The Birth of Oklahoma:

A Brief History of Chaser Oil Company, Farmer’s

National Bank of Tulsa, and Controversial Oil

Barons and Bankers Harry Sinclair, C. J.

Wrightsman and E. F. “Gene” Blaise

City of Tulsa Collage Blaise-Shepherd Collage

by Tom Blaise Shepherd

Note: In November 1907, Oklahoma Territory and Indian Territory joined hands to become the forty-sixth state in the Union. The pioneer Chaser Oil Company, created by Harry Sinclair, W. H. Connelly, C. J. Wrightsman, E. F. Blaise and Frank Tanner, would grow into the Prairie Gas & Oil Company, then become a part of Sinclair Oil Company, which would, following the death of Sinclair, become a part of Atlantic Richfield Co. (ARCO), now a part of the controversial world conglomerate known as British Petroleum (BP)

The Farmers National Bank of Tulsa was created by Blaise, Wrightsman and Sinclair in 1908. E. F. Blaise was installed as president of the bank. Blaise was simultaneously the owner and president of the State Bank of Kiefer. He was also cashier of American National Bank of Bartlesville, owned by F. W. Fowler (a native of Wellsville, N.Y.).

The pioneer Farmer’s National Bank of Tulsa would collapse in 1910 as a result of the highly unorthodox acts of one of its board members, F. W. Fowler, who was (at the same time) owner and president of Columbia Bank and Trust Company of Oklahoma City. Fowler was convicted and served time in a federal prison at Fort Leavenworth, Kansas for having deceived and defrauded E. F. Blaise and other bank owners and depositors.

Farmer’s National Bank of Tulsa then reorganized as the Exchange National Bank (with Harry Sinclair as president), which would also collapse after Harry Sinclair was convicted of bribing a congressman for oil drilling rights on a government reserve. Sinclair also served time at Fort Leavenworth. The bank was then reorganized as the National Bank of Tulsa, which would years later be reorganized as the Bank of Oklahoma, now a part of a conglomerate that also controls the Bank of Arizona, the Bank of New Mexico, the Bank of Nevada and the Bank of Colorado.

E. F. Blaise was the nephew of Congressman Eugene Hainer (Nebraska Republican) and of Oklahoma Territory Supreme Court Justice Bayard Taylor Hainer, appointed by President William McKinley. He was the grandson of Ignace Hainer, Hungarian-American statesman, lawyer, journalist and professor, who had served as a member of the staff of Hungarian Premier Lajos Bathyanyi during the 1848 Hungarian War of Independence.

Harry Sinclair was the son of a well connected Independence, Kansas businessman. He also owned an Independence, Kansas baseball club.

C. J. Wrightsman, a native of a Pennsylvania, was a knowledgeable and experienced jurist. He was the father Charles B. Wrightsman, who later became president of Standard Oil of Kansas, and he was the grandfather of socialite Charlene Wrightsman Cassini, wife of Igor Cassini – legendary American syndicated gossip columnist (a/k/a Cholly Knickerbocker).

Acknowledgements: Authors William H. Connelly (The Oil Business As I Saw It: Half a Century With Sinclair), Ruth Sheldon Knowles (The Greatest Gamblers) and James M. Smallwood (An Oklahoma Adventure of Banks and Bankers) of are among the primary contributors to this historical piece about the Oklahoma oil and banking industry. Richard Lloyd Jones, publisher of Oklahoma and Mid-Continent Oil Field, also contributed. However, Knowles’ account about the formation of Chaser Oil Company was sloppily and inaccurately copied from Connelly’s book. Both books were sloppily edited by the University of Oklahoma Press, which published both books. Prior to his death, Connelly and I corresponded by mail, when Connelly apprised me of facts that were not accurately reported in Knowles’ book.

As a result of our correspondence, the following account of the history of Oklahoma is an attempt to set the record straight.

The Chaser Oil Company

In the fall of 1906, explorers found oil in Indian Territory near the Kansas border. Department of the Interior restrictions complicated leasing Indian lands. Frank Tanner, a Cherokee, owned a 110-acre allotment in Nowata County near the new production. Twenty-year-old Frank was a minor; the Department permitted leasing of his land, but the contract would terminate on February 14, 1908, the day Tanner came of age. He would then be free to lease on his own terms. The cautious lease owner was unwilling to risk drilling to prove the acreage that might then be sold to somebody else.

