The Best of the Texas Century—Business

December 1999By Comments

Chain of the Century

All convenience stores are 7-Elevens—not literally, of course, but just as all colas are Cokes and all tissues are Kleenex, the brand is such an icon that it’s practically synonymous with the product. There are 5,600 or so 7-Eleven locations in the U.S. today, each open 24 hours a day, seven days a week, meaning if you absolutely, positively need a Slurpee or a Big Gulp or a Slim Jim at three in the morning, no problem. That wasn’t quite what the Southland Ice Company of Dallas had in mind in the late twenties when its sixteen ice stores in Oak Cliff began selling milk, eggs, and bread, but as the saying goes, from small things big things one day come. Or to put it another way: Oh, thank heaven. Runner-up: San Antonio–based H-E-B, the eight-hundred-pound gorilla of Texas grocers, with 266 locations in the U.S. and Mexico, including three Central Markets—the most talked-about supermarket concept in the country. Evan Smith

Salesman of the Century

Barely in her twenties, newly divorced, with three children to support, Mary Kay Ash went to work for Stanley Home Products in Dallas, selling household goods at “home” parties. A little more than ten years later she was named the national sales director for World Gifts, another direct-sales company in Dallas. By the end of 1963, she had quit her job after a male assistant she had trained was promoted ahead of her at twice the salary. So it was, at the age of 45, that she decided to form her own company—for women. Today Mary Kay Inc. is in the pink, the number two direct seller of beauty products behind Avon. Back in the sixties, Ash built her company to appeal to a woman’s sense of femininity and emerging independence. As the world has changed, so has she. Her sales force now includes men; she’s gone global, with 500,000 beauty consultants in the U.S. and another 28 countries; and no longer is the pink Cadillac the sole symbol of success among the men and women who sell her products—her fleet includes a red Grand Am and a white Jimmy. Runner-up: Billy Joe “Red” McCombs, San Antonio’s can-do car dealer, radio station mogul, and pro-sports team owner. Jane Dure

Wildcatter of the Century

Wildcatting has been responsible for almost every major discovery of oil in the United States, and Hugh Roy Cullen took it to a new level: deeper. Most of his major finds were properties abandoned by the big oil companies—including his first strike, Pierce Junction, a field southwest of Houston that was riddled with 52 dry holes in 1921, when he first drilled it. By the start of World War II, he was worth hundreds of millions of dollars. Runners-up: The Moncriefs of Fort Worth, who’ve wildcatted around the country for three generations. Jane Dure

Lawyer of the Century

When Joe Jamail won an $11.2 billion jury verdict against Texaco for his client, Pennzoil, in 1985, the plaintiffs lawyer from Houston officially became larger than life. But he won that case and so many others by humanizing concepts as nominally intimidating as “tortious interference with contractual relations” and reminding businessfolks that a handshake really does mean something. And he is decidedly human himself: Despite securing more than two hundred verdicts and settlements in the neighborhood of $13 billion, he counts among his proudest achievements a summary judgment over McCarthyite attack dog Roy Cohn (“I sent his ass back to New York in tatters”) and the fact that a group portrait hanging outside the Joseph D. Jamail Center for Legal Research at the University of Texas shows him holding a highball. Runner-up: Leon Jaworski, who prosecuted Nazi war criminals, a segregationist Southern governor, and a lying U.S. president. John Spong

Millionaire of the Century

In the heady days of the state’s first oil boom, when the entire world, it seemed, was rushing to Texas to get rich, John Henry Kirby of Houston made the biggest deal anyone had ever seen. The onetime Woodville lawyer put together vast tracts of pine forest north of Beaumont, sold it to the brand-new Houston Oil Company, kept the timber, and organized the Kirby Lumber Company to cut it down. At its creation, his lumber company was the largest in the world, capitalized at $10 million, and on July 8, 1901, the day after it was chartered, giant headlines shouted out the news. But wealth and fame proved fleeting. Kirby was plagued by litigation and debt, bankrupted by the Depression, and reduced in the later years of his life to traveling the country to denounce the New Deal. His name is attached today to one of Houston’s busiest streets, but how many motorists know of the man who was Texas’ first industrial multimillionaire? Runner-up: Nolan Ryan, the first baseball player to earn $1 million a year—and one of the few who has been worth it. Paul Burka

