IN 1944, however, natural gas had still been merely a by-product of the oil industry, a by-product whose price was low because the supply far exceeded demand. During the war, the government laid gigantic pipelines—including the picturesquely named “Big Inch” and “Little Inch”—more than a thousand miles northward to defense plants, and after the war those pipelines were available to link the urban and industrial markets of the Northeast and Midwest to the Southwest’s natural gas fields. Demand multiplied, and multiplied again. Prices and profits could obviously be greatly increased, and private companies built more pipelines. A company established by Herman and George Brown, Texas Eastern Transmission, was allowed to purchase the Big and Little Inch—thanks to Lyndon Johnson’s intervention—for a cash investment of $143 million, a fraction of what it had cost to build them. Although Olds allowed price increases, increases viewed as generous by impartial analysts, he kept prices far lower than the companies would have set them. And the 9.5 percent return on their investment that the FPC allowed producers, while high enough so that the stocks of natural gas companies were among the most attractive investments on Wall Street, was far lower than what the producers wanted. The cost of the FPC policies to the oilmen was immense; it was estimated that an increase of five cents per thousand cubic feet in the price at the wellhead would increase the value of the holdings in Texas alone of the Phillips Petroleum Company by $389 million. As for Texas Eastern Transmission, it had sold 118,000,000 cubic feet of natural gas in 1948 at prices between seven cents and ten cents per thousand; deregulation would enable the Browns to charge several times those figures. And Texas Eastern had recently received FPC permission to build a new pipeline to New England, with a capacity of 200 million additional feet. Hundreds of millions of dollars were at stake. During 1948 and 1949, natural gas producers lobbied furiously for an end to federal regulation, and supported a deregulation bill introduced by Moore’s successor, Robert S. Kerr (a major stockholder in Phillips Petroleum). But in March, 1949, after Olds had testified against the Kerr Bill—testified not only convincingly, but, as one historian put it, “courageously,” since his renomination for a new five-year term would soon have to be confirmed by the Senate—President Truman, whose respect for Olds was as deep as President Roosevelt’s, vetoed the bill. A single figure was standing between the big producers, already the possessors of great wealth, and wealth far greater. Herman and George and their friends raged against him in letters to Lyndon Johnson. Olds “would establish ‘social responsibility’ in place of the profit motive. That is conclusive proof that he does not believe in our form of government,” Hugh Roy Cullen of Houston wrote. “There is nothing more important to the welfare of the natural gas industry in Texas” than that Olds’ confirmation be defeated, Charles I. Francis, a Brown & Root attorney, declared.
It was important for Johnson not only that Olds be defeated, but that he, Johnson, be given credit for that defeat. The oilmen had never been enthusiastic about Johnson; they had poured money into his 1948 campaign only because of Herman Brown’s personal assurances that he could be counted on. He would need their money for his 1954 re-election campaign—and for the campaigns he saw beyond. It was essential that he demonstrate to them that they could depend on him—that he could be counted on not just to work in their behalf, but to work effectively—and Olds’ renomination process was the ideal opportunity for such a demonstration.
“Olds was the symbol of everything they [the oilmen] hated,” recalls the former Texas legislator Posh Oltorf, who had now become Brown & Root’s principal Washington lobbyist. “He was just anathema to them because of his philosophy.” And because of something more important to these men than philosophy: money. Says John Connally, who would shortly leave the Wirtz law firm to become oilman Sid Richardson’s attorney: “This [Olds’ defeat] transcended philosophy, this would put something in their pockets. This was the real bread-and-butter issue to these oilmen. So this would prove whether Lyndon was reliable, that he was no New Dealer. This was his chance to get in with dozens of oilmen—to bring very powerful rich men into his fold who had never been for him, and were still suspicious of him. So for Lyndon this was the way to turn it around: take care of this guy!”
AND LYNDON KNEW how to take care of him. In 1944, the charges that Leland Olds was a Communist had not been taken seriously. But times had changed since 1944. China was being “lost”—and there was a steadily mounting crescendo of accusations that it had been lost because of the treachery of men in the American government. All through the summer of 1948, the House Un-American Activities Committee was holding hearings at which Whittaker Chambers was testifying to the existence of a Communist spy ring within the government, and in December of 1948, the microfilms of “documents of enormous importance” were found in a hollowed-out pumpkin on a Maryland farm—just where Chambers had said they were hidden. And all through 1949, there would be trials in New York not only of Alger Hiss for perjury but of eleven leaders of the American Communist Party for conspiracy to overthrow the government—and that trial would end in October with their conviction. In 1944, the Senate had not believed that Leland Olds was a Communist. It would be easier to make the Senate believe it now.
In the summer of 1949, Johnson asked Interstate Commerce Committee Chairman Ed Johnson for the chairmanship of the subcommittee that would look into Olds’ renomination—he had no difficulty obtaining the assignment; no one else was particularly interested in it—and he then persuaded “Mr. Wisdom” to allow the subcommittee to hold hearings on the renomination. And then he set about arranging the hearings.