Harry Sinclair had a hunch there was oil on Tanner’s allotment. He instructed Connelly to offer Tanner a $20,000 bonus if he would agree to sign a new lease to Sinclair when he came of age; until then he would be paid $100 a month on account. Tanner signed the agreement. Sinclair, knowing it was not legally enforceable, was delighted to find a more subtle way to bind him. The young Cherokee was a promising baseball player, and Sinclair had bought the Independence Baseball Club. Tanner was signed as pitcher for the next season’s team. Connelly, nursing the situation along, noticed signs of Tanner’s becoming “nervous.” The manager of the Pittsburgh Pirates in the National League, a friend of Connelly’s, was persuaded to write Tanner a letter promising to give him a tryout the following spring. This kept Tanner happy.

The week before the crucial birthday Sinclair and Connelly also began to grow nervous. Sinclair did not have $20,000 on hand to pay the bonus. On a trip East he obtained a loan and wired Connelly to get the lease. Connelly went to Tanner’s home in Nowata and was dismayed to find him gone. He caught sight of an enterprising lease broker carrying a trip an followed him on a train to Coffeyville, Kansas, thinking perhaps he had hidden Tanner. It was a false trail. Connelly went to Tanner’s parents’ farm, learning there that Tanner and a friend, Joe Rogers, had left on a trip. A hack driver who had driven them to the Katy depot that morning said they had bought tickets for Guthrie, 130 miles west. Connelly caught the next train, telling the conductor to wake him to change trains. Forgotten by the conductor, he woke up in Oklahoma City, 25 miles beyond Guthrie. Waiting for a train to go back, he called a friend in Oklahoma City and asked him to check all the hotels for Tanner.

In Guthrie, Connelly learned that Tanner and Roger had checked out of the hotel the night before, saying they were going to Denver. “This was a stunner,” Connelly relates. He knew only one man in Denver, an attorney, whom he called. The attorney promised he would have the Denver police pick up Tanner and hold him. At this point Connelly’s Oklahoma City friend telephoned that he had located Tanner and Rogers in the company of Charles J. Wrightsman and Gene Blaise, two well known, well connected and smart oil producers. Wrightsman was a well-seasoned lawyer. Blaise was the nephew of Justice Bayard T. Hainer, former O.T. Supreme Court Justice, former chief counsel to the City of Guthrie, who was later appointed chief counsel to the Federal Trade Commission. Connelly knew there was trouble ahead.

Rushing to Oklahoma City, Connelly found his friend had been jailed when Wrightsman, observing that he was being followed, complained to the police. Connelly and his friend learned later that Wrightsman and Blaise were staying in a hotel, the Tanner and Rogers in a rooming house. Connelly trailed Tanner and Rogers to the hotel the next morning, when Rogers, apparently in the oil-producers’ hire, went upstairs to confer with them. Connelly cornered Tanner in a washroom and told him a lie, that the manager of the Pittsburgh Pirate wanted him to come to Pittsburgh at once. Assuring him he needn’t worry about money, clothes, or telling his friend good-by, Connelly rushed him to the depot. Four minutes before the train pulled out, Wrightsman, Blaise and Rogers arrived sensationally in a Thomas Flyer, one of the few automobiles in Oklahoma. They boarded the train, rescued Tanner and roared off. “This,” Connelly complained, “was a body blow.”

Connelly telephoned the police chiefs in all the larger towns nearby asking them to locate the Thomas Flyer, falsely claiming an emergency existed, affecting one of the men in it.” Reluctantly, he telephoned Sinclair and gave him the bad news. “You can handle Blaise, but Wrightsman is too fast for you. I’ll go down to Oklahoma City and join you.”

A bribe offered by Connelly prompted a garage man to report the rented Thomas Flyer’s first night stop. The town was between Enid and Guthrie. As the next train left for Guthrie, Sinclair and Connelly rushed there on the chance it might be the Wrightsman’s and Blaise’s destination. Sinclair managed to borrow one of the few other cars in Oklahoma—it belonged to the new state’s lieutenant governor—and made ready to pursue the Thomas Flyer. By nightfall, after much telephoning, Connelly located Wrightsman, Blaise, Rogers and Tanner in Enid, 73 miles away. Rain, mud, and darkness made Connelly and Sinclair give up the idea of driving. The last train had left, but the stationmaster agreed to run a special train. Not having the price of it, Sinclair and Connelly scouted the hotel lobby and found a Kansas friend with $25 cash and a draft for $200. The train was on the track, ready to go, but the stationmaster refused to cash the draft. The hotel cashier didn’t have enough money and they had to get the owner out of bed to make up the difference. Back at the station they found the stationmaster had dismissed the train crew. When the train finally pulled out it was almost midnight. Tanner’s birthday was only minutes away.

