Buyers beware. While the U.S. petroleum industry has made the nation a world power with the best standard of living, there have been those who have taken advantage of “oil fever” among investors since the first commercial well in 1859. C.C. Julian and his Julian Petroleum Corporation was one.
In May 1923, a Canadian Courtney Chauncey “C.C.” Julian formed the Julian Petroleum Corporation in Los Angeles. It was a time of extreme excitement in the California oil patch (see Discovering Los Angeles Oilfields).
In a Ponzi scheme promoted as an oil investment opportunity, Julian bilked millions of dollars from investors through a continuous newspaper advertising blitz.
Julian’s scheme became known nationally as the “Julian Pete Scandal” and by April 1927 had peddled almost four million worthless stock certificates. Newspapers across the county wrote about the Julian Petroleum Company and the swindle that rocked Los Angeles.
“In Los Angeles in the early years of the Great Depression, C.C. Julian and the Julian Petroleum Corporation were household words,” notes the 1994 book, The Great Los Angeles Swindle.
“They symbolized, not merely what President Franklin D. Roosevelt would later deplore as ‘a decade of debauchery of group selfishness,’ but the failed hopes and dreams of the great boom of the 1920s,” explains author Jules Tygiel.
“Indeed, no single story captures the essence of the 1920s in America – its booster optimism and rampant speculation, its entrepreneurial mania for mergers, its overlap of business and politics, its application of new communications technology, and its cast of oilmen, stock promoters, Hollywood stars, cinema moguls, banking executives, Prohibition era gangsters, and evangelists – quite so well as the Julian Petroleum swindle.”
A 1994 Los Angeles Times book reviews notes that Tygiel’s book is “a cautionary tale of oil promoters, dream weavers and bunco artists breeding civic and corporate corruption. But mainly it’s the story of C.C. Julian, a flamboyant oil huckster who was part dreamer, part dream merchant.”
The stories of exploration and production companies joining petroleum booms (and avoiding busts) can be found updated in Is my Old Oil Stock worth Anything? The American Oil & Gas Historical Society preserves U.S. petroleum history. Please support this AOGHS.ORG energy education website. For membership information, contact firstname.lastname@example.org. © 2018 Bruce A. Wells.