Bryan Burrough (16 page)

As he did, he received a call from Humble’s Wallace Pratt; alone among the majors, Humble was willing to bet Strake was sitting on a bonanza. “Well,” Pratt said, “Humble was too big and smart to see what you saw. You brought us this thing and we turned you down. I guess we’re getting ready to pay for that mistake.” He asked how much Strake wanted for his acreage. Strake, still penniless, offered meager terms for half his leases: $500,000 up front, plus $3.5 million out of oil proceeds. Humble took the deal and began a discovery well.

On June 5, 1932, the Strake No. 2 well struck oil at five thousand feet, a geyser of black crude that arced high over the surrounding pines. Strake had been right about everything. Within ninety days another seventy-five operators had begun drilling in the area, and by the end of the year the Conroe field would be recognized as the state’s second largest, behind only East Texas, and the third-largest oil field in the United States. Even after the Humble sale, Strake held on to nearly a third of its acreage, holdings worth tens of millions of dollars in the coming decades. Overnight he became the third-wealthiest oilman in Houston.
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While East Texas made fortunes for Hunt, Murchison, and other oilmen, it ruined Sid Richardson. With prices for the new, high-quality crude driven as low as ten cents a barrel, the majors saw little reason to buy the remote, sulfur-laden West Texas oil Richardson was selling. Cash from his best wells in Ward County shriveled to almost nothing. In January 1930 his income was twenty-five thousand dollars a month; by December it had fallen to sixteen hundred dollars a month, and the bank took every cent.

In a matter of months Richardson went from the penthouse to the outhouse—literally. He moved out of his top-floor suite at the Blackstone Hotel into a forty-dollar-a-month maid’s room. When he couldn’t afford that, he moved into a twenty-five-dollar-a-month room at the Texas Hotel; when he couldn’t afford even that, he was evicted and sued for back rent, at which point one of his closest friends, Amon Carter, publisher of the Fort Worth newspaper, gave him a room at the Fort Worth Club for free. When he was evicted from his office, Richardson set up business at a downtown drugstore. If he was out, the soda jerk, a man named Jack Collier, answered the pay phone, “Sid Richardson’s office.”

His only hope was to find more oil. Murchison begged him to come to East Texas, but he wouldn’t; all his leases and contacts remained in remote Ward and Winkler Counties on the New Mexico border. He was determined to keep drilling, but his credit at West Texas oil-supply outfits was running low. When the inn in Monahans threw him out, he fled to the new hotel in Kermit. When the Kermit hotel threw him out, Richardson resorted to bunking at a ranch outside town. In desperation he resorted to poor boying, paying his men with groceries and the promise of an eventual paycheck. During the Depression poor-boys like Richardson paid drillers and toolies ten to twelve dollars a day in oil, if it was found. If it wasn’t, they received whatever a driller could come up with. Richardson, who kept a chronically overdue account at the general store in Kermit, became reknowned for paying his men in bread, eggs, or milk—whatever they needed to eat.

In 1931 Richardson managed to drill another well on the O’Brien Ranch in Ward County, but the gusher he needed turned out to be a fountain; whatever profits he saw went to his banks. Worse, the well took the last of his money. By early autumn Richardson was flat broke. He was convinced there was more oil in Ward County, as he had argued in vain as he made the rounds of the banks in Fort Worth and Dallas. Temporary relief came in late October when, with Clint Murchison’s help, Richardson managed to coax $110,000 out of Nathan Adams at First National of Dallas. The money allowed Richardson to spud a series of new wells, on the Estes and Scarborough ranches in northern Ward County. Several were meager producers, but by mid-1932 Richardson’s cash flow had slowed to a trickle. His creditors, including the oil-supply companies that leased him his rigs and piping, began to sue. There was no way he could begin to repay his debts.

Subpoena servers began hounding him everywhere. Whenever Richardson stepped out onto a Fort Worth sidewalk, he watched for one. In later years he told of one creditor who tracked him down while he and Murchison were out hunting. In desperation he turned to Murchison for more relief, and Murchison began covering his loan payments. A year later Murchison would take over the First National loan entirely.
^f
For collateral Richardson signed over his last leases on the O’Brien Ranch.

