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Wallace Melvin Morgan.

History of Kern County, California, with biographical sketches of the leading men and women of the county who have been identified with its growth and development from the early days to the present; online

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Online LibraryWallace Melvin MorganHistory of Kern County, California, with biographical sketches of the leading men and women of the county who have been identified with its growth and development from the early days to the present; → online text (page 18 of 177)
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comprised the heart of the old McKittrick field, where many of the present
producing wells are located, and the exact description of the land is given to
show that even in those days the oil men had learned to "lay the ruler diagon-
ally across the sections from northwest to southeast" when they studied
their maps.

This is sufficient to show that thirty or thirty-five years before the first
big oil boom in Kern county oil had been discovered in all the great fields of
the present day except Midwa}^ and Lost Hills. Moreover, six years before the
oil boom in 1899, when the Kern river field was uncovered and oil began
to be the principal subject of interest in Kern county, the quiet, laborious
and not too profitable development of the oil and asphalt industry at McKit-
trick and Sunset had reached such a stage that the McKittrick railroad had
been built and the Sunset road was projected. The big oil boom was not, ac-
cordingly, so much a boom of discovery as a boom due to the ripening of mar-
ket conditions and the revival of industrial enterprise and expansion after the
financial depression of 1893-4. Similarly all the later booms have depended as



HISTORY OF KERN COUNTY 127

much on outside conditions as on the bringing in of wells in new territory.
Whenever the market has demanded more oil and the price offered has been
tempting the oil industry of Kern county has risen to the emergency, and
there is now every reason to believe that future renewals of the same con-
ditions will stimulate the industry to renewed activity until the county's oil
production reaches several times its present great aggregate.

Early Development at McKittrick

Aside from the unprofitable efforts of the war-time oil prospectors already
referred to, the first development of the Kern county oil deposit was in the
early 70s when a company of Italians from Mariposa county built a crude
refinery at McKittrick, sunk shafts into the beds of asphaltum and dug some
shallow wells in search of oil.

It was the natural thing that development should begin at this place,
for near the present site of the town of McKittrick violent upheavals of the
earth in ages past had rent and torn the strata leaving a great body of oil
sand exposed. From this oil sand the crude petroleum oozed and flowed
gently over the broken edge of the hill, thickening as the sun and air ex-
tracted the lighter elements and finally forming great masses oi natural as-
phalt, pure and clean except for the sand and dust that the winds carried into
it. At no other place in the county were the oil sands so largely exposed,
and nowhere else were the surface evidences of petroleum so conspicuous and
extensive. It was only a matter of quarrying to obtain the asphalt in great
quantities, and the early operators sought only enough oil to serve as a flux
for the heavier product that Nature had prepared in her own laboratory. At
one place the Italians drove a tunnel eighty feet into a mass of asphalt that
had flowed over the edge of a little canon, but at that time there was no
railroad in the valley, and it was altogether out of the question to reach a
profitable market.

Following the building of the Southern Pacific and the beginning of new
enterprises in Kern county with the capital of Livermore & Redington and
J. B. Haggin, the Columbian Oil Company was organized by Solomon Jewett,
F. R. Fillebrown, Dr. George F. Thornton, J. G. Parke, Alfonse and Jacob
Weill and others and a well was started on section 13, 30-21, on what is now
known as the Del Monte property. Parke, who was a civil engineer, had
some experience in the Pennsylvania oil fields, and was the prime mover in
the enterprise of the Columbian. The company drilled to a depth of 800
feet, but by that time the gas pressure had become so strong that the drillers
were unable to go deeper with the imperfect machinery then obtainable. The
derrick was moved to section 24, and a contract made for a hole 1000 feet
deep. The result was a clean, dry hole with neither gas nor oil nor any other
valuable product.

Operators Move to Sunset
The Columbian abandoned the field, and in 1890 the derrick was moved
to Sunset, where Jewett & Blodget had begun operations. The first activity
at Sunset began in 1889, when Solomon Jewett, H. A. Blodget, John Ham-
bleton. Judge J. O. Lovejoy, J. H. Woody, William F. Woods and others
located 2000 acres of land along the edge of the hills northwest and southeast
of Old Sunset, organized the Sunset Oil Company, and started a well on sec-



128 HISTORY OF KERN COUNTY

tion 2, 11-24, about half a mile west of where the fine producing wells of the
Adeline Extension were subsequently brought in.

