USA > Pennsylvania > Pennsylvania, colonial and federal : a history, 1608-1903, Volume Three > Part 30
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According to this authority, statistics showing company ton- nage develop the fact that each company has an average of four or five accessible seams of commercial importance: Two com- panies have nine seams; two have eight seams; four have seven seams; two have six seams; two have five seams; seven have two seams, and three have one seam. In the importance of these seams as a source of supply, Fayette county stands at the head, followed by Washington, Greene, Allegheny, Westmoreland, In- diana, Jefferson, Armstrong, Somerset, Cambria, Butler, Clear- field, etc. This order has no reference to their present impor-
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tance. The amount of coal excluded from the above estimates through poor quality, depth under water level or rocks, is ad- mitted by the writer to be very great.
Since the zenith of bituminous coal production in the State was reached in 1883 in the Pittsburg region, the quantity pro- duced has been reduced some 20,000,000 tons annually, through the extensive consumption of natural gas in Pittsburg and its near vicinity. In 1886 this gas was in use there by 3,000 families, 34 iron and steel mills, 60 glass factories, and 300 smaller manu- factories, hotels, etc., all of which were supplied by one company which was organized in Philadelphia. The number of consumers was greatly increased in succeeding years through the supply from other companies of less importance.
PETROLEUM
The production and various phases of manufacture of petro- leum (as it is now generally called) occupy a position among the foremost of the great industries of Pennsylvania, and their history is replete with facts of startling interest and significance. No romance ever written surpasses it in its marvellous details.
The discovery made far back in past years that this fluid flowed naturally from the earth in western Pennsylvania, and the fact that the substance was known in some parts of the world centuries earlier, while most important in themselves, do not possess a tithe of the interest that surrounds the early development of its pro- duction in this State and the discovery of its valuable constituents, made in comparatively recent times.
Oil that was doubtless petroleum was mentioned by Marco Polo in the year 1260 during his travels of that and succeeding years. He wrote that on the north of Armenia the Greater "a fountain is found from which a liquor like oil flows." At an- other place was found a fountain "whence rises oil in such abun- dance that a hundred ships might be at once loaded with it. It is
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not good for eating, but very fit for fuel, for anointing the camels in maladies for the skin, and for other purposes." Previous to the actual beginning of the oil industry in this country the sub- stance had been known for two hundred years to both Indians and settlers, by whom it had been gathered from the surface of springs and small streams by absorbing it in blankets and otherwise, to be used as a remedial liniment. Coming down to more recent times, after the oil had to a small extent been introduced in its crude condition into the eastern States as a remedy for disease, Pro- fessor Silliman, in 1833, recorded the following: "I cannot learn that any considerable part of the large quantity of petroleum used in the eastern States under the name of Seneca oil comes from the spring now described [near the county line of Cattaraugus and Allegany counties, N. Y. ]. I am assured that its source is about 100 miles from Pittsburg on the Oil creek, which empties into the Allegheny river, in the township and county of Venango. It exists there in great abundance, and rises in purity to the surface of the water."
With reference to the oil deposits in western Pennsylvania, from the geologist's point of view, it may be said that the carbon in the depths of those regions, which is the base of the oil, shows that those deposits were either animal or vegetable, it being the base of the animal and vegetable world. The drill does not reach these, as they lie under the edge of the great secondary formation at a depth of 30,000 or 40,000 feet. The heat at those depths is very great. It would seem that the deposits of animal or vege- table matter are thrown off into the upper rocks as gas, and there condensed by the lower temperature into the liquid oil. Into what rock the gas will enter depends on the character of the rock. A close slate or sandstone will resist it, but wherever there is a crevice or a porous rock, it will force its way in and condense. Hence, the rock is a guide to the driller, and the location of the oil producing areas resolves itself into the existence of this porous sand rock. These areas are only small spots in the great belt of
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the formation and are indiscriminately scattered. Great geolo- gists have differed somewhat upon the character of petroleum. Dana wrote: "A bituminous liquid resulting from the decomposi- tion of marine or land plants, and perhaps also of some non- nitrogenous animal tissues." Denton thus describes it: "It is a coral oil, not formed from the bodies of the coral poplyps, as some have supposed, but secreted by them from the impure waters, principally, though not exclusively, of the Devonian times." Winchell says: "Crude petroleum is not a product of definite $ composition. It seems to be a varying mixture of several hydro- carbons . . . . and contains varying quantities of aluminous matter and other impurities."
