JUDGE JAMES A. ELKINS AND THE VINSON & ELKIN'S LAW FIRM: AS PORTRAYED IN CRAFTSMANSHIP & CHARACTER: A HISTORY OF THE VINSON & ELKINS LAW FIRM OF HOUSTON. 1917 - 1997 BY Harold M. Hyman
by Tom Lovell
Submitted to the Raleigh Tavern Philosophical Society
Dressed in a cheap olive green poplin suit and carrying a battered black briefcase, I made my way to the white marbled mezzanine floor of the First City National Bank Building located on the corner of Main and McKinney, arguably then and now the most expensive piece of real estate in Houston.
It was a typical muggy day in May back in 1963 but my step, as I recall, was rather jaunty as this late morning appointment was scheduled to be the last of some 14 interviews I had set up with prominent Houstonians knowledgeable of the New Deal era, the general topic of my masters paper.
Clifton McClesky, a member of my thesis committee and an aggressive young associate professor of political science at the University of Houston, had raised the name of Judge James A. Elkins as someone I at least should try and contact. The chances weren't good the Judge would comply with my request, I was told, but I should try anyway. In somewhat whispered tones McClesky proclaimed Elkins -- by virtue of his behind-the-scenes' string pulling prowess with the state legislature -- "the most powerful man in Texas."
Being in those days a rather brash liberal Democrat and thus not a disinterested subscriber to Ronnie Duggar's populist monthly The Texas Observer, I seemed to remember reading how Elkins and his ace lobbyist Ed Clark regularly advanced the interests of the oil and gas industry over those of school teachers, labor unions, Negroes, and other deserving sorts, including pretentious intellectual wannabes like myself.
But though a Houston native, I could recall little or nothing regarding Elkins. Knowledge of my home town's movers and shakers pretty much extended to the likes of the perennial mayor Oscar Holcombe; famed Houston Chronicle publisher, banker, FDR commerce secretary and Democrat Party operative Jesse H. Jones who had died a few years previous; the brawling wildcatter and Shamrock Hotel impresario Glen McCarthy, and that was about it. And I don't think I was alone in those days in not knowing about Elkins.
As a matter of fact Elkins' low profile was the result of a purposeful decision of a purposeful man. John Bainbridge, one of a seemingly endless number of Yankee writers who descended on Texas in the early sixties in the wake of the popular extravaganza of a movie Giant -- a film which parodied the then familiar view of a Texas awash in drawling bigots and newly rich Yahoos -- quoted the Judge in his book The Super Americans as saying something to the effect that "by opening his mouth the large-mouth bass ended up getting hooked and dried in corn meal." Elkins by all reports was definitely a behind-the-scenes', closed-mouthed, kind of guy.
I entered his outer office through two huge glass doors and announced myself to an ample lady behind an equally ample desk. She was blond, in her early forties, and decidedly unappealing. But she led the way to Elkins' interior office in unmistakably self-important strides. Upon making our way inside she unexpectedly pulled up a chair across from that of my own. Later I was to learn she not only was the Judge's private secretary, but his private companion: one Velma Ferris.
I shook hands with a bald-headed old man, dressed in a double-breasted suit, whose most distinctive feature was a lantern jaw the original lines of which were almost hidden beneath an array of fleshly, liver-spotted jowls. But what immediately caught my attention was that from the onset of the interview the target of my inquiries made no pretense of cordiality or bonhomic levity. I clearly was in the presence of someone not in the habit of suffering fools gladly or otherwise.
I remember trying to break the ice by repeating McClesky's remark about the Judge's exalted, albeit informal, title. He cracked a wry smile which quickly faded. My questions were pro forma soft balls having to do with what he remembered of the Depression and the New Deal, all of which he answered in benign, predictable generalities. I was probably out of there in less than twenty minutes with little to show short of the fact that If could cite our meeting in my bibliography.
At the time -- I was 25 -- I'm not sure I had even heard of Vinson-Elkins nor was I aware the old man I had spoken to was the legendary founder of both the law firm and the sumptuous bank in which he was officed. All of this I learned later.
I have recently been taken to school on such matters by a 500-page, densely packed text of a book by the William P. Hobby, Professor of History at Rice University, Harold M. Hyman. Hyman's tome proclaims to be a history of one of Houston's most prestigious law firms but not for the first 350 some odd pages it is better described as an archly etched narrative of one man's single-minded, almost megalomanical quest to build a great law firm, his achievement of that goal, and a painful, almost "lion in winter" - like struggle by his heir apparents to loosen his grip on the edifice he largely was responsible for creating.
