The Economic Boom in the 1920s was marked by rapid industrial growth and advances in technology, such as the modern assembly line, mass distribution of electricity, and radio. After an initial recession following World War I in 1919, a period of prosperity ensued. Between 1921 and 1924, the nation’s gross national product jumped 40% from $69 billion to $93 billion and wages rose by an average of 22% per person, leading to massive profits for businesses and corporations.
Move to Dallas & Partnerships
In April of 1919, John D. McCall announced that he would resign as Governor Hobby’s private secretary in order to enter into a partnership with William Milton Harris, effective May 1, 1919. Then 27 years old, John D. moved to Dallas and opened “The Law Offices of John D. McCall” in the Western Indemnity Building located at 1000 Main Street, 5 blocks away from Harris’ office. John D. frequently associated himself with Harris and Harris’ partner, William H. Graham, under the name “Harris, McCall & Graham,” but he kept a separate office and used his own letterhead. Harris had served as an Assistant Attorney General to B.F. Looney from approximately 1913 to 1917, when the number of public securities submitted to the Attorney General for approval had exponentially increased. During Looney’s administration, the Attorney General’s office consisted only of the Attorney General himself, eight assistants, and a clerk named William Pinkney Dumas. Harris thus appears to have been the first Assistant Attorney General in history to focus on the examination of municipal bonds. When Harris left the Attorney General’s office to enter into private practice, Dumas took Harris’ place in reviewing municipal bonds that were submitted to the Attorney General for approval.
At the same time, McCall also frequently associated himself with Eugene DeBogory under the name “DeBogory & McCall.” DeBogory, a 1906 graduate of The University of Texas School of Law, was a trial lawyer and World War I hero from Abilene who had previously served in the Texas House of Representatives. DeBogory resigned from the Legislature on August 6, 1918 and moved to Dallas to practice civil litigation. It was in this unorthodox manner that John D. simultaneously apprenticed under both a civil litigator and a municipal bond lawyer.
During his first year in Dallas, John D. handled only a few legal matters, but was involved in numerous business enterprises involving Hobby, DeBogory, and J.E. Blaine (his brother-in-law). Blaine brokered municipal bond offerings for several firms, including the Brown-Crummer Investment Company of Wichita, Kansas (“Brown-Crummer”), who focused on purchasing municipal bonds throughout the Southwestern United States. Together with these men, John D. established numerous banks, purchased railroads and mineral rights throughout Texas, and founded several other companies, all aimed at making a profit. Following in his father’s footsteps, John D. also became active in various chapters of the Good Roads Association throughout Texas.
By 1920, however, the vast majority of John D.’s legal work involved Brown-Crummer. During 1920 and 1921, John traveled all throughout Texas, finding municipal bond offerings for Brown-Crummer to underwrite, then serving as bond counsel for the offering. In 1920, John D. worked with Brown-Crummer in attempts to underwrite municipal securities including for the Cities of Cisco, Dalhart and Sherman, Montgomery County, and the Wichita Falls Independent School District.
During this era, bond attorneys did not represent any particular client in a municipal bond transaction. Rather, the custom was that bond counsel represented the “transaction” or the “deal” itself by “approving” the bonds and delivering a legal opinion that the bonds were issued in accordance with state and federal laws and were thus valid and binding obligations against the political subdivisions that issued them. For this reason, municipal bond lawyers were colloquially referred to as municipal bond “judges,” and for the rest of his life, John D. would be referred to as “Judge McCall,” or just “Judge.”
Also in 1920, John D. and J.E. Blaine incorporated the Southern Fire Apparatus Company, whose business was selling and financing fire-fighting equipment to municipalities, a fast-growing industry at the time. Blaine would sell and finance the fire-fighting equipment, and John D. would approve fire apparatus warrants issued by the purchasing city. In 1920, John D. approved such warrants including those issued by the Cities of Granbury, Halletsville, Seymour, and Wharton.
Municipal Securities Offerings
From the beginning, McCall was careful with his reputation. In the 1921 issuance of $40,000 Bell County, Texas General Funding Warrants, John D. wrote a lengthy letter to Brown-Crummer explaining why he was uncomfortable rendering a bond opinion that the funding warrants were valid, and turned the file over to Harris & Graham to approve instead. Soon, McCall began receiving work from other securities dealers throughout the United States, other manufacturers of municipal equipment, and from Wall Street bond attorneys, Clay, Dillon & Vandewater.
