The Rule of Reason in Texas

Not a single courageous effort to enforce the law, born of patriotism to duty and love of right, has ever gone unrewarded by the people.

The trouble has been that politicians too often attempted to use the anti-trust law for a political purpose, doubly intent. An officer of the law would start out to enforce the law against trusts and monopolies, and just when the people were applauding him for his loyalty and fidelity to his duty, strange rumors would begin to float about, rumors of compromise. Great and powerful bankers would make pilgrimages to his office, approaching him with grave countenances. Great lawyers would be closeted with him in secret for hours at a time, submitting long and tedious briefs.

After the bankers with their grave countenances, after the lawyers with their briefs, the “pussy-footed,” fox-faced lobbyists would begin to “soft-pedal” in and out of his office, bringing each time some old friend of the officer for whom the lobbyist had paid to chant for him his little song, which is to the effect that “the people are tired of this merciless enforcement of the law against the trusts; that he has gone as far as any reasonable man could expect him to go, and while the people are for him the thing to do is to let the trusts down light and not incur their mortal enmity.”

And, probably, maybe if everything goes along all right, the rich bankers who have pleaded with him will advance the funds for a campaign, the great lawyers will say a few words to the world about his ability, and all together they will make him Governor.

The world has ever been thus and man’s vanity has ever been his weakest point. Slap a constable on the back and tell him he ought to be United States Marshal, and he is your bodyguard for life. Call one of these Attorney Generals in the South or West “Governor” and he will recognize you at a circus clear across the tent – he likes to hear it, it sounds good to him.

So when the great bankers, the wise lawyers, and the cunning lobbyists have finished with the people’s representative, the newspaper reporters who have been hanging around the doors and windows like thieves for days, watching this rape of the law, are let in and guardedly told what the public may expect.

And then some fine morning, after the air has been charged and surcharged with rumor for weeks, possibly months, the honest citizen is startled with the following double-leaded headline in the morning paper: “Compromise Reached Between the Attorney General, in the Name of the People, and the Standard Oil Trust.”

Then follows an account of the meeting together of a large array of legal talent at some hotel, Court House, or Capitol, and a division of various sums of money in which attorneys on all sides get various large fat fees. The State, which does not need, does not want, and ought not to take “hush money,” gets a slice. And after congratulations all around, the trust managers and their lawyers go home and continue to practice the same methods as before, doing the same things which were complained of before, using the same methods, the same tools, and the same people. Not a hitch! Everything runs smoothly in violation of the law after everybody has had part of the money.

And the plutocrats, who have persuaded the officer of the law to compromise with them and let them run? They go to their clubs and scoff and make light of the officer for having been soft-headed and “easy” – “just a little graft money for the lawyers and the State,” they say; “that’s all.”

And the people in whose name the officer has taken this bribe? Their idol broken, they bow their heads in sorrow and in shame. When they look upward again, it is with an expression of contempt.

And the officer of the law who has been responsible? Well, he usually swaggers to the front of the stage, affecting as far as possible the air of “Saul of Tarsus,” but in reality looking very much like “Don Quixote,” runs for Governor on his anti-trust record and gets the “whey” beaten out of him.
– W. H. Gray, self-published after Texas publishers refused the manuscript, 1911. Public domain.

Proceedings regarding violations of antitrust act related to Standard Oil Company had been ongoing since 1904. The litigation finally gained traction when a young man named W.H. Gray became counsel for the Oil Producers’ Association in Texas. On behalf of that association, Gray successfully sought to have all Texas pipelines declared “common carriers,” which is still law of the land in Texas well over one hundred years later.

In his role as counsel for the Oil Producers’ Association, W.H. Gray understood that Standard Oil and its ‘subsidiaries’ and C-Suite were in direct violation of US antitrust laws. He meticulously gathered information that would assist the Texas Attorney General in prosecution of Standard Oil, along with its executives. Gray compiled his facts and figures into a book he entitled The Rule of Reason in Texas, submitting it to multiple publishers for consideration.

When no one would accept his manuscript, Gray self-published the tome. He sent a copy to the Attorney General of the State of Texas, hoping they would use his material as basis to finally prosecute Standard Oil.

