It cut through the summer night like a star fallen to earth, its blue-white flame casting deep unnatural shadows for miles. “I have lived in Petaluma for forty-five years. It was the grandest thing I ever saw,” said Frank Lippitt.
“Put me down as saying we are just on the verge of a new era of prosperity,” Richard Skinner told the Petaluma Morning Courier. “The striking of gas will put Petaluma before the world as the ideal manufacturing center.” Forget the eggs, forget the chickens; soon there will be oil rigs on every farm and field and everyone in town will be as rich as the McNears. Richer.
This is the first of three articles on the Sonoma County speculation oil boom in the early 20th century. Although this installment covers just a single oil field near Petaluma, during those years petroleum prospecting companies were sprouting overnight with their “experts” rushing everywhere, signing oil leases on lands from Occidental to Bennett Valley to Two Rock. So also forget the hops and the grapes, the dairies and the orchards – no more Redwood Empire but rather an Empire of Oil.
But these particular stories are really not about the search for oil. They are about stock swindles and fraud scams – crimes which not only occurred here, but apparently were endemic to oil prospecting all over the country at the time. Then there are related mysteries about how much the local bigwigs and newspaper editors knew about what was really going on and chose to keep quiet. As found below, the Petaluma Daily Morning Courier seemed particularly eager to keep a lid on news that may have raised eyebrows.
Andy Ducker and his family had a 363 acre sheep ranch three-quarters of a mile east of (what’s now) Petaluma Adobe State Park. It was never explained what set the wheels in motion but we can assume in 1907 Andy told someone about the thick black gunk seeping out of the ground in a few places. In August a man named Larimore showed up and he signed a lease to allow drilling on part of his property. If they didn’t strike oil at least he’d get a free water well out of the deal, the 68 year-old rancher said.
Within weeks, prospects were starting to look like a sure thing. “At a depth of only about sixty feet the men have come across strong indications of oil,” wrote the Argus. “Blue soil, which has a strong petroleum smell is being brought up by the auger and there is such a flow of gas that one man was put out of commission on Tuesday.”
With the test drilling over, the project went on hiatus to raise money for purchasing gear and staffing up, so Larimore and others formed the Petaluma Oil and Development Company.* It would control the project on Andy’s farm and another place nearby as well as selling stock. There were 100,000 shares available at one dollar apiece.
Almost a year passed before work resumed on the Ducker farm, but there was much going on behind closed doors. In fact, this is like the point in a good mystery story that Gentle Reader will return to at the end and groan, “aha! the clues were there all along!” To make that easier, I’m highlighting certain names in the following paragraphs. (Spoiler alert: None of them were who they were said to be.)
Unable to woo a sufficient number of Sonoma County investors, Larimore went to the East Coast to pitch a deal. There he met Charles Gregg.
In April 1908 the Morning Courier printed, “An eastern oil syndicate has purchased a controlling interest in the Petaluma Oil and Development Company…” The very next day, the same paper quoted a director of the company denying it. But the Petaluma Argus (which had a different editor and publisher than the Morning Courier) wrote a few weeks later, “…It is an open secret that Mr. Gregg, to whom has been assigned an undivided one-half interest in the lease holdings of the company in [the Ducker ranch] is in reality the chief of the fuel department of the Western Pacific Railway Company, and is representing that company in his dealings here…”
The headline on that Argus story was “WESTERN PACIFIC BUYS OIL LEASES AND WILL BORE WELLS NEAR TOWN”. And again, the Morning Courier said it wasn’t true: “The Western Pacific is in no way connected with the company which is to operate [here]…” It certainly made sense for Western Pacific to invest in oil drilling; the railroad’s California operations were in a bind because they had to buy all their oil from other companies, namely Southern Pacific or Standard Oil.
Although drilling had yet to begin by September, Gregg showed up in Petaluma accompanied by a San Francisco banker named Norton C. Wells who, like Gregg, did not appear to have any experience in the oil business. Together they formed the Ramona Oil Company, with Wells as manager and Gregg as VP. The titular president was a very well-known and respected Southern California oilman who may not have ever visited this area. Within a few months he “retired” and Gregg became the head man.
Ramona Oil subleased half of the property controlled by Petaluma Oil & Development and took control of the project, buying all equipment and contracting Petaluma O&D to do the labor. Any profits were to be split fifty-fifty.
As boring continued into 1909, the real action was taking place at the county clerk’s office. Besides Ramona and Petaluma O&D, there was now the Petaluma Home Oil Company, the Robinson Creek Oil Development Co. and a half-dozen more new companies. The Argus reported one speculator had 6,000+ acres under lease. “All that can be heard on the streets now is oil and gas and a man who is on the inside, informed an Argus reporter on Wednesday that inside of a year there will be a forest of derricks around Petaluma and that numerous oil wells will be sunk.” And that was all before everyone suddenly went nuts.
