Calming petroleum markets by curbing speculators trading oil and pipeline certificates.
In a sign of the growing power of John D. Rockefeller at the end of the 19th century, Standard Oil Company brought a decisive end to Pennsylvania’s highly speculative – and often confusing – oil trading markets.
The Oil City, Pennsylvania, Oil Exchange incorporated in 1874. In 1877, it was the third largest financial exchange of any kind in America, behind New York and San Francisco.
On January 23, 1895, the Standard Oil purchasing agency in Oil City notified independent oil producers it would only buy their oil at a price “as high as the markets of the world will justify” – and not necessarily “the price bid on the oil exchange for certificate oil.”
Standard Oil’s action would bring an end to a popular “paper oil” market of brokers and buyers.
Before the 1870s, oil buyers took on-site delivery in wooden barrels they provided. Soon a rapidly growing pipeline infrastructure spawned “oil certificates” or “pipeline certificates.” These negotiable new instruments were based on the number of barrels in a pipeline issued for delivery in kind. (more…)
A small church in Texas was once declared the richest in America.
In the fall of 1917, the Eastland County cotton-farming town of Merriman was inhabited by “ranchers, farmers, and businessmen struggling to survive an economic slump brought on by severe drought and boll weevil-ravaged cotton fields.” Everything changed on October 17, when a Texas & Pacific Coal Company wildcat well struck oil near Ranger, four miles away.
The “Roaring Ranger” gusher of 1917 brought an oil boom to Eastland County, Texas, about 100 miles west of Dallas.
The J.H. McCleskey No. 1 well produced 1,600 barrels of oil a day, enough to buy nine new Ford Model-T touring cars every day. The rush to drill in the “Roaring Ranger” field soon became legendary among oil booms, even for Texas, home of the 1901 “Lucas Gusher” at Spindletop. As drilling continued, the potential yield of the Ranger oilfield led to peak production reaching more than 14 million barrels in 1919.
Texas & Pacific Coal Company had taken a great risk by leasing acreage around Ranger, but the risk paid off when lease values soared. The company quickly added “oil” to its name, becoming the Texas Pacific Coal and Oil Company. The price of company stock jumped from $30 a share to $1,250 a share as landmen, “scanned the landscape to discover any fractions in these holdings. A little school and church, before too small to be seen, now looked like a sky scraper.”
Warren Wagner, driller of the McCleskey discovery well, leased the local school lot and in August 1918 completed a well producing 2,500 barrels of oil a day. Merriman Baptist Church was a different kind of challenge. Deacon J.T. Falls complained in February 1919 that the drilling boom’s oil wells, “ran us out, as all of the land around our acre was leased, producing wells being brought in so near the house we were compelled to abandon the church because of the gas fumes and noisy machinery.”
Deacon J.T. Falls (second from left) was not amused when the Associated Press reported his church had refused a million dollars for the lease of the cemetery.
Falls added that, “So as we could not worship God on the former acre of ground, we decided to lease it and honor God with the product.” A Texas State Historical Society marker erected in 1999 records when the well on the church’s lease struck oil, earning the congregation a royalty of between $300 and $400 a day. Merriman Baptist Church, “kept a small amount for operating expenses and gave the rest to various Baptist organizations and charities.”
But drilling in the church graveyard was a different matter.
A 1999 Texas State Historical Society marker explains how members of the Merriman Baptist Church generously shared oil royalties.
At the cemetery, a second, less seen Texas Historical Society marker notes the oil boom’s fierce competition to find property without a well already drilling on it: “Oil speculators reportedly offered members of the Merriman Baptist Church a large sum of money to lease the cemetery grounds for drilling.”
When local newspapers reported that the church had refused an offer of $1 million, the Associated Press picked it up and newspapers from New York to San Francisco ran the story. Literary Digest even featured “the Texas Mammon of Righteousness” with a photograph of the “The Congregation That Refuses A Million.”
Deacon J.T. Falls was not amused. “A great many clippings have been sent to us from many secular papers to the effect that we as a church have refused a million dollars for the lease of the cemetery. We do not know how such a statement started,” he opined.
“The cemetery does not belong to the church. It was here long before the church was. We could not lease it if we would and we would not if we could, the deacon explained. “If any person’s or company’s heart has become so congealed as to want to drill for oil in this cemetery, they could not – for the dead could not sign a lease and no living person has any right to do so.”
Deacon Falls concluded with an ominous admonition to potential drillers that “those that have friends buried here have the right and the will to protect the graves and any person attempting to trespass will assume a great risk.”
A lack of knowledge about the young science of petroleum geology defused the issue. Roaring Ranger’s oil production dropped precipitously because of dwindling reservoir pressures brought on by unconstrained drilling.
Despite another oilfield discovery at Desdemona, by 1920 the Eastland County drilling boom was over. Many exploration and production companies failed (including fraudulent ones like Hog Creek Carruth Oil Company).
