Climbing The Hill

PORT ARTHUR HAD BROUGHT THE SEA INLAND to its doors, but its bitter struggle for maritime progress continued in the offices of legislators and between factions. The city, so near and yet so far from the Gulf, had made concerted efforts to have itself declared a port of entry. The local Board of Trade now issued a circular letter to citizens who “entered into the work of distributing them in the places where more good is likely to be done.” On April 4, 1906, the Beaumont Enterprise reported:

It is learned here today that there is litttle chance of Port Arthur being made a port of entry at this session. Luther Kountze, of Kountze Brothers, was in Washington all last week and it is believed here that he was there to oppose the passage of this bill in the interest of Sabine. . . . One of the objections urged to the bill is that it is to create a port of entry on a private waterway.

This report of opposition stirred businessmen of Port Arthur to further activity, and “not until a solemn decision has been given from Washington headquarters will efforts cease,” said the Enterprise.

On April 26, a Washington correspondent of a local newspaper reported:

Port Arthur hauled big artillery into line at the port of entry bill’s hearing before the ways and means committee today. John W. Gates made the principal statement, the feature of which was that the Kansas City Southern executive committee has voted to turn over to the gov ernment their private canal “at any valuation the board of government engineers may put on it.”

Kansas City Southern Railroad Station

But the Kountze interests were not to be conciliated even by this offer. The Beaumont Enterprise carried this story:

“This is a Wall street battle” said Banker Kountze during the hearing. . . . Mr. Kountze made an impassioned plea for Sabine Pass, saying the place was being discriminated against by the railroads.

Statistics used during the hearing were widely publicized. The total value of shipments, foreign and coastwise, for the period from 1900 to 1905 was set at $40,748,108. Total tonnage in 28 seagoing ships owned at Port Arthur was declared to be greater than for any port south of Baltimore, aggregating 60,000 tons. Port Arthur was described as a town with a “population of 5200. .. paved streets, sewerage . . . street light system, water works and two banks.” During the previous year more than 109,000 bales of cotton were shipped. The Enterprise

The lumber wharves and sheds . . . have in storage and in the course of shipment over 5,000,000 feet. The coaling station . . . under construction will have a capacity of 500 tons in ten hours. . . . In the immediate vicinity of Port Arthur there is oil tankage capacity of over 7,000,000 barrels. There are three refineries in active operation at Port Arthur and its immediate vicinity with a capacity of 20,000 barrels of finished products per day.

Meantime, the port fight continued, and on May 7, the secretary of the Port Arthur Board of Trade received a telegram from Washington which said: “John W. Gates will, at the port of entry hearing on Wednesday, offer the Port Arthur ship canal to the government free of all cost if Port Arthur is made a port of entry at this session. No strings are tied to this offer.”

First results of the prolonged port campaign bore fruit on June 4, 1906, when the House of Representatives in Washington passed the Broocks Bill making the city a port of entry, and turning over to the Federal Government its ship canal. The only amendment was to make Sabine Pass a sub-port of entry. On June 19 the bill was passed by the Senate. The channel was approximately seven and a half miles in length, and had cost $1,400,000, including legal fees. It was deeded to the Government for “one dollar and other consideration.”

In October, preliminary surveys were made for free postal delivery, and advance figures from a city directory on the press indicated that the population was fully 8,500. A six-foot cement walk was being built about Block 140, bounded by Austin and Waco Avenues, 4th and Procter Streets.

Ownership of the Port Arthur Canal passed to the United States Government on December 14, and the city became a port of entry. Russell H. Dunn was appointed collector at Port Arthur for the new customs district of the Sabine.

On March 25, 1907, the schooner Martha cleared the customhouse for Vera Cruz with a cargo of lumber. This was the first vessel to reach foreign waters under a register issued in the Port Arthur district.

Building continued; work was rushed on a $12,000 summer theater on the Pleasure Pier. A $76,540 manual training and high school building was completed on June 21, 1907.

When the British steamer Reynolds loaded 176,000 bushels of wheat from Elevator A for St. Petersburg, Russia, the Beaumont Enterprise said:

But very few grain shipments are made from any United States port to Russia, as the latter country is the premier grain producer of the world, and ordinarily exports instead of importing wheat.

Another organization was added to the rapidly-growing list of civic groups on April 24, when the Retail Merchants Association was formed, with a membership of eighteen.

First benefits from the construction of the Lake Sabine Channel were felt by Port Arthur when a barge loaded with lumber from Orange, consigned to a Port Arthur company, arrived on April 30. Towed down the River and Lake to the Pass, and up the Port Arthur Ship Channel to a dock, the cargo of the barge was unloaded on wagons.