This first well was drilled by William DeWitt of Tulare, and was located,
as was the case of nearly all the earlier wells, in a bed of brea, just at the
point where the oil sands outcropped. DeWitt got a strong flow of sulphur
water at 300 feet and abandoned the well. Had he moved his derrick a little
farther to the east he would have developed an oil well at a very shallow
depth, but instead he found another bed of brea on section 21, 11-23, about
five miles southeast of his first location, and started drilling there. At a
depth of 100 feet the drill went into a very heavy oil that rose in the casing
and oozed over the top.

Meantime Jewett & Blodget and Charles Bernard of Ventura county se-
cured a lease on the Sunset Oil Company's 2000 acres of land, and Bernard,
who had gained some experience in the Ventura oil fields, took over the De-
Witt outfit and began a new well close to the second hole which was drilled
by the latter on section 21. By the time Bernard had gone down 300 feet he
had three strings of tools in the well, and decided that it was cheaper to move
than to fish them out. He took his derrick to section 13, 11-24, drilled down
300 feet, got a flowing sulphur water well, and sold his interest in the lease
to Jewett & Blodget.

Blodget then took charge of the development of the Sunset field, bought
the rig of the Columbian Oil Company at McKittrick, and drilled a number
of small wells along the edge of the outcroppings near Old Sunset. None
of the wells yielded much oil, but the total output was sufficient to supply the
flux for making asphalt, and in 1891 the Jewett & Blodget refinery was
established at Old Sunset. The natural asphalt was quarried as at Mc-
Kittrick and melted in open kettles with a small amount of crude oil as a
flux. Then the hot asphalt was drawn off into wooden boxes, and the settlings
of dirt and sand were shovelled out of the kettles ready for another batch. The
asphalt was hauled to Bakersfield by teams of sixteen to twenty-four horses
and shipped east.

McKittrick Railroad Built

The expense of this method of transportation was so great that Jewett
& Blodget through H. F. Williams and A. N. Towne began negotiations with
the Southern Pacific for a railroad to Sunset and one to McKittrick, where
Jewett & Blodget were operating also to some extent. The result was an
agreement in 1892 by which the railroad undertook to build a road to Mc-
Kittrick within two years, and another to Sunset within five years, Jewett
& Blodget to secure the right of way and guarantee sufficient business to pay
the operating expenses. As a part of the agreement, also, the Standard As-
phalt Company was organized with Jewett & Blodget and the railroad com-
pany as equal partners. Later the agreement as to the building of the roads
was amended by the Southern Pacific beginning the construction of the Mc-
Kittrick branch at once and the Sunset branch construction being postponed
indefinitely. The McKittrick road was completed in 1893, just in time for
the financial panic to offset by reduced demand for asphalt the advantage
of better transportation facilities. The operations of the Standard Asphalt
Company did not pay, and the partnership between Jewett & Blodget and
the railroad was dissolved, Jewett & Blodget going back to Sunset and the
railroad taking the McKittrick end of the business.



HISTORY OF KERN COUiNTY 129

Jewett & Blodget kept plodding away in the Sunset field, bringiiig in
small, shallow wells near the outcroppings, and in 1895 they had a production
that justified them putting in stills for the manufacture of asphalt. These
operations comprised the whole of the oil business in Kern county until 1898,
when ]\lcWhorter, Doheny and others of the advance guard of the first rush
of oil men began to explore the west side. In 1899 the oil excitement had
spread from the south and from Coalinga. There was much talk of the Mc-
Kittrick field and many visitors and prospectors were arriving there from all
parts of the state.

One of the men who invested in McKittrick was Judson F. Elwood of
Fresno, who bought a few shares in one of the early companies and went to
see what the property looked like. On his way home he stopped to visit his
brother, James Munroe Elwood, who was keeping a small wood yard in
Bakersfield. Judson told his brother about his McKittrick oil venture, and
remarked that the country north of Kern river looked much as it did at
McKittrick. James Elwood's interest was further excited by overhearing two
men discussing the story of the oil spring from which Gilbert took the tar
to mark Jewett's sheep in the '60s. He made inquiries of Thomas A. Means,
who owned land along the north side of the river, and Means told him that
the Kern County Land Company, in excavating for a ditch years before, had
uncovered oil sand and that gas had been seen bubbling up in the waters
of the river. The exposed oil sand had long been recovered, however, and the
gas was seen no more. Means for a long time past had been seeking to in-
terest someone in the oil prospects on the north side of the river, and had
shown E. L. Doheny and W. S. Tevis over the land without result. Accord-
ingly he was only too glad to give James Elwood a favorable lease, and
Elwood wrote to his father, Jonathan Elwood, who was living in Fresno
county and who was an old prospector, to come and help him find the Kern
river oil.

