in the Union, with pictures of the good Samaritan adminis-
tering aid and comfort to the sufferer. The oil thus sold was highly recommended
by physicians and others, and met with an immense sale which continued for many
years. The supply, however, after a while so much exceeded the demand, that
Mr. Kier conceived the idea of utilizing petroleum for illuminating purposes, but
owing to the odor and smoke arising from it this disposition was deemed imprac-
ticable by many scientific men. The first attempts of Mr. Kier at distillation were
not crowned with that success that he had hoped for, but he persevered with his
investigations, and making some change in the old style of camphene lamps, he
made the important discovery that his distillate would burn under certain circum-
stances. From this rude beginning he went on making improvements in the
quality of his distilled oil and adaptability of his lamp, by the introduction of the
' Virna' burner and the treatment of his distillate with acids, he had brought his
experiments to a close and secured to the world one of the greatest and most im-
portant discoveries of modern times. Up to this time he had enjoyed a monopoly
in the production of petroleum, but the magnificent results of his invention led to
the discovery of other wells in various portions of the State and continent, and
from that day to this petroleum has been one of the most important products of
Western Pennsylvania. The original 'still,' about 6 feet by 3 feet in diameter, is
retained in the family as a priceless relic.

" The first effort to obtain this oil in quantities by the sinking of a well has al-
ways been accorded to Col. Drake, who is said to have conceived the idea in 1859.

" Some six years prior to that Mr, George H. Bissell, when on a visit to Darts-
mouth College, was shown a sample of this so-called Seneca oil, taken from the
surface of a spring near Titusville. Desirous of further information, Mr. Bissell
wrote to Dr. F. B. Brewer, of the firm of Brewer, Watson & Co., of Pittsburgh, in
regard to this singular product of nature. From the answers received Mr. Bissell
was induced, in company with Mr. Eveleth, to visit Titusville in 1854. The terri-



OIL TRADE. 213

tory on which the springs in which the oil was found was then owned by Brewer
Watson & Co., although having some years previously been purchased by a Mr*
C!hase for a cow. Messrs. Bissell and Eveleth leased the property for ninety-nine
years, paying the sum of $5,000. Following somewhat the old Indian method,
Ijefore mentioned, of " pit gathering," they began the obtaining of the oil by dig-
ing trenches, which were allowed to fill with water, and it was then pumped into
vats and the oil drawn off as it rose to the surface. It is a matter of curious men-
tal speculation to imagine what would have been the thoughts of those two gentle-
men could they "'i the visions o' the night" had a view of the 4,000 barrels a day
well struck in September of 1861 on the Tarr farm. They had, however a vision
•of there being " money in it," and impressed others also, for in 1855 Messrs. Bissell
■& Eveleth sold one-third of their property to some New Haven capitalists, and a
•company was formed, called the "Pennsylvania Eock Oil Company," of which
Prof. B. Silliman, Jr., was president. It was this company that in 1858 employed
•Col. Drake of New Haven to sink an artesian well. Work on this well was begun
in 1859, and at the depth of 602^ feet the first vein of oil was struck on the 28tli of
August, 1859. It would seem, therefore, that to George H. Bissell and conjointly
Dr. Brewer, of Pittsburgh, this city owes whatever of mercantile renown and
wealth has been derived from the petroleum trade ; and to Mr. Kier, before men-
tioned, another Pittsburgher, the immense business in illuminating oils prepared
from crude petroleum. This first well flowed ten barrels a day for a time, and tha
oil sold at fifty cents a gallon. The production of the well, by the use of a pump,
was, in September, increased to forty barrels a day."

The idea of sinking a well for the procuring of oil in the Venango district was
one of those pioneer thoughts that always mark an advance in the circles of com-
merce or manufacture. And again it is to be noted, as in other cases, Allegheny
•county was, though slow to begin the work, the pioneer. In this case, as in most
others of a similar nature, the effort was met with ridicule, and the originators of
the idea were obliged to prosecute their scheme through much discouragement.
In proving that, by sinking a well petroleum could be obtained in quantities, made
an excitement rarely witnessed in the commercial history of any country. The
story that oil was being pumped from the earth as freely as water was at first
-scouted as a farce, then accepted as a phenomena, and then believed to be a defined
fact pertaining to certain tracts. Men were prepared to believe, from California
experience, that it was possible gold might be found in such copious deposits that
it could be gathered by the shovelful, but that real oil, excellent for burning, for
lubricating and all the uses of oil, was being pumped from out the earth in the in-
terior of Pennsylvania was beyond belief. When, after a time, it was announced
that oil was not only pumped up, but that it gushed out of its own power, not by
the gallon, but at the rate of hundreds of barrels a day, the excitement to embark
in the business and to buy oil territory became almost a mania.

