An Excerpt from the Benedum Foundation 80th Anniversary Special Report
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Thus begins the Fifth Codicil to the Last Will and Testament of Michael Late Benedum, written two years before his death at the age of 90. At the time of his death, Benedum was considered to be one of the wealthiest men in the country. Half of his $100 million fortune went to the funding of the Claude Worthington Benedum Foundation, which he and his wife, Sarah, created in 1944 in memory of their only son, who tragically died at the young age of 20 from Spanish Flu-induced pneumonia during World War I. Since its founding 80 years ago, the Benedum Foundation has supported charitable, educational, and civic initiatives, almost exclusively in West Virginia and southwestern Pennsylvania.
In many ways, Michael L. Benedum’s life is a quintessential American story. He grew up in humble beginnings, where the virtues of patience, humility, integrity, and empathy were woven into the fabric of his being. Devoted to his family, his community, and God, he was a pioneer, a self-made entrepreneur, and an innovator. Never one to dwell on the past, he always looked to the future. His is a story of achieving success through hard work, determination, and ingenuity. It is a West Virginia story—one upon which the Claude Worthington Benedum Foundation is built.
The Making of the Man
Michael Late Benedum was born in Bridgeport, West Virginia, in 1869, four years after the end of the Civil War. “Mother always had great expectations for Mike,” said Michael Benedum’s sister Sophia, when interviewed in 1951 by Columbia Center for Oral History. “An old gypsy came through one time, and she told my mother that this son would become a great man. She never forgot it.”
Their father, Emanuel, who at one time had been mayor of Bridgeport and justice of the peace, had hoped that Mike, as he was called, would follow in his friend General Thomas “Stonewall” Jackson’s footsteps and attend West Point. But during the 1880s, the Benedums were struggling financially. They sold their general store and one of their three farms. In order to contribute financially to the family, at the age of 16, Mike, who had the equivalent of an eighth grade education, got a job working 12-hour days at a flour mill making $16 a month. Two years later, he became a manager making $35 a month at a neighboring mill. He worked there until his coat sleeve got caught in the gears of the grinding mill, mangling his arm. After recovering from this traumatic experience, he became a salesman for a milling machinery company, where he learned that salesmanship was one of his skill sets.
By the age of 21, he was on the hunt for something new—a career that would provide upward mobility. In 1890, on a hot summer day, he boarded a train to Parkersburg, West Virginia, thinking he would find a job working on the railroad. But he never made it to that bustling town on the Ohio River. His plans were altered when an older gentleman boarded the crowded train at the Gregory’s Run Station. Benedum stood up and graciously offered his seat to him. The man was John Worthington, the general superintendent of the South Penn Oil Company, a division of John D. Rockefeller’s Standard Oil Company. Worthington was so impressed by this bright-eyed young man and their ensuing conversations, he said, “How would you like to learn something about my business?”
“What is it?” asked young Michael Benedum.
“The oil business,” replied Worthington.
“What is the future in it? If you think there is one, I’ll get off with you.”
Worthington smiled and said, “Oh, yes, there’s a future.”
Benedum got off the train with Worthington at the West Union station and became an employee of South Penn Oil Company, where he quickly excelled as a landman, negotiating land leases for future oil drilling. He was a natural salesman. His success was often a result of his non-threatening, kind, and personable approach. “Before you can have a friend, you must be a friend,” he would say.
Benedum worked his way up at the company and on the side, as permitted, he began investing in lease royalties. In 1896, he made two decisions that would change the trajectory of his life. He left South Penn Oil and struck out on his own, hitting his first gusher in Pleasants County, and he married the niece of Stonewall Jackson, Sarah Nancy Lantz of Blacksville, West Virginia. A couple of years later, their son, Claude Worthington, was born. During this time, Benedum met another person who would play an important role in his future—Joseph Trees, an engineer who was in need of some capital for drilling a well.
