Oil Discovered on Signal Hill

By Claudine Burnett

In ages past, Signal Hill was used by Indian tribes as a signaling site. Fires were built that could be seen many miles from its summit. They gave warnings about invasions of warring tribes, or told of native festivities, to which all the surrounding tribes were signaled to attend. For many years, Signal Hill was part of the vast rancho of Los Cerritos settled by Japanese who established wonderful berry and cucumber farms on its heights. In 1916, sunrise Easter services began to be held on the summit, worshippers climbing or driving up the winding roads and narrow trails to sing praise to the risen Christ. But in 1921 things changed. Black gold was discovered.

There were signs that Long Beach was sitting on a vast oil reserve. On April 5, 1921, the Daily Telegram reported 96-year-old inventor Jonathan Beggs’ prediction of an oil strike in the Signal Hill area that would make land owners instant millionaires. On Monday, May 23, around 5 p.m., his prediction came true when Shell Oil Company struck oil at its well at Temple and Hill Street.

Local oil discoveries had already been made in Huntington Beach when, on April 24, 1920, the Eddystone Oil Corporation struck oil. Since the Huntington Beach discovery investors had been looking for oil in other likely areas, including Signal Hill. Shell’s well was a “wildcat well,” one that was dug without definite proof that the land was oil bearing, a lucky hunch that proved fruitful.

Oil fever quickly spread. Sandberg Petroleum Company, with massive Signal Hill oil holdings, was swamped with people wanting to invest in their company. Within 48 hours of the Shell discovery, Sandberg sold $112,000 worth of stock. Real estate promoters in the area on and surrounding Signal Hill could barely keep up with sales. The City of Long Beach owned 36 acres of land between the Shell and Sandburg holdings and envisioned itself becoming the richest city in the world — a city that would end taxation.

At 9:30 p.m. on June 23, the Shell gusher came in spraying oil for a radius of 300 feet. The bringing in of the well sent the price of Signal Hill leases sky high with several leaseholders refusing as much as $8000 (116,000 in 2021) an acre for their holdings. Shell well No. 2, Nesa, on the west slope of Signal Hill, struck oil at 12:45 a.m. on Sept. 2. It came in with such an explosion that everyone thought an earthquake had struck. People as far away as Los Angeles were awakened by the blast.

Other wells came in on Oct. 26, Nov. 17 and Dec. 13. On Nov. 28, the city-owned municipal oil well hit pay dirt, shooting two hundred barrels of fluid above the top of the derrick. For many years afterwards this single well brought $360 ($5,200 in 2021 dollars) a day into city coffers.

Amid all of this oil, Signal Hill, which had been renowned for its scenic grandeur, productive soil and magnificent homes, was transformed. Building restrictions, paved streets and walks and curbs were supplanted by oil leases, oil stocks, derricks and drills. Palm trees and rose gardens were removed to make way for boilers and tool houses.

It was now dangerous living on the Hill, residents were regularly routed from their homes by blowouts from the oil wells. Often it was so sudden residents fled like the inhabitants of Pompeii before the streams of lava. Families escaped through the rain of greasy crude oil, leaving behind everything but the clothes they were wearing. They would pile into their automobile, trying to drive to safety but finding it difficult to get through the oil that coated everything.

On returning home they found their once white home now black, trees in their orchard destroyed, stripped of branches by the clinging oil, the contents of their homes worthless, and the building, soaked with highly flammable oil, a fire trap in which no one could safely live.

H.F. Ahlswede described his experiences in an article in the Long Beach Press on Feb. 5, 1922:

“After the experience with the three gassers we knew that it was only a matter of time when we would have to move. I want to tell you that it is very difficult to live as neighbor to one of these roaring gas wells. The first gasser was something of a novelty and proved there was something under the ground that resembled what they had been drilling for. When the fourth gasser suddenly developed into an oil gusher and commenced to pour sand and rocks about our premises, we knew the time had come to leave Signal Hill.”

Houses, streets and sidewalks were covered with sticky black tar; rocks that came up with the gushers broke through roofs and windows. The time to leave had come. Fortunately, many left rich, having leased or sold their Signal Hill real estate. Yet things remained the same in the adjoining gardening district. In the shadow of the derricks, farmers were still tilling the land and planting their crops. Celery was the big cash crop of the year, grown along with berries to the east of the hill where the soil was favorable to such produce.

To the west of Signal Hill acres of muslin could be seen covering acres and acres of cucumbers. The thin material helped diffuse the rays of the sun and accelerated the growth of the vine. Recent rains assured the farmers of a plentiful year and they were wearing smiles just like those of their new neighbors whose oil wells had just “spudded in.”

In Long Beach, an oil zone ordinance that had been in the making before the Signal Hill discovery, passed on July 26, 1921. It defined the territory within the city limits where drilling would be allowed. Many crowded the council chambers wanting an exemption for their property if oil was discovered. Mayor Buffum assured the Long Beach citizenry that every location that had oil prospects in the city would be carefully considered before permanent zoning was in place. After all, with a license fee of $1,000 ($14,500 in 2021 dollars) for each well in the city,

It was estimated that the city’s revenues from oil royalties would exceed $300,000 ($4.7 million in 2021) for 1922. The city owned 300 acres situated in the middle of four sections of the oil fields. By November 1922 four city wells were producing 5200 barrels of oil daily. The city’s 140-acre Jergins tract lying north of Sunnyside Cemetery was considered the most valuable tract in the field with the city receiving 40% of its profits. It was felt that if this production continued Long Beach would be able to finance its entire annual budget of nearly $2 million ($29 million in 2021) from its oil revenues. Long Beach, if she wished, could become a “tax-less city.”

Historian Kevin Starr divides those living in Southern California in the 1920s into three categories: Oligarchs, Babbitts, and Folks. The Oligarchs consisted of older Southern California families such as the Bannings, Bixbys, Hellmans, Pattons, now in their second or third generation of wealth, or, in the case of oilmen Edward Doheny and George Getty, enjoying first-generation wealth of great magnitude. The Babbits represented the newly arrived middle classes: the corporate executives, the bankers and lawyers, the doctors, real estate developers, and automobile dealers.

That middle-class way of life was centered on clubs, including Long Beach’s Pacific Coast Club, Virginia Country Club, and many gun clubs throughout the city. Farther down the socioeconomic ladder but predominant in numbers were the Folks: white Anglo-Saxon Protestants from the Midwest, many of them in late middle age, most from rural or small-town backgrounds, undergoing urbanization for the first time. Once a year they would gather for the state association picnics sponsored by the All States Society of Long Beach.


Claudine Burnett is a retired Long Beach Public Library librarian who compiled the library’s Long Beach History Index. In her research, she found many forgotten, interesting stories about Long Beach and Southern California which she has published in 12 books as well as in monthly blogs. You can access information about her books and read her blogs at www.claudineburnettbooks.com.


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