THE HISTORY OF GEOPHYSICAL PROSPECTING
PART TEN - MARLAND AND MINTROP

Chapter 25  -  The Last Five Years of the Marland Oil Company

The end of the Marland Oil Companies and the beginning of the Continental Oil Company constitutes a unique tale; one of the most interesting episodes of petroleum history. Even though it is a matter of public record, the highlights will be repeated here for the benefit of those who have not read the account. Unfortunately, only the Marland version is available; the dignified House of Morgan could not be expected to publish the bankers' side of the story. One day in the fall of 1923, E. W. received a telephone call in his hotel room in New York City. Mr. Charles Sabin was on the other end of the line. Mr. Sabin was with the Guaranty Trust Company and he had a slight acquaintance with E. W. Marland. “Would Mr. Marland drop by Mr. Sabin's office at his convenience?“

When Ernest Marland appeared at Mr. Sabin's establishment, he was informed that Mr. John Pierpont Morgan would like to meet Mr. Marland. Mr. Marland was flattered and readily agreed to a meeting with Mr. Morgan and Mr. Morgan's associates. Mr. Morgan and Mr. Morgan's partners greeted Mr. Marland as though he were the King of Petroleum, which in a way he was. Marland talked long and knowingly about the oil business and the bankers listened carefully in respectful silence. Toward the end of the meeting Mr. Morgan said that he and his partners would like to be the bankers for the Marland oil enterprise. There was no point in Marland going to bankers in St. Louis, Kansas City and Chicago, as he had done in the past when money was needed. He could obtain all the funds he required at one bank in one city, New York. Also, John Pierpont Morgan and his associates would like to have a small share in the Marland Empire, since they had agreed among themselves that it was an up and coming corporation, weIl worthy of investment. E. W. Marland was delighted to have the House of Morgan as his one and only banker and he was happy to have Morgan and his friends take a stock interest. More conferences followed at which Marland lectured on petroleum and the international bankers listened. As he talked, Marland saw himself as a world power, too.

In January, 1924, at a stockholders meeting, Ernest Marland was authorized to seIl 3,000,000 shares of unissued common stock to the Morgans for $90,000,000 in cash. At first the Morgan participation on the Board of Directors of the Marland Oil Company was modest with only three representatives, George Whitney, W. C. Potter and Charles F. Smithers. But these three  were enough to persuade the other members of the Board to authorize the creation of an Executive Committee to be composed of the three Morgan as sociates plus W. H. McFadden, Vernon F. Taylor and E. W. Marland. The Executive Comittee met in New York City periodically and for over a year they allowed Marland to lead the policy commitments, with strong support and few suggestions.

In 1924 and 1925, the Marland Oil Company of California became the leading corporation in the Marland chain. Franklin R. Kenney, Marland's nephew, was made President of this company. Carl H. Beal was Marland's consulting geologist for the west coast. Beal recommended the acquisition of leases on acreage in the Rio Bravo field. Also in Kern County, fifteen thousand acres were purchased in the Lost Hills field. In Los .Angeles and Orange Counties Marland had the majority interest in the Seal Beach oilfield plus substantial acreage in the Dominguez field. A Marland weIl drilled on Kettleman Hills ran out of hole only a few hundred feet short of what might have been the discovery weIl.

In 1925, "Spot" Geyer became President of the Marland Oil Company of Texas with C. E. Hyde and Alexander Deussen as Vice Presidents. When Geyer resigned, Van Waterschoot van der Gracht, the Dutch geologist, succeeded him.

In March, 1927, E. W. Marland was able to tell his stockholders an impressive story of expansion for the year 1926. Marland companies had run over 13,000,000 barrels of crude oil, half of which had been processed at the Ponca City refinery. By 1928, Marland Service Stations were operating in every state in the Union and in 17 foreign countries.

