Clifford Mooers to Sterling, June 5, 1931
In the early years of the 20th century, the oil fields contributed as much to the Texas legend as the cowboy had in the 19th century. The petroleum industry came into its own in Texas with the gusher at Spindletop in 1901. In the early rough-and-tumble years of the industry, the wildcatter, the roughneck, and the newly rich oilman all took their places in Texas folklore. The oil industry also became an important source of public revenue.
East Texas was the last section of the state to strike liquid gold, with a huge oil field discovered in October 1930. The economic impact of this discovery ran straight into the circumstances of the Great Depression to produce another economic crisis of overproduction. By June 1931, average daily production from East Texas was over 300,000 barrels. The production from East Texas caused the price of oil to vary wildly in 1931, going as low as 10 cents a barrel. Another problem was "hot" oil which was siphoned from pipelines or from other driller's lands, and which was selling for as little as 3 cents a barrel.
In August 1931, Governor Sterling, himself an oilman, ordered a field shut-down and sent the National Guard into East Texas to enforce martial law. The Railroad Commission ordered proration, which meant that drillers had to produce at a rate set by the Railroad Commission. This would support prices and conserve the state's natural resources by regulating output. Although Sterling's decree was ruled illegal in February 1932, he continued to use the Texas Rangers to enforce compliance with proration. Later, interstate commerce laws passed under the New Deal would enable better enforcement of proration, and for the next 40 years the Railroad Commission would be one of the most powerful regulatory bodies in the United States.
This telegram alerts Governor Sterling to the situation in East Texas.
Clifford Mooers to Sterling, June 5, 1931, Records of Ross S. Sterling, Texas Office of the Governor, Archives and Information Services Division, Texas State Library and Archives Commission.