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The Transformation of the Railroad Commission of Texas, 1917–1940: Business-Government Relations and the Importance of Personality, Agency Culture, and Regional Differences

Published online by Cambridge University Press:  13 December 2011

William R. Childs
Affiliation:
William R. Childs is associate professor of history at theOhio State University.

Extract

This intensive analysis of the Railroad Commission of Texas during the first half of the twentieth century focuses on the impact of personality and of regional and cultural characteristics on regulatory policy and outcomes. The article suggests that a “myth of power” and a “civil religion” of Texas oil, galvanized by a popular commissioner, both allowed cooperative control of oil production and obscured the real sources of power in the world oil industry.

Type
Articles
Copyright
Copyright © The President and Fellows of Harvard College 1991

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References

1 “Oil Week,” Time, 2 July 1934, 49–50, 50 (quotations); R. D. Parker, Vertical File, Biographical, Barker Texas History Center, Austin, Texas [hereafter cited as BTHC].

2 Baughman, James L., Henry R. Luce and the Rise of the American News Media (Boston, Mass., 1987), chap. 4, especially 45–16, 60Google Scholar.

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4 For discussion of these analytical concepts, see McCraw, Thomas K., “Introduction: The Intellectual Odyssey of Alfred D. Chandler, Jr.,” in The Essential Alfred Chandler: Essays Toward a Historical Theory of Big Business, ed. McCraw, (Boston, Mass., 1988), 1121Google Scholar, 17 especially; Scheiber, Harry N., “Federalism and the American Economic Order, 1789–1910,” Law and Society Review 10 (Fall 1975): 57118CrossRefGoogle Scholar, especially 117–18; Galambos, Louis, “The Emerging Organizational Synthesis in Modern American History,” Business History Review 44 (Autumn 1970): 279–90CrossRefGoogle Scholar and “Technology, Political Economy, and Professionalization: Central Themes of the Organizational Synthesis,” ibid. 57(Winter 1983): 471–93.

5 “Panel in Charge of Texas Oil Industry Gains in Importance as Prices Decline,” Wall Street Journal, 1 May 1986 (quotation); for earlier assertions of TRC power, see “The Three Wise Men of Texas,” Financial Times (London), 11 Jan. 1957Google Scholar; special “Oil Section” of the Austin American Statesman, 26 May 1957; Dave McNeely, “Prime election opportunity draws crowd to railroad board,” 11 Sept. 1985, ibid., reviews the historical rise and fall of the TRC's power “to keep the prices up.”

6 Zimmermann, Erich W., Conservation in the Production of Petroleum: A Study in Industrial Control (New Haven, Conn., 1957)Google Scholar; Prindle, David F., Petroleum Politics and the Texas Railroad Commission (Austin, Tx., 1981)Google Scholar, chap. 4; Cassady, Ralph Jr, Price Making and Price Behavior in the Petroleum Industry (New Haven, Conn., 1954)Google Scholar, chaps. 7, 8; Liebcap, G. D., “The Political Economy of Crude Oil Cartelization in the United States, 1933–1972,” Journal of Economic History 4 (Dec. 1989): 833–55CrossRefGoogle Scholar.

7 Nash and Clark do not address the media's view of the TRC; Vietor, Richard H. K., Energy Policy in America since 1945: A Study of Business-Government Relations (New York, 1984)CrossRefGoogle Scholar, possibly the best study to date on postwar U.S. energy policy-making, nonetheless draws undue attention to the TRC and its alleged powers. He singles out the TRC when discussing “monopoly rent” (which he defines as “the unearned return from a price that exceeds long-run marginal costs”), argues that government agreements to restrict oil supplies brought forth monopoly profit, and concludes that “The Texas Railroad Commission and other state agencies [presumably the IOC] did just this from the 1930's until 1972. In 1973, the governments of OPEC picked up where the state governments left off' (p. 6). He singles out the TRC again, “As a result [of Saudi price increases, depletion of petroleum deposits and increased demand], the transition to shortage appeared abrupt [in the 1970s], in the form of curtailments in the interstate gas market and a shift of control over oil prices from the Texas Railroad Commission to the government of Saudi Arabia” (p. 193, emphasis in original).

8 Wiebe, Robert H., Businessmen and Reform: A Study of the Progressive Era Movement (Chicago, Ill., 1962)Google Scholar; Nash, Gerald D., State Government and Economic Development: A History of Administrative Policies in California, 1849–1933 (Berkeley, Calif., 1964)Google Scholar; Burnham, John C., “Essay,” in John D. Buenker, John C. Burnham, and Robert Crunden, Progressivism (Cambridge, Mass., 1977), 129Google Scholar. As Burnham notes, the term “progressive” did not emerge in American society until about 1907 in the states (p. 5). The regulatory approach at the TRC in the 1890s anticipated post-1907 state and federal efforts. Indeed, James S. Hogg, who as attorney general and then governor, convinced the electorate to create the TRC, has been cast as a proto-progressive; see Cotner, Robert, James Stephen Hogg: A Biography (Austin, Tx., 1959)Google Scholar.

9 Continuities and discontinuities in progressive ideals after the First World War are chronicled in Brand, Donald R., Corporatism and the Rule of Law: A Study of the National Recovery Administration (Ithaca, N.Y., 1988)Google Scholar; Seely, Bruce, Building the American Highway System: Engineers as Policy Makers (Philadelphia, Pa., 1987)Google Scholar; and, Childs, William R., Trucking and the Public Interest: The Emergence of Federal Regulation, 1914–1940 (Knoxville, Tenn., 1985)Google Scholar.