On June 24 the Thos. W. Lawson, only seven-masted schooner afloat, arrived. It was under charter to the Standard Oil Company for Texas oil-carrying trade. The Hydro graph of the United States Geodetic Hydrographic Coast Survey was the first steamer to enter the new lake shore canal. This trim little boat dropped anchor at the foot of Houston Avenue on July 1. Formal inauguration of train service over a new branch of the Southern Pacific Railroad into Port Arthur began on September 15 without a celebration.

Banana plants in the city were now bearing heavily. The year’s largest banana was grown by Adrianus J. M. Vuylsteke of the Holland Consulate; the fruit was two inches thick and eight inches long. It was displayed in a drug store in September.

Figures for November, 1907, showed more foreign shipments than for any other month in the history of the town. Exports from Port Arthur and Sabine amounting to $2,510,954, went to England, Germany, Belgium, the Netherlands, Canada, Cuba, and Mexico. Included were cotton, wheat, sulphur, residuum oil., illuminating oil, and cottonseed meal.

Arrangements were completed during the first of December to load five vessels with more than a million bushels of grain. The Beaumont Enterprise commented, on December 13:

Corn shipping via Port Arthur until now has been attended by some dissatisfaction, owing to the fact that the elevator had no means of drying grain which became wet in transit. . . . The new grain drying house, which will be finished by January 1, will do away entirely with all trouble of this character.

At a taxpayers’ meeting held at Rodgers’ Opera House on the night of January 8, 1908, a Citizens’ League of Port Arthur was organized, with the slogan, “Pull Together for Port Arthur.” It resolved to “make every effort in behalf of the city’s interests, regardless of nationality, creed or politics.” The principal speaker was Gates, who had just arrived—suave, dynamic and thoroughly at ease. During his speech he made the statement that he was to be considered a citizen of Port Arthur, and that wherever he went he would register as “John W. Gates, Port Arthur, Texas.”

Although Gates long had been a familiar figure on local streets, his visits had been brief. Many expressed amazement that he should desert larger cities and settle down in a place as small as Port Arthur. Many stories were told about why he had so decided, but the one to which his biographer Robert Irving Warshow gives the greatest credence involves events in Gates’ business career of the several years previous to his sudden appearance in the minor role of a Gulf port citizen.

After eliminating Stilwell from the Port Arthur scene, Gates had used his promotional and administrative ability in numerous stock schemes. One of these involved the Armour interests and a corner on the wheat market. Gates tried to force Armour out, but the latter hung on grimly, and Gates came to the conclusion, after losing nearly nine million dollars, that his efforts “had better he confined to Wall Street.” He had discovered that during the four years previous to 1905 he had made little in his manipulations.

When in 1906 the stock market had shown signs of crashing, Gates apparently did not recognize the symptoms. He, with many other operators, had recovered so rapidly from the 1903 panic that he did not believe a major depression possible. The crash in February, 1907, found him heavily loaded with a particularly large block of Tennessee Coal and Iron stock. He had formed a syndicate, figuring that Morgan would have to buy it for his United States Steel. Biographer Warshow wrote: “Morgan chuckled when he heard of Gates’ predicament.”

In addition to the losses that he was forced to take in Tennessee Coal and Iron, he suffered many in other securities. He was by no means broke, but was quoted as saying he was “badly bent.”

Until that time, C. G. Gates & Company had been one of the larger brokerage houses in Wall Street. Although Charles Gates was its head, it was generally believed that the elder Gates was a special partner in the firm, which was popularly known as The House of the Twelve Partners. For a three-year period ending March 1, 1907, the profits of the house were reported to have been a million and a half dollars annually. Now, abruptly, Gates announced that the firm would liquidate its affairs and close its doors. Within a week this had been done, and Gates, accompanied by his wife and son, were on their way to Europe.

He had saved much of his private fortune, and began looking for another business opportunity and “a chance to get back at the Standard Oil people.” It was the opinion of some of his contemporaries that his decision to live in Port Arthur was due to a belief that Texas was the weakest territory in the Standard Oil monopoly, and that he hoped in that state to found a company that could “defy the Rockefellers.”

Port Arthur soon felt the touch of Gates’ promotion. A celebration of the completion of the long-sought inland Sabine-Neches Canal in January, 1908, drew visitors from as far away as Kansas, while residents of Beaumont and Orange flocked to the city for elaborate ceremonies. Port Arthur craft, and the United States cutter Windom, veteran of the Spanish-American War, anchored in the channel, were a mass of color from flying flags. At the docks, three miles away, decorations were so numerous that they could be seen in the city. Special trains arrived before the ceremonies, bringing crowds who jammed the water front. The celebration lasted all day and long into the night. Those who did not return home on trains or boats at nightfall were guests at a ball given on the Pleasure Pier.

