Seaside History from 1898

History of Seaside Oil Company

1898-1973, Seaside Oil Company, the longest running independent in the west, the beginning. In order for you to understand the beginning of this company, you must first understand and have a little knowledge of the founders. There were six founders. Other reports have stated there were   five. Five of the six founders sat on the board of the company.     The one that brought them all together was John B. Cook, and he refused to sit on the board. So, for the time being, we’re going to get to know just one, John B. Cook, who, in his own right, was a very successful inventor and businessman, owner of the Cook Water Pump Company headquartered in Oakland, California.
John B., as we will call him, sat on two water district boards - one for the City of Oakland and the second for the City of San Francisco. John B. was a great water pump inventor. He had something to do with the invention of the high-pressure two-man and four-man, horse driven pump wagons to fight large fires. He also is the one that came up with the idea of putting holding tanks up in the hills of both cities to store water for fires and flushing toilets; plus indoor water was just coming in.
His interest in all this started mainly from reports from back east regarding the big city fires that started mainly from the use of natural gas for street lamps, blacksmith shops, factories, and households.
The surge of gas in the lines because of no control of the pressure and no collectors of the liquid that accumulated in the lines was called condensate distillate. Sometimes the gas would have a back flow and ignite the liquid in the lines and blow the pipes clear out of the ground. Because of his reputation with pumps, he was asked several times by large oil companies to come up with a pump for oil.
He had gone to the eastern oil fields to look at the way they were storing the oil, which was pumped into large pits to wait for horse-pulled wagons to take large wooden tanks of oil to the so- called refinery for testing the oils. They had some uses for the lighter oils like diesel fuels, kerosene, and white gas. They went as far as using white gas in home lanterns for lighting the inside.   John B. would bring samples of the crude oils from different areas for testing in his laboratory. The large oil companies were starting to drill in the southern part of California, and he made trips there also to get samples of the oil. On several trips he got to know some of the shipping and hardware store businessmen that were also landowners up and down the coast.
On several occasions the businessmen of the south had asked John B. to go into business with them to explore for oil. He talked to his father about it and his father agreed to meet with these men and discuss it. At the meetings John B. let it be known that he would work in the field and not on the board.
And so it was.

On February 19, 1898, these four Southern California businessmen met with John B. Cook’s father, John J. Cook,
at 121 Post Street in San Francisco. The meeting was to talk about the corporate laws of the state, stock, shares, and business of the company , “ To Acquire, …. Hold, ….Sell, ….lands, water, water rights,…to buy…sell and explore for oil in the future, to refine petroleum, natural gas and other mineral substances.
The shares were set at $1.00 a share. John J. Cook was voted the first President of the company with the purchase of 99,995 shares. The main office was set up in San Francisco, since that was where John B. would be shipping most of his equipment from and John J., the President, had three very successful pharmacy drug stores.
The Board of Directors were: Joseph Musgrove of Santa Barbara, landowner and businessman, who only purchased 5 shares but signed over a large section of land to the company for a total of $99,990. Joseph W. Delaney, of Summerland, landowner and businessman, also purchased 5 shares and signed over a large area of land along the ocean front for the total of $99,990. R. A. Fitzgerald of Ventura , also only 5 shares and signed over the same amount of land for the shares that equaled 99,990.    Alfred Edwards, of Summerland, purchased 99,990 in shares. And John B. only purchased $30,000 in shares, but also agreed to use his water pump company to invent oil pumps.

John B. Cook gave the company its early boost by developing a positive displacement pump that could pump up to six wells simultaneously instead of only one. So, Seaside, in the beginning, was a pumping company, and a very well–known one at that. Not only did they pump oil, they pumped water to keep the oil afloat in the large tanks along the ocean that was dug in the sand and hauled by wagon to the refinery.
Or, if they were lucky to have the railroad near and they might have a spur brought in close as Seaside did, where they had their shop built and John B. and his crew put pumps together. As John B. was busy with that part of the business, the other founders had hired a drilling crew and were searching for oil. It wasn’t long and Seaside was producing oil and by 1906 had a refinery built at the same location as the shop not far from the old Treadwell wharf. This refinery opened up outlets previously lacking for the heavy Summerland crude oil. This refinery had a capacity of 500 gallons per hour and was capable of producing distillates (liquid fuels - kerosene, diesel, white gas) and asphalts.

