Water Rails & Oil - Historic Mid & South Jefferson County

❖
Left: Isaac L. Ellwood, one of the first
successful commercial producers of
barbed wire and builder of the
Pompeiian Villa. Ellwood’s wife
refused to live in Port Arthur because
of the rain and the mosquitoes. He
sold the palatial home to James
Hopkins, President of the Diamond
Match Company, who, in turn, traded
the house to George Craig for Texas
Company stock.
COURTESY OF THE MUSEUM OF THE GULF COAST,
PORT ARTHUR, TEXAS.
Center: John W. “Bet-a-Million”
Gates, financier. Gates built the Mary
Gates Memorial Hospital on
Lakeshore Drive in 1909 in memory
of his mother. He also founded Port
Arthur College in 1909. Gates
realized that the men on the ships
transporting oil around the world
could not talk to each other. He
opened the school to teach wireless
telegraphy to the seamen and also to
teach young women office skills so
they could work in the business world.
Gates died suddenly in Paris in 1911.
COURTESY OF THE MUSEUM OF THE GULF COAST,
PORT ARTHUR, TEXAS.
Right: Dellora Gates, wife of “Bet-a-
Million” Gates. In January 1916 Mrs.
Gates announced that she was
donating $25,000 to build and
maintain a public library in memory
of her husband and their son, Charles.
Charles died in 1913 in a New York
railroad station.
COURTESY OF THE MUSEUM OF THE GULF COAST,
PORT ARTHUR, TEXAS.
other railhead towns had been underway a
decade, and cattle spreads stretched westward
and north to the state’s borders with New
Mexico and Oklahoma. Most of that territory
did not afford sufficient timber or rocks for
fencing, standard natural materials readily
available in the eastern United States; if they had
been available in the West, likely labor intensity
would have made them unaffordable. Barbed
wire provided a solution, but cattlemen worried
that such small strings of steel could not contain
their heavy livestock, especially a bull or a cow
determined to reach the other side of such a
fence. They were correct, of course, but Gates
knew that cattle would honor the fence if they
could see it, so he engaged cattlemen in San
Antonio in an experiment—a bet, really—to
demonstrate the effectiveness of his product. He
enclosed a few animals in a small, fenced area in
a public square. When the scheme worked,
Gates achieved such sales success that he
demanded a half interest in Ellwood’s company.
Ellwood refused, Gates organized his own
competitive firm, John W. Gates & Company,
and eventually their mutual interests led the two
to merge their businesses.
Many stories illustrate how Gates earned
his nickname, Bet-A-Million Gates. Texans
like to think the moniker came from Gates’
wagers in their state about the effectiveness
of barbed wire. This doubtless contributed
to the legend, but Gates was a determined
and lifelong gambler. Ellwood claimed that
once while riding a train in the rain they
had wagered on which drop of water would
run down their windowpane quickest. Gates
often bet on horse races and engaged in
other forms of gambling, but above all
he wagered on his own ability to walk
away from any business deal with his
position improved.
Gates formed Southern Wire Company in
1881, and with Ellwood, Henry Weil, and
Joseph Leiter, in the 1890s also entered the steel
business—the supplier of the fundamental
source of barbed and other wire. Gates kept
himself informed on general business affairs,
including Stilwell’s effort to build a railroad
from Kansas City to the Gulf of Mexico and
develop a port in southern Jefferson County.
Gates had become acquainted with Stilwell
when he sold life insurance. Gates invested
$270,000 in Stilwell’s financial empire, won a
place on the board of directors, and became
chairman of a committee to reorganize the
company’s activities. To learn more about the
company, Gates and Stilwell traveled to Port
Arthur late in 1899. While there, Gates
purchased lots from the Townsite Company and
commissioned George Nimmons to construct a
colonial mansion for himself and a Pompeian
Villa for Ellwood. After that visit, Stilwell’s role
in the company and authority in southern
Jefferson County waned in tandem with Gates’
increased influence and power until Stilwell’s
efforts to found his namesake city became only
part of Port Arthur’s history.
When the entrepreneurs returned to
Chicago, the reorganization committee, run by
Gates, forced federal courts to intervene in the
22 ✦ WATER, RAILS & OIL