The mere presence of petroleum in a geological formation is not always evidence of the existence there of a large quantity ; it occurs in all stratified rocks of all ages from the Laurentian to the recent. Almost all geological authorities credit it to organic re- mains, differing somewhat as to whether animal or vegetable re- mains were the source of the greater part. They, however, gen- erally agree that most of it found in the pores of fossiliferous limestone was produced by animal bodies, while that found in shales had a vegetable origin, the oil of commerce coming chiefly from the latter. (See "History of Petroleum," by J. T. Henry. )
The commercial production of petroleum in this country was preceded by the distillation on an extensive scale of oil directly from coal. The first of this product made and placed on sale was by the United States Chemical Manufacturing Company, Phil- brick & Atwood, at Waltham, Mass., early in 1852. They called it "Coup" oil, the name having reference to the historical coup of Napoleon III., some time previous to that year. Their product was a lubricator and gained favor among users of machinery. In 1856 coal oil was made in South Boston for Samuel Downer, by Joshua Merrill, a practical oil manufacturer. The first illuminat- ing oil of this character was made in 1856, from Trinidad asphalt. In the following year the so-called Albert coal of New Brunswick
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was quite extensively used in South Boston in making both lubri- cating and illuminating hydro-carbon oils, and a large business. was subsequently built up.
Meanwhile, a bottle of the so-called "Seneca oil" of western Pennsylvania was taken to the professor of chemistry in Dart- mouth college in 1854, where it fell into the hands of George H. Bissell, a graduate of that institution, who had been in the South a number of years and had come north to recruit his health. S. M. Kier had "struck oil" while drilling for salt water at Tarentum, Pa., in 1847, and pumped it up with the brine. He placed it on sale in the east in bottles as a remedy "celebrated for its wonderful curative powers. A Natural Remedy; Produced from a well in Allegheny county, Pa., four hundred feet below the earth's sur- face," etc. On the label of the bottle was a picture of an artesian well. The Dartmouth professor expressed his belief to Mr. Bis- sell that the oil in the bottle which came to the college was as good or better than the coal oils for illuminating purposes, if properly prepared. Bissell believed it, and the picture on the label seen by him a little later in the window of a drug store gave birth in his mind to the conviction that the right way to get the oil in great quantities was to bore down into the earth for it. He organized the Pennsylvania Rock Oil Company, the first of its kind in the United States, and leased the land on which were situated the principal oil springs. He sent a quantity of the oil to Professor Silliman, who analyzed it and made his report. The statement made by him that from the oil could be made as good an illumin- ant as any known to the world, attracted much attention. Said
he in his report : "Your company have in their possession a raw material from which by simple and not expensive process they may manufacture very valuable products. It is worthy of note that my experiments prove that nearly the whole of the raw prod- uct may be manufactured without waste, and this solely by a well- directed process which is in practice one of the most simple of all chemical processes." The next step was to get the oil in paying
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quantities. Fortunately the company looked with favor upon Bissell's plan of drilling and pumping and in the spring of 1858 sent one of the stockholders, E. L. Drake, to Titusville, then a mere lumberman's settlement on Oil creek, about seventeen miles from where it unites with the Allegheny river. Far distant from
Edwin Laurentine Drake
The first person to successfully bore for oil in Pennsylvania; born at Greenville, New York, 1819; died at Bethlehem, Pennsylvania, 1880. Reproduced for this work from a negative by J. A. Mather
railroads and manufactories, it required months to get the neces- sary tools to the scene of his operations, and more months to secure a man of experience to drill the proposed well. He began at first by digging, but found this a slow process. In February, 1859, he engaged a practical well driller at Tarentum, Pa., who was to begin his work in the following April; but he disappointed his employer and did not appear till some months later. When he did arrive they experienced considerable difficulty in removing
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the earth down to the rock, where the drilling was to begin. It was this fact that led Drake to conceive the idea of driving a tube down to the rock, thirty-six feet below the surface. This was accomplished in August and the drill was started. An average of about three feet per day was made. The last of August when the well was visited it was found nearly filled with oil, and on the following day a pump was placed in it and twenty-five barrels of oil taken out. Titusville awoke to find itself famous, and in an incredibly brief period the news spread over the country that any quantity of petroleum could be obtained in that vicinity by simply boring a well a short distance into the earth. And then began that spectacular and unparalleled rush of men into western Penn- sylvania which astonished the world. Most of them were young or middle aged, adventurous and ambitious, many of them men of high intelligence, and many also whose chief motive in going there was for gambling and dissipation. Land was leased along Oil creek and elsewhere, stock companies were rapidly organized who by lease or purchase secured great tracts, and wells were put down on every hand. Several hundred barrels of petroleum were sent to Joshua Merrill, at South Boston, from the first wells and from surface production, in 1858-9, which he distilled and placed the illuminant on the market. The days of distillation from coal were numbered.