10 “Personality-based regulatory politics” builds on the work of McCraw, Thomas K., Prophets of Regulation: Charles Francis Adams, Louis D. Brandeis, James M. Landis, and Alfred E. Kahn (Cambridge, Mass., 1984)Google Scholar and Doig, James W. and Hargrove, Erwin C., eds., Leadership and Innovation: A Biographical Perspective on Entrepreneurs in Government (Baltimore, Md., 1987)Google Scholar.

11 “‘Personality’ and the Making of Twentieth-Century Culture,” in Susman, Warren I., Culture as History: The Transformation of American Society in the Twentieth Century (New York, 1984), 271–85Google Scholar and “The Culture of the Thirties,” ibid., 150–83. Susman's essay on the cult of personality appeared first in 1979. See also Sennett, Richard, The Fall of Public Man (New York, 1977)Google Scholar.

12 Smith, T. V., “The New Deal as a Cultural Phenomenon,” in Ideological Differences and World Order: Studies in the Philosophy and Science of the World's Cultures, ed. Northrop, F. S. C.. (New Haven, Conn., 1949), 208–28, esp. 219, 225Google Scholar; Lawson, Alan, “The Cultural Legacy of the New Deal,” in Fifty Years Later: The New Deal Evaluated, ed. Sitkoff, Harvard (New York, 1985), 155–86Google Scholar.

13 See McCraw, Prophets of Regulation; Doig and Hargrove, Leadership and Innovation, and Erwin C. Hargrove, “David Lilienthal and the Tennessee Valley Authority,” in Leadership and Innovation, 27–62.

14 Civil religions are usually associated with “nations,” such as the United States or the Confederate States of America. That Texas was once a nation lends credence to the use of the concept in this context, but nationhood is not necessary; N. J. Demerath III and Rhys H. Williams, “Civil Religion in an Uncivil Society,” Annals (July 1985): 154–66, 166 (quotation); Gail Gerhig, “American Civil Religion: An Assessment,” Society for the Scientific Study of Religion Monograph Series, no. 3 (1979); Mathisen, James A., “Twenty Years After Bellah: Whatever Happened to American Civil Religion?Sociological Analysis 50 (1989): 129–46CrossRefGoogle Scholar; Bellah, Robert N., “Civil Religion in America,” Daedalus 96 (1967): 121Google Scholar.

15 The therapeutic theme draws from Marchand, Roland, Advertising the American Dream: Making Way for Modernity, 1920–1940 (Berkeley, Calif., 1985)Google Scholar.

16 Dellheim, Charles, “Business in Time: The Historian and Corporate Culture,” Public Historian 8 (Spring 1986): 922CrossRefGoogle Scholar and, The Creation of a Company Culture: Cadburys, 1861–1931,” American Historical Review 92 (Feb. 1987): 1344CrossRefGoogle Scholar. Dellheim's triadic pattern proves useful in analyzing both private- and public-sector agencies. See also Robert A. Katzmann, “Federal Trade Commission,” and Weaver, Suzanne, “Antitrust Division of the Department of Justice,” both in The Politics of Regulation, ed. Wilson, James Q. (New York, 1980)Google Scholar. Alan Brinkley, “Writing the History of Contemporary America: Dilemmas and Challenges,” Daedalus (Summer 1984): 121–41; Leonard DeGraaf, “Corporate Liberalism and Electric Power System Planning in the 1920s,” Business History Review (Spring 1990): 1–31, especially 2–4(n2–7), 29–31(n77). DeGraaf mounted another effective attack on the corporate liberal and corporatist schools; it may be that “civil-religious” language has misled the corporate liberal and corporatist scholars into stressing the cooperative features and underplaying the conflicts underlying much of American business-government relations in the twentieth century.

17 Stigler, George, “The Theory of Economic Regulation,” Bell Journal of Economics and Management Science 2 (Spring 1971): 321CrossRefGoogle Scholar; Richard A. Posner, “Theories of Economic Regulation,” ibid. 5 (Autumn 1974): 335–58; for an evaluation of the conundrums involved in assessing regulatory policy-making, see McCraw, Prophets of Regulation, chap. 8.

18 Nash, Gerald, “A Chapter from an Active Life: John H. Reagan and Railroad Regulation” (MA thesis, Columbia University, 1952)Google Scholar; Procter, Ben H., Not Without Honor: The Life of John H. Reagan (Austin, Tx., 1962)Google Scholar; John H. Reagan to E. S. Jemison, 18 July and to T. L. Stanfield, 11 Sept. 1891, both in Railroad Commission of Texas Letter Press, Texas State Archives, Austin, Texas [hereafter cited as RCTLP]. For the railway situation generally, see Keller, Morton, Affairs of State: Public Life in Late Nineteenth Century America (Cambridge, Mass., 1977), 176–80, 422–30CrossRefGoogle Scholar.

19 McCraw, Prophets of Regulation, chap. 2; Spratt, John S., The Road to Spindletop: Economic Change in Texas, 1875–1901 ([1955]; Austin, Tx., 1970)Google Scholar, chap. 9; Reagan to Capt. E. S. Jemison, 18 July 1891, RCTLP (quotation).

20 N. A. Stedman to Chas. W. Bower, 27 Sept. 1895; Reagan to I. J. Polk, 6 Oct. 1891; Reagan to J. H. Drennan, 12 May 1896; Stedman to J. M. Kennedy, 13 Sept. 1895; Stedman to Clarence Ousley, 12 May 1896; W. P. McLean to Wm. Cameron, 3 Sept. 1892; Reagan to J. W. Maxwell, [c. 25–27] June 1891; Reagan to T. U. Lubbock, 13 July 1891; Reagan to E. H. Hinton, 19 Aug. 1891; Reagan to Wm. P. Ladd, 3 Dec. 1895; and, L. J. Storey to W. A. Shaw, 7 Feb. 1896, RCTLP.