In 1921, McCall was involved in various municipal securities offerings, including offerings by the Cities of Greenville, Pearsall, and Quanah, as well as Bell County. In February of 1921, William Harris served as bond counsel on an offering of $300,000 in water revenue bonds issued by the City of Fort Worth. Between 1922 and 1924, John D. moved his law office to the Kirby Building in downtown Dallas, where Harris’ as well as Brown-Crummer’s office moved. McCall also moved his family to Highland Park around this time. In 1922, Harris became General Counsel to the First Municipal Bond & Mortgage Company, a broker of municipal bonds in Dallas, and in 1923, William Dumas also left the Attorney General’s office and entered into a similar partnership with Harris.
The Permanent University Fund Legislation for The University of Texas
In November 1922, McCall was contacted by Dr. Robert E. Vinson, President of The University of Texas, the man who 5 years prior was at the center of the impeachment of Governor Ferguson; a trial which John D. had overseen as Secretary of the Senate. Dr. Vinson requested McCall’s assistance in drafting legislation that would permit The University of Texas to pledge all presently accrued and future interest accruing on the Permanent University Fund for a period of fifteen years, including proceeds from grazing lands, to the repayment of bonds. The large bond issue would finance a wide variety of capital improvements at the campus in Austin, the medical school in Galveston, and in particular, “the removal as rapidly as possible of the long string of wooden shacks on the University campus.” John D. was assisted in part by Mr. William Henry Burges of El Paso, who rendered a legal opinion that the Board of Regents of the University had constitutional authority to impound its revenue. In the ensuing months, McCall consulted with Judge Harris as well as bond attorneys outside the State to ensure that the pledge ultimately approved by the Texas Legislature would be “the strongest obligation possible short of [being a] direct state obligation,” and acceptable to their clients who would ultimately purchase the bonds from Brown-Crummer. The legislation was ultimately adopted by the Texas Legislature (Act of February 26, 1923, 38th Leg., R.S., ch. 37, 1923 Tex. Gen. Laws 71), although the project was stalled for many years due to political controversy. In 1928, Attorney General Claude Pollard issued an opinion confirming Burges’ position that The University of Texas Board of Regents could issue bonds against the annual income of the Permanent University Fund (the Available University Fund).
Engagements with the City of Dallas
In July 1924, the City of Dallas engaged McCall to assist with the issuance of $400,000 in certificates to finance the widening of Harwood Street in downtown Dallas. Each of the 124 Street Widening Certificates was secured by the pledge of an assessment levied against a particular parcel of property abutting Harwood Street, much of which property was condemned by the City for construction of the project. This lead to a substantial amount of controversy and litigation, in which McCall assisted the City of Dallas.
In October 1925, Brown-Crummer entered into a contract with the City of Dallas to underwrite up to $55,000 in warrants to complete construction of the auditorium at Dallas Fair Park. Pursuant to the contract, the parties agreed that Judge John D. McCall would serve as “approving attorney” for the bond issue. Clay, Dillon & Vandewater represented the bond purchaser, C.A. Bryant Company. During the ensuing years, the Dallas City Attorney’s office continued to rely on McCall in public finance matters. John D. then hired a young associate, Shirley Wilmont Peters, who soon left to start his own practice.
In 1929, the first football game (between The University of Texas and Oklahoma University) was played on a small field at Dallas Fair Park during the annual State Fair of Texas. The response was so overwhelming, the City of Dallas desired to construct an enormous concrete stadium to host an annual bowl game. In March 1930, investment banker Donald O’Neil wired John D., then in New York City, asking for his advice as to how the City could finance such a project, given that the City was then experiencing a financial crisis, and thus would not likely be able to sell marketable bonds. After consulting with New York bond lawyers, Clay, Dillon & Vandewater, McCall suggested that the City convey the land for the stadium to the nonprofit association that operated the fair, who could then issue mortgage-backed revenue bonds to finance construction of the project, which ultimately became known as the Cotton Bowl Stadium.
On October 24, 1929, the stock market crashed and ushered in the Great Depression.