Billionaire of the Century

It’s easy to forget, but before he was caricatured as a cranky kook, H. Ross Perot was admired for his business savvy. Before he even turned forty, in fact, he was a billionaire. Within a year after the company he founded, Electronic Data Systems, went public, shares were selling for $160; Perot owned nearly 9.5 million, putting his value at more than $1.5 billion, leading Fortune magazine to dub him the “fastest, richest Texan ever.” He remained so until the nineties, when the high-tech boom fattened the ranks of the billionaires’ club; according to the Forbes 400, Perot’s net worth is $3.8 billion today—a good distance from number one Michael Dell’s $20 billion, but more than enough to run for president until his dying day. Runner-up: Dell, who’s richer than numbers two through seven combined on the Forbes list of the richest Texans. Evan Smith

Merger King of the Century

The urge to merge has always been part of American business, but before James Ling came along in the sixties, the typical deal involved a large company taking over a smaller one. Ling started with a little company and went after bigger ones. Wall Street had never seen anything like the young Dallas wheeler-dealer who started acquiring small electronics companies in the fifties, added aerospace giant Chance Vought in 1960, when he was just 38, and kept buying. Shares of his umbrella company, Ling-Temco-Vought (later LTV), hit $169 a share in 1967, making Ling’s personal holdings worth $70 million, and he built the most ostentatious house in Dallas, a $3 million mansion modeled after a Versailles château. But he bit off more than he could chew when he bought Jones and Laughlin Steel for $425 million in cash; he had to battle debt, government antitrust regulators, and a palace revolt inside LTV. By 1970 the price of LTV shares had sunk to $7 1⁄8, and Ling had lost control of the company. But the lesson he taught American business has not been forgotten: No publicly held company in America is immune to a takeover. Runner-up: Frank Lorenzo, whose tiny Texas International airline swallowed Continental. Paul Burka

CEO of the Century

Because he realized ahead of everyone else that bigger isn’t necessarily better. Because he realized ahead of everyone else that cheaper isn’t necessarily worse. Because he believes that employee relations are for the benefit of employees as well as management. Because his customers love him. Because he says what’s on his mind. Because he’s never lined his pockets, though his shareholders have sure lined theirs. Because he has fun. Because he wants us to have fun. And, most of all, because without the vision and the values of Herb Kelleher, Southwest Airlines might have gone the way of People Express—and then we’d all have to drive. Runner-up: Stanley Marcus of Neiman Marcus, whose commitment to customer service was (and is) unrivaled in the world of retail. Evan Smith

Con Man of the Century

After he was run out of Kansas for performing a procedure that involved implanting goat glands in men’s testicles as a way to increase sexual virility, John R. “Doc” Brinkley came to South Texas in 1933 and set up shop in Del Rio’s Roswell Hotel. Across the river in Villa Acuña he promoted the implant and other medical “miracles” on XER, a 500,000-watt radio station that broadcast his message to most of North America. Hounded by controversy, he moved his operations to Arkansas five years later. Runner-up: Billy Sol Estes, who became a confidant of Texas power brokers despite borrowing money against nonexistent fertilizer tanks. Joe Nick Patoski

Rancher of the Century

When Robert “Bob” Kleberg, Jr., was handed the reins of the King Ranch in 1918, he was a serious young man with a squeaky voice and an ungraceful demeanor. Within thirty years he was on the cover of Time magazine, celebrated as the greatest American cattle baron of the modern era—an astute businessman who persuaded Humble Oil to sign a lease that saved the ranch from its $3 million debt and enough of a forward-thinker that he created a new line of cow pony, a new breed of cattle (the Santa Gertrudis), a new type of cattle prod, and a new kind of plow to clear brush. He even created a Thoroughbred-breeding program that produced (much to the chagrin of Kentucky horse breeders) Assault, the 1946 Triple Crown–winner. Runner-up: Dolph Briscoe, who inherited 190,000 acres in 1954 and has more than tripled his holdings since, making him Texas’ largest individual landowner—and, amazingly, he actually turns a profit on his ranching operations. Skip Hollandsworth

