TILTING AT OIL WELLS
© 2006 by Linda Minor, all rights reserved
“Throughout most of history,” wrote Robert L. Heilbroner, “wealth and power have gone hand in hand.” The alliance, an obvious one, has grown with but occasional public outcries. Working together, possessors of wealth and power may achieve a stability of their own. Over most of history, wealth has been a vassal to power, for as Heilbroner explained, “it was easier for the ruler to become a rich man than the rich man a ruler.”
James Presley, A Saga on Wealth(New York: G.P. Putnam’s Sons, 1978), 302;quoting Heilbroner, The Quest for Wealth: A Study of Acquisitive Man (1956)
Quixotic Cowboys
James
Presley’s evocation in the above quotation of feudal imagery to
describe the role played by Texas oilmen during the independent
wildcatting days of the 1930’s conjures up chimerical pictures of
overweight and uneducated cowboys, engaged in a Quixotic joust against
their own windmills—in the form of oil derricks—while upsetting the
national power structure in the process. It is a comical image; but no
one is laughing. 
Nothing
illustrates the full significance of the crusade Texas oilmen have
waged against established capitalists and bankers in the northeastern
United States than the life and career of Sid Richardson (1892-1959.
Though virtually unknown today, except in Texas where his foundation’s
name adorns buildings on most Texas colleges, he may be more readily
recognized as the great uncle of the notorious “Bass Brothers,” who
would have been equally unknown but for Uncle Sid’s millions.
Although
any biography of Lyndon Johnson, John Connally, or Dwight Eisenhower
will mention Richardson’s role in financing the campaigns of those men,
it is the intent of this article to provide more than a mere recap. Richardson’s influence upon the administrations of Franklin Roosevelt,
Dwight Eisenhower and Lyndon Johnson spanned the years 1933 through
1969, continuing even after his death through those in charge of his
business interests. Author James Conaway has given us a colorful glimpse
into the camaraderie between Texas oilmen of that era:
“Oil served as the conduit between potential and realization. Sid Richardson, Texas wildcatter and one of the richest men in the country, told his friend [Lyndon] Johnson [in 1948] that he needed someone to help look after his varied interests, particularly in relation to Washington. Johnson recommended Connally. Richardson’s primary interests were related to oil and gas—the oil depletion allowance, and regulation of the price of natural gas by the Interstate Commerce Commission—and Connally understood the workings of Congress. … Connally arrived as Richardson’s emissary to Washington…. He refused to register as a lobbyist, even at Johnson’s urging, claiming that he had his own investments, and was looking after his own interests.”[1]As prodigious as the influence exerted on national oil policy by these Texans was, however, there is an even deeper aspect to the story which, given the secrecy surrounding the subject, can only be postulated by interlacing the known history with disclosures first made public in The Gold Warriors published in 2002 by Sterling and Peggy Seagrave. It concerned the use of secret gold accounts, not only to finance the cold war and manipulate foreign governments, as the Seagraves suggest, but also to tip the balance of the American banking establishment out of the hands of Eastern “liberals”—the Morgan-connected banks—into the clutches of a new syndicate of capital.
Oil strikes in 1910 made Wilbarger and Wichita Counties in North Texas the new Spindletop. Sid Richardson and his closest friend Clint Murchison, Sr. — both born in the last decade of the 19th century in a small town southeast of Dallas called Athens — were soon drawn there by the promise of black gold. Sid, who acquired the rudiments of a higher education at Baptist colleges, had tossed a degree aside in favor of cattle trading before the 1910 oil strike on W.T. Waggoner’s ranch west of Wichita Falls, lured him.
