The Path to Power

by Robert A. Caro

  Little awareness of this development existed among even the shrewdest of politicians in Washington. The names of many of the new rich were not even known, and the wealth of others was drastically underestimated. In August, 1935, Harold Ickes forwarded to President Roosevelt an “interesting document” which Ickes said had been “handed to me by a man in the oil game who thought it ought to reach you.” It was a list of oilmen who had contributed that year to the Democratic National Committee—most of the contributions were for $1,000 or less—together with a brief description of the contributors. Of one of them, Herman Brown (Brown had begun buying oil leases), the writer says only: “Do not know of him.” One “S. W. Richardson” is described as “in debt and borrows money to develop leases from Charles Marsh. …” Of only two names on the list—Clint Murchison and his partner, Dudley Golding—is there an awareness of the size of their fortune (“Golding & Murchison came into the East Texas Field several months after it started with no money and [after] a little over three years … sold out … for about five million dollars”). Neither the author of the document—nor, apparently, Ickes—had any idea of the true financial circumstances of the men on the list. And this was still the situation in 1940. In part this was due to the rapidity with which their circumstances had changed: Sid Richardson had indeed long been in debt, but at the time the memo was sent, that description of him was out of date by several years—and several millions of dollars. And in 1937, he hit the Keystone Sands in West Texas. By 1940, his income was close to $2 million a year.

  But while the politicians had no knowledge of these oilmen, the oilmen had a deep interest in national politics. They enjoyed many federal favors. The most widely known, of course, was the 27.5 percent oil-depletion allowance, the loophole that, as Theodore H. White was to put it, “gives oil millionaires magic exemption from tax burdens that all other citizens must bear” by making 27.5 percent of their income free from tax. But there were many others, also important in oilmen’s bookkeeping, if less known—for example, the law that allowed the immediate writing-off of intangible drilling and development costs on successful wells. And the owners were vitally interested in keeping those favors, which were under almost constant attack. Hardly had the Roosevelt administration entered office when Secretary of the Treasury Henry Morgenthau, Jr., called the depletion allowance “a pure subsidy to a special class of taxpayers” that should be eliminated. In 1937, Morgenthau renewed his plea, calling the allowance “perhaps the most glaring loophole,” and Morgenthau’s boss joined in, calling depletion and other loopholes attempts “to dodge the payment of taxes.”

  And the wildcatters were concerned with national policy not only because of favor but because of fear. As oil from the East Texas pool glutted the market and the price of oil plummeted, the industry was in turmoil and the positions of majors and independents swirled back and forth in confusion, but in general the wildcatters feared federal regulation. The occasion of the memo to Roosevelt—and of the donations which it reported—was a bill, introduced by the Oklahoma Populist, Senator Elmer Thomas, in 1935, that would have directly regulated the industry. That bill was blocked (in favor of Texas Senator Tom Connally’s “Hot Oil Act,” which left the setting of production quotas with the Texas Railroad Commission, a body which would be controlled by the wildcatters). Protected by the Railroad Commission from the price-cutting practices of the “majors,” the “independents” were soon flourishing, but the threat of federal regulation was a constant cloud on an otherwise limitless horizon. They had plenty of money; they needed a way to make it felt in Washington—they needed a path through which the power of their collective purse could be brought to bear on the federal government.