Adman of the Century

Call them slogans, cutlines, catch lines—but whatever you do, call them five of the many reasons that the man who presided over their creation, Roy Spence, the co-founder and president of Austin advertising agency GSD&M, is a master at selling Texas to the rest of the world.
1. Don’t Mess With Texas (Texas Department of Transportation, 1985)
2. Texas. It’s Like a Whole Other Country (Texas Department of Economic Development, 1988)
3. I Want My Babyback Ribs (Chili’s Grill and Bar, 1995)
4. You Are Now Free to Move About the Country (Southwest Airlines, 1997)
5. We’re Texas (the University of Texas, 1998)
Runner-up: Stan Richards of Dallas’ Richards Group, the largest individually owned agency in the U.S., with $515 million a year in billings. Evan Smith

Dealmaker of the Century

In 1930, having already run through one fortune made in the oil boom in Arkansas, Haroldson Lafayette “H. L.” Hunt, a 41-year-old land speculator, professional gambler, and small-time oil promoter, hit Rusk County. Columbus “Dad” Joiner, who had spent thirty of his seventy years drilling the oil patches with little to show for it, was on his third well there (the first two had been dry holes). But when Daisy Bradford No. 3 struck oil, what should have been good news for Dad wasn’t necessarily. He had a habit of overselling interests in his leases; everyone who had bought in would soon come looking for his money, and more than likely, lawsuits would follow. So he lit out for Dallas and the Baker Hotel, where he’d hid from creditors before.

But he couldn’t hide from H.L., who thought that, just maybe, Dad had found a rich pool of oil this time. H.L. sent scouts to monitor the activity at rigs neighboring Dad’s leases while he went after Dad and set to wining and dining and otherwise keeping the old man occupied. When another well hit, H.L. made Dad an offer he couldn’t refuse. For the well and 5,580 acres worth of leases, H.L. paid Dad $1.26 million, $30,000 of it in cash, which he’d borrowed from a friend, the rest to be paid over time. The deal enabled Dad to avoid certain legal troubles and made him, finally, a rich man, but it didn’t last. When he died in 1947, his estate was described as only of “nominal value.” H.L., on the other hand, founded an empire on Dad’s leases. In 1948 Fortune named him the richest man in the U.S., estimating the value of his oil properties at $263 million. When he died, in 1974, his net worth was around $4 billion. Runners-up: The five lawyers who, we’re sure, worked very, very hard representing Texas in the 1998 lawsuit against Big Tobacco and stand to pocket approximately $2.3 billion in fees. Jane Dure

Oil Well of the Century

Spindletop may have started it all, but the well that had the most impact on the most Texans was Santa Rita No. 1, the gusher that made the University of Texas rich. When Texas was still a republic, its constitution provided that state-owned farmland should be set aside to endow the future university. But by the time UT opened in 1883, the original farmland had been swapped for two million acres of West Texas desert. For forty years the land yielded little more than a few thousand dollars annually in grazing leases. In 1921 the Santa Rita No. 1 began chewing through the hardscrabble of the featureless—and until then, oilless—plain of the Permian Basin west of Big Lake in Reagan County. On the 646th day of drilling, in May 1923, it struck oil. UT and the other beneficiary of the find, Texas A&M, were freed from the stinginess of a legislature that appropriated little money (and sometimes none at all) for higher education. By the time Santa Rita No. 1 was plugged in 1990, the value of the endowment was $3.5 billion. Runner-up: Spindletop, of course. Paul Burka

Strike of the Century

In May 1972 four thousand members of the garment workers union went on strike at El Paso’s Farah Manufacturing Plant, resulting in a sixty-city boycott of products made by one of the world’s largest producers of men’s slacks. The workers, mostly Hispanic women, were protesting minimal benefits, low wages, and high production quotas. Tensions in the city reached a fever pitch when Willie Farah, the company’s president, blamed his problems on the Catholic Church, which was actively supporting the strikers. By the time the work stoppage ended, in March 1974, both sides had suffered: The union had spent $8 million, and the company’s image was irreparably damaged. Runner-up: San Antonio’s pecan shellers’ strike in 1938, which led to the arrest of seven hundred workers. Jordan Mackay

