Glenn McCarthy: King of the Wildcatters

Rough and Tumble Texas Oil

A wildcatter is someone who looks for oil where the experts say there isn't any and Glenn McCarthy was one of the best there was. His is a colourful story of rags-to-riches-to-rags-and-back-to-riches.

Vanity Fair says of him that “The stereotype of the raw, hard-living, bourbon-swilling, fistfighting, cash-tossing, damn-the-torpedoes Texas oil millionaire did not exist before Glenn McCarthy ...”

Glenn McCarthy's Early Days

He was born on Christmas Day 1907 in Beaumont, Texas where his father was an oilfield worker. At the age of eight, he was paid 50 cents a day to carry water to the labourers who manned the oil rigs.

When he was 10, his family moved to Houston where he starred with the San Jacinto High School football team. His gridiron prowess got him into Texas A&M University but he was expelled before the season started. Kinder biographies say he dropped out and went into the oil business.

He was 23 when he met Faustine Lee, the 16-year-old daughter of wealthy oilman Thomas P. Lee. Elopement followed and McCarthy later claimed that he had $1.50 to his name when he and Faustine married.

The Lee family was not happy that Faustine was hitched to what was at the time a gas station jockey, but McCarthy had ambitions. He swore he would never ask his father-in-law for money, and he didn't.

He pestered Sinclair Oil into letting him open his own gas station. The young man had spectacular entrepreneurial skills and a willingness to work brutal hours. Soon, he had a second gas station. But, he knew the real money was not in pumping gasoline; it was in drilling successful oil wells.

A Wildcatter Is Born

On a hunch, he sold the gas stations and bought options on land to the east of Houston. His first three drill holes came up dry and he lost every penny he had. Undaunted, he cajoled others into loaning him drilling equipment. That which he couldn't borrow he liberated from other drill sites during the night. Eventually, he hit oil and then came Anahuac.

He was about 30 and he had come to believe there was oil to the east of Galveston Bay. The major oil companies had sent geologists to the Anahuac area and declared it to be free of oil. McCarthy drilled a bunch of dry holes just like the big boys had. But, unlike them, he didn't give up. He drilled deeper and found black gold; there was oil in a place the experts had said it didn't exist. And, lots of it.

In 1939, he gathered everything he had and started drilling on the Gulf Coast near the town of Palacios. All he found was natural gas that he couldn't sell and that ended up blowing out his rigs. Nearly broke, he started working for other oil companies until he paid off his debts. Then, he was back drilling his own wells.

Bryan Burrough, author of The Big Rich: The Rise and Fall of the Greatest Texas Oil Fortunes, tells us that “All through the war years, with little fanfare, he opened new fields, extended old ones, and fattened his accounts. By 1945 he was a very wealthy man, his oil reserves worth $50 million, about $535 million today.”

He bought the 22-story Shell Oil Building in Houston and two banks. His other holdings included a radio station, numerous newspapers, a chemical business, and a movie production company. The American Oil & Gas Historical Society says by the late 1940s “his estimated worth reached $200 million (almost $2.5 billion in 2023 dollars).”

The Shamrock Hotel

McCarthy enjoyed his money. He bought a 15,000-acre ranch and built a 7,000 square foot home to house his growing family. Then, it was time to really show off what an ambitious man who started with nothing could achieve.

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Between 1946 and 1949, the Shamrock Hotel rose in Houston. McCarthy named it in honour of his Irish ancestry and opened it on St Patrick's Day with the most lavish party Texas had ever seen.

Hollywood stars turned up, among them Stan Laurel, Dorothy Lamour, Kirk Douglas, and Errol Flynn. The actors mingled with the oil barons and the upper echelons of Texas society. Everybody who was anybody was there.

