by The Big Rich: The Rise;Fall of the Greatest Texas Oil Fortunes
The new gushers in West Texas roused Murchison from his struggle with alcohol and depression. By chance he already owned several leases in Winkler County. His geologist, Ernest Closuit, was already analyzing data from the new field when Murchison dispatched him west to drill a test. Murchison, meanwhile, hit the phones. Not for him the muddy boots and windblown tents of a remote drill site: Clint Murchison found more oil on the telephone than most of his peers would ever draw from the ground. He first began buying leases. By the end of 1926 he had put together eighty acres on the edges of the Hendricks Field.
One night while he and Closuit were meeting in San Antonio, their test well came in strong. Within weeks they had a dozen more just like it. The problem was, there was no place to put the oil. For the moment, Murchison did what oilmen had always done: he built two giant, five-hundred-thousand-barrel storage tanks. The nearest railhead was at Pyote, south of Wink, but there was no way to get the oil there. Though he knew nothing about pipelines, Murchison decided to try to build one. A lumberyard worker at Pyote said he could locate secondhand pipe and lay the pipeline if Murchison paid. Murchison arranged a line of credit and work got under way, but before the pipe reached Pyote he received crushing news: Humble Oil was building a pipeline of its own. Murchison didn’t have enough production to feed the pipeline himself. If other producers sold to the Humble line—as they would—he would face a massive loss.
Then, walking down Wink’s muddy main thoroughfare one evening, Murchison had a thought: Why not offer gas heating and light to the locals? He already had the pipe; it took a matter of weeks to lay it down one side of the street. Residents were invited to tap into it anywhere they could, five dollars a month for a home, ten dollars for a business. Natural gas had been used to heat homes and factories in England for a century but had never caught on in the United States; most Texas oilmen simply allowed the gas they found to escape into the atmosphere. Murchison was amazed how simple the business was; once a pipeline was built, all he did was sit back and collect monthly checks. When other West Texas towns expressed interest in having gas lines of their own, Murchison incorporated the Wink Gas Company and built lines to Pecos, Barstow, and Pyote. A friend in Oklahoma said his town could use one, too, so Murchison sent work crews north and by mid-1928 had a pipeline furnishing gas to the towns of Kingfisher and Hennessey. He sent salesmen fanning out across South Texas and soon had contracts to supply gas to Navasota, Sealy, Bellville, Eagle Lake, and Columbus.
In late 1928, after taking expansion loans from a pair of Dallas banks, Murchison moved into an apartment in a fashionable Dallas building called Maple Terrace; his roommate, a fastidious, nearsighted boyhood chum named Wofford Cain, ran the Oklahoma side of the pipeline business. The two would remain in business together for decades. In January 1929, in an effort to consolidate the chaotic piles of paperwork in his apartment and San Antonio office, Murchison leased space in the fifteen-floor American Exchange Building in downtown Dallas and, together with his brother Frank and Ernest Closuit, officially merged their far-flung gas operations into a single company they decided to call the Southern Union Gas Company. Murchison had big plans for Southern Union, the kind that occurred to few if any of his peers in Texas Oil. He wanted to make it a national company, with stocks and bonds sold in northern stock markets. Murchison would arrange and build the pipelines, Closuit would drill for the gas, and Frank Murchison was sent to Chicago to begin raising money.
Clint and Closuit easily held up their end. During a New Mexico vacation that spring with Wofford Cain, Murchison found their next customers when he realized neither Albuquerque nor Santa Fe used natural gas. Instead of hunting and fishing, the two pals ended up spending weeks negotiating the acquisition of a small oil company that had found gas in the mountains near Farmington. Once the gas supply was secured, Murchison had little trouble obtaining a franchise to supply Santa Fe. Albuquerque was another story. A half dozen competitors sprang up to bid against him. At a city council meeting the mayor asked whether any bidder could supply a twenty-five-thousand-dollar cash bond to insure its financial viability. Everyone raised their hand. When the mayor asked for fifty thousand, Murchison and another man raised their hands. When the bidding went to one hundred thousand dollars, only Murchison raised his hand. He scribbled out a check and left with the franchise.
