Founders - #149 The Big Rich (Oil Billionaires)

Episode Date: October 18, 2020

What I learned from reading The Big Rich: The Rise and Fall of the Greatest Texas Oil Fortunes by Bryan Burrough.----Get access to the World’s Most Valuable Notebook for Founders by investing in a subscription to Founders Notes----[3:12] There's truth behind legend. There really were poor Texas boys who discovered gushing oil wells and became overnight billionaires, patriarchs of squabbling families who owned private islands and colossal mansions and championship football teams, who slept with movie stars and jousted with presidents and tried to corner and international market or two. [9:55] Their success raised a tantalizing question. What if there really was another Spindletop out there, and what if it were discovered not by a large company but by a single Texan working alone? One well, one fortune, it was the stuff of myth, the Eldorado of Texas Oil, and as a new decade dawned, a hoard of young second-generation oilmen would begin trying to find it. [14:53] He first headed to the Houston public library where he read every book he could find on the geology of oil. [17:51] Let me get a shave and a bath. Tomorrow's another day he would tell her. [19:35] This is a metaphor for a lot in life. Not just oil: The trouble with this business is that everybody expects to find oil on the surface. If it was up near the top, it wouldn't be any trick to it. You've got to drill deep for oil. [25:45] What Clint lacked in physical appeal, he made up for with a mind that whirred like a Swiss timepiece. Headstrong and independent, disdainful of his father's stuffy ways, young Clint was Tom Sawyer with an abacus. [32:21] “Daddy, you cheated me!” he exclaimed.“ “I did not,” his father said. “People will try to get at you any way they can, and you might as well learn now.” [33:46] If that dunce can make so much money we’ll go too. [42:07] H.L. Hunt was a strange man, a loner who lived deep inside his own peculiar mind, a self-educated thinker who was convinced —absolutely convinced— that he was possessed of talents that bordered on the superhuman. [49:30] Great fortunes are built on great convictions. [52:33] Hunt drilled wells like a madman. He worked from dawn till late in the evening seven days a week. Every cent he took in he plowed back into the search for more oil. [58:50] The spigot of cash Texas oil opened in the early 1930s ranks among the greatest periods of wealth generated in American history. [1:02:30] Sid Bass and his brothers had since achieved everything he hadn’t, that while the Basses were investing in Wall Street stocks and high tech startups, he had been snorting cocaine. [1:10:30] A harking to the days when giants walked the oil fields, when men like Hunt and Clint and Sid and Roy helped build something unique in midcentury, Texas—an image and culture loud, boisterous, money-hungry and a bit silly, but proud and independent. ----Get access to the World’s Most Valuable Notebook for Founders by investing in a subscription to Founders Notes----“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — GarethBe like Gareth. Buy a book: All the books featured on Founders Podcast ----Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. ----“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — GarethBe like Gareth. Buy a book: All the books featured on Founders Podcast

It's hard to tell people about Texas. It's hard to explain what it means to be a Texan. But if you grew up in Texas, as I did, it becomes a part of you, as if you're a member of a club. The myths about Texas die so hard mostly because Texans love them. So much of it is wrapped up in oil. But the fact is, growing up in central Texas during the 1970s,

I never met an actual oil man. It wasn't until I was 16, the weekend I served as an escort at a debutante ball, that I was introduced to the class of Texans known as the Big Rich. They talked of boarding schools, and weekends in Las Vegas, and wine in Paris, and jetting to London, and my head just spun and spun and spun. Though I didn't realize it at the time, those were the years, the early and mid-1980s, when their era was ending. The fathers of those boys were going bankrupt. When my editor suggested some kind of book on Texas oil, I was surprised how quickly a structure sprang to my

mind. It would be not about the oil industry per se, but about the great Texas oil families, the ones who generated all those myths. The Hunts, the Basses, the Merchantsons, the Cullens. I thought of them as the big four, though it wasn't until I began my research that I found out that they had been called exactly that. This book is built on three years of research, during which I plunged into dozens of Texas and out-of-state archives, interviewed surviving members of the Big Four families, and read more than 200 books and thousands of newspapers and magazine articles. These and other histories served as a starting point to explore the rise and fall of the greatest Texas oilman, many of whom are fast being forgotten. There's

never been anything lasting written about Houston's flamboyant Glenn McCarthy, though there should be. It's hard to find anyone under 60 who remembers a Texas legend so famous in his day that he adorned the cover of Time magazine. There's even been less written about the secretive Sid Richardson, once the richest man in America. The joys of writing this book were multitude. There's nothing I love more than cruising the Texas backcountry. One morning in 2005, I was in far west Texas. I entered a table land whose view was so breathtaking, I had to pull to the side. There, as far as the eye could see, were oil wells. Hundreds, maybe thousands.

A lost plateau, filled not with dinosaurs, but with the steel and wire and sweat of American industry. Men had been out there for years, I realized, mapping the land, drilling holes in the earth, returning home to Dallas and Houston and Fort Worth with millions of dollars in their pockets. This was a Texas, an America I had never seen, and I suddenly needed to know what became of these men and their fortunes. Their stories, it turned out, were everything I had imagined and more.

There is truth behind legend. There really were poor Texas boys who discovered gushing oil wells and became overnight billionaires. Patriarchs of squabbling families who owned private islands and colossal mansions and championship football teams, who slept with movie stars and jousted with presidents and tried to corner an international market or two. This is their story, told through the lives of the four Texas families and a few of their peers, who rose the highest and in some cases fell the hardest. Each of their patriarchs began in obscurity, and all, through a historic quirk of fate, laid the foundations of their fortunes in a single four-year span.

In time, their days dissolved into a sordid litany of debauchery, family feuds, scandals, and murder, until collapsing in a tangle of bankruptcies. Some survived, others didn't. A few count their millions to this day. That was an excerpt from one of the wildest books I have ever read. The book is called The Big Rich, The Rise and Fall of the Greatest Texas Oil Fortunes, and it was written by Brian Burrow. This was actually recommended to me by a listener, and I went to the page on Amazon. And this is what I read, the first sentence I read, and I immediately ordered it after I read the sentence. It says, this is The Economist reviewing the book, and it says, what's not to enjoy about a book full of monstrous egos, unimaginable sums of money, and the punishment of greed and short-sightedness?

Okay, so I have a ton of highlights and notes, so I'm going to jump right into it so we don't waste any time. I'm going to focus. There's a million interesting stories in this book. I'm going to focus on the four main founders. That's Roy Cullen, H.L. Hunt, Clint Murchison, and Sid Richardson. So before I get into the four main characters, I want to give you a little prehistory to the Texas oil industry. Most, there's a generation before our four main characters, there was a another boom in Texas oil. So I want to read this part because it's really, for me, it was really hard to comprehend one, the size of these early Texas oil wells, and then two, how the size and the quality or lack thereof of that oil changed the world. So it says, Lucas had never seen anything like it.

No human had. The Lucas number one oil well changed the world forever. That first well produced at a greater rate than all other American oil wells in existence, combined. In a matter of days, in fact, the pastures around the well would be producing more than the rest of the world's oil wells combined. Of those first six Texas oil wells, three produced at a higher rate than the entire country of Russia, then the world's top producer. It's called Spindledrop, is where we are in Texas. Spindledrop not only created the modern American oil industry, it changed the way the world used oil. Its dirty little secret was that the oil found there was such poor quality that it could not be refined into kerosene. And that's what changed everything.

