Oil, Fortune, and Scandal Kevin Chen

Margaret Leslie Davis, a graduate of Georgetown University, is an author and a lawyer in California. She has written numerous works about prominent historical figures of California. Her most acclaimed works include Rivers in the Desert: William Mulholland and the Inventing of Los Angeles, a Golden Spur Award winner, and The Dark Side of Fortune: Triumph and Scandal in the Life of Oil Tycoon Edward Doheny, a Los Angeles Times bestseller.

The transition in the United States from the nineteenth century to the twentieth century was characterized by the rapid wave of industrialization and the perpetual rise of large corporations and companies. Along with enormous industries rose to prominence the “financial and industrial giants,”¹ such as Andrew Carnegie, John D. Rockefeller, John Pierpont Morgan, and numerous others who were regarded either as “Captains of Industry” or “Robber Barons.” Each renowned industrial individual contributed greatly—in his respective area—to the ascension of United States as a world power thorugh its industrial boom and economic prosperity. The flourishing railroad and automobile industries, consequently, laid the steps that allowed the petroleum industry to prosper and secure a strong grip on the United States’ economy. Petroelum sources were discovered in California, which attracted a large number of prospectors, planting the seeds of an oil empire. Exploring and revealing the story behind the petroleum industry in California, Margaret Leslie Davis studies and analyzes the career of an oil tycoon, Edward L. Doheny, in her biography The Dark Side of Fortune. Pieces of Doheny’s life story are collected and assembled by Davis into a documentary of a truly successful industrial oilman, whose various phases of life which consist of successful business ventures, traumatic personal experiences, and tremendous political responsibilities.

Born in 1856, in the state of Wisconsin, Edward Laurence Doheny was a brilliant child, graduating from his high school as the valedictorian at fifteen. Margaret L. Davis begins her biography of Doheny with the roots of his career as a young land prospector working with the U.S. Geological Survey Department. After this, Doheny turned to land prospecting in the West. He primarily focused on silver and gold mining. His first mining ventures began in the Black Hills of South Dakota and in New Mexico. Engaging in partnership with Charles Canfield, Doheny initially had some success; however, as time went on, economic instability and striking workers drained Doheny and Canfield’s finance, bringing about the collapse of their mining venture. Shifting their attention oil drilling, Doheny and Canfield transferred their energy to developing an oil company in southern California. Doheny’s fate was altered forever when he discovered a hole oozing with a substance—tarry exude—which, he learned, could be mixed with soil to create black, combustible oil. Seeing unlimited potential in his discovery, Doheny expressed his joy: “I had found gold…silver…lead, but this ugly-looking substance…[was] more valuable than any or all of these metals.”² Doheny and Canfield capitalized upon this golden opportunity to begin drilling and extracting tarry exude and turning them into barrels of oil, which the men sold to nearby factories below market price. The ingenius Doheny also designed a device—the oil derrick, an oil drilling machine—which he utilized to start off his oil venture in California. With tremendous growth and efficiency, Doheny and Canfield’s oil company prospered and transformed the source of energy used in automobiles and railroads from coal to petroleum. Their achievements and triumph in the Californian oil industry would lay a path for many to follow and launch the Californian petroleum industry forward.

Bordering the vast state of California, Mexico lacked a stable economy. Deprived of a transportation network, Mexico lacked the factors necessary to stimulate industrial and national growth. Meanwhile, Edward Doheny had discovered a massive source of oil in the Gulf Coastal Plains near Tampico. Determined to acquire and sell the oil of Tampico, Doheny and a small group of men embarked on a journey to the unexplored, oil-rich territories of Mexico. Mexican President Porfirio Díaz further encouraged Doheny’s business venture as he believed these Americans would stimulate the Mexican oil industry and educate the common Mexican people. Doheny boldy gambled with the expansion of his oil operations into the “Faja de Oro” (Golden Lane), with its myths of containing “oceans of oil.”³ His courage and decision proved to be correct; Doheny’s eyes were opened to unprecedented wealth and, with his elite plutocratic status, Doheny inevitably became influential in Mexican politics as well. Doheny reigned over the Mexican petroleum industry for many years—the Mexican Petroleum Company, with roots extending from the northern part of Doheny’s Pan American Petroleum and Transport Company in California. However, Doheny’s domination of the Mexican petroleum industry came to a halt, when foreign competition and Mexican political turmoil forced him to sell his Mexican Petroleum Company and turn his attention back to California. Although Doheny lost possession of Mexican oil reserves, his profit had been magnificent and his reputation—as an oil tycoon and leading capitalist—would rise dramatically throughout the United States.

