Part 3 — From monopoly to ‘Million Dollar Elm’
(Editor’s Note: What follows is a portion of the book, “Oil in the Osage,” originally published in 1996 by the Pawhuska Journal-Capital. Much of the book’s content was produced by writer Libby Meyer. As a tribute to that book and the rich story it told, the newspaper is serializing the content over a period of seven weeks.)
Foster’s Monopoly Broken
The monopoly of the Osage Reservation was about to end. John N. Florer, who had worked to gain the entire reservation for the Fosters, began working in 1904 with a group of oilmen to convince the Osage to open the reservation to other producers.
The Foster lease was renewed in March 1905 for an additional 10 years. However, it was restricted to an area of 680,000 acres in the eastern part of the reservation, and the royalty payments were increased to $100 a year for gas wells and one-eighth royalty on the oil.
With Fosters’ restriction, the door was open for Osage oil production and with it came the oil boom.
Oilman in the Osage
Sixty-four companies began drilling within three years.
Among these were Frank Phillips, who would not only become a part of the Osage Nation through oil, but eventually became an honorary member of the Osage Tribe. He was given the Osage name Hulah Ki He Kab (Eagle Chief).
Other well known oilmen include W. G. Skelly, E. W. Marland, and even 16-year old J. Paul Getty who worked in Osage County for his father, George F. Getty, Sr., “starting at the bottom and working his way up.”
The Million Dollar Elm
On the front lawn of the Osage Council House in Pawhuska was a huge elm tree. Auctions for the right to drill on the Osage Reservation took place under this tree. Vast sums of money exchanged hands, with the tree eventually being called the “Million Dollar Elm.” Colonel E. Walters of the little town of Skeedee, Oklahoma was employed as a lease auctioneer, and he continued in this capacity until late in the 1940’s.
The tree’s location is now marked by a granite block and plaque donated and placed by the late H.G. Benson, pioneer Pawhuska businessman.
When the second lease expired in March 1916, the conditions again were changed. The Tribal Council, with approval of the Secretary of Interior, awarded to the operators the tracts whose wells were producing less than 25 barrels of oil a day.
Those with an average of more than 25 barrels daily, together with some undeveloped tracts, were sold at public auction on April 20, 1916.
This wasn’t the first of the public lease auctions, but it was highly significant, because by that time the world of oil was turning it’s attention to the Osage possibilities and the money started pouring in. This sale brought $2,057,600 in bonuses!
With these bonuses, the Osage’s payments increased to make the tribe known nationally and internationally as the “richest group of people in the world.” In some cases, a naivete of money caused problems for some members of the tribe as they spent money freely on items from luxury cars to extravagant vacations.
Meanwhile, in 1912, President Taft had revised the royalty payment. It was set at one-sixth on both oil and gas — the gas royalty being determined on the market value of the gas at the well, based on 18 cents per 1,000 cubic feet — and this has been the prevailing royalty since that time, except for some special revisions.
Next week: The Boom Days Begin and Boom Towns Develop.