Rights of Citizenship and Accumulation

No sooner had Doheny settled into these arrangements than the Cerro Azul gusher brought additional marketing problems and strained all of Huasteca's new transportation facilities. From that moment onward, Doheny began to build his own refining and marketing facilities at ports along the coast from Louisiana to New England. This second phase of expansion lasted from 1916 to 1921. Doheny created a holding firm, the Pan American Petroleum and Transport Company, incorporated in Delaware. Pan Am came to hold the stock of the Mexican producing subsidiaries, Huasteca and Mexican Petroleum, as well as his California oil fields and the plethora of new facilities on the Gulf and Atlantic coasts of the United States. Pan Am established distribution depots in Portland, Maine, Boston, Providence, Fall River, New York, Baltimore, Norfolk, Jacksonville, Tampa, New Orleans, and Galveston. It built a 25,000-bd refinery at Destrehan, Louisiana. Abroad, the new Doheny interests established additional depots in the Canal Zone, Pará, Pernambuco, Bahia, Rio de Janeiro, Santos, Montevideo, and Buenos Aires. In Great Britain, Pan Am opened up distribution centers in Southampton, Liverpool, Avonmouth, South Shields, and Glasgow. Bunker and fuel oils continued to be the principal products sold at these points. The opening of the Panama Canal in 1914 permitted the Mexican oil, for the first time, to be sold on the west coast of South America. Doheny in 1917 was selling crude to Union Oil of California and to Chilean mining companies. Despite some problems with sea transport during the war, Pan Am came to own thirty-one tankers, amounting to 272,493 total tonnage, by 1921. It chartered many others. As the third decade of the twentieth century began, Doheny's companies had the capacity of selling some twenty million barrels of oil per year.^[74] Moreover, it was attempting to wean

itself from dependence upon the large U.S. marketing firms like Jersey Standard.

The rapid expansion also created a need to expand Doheny's refining capacity. Beginning in September of 1916, Huasteca laid plans to convert its Tampico topping plant into a larger and more sophisticated refinery. While its capacity to produce fuel oil was expanded, stills and equipment to manufacture kerosene, gasoline, and lubricants were also installed. Within a month, Huasteca received the government permits. The contract stipulated that the company was to obey Mexican laws, permit government inspections, and provide certain services and benefits for refinery workers.^[75] By the end of the decade, the Tampico refinery had the capacity to refine 140,000 bd.

Pan Am appeared to maintain a solid profitability during the great Mexican oil boom. Its sales — and dividends — mounted. By 1918, sales revenues rose to $17 million, and net profit to nearly $5 million. In 1920, its total assets were $103 million.^[76] By any measure, Pan American Petroleum was becoming a successful multinational company.

The expansion of his oil enterprise motivated Doheny to promote his experienced employees and bring in new officials. His old partner from the Los Angeles oil rush, C.A. Canfield, remained as a vice-president but died in 1919. Herbert Wylie, who opened up production at El Ebano and in 1910 directed the Mexican operations from Tampico, moved to New York as general manager of Pan American Petroleum. Wylie had accomplished much in Mexico without ever having learned Spanish at all.^[77] Harold Walker left his duties as manager of the paving operations in Mexico to assume the vice-presidency of Pan Am with responsibility for public relations. Walker soon became Doheny's political alter-ego.

New men soon rose within Doheny's Mexican operations. Capt. William H. Green in 1916 took over as general manager of Huasteca at Tampico and had charge of oil fields and refineries of both Mexican "Pete" and Huasteca. Green knew Spanish, having served with the U.S. Constabulary in the Philippines.^[78] Weighing 250 pounds, Green was an imposing, dominating figure. He dealt with Mexican labor disputes and with local Mexican officials. José López Portillo y Weber, a young technician for the government petroleum office in Tampico in 1919 (and father of a future president), did not like Captain Green. He thought that Green, who could speak Spanish quite fluently, purposely maintained a strong English accent, because "he was convinced of the efficacy of humor to attract sympathy."^[79] Green was also considered a

Yankee jingoist, believing the Americans were great and the Mexicans were lucky to be so close to such greatness.

In Mexico City, Hilarión Branch became the chief political trouble-shooter and public affairs official of the Doheny interests. Born to British citizenship in the Antilles, he lived for many years in Mexico, learning to speak Spanish grammatically and elegantly. He had polish where most American oilmen were somewhat coarse. Branch studied Mexican law and became an abogado. "He knew and understood us [Mexicans] very well," said López Portillo of Branch.^[80] Branch's job was to deal with the diverse functionaries of the government. Mexican officials appreciated foreigners like Branch more than those like Green.

