usually sunk to a depth of several hundred feet. They were quite common, and have been for many years, in the neighborhood of Pittsburg, and in the Kanawha region, and a large supply of salt has been obtained from them. * The Pennsylvania Rock Oil Company then determined to sink an artesian well, and concluded a contract with some of its members, the condition of which was that the company should receive twelve cents per gallon for all oil raised from their land, the lessees to pay all expenses for future developments. The lessees employed one of their number, Mr. E. L. Drake, as superintendent, to oversee their operations on Oil creek, and furnished him with the necessary capital. Mr. Drake commenced operations at once, but was delayed by many obstacles, until, finally, on the 28th of August, 1859, the first vein of oil was obtained from a well sunk in one of our trenches upon the bank of Oil creek, about two miles below Titusville, in Venango county, Pa. This vein was struck at a depth of sixty-nine feet and six inches from the surface. The well produced oil for six or eight months, but it never exceeded four hundred gallons per day. I think the production ceased in about eight or nine months.

“Our success in striking oil created a great excitement, and was the beginning of the petroleum business in America. Immediately upon the striking of oil, Mr. Eveleth and I went out to that region and commenced purchasing land. Our entire purchases at that time amounted to something in the neighborhood of $200,000. A month or two later many other parties appeared in Venango county to buy lands for oil purposes, and by December the hotels in Titusville were crowded with speculators. By that time several wells had been started, and preparations were being made for a large development. I think that the Parker and the Crossley wells were struck in December, 1859. The Crossley well yielded thirty-five or forty barrels a day. The Parker well was smaller. The next well of importance was a well on the Hamilton McClintock farm, which was struck that winter or early in the spring.

“The Evans well, at Franklin, which produced about twenty barrels a day, at one time, was struck in the winter or early in the spring. The Hoover well, a very celebrated well on the Alleghany river, below Franklin, was sunk by our firm, Eveleth, Bissell & Co., in the spring, and was a forty-barrel well." Several witnesses estimate the product from all the wells in June, 1860, at about two hundred barrels.

From that time forward the production increased rapidly. By January 1, 1861, it is supposed to have reached seven hundred and fifty barrels per day, and in the spring of 1861, twelve to fifteen hundred barrels per day, in Venango county, Pennsylvania. The production of the Kanawha region, West Virginia, had also become large, but was soon after lessened by the inroads of guerillas.* Late in the spring and in the summer of 1861 borings were pushed through the first and second strata of sandstone. At a depth of between four and five hundred feet cavities were reached filled with oil and carburetted hydrogen gas. The surface water and oil were forced out by the gas to a great height, in some instances sixty or seventy feet above the surface, and the fortunate adventurers were in possession of flowing wells of oil. Three of these wells, the Burnt well on the Blood farm, five miles above Oil City; the Phillips well, and the empire well, yielded each over two thousand barrels per day, with but slight diminution for months. The production increased almost immediately from twelve hundred to about eight thousand barrels per day, a large portion of

* In January, February and March, 1861, large wells were struck in West Virginia. The Llewellyn well-a flowing well-yielded three or four hundred barrels per day, but was destroyed by fire within a few days after it was struck. In the spring the production was probably eight hundred barrels per day at first. For the year it may be set down at five hundred barrels per day. For 1862, as much or more. For 1865, and at present, two hundred barrels per day.

+ The first flowing well was struck near the Kanawha river, in October, 1860.

which was allowed to run to waste, for want of facilities for preserving it, and on account of the mere nominal value to which it was reduced by the over-supply. The yield continued to increase, other flowing wells, besides many pumping wells, being struck from time to time.

The daily production for the year 1862 has been estimated at twenty thousand barrels, of which it is probable that three-fourths were wasted.

The production for 1863 was probably not over one-half that for 1862. That for 1864 was still less. By May 1, 1865, the production had declined to less than 4,000 barrels per day. Soon after that time, the marvellous discoveries upon Pit-hole creek began to take place. A large number of flowing wells were struck at a depth of between six and seven hundred feet, mostly upon a single farm of 150 acres-the Holmden farm. By these and other discoveriesthe most recent of which are upon Bennehoff's run, and the Stevenson farm on Oil creek-the product has been increased, until it is now in the neighborhood of 12,000 barrels per day, most of which finds its way to market. The amount of the product will be more carefully considered in a subsequent part of this report.

The excitement caused by the success of the first wells sunk was but little diminished by the decline in prices, which, however, was quite rapid.

The first oil obtained from the well of the Pennsylvania Rock Oil Company was sold at fifty-five cents per gallon. By July, 1860, the price at the wells had declined to seven cents per gallon. In October, it was ten cents. It advanced steadily until January 1, 1861, when it reached twenty-five cents per gallon. It continued at about that figure, until toward the end of February. On the 1st of March, 1861, it was fifteen cents; on the 10th of March ten cents. The decline continued with the increasing supply, until just before the discovery of the large flowing wells. In the summer the price had fallen to five cents per gallon, or two dollars per barrel. The sudden and immense increase of the product almost totally destroyed its value. Thousands of barrels daily were allowed to flow away, and the sales made in August and September were as low as fifty cents, and even twenty-five cents per barrel. Sales were made at forty cents per barrel in October, November and December, and even as low as thirty-five cents later in the winter.