Much of the story begins in Huntsville, Texas, in the latter decades of the nineteenth century. When today one thinks of Huntsville one brings to mind an extensive state prison system and a second-layer quality state college or, more grandiloquently, university. In the last century, Huntsville not only prided itself on its prison and teachers college but its economic growth and taste for high culture. It eventually would be known for perhaps a more dubious distinction that of a "nursery for lawyers," to use Hyman's words.
The founders of the most prestigious Houston law firms, including Andrews, Kurth and Baker and Botts, managed to be born in Huntsville. James A. Elkins was born there in 1879 which would have made him 84 at the time of my interview (he looked younger). His father had been a Georgia cotton farmer and businessman who migrated to Texas to become sheriff of Walker County of which Huntsville was and is the county seat. According to Bill Elkins, Jr., grandson of the V & E founder and someone I have interviewed extensively, the Judge's mother was a character not unlike Scarlet O'Hara, at least as far as her survival instincts were concerned. The latter refers to the fact that when James Elkins was an infant his father was shot and killed leaving a widow to heroically raise both James and an older sister.
The shooting incident by the way is disputed. Hyman claims it occurred during the pursuit of a felon, while James Patton, longtime Walker county clerk and by all accounts the most knowledgeable of that county's historians, recently confided that the sheriff had been shot outside a saloon following a drunken argument.
Another piece of family lore apparently has it that James was an older child at the time of his father's death and at least had been old enough to witness an angry encounter between his beloved mother and his drunken father that led the boy to vow to make enough money to care for his mother thereafter. The latter story has the ring of truth, particularly as it goes toward explaining the fierce drive to achieve wealth and position Elkins exhibited throughout his life.
His upbringing in Huntsville took on a rather Horatio Alger turn with stories of working odd jobs, the opening of a store at 14, and, most tellingly, his haunting of the local court house to watch the lawyers at work. The one out-of-character side of his youth that belies his workaholic career in business and the law was his passion for baseball and the fact that he received a $50-a-month offer from the Houston Buffs, a longtime farm team of the St. Louis Cardinals. A sprained thumb and a yen for a higher calling, prompted no doubt by a concern for his mother's well being, sent him instead to the University of Texas to study law -- a program subsumed in those days within the undergraduate curriculum.
He graduated in 1901, returned to Huntsville, married his college sweetheart, fathered a son, and was taken under the wing of Will A. Hill, a former county attorney who used his influence to help Elkins get appointed first city attorney, then county attorney, and finally county judge. It was from holding the latter office that he acquired the "Judge" monicker he bore as a badge of authority the rest of his life.
At this stage of his career he exhibited a knack for one-on-one politicking and negotiating that would later pay off when developing his law firm and bank. It was also at this juncture that he acquired a taste for what Hyman called "backstage wire-pulling." For example his service as a Sam Houston College regent and board member of a local bank revealed to him the opportunities available in using personal contacts, what nowadays is called "networking", to gain favors and influence.
His personal political aspirations however were strangely muted: remember he had only been appointed to the elective positions cited above. And it seems his penchant for behind-the-scenes' maneuvering was equally manifested in the political arena. Instead of running for office he was more adept at working in behalf of candidates. He became the East Texas campaign manger for his old UT classmate William P. Hobby's run for the governorship in 1914. His friendship with Hobby would pay off later in important reciprocal favors granted by the Beaumont-based Texas governor.
Hyman determined that while Elkins was in his thirties that he opted out of elective politics because of its lack of bountiful remuneration. After Hill made the Judge a partner the latter discovered how much money could be made in harnessing banking and lawyering to the same plow, thus laying the ground work for a successful formula he would assiduously follow thereafter. While in Huntsville he increasingly acquired corporate clients whose substantial fees whetted his appetite for money making. And he soon gained a profitable reputation representing Texas railroads against workmen's compensation claims lodged by employees of independent contractors.
His ties to Houston came soon thereafter when Huntsville insurance companies made a move to the Bayou City and had need of his services. The most famous case in this regard was that of the Wortham family, already a force to contend with in Texas politics, whose son Gus had busted out an old lady's window with a slingshot. A lawsuit ensued but Elkins came to the rescue and got the 16-year old off on grounds he was crazy. Thus was sealed a lasting friendship. The Worthams went on to build a fortune with their American General Life Insurance Company from which Elkins' later law firm received a hefty retainer in perpetuity.
