Sunday, June 23, 2013

Book Review: The Big Rich

The Big Rich, subtitled The Rise and Fall of the Greatest Texas Oil Fortunes by Bryan Burrough (2009) is a fascinating read and on my all time Top Ten.  Even if this was fiction, the tales of the Texas oil business would be engrossing, the fact it is true makes the book utterly compelling.

The author focuses in on a handful of the largest Texas oil families and their patriarchs:

Roy Cullen, who had an instinctive nose for where the oilfields lay and in the the 1920's pioneered drilling deeper than everyone else and discovered huge amounts of reserves in Humble, TX.  Cullen was one of the less flamboyant oilmen, amassing rather than squandering wealth, setting up a huge philanthropic trust and donating enormous amounts of money to Houston area hospitals, which to this day are among the world's finest.  Cullen was also an early backer of LBJ.

Clint Murchison Sr. was more the stereotypical Texas oilman.  In the 1930's he was leveraged to the hilt, always running from bank to bank, trying to borrow enough to bring in the next gusher.  Much of his early fortune was built around "hot oil" meaning that despite government caps on production, Murchison's wells kept flowing.  He bought large ranches, including Matagorda Island on the Gulf coast, built huge homes, had a private plane and in general, lived large.  His son, Clint Jr. went on to start the Dallas Cowboys.  Ultimately much of the Murchison wealth was lost and Jr. filed bankruptcy in 1985.

The Hunts took it to a whole other level.  The founder of Hunt Oil, H.L. Hunt was a bigamist (15 children, three wives!) and in the 1920's and 30's discovered oil in East Texas the old fashioned way - by spying on other wildcatters and buying up leases ahead of them.  The character of J.R. Ewing is definitely based on H.L.  Despite building a huge family fortune, the Hunts lost most of it - a combination of buying much of the worlds silver before that market collapsed and having Gadhafi kick them out of Libya.

Glenn McCarthy epitomizes rags-to-riches.  He had $1.50 to his name when he got married but a succession of oil strikes in the 1930s and 40's made him one of the wealthiest men in Texas.  Part of his undoing was the Shamrock Hotel in Houston, which cost him $21 million to build in 1949 but ultimately failed.  Much of the character played by James Dean in Giant is based on McCarthy.

Finally there is the Richardson / Bass empire and one of the few that survived, flourished and for the most part avoided scandal.  Sid Richardson was one of the pioneers to drill in West Texas in the 1930's, which to this day remains one of the centers of the US oil and gas business.   Richardson went on to be a major philanthropist and never married, leaving much of his wealth to his nephew Perry Bass.  Despite sibling infighting, the Bass fortune remains substantial and they have donated millions to Yale University, the World Wildlife Fund and more importantly to our area, Fort Worth.

The Big Rich is, in a word, terrific.  Every page has some event that makes you shake your head, whether it is the Machiavellian scheming, the wilful bankers, the huge bets, the influence of oil in politics (see LBJ and the Bushes), etc.

Burrough's previous work includes Barbarians at the Gate (1990), a chronicle of the RJR Nabisco takeover and for several years was required reading (and may well still be) for every MBA student.  The Big Rich should also be on the college syllabus for every business and petro-chemical major.

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