Even Connally’s Woes Fail to Dim Texans’ Hopes

When a Houston multimillionaire who was once entrusted with the nation’s purse-strings goes broke, the evidence can hardly be plainer that the era of Texas-sized oil and ranching fortunes is nearing an end.

The recent bankruptcy filing by John Connally, a patrician lawyer, rancher, oilman and real estate developer who served as Treasury Secretary in 1971-72, was the latest in a stampede of Chapter 11 proceedings among many of Texas’ wealthiest residents who lost millions when oil prices collapsed.

But the humbling of Connally, the superrich Hunt brothers of Dallas, south Texas rancher Clinton Manges and others doesn’t mean there are no fortunes left to be made in the Lone Star state.

Experts suggest that high-tech businesses requiring more brains than brawn will produce a new breed of Texas millionaire.

Dallas entrepreneur H. Ross Perot and Rod Canion of Houston-based Compaq Computer--who made their fortunes selling computers instead of cattle--are already edging aside traditional Texas business heroes such as wildcatter H. L. Hunt.

Symbol of Wealth, Power

“Energy is still going to be very important to the Texas economy in the future, but a lot of the families that made money in energy the old-fashioned way, by taking risks with money borrowed from a bank with a handshake, are disappearing,” said economist Harold Gross of Southern Methodist University’s Center for Enterprising.

“People like John Connally, the Hunt brothers and others represent the old Texas and are gone forever.”

Connally, 70, perhaps symbolized the state’s wealth and power more than any other living Texan.

The son of a poor farmer, Connally became a legal adviser to legendary wildcatter Sid Richardson, an assistant to then-U.S. Sen. Lyndon Johnson, a three-time governor of Texas and confidant of presidents. He was wounded while riding in the Dallas motorcade in which President John F. Kennedy was assassinated in 1963.

Connally, who resided in a palatial Houston mansion for years, retired from politics in 1980 after making an unsuccessful attempt to capture the Republican nomination for president.

In his Chapter 11 bankruptcy petition filed July 31, Connally blamed the crumbling of his $300-million empire on falling real estate values triggered by the fall in oil prices.

Connally may decide to take some lessons in bankruptcy tactics from the once-billionaire Hunt brothers, who last week proposed a plan to reorganize their oil businesses.

The feisty brothers Nelson Bunker, Herbert and Lamar Hunt, heirs to one of the greatest oil fortunes in U.S. history, described their reorganization proposal for Placid Oil Co. as a “cram-down” plan that their bankers will have to accept whether they like it or not.

“I think there’s a sadness and nostalgia that these bigger-than-life Texans are disappearing from the scene,” said Rice University sociologist Stephen Klineberg.

“The special quality of Texas businessmen that came from its oil industry is ending. It’s no longer this brash and freewheeling place where you can get rich by cutting the right deals and having liquid gold under your land,” Klineberg said. “Texas is becoming a microcosm of the rest of the United States.”

Molly Ivins, a native Texan and columnist for the Dallas Times Herald, also laments the oil boom days of the 1970s, when rich Texans measured their wealth in units of $100 million.

The lavish life style of the decade often included private jets, ranches for deer hunting, weekend shopping trips to Paris and his-and-her Rolls Royces.

“When they crap out, Texans are very good-natured about it and just start over with something else. It’s the game they like, not the money itself,” Ivins said.

“This isn’t like 1929, when rich people in New York jumped out of windows in great numbers because they didn’t think they could go on without their money.”

With so many of Texas’ nouveau broke turning to bankruptcy courts for protection from creditors, Chapter 11 has become a respectable topic at cocktail parties.

Separate checks at tony restaurants, designer gowns purchased on sale and cut flowers from the grocery store instead of the florist have all become acceptable ways for the formerly rich to cope with Texas’ economic crisis.

So widespread is the turn in fortunes among the state’s upper crust that Texas Monthly magazine recently published “A Guide to Gracious Living in Troubled Times,” offering such tips as how to write a letter of sympathy to an ousted bank president.