The whole of the Pan Am organization bore the imprint of Doheny. An optimistic and driven man, of rigid puritanical character, Edward L. Doheny did not easily accept criticism. It was rumored that his first wife, who died, was an alcoholic, and he suffered no one to drink or smoke in his presence. Together with his second wife, Estelle, Doheny became a great philanthropist and patron of the Catholic Church in Los Angeles. His Mexican geologist, Ezequiel Ordóñez, described the personal traits that led to executive success:

Two things were characteristic in the active business life of Doheny. The first was a slow and almost completely discussed resolution, but once taken, indeed, he had to carry it out promptly and decidedly. The second was that he was not a creator of great ideas. The primordial idea of a thing had to come from outside, from others, but once placed in his mind, he could develop and calculate its consequences with astonishing precision.^[81]

Nevertheless, the successful, self-made American oilman in Mexico also had an Achilles' heel, a fatal flaw that was soon to mar his career and leave him a retired recluse who would die a vilified and embittered man. Doheny began to feel he was superior. Against those who opposed him, crossed him, or questioned him, Doheny could be a tireless fighter. "He could spend entire hours speaking about only one negotiation, trying always to dominate his listeners," observed Ordóñez. "Generally, he did not admit objections to his conversations and in the best epoch of his work, if someone dared contradict him, he would start to shout, pound his fists, his eyes irritated and his face reddened."^[82] His arrogance and his growing profile during the war led him on a collision course in the political arena. What he saw as President Woodrow Wilson's bumbling responses to the Mexican Revolution and his wrongheaded domestic oil policies soon converted his political sympathies from the Democratic to the Republican party.

As the scion of an immigrant, working-class Irish family, Doheny had always been a Democrat. He gave money to Democratic candidates and to the Wilson campaign. But as a westerner and businessman, he came to resent the conservationist attitude of the East Coast Democratic establishment. He soon became an outspoken witness in Congressional hearings. In 1917, he appeared before the Senate Committee on Public Lands and clashed with the administration over its decision to withdraw the naval oil reserves at Elk Hills, California, and Teapot Dome, Nevada, from private exploitation. Doheny also objected to the U.S. Navy's refusal to burn high-sulfur Mexican bunker oil in its warships. Questioned about the excessive smoking of Mexican oil, Doheny retorted that various senators were intimating "that I lied about it."^[83] Josephus Daniels, the secretary of the navy, spoke against exploiting U.S. naval oil reserves. "We would prefer to buy the oil, all that we can get, from foreign countries, if we can, and hold our own supply as long as possible," he told the Senate panel.^[84] Doheny held a grudge upon which he would act later, becoming involved in the Teapot Dome scandals. Daniels later was to serve as U.S. ambassador and witness the Mexican oil expropriation. Needless to say, Daniels would not be known as a friend of American oilmen in Mexico.

The next year, 1918, Doheny returned to Capitol Hill to protest wartime policies of the U.S. Shipping Board. Pan American Oil representative, attorney Frederick R. Kellogg, claimed that the government had commandeered five Pan Am oil transports from the company's Tampico run. He asked for 100 percent compensation for the loss of the ships and not merely payment for the use of these ships. The argument stressed that Pan Am tankers were not carrying Huasteca's product to war but transporting the oil from competitors on the East Coast to France. The competition, not Pan Am, was therefore reaping the profits from the government's shipping policy.^[85] Doheny's own testimony to the Senate committee seemed both condescending and whining. When war was declared, he said, he had offered all his ships and five million barrels of Mexican oil to President Wilson. Instead the government "commandeered" five of his vessels and paid him a charter fee amounting to $3.65 per ton for moving the petroleum of other companies. His companies could have been earning $16 per ton if those ships carried Mexican oil. Clearly, Doheny was forming the opinion that the Wilson administration was persecuting him. As the largest producer of oil in Mexico, if not the world, Doheny said he deserved better.

The world's greatest oilman continued this kind of political action during the remainder of the Wilson administration. Doheny commissioned a special panel of scholars to study Mexico and propose to the government a more appropriate U.S. policy toward the Mexican Revolution. The Doheny Research Foundation, featuring the investigative research of some fifteen prominent American academicians, may have been one of the first conservative think-tanks in U.S. politics. He also commissioned newspaper attacks against U.S. policies, and he supported one book, The Mexican Problem, by Clarence W. Barron. Among that book's profoundest convictions are the following:

The redemption of Mexico must be from the invasion of business, forcing upon the natives — the good people of Mexico — technical training, higher wages, bank accounts, financial independence, and the rights of citizenship and accumulation.^[86]

The opinion reflected Doheny's ideas perfectly.

The Senate's investigation of U.S.-Mexican relations, however, was Doheny's most prominent public forum to express a policy alternative that was to be known as the "interventionist" lobby. Doheny's old friend from his prospecting days in New Mexico, now senator, Albert B. Fall, was an influential member of that committee. Moreover, Fall had become the Republican party's chief critic of the administration's Mexican policy. When the Senate began its hearings on Mexico in 1919, Doheny served as the first witness. Two giant wells in Mexico and a new marketing presence on the East Coast of the United States had taken Edward L. Doheny so far that he felt justified in influencing U.S. policy toward Mexico.