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The French, Belgians, and Dutch Come to Salt Creek

Published online by Cambridge University Press:  11 June 2012

Gene M. Gressley
Gene M. Gressley
Affiliation:
Director, Western History Research Center, University of Wyoming
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Abstract

Professor Gressley recounts the escapades of domestic and international promoters in the history of the Salt Creek oil field, demonstrating that fraud and chicanery can play indispensable roles in the process of economic development.

Type
Research Article
Information
Business History Review , Volume 44 , Issue 4 , Winter 1970 , pp. 498 - 519
Copyright
Copyright © The President and Fellows of Harvard College 1970

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References

1 The writer would like to express appreciation to the W. R. Coe Endowment of the School of American Studies, University of Wyoming, for research support.

2 The Teapot Dome episode has been covered in a number of able monographs: Bates, J. Leonard, The Origins of the Teapot Dome (Urbana, 1963)Google Scholar; Nash, Gerald, United States Oil Policy, 1890–1964 (Pittsburgh, 1968)Google Scholar; Ise, John, The United States Oil Policy (New Haven, 1926)Google Scholar; Noggle, Burl, Teapot Dome: Oil and Politics in the 1920's (Baton Rouge, 1962)Google Scholar; Werner, Morris R. and Starr, John, Teapot Dome (New York, 1959)Google Scholar; Stratton, David H., “Albert B. Fall and the Teapot Dome Affair,” (Ph.D. dissertation, University of Colorado, 1955)Google Scholar; Waller, Robert, “Business and the Initiation of the Teapot Dome Investigation,” Business History Review, XXXVI (Autumn, 1962), 334–353.CrossRefGoogle Scholar

3 One of the more balanced and incisive accounts of the Continental Trading affair is in Giddens, Paul H., Standard Oil Company (Indiana) (New York, 1951), 230–34, 362–64.Google Scholar

4 Samuel Aughey, “Annual Report of the Territorial Geologists” (Laramie, 1886); Lewis B. Ricketts, “Annual Report of the Territorial Geologist,” (Laramie, 1889).

5 If the extraordinary amount of litigation on the Salt Creek field accomplished nothing else, it did provide the historian with rich documentary records of the manifold byways of Salt Creek history. The Iba family migrations and personal history are best revealed in C. W. Iba's testimony in the transcript of Central Wyoming Oil and Development Company vs. William Henshaw, et al., VII, 4–429. Midwest oil Collection, Petroleum History and Research Center, University of Wyoming, Laramie. Hereafter cited as Midwest Oil Collection.

6 Pieces of the Pennsylvania Oil and Gas Company history can be put together from “J. W. Gordon Testimony,” C. L. Hendershot Affidavits, 7–51; “Minute Book of the Pennsylvania Oil and Gas Company” Midwest Oil Collection; and Wilbur C. Knight, “The Petroleum of Salt Creek, Wyoming,” Bulletin No. 1, School of Mines, University of Wyoming (Laramie, 1898).

7 C. A. Fisher, “History of the Well Drilling in Salt Creek field in chronological order from 1889 to the Present Time” unpublished manuscript, Midwest Oil Collection.

8 “Minute Book of the Pennsylvania Oil and Gas Company,” 8, 23, Midwest Oil Collection.

9 After receiving a flood of inquiries regarding Joseph Lobell, Senator Francis E. Warren of Wyoming determined to find out all he could about the various Lobell company manipulations. He sent off inquiries to the American consuls in France, Belgium, and Switzerland, besides hiring a special investigator in Chicago. The report that he received from Chicago is an astounding document which graphically outlines the Lobell family biography to 1903. Had Lobell's European investors been privy to this document, it is doubtful whether the Lobells would have been welcome in any of the financial offices in Europe. “Special Report—Class A, on Lobell & Lobell, 67 Clark Street,” Chicago, May 13, 1903, F. E. Warren Letterbook, February 2, 1904–July 11, 1904, F. E. Warren Collection, Western History Research Center, University of Wyoming, Laramie. Hereafter cited as F. E. Warren Collection.