Discovery of the Kern River Field

In a letter to the California Oil World published August 24. 1911, Jon-
athan Elwood tells the story of the discovery in these words :

"James Munroe Elwood and I, Jonathan Elwood, alone and without the
assistance of anyone, discovered oil on the north bank of Kern river, seven
miles northeast of Bakersfield on Thomas A. Means' farm. This was in
May, 1899. We made the discovery with a hand auger, under the edge of a
clifif, close to the river. Our auger consisted of a piece of thin steel about
four inches wide and twisted so as to bore a hole about three inches in
diameter.

"We had a short piece of one-half inch iron rod, making the bit and rod
together four feet long. A screw was cut on the end of this rod to receive a
one-half inch gas pipe which we had cut in four and eight-foot lengths, so we
could bore one and the other alternately and never have our auger handle
more than four feet above the ground. We bored a number of holes fifteen or
twenty feet deep and every time would bore into water sand that we could
not keep on our auger.

"We concluded that the bank must have slid down and that we were
boring where the river had once been. We then went where the bank was
worn of? by the river perpendicularly thirty feet. We dug back into the bluff
as if making a tunnel three or four feet, and set our auger on solid formation



130 HISTORY OF KERN COUNTY

and in three hours we were in oil sand at a depth of only thirteen feet. We
had enough auger stem with us to go on to a depth of twenty-five feet and it
was looking well.

"We then went up onto the bluff and commenced a shaft, and at the
depth of forty-three feet we again struck the oil sand. We were then obliged
to get timber and curb as we went down, as the oil sand was too soft to stand
up. We were obliged to put in an air blast to furnish fresh air to the man
below on account of the strong odor of gas. At a depth of seventy-five feet
there was so much oil and gas that we concluded we had better get a steam
rig. We got this and went down 343 feet.

"By this time men were coming there from all over the state, locating
government land and quarreling over first rights, jumping some that we had
located, three or four claims deep. The shaft furnished us with oil to run
our own steam rig also rigs for several of the locators. The first oil taken
away was when I took four whiskey barrels of it to Kern city and shipped it
to Millwood for skid grease, getting $1 a barrel net."

As Mr. Elwood says, by that time people were coming to Kern county
from all parts of the state, and very soon after they were coming from all
parts of the world. The boom resulted in development that soon proved the
land over the great Kern river oil pool, and scattered derricks north along the
low hills as far as Poso creek. It extended to the Sunset and McKittrick
fields, and spread a line of prospectors all across the territory between, which
soon took the name of ]\Iidway.

Sunset Railroad Built

In March, 1900, Solomon Jewett, H. A. Blodget, L. P. St. Clair, C. N. Beal
and F. T. Whorff incorporated the Sunset Railroad Company, and Beal, who
formerly had been in the employ of the Santa Fe railroad, undertook to in-
terest President Ripley of the Santa Fe in the Sunset branch. This he suc-
ceeded in doing, and arrangements were made to float a bond issue of $300,-
000, guaranteed by the Santa Fe. Before the plan was carried out, however,
the Santa Fe and Southern Pacific entered into an agreement to build and
operate jointly all branch or feeder roads terminating at common points.
This agreement and the death of C. P. Huntington, president of the Southern
Pacific, delayed the building of the Sunset road until 1902.

The Southern Pacific in December, 1899, began building the short branch
from its main line west of the Kern river field into the lower part of the pro-
ducing territory, where oil from all the leases higher up could be delivered
by gravity or small pumping power to the loading racks. By these means
all the producing fields of the county had rail transportation by the latter
part of 1902 except Midway, which was then hardly in the producing class.