In 1907 after acquiring the then huge fee of $60,000 from a client, the Judge risked opening an office in Houston while still keeping his base in Huntsville. During the years he was commuting from Huntsville to Houston he encountered William A. Vinson. Older than Elkins by five years, Vinson was already established as a successful attorney when the two met.
Vinson's role in Hyman's story is notable for its brevity. We learn of Vinson's roots in North Carolina and his youth in Sherman, Texas. The son of deeply religious farming and shopkeeping parents, he matriculated at the academically sound Austin College located in his new hometown and, like Elkins, was mentored by and joined a partnership with an experienced older lawyer before first moving to Fort Worth where, again like Elkins, he sat on the board of a bank, using that experience to explore the banking-lawyering connection.
While in Houston representing the newly-minted Rice Institute, he was persuaded by local attorneys that Houston's growth potential made it a more promising place to launch a successful career. Thus in 1909 Vinson moved to Houston And once again mirrored Elkins' career by successfully defending railroad interests. by 1915 the forty-year-old Vinson had formed a new partnership with Ernest Townes whose father was the first dean of the University of Texas law school and whose brother would go on to found what eventually became the South Texas College of Law.
While Townes' partner, Vinson became increasingly interested in the growing field of oil and gas law then in its infancy. He also landed deep-pocketed clients such as Great Southern Life Insurance Company and Hughes Tool while establishing a reputation as a legal ethicist by coming out against conflicts of interest within the profession. But his biggest success seems to have been in cagily seeking out business by accepting contingency fees from smaller-capitalized clients rather than relying too heavily on retainers from the older more wealthy and established parties. He seems also to have pioneered the acceptance of shares of stock in lieu of cash in payment of legal fees. Many of these were shares in oil leases that eventually paid off big time.
Upon the death of this partner in 1917, Vinson, enamored of the law writ large but disliking the day-to-day problems that arose in its practice, was open to finding yet another amiable partner equally ambitious, innovative, and energetic. After several months of sizing each other up, Vinson and Elkins sat down and signed a partnership agreement that would last until Vinson's death in 1951.
Hyman makes much of the founders' decision to make a lot of money by patiently building up a large firm over the long haul. In pursuit of this goal the two agreed and would steadfastly hold to the policy of banking most of their profits rather than routinely insisting on an equitable annual split. Many of the early monies were invested with the pair's various clients, a strategy that of course netted them a retinue of steady and loyal patrons for years to come. But increasingly much of the profits were plowed into the bank the partners slowly set out to build. The accumulation of these bank shares, representing as they did the profits of the firm, were to be an ongoing source of wealth for both founders and those partners fortunate enough in due course to come aboard. The supervision and distribution of these accounts lay almost entirely with Elkins and represented a major source of the power the Judge exercised in running the firm and eventually a major source of angst among new partners, who, while being enriched, still occasionally objected to their loss of autonomy when it came to accessing their share of the profits.
Apparently in those days, at last in Texas and the South, large law firms were a novelty. Traditionally, lawyers either worked solo or with one or two partners. In 1917 Houston hosted only two firms sporting five or more partners and these would prove, over a stretch of ground, V&E's most determined competitors, namely Baker & Botts, and Andrews Kurth.
Wearing his liberal historian's hat, Hyman offers that big law firms were discovered to be increasingly necessary in order to meet the needs of the growing corporate giants of the day, especially in light of the fact that government, prodded by Populist and Progressive turn-of-the-century atmospherics, increasingly sought to erect an offsetting regulatory state. The latter fear, of course, foreshadowed the need for lawyers to master the new field of administrative law and to lobby and testify before regulatory commissions and legislative committee, state and national, in behalf of their corporate clients.
It might be appropriate at this point to pause and address Hyman's scholarly idiosyncrasies: in the first hundred or so pages his text is dotted with politically correct animadversions: when not referring to directly he alludes to racist, sexist, and anti-ethnic proclivities that then applied in Houston and Texas and of course within the V&E operation. These almost snide criticisms stick out as gratuitous addenda and remind one of Claude Rains' shock over finding gambling going on in Rick's back room. The reader is left asking in a loud voice, "What would one expect to find at that point in the South?"
My original approach to this book, which, by any measure, is a magnificent piece of scholarship, crafted in highly literate prose, was to assume Hyman, with malice of forethought, was seeking to smear the awesome Vinson and Elkins' reputation. I was prepared to see Matthew Josephson's muckraking "Robber Baron" volume reborn with Judge Elkins in the role of Jay Gould. But at the end of the day I came away convinced the author possessed a grudging respect and even veneration for both Judge Elkins and Vinson (a third of the way through the book Hyman ceases referring to the two founders in the style that appears on their letterhead and insists on speaking of Elkins and Vinson). This might be a stretch, but I even intuited a feint whiff of nostalgia emanating from Hyman's word processor for a time in which professional integrity and simple standards of propriety co-existed within the parameters of an "honest graft" environment.