21 Reagan v. Farmers' Loan and Trust Company, 154 U.S. 362 (1894); Reagan to W. R. Morrison, 5 April 1895, RCTLP.

22 Reagan to F. R. Blount, 23 March 1894, to W. A. Shaw, 13 Feb. 1896; Stedman to J. C. McCabe, 25 June 1896; Reagan to John F. Elliott, 2 Dec. 1897, RCTLP.

23 Stedman to H. W. Kuteman, 14 Oct. 1895, RCTLP; Haney, Lewis H., “Railway Regulation in Texas,” Journal of Political Economy 19 (June 1911): 439CrossRefGoogle Scholar (quotation).

24 Gould, Lewis L., Reform and Regulation: American Politics from Roosevelt to Wilson, 2d ed. (New York, 1986), 3339Google Scholar.

25 Susman, “Culture of the 1930s,” 161 (quotation).

26 Sixth Annual Report of the Railroad Commission of Texas for the Year 1897, 5 [hereafter cited as — th Annual Report of the RCT (year)]; Reagan to C. S. Collins, 13 Jan. 1897; Reagan to T. Leigh Thompson, 4 March 1897, RCTLP; Hart, James P., “Oil, The Courts, and the Railroad Commission,” Southwestern Historical Quarterly 44 (Jan. 1941): 307–8Google Scholar.

27 Eleventh Annual Report of the RCT (1902), xxxi. A black porter raised the total of employees to 8; Reagan to Finley, et al., 7 Oct. 1891, RCTLP.

28 Wilson, Charles R., Baptized in Blood: The Religion of the Lost Cause, 1865–1920 (Athens, Ga., 1980)Google Scholar; Storey to R. H. Cousins, 2 Feb. 1897, RCTLP.

29 C. Vann Woodward, Origins of the New South, 1877–1913 ([1951]; Baton Rouge, La., 1971); Reagan to W. L. Moody, 9 Sept. 1891 (first quotation); McLean to J. Moller & Co., 31 Oct. 1891; Reagan to A. B. Frank & Co., 9 Dec. 1891, (second quotation), RCTLP; some scholars dispute the New South influence in Texas; see Calvert, Robert A., “Agrarian Texas,” in Texas Through Time: Evolving Interpretations, ed. Buenger, Walter L. and Calvert, Robert A. (College Station, Tx., 1977), 199Google Scholar.

30 “Message of Governor James S. Hogg to the Twenty-Fourth Legislature of Texas, 1895,” 8 Jan. 1895, box HC 3/71, folder Speeches, Reports, Printed, James S. Hogg Papers, BTHC.

31 Allison Mayfield to Henry C. Adams, 5 Nov. 1902; Clarence Gilmore to John E. Benton, 11 May 1923, RCTLP; chart, box 4–3/332, folder History of TRC, Records of Ernest O. Thompson, Record Group 455, Texas State Archives, Austin, Tx. [hereafter cited as EOT Records].

32 Reagan to L. F. Day, 13 Aug. 1895, RCTLP.

33 Reagan to H. A. Judd, 24 April 1900; Storey to Lee Satterwhite, 14 May 1900, RCTLP. For the ICC, see the Joseph B. Eastman Papers, Frost Library, Amherst College, Amherst, Mass.

34 Brock, William R., Investigation and Responsibility: Public Responsibility in the United States, 1965–1900 (New York, 1984), 203–5CrossRefGoogle Scholar; ? to Ben B. Cain, 12 June 1895, RCTLP; Gould, Lewis L., Progressives and Prohibitionists: Texas Democrats in the Wilson Era (Austin, Tx., 1977), 285–86Google Scholar.

35 Stedman to Plano Milling Co., 17 June, and to M. L. Welch, 28 June 1895; Reagan to W. H. Gaston, 14 Oct. 1897, RCTLP.

36 Clark, Ira G., “State Legislation and Railroads of the Gulf Southwest,” South-western Social Science Quarterly 41 (Supp. 1960): 268–82Google Scholar; Brock, Investigation and Responsibility, chap. 7; Nash, Gerald D., “The California Railroad Commission, 1876–1911,” Southern California Quarterly 44 (Dec. 1962): 287305CrossRefGoogle Scholar; Caine, Stanley P., The Myth of a Progressive Reform: Railroad Regulation in Wisconsin (Madison, Wisc., 1970), 71–72, 76, 87, 93, 127Google Scholar; Reagan to R. Q. Mills, 20 April 1897, Reagan to T. Leigh Thompson, 4 March 1897, RCTLP; Reagan also mailed letters of advice to Tennessee, Arkansas, Kansas, Nebraska, Minnesota, Colorado, and South Dakota.

37 Norvell, James R., “The Railroad Commission of Texas: Its Origin and History,” Southwestern Historical Quarterly 68 (April 1965): 472–73Google Scholar; Miller, E. T., “The Texas Stock and Bond Law and Its Administration,” Quarterly Journal of Economics 22 (1907): 109–19CrossRefGoogle Scholar; Splawn, W. M. W., “Valuation and Rate Regulation by the Railroad Commission of Texas,” Journal of Political Economy 31 (1923): 675707CrossRefGoogle Scholar; Reagan to John L. Spurlin, 3 April 1901, RCTLP, cites defective legislative language as the problem.