In
only seven years he accumulated more than $100,000 trading oil
properties and, when another major discovery occurred in Burkburnett,
fifteen miles north of Wichita Falls, he trained Murchison, just back
from the war in 1918, to trade and leverage oil leases and, thus, to
make money without investing any of their own capital. Much of the time
they stayed in Wichita Falls at the home of Sid’s sister, Annie Bass,
whose physician husband found that he too could make more money as an
oil operator than as a doctor. A few years later, after graduation from
Yale in 1937 with a geology degree, their son Perry Richardson Bass
would become Sid’s business partner in Forth Worth, while Murchison
married and moved to Dallas.[2]
Beginning
in 1948, just after Sid’s long-time friend Lyndon Johnson took his new
seat in the U.S. Senate, LBJ’s former aide John Connally moved to Fort
Worth to work for Sid and Perry in their business ventures. When Sid
died in 1959, Connally, as attorney, and Bass, as executor, handled the
estate, for which Connally received $800,000 — to be paid out over a
period of years long after he was elected Governor of Texas in 1962. The
scheme by which Connally’s remuneration was paid is not dissimilar from
the one designed to net Sid’s friend, Robert B. Anderson, a million
dollars when he left his employment at the Waggoner Ranch to work in the
Eisenhower administration,[3] and became a point of inquiry during 1971 Senate hearings to approve Connally as Richard Nixon’s Secretary of the Treasury.[4]
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| Left to right: Sid, Ike, and Amon G. Carter, Sr. of Fort Worth |
Wanted: Conduit to the Presidency
The
most believable cover story about how Sid and Ike first met was told to
Washington Post reporter Edward Folliard by former Texas Democratic
Party head Bob Kittrell, who claimed to have introduced the General to
Richardson on a train in December 1941—when both men were coincidentally
on their way to meet with President Roosevelt five days after the
bombing of Pearl Harbor. It was that same day that the U.S. declared
war on Germany and Japan, and Eisenhower, then the chief of staff to Lt. Gen. Walter Krueger (whose papers are now housed at the University of Texas), was stationed at the Third Army in San Antonio,
Texas. Six months later Eisenhower’s promotion as commanding General in
Europe was announced by General George C. Marshall.
Sid
Richardson had been summoned to Washington that day by FDR, whose son,
Elliott, had been acquainted with Richardson’s clique of Texas oilmen
since 1933, when the young man had stopped in the Dallas-Fort Worth area
to visit a “college chum,” only to meet and later marry a local girl
(daughter of a deceased Swift Packing Co. executive and country-club
builder J.B. Googins), who frequented the same country club social set as
Richardson’s friend, publisher Amon G. Carter, Jr.[5]
The Texans jumped at their chance to employ Elliott as their conduit to
federal executive power by setting him up in business deals in exchange
for meetings he arranged for them with his father.[6]
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| Elliott Roosevelt, left, with Ike during WWII |
Internal
Revenue Service investigators learned that, three days after his
meeting with FDR, Murchison entered a plea of nolo contendere to a
then-pending charge of violating the federal “hot oil” provision
(interstate transportation of fuel in violation of the National
Industrial Recovery Act), which FDR’s Secretary of Interior Harold Ickes
had been pressing for several years in order to conserve petroleum.[7] During the 1945 IRS investigation Richardson testified that, a short
time following the May 1937 fishing trip, he made a $20,000 loan to
Elliott to purchase a radio station, followed by capital purchases of
stock in a radio and additional loans for its operations and expenses. Elliott admitted to borrowing a total of $600,000 — including the loans
from Richardson, Fort Worth oilman Charles Roeser, Great Atlantic &
Pacific Tea heir John Hartford and others.[8]
If possible, he was a worse businessman than George W. Bush! But, like Bush, he had friends in Texas who could bail him out of his messes.
If possible, he was a worse businessman than George W. Bush! But, like Bush, he had friends in Texas who could bail him out of his messes.
A
few months after Elliott joined the Army in 1940, Jesse Jones was
called in to negotiate Elliott’s loan from Hartford from $200,000 (none
of which had been repaid) down to $4,000. None too happy about being
used by FDR to wipe his son’s nose, as it were, Jones paid the $4,000
out of his own personal funds, for which he was eventually reimbursed by
Elliott.
In 1944 Richardson and Roeser acquired additional stock in the radio network in settlement of the unpaid loans.[9] Shortly after his 1937 meeting with FDR, Richardson received his reward; he was named “oil policy adviser” to the President.[10] In his 1945 testimony Richardson recalled that his first White House invitation occurred not long after his first loan to Elliott and that Elliott had instigated that meeting, and the others which followed, to give Sid the opportunity to discuss his opposition to “a certain phase” of FDR’s oil policy.[11]
In 1944 Richardson and Roeser acquired additional stock in the radio network in settlement of the unpaid loans.[9] Shortly after his 1937 meeting with FDR, Richardson received his reward; he was named “oil policy adviser” to the President.[10] In his 1945 testimony Richardson recalled that his first White House invitation occurred not long after his first loan to Elliott and that Elliott had instigated that meeting, and the others which followed, to give Sid the opportunity to discuss his opposition to “a certain phase” of FDR’s oil policy.[11]
Golden Opportunity
FDR
in 1944, most likely at the behest of is “oil adviser” Richardson,
appointed Texan, Robert Bernerd Anderson, as a consultant to Secretary
of War Henry L. Stimson’s deputies, John J. McCloy and Robert A. Lovett,
to work with Democratic Party fundraiser and California oilman Edwin Pauley on the matter of confiscated German gold. It became a simple
matter six months after FDR’s death in April 1945 to convince the new
President, Harry Truman, that Anderson was an expert in such matters.