Begin Building Pipe Lines

In the spring of 1902, also, the Standard Oil Company began its eight-inch
pipe line from the Kern river field to Point Richmond, and in October or
November it was practically ready for use, thus affording a large additional
means of handling the oil. But the production of oil and the means for
handling it increased much faster than did the markets. In 1902 the Kern
county fields produced 9,705,703 barrels of oil. In 1903 the amount had jumped
to over 18.000,000 barrels. The production of the state was nearly 14,000,-
000 barrels in 1902, and in 1903 it was over 24,000,000 barrels. The result of



HISTORY OF KERX COUNTY 131

this tremendous increase in the supply of a commodity which the state had
been getting along without only a very few years before could have but one
consequence — a rapid and steady decline in price. In spite of the decline the
impetus that the industry had gained from the first excitement carried it
to a production of 19,600,000 barrels in Kern county in 1904.

Then the prices went to complete ruin, and the Standard Oil Company
built great earthen reservoirs — holding a half million to a million barrels each
— and began tilling them with oil at fifteen, twelve and a half, and finally at
eleven and twu-thirds cents per barrel. Bankruptcy stared the producers in
the face.

Associated Oil Company Formed

With tlie first appearance of the Standard on the horizon of the Cali-
fornia oil industry a number of producing companies in the Kern river and
other fields joined in the organization of the Associated Oil Company, the
avowed object of which was protection from the aggressions of larger con-
cerns and economy and efficiency in the marketing of its oil. The Associated
early effected an alliance with the Southern Pacific Railroad Company and
at the time of the depression in 1904 it occupied a position of great strength as
compared with the independent, unorganized producers. In fact .the large
factors in the oil situation in the state at that time were recognized to be the
Standard, the Associated, the Union Oil Company, the Southern Pacific Rail-
road and the Pacific Oil & Transportation Company.

It was early in August, 1904, that the Standard announced that it would
pay eleven and two-thirds cents for oil in the Kern river field. Although the
Associated and Standard were commonly supposed to have a working agree-
ment by which each steered clear of competition with the other, officers of
the former company gave out that for the sake of accommodating the pro-
ducer it would pay fifteen cents. About the same time W. S. Porter, general
manager of the Associated, estimated the overproduction of oil in the state
at 8,000,000 barrels per year. On .\ugust 15th the Standard, which was at
that time completing storage reservoirs in the Kern river field at the rate of
one half-million barrel reservoir per month, announced that it did not care
to buy Kern river oil at any price.

Independent Agency Organized

Oil men estimated that under twenty-five cents per barrel they could not
produce oil, pay expenses and set aside the sinking fund to meet the value of
their investments against the time the wells went dry. The plan of shutting
down the wells was generally discussed, but for many of the companies this
was wholly out of the question, either because they had leases that required
the operation of the property or because they had creditors who would not
consent to wait for their money. On August 23d the Morning Echo of
Bakersfield printed an interview with H. H. Blood, one of the best known
of the early operators in the Kern river field, in which the organization of
the producers was strongly urged, not for the purpose of fighting, as Blood
pointed out, but for the purpose of facilitating the sale of oil and to prevent
the indiscriminate, disorganized competition by means of which the pro-
ducers were constantly opposing each others' interests.

Blood's suggestion formed a stable point around which the random
discussion of the situation began to crystalize, and that evening, on the



132 HISTORY OF KERN COUNTY

initiative of W. D. Young, a meeting of oil men was called at the National
Oil Supply Company's office to talk the matter over. The meeting was organ-
ized by the election of W. S. Morton as chairman and W. D. Young as sec-
retary, and the secretary was instructed to send out invitations to the ind&-
pendent producers of the state asking them to meet in Bakersfield on Sep-
tember 1st for the purpose of forming a permanent organization. On the date
named representatives of forty-four companies met at the Southern hotel
parlor, elected Timothy Spellacy chairman and W. D. Young secretary and
appointed a committee to name a committee of five on organization.

At that meeting it was stated that between 9,000,000 and 10,000,000
barrels of oil were stored in the Kern river field, mostly in the reservoirs of
the Standard. The next day, however, the committee on organization decided
that the job was too big for it, and another meeting was called for Sep-
tember 5th to name a committee of ten to draft a plan for the new concern.
This committee, duly appointed and consisting of T. Spellacy, T. Earley,
M. V. McQuigg, W. B. Robb, A. H. Liscomb, C. H. Ritchie, W. W. Steven-
son, F. W. McNear, I. E. Segur and H. U. Maxfield, met on September 10th,
with all members present, and spent the whole day and until 10 o'clock at
night in deliberating over the task. A further meeting was held next day,
and lawyers were called in counsel, among them being George W. Lane, who
remained with the organization as its attorney until the present day.