  Of the members of the federal government, the only one they knew well enough to be comfortable with was Sam Rayburn. Richardson was from Fort Worth, and many other wildcatters lived in nearby Dallas. Rayburn’s district adjoined Dallas, of course, and he had many close friends among the politicians there. On his frequent visits to the city, he had come to know Richardson and some of the other wildcatters while they were still poor-boying wells, searching for wealth on a shoestring. Becoming rich, other wildcatters moved to Dallas—the nearest large city and also the city whose banks first revealed a willingness to finance the wildcatters’ new ventures—and made their headquarters there. Rayburn met these men, too, usually through a pair of old friends who were intimately connected with the wildcatters, former State Attorney General William McCraw and William Kittrell, the veteran Texas lobbyist. Rayburn actively disliked the “old” oilmen, the wealthy shareholders in major companies like the Magnolia, whose 6,000-pound flying red horse atop the Magnolia Building dominated downtown Dallas and, at night, when it was outlined in 1,162 feet of ruby neon tubing, the plains for thirty miles around; and he disliked the oil-company corporate executives and lawyers, the lobbyists. And the feeling was mutual; traditional oil interests disliked Sam Rayburn as much as the utilities; attempting to remove him from Congress, they would fruitlessly pour money into his district year after year. But Rayburn liked Sid Richardson, whom he had known for years as a broke young man, and he liked many of Richardson’s friends. And when they had asked him for help, he had helped them. They had told him that the Thomas bill was a device of the big companies to kill off the little fellows—little fellows like themselves. If they had very recently—thanks to the East Texas pool—graduated out of the “little fellow” class forever, he did not grasp that fact. (He was never to grasp it fully—a fact that was to have grave consequences for the United States in decades to come.) The bill was, they said, a device of Wall Street to keep Texans—them—from ever getting a share of their own state’s wealth. They should be allowed to handle their own problems until it was proved they couldn’t, and since all this oil was in Texas, this seemed like one problem that Texas should definitely be allowed to handle. Roosevelt at the time was working closely with Rayburn on the SEC Bill; the President told Ickes (who would, under the proposed legislation, be given the federal regulatory power), “I do not want to cross wires with Sam Rayburn about this matter.” And the Thomas bill was tabled.

  Rayburn was no stranger to the use of money in politics. As Garner’s campaign manager not only in 1940 but in 1932, he had asked for contributions to his friend’s campaign, and had gotten them. But, perhaps because he was uninterested in money himself, when he thought about campaign contributions, he had a tendency to think small. When he thought large, he thought in terms of Texas, and of the kind of Texans who gave large contributions to politicians, and this old money—cotton money and cattle money—was, almost entirely, Garner money. He knew how much Garner’s backers hated Roosevelt, and he knew that in 1940 they were contributing to Wendell Willkie, and that their money would not be available to him.

  If there was new money in Texas on the same scale as the old—oil money, the wildcatters’ money—he had not yet come to understand that fact. Not having even the vaguest notion in 1940 of the extent of the wildcatters’ recently acquired wealth, he could not see its potential for politics. The scale of contributions they had made in 1935—a scale calculated largely in the hundreds; a thousand dollars was a generous contribution—was the scale on which he still thought. And as for using their money on a national scale—the obtaining and distribution of funds to scores of Congressmen across the country—what relationship did a task of such a magnitude have with, say, squat, silent, unassuming Sid Richardson, still wandering around Fort Worth in a rumpled suit and living in the same small, shabby bachelor quarters at the Fort Worth Club where he had always lived? Says Richard Boiling: “He thought that his people were little people. He missed the fact that the independents had become giants. … He knew they had money, but he had no idea of the extent of the money.”

  Rayburn did not, moreover, understand—perhaps because he was a man who could not be bought, and this reputation, and the fear in which he was held, kept anyone from explaining his position to him—how important he was to the wi
ldcatters, how the protection he had extended to them in the past, and the protection they were hoping he would continue to extend to them in the future, was one of the most significant factors in the accumulation of their wealth. The Speaker, according to the unanimous opinion not only of his allies of this period, but of his opponents, had not the slightest idea of the potential of his position for political fund-raising for Congressmen on a national level.