Before
long, however, Truman began to exhibit his feisty independence of
established policies when he vetoed laws passed by his own Democratic
Congress (headed by Speaker of the House Sam Rayburn, a Texan from the
same part of the state as Richardson). He vetoed both the Tidelands
bill, which gave states title to oil found within coastal tidelands, and
the Kerr gas bill, which attempted to exempt independent producers of
natural gas from federal regulation. Richardson, Murchison and their
friends, disgusted with Truman, had by 1949 settled upon a new conduit
to Presidential power. Richardson hosted Eisenhower’s 1949 Texas
vacation at St. Joseph Island, which adjoined Murchison’s Matagorda,
where FDR had fished with Elliott.[12] Then in 1952 Richardson spent two weeks in Paris with General Eisenhower, planning the general’s campaign for President.
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| Col. Lansdale |
“Robert B. Anderson flew back to Tokyo with Lansdale, for discussions with [General] MacArthur. After some days of meetings, MacArthur and Anderson flew secretly to Manila, where they were taken by Lansdale and Santy [Severino Santa Romana, secret agent of MacArthur’s personal attorney, Courtney Whitney] to some of the sites in the mountains, and to six other sites around Aparri at the northern tip of Luzon…MacArthur and Anderson were able to stroll down row after row of gold bars.”[13]
According
to the Seagraves’ C.I.A. source, Ray Cline, “Anderson apparently
traveled all over the world, setting up these black gold accounts,
providing money for political action funds throughout the non-communist
world”—a total of 176 accounts in 42 different countries. Since McCloy
and Lovett retired from their government jobs in 1945, they became
private advisers to Anderson, who was later appointed by Eisenhower to
serve as Secretary of the Navy and as Secretary of the Treasury.
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| Pari-Mutuel Racetrack betting legal in Texas in mid-1930s |
From Ranching to Racehorses
Betting
on races had been outlawed by Texas in 1909, and the first racetrack
built since that date—Arlington Downs, halfway between Dallas and Fort
Worth—had opened in 1929, without gambling. The owners of that track
were none other than Anderson’s future employers, the sons of W. T. Waggoner,
who coincidentally owned the second largest ranch in Texas, which
“sprawled across more than 500,000 acres in north Texas.”[15]
It was this ranch’s oil strike in 1910 that had first enticed Sid
Richardson and his fellow independent wildcatters into the oil business a
generation before.
Though
the Waggoner family had lobbied long and hard to pass legalized betting
on horse races in Texas, their investment proved to be wasted. Three
years after Tom Waggoner died of a heart attack in 1934, the Texas
legislature sans Anderson, repealed the law.
The lands owned by the Waggoner Estate would later be mentioned in connection with the John F. Kennedy assassination, a topic we must reserve for the future.[16]
The lands owned by the Waggoner Estate would later be mentioned in connection with the John F. Kennedy assassination, a topic we must reserve for the future.[16]
The
four years Anderson had acted as tax collector for the racing industry
had obviously been long enough for him not only to ingratiate himself to
the two sons of Tom Waggoner, but to come into contact with other
vassals of power as well; his Austin office, according to directories of
the mid-1930’s, was housed in the same building in which Lyndon Johnson
briefly ran FDR’s Texas branch of the National Youth Administration,
and Austin was a relatively small city in those days. In 1937, the same
year Lyndon ran for Congress, Anderson was hired to move back to his old
stomping grounds in North Texas and act as attorney for the
multi-million-dollar estate. Since E. Paul Waggoner lived in New York
and his brother Guy soon moved his business interests to Palm Springs,
California, the ranch was virtually Anderson’s private domain for many
years, including the time he was traveling to Europe and the Philippines
to look at vaults filled with gold.
As
chief executive of the wealthy Waggoner estate Anderson was a
recognized authority in both the oil and banking industries, serving as
President of the Mid-Continent Oil and Gas Association and as deputy
chairman of the Federal Reserve Board in Dallas during the 1940’s. Not
only did the Waggoner Ranch produce beef, but it was also a source of
refined oil, independent from the “big oil” companies, and the estate
owned the Waggoner National Bank in Vernon as well. Anderson hobnobbed
with other members of these organizations, which included cattlemen,
oilmen, bankers and politicians.
