Final Voyage (25 page)

Bissell quickly formed the Pennsylvania Rock-Oil Company and leased the farmland where the oil he’d been shown had come from. He sent a sample of this oil to Benjamin Silliman, Jr., a distinguished professor of chemistry at Yale, to be analyzed for its potential properties. Silliman reported that the oil could easily and inexpensively be made into a high-quality illuminant. “Gentlemen,” he wrote Bissell and his partners, “. . . your Company have in their possession a raw material from which, by simple and not expensive processes, they may manufacture very valuable products.”

Encouraged, Bissell now turned to the process of obtaining the oil in quantities. So far, the only methods of collecting it had been skimming the surfaces of oily creeks and wringing the water out of oil-soaked rags. This had adequately provided the quantities demanded by the patent-medicine market, with its small glass bottles, but Bissell’s dreams called for much more. His second recorded flash of illumination occurred as he stopped one day in the shade beneath a drugstore awning on Broadway, in Manhattan, looked into the window, and saw a bottle of Kier’s rock oil, or petroleum, “celebrated for its wonderful curative powers. A natural Remedy; Produced from a well in Allegheny Co., Pa., four hundred feet below the earth’s surface.”The bottle’s label showed a picture of a well-drilling derrick.

He would drill into the earth to obtain oil in commercial quantities, Bissell decided.

Bissell’s investors, with varying degrees of faith, came and went. He eventually launched a new company, Seneca Oil, and looked for someone who would travel to the leased farmland in Pennsylvania and set up a drilling operation. One of Seneca’s investors, a banker named James Townsend, was living in the Tontine Hotel in New Haven, where he began talking with a colorful thirty-eight-year-old out-of-work railroad conductor named Edwin L. Drake. Townsend hired Drake for the job and sent him south to Pennsylvania with bank drafts and letters of introduction describing the bearer as “Colonel E. L. Drake.” Drake held no such military rank, but the title lent him a stature that was to help launch his wild scheme in the backwoods valleys along the Allegheny.

On the company’s leased farmland beside Oil Creek, two miles from the run-down lumber town of Titusville, Drake spent more than a year setting up a steam engine that would drive a drilling rig. He hired a driller, William (“Uncle Billy”) Smith, and Smith’s two sons, who had worked on artesian salt-drilling rigs. As time passed with no results, most of Seneca’s investors bailed, leaving Townsend to pay the mounting bills out of his own pocket. Eventually even he despaired and wrote to Drake to close up the operation. Drake had not yet received that letter when he arrived at the well on August 29, 1859, and found Uncle Billy and his boys filling pots, barrels, and washtubs with dark, viscous oil that was rising from their borehole, which by then reached sixty-nine feet into the ground. Drake attached a common water pump to the hole and began pumping up oil.

Bissell’s intuition about the possibilities of petroleum oil was not original. He is the man history has remembered for his role in getting Edwin Drake to Pennsylvania, but many were already well aware of the potentials of rock oil. Within days of Drake’s “discovery,” speculators poured into Titusville and the surrounding area, buying up farmland at prices that doubled and tripled overnight. Bissell, too, arrived and spent hundreds of thousands of dollars, buying and leasing more farmland. The swampy land up and down Oil Creek turned into a vast tract of mud with the sudden traffic of people, lumber, and wagons. Derricks were erected, wells were drilled in every creek off the Allegheny, and oil obligingly flowed: two, three, four thousand barrels a day, right away, and more bubbling up.

There was the immediate problem of what to do with it. There were not enough whiskey barrels, molasses barrels, casks, or milk cans in Pennsylvania—or, soon, in America—in which to store it all. Reservoirs were dug in the muddy earth, lined with logs and planks, wooden tanks built, though all these soon proved inadequate. Barrels—as suited to petroleum as whale oil—when they could be provided and filled, had to be transported to the nearest rail depots in Erie and Union City. “Teamsters equipped for this service seemed to fall from the sky,” wrote Ida Tarbell in her groundbreaking
History of the Standard Oil Company
. Boys and men from surrounding farms dropped their tools and plows and headed to the nearest oil derrick with their horses and wagons. They were paid three and four dollars a barrel for hauling wagonloads of oil five or ten miles. But it was hard work: the roads, such as they were, deteriorated immediately to muddy canals across fields and through forests. Caravans of a hundred and more wagon teams were held up by broken wheels and deep mud holes and fallen and dying horses.

Roughly built flatboats were loaded with oil barrels and sent down Oil Creek—“a more uncertain stream never ran in a bed”—colliding with others, running aground, their wreckage piling up on the banks, the oil running freely down to the Allegheny and the Ohio.

The teamsters were eventually put out of business by pipelines. Almost from the beginning, pipes were laid, aided by gravity and pumps, but there were many early problems: they proved too weak, they burst or clogged; collection centers moved, leaving pipes heading nowhere. “Then suddenly the man for the need appeared, Samuel Van Syckel,” Tarbell recounted. Van Syckel had seen much of his own and others’ profits eaten up by the teamsters. He laid a two-inch pipe, with three relays, that carried eighty barrels of oil an hour from the wells to the railroad. “The day that the Van Syckel pipe-line began to run oil a revolution began in the business,” Tarbell observed. “After the Drake well it is the most important event in the history of the Oil Regions.”

The teamsters clearly saw the threat to their livelihood and dug up parts of Van Syckel’s buried pipe, until armed guards were stationed along its length. They burned storage tanks, threatened well-drillers and owners whose oil was carried by pipe. But the pipeline had arrived, as surely as the oil, and the teamsters were finished—though the cutting and destruction of pipelines has remained an enduring form of sabotage.