In the decades since the McCleskey No. 1 well, advancements in horizontal drilling technology have presented new legal challenges to mineral rights of the interred, according to Zack Callarman of Texas Wesleyan School of Law. Callarman wrote an award-winning analysis of laws concerning drilling to extract oil and natural gas underneath cemeteries.
Callarman’s “Seven Thousand Feet Under: Does Drilling Disturb the Dead? Or Does Drilling Underneath the Dead Disturb the Living?” was published in the Real Estate Law Journal in 2014.
Citation Information – Article Title: “Oil Riches of Merriman Baptist Church.” Author: Aoghs.org Editors. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/oil-almanac/oil-riches-of-merriman-baptist-church. Last Updated: January 13, 2020. Original Published Date: January 18, 2019.
Have an artifact, a collections of papers, photos, or other petroleum-related material that should be preserved? Local museums and county historical societies are a good place to start.
The American Oil & Gas Historical Society’s Oil Families page offers several examples and suggestions. Community museums preserve the many personal and professional stories of U.S. petroleum history.
September 2019
Sinclair oil tankers from 1941
I am seeking information on three tankers which so far has been hard to come by. I happened upon your pages and, while these vessels are not listed there, I am taking a stab in the dark that you might know the information I seek, or know where to direct me to get it.
It is information on three Sinclair oil tankers, which were not Type T2 but rather custom built. I have so far found their names, that they were built in 1941 in Quincy, MA, at the Fore River shipyard, and that they had Armed Guard detachments during WWII, indicating that they had some armament.
The vessels are the Sinclair Opaline, the Sinclair Rubilene, and the Sinclair Superflame. I want to know for all three their:
total barrels or gallons of cargo they could carry
net and gross registered tonnage
maximum and cruising speeds
specific armament
I have this additional information from NavSource:
Hull No. 1488 Sinclair Opaline 471′ Tanker Sinclair Refining Co. New 16 Aug 1941
Hull No. 1489 Sinclair Rubilene 471′ Tanker Sinclair Refining Co. New 20 Sept 1941
Hull No. 1490 Sinclair Superflame 471′ Tanker Sinclair Refining Co. New 7 Nov 1941
I do appreciate your assistance, and any information which you can provide. Sincerely, — John
Post helpful information or suggestions in comments section at bottom.
As the U.S. petroleum expanded following the 1901 “Lucas Gusher” at Spindletop in Texas, service company pioneers like Carl Baker and Howard Hughes brought new technologies to oilfields. Baker Oil Tools and Hughes Tools specialized in maximizing oil and natural gas production (competitors would include Schlumberger, a French company founded in 1926 and Halliburton, which began in 1919 as a well-cementing company).
R.C. “Carl” Baker Sr.
Baker Tools Company founder R.C. “Carl” Baker in 1919.
Baker Oil Tool Company, later Baker International, was founded by Reuben Carlton “Carl” Baker Sr. of Coalinga, California, who among other inventions patented an innovative cable-tool drill bit in 1903 after founding the Coalinga Oil Company.
“While drilling around Coalinga, Baker encountered hard rock layers that made it difficult to get casing down a freshly drilled hole,” notes a Coalinga historian. “To solve the problem, he developed an offset bit for cable-tool drilling that enabled him to drill a hole larger than the casing.”
Baker also patented a “Gas Trap for Oil Wells” in 1908, a “Pump-Plunger” in 1914, and a “Shoe Guide for Well Casings” in 1920.
Coalinga was “every inch a boom town and Mr. Baker would become a major player in the town’s growth,” reports the Baker Museum. Baker organized small oil companies, a bank and the local power company.
After drilling wells in the Kern River oilfield, Baker added another technological innovation in 1907 when he patented the Baker Casing Shoe, a device ensuring uninterrupted flow of oil through a well. By 1913 Baker organized the Baker Casing Shoe Company (renamed Baker Tools two years later). He opened his first manufacturing plant in Coalinga.
The R.C. Baker Memorial Museum was the 1917 machine shop and office of Baker Casing Shoe. When Baker Tools headquarters moved to Los Angeles in the 1930s, the building remained a company machine shop. It was donated by Baker to Coalinga in 1959 and opened as a museum in 1961. Carl Baker Sr. died in 1957 at age 85 – after receiving more than 150 U.S. patents in his lifetime. “Though Mr. Baker never advanced beyond the third grade, he possessed an incredible understanding of mechanical and hydraulic systems,” notes the Coalinga museum.
Baker Tools became Baker International in 1976 and Baker Hughes after the 1987 merger with Hughes Tool Company.
The Houston manufacturing operations of Sharp-Hughes Tool at 2nd and Girard Streets in 1915. Today, the site is on the campus of University of Houston–Downtown. Photo courtesy Houston Metropolitan Research Center, Houston Public Library.
Howard R. Hughes Sr.
The Hughes Tool Company began in 1908 as the Sharp-Hughes Tool Company founded by Walter B. Sharp and Howard R. Hughes, Sr. “Fishtail” rotary drill bits became obsolete in 1909 when they introduced a dual-cone roller bit patented by Hughes. The business partners developed a bit “designed to enable rotary drilling in harder, deeper formations than was possible with earlier fishtail bits,” according to a Hughes historian. They conducted secret tests on a drilling rig in Goose Creek, Texas.
