The Big Rich: The Rise and Fall of the Greatest Texas Oil Fortunes

by Bryan Burrough

Hunt wanted to invest. He had thought he might offer to pay for Joiner’s casing in return for a share of the lease.

this meant only the first eighty certificates were valid. Never one to let ethics stand in the way of fund-raising, however, Joiner had wildly oversold the certificates, selling rights to the same land to multiple buyers; one lease went to eleven different people. It was only a matter of time before someone found out. Worse, Joiner’s own driller, Ed Laster, had betrayed him to a Kansas oil company, selling off his drilling data and rock samples. The Kansas company had already begun leasing up nearby acreage.

Hunt called in his men from El Dorado and waded into the thick of the trading, swapping IOUs for four hundred acres of leases south and east of Joiner’s well; Joiner had almost everything north and west. As the fervor spread, Joiner was celebrated as a local hero.

The town of Overton feted Joiner with an all-day parade. When the inevitable finally occurred—one of his investors, comparing his certificates to others, realized he had been cheated and sued to place Joiner’s acreage in receivership—the Tyler Courier-Times rushed to his defense, denouncing the “slick lawyers” who dared to attack their savior. “It’s high time the independent operators had their inning,” an editor wrote. “Now, if this be bolshevism, then we’re bolshevists.

After the last drill test, Laster had blocked the hole with a cement plug, and by Friday morning, October 3, word had spread that he was preparing to drill out the plug and see what lay beneath.

By nine o’clock that morning nearly eight thousand people had tromped through the woods to the drill site. Kids sold soda and sandwiches, while bootleggers hawked bottles of white lightning. All morning the clearing thrummed with anticipation. All that was missing was Joiner himself, said to be recovering from a bout of flu in Dallas.

D. H. Byrd, known as “Dry Hole” Byrd for a string of fifty-six straight dry holes he had once drilled; Byrd, like so many of the eager young men who flocked to Rusk County that fall, would later become one of the wealthiest oilmen in Dallas.

Finally, around nine o’clock, Laster detected a faint gurgling sound deep in the well. For a fleeting second he smelled gas. “Put out the fires!” he hollered. “Put out your cigarettes! Quick!

After a minute or two, Laster spun a set of valves, diverting the gush of crude into the waiting storage tanks.

“She’s flowing at sixty-eight hundred barrels a day,” he whispered.

“flowing in heads,” that is, in uneven spurts, 100 barrels one hour, 500 the next. Within days many scouts were dismissing it as a freak.

Not H. L. Hunt. Great fortunes are built on great convictions, and from the moment he watched Joiner’s drill test Hunt was certain this was a giant field. On October 20, two weeks after the initial strike, he began drilling his first lease, south of the Daisy Bradford.

Maybe, Hunt mused, the play wasn’t to drill near the Joiner leases. It was to buy the Joiner leases.

His opportunity, he sensed, lay in the old wildcatter’s legal troubles. Already his investors were beginning to sue.

One lawsuit, seeking to force Joiner into involuntary receivership, had been filed in Dallas; if Joiner lost, all his leases might be thrown into the hands of a court-appointed receiver. Joiner tried to hide from process servers at the Hotel Adolphus, but a lawyer slipped a hundred-dollar bill to a bellboy, flushing Joiner out, then forcing him to attend a hearing on October 31. It was a confusing session, with Joiner’s attorney asking for a voluntary receivership, and by the time the judge gaveled it to a close a receiver had in fact been named, though Joiner retained control of his leases, at least for the time being. As the crowd filed out, no one was quite certain what had happened. It was then that Hunt, standing outside the courtroom, approached Joiner in the hallway.

“Mr. Joiner,” Hunt said, “I’m offering to buy you out lock, stock, and barrel.” “Boy,” Joiner said before walking off, “you would be buying a pig in a poke.

Finally he arm-twisted his Arkansas pal Pete Lake into a deal; Lake agreed to supply $30,000 in return for a 20 percent stake in Joiner’s leases.

then a discovery well being drilled by the Deep Rock Oil Company, northwest of the Joiner well, would tell the tale.