On August third the Argus presented a huge, war-is-declared banner headline: “STRUCK A BIG FLOW OF NATURAL GAS”. At about 800 feet Ramona hit a reservoir with enough pressure to blow some equipment a hundred feet in the air. This had actually happened sometime in late spring and the crew was completely unprepared to handle it; the high-pressure gas which was blasting from the well was apparently only partially contained for weeks until a special device arrived from Texas to cap it. Ramona asked the local papers for a news blackout until it was installed, but it was the talk of the town that something big was afoot.
The Morning Courier reported, “Petaluma is teeming with rumors concerning the oil situation on Sonoma countains [sic] and the Ramona and Petaluma Oil Companies but no one really knows anything except the oil men themselves and they are positively non committal. One thing is certain – every day or two a Ramona official pops quietly into town, accompanied by a stranger and just as quietly pops out again…”
After the well was capped the editor of the Argus was invited to the site for a demonstration:
|…When this valve was opened and the gas allowed to escape, the writer was standing a few feet away. An instant later he was some fifteen feet away and had his hands over his ears to shut out the noise, which was deafening. The gas escaped from the two-inch pipe with a rush and a roar that was not only deafening but astounding. Nothing could be seen except an occasional misty vapor that was gone immediately, and there was very little odor. Little pieces of wood dropped at the pipe outlet would be instantly caught up and carried through the air a hundred feet or more. The gas was permitted to escape for some minutes during which period of time roar and rush of the mysterious pressure seemed to grow greater rather than to diminish. When the valve was closed, the quiet of the open country was welcome to overtaxed ear drums.|
Unlike the Morning Courier, the Argus wasn’t a cheerleader for the project until then: “We must confess that we have all been somewhat skeptical as to the quantity and quality of gas in the Ramona company’s Ducker ranch…” but now the paper was all in. The well could supply enough gas for a city 10x the size of Petaluma, the paper boasted, and a pipeline must be built immediately. “This means a vastly ‘Greater Petaluma’ in a very short space of time.”
A week later, Ramona announced they were going to ignite the gas flow for an evening public demonstration. “When the news became generally known on the streets Wednesday the first thing people spoke of was where they would go to watch the spectacle,” reported the enthusiastic Argus. The next night up to 300 people were at Andy Ducker’s farm to watch the show. Others in Petaluma saw the flame from their porches and windows as far away as D street.
“Oil, oil, oil, is all that can be heard on the streets of this city at the present time, and everyone is enthused over the prospects of striking big ‘gushers’ in this vicinity,” the Argus remarked afterwards, adding “the all prevailing question is ‘Have you any oil stock?'”
Ramona stock was in short supply, but by the end of the month there was a new corporation: Bonita Oil Co. with $1 million in shares at 25¢ each. It would drill on a nearby ranch (Patocchi’s) but Gregg was the head of this operation, too, and Norton C. Wells was called a “heavy stockholder” in both Bonita and Ramona. By the end of 1909 a strong supply of natural gas was also struck in the Bonita well.
Although little actual news developed over the following months both the Courier and Argus kept readers whipped up with a steady flow of oil-related hype. The Ramona well was using its own gas to supply power to a steam engine used for drilling as well as cooking in the work shed! A “flying machine” was spotted and it might have been an oil prospector! A man knocked on Andy Ducker’s door at 10 o’clock at night and wanted to buy his entire property! The Courier remarked, “many new faces are seen on the streets and at the hotels, the owners of said faces being bent on getting in on any oil boom which may suddenly spring up.” One name that started being mentioned in association with Gregg and the Ramona well was John W. Frank, who supposedly had located potential well sites on other ranches. But as we’ll learn in the next chapter, Frank had actually been involved since the beginning.
Come 1910, however, things began happening fast. Both the Ramona and Bonita Oil Companies were sold to an English syndicate, Consolidated Oil Fields of California Ltd. The general manager of all these projects was now J. W. Frank.
There was bad news: In May, a massive wind storm destroyed all the derricks and sheds, setting drilling work back many weeks and costing many thousands, which today would be many hundreds of thousands.
There was good news – no, great news: In early summer a new well on the Ducker ranch finally struck oil.
John Frank managed the announcement like a master showman. Scores of investors, bankers, reporters and state officials were personally invited to come up here on August 15, although no one knew for sure what was to be revealed. Not even Andy Ducker knew exactly what was afoot until he was told to get into a big Buick that pulled up to his farmhouse.