To my mind these later observations or borne out most clearly following the death of the Judge in 1972. From that point forward the tone and tint of the book loses its momentum and devolves into a rather flaccid recitation of almost current events. Even John Connally's appearance in Act Three as partner extraordinare does little to enliven things. In short what makes the book rise above the average humdrum business history, of which there have been entirely too many examples is the fire-in-the-belly personality that Vinson and particularly Elkins impart to Hyman's narrative.
A revelatory portion of Hyman's tale focuses on the clutch of reasons that go toward explaining the Firm's extraordinary success beginning with is maiden voyage in 1971. Hyman, by the way, adopts the uppercase style "Firm" early in his text, and it occurred to me, if only briefly, that he might be drawing a sly parallel between V&E and the 1992 Tom Cruise melodramatic movie of the same name; a film that portrays the evil machinations of a large law firm staffed with super WASPS. But after sober reflection I discarded that likelihood. Even Hyman, I thought, couldn't be that anti-business.
* * * *
Early V&E success, it seems, had a lot to do with timing, Houston's preexisting 17 trunk railroads; the ravaging of Galveston by the 1900 storm, providing Houston and its Ship Channel with an opening; the fact that Houston had long been a center of cotton merchandising and export; the onset of World War I and the business opportunities that flowed therefrom; and the need for building new urban infrastructure including water supplies, electric power, roads, bridges, wharves, right-of-way for freight and trolley lines, all suggested the possibility of opportunistic ties between the public and private that would make behind-the-scenes' negotiations and political schmoozing--a V & E specialty--remunerative in the extreme. After all both Vinson and Elkins had experience representing local governments as well as private interests.
Meanwhile lying all but dormant in a multitude of salt domes and sand and limestone formations, rested the premier reason for the Firm's early success: huge deposits of oil and gas, the discovery, production, and refining of which, and the ensuing legal battles over land titles, mergers, and the like, would propel V &" E to new heights of economic gain and political influence.
But the partners brought to the table important human resources as well. "Commodities," is what Hyman called them. These included a plenitude of experience, plus Vinson's reputation for rectitude and Elkin's for legal craftmanship, thus the "craftsmanship and character" of the book's title. As Hyman would put it, their success depended on "convincing the stringpullers of this 'free enterprise city' and state that they, independent lawyers exercising the prerogatives of the bar, would defend pro-growth interests better than competitors, including in-house counsel...."
World War I put on hold the Firm's climb to success as Elkins was induced by his friend Governor Hobby to take the job of state attorney for the Houston area. For a year Elkins served rather glumly in that capacity; during his tenure he developed a perfect aversion to the practice of criminal law. But Elkins did not allow any grass to grow under his acquisitive feet; he used his opportunities to cultivate powerful friends in construction, oil, lumber, insurance, and banking.
Indeed it was during these years that he became a regular at the most famous gathering of powerbrokers in Houston's history: the bunch of entrepreneurs and politicians who hung out in George and Herman Brown's (Brown and Root) suites 7-F and 8-F in downtown Houston's Lamar Hotel, an address less than a 100 yards west of the office where I had interviewed the Judge.
For years these premises played host to the likes of Jesse Jones; the cotton factor Will Clayton who later helped cobble together the Marshall Plan and, by the way, another one of my interviewees; John Henry Kirby, the lumber baron; Oscar Holcombe; Bill Hobby; and a roll call of Houston oilmen, including such hard-bitten luminaries as Jim West, James Abercrombie, and Roy Cullen.
Here, well into the Fifties, these and other Houston titans drank bourbon, played dominoes, and exchanged bridge partners, as a preliminary to setting forth much of the political agenda for Houston and Texas. Elkins moveover not only was an early habitant of the Lamar Hotel muster, but was around long enough, according to Bill Elkins, Jr., to send a visiting politician by the name of Lyndon Johnson out for a Coke.
It was here, Hyman claims, that the Judge indulged a weakness for profanity, liquor, gambling, and the opportunity to share a conventional conformity of thought that included damning labor unions, poking fun at or patronizing minorities and women, and extolling greatly the virtues of capitalism. In other words, in Hyman's eyes, the Judge was a higher-order version of Sinclair Lewis' George Babbitt.