  But Lyndon Johnson saw the potential.* Henry Morgenthau and the demands of justice had persuaded Franklin Roosevelt that the oil-depletion allowance should be reduced or eliminated; it was only Congress which had kept it intact. The administration had wanted federal control of Texas oil; it was Congress which had kept that control in the hands of Texas. The wildcatters’ strength in Washington was in Congress, yet these men were not acquainted with many Congressmen. The one they did know well enough to talk to frankly, to explain their problems to, was Sam Rayburn; their strength in Washington was, in the final analysis, that one man. Now, as Speaker, Rayburn was the single most powerful Congressman. It was in their interest to keep him in power, to keep him Speaker. And that meant keeping the Congress Democratic. Johnson realized that money could be raised in Texas to keep Congress Democratic. And because Johnson realized the stakes involved, he realized that the money available was big money.

  BUT CAMPAIGN CONTRIBUTIONS from contractors (from, that is, all contractors but one) and from the wildcatters would have to be obtained through others. Since they had not previously contributed to the Democratic Congressional Campaign Committee, an element of uncertainty existed as to whether they could be persuaded to give now. More important, there was an element of uncertainty as to whether they could be persuaded quickly; with the November election day approaching, it would be difficult to get their money in time. Because of Herman Brown, however, Johnson possessed a source of funds—substantial funds—about which there existed neither uncertainty nor delay. He knew that if he could obtain the position he wanted, he would have—instantly; at his command—substantial sums of money to use in it. If he were put in charge of the Congressional Campaign Committee, he could guarantee that it would have funds. He asked Sam Rayburn to put him in charge.*

  Rayburn did not do so.

  The relationship between him and Lyndon Johnson during the year and a half following the July, 1939, confrontation over the Texas delegation’s resolution on the Garner-John L. Lewis explosion will probably never be charted definitively. Around the Speaker’s personal feelings had been erected a wall as impenetrable as the wall with which Lyndon Johnson surrounded himself. But there were hints as to its course.

  The confrontation itself had not angered him; if anything, he seemed rather proud of the way Lyndon had stood up to him. “Lyndon is a damned independent boy, independent as a hog on ice,” he said when someone asked him about the incident. But despite Lyndon’s attempts to conceal the fact that it was really he who was turning Roosevelt and the New Dealers against Rayburn, the Majority Leader may have realized at the last moment the role being played by this young man of whom he was so fond. On the very day on which his secret campaign to undermine Rayburn in Roosevelt’s eyes had triumphed—on April 29, 1940, the day the President had forced the Majority Leader to accept as co-signer on the “harmony” telegram “kid Congressman” Lyndon Johnson—Johnson attempted to act as if no reason for a break between them existed. A Washington Post article stated that Johnson “praised the work done by Rayburn in achieving the compromise” and “predicted he would lead the Garner-pledged Texas delegation ‘with other men of liberal makeup.’” A week later, he made a private overture. Rayburn’s roommate during his first year in the Texas Legislature, R. Bouna Ridgway, wrote Johnson a note advocating Rayburn’s nomination as Vice President at the upcoming Democratic National Convention (and recalling his roommate’s character: “He was so quiet and reserved. Honorable, honest and 100% true to a friend”). Johnson had not written to Rayburn for a year—since the time, in fact, that he had begun his career as the New Deal spy in Rayburn’s meetings. Now, perhaps using the Ridgway note as an excuse to resume communications, he sent it to Rayburn with a covering note of his own (“Here is a letter from one of the rank and file boys who I am happy to know is a great admirer of yours …”) signed, “Your friend, Lyndon.” Previously, when Johnson had written Rayburn, the Majority Leader’s replies had been warm; the three lines of his reply to Johnson this time spoke volumes:

  Thank you for sending me the letter from my old-time, dear friend, Bouna Ridgway.

  With every good wish, I am, sincerely yours,

  Sam Rayburn

  As part of the compromise that had ended the Roosevelt-Garner fight in Texas, the White House had insisted that Johnson be made vice chairman of the state’s delegation to the Democratic National Convention in Chicago. Rayburn was chairman, so at the convention the two men were frequently thrown together, and often heard together of candidates’ financial problems. But when Johnson (who of course was himself unopposed for reelection) raised the possibility that the solution to the problems was his appointment as head of the Congressional Campaign Committee, Rayburn gave him no encouragement.