So much black crude flowed that railroads and steamship companies, it was so cheap, they decided to convert from coal to oil. Other industries soon followed, as did other countries, the British, American, and German Imperial Navies. Everything that today runs on oil and its byproducts from automobiles this is the most important section so let me read this to you again more most important sentence rather everything that today runs on oils and its byproducts from automobiles to jet fighters to furnaces barbecue grills and lawnmowers all of it began at spindle drop so the author is giving us all

this backstory because in the first generation of Texas oil boom, there's a distinction that I think I need to tell you right up front. So you have the independents, which are just like individual independent businessmen and entrepreneurs that start drilling for oils. They're usually called wildcatters. And then you have the majors. Majors are like Texaco, Mobil, all these gigantic oil companies. So out of the first boom, the first generation of independent Texas oilmen, almost all of them go broke. And the author brings up some somebody I talk about over and over again, which is Howard Hughes Sr. And he says that after the only person that really emerged from the first oil boom, extremely wealthy, was Howard Hughes Sr. And

that's because in a gold rush, he was selling pickaxes. This is something you and I have talked about over and over again. I've said on the past podcast, including the one I did on Howard Hughes, that I really think somewhere along the lines we messed up. We're celebrating the wrong person. Although, yes, Howard Hughes' life was interesting on its own part, junior that is. It's his dad's discovery, his invention,

and the company he built that allowed his son to go off and pursue things in aviation and movies and all the other stuff. But Howard Hughes Sr. had to build, in my opinion, one of the most profitable companies that ever existed, and this is the author talking about that. So it says, What the spindle drop boom provided

was a classroom where the oil business could be learned. A few caught on quickly. Among them was Howard Hughes. Captivated by oil, this is Howard Hughes Sr., obviously. Captivated by oil, Hughes and his partner, this guy named Walter Sharp, began drilling wells. This is in Louisiana. Frustrated by their dr drillers inability to penetrate solid rock Hughes and Sharp developed a drill that could that's his innovation that the cornerstone of

the empire that he builds right they patented in 1908 and Hughes rock bit became an industry standard in time the company he founded Hughes tool would make his son the legendary Howard Hughes jr the wealthiest Texas oil man of all. So moving on, you have this huge bust, or excuse me, you have this huge boom that then you're going to have a bust. And I thought this was very interesting. And the main point of this section is like, what if one person could capture all the upside of these giant wells? So it says the oil man who ran Humble and Magnolia, these are large, large oil companies of their day. He says, survive the lean years of the 1910s by dividing the risk in a very risky business. In doing so, so they spread the risk over.

So not any one of them was going to take a loss. But the problem is, is like you're also if you have another boom, which they didn't think was going to happen at the time. They thought it was going to dwindle. Then you don't capture all the upside. So it says, in doing so, they also divided the upside. No one in that first generation of Texas oil men, with the with the exception of Howard Hughes, created anything like a true American fortune. Their success, however, raised a tantalizing question.

What if there really was another spindle drop out there? And there is multiple times over all over the world, actually. And what if it was not discovered by a large company, but by a single Texan working alone? One well, one fortune. It was the stuff of myth, the El Dorado of Texas oil. And as a new decade dawned, a horde of young second generation oil men would begin trying to find it. And that is the foundation of the story that takes place in this book. And that is going to lead us to the big four, all of whom are wild and crazy in their own way. So it says, Of all the thousands of men who swarmed into the muddy tent camps in those boisterous years after World War One, four would find the most.

Two did it the old fashioned way, drilling holes deep in the earth. One did it with his mind and the fourth did it with a fountain pen. If Texas oil had a Mount Rushmore, their faces would be would adorn it. A good old boy, a scold, a genius, a bigamist. Known in their heyday as the Big Four, they became the founders of the greatest Texas family fortunes. Headstrong adventurers who rose from nowhere to take turns being acclaimed America's wealthiest man.

Okay, so the first of the Big Four is this guy named Roy Cullen. He's also older than the rest of the big four. It says, History has not been kind to Roy Cullen, a fifth-grade dropout who in his heyday was probably America's richest man. Cullen grew up poor in San Antonio. He endured a difficult childhood marked by family turmoil, financial reversals, and frequent fistfights. Cullen appears to have been a stubborn, prideful child. Qualities that would follow him into adulthood. Ashamed of the family's poverty, he clung to his mother's stories of his grandfather's Ezekiel Cullen's prominence.

So what they're talking about there is the family lost a lot of wealth because they were on the wrong side. They picked the wrong side in the Civil War. So it says, A lonely boy, Cullen hung a blanket over his head at night and retreated inside with a lantern, maps, and dozens of books. Sir Walter Scott, Thomas Carlyle, Shakespeare, Dickens, Blackstone, and plenty of history. He daydreamed of traveling the world, of owning his own business. His favorite dream was of the massive white plantation home that he would build someday.

With porticos and gardens, just like the beloved family plantation the hated union men had burned. Someday, he promised his mother, they would live in it together. When Cullen was 12 years old, the money ran out. He dropped out of school to work 10 hours a day in a candy factory. It's kind of like Milton Hershey Milton Hershey, we talked about a few weeks ago, right? At 18, he knew enough about cotton to become a buyer. So the cotton buyer at the time, it says it was a roving company representative who negotiated with farmers for the crop. So you travel all over the country, negotiate a price and then buy that and then

you're going to resell it. Cullen did his business on horseback, almost dying at one point during a blizzard. Interesting enough, there's just one sentence that ties into the biography of Sam Colt that I just told you about. Cullen strapped on a Colt revolver. If you listen to that podcast, you know that Texas was a probably, no, it was the most important early market in the early days of Sam Colt's company. So back to Roy Cullen. For seven years, Cullen made his way as an independent cotton broker, but he lost most of his savings in the financial panic of 1907. When he turned 30, Cullen was itching for a change. He set his sights on learning about

real estate. So he's going to try to sell real estate. He does that for a few years. And it says the real estate business, he noted years later, was not exactly booming in Houston in those days. He stuck it out for four frustrating years before giving up and returning to the only business he knew, trading cotton. So I just want to pause here. The reason I'm telling you all about this is because what I found most interesting about this part, he's 34, 35, something like that, years old. Nothing, nothing in his life up until this point would indicate that this guy was going to become the richest American. And here's the event that got him going down that path. So he's walking to his office one day. He says he was brooding over his dismal prospects one day when a man named Jim Cheek stuck his head into the hall.

Cheek was a real estate developer and he was thinking about getting into oil. He asked if And this is what Cullen says. Cullen's like, I don't know anything about oil, Jim. I've never read an oil lease in my life. Cheek's offer, though, was attractive. All expenses paid, a solid salary, plus one quarter of anything they brought in. And this is what this is actually a smart move that Cullen does. Echoes back to what he did when he was a child underneath his blanket. He first headed to the Houston Public Library, where in time he read every book he could find on the geology of oil. What he found was a mishmash

of fairy tales and guesswork. Oil fields were thronged with characters who claim to have special oil-finding powers, preachers who swore they had x-ray eyes, and drifters who used psychic powers to direct drillers now in hindsight this obviously is going to sound extremely silly to us but at the time there were indeed companies entrepreneurs and others paying people that claim to have psychic or some kind of supernatural power that they could find oil and those people made money they made money short term because they realized pretty clear if you tell me hey drill here and there's nothing tell me, hey, drill here and there's nothing there. And you tell me, hey, drill here and there's nothing there.