In the midst of Mexican political instability, President Porfirio Diaz was overthrown by General Victorio Huerta, who in turn was dethroned by Venustiano Carranza, assassinated a year later. Back in the United States, with the inauguration of President Harding came his pro-oil platform and his “oil cabinet”—a group of advisers supporting wealthy capitalists and large privately owned oil enterprises.⁴ Among the cabinet members was Secretary Albert B. Fall, Edward Doheny’s close friend, who introduced Doheny to Harding. Having been victorious due to the financial support by wealthy industrialists and capitalists, Harding acted in accordance to the will of the elite of society. Having munificently donated and purchased liberty bonds during the first World War, Edward Doheny, naturally, was re-approached by the government when the navy needed funds. Convinced, the oil tycoon donated large sums of wealth to the development of the navy at Pearl Harbor. As a part of the plan of Harding’s administration, the Naval Petroleum Reserves, oil-rich fields set aside by the federal government, were established in California to prevent the natural supply of petroleum from being completely drained. The most famous one, Naval Reserve No. 3, was associated with the scandal that tainted Harding’s presidency and his cabinet administration. Edward Doheny’s Pan American Petroleum and Transport Company was granted rights to drill and extract oil from California Naval Petroleum Reserve No. 3, located in Teapot Dome, Natrona County; hence the “Teapot Dome” scandals.

In Wardman Park Hotel, New York City, Edward Doheny Jr. was ordered by his father to obtain one hundred thousand dollars in cash and give the money to Secretary Albert B. Fall in return for a promissory note. Information leaked and was publicized greatly by the media. The people of United States cried corruption, and the federal government investigated this scandal. Doheny and his son were indicted for bribery. As time passed, the case eventually went to the Supreme Court as U.S. v. Albert Fall and Edward Doheny. Numerous trials ensued; Doheny insisted that the money was a loan to an old friend, while Fall claimed his innocence as well. Denounced by prosecutor Owen Roberts as “criminal conspirators…who intended to defraud the government,” Doheny suffered similar caustic criticisms and bombardments from the public and media.⁵In the final verdict, Judge Hitz ruled Edward Doheny free of bribery accusations. Ironically, Fall was ruled guilty despite similar evidence and testimonies. Weakened by the constant battering by the media and government, Edward Doheny’s remaining spirits completely broke down when his thirty-six-year old son, Ned Doheny, was assassinated by a family confidant. Doheny’s intrepid life ended soon following his son’s departure; in 1935, he passed away at age 79, leaving behind his heroic, philanthropic, and tragic legacy.

A book centered around Edward Doheny, Margaret L. Davis’s Dark Side of Fortune truly fascinates readers with the adventurous life and successful business ventures of Doheny, the “Emperor of Oil.”⁶ Davis elucidates the life of Edward Doheny and introduce a significant individual whose story has been nearly lost in the pages of the nation’s history. Mentioning many insignificant details about Doheny’s personal life, the author truly desires to introduce the character as a whole, including each and every aspect of his life. Davis understands that an individual’s success is attributed to each and every event of his life, which altogether shape the individual. Davis attempts to sway her readers’ opinion toward Doheny. Furthermore, the author portrays Doheny as a faithful family man and a loving father and husband as well, rather than an inhuman, bloodless businessman who lives his life in intimidation and solitude. Finally, Davis establishes Doheny as an honest and heroic individuail, liberating from his accusations of scandals and corruption-tainted life.

