Sell Mineral Rights in Rusk County, Texas

Everything about the modern oil business, proration, the Railroad Commission's real power, the Hunt fortune, the smell in your gas line, traces back to one farm in this county and a man who had forty-five dollars.

A promoter with a fake map

Columbus Marion Joiner was sixty-seven years old when he started drilling in Rusk County in 1927. He had been a lawyer and a Tennessee legislator. He had drilled and failed in Oklahoma. He arrived in East Texas with roughly forty-five dollars and a conviction that there was oil under Rusk County, which every major company's geology department had already concluded was wrong.

His partner was A. D. "Doc" Lloyd, who wrote a promotional geological report describing formations and a salt dome that did not exist under that land. It was, in plain terms, fiction. It was also persuasive. On the strength of it, Joiner sold one-acre certificate interests at twenty-five dollars apiece to farmers, widows, storekeepers and anyone else who would buy one, and kept selling them, in overlapping quantities, to keep the rig turning.

That detail matters more to you than any other fact on this page. We will come back to it.

Daisy Bradford

The land belonged to Daisy Miller Bradford, a widow and businesswoman who leased Joiner part of her 975.5-acre farm west of Henderson in 1925. She was not a bystander. When Joiner could not make lease payments she granted extensions. She lent him $5,000. She cooked for the crew, nursed injured hands, and kept the operation alive through two failures.

The Daisy Bradford No. 1 stuck its drill pipe at 1,098 feet and was abandoned in February 1928. The No. 2 failed at 2,518 feet in March 1929. Joiner moved the rig a short distance and started a third hole.

October 3, 1930

The Daisy Bradford No. 3 came in as a gusher in front of a crowd estimated at four thousand people. Total depth 3,592 feet. Initial production about 300 barrels a day, respectable, not spectacular, and nobody yet understood what it meant.

Seven weeks later, Joiner sold it

On November 26, 1930, Joiner sold his roughly 5,000 acres of leases and the eighty-acre tract containing the discovery well to H. L. Hunt for $1,335,000. He was tangled in litigation from all those overlapping certificates and needed out.

Hunt later called it the greatest business coup of his life, which is a modest way of describing it. That transaction is the origin of the Hunt family fortune, and it happened in this county, on paper filed in this courthouse.

The field that broke the price of oil

Then the field proved itself. The Lou Della Crim No. 1 came in near Kilgore on December 28, 1930 at 22,000 barrels a day, seventy times the discovery well. The Lathrop No. 1 followed north of Longview in January 1931. These were not three separate finds. They were one field: 140,000 acres across central Gregg, western Rusk, southern Upshur, southeastern Smith and northeastern Cherokee.

By mid-summer 1931 roughly 1,200 wells were making 900,000 barrels a day. Nobody could absorb it. Crude that sold for ninety-nine cents a barrel when the discovery well came in fell to forty-six cents, and by July 14, 1931, to thirteen cents a barrel. In the middle of the Depression, the largest oil field ever found had made oil nearly worthless.

Martial law

On August 17, 1931, Governor Ross S. Sterling sent the Texas National Guard and the Texas Rangers into the field with orders to shut in all 1,644 wells and hold order. Soldiers occupied the oil field of a sovereign state's private landowners for the purpose of raising the price of a commodity.

Production resumed September 5. Martial law ran until February 2, 1932, when a federal court ruled it illegal.

How this county created modern oil regulation

The Railroad Commission had issued its first proration order for the field on April 4, 1931, holding the field to 50,000 barrels a day. Federal courts struck down nineteen proration orders during 1932 alone. Texas passed a market-demand proration bill that November. The Commission shut the field in again on April 6, 1933, and reopened it April 24 with a 750,000-barrel allowable.

What was being invented, order by order and lawsuit by lawsuit, was the authority of a state agency to limit oil production to match market demand. That authority, worked out here, over this field, became the model that the Texas Railroad Commission used to set world oil prices for the next forty years, and the model OPEC later copied.

Hot oil

Where there is a quota there is smuggling. Oil produced over the allowable was called hot oil, and East Texas ran an industry in it: tapping pipelines, loading trucks by moonlight, disguising tank trucks as moving vans, piping crude to unlicensed "moonlight" refineries back in the woods.

At the peak, between late 1934 and early 1935, the Railroad Commission put illegal production from this field at 55,000 barrels a day. Officials closer to it thought the real number was 90,000 to 150,000. It took an interstate compact drafted in Dallas in February 1935 and the federal Connally Hot Oil Act that year to bring it under control.

March 18, 1937

The field's worst day had nothing to do with a well.

The London Consolidated School at New London, in northwestern Rusk County, sat in the middle of the richest school district in the state. In January 1937 the school board switched its gas supply from United Gas to a residue line belonging to Parade Gasoline Company, saving about $300 a month. The gas was "green", untreated casinghead residue, and it had no smell.

It leaked into the crawl space under the building for weeks and nobody could tell. At 3:05 in the afternoon on March 18, 1937, an instructor switched on a sanding machine in a shop room. Approximately 298 students and teachers were killed. It remains the deadliest school disaster in American history.

Texas responded by requiring that a distinctive malodorant be added to all commercial and industrial gas. That is why natural gas smells. Every gas line in this country carries that smell because of what happened in this county.

What it left in the deed records

Now the part that matters if you own minerals here.

The field produced 216,291,397 barrels in 1933 alone from 11,867 wells, and has produced more than five billion barrels in total. Rusk County's share is more than 1.8 billion. In 1938 operators began reinjecting produced salt water to hold reservoir pressure, which is why hundred-year-old wells here still make oil.

Rusk County is East Texas Field oil and Cotton Valley and Travis Peak gas. On its eastern edge, near Tatum and toward Panola and Harrison, operators have drilled a small number of Haynesville horizontals at about 12,000 feet. Rusk sits on the western fringe of the play, not in its core.

But the ownership underneath all of that was created in a hurry, in 1930 and 1931, by people signing whatever was put in front of them. Three things came out of that period and all three are still in the records:

• Joiner's certificates. Those twenty-five-dollar one-acre interests were sold overlapping and were litigated for years. Fractional interests traceable to that promotion still turn up in these chains.
• Leases with no Pugh clause and no depth limit. A 1931 lease covers all depths forever, so long as anything produces. A shallow Woodbine stripper making four barrels a day can be holding the Haynesville underneath it.
• Ninety years of undivided inheritance. Interests created in 1931 have passed through four generations, often without probate, frequently by affidavit of heirship, and are now split into fractions that no operator wants to chase.

That is why a Rusk County royalty check can be small and the interest behind it complicated. It is also why almost nobody has ever sat down and explained to these families what they actually own.