There had been a gradual change in the policy-making principles of the Marland Executive Committee. E. W. Marland found more and more of his ideas being negated by the solid block of the three Men of Morgan in opposition. When the Morgan bankers wanted some measure passed they usually managed to convince W. H. McFadden or to persuade Vernon F. Taylor of the soundness of their judgment. The Morgan bankers were right in most instances. However, their move to raise money on a bond issue, when money was not needed, merely because as bankers they would reap a handsome commission, was a bad decision, for the Marland Oil Company, that is. In preventing E. W. Marland from building a system of pipelines they were wrong, because pipelines are the heart and blood of the profit structure for integrated companies. Pipeline profits enable major companies to survive during periods of economic distress and depression.

Ernest Marland was given a free hand to build up an enviable position in early earth science development. His part in the 1921 reflections experiment and the 1923 procurement of Mintrop and his Seismos Party #2 was only the beginning for Marland. In 1924, 1925 and 1926, the Marland Oil Company set many more firsts in seismograph prospecting.

When in the spring of 1924, Marland learned that his exclusive contract with the Seismos Company was anything but exclusive, he called in Dr. Williarn Peter Haseman and told him to organize a Research Division for the Marland Oil Company. He was going to have his own physicists as well as his own geologists to guide the destinies of the Marland Oil Company. The Marland Research Division was the first such division to be established by any oil company.

By 1925, when a year of work in the Texas-Louisiaua Gulf Coast with the German Seismos crew had produced no salt domes or oilfields, Marland asked Haseman if he could build a better refraction seismograph than Mintrop. Dr. Haseman replied that an electrical seismograph such as he had been operating in 1921 was inherently superior to Mintrop's mechanical seismograph. Marland told him to get the help he needed to form a geophysical department and to start to work making an electrical refraction seismograph. Haseman persuaded Dr. E. A. Eckhardt of the Bureau of Standards to join him in Ponca City as Assistant Director of the Research Division and Chief of the Geophysical Department. Eckhardt with some help from Haseman designed and built a set of refraction seismograph instruments. Under Eckhardt was expert machinist, A. P. Lipski, obtained from the University of Washington. Ralph D. Wycoff and Dr. Leo Peters came into the Ponca City organization as junior physicists to Dr. Eckhardt.

Maurice Kaiser knew something of radio equipment, so he was given the job of building a vacuum tube transmitter and a superheterodyne receiver. The Eckhardt-Kaiser equipment was put into Model T Fords and sent to Houston. The equipment arrived in December of 1925 and became the first electrical seismograph to be used in salt dome exploration. The Eckhardt seismograph performed weIl but neither the Kaiser built transmitter nor the Kaiser built receiver would give proper or dependable communication.

Experienced radio engineers were extremely scarce in 1925. The Geophysical Research Corporation managed to secure one in 1925 in the person of Eugene McDermott. Late the same year, Reginald C. Sweet came to work for Marland. As an undergraduate at the University of Oklahoma, he had successfully installed a commercial radio station in Wichita Falls, Texas, in the summer of 1923. Sweet was now a graduate student in physics, with a year's work spent toward his Master's degree. Haseman asked the man who had replaced him as head of the Physics Department at the University of Oklahoma, Homer L. Dodge, if Dodge had a radio expert in his department. Dodge recommended Sweet, who was hired by Haseman and Eckhardt. Reginald Sweet, on looking over the radio equipment after his arrival in Houston, found that the electrical connections were soldered with acid-core solder. Such was the primitive state of electronics in 1925. When the acid-core solder was replaced with resin-core solder, the radio equipment worked much better. At a later date, Reginald Sweet completely overhauled the radio equipment so that it could be used for transmission in heavily wooded areas and at a distance of seven miles. Sweet affected other changes, too. He replaced the transformer-coupled amplifiers with resistance-coupled amplifiers and replaced the stiff springs in the geophones with piano wire, thus lowering the natural frequency to about fifteen cycles.