Nearly all these purchases proved unfortunate. The flood of oil reduced the price at the seaboard to nine cents per gallon in May, 1862, which occasioned a loss to the seller of the first cost of the oil, and from one to two dollars per barrel in addition.

Our enterprising merchants had already visited Europe, seeking a foreign market. The first shipment abroad had been made in October, 1861. The exports for that year were 1,112,476 gallons, or 27,812 barrels. When the flood reached the European ports, in the summer of 1862, the same destruction of values took place that had occurred here. Parties who had bought in New York at nominal prices, suffered heavy losses. But the article was thus forced upon public attention; and, although for the time being the markets were glutted, the way was opened for a future and increasing demand.

The suspension of specie payments in the spring of 1862, and the subsequent rapid advance in the price of gold, contributed to reanimate the oil business; speculation revived, and in October the price was carried as high in New York as fifty cents per gallon for crude. By December it had receded to twenty-five cents. During the year 1863 it ranged between eighteen and twenty-five cents. In 1864 the advance in price was rapid and great, from twenty-nine and a quarter cents in January to fifty-six cents per gallon in July. It continued high, but with some fluctuations, until January, 1865, when crude was selling at forty-nine to fifty cents.

The advance in the price of gold and exchange, which began in the spring of 1862, and continued until it reached its maximum in the summer and fall of

1864, soon carried up prices to a point at which the oil would pay all expenses of transportation, and give the owner of the well from three to seven dollars, and at one time even ten dollars per barrel. Then wells, which a few months before were worthless, owing to the low price of oil, became of immense value. Speculation in oil lands and the organization of oil companies immediately followed to an enormous extent. Lands before almost valueless were sold to speculators at fabulous prices, and were again resold to other speculators at prices still higher, or were revalued by the holders at an immense advance, and used by them in the formation of joint stock companies or pretended companies, by means of which the stock was sold in parcels wherever the spirit of speculation had been sufficiently excited by the newspaper reports of sudden fortunes made by oil operators, and by other means used for the purpose. Many of these companies were fraudulent, and only entailed loss and disappointment on those who were induced to take stock in them. Many others, perhaps the largest proportion, were honestly organized and conducted with integrity.

The amount of capital thus withdrawn from other pursuits, or the savings of the community, and applied to the purchase and development of oil territory, cannot be accurately estimated, but is supposed to exceed one hundred millions of dollars.

The tide of oil speculation, or the "oil fever," as it was called, was at its height when the masterly combinations of Grant and Sherman, using the immense resources placed by Congress at the disposal of the Executive, brought the rebellion to a sudden close, and restored to something like its real value the national currency which, under the apprehension of the failure of the Union, had depreciated as low as forty cents on the dollar. Gold which, compared with the currency, had been worth over two hundred and fifty per cent., declined to one hundred and thirty. The returns from shipments of petroleum and the currency price at home were reduced to a great extent, and as the cost of transportation and other expenses continued with little or no change, the effect was again disastrous upon the business. A great flood in Oil creek also destroyed much oil and reduced the product. The war tax of one dollar per barrel on the crude oil, which took effect the 1st of April, 1865, still further depressed the business and disheartened those engaged in it. The fictitious character and utter worthlessness of many of the oil companies, and the disappointments experienced by most of them, becoming known to the public, added to the depression.

In the mean time prices began to advance abroad, owing to the increasing demand and diminished supply. An immense number of wells were sunk by companies organized the fall and winter previous. Although most of these proved unprofitable, among the exceptions were the great flowing wells upon Pit-hole creek, to which reference has been made. Some productive wells were also sunk in Ohio, western Virginia, and Kentucky. And it is now probable that with the necessary reductions in taxation and cost of transportation, the business will assume a permanent character as one of the branches of our regular mining industry.

We have thus sketched, as briefly as possible, the remarkable history of the petroleum development in this country.

ANALYSIS OF PETROLeum.

Petroleum is, as has been remarked of the refined oil, a mixture of hydrocarbons of various compositions, all free from oxygen. It is an oleaginous fluid of a brownish or greenish color; a strong and peculiar odor; feels smooth and greasy between the fingers; does not congeal at low temperatures, and burns with a bright but very smoky flame. It varies greatly in density all the way from 23° to 57° Beaumé, and is divided into two classes, the heavier, or those

below about 35°, being designated and used as lubricating oils for oiling machinery; and the lighter, or those above 35°, as illuminating oils, from which are manufactured the refined oils for photogenic purposes. The general appearance and properties of both classes are nearly the same.

The instrument used in the United States for measuring their density is the hydrometer of Beaumé. The specific gravity indicated by different degrees of Beaume's hydrometer, and the weight of the oil per American gallon, appear from the following table:

The following analyses of different samples of petroleum were made by Prof. H. Dussauce of New Lebanon, New York.

* The densimetre of Gay-Lussac, in use in France, indicates the specific gravity.

100

Pennsylvania petroleum, of a dark greenish color, strong but not unpleasant ethereal odor; evolves an inflammable vapor at ordinary temperature-density 4310.

American petroleum, locality unknown-density 40°.

Western Virginia oils from wells of burning springs-density 42°.

Petroleum Station-mixture of the wells-density 3710.