East Texas Oil Boom

1. Quantity and over production effects of oil boom on market
2. Battle to control oil fields-Big Oil Companies vs small
3. How it helped with Depression relief in East Texas
4. Prorationing/Stopping production
5. Governor Ross Sterling’s use of National Guard troops, Texas Rangers, and martial law to control production and restore order
6. the eventual outcome of the prorationing battle

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Time period: East texas oil boom 1930s

Sept 5, 1930 Columbus Marion Joiner hit the largest reservoir of oil in the contiguous US, dwarfing Spindletop and Borger strikes.

Kilgore became a boom town, serving as focal point for production, processing, service, and supplies.  Thousands flocked. Increased population of Kilgore from 500-12,000 by 1936.

over production:

-over 1000 producing wells within the city of Kilgore.

-Oil boom led to sharp decline in oil prices.

-As prices declined, small producers increased their productino to make up the difference. 

-Prices fell further

-Tx R.R. Comm. tried to intervene: ordering prodcution restrictions. Driller disregarded.

-Shipped and produced "hot oil"-petroleum above assigned quotas.

-Gov. Sterling declared Martial law. Over 1000 national guardsmen and Tx Rangers were sent to the fields to establish order and temp shut down production.

-Oil boom offered relief from Depression because the fields offered jobs to residents and did not want the production to stop.

-Operators disregarded Sterling's attempt to shut down production siting his past involvment with Humble Oil Company-accusing him of having big oil companies interests at heart.

-nat'l guard Gen jacob Wolters enforced martial law, although experienced had ties with Texaco. 

Feb 2, 1932, Tx Supreme Court ended martial law in the oil fields by ruling the Gov's actions were illegal. 

-Jan 1933, Legislature gave the R.R.Comm clear authority to limit oil production based on market conditions and to enforce indiviusal productino levels. 

-Hot oil continued to flow.

-Resentment continued for Sterling in East Tx because of his actions towards the oil fields and the "cotton holiday"

"Cotton Holiday"

What were Texans' reaction to the plan.

Who implemented it?

Gov. Sterling was dealing with East Tx Oil Fields and growing protest among the state's cotton farmers.

-Farmers were plagued with overproductino, too.

-in 1931, Huey Long, Gov. of Lousiana, assumed leadership of the radical plan to deal with deteriorating cotton market.

-Cotton Holiday Plan-effort to eliminate large cotton surpluses and raise low prices by ceasing all planting in 1932. In doing so, would create a spike in 1931 cotton prices and lead to more income to cary farmers into 1932.

-Called for Cotton states to remove 75% of South's acreage out of production.

-Gov Sterling DID NOT support. After 10 days session, legislature killed the Cotton holiday bill.

-introduced Cotton Acreage Control Law which never happened-limiting acreage cultivated to 30%. NEVER HAPPENED.

 -Farmers became more disgruntled with Sterling.

Who won Gubernatorial primary in 1932?

How/Why?

-Miriam "Ma" Ferguson announced she would run against Sterling for Governor.

-James "pa" Ferguson potrayed Sterling as a rich uncaring millionaire, while representing the Ferg's as the champions of the common man. 

-Ferguson's Claims: Attacked Sterling for martial law in E. Tx, constantly repeated false charges that Sterling wasted $100 million in state highway funds.

-Ferguson's plan for Depression: LOWER TAXES

-Ma Ferg won, even though other candidates put their support behind Sterling.

-Sterling's campaign cried fraud.

-Supreme Court allowed the result of Ma to stand.

Who were the Texans with political influence in DC during the New Deal Era and why?

What is the RFC?

What was the New Deal Era?

What is the FDIC?

-Congressman and Speaker of the House, John Nance Garner opposed Franklin D. Roosevelt.

-Nance's mentor secured Nance's support for FDR by offering Nance a spot as Vice Pres to FDR.

-jesse Jones: head of Reconstruction Finance Corp (RFC), a gov. agency initially created under Hoover to aid banks and large businesses in financial constraint.

The RFC was transformed by FDR as primary funding agency for many New Deal programs. The RFC loaned over $10 billion to American businesses during 1930's.

-Jones and Garner were instrumental in convincing FDR to drop his resistance to what would become cornerstone NEW DEAL REFORM-the guarantee of bank deposits through the creation of the Fed Deposit Insurance Corp (FDIC).

