Pan American profited from fuel demand during World War I, and from the subsequent growth in use of automobiles.
In 1924 Pan American was involved in the Teapot Dome scandal over irregularities in the award of a U.S. government oil concession.
[4] The setback was temporary, and a long-term contract with the Atchison, Topeka and Santa Fe Railway gave him the opportunity to develop and expand a growing number of oil properties.
[5] In 1900 he visited Mexico with his associate Charles A. Canfield and Almon Porter Maginnis of the Santa Fe railroad, saw the oil potential of the country near Tampico and began acquiring property.
[7] In 1910, his wells in the Juan Casiano Basin in the Faja de Oro field started to produce good quality oil.
[9] The Mexican Petroleum Company eventually acquired ownership or leasehold rights to 1,500,000 acres (610,000 ha) of land.
[11][12] World War I drove up demand for oil-fueled transport, and Doheny responded by expanding pumps, tanks and loading sites in Tampico.
Fall, U.S. Secretary of the Interior, leased the oil field at Elk Hills, California, to the Pan American Petroleum & Transport Company.
[18] On 24 January 1924 Doheny testified before the U.S. Senate Committee on Public Lands and Surveys, and admitted that he had loaned Fall $100,000 in cash with no security some months before the oilfield leasing arrangement was made.
[26] Standard of Indiana increased its stake over time and by 1931 owned 95% of both classes (voting and non-voting) of common stock of PAT.
[27] At the end of 1925 Pan American Western gained control of Lago Petroleum Corporation from C. Ledyard Blair's Blair & Co..[28] The transaction was to be the subject of a stockholder action in 1933, alleging that there had been a conspiracy by the bankers, who were represented on the Pan American board, to make excessive profits.
In 1932 Standard Oil of New Jersey offered $50 million in cash and $98 million in Jersey shares for all foreign assets of Pan American Petroleum as part of a deal arranged with Standard of Indiana which then sold its entire stake of 96% in these subsidiary assets.
[33] The deal also included large oil concessions in Venezuela and Pan-American's UK subsidiary Cleveland Petroleum Products.
[35] President Lázaro Cárdenas expropriated all foreign oil concessions on 18 March 1938 and placed them under the government-controlled Pemex, paying compensation to the former owners.
[37] The majority finding, setting an important precedent, was that it should be assumed that they had acted in good faith and without personal gains to themselves.
[40] In August 1925, shortly after the Indiana takeover, PAT was working under a policy of conservation of Mexican resources, concentrating more on production inside the United States.
[64] Up until 1924, Pan-American only sold crude naphta and gasoline wholesale to Standard Oil companies (200 million gallons in 1923) but then in 1924 began operating its own filling stations.
At the time of the Indiana merger in April 1925 there were 68 stations in Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Delaware, Maryland, Washington D.C., Virginia, West Virginia, North Carolina, South Carolina, Mississippi, Georgia, Florida, Louisiana, Alabama and Tennessee.
[74] The Pan American Foreign Corp. was dissolved at the end of 1936 to avoid double taxation under the Revenue Act of 1936.
A photo by Walker Evans in Let Us Now Praise Famous Men of a post office in Sprott, AL shows a Pan-Am pump.