Margaret Davis believes Doheny deserved greater reputation and a more renowned status. Davis views him as an important character in history who unlocked the petroleum industry for future generations, leaving behind his magnificent legacy—his philanthropy and his vast oil empire. Admiring Doheny’s bold and triumphant oil ventures in California and Mexico, Davis assumes that the key to “progress and economic expansion” lies in the visions and legacy of Doheny.⁷ Througout the book, Davis attempts to maintain objectivity toward the subject to increase the credibility of her work and allow readers to possess their own perspectives. Yet with careful examination, Davis’s words, overall, imply her admiration for and passion toward Edward Doheny—often describing his life with a mixture of victorious moments and tragic breakdowns, which elicit admiration and sympathy for Doheny. Davis’s perspective, however, is somewhat limited due to her outlook through the eyes of a modern historian, unable to experience the feelings and sentiments toward her subject—Edward Doheny—during an earlier time period.

In his critique of Davis’s Dark Side of Fortune, Christopher J. Castaneda writes that Davis offers a reasonable biographical study of Doheny, in which she utilizes secondary sources and extensive research of previously untouched resources to create historical context of Doheny’s life. Furthermore, Castaneda argues that although Davis attempts to glorify Doheny by describing him in “friendly terms” and likening him to the “legendary ranks of Rockefeller, Carnegie, Vanderbilt and other [well known] U.S. financial and industrial giants,” her argument is invalid because Doheny was merely not historically significant compared to other great, renowned capitalists.⁸ Despite Davis’s insistence that Doheny has been deprived of the respect he deserves due to the Teapot Dome Scandal, Castaneda refutes her statement, reasoning that Carnegie and Rockefeller had both been accused of corruption and been involved in scandals, yet they still stand among the greatest American industrialists. Nevertheless, Castaneda describes the book as engaging and readable.

Phillip Payne, from the Department of History at St. Bonaventure University, praises Davis for collecting an abundance of information to create a “first-rate” biography which gains its “real appeal and value” from Davis’s ability to place significant moments of Doheny’s life “into sophisticated and nuanced context.”⁹ Payne, however, is baffled as to why Davis reserved her opinion on the scandal and Doheny’s innocence, despite her being an attorney. Payne further notes that Davis offers new insight into Doheny’s oil business, his dealings with Mexico, and the scandal associated with Secretary Fall. Overall, Payne deems the biography as a “well-written and enjoyable book.”¹⁰

Margaret Leslie Davis does an amazing job of capturing the significant moments of Doheny’s career and personal life. Having lost a great primary source due to Estelle Doheny’s burning of letters and documents, Davis still manages to conduct research and discover hidden sources to assemble a complete and enrapturing biography. Her biography exhibits remarkable organization as she shifts from one phase of Doheny’s life into another. Davis, while placing these events in sequence, incorporates elements from Doheny’s personal life and his emotions into the biography as well. Davis supports her argument well and protects her belief that Doheny deserves to be among the prestiged ranks of Carnegie, Rockefeller, Vanderbilt, and other renowned industrialists due to his great “contribution to the industrial wealth of the nation”¹¹Providing the requisite background information to understanding her subject’s life, Davis collects a multitude of sources and weaves Doheny’s into an informative and refined biography.