38 Tindall, George B., The Emergence of the New South, 1913–1945 (Baton Rouge, La., 1967)Google Scholar; Grantham, Dewey W., Southern Progressivism: The Reconciliation of Progress and Tradition (Knoxville, Tenn., 1983)Google Scholar; Gould, Progressives and Prohibitionists; Woodward, Origins, 381–82.

39 William D. Williams to George A. Henshaw, 10 June 1911; Williams to Jas. H. Gannon, Jr., 19[?] Dec. 1910; Earle Mayfield to Moore Grocery Co., 8 Nov. 1916, to Shelby Taylor, 25 Feb. 1917, RCTLP; Thompson, Alan S., “The Shreveport Rate Case,” in Grassroots Constitutionalism: Shreveport, the South, and the Supreme Law of the Land, ed. Provizer, Norman W. and Pederson, William D. (Lanham, Md., 1988), 111–24Google Scholar.

40 “Railroad Commission. Report of Subcommittee No. 5,” Reports of Subcommittees of the Central Investigating Committees of the House and Senate Third Called Session of the Thirty-Fifth Legislature of Texas Including Audits (Austin, Tx., n.d. [c. 1918]), 606–39Google Scholar.

41 Childs, Trucking and the Public Interest, chap. 5; Potter, David M., “Historical Development of Eastern Southern Freight Rate Relationships,” Law and Contemporary Problems 12 (Summer 1947): 416–48CrossRefGoogle Scholar; Lively, Robert A., “The South and Freight Rates: Political Settlement of an Economic Argument,” Journal of Southern History 14 (1948): 357–84CrossRefGoogle Scholar.

42 Wright, Gavin, Old South, New South: Revolutions in the Southern Economy since the Civil War (New York, 1986)Google Scholar; Cobb, James C., Industrialization and Southern Society, 1877–1984 (Chicago, Ill., 1984)Google Scholar and The Selling of the South: The Southern Crusade for Industrial Development, 1936–1980 (Baton Rouge, La., 1982)Google Scholar.

43 25th Annual Report of the RCT (1916), xxxii.

44 This section draws from Childs, William R., “Origins of the Texas Railroad Commission's Power to Control Petroleum: Regulatory Strategies in the 1920s,” Journal of Policy History 2 (1990): 353–87CrossRefGoogle Scholar. The citations for this section represent material not emphasized in the earlier article.

45 Motor carrier controversies began in the late 1920s; those connected to natural gas utilities did not erupt until the mid-1930s.

46 Nash, United States Oil Policy, chaps. 4, 5; Clark, Energy and the Federal Government, chaps. 6, 7.

47 Zimmermann, Conservation in the Production of Petroleum, 96–100.

48 Earle Mayfield to Will C. Hogg, 3 April 1919, RCTLP; Chair to Ed Westbrook, 14 July 1919, box 2–10/533, Record Group 455, Texas State Archives, Austin, Texas [hereafter cited as RG 455, TSA]; 29th Annual Report of the RCT (1920), 5–6; 39th Annual Report of the RCT (1930), 4, 63–65; 41st Annual Report of the RCT (1932), 85–91; 44th Annual Report of the RCT (1935), 30–36; 48th Annual Report of the RCT (1939), 26–33; Oil and Gas Division Annual Report of the RCT (1939).

49 Chandler, Alfred D. Jr, Strategy and Structure: Chapters in the History of the American Industrial Enterprise (Cambridge, Mass., 1962)Google Scholar.

50 Susman, “‘Personality’ and the Making of Twentieth Century Culture,” 275; Roell, Craig H., The Piano in America, 1890–1940 (Chapel Hill, N.C., 1989), xii–xviiGoogle Scholar.

51 “Clarence Gilmore Victim of Heart Attack,” Austin American Statesman, 11 Oct. 1929, Vertical File, Biographical, BTHC; Clarence Gilmore to John Marshall, 16 Sept. 1919, RCTLP (quotations); Larson, Henrietta M. and Porter, Kenneth W., History of Humble Oil & Refining Company: A Study in Industrial Growth (New York, 1959), 312, 451Google Scholar.

52 George C. Butte Papers, esp. boxes 2B163, 2B169, 2B172, and 2B173 and Vertical Files, BTHC; Brown, Norman D., Hood, Bonnet, and Little Brown Jug: Texas Politics, 1921–1928 (College Station, Tx., 1984), 247–51Google Scholar.

53 George C. Butte to W. B. Wortham, 30 March 1920, box 4–3/364; Butte to T. L. Coplin, 7 May 1920, box 4–3/385; Parker to T. J. Strickler, 26 June 1922, box 2–10/541 (quotation); Bell to Leslie McKay, 26 Aug. 1926, box 4–3/392; R. D. Parker to Geo. W. Tilley, 18 Jan. 1928, box 2–10/555; John Hoffer to Parker, 7 June 1929, box 2–10/558, all in RG 455, TSA; Brown, Hood, Bonnet, and Little Brown Jug.

54 Gilmore to W. B. Hamilton, 4 May 1928, RCTLP (quotation).

55 Olien, Roger M. and Olien, Diana Davids, Easy Money: Oil Promoters and Investers in the Jazz Age (Chapel Hill, N.C., 1990)Google Scholar.

56 For examples of how the experts were dealing with these problems and learning from experience, see the articles in Transactions, the journal of the American Institute of Mining and Metallurgical Engineers, for 1930 and 1931.

57 Parker to Bertram E. Giesecke, 18 Sept. 1930, box 2–10/565, wallet 1930 and H. E. Bell, Memorandum to the Railroad Commission, 15 Jan. 1926, box 2–10/551, wallet 1926–27, RG 455, TSA.