Riches-to-Rags Story of the Century

Once the wealthiest man on earth, Howard Hughes is today remembered less for his triumphs—as a Hollywood producer, record-setting aviator, casino tycoon, and world-famous playboy—than for his eventual decline into madness, which caused him to lose control of his empire. Raised in Houston high society, Hughes inherited a multimillion-dollar estate in 1924 at age eighteen when his father, who had invented the Hughes rock bit, suffered a fatal heart attack. He used his fortune to bankroll dozens of films—among them the first talkie blockbuster, Hell’s Angels—and to purchase a controlling interest in RKO Pictures. He took over Trans World Airlines in 1940, stocking it with a fleet of planes and pioneering the age of commercial aviation; more than two decades later, he bought up much of the Las Vegas strip. As he amassed his riches, however, his mental health deteriorated. Heavily medicated and kept in isolation by a coterie of personal aides, he became an eccentric recluse who covered his windows with black paint and refused to cut his hair or trim his fingernails, communicating with business associates and even his estranged wife through peculiar, disjointed memos. When he died in 1976 on a flight bound for Houston, the once-dashing billionaire, who had romanced Katharine Hepburn and left Lana Turner at the altar, weighed only 93 pounds, his body ravaged by codeine addiction and neglect, and his financial holdings in ruins. Runners-up: Nelson Bunker Hunt and William Herbert Hunt, sons of oil magnate H. L. Hunt; their inability to meet a margin call on silver—an asset in which they had invested heavily—caused the silver market to collapse on March 27, 1980, and cost them more than $1 billion. Pamela Colloff

Bankers of the Century

Cattleman Tol Ware purchased the Amarillo National Bank in 1909, building it into a venerable financial institution. To this day it is owned and managed by his heirs—that is, Texans, something most other banks operating in the state today cannot claim. For nearly a century, the Ware family has remained at the vanguard of the banking business, giving Texas its first drive-up bank window in 1950 and its first automatic teller machine in 1978. ANB is currently the largest family-owned bank in the nation; Tol Ware’s great-grandson, Richard Ware, serves as its president. Runners-up: the Frosts of San Antonio, who founded Frost Bank in 1868 and have had a hand in running it ever since. Pamela Colloff

Company of the Century

As much a defining company as a refining company, Humble Oil shaped the reality and perception of Texas oil around the globe. When it was opened for business in 1917 as the Humble Oil and Refining Company, the Houston-based concern had only 217 wells. Just over thirty years later, it had nearly 10,000 and had expanded its operations into Florida, California, and other states, though the bulk of its production came from oil fields here. The men who ran it demonstrated their willingness to take risks by shelling out $3 million during the depths of the Depression for the mineral rights on the King Ranch, a decision that turned out quite nicely in the end. They inspired loyalty and maintained high morale, from the most senior executive to the lowliest field hand, by offering above-average salaries and handsome benefits. They ensured that their image was tightly entwined with the state’s by sponsoring radio broadcasts of Southwest Conference football and contributing to historical societies. In the process, Humble Oil’s founders—Farish, Blaffer, Fondren, Wiess, Sterling—became super-rich and saw their names stamped on buildings all over Houston. And then it came to an end: In 1959 Standard Oil of New Jersey assumed control of the company, and thirteen years later it was rechristened Exxon. Runner-up: Texas Instruments, one of Texas’ first high-tech powers—and still one of its most formidable. Jordan Mackay

Developer of the Century

Give Trammell Crow the credit he’s due: Rarely has a commercial developer’s crystal ball been so accurate. In the forties he guessed correctly that Dallas—where he grew up Depression-era poor—would need warehouses, so he built hundreds of them, dressing them up with windows and landscaping. In the fifties he turned to gigantic atrium-decorated merchandising marts, and by the sixties he was on to hotels and office towers. By 1989 he had nearly 300 million square feet of developed real estate in more than one hundred cities around the country, totaling more than $14 billion in assets. Although his company is now publicly traded, the 85-year-old maintains a separate private development company and still goes to the office almost every day. Runner-up: Gerald Hines, who during the mid-sixties paid $3 a square foot for several tracts of land in a prime area of West Houston to build a mall—no one had ever paid more than 50 cents a square foot for property to build a mall on—and set about creating what he hoped would be the most exclusive shopping area in the country, an American version of Milan’s elegant shopping arcade, the Galleria Vittorio Emanuele II. Anyone who has been to Houston’s Galleria knows that he succeeded. Skip Hollandsworth

