California Rich Page 2
All at once, as news of Doheny’s hand-dug discovery spread, it was Titusville all over again. Anyone who could scrape a few hundred dollars together began leasing land west of downtown Los Angeles to dig or drill for oil. The wells were shallow and cheap to dig; the average cost was $1,500, including tanks and pumps, and by 1899 there were more than three thousand wells pumping oil, all from a narrow tract of land varying from 800 to 1500 feet wide and about four and a half miles long. The silhouettes of oil rigs dominated the skyline, and the drilling became so frenzied that the city fathers of Los Angeles declared that oil wells were a civic nuisance, and a moratorium was pronounced on further drilling within city limits. The moratorium did no good whatever. Everyone in Los Angeles, it now seemed, needed to drill a well for water. The city council could not deny its citizens the right to do that, and so the drilling continued. If the water wells spouted oil instead—well, that could be dismissed as just a lucky accident.
There were, as it turned out, economic reasons more pressing than esthetic ones for trying to bring oil exploration under some sort of control. Within five years of Ed Doheny’s find so much oil had been pumped out of the Los Angeles basin that the market was glutted. It cost less to buy oil by the barrel than it did to drill for it, and boom was followed by panic. By the end of 1899 oil leases were going begging, and it was in this panic that Edward Doheny made his next important move. Quietly, systematically, he began buying up leases at bargain-basement prices. The market for oil, he reasoned, did not have to be limited to southern California. Los Angeles, after all, offered something that western Pennsylvania did not. Titusville was an inland city and oil could only be shipped out expensively overland by rail or by pipeline. Los Angeles was a port city. To be sure, no canal yet existed across the Isthmus of Panama, and various schemes and projects to build one had languished over the years since the French construction had been undertaken in 1879 and abandoned ten years later. But the Spanish-American War of 1898 had given tremendous new impetus to the idea of a canal, and in the minds of most of the American public it had become almost an article of faith that such a canal had to be built and would be built, and would be built soon, and would be built and controlled by the United States. A canal through the isthmus would greatly enlarge the market for California oil. With this thought in mind, Edward Doheny set about seeing to it that within ten years of his first bonanza in Hancock Park he would own or control nearly the entire oil production of California.
Meanwhile another character had arrived on the turbulent California oil scene. He was Lyman Stewart, and his future would one day be entwined with Ed Doheny’s. In character and background Lyman Stewart was totally unlike Doheny. For one thing, Stewart was an easterner, and whereas Doheny’s rich strike had been a matter of luck, Stewart brought to the business a certain amount of experience. He had been “born to oil,” barely ten miles from Titusville, and had already made and lost—and partially recouped, to the extent of about $75,000—a fortune in oil before he set out for California in 1882. Where Doheny was rash, impetuous, and headstrong, Stewart was cautious and precise. Doheny was rough-spoken and hard-drinking, and Stewart was abstemious and pious almost to the point of prudishness. He had descended from a long line of strict, Bible-quoting Scottish Presbyterians.
In his oil-exploration activities in California, Stewart had avoided the Los Angeles basin, primarily because the cost of Los Angeles city land—as much as $1500 for a twenty-five-foot lot—went against his Scotch grain. He had begun drilling farther north, in the Central Valley, and though he had one or two good strikes, a discouraging share of Stewart’s wells were dusters. Stewart’s early efforts were handicapped by a variety of factors. For one thing, South America had begun exporting oil to the United States, and each time a freighter full of oil sailed into San Francisco Bay the price of California oil plummeted. There was also the matter of Stewart’s hardline religiosity. If, for example, a choice option on a piece of promising oil property became available on a Sunday, Stewart refused to consider it because he would not conduct business on the Sabbath. His stubborn refusal to work on the Lord’s Day often cost him money, because for some reason a number of his better wells had had the perverse habit of coming in on a Saturday night, and by the time Stewart permitted his crews to go back to work on Monday morning, much of the black gold had spilled away.