The result of all these serious and extended conferences was the formal
organization of the Independent Oil Producers' Agency on November 3, 1904.
On that date incorporation papers were filed in Sacramento having
first been filed in Kern county, and the following officers were
elected: President, M. V. McQuigg; first vice president, Timothy Spellacy;
second vice president, F. F. Weed; secretary, A. H. Liscomb; treasurer, W.

B. Robb; auditing committee, W. H. Hill, T. Turner and J. Benson Wrenn.
The directors for the first year, each representing a producing oil
company, were Timothy Spellacy, W. B. Robb, A. H. Liscomb, W. S. Morton,

C. H. Ritchie, W. W. Stevenson, L. P. St. Clair, Jr., S. P. Wible, W. H.
Hill, G. J. Planz, Lesser Hirshfeld, W. A. Ferguson, E. E. Jones, C. C. Bowles,
J. F. Lucey, J. B. Batz, T. O. Turner, C. A. Barlow, H. A. Jastro, J. Benson
Wrenn, W. D. Young, T. V. Doub, L. E. Doan, E. Dinkelspiel, Thomas
Earley, J. F. Ker, F. F. Weed, L. Woodbury, E. Denicke, G. W. Lane, A. J.
Wallace, M. V. McQuigg, T. M. Gardner, F. P. Fuller and F. N. Scofield.

The organization, which has had so large a part and influence in the
making of subsequent history in Kern county as to require especial detail in
its description, was organized on a plan conspicuous both for its strength
and its democracy. Each constituent company signed a lease of its property .
to the Agency for a period of five years, and the Agency executed a license
and agreement giving each company the right to operate its own property,
the Agency, however, reserving the right to handle and dispose of all the
oil produced. Each constituent company was given one share of stock in the
Agency, entitling it to one vote in all stockholders' meetings. The unique
feature of this arrangement was that no matter whether the Agency company
owned a thousand acres of oil land and was producing 100,000 barrels per
month or had a lease on two and a half acres and was producing 1000 barrels
per month it had the same voice and vote in the management of the affairs
of the Agency. It is a matter of history, also, that the Agency has been



HISTORY OF KERN COUNTY 133

remarkable throughout almost its entire career so far for the free publicity
which has been given to its aliairs and its deliberations. A great percentage
of its directors' meetings at which matters of vital importance have been
discussed have been with open doors and with representatives of the press
occupying seats about a table in the foreground. Whether or not it has been
in any degree a result of this policy, it is a fact that the Agency, struggling
at all times to increase the price of its product, has had the universal good-
will of the people of the state, including the "ultimate consumer," who is
usually supposed to be hostile to any movement for an advance in prices.

The first plan of the Agency was not to go into the business of marketing
of oil, and its first sales contract was with the Associated. After two weeks
of negotiations with the executive committee of the Agency, the Associated
agreed, on December 23, 1904, to buy, at eighteen cents per barrel, sixty per
cent of the Agency's total output for the year, estimated at 3,500,000 barrels,
and to store the other forty per cent at a reasonable rate.

In view of the fact that the producers had been declaring that oil could
not be produced under twentyfive cents per barrel and meet all expenses and
depreciation, this contract was not hailed with absolute satisfaction. It was
agreed, however, that the executive committee had done as well as it could
under the circumstances, and the situation was accepted with good grace.

The low price, hard as it bore on the individual producers, had two good
effects on the market. It discouraged production and it encouraged consump-
tion. The production in the Kern county fields fell oiif from 19,600,000 barrels
in 1904 to 14,487,967 barrels in 1905. In 1906 the Kern county production was
almost the same, and the production throughout the state increased only
3.600.000 barrels from 1904 to 1906, inclusive.

On the completion of the first year's contract with the Associated it
was renewed at twenty-seven and a half cents per barrel, the half cent
representing the cost of handling the oil by the Agency. The increase in price
was very gratifying to the independents, but it did not result, as we have
seen, in any great immediate increase in production. The prices for the two
years, however, did permit the marketers to extend the use of oil to new fields,
with the result that all the stock oil in the state except what was stored in
the Standard's reservoirs, was well cleaned up by the spring of 1908, and L.



Online LibraryWallace Melvin MorganHistory of Kern County, California, with biographical sketches of the leading men and women of the county who have been identified with its growth and development from the early days to the present; → online text (page 18 of 177)