And over and over again, these people are full of shit. But at the time, they were able to make a living, which just sounds really silly to us. Now, one of the reasons I want to pick out a few more parts on Roy is because really his story is one of perseverance. You know, he's struggling in the cotton industry for a while. Then he's struggling in real estate. Five years pass and he's in the oil industry with little luck. He's still working with Jim Cheek. He's eventually going to drag out on his own, but we're not there.

For the next five years, Cullen roamed West Texas, leasing oil rights everywhere he went. All the wells came up dry. What Cullen got, though, was an education and a wealth of contacts in and around Houston. By 1920, his wife was making noises about how much he was traveling. Cullen was almost 40 by then, and his five children barely knew him. So he's like, all right, I'm going to just come back home. I'm going to drill and try to build my own business based on what I learned, because when I'm working with Jim, it's not really working out, which is how armed only with his library books and a reputation for hard work and honesty, Cullen decided to drill a well on his own. And this is the first time in his life he's

ever going to be successful. We're not there yet. First, he has to persevere through a lot of other failures. To Cullen's irritation, the first well came up dry, as did the second and the third. His investors, he was acutely aware, were quickly losing their earlier profits. For months, Cullen's irritation, the first well came up dry, as did the second and the third. His investors, he was acutely aware, were quickly losing their earlier profits. For months, Cullen rose before dawn, kissed his wife goodbye, and drove down to Tramp, Damon's Mound. This is the area of Texas where he's drilling. His eyes studying the scrub for anything that might suggest oil beneath it. Let me pause there. Geologists just at this time were realizing, hey, if you study what's on top of the land, it might be an indicator of what's beneath it.

And so Cullen is actually self-taught, and he's one of the first people to use that idea. So it says, many nights Cullen didn't come home at all, grabbing sleep on the ground beside the drilling rig. When he did make it home, streaked with mud and sweat, his skin pimpled with insect bites. This is what I mean about the the story of roy colin just more and more hard work and more and more perseverance over and over again colin spent 36 months at damon's mound the most frustrating period of his life three years in hell he called it so this whole time he's struggling it's not like the rest of his life it's just standing still his kids are growing up. His son had gone off to college.

The two older girls were in high school. And now they had two more little girls to pay for. And this is really, I feel like when you read this sentence, you can really put yourself in his shoes. At night, lying in bed, Lily, that's his wife, wondered how long this could go on. We got to keep going a little longer, honey, Cullen would say. I want the children taken care of. Tomorrow will be another day. So we just pause there. Roy is definitely a troubled person. He's got a lot of interesting

ideas. So let me just tell you the things that I thought were most valuable about his story is the fact what fact what I just covered, the fact that he's willing not to give up. He's got an abundance of perseverance. What he just said about, hey, I'm working this hard. He's willing to work hard because that he would not relinquish his independence. And he also realized that if you're doing the exact same thing everybody else does, you're just going to get the same results as everybody else does. And so he starts talking about this here. He says, listen, the trouble with this business is that everybody expects to find oil on the surface. If it was up near the top, there wouldn't be any trick to it. You've got to drill deep for oil. So over the next few pages, we really see his fundamental belief. And I think there's a metaphor.

What's the note I left? There's a metaphor here. He's finding success where others have failed. So I'm going to read that to you. Let me finish this page first. So it says, Colin hit the second gusher of his career. That man had guts, one investor said. If he thought there was oil

under a track, he'd spend his last dollar drilling it, regardless of what anyone thought. So that's another illustration of his independence. Not only independence because he wanted to be in control of his own destiny by running his own company, but independence of mind. But when he missed, it didn't faze him. Nothing ever discouraged him. So you add optimism and perseverance to that list as well. But that second gusher, there's a lot going ever discouraged him. So you add optimism and perseverance to that list as well. But that second gusher, there's a lot going on this page. So hopefully I'm making sense to you. There's just a lot happening here.

But that second gusher also becomes his mantra. This idea that you've got to drill deeper. And again, I think that's the metaphor that can be applied to so many different things. So it says this second gusher earned a new mantra for Cullen. Hit the flanks. Skip over that part and drill deeper. If he didn't find oil, drill deeper still. Many of the field field hands, a number of whom would work with Cullen for the next 30 years, could imitate his laconic instructions in their sleep.

Boys, let's go a little deeper. His longtime operations manager said, well, when they start to lower Mr. mr cullen into his grave i bet he'll sit up and say boys dig her a couple feet deeper another thing that's interesting that he's different from the big four is he gives away 93 of his fortune i think before he dies which when you find out what happens to some of the other fortunes that are left behind that's probably the best thing you could do because take clint murchison jr we haven't got to his dad yet, but you might know that name because he's the founder of Dallas Cowboys. He's also an absolute moron who squanders the second biggest fortune in Texas family history. So if you think about it, you know,

Clint dies, leads this giant fortune to his son and his son, you know, is full of cocaine, just drinking. He's just an absolute idiot. And I think it's very helpful to read stories about people like that, because then it's that old Charlie Munger saying where he's like, hey, tell me I want to know where I'm going to die and I'll just never go there. That aphorism of his. Same thing. Study Clint Murchison Jr. and be like, OK, just do the opposite of what that guy does and you'll be fine in life uh but we're not there yet let me get down so this idea of uh that that roy cullen has hey drill deeper drill deeper what he's doing is there'd be all these fields that other people hit they came up dry he'd come in behind and just drill deeper deeper deeper and realize those people quit too early this is the metaphor here there's just a lot of things that that this this idea can be applied to but But as his strategy gets out, there's other people that are not in the oil industry that want to get into the oil industry. So in Texas, I think it was lumber and I can't remember the other industry, but there's gigantic fortunes made. And so one of these guys that made a fortune in lumber is trying to go in and bankroll with Roy. And this is where Roy is just absolutely refusing to give up his independence.

So this is a little longer part. Let me go ahead and read this to you. As Cullen remembered the conversation 25 years later, Wes, that's the guy's name, said, I've got $3 million lying around, and I've got the Wes Production Company, which doesn't amount to much. I'll put the $3 million in my oil company and give you one quarter interest if you'll go in with me. You'll be president and have complete charge of

the company. Cullen said he'd think it over. Remember, Cullen's not he's he's moderately successful, but he's not set for life by any means at this point. So this is what makes it so surprising about what he does here. The following Tuesday, having heard nothing from Cullen, West telephoned him again. I made a proposition to you last Saturday and since then I haven't heard a damn thing from you I offered to give you almost a million dollars and you haven't taken the trouble to reply what's your answer

Roy not interested Colin said for a moment Wes was speechless not interested he barked my god what do you want tell you what I'll do, Cullen said. I'll go in the oil business with you, 50-50. For every dollar you put in, I'll put in a dollar, but only on condition that I have full charge, no interference from you.

West went quiet for a moment. Roy, he said after a moment, I didn't know you had that kind of money. He didn't. I'll put up $5,000, Cullen said, and you put up $5,000. We'll each have half interest. Wes didn't understand. I offered you $3 million, and you get a quarter of that outright. You'll turn that down and put up $5,000 of your own money? That's right, Cullen said. Then he went on.

I won't be working for you. And I just love that story because that demonstrates his personality. It's just really unbelievable. And in this one sentence is a summary of what I kept mentioning, the fact that he's using a strategy different than other people. He's not just got most people are just lemming like, right? They're just going to, oh, this guy found oil. OK, let me go over there. I'll draw it next to him. Oh, and they'll do it over and over and over again until all of the profits are obviously whittled away. Roy, the metaphor here is he's finding success where others have failed. I think that's such a key. Okay, so now I want to introduce you to the second and third of the big four.

