AN OIL FARM
“What,” I asked Mr. Carnegie, “was the next enterprise with which you identified yourself?”
“In company with several others, I purchased the now famous Storey farm, on Oil Creek, Pennsylvania, where a well had been bored and natural oil struck the year before. This proved a very profitable investment.”
In “Triumphant Democracy,” Mr. Carnegie has expatiated most fully on this venture, which is so important. “When I first visited this famous well,” he says, “the oil was running into the creek, where a few flat-bottomed scows lay filled with it, ready to be floated down the Alleghany River, on an agreed-upon day each week, when the creek was flooded by means of a temporary dam. This was the beginning of the natural-oil business. We purchased the farm for $40,000, and so small was our faith in the ability of the earth to yield for any considerable time the hundred barrels per day, which the property was then producing, that we decided to make a pond capable of holding one hundred thousand barrels of oil, which, we estimated, would be worth, when the supply ceased, $1,000,000.
“Unfortunately for us, the pond leaked fearfully; evaporation also caused much loss, but we continued to run oil in to make the losses good day after day, until several hundred thousand barrels had gone in this fashion. Our experience with the farm is worth reciting: its value rose to $5,000,000; that is—the shares of the company sold in the market upon this basis; and one year it paid cash dividends of $1,000,000—upon an investment of $40,000.”