In Enid, the police chief revealed that Wrightsman was at one hotel, and Blaise, Tanner and Rogers at another. He agreed to pick up Tanner and have him in his office first thing in the morning. It was 2 a.m. when Sinclair and Connelly pounded on the door of Wrightsman’s hotel room. “Wrightsman was utterly dumbfounded,” gloated Connelly. “’I thought I left you at the Katy station in Oklahoma City,’ he said. I agreed this was where he had seen me last but added that I had moved around some.”

The men argued futilely for several hours. Wrightsman and Blaise agreed to meet Sinclair later for more parleying, promising to make no move meanwhile. At 8 a.m., the police chief telephoned, claiming he had Tanner in custody.

Technically, Tanner was a victim of conspiracy, of false arrest and of false imprisonment by Sinclair, Connelly and the Guthrie chief of police.

When the rivals resumed their conference, Wrightsman and Blaise simply laughed at Sinclair’s proposal to settle the matter by each taking a half-interest in the lease. Wrightsman and Blaise were willing to let Sinclair have a quarter at most. Connelly then had the police chief produce Tanner in an attempt to get Tanner to sign a lease agreement with Sinclair, an agreement that would exclude Wrightsman and Blaise. However, Wrightsman and Blaise stood firm. Sinclair and Connelly were apprised that the two of them could be charged with bribery and with having falsely arrested and falsely imprisoned Tanner.

That afternoon, Sinclair, Connelly, Wrightsman and Blaise formed the Chaser Oil Company, one-half of the stock being owned by Wrightsman and Blaise, the other half being owned by Sinclair, Connelly and John A. Bell. Sinclair, Wrightsmn and Blaise meanwhile established the Farmers National Bank of Tulsa, with Blaise acting as president. In 1910 it was reorganized as the Exchange National Bank of Tulsa, with Sinclair acting as president. Today it is known as the Bank of Oklahoma.

Although Tanner never became a big-league pitcher, he could have bought a ball club if he wished, however, for his Nowarta County lease proved to have 2 million barrels of oil under it, one of the largest oil-producing leases in Oklahoma history. Tanner himself resultantly became a wealthy man in his own right.

Sinclair, Bell and Connelly later sold their half interest to Prairie Oil & Gas Co. Blaise and Wrightsman ultimately sold their interest to Prairie. Twenty-five years later, in 1932, at the time of the merger of the Prairie Oil & Gas Co. with Sinclair Oil & Gas Company, the Chaser Oil Company leases came back to Sinclair.

Following the death of Harry Sinclair, the Sinclair Oil Company was acquired by Atlantic Richfield Company (ARCO), which was still later acquired by British Petroleum Corporation (BP).

Meanwhile, in 1913 Blaise formed a partnership with Friend Martin Aiken. Blaise and Aiken then teamed up with Joshua Cosden to form the Peerless Refining Company. Aiken and Blaise then traveled south to Fort Worth where they established the Inland Refining Company and the United Producers Pipeline Company, building the first pipeline from the heart of the Rangers oil field to their Fort Worth refinery. They later established the Inland Refining Company at Cushing, Oklahoma.

E. F. Blaise and F. M. Aiken also operated the Queen Esther Mining Co. and the Admiralty Zinc Co. in Northeast Oklahoma.

E. F. Blaise continued to produce oil independently, eventually acquiring part ownership of the Cushing Gasoline & Refining Company, of which he served, first as treasurer, then as president up until his death in 1958 at the age of 79.

One day in the spring of 1909, Sinclair waited at the Independence station for a special train from Kansas City. He was immaculate and impressive-looking as the Buick touring car he ha bought for the occasion. A crowed had gathered around it. Any car was still a curiosity, but this was the most elegant horseless carriage Independence had ever seen.

Although he did not show it, Sinclair was excited. In a few minutes John D. Rockefeller, Jr., and a party of Standard Oil officials would be arriving. It a the thirty-five-year-old Rockefeller’s firs visit to the mid-continent oil fields; Sinclair was to be his guide on the party’s brief stop. Sinclair had read the interview Rockefeller had given in Kansas City the day before, in which he excused himself from making any comments on oil matters y saying, “I don’t know anything about the oil business although I am a director of the company. I look after my father’s personal affairs and that is quite a little chore. I found that it kept me so busy that I had to give up my Bible class.”