They're going to be friends. They start working together. Eventually, they go separate ways even though they're lifelong friends. This is an intro to Clint Murchison and Sid Richardson. So Clint Murchison, he richardson so clint murchison he's arguably a genius really smart um it's his son that i was just talking about that is an absolute moron um so this is clint uh saddled with the body of a snowman he had a giant head a beanbag nose and no neck to speak of he had a listen to this what a crazy sentence he had a face like a dish of melted ice

cream but what clint uh lacked in physical appeal he made up with a mind that word weird word i don't know how to pronounce that word like a swiss timepiece headstrong and independent disdainful of his father's stuffy ways young young Clint was Tom Sawyer with an abacus. So the benefit that they just referenced his father, his father, the benefit he had is his father was a local Texas banker. And so Clint, the way he's going to dominate is his understanding of the banking industry and then using the banking industry's desire for increased returns to pull out financing and using leverage to build his oil fortune. Okay, so we'll get there. While his brothers took jobs at the bank, teenage Clint was drawn to the excitement

of livestock pens, where roving traders wheeled and dealed for the best prices on cattle and horses. The reason I'm bringing this up is because he didn't think he was going to get into oil. He thought he was going to trade livestock. That's what he wanted to do with his life. He found the give and take thrilling and as a teenager made extra money trading livestock. He was joined by an older boy named Sid Richardson.

This is the third of the big four. Now Sid's interesting because he never marries, never has any kids, right? All of their, so you have Roy. I'm going to move ahead in the story so you understand where their fortunes end up, right? So you have Roy. I'm going to move ahead in the story so you understand where their fortunes end up, right? So Roy Cullen gives away 93% of his wealth, but he's still alive. Clint leaves. He's the only one that diversifies out of oil. This is the big-headed, face-with-a-dish-of-melted-ice-cream guy. And he really didn't fancy himself an oil man.

He fancies himself more as a businessman and an investor, right? So he winds up diversifying, makes all this other money with his mind by diversifying all the money he made in oil, right? So when he dies, he leaves his two sons in control of like 20-something companies. You're talking about like banks and life insurance companies all that kind of stuff real estate stuff like that construction and that's his his

boneheaded son that's named after him that starts the Dallas Cowboys is the one that squanders that fortune he goes through about goes from having like a net worth of uh 1.5 billion dollars to negative net worth of like 500 million and then dies meekly. Then you have H.L. Hunt, who might be the craziest of all these characters. He leaves behind a gigantic fortune. His son also manages to go bankrupt and squander one of the greatest fortunes that have ever existed

because he tries to corner the world's silver market. He's also an idiot. Try to corner the world's silver market. He does this on margin winds up the entire business and his family collapses it's it's in the book i'm not going to cover it but it's a very fascinating story so that leaves the final fourth fortune right which is sid richardson we're about to get into he doesn't have any heirs of his own leaves his uh gives away a lot of his fortune leaves a small amount to a uh to i think he takes on a partner uh that's his nephew it's

the last name is bass and so sid's partner i think his name is perry bass when he passes on he leaves that fortune to his his kid sid bass is the only smart one out of all the descendants in this book which is crazy because some of these guys uh like hl hunt he's gonna have three separate families he's a bigamist and he's got 15 kids right but sid bass takes a 50 million dollar inheritance and turns it into five billion dollars he's really that that was one of my favorite parts of the book it's very interesting i'm actually looking for a book on sid bass because again i just first of all, what a weird experience to be left with that much money and not only squander it but be hardworking and smart. It's very, very rare.

So I'm going to focus, again, this podcast is just on the main four founders, but I wanted to tell you how they end up because I find that part just so fascinating. Okay, so let's get into he was joined by an older boy named Sid Richardson. Clint and Sid established a lifelong friendship during impromptu cattle buying jaunts into Louisiana, where they purchased cows they sold for meager profits. So they've got a side hustle going on. They're trying to make money on the side, and they both do it by selling cattle. This is now on Sid. Chafing at the classroom structure uh no this is clint actually chafing at the classroom structure clint took to organizing crap games when school officials found out clint found himself on the first train back to athens that's texas downcast he reluctantly took a job at the bank a natural

with numbers he could add subtract and multiply large sums in his head while other while other tellers had to do it on paper but he found life in a teller cage just that, a cage. He complained he could make more money in a week trading cattle than he made at the bank in a month. So he's unhappy, early 20s. He's like, I don't want to do this. I feel like I'm smarter. I can make more money with my brain.

And he was a really, really smart guy. So he says he was 23 by then, eager to tackle the world and certain of his plan. He was heading to Fort Worth to work with a young oil man who had bombarded him with letters of the money to be made in North Texas. This was his old friend, Sid Richardson. For a man who would one day be proclaimed America's richest citizen, who at his death controlled more petroleum reserves than three major oil companies, Sid Richardson left few footprints on history. This sentence is almost unbelievable, too. One of his proteges was the evangelist Billy Graham. Once said, Sid Richardson told me years ago,

don't put anything in writing. So once again, we see this idea I talked about on the, when I just read the autobiography of Rockefeller, when you study a lot of these entrepreneurs in the past, they put a priority on silence. Just to shut your mouth. Don't tell everybody what you're doing. You're going to give away your advantage. It's very hard to compete with somebody you don't even know exists. I think that's a very interesting idea. Sid came from humble beginnings.

That much is sure. Richardson was one of seven children. Three of his siblings died before the age of seven. Richardson, unlike his friend Clint, was not exactly a go-getter. When he was 16, he took a dollar a day after-school job at a cotton compress, and he was fired for being lazy. And it's during his childhood he actually discovers a love for trading things from his father, and this is a very important lesson that he keeps with him for his whole life.

It's also part of why he was also silent. He was a little bit paranoid. He says, Daddy taught me a hard lesson with that first trade, but he started me trading for life. So they're trading horses, excuse me, horses this time. Sid worked all summer creating peaches to raise the money to buy the horse from his father, right? But once he purchased the horse, he discovered the horse was blind. Daddy, you cheated me, he exclaimed. I did not, his father said. People will try to get at you any way they can.

You might as well learn that now. So Sid, you know, not the smartest person around, not definitely a little bit lazy, he takes a bunch of different jobs, and he kind of stumbles into the oil industry somewhat by accident. He began, I'm just going to list some of the jobs he had. He began as a laborer, hauling pipe by day and apprenticing on derrick floors at night. He was hired as an office boy for an oil well supply company. Then he was hired as an oil scout.

So scouts, this is also interesting. Scouts are the oil industry's spies. They spend their days driving from well to well checking production trends gauging competitors strategies and picking up rumors there's a little bit of early oil corporate espionage going on scouting was good money and richardson entered the town square at the wheel of a new cadillac he's coming back to town because he owes clint's father money he tried to lend him like i think six thousand $6,000 or something like that to trade cattle, and he lost all the money.

So he used scouting as a way to pay him back. He says, I swung back around that dusty square twice so all the benchwarmers could see me good. And then I marched into the bank, and I paid Mr. Munchinson his money in cash. Then I drove out of town again. Before the dust settled, all those old boys got off their benches and started for the oil fields. They said, if that dunce can make so much money, we'll go, too.