As they walked outside, Cain shot him a glance. “We don’t have that kind of money in the bank,” he said.
“We’ll worry about that when we get back,” Murchison said.
Murchison operated this way the rest of his life; as the son of a banker, he knew he could always find a gullible loan officer somewhere. In this case he took a train directly to Dallas and met with one of his father’s oldest friends, Nathan Adams, president of First National of Dallas. Adams was a crucial building block in the budding Murchison empire and would remain so for years. One meeting was all Murchison needed to get the one hundred thousand dollars. “If you are honest and you are trying, your creditors will play ball,” he told Cain afterward.
Once the franchises were secured, the challenge became building a pipeline 150 miles across the Continental Divide to link Santa Fe and Albuquerque to the gas wells in the mountains. It was an engineering effort that would have daunted lesser men. Murchison surveyed the route from an airplane, dropping flag-tipped bags of flour to mark the route he wanted. Roads needed to be laid across canyons and mountainsides, then huge sections of pipe trucked in and buried, often in rain- and snowstorms. The pipe alone cost three million dollars, all of which Murchison got on credit. He had hoped his brother Frank could raise money to repay the loans in Chicago, but their brokerage firm, Peabody & Co., ran into management problems, and Frank was forced to step in and actually run Peabody himself. Still, Murchison was confident that once the pipeline was complete, gas sales would allow him to repay the banks and his main trade creditor, the Oilfield Supply Company.
Construction had just begun in the fall of 1929 when the stock market crashed. In a matter of weeks America sank into a national depression. Murchison watched in dismay as his cash flow sputtered, coughed, then finally stopped altogether. He couldn’t pay his workers, endangering the entire pipeline project. One week he made payroll only by borrowing forty thousand dollars from one of his father’s friends. When the pipeline reached a point seven miles outside Albuquerque, they ran out of money once more. Only when Wofford Cain appealed to the mayor to return a portion of their cash bond was the pipeline finally completed.
All through the worst months of the Depression during 1930 and 1931 Murchison signed up new customers for Southern Union, and barely two years after its founding he could boast service to forty-three towns in six states—this despite the weekly struggle every Friday to meet payroll. What saved him was the fact that he knew more about banking than any other oilman in Texas. He coaxed every last dollar he could out of the Dallas banks, then pushed back repayment, all but daring the bankers to foreclose. By 1932 his debt had grown to more than four million dollars, far more than his net worth. “Aren’t you concerned about owing all this money you can’t pay?” Ernest Closuit asked him.
“No,” Murchison said with a smile. “If you’re gonna owe money, owe more than you can pay, then the people can’t afford to foreclose.”
VI.
The town of Monahans, thirty miles south of the new Hendricks Field in far West Texas, was a cluster of sandblown shanties clinging to the railroad line out to El Paso. Though the seat of Ward County, it had barely two hundred people, many of them trying to eke out a living on the ranches outside town. By 1926 West Texas was in the tenth year of an agonizing drought, and a number of ranchers had given up, leading off their remaining cattle and letting the desert reclaim their land.
One of the most desperate was a man named George Washington O’Brien. In 1928, according to his grandsons, O’Brien was on the verge of bankruptcy. His only hope, one he shared with every rancher west of the Pecos, was oil. He had sold leases to Gulf in the rush o
f the mid-twenties, but Gulf had shown no inclination to drill. O’Brien was certain there was oil under his dirt, a conviction that grew when Ward County’s first well, a small one, came in that November. Unable to mobilize Gulf, O’Brien decided to drill his own well. He gathered his sons, borrowed a derrick from a water-driller, and managed to get down several hundred feet before giving up, the apparent victim of a broken drill bit. Desperate, his bank threatening to foreclose, O’Brien drove into Monahans and found a doughy, down-on-his-luck character who said he was an oilman. He introduced himself as Sid Richardson.