Skyscraper of the Century

It isn’t the tallest building in Houston, but the Williams Tower certainly stands out from the crowd. Way out. In fact, the 64-story skyscraper—better known by its former name, Transco Tower—isn’t anywhere near downtown. That’s what’s so great about it. Its location proved that business and commerce didn’t have to be confined to the city’s center, and prosperity could and did exist outside the loop. (That would be Loop 610, for those of you unfamiliar with the city.) Completed in 1983, the tower was developed by Gerald Hines, designed by Philip Johnson and John Burgee, and built right across the street from the Galleria; with its magnificent 88-foot granite arched entry, an adjacent 3-acre park with a 64-foot-high waterwall, and a helipad and revolving light atop its roof, it signifies Texas opulence at its best. Runner-up: Reunion Tower in Dallas—thanks to the TV show Dallas, the state’s most recognizable skyscraper. Patricia Busa McConnico

Dynasty of the Century

Sid Richardson was a venerable wildcatter, discovering fields in East and West Texas and accumulating such wealth that Life magazine recognized him as America’s first billionaire. A crusty, publicity-shy figure, he preferred playing cards with his friends to mingling with the public. When he died unmarried in 1959, he bequeathed his fortune to his nephew, Perry R. Bass, who maintained the family’s considerable oil and ranching holdings through the early eighties. In 1983 he passed control to his son Sid. Sid and his brothers have taken decidedly different paths than their father and great-uncle, expanding the empire through diversification—first collectively, through Wall Street takeovers and buyouts engineered by financier Richard Rainwater, and then individually, in a variety of projects that included reviving the downtown of their hometown, Fort Worth. Their cumulative net worth—$12.8 billion, according to Forbes—makes the Basses Texas’ richest (and, arguably, most powerful) clan. Runners-up: the Hunts, whose wealth, conservatism, and abiding interest in football helped to shape the Dallas we know today. Joe Nick Patoski

Boom-and-Bust Town of the Century

The financial capital of the oil-rich Permian Basin, Midland has seen its fortune ebb and flow since wildcatters first arrived in the twenties. Black gold transformed it in the fifties from a small ranching town to a city whose skyline could be seen thirty miles away, but its financial stability has never been certain: Its economy slumped in the sixties; flourished during the Arab oil embargo of the seventies, when it was one of the richest cities per capita in the U.S.; and then bottomed out in the eighties, when crude hit $10 a barrel—a devastating depression from which it has never fully recovered. Runner-up: Laredo, which has long been dependent on the peso’s unpredictable value; prosperous in the seventies and in economic free fall in the early eighties—when its unemployment rate reached 27 percent—it is now, thanks to NAFTA, the nation’s second-fastest-growing city. Pamela Colloff

Raider of the Century

Greenmail. White knights. Poison pills. How quaint those phrases sound today even though they entered the lexicon just fifteen years ago. At the time, takeovers were so new and threatening that Congress fought over legislation designed to prevent them. Now they’re commonplace and seldom hostile, which they definitely were in the past. And the reason for these changes in practice and in attitude is T. Boone Pickens, Jr., of Amarillo. There were plenty of corporate raiders in the eighties, but Boone was the only one with a philosophy. All he was trying to do, he said, was earn money for his shareholders; corporations were getting too fat, management was getting too rich, and the time had long passed for American business to shake itself free of complacency. And he was funny. He referred to one CEO of a Fortune 500 company as “so old he shouldn’t buy green bananas.” Boone himself soon lost his luster. His company’s stock sank, and he became embroiled in several ill-advised public spats that made him seem petty. But today, whenever someone talks about the need to be lean and mean to survive in a competitive world, you’re hearing a bit of Boone’s legacy. Runner-up: David Batchelder, because after learning the takeover game at Pickens’ knee, he set up his own company and tried to take over Mesa from him. Gregory Curtis

Environmental Battle of the Century

In 1978 Mary Evelyn Stokes Johnson filed a $3.5 million suit against B. F. Goodrich, Neches Butane, Texas—U.S. Chemical, and 26 other companies with petrochemical plants in the Golden Triangle, alleging that the pollution emitted by the plants had caused her husband’s leukemia. Carlos Dwight Stokes died when he was 25; although he had never worked in any of the plants that dot the coastal region around Beaumont, Port Arthur, and Orange, he (like everyone else in the area) was constantly subjected to their by-products. Her suit was settled in 1984, but the issue never was. Over the years, more and more cases of leukemia were reported in the region, and it became known as the Cancer Belt—a moniker that sticks today. Runner-up: The fight over the proposed nuclear waste dump in Sierra Blanca. Patricia Busa McConnico

