Newhall Petroleum Company stock certificate, 9¼x5½ inches, dated August 31, 1876. Lithography by A.L. Bancroft & Co. of San Francisco. Back is blank. Possibly unique. Ex-collection of Ken Prag, a major scripophily dealer in the Bay Area (Burlingame, Calif.).

Not only was this a wildcat oil company — meaning a speculative venture on an unproven oil claim or region — but it was also related to a stock price manipulation scheme (described in news articles below).

The unsuspecting sucker in this scenario was a Mr. John Whitney who was into it for 25 shares. On the bright side, Whitney wouldn't have paid anything close to the par value of $100 per share — more like $2 or $3 (see below).

While it is technically possible this could have been the John H. Whitney who settled in the 1870s or 1880s in the canyon east of Newhall that now bears his surname, it is unlikely.

Logic suggests it was the John Whitney who was co-owner of the St. Charles Hotel in Los Angeles, where the mastermind of the scheme, if you can call him that, was staying and showing maps of mining claims — not necessarily his own! — to his marks.

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Such a "mastermind" was William Parsons that he committed his nefarious modus operandi to writing, in the form of badly misspelled letters to his partners in San Francisco.

The principals of the concern, a consortium of lawyers who had relocated from Virginia to San Francisco, along with Parsons — who was decidedly not a lawyer — incorporated both the Newhall Petroleum Company and a "Union Oil Company" on the same day, July 28, 1876. They initially filed for a $5 million capitalization on Newhall, then quickly upped the ante to $10 million. (Their Union Oil Company had nothing to do with the "real" Union Oil Company that Lyman Stewart organized 14 years later, any more than their Newhall Petroleum Company had anything to do with the legitimate one that operated in or near Elsmere Canyon about 1910.)

Their Newhall company supposedly held one or more claims in Los Angeles County. At the time, workings in the Pico Canyon area near Newhall were well known, so this makes sense. While the date historians remember is September 26, 1876, corresponding with Alex Mentry's deepening of the No. 4 well in Pico Canyon to produce oil in marketable quantities for the first time, in truth the Pico operation was a gradual run-up that was frequently reported in the San Francisco newspapers.

As for the association of the name "Newhall" with the area, the Bay Area entrepreneur Henry M. Newhall purchased his (approx.) 48,000 acres of the Santa Clarita Valley a year and a half earlier, in January 1875. By mid-1876 the Southern Pacific was pushing through the "Newhall" area. Every San Franciscan knew it.

Four days after they incorporated their Newhall and Union oil companies, Parsons and some of his compatriots were in court in San Francisco to answer charges relating to another one of their paper companies, the English Gold and Silver Mining Company, which ostensibly held claims in Nevada.

As explained in the San Francisco Chronicle (Aug. 2, 1876): "The object of the managers of the company was to bolster the price of the stock in the market in this city [San Francisco], while they disposed of it in Los Angeles and other places, so that when they made a wash sale the stock could not be thrown upon their hands by parties holding it here." Whatever that sentence means, Parsons was in Los Angeles, selling shares for $2 or $3 and returning $1 to the company. The sale would be recorded at the higher amount.

On August 1, 1876, a Mrs. Richard Dunning was in court to get her $100 investment back — or take delivery of the 100 shares of "English" company stock she was promised but never received. The corporate officers didn't want to imburse her at $1 per share when their man Parsons was down in L.A. running up the price to $3.

For her sake, we hope she got her money back. As the San Francisco Chronicle reported (August 2, 1876), the stock was worth "not more than ... the paper the certificates were written upon."

Two days later, on August 3, Parsons was arrested in connection with an unrelated stock fraud scheme dating back to September 1875. Duly disgusted and cognizant of Parsons' apparent attempt to jump bail, one wise jurist after another allowed the miscreant to rot in jail for some considerable time.

Parsons' lettered co-conspirators in the Newhall and Union oil companies did not meet similar fates. Quite the opposite. In fact, it is unclear to what degree the attorneys colluded. The first-named incorporator, San Francisco attorney Thomas L.M. Chipley, was probably in on the price-manipulation scheme and reportedly helped hatch it. But there is scant evidence to suggest the others were fully aware of Parsons' activities on their behalf, and some evidence to show they didn't condone it if they did know. (See San Francisco Chronicle below, August 2, 1876.)

One incorporator, attorney F.A. Berlin, was a respected member of the Presbyterian Church and served on nonprofit boards in San Francisco in the late 1870s and early 1880s. Berlin became one of San Francisco's hoi polloi and made the guest list for every important wedding in the early 1880s.