First, there was the research. “He [Johnson] suggested that we bring in various experts,” recalls Representative John Lyle of Corpus Christi, a baby-faced congressman with a southern stem-winder’s gift for loud stump oratory, and a keen understanding of the importance of serving his constituents—particularly his district’s natural gas moguls, one of whom, Maston Nixon, the reactionary multimillionaire head of the Southern Minerals Corporation, had directed him to give Johnson any help he needed. The expertise required was in one particular field: Lyle was soon in communication with skilled investigators from the staff of the Communist-hunting House Un-American Activities Committee. A memorandum was prepared summarizing the information about Olds in the committee’s files. Supplementing these efforts with those of his own men (“We called in several of the brilliant young lawyers who were associated with Lyndon at that time in various matters,” Lyle was to recall), Johnson coordinated the overall effort.
Some of the research was in the area that, five years earlier, the Senate had agreed was the only relevant area: Olds’ long record in the job to which he was now being renominated. Ten years of formal FPC reports, drafts of reports, and internal memoranda were combed for evidence of anti-industry bias and for instances in which Olds had gone beyond the intent of Congress. That area proved unrewarding; it was, it was decided, better to avoid Olds’ record. But there were other areas of research—most particularly the area that, five years earlier, Lister Hill had said, and the Senate had agreed, was “immaterial” and “irrelevant.” The research into this area, Lyle recalls, was “very thorough.” Johnson’s investigators combed through bound volumes of scores of “newspapers that had come out during the 1920s,” Lyle was to recall. “We made copies of every statement that he [Olds] had made and every article that he had written.”
The coordinating of the research was done in Austin, Texas—by a master: Alvin Wirtz, who was the Austin lobbyist for many Texas oil and natural gas companies. One of the reasons that Wirtz was a feared figure to those who had had dealings with him was the combination of cruelty and guile that he possessed. The big, burly man with a broad, ever-present smile was gentle in manner but, a fellow lobbyist—a friend—says, “He would gut you if he could. But you would never know he did it…. He would still be smiling when he slipped in the knife.” And those qualities were very evident in a courtroom, where his agile mind (“slow in his movements,
slow in his speech, but a mind as quick as chain lightning”) made him a fearsome cross-examiner who, with his soft voice and reassuring manner, excelled in leading witnesses into traps from which they could not extricate themselves.
The material assembled in Washington was loaded into Brown & Root’s DC-3 and flown down to Austin, and Wirtz and Johnson began consulting daily by telephone as the attorney hammered the evidence into shape.
Selectivity was the key. During his years with the Federated Press, Olds had written more than eighteen hundred articles. Out of them, Johnson and the investigators had selected fifty-four which, they felt, would most effectively influence senators against the nominee. And out of those fifty-four, they had selected portions—a paragraph from one, a sentence from another, sometimes merely a phrase—that highlighted what they wanted highlighted, and now, consulting with Johnson, Wirtz refined these into a presentation to be made to the subcommittee.
And finally there was the selection of the witnesses who would make the presentation.
Johnson, of course, could not be a witness; as chairman of the subcommittee, he had to appear impartial. So he decided that Lyle would be the main witness. Not only was Maston Nixon’s man on the Hill an effective public speaker, he was especially effective when speaking for a cause in which he believed, and he believed deeply that Red Russia was threatening America’s very existence. Now, Lyle recalls, the necessary “information” had been collected, and Lyndon Johnson “could translate that information into an effective weapon,” and he, Lyle, had no qualms about using that weapon; he could, in fact, hardly wait to use it. And Lyndon Johnson coached him on its use: “we spent hours and days discussing it.”
In selecting other witnesses, Johnson worked mostly through Wirtz, whose principal client was Brown & Root, and Ed Clark (himself the owner of forty thousand shares of Texas Eastern stock, purchased at seven cents a share) who was on retainer from oilman Clint Murchison, so that these clients would be told how hard their new senator was working on their behalf. (The two attorneys were in some respects very different. Clark, bluntly candid, unwilling to cloak his actions in some noble purpose, would have no patience with Johnson’s hints that what they were doing was to protect America from Communists. “He [Johnson] would call early in the morning—‘Communists! Communists!’ Bullshit! Communists had nothing to do with this, and he knew it, and I knew he knew it,” Clark says. On September 20, talking to Johnson’s secretary Mary Rather, Clark said, “I don’t care anything about these Communists. I wouldn’t look under the bed for Communists but I might look down there and hope I would find a blonde. The only reason I am interested in this hearing is on account of Mr. Murchison….” Wirtz, on the other hand, hated Reds almost as intensely as he did blacks.)
