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History Snoopin’: Oil boom dreams

It began tempting the get-rich-quick-crowd over 100 years ago.

Oil! Texas Tea! That oozing goo that could turn a humble valley into a rich industrial powerhouse.

In the fall of 1919, a wealthy, retired varnish company owner, Charles Lilly, convinced a group of Oregonians to file for incorporation of the Trigonia Oil and Gas Company.

Whether Lilly actually believed there was oil in Southern Oregon or was just a flim-flam stock manipulator has never been clear.

The company was authorized to issue 500,000 shares in the company at $1 a share, along with a bonus share for each share sold. The Mail Tribune believed this was the “beginning of an earnest effort to test the veracity of the opinion of many oil experts that large deposits of petroleum exist nearby.”

To cover expenses, once $30,000 worth of shares were sold, the first test well would be in the Fern Valley, east of Phoenix.

“Nothing would help this city and valley more,” said a Mail Tribune story, “than to strike oil, and the way to find it is for everybody to do their bit in going after it.”

Investors were hooked. By December, over 500 shares a day were being sold.

On a literal dark and stormy Saturday, Feb.14, 1920, drilling began. Week by week, month by month, newspapers reported the well’s depth — 100 feet, 270, 680, 1,058, and, a year later, 1,350 feet. Although there were frequent “signs and indications” of oil, there was no oil.

The company was branching out to Klamath Falls, Astoria and California with stock sales soaring. Each area’s investors would pay for their own drilling; however, each shareholder everywhere would share in any success.

By the fall of 1922 the well was down 1,652 feet and excitement was failing. A local group tried to keep the project going with financial aid from the city of Ashland, but by the end of 1924, it was over.

Hope and investors turned to the Hartman Syndicate, two New England brothers who claimed to have invented a retort device that would extract shale oil from shale rocks.

H.W. Hartman came with the fervor of a carnival pitchman. Gathering a Fourth of July crowd onto the Ashland Plaza in 1922, he pushed shale rocks into a scale model of his machine that he said would make investors rich. It seemed to work, and when Hartman appeared to be investing in valley land, the public was hooked.

Just east of Ashland, about 1,000 feet down from the top of Grizzly Peak, Oregon’s oil-bearing shale rock glittered like gold.

Hartman incorporated his company in early 1923, offering $3 million in shares at $10 each.

With the help of frantic schemers and everyday investors, he turned that peaceful pine-covered bench on the eastern slope of the mountain into a bustling mining village. A new road up the mountain led to cabins, a school and shops. Quickly dubbed Shale City, it was headquarters for the man and his magic machine.

By August 1924, it seemed the operation was going to be a success. Hartman claimed 1,260 gallons of crude shale oil had been produced from 600 tons of shale rock.

Two months later, a report from the governor’s stock investigation committee reported Hartman and his promoters had illegally kept $1.5 million of the stock offering “for promotion purposes” and “the remainder of the stock was left to be sold to the public, “who were expected to supply the capital and assume the risk.”

Hartman’s attorney sued, claiming libel and demanding $100,000 in damages. Hartman suddenly left for business in the east, or somewhere.

A final letter from Hartman saying he had found financing to make everything right was the last time anyone in Oregon heard from Hartman.

Southern Oregon’s oil boom dreams were over.

Writer Bill Miller is the author of five books, including “History Snoopin’,” a collection of his previous history columns and stories. Reach him at newsmiller@live.com.