Thursday, June 21, 2012

Knights and Their Secret Orders

Conditional Allegiance to Power?

In another blog article, I borrowed a quote from famed economic historian Robert L. Heilbroner who was quoted by James Presley in his book, A Saga of Wealth as follows:
Vassal swearing allegiance to lord
“Throughout most of history,” wrote Robert L. Heilbroner, “wealth and power have gone hand in hand.” The alliance, an obvious one, has grown with but occasional public outcries. Working together, possessors of wealth and power may achieve a stability of their own. Over most of history, wealth has been a vassal to power, for as Heilbroner explained, “it was easier for the ruler to become a rich man than the rich man a ruler.” [Presley, page 303]
Elliott Roosevelt was ushered into the radio business initially by Fort Worth men associated in business with  the father of his second wife, Ruth Googins. They enticed him to move to  Texas -- undoubtedly promising him the moon in the hope of attracting his father's power for their own interests. Newly elected Franklin Roosevelt had a power to which these businessmen gravitated, but that expanding federal power could also make them shudder. Americans, since the days of the Federalist blockade against England, have fought tooth and nail against the Constitutional principle of majority rule, which effectively damns the business interests of the defeated minority. They swear their fealty and allegiance to the man in power only when he gives them what they want. Full stop.

In 1930 Texas had quite a number of men, like Elliott's radio investors Sid Richardson and Charles Roeser, who had recently become rich in the oil fields of Corsicana and East Texas. Over the preceding decades these wealthy men had witnessed what they viewed as the usurpation of state law by the federal government. The federal government had obtained the power to tax their incomes in 1913 and to prohibit the sale of liquor within the state in 1920. Both laws could now be enforced through the expanding powers of the Bureau of Investigation, linked to the Treasury Department's Bureau of Prohibition, as opposed to Texas' own police force, the Texas Rangers.

With this feeling of a need to reach out and grab control of federal authority--much as Colonel Edward M. House of Texas had done when he went in search of a candidate for the Presidency in 1912--the newly wealthy oilmen in Texas thought that, by buying Elliott a place within Fort Worth society, they would thus gain the power of the executive office for themselves. Like the du Pont family of Delaware who would attempt to buy Franklin Roosevelt, Jr. in 1937, the Texans soon discovered things did not quite go as planned under the new President.

FDR was happy to accept his minions' pledge of fealty but, as the rich Texans soon learned, he rarely protected their interests if it was inconsistent with his concept of the overall good for America. Two of these wealthy "vassals," as we have seen, Sid Richardson and Charles Roeser, saw their investment in Elliott's radio network tank. At the same time, their primary interest--oil--was also in dire straits. Where was the protection they expected?

Hot Oil in East Texas

FDR was elected in 1932 by a plethora of groups disenchanted with Republican Herbert Hoover's nonaction in overcoming the effects of the stock market crash in 1929 and the depression that seemed to be unending. The Democrats' pledge to repeal the Volstead Act brought several otherwise divergent groups of voters into the Party, including Franklin Jr.'s in-laws, the du Ponts of the famous chemical conglomerate.

Over-drilling in East Texas
A wealthy group of Texas Democrats consisted of oil men made wealthy in the East Texas Oil Fields, who saw their profits being drained by fly-by-night opportunists tapping wells into the massive pools of oil underneath their own oil wells. They believed they had the right to regulate production through the Texas Railroad Commission, originated in the days when Colonel Edward M. House was building his own railroad and electing governors in Texas to appoint men to the Commission judicially recognized as the agency in charge of regulating oil and gas.

The Texas Oil and Gas Conservation Act of 1919 prohibited production of crude oil “in such manner and under such conditions as to constitute waste” and the Texas Railroad Commission was charged with doing “all things necessary for the conservation of oil” and with establishment of “such rules and regulations as will be necessary to conserve the oil and gas resources in the state.”

Believing the 1919 Act gave Texas complete power to regulate oil well production within Texas, the commissioners attempted to quell the flow from cheap "teakettle" refineries set up by independent oilmen who came to the Texas boom field from all parts of the nation, threatening to drain the pools underneath the wells of the "big oil" interests like Humble Oil. In the summer of 1931, more than a year before FDR's election, a federal appeals court had struck down the power of the Railroad Commission to do more than to "conserve" oil, disallowing a quota system, and thus upholding the rule of capture announced many years earlier in Pennsylvania.