Morris Sheppard and Tom Connally exerted influence by flexing their seniority, reputations, and committee assignments, nine Texans also chaired committees in the House of Rep's, thus assuring influential roles in passing New Commerce Committee.

-Sam Rayburn, chairman of the Interstate of Foreign Commerce Committee.

-Steered passage of:

the truth in Securities Act: bills establishing the Securities And Exchange Commission, the Fed Communications Commission, Rural Electrification Act.

-Ag Chairman Marvin Jones of Amarillo:

farm bills, sponsoring Soil Conservation Act and co-authoring the Second Ag Adjustment Act.

-James Buchanan, chairman of Committee on Appropriation, handled huge sums of money earmarked for relief and economic recovery.

New Deal Initiatives in response to The Great Depression:

1.)"Bank Holiday", Emergency Banking Act, and FDIC

"Bank Holiday"- People were making "bank runs" to withdraw their money quickly due to lack of faith in their financial institutions staying open.

Gov Ferguson ordered thes tates banks to be closed on march 2, 1933. 

March 6, FRD declared Bank Holiday, closing all Nation's banks, to allow time for the bank runs to cease while gov officials assessed banking situation and crafted appropriate relief measures.

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-Emergency Banking Act:1933,continued the banking holiday until Gov inspectors could evaluate each individual bank's financial standing. If bank was in good standing, they could reopen.

-5% of national banks on the verge of collapsing were closed permanently. 

-Large number of banks were deemed capable of being saved if received gov help. Jesse Jones's RFC provided aid, buying bank's preferred stock. Gov relief helped the banking system stabilize. The New Deal's first order of business was a success.

Home Owners Loan Corp (HOLC)

&

Farm Credit Administration (FCA)

HOLC: Agency designed to help save America's homes and farms from foreclosure. Provided interest bearing Gov bonds to creditors in exchange for defaulted home mortgages. The agency then offered homeowners lower monthly payments with longer payout periods. The HOLC eventually advanced over $100 million to cover over 44000 Texas home mortgages. Foreclosed on over 200,000 nationally, 8,000 in TX. Earned congress a slight profit.

FCA: pumped $2billion into the federal land banks for the purposes of refinancing farm mortgages. by the end of 1938, Texans had received  more than 100,000 loans worth $250 million to protect their farm properties from foreclosure.

Federal Emergency Relief Admin (FERA)

Who started it?

Who supported it and why?

What did it do?

FDR had plans to directly aid the nation's unemployed. The Ferg's supported because the New Deal's unemployment relief efforts programs would help those greatly affected by the Depression BUT ALSO because distribution of fed relief dollars provided a tremendous opp to establish a patronage system to reward their political supporters.

FRD started the FERA to provide funds for the needs on the basiss of one federal dollar for every three provided by the states. 

To determine level of need and to distribute the funds, the legislature created the Tx State Rehabilitation and Relief Commission. 

Without legal authority, James Ferguson chaired the commission's initial session and arranged for the commission to appoint Ferguson supporters to the various county boards empowered to oversee local relief operations. 

-By 1933, Texas State Senate began investigating the Relief commission due to rumors. They found evidence of malfeasance, including favoritism in selection of clients, use of funds to pay the poll taxes of recipients, diversion of relief money to make improvements on private property and gross expenditures on local relief board salaries.  These finding led to: new chair, closer observation of FERA director, and tougher rules.

Public Works Administration (PWA)

&

Works Progress Administration(WPA)

BOTH WORK RELIEF EFFORTS THAT HELD THE IDEA OF "PLACING DOLLARS IN THE UNEMPLOYED HANDS"

PWA-specialized in LARGE SCALE CONSTRUCTION PROJECTS. Employed large work crews for long period of time. Types of projects: mansfield dam, Airport Terminal at Hobby Airport

WPA-smaller scale projects, employed 8 million Americans, 600,000 Texans.  75% of workers did construction. 25% did works related to the arts: musicians, directors, producers, actors, artists, etc.

Females were discriminated against like in the rest of country. 

-Assumed traditional roles in work.

Civilian Conservation Corps (CCC)

& 

National Youth Administration (NYA)

-types of programs of NYA?

Both provided work for unemployed youth coming from families receiving FERA aid. Enjoyed wide popularity.

march 1933, congress created the CCC to conserve the nations natural and human resources.  50,000 young Texans aged 18-25 served in the CCC over it's 10 year existence.  Worked in rural camps on projects involed in building or maintaining state and national parks and forests.

