THE HISTORY OF GEOPHYSICAL PROSPECTING
PART TWELVE - GEOPHYSICAL RESEARCH CORPORATION

Chapter 37  -  The Power Struggle

Any young, expanding company would consider itself lucky to have two top-flight executives to guide the corporation destinies. The Amerada Petroleum Corporation had three high caliber leaders in Everette De Golyer, John Lovejoy and Alfred Jacobsen. Three excellent executives of equal age and vigor is a bit too much of a good thing.

De Golyer was the founding spirit of Amerada. No English-American team could have had more mutual trust and mutual admiration than existed between Viscount Cowdray and E. L. De Golyer. De Golyer was perfectly happy to be Vice President and General Manager of the new oil company and let Thomas Ryder, an older man, be President. Both Thomas Ryder and Sir John Body, Weetman Pearson's personal representative on the Amerada Board, had been De Golyer's superiors when De had been the blazing star of the Mexican Eagle Oil Company. The New York venture was similar to the Tampico enterprise in structure; functionally, De Golyer ran the Amerada.

In 1919 De Golyer had hired three returning war heroes. John Lovejoy, a Columbia University graduate in mining and geology, had served with distinction as a Captain of field artillery. Harvard geology graduates, Dr. Sidney Powers and Dr.Donald Barton, had held the unusual title in France of "Military Geologist." Anyone acquainted with Sidney Powers would anticipate that he would more or less resent the man placed over him as Vice President in charge of the Tulsa office. Sidney Powers was just being Sidney Powers when he went over Lovejoy's head and addressed his geological reports to De Golyer. With all his personal idiosyncrasies, Powers had no peer in geologie know-how. Loyal and hard working, he became the ideal partner for De Golyer's geologie genius. No talk could have been more cordial than a De Golyer-Powers earth science discussion far into the night. They fairly radiated brilliant ideas to the benefit of the Amerada Petroleum Corporation.

John Lovejoy, like De Golyer, possessed that rare combination of excellent technical and excellent administrative skili. The De Golyer-Lovejoy axis was another well-oiled piece of corporate machinery, for Lovejoy knew instinctively how De Golyer wanted things done. Of all the many distinguished and able Amerada employees, John Lovejoy was probably closer to De Golyer in thought and aims than anyone else.

The Rycade Oil Corporation was formed in 1923, when Donald C. Barton went from Amerada's Gulf Coast Geologist to Chief Geologist for the Rycade. The name, Rycade, was a combination qf parts of the last names of three Amerada executives; Thomas Ryder, Herbert Carr and Everett De Golyer. The two Cowdray companies were kept separate in Houston, Amerada staying on the third floor of the old Humble building and Rycade moving into the second floor. Amerada's Gulf Coast interests were allowed to dwindle, while Rycade was quite active throughout the rest of the 1920s. The Texas legislature had begun to frown on foreign corporations, which meant anything organized west of EI Paso or east of Texarkana. To stay within the law, Standard of New Jersey had purchased only half of Humble; Shell set up Roxana, and Rycade used a trusteeship to give itself a Texas facade.

Amerada employees were allowed to buy Rycade stock not as an investment but as a gamble. When they wanted to buy such stock they were informed by De Golyer that Rycade was built on a speculative policy and that they could either win big or lose their money. What actually happened when the stock took a nose dive, was for De Golyer to personally buy back all the stock interest of the small investors within Amerada for what they had originally paid for it. That was the kind of a man De Golyer was. When John Clarence Karcher, like so many of his fellow Americans, lost his shirt in the 1929 stock market crash, it was De Golyer who unhesitatingly came through with a substantial amount of cash to put Dr. Karcher back on his financial feet. This happened at a time when De Golyer was a bit worried about the future and opined to Mrs. De Golyer how very lucky they were that their new home in Montclair, New Jersey, was clear and unmortgaged; so that if the worst came to worst, they would be able to keep a roof over their heads and over the heads of their four children.

