LIVERMORE

HERITAGE

GUILD

May 2001 Vol. XXX No. 8

 

CALENDAR

Thursday, May 10 @ 7:00 p. m.

LHG Meeting, Carnegie Bldg.

 

Saturday, May 26 Duarte Garage, Livermore Heritage Guild Annual Auction and spaghetti dinner. Auction preview begins at 5 p. m., dinner starts at 6 p.m. and the auction starts at 7 p.m. Tickets for the dinner are $6. 00 and can be purchased in advance at the Carnegie Library Bldg. or at the door that night. This price includes spaghetti dinner, coffee and dessert. The auction itself is free.

 

HERITAGE GUILD HAPPENINGS

Excerpted from Livermore Herald October 18, 1967 Oil in Livermore Plans Were Only Dreams By M. R. Henry (third in a series)

There are many interesting sidelights on the drilling operations and on companies which were formed but never passed the organization stage.

The Independence speeded up activity at its well in November, 1911, when it started hauling supplies with steam traction engines. These engines previously had been used to haul ore from the Red Mountain magnesite mines of Livermore over the Mines Road. They had two advantages they could haul loads far in excess of those by horsedrawn wagons and they could operate over roads made muddy by rain, conditions which made hauling by teams impossible.

Two wells turned into producing water walls. The Southern Pacific secured water for its locomotives at Altamont by pumping from the nearby Egan well of the Standard Oil Co. The Daisy well is capped and still produces water for livestock.

Women had their part in promotion. In March, 1912, Mrs. Ada Clement of Oakland, one of the organizers of the Alisal, formed a new company, the Livermore and Pleasanton Oil Co., to prospect for both -as and oil, but never got it started. Then there was the mysterious Princess Red Wing, mentioned elsewhere.

 

The Livermore Oil Co. was incorporated in February 1900, and claimed to have leases in the Vallecitos Valley, San Benito County and Livermore Valley. A derrick was to be erected near Corral Hollow. No further mention of this company is found.

 

In October 1908, the San Joaquin Oil Co. was formed to drill near the Daisy but never appears again in the news.

 

Oakland men leased the Nickerson place at Altamont in November 1908, and announced drilling plans. No other mention is found of the enterprise, except that its stock was to be sold by Financial Underwriters of Oakland.

 

Peter Moy, who had extensive sheep ranges on the east side of the Altamont hills, was associated with a group of Alaska promoters who planned to drill between Corral Hollow and Lone Tree Creek to the south.

 

There were a number of promotions in the Pleasanton area. In April, 1910, San Francisco, Oakland and Pleasanton capitalists formed a company with the highsounding name of "North Star Mining, Prospecting Smelting and Mercantile Company" and started drilling, but passed out of the picture. A company was formed in March 1900, to drill in Dublin canyon, but never made any progress. Edward Salz, owner of 520 acres in La Costa Creek Canyon, south of Sunol, announced plans to organized a company and drill in October 1908, but the plans never materialized.

Photo Courtesy C. G. Clarke

There were several projects in the Dublin-Tassajara region in later years but none developed producing wells.

The exciting part of the wildcatting venture with which the public was mostly concerned had to do with financing and leasing.

It is almost impossible to believe the wide extent to which news of the Livermore operations reached. It brought in money from many hopeful investors. The Independence Oil Co. was organized in 1909 and its records show a total of 148 stockholders with addresses as widely divergent as San Francisco, Oakland, Sacramento, San Mateo, Lackawana, N.Y., Princeton, NJ., Richmond, VA., New York City, Long Island, N.Y., and other places in California.

There were 17 from Gloucester, MA, and six from Boston, plus several more in Massachusetts cities. The reason was set forth in the obituary of W.W. French, Livermore stockholders numbered 36. The company had special claim to fame in that one of these Livermore stockholders was Battling Nelson, then world's lightweight boxing champion. He had trained in Livermore and bought property here. It can be safely said that no stockholder ever made a dollar on his investment, except those who sold to other investors.

"The Derrick", a San Francisco oil paper, published a two-page story on the Livermore field on December 28, 1908. "Money Talks", a financial publication in San Francisco, featured Livermore oil in an article published about the same time. The Livermore Chamber of Commerce received many requests for information by mail and telephone. The Los Angeles Times on October 31,1908, said that San Francisco was excited over reports that the Daisy well had struck oil.

Most of the wells were located by qualified oil men but in at least 2 instances clairvoyants called on the spirits to decide where wells would be "spudded in".

Leases were the one source of revenue from which owners of ranch property throughout the eastern section of the Valley profited. However, in some instances leases became highly involved, resulting in clouds on land titles and the owner wished they had never heard of an oil lease.

From $ 1 to $2 a year was the going price per acre for leases. Some were for one year, some for three.

The Standard Oil Co. had leases on 6,000 acres when it started drilling at Altamont and wanted' 30,000 acres. An unnamed oil company claimed to have 4,000 acres under lease in 1908 near the site of the abandoned Brown Ranch well.

The Livermore-Coalinga Oil Co. had leases on 1,100 acres in the eastern part of the valley when it planned to start drilling in 1908.

When the Standard shut down operations at Altamont in 19 10, it abandoned most of-its leases but retained those on aline between its well and the Alisal. A.M. Gilstrap held leases on 5,000 acres in 193 1 in the Paterson Pass area.

The California Corporation Commission moved into the picture in December 1927, ordering the Pacific Oil Leasing Co. to stop its traffic in oil leases. Pacific's was allegedly charged with operating without a permit, making an exorbitant profit and that its activities were against the best interests of the community. The commission also said that Calhoma, which was not operating at the time, would be restrained if it attempted to resume operations without a permit.

Landowners alleged that Pacific and Calhoma had leased drilling rights for $1 an acre and sold them throughout the country at from $5 to $100. They said that in subleasing these rights the companies had so confused land titles that many suits have had to be instituted in court by owners who were forced to prove their legal title to their own land.

Fraudulent boring operations were also charged, such as keeping a rig in operation without actually drilling to impress prospective lease buyers visiting the well.

Twelve companies were selling oil leases in 1927. The following year tow unusual operators made their appearance, Chief and Princess Redwing of Oklahoma announced they had bought 160 acres and would start 32 wells, one to each five acres. They did not give the location of the land, and there is no record off further action on their part.

Information on shares of stock issued by the various companies was always at a minimum and never dependable. Financing was always in a chaotic condition, price of shares rising with each rumor of oil being struck and falling as the rumors proved false. There were also many reorganizations, each having an influence on the value of stocks.

The general trend is shown by what happened with the Daisy well, more data being available on that drilling project than any others, and still very

meager. When a rumor developed in October 1908, that oil ha been struck shares brought 26 cents to 31 cents on the San Francisco Oil Exchange, a substantial increase. In May 1909, the company was reorganized, W.J. Rhoads, the driller, retaining controlling interest with 25 1,000 shares and the balance, amount not revealed, sold at 10 cents. More than a year later, in September 19 10, there was another rumor or oil being struck and work was stopped to test the showing. The company was acquiring more land and the stock had advanced to 25 cents a share, stockholders doing the buying to increase their holdings.

In November 1911, the Independence required additional capital, $3,500 subscribed in Livermore raising the price of shares to 25 cents. In June 1910, the W.M. & S. issued an additional one million shares, the price not being given.

Promoters often resold their stock at higher figures, some fantastic, up to$ 100 a share, as advantage was taken of the proclivity of certain types of persons to plunge in oil and mining stocks in the hope of cashing in, this despite a total lack of knowledge of oil drilling or in mining.

Assessments were frequent, causing distress to stockholders, who expected their stock to skyrocket in value rather

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