Big Oil vs. Independents

Sterling Mansion portico
The governor of Texas at this time, Ross Sterling, was one of the founders of Humble Oil (now Exxon), who had resigned from the Humble board in 1925 when his sale of stock to Standard Oil of New Jersey made him a wealthy man and gave Jersey Standard half of Humble's stock. Sterling had seen his fortune diminish with the 1929 stock crash, which came on the heels of his sinking a hefty $1.4 million of his new-found wealth into the construction of a 21,000-square- foot mansion in La Porte, Texas.

Governor Sterling
As the Depression deepened without help in sight from President Herbert Hoover, Sterling took action on the state level, calling a special session of the Texas Legislature in August 1931 to address the oil crisis. Federal courts were being requested to grant injunctions in favor of small independent oil men who had contracted to sell more oil than the Railroad Commission permitted them to drill under new proration orders, issued in the hope of stopping the price of oil from plummeting further.

Since June, "the price of oil throughout the Mid-Continent Field had fallen from one dollar and seven cents for high gravity oil, similar to that produced in East Texas, to an average of twenty-two cents a barrel." [Master's thesis of Lucile Silvey Beard, citing L. G. Bignell, “East Texas Must Not Pass 160,000 Barrels of Oil,” Oil and Gas Journal, August 20, 1931, p. 23.]

While appealing one such injunction to the U.S. Supreme Court, Sterling then declared a state of war in East Texas and put the Texas National Guard's Brig. Gen. Jacob F. Wolters in charge of enforcing the new Texas law. Wolters, a graduate of the Fort Worth college that later became Texas Christian University (TCU), was not only a partner in a Houston law firm which acted as general counsel for the Texas Company (later Texaco), but, since 1918, as a general in the Texas National Guard had been the "troubleshooter for many Texas governors. They called on him to establish martial law in areas where even the Texas Rangers could not reassert civil law and order." [1]

In December 1932, a month after FDR was elected but not yet inaugurated, the U.S. Supreme Court upheld the federal district court's contempt order against Governor Sterling "on the ground that a governor can declare martial law only in case of actual insurrection or menacing threats of insurrection."

In Sterling v. Constantin, 287 U.S. 378 (1932), Chief Justice Charles Evans Hughes, who wrote the stinging opinion, addressed the governor's "attempt to regulate by executive order the lawful use of complainants' properties in the production of oil" by interjecting himself in the place of civil judicial process, delegating the authority to the

Humble Oil
Not only did Governor Sterling lose this case, so did former-governor Dan Moody, who had preceded Sterling as governor. Moody, given the credit for ending the reign of the Ku Klux Klan prominent once again during Prohibition, by fighting against the localized corruption of Pa and Ma Ferguson, had made it possible for the federal government to increase its power in areas formerly left to state control.

According to Nicholas G. Malavis in Bless the Pure and Humble: Texas Lawyers and Oil Regulation, 1919-1936, Moody--who had returned to private practice when succeeded by Sterling (elected apparently in an effort to protect Standard Oil's stock value)--was hired as attorney for a plethora of independent East Texas oil operators (filling 13 Pullman train cars) when Dan represented their interest before proration hearings at the Railroad Commission in March 1931. The orders came and went but, without any inherent enforcement mechanism, Governor Sterling was impotent without the national guard.

Rise of the "Federal Authority"

What is important for these purposes, however, is how this battle in the oil fields affected what was later to occur in Texas politics during the 1960's. Having been slapped down for using state action to regulate what they thought should have been within the state's power, certain influential Texans sought to buy their way into federal power. And if that wouldn't work, ... well, it would work. Texans knew how to handle such matters. They had being doing it since 1836.

Pre-1931 photo of Gov. Moody showing Oveta Culp as parliamentarian; she was later wife of Gov. Hobby

Remember San Jacinto!