The 1906 fires and earthquake in San Francisco destroyed all the early business papers of the company. So they moved their headquarters to Summerland, California in 1906. In 1906, even though the company suffered a loss with the fire and earthquake, this was a very good year. The water pump part of the company was booming. They also struck oil and purchased a refinery to be built on their land location at Summerland, so the company split into two sections; the oil part now used the name Seaside Petroleum Products Company. Oil company distributors didn’t have many places to sell their products as people were still using horse and buggy to get around. The delivery stables where horses were kept were now being used to put the motor cars and trucks together. The old delivery stable blacksmith shops were always close to the railroad tracks so the motor cars were shipped in by rail in boxes and assembled at the delivery stables by the blacksmiths, since the blacksmiths were the only ones in town that had tools to do this type work. The old wooden barn buildings were being replaced by brick. They had horses on one side and motor cars on the other. Petrol, oils, distillates, and many other petroleum products were now being sold at these places by using sidewalk cart pumps. (picture ) (1907 side walk pump Boyle Dayton cart, Bowser pump ?? pumped distillate , ½ pint, 1 pint, 1 quart,) The old low compression engines ran on a oil base fuel like diesel or kerosene, but they needed distillate (or white gas) to start them. The old motor cars had a small tank on the fire wall for the distillate. You opened a pit cock valve, cranked the engine until it fired, then switched the valve back and the engine would take off. If you left the distillate valve open, it would burn a hole in the top of the pistons.

At the turn of the century, petroleum operators were constantly looking for new outlets and markets for their products. One major advantage of petroleum was that it was cleaner and more efficient as a fuel for heating. The conversion of wood and coal burning furnaces to oil became a major project among sales people in those days because of all the fires that was caused by natural gas.
Seaside began buying higher grades of crude from other independent companies and other sources. This was the start of Seaside products being sold through filling stops or depots.
During World War I, a higher grade of fuel was needed and in great demand and it was in this time that the first filling stations appeared in the large populated areas. Kerosene and oil based fuels were still being used in the old low compression engines (petrol) also called gas o lene. But as the fuels and additives were developed to give more octane, the motor car makers had to make the pistons stronger to take the heat.
Filling stations were few and far between back then. Motorists strapped 5 gallon cans to the running boards to make it to the next stop. Many of the area stations were also the old delivery barns where they kept horses, as not everyone could afford a motor car. A few of these stations were operated by the Charlesworth brothers, whose experiments with petrol indicated that Seaside’s high grade distillates could be blended with gas o lene , making it a great fuel for high and low compression engines of the times. Between 1913 and 1917 they were testing a higher octane, as it was called, to help keep the knocking of the engine down. Back east, they were also trying to come up with a quieter fuel. It wasn’t until 1922 that the Ethyl Corporation, later known as Standard Oil Ethyl, developed their quieter fuel. Their product was known as Tetraethyl.

The refinery in Summerland had a large setback in 1921 due to a fire while testing the new fuels. A new refinery was built which was equipped to produce gas o lenes of both high and low grades of fuels. This was Seaside’s beginning as a gasoline producer. So they started another branch called the Grade Gasoline Company.
   Using the slogan non-carbonizing, the new plant was doing so well producing gasoline that they opened two filling stations on property that they owned. “A” in Santa Barbara on the corner of Montecito and Anacapa Streets, and station “B” located in Ventura at the corner of Santa Clara and California Streets.
They also installed a sidewalk pump at the refinery along Hwy I as it was called and later, on this site a full filling station was built. By becoming a gasoline producer, this would change the course of the entire company. By 1923, the oil along the coast was declining. As far as the grade of oil, most of it was used as tars for roofing and asphalt. This would bring the price down to
.25 cents a barrel, and with the oil only graded at tar quality, they had to purchase a higher grade of crude. Even though their other fields were pumping good grades, they needed more to stay in market as a gasoline producer. So in 1923 they purchased the Chrisman Refinery in Ventura in order to develop higher octane fuels. The motor car engines were now requiring a higher grade of fuels.
This allowed Seaside to expand into some 900 retail dealers over a period of years, covering the coast and inland of California from San Diego to Ukiah, and spread into areas like San Jose, Stockton, Modesto, Tracy, Lodi, Galt, the Imperial Valley and even into Arizona.   Later, they would move into Oregon.