So at the beginning, in the early days of their oil careers, Clint and Sid worked together. What's weird is they never explain why they broke up and have very different paths. But they do wind up being lifelong friends. I love it. I love some of these stories in the book because they're in their 60s at the time. And every morning, they get up at like 5 in the morning and the first thing they do is grab a cigarette,

a coffee, and then they call each other and they talk for about an hour. Even though they're not doing business together. It's very, very interesting. Clint went to work buying new leases. It was then he began to... Remember, this is the big headed dish face guy. The guy said that was smart that his son's an idiot. It was then he began to display his true genius.

For the first time, he actually began drilling his own oil wells. Chronically short of cash, he would trade a share in one lease for a rig to drill in another. Once he got the rig, he would trade shares in its production for another rig and so on and so on. So he's a trader at heart. You can see how he approaches everything. He called it financing by finagling. Unlike older oil men, Murchison put his faith in science. One of the first men he ever hired was a talented geologist. By then, Murchison was no longer working with Richardson, exactly why it had never been explained. And it's interesting because they break up around this time. And Sid winds up being, he tries to drill for oil himself.

Again, he's another person that perseveres. And he fails over and over again, even while his friend Clint is succeeding. And I think Clint winds up loaning him money so he doesn't go bankrupt at this time. But at this point in the story, Richardson, it says, is all but broke. Okay. Clint, I need to stick to their names. I got to stop switching. So I'm going to call them by their first names.

Sid is all but broke. Clint, meanwhile, remained in North Texas and thrived. He partnered with a local wildcatter. These are these independent people, like these oil spectators, speculators, speculators. And through their early 1920s, they hit strike after strike. Their partnership grew prosperous. And so this is going to go into a little bit more about the different trajectories of Clint and Sid. Clint, when he turned when he turned 30, Clint was already a wealthy man. So he winds up working with this other guy for a while, and then he's got enough money.

So he's like, all right, that's it. I'm going to run my own show. So it says Clint dissolved the partnership. He took his proceeds, an estimated $5 million, which is an insane amount of money in 1925, and moved Ann, that's his wife, and the boys to cosmopolitan San Antonio. He wanted a settled life, one where he could work finite hours in a clean office and make it home in time for dinner that was not normal for the early oil industry as we just went over with roy who you know is waking up before the sun comes up sometimes sleeping at the

oil rig very different life clint's like no i'm not going to do that i'm going to make money with my mind before that happens so a tragedy strikes uh the easy life he envisioned in san antonio however was not to be his wife noticed faint brown spots on her skin doctors diagnosed yellow jaundice so a year after he quote unquote retires to office life uh his wife dies she enters the hospital and died in may 1926 clint was stricken he left the children in the care of relatives and disappeared, driving around the state alone, a whiskey bottle usually at his side. What remained of his business began to decay. When Ann died, Clint said, people said I stayed drunk for a year.

So he's in mourning. He's drunk all the time. I mean, all these guys are normally drunk all the time, but eventually he goes back to work. And so I'm going to fast forward to that part. Now, the company that he's going to set up, he does something really interesting because they were just looking for oil. And a lot of when you're drilling for oil, a lot of natural gas just escapes into the atmosphere. And they didn't realize the value of it. Clint realized it. So the company he's going to start, let me read my note, is going to supply natural gas, drill for oil.

He uses that money to buy life insurance companies, banks, publishing companies, railroads, industrial building material companies, and so on and so on. So now this is the beginning of the family business that he builds of incredible wealth that he's going to leave to his two idiot sons. It says, Clint had a thought. Why not offer gas, heating, and light to the locals? He already had the pipe. It was just a pipeline. And it only took a matter of weeks to lay it down on one side of the street. Residents were invited to tap into it any way they could.

So, again, this is just he's discovering the point of this section I'm reading to you is there's all this value that people are just ignoring. And we see this over and over again through history. So Clint's like, this is stupid. Why am I? This is valuable. People will pay for it. And he's going to set up and he's going to get this ongoing. It's almost like a mini utility company, right?

Residents were invited to tap into it any way they could. $5 a month for a home, $10 for a business. Natural gas had been used to heat Texas homes and factories in England for a century, but it never caught on in the United States. Most Texas oil men simply allowed the gas they found to escape into the atmosphere. Clint was amazed how simple the business was. Once a pipeline was built, all he did was sit back and collect monthly checks. And it talks about, this next sentence is going to talk about the difference between the mind of Clint and all these others,

all the big four, all his other peers. Clint had big plans for Southern Union, that's the name of his company, the kind that occurred to few, if any, of his peers in Texas oil. It's a value of thinking differently than those around you. So he goes out and he starts expanding this natural gas pipeline business that he's got. He wants to expand out of Texas, and he goes and does this auction in Albuquerque. And this is also something fundamental to understand about Clinton is he carved out an advantage because he understood banking. Remember, that's his family was in banking Better than any other oilman.

They didn't understand that, and this gave him a massive advantage. He might be the most interesting of the big four. H.L. Hunt is by far the craziest, but I don't know. I like the way Clint thought. A half-dozen competitors sprang up to bid against him. The mayor who's conducting this bid in Santa Fe, no, is Albuquerque? Albuquerque. The mayor asked whether any bidder could supply a cash bond to ensure its financial viability.

Eventually, they want to have a bond of $100,000 to make sure, hey, if I give this contract, I want to make sure you're not going out of business. So all these people are bidding. The only person that raises their hand when it gets to a hundred thousand dollars was clint and this is why this is so interesting so he's walking out with this other guy that he's working with and he says as they walked outside kane shot him a glance we don't have that kind of money in the bank he said we'll worry about that when we get back clint said clint operated this way for the rest of his life. As the son of a banker, he knew he could always find a gullible loan officer somewhere. One meeting was all Clint needed to get the $100,000.

And this is what Clint said. Again, some people might be like, oh, I don't want to go to the bank. What if they say no? Clint's from the other side. He's like, that's their business. They want to give, just like you want a loan, they want to give it to you. And so he summarizes that here. He says, listen, if you are honest and you are trying, your creditors will play ball. He coaxed every last dollar he could out of the Dallas banks, then pushed back the repayment, all but daring the bankers to foreclose.

Now, this is a little crazy because he's highly leveraged. And so he says by 1932, his debt had grown to more than $4 million, far more than his net worth. And this goes back to his understanding of the banking industry, though, that maybe he had a knowledge that other people didn't. He says, aren't you concerned about owing all this money that you can't pay? Somebody asked him. No, Clint said with a smile. If you're going to owe money, owe more than you can pay. Then the people can't afford to foreclose.

OK, Sid eventually does better. He winds up hitting at 37. It takes him until he's 37 years old. But at 37 years old, he becomes an independent, successful oilman. He's going to build on that. I'm going to move because I got to I got to introduce you to the fourth of the big four. And this is the craziest one. also be the richest one h.l hunt he was a strange man a loner who lived deep inside his own peculiar mind a self-educated thinker who was convinced absolutely convinced that he was possessed of talents that bordered on superhuman that is not hyperbole uh you could compare him he thought he was like the second coming of jesus christ not in the literal sense, but he just thought he was a superhuman. He was a god.

That's why he was a bigamist. He had secret families, three wives. They wound up finding out about each other later, but they didn't know about each other at the time. Fifteen kids. And he did that because he thought his genes were so great that they should be spread throughout the world. This is an insane, insane character. He may have been right. In the annals of American commerce, there has never been anyone quite like H.L. Hunt. At a time

when interant wildcatters like Sid Richardson couldn't find time for a wife, let alone a family, Hunt would build three, two in secret. If they made a movie of his life, no one would believe it was true. The man who came to embody all the myths of the Texas oilman was neither raised in Texas nor introduced to oil well after his 30th birthday. He was barely walking when his parents realized his intelligence bordered on that of a prodigy. His siblings swore he could read newspapers aloud at the age of three. His capacity for mathematics became a local legend. People marveled how the child could multiply large sums in his head.