In the first hundred pages Hyman analyzes the chemistry that made the team of Vinson and Elkins so formidable. Vinson, who eventually was to be eclipsed by his more aggressive younger partner, nevertheless, shines early on as an elegant, scholar-advocate for his clients. Tall and distinguished looking, if somewhat on the priggish side, he played an effective role as "good cop" in contrast to his more abrupt partner. His reputation for ethical fair dealing further solidified his ability to sway judges, jurors, and even influence attorneys who happened to be his adversaries, and he was particularly effective lobbying in Austin for or against laws or regulations that would impact his clients.
But it is Judge Elkins that Hyman finds fascinating. Hyman cites an autobiographical memoir penned by Vinson a few years prior to his death which rather self-effacingly gives Elkins the lion's share of the credit for the success of the Firm. Then there is the encomium provided Hyman by Elkins' youngest son and favorite, James Jr., which Hyman quotes at length. Elkins' namesake recalled that his father was "a very aggressive, fair-minded, highly intelligent, energetic, purposeful man,...who was motivated by what was good for the community...meaning by that his business community and [his] partners, [which was] the world in which he lived. And he was extremely pragmatic, and very interested...in the political scene, all of which he would tie together.
James Jr., who was schooled to follow his father in the banking side of the Judge's interests, contended that he never "saw his father practice any law, if you want to know the truth. He was either in an administrative/managerial sort of position with the law firm, or in the bank...at the same time, but he wasn't...practicing...[law]."
James Allred, who, until the arrival of Anne Richards, was the closest Texas has come to seeing an authentic liberal sit in the governor's mansion, perhaps said its best with the line, "Judge [Elkins] doesn't practice law, he practices influence."
Finally, Hyman caps off the assessment of how the Judge's contemporaries viewed him by quoting a retired V & E attorney's opinion that Elkins "was the most powerful politician in the country." But if not in the country, surely in Texas. A familiar buzz in those days had it that all candidates for public and appointive office in Texas needed the Judge's stamp of approval before going forward.
* * * *
Hyman's book, or anyway the bone and muscle of the book, essentially hangs from two pieces of scaffolding. Namely a narrative of the acquisition of and services rendered a variety of deep-pocketed clients that go a long way in defining the Firm's success, and a detailed and fascinating recounting of the key partners and associates Elkins brings into the organization over some four decades at is helm.
First to the clients. One begins necessarily with the most important and at the same time most controversial client of them all, namely the bank the Firm regularly served in a close-knit symbiotic arrangement. As mentioned above the founders early on set about building this cozy connection. In 1924, with funds drawn from the Firm's coffers and dragooned from the pockets of a handful of less-than-willing partners, Guaranty Trust, V & E's first such venture, was christened only to be followed with successive recharterings in 1928 and 1934, concluding with the founding of First City National in 1956. Although the founding duo launched this enterprise together, the bank would be the Judge's "baby" throughout the remainder of his lifetime.
What was at play here was a strategy of institutional quid pro quos: law clients in need of mortgages or financing for their businesses would be urged to use the bank's facilities, while new bank depositors, many only recently arrived from out of town, were quick to be told of the legal services V & E was ready to put at their disposal. William Kirkland longtime Elkins' bank CEO put it this way:
As small business outfits grow and need financial help, the recommendation of their lawyers to a bank is important. Companies or branches of the firms sometimes get early notice of the approach of new ventures to this city. And, of course, the bank is in position to steer strangers into the law firm. Banks, in their correspondent relationship, send customers back and forth; from Houston to New York and New York to Houston. The bank is in position to tip the law firm off to approach possible customers.
What made this longstanding sweetheart arrangement so controversial was the fact that the bank's legal work, which was substantial, was routinely handled by the Firm's lawyers but at a substantial discount. In other words, V & E ended up carrying the bank by assessing the bank ridiculously low fee rates, which while burdening the Firm, made life easier for the bank. Over the years disgruntled V & E lawyers toiled away at a pittance while participating in a game of taking from Peter to pay Paul.
Elkins' banking interests ranged far and wide. And as the years progressed he became the major voice in the Texas State Bankers Association as well as the state's Banking Commission and, perforce, before the state legislature when banking issues were brought forward for debate.
It's at this point that the oil and gas industry is most pertinent in accounting for the success of both V F& E and its companion bank. Hyman asserts that from the mid-1920s through the 1960s, almost up to the time of his death, Elkins insisted that oil and gas be the major focus of their attention. For one thing, the attorneys both at the associate and partner level were routinely assigned to duties related to oil and gas matters. And as will be shown below, V & E prided itself on possessing the most skilled oil and gas legal team in the country.
