Besides the Mellons’ Gulf Oil Company, this situation also allowed the creation of another major integrated oil concern, the Texas Company (later Texaco), founded in 1902 by Joseph S. Cullinan, in association of the Laphams (wealthy New York leather merchants), steel wire tycoon John Warne Gates and the powerful Texan Hogg-Swayne Syndicate. But Spindletop was literally only the top of an iceberg, as far as oil production in the Southwest was concerned. It started a boom which lasted well into the 1930’s and changed the scope of the oil & gas industry altogether.
Like the gold rush in California and the first oil boom in Western Pennsylvania, the prospect of boundless wealth spilling from the underground attracted countless hopefuls to Texas and Oklahoma, then considered as the last frontiers, after the first great gusher at
Spindletop. But whereas neither the California gold rush nor the Pennsylvania oil boom produced significant fortunes, except indirectly to those who benefited from outside, some Texas and Oklahoma wildcatters actually rose to great wealth. The first such independent oil fortunes were not made by the wildcatters though. As mentioned, Gulf Oil ended almost entirely in the hands of the Mellons, Pittsburgh private bankers.
Cullinan, who besides the Texas Company also founded Magnolia and Farmer’s Petroleum Company, was involved hands-on in oil drilling operations, but his partners, who took the lion’s share in the companies he founded were not. Gates and the Laphams were Eastern financiers who made their money in the consolidation of other businesses (steel wire and leather). John Hutchings Sealy, who took over Magnolia Petroleum from Cullinan, was the second-generation heir of an established cotton brokerage and banking family of Galveston. And the members of the Hogg-Swayne syndicate were political power brokers.
But in time some of the wildcatters struck it rich enough to rise to the forefront of wealth in America. Bolstered by generous depletion allowances, a special tax loophole that benefited oil producers, the larger operators among the independents soon made more money than they could spend and the increased competition among the major, a typical case of oligopoly further increased their bargaining power. During the 1930’s as old wealth was dwindling because of estate taxes and the depression, some extraordinary oil fortunes were made by wildcatters in Texas and Oklahoma. Sid Richardson, Haroldson Lafayette Hunt, Clint Murchison and Hugh Cullen are but a few of the men who ranked high on the lists of wealthiest Americans after World War II.
The capital of all this activity was Houston Texas, where many of the state’s new oil companies soon established their headquarters. The ascension of Houston as capital of the oil barons was crowned with the opening in 1949 of the Shamrock Hotel. Built by Glenn McCarthy, most flamboyant among the oil barons, at a cost of $26 million, the Shamrock was the symbol for Texas oil wealth and its grand opening, for which the host chartered entire trains to bring in celebrities from Hollywood, the epitome of an era of great expansion.