He winds up building his first fortune, like a small fortune, as a gambler. In fact, there's a rumor that he was down to his last $100 in the oil business, and he winds up going on a gambling spree and turns $100,000 into $100,000 and saves his company. So it does seem to appear that he was gifted with a beautiful mind. I mean, he's got some very peculiar—that manifests itself very peculiar later in life, but he does seem to have a brain in there. Hunt recounted with odd pride in later years that his mom breastfeeded him until he was seven. I don't even know what to say about this guy. Hunt had a keen sense of entitlement,

a feeling that he possessed a unique intellect, exponentially more insightful than anyone he met, and he means this, and this too became a lifelong trait. He winds up leaving home at a young age. He yearned to see the world. 16-year-old H.L. Hunt ran away from home. He worked as a laborer, a dishwasher. I'm just going to list all these weird jobs he had. He cut sugar beets. He was a sheep herder. He was driving mules, planting cattle feed, lumberjacking, and he tried out for a semi-pro baseball team.

In the days after his father's funeral, Hunt finally confronted his future. He was 22 at that point. He couldn't sit still for college, and farm life bored him. In time, he made as much gambling as he did from the cotton fields. Now in his mid-20s, Hunt had grown to be a serious, solitary young man, quiet, focused, and disciplined. He keeps those traits for his whole life too. I think he has some kind of stroke.

I can't remember what happens to him. But later on, up until he's like 85 years old, he just drove himself in a normal car with his brown bag lunch every day to the office and just methodically went about his business. Even though inside, you know, he is a crazy person and he's siring all these children and having all these these fake are these hidden families it's wild uh he developed a reputation for honesty hunt's fortunes continue to rise and fall on cotton prizes and his poker winnings for the first time hunt began to question his style of living he He turned 32 that year. He wasn't a kid anymore.

Oil had been, now he's finding out that there's a second boom in oil happening in Texas. Oil had been found. It sounded exciting, far more exciting than any, than another year of praying for cotton and land prices to rebound. What, this is, this is interesting because we get an insight into his inner monologue, which I always find fascinating in fascinating these stories what is it that you're trying to do he asked himself remember he's 32 are you gonna bury yourself here for the remainder of your life why not rent out the land and try something new and so that's that inner monologue that eventually leads him into the oil business so he goes into the oil business he He finances that through his gambling winnings. That's the rumor I told you about earlier.

And I think he also got some loans as well, but says there's just a series of ups and downs. And then eventually he's going to be on solid ground. This is actually happening. I was wrong. It's not in Texas yet. He doesn't go to Texas first. He has his first oil success in Arkansas. So it says, in three short years, Hunt had transformed himself from a gentleman planter into a professional gambler. And then finally, at the age of 35, a successful oilman. So it says, in three short years, Hunt had transformed himself from a gentleman planter into a professional gambler, and then finally, at the age of 35, a successful oilman. He controlled nearly 400,000 barrels of proven oil reserves, about $7 million in today's dollars.

During the day, he was busy in the oil fields, and at night, he was playing poker. So he's married. This is his first first family he's got a bunch of kids unfortunately one of his kids dies and this this uh this is where he he runs away from his life again uh weeks after his daughter's death it was hunt who underwent the most profound change maybe it was the grief maybe it was at the age of 35 an early midnight crisis maybe it had been his plan all along whatever it was hunt decided he had no interest in living out his days a country oil man in Arkansas. He suddenly sold all his holdings for a $600,000 promissory note and then had the bank discount it for cash. He takes off to Florida looking for another wife, though. We never find out why.

He never explains his actions, why he did this. So he goes down to Florida, meets a much younger woman, gives her like a fake name and everything else. That has this fake marriage ceremony. They start having kids. He settles her away far from his other family. And then eventually he's going to move to Texas with his first family. And then just goes back and forth between the two families. And then eventually starts a third family. So he's trying to figure out where he's going to move to Texas with his first family and then just goes back and forth between the two families and then eventually starts a third family.

So he's trying to figure out where he's going to set up in Texas. There's this guy named Dad Joyner who is going to accidentally discover the East Texas oil field, which winds up being, I think, maybe the largest one in Texas history. H.L. is going to buy it from him. It's a very complicated thing that has to happen first. Let me just read the section. This is the most important revelation of his entire career because this is where he's going to build his fortune. The first, the foundation of his fortune. Okay. So this is the people of Rust County where dad Joyner discovered this well, went to bed that night convinced they were sleeping

atop an ocean of oil. So they hit, but it's inconsistent. Usually if you have a large oil field, it'll produce, let's say 2,500, whatever the number is. I'm just going to throw a number out there, 5,000 barrels a day. It'll do that relatively consistently. And that's how you know how large it is. This something's here. The the large oil companies installed this before. And they're like, no, that's a telltale sign that that it's inconsistent, that it's not as large as you think that you think it is. Hunt disagreed. OK, so it says they were convinced they were sleeping atop an ocean of oil. The professionals, however, weren't so sure. Within days, many scouts were dismissing dismissing it as a freak. And that's a terminology in the oil industry. It's a freak. This is that up and down oil well I was just talking about. Not H.L. Hunt. Great fort...

This is such a great sentence. Great fortunes are built on great convictions. And from the moment he watched Joyner's drill test, Hunt was certain that this was a giant field. It got Hunt to thinking. The more he studied the land, the more he became convinced that the field stretched north and west of Joyner's wells. On the 4,000 acres Joyner had already leased, an idea began to form.

Maybe, Hunt mused, the play wasn't to drill near the Joyner leases, which is what everybody's doing. It was to buy the Joyner leases. His opportunity, he senseded lay in the old wire wildcatters legal troubles already his investors were beginning to sue and so this is what i meant about being complicated joiner had most of these wildcatters don't have a lot of money right so what they would do is they would go out and speculate they drill and if they hit they'd immediately sell like let's say 50 or 75 interest to a major oil company so the major oil companies are using these people like individuals as think of it as like a laboratory you go out and you run

all these experiments most of the experiments are going to fail the ones that hit come back and will pay right it's almost like an outsourced research and development arm if you think about it that way um so joiner what he did is because he didn't have any money you could sell like you could have individual leases right so maybe you have one acre and say, okay, maybe you have 4,000 acres, but you sell leases on an individual basis, like maybe an acre, 10 acres, whatever the size is. And you say was doing, he was committing fraud. He would resell the same lease over and over again. And then what happens is when some of his small oil fields came back, all the people that had claims on it said, oh, yeah, good, I'm going to make money now. And then they realized, oh, wait, you sold to me,

you sold to this guy and that guy and her cousin and all these other people. And so he's going to wind up getting sued. And so the play that HL makes is, hey, I'm going to buy it. I'm going to give you a lot of money up front, and you're going to get money on what I make on the back end, and I'll take care of your legal troubles because those legal troubles could bury you, and you might lose all your lease in these lawsuits anyways.

