East Texas in the Depression: What Cheap Oil Costs
Near Tyler, Texas
When the Daisy Bradford Number Three came in on October third, nineteen thirty, the timing was simultaneously miraculous and destabilizing. America was thirteen months into the Great Depression. East Texas oil looked like a gift.
In some ways, it was. In other ways, the sheer scale of the discovery created a new crisis to replace the one it seemed to solve. By the summer of nineteen thirty-one, the East Texas field was producing nine hundred thousand barrels of oil every single day from Rusk County wells alone.
The price of crude oil, already depressed, collapsed further. Oil that had sold for over a dollar a barrel fell toward ten cents. Refiners and producers across the country were being destroyed by the glut even as East Texas drillers sank more wells.
The State of Texas intervened through the Texas Railroad Commission, which had authority to regulate oil production. The commission established what were called allowables, production limits for each well, to prop up the price. Producers who violated these limits became known as hot oil runners.
The federal government eventually stepped in under the National Industrial Recovery Act of nineteen thirty-three to help enforce production controls. H. L.
Hunt, who had purchased Dad Joiner's rights for one point three million dollars, became one of the richest men in America as prices eventually stabilized and production continued for decades. The East Texas field remains active today, having produced more than five billion barrels of oil over its lifetime. The Depression-era discovery that seemed like a miracle turned out to be complicated, as most miracles are.