When the depression hit in the early 1930s, most major oil companies met the challenge with layoffs and closing of filling station schools. But a new president for Seaside took a different tact. He assured employees there would be no wage cuts or firings. Instead, J. F. Bushnell planned to add more service stations.   Seaside’s aggressive marketing program succeeded in the agricultural and rural areas in California. A number of new farm equipment was on the market and farmers were buying to save money and time planting, so lubricants were needed. And not only did they come out with new lubricants, but an employee came out with a slogan, and then a sign for the farmers to put on posts along the highways, which read “THIS RANCH TOO USES SEASIDE GASOLINE.” The man’s name was G. B. Tucker. The first signs were wood, then lead, then fiberglass. Also another slogan sign came on the scene from Seaside, “The Sign in the West that Ranchers Know Best.”
Seaside, like most of the larger companies, found a method of finding good sites for stations along busy highways. By doing surveys where through traffic seemed favorable, the property owners were approached by the company with a proposition to
erect a service station on the owner’s property. If the owner accepted, he became an owner-operator on a contractual basis, selling Seaside gasoline and accessories. To many, this seemed like a way to keep ahead of the depression.
The new owner-operator was helped by the company with free advertising and advice on the general operation of the station.
Whenever possible, Seaside’s personnel department would send an experienced operator to the new stations to oversee business. In the early 1930’s, business was not easy for a number of operators; it was the height of the depression. Seaside, like all the major companies, protected itself by writing a mortgage agreement into the contracts with the operators. In the end, some operators could not make their payments and lost their properties.

By the early 1930s, Summerland’s oil supplies were drying up. All that was left was only good enough for roofing tar. It was sold to Hawaii, Japan, Mexico, and other countries in need. Seaside began to buy crude oil from Ventura Crude Oil Company. The Depression was making it hard to get rid of the residual gas supplies and Seaside was sliding into debt. One of the companies it was indebted to was Tidewater Associated Oil Company. J. Paul Getty, got Seaside the same way that he got many of his oil companies. He would let the companies go in debt to them and then trade the debt for stock. After a few times he had control. (By this method, Tidewater acquired a controlling interest in Seaside. By 1942 they Tidewater had 51%, and by 1946 they had complete control)

The genius of John D. Rockefeller! While his crews were exploring for oil in the eastern states, his friends in Congress were passing laws of property and mineral rights, so wherever there was oil explorations, John D. was buying the mineral rights. Seaside and other small companies found this out the hard way. Property that Seaside owned that was traded for stock by the early founders was already filed on by guess who? That’s one of the reasons the West Coast independents didn’t make it and had to buy or borrow oil from the bigger companies.

One of Seaside’s presidents that started the big move of offices from Summerland to Santa Barbara died before seeing the move in 1937.   While construction of the new home office known as Seaside Oil Company in Santa Barbara was being completed, restructuring of the executive level staff was being discussed in the company, and a gala celebration took place on November 16, 1937.
Over 8,000 visitors attended the open house of the $80,000 building at 330 State Street. Hundreds of floral displays, gardenias for the ladies and 2,000 “Silver Gull” gliders for the children were distributed. A 72-inch spotlight lit the skies. That was how it went for big events.
The move to Santa Barbara brought greater company involvement in that community. The best known example of this was Seaside’s sponsorship of the posters for the city’s annual Old Spanish Days Fiesta from 1936 – 1941, when World War II halted the Fiesta for the duration of the war. But the posters still appeared on street corners and windows. They also contributed to the missions in the area. A lot of the employees went to war so it was hard to find people who knew the jobs.