Visionary of the Century

Some people are visionaries about the future of business. Others are visionaries about the future of society. Arthur Temple, Jr., was a visionary about both. In 1939, the year that Temple came to work for his family’s timber company after dropping out of college, East Texas resembled a patchwork of feudal estates. Timber barons housed their workers in ramshackle company towns and paid them with company scrip that could be used only at the company store. Temple saw that the system was both inhumane and inefficient—and could not last. He paved the muddy streets of Diboll, gave the workers deeds to their houses, and began to build sleepy Southern Pine Lumber Company into an industry giant. He advocated the construction of reservoirs that would provide recreation for the region and defeated rival owners who objected that the lakes would inundate timberlands. One by one, Temple’s rivals shut down or sold out, and the names of their company towns began to disappear from the map. Under Arthur Junior, Southern Pine became Temple Industries, merged with Time Inc., and eventually was spun off as Temple-Inland, a Fortune 500 company. Runner-up: Erik Jonsson, the co-founder of Texas Instruments, who as mayor of Dallas helped restore the city’s good name in the wake of the Kennedy Assassination and led the campaign for the Dallas—Fort Worth International Airport. Paul Burka

International Agreement of the Century

In 1942 the United States government signed an agreement with Mexico called the Mexican Farm Labor Program Agreement, otherwise known as the Bracero Program. With the American workforce depleted by World War II and straining to fill jobs, the program was the first attempt to regulate Mexican braceros (“strong-armed men”) who crossed the border into California, Arizona, New Mexico, and Texas by guaranteeing them adequate housing and food and providing a minimum wage of 30 cents an hour. Texas farmers lobbied Congress against having to provide and pay so much, while Mexico, convinced that Texas was a hotbed of racism, forbade its laborers to work in the state legally until 1947 (though during those five years many workers crossed the Rio Grande anyway). By the fifties, both sides had relented, and they participated in the program until it was terminated in 1964. Runner-up: the North American Free Trade Agreement, which went into effect in 1994 and promoted trade and investment among the U.S., Mexico, and Canada. Brian D. Sweany


Inventor of the Century

No pocket calculators. No digital watches. No 32-inch televisions. And, yes, no computers, Internet, or e-mail. None of these would exist if it weren’t for Jack Kilby. Kilby, who grew up in Kansas, moved to Dallas in May 1958 to work for Texas Instruments. Two months later, with TI’s employees on summer vacation—Kilby wasn’t eligible because he hadn’t been with the company long enough—he was working alone in his lab when the idea hit him for the integrated circuit, or silicon chip. Now 75, the man who revolutionized electronics and ushered in what has been called the second Industrial Revolution still reports to work at least one day a week to TI’s Kilby Center in North Dallas. Not bad for a soft-spoken engineer who received only one job offer when he graduated from the University of Illinois. Runner-up: Howard Robard Hughes, Sr., who in 1909 patented the Hughes rock bit, a breakthrough in oil-field technology that could tear through rock ten times faster than previous designs. Brian D. Sweany

Rags-to-Riches Story of the Century

It’s a good thing that Ira Yates, Jr., wasn’t big on advice. With both of his parents dead before he reached the age of thirteen, he found himself on his own, working as a cowboy and buying cattle when he could. Against the advice of friends, he bought a foundering dry-goods store in Rankin in 1913. Within two years he had turned the business around, bringing in $5,000 a month. Yates, however, longed to return to the land, so in 1915, he took the opportunity to swap a 16,640-acre spread in Pecos County for the store plus some cash, even though a friend warned that the land was so inhospitable that “a crow would not fly over it.” A decade later, on October 28, 1926, Yates became an instant millionaire when he struck oil. His field became one of the most prolific in the world, producing more than 1.6 billion barrels of crude by 1997. Runner-up: Columbus “Dad” Joiner, the wildcatter who made and lost two oil fortunes before striking it rich in Rusk County with the Daisy Bradford No. 3. Brian D. Sweany

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