58 Pratt, Joseph, “Creating Coordination in the Modern Petroleum Industry: The American Petroleum Institute and the Emergence of Secondary Organizations in Oil,” Research in Economic History 8 (1983): 179215Google Scholar.

59 For a convenient list of cooperative industrial activities and citations, see McCraw, Prophets of Regulation, 147–52, 342n9, 13, 343n14, 18.

60 Day, “Oil and Gas and Texas Politics,” 68; Larson and Porter, History of Humble Oil and Refining, 312–15, chap. 13. The state's problems with Standard reached back to 1899 and the so-called Waters-Pierce imbroglio. See Pratt, Joseph, “The Petroleum Industry in Transition: Antitrust and the Decline of Monopoly Control in Oil,” Journal of Economic History 40 (1980): 815–37CrossRefGoogle Scholar.

61 Brown, Hood, Bonnet, and Little Brown Jug, 128; “To all Klansmen of the State,” 10 July 1924, box 301–421, folder 28, Miriam A. Ferguson, Governors Records, Texas State Archives, Austin, Tx., for charges that TRC candidate Lon Smith supported the Klan.

62 All are found in RG 455, TSA: Bell, “Memorandum to the Railroad Commission,” 15 Jan. 1926, box 2–10/551; Gilmore, C. V. Terrell, Lon Smith to Bell, 17 Feb. 1926, box 4–3/391; Pat Neff to P. L. Anderson, 28 Aug., to H. C. Connally, 29 Aug., to J. E. Nunn, 29 July 1931, all in box 2–10/568; J. A. Morehouse to Bell, 22 July 1926, box 4–3/387; Bell to W. J. Carden, 29 July 1926, box 4–3/391; D. B. McGinty to Terrell, 9 July 1932, box 4–3/389; Omar Burkett to Terrell, 9 March, 5 April 1930, and Terrell to Burkett, 9 April 1930, box 2–10/565; materials in boxes 127, 133, and 135, Pat M. Neff Papers, Texas Collection, Baylor University, Waco, Tx., indicate Neff, who was a commissioner from late 1929 until the spring of 1932, tried to expose the corruption attending C. V. Terrell's political activity.

63 Susman, “‘Personality’ and the Making of Twentieth Century Culture,” 271–76 and “The Culture of the Thirties,” 158–59; Keller, Morton, Regulating a New Economy: Public Policy and Economic Change in America, 1900–1933 (Cambridge, Mass., 1990)Google Scholar.

64 “In Memory of Clarence Edgar Gilmore,” 38th Annual Report of the RCT (1929), 3–4; Larson and Porter, History of Humble Oil and Refining, 451 (quotation); “Neff Rail Member,” Austin American Statesman, 14 Oct. 1929; Parker to Tilly, 16 Oct. 1929, box 2–10/558; Neff to H. C. Connally, 29 Aug. 1931, box 2–10/568, RG 455, TSA; see Neff Papers citations in note 62.

65 “Pipeline Bill Is Made a Law When Moody Files It,” Austin American Statesman, 18 March 1930; Day, “Oil and Gas and Texas Politics,” 69–72.

66 Hart, “Oil, the Courts, and the Railroad Commission,” 312; Day, “Oil and Gas and Texas Politics,” 83–87; Shuman, Ronald B., The Petroleum Industry: An Economic Survey (Norman, Okla., 1940), 266–67Google Scholar, notes that only 6,000 of the 22,000 wells drilled by 1938 were needed to drain the pool efficiently. See also Constant, “State Management of Petroleum Resources: Texas, 1910–1940,” 161; “Oil Enriches Texans Hard Hit by Drouth and Without Money,” Austin American Statesman, 20 March 1931, 6; Rister, Carl Coke, Oil! Titan of the Southwest (Norman, Okla., 1949), 326Google Scholar; Williamson, et al., American Petroleum Industry, 564–65.

67 Olien, Roger M. and Olien, Diana Davids, Wildcatters: Texas Independent Oilmen (Austin, Tx., 1984), 5658Google Scholar; Prindle, Petroleum Politics, 49–50.

68 Olien and Olien, Easy Money; Clark, James A. and Halbouty, Michel T., The Last Boom ([1972]; Tx., 1984)Google Scholar; Knowles, Ruth S., The Greatest Gamblers: The Epic of American Oil Exploration (Norman, Okla., 1978)Google Scholar; Day, “Oil and Gas and Texas Politics,” 87, 93 (quotation).

69 “Texas Legislature Works on Oil Law,” New York Times, 19 July 1931 (quotation); “East Texans Gird for Oil Parley Here,” Austin American Statesman, 21 March 1931.

70 Constant, “Cause or Consequence,” and “State Management of Petroleum.”

71 All in Austin American Statesman: “East Texas Force Resists Proration,” 24 March 1931; “Proration is Illegal, Oil Men Told,” 25 March 1931; “Penn Lunges at Moody from Chair,” 27 March 1931; “Oil Lobby Faces Bitter Fight in Special Session,” 13 July 1931; Day, “Oil and Gas and Texas Politics,” 85–87ff., 88 (quotation).

72 Gilmore to Gus F. Taylor, 10 June 1927, RCTLP; Day, “Oil and Gas and Texas Politics,” 88–89 (quotation). Estes was editor of the Tyler, Texas, Daily Courier-Times and promoted organization of numerous East Texas units of the East Texas Lease, Royalty & Producers Association. Of a populist temper, he sought to prevent the major oil firms from controlling the new wealth in East Texas.