“I can see Joe Trees yet,” recalled Benedum when interviewed on June 15, 1951, by the Columbia Center for Oral History. “He was a fine-looking fellow. He was 6 feet 3, built from the ground, all muscle and bones, and red-headed, you know. He carried himself as straight as an arrow. He had a commanding look about him.”
Trees, who was a beloved football player from the University of Pittsburgh, had a proposition for Benedum. He had met a landowner who was interested in selling half of his one-eighth interest in a piece of promising property for $2,000 cash. Trees only had $45. Benedum advanced Trees $1,955 in exchange for three-quarters of the royalty. “It started Trees and me,” said Benedum, who by the age of 27 was already a millionaire. Their unique friendship and business arrangement would span the rest of their lives.
On September 17, 1900, Michael Benedum and Joseph Trees formed the Benedum–Trees Oil Company and, a decade later, they moved their offices from Wheeling, West Virginia, to Pittsburgh, where their oil and gas interests flourished.
Margaret E. Davis, who became a stenographer for Michael Benedum in 1919 and, shortly later, his executive secretary, recalled the uniqueness of Trees and Benedum’s business relationship when she was interviewed on November 6, 1951, by the Columbia Center for Oral History. “It was not a partnership. Each individual was a free agent, but they always asked the other to participate in anything they undertook, and they had the option to decline,” she said.
The two tall and distinguished men stood out in a room. “In action they functioned with the precision of fine time,” Davis said. “Together they accepted the challenge of their generation and carried it to undreamed heights; together they faced disappointment and defeat to rise stronger than before; together they were planning new ventures when death separated them. Two men, two lives, two fortunes, one name—Benedum–Trees.”
By the time they moved their headquarters from Wheeling, West Virginia, to Pittsburgh, Pennsylvania, Benedum and Trees had opened up oil fields around the country and had made, lost, and remade millions. When the duo reached their 50s, they were multimillionaires, and according to Margaret Davis they were at a place of reflection about whether they should retire and enjoy the fruits of their labors. “The question to be decided was whether to retire and become country gentlemen or maintain their place among the independent oil operators,” said Davis. “Mr. Trees toyed with the idea of becoming a country gentleman, but Mr. Benedum knew that his niche in the world was in the oil industry.”
It is widely believed that Benedum drilled more successful wells in more places than anyone else in the world. Because of his uncanny abilities, he became known as “The Great Wildcatter.” In addition to discovering oil in the United States, he developed fields around the world, often traveling with his wife, who was said to have had a similar adventurous spirit and was his most trusted confidant.
Benedum also had his fair share of failures. But he never dwelled on them. He had a high tolerance for risk, and he always persevered. He was a tenacious optimist. According to his secretary, who, after his wife, arguably knew Benedum and his business ventures better than anyone, “Each new day found Mr. Benedum at his desk bubbling over with enthusiasm for a new adventure in the oil business. The thrill of the drill has always challenged his pioneer spirit; it is like the call of the wild.”
By all accounts, Benedum’s personality radiated enthusiasm, goodwill, and friendliness. “His happy countenance invites your confidence and his love of life makes his spirit sparkle with human kindness and casts a rosy glow all about him,” explained Davis. “Mr. Benedum is kindness personified. He always has been. He is just as kind to the office boy as he is to everyone else.”
Benedum often credited his upbringing for his lack of airs. He told the Pittsburgh Sun-Telegraph in 1950, “When I left home at 21, I had never earned more than $50 a month. When I went back home at 27, I was feeling pretty proud of myself because I’d made a million. I guess it showed, too. My father was a small man, but he reached up and put his hands on my shoulders and said, ‘Get down on earth.’ Even today I can still feel my father’s hands on my shoulders, and hear him saying that.”
What first impressed Davis about Benedum was “his courage, his indomitable will, his stick-to-itiveness, and his dogged determination that things had to be done.” She said, “He had a lot of push, he never let the grass grow under his feet, and he never let you put off until tomorrow the things that should be done today. He always had a way that could figure out how to do things; he wasn’t being told by attorneys, production men, or anybody else in the field that the thing could not be done. Mr. Benedum has always said, ‘There’s a way to do things. We’ll find the way.’ And we always have found the way.”