He was equally strict in dictating the moral code for his employees. Once, inspecting the progress of one of his wells, Lyman Stewart noticed a frail young boy drenched with perspiration from his labors at the rig and commented to the youth that his was pretty heavy work for a man of his tender years. “Mister,” replied the boy, “she is a son-of-a-bitch, and you can tell the whole Goddamn world I said so!” Horrified at such language, Stewart quickly withdrew from earshot, and immediately decided to establish, with his meager profits, a chapel in Torrey Canyon, and hired one Reverend Mr. Johnson to conduct services in it. Not long afterward Stewart set aside funds to erect a “temperance rendezvous” for the neighborhood. This establishment would contain “a temperance bar, a library, a reading room, a gymnasium and so forth for the purpose of giving men and boys a place to spend their evenings and keeping them out of saloons.” The temperance rendezvous, which was indeed built, was something less than a popular success with members of the drilling crews.
Fortunately, perhaps, for Lyman Stewart, his son William, who had come with his father from Pennsylvania and worked as his father’s field superintendent, was much more liberal in his views. At one point in his California career the senior Mr. Stewart received a report that one man on his drilling crew was a perpetual drunkard, that the fellow arrived at work in the morning sober and left half drunk at the end of the day. Mr. Stewart ordered the man immediately dismissed. But William Stewart interceded on the man’s behalf and argued with his father that regardless of the man’s condition he was a superior worker and more than worth his wages. “Actually,” William Stewart said later, “what my father heard about the man was completely untrue. He didn’t come to work in the morning sober and go home drunk. He came to work in the morning drunk, and he stayed drunk all day long.”
Despite Mr. Stewart’s problems, however, he was able—on a shoestring, and a borrowed shoestring at that—to put together, in 1890, the Union Oil Company. Three years later, in the wake of Doheny’s bonanza in Hancock Park, the Stewarts made their first moves into the Los Angeles area, but, unfortunately, they did not have Doheny’s immediate good luck. No sooner had the Stewarts got three producing wells dug in Los Angeles than oil prices took one of their periodic nose dives. Discouraged, the Stewarts moved northward again, into the San Joaquin, Lompoc, and Santa Maria valleys. Ed Doheny meanwhile had also lost interest in the Los Angeles area—though not in his lands and leases—and was expanding his exploration southward into Mexico.
Ironically, what none of the restless explorers in the Great California Oil Scramble yet realized was that beneath the Los Angeles basin, and stretching out under the ocean beyond, lay one of the widest and deepest oil lakes in the world. It was 46 miles across and 22 miles long, and from it in time would come three and a half billion barrels of oil. In the 1890s a visiting professor of geology at Yale named Benjamin Silliman had speculated that there was more oil beneath the soil of California “than in all the whales in the Pacific Ocean.” Professor Silliman’s projection was considered a naïve easterner’s wild-eyed exaggeration. His estimate would turn out to be very much on the conservative side.
The California oil rush, of course, would always be overshadowed by the gold rush. The gold rush, after all, had more glamour. Gold is mankind’s most ancient symbol of wealth, the basis for his most valuable coins. And yet, for all practical purposes, gold is an almost useless metal. Unlike other precious substances, including diamonds, there is little industrial use for gold, unless one counts dental inlays. (Recently, computer technology has found a few new uses for gold.) Gold is pretty, yes, but the beauty of gold is a matter of opinion, its va
lue a matter of faith. It serves no practical, but only an emotional need, a religious need, and has decorated history’s greatest altars and temples. And yet, for all the impracticality of gold, explorers and conquistadors throughout history have set forth in search of gold, of King Solomon’s Mines. The quest of the Argonauts has always been a bit like the search for the Fountain of Youth, because once one finds gold, it doesn’t quite work. Perhaps the ephemeral, spiritual context of gold, and the fact that the use of gold is essentially ornamental, explains why all the gold that was mined in the California gold rush—some three billion dollars’ worth—made no man permanently rich. It slipped like dross through its finders’ fingers and made its way underground again, to Fort Knox, the temple of United States currency.