10 C. W. Burdick, “Organization of the Belgian and American Belgo Companies, Acquisition of Land and Present Status,” 2, unpublished manuscript, Midwest Oil Collection. Harold Roberts, who served as attorney for over forty years for the Midwest Oil and associated companies, wrote a valuable history of the Salt Creek field, Salt Creek, the Story of a Great Oil Field (Denver, 1956). However, as the result of Robert's heavy reliance on his personal recollections and files, the early history of Salt Creek is sketchily treated. “Notes for the Salt Creek History,” Harold Roberts Collection, Petroleum History and Research Center. Hereafter cited as Harold Roberts Collection.

11 C. W. Burdick, “Organizations of the Belgian and American Belgo Companies, Acquisition of Land and Present Status,” 3.

12 “Minute Book of the Sociéte Belgo Américaine des Pétroles du Wyoming,” Midwest Oil Collection.

13 Redwood, Boverton, A Treatise on Petroleum, I (London, 1913), 94, 183.Google Scholar

14 “Letter Relating to an interview with Dr. Boverton Redwood,” F. E. Warren Letter-book, February 2-July 11, 1904, 433. F. E. Warren Collection.

15 Wilbur C. Knight, “Special Report on the Salt Creek Oil Field, Located in Natrona County, Wyoming, U.S.A., for Governor Noel Pardon of Paris, France,” (Laramie, Wyoming, July 6, 1903), Wilbur C. Knight Collection, Western History Research Center.

16 Ibid., 6.

17 Le Roux, Hugues, Le Wyoming: Histoire Anecdotique du Petrole (Paris, 1904).Google Scholar Wilson O. Clough has translated this volume and the André Sayous pamphlet. See Clough, Wilson O., “Portrait in Oil: the Belgo-Americaine Company in Wyoming,” Annals of Wyoming, LXI (April, 1969), 5–31.Google Scholar

18 Le Roux, Hugues, Le Wyoming: Historie Anecdotique du Petrole (Paris, 1904), 44Google Scholar; Clough translation, Wilson O. Clough Collection, Western History Research Center. Hereafter cited as W. O. Clough collection.

19 Cheyenne Leader, April 28, 1903.

20 Laramie Daily Boomerang, May 3, 1903.

21 Sayous, André E., “Le Wyoming and General Considerations on the ‘Far West’,” (Paris, 1904).Google Scholar

22 Ibid., 1, Clough translation, W. O. Clough Collection.

23 Ibid., 16.

24 Ibid., 28–31.

25 Magne, Louis, Histoire de la Société Belgo-Américaine des Pétroles du Wyoming (Brussels, 1904).Google Scholar

26 Ibid., 123.

27 J. K. Goudy to Francis E. Warren, March 28, 1904, F. E. Warren Letterbook, February 2, 1904–July 11, 1904, 427. F. E. Warren Collection.

28 George Roosevelt to Francis E. Warren, March 25, 1904, Ibid., 429.

29 Horace Lee to Francis E. Warren, March 29, 1904, Ibid., 428.

30 Wyoming Industrial Journal (October, 1903), 106; Cheyenne Leader, March 19, 1904, and London Times, December 4, 1903.

31 “To our Friends and Shareholders of the Société Belgo Américaine of Wyoming Petroleums,” copy in F. E. Warren Letterbook, Februar 2, 1904–July 11, 1904, 432. F. E. Warren Collection.

32 Cheyenne Leader, April 28, 1903; May 2, 1903; Laramie Daily Boomerang, March 19, 1904; March 17, 1904.

33 Wyoming Industrial Journal (December, 1903), 180–81.

34 C. W. Burdick, “Organization of Belgian and American Belgo Companies, Acquisition of Land and Present Status,” 2–3.

35 “Transactions of Joseph H. Lobell in re. to the Salt Creek Oil Field,” unpublished manuscript, Midwest Oil Collection.

36 “Minute Book Société Belgo Américaine des Pétroles du Wyoming,” 36. Ibid.

37 S. A. Lane, whose company sub-contracted the Dutch-Belgo-Américaine Drilling Contract in Salt Creek, recalled that Lord Templeton told him that Joseph Lobell “never will operate the Belgo-Américaine Drilling Trust — operation is not the purpose of Lobell's life.” Interview with S. A. Lane, February 23, 1958, Petroleum History and Research Center.