His natural ability to connect deeply with people and his innate sense of fairness served Benedum well. Around 1908, he ran into difficulty getting the rail cars to transport his oil to market because the director of Standard Oil was also the director of the railroad. Benedum was not a fan of monopolies and believed in level playing fields. He went to one of his congressmen to set up a meeting with President Theodore Roosevelt. “At the time, we didn’t have laws that kept the fellows from going around and talking together and blocking an energetic fellow who was trying to come along and make an honest living—they wanted it all,” said Benedum. But he was not to be deterred.
The wildcatter, who would typically be found in a three-piece suit, recounted his important meeting with President Theodore Roosevelt when he was interviewed by the Columbia Center for Oral History in 1951. “I knew his type. I didn’t dress up at all. I went in there with my high-topped boots on and my flannel shirt,” he said. “I could see the minute I went to see old Teddy, that was what he liked. I told him my story—the whole story about my wells, the trouble I’d had there, and about them cutting the price of the oil on me and all that. The old son-of-a-gun began to swear. ‘I’ve got it now,’ he said. He wrote a little note with a pencil. ‘You take this to that fellow in Kansas City.’”
Benedum did as the president instructed, and his shipments resumed.
As the number of oil fields Benedum managed grew, he decided to consolidate some of the companies and form the Transcontinental Oil Company. “This had long been a dream of his,” recalled Davis. “The Transcontinental Oil Company was chartered on June 28, 1919, and the stock was listed on the New York Stock Exchange. Shares climbed to a high of $62.50, and then three years later, tumbled to a low of $1.50.”
In the early 1920s Transcontinental was floundering. “The only time I ever saw Mr. Benedum really down was the day Transcontinental was selling for $1.50 a share. He really looked gloomy that day. But as a rule he is enthusiastic. He comes in every morning just bubbling over, just like he was bouncing into a new day. I think that has been his salvation. He always has something new. If he hits a dry hole, he forgets it, and it doesn’t worry him. He tries and does the best he can and then forgets about it. His innate strength of character made it possible for him to take disappointment gracefully.”
When Transcontinental was in dire straits, Benedum dug deep into his own pocket, putting up $29 million of his own money to keep the company afloat. He was falsely accused by the federal government of selling his stock at a high price and reaping large profits for himself at the expense of the stockholder. But this wasn’t the case. He had reinvested his money back into the company. These false accusations would take him to the U.S. Supreme Court—a case he would win. “I think this is one of the most important chapters in Mr. Benedum’s life,” Davis said. “He could have written the Transcontinental Oil Company off as a failure and forgotten about the loss he would have sustained, but instead, he accepted the moral responsibility he had to the stockholders as a liability of his own. Mr. Benedum has never shirked his responsibility; in fact, one of his most outstanding characteristics is his innate honesty. Had they gone to the wall that day, we would have gone with it and lost everything we had. But there is never a cloud so black that hasn’t a silver lining.”
That silver lining proved to be in Texas. Benedum took a risk and drilled on the Yates Ranch, ignoring the naysayers. That decision led to the discovery of the Permian Basin, which became one of the richest oil fields in the United States. It has made the University of Texas one of the wealthiest public universities and even today is producing an average of 4 million barrels of crude oil per day. Having turned potential catastrophic failure into one of his most celebrated successes, Benedum sold Transcontinental in 1930 to Ohio Oil for $60 million, the equivalent of $1.1 billion today.
“Mr. Benedum’s theory is that a very fine line separates success from failure and that the only way to achieve one’s goal is to put plans in action and then to follow them through to the end,” said Davis.
Being an oil man, Benedum took high-stake risks every day, yet he never gambled. “There is a vast difference between the chances I take on wildcats and those I warn you against,” said Benedum in the San Angelo Standard-Times in 1948. “If you win in the stock market or on the gaming table, somebody else loses. But if I win, nobody loses: everyone gains because new wealth is discovered and made available to all.”
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