So you could potentially lose everything. You might as well take my offer. And so I'm just skipping over all of this because I'm going to give you the main point here, okay? News of the historic deal broke on the front pages of the Dallas papers. The men of Texas Oil were left speechless. It was the most astounding business deal

the state had ever seen. As the enormity of the East Texas field became apparent in coming months, it would be hailed as the deal of the century. This is why most people think H.L. Hunt was the richest of all these guys. An obscure interloper, a closet bigamist, a man just nine years removed from life as a professional gambler, and from Arkansas of all places, had seized the heart of the greatest oil field in history. This is, oh my god, this is going to blow your mind.

A field that in the next 50 years would produce 4 billion barrels of oil. So now he does the deal of century, but he does something really smart. He realizes this is the opportunity of a lifetime. You got to go all in. There is not, there's not another opportunity coming later. That's going to be bigger than this. So it says he drilled wells like a madman. He worked from dawn to late in the evening, seven days a week.

Every cent he took in, another smart move here, from oil sales, from the new loans he got, occasionally from selling part of the lease, he plowed back into the search for more oil. He also closed all his existing businesses in El Dorado and Shreve Point. So he's like, there's not going to be an opportunity better than this. I'm going to focus all of my attention on the greatest oil field in Texas history. And it says, and though not everyone realized it at the time, Hunt himself was fast on his way to becoming not only the wealthiest Texan of all time, but the richest man in the world. There's a quote I was researching H.L. Hunt outside of the book, and I came across this quote from J. Paul Getty, also another oil man. And he says, in terms of extraordinary independent wealth, there is only one man, H.L. Hunt.

So the book goes on and on about the political influence that the big four had. They did not like government intervention. There's also all kinds of crazy stories. There's corruption in here between the big four and Lyndon Johnson, FDR. They wind up buying a radio station for FDR's son to run. So it's amazing how much we see now, you know, decades after the fact, and how corrupt all these politicians were and how they would do the bidding of, you know, these these these four oil men. If you put them together, it's almost like they had the GDP of a small country. But the reason I bring that up is because part of what fueled them is that there was all these

regulations happening because they you'd have large companies. It's like a form of regulatory capture, right? So you have large companies petitioning lawmakers to say, hey, limit how much these independent guys can drill. They cloak their arguments and, hey, if you drill too much, it could make the land underneath unstable. It could cause the prices to crash, et cetera, et cetera. If you're interested, obviously, read the book, there's tons of it in there. But what I found most interesting is that Clint, think of like what's happening is he would refuse to adhere to these new laws. It's very similar to when I've covered several

of the founders during the prohibition era, right um they think of hot oil what i'm talking about is known as hot oil hot oil is drilling and transporting more oil than you're allowed to and so it's just like you know bootleggers running alcohol from canada into the united states you weren't allowed to do that either clint said to hell with you guys i'm not going to like i think that's un-american i think it's impeding my liberty. And so he was reported to be the largest. Company in distributing hot oil, which, again, he had the legal right. These are his oil fields. He just it he was producing more oil than technically he was allowed to. It all ties together because these are not normal people.

When they had a law, it's not like URIs. It's like, okay, I guess it's that law. It's like, no, they're like, okay, I'll just go by the politician or I'll go find the person that's in charge of that Senate committee and I'll donate to his wife's charity. All the different ways. It's bribing. Let's call it what it is, but they just find ways around it

so they can legally bribe these people. Like, hey, hey, oh, your son FDR wants twenty five thousand or fifty thousand dollars for his company. OK, I'll give it to him. Oh, and oh, it's just it's just a coincidence later that year that now I don't have to worry about this investigation from the IRS or this regulator has been changed out or whatever the case is. And it's interesting because even FDR's son in his autobiography, which the author of this book, Brian Burrow, talks about that later in life, he stops being friends with these oil guys because he realized I was just, he says something like in his autobiography, I was just their pawn to get to my father. All right, so let's go into the hot oil thing. It's called proration, but proration loomed as the real killer. The only way for Clint to offset his mounting losses was to pump more oil, but the federal government was now saying that that was against the law. Clint was apoplectic. This is un-American, he told anyone who would listen.

It was all scheme devised by the majors to squeeze the independents out of East Texas. As one of his peers put it, it's my oil, and if I want to drink it, it's none of your damn business. It was this line of thinking that led Clint to become an outlaw, a defiant hot oiler. He may have been the biggest hot oiler in all of East Texas and he didn't especially care who knew. He even renamed his partnership American Liberty because he said it represented freedom against regulatory tyranny. The new company would soon become Clint's largest. Running hot oil was a cat and mouse game. Federal inspect.

This is why this part, this paragraph reminds me a lot of what I read on Prohibition. It sounds almost the exact same thing. Except you're swapping out oil for alcohol, right? Running hot oil was a cat and mouse game. Federal inspectors, railroad commission agents, and Texas Rangers were everywhere. Lookouts had to be posted. Most hot oil was pumped and refined late at night. When federal agents were in the area, decoy caravans were sometimes used,

and many inspectors could be bought off with bribes. And what I referenced in the introduction is the foundations of all these great fortunes happened in a very, very quick time. You're talking about four or five year period. It says the day that East Texas oil field, the day that the East Texas oil field, there were wealthy oil men in the state, but there were no true oil fortunes. It was East Texas and other fields discovered during a single five year window, 1930. What's crazy is this is happening during the Great Depression, right? right 1930 to 1935 that created the state's great family fortunes the magnitude of wealth initiated in those 60 months would not become apparent for years and remains underappreciated

today in fact the spigot of cash texas oil in the early 1930s, ranks among the greatest periods of wealth generated in American history. I already referenced this, but I'll read it to you, which is how Sid Richardson, barely two years out of poverty, found himself bankrolling the president's son in the radio business. This is FDR's son. This is July 1938. This actually happened. A year after President Roosevelt's visit, Richardson loaned Elliott, that's FDR's son, $25,000, which Elliott used to buy a Fort Worth radio station. So Clint, Sid and Clint spent days fishing and barbecuing with FDR and his son. That's how they got to know him. Soon thereafter, Clint got out of a hot oil indictment by paying a nominal fine. So they build their foundation of their wealth in the 1930s. World War II makes their wealth skyrocket. Look at the demand. I'm going to read you a couple paragraphs here because this just blew my mind. I just thought it was interesting even by itself.

So this is the demand for oil that World War II caused. So it says, A single destroyer burned an average of 3000 gallons of oil every hour. One tank required 10,000 gallons of gasoline to drive a hundred miles. That's insane. 10,000 gallons of gasoline to drive a hundred miles. A single four engine bomber used up to 400 gallons of high octane jet fuel per hour. And I mentioned earlier how it's hard for us to wrap our minds around some of the size of their discoveries, especially because it was owned essentially by one person, right? So this is an example of that. Between 1941 and 1945, the Axis powers, think about all the countries that are containing the axis powers produced an estimated 276 76 million barrels okay so axis power 276 million barrels okay the same time span

so all those countries could make 276 million barrels of oil tex produced $500 million from Texas alone. One state in America produced double the amount of oil as all the Axis powers combined. You want to go even crazier here. Remember H.L. Hunt, why I think he was the richest that same time period. His oil field produced $100 million a hundred million out of the 500 million the axis powers did 276 and hunt by himself did a hundred million that's insane i mentioned how crazy um an egotistical hl hunt was i want to elaborate on a little bit all the resulting attention the bags of mail the interview requests seemed to confirm what hunt had long believed that he was a unique intellect, a superman, a figure whose ideas could save the nation from the mounting perils of communism. More than one of his aides sensed a new messianic quality in Hunt. One of them said he thought he was the second Jesus Christ.