38 A French group under the company title of ASCO drilled several wells on Section 2, Salt Creek on Belgo sub-leases; none was productive. A Swedish concern added to the cosmopolitan flavor of Salt Creek in 1907 by taking another sub-lease from the Belgo company. They also drilled on Section 2, finding water. Evidently this was enough to dampen Swedish spirits, for this is the one and only time they are recorded in Salt Creek history. C. A. Fisher, “History of Well Drilling in the Salt Creek field in Chronological Order from 1889 to the Present Time,” unpublished manuscript, Midwest Oil Collection.

39 “Testimony of C. W. Iba,” Transcript, Central Wyoming Oil and Development Company vs. William Henshaw, et al., VII, 210–11. Midwest Oil Collection.

40 Very little is known of van der Gracht's life. A bachelor, he died at The Hague on July 26, 1916. H. L. Kruimel to Gene M. Gressley, January 1, 1958, Petroleum History and Research Center.

41 Everett De Golyer wrote of Porro, “His work covered almost the entire oil world of his time and was marked by notable successes. His location of the discovery well for Salt Creek is probably the first geological location for a big oil field in the United States and at the time of his death, he was probably the senior oil geologist for the world.” For details of his life, see Harrison, Thomas, “Cesare Porro,” Bulletin of the American Association of Petroleum Geologists, XXXVI (August, 1952), 1681–86.Google Scholar

42 Cesare Porro, “Report on Salt Creek,” 4. Thomas S. Harrison Collection.

43 “Corporation Record,” Petroleum Maatschappij Salt Creek of The Hague, 8. Midwest Oil Collection.

44 “Memorandum, Transactions of Joseph H. Lobell in re. Salt Creek Oil Lands,” Mid west Oil Collection.

45 Interview with S. A. Lane, February 23, 1958.

46 When Kerbert departed from Casper and the Petroleum Maatschappij in 1911, he went with Royal Dutch Shell first in Russia. In December of 1919, he “escaped with so-to-speak nothing but my pants on and lucky at that.” After Russia he spent the next twenty some years with Shell in Sumatra, Venezuela, and the Middle East. When the Central Wyoming Oil and Gas Company sued William Fitzhugh and William Henshaw in 1916, they sent two attorneys an a stenographer to Russia to obtain Kerbert's testimony. They returned to New York with Kerbert's deposition on July 20, 1916. The accuracy and forthrightness of Kerbert's testimony proved valuable not only in the Central Wyoming case but in much of the subsequent litigation on Salt Creek. H. L. Kruimel to Gene M.Gressley, January 1, 1958; Coenaard Kerbert to Gene M. Gressley, February 2, 1958, March 23, 1958. Interview with S. A. Lane, February 23, 1958; Harry McCracken to Gene M. Gressley, October 14, 1958. Petroleum History and Research Center.

47 Interview with S. A. Lane, Ibid.

48 “Minute Book of the Central Wyoming Oil and Development Company,” 13. Mid west Oil Collection.

49 Kerbert in Guriev, Russia, on June 16, 1916, was asked the embarrassing question of whether he had written his Casper attorney on November 26, 1908, as follows, “About the jumping of more Belgo-American lands after January first, I shall write you in a few days.”Kerbert conceded that the quotation was probably accurate. “Kerbert Deposition,” Central Wyoming Oil and Development Company vs. William G. Henshaw, et al., 152. Midwest Oil Collection.

50 Interview with S. A. Lane, Ibid.

51 The “discovery” date has been open to considerable controversy; however, the diary of Frank Middaugh, an employee of the Dutch Maatschapij, establishesthe above date. “Frank Middaugh Diary,” C. L. Hendershot affidavits, William M. Fitzhugh Collection.

52 Kerbert Testimony, Central Wyoming Oil and Development Company vs. William Henshaw, et al., I, 175–77.

53 “Corporation Record,” Petroleum Maatschappij Salt Creek, 64–66.

