Monday, March 19, 2018

Glenn Alvin Smith, Standard Oil, and "Dirty Tricks"

Glenn Alvin Smith, my great-grandfather

In my last post, I quoted from my great-uncle William B. Ross' recollections of Glenn Alvin Smith. Bill recounted the relationship between Glenn and his wife Genevieve, and Glenn's early career in wholesale jewelry. However, the business venture Glenn is best known for is his oil exporting company. Here, I will continue to quote Bill Ross as he describes Glenn's adventures in oil.

Glenn Smith made his first big money as a petroleum exporter. And he made it as he always did, as an independent, almost one-man operation who could find a marketing niche ignored by the big companies and make big money. In this case it was discovering the "oil for the lamps of China" trade, which incidentally, inspired a great novel of the same name. In the 1920s and '30s, California was awash with oil. Signal Hill north of Long Beach was a forest of oil derricks. Huntington Beach and Venice reeked of the smell of oil and at night acres of rigs were silhouetted by flaming jets of surplus gas for which there was no market. The big oil companies were here, but so were the scores of independents, and these successful wildcatters were Glenn Smith's suppliers.

Oil for the Lamps of China by Alice Tisdale Hobart. From "Oil for the Lamps of China (1934) was a best-selling novel when it was first published... The hero of the story is a keen, young American businessman who wants to bring "light" and progress to China in the form of oil and oil lamps, but who is caught between Chinese revolutionary nationalism in the 1920s and the heartless American corporation which has built his career."

The major oil companies were shipping tankers of a kerosene type oil to the Orient to big merchant companies who in turn sold to big distributors who sold to smaller distributors who sold to retailers who finally dribbled it out in small measures to the wretchedly poor consumer. Glenn Smith, operating as the American Petroleum Exporting Company (APEX) out of a two-man, two-secretary office, had a radically new idea. He put the oil distillate into five gallon tins, slapped a big red ball on the container sides, and sold "Red Ball" to Chinese distributors who could finance big quantities of packaged oil but could not buy in tanker-loads. Several layers of profit-takers were removed and lamp oil from Red Ball tins burned brightly at less cost in Chinese hovels.

 The vintage oil can on the left shows the kind of red ball packaging that APEX used to distinguish their product. (Here, the oil is from Imperial and is in a 4 oz. container). In the center is a 5-gallon Standard Oil container from the 1930s, around the time that Standard Oil started to edge APEX out of the market. On the right is a 5-gallon Amoco container from the 1960s, demonstrating that this size container continued to be popular decades after Glenn Smith made his name pioneering the export of the 5-gallon drum.

The success of Red Ball lamp oil was eventually noted by Standard Oil which responded by smart marketing coupled with what in our era are identified as "dirty tricks." They put their lamp oil into five gallon tins, slapped identical Red Balls on the sides and cut prices. There were no trademark protections in China in those days and Red Ball became generic for lamp oil... and Smith sales slumped.
Much of this information came from Mother Smith and Virginia, for Glenn Smith was not one for recounting past troubles and triumphs-- he was always looking for today's buck and future possibilities. One of Genevieve's story about dirty tricks she attributed to Standard Oil concerned the arrest and overnight jailing of her husband. Someone with political clout said that APEX had falsified documents, cheated on L.A. Harbor or some other fees and Glenn Smith was responsible. He was removed one day from the office, put into a jail uniform, mugged and otherwise given the common-criminal treatment. Prominent corporate attorney Byron Hanna1, partner in the prestigious firm of Hanna and Morton, was the hero of her tale. He got Dad Smith out on bail the next morning, presented the documentation to then district attorney Buron Fitts2 and charges were dropped with a "sorry about that" explanation.
Speaking of the harbor brings back another remembered tale. APEX was storing Red Ball-filled containers in a harbor site leased from the Harbor Department. At some "dirty-tricker's" instigation, an inspector ruled that this was a fire hazard and ordered Glenn to vacate. Always a quick and innovative thinker, Dad Smith bought an old sailing vessel in San Francisco, had it towed down to Los Angeles harbor and anchored it at a very low fee in the outer harbor. The warehouse was emptied, the old sailing vessel became a storage ship, and the fire hazard charge was destroyed. Glenn named the ship the S.S. Mesa and when he ultimately scrapped it, he made the helmsman's wheel and a capstan into what he called "the ship's table." For years it was the centerpiece of the "Shiproom" playroom at 1744 Buckingham Road, and now it is on the Ross patio at 532 S. Lucerne.
When I met Dad Smith in 1933, it appeared to me that his biggest moneymaker was in exporting tanker loads of oil and oil products to the Orient from Los Angeles and Texas ports. Gradually, this Orient business decreased for reasons I do not know for sure (drying up of supplies in California? Oil exploration in Arab countries and the Far East?). Glenn went to Texas to "wildcat" new fields. Sadly, he found nothing but sand and water and a lot of money was spent with no return.
There has been much speculation in our family as to why APEX eventually fizzled out after so much success. I have heard a number of theories, but it's likely a combination of increased competition and the onset of World War II, which limited shipping. This period was a challenging one for the Smith family. My grandfather, Glenn Murray Smith, wrote in his memoirs about suddenly losing the funds to continue his education at Stanford University. He also accompanied his father to Texas in 1935 to wildcat for oil, which proved to be a difficult and unsuccessful venture. However, Glenn Alvin Smith was a man who knew when it was time to find a better idea, and a new one was just on the horizon. In my next post, I'll share Bill Ross' memories of Glenn's years in the wine and liquor business.

1 Byron Hanna was a very well known defense attorney in Los Angeles in the mid-twentieth century. In 1940, he served as mobster Bugsy Siegel's defense attorney when he stood trial for the murder of Whitey Krakower. The firm which bears his name still exists.
2 Buron Fitts was one of only a handful of individuals to serve three terms as Los Angeles District Attorney. During his term, he worked on a number of infamous cases, including the suspicious death of Hollywood producer/director Paul Bern, the husband of actress Jean Harlow. He was indicted for bribery and perjury, and in 1937 survived being shot multiple times in an assassination attempt. The Los Angeles Times wrote a wonderful article about his accomplishments and scandals that is worth reading.

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