Product Details

Historical Context

By 1919, when one of hundreds of newly formed companies sought investors, Capitol Petroleum Company made its brief appearance. Similar to promotions the company inserted in Denver newspapers and elsewhere, a 1919 half-page advertisement in the New York Herald solicited with the admonition, “We Advise You To Buy Now At $1.00 Per Share – All Cash or Four Equal Payments.”

Advertisements included grainy black and white images of a gusher from a petroleum well.

Seeking additional funds for drilling (supposedly to follow-up on previous successes at questionable sites), Capitol Petroleum Company used newspaper advertisements to lure unwary investors.

Chairman George Fruth even noted the company’s successes in Texas, as well as a “luxurious flow of oil…from our Mexican Well” near Tampico, Mexico – the “World’s Richest Oil Field.”

However, when queried about the wisdom of buying Capitol Petroleum Company stock, United States Investor challenged the credibility of the company’s changing par value, initially set at one cent, but subsequently increased to 10 cents, then changed again to $1. This artificially raised capitalization to $10 million – a move United States Investor adjudged to be “absolutely unjustified,” surmising “some promoters of the stock expect to pocket a lot of money for themselves.”

With little more information to be found in financial records, Fruth’s company no doubt was among those who failed during one of the petroleum industry’s boom-and-bust cycles. Surges in oil production often brought a collapse in prices at a time when lease and equipment costs soared.

Related Collections