54 Lobell, for a decade after 1913, continued to harrass the Salt Creek contestants, pyramiding one company on top of another. For details, see Henry McAllister to William M. Fitzhugh, April 7, 1915; G. R. Hagens to William M. Fitzhugh, October 13, 1911; HenryMcAllister to William Fitzhugh, April 7, 1915, May 6, 1915; William M. Fitzhugh Collection. Statement by Frederick J. Lobell, July 6, 1917, Midwest Oil Collection. Frederick J. Lobell to Charles W. Carlisle, December 17, 1915, January 26, 1916; Charles W. Carlisle Collection. Petroleum History and Research Center.

55 Kerbert Deposition, Central Wyoming Oil and Development Company vs. William G. Henshaw, et al., 127. Midwest Oil Collection.

56 William M. Fitzhugh, “Chronological Statement of Facts Respecting the Relations between William G. Henshaw and William M. Fitzhugh as to Wyoming Lands, and also contractual relations between Fitzhugh and the Midwest Oil Company, the Reed Investment Company and Others,” William M. Fitzhugh Collection.

57 Ibid., 3.

58 “William M. Fitzhugh Testimony,” Central Wyoming Oil and Development Company vs. William G. Henshaw, et al., I, 274.

59 A half century later the bitterness engendered by Hagens' action lingered in S. A. Lane's memory; he spoke in 1958: “In the meantime he had gone to our attorney and I don't know what he paid him, which he evidently did, and he turned around and said our titles were no good and he would work for Fitzhugh against us. Can you imagine that” Interview with S. A. Lane, February 23, 1958.

60 “William M. Fitzhugh Testimony,” Central Wyoming Oil and Development Company vs. William G. Henshaw, et al., I, 276.

61 For the life and times of Vemer Zevola Reed, see two volumes by Sprague, Marshall, Money Mountain (Boston, 1953)Google Scholar and Newport in the Rockies (Denver, 1961).

62 Long after he had left Salt Creek, Oliver Shoup put down a delightful memoir of his Wyoming years. See Oliver Shoup, “When Salt Creek Roared,” Oliver Shoup Collection, Petroleum History and Research Center.

63 “Minute Book,” Midwest Oil. Midwest Oil Collection.

64 C.W. Burdick, “Organization of Belgian and American Belgo Companies, Acquisition of Land and Present Status.”

65 The problem of handling title litigation in Salt Creek caused a wide split in the Franco-Wyoming board of directors. Some wanted to prosecute their claims vigorously; others desired to “assume” possession, letting their opponents contest their possession. The latter viewpoint prevailed, but the wounds from the dispute were still open at the time of the Paris Agreement.

66 Excellent accounts of the background of the withdrawal order can be found in: Bates, J. Leonard, “The Midwest Decision, 1915, A Landmark in Conservation History,” Pacific Northwest Quarterly, LXI (January, 1960), 29–34Google Scholar; Bates, J. Leonard, The Origins of Teapot Dome (Urbana, 1963)Google Scholar; and Nash, Gerald, United States Oil Policy, 1890–1964 (Pittsburgh, 1968).Google Scholar

67 William M. Fitzhugh to J. D. Negus, June 29, 1910; Henry McAllister to William M. Fitzhugh, January 29, 1912; William M. Fitzhugh Collection.

68 Edwin Hall to Editor, London Times, August 31. 1910. State Geologists' Files, Western History Research Center. Hereafter cited as State Geologists's Files.

69 Ernest Ayrault to Edwin Hall, December 6, 1910; Camille M. S. de Ryck van der Gracht to Edwin Hall, November 27, 1910, Ibid.

70 Interview with S. A. Lane, February 23, 1958.

71 C. E. Jamesion to Editor, London Times, February 10, 1911. Not all European reaction to Hall's letter was negative. Charles Walter, brother of Henry Walter, a prominent board member of the Belgo companies, could not refrain from expressing his delight over the discomfort of the Franco-Wyoming board. Charles Walter sent off a letter to Hall congratulating him on his stand against fraudulent activities in Wyoming oill Further, Walter advised Hall that with his new-found reputation of high honesty, he would be in demand by all the companies in England desiring an expert's opinion. However, Walter's cynicism showed through: “In this connection pardon me if I call your attention to the fact that the dear British Public invariably appreciates and values an Expert's opinion and advice in accordance with the honorarium therefor. In England such run and must run into good solid figures. Verbum sap.” Charles Walter to Edwin Hall, September 13, 1910, State Geologists' files.