  Then Johnson attempted to gain a role in the financing of Congressmen’s campaigns by another method. He tried to become the liaison between the Congressional Committee and the Democratic National Committee which furnished much of its funds. Rayburn was not amenable to this suggestion, either. On August 20, Rayburn told a Flynn aide that there would indeed be a congressional liaison man, but neither of the names he mentioned was that of Lyndon Johnson. “I think it will be John McCormack and probably Charlie West,” he said.

  Johnson continued maneuvering. The young New Dealers who were his friends received from him continuing stories of the desperate straits of Democratic Congressmen, of the likelihood that the Democrats would lose the House, of Drewry’s inefficiency, of Drewry’s lack of enthusiasm for the candidacies of New Deal Congressmen. These stories were reported at the White House—along with Johnson’s interest in being of help in an overall effort to elect Democratic Congressmen—and the suggestion was made, according to some sources, by the President himself, that Johnson should in some vague way be attached to the Congressional Campaign Committee, or to the Democratic National Committee itself, to assist them.

  Johnson, however, appears to have had in mind not an assistantship but independent, formal, authority of his own. His next attempt to get it may have been an attempt to circumvent Rayburn: an approach directly to the President, through the malleable Agriculture Committee chairman, Marvin Jones. On September 14, Jones went to see Roosevelt and then sent a letter, drafted by Johnson, suggesting that “If we are to get the results that we desire, Lyndon’s work should be supplementary to the regular work done by both the Democratic Congressional Committee and the National Committee rather than an assignment to aid them with their regular functions.” A letter drafted by Johnson for Flynn’s signature—to be sent out by Flynn to all Democratic members of the House of Representatives—further spelled out the authority he had in mind, and in addition included a reference to the President, which might have thrown the weight of at least a hint of presidential authority behind Johnson’s efforts. Had Johnson’s draft been sent out by Flynn, Flynn would have been saying:

  Dear Congressman ______:

  … The President has discussed with me some of the problems you will face in November and I have assured him that the Democratic National Committee will do everything possible to give you the maximum assistance in your coming campaign.

  In order that we may work most effectively with you in this connection, I have asked one of your Democratic colleagues in the House, Congressman Lyndon B. Johnson of Texas, to act as liaison officer between my office in the Democratic National Committee and the Democratic congressional candidates.

  This would, of course, have made Johnson the arm of the Democratic National Committee in dealing with Congressmen.

  Roosevelt, howe
ver, did not want to give him such formal authority. He eliminated the reference to “liaison officer.” All the letter, as edited by Roosevelt, says is that, in order that the Democratic National Committee “may work most effectively with you” in your campaign, Johnson will “assist me [Flynn] and the Democratic National Committee in aiding the congressional candidates.”

  Roosevelt told Johnson he would give the letter to Flynn, and asked Flynn to see the young Congressman, but Flynn balked at giving Johnson even the informal post. Meeting with Johnson in his room at the Carlton Hotel on September 19, he said he would be glad to send out the letter—if it met with Rayburn’s approval.

  Rayburn’s approval was not forthcoming.

  Then Johnson thought he saw an even better opening. On September 23, the National Committee’s secretary, Chip Robert, resigned. Johnson pulled strings to obtain this post, using the argument that in it he could serve as a liaison with the Congressional Committee. Influential Democrats such as Claude Pepper, a Longlea visitor, wrote or telephoned the White House to urge the appointment. Johnson persuaded Drewry to write Roosevelt that he would have “no objection” to it. Roosevelt may have considered making it; the possibility was raised with Rayburn, who had become Speaker the week before, but Rayburn’s response was that the appointment would be satisfactory to him if it was satisfactory to Flynn—which, of course, Rayburn knew it wasn’t. Flynn, who had been less than enthusiastic about Johnson’s appointment even to an informal liaison role with the committee, had stronger objections to his being made its secretary. He said, in fact, that if Johnson was appointed, he would resign.