Representative Samuel Bronson Cooper telegraphed Postmaster C. E. Dodge on January 31 that funds for a Federal building for Port Arthur would be approved by Congress. The next morning, residents received their first mail from route carriers. The former were satisfied, but the carriers complained considerably about ankle-deep mud, and droves of mosquitoes which accompanied them as they made their deliveries.

Gates enjoyed managing and scheming on a small-town scale as much as on a nation-wide one. His new Texas acquaintances held him in little awe—O. A. Owen, his secretary, wrote long afterward that they took him much more casually than did New York, Chicago, London, and Paris. He played poker with them for stakes sometimes so small that the greatest loser would be out no more than ten dollars in an evening. He had an office at the back of the little National Bank building, where he devoted hours to discussing relatively minor undertakings. He entered into all the city’s plans, one of the most ambitious of which was the erection of a great hotel to stand on the site of the widely-known Hotel Sabine. He could have built it himself without financial strain, but to his promoter’s mind that would have been too easy; he put as much effort into the financing of that building as he would have expended on the organization of a multi-million-dollar corporation, seeing to it that the more substantial citizens subscribed for stock and that as many of the townspeople as possible aided in the undertaking.

The collection of a $15,000 subscription was completed in February, and Gates, who had gone to New York on a trip, was wired to that effect. He and his associates of the United States Realty Company had agreed to handle the remaining cost of $150,000.

At 6 o’clock on Thursday morning, February 20, 1908, the last work on the Sabine Lake channel was completed, and the final cut made on the turning basin in front of the city. The dredge was moved to the foot of Shreveport Avenue, to excavate the city slip for the accommodation of large numbers of small craft unloading produce and fuel.

In April, surveying of the proposed drainage district of which Alligator Bayou was the outlet was started. Stakes were placed for excavation and deepening of the bayou to form a canal to reclaim the great marsh between Port Arthur and Nederland. With removal of the swamp imminent, a retrospective article appeared in the Beaumont Enterprise on May 5:

It has been barely ten years since the first house was built on the townsite of Port Arthur. Everything was ordered and done on a large scale. The townsite was laid out for a city of 100,000 or more. Broad streets and avenues crossed at right angles. A public park was reserved along the shores on the lake across the whole front of the city. A large up to date hotel was built. . . . The census of 1900 gave a population of barely 1000. Today the population is estimated at 8000.

Eight major industrial concerns were listed; total monthly payrolls were given as $114,000, with more than 1,067 employed. An $80,000 school building with its corps of nineteen teachers, and eight churches were listed among the town’s assets.

During the previous three years a number of large two- and three-story brick buildings had been erected in the business center, while in the residential section hundreds of new houses had been constructed.

An amendment making the city a full port of entry was added by Representative Cooper to a bill in Congress, in May, placing Port Arthur on an equal footing in this respect with Baltimore and other large Eastern ports. During the same week, announcement was made of the formation of the Port Arthur Exporting Company, backed by Gates. Exportation of cotton seed and its products was to be the principal business of the firm. A 900-foot wharf was to be constructed.

Figures released by the United States Government on June 30 ranked Port Arthur, with an export business valued at $12,000,000, thirteenth among ports of the United States.

The Port Arthur Cotton Gin was advertised as being ready for use before September 1, although very little cotton was produced in the vicinity. It was hoped that the gin would boost the acreage planted to this crop.

The eighth oil fire of the year occurred at the Guffey Petroleum plant on August 18, 1908, with a property loss of $33,000. The fires had been caused by lightning striking tanks.

Port Arthur’s first harbor master was appointed during September, Gen. L. E. Ward, a former Confederate soldier, being selected. At about this time, Ordinance 177 regulating cargoes and wharfage in the Canal went into effect, all boats being ordered to anchor in the city slip and unload across the municipal wharf. Previously it had been customary for boats to tie up and unload anywhere along the Canal and water front; freight was hauled through Lake Shore Park. With the new regulation in effect the city ordered the drive along the lake shore graded, rolled and heavily oiled to keep down dust.

By the end of October work on the new Hotel Gates had been started, and other improvements were in progress. It was said that for the “first time in the history of the city wagon loads of seed cotton on the way to the gin and loads of baled cotton for shipment are common sights on the streets . . . adding a large cash industry.”

A report of the Department of Commerce and Labor, issued for the first nine months of 1908, showed Port Arthur sixteenth in a total of sixty Atlantic and Gulf port customs collection districts, and seventeenth in net tonnage received from foreign ports. In the South, Port Arthur was declared to be “the fifth Gulf port in importance and of the six collecting districts in Texas stands next to Galveston.”

