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Edward L. Doheny

Overview

Edward L. Doheny

birth name	Edward Laurence Doheny
birth date	August 10, 1856
birth place	Fond du Lac, Wisconsin, U.S.
death date	September 8, 1935
death place	Los Angeles, California, U.S.
occupation	Miner · prospector · driller · businessman · philanthropist
spouse	Carrie Louella Wilkins (1862-1900)‡R1R‡ Carrie Estelle Betzold (1875-1958)‡R1R‡
children	Edward (Ned) L. Doheny Jr. (1893-1929)‡R1R‡‡R2R‡ Eileen Doheny 1884-1892‡R1R‡

Edward Laurence Doheny (August 10, 1856 – September 8, 1935) was an American oil tycoon who, in 1892, drilled the first successful oil well in the Los Angeles City Oil Field. His success set off a petroleum boom in Southern California, and made him a fortune when, in 1902, he sold his properties.

He then began highly profitable oil operations in Tampico, Mexico's "golden belt", drilling the first well in the nation in 1901. He expanded operations during the Mexican Revolution, and opened large new oil fields in Lake Maracaibo (Venezuela). His holdings developed as the Pan American Petroleum & Transport Company, one of the largest oil companies in the world in the 1920s.

In the 1920s, Doheny was implicated in the Teapot Dome scandal and accused of offering a $100,000 bribe to United States Secretary of the Interior Albert Fall.[3] Doheny was twice acquitted of offering the bribe, but Fall was convicted of accepting it. Doheny and his second wife and widow, Margaret McFadden, were noted philanthropists in Los Angeles, especially regarding Catholic schools, churches and charities. The character J. Arnold Ross in Upton Sinclair's 1926-27 novel Oil! (itself the inspiration for the 2007 film There Will Be Blood) is loosely based on Doheny.

Youth

Early career

Doheny is listed in the 1880 United States census as a painter living in Prescott, Arizona.[8] Later in 1880, he was in the Black Range in western Sierra County of south-western New Mexico Territory, living in the rough silver-mining town of Kingston (about 10 mi west of Hillsboro), prospecting, mining, and buying and trading mining claims. He worked in the famed Iron King mine, just north of Kingston, which drew men to the area. In Kingston, he met two men who later played important roles in his life: Albert Fall, the future Secretary of the Interior, and Charles A. Canfield, who became his business partner.[9]

Doheny and Canfield together worked the former's Mount Chief Mine with little success.[9] In 1883, in the Black Mountains town of Kingston in the New Mexico Territory, Doheny met and married his first wife, Carrie Louella Wilkins, on August 7.[10] In 1886, Canfield prospected further in the Kingston area, leasing and developing with great success the Comstock Mine (not to be confused with the Comstock Lode of Virginia City, Nevada). Doheny declined to join him in this venture, but Canfield made a small fortune from it. Doheny's daughter, Eileen, was born in December 1885.[10] Doheny was eventually reduced to doing odd jobs (including painting) to support his family.[11]

In the Spring of 1891, Doheny left New Mexico and moved to Los Angeles, California, attracted by Canfield's success in real estate there. Canfield had previously left New Mexico with $110,000 in cash from his Comstock Mine venture, which he parlayed into extensive real estate holdings during the Los Angeles boom of the later 1880s. With the collapse of the speculative fever, Canfield lost his wealth and land holdings and, by the time Doheny arrived in Los Angeles in 1891, he was deeply in debt.[12]

The two men briefly tried prospecting in the San Diego County area of Southern California, forming the Pacific Gold and Silver Extracting Company there—but without achieving success, they soon returned to Los Angeles.[12] By 1892, Doheny was so poor he could not afford to pay for his boarding room.[13]

Doheny's daughter Eileen was a frail child and died at age seven on December 14, 1892. Her death was caused by heart disease stemming from rheumatic fever, as well as a lung infection.[14] Edward and Carrie's marriage was fragile, owing mostly to the harsh reality of mining life and their many financial problems.[15] Eileen's death further strained the marriage. Nearly a year after Eileen's death, on November 6, 1893, Carrie gave birth to their only son Edward Jr., known as Ned.[16]