From that day, now over a quarter of a century, the buying of oil territory
and the drilling of wells has been a speculative as well as a legitimate business,
and Pittsburgh has been the center of the producing interests. Whatever have
been the losses in the ebbs of speculation to individuals, Pittsburgh has been a
great gainer in the establishment of her oil trade. The world, as well, has been
greatly benefited, and perhaps to an extent unequalled by few other articles.



214 ALLEGHENY COUNTY'S

In 1860 petroleum was unknown in France as an illuminator. In 1861 forty-
casks were sent there as a curiosity. In 1862 there were shipped 3,934 casks as a.
commercial venture. In 1863 the demand for exportation was 29,197 casks, and
in 1864 there were sent out to Marseilles 66,000 casks, and in 1875 the exporta-
tions to foreign markets were 232,839,457 gallons, or equal to 5,543,796 barrels,
and in 1883 the export was 673,906,817 gallons, or equal to 16,045,817 barrels of
crude oil. In addition to this, there was a large quantity of the by-products also-
exported, and the value of the export for 1883 was about |69,650,769.

In 1876, the following, in relation to the production and location of petroleum,,
was said in "Pittsburgh and Allegheny in the Centennial Year" :

" While the crude and refined petroleum now bought and sold in the markets
of and exported from the United States is chiefly the produce of some three of
the counties of Western Pennsylvania, yet the petroleum indications undoubtedly
extend in an oblique belt or zone around the earth, and its course is distinctly
marked by the districts where it is already obtained for market, and by the points
at which it crops out, so to speak, in the shape of oil and burning springs. Begin-
ing with the Canadian district and passing south vvestwardly into the oil district
of Pennsylvania, from thence to the Kanawha, then through Kentucky, finding
the indications at various points, the belt passes into Arkansas, from thence to^
Utah, thence to California. Crossing the ocean it is found in Hindostan, from,
thence, changing the direction to a north-westwardly course, the belt passes to the
burning springs of Persia and the " Naphtha" of the neighborhood of the Caspian
Sea. Still pursuing a north-westwardly direction to the petroleum wells of Wal-
lachia, and finding traces through Germany, the British Isles are reached. Al-
though no petroleum has yet been found in them, the coal and peat districts fur-
nish, on distillation, coal oil. From thence crossing the Atlantic the Canadian'
districts, from whence the departure was made, are reached, and the circle thua
dotted out by actual production and unmistakable indications is completed. That
this is one broad, permanent belt of petroleum remains for actual explorations of
a long series of years to determine, but that at all the points indicated, greater or
less quantities are to be obtained, is undoubtedly true. Such immense supplies of
petroleum as this probable zone would seem to indicate might, almost, on first im-
pression, lead to the conclusion that the obtaining of that article would soon be
unprofitable; yet it should be recollected that the deposits of coal are no less, if
not wider, in range. The progress of civilization as it occupies with fresh popu-
lation and the manufacture and commerce thereof, the successive coal fields gives
value to that mineral which, ponderous to transport, necessarily finds its consump-
tion principally in the immediate districts of its production — while petroleum is
transported thousands of miles to markets far removed from the locality of its
production. Petroleum, therefore, beside being more than an equal necessity to
civilization than coal, possesses greater advantages of being transportable to con-
suming markets, long distances removed from its place of production. There
would seem to be no fear so long as petroleum continues the necessity it now is —
taking the general facts in relation to the existence, value and production of that
equal primary necessity, coal, as a guide of oversupply.

"It may be safely assumed that until it is superseded in all its chief uses by
some other article as abundantly found and as cheaply produced, the obtaining of
petroleum will always be as profitable where judiciously prosecuted as the mining
for any other mineral substance ; and holders of tracts of good petroleum produc-
ing territory will be as wealthy in proportion as the possessor of coal, iron, or other-
producing mineral lands."



OIL TRADE. 215

As an exhibit of the progress made in the oil business by Pittsburgh for the
period of not quite one decade from Mr. Kier's success in the production of an
illuminating oil, the following is quoted from " Pittsburgh and Allegheny in the
Centennial Year : "

" As before mentioned, the success that followed the efforts of Drake to procure
oil by boring soon led to such quantities being offered in the market as at once
brought it into use as an illuminator and a lubricator, and caused the erection of
seven refineries at Pittsburgh in 1860.

" In the following year, 1861, there were seventeen refineries added to those
previously in existence ; and in 1862 nine more were built ; and in 1863 fifteen
more were constructed.