In December, the city was raised from vice-consular to full consular standing with the appointment of Jose F. Balboa as Mexican consul at Port Arthur.

During 1909, the careful planning of John W. Gates and his associates began to bear definite results. Imports and exports jumped to such an extent that Port Arthur ranked twelfth among United States ports. The boast was made that there were more ocean-going barges owned and operated in Port Arthur than in any other southern seaport.

Gates purchased the Experimental Farms from James Hopkins for $15,000, renamed them Port Arthur Nurseries and began increasing the number of trees and plants. He gave the city 1,000 eucalyptus trees to be planted along the streets. The Gates Model Farm had opened for business on North Procter Street; it produced butter, eggs, milk, and cream. Growing on this farm were 1,200 fig, 2,000 orange, 4,000 grapefruit, and 17,000 eucalyptus trees.

With a population of 5,000, Port Arthur now had a building boom. Permits were issued for construction of a $125,000 Federal Building; the $85,000 Gates Hotel, to be known later as the Plaza Hotel; the $25,000 Mary Gates Hospital; the $60,000 Port Arthur Business College, and a 70-foot business block. Jan Van Tyen, manager of the Port Arthur Land and Townsite Company advertised, “Don’t be a rent slave! Buy one of our choice lots and let us build your home!”

The editor of the Port Arthur Herald bemoaned the fact that so few marriages had occurred during leap year. “Something,” he declared editorially, “must be wrong with the looks of either the men or the women of the city for not taking advantage of the year!”

Port Arthur took a holiday on September 27, 1909, and attended the laying of the cornerstone of the Mary A. Gates Memorial Hospital.

The turning basin now came in for a share of the Federal Gov ernment’s attention, $15,000 being allocated for dredging. Three United States torpedo boats, the Thornton, Fingey, and Wilkes, passed through the Canal in November.

The private opening of the Plaza Hotel occurred on November 15. During the evening a “Billion Dollar Dinner” was given by Gates and his son to stockholders of the Texas Company. Among those present were James N. Hill, son of James J. Hill, pioneer railroader; James Hopkins, president of the Diamond Match Company; Lewis H. Lapham of New York; John F. Harris, New York broker; A. L. Beaty of Dallas; Joseph S. Cullinan, and W. B. Sharp of Houston, and many others high in financial circles.

Townfolk, awed by the presence of so many celebrities, watched waiters scurry up and down behind the long tables carrying champagne buckets. But the big moment came when Gates rose, and holding his glass aloft declared:

This hotel is dedicated to the future_ of Port Arthur, It typifies the city we must build for—a port that one day shall rival New Orleans and Galveston, and a city that shall be the metropolis of the Gulf Coast!

By the end of the year, engineers under the supervision of E. E. Corry had started the first survey of the Intracoastal Canal between Port Arthur and Galveston.

Port Arthur Nurseries, described as “one of the most beautiful spots along the Beaumont-Port Arthur road,” underwent extensive improvements during the early part of 1910, so that the growth of citrus fruits might be pushed for the area. Eighty per cent of the grading and pole-placing of the Port Arthur street railway was completed during this period.

The public opening of the new Plaza Hotel was celebrated on January 20, 1910, with a great ball. Lavish newspaper accounts described the event. The Enterprise said:

There is a glow of light from the Plaza hotel tonight, while to music, couples flow past in an eddying and whirling stream under the enchant’ ment of the dreamy waltz. . . . It is the grand and formal opening of the Plaza Hotel. . . . The Plaza is built on the lines of the mis- sions which the Spanish priests erected across the country. . . . This hotel is a realization of the dreams of the men who wanted something faultless and had the money to buy it. . . . The structure proper cost $150,000 and stands on a four acre site fronting the canal and within a stone’s throw of the lake.

While the rest of the United States was recovering from the panic of 1907, Port Arthur continued to be a bright industrial center. Payrolls in the city were so heavy that banks found it necessary to open their doors for one hour on Saturday nights. When the work train came in from the docks, approximately “1,000 men swarmed off, formed a long column, and marched up town like soldiers returning from battle.” Workers using this train came from both the docks and the Gulf Refinery. Said the Enterprise:

Those who have been on the coast for a decade can remember when Port Arthur was largely an experiment . . . when the town did not have enough trade in hand to maintain its standard as a railroad terminal on the gulf. . . . That is all history now and one can see any time a fleet of freighters in the Port Arthur basin whose black flanks seem to almost burst with their cargoes. This means work and plenty of it; means homes and school houses and the banks opening their doors in the night to cash checks.

Barely a dozen years had passed since Arthur Stilwell had dreamed his dream. Stilwell was almost forgotten now, but the men who took up the work where he left off had pushed Port Arthur’s wagon well up toward the top of the hill.