Ira G. Yates’ “Billion Dollar Lane”! [Texas]

Oil speculation on the verge of the Great Depression.

“The Shade of Croesus fades out and disappears before the avalanche of Royalty Wealth that has come to Ira G. Yates, owner of the world-famous ranch.” – Leo F. Reardon, President of Yates Ranch Royalties.

Ira and Ann Yates defied all expectations when they became instant millionaires in 1926, striking it rich overnight with the discovery of massive oil reserves on their ranch in Pecos County, Texas. Most speculators had agreed that there was no ‘black gold’ to be found west of the Pecos River; so it came as a surprise when oil spouted into the air during a test drill, requiring the construction of an earthen plug to stop the gushing flow. Output of crude oil was limited only by the isolated area, making storage and transportation difficult. The addition of necessary infrastructure facilitated the mind-blowing increase of ~45,000 barrels in 1926 to over 29 million barrels in 1929 (the year of peak production).

This circular was issued in early 1928 to prospective investors in the Yates Ranch Royalties Company. It highlights the recent successes enjoyed by local oil corporations, using bombastic language to encourage the purchase of stocks at a price of $12.50.

“Unlimited Profit Possibilities. The chance we have for years upon years of profit in this Company staggers the mind and makes any approximate estimation of Returns impossible…Blot out the memory of your past investment failures. Another era in oil investment has dawned. This is the age of playing the game with the great Oil Companies of the World – as a Royalty Owner. Today – or never again in your life.”

A map of Ira G. Yates’ “Billion Dollar Lane” emphasizes the plentiful production in the region. Property in black is ostensibly subject to profit by way of the Yates Ranch Royalties, though it contains few wells when compared to the adjacent parcels. The grandiose presentation falls a little flat upon closer examination. The company only controlled 1/16th of Yates’ royalties on less than six thousand acres total.

This doesn’t dissuade Leo Reardon, Company President, who postulates in a January 4th, 1928 letter that the current production of 125,000 barrels a day will increase substantially to 400,000 daily by May. Stock prices will increase, necessitating immediate purchase! An interesting collection from the heyday of oil boosterism in Texas.

Sources: Texas State Historical Association;  Midland Reporter-Telegram;