The early days of Petroleum
By Theodore B. Robinson
Published in print (with additional illustrations) in the Journal of the International Bond & Share Society, November 1997
Copyright ã International
Bond & Share Society 2001
Petroleum – no other industry has changed the
world in so many ways, both good and bad. It has been responsible for the
development of everything from the automobile to plastics to pollution and much
more. It has fostered the growth of the world’s largest corporations, has
turned paupers into millionaires and sometimes back to paupers.
Why collect early (1860’s) petroleum share
certificates ? First of all they are rare. Most certificates are found in
very small quantities, usually just a few. This is because the vast majority
come from private holdings rather than corporate archives. Almost all are found
issued/uncancelled and usually in excellent condition. Most petroleum
corporations founded in the 1860’s failed early in their existence and thus the
certificates that had been issued never made it back to the corporate offices.
Out of the hundreds of different petroleum corporation certificates found, only
a relative few have been found in cancelled condition and in quantities that
lead one to surmise that they were from corporate archives. Between 1860 and
1870, over 800 corporations in a half dozen states were formed to explore and
drill for petroleum. This makes collecting early petroleum certificates, and
obtaining a good number of the corporations, a more attainable goal as compared
to railroads or mining.
A second reason to collect petroleum share
certificates is for their beauty and uniqueness. Most certificates depict
different aspects of petroleum exploration, storage and transport. A number of
certificates have vignettes unique to a specific corporation. One lithographer,
Hatch & Co., produced certificates with beautiful and intricate vignettes
used by a single corporation and unique to that corporate certificate. These
are much prized by collectors and thus command a higher value. Certificates
also come in a variety of colours.
Some certificates can be found with signatures
of famous personalities of the early oil industry and those that invested in
it. Fargo, Drake, Roberts, and Andrew Carnegie, just to name a few.
According to American history books, oil was
discovered in August 1859 when Edwin Drake drilled the first succesful well
near Titusville, Pennsylvania. Truth be known, long before 1859, oil was known
to exist and was used in the United States and Canada. Successful wells had
been drilled in the Province of Ontario, Canada, years before the Drake well
was drilled.
As early as the 17th century, French missionaries recorded in their
journals the existence of petroleum in what is now western New York state. In
the 18th century, Seneca Indians brought oil to Niagara, to trade
with the early settlers. Oil bubbled up along many streams in New York,
Pennsylvania & West Virginia and was harvested by skimming it from the
streams’ surface. Prior to 1846, this ‘Rock Oil’ was mostly used for medicinal
purposes. Salt was the important commodity in the 19th century and
salt wells were a big business in Pennsylvania. When oil started to come up
with the salt water, the drillers actually dumped it into the Pennsylvania
Canal causing what probably was one of the first oil spills and pollution. So
much oil was found in Western Pennsylvania that bottlers actually burned the
surplus. It wasn’t until 1850 that Samuel M. Kier devised a crude distillation
process that allowed oil to be used for other purposes such as illumination.
This new product was called ‘Carbon Oil’.
The demand soon exceeded the supply and new methods of obtaining petroleum needed to be derived. Wells drilled between 1859 and 1865 produced only small quantities of oil and were not efficient or cost effective. They had to be cleaned often and redrilled due to the build-up of paraffin and clay deposits. Many inventors tried various methods of improving petroleum production. It was not until January 28, 1865 when Col. E.A.L. Roberts succesfully discharged his eight pound torpedo, that oil production could be increased significantly. The torpedoes which were lowered into the drilled wells ‘were of cast iron flasks, filled with gunpowder, and ignited by a weight dropped along a suspension wire onto percussion caps in the flask.’ In later models, the gunpowder was replaced by nitroglycerine. The results of Roberts’ invention increased oil production over 40 fold. Modern torpedoes are still used today to increase oil production. In February 1865 E.A.L. Roberts and his brother Walter and associates formed the Roberts Petroleum Torpedo Company. Roberts was granted a patent that gave his company a virtual monopoly on all types of torpedo used in the oil industry. This patent was vigorously fought by both oil exploration companies and other would-be torpedo producers. In August 1866, the United States Supreme Court confirmed the Roberts’ sole right to the patent. When Roberts died in 1881 he was a millionaire. His expenditures in the courts to enforce his monopoly cost over $250,000 and he had earned the reputation for having been responsible for more litigation than any other man in the United States.
References :
1.
The
American Petroleum Industry 1859-1899. Williamson, Harold & Daum, Arnold.
1959. Northwestern University Press, Chicago.
2.
Pennsylvania
Petroleum 1750-1872. Giddens, Paul H. 1947. Pennsylvania Historical &
Museum Commission Press, Titusville.
Copyright ã INTERNATIONAL BOND
& SHARE SOCIETY 2001
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