These events occurred a relatively short time before Texas started to plan for the Centennial to commemorate its 100 years of independence from Mexico, declared on March 2, 1836, but not officially won until winning the battle at San Jacinto on April 21 that year. Ironically, Texans were only able to build a suitable monument to their glory days of independence by tapping into funds obtained from the federal government. And it just so happened they had powerful men in place who did the tapping for them--Vice President John Nance Garner and RFC chairman Jesse H. Jones.  The total monies for the memorial was set out in a special article in the San Antonio Light May 9, 1937:
The government, appropriated $3,000,000 for Centennial markers and buildings and other government agencies contributed enormous amounts of money toward various Centennial projects. The expenditure for San Jacinto is approximately this:
Vice President Garner's Centennial commission..................$ 385,000
WPA for landscaping...............................................................325,000
WPA Funds for terracing........................................................ 500,000
Extra fund approved by president........................................... 200,000
Total federal funds.............................................................. $1,320,000
State appropriation .............................................................$   250,000
Houstonians and Texas officials were embarrassed when Jesse Jones who, as chairman of RFC was instrumental in obtaining the WPA and PWA grants and originally inspired the San Jacinto monument, came to Houston to level the cornerstone which was to have borne his name. Additional embarrassment is in store for those who accompany President Roosevelt on his scheduled visit to San Jacinto at the end of his gulf fishing trip.
The reason the original fund set up in Texas was not used was that the constitutional amendment authorizing a centennial celebration and instructing the legislature to make adequate financial provision for resulted in competition among Dallas, Houston, and San Antonio to host the central exposition. Although it possessed the least historical background, the commission chose Dallas because it offered the largest cash commitment ($7,791,000), the existing State Fair of Texas facility with provisions for expansion, and unified urban leadership headed by bankers Robert L. Thornton, Fred F. Florence, and Nathan Adams. The Texas legislature and the United States Congress each appropriated $3,000,000 for the special 1936 centennial; however, it was determined these funds could not be used in this monument.

It was thus up to Houstonian Jesse Jones to ensure that those "Sons of the Republic of Texas" who fought at San Jacinto were properly memorialized. An editorial in the Kerrville Daily Times humorously recounted events surrounding San Jacinto Day celebrations of 1937:

It has been suggested that an enemy of Jesse Jones is responsible for the protest of the patriotic organization. This may or may not be true, but the whole fuss looks like a tempest in a teapot to us. Far too many squabbles have developed during the Texas Centennial period over the location bill u provision which would have of Centennial memorials, etc. Such foolishness should stop....Jesse Jones foremost citizen of Houston, and a National leader, was largely responsible for the Federal appropriation for the monument. We see no good reason why his name and the names of the President and Vice President might not have been cut into an inconspicuous cornerstone. The whole fuss is being humorously referred to as the "Second Battle of San Jacinto." A similar uproar about the Alamo which occurred several years ago, was designated as the "Second Battle of the Alamo," and just now a third battle seems to be possible over the location of the Alamo Museum.
Jesse H. Jones and Sam Houston's only surviving son, Andrew Jackson Houston - 1936
In a show of gratitude that the long-dreamt-of monument was finally a reality, the Sons of the Republic of Texas (Gen. Jacob F. Wolters had been a president of the fraternity before 1934) made Jesse an honorary member. He could not be a regular member, because of its bylaws:

The society of Sons of the Republic of Texas is composed of white male persons of good moral character who are more than 16 years old and who are descended from an ancestor who was a loyal resident citizen of Texas prior to its annexation to the United States of America in February of 1846.
Base of San Jacinto Monument
Then they took him into their small secret order, the Knights of San Jacinto, created by Texian President Sam Houston in 1843, and revived by the Sons of the Republic of Texas at the culmination of Centennial celebrations on San Jacinto Day 1939. San Jacinto Museum of History Association headed by George A. Hill, Jr., the man "primarily responsible for creating the San Jacinto Museum."

The secret order's major role in later history will be explored in other posts at this blog.


[1] Wolters, a partner in an eminent Houston firm--Lane, Wolters and Storey--with Judge James L. Storey and Jonathan Lane. When Storey died in 1925, his obituary stated he had recently withdrawn from the firm -- making it Wolters, Blanchard, Woodul and Wolters -- which then included former lieutenant governor Walter F. Woodul, with offices on the  eighth floor of Jesse Jones' Houston Chronicle Building.

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