73 “East Texas Force Resists Proration,” Austin American Statesman, 24 March 1931; Day, “Oil and Gas and Texas Politics,” 92–93.

74 “99 Legislators Indicate Favor for Oil Conservation Bill,” Austin American Statesman, 1 July 1931; Constant, “State Management of Petroleum Resources,” analyzes the court battles, and “Cause or Consequence, ” 164ff.; Olien and Olien, Wildcatters, 61. Most of the fields that the TRC controlled before East Texas operated on gas lift. Rapid extraction of oil in East Texas led to salt water contamination sooner than in gas lift fields.

75 All in Austin American Statesman: “99 Legislators Indicate Favor for Oil Conservation Bill,” 1 July 1931; “Sterling Stresses Conservation Need,” 14 July 1931; “Oil Inquiry Opened,” 18 July 1931; “Terrell and Smith Tell House Version of Split with Neff,” 19 July 1931; “Sick Brother Keeps Neff from Oil Quiz,” 20 July 1931; Raymond Brooks, “Lawmakers Forgetting Politics and Trying to Aid Oil Industry,” 19 July 1931.

76 Day, “Oil and Gas and Texas Politics,” 114–16; “Grand Row Near in East Texas Oil Field, Umpire Says,” Austin American Statesman, 7 June 1931 (quotation).

77 Day, “Oil and Gas and Texas Politics,” 99–116, 170. Although the two laws enacted in the summer of 1931 were in part intended to strengthen TRC powers (one amended an earlier conservation law, the other amended the 1930 Common Purchaser law), the proscription against market-demand proration negated most of the gains; Presley, James, A Saga of Wealth: The Rise of the Texas Oilmen (New York, 1978), 140Google Scholar; boxes 301–455 through 301–560, Ross Sterling Governors' Records, Texas State Library, Austin, Tx., contain revealing materials on military enforcement of TRC regulations.

78 Day, “Oil and Gas and Texas Politics,” 149.

79 “Neff Resigns; Thompson Named,” Austin American Statesman, 25 May 1932.

80 Clark, James A., Three Stars for the Colonel: The Biography of Ernest O. Thompson, Father of Petroleum Conservation (New York, 1954)Google Scholar, chap. 5, passim. The biography, the only one of an RCT commissioner, should be used with care.

81 “Texas Topics,” 30 May 1932, (quotation) and “Landslide Seen for Thompson in Rail Race,” Austin American Statesman, 26 Aug. 1932. Thompson had to run for election to complete the four years left in Neffs six-year term.

82 Susman, “‘Personality’ and the Making of Twentieth-Century Culture,” 277, quoting from Laurent, Henry, Personality: How to Build It (New York, 1915), iv, 29Google Scholar, translated from the French by Richard Duff (quotation); Susman, “Culture of the Thirties,” 153–58. Thompson displayed numerous aspects of this new individual, including keeping up on the latest ideas about culture and society, a trend that captivated many Americans in the 1930s. He told his audiences that he saw the troubled 1930s as a continuation of the accelerated pace of transition into modern society that Frederick Lewis Allen had chronicled in Only Yesterday: An Informal History of the 1920s (1931). “The Texas Situation (for publication by Carl Estes),” 20 April 1934, box 4–3/329, EOT Records.

83 H. J. Porter to Preston Martin, 12 July 1932 (first industry member quotation); H. C. Moran to O. D. Hundall, 11 July 1932 (second industry member quotation); Hundall to Moran, 27 June 1932 (TRC employee quotation), all in box 4Ze136, Ernest Othmer Thompson Papers, 1907–1967, Barker Texas History Center, Austin, Tx. [hereafter cited as EOT Papers].

84 Susman, “‘Personality’ and the Making of Twentieth Century Culture,” 277 (quotation, emphasis in original).

85 Ibid., 283 (quoting Schickel, Richard, His Picture in the Papers: A Speculation on Celebrity in America Based on the Life of Douglas Fairbanks, Sr. (New York, 1974), 9); Clark, Three Stars for the Colonel, 74–75; Day, “Oil and Gas and Texas Politics,” 161.Google Scholar

86 “Special Session Assured,” 2 Nov., “Market Demand Bill Agreed On,” 3 Nov., “Solons Pass and Sterling Signs New Oil Measure, ” 13 Nov. 1932, all Austin American Statesman; Day, “Oil and Gas and Texas Politics,” 151–57, 155 (quoting Estes, from Houston Post-Dispatch, 4 Nov. 1932). The so-called Champlin case had upheld market demand proration in Oklahoma; the so-called People's case had overturned a TRC order because it had been based on market demand and thus violated Texas statutes.

87 Day, “Oil and Gas and Texas Politics,” 188–210.

88 Committee on Oil, Gas and Mining to Coke R. Stevenson, 13 March 1933 and “J. B.” to Bob Long, 15 March 1933, box 4–3/330; J. R. Parten to Nathan Margold, 30 April 1933, box 4–3/335, EOT Records.

89 Olien and Olien, Wildcatters, 61; Presley, Saga of Wealth, 154–57; Day, “Oil and Gas and Texas Politics,” 203–6.

90 For a concise and incisive portrait of Ickes and sources, see Stoff, Michael B., Oil, War, and American Security: The Search for a National Policy on Foreign Oil, 1941–1947 (New Haven, Conn., 1980), 1217Google Scholar. For an overview of the 1930s and oil policy, see Hawley, The New Deal and the Problem of Monopoly, 212–20 and the relevant chapters in the works by Nash, Clark, and Brand cited earlier.