Drew
Pearson repeated in a 1952 column a story told by Chief Justice Vinson
about Sid Richardson, Speaker Sam Rayburn and “Bob Anderson, quiet,
efficient manager of the giant Waggoner ranch in Texas,” who, while out
riding together one day, were discussing the price of calves. When
Anderson told the others he had sold his calves for 41 cents (which
would have amounted to over a million dollars), Rayburn asked, “Who
would be fool enough to pay that much?” Anderson replied, “Howell
Smith,” to which Richardson roared, “What!...He’s my partner and
brother-in-law! You mean to say that he paid 41 cents a pound for
calves!”[17]
The Vassal to Power
Before
the Seagraves’ revelations hit the news, however, there were other
hints that something suspicious was going on. First was the disclosure
in the anti-LBJ book written by Texas ranch historian J. Evetts Haley in
1964 that, for several years prior to the time Lyndon Johnson acquired
his first radio station in 1943, the license was held by a syndicate of
men with Robert B. Anderson acting as president.[18]
The
second and even more telling clue that something very significant was
being hidden from the public was related by Robert Sherrill, who noted
as follows:
…Johnson has not been above taking support, a subtle kind of kickback, from men grown rich largely from government contracts; but in the early years his spreading domain was purchased with the aid of men who made their money from plundering the state’s natural resources or from other normal cutthroat enterprises. The old steadies who have been around from the beginning are contractors like the Brown brothers of Houston [Brown & Root, involved in the notorious 'Suite 8-F Crowd' in Houston] … and the oil men … and the Murchisons and always, but always the late Sid Richardson. These are his kind of men, and he theirs. Between them there is a rough-hewn camaraderie which has not always produced the most burnished examples of statesmanship.
Within the hour after his return to Washington after taking the oath in Dallas, Johnson (according to The New York Times) was talking by telephone with his old confidant Robert Anderson in New York. He asked Anderson to come to Washington; Anderson, another of Johnson’s key links to the oil fraternity, is always happy to answer his country’s call. He and Johnson talked several hours that Sunday and, The New York Times reported, they resumed their conference the next day. The consultation, in a manner of speaking, still continues. For some reason, the Johnson-Anderson relationship is often treated as something almost clandestine.[19] [emphasis added]
Sherrill
also passed on a tidbit of gossip spread by Walter Winchell in
early-1964, describing Anderson as “LBJ’s No. 1 financial adviser,”
gossip which Sherrill found to be not at all surprising, considering
that the two had been “especially intimate in the creation of an oil
program which, without much public awareness, had developed to a
controversial crisis that was effectively quashed only by Kennedy’s
death.”
“This is not an assassination conspiracy theory.” [20]
But it obviously was a conspiracy of some sort. Why all the secrecy? We have to go back to the Seagraves’ book for part of the answer:
“There were important reasons for all this secrecy. If the recovery of this huge mass of stolen gold was known only to a trusted few, the countries and individuals that had been plundered could not lay claim to it. Truman recognized that the very existence of so much black gold, if it became public knowledge, would cause the metal’s fixed price to collapse. But as long as the gold was kept hidden, prices could be maintained and currencies pegged to gold would be stable. Meanwhile, the black gold would serve as a reserve asset, bolstering the prime banks in each country, and strengthening the anti-communist governments of those nations.”[21]
The
other part of the answer, unfortunately, did not appear in the
Seagraves’ book, nor has it been revealed in any other book to date.
There was another reason for the secrecy. It was a reason having nothing
at all to do with patriotism, but rather with the tendency of persons
who have acquired great wealth attempt to use their riches to buy power
for themselves, or to influence the powers-that-be.
ENDNOTES:
[2]
Perry R. Bass also married and reared four sons, each of whom received
an education suitable to the station his inherited wealth entitled
him—first at Phillips Academy in Andover, Massachusetts, then Yale. Two
of the four also took M.B.A.’s at Stanford University and one at
Wharton. The four “Bass Brothers” would eventually become billionaires,
in charge of the huge profits generated initially by their uncle’s huge
fortune.