As the group walked towards the new well, pools of oil were seen seeping out of the ground and the acrid stink of petroleum grew stronger. Superintendent McDonald explained the oil sands on the ranch were particularly deep, which was associated with fine quality oil. Once they reached the derrick and a four-inch pipe was lowered into the borehole and when it was pulled up, the pipe was thickly coated in oil.
Cassius M. Webb, the lawyer for Ramona Oil was standing too close and got splattered with the gunk yet could not keep from smiling. It was agreed by all there was indeed oil “in paying quantities” but there was some disagreement as to how much it would produce, with estimates ranging 200-400 barrels per day. Either number would be perfectly fine.
Word spread like lightning once the group returned to town. “The community is stirred up to a high pitch and crowds are swarming that way,” reported the San Francisco Call. They brought buckets and five gallon cans which they dipped into the trench holding the overflow, then at home transferred their liquid gold into bottles and fruit jars to show off as souvenirs.
The euphoria lasted less than a month. A discouraging report from the State Mining Bureau about the oil well was waved off by the Petaluma papers as being no more than an opinion.
But then came the shocker: The Ramona and Bonita oil companies – those sure-fire investments who had locals clamoring to buy stock shares at any price – were secretly controlled by a man who was about to screw over everyone connected with the projects, including investors. And this fellow was no ordinary sleazy businessman: He was an infamous swindler whose financial crimes made him the last man anyone in America would trust with a single penny.
* There was a previous corporation also called the Petaluma Oil and Development Company, which was formed in 1901 with different board members; that business was dissolved in 1906.
WILL BORE FOR OIL
John M. Larimore, representing a syndicate has secured a lease of a portion of the Andy Ducker ranch and bore for oil. The gentleman is also negotiating for a lease of one hundred acres on the Murphy ranch.
– Petaluma Daily Morning Courier, August 23 1907
On Saturday articles of incorporation of the Petaluma Oil Development Company were filed with the County Clerk by Lippitt & Lippitt attorneys for the corporation. The new company is incorporated to mine for oil, petroleum, gas, gypsum, asphalt and like-products and the capital stock is $100,000 divided into 100,000 shares at one dollar per share. The directors are J. W. Larimore. J. W. King, J. H. Mossi, J. J. Lopus and G. L. Barry. As is well known the company has a lease on portions of the Ducker and Murphy ranches east of town and some time ago began boring for oil and already have most excellent prospects and feel confident of success. Mr. Larimore, the head of the new company is one of the best oil experts on the coast and gave up a very lucrative position in order to devote his entire attention to the local project. He is confident that there is an abundance of oil here.
– Petaluma Argus, October 26 1907
An eastern oil syndicate has purchased a controlling interest in the Petaluma Oil and Development Company, whose plant is located in Vallejo township near this city. Mr. Smith, one of the new stockholders was here on Sunday looking over the plant. The gentleman is an oil expert and is confident that the yield of oil will be rich. He wanted to lease all the Andy Ducker ranch to bore for oil, but Mr. Ducker did not wish to lease any more of his farm. The new concern will put the work through and will at once begin operations.
– Petaluma Daily Morning Courier, April 15 1908
WESTERN PACIFIC BUYS OIL LEASES AND WILL BORE WELLS NEAR TOWN
…It is an open secret that Mr. Gregg, to whom has been assigned an undivided one-half interest in the lease holdings of the company in [the Ducker ranch] is in reality the chief of the fuel department of the Western Pacific Railway Company, and is representing that company in his dealings here. The Western Pacific must have its own oil land in California if it can get them at any price for at present the oil industry including the wells, tanks, pipe lines, cars, etc. are controlled either by the Southern Pacific or the Standard Oil Company.
– Petaluma Argus, July 30 1908
The oil company which recently leased a part of the Petaluma Oil and Development Company’s land near this city will begin to drill for oil in a few weeks. The company organised in San Francisco this week and is composed of prominent oil men who have oil interests throughout the state. Messrs. Gregg and Wells who are members of the new company were in Petaluma Thursday on business in connection with the Petaluma interests…The Western Pacific is in no way connected with the company which is to operate despite the erroneous published report given out some time ago.
– Petaluma Daily Morning Courier, September 18 1908
TWO DIFFERENT COMPANIES
The Petaluma Oil and Development Company and the Ramona Oil Company are two different companies. The Petaluma Oil and Development Company first leased the land which is to be operated by the Ramona Co. They have been working on the proposition for over two years.
It was through the efforts of the Petaluma Oil and Development Company that the Ramona people leased a part of the land.