It was soon learned that pumping was not to be necessary in many of the wells. On the Archie Buchanan farm, near Rouse- ville, what is said to have been the first flowing well was sunk in 1860. It was not tubed and was only 200 feet deep ; it soon ceased to flow. The price of oil in January, 1860, was $20 a barrel, but so enormous was the output from hundreds of flowing wells, some of them supplying several thousand barrels a day, that at the end of 1861 it had fallen to ten cents. The second productive well was sunk by Barnsdale, Meade & Rouse in November of that year, and the third for Brewer, Watson & Co., in December. One of the very early organizations in the business was the Pennsylvania
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Rock Oil Co., before mentioned, of which Jonathan Watson was an officer. He was a Titusville merchant, was in the field, and promptly leased all the land he could secure along Oil creek. His first well produced sixty gallons a minute, and oil was then selling at sixty cents a gallon. In two years from that time the farm on which this well was situated had produced 165,000 barrels of oil. The area of producing wells rapidly spread and soon Oil City sprang into existence, almost in a day, as an intensely active busi- ness center, with a population of thousands, a result that followed later at numerous other points.
With the oil output reaching hundreds of thousands of barrels per day, as it did before two years had passed after Drake's first success, the problem of storing and getting it to market became of vital importance and the task of solving it a gigantic one. The distance down Oil creek and the Allegheny river to Pittsburg was about 130 miles. The other points where railroads could be reached were Meadville, Corry, Erie, and Union City, all far away, and accessible over only rough country roads. Barrels of every description, new and old, were gathered, filled with oil, and hauled by an army of teamsters over these roads or floated down the Allegheny to Pittsburg. The cost of this work was enormous, three or four dollars per barrel being paid in some instances for hauling ten miles. Fleets of flat boats were built along Oil creek, which, by creating artificial floods with water stored behind nu- merous dams, were floated to the river and so on to market. On the river a fleet of a thousand boats and thirty steamers was en- gaged in this work. Captain J. J. Vandergrift, a former Missis- sippi river navigator, came east and here saw his opportunity. He towed a cargo of barrels up the Allegheny and saw at once that if transportation in bulk could be accomplished a great saving would be effected. He built a number of boats which were made oil-tight, towed them up the river to the creek, filled them with oil and floated them down to Pittsburg, realizing immense profits. It was a foregone conclusion that the railroads would soon reach out
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for this freight. They carried an immense quantity of oil during the first few years of the business, especially the Pennsylvania road, which was reached at Union City, twenty-two miles away ; Corry, twenty-six miles, and Erie, forty-four miles. By the be- ginning of 1863 the so-called Oil Creek railroad was opened be- tween Titusville and Corry. At the same time the Erie railroad company built a line from Meadville to Franklin, on the Alle- gheny, and by 1865 both roads were continued to Oil City. The freight situation was thus greatly relieved; but the great task of getting the oil from the wells to the immediate shipping point still remained, and ultimately led to the construction of the first pipe line.
