[the fortune builders]

[garrett county press]

The Fortune Builders

Excerpt from
The Fortune Builders
by Edwin Darby

There was nothing strange about Carbon Petroleum Dubbs. Not really. It could be said that others were responsible for his name and he did without a doubt have good reason to wear roller skates at home.

Or in one of his homes. He built the first house in Wilmette, one of the wealthy suburbs that line the shore of Lake Michigan north of Chicago. It cost $250,000 and was designed by Dubbs for ease of living as he saw it. In the form of an L, it had twenty rooms, but it was only one room wide. The Paget, Bermuda, house was the problem. Dubbs bought the Bermuda house and was only responsible for extensive remodeling and additions. A coral-stone villa, it was huge with terraces and garden walks and guest houses sprawling all over a hilltop. Why wouldn't someone touched with imagination -- and Dubbs was an inventor of some genius -- immediately think of roller skates as the best way to get from here to there? Tall, well built, athletically inclined, and a demon sailor on water, Carbon Petroleum didn't need to worry about his glasses falling from his strong, square-jawed face and shrewd blue eyes as he streaked about the house; at bottom he was a conservative man and his glasses were always secured by a ribbon.

Not too many Americans have ever heard of Carbon Petroleum Dubbs, but his name rightly should be familiar to all inhabitants of the United States, the nation created by, for, and of the automobile. By helping to make gasoline and oil plentiful and cheap, he and his father -- and J. Ogden Armour -- played a considerable part in the development of the automobile age and the vast changes that eventually made the nation's comfort and prosperity dependent on the dictates of Arab sheiks.

As far back as anyone knows, the men in the Dubbs family were apothecaries and chemists. Jesse A. Dubbs, Carbon's father, was a fortunate member of the line in that he found himself in the late 1800s a resident of Franklin, Pennsylvania. Franklin is in that part of the country where Indians once skimmed an oily substance from streams and swamps and made use of it as a cure-all for the ailments of natural man. And Franklin is in that part of the country where curious and energetic white men first learned that the same substance could be extracted in seemingly unlimited supply from the ground by sinking wells. A simple distillation process would provide a product that would beach the New England whaling fleet in time to save some species of ocean mammals from extinction. Edwin Drake sank his first well in Titusville, Pennsylvania, in 1859 and soon kerosene was lighting the nation's (whale oil) lamps.

While John D. Rockefeller While John D. Rockefeller, from his base across the Pennsylvania border in Ohio, was working day and night putting together a corporate combination to control the sources, the refining, and the transportation of petroleum, Jesse Dubbs was taking a chemist's interest in the process of distilling useful products from Pennsylvania crude oil. Rather obviously from the years he put into his research, the senior Dubbs was no light-bulb-Eureka inventor. But just as obviously, he was a determined man and so single-minded that he named his son Carbon after that essential element of Pennsylvania coal and petroleum.

The son always insisted that his middle name was a bit of fun and not really legitimate although he did use it all his adult life. "I put the initial 'P' in just to make the name euphonious," Carbon always told anyone who asked. "Then people started calling me Petroleum for fun, and I've been called Carbon Petroleum ever since."

In any event, it was not until 1914 that Jesse Dubbs thought he had worked out something of real value. On January 5,1915, he was granted his first patent for "Treating Oil," as the patent was titled. Still, that was only a piece of paper, and neither the oil companies nor investors beat a path to the Dubbs door. However, Dubbs did find his own way to the door of Jonathan Ogden Armour. He was well and even lavishly received.

The second son and heir of Philip D. Armour was lectured from childhood in all the hard-work and penny-saving virtues, but perhaps J. Ogden was more impressed with some of the spectacular things his father had done in his lifetime than he was with what P.D. said. Or perhaps J. Ogden inherited a touch more of the Irish romantic from the family than he did of the frugal Scot. He was always a sucker for a long shot.

"You can not be too careful of yourself in husbanding your money," P.D. once wrote to his sons, then grown men. "Don't try to get rich too fast and never feel rich."

J. Ogden not only felt rich; he also believed that he could get a lot richer in a hurry by scattering some of his money around in likely places instead of husbanding it. One promising place, in Armour's eyes, was a California valley with a glittering name, Sutter's Basin, as in Sutter's Mill, where gold was first discovered in 1848. Even if John Sutter of Sutter's Mill had not piled up millions for himself in gold, John Sutter of Sutter's Basin and J. Ogden Armour thought they could extract millions from the land. John Sutter, with the same single-minded purpose exhibited by Jesse Dubbs, had spent the greater part of his life trying to make use of irrigation techniques to turn parched acres into a Garden of Eden. J. Ogden put his trust and considerable money into Sutter's dream. Perhaps a half century too soon.