With oil, on the other hand, the explorers were seeking a product that would have many practical uses and would reign as the most potent source of energy until the splitting of the atom. In the single year of 1950, for example, the output of California oil wells surpassed in dollar value the entire output of all the state’s gold mines since the discovery of gold at Mr. Sutter’s mill in Sacramento, which set off the gold rush. And oil made a number of California men permanently rich.
Meanwhile, throughout both rushes—the gold and the oil—the explorers and pioneers displayed a spirit and a character that would become typically Californian. The California élan involved a special doughtiness, a certain daring, a refusal to be fazed or put off by bad luck or circumstances, an unwillingness to give up. To the California pioneer, after all, California was more than the end of the rainbow; it was the last stop for the Conestoga wagon. The California pioneer had reached the edge of the continent, the last frontier, the last horizon. He could go no farther, and he would not turn back. To have made it to California was to have made it all the way, and those who did not make it were by definition failures. To those who made it to California success was the only possibility. The place had to be made to work. In the winterbound Sierras the Donner party would turn to cannibalism in order to make it over the hills to California.
In the early days of the California pioneers the region was not particularly hospitable. Northern California was damp and foggy most of the year, while the south was hot and waterless. The state was cut off from the rest of the country by an implacable backbone of rugged mountains, and most of its wide central valley was barren desert. And yet the Californians would change all that. They would change the landscape and, in the process, the climate. They would make the desert bloom with everything from cotton to peaches, lettuce, tomatoes, strawberries, artichokes, and alligator pears. In the process they would become rich.
They would remain daunted by nothing and they would retain the gambler’s heart. They would build houses on mountainsides that were slipping into the sea, on the rims of canyons where in dry weather a single match would ignite a hillside and make it burn like kerosene and where when it rained the hills would be deluged by mud slides. They would confidently build houses with swimming pools along the notorious San Andreas Fault and facing beaches that were periodically swept away by high seas. Had there been any live volcanoes, Californians would have built houses beside their craters.
In the aftermath of the great earthquake of June 29, 1925—a shock that registered 6.3 on the Richter scale and virtually leveled the city of Santa Barbara—it was rumored that a huge tidal wave, miles high, was headed across the Pacific toward the southern California coast. It is rather typical of the California spirit that, when this news was heard, thousands of citizens of Los Angeles hurried eagerly to the beaches to see it come. They were actually disappointed when it didn’t arrive.
But there is still more to the California spirit than a willingness to gamble and accept dares. Having arrived at the rim of the continent, the California pioneers, with no farther to go, became almost obsessive about the need to fight for a share of whatever it was they had found. From their faraway perch, the Californians promptly acquired rather large chips on their shoulders, and, in addition to a certain hauteur, the California character became notably disputatious and competitive. And, besides the amount of skulduggery, larceny, and blackmail that might be considered routine in the making of all great American fortunes, California’s money was made by men who were ready, literally, to shoot it out with one another and would stop at nothing—not even murder—to get what they wanted.
CHAPTER TWO
Grants and Grabs
Actually, the success of California has depended on a far more basic liquid than petroleum, and any California story becomes in the end a story of water.
There has always been plenty of water in California, but the trouble was that nature didn’t distribute it very evenly. The Sierra Nevada mountains were dotted with lakes and streams and rivers and in winter collected huge amounts of water in the form of snow. Below, the Central Valley is actually a pair of valleys placed end to end, created by two rivers—the Sacramento, which flows southward out of the northern Sierras, and the San Joaquin, which rises in the southern Sierras and flows northward. The two rivers merge in a fan-shaped delta east of San Francisco and then empty to form San Francisco Bay. At the end of their journeys the converged rivers spill out through the Golden Gate. The topography of the double valley—which on a relief map looks as though a great scoop had been drawn down through the center of the state, cutting it to just above sea level—is responsible for the state’s special climate. Cool, moist air from the Pacific is turned back by the coastal range of mountains, and on the Central Valley’s eastern flank the towering Sierras collect westward-moving weather in the form of rain or snow. Thus, when the first white settlers came to California they found a central valley that remained hot and parched throughout most of the year, where it “never” rained from April through October. The northern seaport, furthermore—San Francisco—was blessed with the infusion of not one but two important rivers, while southern California and Los Angeles had hardly been given a single tiny streamlet.