Incorporator Thomas C. Huxley was later appointed notary public for Alameda County by the governor (as was the practice in that day). He lived at the Mission San Jose where he married the county treasurer's daughter in 1880.

The destinies of the other incorporators — Chipley and George S. Riggs, the corporate secretary — are unclear. The former died in Phoenix, Arizona Territory, in 1881; the latter may have returned to the Virginias and run into some trouble, but this will require additional investigation.

One name on the stock certificate shown here is a puzzle: that of (J.A.?) McPherson, which appears in the space for the president's signature. No such person was an incorporator of the company.

We can only speculate. The name "McPherson" was known in San Francisco and the Newhall area in 1875-76. Robert C. McPherson was a historically important early booster of the Pico oil field and its related refinery at Lyon's Station (now Eternal Valley Cemetery). An oil field equipment salesman from Pennsylvania, McPherson, now in San Francisco, recruited the refiner John A. Scott to rework the ("Pioneer") refinery, and McPherson even started a well of his own in Pico Canyon on behalf of something called the San Francisco Oil Company. (It was a duster.)

By his own unwitting admission, the schemer Parsons forged signatures on stock certificates, or at least offered to do so in correspondence to his partners. Perhaps he forged the name "McPherson" on this stock certificate to lend it credibility, knowing the name would mean something to someone who was too far away from San Francisco to verify it.

JOHN WHITNEY.

THOMAS L.M. CHIPLEY.

F.A. BERLIN.

THOMAS C. HUXLEY.

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In the Justices' Court yesterday morning a suit was tried involving a stock transaction between Mrs. Richard Dunning and the officers of the English Gold and Silver Mining Company, who manipulate a suspicious mine in Storey county, Nevada. The suit was brought by the speculative lady to compel the company to return to her $100 in gold coin or deliver to her 100 shares of the stock, for which an agreement was presented signed by the President and Secretary of the company. The testimony adduced in the case showed that the stock of the company had sold in the Pacific Board in June last at from $2 to $2.25, and in July as high as $3; also that 3,000 shares of the stock had been sent to Los Angeles, where it was disposed of by one of the Trustees, William Parsons, who returned to the company $1 per share for all that was sold. The Secretary had signed her certificate, but the President had refused to do so, and hence the suit.

THE EVIDENCE

went to show that in the month of June 250 shares of the English Gold and Silver Mining Company's stock had been sold in Los Angeles to Dr. Steinway for $2.50 per share; that 250 shares had been sold to Thomas Gates of the same place for $2.50 per share, and that Isabella Babcock had invested $500 in the mine, for which she paid cash. In all this there appeared to be a screw loose, and it was alleged that the object of the managers of the company was to bolster the price of the stock in the market in this city, while they disposed of it in Los Angeles and other places, so that when they made a wash sale the stock could not be thrown upon their hands by parties holding it here. In connection with this court note and the few interesting facts it has brought out for the edification of the stock-dealing public, a short history of the organization and conduct of the English Gold and Silver Mining Company may not be out of place. Such a history will present a number of facts that are not generally known among those

DELUDED INDIVIDUALS

who have invested their subsidiary in wildcat, and which if properly pondered upon will prevent others from doing likewise. The English Gold and Silver Mining Company was incorporated April last, with a stock divided into 100,000 shares, at a price that would, strange as it may seem, not more than have paid for the paper the certificates were written upon, which was about all the stock was worth. J.R. Morgan was the President of the company, and C.A. Gould its secretary. Of the stock, 20,000 shares were credited to the owners; 20,000 for a working capital; 5,000 to the Trustees; 12,000 to Thomas Huxley, and 43,000 were given to William Parsons and J.E. Stoutenburg as the promoters of the mine. In this organization everything was satisfactory, and things went "as merry as a marriage bell" for some time. Shortly afterward, in May, Mr. Parsons went down to the southern country in a ship for the purpose of looking at some land, in which he contemplated investing a few trade dollars. Unfortunately, while going down to the sea in this ship a little cherub did not sit aloft to watch him, and he fell in with T.L.M. Chipley, a lawyer whose shingle adorns and office on California street in this city. The time of day thus passed between the two gentlemen was fostered into a friendship, and from swapping biographies they began exchanging speculative ideas, and after a short consultation they both concluded there were millions in manipulating the stock of the English Gold and Silver Mining Company. Parsons introduced Chipley to his friends, and Chipley returned the compliment — "deuced good fellers, both of them, you know." What Parsons did in Los Angeles besides this he tells in the following letter to Mr. Stoutenburg:

A POSTSCRIPT.