The two key attorneys sent lists of potential witnesses to Johnson in Washington—Clark, disdainful as always of consequences, put them in writing; Wirtz, always cautious, used the telephone—and from these lists, and from suggestions made by Maston Nixon and by Brown & Root’s Charles Francis, Johnson culled the names he wanted, interviewing some potential witnesses in person to determine their suitability for his purposes, and coaching them—sometimes at considerable length—on their testimony.
A FINAL ELEMENT in Johnson’s strategy was the element of surprise. This was vital. Not merely the Commerce Committee but the full Senate would have to be persuaded by the hearings to vote against the President’s nominee, a nominee with whom many senators had worked, a nominee of whom many senators were fond. The hearings must therefore be convincing—and at them Olds would have to be allowed to reply to the accusations that were going to be made against him. The accusations dealt with the fifty-four articles—some concerning complex economic issues, so a reply would have to be rather detailed. Adequate time to research the reply was therefore necessary; a witness who attempted to handle complicated issues without careful preparation was seldom convincing. Some of those articles had been written a quarter of a century earlier; Olds could hardly be expected to be familiar with them, or to answer questions about them in a convincing manner. And while only fifty-four articles were going to be introduced into evidence, they were part of a body of eighteen hundred articles. Were Olds to attempt to answer a question about one of the fifty-four, some of those other 1,746 articles might be quoted against him to ostensibly refute his replies, to make them appear evasive or misleading, because he had not taken them into account in his answer. With time to read the articles he might be able to answer convincingly, but unless this reading took place before the hearings, it would not be effective. Reading such a mass of material took time, and once damaging testimony was given, it had to be answered quickly, otherwise, the charges would take root in the consciousness of the senator-judges and their newspaper-reading constituents. And since the hearings would take only a few days, if Olds did not answer quickly, the hearings would be over, his fate decided. If he was to defend himself, he had to have time to prepare—and he couldn’t prepare unless he knew what was coming. So it was crucial that he not know.
Surprise was also vital because if Olds became aware of the scope and intensity of the attack that was to be launched on him, he might arrive at the subcommittee hearing with an attorney—an attorney experienced in such hearings and unintimidated by senators, an attorney who might, for example, request a recess if unexpected charges were suddenly made about writings or events that had occurred so long in the past that the witness needed an opportunity to familiarize himself with them before he answered questions about them. Many liberal Washington attorneys would have been willing to represent Leland Olds at the hearings. “He was a hero of mine,” the great liberal advocate Joseph L. Rauh was later to say; “I would have gone in a minute” had Olds asked him. So it was important that Olds not become aware.
Finally, there was potentially a great deal of support for Olds—not only from officials of rural cooperatives all across the country for which he had helped to obtain electricity, and from governors and mayors whose constituents’ natural gas bills had been reduced as a result of his efforts, but also from major figures of the New Deal aware of Olds’ role in implementing FDR’s policies. This support could be effective if it was organized and mobilized—as it would be should the seriousness of the threat to Leland Olds be recognized. So it was important that it not be recognized.
FOR A WHILE, keeping Olds and his liberal supporters from knowing what was coming was easy, for they believed that Lyndon Johnson was on their side.
The link that most strongly bound together the particular inner circle of New Deal liberals of which Johnson had been a part was the fight that had been a central element of both Leland Olds’ career and Johnson’s—the fight to break the power of private electric utility companies and bring electricity to farms: in Olds’ case, to all America’s farms, in Johnson’s to the farms of Texas’ Tenth Congressional District. Tommy Corcoran and Ben Cohen had drafted the legislation that broke up the utility monopolies and created the REA, Jim Rowe had been their young assistant in that drafting; Abe Fortas had devised the strategy that enabled the PWA to defeat the power companies’ lawsuits. And Johnson’s victory in his difficult fight to “bring the lights” to the Hill Country had seemed to this group to be a wonderfully concrete realization of the goal—“public power”—for which they had been fighting. If as a senator Johnson had backed the Kerr Bill, well, that was a necessary requirement for any senator from Texas, and it hadn’t anything to do with electric power, after all—and as for Lee’s renomination, surely Lyndon, the passionate advocate of public power, would not oppose one of public power’s greatest champions. In fact, Johnson had had dealings with Olds when he brought electricity to his district, and in these dealings, the two men had been in accord; Leland Olds felt that Lyndon Johnson was not only his ally but his friend. There had been a disagreement early in 1949, but only a brief one: Olds had rejected a Johnson request for a waiver of an FPC regulation that was causing complications on a Brown & Root construc
tion project, but Johnson had quickly retreated. Olds believed that they were still basically on the same side—and that in the subcommittee hearing, he would have a friend in the chair. He believed, too, as did his friends, that these 1949 Senate hearings would be similar to the 1944 Senate hearings: the charge of “Communist” would be made; no one would take it seriously; even should the subcommittee vote against the nomination, his support in the full Senate was so overwhelming that he would certainly be confirmed.
Master of the Senate: The Years of Lyndon Johnson Page 42