Texas Almanac, 1988-1989 Page: 38
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38 TEXAS ALMANAC 1988-1989
The New Century
Disaster and discovery set the tone for the develop-
ment of Texas' Gulf Coast in the early 20th century.
Galveston, as noted, was destroyed and spent the early
years of the century in recovery. Houston, however,
along with with several other Southeast Texas commu-
nities, became a boom town as the discovery of Spindle-
top ushered Texas; the nation and the.world into the oil
The presence of oil in Texas was well established.
Indians-had used oil seeps for medicinal purposes, and
the Spanish used the petroleum to caulk boats on occa-
sion. Immediately after the Civil War, contracts were
made to allow for the exploration of oil and gas. And
petroleum had been discovered at Nacogdoches and
Corsicana. Indeed, Navarro was the leading oil-produc-
ing county in the state, and J. S. Cullinan built a refin-
ery in the East Texas city and a pipeline to transport oil
from nearby wells.
The conventional wisdom, however, was that oil in
large commercial quantities simply did not exist in Tex-
as. But men like Pattillo Higgins were not convinced
when state and, federal geologists counseled against
drilling for oil around the salt domes near Beaumont.
Beginning in 1892, three efforts were made to find oil
near Beaumont. Only finances stopped liggins, and in
1899, he sold his leases to Capt. Anthony F. Lucas, a
mining engineer from Washington, D.C., who had ex-
perience in drilling salt domes in Louisiana.
One test well consumed Lucas' money, and he ar-
ranged an association with the flrmof Guffey and Galey
of Pittsburgh, Pa., which agreed to finance future drill-
ing in return for a share of the profits, if any. The sec-
ond well was started in October 1900. By'Jan. 10, 1901,
the crude rotary rig had reached a depth of 1,020 feet,
and the well blew in, sending thousands of barrels of oil
into the air. Texas' first oil boom was under way. It was
more spectacular than anything else in the American
experience except, perhaps, the California Gold Rush
of 1849. The name "Spindletop," which was emblazoned
in history, was taken from a nearby subdivision, Spind-
letop Heights. Despite all the legend that has developed
aroundthe monumental discovery, it might never have
been made except for Lucas' wife, Caroline, who pro-
vided encouragement for her husband during particu-
larly discouraging times.
Oil experts, investors, company executives and
confidence men flocked to the area. By July 1901, there
were 14 producing wells, three abandoned tests, 15 rigs
drilling and 18 more preparing to drill - all on an 80-
acre tract of land surrounding Spindletop. In the first
year of operation, 630,753 worth of oil were sold at 25
cents a barrel, and another 1.5 million barrels of oil
were held in stock.
Facilities for refining, storage and transportation
of oil were lacking in the area. Within a year, 400 com-
panies with capitalization of approximately $200 million
were organized. Among these were today's Gulf, which
was purchased recently by Chevron, and Texaco.
The first refinery was built at Port Arthur by the
Guffey Oil Co., which had the facility in operation by
July 13, 1901. This refinery was quickly followed by two
more, one by Burt Refinery in Beaumont ahd another
in Port Arthur by Texaco (the Texas Co.).. In just over
two and one-half years, $36 million was invested in
Southeast Texas, one-third going to explorations and
two-thirds to transportation, storage and refining.
Port Arthur was a new city, the brainchild of Arthur
E. Stilwell, a promoter and president of the Kansas City
Southern Railroad. Stilwell wanted a terminus and port
for his railroad. So he bought 50,000 acres of land
around the defunct community of Aurora on the north-
west shore of Sabine Lake. Work began on the 4,000-
acre townsite in 1895, and by 1899, a25-foot deep channel
that could handle ocean-going ships was complete. The
-vessels could come directly to Port Arthur's docks, and
in 1906, the city became the port of entry for the Sabine
Spindletop's success encouraged drilling all along
the Gulf Coast. By 1904, 650 wells were producing
21,674,111 barrels of oil a year in Southeast Texas. Dis-
coveries had been made in Liberty, Hardin, Brazoria,
Matagorda and Harris counties. Evidence of oil or gas,
if not in commercial quantities, also had been found in
Calhoun and San Patricio counties. By 1902; the Beau-
mont Oil Exchange and Board of Trade, the Houston Oil
and Stock Exchange and the Galveston Oil and Stock
Exchange were in operation.
