Let’s Make a Deal
If Dad Joiner had said no in 1930 he could have been H.L. Hunt.
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Pick up a history of the Texas oil industry, or of the big figures in oil, and chances are it will include a photograph taken one day in October 1930 showing a group of men in front of an oil rig. Sometimes the photograph is cropped to show only two of the men: Columbus Marion Joiner (called Dad), the man who promoted the well, and A.D. Lloyd (called Doc), a self-taught geologist who provided the “scientific” support for Joiner. Usually they are the only two people identified in the captions. But there is another man in the picture, a tall, heavy man with a boater straw hat on his head, a big cigar in his mouth, wearing a white shirt with a tie blowing in the breeze. That man is H. L. Hunt, who had come over from Arkansas to see what Joiner was up to. Hunt had heard about the Joiner promotion from some people he knew in
El Dorado who had developed a tool for testing oil wells that they were going to use in Joiner’s well. He came over to Rusk County, where Joiner was drilling, took a room in a hotel in nearby Henderson, the county seat, and watched and waited. When the well test showed oil in the well, Hunt bought some cheap leases near Joiner’s well. They had to be cheap, because he was just about broke. Then on a humid Sunday in early October, before an audience of local farmers and sightseers, Joiner’s crew got the well to erupt over the top of the slapdash wooden derrick, and another boom was on, the one that H.L. Hunt had been waiting for.
It wasn’t much of a well, despite its initial roar, but it was enough to start the usual hysterical rush for leases, beds, food, booze, and money. The Joiner well—known as Daisy Bradford No. 3, after the woman on whose land Joiner had drilled three times in three years—had tapped the largest pool of oil ever found in the United States. But the boom began before anybody knew that, for reasons that had little to do with what was under the ground. That part of East Texas always had been a poor country of small farmers trying to make a living from patches of corn and cotton. It was the Texas equivalent to Appalachia, out of the mainstream and going nowhere. There had been oil in the region before, in Van Zandt and Navarro counties and elsewhere. And oil people had taken a look at Rusk and Gregg counties over the years, even drilling some wells sometimes. But nobody authoritative figured there was anything there, though the Humble company held onto some leases because they were cheap.
Aside from that, there was no major oil company interest in what Joiner was doing. That part of East Texas just didn’t look like serious oil country.
For Joiner, that didn’t mean anything. In fact, the absence of any major company interest probably even made the place more appealing to him, because he was the classic promoter for whom the raising of money and the search were the game. Joiner had leased up about 10,000 acres in the Twenties and raised money by selling off pieces of his leases. He had been an oil promoter for 30 years or so, and he had even drilled in a couple of places where oil later was found by others. But that probably was sheer luck, though some people think it indicated some special sense about where oil was. What Joiner unquestionably did have was the ability to talk people, especially women, out of money and whatever else he needed from them. That talent may have been his most important resource, but it was well enough known so that it also became a weak point, a way to get to him.
So here is this old-time oil promoter, 70 years old by this time, with nothing to show for his years of wandering and hustling except this broken-down oil rig that barely made a hole. Joiner had hustled just about everybody in the area over the years he drilled on Daisy Bradford’s farm. He traveled to El Dorado, to Dallas, to Oklahoma, peddling shares in his scheme. He paid for haircuts, clothing, and meals with the pieces of paper that represented interests in what he was going to find. A college boy vacationing in his father’s oilfield supply house once lent Joiner a hundred dollars and couldn’t even get him to sign the document that would give him a quarter interests in a lease in return for the loan. As it turned out, five other people also had quarter interests in the lease, so Joiner gave him a sixty-fourth interest in something else instead.
“Joiner knew when he sold more than he had. I’m sure he always had it all in his head,” this man told me.
But in those days, the local people and the widows took Joiner’s funny paper and put up money and haircut and food and firewood for the boiler that powered his drill and hard labor too—because his crew often got leases instead of pay. But they wanted to believe in this smooth talker who kept promising that he was going to find an ocean of oil for them. The Roaring Twenties and the marvelous speculative orgy in Wall Street had passed them by. They desperately wanted a piece of some kind of dream, and Joiner’s was the only one in town, so they kept buying in. When Joiner turned the dream into reality for a change, the burst of excitement was inordinate, even for an oil boom, because it was fueled by all that local hope and by the fact that the major companies had passed it by, so the price of leases was still relatively cheap.
About all that many of Joiner’s backers knew or cared about his project was contained in a geological map of the area prepared by Doc Lloyd, the man Joiner is shaking hands with in the photograph. The former medicine show impresario had hoked up a completely false description of the subsurface that any geologist who knew the area would have laughed at. But it wasn’t an exploration map; it was a money-raising map. And it served its purpose. It helped finance Joiner’s drill down to the oil.
