A Magic Carpet Ride : THE GREAT LOS ANGELES SWINDLE: Oil, Stocks and Scandal During the Roaring Twenties, <i> By Jules Tygiel (Oxford University Press: $25, 398 pp.; illustrated)</i>

Los Angeles worshiped citrus and bowed down to the automobile but in the 1920s it was “oil, oil, oil” that made “L.A. boil,” as the official drinking song of a prominent booster club put it. Oil started gushing at Huntington Beach in 1920, and at Signal Hill and Santa Fe Springs a year later, enriching tycoon and tiny property owner alike. No wonder the population of Los Angeles would more than double in a decade.

Some have pictured the Los Angeles of this period as a kind of Oildorado. Others, such as Kevin Starr, call it Oz, an ordinary place “touched by magic” for those wearing emerald-tinted glasses. Carey McWilliams took a darker view, choosing as his L.A. metaphor the “mushroom”: bright and attractive on the surface, but with a dark and ugly nether side.

Jules Tygiel’s “The Great Los Angeles Swindle” somehow validates all three of these visions. It’s a cautionary tale of oil promoters, dream weavers and bunco artists breeding civic and corporate corruption. But mainly it’s the story of C. C. Julian, a flamboyant oil huckster who was part dreamer, part dream merchant. What has become known as the Julian Petroleum Scandal has never received a full-length study until now, and Tygiel, author of “Baseball’s Great Experiment,” an excellent biography of Jackie Robinson, gets it right (despite some serious flaws).

Courtenay Chauncey Julian, a Canadian who had worked in Texas as a rigger, arrived in Los Angeles around 1920 at the height of boosterism. Los Angeles was being sold as a commodity, and hundreds of thousands from out of state were buying it. Florida had its land boom, Oklahoma and Texas their oil booms, but in California everything seemed to explode at once, feeding the ballyhoo spirit. Many of the new arrivals--Midwestern farmers, retired businessmen, get-rich quick adventurers--were eager to invest in almost anything. This made L.A. ripe for what journalist Guy Finney called “heedless financial adventure.”

When George Getty struck it rich at Santa Fe Springs in early 1922, C. C. Julian decided to become an oil magnate himself. There was only one hang-up: He didn’t have any money. In Los Angeles in the 1920s this wasn’t necessarily a problem. It could even be a solution! Julian borrowed from friends to buy some land and then went to “the folks” (as American historian Louis Adamic called them) to raise the rest.

Other promoters lured investors through the mail, or by passing out circulars, or chartering busses that took sightseers from Pershing Square right out to the oil fields for a look around. Borrowing a page from evangelists, they set up circus tents and welcomed the suckers inside.

But C. C. Julian did things differently. Advertising was just coming into vogue, and Julian recognized that he could reach more investors that way--in his own voice. And what a voice! In his daily ads in the Los Angeles Times (and later, on radio) the nattily dressed gentleman who drove a Pierce-Arrow addressed “the folks” on their own level, “just as if I was talking to them,” he later explained. His most successful ad declared: “Widows and Orphans, This Is No Investment for You! . . . My appeal is addressed to people who can legitimately afford to take a chance. . . .” In a matter of days over 175,000 arrived at his door.

But he was only beginning. “You’ll never make a thin dime just lookin’ on,” he preached. Julian appealed to his investors’ gambling instincts, picturing himself as a race horse they should bet on. He begged them to “walk in and shoot me” if he ever betrayed their confidence--and may “buzzards pick my bones and the wind whistle ‘Star-Spangled Banner’ through my ribs.”

Within five months, Julian had raked in close to a million dollars, and his two wells were pumping 3,500 barrels of oil a day. By the spring of 1923 many of his 40,000 backers were earning dividends and he had solicited another cool million. He incorporated Julian Petroleum and opened a chain of gas stations. This made him “the prince of oil promoters,” Tygiel observes, and his newspaper ads “had become a Southern California institution.”

By this point, however, Julian was spending most of his time trying to keep one step ahead of prosecutors, who suspected that he was cooking his books and watering his stocks. Withing a few weeks in early 1924 the L.A. Times stopped accepting his ads; Charlie Chaplin decked him with a punch at Cafe Petroushka; and he had to dodge three bullets fired at his Los Feliz mansion.

As one critic put it, Julian had done “all the extracting, but never put in the promised gold bridgework.” With his oil operations a shambles and a federal indictment pending, Julian got out while the getting was good, selling his interests to a man named Sheridan C. Lewis for half a million dollars.

While Julian had been a lone wolf, Lewis invited the rich and powerful to join him in a swindle of outrageous proportions. Such luminaries as film magnate Louis B. Mayer, banker Henry Robinson and industrialist Harry Haldeman played small roles in the conspiracy. Over-is sued stock poured out “like sausage coming out of the mill,” as one observer put it. The fraud would exceed $150 million.

Lewis and his associates were finally indicted and brought to trial but declared innocent. Soon it was learned that three jurors had taken bribes and that Dist. Atty. Asa Keyes had been paid tens of thousands of dollars to throw the case. (Lewis, Keyes and half a dozen others eventually went to prison for various crimes, but no one was ever punished for the Julian swindle itself.)

The stock market crash in October, 1929, “would douse the speculative fires that had raged throughout the 1920s,” Tygiel observes, but the Julian case continued to reverberate. Henry Robinson’s bank was forced to merge with a rival; an assassin, angry about losing his life savings, shot and killed millionaire Motley Flint; and the Julian fiasco became an issue in the 1930 California governor’s race.

The man who started it all, C. C. Julian, went bankrupt and, after being indicted for mail fraud, fled to Shanghai. One evening in 1934 he treated himself and a woman guest to a lavish champagne supper, returned to his hotel room, took poison and died. All he left was an autobiographical manuscript entitled “What Price Fugitive?” which actor George Hamilton later purchased and (according to Tygiel) is still trying to turn into a movie.

All of the delicious dirt and sleaze--what Tygiel calls “the speculative debauch”--associated with the Julian scandal can be found in “The Great Los Angeles Swindle.” Unfortunately, there’s a whole lot more. To get from one shocking revelation to another you have to wade through many pages of deals made and unmade, stock prices rising and falling and rising again; there are even a few charts to contend with. (In fairness, readers fascinated with high finance may appreciate the details more than I did.) Regulators repeatedly close in on C. C. Julian, then retreat, and the narrative is nearly back where it started. And when Julian exits center stage halfway through the story, his sense of humor is badly missed.

Early on, Tygiel cities Carey McWilliams as his inspiration, but at the end of the book, in a very brief analysis section, he takes issue with the great California journalist on a central point. Tygiel views the Julian scandal as “not so much the story of a city or a region as it is the saga of an era.” McWilliams, on the other hand, felt that the Julian scandal could have happened only in Los Angeles, where the unique combination of mass migration, easy money and a gambling spirit “bred a reckless social irresponsibility.” Tygiel doesn’t care to argue the point, so neither will I, except to say that in this book the author himself provides much evidence that supports McWilliams.

Still, “The Great Los Angeles Swindle” fills an important gap in California history. More than 60 years ago a Los Angeles journal declared: “Brave is he who would attempt to write the true story of the notorious Julian Petroleum overissue fiasco.” Jules Tygiel, who writes with unusual clarity, deserves credit for finally putting all the pieces together, while relating a tale that is, to borrow a phrase from C. C. Julian, “finer than the fuzz on a frog’s face.”