So before I go to the end of the lives of the big four, I want to tell you, there's so much more of this book. Maybe the last like 25% is all about what the next generations do. But I just want to, I want to, well, let me just read the census to you. This is the difference between the second generations of Clint and Sid. Remember they were lifelong friends, right? Now, big Clint's son, this is the guy, I think I've called him an idiot like five times on the podcast. Now, Big Clint's son slouched in his wheelchair, fully aware that Sid Bass, which is the second generation of Sid Richardson, right? So now, Big Clint's son slouched in his wheelchair, fully aware that Sid Bass and his brothers had since

achieved everything he hadn't. That while the Basses were investing in Wall Street stocks and high-tech startups, he had been snorting cocaine. So I was going to tell you a couple of great trades that Sid Bass, and he's working with this guy he hired with the last name of Rainwater. I'm going to look for books on their company because I thought it was so interesting. In a good year, the Yates produced 25 million barrels plus natural gas with oil prices at $30 a barrel. That meant the field was generating $750 million in revenues a year. So what they're talking about is they realized at this time, I don't know what year it is, unfortunately. They talk about T. Boone Pickens is also somebody that

realized the same thing that Sid Bass did, that eventually the stock market was so depressed that you could buy, the best way to buy oil is not by drilling for more, but by buying a company that was undervalued because you could buy the company for less than their oil was actually worth. So this is an example of that. It says, in a good year,

the Yates produced 25 million barrels of natural gas. Oil prices, $30 a barrel. That meant the field was generating 750 million in revenues a year. Sid did the math. the value of its stock was barely 3.8 billion that's absurd they began buying marathons the company they're going after stock okay so now we're 1981 there you go they began buying marathon stock in early 1981 bass and rainwater had accumulated just over five percent of marathon shares at a cost of $148 million. Marathon executives fearing a hostile takeover panicked, and a month later they sold out to U.S. Steel.

Bass and Rainwater walked away with $160 million in profits. So, again, everybody else failed to continue to be good stewards of the wealth left to them besides the descendants of Sid Richardson and the Bass family is the one. I think this guy is still alive, actually, is the one that, you know, the only smart ones I would consider. They did this with Texaco, too. They wind up buying a bunch of stock in Texaco. They ended up selling it back to the company at a profit of over $400 million. This whole section on Sid and the Basses is just trade after trade after trade like this um you know the

other guys buying football teams and snorting coke and you know never did anything of substance his life he winds up he does do one smart thing uh uh he winds up getting one of the largest oil fields in Libya and then like two years later Gaddafi takes it away from him and nationalizes, unfortunately. But again, that was one good decision and a thousand bad ones. All right. So let me go back to the basses. So they wind up selling it back to the company at a profit of $400 million. What he does next is really interesting. They decided to put that money into Walt Disney. Disney, he swore, was a neglected gem. The stock was stuck in the $55 range. They thought that they could double prices at

they thought they were undervaluing the media library, the content library of Disney, and then that their theme parks were in neglect. And they actually wound up being some of the people that pushed Disney to hire Eisner, actually, it was interesting.

By the early 1990s, the Bass' $500 million stake in Disney would be worth a staggering $2.8 billion. It was Sid's crowning achievement in a span of just 16 years in one of the greatest investment performances of the 20th century. He and Rainwater had increased the Bass family fortune from $50 million to an estimated $5 billion. So let me get to the end of the lives of the big four. Nothing marked the end of the golden age so much as the dimming of the men who had created it.

So what they're talking about there is Texas oil dominates for a few decades, and eventually you have rising in the Middle East and Africa and other places, and eventually they can produce oil cheaper than Texansans could and so that uh that's why clint saw so far ahead he's like i gotta um diversify out of the oil industry and that's when he's buying up railroads insurance companies everything else um so it says uh golden age is so much as dimming of the men who created it the original big four oh man clint was the first to retreat um in his budget he'd wake up every morning in his pajama, in his pajamas and a cigarette in one hand and a couple of copy in the other. He began each morning around five in the morning with a call to Sid Richardson.

What's the dope were usually Clint's first words. And the two would spend an hour discussing everything from investments to their peach crops. I just think that's really cool. They weren't business partners. They wound up being lifelong friends. They work in the same industry. And again, I think when you read autobiographies of people right before they die, Rockefeller is the most recent addition to that. They all hound on this, the importance of friendship. It's your enjoyment later in life. Don't neglect your relationships just for your business. Include it with your family, your friends, and everybody else. We're social creatures. Even if you only have a handful of them, they make your life a lot better. And I think we'd be wise to heed the advice from these

wise old men. After another series of strokes, Clint was relegated to a wheelchair. He finally died of pneumonia in June 1969. The New York Times ran an obituary on page one terming Clint a one-man conglomerate. His entire life was devoted to making money, the New York Times ran an obituary on page one, terming Clint a one-man conglomerate. His entire life was devoted to making money, the New York Times wrote, but that wasn't really true. Clint had torn through his life with a gusto, and those he left behind were uniformly thankful to have known him. Now we get to Sid. Sid's routine rarely varied. He arose around five and spoke to Clint.

He talked and inevitably began with one saying that he had been awake for hours waiting for the other to get up. That's hilarious. I just picture like two old men saying that to each other. His health was failing. He had high San Antonio. The next morning, a servant found him dead in his upstairs bed. He had suffered a massive heart attack and died in his sleep. He was 68. Back to Roy. Roy Cullen spent his last years paying more attention to his growing crop of grandchildren than politics or oil. This is the guy that donated, I think, 93% of his fortune. I think before he died, too. His time had passed and he knew it. In their 70s now, he and Lily spent more time. Remember, Lily's the wife back when he was 35, poor. They're laying in bed. He's

like, just give me one more day. Like, I'm gonna provide for the family. Tomorrow will be another day. And she stuck with him. And loyalty was obviously rewarded. He and Lily spent more time at their ranch. They played cards and dominoes on the back porch. And they would drive out at dusk to watch their deer. They built homes for their daughters and their husbands. Most of their brood had taken their plane to a Gulf Coast beach vacation in February 1957 when they got the call.

Gampa, that's what they called him, had suffered a stroke in his sleep. He lingered on for four more months but never regained consciousness. He died in June 1957, Lily at his side. She died two years later, never adapting to her beloved husband's absence. H.L. Hunt turned 85. His health was failing. Chronic back pain forced him into a wheelchair. He finally consented to be driven to his office by a chauffeur.

On September 13, 1974, the old man collapsed at his desk. He was rushed to the hospital. The diagnosis? Advanced cancer of the liver. Hunt never left the hospital. The day after Thanksgiving, his heart gave out and he died. His obituary in the Texas Monthly said he was many men in one. Contradictory, good and bad, but on a larger scale, right out of Ayn Rand. In the age of midgets and conformists, he was a rogue who broke rules and cut a large swath, and at last laid down with a smile.

This and similar eulogies were an early sign of a developing Texas nostalgia, a harking to the days when giants walked the oil fields, when men like Hunt and Clint and Sid and Roy helped build something unique in mid-century Texas. An image and culture. Loud, boisterous, money-hungry, and a bit silly. But proud and independent. And that's where I'll leave it. If you're looking for a wild story, pick up the book. It was absolutely fantastic.

I really enjoyed reading this. If you buy the book using the link that's in the show notes on your podcast player or by going to founderspodcast.com you'll be supporting the podcast at the same time that is 149 books down 1,000 to go and I'll talk to you again soon