27 August 2011

Olinda Oil Field History: Origins of Olinda, Part 7

With the successful launch of the Olinda oil field, courtesy of a joint venture between Edward Doheny and the Southern California Railway (as owned by the Atchison, Topeka and Santa Fe Railroad), in 1897, it was not long before other oil companies came into being and then the battles in the courtroom followed. 

As noted last post, William Hervey Bailey, founder of the Olinda Ranch in 1887, teamed up with other investors to create the Richfield Oil Company (later Atlantic Richfield, now known as ARCO) to develop portions of the ranch for oil development.  Moreover, the San Francisco-based real estate firm of Eldridge, Easton and Company, which had also recently been hired to sell and develop land in the east end of Carbon Canyon located within the Rancho Santa Ana del Chino, was hired by Bailey's Olinda Ranch Company to do the same on his holdings.

With the formation of Richfield Oil, the idea was to transfer all viable oil lands within Olinda Ranch from the ranch company to the oil firm.  This was based on an agreement entered into between the two entities in April 1898.

Alas, a year later, problems arose amongst the principals involved in the agreement, when suit was filed in Orange County Superior Court in Santa Ana by Easton, Eldridge and Company (consisting of four men: George Easton, D. Easton, W. L. Valentine, and L. Phipps) against Bailey and the Olinda Ranch Company.  The allegation was that, although some Olinda Ranch lands that had bearing oil deposits were transferred to Richfield as stipulated in the Spring 1898 compact, other properties that were determined to have oil at some point before 1 April 1899 were not.  Easton, Eldridge and Company were asking the court to compel Bailey to transfer those properties and to pay for the plaintiffs costs and attorney's fees, amounting to $1000.

As often happens in matters of civil law, the parties found a way to resolve their differences without going to to the further and greater expense of a trial.  In early May, the Los Angeles Times reported that the case had been dismissed, because a deal was made out of court.  A four-party transaction involving the Olinda Ranch Company, Richfield Oil Company, George Easton (principal figure in Easton, Eldridge and Company) and a portion of the stockholders of the first two firms was consummated,

in which it is agreed that in consideration of the sum of $575 paid to the Olinda Ranch Company by the Richfield Oil Company and other valuable concessions, the Olinda Ranch Company conveys to George Easton of Los Angeles city fifty acres of land . . . transferred with this land are valuable oil wells which are now largely productive.

Clearly, despite the previous indications that there were four Easton, Eldridge and Company litigants, there was really just George Easton who was pursuing the matter and he seems to have obtained much or all of what he sought in the settlement.

Meantime, within a week, William Hervey Bailey moved to create his own oil company, although it is not clear whether he parted ways with Richfield to do so.  At any rate, he formed the Olinda Oil Company with $100,000 in stock and took on his son William, Jr. and Los Angeles investors J. W. Briggs, J. G. Mossin, and T. W. Phelps as fellow directors.

In August, the Times reprinted a lengthy article by the Santa Ana Blade, later absorbed into the Santa Ana Register, which gave some detail about the emerging Olinda field.  Notably, the unnamed Blade reporter referred to "the Santa Fe group of wells," noting that this name came from its ownership by the Atchison, Topeka and Santa Fe Railroad and its partner, Edward Doheny.  Also of note was that the crude generated from the "Santa Fe wells" "is hauled to Richfield Station, four miles distant," this being the Southern California Railway depot in present Atwood in Placentia.  The Blade also reported that there were ten operating wells and four others in the process of drilling. 

Meantime, there were a growing number of companies and individuals mentioned at Olinda in addition to the Santa Fe/Doheny enterprise.  These included the Columbia Oil Company (which has been mentioned in this blog fairly recently as a firm headed by William B. Scott, William R. Rowland and Harry Chandler, the main figures in the later purchase of much of Tonner Canyon for the Tres Hermanos Ranch) though the Columbia was then occupied principally at Brea Canyon; the Graham-Loftus Company (William Loftus, in 1910, provided a detailed update on Olinda progress, as covered in this blog before); Charles Victor Hall, another recent notable covered here, thanks to contact from a descendant; and the others mentioned above, namely Easton, Eldridge and Company and the new Olinda Oil Company.

According to the Blade, "so far as we could learn there have been no failures," which seemed to indicate that all drilled wells came up with crude, although the paper then drew the erroneous conclusion that "there seems to be every reason to believe that oil may be developed at almost any point upon the strike [geological formation] from Los Angeles to some point east of the Santa Fe development."  It was correct, though, that "the fields already partially explored will be greatly extended," and that, "the life of the wells developed is probably very great." 

As for extended activity in the fields, the next post will cover further maneuverings involving Olinda Ranch owner William Hervey Bailey as well as an important development for "the Santa Fe wells."

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