But apparently what iced their earliest success along this line was the fact that from the beginning V & E reached out to serve the contentious and fractious independent oil operators who populated much of the Texas oil patch. Whether they be instinctual wildcatters or scholarly geologists they often experienced a thirst for credit that was not easily slaked. Here's where Elkins stepped in. He did so by insisting that when the prospectors applied for loans that they had to agree to keep their deposits with Elkins' bank and employ the V & E legal team to check out land titles and handle other routine legal work including coping with the never-ending possibility of litigation, not to mention overseeing the original loan applications. And when it came to loan decisions, the Judge frequently operated as a one-man loan committee.
Indeed in the Firm's formative years these almost penny ante operations, along with the willingness to accept even the smallest deposits at the bank, paid the bills until the arrival of more lucrative accounts. And, as Vinson had already satisfactorily demonstrated in his own dealings, it wasn't unusual for Elkins to invest monies from the Firm and bank into nascent oil companies, some of which hit pay dirt.
* * * *
One of the characteristics of most histories of entrepreneurial America is the arrival of that critical point in the life of the magnate or the narrative of his enterprise when a "takeoff" point is reached. That is to say when either a deal is struck with a handshake over a shot of bourbon or a new piece of technology comes on line or a new market is opened, the end result of which is a successful breakthrough that opens the floodgate to a bounty of riches and prospects for a sanguine future. In Hyman's account this point is reached in 1921 when one Albert Humphrey arrives on Elkins' doorstep.
Humphrey was a Colorado wildcatter who was prospecting for oil in Mexia and Limestone counties when late in 1920 the Mexia gusher came in and an oil rush ensued. But Humphrey was having trouble paying his bills as the Texas Oil Company, which had agreed to buy some of his oil, apparently reneged on its contract. Humphrey, for reasons Hyman does not make clear, was also potentially implicated in the Teapot Dome investigation, and thus was desperate for a knowledgeable legal team that could be relied on. And since the Mexia lawyers had been snapped up by the Texas Company he found himself especially vulnerable.
While on a train, Humphrey disclosed his problem to a new acquaintance who happened to be W. A. Keeling, Texas' new attorney general and a law school classmate of the Judge. Keeling recommended Elkin's firm and the rest is history.
Elkins convinced Humphrey that Texas' failure to pay was the result of an accounting snafu and after consultation with his friends at the Texas Company, the latter agreed to send over by messenger a check to Humphrey, who had been asked to wait in Elkins' office. Humphrey, to say the least, was overjoyed and absolutely flabbergasted when Elkins declined to accept any payment for his timely intervention. Hyman indicates this was typical of how the Judge cultivated and built goodwill within the oil community. Humphrey, to show his gratitude, invited Elkins to return with him to Mexia, where, on arrival, he announced to his assembled staff that Elkins was to take over Humphrey's legal business in Texas, and, in due course, much of the lawyering related to his other interests as well. This was one of several substantial accounts Elkins garnered that insured the firm a steady infusion of retainer-generated income.
This particular windfall was followed hard upon by an even greater stroke of fortune when Chicago-based Pure Oil, which evolved into the first fully-integrated independent oil company, sought to buy out Humphrey's Texas holdings. Elkins handled the negotiations from Humphrey's and so impressed the Pure executives with his negotiating acumen that Pure, assured as they were by a recommendation from Governor Hobby, hired Elkins to handle their own Texas operations. Soon thereafter Elkins was appointed to Pure's board of directors: his bank became Pure's financial agent in Texas: and V & E would be handed Pure's legal business in the Lone Star State. Meanwhile, the Judge began to invest his personal funds and his partners "accounts" in Pure stock.
* * * *
The Depression years and those of World War II saw the V & E empire assume a kind of stasis: as the exigencies of hard times and an economy increasingly supervised by governmental ukase tended to place a damper on entrepreneurial risk taking.. The early thirties saw Jesse Jones and the Judge manage to salvage those few Houston banks that were in danger of failing. But most interesting was the stance the Judge took in reacting to the burgeoning growth of the federal government. During the "honeymoon" months of the New Deal -- in keeping with host of national business headers -- Elkins signed on to the National Recovery Administration, particularly when it positioned itself to intervene in the "hot oil" glut which followed in the wake of the East Texas field.