91 Day, “Oil and Gas and Texas Politics,” chaps. 5–7. Much of Thompson's correspondence for 1933 is located in box 4–3/335, EOT Records; see also Thompson to Amarillo Daily News, 24 Feb. and EOT to Sam Greer, 28 June 1934, box 4Ze136, EOT Papers; clipping from Houston Press, “Texas Not to Bow to Ickes,” 11 Jan. 1934, box 4–3/329; Thompson to Tom Connally, 22 March 1934, box 4–3/336; Melvin P. Boyd to Thompson, 29 April 1935, box 4–3/331; “Statement of Ernest O. Thompson… on the Thomas Federal Oil Control Bill,” n.d., box 4–3/330, all in EOT Records; see also in Austin American Statesman: “Texas to Present Solid Front for Thomas Oil Fight,” and “Thompson Asks Why F. D. Called No Oil State Men,” 14 April 1935; “Thomas Oil Bill is Considered as Good as Dead,” 21 April 1935.

92 Telegrams, TRC to Harold L. Ickes, 5, 6 Sept. and 24 Nov. 1933, box 4–3/335, EOT Records.

93 Telegram, J. H. Walker to FDR, 10 May 1934, box 4–3/335, EOT Records.

94 Thompson to J. Edgar Pew, 14 Oct. 1933, box 4–3/335, EOT Records (quotation).

95 Day, “Oil and Gas and Texas Politics,” 269, quoting from Oil and Pipe Lines, Hearings, before Committee on Interstate and Foregin Commerce, House of Representatives, 73d Congress, 2d sess., 1934, 45.

96 Day, “Oil and Gas and Texas Politics,” 244ff.

97 Owen P. White, “Piping Hot,” Collier's, 12 Jan. 1935, box 4–3/330, EOT Records; E. Baker, “Not So Hot,” manuscript article rejected by Collier's, c. 5 March 1935, box 4Ze139, EOT Papers.

98 Day, “Oil and Gas and Texas Politics,” 249–52.

99 Clark, Energy and the Federal Government, 237–43; Day, “Oil and Gas and Texas Politics,” 291–303, 314.

100 “Financial Aspect of Texas Oil,” 22 May 1935, p. 2, box 4–3/338, EOT Records (first quotation); “Thompson Tells of Commission's Oil Field Work,” Dallas Morning News, 10 July 1936, box 4Ze136, EOT Papers (second quotation); “General, 1936” (campaign literature), box 4–3/327, EOT Records (third quotation); “Address of Ernest O. Thompson, Railroad Commissioner of Texas, San Antonio, Texas—May 25, 1936,” box 4–3/338, EOT Records.

101 Walter Splawn to W. P. Hobby, 15 Oct. 1935, box 4Ze136, folder RRC Corresp. May-Dec. 1935, EOT Papers (quotation).

102 M. M. Crane to Ed [Crane], 22 Aug. 1936, box 3N102, (first quotation) and 23 July 1938, box 3N103, (second quotation), Martin McNulty Crane Papers, BTHC.

103 Baughman, Luce and the Rise of the American News Media, 45 (quotation); Richard Denney Parker Papers, boxes 3F90–91, BTHC.

104 Annual Report of the Oil and Gas Division (1939), 10–15; 49th Annual Report of the RCT (1940), 26–32. Comparison of these volumes suggest that as many as 120 oil and gas workers and 45 motor transportation division employees had been let go during 1940; Audit Report and Personnel Survey Railroad Commission of Texas, August 31st, 1943, box 2–10/574, RG 455, TSA.

105 Clark, Energy and the Federal Government, 242–43, 249–50.

106 Doig and Hargrove, Leadership and Innovation, 8–12.

107 “Thompson Tells of Commission's Oil Field Work,” 10 July 1936, Dallas Morning News (first quotation); “Statement of Ernest O. Thompson, Chairman Railroad Commission of Texas,” 4 June 1936, box 4Ze139, EOT Papers (second quotation).

108 boxes 4–3/318–324, EOT Records; EOT to Dean Acheson, 8 Sept. 1951, box 4ze137, EOT Papers; Clark, Three Stars for the Colonel, 226–30.

109 Thompson to Al Buchanan, 11 Sept. 1942, box 4ze137, EOT Papers (first quotation) (this was a speech Thompson wrote for Buchanan to deliver); “Statement of EOT,” 26 April 1943, box 4–3/324, EOT Records (second quotation).

110 “A Texas Viewpoint on the Proposed Anglo-American Oil Treaty,” n.d. [probably Aug. or Sept. 1944] (quotation); “An International Oil Picture,” 3 Nov. 1944, box 4–3/324, EOT Records.

111 “Remarks on Secondary Recovery at the Great Falls, Montana, Compact Meeting,” 10 Aug. 1947, box 4ze139, BTHC; Press Release, 21 March 1950 (quotation) and “The Necessity of Clear, Technical Testimony in Administrative Processes,” 14 Nov. 1949, box 4–3/321, EOT Records, TSA.

112 “Octane vs. Conservation,” 24 April 1947, box 4–3/320; “Excerpts from official transcript of statewide hearing held in San Antonio, Texas,” 17 Feb. 1950, box 4–3/321, EOT Records; “Citizen-Soldier Lays Down His Shield,” Texas Oil Report, 8 Jan. 1965, box 4ze139, EOT Papers.