" From September, 1862, to September, 1863, the export of refined and crude
petroleum and benzine from Pittsburgh to the East and West, hy railroad alone,
was 23,739,080 gallons, and yet an additional amount was sent West by steamboat,
of which there is no record. Daring 1863 there was exported to foreign ports
from the United States, 28,250,721 gallons. Of this amount there was shipped
East from Pittsburgh 26,970,280 gallons, or nearly the entire foreign consumption.
The value of the exportation in New York, in currency, was at an average of rates
for that year, $9,102,472, the average rates for that year in New York being 28
cents for crude and 441 cents for refined. The entire value of the oil trade of
Pittsburgh for 1863 being nearly eleven million dollars.

"In 1864 five additional refineries were put in operation. During that year the
entire exportation to foreign ports was 31,872,972 gallons. The shipment from
Pittsburgh for that year was 25,549,385 gallons, or 35,500 barrels less than in 1863.
During this year the average rates for crude in New York, in currency, was 41 1-
cents, and for refined 64| in bond. The value at these prices then, in New York,
of the oil exported East from the city of Pittsburgh, was, in 1864, equal to $IB,-
610,411, and the entire trade of the city about fifteen millions.

" In 1865 the entire exportation to foreign ports from the United States was
28,072,018 gallons, while the amount shipped East of Pittsburgh was 25,549,385
gallons. This was worth in Pittsburgh, at the average market rates for that year,
$9,929,096, the average rate for crude being 25| cents, and for refined 52 1-10
cents. The entire trade of the city may be estimated at twelve millions.

"In 1866 the entire exportation to foreign ports was 67,142,296 gallons, while
the shipments east from Pittsburgh was 32,879,062. This was v/orth in Pittsburgh
$7,421,085, the aggregate rates for crude being 144 cents, and for refined 31 J cents,
and the entire oil trade of the city for that year did not reach ten millions.

" For 1867 the exports to foreign ports were 62,600,685 gallons, and the ship-
ments east from Pittsburgh 23,701,760 gallons. The average rate for crude was
10^ cents, and for refined 44| cents. This would make the value of the oil shipped
from Pittsburgh to the east $6,655,286 ; and taking for the home consumption and
western exportation an average of previous years in their proportions to eastern
shipments, the entire oil trade of the city for 1867 may be put at about eight mil-
lions of dollars.

"From these figures, most of which are from the actual statistics of exporta-
tion and recorded prices, it will be seen that from January, 1863, to January, 1867,
a period of five years, the exportation of oil from the city of Pittsburgh brought
to it a business and a circulation o^ money amounting to nearly forty-seven mil-
lions of dollars, while the whole trade in that period amounted to fifty -six millions,
or an average of eleven millions yearly.

" During those five years the entire exportation to foreign ports from the United
States has been 217,948,692 gallons, and the shipments east from Pittsburgh been
132,396,179 gallons, showing that Pittsburgh supplied over sixty per cent, of the ivhole



216 ALLEGHENY COUNTY'S

foreign exportation of petroleum up to 1867. At that time there were fifty-eight re-
fineries in the city of Pittsburgh and suburbs ; of these fifty -one were in operation
and seven were idle. These refineries employed about 700 hands, whose yearly
wages amounted to |560,000. The refining capacity of these refineries was equal
to 31,500 barrels a week. The capital invested in buildings, machinery, &c., was
then estimated to be $7,630,000, and in tanks, barges, &c., about $5,432,000. Nearly
the entire amount of these sums invested had been distributed among the other
branches of manufacturing in Pittsburgh ; having thus added to the business of
the city in five years nearly thirteen millions of dollars. There was also expended
in repairs annually a sum which, it is estimated, amounted to 10 per cent, upon
the value of the investment in the refineries, barges, tanks, &c., or an annual ex-
penditure of over one and a quarter millions per annum among the workshops of
the city.

" It would seem, then, that petroleum had added to the aggregate business of
Pittsburgh in those last five years over seventy- one million of dollars, besides dis-
tribution in the community for labor directly connected with the reiineries a sum equal
to nearly three millions of wages."