The plan of piping oil from the wells was not a new one and had been frequently discussed almost from the beginning, but it was not until 1864 that Samuel Van Syckel, who had "struck oil" a few miles from the railroad and found he must pay all of his profits to teamsters, laid the first pipe for conveying the product. It was a momentous event in oil history. When his pump was set at work and the oil was turned into the pipe it was found that it would do the work of 300 teams, and oil transportation, in fact, the whole business, was soon revolutionized. There was intense opposition to this and later pipe lines by the men who saw that their profitable occupation was doomed, and finally in the spring of 1866 the Governor of the State was called on to protect prop- erty and workmen of the lines. Van Syckel's first line was only four miles long, extending from Pit Hole to the railroad, but it was only a short time before others were laid to Oil Creek and other points, so that in 1873 there were nearly 2,000 miles in operation. A few of these operated by gravity.
It was inevitable under the circumstances that every acre of land in western Pennsylvania on which there was the slightest probability of drilling a producing well would be greedily leased or purchased. The business grew and spread with almost in- credible rapidity. The little hamlets along Oil creek became pop-
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ulous cities, and on some of the farms where there had been no settlement at all, villages sprang into existence almost in a day, and grew into active business centers in a few weeks. Pit Hole City, Rouseville, Petroleum Centre and others in Venango county,
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Drake's First Oil Well
Depth 69 1-2 feet; average daily production for one year, 20 barrels; drilling commenced May 20, 1859; finished August 27, 1859. Engraved especially for this work from a negative made by John A. Mather, August 17, 1861
with Tidioute and Enterprise in the southern part of Warren county, all became active points of business of all kinds, their streets teeming with a throng of ambitious, eager, and excited men. Pit Hole City from a single farm house in May, 1865, became a city of 15,000 inhabitants by September of the same year, with most modern public and private institutions. The first producing well at that point gave 800 barrels per day and
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hundreds of others followed rapidly, many of them of far greater capacity. To-day the place is deserted, the supply of oil in that immediate region having first gradually diminished and then failed altogether. The same general statements may be applied to Tidioute and other points, where producing wells of large ca- pacity were drilled soon after Drake's success on Oil creek. The usual rush of speculators, workmen, merchants, mechanics and gamblers followed. Diminishing production, the panic of 1873, and depreciation in value of property eventually left the place in stagnation. Pleasantville, Petroleum Centre, Triumph Hill, and other points became successively centers of wild excitement, the greater number of which have since settled down to quiet villages or have altogether disappeared as far as regards large business interests.
This great industry of getting petroleum out of the earth, storing it and then sending it to market, gave rise to others little less important. The principal one of these was that of refining the crude oil. At the works of Samuel Downer, of Boston, a very large and prosperous business was in progress in the distillation of coal oil at the time the first wells were opened in western Pennsyl- vania. He was associated in the work with Joshua Merrill, be- fore mentioned. It needed no special foresight to enable those men to realize that a product was at hand that would soon displace coal as a source of oil for illumination. They promptly accepted the situation, visited the oil region, and in 1862 built a refinery at Corry at a cost of $250,000, where a vast business was carried on. They meanwhile sent crude oil to the Boston works, where great quantities were refined.
Extension of the boundaries of the oil producing region was only a part of the natural evolution of the industry. Most of the land in the near vicinity of the great oil centers was soon a veri- table thicket of derricks, and prospectors were perforce driven farther away in quest of the buried treasure. The first belief that producing wells could be drilled only in valleys had been proven a
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fallacy, and at the same time it had been learned that, while oil might be found in the "first sand," from which Drake obtained his supply at a depth of seventy feet, it also existed, and frequently in such quantities and under such pressure that wells would spout forth thousands of barrels in a day, in second, third or fourth sands, from far greater depths. These facts could have but one tendency-to immensely increase the number of experimental wells, as well as their average depth; and the greater the number of wells drilled, the greater the number of those that were merely "dry holes," as they were termed, or else produced in such limited quantities as to be unprofitable. During the first ten years of the industry, something over 5,000 wells were drilled, and only a little more than one-fifth of these were profitable producers. It was a hazardous lottery, but the men were always at hand to take the chances.
