The Oklahoma oil industry began in 1897. By the 1920s, leases sold in the shade of a “Million Dollar Elm” brought prosperity to the Osage Nation. Production from Osage County alone launched the careers of Frank Phillips, J. Paul Getty, Bill Skelly, E.W. Marland, Harry Sinclair – and Clark Gable.
In the spring of 2003, the Osage nation opened a “Million Dollar Elm” casino a few miles from its council house at Pawhuska, Oklahoma. The name came straight from Osage reservation petroleum history. Multimillion dollar lease auctions once took place in the shade of a giant elm next to the council house.
Osage County, at more 2,250 square miles, is the largest county in Oklahoma – larger than Delaware or Rhode Island. On the grounds atop Agency Hill between the county courthouse and the Osage tribal council house, today stands a symbolic elm where auctions regularly took place on hot summer afternoons.
Soon after Oklahoma statehood, more Osage discoveries brought thousands to Bartlesville, Hominy, Fairfax, Grainola and Burbank. All the oilfields produced a high-quality, easily refined oil. First drilled in 1920, the Burbank field and several others soon became one of the richest in Oklahoma. At its peak, the Burbank oilfield produced more than 70,000 barrels a day from more than 1,800 wells. Phillips Petroleum made a fortune there.
Other petroleum companies got their start in Osage oilfields, including Conoco (originally Marland Oil), Skelly Oil, Carter Oil (later incorporated into Standard Oil), and Gypsy Oil Company (later Gulf).
Traces of oil had long been noted in the area, including slicks on creeks and oil seeps. The southern end of the Flint Hills, which ranges down from Kansas, has rocks 298 million years old, according to Jenk Jones Jr. of the Tallgrass National Preserve in Cottonwood Falls, Kansas.
The Indian Territory Illuminating Oil Company made the first drilling deal with the Osage Tribe, Jones notes. The company received rights to all drilling in the Osage Nation for 10 years, beginning in 1896. The next year the territory’s first commercial producer was hit, the Nellie Johnstone No. 1 well, in what is now a park in Bartlesville. Learn more in First Oklahoma Oil Well.
Jones says that all of Osage County was open for bidding after 1916 – just in time for the greatest years of the Osage boom, triggered by demands of World War I and the postwar growth in automobiles. “To get a sense of how the oil business exploded in the Osage, there were about 6,000 barrels produced in 1900, more than 11 million in 1914. The Osage boom and a vast leap in the number of automobiles coincided remarkably well,” Jones explains.
During the height of the drilling boom from 1919 to 1928 northwest of Tulsa, more than $202 million was paid to the tribe in oil and natural gas royalties, bonuses, interest and land rentals. “The Osage fields were an oilman’s dream,” says Jones. “The oil was a high-grade, with a good conversion to gasoline ratio. It was easily refined, with a very high percentage of kerosene. It was free of sulfur and asphalt.”
Million Dollar Auctioneer
According to Corey Bone of the Oklahoma Historical Society, the profitable auctions of Osage mineral rights were based on “headrights” from a 1906 tribal Sadlympopulation count.
“Unlike other landholders, the Osage were able to retain collective ownership of subsurface mineral rights, rather than having to accept allotments to individual owners,” Bone explains. “Instead, tribal members received ‘headrights’ that assured them an equal share of mineral rights sales equivalent to income from 658 acres.”
She adds that a headright could not be sold, but an individual could sell his or her surface rights.”
An average Osage family of a husband, wife, and three children would receive more than $65,000 a year in 1926,” she notes. “By 1939 Osage individuals had received a total of more than $100 million in royalties and bonuses.” (Sadly, Osage oil wealth also brought criminal conspiracies and the murders of men, women, and children, killed for the headrights to their land.)
Among those who helped the Osage, beginning in 1912, was a skilled auctioneer of the tribe’s oil leases, Colonel Elmer Ellsworth Walters. He worked for only about $10 a day but netted millions of dollars for the tribe. Walters had been named after the first Union martyr at the start of the Civil War, Col. Elmer Ellsworth of the 11th New York Volunteers.
The “Million Dollar Auctioneer” would become famous from the Osage lease bids in Pawhuska. In 1926, a statue of Walters and Osage Chief Bacon Rind was dedicated in his nearby hometown of Skedee.
“He knew the oilmen intimately and was an expert at getting them to raise bids,” Jones explains. “So subtle were their signals that L.E. Phillips reportedly ‘bid’ $100,000 for a lease by brushing a fly away from his nose.”
The elm’s name was not given by tribal leaders – but by reporters and magazine writers who were dramatizing the events when founders of the world’s greatest oil companies came in person to bid. It truly earned its name when 18 tracts brought bonuses of $1 million on a single day, November 11, 1912.
On March 18, 1924, Walters secured a bid of $1,995,000 from Josh Cosden, at that time the highest-paid price for a 160-acre tract. By 1928 Walters had earned around $157 million for the Osage tribe. He presided over the lease auctions throughout the 1930s. Learn more in Million Dollar Auctioneer.
A large cast of national characters are linked to the Osage oil boom. Future president Herbert Hoover, an orphan, spent summer months in Pawhuska after his uncle Major Lahan J. Miles was appointed agent to the Osages in 1878.
Southeast of Pawhuska the town Pershing was an oil boom town named for Gen. John J. Pershing, leader of U.S. forces in Europe during World War I.
Tom Mix, future silent film star, was a town marshal in Dewey just east of the Osage County border. The Wild West show of the 101 Ranch in Kay County west of the Osage gave him the boost that sent him to Hollywood. Clark Gable worked as a roustabout in the Osage oilfields, especially around Barnsdall and Pershing, before heading to Hollywood.
Memories of what took place beneath the Osage Nation elm did not fade after the original tree died in the 1980s. The latest elm, dedicated during a September 15, 2006, ceremony, grows new roots into the historic site. Thousands of visitors today gamble at six Osage Nation “Million Dollar Elm” casinos.
Special thanks to research found in “Osage County History” by Jenk Jones Jr., presented March 1, 2003, at the Tallgrass Prairie National Preserve docent reorientation in Cottonwood Falls, Kansas. In 2011, Oklahoma City-based Chaparral Energy reportedly began working on methods to increase production from Osage oilfields that could bring $11 billion to Osage County and provide the Osage Nation with $1.2 billion in royalty payments over the next 30 years.
The American Oil & Gas Historical Society preserves U.S. petroleum history. Support this AOGHS.ORG energy education website with a contribution today. For membership information, contact email@example.com. © 2019 Bruce A. Wells.