At that time pipe lines were only beginning to be thought of, but economies in
the transportation to the seaboard for exportation was a subject of much discussion
and also indications of those natural evolutions in trade mentioned in the opening
paragraph of this chapter began to show. In the development of those two pro-
gressive factors in the petroleum industry changes began to take place in the
handling of petroleum at Pittsburgh and the refineries to concentrate. In 1876
there were at Pittsburgh twenty-nine oil refineries, having 138 stills, with a weekly
capacity of distillation of crude petroleum of 126,371 barrels, or a capacity of pro-
duction of 95,000 barrels of refined oil weekly. This is a decrease from the num-
ber of refineries in 1866 of just fifty per cent.; but it is an increase of two hundred
per cent, in refining capacity in ten years — there being 58 refineries, with a weekly
capacity of 31,500 barrels, in 1866, as against 29 refineries, with a weekly capacity
of 93,000 of refined oil, in 1876. Although the refineries of 1875-6 were not run
to anything like their full capacity, yet the proportionate increase in capacity is
maintained in actual results under the partial runniug of the works. In 1866 the
exportation of refined oil from Pittsburgh by railroad, to the East alone, was 424,-
848 barrels, and in 1874 it was 1,247,641 barrels, being, in the actual amount of oil
refined, an increase over the trade of 1866 of 849,696 barrels or quite two hundred
per cent., in perfect unity with the increase of refining capacity, and demonstrat-
ing an absolute increase of that proportion in the oil trade in ten years, as shown
by shipments to the East alone. To this is to be added those to the West and by
river. In 1875 this increase fell off from inability of Pittsburgh refineries to ship
profitably, owing to the schedule of railroad freights, by which Cleveland was en-
abled to enter the market more advantageously. The decrease caused by this
freight discrimination was equal to 150,553 barrels; but even under this disadvan-
tage the showing is still, in an exceptional year, a gain of one hundred and sixty
per cent, in the volume of trade in ten years.

The building of the pipe lines to the sea board has wrought a change in the
Dianner of the shipments of petroleum to the East, and it is only in refined oil



OIL TRADE. 'lYI

that the shipments by rail are made. In the place, however, of handling the bar-
rels of crude petroleum oil brokers now handle pipe line certificates, representing
specific numbers of barrels. Under this system of dealing in oil immense sales are
daily made of crude petroleum, through which the monetary value of the oil trade
of the city is greatly enhanced. It may be said, perhaps, that the same certificates
for any given number of barrels is sold and re-sold, and there is no actual oil
moved. That is nothing more than occurred daily in the oil excitement from '60
until the issuing of pipe line certificates ; the stocks of petroleum in the city were
sold and re-sold and not a barrel moved, although ultimately shipped to the sea
board or the refinery from the warejiouses. The only difierence now is, that in-
stead of being in the city warehouses, or sold to arrive from the wells, it is in the
tanks of the pipe line companies ; and, no matter however much it may in certifi-
cates change hands, does as before, ultimately pass to the sea board or the refinery.
The sale, then, of a thousand barrels of oil on certificates is usually the same as a
similar sale on call in a warehouse, and representing an actual transaction in the
market, its monetary sum, or its representation of oil, is that much business trans-
acted. It would appear from the report of the Petroleum Exchange for 1886,
that the transactions for the year represented 797,827,000 barrels of oil, and a
monetary value of transactions of $690,067,760 at the average price of oil through-
out the year. Of course a great part of this is speculative sales, but still it repre-
sents that value of actual business for which checks were given or received.

In the refining of oils, under the natural evolution of trade by which the mon-
opolizing tendencies of capital are developed, there has been a concentration of the
refining interests. Such changes are a natural result of the accumulations of
capital and the necessity for its employment, and is not to be looked upon as other
than a simple business result, by which the holders of large capital absorb, and
those of less resources are absorbed. There are laws of nature whose action are
inevitable, and there are laws of trade as well. While under such processes there
may be infringements on individuals, the trade of the community is only concen-
trated or changes its character, not lessened.

There are now working at Pittsburgh 12 refineries, employing 980 hands, whose
wages will amount to $490,000. The value of the plants was not obtained, nor the
statistics of the actual output. The capacity of these refineries is 32,958 barrels
crude a day. The yield of refined oil is about 75 per cent, of the crude, which, if
the refineries were all running to their capacity, is equal to about 6,500,000 barrels
refined oil a year. Of these refineries four pay especial attention to the produc-
tion of high grades illuminating oils, as mentioned under head of " Illuminating
Oils."

As mentioned in the early paragraphs of this review of the oil trade of Pitts-
burgh, Mr. S. M. Kier is entitled to the credit of being the father of this branch
of the oil trade. Various illuminating oils were produced by the refineries from
1863, The output of these oils at the present time is estimated to be of a value
of $1,000,000, no absolute statistics being attainable.



218 ALLEGHENY COUNTY ^S

As to the total value of the oil trade "Pittsburgh's Progress, Industries and
Resources " says:

"The summary of the oil trade is one that, while showing a decrease in the
actual number of refineries, still shows in the money total a large increase in the
aggregate of barrels of oil sold. That a large amount of that is from the sales on
the Petroleum Exchange does not make against the totals of the trade. A thou-
sand barrels of oil sold on 'change, even if it is resold within a few moments, is still
an actual transaction; the only difference from the habit of ten years since is, that
now it is the oil in the tanks of the United Pipe Lines, where the producer's oil
is piped, that are sold, instead as was formerly in the tanks and barrels of the in-



Online LibraryGeorge H. (George Henry) ThurstonAllegheny county's hundred years → online text (page 29 of 43)