Although several inventors tried to develop better rotary drill bit technologies, Sharp-Hughes Tool Company was the first to bring it to American oilfields. Drilling times fell dramatically, saving petroleum companies huge amounts of money.
Howard Hughes Sr. of Houston, Texas, received a 1901 patent for a dual-cone drill bit.
The Society of Petroleum Engineers has noted that about the same time Hughes developed his bit, Granville A. Humason of Shreveport, Louisiana, patented the first cross-roller rock bit, the forerunner of the Reed cross-roller bit.
Biographers note that Hughes met Granville Humason in a Shreveport bar, where Humason sold his roller bit rights to Hughes for $150. The University of Texas’ Center for American History has a rare 1951 recording of Humason’s recollections of that chance meeting. Humason recalls he spent $50 of his sale proceeds at the bar during the balance of the evening.
After Sharp died in 1912, his widow Estelle Sharp sold her 50 percent share in the company to Hughes. It became Hughes Tool in 1915. Despite legal action between Hughes Tool and the Reed Roller Bit Company that occurred in the late 1920s, Hughes prevailed – and his oilfield service company prospered.
By 1934, Hughes Tool engineers design and patented the three-cone roller bit, an enduring design that remains much the same today. Hughes’ exclusive patent lasted until 1951, which allowed his Texas company to grow worldwide. More innovations (and mergers) would follow.
A February 1914 advertisement for the Sharp-Hughes Tool Company in Fuel Oil Journal.
Frank Christensen and George Christensen had developed the earliest diamond bit in the 1941 and introduced diamond bits to oilfields in 1946, beginning with the Rangley field of Colorado. The long-lasting tungsten carbide tooth came into use in the early 1950s.
After Baker International acquired Hughes Tool Company in 1987, Baker Hughes acquired the Eastman Christensen Company three years later. Eastman was a world leader in directional drilling.
When Howard Hughes Sr. died in 1924, he left three-quarters of his company to Howard Hughes Jr., then a student at Rice University. The younger Hughes added to the success of Hughes Tool while becoming one of the richest men in the world. His many legacies include founding Hughes Aircraft Company and the Howard Hughes Medical Institute.
A major competitor for any energy service company, today’s Schlumberger Limited can trace its roots to Caen, France. In 1912, brothers Conrad and Marcel began making geophysical measurements that recorded a map of equipotential curves (similar to contour lines on a map). Using very basic equipment, their field experiments led to invention of a downhole electronic “logging tool” in 1927.
After successfully developing an electrical four-probe surface approach for mineral exploration, the brothers lowered another electric tool into a well. They record a single lateral-resistivity curve at fixed points in the well’s borehole and graphically plotted the results against depth – creating first electric well log of geologic formations.
Meanwhile another service company in Oklahoma, the Reda Pump Company had been founded by Armais Arutunoff, a close friend of Frank Phllips. By 1938, an estimated two percent of all the oil produced in the United States with artifical lift, was lifted by an Arutunoff pump. Learn more in Inventing the Electric Submersible Pump (also see All Pumped Up – Oilfield Technology).
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Citation Information – Article Title: “Carl Baker and Howard Hughes.” Author: AOGHS.ORG Editors. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/oil-almanac/carl-baker-howard-hughes. Last Updated: December 15,2019. Original Published Date: December 17, 2017.
Picturing California petroleum history in a family album.
Although it’s just an old photograph from a southern California port, an image from Los Angeles Harbor tells a tale about U.S. maritime and petroleum histories, including the story of Puente Oil Company.
Seeking to preserve her father’s years as an employee of the Los Angeles Harbor authority, Valerie Raynor contacted the American Oil & Gas Historical Society (museum donating suggestions are in Oil Families). It did not take her long to find a permanent home for her collection of his photographs at the Los Angeles Maritime Museum.(more…)
Have an artifact, a collections of papers, photos, or other petroleum-related material that should be preserved. Local museums and county historical societies are a good place to start.
The American Oil & Gas Historical Society’s Oil Families page offers several examples and suggestions. Community museums preserve the many personal and professional stories of U.S. petroleum history.
Historic Tanker Memorabilia
My father spent his working life with Lone Star Gas, he is gone many years now I am getting on. Going through a few of his things. A little book made up that he received when he & my mother attended the commissioning of the Natalie O. Warren Propane Tanker. I am wondering if it is of any value to anyone. Or any museum. – Bill
Please offer helpful suggestions and ideas using the comments form below:
Live elephant advertising, Skelly Oil
My grandfather owned a Skelly service station in Sidney, Iowa in the 1930s and 1940s. I have a photo of him with an elephant in front of the station. I recall reading somewhere that Skelly had this elephant touring from station to station as an advertising stunt. Does anyone have any more history on the live elephant tour for Skelly Oil? I’d love to find out more. — Thanks, Jeff
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