And then, as if to preclude the possibility of a "fial," he added a postscript, "be sure to express me the map of the mine or the smal one of the Comstock and do not fial." But somehow things did not progress satisfactorily, and notwithstanding the fact that he was "delited" with the country and the "Land," Parsons returned to this city in company with Mr. Chipley. While here Mr. Stoutenburg importuned him to appoint the Los Angeles Bank a depository for the stock and funds of the English Company, but Mr. Parsons, on account of the fine "bisness" outlook in the southern country, was going to open an office down there, and he thought he could take charge of those matters himself. He had returned to make arrangements to receive a telegraphic list of the "cotations" of the Pacific Board in Los Angeles, which were not then transmitted to that place, and while here complications sprung up, which detained him several days. E.S. Davis, a stockholder, wanted to withdraw from the company because of his contemplated departure for Arizona. Parsons swore he should not withdraw, and Davis swore he would. Davis had signed a contract to take an interest of $600 in the company, but had only paid $200, whereupon Parsons claimed that he had not complied with the terms of the contract. The affair was merging into an interesting row, when suddenly Davis swore with a horrible oath that if his interest was not brought up, he would make it so hot for the company's job in Los Angeles that they would be glad to flee the country — whereat the English Gold and Silver Mining Company shook in its boots. Stoutenburg finally bought out Davis' interest and sold it to Chipley for $600. He received $250 in cash and the remainder in a note. For this Davis signed an agreement not to in any manner injure the "prospects" of the English Company or any of its officers, "in particular William Parsons." Mr. Parsons then returned to Los Angeles, having made arrangements to get the "cotations," and thus he wrote:

In compliance with this astute stock speculator's oft-repeated request, the stock was raised "slowly but surely." He did not write again on Monday, as he had promised, but on the following Tuesday Mr. Stoutenburg received another letter. Parsons' inclinations to "give himself away" was irrepressible, notwithstanding the danger he ran. His "bisnis" had increased so rapidly8 that he had got a "sut" of rooms, where the bloated aristocrats of Los Angeles were calling to see about the maps. Hear him:

It is somewhat strange that Parsons was, as he represented, busily at work during all this time and still accomplished nothing. His next letter did not boil over with those stirring adjectives that had characterized his former efforts, and from its tone shows that "business" was not so brisk as before; in fact, he needed a little to start the thing with.

During all this time short and mysterious telegrams were flying between Chipley and Parsons, and Morgan and Parsons, relative to the prices of the stock, which they were endeavoring to "raise surly." The following letter, and the last that will appear in this thrilling history, betrays a feeling of despondency regarding stock matters in Los Angeles. He sees doom impending unless he receives that "Telegraphe" list, and threatens to come home:

PARSONS AT HOME.

Well, the result was that Parsons returned to San Francisco in disgust. History does not say whether the county officers and "sheep deelers" went back on him or not, but at any rate he concluded that there were not so many millions in Los Angeles as he had at first supposed, and if there were, anyhow he would generously let them remain there. Arriving in this city discord was bred in the Company's ranks. Stoutenburg wanted things conducted on the square, and Parsons did too — if there was money in it. F.A. Berlin was elected a trustee, and took 100 shares of stock; Chipley was also elected and took 900 shares. Then at a meeting of the Directors Chipley wanted to set aside the 43,000 shares of stock owned by Stoutenburg and Parsons, or make the latter a present of them. Then a row ensued, and fur enough to fill a bed-tick and finger-nails enough to scratch the eyes out of all Christendom were spilled upon the floor. When the brimstone finally blew from the field it was decided to put the stock in the President's hands, in trust. It was soon removed from that dangerous locality, however, and equally divided betwen Stoutenburg and Parsons again.

STOUTENBURG FROZEN OUT.

Then in a meeting called soon after Tom Houxley [sic] swing his fists about promiscuously and said that every meeting held before was void, because notices of them had not been published. Stoutenburg did not think so, but nevertheless a new election was immediately proceeded with, resulting as follows: President, T.R. Morgan; Vice-President, Thomas Houxley; Secretary, C.A. Gould; Trustees, William Parsons, T.L.M. Chipley, T.R. Morgan and Thomas Houxley. This left Stoutenburg entirely out in the cold, and when Berlin moved that the 20,000 shares belonging to the owners be presented to Chipley, what could he do but growl? And it was moved and carried that 1,500 shares form a Fourth of July present for Parsons; and when again it was moved and carried that 21,500 shares be given to Houxley, what could he do but grin and bear it? The notes from Steinway and Gates have never been paid into the Company's treasury, as Parsons considers that they are good, and it is not policy to press a man to pay up while "bisness" is as brisk as at present. And this is now "the thing" stands now, and how it probably will stand for some time to come.