But as could have been predicted, the Judge soon locked horns with FDR's curmudgeonly Interior Secretary, Harold Ickes. Elkins soon turned against the New Deal with a vengeance and blamed Ickes for an antitrust action filed against Pure Oil; a suit the Judge successfully defended against.
But there was one piece of silver lining in a rather somber sky and that was the fact that the command economy dictated by war, Depression, and the New Deal, opened up all manner of new opportunities for the Judge to leverage his political connections. Elkins' lines of influence reached not only into the Texas Railroad Commission, which through its oil proration decisions, determined the price of oil, but all the way to Washington itself. Speaker Sam Rayburn, Senator Tom Connally, and Congressman Lyndon Johnson, all were class acquaintances of Elkins during these years, and before the war -- as indicated above -- Johnson had obsequiously tended bar in suite 8-F.
These frustrating years brought out something of a change in Elkins' approach to politics. he had actually flirted with the Republican Party as far back as the Twenties. Now his rejection of the New Deal was reflected in his decision to openly endorse Alf Landon in 1936 and Wendell Wilkie in 1940. These were particularly unorthodox decisions in a city and state still bound hand and foot to the Democrat Party past. ( As a child I vaguely remember Wilkie arriving in Houston to a cannonade of rotten eggs.)
The Wilkie defeat, according to Hyman, so deflated Elkins that he resolved never again to publicly tip his hand. From that time forward, he returned to his cagey, behind-the-scene maneuvering while urging V & E lawyers to stay out of politics. And when it came time for political contributions, both parties were favored by the Firm. In short what was good for business dictated a return to a more expedient approach to politics.
The post-war economic boom meanwhile uncovered an opportunity of bonanza proportions that Elkins was not about to let slip by. He seized it with both hands and in so doing insured the enrichment of his domain. The main chance I'm referring to is the development of huge Texas Eastern, the mother of all natural gas pipelines.
It all started during WWI when the federal government deemed it necessary to build the huge oil and gas pipelines from energy-rich Texas to the industrial northeast to fuel the defense plants and thwart U-boat attacks on tankers. The project was launched in 1943 with Brown and Root engaged as one of the major contractors. By the time the project was completed the war had come to a close leaving the pipeline in limbo. Legend has it that during one of the Lamar Hotel get-togethers in 1945 the Judge off-handedly urged George Brown to buy the pipeline from the government. And when Brown's engineers determined it would be cost effective to do so, Elkins stepped in and assumed a leadership role that would not be relinquished.
Hyman said the Judge performed like a general massing his battalions. Which, in this case, included harnessing the extensive resources of the bank and Firm in tandem to tackle the mountainous legal, financial, and political work inherent in acquiring and then operating pipelines transiting a half-dozen states.
In January 1947 Elkins with a bevy of experts and newly-minted allies in tow incorporated what was christened the Texas Eastern Transmission Corporation. Elkins acquired 9,000 shares while 1,500 were reserved for V & E. The other Lamar Hotel regulars also were in at the beginning. Each share would eventually return $63,000 on the initial dollar invested.
On November 3, 1947, after putting in enormous hours of planning and preparation, TETCO's sealed bid of over $149 million turned out to be the high winner before the federal War Assets Administration. V & E needless to say became TETCO's primary attorney and fees and retainers rolled in.
Charles I. Francis, the Judge's point man on the project and already named letterhead partner in the Firm, demonstrated such abilities in assembling and marketing the package that he found himself in the national limelight. And now, really for the first time, Vinson and Elkins could claim nationwide recognition.
* * * *
V & E's journey to power and riches, as Hyman so well documents, not only is a tale of slick deals midwifed along by the astute political influence paddling and overpowering personality of Judge Elkins. That was a lot of the story but by no means all.
As indicated by the reference to Charles Francis above (by the way Francis was yet another one of those I interviewed for my masters thesis) Elkins could not have brought his Firm and bank as far as he did without the assistance of a panoply of cracker Jack lawyers, some of whom made it to the august "partner" level through a process a Catholic cardinal could identify with. Better yet a Byzantine cardinal or the equivalent thereof.
Remember one of the original tenants of the two founders was not just to build a law firm, but a "big law firm". And so practically from the beginning the search was on to add new attorneys. Hyman has a tendency to grimace throughout when touching on
V & E's hiring philosophy, only one day almost up until the Judge's death, obviously no minorities or women, again until after the Judge's passing, and so on. But while all this is not surprising for the time, Hyman is on to something here that underscores much of
V & E's history.