CCC Boys built: roads, small dams, campsites, etc.

CCC provided educational opportunities to off-duty employees. Took onsite classes or correspondence courses from the remedial stage up to college level.

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NYA created in 1935 under the Works Progress Admin. 

Provided jobs for eligible youths who either could not or would not enlist int he CCC. Some joined the NYA instead of the CCC because they were relcutant to distance themselves from home.  NYA also had females, CCC DID NOT.

NYA had African Americans. CCC also had African Americans.

Lyndon B Johnson directed the NYA for the first 3 years. He gave regular inspections of black projects and channeled additional monies to help fund black projects when available.

Types of programs of NYA:

-most well known-part time jobs for high school and college students on their campuses (landscape, maintenance, library work,etc)

-other less known-aided out-of-school youth through work programs that later served as the inspiration for the Job Corps-on site training, and training at established work centers.

Rural Electrification Administration (REA)

Effects on rural america?

Created in 1935 and The REA helped to usher in a new age in American countryside.

before REA-10% of nation's rural areas had electric power.

REA provided low interest loans to communities that established cooperatives consisting of rural residents. The loans paid for laying down power lines in localities that private electric companies had previously ignored. Private companies seen the profitablity and stepped in to provide additional service to rural US. 

Lifestyle changes: Radio and TV broke down cultural isolation, electric pumps provided indoor plumbing, immediate acces to hot water, improved sanitation, electric kitchen appliances eased the burden of cooking, refrigeration improved diet and overall health, reduced time from chores freed up more time for relaxing, etc creating quality of life in rural US. 

Agriculture & TX Economy New Deal Efforts:

Agricultural Adjustment Administration (AAA)

-Why? 

-"Plow up Campaign"

IMPORTANT CHANGES  IN AAA'S COTTON PROGRAM

AAA overseen the programs the following programs:

-Aid for agriculture further promised the stimulate industrial recovery because farmers also bought industrial products. in 1933, it became official. 

-Plan of voluntary crop reduction in exchange for gov payments.

Plow up Campaign:

Cotton farmers had a problem because they had already planted their crop. Gov. paid growers in exchange for destruction of up to 1/3 of their crops.  The AAA used Agricultural Extension Service agents and appointed farmer committees to educate farmers about the campaign: SIGN THEM UP, OVER SEE CROP DESTRUCTION, DELIVER BENEFIT PAYMENT.

Cotton prices doubled and $43 million was paid. Farmers benefitted.

Some sharecroppers complained the landowners kept the money given to the farmers, which was against the rules of the AAA.

-IMPORTANT CHANGES AND WHY:

1934 souther producers wanted the crop reduction mandatory as NON-COOPERATORS benefitted more than COOPERATORS and the money they recieved was more from their crop that WASNT destroyed once prices rose.

 Cotton prices continued to rise.

Jones-Connally Act

 What is it?

Why?

Who benefitted? 

Severe drought affected Texas cattle producers. ranchers supported the Jones-Connaly Act making cattle an AAA commodity subject to reductions in exchange for payments.  

-Compensating cattle owners for removing diseased cattle from stockpiles and healthy cattle from the marketplace, the AAA worked through local committees and inspectors with the USDA Bureau of Animal Industries.

These AAA reps visited individual ranches and farms and purchased livestock. Diseased and emaciated animals found to be unfit for human consumption were shot and buried on spot. Agents turned over healthy stock to the Fed Surplus Relief Corp (FSRC) for slaughter and canning.

-FSRC CANNERIES DISTRIBUTED ABOUT 50 MILLION CANS OF BEEF TO THE NEEDY.

WEST TEXAS GRAIN FARMERS ALSO RECEIVED DROUGHT RELIEF FUNDS IN 1934 DUE TO THE DUST BOWL.

WHO BENEFITTED?

CATTLE PRODUCERS, WEST TEXAS GRAIN FARMERS 

SOIL CONSERVATION & DOMESTIC ALLOTMENT ACT (SCDAA)

& 

AGRICULTURAL ADJUSTMENT ACT OF 1938

WHY?

problems?

SCDAA was a plan to conserve the foil and make healthy soil plentiful again by planting different crops: soil building crops:legumes/grasses instead of SOIL DEPLETING CROPS: cotton.