In later years Richardson often said he had been so destitute he was forced to abandon the oil business for several years. Like so many of his tales, this was an exaggeration. If he gave up wildcatting at all, it was likely only for several months, probably during the winter of 1932-33, when reports of his drilling disappear from the San Angelo newspaper. According to Bass family lore, Richardson was able to resume drilling only after his brother-in-law, Doc Bass, refused his entreaties for one last loan. It was his sister Annie who dipped into her purse and gave Richardson forty dollars. It was with this money, Richardson claimed, that he bought train fare for one last trip west.

The story is apparently true. According to a rare interview his nephew Perry Bass gave the
Dallas Morning News
in 1984, the Bass family was vacationing in New Orleans in March 1933 when Richardson appeared, asking for a loan. When Doc Bass refused, Annie gave him forty dollars her husband had given her to bet on a horse; the “Old Family Friend” says it was actually four hundred dollars. Whatever the amount, Richardson used it for train fare to Ward County. As it happened, it was the last time he and Doc Bass ever spoke. One week later, having returned to Texas himself, Bass dropped dead of a heart attack at an Austin hotel.

While the story may be true, however, one suspects the $165,000 Clint Murchison persuaded First National of Dallas to lend Richardson a month later, in April 1933, was a tad more important. Richardson used the money to spud a series of four new wells on the Scarborough Ranch in Ward County. In the fall of 1933 all four struck oil, but not much, and not nearly enough to repay his debt. Once again he had found a babbling brook. What he needed was the Amazon. For officers at the First National banks of Dallas and Fort Worth, Richardson was a nightmare. His debt now approached $1 million. Yet they couldn’t simply foreclose; his assets were minimal. They could either write off their loans and take a huge loss, or find a way to make Richardson a success.

The ideal solution would be to locate a wealthy partner, someone who could fund drilling that might produce enough oil to repay the banks. For most of 1933 loan officers from both banks queried their largest customers, but none proved interested in backing Richardson. Then, in late 1933, Eugene McElvaney, a vice president at First National of Dallas, came up with a new name: Charles E. Marsh, co-owner of several Texas newspapers, including the politically influential
Austin American
. Marsh, like his Austin neighbors Herman and George Brown of the Brown & Root contracting company, was using his spare cash to bankroll several Texas wildcatters. When McElvaney sent him a telegram at Washington’s Mayflower Hotel, Marsh consented to a meeting. “Mr. Richardson, the party I had in mind, seems anxious to get together with you,” McElvaney wired Marsh on November 27, “and I see no reason why you couldn’t work out an advantageous deal.”
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It is a measure of how totally Sid Richardson cloaked his business in secrecy that the name of Charles Marsh, the man whose backing made Richardson’s fortune possible, remained unknown to Richardson’s family until they learned it during research for this book. In all likelihood, in fact, Marsh’s name would be lost to history were it not for his subsequent sponsorship of an obscure Texas congressman named Lyndon Johnson, a relationship chronicled by all of Johnson’s biographers. A large man with an even larger ego, Marsh was by every account a self-important blowhard who expected his lessers to endure endless lectures on his favorite topic, politics. “Marsh was a high-rolling, J. Rufus Wallingford type,” a Johnson aide named Welly Hopkins told an oral historian for the Johnson Presidential Library. “He could be very rude at times because of his overweaning ego. Charles Marsh, to himself, would think he could do anything.... He always wanted to be the great manipulator behind the scenes.”

That Marsh and Richardson were polar opposites was obvious. Richardson didn’t care; he just needed money. Marsh’s initial commitment was modest, at least to him. He guaranteed a thirty-thousand-dollar line of credit at First National of Dallas. Like a starving dog, Richardson drew the money in gulps, ten thousand dollars in February 1934 and another ten thousand a month later. “He wants an additional ten now against same commitment feeling that he can deal more advantageously with his creditors,” a bank officer then wired Marsh. “We are willing to make the advance . . . but would like to have your permission and approval beforehand.”