[3] Robert Sherrill, The Accidental President (New York: Pyramid Books, 1967), described the scheme (page 236) as follows:
1. Standolind Oil Company, Kirby Oil Company, Phillips Oil Company, and Sun Oil Company held farm-out property belonging to Richardson in Texas and Louisiana.2. Richardson asked those companies to assign a royalty interest to F.J. Adams, a Fort Worth oil man who had been a vice-president of Gulf Oil Corporation. Adams’ role was simply that of a go-between.3. Adams assigned his royalty interest to Anderson for one dollar and “other valuable interests.”4. Anderson sold his interest in the property to Dalada Corporation for $900,000, half cash, half from future earnings. (Dalada was run by Toddie Lee Wynne, an old friend of Richardson’s who accompanied him to a stag dinner at the White House in November, 1954.) Also, Anderson had already earned $70,000 in production before the sale.5. Finally, Perry Bass, Richardson’s nephew (John Connally’s law partner [sic]), bought back Dalada’s interest.Thus the property went full circle, with Anderson grabbing his $970,000 as it went past.
[4]
It is also reminiscent of Dick Cheney’s arrangement with Halliburton to
donate stock options to charity. Connally’s fee arrangement was
described fully in the New York Times (February 4, 1971), 1.
[5]
Fort Worth, nicknamed “Cow Town,” holds the title as the Texas
headquarters for the national beef packing industry and the distribution
hub for cattle going in and beef going out. Both Armour and Swift had
packing plants in Fort Worth, and several railroads came together in
that city.
[6]
While deep-sea fishing with his father along the Texas Gulf Coast,
Elliott “went ashore at Port Aransas, where he met Richardson…,
according to the Corpus Christi Caller-Times. Elliott left Aransas with
Richardson for an island named Matagorda, owned by [Dudley] Golding and
[Clint] Murchison….On May 7, President Roosevelt left the [yacht]
Potomac to lunch with his son, the latter’s wife at that time…and their
friends on Matagorda, at the club-house of the American Oil company,
which was owned by Golding and Murchison.” Chicago Daily Tribune (November 10, 1945), 2.
[7] Ibid. The Tribune cited The National Petroleum News of May 6 19, 1937 as the source of this information.
[8] Los Angeles Times (September 16, 1945), 1.
[9] TSN’s largest shareholder in 1960 was the Sid Richardson Foundation. New York Times (May 17, 1960), 60.
[10] Walter Trohan, Chicago Daily Tribune (November 10, 1945), 2. Jones’ involvement with FDR was discussed in this author's article about Texan, Jesse Jones, "The Great Financial Bridge."
[11]
Independent oilmen in Texas were then in a virtual war with “big oil,”
represented by Eastern Establishment capitalists epitomized by the John
J. McCloy’s clients—called the “seven sisters” oil companies. Big Oil
had the funds to explore for oil overseas, while the independents had
been content to search for new wells within the United States. Thus
began a philosophical battle that allowed the independents, like Edwin
Pauley of California, to gain a foothold in the Saudia Arabian oil
fields in the 1930’s.
[12] New York Times (December 16, 1945), 1.
[13] Sterling and Peggy Seagrave, Gold Warriors (Bowstring Books, 2002), 96. See also Douglas Valentine, “The Plundering of Asia,” Counterpunch (September 26, 2003).
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| 306 W. 7th St Fort Worth, TX |
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| Austin, TX office 1935 |
[16] The curious are encouraged to read Peter Dale Scott’s Deep Politics and the Death of JFK,
which contains the following passage:
“There is a deep pattern in this country where mob-controlled funds, licit and illicit, are brought in to revitalize declining ‘old wealth’ firms. In 1963, the largest Teamsters’ fund loan to that time, $25 million at 6.5 percent, went to the aging and almost bankrupt New York realty firm Webb & Knapp, which declared bankruptcy two years later. That $25 million loan (or gift) kept the cash-hungry Webb & Knapp alive for two more years, at a time when (as Esquire pointed out in May 1963) much of its capital was tied up in a joint yankee-cowboy Dallas-Fort Worth real-estate venture on which it was earning no return. This investment was the Great Southwest Corporation, a realty development where control, in late 1963, ‘was tightly centered in the Rockefeller and Wynne families.’ We owe this revelation to a congressional investigation of the 1970 Penn Central Railroad bankruptcy, in which it appeared that, as in the case of the Teamsters’ Pension Fund loss in Webb & Knapp, a dying publicly held corporation had been looted for the benefit of this major Wynne-Rockefeller investment.”
[17] Drew Pearson, “The Washington Merry-Go-Round, Washington Post (February 28, 1952), B13.
[18] J. Evetts Haley, A Texan Looks at Lyndon: A Study in Illegitimate Power
(Canyon, Texas: Palo Duro Press, 1964), 63. In Anderson’s “Who’s Who”
from 1954 it states that he was president of Northwest Broadcasting Co.,
Inc.
[20] Ibid., 116-120, passim.