Oil wells and success

While in Los Angeles, Doheny found out that there were local reserves of natural asphalt, which in places came to the surface—notably at the La Brea Tar Pits. Doheny obtained a lease near downtown with $400 in financing from Canfield, who had made some money from the mining industry. In the fall of 1892, Doheny dug a well with picks, shovels, and a windlass, looking for asphalt, from which oil could be refined. When the well (6 x wide) reached 155 ft, Doheny devised a drilling system involving a eucalyptus tree trunk.[13] When completed in 1893, the well reached 225 ft and produced 40 oilbbl/d. (The discovery of this well appears in John Jakes's novel California Gold,—as do Doheny and Canfield, as partners with the novel's fictional protagonist, Mack Chance.)

Edward and Carrie Doheny divorced in 1899, when Ned was six years old.[17] Edward gained custody of their son, and remarried. Unable to cope with her losses, the following year Carrie Doheny committed suicide.[18] Doheny married his second wife, Carrie "Estelle" Betzold, inside the private Pullman car of Santa Fe Railway executive Almon Porter Maginnis ("Car 214").[19] It was held on the siding in New Mexico Territory on August 22, 1900.[20] Though she bore no children, Carrie raised Ned.[21]

The first well dug in Los Angeles was in 1863, on Hoover Street between Seventh Street and Wilshire Boulevard, by a man named Baker. However, in his book Petroleum in California: A Concise and Reliable History of the Oil Industry of the State, Lionel V. Redpath says the Los Angeles oil industry began with the Doheny and Canfield well at the corner of Patton and West State streets. The well was a small producer, but it pumped steadily for three years, and during that time Doheny and others sunk about three hundred more wells.[22] Doheny and Canfield soon made a fortune by drilling in the area and selling the oil to nearby factories. Later, they helped spur the California oil boom of the early 1900s by persuading railroads to switch from coal to oil to power their locomotives.[13]

Doheny was also a pioneering oil producer in Mexico. In Tampico his company drilled the first well in Mexico in 1901. He expanded operations during the Mexican Revolution, and opened large new oil fields in Mexico's "golden belt" inland from Tampico. It also drilled Cerro Azul No. 4 well—which, in February 1916, became the world's largest-producing well, pumping 260,000 barrels per day (B.P.D.). When the well—drilled by Herbert Wylie—came in, the sound could be heard 16 mi away in Casiano, and it shot a stream of oil 598 ft into the air, sending oil in a two-mile (three-kilometre) radius. Over the next fourteen years, the well produced over fifty-seven million barrels.[23]

Big business and Teapot Dome scandal

Doheny formed the Pan American Petroleum and Transport Company (P.A.T.)—part of which later became the Mexican Petroleum Company (Pemex)—to hold his two Mexican companies (Mexican Petroleum and Huasteca), his Atlantic and Gulf Coasts facilities in the United States, and his California holdings.[23] The company owned 600,000 acre of land worth about $50,000,000 and secured an additional 800,000 acre in Mexico in October 1919.

In 1919 the Colombian Petroleum Company, a P.A.T. subsidiary, bought a 75% interest in the Barco oil concession in Colombia.[24] Doheny was also interested in plans to develop the oil industry in Venezuela, and in building a pipeline from Colombia to Venezuela to make it more economical to export the Barco oil from the west coast of Lake Maracaibo.[25] In 1920 Pan American was the largest oil company in the United States, ahead of Sinclair Consolidated Oil Corporation and Standard Oil Company of Indiana. Automobile production was booming and oil prices were high. The Mexican Petroleum Company was the largest in Mexico, and Mexico was the largest oil producer in the world. By 1925, Doheny's net worth was $100 million ($ in dollars), more at the time than John D. Rockefeller.[26]

In 1922 Albert B. Fall, U.S. Secretary of the Interior, leased the oil field at Elk Hills, California, to the Pan American Petroleum & Transport Company. Around the same time, the Teapot Dome Field in Wyoming was leased to Sinclair Consolidated Oil Corporation. Both oilfields were part of the US Navy's petroleum reserves. Neither lease was subject to competitive bidding. In 1924 rumors about corruption in the deals escalated into the Teapot Dome scandal.