In the fall of 1928 Richardson was thirty-seven years old, flat broke, and deeply in debt. Between the day he drilled a dry hole in Henderson County in 1922 and the day he agreed to drill the well for George O’Brien, Richardson all but vanishes from the pages of history; more is known about sixth-century Byzantine kings than Richardson’s life in the mid-1920s. In all likelihood he had continued working for a time with his brother-in-law, Doc Bass, but at some point he struck out on his own. One account has him trading leases in the Mexia boom. Records at various county courts show he leased land in several spots in West Texas, which took little money. He presumably attempted to drill some of that land, given the astounding two hundred thousand dollars or so he had somehow managed to borrow from the First National Bank of Fort Worth.c
Whatever holes he drilled, however, came up dry. He had no cash flow, and no way to repay the bank. But he still had credit at the equipment-rental compounds in Winkler County, and with a borrowed rig he struck oil on George O’Brien’s ranch in early 1929. It was a small well, but it got his name known around the county, and a number of neighboring ranchers happily signed over leases he promised to drill. Other independents had begun wells on the Estes ranch in northern Ward County, and Richardson,paying his drill hands in groceries and promises, plunged into the play with vigor. In the coming months he struck a half-dozen good wells in what became known as the Estes Field. He began paying off his debt and looking for more land. For the first time in his thirty-seven years he was a successful independent oilman.d
By the end of 1929, sale of oil from Ward County was putting $25,000 a month in Richardson’s pocket. He was wealthy enough to rent one of Fort Worth’s finest hotel suites, the $750-a-month penthouse at the Blackstone Hotel, with a balcony looking south over the city. Most Fridays he drove his maroon Chevrolet in from West Texas, washed the dust from his clothes, then headed to Dallas, where Clint Murchison had purchased an old polo club and was transforming it into a family compound. There Richardson joined a revolving group of young oilmen who drank and cursed and played poker through the long weekends. Monday morning he would head west again. It was a good life, soon to end.
FOUR
The Bigamist and the Boom
You can’t hold it against a man for possessing and being possessed by all the component and conflicting parts of being a genius. It’s just that sometimes it is difficult for mortals to live with.
MARGARET HUNT HILL, H.L. AND LYDA, 1994
I.
In the 1920s the eastern quarter of Texas, a triangle of thick pine forests loosely bounded by Dallas, Houston, and Shreveport, Louisiana, was about as backward a region as America knew. Dotted with tar-paper villages and the odd sawmill, the area had few paved roads and fewer telephones, little indoor plumbing and not many people. The white farmers, many of whom tried to grow cotton, corn, and yams, were suffering through a decadelong drought that had banks knocking on their doors. Teetering on the brink of depression, East Texas, its inhabitants mostly poor, suspicious, Bible-thumping fundamentalists, was Sherwood Forest with a drawl. Its unlikely Robin Hood, the man who promised to find oil beneath the pine needles, arrived in 1926.
His name was Columbus Marion Joiner, and he was sixty-six years old when he drove into East Texas that autumn. A thin, kindly man, bent at the waist, he said he was a famous oilman. He wandered from farm to farm talking about oil prospects, but seemed to spend much of his time tending to several elderly widows in Rusk County, over toward the Louisiana line. The ladies gave him tea and afternoon conversation, and their mineral rights. What the old gent didn’t mention was that he was down to his last forty-five dollars and had found the widows after reading their husbands’ obituaries in the Dallas newspapers.
Depending whom you talked to, C. M. Joiner was either a con man, a down-on-his-luck wildcatter, or some combination of both. Born on the eve of the Civil War in Alabama, he had earned a law degree and served a term in the Tennessee legislature before settling near his sister in Oklahoma Territory; her husband, a Choctaw Indian, introduced him to tribal leaders who, impressed with his legal acumen, hired him to negotiate sales of their mineral rights. Joiner thrived for a time, using his earnings to amass twelve thousand acres of prime farmland. But just as it had Roy Cullen, the Panic of 1907 wiped him out. Penniless, he drifted into the Oklahoma oil fields, where he bought and sold leases on credit, scraping by, living in boarding-houses and begging for food.