In 1913, Armour, a wintertime visitor to California, organized the Sutter Basin Co. It was no penny-ante venture. The company owned 54,000 acres, the capital stock was valued at $6 million, and Armour not only was the big investor but also signed and personally guaranteed $7,500,000 in bonds sold to others. Before Sutter Basin dried up and blew away, J. Ogden poured upwards of $17 million into it.

Freudians might pause and take a longer look at J. Ogden's stubborn gamble on wringing riches out of a California irrigation project. Presumably he knew that his brilliantly successful father had made his first stake on the way to millions by constructing ditches and selling sluicing water to the California gold miners of the 49er era.

To J. Ogden, Jesse Dubbs's plans sounded just as promising as Sutter's. Dubbs was a man who had patents on the very best process for refining petroleum, and by 1916 even a man who made his living in cattle and hogs could see that the age of the gasoline-powered internal-combustion engine had arrived.

Armour put $2 million into Dubbs's company, grandly named Universal Oil Processes, Inc. (later Products, Inc.), and set Dubbs up in a secret laboratory on a two-acre site near Independence, Kansas. It is the younger Dubbs, Carbon Petroleum, who is given the credit for perfecting the process. In July 1919, what is conceded to be the world's first petroleum thermal continuous-cracking process went on stream at the Independence laboratory.

The petroleum industry had been getting along quite nicely until then without either of the Dubbses and had, of course, supplied the suddenly big demand for gasoline and oil occasioned by the military's need for land, sea, and air transport in World War I. So it was three long years later before the first commercial Dubbsprocess unit was in operation -- at the Wood River, Illinois, refinery of Roxana Petroleum Corp. (Dubbs, like Howard Hughes's father with the Hughes patented oilwell drilling bit, chose to license his process instead of selling it, in the hopes of keeping royalty payments gushing in for years.)

Dubbs very definitely had something of great value to the burgeoning oil industry. The word "continuous" is one key. The refining processes in general use at the time had to be shut down periodically while clogging deposits of coke were cleaned out, a costly and time-consuming operation. The Dubbs system had "clean circulation." Of greater importance, Dubbs guaranteed a higher percentage of gasoline of specified quality from the breakdown of crude oil. Simple crude-oil distillation processes yielded only about 26 percent gasoline -- four barrels of crude to get one barrel of gasoline. There was also a yield of oil and kerosene, but Edison had pretty well taken care of the kerosene market by the 1920s, and more than half of a day's production of a conventional refinery could be sold only as fuel oil at bargain-basement prices or reduced to even less profitable asphalt.

Standard Oil of California was the second company to go for the Dubbs thermal cracking system and it was Dubbs who really made the growth of California's "black gold" industry possible. It seems that California crude is heavy -- a high specific gravity -- and the stuff was very difficult to refine until the Dubbs thermal cracking process solved the problem.

In 1923, Universal Oil Products was bubbling along. Carbon Petroleum and J.O. were happy to report that sixty-five thermal cracking units were installed that year. But this was not the big time; the sixty-five units had a total capacity of only 42,000 barrels a day. Universal was not so universal as it hoped. There were a number of competing systems, and engineers argued vehemently and jealously about their merits. (In the nature of things and of corporations, outsiders are resented and rebuffed. The virulent form of the disease is known in corporate research circles today by the initials NIH, for Not Invented Here -- and we don't want any part of it.) Naturally, and even deliberately, the growing giants of the still-infant industry sought to develop their own refining processes, skirting the patents held by Universal.

If everyone dreams of an invention that will be a money-making machine, Americans and particularly the practical citizens of Chicago have been peculiarly adept at inventing new and better ways of solving problems. The inventive strain has been a part of America since the Revolution freed the colonies of Britain's attempt to keep a strangehold on all industrial technology. Certainly the make-do realities of frontier life demanded invention. In more modern times there have been in general two ways to go with an invention. One, patent it and use the patent to beat back all competition. Or, two, forget about patent law and use the invention to build a production and marketing organization that always stays one step ahead of the competition.


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