Rockefeller was much more voluble on the subject of a young man’s chances in America, which he thought were “first rate” if he had “ability, integrity and is on the square.”

“There are so many young men who would like to live on easy street who do not like to do a day’s work and there isn’t a chance for them anyplace. But there is not so many of that sort out here as we have in the East. They are a fine lot out here. I have found that out and from what I an find out the chances are better here and the young men are more willing to embrace the chances.”

The thirty-three-year-old Sinclair knew all about the willingness to embrace chance and it results. What he was thinking about was how to convince this other young man that Standard should give the young men of Kansas even better chances by increasing the price of oil. Feeling against Standard was more violent than ever in Kansas. Sinclair, as treasurer of the Mid-Continent Oil and Gas Producers Association, intended to make good use of the time he would spend with young Rockefeller in the back seat of his new Buick showing him the town.

The Standard Oil party was affable and gracious. Rockefeller was gratifyingly interested in all he saw. Sinclair found an appropriate opening and plunged into a detailed description of the oil producers’ plight. He thought Rockefeller was paying close attention, but apparently he had not been.

“Is this your automobile, Mr. Sinclair?”

“Oh, yes.”

“It is a very beautiful one.”

“Thank you, Mr. Rockefeller. It’s the first Buick in Independence.”

“Well, Mr. Sinclair, it seems to me that if you have been able to buy an automobile like this with the present price of oil, that you producers are doing very well.”

Sinclair remained silent. Talk was a waste of time. Ida Tarbell had been right when she said the producers’ only solution was to play the game as well as Standard Oil played it. “Not just as well,” said Harry Sinclair to himself. “I’ll show them how to play it better.”

Acknowledgements:

Oklahoma and the Mid-Continent Oil Field by Richard Lloyd Jones. 1929.

The Oil Business As I Saw It: Fifty Years With Sinclair by W. J. Connelly. University of Oklahoma Press. 1960.

The Greatest Gamblers by Ruth Sheldon Knowles. University of Oklahoma Press. 1978, 1981.

Editor’s Note: Charles J. Wrightsman was the father of Charles B. Wrightsman (president of Standard Oil of Kansas) and the grandfather of Charlene Wrightsman Cassini (wife of American syndicated gossip columnist Igor Cassini, a/k/a Cholly Knickerbocker)

* * * *

The Farmers National Bank of Tulsa

At the time of statehood (1907), according to historian James M. Smallwood, a total of 665 banks served a population of 1,414,042; total resources of the commercial banks exceeded $95 million. Most financiers welcomed statehood because of the benefits it would bring. They knew that banks always tended to flourish during eras of stable economic development and to suffer during times of upheaval.

In 1908, the State Legislature passed the Oklahoma Guarantee Law. A forerunner of the Federal Deposit Insurance Corporation, the new law was supported by Governor C. N. Haskell. Earlier, Haskell had tried to write the guaranty into the state constitution but had failed by one vote to secure its adoption.

Organized under an Indian Territory charter in 1905, the International Bank of Colgate was first audited in February 1908, and examiners objected to several unsound practices. Although the bank listed capital of $38,000 and deposits of $32,424, the examiners found notes for $9,923 in unsecured loans made to officers of the bank, and also unsecured, speculative stock loans for another $7,812. In addition, furniture and fixtures were carried t $900 in excess of their actual value. After being warned, bank officials promised to adjust the objectionable items. Yet, by May nothing had been done. Another audit revealed that loans to bank officials had in fact increase to $10,181. Immediately, State Commissioner H. H. Smock ordered the bank closed and sent his assistant, C.H. Schultz, to liquidate its accounts. Although $24,844 was taken from the guaranty fund to pay depositors, the sale of the bank’s assets followed a full reimbursement. Later, the bank was reorganized as the Citizens State Bank of Colgate, and its new officers followed all of the state board’s guidelines.

Although the guaranty program proved to be an immediate success, a rash of bank failures jeopardized the new program. The system continued to operate, however, and demonstrated to the citizenry that the state government was fully committed to it.

On September 21, 1909, the Columbia Bank and Trust Company of Oklahoma City closed its doors. Although $2,800,000 was required to satisfy depositors, Governor Haskell took the money out of the guaranty fund and ordered the institution reopened the next day.