Gray quickly found out that the state legislature had been bought by Standard Oil.

He then posted a copy to the US Department of Justice, which surprisingly used his facts and testimony and expertise in the 1911 antitrust prosecution of Standard Oil, holding steady through the 1912 appeals process! The Department of Justice indicted Standard Oil Company, the Magnolia Petroleum Company, W.C. Teagle, H.C. Folger, Jr., and Calvin N. Payne – for violation of the Sherman Act passed in 1890, resoundingly ignored by Standard Oil.

The New York Times featured W.H. Gray in an article dated October 20, 1912. The unnamed reporter noted that in a hearing over control of the Waters-Pierce Oil Company, which John D. Rockefeller had apparently subsumed into Standard Oil, W.H. Gray assisted the attorneys for H.C. Pierce. They called Gray “an inconspicuous man” to whom counsel for Pierce frequently deferred.

Critical to note that Gray did not believe in regulation of trusts. He felt that trusts were either legitimate, or not. If not legitimate, as in the case of Standard Oil, which used their monopoly to fix prices, the trust should be broken up. Gray thought that legitimate trusts should be left to their own devices.

The State of Texas retaliated against W.H. Gray. I will let the New York Times article speak for itself.

One of the incidents of Mr. Gray’s career in Texas was his arrest, conviction, and sentence to jail last summer by the State Senate. It was his political activity that brought this about. Just how much connection there was between the oil war and the fight over State-wide prohibition that ripped the Lone Star State open may never be known. The men who have been injured by Mr. Gray’s anti-trust campaign haven’t remained idle, but he is reticent as to their moves against him.

“I won’t say anything about that,” he says. “That would be showing a yellow streak.”

But there were rumors at the time that the prohibition campaign was financed largely by men connected with the Standard Oil Company, and Mr. Gray, with Capt. J. F. Wolters, was in charge of the anti-prohibition forces.

Texas therefore trumped up charges based on Gray’s anti-prohibition politics, to seek revenge for his antitrust work. They convicted him of “contempt” of the State Senate. Gray must have been a fine attorney, because he forced Texas’ hand. He appealed his sentence, stating that the State Senate had been in session to consider an appropriations bill and therefore had no power to investigate him for alleged anti-prohibition activities. The Court of Appeals agreed and overturned Gray’s conviction.

The Texas State Senate then subpoenaed many of Gray’s supporters and allies. When the reporter asked Gray what they had done, Gray replied that once his conviction was overturned, “most of them telegraphed to the Chairman to go to a hot place.”

I found this story when working on my autobiographical fiction novel-in-progress. Gray’s saga reminded me that sometimes the little guy who is willing to make a lot of noise, do his homework, and tolerate injustice can win! Takes a great deal of backbone and courage, but it’s doable.

The inconspicuous man, an attorney who worked in the background. Unheralded. All but forgotten.

And yet, over a hundred years later, his legacy lives on.

In 2012 when doing initial research for my autobiographical fiction novel, as well as now, as I have worked on this update, I’ve tried in vain to learn more about W.H. Gray. I hoped that West Gray, a significant street in Houston, paid tribute to him. No – that street honors Peter Gray, another attorney.

I found bits and pieces of his archives, some at the University of Houston, some in Texas state libraries. None of W.H. Gray’s personal correspondence or achievements after 1912. The few files I found consist of little more than legal briefs in connection with his work as counsel to the Oil Producers’ Association. I could not even find records related to his anti-prohibition efforts!

Perhaps someone reading this will be inspired to dig into this man’s life and memorialize the person who helped the US Department of Justice break up the Standard Oil monopoly. Please let me know if you do!

PS: I had no idea that there was a connection between Standard Oil’s monopolies and Prohibition! Explains a lot, when you think about it. — DEH.

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Images: Top image of scales is Shopify stock photography. Image of W.H. Gray: 1912 portrait of W.H. Gray, from the New York Times. Image was originally copyrighted by the New York Times, but is now public domain. It is the only one I could find of W.H. Gray.

Everything in this post is thoroughly documented. Newspaper articles, dates, pages, and other reference materials... if you are researching this topic and would like me to share these references with you, please contact me. There will be a nominal $25 charge for that information, along with agreement to properly cite this post.

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