In scanning the ten slick pages of photographs that Hyman inserts about two-thirds of the way into his text, the reader gazes upon the faces of R. A. Shepherd, Raybourne Thompson, A. Frank Smith, Jr., William Randolph Smith, Cameron Hightower, Lewis White, and the man Hyman argues did the most to slip the Firm out from under the grip of the Judge, David Searle. Perhaps the only surprise here is the absence of the debonair Wharton Weems who Hyman claims was Elkins' "favorite."
One need not be an ethnologist to determine the bloodlines of these men: generic Anglo-Saxons all, and mostly Texans and graduates of the UT Law school to boot (Elkins rarely looked elsewhere for new talent). Some of the early ones, such as Hightower, were Huntsville residents. But they had still other traits in common like the Judge, they were hard workers; and they were miraculously loyal.
The better point is worth highlighting because for most of their careers they lived in a universe dominated by one man: James Elkins. In Hyman's book the Judge, as employer, comes across as an imperious despot, I almost want to say a blend of Simon Legree and Henry VIII. And although in their photographs, posed before a library of law books, the partners resemble distinguished, handsome paladine worthy of a place at King Arthur's table, after reading Hyman's book one can't help but see them as pussycats rubbing up against the Judge's pants legs.
Another image that works is that of a bunch of Samsons, shorn of their hair, and fettered to a millstone. I say this because many of them were required to work seven-day weeks, often to spend long months, if not years, in far away insalubrious locales. That they did so and did so willingly speaks again, it seems to me, to the power of Elkin's personality. It certainly helped that they were among the best-paid lawyers in the profession. And the luck few who made it to a partnership had even greater pecuniary reasons to stay the course as retirement meant bountiful rewards. Hyman asserts that another reason for sticking it out was their awareness that they were part of an operation that was succeeding and succeeding on a grand scale. In short, they were part of a winning team! But still, my question remains an unsatisfactorily open one?
My problem is that the law is touted as the most masculine of professions and that these obviously talented men were willing to accept the restraints, big and small -- including a multitude of petty slights -- imposed upon them by the Judge is a difficult proposition to accept.
Those who did challenge the master's authority soon were forced out but one can only wonder why a more concerned effort was not made to bring down the king. It was not until he was on the doorstep of senility that they finally mustered the determination to move him aside, and even here it had to be done with stealth.
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Hyman's book is a tour de force of business history. The University of Georgia Press picked it up for its series on legal history, but at $60 a pop one doubts it will appear as a Book of the Month.
In conversations with the author, he indicated to me it was seven years in the making; Bob Eubank tells me however that it's been on the drawing board for over ten. The research is primarily limited to a host of oral interviews, and in-house recollections from former partners, associates, and their family members. Hyman said over two hundred interviews were involved, most of them face to face, and many of them were carried out by a phalanx of his graduate students. With the exception of income tax returns, personal papers of the Judge apparently are nonexistent and the text of the interviews are currently sealed by the existing law firm that helped underwrite the project.
In closing one can't help but ponder the demons that drove Judge Elkins. Here was a man with not much of a family life; his wife apparently was no more than an ornamental fixture who dabbled in genteel charities; as a father, he left much to be desired. He treated his eldest son William like a stepchild: upon the latter's graduation from the UT law school, the Judge took him into the Firm but was observed on numerous occasions berating him in public. And for years William would wander in a wilderness of petty assignments, before being raised to a partnership.
Other than those hours of fellowship in the Lamar Hotel his closest idea of leisure was to return regularly to his bucolic roots near Huntsville where early on he had purchased thousands of acres surrounding what became Elkins Lake. In Houston, by the way, he chose not to buy a house -- he didn't want to tie up money in a mortgage -- but chose to live first in the Rice Hotel downtown and later in the more staid uptown Warwick.
The crowning irony of Elkins' life seems to have been that for a man who operated best from behind the scene, and relished his closed-mouth persona, that when it came to his own personal life there doesn't seem to have been much there. As his son James put it his life basically was his work, albeit what an awesome piece of work it was!
Years ago while interviewing Jesse Jones' two private secretaries in what had been Jones' mausoleum of an office in the old Guaranty Trust building on Main Street, I asked them what books the great Houstonian had enjoyed reading? They thought awhile and both came to the conclusion that they didn't remember ever seeing Jones with a book in his hand. But then suddenly one remembered that Jones was known for reading on book over and over again. It apparently was a novel about a man swindled by stock traders, who spent his lifetime hunting the villains down and killing them one by one.
I'm sure the Judge, who if he feared anyone it was Jones, must have shared his fellow banker's taste in literature.