113 Prindle, Petroleum Politics, 70–71ff., 149–50 (quotation), 185–88.

114 Smith, “The New Deal as a Cultural Phenomenon,” 219, 225; Hawley, The New Deal and the Problem of Monopoly.

115 Hargrove, “David Lilienthal,” 27–62; McCraw, Prophets of Regulation.

116 Doig and Hargrove, Leadership and Innovation, 15–16 (quotation).

117 Prindle, Petroleum Politics, argues that the TRC favored independents; Olien and Olien, Wildcatters, 65–66, note that results did not match the rhetoric; “Famed wildcatter Glenn McCarthy dies,” Dallas Morning News, 28 Dec. 1988; Robert A. Calvert and Walter L. Buenger, “Introduction: The Shelf Life of Truth in Texas,” Texas Through Time, ix–xxxv.

118 See all of the articles, but especially Hardwicke, Robert E., “Legal History of Conservation of Oil in Texas,” Legal History of Conservation of Oil and Gas: A Symposium (Section of Mineral Law of the American Bar Association, 1938), 214–68Google Scholar; Constant, Edward W. II, “Science in Society: Petroleum Engineers and the Oil Fraternity in Texas, 1925–1965,” Social Studies of Science 19 (1989): 439–72CrossRefGoogle Scholar; Prindle, Petroleum Politics, 151–56, 162–63. Expertise was now lodged in the secondary levels of the agency hierarchy. After 1940, only two commissioners had any technical training. Olin Culberson had some utility experience from earlier service at the TRC, and William J. Murray, who served from the late 1940s to the early 1960s, was a professionally trained petroleum engineer.

119 Prindle, Petroleum Politics, 9, 44ff., 73–74, 151–56, 185–88; Clark, Three Stars for the Colonel; Oral History of the Texas Oil Industry, BTHC; for a recent example, see “Texas loses oil production title to Alaska,” Austin American Statesman, 14 Jan. 1988.

120 See note 100 (quotation). The myth of the TRC's price-fixing powers came out clearly in “The Three Wise Men of Texas,” Financial Times (London), 11 Jan. 1957Google Scholar, box 4ze137, EOT Papers; Hargrove, “Lilienthal and TVA,” 56–57.

121 Prindle, Petroleum Politics, 185–88, for a vivid description of this contradiction in action.

122 The following paragraphs are based on Zimmermann, Conservation in the Production of Petroleum, 11–12, 213–26ff.; Prindle, Petroleum Politics, chap. 4 (and see 132–33 for his criticism of Zimmermann); and Cassady, Price in the Petroleum Industry, chaps. 7, 8.

123 Zimmermann, Conservation in the Production of Petroleum, 226 (quotation); Cassady, Price in the Petroleum Industry, 134–40; Clark, Energy and the Federal Government, 242; Liebcap, “The Political Economy of Crude Oil Cartelization.”

124 Thompson review of Zimmermann, in galleys, scheduled to appear in the API Quarterly autumn 1957 issue, box 4Ze138, EOT Papers (quotation).

125 Not until recently was the proration system in East Texas challenged seriously, and that failed: “Judge signs final order on oil output rates,” Austin American Statesman, 4 Jan. 1991.

126 Zimmermann, Conservation in the Production of Petroleum, 214–16; Liebcap, “Political Economy of Crude Oil Cartelization,” 845, disagrees that Texas cut its production proportionately more than the others.

127 Hargrove, “David Lilienthal,” 58 (quotation).

128 Jared Hazelton, “Oil-price game forces Texas to adjust expectations,” 17 April 1989, Austin American Statesman.

129 Nash, United States Oil Policy; Clark, Energy and the Federal Government; Vietor, Energy Policy in America since 1945.

130 Constant discusses multiple causation relevant to this topic in his “Cause or Consequence.”

131 Shuman, Petroleum Industry, 265–72; Williamson, , et al. , American Petroleum Industry, 2: 535–56Google Scholar; McDonald, Stephen L., Petroleum Conservation in the United States: An Economic Analysis (Baltimore, Md., 1971)Google Scholar, chap. 7, esp. 225–26; Day, “Oil and Gas and Texas Politics,” 318.

132 Clark and Halbouty, The Last Boom, 286; “Judge signs final order on oil output rates,” Austin American Statesman, 4 Jan. 1991.

133 The capture thesis originated during the East Texas crisis; Childs, “Origins of the Texas Railroad Commission's Power to Control Petroleum,” 356, 376–77n14; Audit Report and Personnel Survey RCT, 1943; Willbern, York Young, “Administrative Control of Petroleum Production in Texas” (Ph.D. diss., University of Texas, 1943)Google Scholar; Davis, Kenneth Culp and Willbern, , “Administrative Control of Oil Production in Texas,” Texas Law Review 22 (1944): 149–93Google Scholar; “Railroad panel embraces cost-cutting changes despite hesitance,” Austin American Statesman, 13 May 1987; “One Tough Bird,” Texas Monthly, June 1990, 132–35.

134 See citations in note 117; Prindle, Petroleum Politics, chaps. 7–9, especially 168–69.

135 Paul Burka, “Boom Town,” Texas Monthly, Dec. 1990, 120ff., reveals a new Texan approach to the industry cycles of booms and busts.

136 See note 16; Vietor, Energy Policy in America since 1945, 349–54, contains a fluid structural model within which further research on the themes presented in this article should be pursued. My argument that the myth of power hid from public view the fact that market forces still operated supports Vietor's contention that energy policymakers did not pay close enough attention to market forces after 1945. Also useful for further research is the theme of inherent instability in regulatory regimes presented in Hammond, Thomas H. and Knott, Jack H., “The Deregulatory Snowball: Explaining Deregulation in the Financial Industry,” Journal of Politics 50 (Feb. 1988): 330CrossRefGoogle Scholar.