In February 1944, Seaside received a T flag from the Treasury Department signifying that 90% of their employees had put at least 10% of their pay into war bonds. With the end of World War II, Seaside and its corporate parent, Tidewater, began their postwar expansion that was successful marketing outside of California.   Even though Seaside was operating as an independent, but buying all their crude oil from Tidewater, they had to get Tidewater’s approval for such a large move. They started their expansion into Arizona and later into Oregon.
At a 50th year anniversary celebration dinner in 1948, the president of Seaside described the company’s success and gave out to all employees commemorative coins.   Later, he made a statement about Seaside’s modest beginnings with “today’s growth of 625 dealers in California, Arizona, Oregon, and 150 employees at the main branch building in Santa Barbara.   With the advertising and promotional efforts with credit cards, millions of Westerners were being advised to go Seaside.

A new slogan started at this time, “ Ride With Seaside,” and around the same time another slogan popped up, “King of the Hiways.”

In 1954, a new president by the name of Reuben J. Irvan was appointed. He began his career in the oil business as a service station attendant in San Francisco in 1921. Even though they were the first to use credit cards (paper), the new president came out with plastic ones. These first plastic credit cards proved to be such a great success that it wasn’t long before all large companies were using them.   New account figures jumped 21% above the nine-month average in November, 1956, the month the cards were introduced. By October of 1957, the figures had improved by a record 172% mark. Irvin also presided over another promotional project that was a success, a 48-page book showing the beauties of California and Arizona. Seaside printed some 30,000 copies to meet requests.

Despite the successes, there were also problems that would make it more difficult for Seaside to respond to changes in the industry. They were having trouble making a high quality of octane for the newer engines at the plant in Ventura, and to buy it from others was too expensive, so of course the price of gasoline was going to have to go up to compensate for the costs of the octane. But they kept the prices and it was dropping profits down to a very low level.

The Beginning of the End of Seaside Oil Company:

The steps that slowly led to the end of Seaside Oil Company were told in an interview by a former Seaside Vice President, Edward Matousek. He stated, “For sometime the major oil companies had tried to fight the price wars by using secondary brands of gasoline to protect their own brands.   Thus, Standard Oil of California used “Signal,” which they held controlling stock in since 1944. Richfield used “Rocket,” Union used “Harbor,” Seaside used “Orbit,” and Tidewater (Getty and Phillips), in turn, used Seaside.”
Secondary brands were supposed to meet the independent re-brand prices without necessarily involving the major brands in a price war.     “For a time, the strategy gave companies like Seaside some reason to continue and survive in the modern markets. However, the other majors were immediately challenged by Shell Oil, which used no secondary brands, nor even to continue subsidization. A large majority of secondary brands disappeared.”

“J. Paul Getty held a substantial interest in Tidewater through its various holding companies. During the Fifties, recurring rumors were extant that Tidewater, an eastern company, wanted to sell off Seaside or that Seaside and Tidewater would merge with other Getty interests such as Skelly Oil, but nothing was consummated.
“Penultimately, Tidewater itself rumored a need to divest itself by selling its entire West Coast refinery and marketing assets, including Seaside. Tidewater’s primary business interests were on the East Coast and that is where they wished to concentrate their business. “The first would–be buyer of Seaside was Humble Oil. Almost consummated, the sale fell through at the last minute, due to anti-trust objections raised by the Justice Department of the Federal government. Phillips Petroleum then stepped in and proceeded with the purchase of Seaside, despite continuing objections of the Justice Department.”
Despite the condition of Seaside’s fate, the company went forward with expanding into new markets in the mid–1960s under the presidency of Ben Avery. Seaside financed and leased dozens of new, higher-volume stations all over California and Nevada, and parts of Utah.   Many of these stations sold their own brand or other brands, like Orbit , Speedol, and Veedol.
So, while Seaside’s sales volume increased, its name recognition did not seem to keep up. State and federal taxes and price wars among the oil companies kept profits low, so that many of the new stations became a financial burden rather than a source of profit.