Doheny's reputation was somewhat tainted by a bribe paid to the Secretary of the Interior, Albert B. Fall in 1921. He made the "gift" of $100,000 in connection with obtaining a lease of 32,000 acre of government-owned land used for the Elk Hills Naval Petroleum Reserve near Taft, California. The resulting scandal broke soon after that, over similar bribes Fall accepted for leasing Teapot Dome in Wyoming. Doheny was charged with bribing Fall but, in 1930, was acquitted. His son, Ned, who had delivered the money, and assistant Hugh Plunkett were also charged, but died before they could be tried.[27] Nevertheless, Fall was convicted of accepting the bribe.[28]

Doheny sold a majority of the family's shares in Pan American Petroleum & Transport to Standard Oil of Indiana, in April 1925, but retained all California assets, which he formed into a new company, Pan American Western Petroleum Company. Pan American Eastern Petroleum (the Mexico holdings, the Atlantic and Gulf Coasts holdings in the U.S., refineries, pipelines, and thirty-one tankers), which held the non-California assets, was sold to Standard. Pan American Western returned to its roots as an "upstream" exploration and production company.[29]

At the end of 1925, after Doheny had given up control of Pan American Petroleum & Transport, in order to exploit the oilfields in Lake Maracaibo, the company gained control of Lago Petroleum Corporation from C. Ledyard Blair's Blair & Co. The transaction became the subject of a stockholder action in 1933, which alleged that the bankers, who were represented on the Pan American board, conspired to make excessive profits. In 1926, Venezuelan Eastern Petroleum Corporation reorganized as a subsidiary of Pan American Eastern to buy and develop Venezuelan oil properties. But Doheny was not really involved, except passively through his remaining minority position in Pan American Petroleum & Transport.

In the midst of the Teapot Dome scandal, Doheny gave Greystone Mansion (designed by Gordon B. Kaufmann after a design competition) to his son, Edward (Ned) L. Doheny Jr., and his wife Lucy Marceline Smith (the couple married on June 10, 1914).[30] He built the 46000 sqft house in 1928, at a cost of $3,188,000, and sold the property and accompanying 400 acre ranch to his son for $10.[31]

When a second criminal trial for bribery began to loom for Doheny and Fall in 1929, the pressure on all parties reached a breaking point. The Dohenys tried to persuade Hugh Plunkett to be committed to a mental institute so that he could not then be made to testify against them. On February 16, Ned and Plunkett were found dead from apparent gunshot wounds. There were rumors that the two were having an affair.[32] The full story was never clear. The police were not called until three hours after the shots had been fired, despite several members of the family being at home and having heard the yelling. The Los Angeles authorities immediately blamed Plunkett in the murder-suicide. In addition to the indictment of Edward Doheny in the Teapot Dome scandal, both Doheny and Plunkett had been indicted in the alleged bribe of Albert Fall—as Ned (accompanied by Plunkett) had delivered the money. They had already gone through some trials.[33]

Raymond Chandler, a former oil man, included a thinly veiled account of this event in one chapter of his novel The High Window, presenting it as a bygone, hushed-up case. He had started work for the Dabney Oil Syndicate in 1922 as a bookkeeper and auditor, but was fired a decade later.[34]

Beset by shareholder lawsuits in the wake of Teapot Dome, and the death of Ned, Doheny became a recluse and invalid.[35] When she realized her husband needed an undisturbed home away for a while after the Teapot Dome travails and Ned's death, Carrie Estelle asked architect Wallace Neff to design and build the Ferndale Ranch complex on their Ojai, California property.[36] Hundreds of workers completed the 9000 sqft house in less than six weeks, including Neff's blueprints, by working day and night.[31][37]