The failure of Columbia had a domino effect. Farmers National Bank of Tulsa had trustingly purchased bad notes from Columbia’s president, F. W. Fowler, prior to Columbia’s closure. Farmers, which had rapidly grown to become the largest bank in Oklahoma under President E. F. Blaise, thus closed its doors, and a national bank examiner, F.W. Bryant, was named receiver.

The State Bank of Kiefer (Kiefer, Oklahoma, which was also owned by E. F. Blaise. was not affected, although Blaise reportedly had transferred some of his personal funds from the Bank of Kiefer to the Farmer’s National Bank of Tulsa prior to the Columbia Bank & Trust Co. failure.

Governor Haskell himself had deposited some of his personal funds in Columbia Bank and Trust of Oklahoma City just prior to the bank failures.

Funds available under the state’s Guaranty Law protected the depositors at Columbia Bank and Trust Co. of Oklahoma City, while those who had done business with Farmers National Bank of Tulsa had no recourse, other than to prosecute Columbia’s president F. W. Fowler

Thus, E. F. Blaise took the initiative insisting that Fowler be prosecuted. Both Fowler and Blaise were indicted by a grand jury. Testimony by all parties involved resulted in F. W. Fowler alone being held accountable for the bank failures to include having defrauded President E. F. Blaise and other owners and depositors at Farmer’s National Bank of Tulsa.

Ironically, Fowler had been a member of the board of directors of Farmers National Bank of Tulsa at the time of scandal. At the time, Fowler (a native of Wellsville, N. Y.) was also the owner of the American National Bank of Bartlesville, of which E. F. Blaise was cashier. American National Bank was not affected.

In 1911, Fowler received a prison sentence for violating Federal banking laws and served time at the Federal Prison at Fort Leavenworth, Kansas.

. E. F. Blaise was a grandson of Hungarian-American statesman Ignace Hainer, a lawyer, journalist, adjutant-general and member of the cabinet of the Hungarian Premier Battyanni and Louis Kossuth during the 1848 Hungarian War for Independence from the Austro-Hungarian Empire. During the war, Ignace Hainer was imprisoned by the Austrians for five months, prior to settling in America, where he was appointed a professor of modern languages the University of Missouri, then later to the post of treasurer of Decatur County, Iowa, as postmaster of Davis City, Iowa, and as a member of the United States Grand Jury.

E. F. Blaise’s uncle, Oklahoma Territory Supreme Court Justice Bayard T. Hainer, was later appointed chief counsel to the Federal Trade Commission [during the Coolidge and Harding Administrations]. He was also appointed general counsel to the Stockyards Association of the U. S. Department of Agriculture.

Note: In 1898, Bayard Taylor Hainer published an 800 page document titled A Treatise on the Modern Law of Municipal Securities, Including Rights and Remedies, As Determined by the Courts and Statutes of the United States. Originally published by the Bowen-Merrill Company of Indianapolis and Kansas City, it was republished in 2008 and 2010 by Cornell University Law School Library – 800 pp. – available from Amazon.com/books.

Soon after the closure of Farmers National Bank of Tulsa, the Exchange National Bank of Tulsa opened its doors with Harry F. Sinclair acting as president. Years later, Exchange National Bank was reorganized and renamed the National Bank of Tulsa. Today it is known as the Bank of Oklahoma and has a controlling interest in the Bank of Arizona and other western banks.

Harry F. Sinclair himself years later received a prison sentence at Ft. Leavenworth for making an “inappropriate gift” [considered to be a bribe] to a U. S. Congressman for the purpose of gaining oil drilling rights on a government reservation known as Teapot Dome.

Seeing that the legislature and the governor fully supported the guaranty program, more financiers holding national charters rushed into the state system after the series of failures.

By January 1910, state banks numbered 695 and national banks 221, according to Oklahoma State University historian James M. Smallwood. Although the program appeared successful, bank failures in 1910 and 1911 continue to deplete the fund. In that latter year the legislature amended the Guaranty Law to require the state banks to contribute 5 percent of their average daily balance to the fund. By October 1913, the number of state banks had dropped to 596 while that of national banks had risen to 326.

Acknowledgements:

An Oklahoma Adventure of Banks and Bankers by James M. Smallwood. University of Oklahoma Press. 1979

Oklahoma Banker. January, 1910, p. 201

University of Tulsa Archives: History of Farmers National Bank of Tulsa and The Exchange National Bank.

Tulsa

a story of black gold, lust and power

Susan Hayward – Robert Preston – Pedro Armendariz

~ human rights violations through entrapment ~