Another important feature of the oil industry was the creation of an army of buyers and brokers, who represented the large re- finers. They visited all of the important wells and purchased the product, relieving the owner of the well of all of his difficulties and expense in transportation. These men ultimately established oil exchanges at Oil City in 1869, and Titusville in 1871; there had been one in New York city as early as 1866. Meanwhile the refining industry grew with increased production until in 1872 the capacity of the refineries in the oil region had reached about 10,000 barrels. It was then confidently predicted and hoped that this great industry would ultimately be wholly confined to this region, where the producers claimed it belonged. This sentiment was destined in the course of time to lead to serious trouble.
In the speculative fever that attended the oil business in all of its phases it is not surprising that prices of the product fluctuated between wide extremes and often at very brief notice. In 1859 crude oil brought about $10 a barrel, a figure that was again ap- proximated in 1864, while a year or two earlier it was scarcely worth a dollar per barrel, and at one time in 1863 it was sold as
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low as ten cents per barrel. These great fluctuations during a long period from year to year, are given in the accompanying fig- ures. No other mineral product of the United States ever sold at such widely differing prices in so brief a period. The principal causes of this fluctuation were the abnormal conditions in the Civil war period, the increase of gross production, the effects of
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General view of Pithole, 1865
Negative by John A. Mather
the Franco-Prussian war of 1870, and government reports of the development of foreign oil fields. To these were added about 1870 the beginning of a practice of discrimination in freight rates by the three trunk railroads that were competing for the oil carry- ing business, a practice that ultimately led to an unparalleled busi- ness conflict.
The yearly average prices of pipe-line certificates of crude oil at the wells from 1860 to 1897 are as follows : 1860, $9.59; 1861, 49c. ; 1862, $1.05 ; 1863, $3.15; 1864, $8.06; 1865. $6.59; 1866,
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$3.74; 1867, $2.41 ; 1868, $3.6212 ; 1869, $5.6334; 1870, $3.86; 1871, $4.34: 1872, $3.64; 1873, $1.83; 1874, $1. 17; 1875, $1.35 ; 1876; $2.5614 ; 1877, $2.42; 1878, $1.19; 1879, 8578c .; 1880, 9472c. ; 1881, 857/gc. ; 1882, 781/gc .; 1883, $1.0534 ; 1884, 831/2c. ; 1885, 877/8c. ; 1886, 7114c .; 1887, 6634c .; 1888, 875/8c .; 1889, 9418c. ; 1890, 8634c. ; 1891, 67c. ; 1892, 555/8c. ; 1893, 64c. ; 1894, 8378c. ; 1895, $1.3578 ; 1896, $1.1778 ; 1897, 785gc.
General view of Pithole, August, 1895
This view is the same as the original made in 1865. Negative by John A. Mather
During a number of years of this industry "the prices of cer- tificate oil," that term meaning the oil taken as standard and mer- chantable by the pipe lines, ruled the market or selling price of crude petroleum. These certificates were bought and sold on the floor of the oil exchanges. In past years there was a large amount of oil held as stocks, and as these were depleted it was necessary for the pipe line companies to recall a large number of these certificates. As the stocks were reduced, it came to pass that a comparatively small amount of oil would control the entire trade. On January 23, 1895, the following notice was posted at the various offices of what was known as the Seep Purchasing
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Agency, Mr. Joseph Seep being the purchaser for the Standard Oil Company : "From this date the prices quoted are not those of certificate oil, but the prices paid by the Seep Purchasing Agency." ("Production of Petroleum in 1897," Oliphant. ) The quotations made in the Oil City Exchange, at various times, show that there was considerable difference between the prices paid for certificates and those paid by the Seep Agency.
The export of refined oil in 1870 was 4,501,983 barrels. In 1874 it had risen to 7,315,406 barrels. The export of crude in 1870 was 329,218 barrels, and of naphtha, 7,668,924 gallons. In 1874, the export of crude was 334,035 barrels, and of naphtha, 9,565,566 gallons. In 1880, the gross production amounted to 27,334,199 barrels.
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