Other advances were quickly made: wood-lined holes in the ground holding from 200 to 1,000 barrels were replaced by iron tanks holding up to 30,000 barrels; pipelines led directly from wells to storage centers and rail depots.

In the frenzied early days, oil buyers raced one another on horseback from wells to storage containers and rail depots, bargaining with producers and transporters. As rail lines were quickly laid between the Oil Regions and cities like Cleveland and Erie, the trains themselves, crowded with brokers, agents, speculators, and drillers, all of them smoking cigars and spilling whiskey, became de facto oil exchanges, the clattering wheels underfoot ratcheting up the hurtling momentum of epic enterprise.

By 1865, at least $100 million in capital had been sunk into the muddy, torn-up country between Titusville and Oil City; $350 million was spent in the region during the industry’s first decade.

Alongside the production of oil arose the frantic, equally tumultuous industry of refining it—initially into kerosene, oil’s first primary use. The process was easily and cheaply done, and a year after Drake struck oil, there were at least fifteen refineries up and down Oil Creek. Others sprang up all along the railroad lines between there and Pittsburgh, Erie, and Cleveland. With its established rail connections and a location at the industrial center of the Great Lakes, Cleveland would become the country’s leading refinery center by 1869. A young Cleveland accountant, John D. Rockefeller, was a month past his twentieth birthday when Drake struck oil. He had grown up on farms in New York and Ohio. Early in his life a number of empirically acquired lessons about the making of money made strong impressions on him. One of these he liked to relate for its clarity:

At seventeen, Rockefeller was earning twenty-five dollars per month as a bookkeeper. He was always “saving a little money to put away.” At nineteen, with his modest savings, he established a produce-trading business on the Cleveland docks with a thirty-one-year-old Englishman, Maurice B. Clark. They reportedly made $450,000 in their first year. In 1862, Rockefeller and Clark opened their first oil refinery in Cleveland. By 1865, it was the largest of Cleveland’s thirty refineries, and that year Rockefeller bought Clark out for $72,500. He began buying other oil refineries, expanding and consolidating his business. In 1870, Rockefeller established the refining company of Standard Oil of Ohio, which, through the omnivorous incorporation of every competitor in its path, was largely successful in monopolizing the oil production and refinery industries in America, until that monopoly was broken by the Supreme Court in its historic antitrust case of 1911.

 

 

 

IN 1861, young “Hen” Rogers of Fairhaven and his friend Charles Ellis opened their own refinery near Oil City. They named it the Wamsutta Oil Refinery after the Indian whose name and mark appeared on the deed recording the purchase of the territory of Dartmouth. They cleared $30,000 in profits in their first year of production. In Oil City they met a fellow Massachusetts man, Charles Pratt, who had worked for a company in Boston specializing in whale oil-based paints and other products. Pratt was quick to see the advantages of petroleum over whale oil and opened his own petroleum oil refinery in Brooklyn, New York. Pratt contracted with Rogers and Ellis to supply him with their entire product (for him to distribute) at a fixed price. When the cost of oil rose and Wamsutta couldn’t meet its obligations, Wamsutta failed, heavily in debt to Pratt. Ellis returned to Fairhaven, but Rogers traveled to Brooklyn and told Pratt he would take responsibility for the debt and repay him. Pratt was so impressed that he hired Rogers. By 1867, Rogers was a partner in Charles Pratt and Company. When Standard Oil of Ohio had the company in its sights, Pratt and Rogers at first fought Rockefeller, but then capitulated, and Charles Pratt and Company was absorbed into the expanding maw of Standard Oil. Rogers eventually became a vice president of Standard Oil and, with investments in gas, steel, copper, coal, and railroads, one of the richest men in America. He acquired a reputation for ruthlessness in business, and the nickname “Hell-hound Rogers,” and he is often cited as the quintessential “robber baron.” But, like many of them, he was also a generous philanthropist, and donated millions of dollars for buildings and public works in Fairhaven.

 

 

 

PRODUCTION OF PENNSYLVANIA OIL rapidly increased on a scale beyond Bissell’s, or any other oilman’s, dreams: from 450,000 barrels in 1860 to more than 3 million barrels by 1862. The supply initially exceeded the demands of a market that was lagging well behind production: oil prices rose and fell mercurially, plummeting from ten dollars a barrel in January 1861 to ten cents by year’s end. But on April 12 of that year, Confederate batteries began firing on the Union garrison stationed at Fort Sumter in Charleston Harbor, South Carolina, and war worked its industrial magic on the nascent oil business. Supplies of the cheap illuminant camphene, made from turpentine, which came from the South, were cut off, creating overnight a large and growing northern demand for kerosene made from Pennsylvania oil.

Abundant petroleum oil, and the resultant cheap kerosene, had a dramatic effect in the illuminant marketplace. In 1860, as the price of petroleum plummeted, whale oil was hovering around fourteen dollars per barrel. It was still the preferred illuminant for those who could afford it, and a superior lubricant, but the volume and the almost immediate availability of the output of the petroleum industry could not be ignored: a successful whaling voyage of three to four years might return three or four thousand barrels of oil; a single well in Pennsylvania could produce three thousand barrels of oil in a day. In its first six years, the petroleum industry produced more oil than all the whale oil brought home in the ninety years from 1816 to 1905.

WHILE HENRY ROGERS, Charles Pratt, John D. Rockefeller, and countless others recognized the sudden, gushing appearance of petroleum oil as an epic paradigm shift, George Jr. and Matthew Howland, and many other New Bedford merchants remained strangely oblivious to what was overtaking them. New Bedford remained cocooned in its history, complacent in the certainty of its holy mission and in the belief that things would go on as they had for more than a century. “Why not?” George Howland, Jr., had declaimed to his audience in 1864.