Despite Hunt’s later denials, court documents would show that he cut a secret deal with the Deep Rock driller to supply his men with inside information in return for twenty thousand dollars in cash. Hunt positioned his three scouts near the Deep Rock drill site, where they stood ready to relay information to him as he dealt with Joiner. The price he would offer for Dad Joiner’s leases would depend largely on their reports.

Williford scurried across to the Adolphus, where he was told Joiner was again sick with the flu. Williford found him hiding in one of the bedrooms, and all but dragged him back to the Baker, where Hunt was waiting on the mezzanine.

He was prepared to offer Joiner $25,000 in cash for his leases, plus $975,000 from the proceeds of whatever oil was found.

Joiner wanted $50,000 up front, plus more on the back end. They began to talk, about life, about their families, about East Texas, about the Daisy Bradford No. 3. Lunch came. They ate in the suite. At breaks Hunt would call for whispered updates on the Deep Rock well. By nightfall they were still negotiating. Dinner came. At midnight they were still talking. By dawn they had the outlines of an agreement, and Hunt telephoned his attorney, J. B. McEntire, and two stenographers. When they arrived, he and Joiner began dictating the terms. In return for all four thousand acres of Joiner’s leases, including the Daisy Bradford No. 3 and acreage surrounding the Deep Rock well, Hunt agreed to pay $30,000 upfront—all of it out of Pete Lake’s pocket. The back end, to be paid out of production, would be $1.305 million.

They were still writing late that afternoon when, around 4:30, Hunt received the call from East Texas. It was his man in Henderson, Charles Hardin, relaying news from the Deep Rock site. “Mr. Hunt,” Hardin said, “I think they’re right on top of the Woodbine sand now.” Hunt returned to the paperwork. Four hours later, at 8:30, as they haggled over final details, Hardin called once more. Even over the telephone line, his excitement was palpable. “Mr. Hunt,” he said, “they’ve cored sixteen feet of material from the Deep Rock well, and ten and a half feet of it is saturated with oil.

At midnight the paperwork was ready. Hunt and Joiner signed, then shared a celebratory plate of cheese and crackers.

As Hunt recalled the moment, Joiner appeared thrilled. “Boy,” he said, “I hope you make fifty million dollars.” Even when news of the Deep Rock well shot through East Texas later that week, sending lease prices into the stratosphere, Joiner seemed happy. His troubles were over. He was rich. And if Hunt found even a fraction of the oil they expected, he would be richer still.

H. L. Hunt had snatched East Texas from beneath the noses of the slumbering majors, and most incredible of all, he hadn’t used a cent of his own money.

The Lathrop well confirmed what no one had dared imagine: it was all one field. One vast oil field, shaped like a forearm, Lathrop high on the northern fist in Gregg County, Daisy Bradford at the southern tip in Rusk, a single pool of oil forty-five miles long and five to twelve miles wide.

The epicenter of the boom was Kilgore, in Gregg County, which within days was transformed into an oil field. Scores of buildings, even a bank, were torn down to make way for derricks. Forty-four separate wells went up on a single city block; by the middle of 1931, it was said a man could leap from derrick to derrick and never touch the ground for six miles.

he stopped in Shreveport to ask a banker there for a $50,000 loan, the cost of two wells. Louisiana bankers, however, like their brethren across the country, had yet to appreciate the intricacies of the oil business; if they couldn’t physically see their collateral, their vaults stayed shut.

“I’ve got the Joiner leases,” Hunt replied. “It’s a proven field. There’s oil in the ground, and that’s a bankable asset.

Not in Louisiana it wasn’t. Dallas, however, was another story. The city’s two largest banks, First National and Republic National, were among the first in the United States to see the wisdom of lending against proven reserves; it was their vision that would transform Dallas into the mecca of Texas oil banking and fuel the city’s future growth.

All Hunt needed was a single meeting with First National’s president, Nathan Adams—the friend of Clint Murchison’s father—to walk away with the fifty thousand dollars he sought.

It was the beginning of a relationship between First National and the Hunt family tha...

Unlike the Dad Joiners and Ed Batemans of the world, who took months scraping together enough cash to complete a well, the majors and their professional crews could reach the Woodbine in fifteen days, sometimes nine or ten.

