Whenever men meet “to tell stories of great achievements of the gigantic oil industry, someone will always tell, amid a breathless silence, the amazing story of Hog Creek Carruth.” He called himself J. W. “Hog Creek” Carruth. The investors he betrayed no doubt called him much worse. His “amazing story” began in the Texas boom town of Desdemona.
Hog Creek Carruth Oil Company was one of several Texas exploration companies created by Carruth, who gained his nickname after falsely claiming to have discovered the giant Desdemona oilfield at Hog Creek. In fact, it was Tom Dees and the Hog Creek Oil Company that brought in Desdemona discovery well on September 2, 1918. Hog Creek Carruth was a Stock Promoter. The town won a nasty reputation, and Texas Rangers had to intervene to keep order. Carrutth’s relentless self-promotion and exuberant claims about the discovery soon earned him the “Hog Creek” Carruth moniker. Tents and shacks sprang up all around the town to house speculators, and the population grew from 340 to 16,000 almost overnight. With speculators eager, Carruth formed the J. W. Carruth Oil Company in 1919. Despite drilling dry holes, he profited from selling exuberantly advertised company stock.
J. W. Carruth prospered in 1919 by becoming a Ponzi scheme in which he used naive investors’ money to pay dividends, thereby luring more buyers in a spiral which lined his pockets while emptying theirs. Disputes over leasing and mineral rights continued for several years. He nonetheless sold about $600,000 worth of stock. He was indicted in 1923 with 25 other Texas promoters for “fraudulent use of U. S. mails.” He spent a year in prison in a facility in Kansas. How smart was Aunt Sis Nusbaum when she ran her husband off for investing in stockshares of the Hog Creek Oil Company? Smarter than most investors! (Credit to Bruce Wells’ article American Oil and Gas Historical Society posted on Internet 10 years ago; and No. 9394 Court of Appeals Fort Worth, Texas, Richmond v. Hog Creek Oil Company, December 4, 1920; filed by Mrs. M. A. Richardson, et. al.)