It was then he met Doc Lloyd. Lloyd, whose real name was Joseph Idelbert Durham, was an aging, rumpled three-hundred-pounder who had wandered west from Cincinnati, leveraging a modicum of training in pharmacology into a career conducting “Dr. Alonzo Durham’s Great Medicine Show,” in which he hawked worthless medicines. When that venture ended, Lloyd searched for gold in Mexico, Idaho, and the Yukon, eventually reading enough about geology to try his luck in the Oklahoma oil fields. By the time he began teaming with Joiner in the late 1910s, Lloyd was billing himself as a “nationally known geologist,” which of course he wasn’t. Together Joiner and Lloyd raised money for several drilling ventures, much of it from farmers and widows. Both were good with the ladies; Lloyd had six ex-wives himself, thus his penchant for pseudonyms. Joiner was the salesman. Lloyd was his “expert,” the one who compiled data into thick geological reports, much of it nonsense. They never found serious amounts of oil, but—and this was the point—they did manage to raise enough money to make a living. Barely.
In the early 1920s, after a succession of dry holes in Oklahoma, Joiner began venturing into East Texas, picking up his first leases in Rusk County. Oil scouts had been sniffing around the region for twenty years. A well or two had been drilled, but no serious oil had been found. Joiner, though, had a hunch. Hoping to assemble a five-thousand-acre lease, he moved to Dallas in 1925, taking a one-room office in the Praetorian Building and slowly wooing a series of East Texas widows to sign over their mineral rights. By 1927 he had enough land to think about drilling, at which point he brought in Lloyd. The onetime snake-oil salesman cranked out another thick report—“Geological, Topographical and Petroliferous Survey, Portion of Rusk County, Texas”—that portrayed the county’s geology as a maze of anticlines, salt domes, and geological faults harboring the greatest oil field in the world. Not a word of it was true, but in Joiner’s smooth hands it impressed scores of Rusk County widows and a few of their friends. Joiner and Lloyd came away with mineral rights to almost four thousand acres, along with the thousand dollars or so they needed to start a well.
By August 1927 Joiner had his equipment in place, a few sections of rusty pipe, a rickety 112-foot wooden derrick, and two boilers, one for use in cotton gins. He lured a driller down from Dallas, filled out his crew with local farmboys at three dollars a day, and broke ground in a clearing belonging to one of his favorite widows, a cheery fifty-four-year-old named Daisy Bradford, known as Miss Daisy. After six months Joiner’s team had drilled down to 1,098 feet but there the pipe stuck. Joiner used the last of his funds to ignite a dynamite charge in the well, but even that failed to dislodge the pipe. He gave up. It took another six months to raise the money for a second well, which Joiner spudded 100 feet from the first. This one reached 2,500 feet before the pipe broke. Joiner told Miss Daisy not to worry. Doc Lloyd predicted oil at 3,500 feet. The next well, he promised, would be the gusher.
At that point, Joiner got lucky. A Humble Oil team struck oil in a new field barely sixty mi
les southwest. The strike came from a previously unknown stand, the Woodbine. Suddenly all anyone in East Texas wanted to talk about was the Woodbine. Joiner wasted no time capitalizing on the news, selling twenty-five-dollar shares in a third Daisy Bradford well to dozens of local families, raising enough to lure a first-class driller over from Shreveport, a man named Ed Laster. In May 1929, nearly two years into the project, Laster began drilling a new well in Miss Daisy’s clearing. In just two days he reached twelve hundred feet; then the boilers gave out. By the time they were fixed, Joiner had once again run out of money. Laster quit, then returned. Joiner began driving prospective investors down from Dallas to show off the well. Laster did his part, drawing up samples of dirt he swore held signals to oil.
The stock-market crash in October 1929 made it all but impossible for Joiner to raise more money; in the end, it took a solid year to gather enough to resume drilling. But in the summer of 1930 Laster went back at it, eventually, by late July, reaching a depth of 3,456 feet—just 44 feet above the level where Doc Lloyd predicted they would hit oil. At that point Laster retrieved a sample from the bottom of the well—and was stunned to find it saturated with oil. He began to get excited. A week later, Laster drew up a second, larger sample, seven inches thick, and found it, too, slathered with oil. Curious oil scouts had begun appearing at the site that spring, and Laster was terrified one would discover what he had found; if news got out, the majors would snap up every remaining acre in the county. In fact, a Sinclair Oil scout found Laster’s sample in a barrel that same night, but dismissed it as a common wildcatter’s ruse called “salting the well,” aimed at enticing a larger oil company to buy the well.