After Seaside was purchased by Phillips 66 of Bartleville, Oklahoma, a new President was put in power from the executive files of Phillips by the name of John Guy in May of 1967.   Edward Matousek, Vice President at the time, explains the changes that then occurred at Seaside:    “When John Guy succeeded to the presidency, there followed considerable restructuring of Seaside, especially in the pattern of Phillips’ policies and organization. Seaside was now in the forefront of an industry trend in which stations formerly leased to dealers were converted to operation by Company employees. These stations used self-service instead of the Seaside employees and eliminated everything (tires, batteries, etc.) except gasoline. Re-brands were used instead of the Seaside name.
“Seaside became one of the first companies to make widespread use of women service station attendants and supervisors.    Guy also turned his attention to sales of unbranded gasoline. In this type of business, an oil company would pick up gasoline at the refinery or terminal at wholesale prices, but with no permission for the buyer to use its own name. These strategies of salary operation and unbranded sales illustrate the fact that years of violent price competition had drastically reduced the value of Seaside’s brand.   The ultimate demise of the Seaside Company came in April, 1973, when Phillips petroleum, the sole owner and stockholder, dissolved the Seaside Corporation and absorbed all its assets into its own organization.”

Like many small oil companies, Seaside could not make the adjustment to survive in a rapidly expanding national petroleum market. The company’s 75-year history was not without achievement.
It was John B. Cook’s early inventions that made Seaside’s name in the pumping business and was a main factor in the company’s great start.   The firm had been a leader in the use of credit cards, in marketing ethyl gasoline and in employing women in areas that traditionally was reserved for men. All this had paid off, as Seaside grew from its modest start in Summerland into a name recognized across the Western U.S. for 75 years. It was a great “Ride with Seaside.”

Following is a newspaper article written by Chet Holcombs, on February 22,1973, for the Santa Barbara News Press, titled ‘Seaside Oil Company, Giving up the Ghost:’
Seaside Oil Company, founded 75 years ago in Summerland, where the world’s first oil was drilled under water, will die as a Santa Barbara corporation April 1, 1973.
It has been learned that Phillips Petroleum Co., of Bartlesville, Oklahoma, the parent firm since 1966, will transfer Seaside’s marketing functions of Phillips 66 products in five western states to Phillips control on that date. All production facilities are directly under Phillips.
Employees of the firm, headed by John Guy, President, and other executives at the headquarters at 330 State St., will be retired, if eligible, or offered new positions elsewhere with the company, if they want to go. The operation, as an integral part of Phillips, is expected to continue for an indefinite period. There are over 200 service stations operated by Seaside.

SEASIDE, which began as a water and oil pumping company, then an independent oil producing company, constructed a refinery in Ventura in 1923 and built its first service stations the same year in Ventura and Santa Barbara. Seaside was among the first oil companies to market Ethyl gasoline and to provide credit cards for the customers (then called “courtesy cards”).

In November, 1943, Tidewater Oil Company, then known as Associated, with J. Paul Getty as president, took control by buying up 51% of the Seaside stock, and it became chiefly a distribution firm with Santa Barbara offices. Such men as H. B. Kellogg, Winslow Bushnall, Harry Jackson, R. J. Irvin, and Benjamin F. Avery served as president at different times.

On July 1, 1966, Phillips, for $350,000,000, bought the western operations of Tidewater, together with some 1,500 service stations, including the Seaside Oil Co. John Guy was named president in 1967 and has served in that position to the present.

Other officials are Edward Matousek, Edwin Weisman, F. M. Walkup and Mrs. A. O. Brady. Offering a wide range of products, including gasoline, diesel fuel, stove oil, kerosene, fuel oil, lubricating oil, tires and batteries, it’s been a good "RIDE WITH SEASIDE."

Information on the Seaside Company was gathered from articles from the Seaside Oil Company museum in Santa Barbara. and other sources , if you have the need to contact me you can at : jlgas@caltel.com .