Joiner had no reason to expect that he would be successfulin Rusk County. He never had been before, though he had always managed to survive fairly well on dry holes. His overselling of interests in his operations never mattered as long as the holes were dry. And the fact that the titles on much of the land he had leased were murky at best didn’t matter either, so long as he didn’t find any oil. Not everybody who bought into Joiner’s syndicates was a naive sucker. Some people quickly discovered little details like this: in one of Joiner’s offering, investors each got a 1/300 interest in one tract plus four acres of another tract of 320 total acres. Now, it is one thing to divide a tract into 300 parts, but how do you get 300 four-acre pieces out of 320 acres? As it turned out, Joiner had routinely over sold his holdings, sometimes selling the same thing to half a dozen or more different buyers. From the time that the first indications of oil appeared in his well, he knew that success could ruin him. Even before the well blew in, suits were filed against him asking that his holdings be put in the hands of a receiver for sorting out.
The first case was heard in Henderson before a judge named R. T. Brown, who listened to the lawyers’ statements and then made this oftquoted decision: “I believe that when it takes a man three and a half years to find a baby, he ought to be able to rock it for a while. This hearing is postponed indefinitely.”
The case was dropped soon afterward, but another was brought in Dallas, where Joiner was not some kind of local hero, and the judge there appointed a receiver to straighten out some of Joiner’s messy financial arrangements.
H. L. Hunt had seen a lot of promoters and booms by this time, and he had a pretty fair idea of the kind of trouble Joiner was in when all those investors came down on him for their money. He also knew something about the problem of hazy titles on land. After all, he had been around the land business in Arkansas and Louisiana for a decade. In East Texas, as in other remote rural areas, land had changed hands often without the changes in ownership being recorded at the courthouse. Small holders often just traded small pieces back and forth without telling anybody else. Boundary markers were vague—“the elm tree,” “the north side of the barn,” and similarly imprecise landmarks were used and—heirs often didn’t even know exactly what they owned or had a right to lease to an oil promoter. None of that mattered as long as there was nothing to claim. Besides, a good lawyer could often settle complicated title problems with simple compromises. Such problems may have intimidated
Dad Joiner, but Hunt knew something about those matters from his past experience, and he knew a good lawyer in Henderson, a man named J.B. McEntire. He had been a county judge for a while, and he was still called “judge.” He was a formidable-looking man in somber clothes with a pince-nez on his hooked nose. People who remember him say he had an encyclopedic knowledge of the law combined with an aggressive view of his clients’ interests.
‘That’s why they built courthouses,” he used to say when confronted with the prospect of a lawsuit.
Hunt, of course, had no more idea than anybody else of what was down there under those rolling fields and piney woods. The geologists of the big companies had swept the area time and again with their newly developed seismographic equipment, and they never saw any indications of the kind of oil-bearing structures that their seismic surveys had located with considerable accuracy elsewhere. Nor did Hunt have any idea that Doc Lloyd’s map was a phony. Of course, he may never have seen it, because it was designed for trusting investors, not oil men. But Hunt—like a lot of independent oil men—had little faith in geology, and—like a lot of promoters—he tended to believe promoters. Years later, Hunt offered at least two versions of why he was interested in the Joiner operation. On one occasion, he said it was because some geologist in Shreveport had offered him a theory about the area that somehow meshed with the way the Daisy Bradford No. 3 was producing.
Another time, he credited it all to some magical power of his own: “I had a hunch,” he said. Which is unlikely.
Geology was never something that Hunt was particularly good at. In fact, according to one close relative, Hunt’s geological judgments often sounded like the rankest sort of nonsense, even when his decisions proved right. His son Bunker recently marveled at the fact a man so quick with numbers never really got the hang of petroleum geology. But it was in keeping with the man’s curious view of himself in the world. He claimed to be the world’s greatest checkers player, and he was apparently very good at the game. But he often sneered at chess as being not nearly so “scientific.” It was another way that he kept the world within boundaries he could control and in which he could excel.
What mattered at this point was that there was some oil under Joiner’s lease and that a lot of people were trying to get their shares of it, which meant that Joiner was in a kind of trouble he was unaccustomed to. If Joiner’s well was anything but a fluke, his leases would be worth a lot of money, the amount depending as much as anything on what it cost to unscramble his legal troubles and satisfy his creditors and investors. Hunt himself was nearly broke. He has said that he had only $109 in the bank at that time. But the first thing he did was to get together enough money and credit to start a well on a lease he owned that was just south of Joiner’s discovery well. Other people were also beginning to drill wells on land near the
Daisy Bradford farm. One was of particular interest to Hunt. It was called the Ashby No. 1 on a lease owned by Deep Rock Oil Company. What was of interest to Hunt was that the Deep Rock lease was a little west of Joiner’s well on land almost completely surrounded by Joiner leases. Years before, wells drilled on land just east of the Bradford farm had been dry. Hunt was now drilling south of Joiner, and Deep
Rock was drilling to the west. Within a few weeks, there would be a lot more information about which way the field went, if in fact there was an oilfield and not just a freak pool under Joiner’s third try.
