Texas Rumble

Last week south Texas citizens heard the first rumblings of what may become one of the most famed lawsuits in the history of their State. The great King Ranch, four-fifths the size of Delaware, is the prize at stake. It is the largest ranch in Texas, the largest in the U. S., and, so far as can be definitely learned, the largest in the world. On its 1,250,000 acres graze 125,000 cattle which, at proper seasons, are rounded up or tick-dipped or dehorned or castrated or branded by some 300 highly skilled Mexican cowboys. These acres have been valued at $8,750,000, the cattle at 85,590,000, the horses at $250,000. the artesian wells, the 265 windmills, the concrete ranch houses, the 1,500 miles of fences and other equipment at $4,000,000 --a grand total of $18,590,000. So tremendous that it is practically an independent kingdom within the borders of Texas, the ranch was founded in 1851 by Captain Richard King, Seminole tighter and Rio Grande pilot. It has been ruled for the past half century by a dynasty of Klebergs: Robert I, who married the Captain's daughter, and Robert II. their reigning son. The Klebergs ruled but the Captain's widow, spunky little Henrietta King, kept the ownership up to her death in 1925. Her will left the estate in trust for ten or 15 years.*

Last week a smart Chicago lawyer filed suit in Federal Court at Corpus Christi against the six trustees of the property on behalf of a group of King heirs. That the suit was filed in Federal court was accepted as evidence of the overpowering local influence of the Klebergs as rulers of the King Ranch. The lawyer is Thomas Hart Fisher, whose father was President Taft's Secretary of the Interior, himself a member of Chicago's eminent firm of Fisher, Boyden, Bell, Boyd & Marshall. His clients are two grandchildren of old Captain King named Atwood. These Chicago heirs have long been dissatisfied with the way their first cousin, Robert II, has run the ranch. Most serious of the many charges astute Mr. Fisher has brought are: 1) The trustees have turned the management of the ranch entirely over to Robert II instead of running it themselves as directed by Henrietta Kind's will. 2) He is not temperamentally suited to run it. 3) He lives on a lavish scale and charges his expenses up to operation. 4) The trustees have lent large sums to favored parties, none to the Atwoods. 5 ) They have not kept proper account books. Ostensible purpose of the suit is to force an accounting and to depose Robert II. Real purpose is probably to gain a bargaining advantage for the Atwoods in the complicated jockeying of the four branches of King heirs for strategic positions in the final split-up of the estate.

The prize is well worth struggling for. As told in the current issue of FORTUNE, the amazing growth of the ranch since the day Captain King rode out with his good friend, Colonel Robert E. Lee, and picked the original acreage is one of the epics of U. S. ranching. The Atwoods to the contrary, the ranch is flourishing mightily today under the dictatorship of good-looking Robert II, a 37-year-old ruler of vast energy. In his eight years' reign he has spent some $2,000,000 on such improvements as building 1,000 miles of new fences, grubbing 15,000 acres clear of mesquite and chaparral to plant them with Rhodes grass from Africa. He is proudest of his new breed of cattle, the Santa Gertrudis, achieved after many a year of experiments. It is a cross of Indian Brahma cattle, which are resistant to the tropical heat and diseases of southern Texas, and pure-bred shorthorns, one of the great English beef breeds. The result is a fat, sleek dark-red cow, both hardy and marketable.

As a commercial enterprise, the King Ranch is big and profitable. Every year it sells some $900,000 worth of cattle. De ducting operating expenses of $300,000, freight bills and grazing charges of $200,000, and taxes of $100,000, this leaves an operating profit of $300,000. But the tale is by no means told merely in terms of cattle. There is oil in Texas, and a lot of it. And it seems as certain as anything can be in prospecting business that somewhere beneath the ranch's 1,250,000 acres lies oil. For years one company and another has been reported dickering for oil rights. This autumn Humble Oil & Refining Co., subsidiary of Standard of New Jersey, closed the deal. In exchange for a low rental on drilling rights (13-c- an acre) Humble takes over the ranch's en tire funded debt (some $3,000,000) on a 20-year note, the interest at 5% payable at the end of the period. This means a yearly income somewhat over $130,000 (figuring the ranch's drilling acres at 1,000,000) in addition to the usual royalty of one barrel of oil in every eight taken out of the ground. By the time the King estate is finally settled, the ranch's acre age may be a minor item compared to its oil reserves.

* In one section Mrs. King's will specified a split-up ten years after her death, in another, 15 years after.

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