72 Harold Roberts Collection.

73 Wyoming Oil Fields Record, Midwest Oil Collection.

74 P. E. de Caplaoe to Ernest Ayrault, October 11, 1911. Wyoming Oil Fields file, Mid west Oil Collection. Interview with H. C. Bretschneider, June 12, 1958.

75 Vaile, McAllister & Vaile, “Memorandum Relative to Fitzhugh-Midwest Contract and Right to Enforce Specific Performance thereof in certain Respects,” William M. Fitzhugh Collection.

76 “Midwest Oil Company — W. M. Fitzhugh Agreement, September 14, 1912,” Mid west Oil Collection.

77 Allusions and rumors were prevalent in the friction among the Midwest crowd in the immediate months preceding the Paris Agreement. Fitzhugh and his attorneys did their best to exploit this dissent in the Reed managerial structure. William M. Fitzhugh to Oliver Shoup, December 17, 1911, Fitzhugh Collection.

78 Reed's surrender may have been due in part to Fitzhugh's intimidations. In a breezy, blunt, blustering letter, Fitzhugh told Reed in unequivocal terms, “I am going to give you my candid opinion of the situation, first prefacing my statements by saying that the Midwest and Reed Investment Companies are so closely identified with my interest that their success is my success. Don't let us kill the goose that lays the golden egg, but let us get together and we can all make more money… I can send to Europe certain official dletters that would in my opinion completely block and stop any stock selling — but I think it would be inadvisable provided we can in any way combine — if we can't then I certainly will stop the stock sales.” Coming as closely as it did on Hall's letter, this Fitzhugh missive must have sent shudders through Reed's spine. For one thing Reed knew about Fitzhugh –he did not bluff. William M. Fitzhugh to Verner Z. Reed, December 18, 1911. William M. Fitzhugh Collection.

79 Paris Agreement, December 29, 1913, Midwest Oil Collection.

80 For background on European economic growth and investment strategy in the 1870–1914 era, see: Cameron, Rondo F., France and the Economic Development of Europe, 1800–1914 (Princeton, 1961)Google Scholar; Landes, David S., “French Business and the Businessman, a Social and Cultural Analysis,” in Earle, Edward M. (ed.), Modern France: Problems of the Third and Fourth Republics (Princeton, 1951), 334–351Google Scholar; Kindleberger, Charles P., Economic Growth in France and Britain, 1851–1950 (Cambridge, 1964)CrossRefGoogle Scholar; Landes, David S., The Unbound Prometheus (Cambridge, 1969)Google Scholar; Laffey, John F., “Roots of French Imperalism in the Nineteenth Century: The Case of Lyon,” French Historical Studies, VI (Spring, 1969), 78–92CrossRefGoogle Scholar; Baum, Warren C., The French Economy and the State (Princeton, 1958)CrossRefGoogle Scholar; Gerschenkron, Alexander, “Social Attitudes, Entrepreneurship and Economic Development,” in Explorations in Entrepreneurial and Economic Development, VI (October, 1953), 1–15Google Scholar; and Hoselitz, Bert F., “Entrepreneurship and Capital Formation in France and Britain since 1700,” in Capital Formation and Economic Growth (Princeton, 1956).Google Scholar

81 An account of French technology in the Caucasus is in the Record Book of A. Beeby-Thompson, 1898, A. Beeby-Thompson Collection, Petroleum History and Research Center. See also, Beeby-Thompson, A., The Oil Fields of Russia (London, 1904).Google Scholar

82 C. L. Lufkin, F. H. Oliphant and J. E. Eckbert, “Report on Wyoming, June 14, 1899.” Carter Oil Collection, Petroleum History and Research Center. For more on Lukin, Oliphant and Eckert's activities with Standard Oil, the reader is referred to the perceptive history of Standard Oil by Ralph and Hidy, Muriel, Pioneering In Big Business, 1882–1911 (New York, 1955).Google Scholar

83 Coenraad Kerbert to S. A. Lane, August 8, 1926, S. A. Lane Collection.