The Gov would continue to make payments to farmers but from the Federal Treasury rather than from processor taxes. Still a production control act.

Inadequate Productino Control method!

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AG ADJUST ACT OF 1938-

WAS CULMINATION OF EFFORTS UNDERTAKEN TO CREATE A LONG TERM PRICE SUPPORT SCHEME FOR AMERICAN FARMERS BASED ON A COMBINATION OF ADMINISTRATION'S PREVIOUS EFFORTS: acreage restriction. production quotas, conservatino payments, and  price-support loans.

With gov. paying farmers to grow fewer crops, the need for ag labor declined!

share croppers and tenant farmers decreased and texas farmers and planters than OWNED their lands increased.

National Recovery Admin (NRA)

&

National Industrial Recovery Act (NIRA)

& Connally Hot Oil Act of 1935

Served to revive the American industrial economy. Created in 1933!

NIRA created the NRA. 

The NRA was an experiment that asked for voluntary cooperation between, GOV, businesses, and labor. It allowed all these to work together to write codes of how to conduct pricing and business with each other so prevent cut throat competition and prices to rise.

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Minimum wage was set, improved work conditions, collective bargaining. 

With all the codes to enforce nationally, it became a bureaucratic nightmare. Laws were difficult to enforce, especially the quota on HOT OIL.

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Conally Hot Oil Act of 1935:

intended to protect interstate commerce against "contraband oil" and to encourage the conservation of US crude oil deposits, the legislation made it federal crime to ship hot oil across state lines.

ONLY EXISTED FOR 2 YEARS. US SUPREME CT STRUCK IT DOWN.

FAILED TO GENERATE INDUSTRIAL RECOVERY!

Wagner Nat'l Labor Relations Act

& 

Fair Labor Standards Act of 1938

Wagner Nat'l Labor Relations Act:

passed in 1935 to preserve the labor provision form the previous law(NIRA/NRA).

-OUTLAWED UNFAIR LABOR PRACTICES, -GUARANTEED THE RIGHT OF WORKERS OT ORGANIZE AND CREATED THE NAT'L LABOR RELATION BOARD(NLRB) TO INVESTIGATE CHARGES OF UNFAIR LABOR PRACTICES

-TO OVERSEE ELECTIONS TO DECIDE IF A MAJORITY OF WORKERS WISHED TO FORM A UNION.

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FAIR LABOR STANDARDS ACT OF 1938:

ESTABLISHED A NAT'L MINIMUM WAGE, INITIALLY SET AT 25 CENTS AN HOUR. CONGRESS LATER REMOVED EXEMPTION THAT FAILED TO INCLUDE AG AND DOMESTIC WORKERS.-REQUIRED OVERTIME PAY AT A RATE OF 1.5 TIMES THE REGULAR HOURLY WAGE FOR PERFORMED WORK OVER A WEEKLY MAXIMUM (ORIGINALLY 44 HRS A WEEK).

-OUTLAWED CHILD LABOR.

COPING WITH THE DEPRESSION IN TEXAS

DIFFERENT STRATEGIES BY DIFFERENT ADMINISTRATIONS: FERGUSONS, ALLRED, O'DANIEL

FERGS:

cooperated with New Deal initiatives.

-porposed new sales teaxes and income taxes to address the state's debt. 

-repeal of Prohibition. people argued that Prohibition took away jobs and money from the state.

-unemployment relief distribution caused the Fergs most political damage.

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Allred:

Cooperated with New Deal initiatives. implementation of nat'l Social Security Act of 1935-providing welfare to blind, disabled, dependent children, elderly, and unemployed. Legislation ONLY agreed to fund the elderly, which were offset by higher oil, gas and liquor taxes. 

-cleaned up Ferg's damage to law enforcement credibility by re-ogranizing the Tx Rangers and the highway Dpt into the new Dept of Public Safety. Left the office with state governemnt debt of $3 million.

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O'Daniel:

ten Commandments! 

Called for state assistance to all elderly Texans and expounded on his opposition to a sales tax to generate revenue. The state gov could get all the money it needed, he claimed, from rigid enforcement of existing tax laws. 

MOST INEFFECTIVE GOVERNOR!

refused to support higher taxes on natural resources and utilities, vetoed appropriations for new orphanages and mental health facilities, and slashed the budget of the Dept of Public Safety.