Bob Feldman : The Rise of the Texas 'Big Rich,' 1930-1940

Charles Marsh, owner of the Austin American and Austin Statesman (later merged as the Austin American-Statesman), also made big money in the oil business. Image from the Public Welfare Foundation.
The hidden history of Texas

Part 11: 1930-1940/2 -- The rise of the Texas 'Big Rich'

By Bob Feldman / The Rag Blog / January 28, 2013

[This is the second section of Part 11 of Bob Feldman's Rag Blog series on the hidden history of Texas.]

In his 2009 book, The Big Rich: The Rise and Fall of the Greatest Texas Oil Fortunes, Vanity Fair magazine correspondent Bryan Burrough indicated how ultra-rich Texas folks like Clint Murchison, H.L. Hunt, Sid Richardson, and former Austin American and Austin Statesman (they merged into the American-Statesman) owner Charles Marsh were, despite the Great Depression, apparently still able to make big money from Texas’s oil industry between 1930 and 1940:

Though he knew nothing about pipelines, Murchison decided to try to build one... Murchison was amazed how simple the business was; once a pipeline was built, all he did was sit back and collect checks... The pipe alone cost 3 million dollars, all of which Murchison got on credit... He coaxed every last dollar he could out of the Dallas banks, then pushed back repayment... By 1932 his debt had grown to more than $4 million dollars, far more than his net worth...

[H.L.] Hunt used most of his inheritance to buy a 960-acre farm... Negroes worked his land, allowing Hunt to spend much of his time playing cards... By that...summer of 1930 he still hadn’t found a drop of oil in Texas. Then, on Sept. 5 [1930], Hunt took a call... Despite Hunt’s later denials, court documents would show he cut a secret deal with the Deep Rock driller to supply his men with inside information in return for $20,000 in cash...

Charles E. Marsh, co-owner of several Texas newspapers, including the politically influential Austin-American...was using his spare cash to bankroll several Texas wildcatters... 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...

Marsh...had begun negotiating a complicated deal involving First National Bank of Dallas... 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... By the summer of 1935 Richardson had used most of Charles Marsh’s investment to buy land all around Gulf’s drill sites...

In 1938, Marsh encountered a sudden...financial reversal... From a single mention in a letter to Richardson -- contained in Marsh’s papers at the Johnson Presidential Library -- it appears that the Internal Revenue Service served Marsh with a request for $1.2 million in overdue taxes... Marsh was forced to repay much of the money. To raise it, he ended up selling all his Texas newspapers.”

Coincidentally, like Sid Richardson, former U.S. President Lyndon Johnson also apparently was backed by former Austin-American and Austin-Statesman newspaper owner Charles Marsh during the 1930s, when LBJ (also using $10,000 that was given to him by the father of First Lady Claudia “Ladybird” Johnson) decided in 1937 that he wanted to get himself elected as Austin’s representative in the U.S. House of Representatives in 1938. As Ronnie Dugger observed in his 1982 book The Politician: The Life and Times of Lyndon Johnson:

Johnson had a special advantage: the partisanship of the Austin newspapers. Charles Marsh... was owner and publisher of the Austin American-Statesman as well as the dailies in 4 or 5 other Texas cities, and he was for Lyndon from the first. Marsh...had been in oil deals...since as early as 1934... Marsh was also... a director and president of Richardson Oils, Inc., which gave Johnson a direct connection to oilman Sid Richardson...

Although the Austin dailies did not formally endorse anyone, Marsh turned them into Lyndon’s harmonicas. "These papers went all-out for him" said Edmonds Travis, one of their earliest editors... From the time the Johnsons arrived in Washington they frequented "Longlea," the plantation home of their friend, publisher Charles Marsh, in Culpeper, Virginia...The publisher also flew Johnson about in his private plane.

And, according to The Big Rich, LBJ also “used Texas Oil’s cash to start his march to... power.”

Besides helping to put Lyndon Johnson into Congress between 1930 and 1940 (and into the U.S. Senate and the White House, eventually, after 1940), Texas “oil money helped bankroll the birth of the religious right;” and “in a very real sense, the influence of Texas conservatives in America today -- in fact, the entire `Texanization’ of right-wing politics that brought George W. Bush and Tom DeLay to national prominence -- can be traced to forces set into motion by restive Texas oilmen during the 1930s,” according to The Big Rich. As the same book also noted:

By 1935...the Kirby Building in downtown Houston was home to...shadowy, interconnected ultra-conservative groups... The Kirby groups were little more than the Ku Klux Klan in pinstripes, a kind of corporate Klan... One of [former National Association of Manufacturers President John Henry] Kirby’s most active allies was Maco Stewart of Galveston, an attorney who...had seen his wealth mushroom when Humble found oil on land he owned south of Houston... The most extreme of Kirby’s circle was George W. Armstrong, a Fort Worth oilman who owned Texas Steel, which made oil field supplies as well as concrete supports for Texas highways...

In his definitive study of Texas conservatives, The Establishment in Texas Politics, George Norris Green pinpoints 1938 as the year oil-backed ultra-conservatives took control of the state’s political structure... Pappy O’Daniel’s victory [in 1938] initiated two decades of ultra-conservative rule in Texas. As governor, O’Daniel became Texas Oil’s reliable partner, freezing wellhead taxes and backing oil industry lobbyists’ takeover of the Railroad Commission. His administration was dominated by ultra-conservatives, many of them oilmen, including his key financial backer, Maco Stewart...

Another ultra-conservative initiative was led by...Texas congressman...Martin Dies, who in 1937 co-sponsored formation of the House Un-American Activities Committee [HUAC]... John Henry Kirby and Maco Stewart were friends and longtime financial supporters of Dies, who was widely viewed as a tool of business and oil interests in the Beaumont area... Dies’s papers indicate he corresponded regularly with Kirby and Stewart.

[Bob Feldman is an East Coast-based writer-activist and a former member of the Columbia SDS Steering Committee of the late 1960s. Read more articles by Bob Feldman on The Rag Blog.]

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