The Marland field crew stayed at the Sam Houston Hotel in Houston. The field cars and trucks were stored in the basement of the nearby Cotton Exchange Building. Alexander Deussen, Vice President of the Marland of Texas, had his office in the Cotton Exchange Building. It was Deussen's responsibility to decide on favorable salt dome prospects and to move the seismic party on to these prospects. The last half of December, 1925, and the first half of January, 1926, were occupied in testing the instruments and in obtaining salt velocity records across Pierce Junction, Blue Ridge and SpindIetop. By mid-January, the Marland Party was through experimenting and ready to commence the search for salt domes.

The first replacement of a rnechanical seismograph by an electrical seismograph in geophysical history occurred in December, 1925, when the Mintrop crew was laid off and Marland's own crew took its place. Two-way radio communication was used for the first time in geophysical history by Marland in December of 1925. The first full calendar year in which an electrical seismograph party was working the Gulf Coast as a continuous operation, was 1926 and the party belonged to Marland. The Marland crew had the first electrical seismograph ever to record a salt velocity.

Late in January, 1926, the Marland party was housed at the Hotel Beaumont in Beaumont, Texas. They were working a prospect in Chambers County. The Marland surveyors conducted a transit survey of the territory and made their own maps. The distanees between shot point and reeording stations were chained, and these distanees were cheeked against the airwave (blastphone) distances for error. The next two field headquarters were Crowley and Jennings, Louisiana. There were two recording units, one run by Mauriee Kaiser and the other run by Reginald Sweet. The Party Chief was a physicist, Dr. Fortsch, who had been hired away from the Standard Oil Company of Indiana. Dr. E. A. Eckhardt and Ralph Wycoff traveled with the seismograph party throughout the winter. In the early spring, Eckhardt and Wyeoff departed for Ponca City, leaving Dr. Fortsch in complete charge of field operations.

Bad luck and misfortune was forever present with the Marland Seismograph parties. Alexander Deussen was the unluckiest of geologists; he shot over and missed some medium deep salt domes in the year and a half with Mintrop; beeause the maximum length of shot for a Seismos crew was 3-1/2 miles. Deussen missed some deep salt, domes with Marland's own crew because (as then was the standard practice) fan shots averaged about five miles in length and only occasionally were expanded to seven and eight miles. Deussen received no organizational help from the President of the Standard of Texas because that gentleman was ill. Finding salt domes was not a one-man show as the Gulf and Humble organizations so vividly proved. A wide-spread network of geologists was needed, plus a large and aggressive scouting system. A supreme authority ready to act in a hurry and backed with adequate cash resourees, so weIl exemplified by Pratt and Garrett, Marland simply did not have. The Alexander Deussen set-up was sadly lacking in any number of essential ingredients. The Marland crews knew what a salt velocity looked like, they had shot across a number of known salt domes. But never in their long career of exploring unknown territory were they destined to shoot a salt record.

The Marland party did shoot across what was to be the Tom Ball oilfield in Montgomery County, Texas, in 1926. Higher than normal velocities were encountered, although not salt velocities. The Marland Oil Company took some protective acreage in the Tom Ball area but the Marland dissolution of 1928 allowed these leases to be dropped, some years before the diseovery weIl was drilled.

With the completion of the Jennings and Crowley prospects, which were worked out of boats, the Marland crew did an inland job in quite muddy territory. The truck panel bodies containing the instruments were moved onto the beds of wagons. Horses and mules hauled the wagons onto location. The observers and the shooter rode saddle horses from one loeation to the next. From that prospect, boat work was again the order of the day and Abbeville, Louisiana, the headquarters. It was while the party was working out of Abbeville that the party chief, Dr. Fortsch, had his fatal accident. By this time the boat work was finished and the trucks were once more in use.

Someone on the Marlanq seismic party should have told Dr. Fortsch as a blunt and direct warning that he was incapable of driving a car. But Fortsch was the boss and no one, apparently, was willing to take the chance on being fired. Dr. Fortsch must have wondered why all crew members carefully avoided riding with him more than once. Fortsch's idea of turning a corner was to spin the steering wheel in that direetion as rapidly as possibie. Most of the automobiles in those days were either open touring cars or open roadsters. The field crew was on its way back to Abbeville late one afternoon when they came to a sharp turn in the road. The Party Chief's Buick Roadster was in the ditch with its four wheels in the air. Pinned underneath the wreck, with a broken neck, was the corpse of Dr. Fortsch.