In a brief time, Spindletop turned the world and
nation askew. Russia had pioneered the use of fuel oil in
steamships. But the-United States soon put the fuel to
work in locomotives, industryand the home. The Hous-
ton and Texas Central was probablythe first railroad to
try oil as a fuel, and Southern Pacific soon converted to
oil at great savings over coal. Steamship lines soon fol-
lowed suit, for oil was a great economy in both price
and handling. Three barrels of oil provided the same
energy as a ton. of coal, but coal sold for 53.50 a ton,
while three barrels of oil cost only 60 cents. In addition,
one man could fuel a ship with oil, while more than 100
were needed to load it with coal.
Two monopolies also were broken by the discovery.
Coal producers soon were faced with competition from
cheaper fuel oil. And Standard Oil Co.; which before
Spindletop produced more than: half the nation's oil,
soon became-only a competitor in the marketplace, al-
though a-formidable one. One fledgling Texas industry,
lignite mining, became a casualty, however, being un-
able to meet the challenge of oil's economy.
To a great extent, eastern money was used to devel-
op the transportation, storage and refining facilities.
Texas investors were too small for the large outlays of
capital needed. Exploration was within local reach; oth-
er functions were not. But to keep out-of-state interests
from gaining too much power, Texas producers in 1905
defeated an attempt in the Legislature to allow one
company to participate in all oil-industry functions.
Houston soon became the gateway to Beaumont.
Immediately after Spindletop came in, six passenger
trains a day, and many specials, too, were plying the 85
miles between the cities: Beaumont became a typical
boom town. It is said that half of the whisky sold in
Texas was consumed in. Beaumont.
From a historical perspective, Houston probably
benefited most from the oil strike. It added oil to the
products that it shipped, and one of the world's largest
refining and petrochemical complexes developed along
the city's ship channel and the rest of the coast.
Galveston's disastrous storm paid dividends for
Houston. For many years, leaders of the Bayou City
argued that Galveston's harbor could not provide pro-
tection for ships during.major storms. The hurricane of
1900 bore out the argument. So Congress looked more
favorably on appropriations for an inland ship channel
and port. Houston's drive to become a deep-water port
was accomplished by 1908 when a channel 18 and one-
half feet deep was completed and a turning basin was
built at Harrisburg. The channel was deepened to 25
feet by 1914. A channel alsowasdredged to Texas City in
1904. The community, originally called Shoal Point, had
been developed by a group of investors from Minneso-
ta. A short railroad also was built, and the Mainland Co.
purchased both townslte and railroad in 1898. In 1911,
the city, which was located in Galveston County, but on
the mainland, was incorporated.
During recovery from the devastating hurricane,
Galveston's leadership - exercised through the Deep
Water Committee - made basic changes in the commu-
nity. The mayor-alderman form of municipal govern-
ment was abandoned in favor of the innovative com-
mission system. The panel included the mayor and a
commissioner for each of four areas of concern: fi-
nance and revenue, fire and police, waterworks and
sewage, and streets and public improvements. During
the progressive era prior to World War I, the system
was copied across the nation, but it proved inefficient.
The tendency was for each commissioner to concen-
trate on only the office's particular responsibility, and
there was little cooperation among the elected officials.
Galveston used the commission system until 1960..
Technology was enlisted to protect the city from
future storms. After a study, engineers recommended
construction of a three-mile long seawall and elevation
of the city. The city's part of the sea wall-was completed
in 1904, and Gov. Oscar Colquitt in 1911 rode in the first
car to drive along the top of the wall after it was paved.
The city's elevation was raised in quarter-mile sec-
tions by dredging from the harbor and pumping the
fluid sand to desired locations through pipes. By 1911,
500 city blocks had been elevated up to 11 feet with 16.3
million cubic yards of sand, and the double purpose was
achieved of increasing the island's elevation while
deepening the harbor.
Early dividends were received on the investments.
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Texas Almanac, 1988-1989, book, 1987; Dallas, Texas. (texashistory.unt.edu/ark:/67531/metapth113819/m1/41/: accessed November 15, 2018), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; crediting Texas State Historical Association.