The furious pace of drilling was driven by what was called the “rule of capture,” a legal term roughly translated as finders keepers. Oil beneath the earth doesn’t conform to the niceties of lease boundaries, and a well drilled beside a competitor’s lease might well suck up oil from both. No matter. What you got, you kept. Those who tarried might end up with nothing. Thus, every well was a race.

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drilling should be regulated so that a field wouldn’t be permanently damaged.

they saw drilling limits, or “proration” as it was called, as a plot by the big companies to squeeze them out of business.

The problem was that enforcement fell to the Texas Railroad Commission, a toothless state agency widely regarded as a joke. The Railroad Commission had field agents, but many were corrupt. By and large, proration only worked where oilmen policed themselves.

Governor Ross Sterling, a onetime chairman of Humble Oil, had issued proration orders even before Dad Joiner brought in the Daisy Bradford No. 3. But the Railroad Commission was all but powerless to enforce them, and they were widely ignored. Hunt, a stranger to most Texas oilmen, quickly emerged as one of proration’s strongest proponents; though an independent, he was sitting on millions of barrels of oil, which he would need time to drill.

“We don’t want rules that favor major companies over independents,” Hunt told the crowd. “We want long-term conservation measures that will benefit all operators in the field.

Finally, on August 5, a day after the governor of Oklahoma declared martial law and sent in troops to shut down and begin regulating his state’s oil fields, Hunt and thirty-six other large East Texas operators sent a telegram to Governor Sterling urging him to follow suit. Sterling gave in. On August 16, declaring East Texas oilmen to be in open “rebellion” against the state, he declared martial law and sent in the National Guard to shut down the oil field.

Three weeks later, on September 5, Governor Sterling announced the field was being reopened, but with sharp limits: no well could produce more than 225 barrels a day. With prices so low, it was impossible for many wildcatters to make money. Only the wealthiest drilling groups, including the majors and large acreage holders like Hunt, could afford to keep drilling, and they did. When they found oil, they simply left it in the ground, confident that they would be able to sell it at some future point.

The problem was obvious: many wildcatters were staying in business by openly flouting the proration limits. This illegal oil, much of it piped into tanker trucks that made nightly smuggling runs into Louisiana and Oklahoma, quickly became known as “hot oil,” and the fall of 1931 marked the beginning of a four-year struggle between feisty independents and state and federal regulators known as the “hot oil wars.” All through the Depression the Railroad Commission and its allies sued, seized, arrested, and prosecuted hot oil operators, who fought back with bribes, secret pipelines, and a blizzard of lawsuits.

To the big operators in East Texas, including Hunt, hot oil not only depressed prices, it threatened to damage the field itself.

Stopping the flow of hot oil, however, proved beyond the Railroad Commission’s limited capabilities.

Humble and other majors appealed directly to the new president, Franklin Roosevelt, to appoint a federal oil czar to squelch the hot oilers. Roosevelt appointed a top aide, Harold Ickes, and on July 14, 1933, the president signed an executive order not only upholding proration but sending hundreds of federal agents into East Texas to enforce it. It took three more years of hot oil prosecutions and legal challenges, some going all the way to the Sup...

All through the hot oil wars Hunt drilled wells like a madman. Shirtsleeves rolled above the elbow, khaki pants splattered with mud, a cigar habitually jammed in one corner of his mouth, he worked from dawn till late in the evening seven days a week, driving from well to well to well, often with his teenage son Hassie at his side. Every cent he took in—from oil sales, from the new First National loans, occasionally from selling part of a lease—he plowed back into the search for more oil. By the end of 1932, despite proration and chaotic conditions and drenching rains, he managed to drill an astonishing 145 wells on his new East Texas leases. More than seven hundred thousand dollars in profits went to Dad Joiner, but even with oil prices at less than a dollar, Hunt himself took home his first million dollars and probably much more.

Other than a vague kidnapping threat or two—after one scare Texas Rangers guarded the family—life was good.

One by one Joiner’s investors sued, until by mid-1932 Hunt found himself facing some three hundred separate legal challenges. Rather than fight each one in court, Hunt told his lawyers to offer the plaintiffs cash settlements. It worked. Dozens of the plaintiffs, mostly poor farmers, took the $250 or so Hunt offered and withdrew their suits. The whole mess would still take nearly a decade to clean up, but Hunt’s strategy saved him a fortune in legal fees and potential judgments.