One maxim that the Marland geophysical organization should have learned  but never did, was that you cannot effectively run a Gulf Coast seismograph party out of Ponca City. Mr. Louis Melchior, relatively inexperienced in both field operations and seismic interpretation, was made the new party chief that summer. In the fall of 1926, Melchior, with a field office in a ramshackle hotel in Sealy, Texas, with no heat other than a kerosene stove, kicked over that stove. The hotel burned to the ground together with all of Marland's seismic records. Out in the middle of the street stood Mr. Melchior, crying like a baby. Early in 1927, after months of continuing bad luck and without a single bright spot to show for their long labors, the technical personnel resigned in a body. That was the end of Marland seismic operations.

Although no one realized the fact at that time, it was also close to the end of the Marland Company. In the Marland Executive Committee Meeting of May, 1928, the suggestion was made that E. W. Marland move up to the position of Chairman of the Board, leaving the Presidency to be filled with a vigorous hard-boiled executive from outside the Marland organization; alerted to erase paternalism from the oil company. The Morgan partners had already approached Dan J. Moran, Vice President of the Texas Company. Later that year, Moran changed jobs and took charge of the Marland companies.

Moran's first official act as the new President was to fire a score of Vice Presidents and numerous other leading executives of the company. When E. W. Marland discovered that he would be required to move away from Ponca City so as not to embarrass the new regime, he resigned as Chairman of the Board. With Marland's financial affairs in a sorry state, he could weIl have used the high salary he was being paid as Chairman of the Board, which really was in the nature of a pension. Ernest Marland's stock in the company was committed in one way or another and he would eventually lose all of it. Marland ceased to be an oil tycoon in 1928. In his own eyes, he was once more broke. The Morgans owned an inconsequential petroleum company in the Rocky Mountain area, called the Continental Oil Company. With Marland gone, they changed the name of his organization to the Continental Oil Company. Only the triangular trade-mark symbol of the old company remained to remind one of the once vast Marland domain.

Dr. Haseman's Marland Research Division was instrumental in setting up the company Petroleum Engineering Section. In May, 1926, E. O. Bennett was designated as Chief Petroleum Engineer for Marland of Texas and K. C. Sclater was made Chief Petroleum Engineer for Marland of Oklahoma. The Marland Petroleum Engineering Departments were among the first to be organized by any operating oil company. Early engineers in these departmerits included Harold Decker, Harold Vance, George Nye, Edward Warren, N. O. Miller, E. H. Griswold, V. V. Vietti, E. V. Foran, Byron Boatright, Clyde Temple, Cube Frye, Jim Shobe, J. P. Malott and R. W. French.

Upon the resignation of K. C. Sclater, E. O. Bennett became Chief Petroleum Engineer for all Marland companies. Bennett occupied the same position for the Continental Oil Company until 1943, when he resigned to start his own consulting firm. George Nye and Harold Vance became Vice Presidents to two leading Houston banks. Harold Deeker, Edward Warren, J. P. Malott and R. W. Freneh were to go on to become either President or Viee President of leading oil companies.

Dr. W. P. Haseman, while with Marland, developed a new and important formula and method of estimating petroleum reserves.

Considering the mechanies of present day corporate proxy fights between equals, the realization is bound to dawn on us of how easy it must have been for the professional, Morgan, to knoek out the amateur, Marland. The end result, the other side of the coin, is the picture of a stabilized, growing  and prosperous corporation , the Continental Oil Company, a worthy addition to our economy. How ironie that Ernest Marland, one of the most original, versatile, far-sighted and humanitarian of American bussiness men, should have been doomed to failure by his own brilliant but undisciplined dream of a better tomorrow.