In the long and distinguished career of Sir Henri Deterding, only two men had been known to tell him "to go to hell." The second one was Alfred Jacobsen. The year was 1925 and Jacobsen promptly resigned as President of the Mexican Eagle Oil Company. Mexican Eagle had been a Weetman Pearson company until taken over by Royal Dutch Shell in 1919. Jacobsen had friends throughout the Amerada organization. When De Golyer heard about the resignation, he offered Jacobsen an Amerada Vice Presidency, which Jacobsen promptly accepted. Jacobsen soon made his genius for financial matters feIt in oil circles. It was his habit to accompany De Golyer on his trips back to Tulsa as often as possible and he quickly became familiar with all phases of the operation. This duo worked out all sorts of elaborate plans for the future good of Amerada during those long train trips back and forth from New York to Tulsa.

The first seven years of Amerada's existence were the wonder years for De Golyer. This Cinderella scientist saw Amerada and Rycade make a brilliant beginning and start to mature on firm ground. By 1926 De had the pleasure of witnessing his new enterprise, the Geophysical Research Corporation, swing into a vigorous prosperity. From 1919 to 1926, when De Golyer was Vice President and General Manager of Amerada, he ran a one man show; he was boss and everyone knew it. As President and General Manager from 1926-1929, his position was one of divided authority and slowly dwindling power in setting policy. In February, 1926, control of Amerada passed into American hands. Its stock was listed on the New York Stock Exchange. The financial house of Dillon Read had members on the Amerada Board and it was through the agency of Dillon Read that American investors gained control of a majority interest in Amerada. Thomas Ryder died in 1926 and De Golyer moved up to the Presidency.

The death of Weetman Pearson on May 1, 1927, came as a powerful shock to Everette De Golyer for he looked on Lord Cowdray as a second father. This sad event had a professional consequence also . No longer could De suggest a brilliant and daring plan and have his fairy godfather in London wave the approving wand of financial backing. In 1927 a new policy came out of Amerada under which members of the geologic staff had to divest themselves of any and all oil royalties or other such interest. After 1927 only Barnsdall, Ohio and Marland permitted employees to benefit directly from petroleum. De Golyer, Lovejoy and Powers sold out their royalty holdings. Dollie Radler proved to Amerada’s satisfaction that her only royalty holding had been proven worthless and was allowed to retain possession.

In 1928, a "special privilege" contract between Amerada on the one hand and De Golyer and Lovejoy on the other, came up for renewal and was not renewed by Amerada. Later that year, John Lovejoy, who had been hearing the refrain from the "third man theme" for some length of time, resigned his job in Tulsa and returned to New York to take a position in the banking firm of Brown Brothers and Harriman. From 1930 until his retirement in 1955, Lovejoy  had a distinguished career with the Seaboard Oil Company, serving first as President and then as Chairman of the Board. At retirement as an oil executive he returned to Brown Brothers and Harriman as petroleum advisor, a position he still enjoys.

In December of 1928, Amerada's position as a minority stock holder in the Geophysical Research Corporation changed to 100% ownership. J. C. Karcher's salary was doubled as one part of the inducement for him to seIl his 15% interest to Amerada. The deal under which Rycade sold Amerada its 42-½ % remains a private affair.

In 1929 Everett De Golyer moved up to Chairman of the Board, a position he always disliked. Yet it was elear to everyone that Alfred Jacobsen certainly deserved the promotion to the presidency for his splendid work for Amerada. As a President should, Jacobsen now ran the company. De Golyer's influence and prestige still weighed heavily at board meetings but it was Jacobsen's policy that won the day when there was a conflict of interest or a conflict of purpose. The first and probably the most serious disagreement between the two financial giants crystallized in 1929. Jacobsen was in favor of limiting all GRC reflection parties for the sole use of Amerada.