The unfairness of this arrangement has long been the cause of bitterness between southern and northern Californians. The legendary rivalry between the cities of Los Angeles and San Francisco has, as its basis, nothing to do with San Francisco’s alleged superiority in culture, architecture, and views of hills and bridges. It is about the unequal distribution of water. If the San Joaquin River had done what most American rivers do, which is to flow southward, there would have been no problem. But the San Joaquin perversely headed the wrong way and cheated Los Angeles. There are still some conservative souls in California today who feel so strongly on this issue that they would like the state to be divided into two states, with a cutoff line between the two somewhere around Tehachapi.
From the earliest days of California settlement men struggled with the problems, and the promises, which this peculiar climate offered. During the long, hot summers the rivers of the Central Valley shrank to trickles or dried up altogether, and the Valley became a desert of cracked earth more forlorn than the craters of the moon. In spring, when the snows on the mountains melted, the Valley waited like a huge catch basin and became an inland swamp for weeks. Early settlers in the Valley had to build their houses on high pilings, like lake dwellers in Peru and Mexico, because of the annual threat of floods. Obviously what the Central Valley needed was a way to catch and store the vast amounts of water from the spring thaws and to distribute this water during the dry summer growing season. From the first sandbagged levees along the Sacramento River and the digging of the first canals, ditches, and sloughs, the battle for water and the control of it have engaged California’s major efforts.
One of the first to recognize the Central Valley’s potential in a large way was a man called Henry Miller (no kin to the writer of the same name, who also made his home in California). For all his importance to history, Henry Miller remains in some ways a figure of mystery. His real name was not Henry Miller. He was born Heinrich Alfred Kreiser, the son of a German (or perhaps Austrian) butcher, and came to the Un
ited States in 1847 at the age of nineteen, with just six dollars as his entire capital. He found work as a butcher. When news of the discovery of gold in the tailrace of Mr. Sutter’s mill reached him, he headed for California. But when he went to pick up his steamer ticket to Panama he noticed that for some reason the ticket had been made out in the name of Henry Miller. This, at least, was what he always claimed. Had he come upon the ticket dishonestly? Had he stolen it? In any case, the ticket was stamped “Non-transferable,” and so the young man, who spoke little English, decided that the most prudent thing to do was to pretend to be Henry Miller rather than risk losing his ticket. He kept the new name for the rest of his life.
Once in California, he did not involve himself in gold exploration. Indeed, he seemed to have lost interest in it. He worked for a while as a dishwasher and then as a sausage peddler. It was as a sausage man that he first entered the Central Valley and was struck with its possibilities. He was a quiet, reclusive young man, and as far as is known, he had no formal engineering training or experience. And yet in his spare time he began designing levees, dams, reservoirs, and intricate irrigation systems. He also began to buy land that was considered worthless and that he could buy dirt-cheap. Henry Miller—who in his later years developed grandiose ideas about himself and his capacities and took to comparing himself with King Solomon—may have been a genius. But more than anything, he was a clever salesman, and he was probably a scoundrel. In the days of feverish railroad-building—and the speculation in land that was central to railroads—Miller was able to do such a thing as persuading fledgling railroad companies to lay their tracks along certain routes. Then, when tracks were ready to be laid, Miller would discover “better” routes. The first routes would then be abandoned, and their elevated roadbeds would become, by default, ready-made levees for Miller’s expanding irrigation system. He also acquired land from the early Spanish settlers by fair means and foul. Once, buying a parcel of land from a Spanish owner, Miller agreed to accept “as much land as a boat can circle in a day” in return for the price he offered. He then strapped a canoe to his wagon, set off at a fast clip across the countryside, and by nightfall had claimed a considerably larger portion than if his journey had been made by water.