When Richardson drew down that first thirty thousand dollars, he wanted more. In fact, if he was to pay off his debt and renew drilling, he might need close to one million dollars. Marsh resisted, finding himself in the same quandary as the banks: risk losing more money, or losing his investment to date. In a search for capital he began canvassing the New York banks, several of whom were opening oil-lending departments. Years later the young bank officer Clint Murchison had befriended, Rushton Ardrey, recalled an incident that probably took place in 1934.

 

 

Unable to entice the New York banks, Marsh took a deep breath and decided to raise his bet. By August he had begun negotiating a complicated deal involving First National of Dallas. From what fragments of legal documents remain, it appears that Marsh agreed to guarantee Richardson’s debt to the bank. In return, the bank agreed to loan Richardson an additional $210,000, followed by another $150,000 the following spring. Much of the money went to pay First National of Fort Worth, which, Rushton Ardrey recalls, was under pressure from banking regulators to reduce its exposure to Richardson’s wells.

 

 

While it kept his creditors at bay, the new partnership with Charles Marsh coincided with the most brazen gamble Richardson had ever made, what amounted to a Hail Mary pass for his career. It was in far northern Winkler County, two miles from the New Mexico border. One or two wells had been drilled in the area; they found natural gas but only a trickle of oil. In the spring of 1935 Gulf Oil began trucking in rigs for a major drilling effort it planned on leases just east of Kermit. While the majors generally refrained from aggressive drilling during the Depression, Gulf was facing the expiration of hundreds of ten-year leases it had signed during the West Texas rush of the mid-1920s; it had to drill the Winkler leases or lose them. Gulf’s plans—and what it knew about the area’s geology—were cloaked in secrecy. The land itself was godawful, patchy sand and scrub crisscrossed by cactus-strewn gullies, but Richardson knew it well. As Gulf moved forward, he began buying up every available lease nearby. He even took a train to Washington to wangle one from the Pure Oil Company.

Where Richardson found the confidence to place such a massive bet remains a mystery to this day, even to his family. While tales of H. L. Hunt’s and Roy Cullen’s first major discoveries became oil-patch legends, there is not a single anecdote celebrating Richardson’s—not one. In later years there would be whispers he had bribed someone, maybe his close friend Jay Adams, head of Gulf’s West Texas operations; it’s also possible Adams gave Richardson a tip for free. Perry Bass, who was to serve as Richardson’s No. 2 man for twenty years, once told the Old Friend that Richardson had devised a more creative way of gathering intelligence. In the 1930s the main switching station for long-distance telephone calls made from West Texas was in the dusty town of Mineral Wells. According to Bass’s story, Richardson became friendly with two of the telephone operators there. In Bass’s words, he performed “stud service” for these young ladies in return for information they overheard. “He would get a call from one of the operators, you know, saying, ‘Oh, Sid, a Mr. Moore from Gulf Oil is calling his headquarters in Pittsburgh, would you like to listen in?’ ” says the Old Friend.

However he learned details of Gulf’s plans, by the summer of 1935 Richardson had used most of Charles Marsh’s investment to buy land all around Gulf’s drill sites. In July the first of the Gulf wells struck oil, one hundred barrels a day—not much. But each succeeding well found a bit more. That autumn Richardson began drilling nearby, on land he leased from a rancher, and in October his well came in strong, as did the next ten or twelve he drilled all around it. They were the first wells in what became known as the Keystone Field, not the largest oil field in Texas, but a good one, big enough to produce a half million barrels of oil in the first two years. Even after splitting profits with Marsh, Richardson was able to begin repaying his debts. What cash he had left over he plowed back into the earth; of the eighty or so wells he drilled in the Keystone over the next five years, he later swore every single one hit oil. He wasn’t a millionaire—not yet—but he was well on his way. By early 1936 he was actually able to reopen a Fort Worth office and pay rent.