Hundreds of petroleum formed in the wake of the spectacular 1901 gusher near Beaumont, Texas. See “Spindletop creates Modern Petroleum Industry.”

It was a highly competitive and risky business. Among those ready to make fortunes for investors were two new “Gladys Oil” companies. One was from Beaumont, the other from Galveston.

Contemporary maps show the Gladys Oil Company of Beaumont to have drilled a successful well very close to the famous January 10, 1901, “Lucas Gusher” well on Spindletop Hill.

That same year, after 29 days of drilling in block 37, the company reported production from “Gusher No. 67” at a depth of 1,025 feet. Locating the “black gold” did not necessarily promise success.

In a scenario that would repeat itself in other oilfields in coming decades, production from the giant field soon brought a collapse in oil prices. By January of 1902 stocks of both Gladys Oil companies were trading for less than 10 cents a share.

By 1903 the Texas Secretary of State reported that Gladys Oil Company of Beaumont had “forfeited its right to do business in the state of Texas” due to a failure to pay franchise taxes.

The company was sued, lost, and United States Investor magazine reported it to be worthless two years later.

Meanwhile, because some cash-strapped and desperate companies made questionable claims, newspapers began referring to Spindletop as “swindletop.”

The Gladys Oil Company of Galveston lasted a little longer than its Beaumont twin, but not without controversy.

In 1907, Success Magazine named the company in its “Fools and their Money” expose of fraudulent promotion schemes perpetrated by the New York, Chicago, and Beaumont Security Oil Trust.

The trust had proclaimed, “it was impossible to lose” with an investment Gladys Oil Company of Galveston. In 1911 R. M. Smythe’s, Obsolete American Securities and Corporations, reported the stock to be worthless.

Read about Pattillo Higgins, the man behind the great Spindletop discovery, and his Gladys City Oil, Gas & Manufacturing Company. See “Prophet of Spindletop.”

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