The boom in East Texas was getting considerable press coverage all over the area. One story in a paper in Longview, a few miles north of the Joiner well in Gregg County, reported that a dozen or so new wells were being drilled in the region including some up their way. The businessmen of Gregg County, their appetites whetted by what was going on just south of them in Rusk County, had offered a prize of $10,000 to whomever brought in the first oil well in their county, though nobody had any real thought that the field, if any, under the Bradford farm could possibly extend that far north. But a lot of people hoped that if there was a pool in Rusk County, there could just as well be another one in Gregg.
One notable detail of this report of October 26, 1930, in the Longview Daily News, was that among the mentions of the various enterprises engaged in the drilling of wells in the area, including some fairly substantial organizations, only a single one was described other than by name: “The H.L. Hunt company is one of the biggest independently owned concerns in the Southwest.”
If the Southwest was meant to include Arkansas, Oklahoma, and Texas, the statement was not yet true. Hunt was still a marginal operator with little output and a big debt load. At the time it appeared in print, it was no more than a harmless piece of puffery. But Hunt had a plan, and if it worked, that statement soon would be accurate.
When the court in Dallas appointed a receiver for Joiner’s holdings, Hunt realized that the old man was losing his tenuous grip on his business. Though Joiner had read law as a young man in Tennessee and had even served a term in the Tennessee Legislature around the time Hunt was born, Joiner was intimidated by what was happening to him and didn’t see his situation as merely a string of legal actions that could be sorted out by lawyers. But that is the way it looked to Hunt and J.B. McEntire. It was certainly a confusing and intimidating situation, no matter how you looked at it. But Hunt realized that if there was enough oil under Joiner’s leases, most of the claims could be settled with the claimants coming out with more money than they had probably ever expected.
Hunt had only one problem at the time, the usual one: he was broke. But his haberdasher friend Pete Lake had plenty and had gone into the business of lending it when he came over to East Texas with Hunt. So when H.L. got the idea of buying out Joiner, Lake agreed to stake him in exchange for a piece of the action. They went off to Dallas with some friends and took rooms in the Baker Hotel where Dad Joiner spent a lot of his time raising money and hiding out from creditors.
At that point, Hunt still didn’t know how good Joiner’s holdings were, but he set up an arrangement that would tell him before anybody else knew. He assigned one of his scouts from El Dorado to hang around the Deep Rock rig and get information about what was underground. As soon as there was an indication of oil, the scout was to get in touch with another Hunt man, Charles Hardin, a hard-drinking ruffian from Arkansas, who was stationed at a telephone with instruction to call Hunt as soon as the Deep Rock showed anything.
Hunt, Lake, McEntire, and at least one other man (who refers to his role as “a good Samaritan for Hunt”) began a high-pressure campaign to isolate and entertain Dad Joiner. The old hustler was kept from contact with anybody outside the hotel, and there are stories of constant partying with women and booze for the old man, who, even at seventy, led an active life. On an afternoon in late November 1925, Hunt got a call from his man Hardin stationed in Henderson. The crew at the Deep Rock well had reached sand, and the scout had seen the drilled core taken from the well and said it was saturated with oil for more than ten feet. That meant that the field, however big it might be, extended westward into the major part of Joiner’s lease. Hunt was now ready to relieve Joiner of his terrible legal harassments and give him enough money to go off and try to find another field somewhere else. Hunt, according to a man who was there, did not mention Hardin’s call about the Deep Rock, but he did remind Joiner of all the oilfields that had been flooded by water and otherwise played out soon after their discoveries. Joiner had been around long enough to know that was true, and in a few hours, he accepted Hunt’s remarkable offer. It was remarkable for two reasons: for one thing, it gave Joiner more money than he had ever dreamed of, and, for another, Hunt didn’t put up a penny to get what he then believed could be an enormously rich group of leases.
Joiner held three groups of leases totaling about 5580 acres. Hunt paid Joiner $30,000 in cash, plus a series of four notes payable over nine months totaling $45,000, and $1,260,000 to be paid out of oil produced on the leases, if they produced. Hunt got the $30,000 from Pete Lake in exchange for a 20 per cent interest in the deal. The first note for $10,000 was not due for three months. So the leases, or an undivided 80 per cent interest in them, were acquired for nothing at that moment. If the other wells being drilled in the area established that Joiner had found a rich pool, then there would be all the money Hunt would need to pay off the balance as it came due. In three months, he would surely know whether Pete Lake’s money had bought them a bundle or not. Meanwhile, the terms of the deal gave Hunt complete discretion over the ways and the times he would be required to develop the leases by drilling additional wells, so he didn’t even have to come up with development money until he was sure of what he was drilling into.
I have read that when the news about the Deep Rock well became public a few days later, Joiner was offered more than three million dollars for his leases. That may well have been true. It certainly was a fact that Joiner didn’t know, at the moment he signed the contracts, that the Deep Rock looked like a big well and that he could have commanded a much higher price if he had known. But the worst that can be said for the coup that Hunt brought off was that he had conned a con man.
Hunt once called that deal “the greatest business coup” of his career.
It was more than that, because, as it turned out, the Joiner leases were to produce enough money for him so he would always have enough resources to play the game his way—to be the house in effect, seeking and producing oil without ever again having to be concerned about running out of money or being forced to sell out his interests. He would be in control.