De Golyer frankly admitted that Jacobsen's reasoning had many strong points to recommend it when he sought to limit a method as powerful as the reflection seismograph to the exclusive use of Amerada and Rycade. However, how long could one hope to deprive other oil companies of this important tool? The Geophysical Research Corporation now employed roughly 70% of all the seismic exploration scientists on earth. Half the technical personnel would suffice to operate a full complement of Amerada parties. If the other half remained as employees of the GRC Houston Division and offered reflection contract crews to the oil industry, the same way it had offered refraction contracts in the preceding four years, then the Geophysical Research Corporation would continue its virtual monopoly on the seismograph business and would continue to bring in substantial revenues for the mother company. Jacobsen's thinking on this controversy prevailed over De Golyer's ideas, so that the GRC Southern Division's days were numbered even before the advent of the Great Depression. De Golyer sent in his resignation as Chairman of the Board in 1929, in 1930 and in 1932. His resignation of November 3, 1932, was accepted, at which time he also ceased to be the President of the GRC. De remained as President of Rycade until 1941; Rycade had always remained a Whitehall (English) company.

Miss Margaret Cobb, with a PhD in geology from Columbia University, was selected as De Golyer's office assistant in 1923 and put in charge of all geological reports and records in the New York office. In the ten years that she served under De Golyer, Miss Cobb does not remember a single instance in which he ever raised his voice or spoke a cruel word to anyone. He was habitually congenial and she never knew him to lose his temper. John Lovejoy says that two or three cocktails made De's conversation positively sparkle. Sometime in the year 1929 at a testimonial dinner or some such occasion when Amerada executives were gathered together, De Golyer had doubled the usual number of cocktails and had therefore doubled the sharpness of his ebullient wit. Using his large vocabulary to good advantage, De summarized the shortcomings of his associates, one by one. The truth hurt and by banker's standards the caustic remarks were completely out of place. By tough, two-fisted scientific standards, De Golyer's speech was pure pragmatism.

The GRC annual employees' party took place on New Year's day of 1927, 1928 and 1929. The first and third parties were held in Houston. The January 1, 1928 blow-out took place at the Jefferson Hotel in Dallas, where the drinking contest was won by Gene Rosaire. In 1927, it was Gene McDermott who sat triumphantly at the table gazing at the prostrate forms of his company colleagues slumped in various attitudes under the table. There had been no serious drinking at the 1929 party at the William Penn Hotel in Houston, when festivities came to a sudden halt through the medium of an informal dual with fire hoses. The GRC had been obliged to spend a pretty penny to fix the water damage and replace the furniture broken in the friendly free-for-all.

The winter of 1929-1930 on the Gulf Coast was the most severe in history. Thousands of cattle died in the bitter cold and portions of Galveston Bay froze over. The annual GRC convention was postponed until February, 1930, and it was high-lighted by the attendance of E. L. De Golyer. De Golyer and Karcher took charge of distribution in the hotel lobby at the conclusion of the party. Bodies were carefully placed by twos and threes in taxicabs, with explicit directions given of the correct addresses to which the limp ones were to be delivered.

When this labor of love was completed, De Golyer told Karcher that he wanted to talk with him at his room in the Rice Hotel. Upon arrival at the hotel room, De Golyer told Dr. Karcher that he had made up him mind to form a reflection seismograph contract company to be called Geophysical Service Incorporated (GSI). He was prepared to spend $100,000, which he estimated would be enough to carry the company forward until such time as contract revenues would make the organization self-supporting. No one but Karcher was to have any knowledge of where the money had come from or that De Golyer had any interest in the new company. De Golyer’s interest in the GSI was to be 50%, carried in Dr. Karcher's name in trust for De Golyer. Karcher was to be President and McDermott, Vice President. The remaining 50% interest would be divided among the key personnel, with Karcher to have the largest share. Dr. Rosaire would be asked to come into the organization within a few months. Karcher and McDermott were to resign from the GRC immediately and to strive to conclude their old obligations in a minimum of time. McDermott was to go to Newark, New Jersey, to start building ten sets of reflection instruments while Karcher went into the field and sold ten contracts to prospective oi clients.

Neither Karcher nor McDermott hesitated to join their old boss in this new undertaking. Both resigned from GRC; Karcher's resignation was effective March 1, 1930; McDermott's even earlier. Karcher started on his fabulous business trip in which he sold ten reflection contracts long before the month of March was over. Even in those days of panic, the producing petroleum companies considered the employment of the reflection seismograph a must.