A suit was tried in Justice Pennie's Court yesterday, involving a stock transaction between Mrs. R. Dunning, plaintiff, and C.A. Gould, Secretary, and T.R. Morgan, President of English Gold and Silver Mining Company. The suit was brought to compel the defendants to return to plaintiff $100 gold coin or deliver one hundred shares of the above stock, as per the following agreement:

San Francisco, May 2d, 1876 — We promise to deliver to Mrs. R. Dunning, sixty days after date, one hundred shares of English Gold and Silver Mining Company, Gold Hill District, Storey county, Nevada, as per agreement. (Signed.) C.A. Gould, Secretary; J.R. Morgan, President.

The plaintiff testified that she had several times demanded the stock, the last time being on the 6th of July; J.E. Stoughtenberg was acquainted with the signatures of the Secretary and President; the stock of the Company was sold in the Pacific Board in June at from $2 to $2.25; in July it sold as high as $3; 3,000 shares of stock had been sent to a man named William Parsons, at Los Angeles, to be sold, and he was to return to the Company $1 for every share disposed of; he sold 500 shares. It seems from the evidence presented that the Company did not desire to deliver the stock to Mrs. Dunning. Mr. Gould signed the certificate, but the President refused to sign it. It is alleged that it was the object of the manipulators of the stock to keep the price of the stock up in the market and sell to parties in Los Angeles and other places, and not allow it to get out among the people here for the reason that when they made a wash sale the stock would not be thrown on their hands by parties holding it in this city. The case is to be submitted on briefs to be filed on Saturday.

Poor William Parsons was unsuccessful in his attempt to enjoy the sweets of liberty, and was harshly again compelled to feed upon the vapors of a dungeon. In the present matter, to use the quaint Scotch expression, one John Evans in the pursuer. That gentleman, in a complaint filed in Judge Morrison's Court, related a number of transactions in which his too great confidence had caused him tobe muleted by the gentle Parsons out of not less a sum than $7,035, for which he asks judgment, and that the said Parsons should be dealt with according to the law in that case made and provided. Judge Morrison hearkened to the prayer of the petitioner and caused Parsons to be arrested, bail being set at $8,000. Parsons gave bonds, but was soon after given up by his bondsmen. Thereupon, he caused sundry writs of habeas corpus to issue, returnable before Judges Morrison and Sepulveda, but they turned deaf ear to the Parsonic plaint. In despair he applied to the Supreme Court as a last resort, but, sad to relate, again miserably failed and was cruelly remanded to the custody of a hard-hearted jailer, there to remain until released by due course of law. Parsons has one comfort, that he will be shielded for a time from the neglect of a cold, cold world.

Last Friday and Saturday the time of the Supreme Court was occupied by habeas corpus proceedings brought on behalf of William Parsons, the mining stock operator, who some time ago was arrested, on complaint of John Evans, on a charge of fraud. It seems that in September, 1875, Parsons managed to get possession of 19,000 shares of Safe Deposit mining stock belonging to Evans. This stock, it is alleged, was secured on false representations, Parsons giving Evans to understand that he was a man of wealth, and among other property owned a valuable house and grounds on Langdon street, which he promised to give in return for the stock. Evans was very gullible for a time, even going so far as to loan Parsons various sums of money, and placing in his custody for safe keeping scrip of other stock of considerable value. Some time elapsed before he discovered that Parsons' property had about as much tangibility as the island which Don Quixote promised to his faithful squire Sancho Panza, but when he did he began an action for fraud against him in the Fourth District Court. He was accordingly arrested and had his bail fixed at $8,000. This was on the 3d of last August. He succeeded in giving bonds, but was surrendered by his bondsmen on the 13th instant, and since then has been in the County Jail. The habeas corpus proceedings were taken on the ground that the lower Court could not make the arrest, and that the order was granted in a case not allowed by law. Justices McKinstry, Wallace and Niles, however, were not disposed to take that view of the matter. The writ was therefore dismissed, and Parsons remanded into custody.