The Industry, 1920-1929
The oil industry during the 1920s has been characterized as “out of control,” with over expansion at all levels. Wide margins between the tankwagon price and tank-car price boosted the number of jobbers and strengthened those already established. Station counts soared at a rate of about 12,000 new stations per year between 1920 and 1930. These were often “cracker box” style units developed by Mobil that featured a canopy located on a large landscaped lot and connected to the street by concrete driveways. The birth of today’s “independent” marketers also appeared (the term no longer really applied to the independent companies of 1909), with some selling gasoline directly to the customer from a railroad tank car on a siding.
Initially, most of the station growth was in company-operated locations. However, fierce price wars of the period encouraged a shift to lessee dealers (often the company store manager), with the hope that the dealers would absorb some of the price cuts, as necessary, to meet competition.
The 1920s is marked by a booming economic climate as suggested by its name the “Roaring Twenties.” As it is well known, the decade sharply ends with the Wall Street Crash of 1929, but the years leading up to that point brought several important advances in the petroleum industry.
The petroleum industry kicked off the decade with a new invention in 1921 by Thomas Midgley, who worked in the lab of Charles Kettering at General Motors Research. The breakthrough discovery was the usage of tetraethyl lead (or TEL) as an additive in gasoline. It was also called an “anti-knocking” agent, which means it can withstand high compression without detonating or knocking. The agent allows the use of higher compression ratios for more efficiency and engine power.
In 1924, TEL was produced and marketed by Ethyl Gasoline Corporation, which was created by Standard Oil of New Jersey and General Motors. Advertisements for Ethyl can be seen in the pages of NPN throughout the later ‘20s. It was in this year that NPN began to cover the issue, including the long feature, “Oil Industry Likely To Take Lead On Anti-Knock Fuel,” in the May 7, 1924 edition.
However, there were serious concerns about the agent and its health effects, which was reported on in an NPN article dated from May 6, 1925 entitled “Stop Tetra-Ethyl Lead Distribution Pending Conference on Hazard.” The piece noted that a Yale professor called TEL a poison and said motor gasoline treated with it was a “menace to the public health.” TEL is, in fact, toxic, and many of the researchers working with it, including Midgley, were lead poisoned. In 1972, the Environmental Protection Agency won its campaign to rid the petroleum industry of leaded gasoline, and by 1986, the additive was phased out.
Banning the Curb Pump
Although the petroleum industry began to grow by leaps and bounds throughout the 1920s, there was also some push back from the public and the government. A popular method of retailing gasoline, the curb pump, began to fall out of favor. The curb pump had a gasoline pump, dispensing hose and underground storage tank. Its name refers to where these devices were placed—near the curb of a road, similar to where a post office box might be located today.
These pumps were popular in the teens and early ‘20s, but started to face criticism for the traffic congestions they caused and questions surrounding their safety, especially as the number of car accidents increased. A growing opposition had formed, and by 1923, 14 American cities had banned them; eventually all cities would follow.
However, some oil companies in the curb pump business would not go down so gently, as noted in an article in the Sept. 19, 1923 NPN, entitled “Runs Series Of Ads To Sell Public On Curb Pump.” The piece reports on the Atlantic Refining Co.’s advertisement campaign to “sell the public…on the wisdom of retaining the curb pump.”
The Automobile Industry
Mass production took off in the 1920s, making more products available and affordable by more people. The automobile was one such product that became more readily available. By 1927, Henry Ford had sold 15 million Model Ts. This boom had a rippling effect on the proliferation of gas stations. Coverage on the new stations being built was sprinkled throughout the pages of NPN in the ‘20s. In the May 13, 1925 issue, a special “Service Station” section ran. In it were articles published with titles such as “Service Station Field is Playground For Architectural Design” and “Fresh Paint and Posies Lift Jinx From Unprofitable Station.”
The increase in gasoline usage and automobile ownership is reported on in NPN numerous times throughout the decade. One such article appeared in the Aug. 25, 1926 issue, entitled “Gasoline Consumption Gains 16 Per Cent; Cars Registered 11.3 Per Cent.” The feature notes the growth from July 1925 to July 1926 and cites that one reasons for this increase was “the rapid expansion of the good roads systems of the various states.” Funding to build the new infrastructure in the ‘20s largely came from the government. Throughout the decade, many roads became highways and expressways began to be constructed from coast to coast.
Because the 1920s were a time of economic boom, many people had a little extra cash. Not only were they spending the surplus of money on goods, but also with this newly founded mobility, lots of people were heading out to tourist camps. This was noted in an NPN article from Aug. 10, 1927, entitled “Fine Touring Season is Carrying Gasoline Consumption to New Records.”
As the number of gasoline stations grew, many new sites were becoming larger in size. The term “super stations” became common in NPN’s pages in the latter half of the decade. These bigger stations offered more services than just dispensing gas, as discussed in an article appearing in the Oct. 3, 1928 issue, entitled “Department Stores for Auto Servicing Planned for 200 Cities.” These sites concentrated different facilities as a convenience for customers, which, of course, was to become a trend in the retail petroleum industry. The article references an “auto laundry,” or more commonly known today as a car wash, at one site, which “turns out a car washing job in 15 minutes.”
The Wall Street Crash of 1929
The Roaring Twenties came to a screeching halt at the end of the decade with the infamous Wall Street Crash of 1929, the most devastating stock market crash in the history of the United States. The event took place in three phases—Black Thursday (October 24, 1929), Black Monday and Black Tuesday (October 28 and October 29, 1929). The market was extremely volatile and unstable in the days leading up to the crash. Millions of shares were traded on Black Thursday and millions more were to be traded in the following week.
The crash, of course, did not go unnoticed among the pages of NPN. However, the sentiment is more optimistic than one would think in the article entitled “Oil Stocks in Wall Street Crash Fare Better Than Most,” which appeared in the NPN issue of Oct. 30, 1929. However, in the Nov. 20, 1929 NPN, the mood is a little gloomier, with the publication of the article, “Refinery Operations Must be Reduced To 1930 Needs, Says Economist.”
NPN published a variety of opinions on the fallout of the crash, as evidenced by the more optimistic article in the Nov. 27, 1929 issue, entitled “Curtailed Buying After Stock Collapse Is Mostly State of Mind.” The magazine also covered the oil industry’s response to the financial doom, as in the Dec. 11, 1929 article, “Our Industry to Work Consistently To Stimulate Employment.” However, the gravitas of the economic situation was surely to hit more profoundly in the next decade.