The petroleum industry in California finds its roots and origins in the eastern United States—mainly attributed to the effects of rapid industrial growth. The Standard Oil Company was founded in 1870 by John Rockefeller in the eastern United States; it set the precedent and model for the oil companies and helped shape the petroleum industry in California. In 1925, “one of the most sensational deals in oil history” was made when Pan American Petroleum and Transport Company sold a majority of its voting stock to the Standard Oil Company of Indiana.¹² Doheny’s petroleum industry in California became a part of the larger oil empire spanning the nation. The customer industries—the automobile and railway industries—of petroleum further demonstrate Eastern United States’ influence on Californian petroleum industry. The invention and popularization of the automobile, promoted by the innovation of Ford’s Model-T, created enormous needs for gasoline, stimulating the oil economy in California. From teast to west, the extension of the railroad network across the nation, with its consequent change from coal to oil, raised high demands for petroleum in California. These changes allowed Doheny’s Pan American Petroleum and Transport Company to dominate commerce and business in the West; however, Doheny’s oil enterprise owes much of its success to the eastern United States’ advancement.

However, the petroleum industry in California has grown independently and distinctively from its counterparts in the nation. Expanding his oil empire from California into Mexican territory, Doheny was able to establish a giant oil empire in a foreign nation and within domestic boundaries. As the leading figure of the petroleum industry in California, Edward Doheny possessed power that far surpassed that of any other businessman—he had influence in not only the United States’ government, but also in the Mexican government. The geographical location of California causes Californian businessmen and industries to be closely associated and tied to the Mexican economy and businesses. Internal relationships, however, differed drastically from international relationships. During the early twentieth century, both President Roosevelt and Taft actively indulged in the practice of trustbusting. Among the most famous trustbusting cases was the “most significant event in oil industry…[the] dissolution of Standard Oil Trust in 1911”; however, Californian petroleum companies avoided such tragic fate.¹³ Such fortune is due to the nation’s capital being positioned on the East coast—those trusts and companies are more closely involved with the government, and thus were under closer watch of the trustbusters. Determining from history and events, Margaret Davis views California as important to the rest of the United States in numerous ways. The California Naval Petroleum Reserves were set up to preserve the oil supply, while oil companies in other states lacked codes to regulate the petroleum industry. This measure provided stability in the American oil economy and allowed the United States to be temporarily free of the OPEC’s (Organization of Petroleum Exporting Countries) oil monopoly in the world market. Furthermore, these influential capitalists aid in international discussions as well as helping to mediate between these American countries. These Californian industrial giants and their ventures in Mexico have helped establish stronger ties between the Mexico and the Unitd States.

Although Edward L. Doheny remains in history textbooks as the man behind the Teapot Dome Scandal, Margaret L. Davis defies history textbooks and redefines Edward Doheny as an individual who bravely ventured into the unknown and built, brick by brick, an “empire of oil” in California and Mexico.¹⁴ Although not as prestigious or prominent as his predecessor John D. Rockefeller, Doheny nevertheless deserves a spot among the great capitalists and captains of industries of his era. He planted the seeds of prosperity into the soil of California and Mexico, nurtured them into a vast oil empire, and bestowed his legacy upon future generations—the heirs of his philanthropy and the beneficiaries to the firm industrial foundation which has propelled and sustained California’s economy.

1. Davis, Margaret Leslie. Dark Side of Fortune. Univesity of California Press: The Regents of University of California, 1998. 283.

2. Davis, Margaret Leslie. 23

3. Davis, Margaret Leslie. 71.

4. Davis, Margaret Leslie. 122

5. Davis, Margaret Leslie. 205.

6. Davis, Margaret Leslie. 25.

7. Davis, Margaret Leslie. 288.

8. Castaneda, Christopher J. “Fall 1999, Volume 45, Number4”. The Journal of San Diego Histroy 1999. 01 June 2008. <http://www.sandiegohistory.org/journal/99fall/dark.htm>.

9. Payne, Phillip. “The Other Side of the Scandal”. H-Net Reviews 1998. 01 June 2008. <http: //www.h-net.org/reviews/showrev.cgi?path=103291006196219>.

10. Payne, Phillip.

11. Davis, Margaret Leslie. 283.

12. Davis, Margaret Leslie. 186.

13. Davis, Margaret Leslie. 187.

14. Davis, Margaret Leslie. 192.