The Petaluma Company had experts at work on the property paying them $70 a day. It was found the sand contained 14½ per cent of oil, the oil being 16 1-8 gravity at 6 feet deep. The local company went to Petaluma people in an endeavor to have them take up the matter but they refused, then they went elsewhere and finally interested C. W. Gregg of New York who came out and took up the matter. After he had his own experts try the ground he consulted the Petaluma company and finally they leased half of their lease to the gentleman and sold him the machinery and equipments for less than one half of what the instruments originally cost them. Mr. Gregg then organized a company which are now working on the same spot where the Petaluma Oil and Development Company placed their derrick. The Petaluma Oil and Development Company still retain half of the land and are independent of the new company but are working in conjunction.
– Petaluma Daily Morning Courier, October 9 1908
OIL AND GAS RUMORS FILL THE AIR
Petaluma is teeming with rumors concerning the oil situation on Sonoma countains [sic] and the Ramona and Petaluma Oil Companies but no one really knows anything except the oil men themselves and they are positively non committal. One thing is certain – every day or two a Ramona official pops quietly into town, accompanied by a stranger and just as quietly pops out again,
One other fact is certain, there is no Ramona oil stock for sale. One man in Petaluma – and he, by the way, is not in the confidence of the Ramona Oil Company management – has been trying for some time now to buy stock and has offered as high as two dollars a share but without success.
People generally believe that the oil men know that they have a good thing…
– Petaluma Daily Morning Courier, July 23 1909
All that can be heard on the streets now is oil and gas and a man who is on the inside, informed an Argus reporter on Wednesday that inside of a year there will be a forest of derricks around Petaluma and that numerous oil wells will be sunk. Already practically all ot the available land from Reclamation to Penngrove has been bonded and one local citizen representing large interests has over 6000 acres under his control.
In addition to the Ramona Oil Co., Petaluma Oil & Development Co., Petaluma Home Oil Co. and the Robinson Creek Oil Development half a dozen companies are being organized to work on lands on all sides of this city.
Farmers in some instances have joined forces, pooled their lands and will work on the co-operative plan, Others are organizing for the purpose of leasing with better results. Already the country is full of oil prospectors and it looks as if Petaluma is on the verge of a big oil excitement…
– Petaluma Argus, August 4 1909
WILL LIGHT THE GAS OF RAMONA OIL WELL
On Thursday the residents of Petaluma and vicinity for miles around will witness a spectacle which those who have never been in the oil fields have never seen. For on that evening the great flow of natural gas which has been tapped by the Ramona Oil Co. at its well on the Ducker ranch will be lighted and a great column of burning gas allowed to burn for several hours. It has been the intention of the company to light the gas and show the people of Petaluma what a supply they have for some time past but the event was postponed until the necessary appliances could be made ready.
The gas will shoot up through a one-inch pipe to a height of twenty feet above the derrick, or about one hundred feet from the ground. On the main pipe above the derrick there are three cross arms, all of which including the main pipe, are perforated and through these perforations the burning gas will shoot forth. On account of the great pressure of gas the flame will be an enormous one and the light will be intense. The sight will be one which everyone should see, and when the news became generally known on the streets Wednesday the first thing people spoke of was where they would go to watch the spectacle…
– Petaluma Argus, August 11 1909
HUNDREDS VIEW FIRST ILLUMINATION OF GAS WELL. BUSINESS MEN EXPRESS VIEWS
The illumination of the Ramona Oil Company’s gas well on Thursday night was a grand success.
A few persons seemed to be disappointed that the big torch did not flame up into the air 100 or 150 feet.
In regard to this it may be said that the apparatus was not rigged for such a display but that with the right sort of rigging such an effect could doubtless be compassed.
Some fifty automobiles were on thr ground together with 250 or 300 people and a great number viewed the fireworks from their homes.
In regard to the display F. K. Lippitt said: “I have lived in Petaluma for forty-five years. It was the grandest thing I ever saw.”
[15 other comments, including:]
Robert Woods: “We saw the illumination from the City Hall. It showed up good. It’s a great thing for Petaluma.”
Coroner Frank L. Blackburn said: “I can’t tell gas from gasoline. I got ‘burned’ several years ago with oil stock, but for Petaluma generally, and the investors especially, I hope proves an everlasting gusher. It takes just such gambles as this proposition to prove a community’s wealth.”
R. M. Skinner said: “Put me down as saying we are just on the verge of a new era of prosperity. The striking of gas will put Petaluma before the world as the ideal manufacturing center.”
George P. McNear: “It looked fine.”
– Petaluma Daily Morning Courier, August 13 1909