A local newspaper gushed that “On every side is evidence of the handicraft and skill of the best artisans. From its commodious transient rooms to the lavish Presidential Suite, from public dining rooms accommodating a dozen for a luncheon to The Emerald Room with banquet facilities for 1,000, it is the culmination of the designer’s and craftsmen’s very best.” Frank Lloyd Wright was unimpressed by the interior; he said it looked as he imagined the interior of a jukebox would look.

What was not clearly known at the time was that the hotel's foundations were firmly set in debt. New York's Equitable Life Assurance Society had advanced McCarthy almost $52 million (about $1.5 billion today) in loans and the oilman had used a large chunk of it just to pay off existing debts. His hotel vanity project cost $21 million.

But, the Shamrock Hotel was rarely, if ever, booked to capacity; the place was losing money. In addition, McCarthy was bleeding red ink on a chemical plant that didn't work. He started defaulting on his debts and seeking the comfort provided by bourbon. The whiskey awakened the pugilist in McCarthy; lawsuits and unpleasant headlines followed.

The members of the board of Equitable Life did not like what they were seeing. When they started a close examination of McCarthy's businesses they found accounting practices that could be charitably described as creative. Oil wells that produced nothing were listed as assets and McCarthy was sloshing money around on frivolities.

By January 1951, Equitable backed McCarthy into a corner. He was forced to hand control of his enterprises, including the Shamrock Hotel, to the insurance company. He was still allowed to manage his businesses but only under the supervision of a comptroller. The deal collapsed in three days.

A closer look at McCarthy's books revealed his companies were in disastrous shape so Equitable took complete control of everything. Glenn McCarthy was retained as a figurehead chairman and had to watch as his empire was dismantled and his hotel placed under Hilton management.

Late Stage Glenn McCarthy

Shorn of his beloved hotel, McCarthy started popping up in many places in the world. This fostered speculation that he was drilling for oil in Egypt or about to build a magnificent hotel in Venezuela.

In 1953, he turned up drilling in Bolivia. He had three wells producing natural gas, but there was a snag. Bolivia had no pipeline to get the gas to market. McCarthy limped back to Houston, not broke, but with far fewer dollars in his pocket than during the heydays.

He opened a night club where he could indulge his favourite things—starlets, showgirls, and bourbon, lots of bourbon. There were more brawls and a few car crashes to keep the media entertained. By the early 1960s, the night club had lost its gloss and was losing money. Soon, it closed.

In 1972, McCarthy sold his mansion and he and Faustine, who had stuck with him through it all, moved into a regular house. The glory days were over, marked in 1987 by the demolishing of the Shamrock Hotel, which had proved a difficult property to squeeze a profit from.

A year later, McCarthy's kidneys gave up their battle with booze and he died a day after his 81st birthday.

He was certainly a colourful man, which gives rise to this writer's first rule of investing: Never do business with someone who is described as colourful

Bonus Factoids

• Several Texas oilmen moved to Los Angeles and, just like Glenn McCarthy, tried their hands in the movie business. One of the most successful was Jack Wrather, heir to an oil fortune. He got into television and produced series such as The Lone Ranger and Lassie. He later became an adviser to Ronald Reagan.
• Novelist Edna Ferber interviewed Glenn McCarthy a couple of times before publishing her book Giant in 1952. A character in the story, Jett Rink, is an oilman who owns a hotel, frequently gets drunk and engages in brawls; he was clearly modelled after McCarthy. The book was turned into a movie of the same name starring Elizabeth Taylor and Rock Hudson, with James Dean playing the Jett Rink part in his last film.

Sources

• “The Man Who Was Texas.” Bryan Burrough, Vanity Fair, September 16, 2008.
• “The Shamrock Hotel: Gone but Not Forgotten.” heritagesociety.org, undated.
• “Remembering the Shamrock Hotel — and What it Changed About Historic Preservation in Houston.” Michael Hagerty, Houston Public Media, June 22, 2022.
• “McCarthy, Glenn Herbert (1907–1988).” Evan Kelly, Texas State Historical Association, July 30, 2020.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2024 Rupert Taylor