The Merchants and Planters Oil Company, a cottonseed oil mill in Houston, was incorporated on April 11, 1889, by T. W. House, W. D. Cleveland, E. A. Sewall, T. H. Scanlan, T. J. Boyles, J. S. Price, and James A. Baker, Jr., with capital stock of $125,000. Although William Marsh Rice was not listed among the original stockholders in the company, James A. Baker (Rice’s attorney) may have been representing Rice's investment in the venture. Rice, who resided at times in both New York and Houston, actively oversaw his Texas investments and as late as 1895 maintained a residence on the third floor of the original Rice Hotel on the northeast corner of Texas Avenue and Travis Street. Rice's ownership of the Merchants and Planters Oil Company dates from 1894, at the very least.
By mid-July of 1889 the Merchants and Planters Oil Mill was under construction. The site lay on the eastern edge of the city in a location that was relatively inaccessible, requiring the contractors to build a floating bridge across Buffalo Bayou to haul materials to the site. On September 14, 1889, the construction of the Merchants and Planters Oil Mill was completed, and the plant was ready to begin making oil.
The Merchants and Planters Oil Mill employed eighty men, and the mill had a crushing capacity of more than 20,000 tons of cottonseeds per year. This capacity ranked the mill third among the cottonseed oil mills in Houston at the time. The Southern Oil Mills had a capacity for crushing 45,000 tons of cottonseed annually, while the largest local mill, the National Oil Mills, had a capacity for crushing 60,000 tons of seed annually while producing three million gallons of cottonseed oil.
The products made at the Merchants and Planters Mill were cottonseed oil, oil cake, meal, and linters—the fine, silky fibers which adhere to the seeds of the cotton plant after ginning. The company also experimented with the use of cottonseed hulls to fatten cattle, and as early as 1892 it had shipped twenty-five car loads of fat stock to Chicago. Cottonseed oil was used to manufacture soap and glycerine (see COTTONSEED INDUSTRY), and after the improvements in the refining process for cottonseed oil, the mill began to manufacture a line of food-grade oils and shortening. The brand names of the Merchants and Planters Oil Company retail products were “M&P butter oil,” “Planto,” and “Polar White” lard.
In 1900 a series of dramatic events involving the Merchants and Planters Oil Company took place which have had a lasting effect on the city of Houston. On September 16, 1900, a week after the hurricane that destroyed Galveston, a fire was discovered about noon in the refinery while the employees were at lunch. The fire raged out of control and burned the whole afternoon, sending a column of black smoke that “seemed to connect with the clouds.” The Merchants and Planters Oil Mill was completely destroyed, and losses to the mill, one of the most prosperous businesses in the region, were between $350,000 and $400,000.
William Marsh Rice, the eighty-four-year-old owner of the mill, was living in New York at the time that he received the news of the fire. He immediately authorized the expenditure of up to $150,000 to rebuild the plant. This decision prompted his valet Charles F. Jones and New York attorney Albert T. Patrick to put their scheme to kill Rice into action. Their plan was to obtain the bulk of his fortune through a forged will. Rice was murdered in his hotel room on September 23, 1900. Only through the persistent efforts of Rice's Houston attorney and friend James A. Baker, Jr., was the plot revealed and the criminals brought to justice. The wealth of Rice's estate was then used to establish the William Marsh Rice Institute for the Advancement of Literature, Science, and Art (present-day Rice University), which opened in 1912 and remains as one of the most prestigious universities in the United States to this day.
After William Marsh Rice's death in 1900, Benjamin Botts Rice, the youngest son of Rice's brother Frederick A. Rice, became vice president and general manager of the Merchants and Planters Oil Company. B. B. Rice began work at the Merchants and Planters Oil Company in 1894 as the company's cashier and bookkeeper, and by 1895 he was the assistant manager. Two years later B. B. Rice became the secretary and treasurer. B. B. Rice's rise in the company, especially after 1900, represented the interest of the Rice family and, subsequently, the Rice Institute in the Merchants and Planters Oil Company. Benjamin B. Rice managed those interests through his role as the general manager, “a position he held until the company's demise in 1941.”
The plant of the Merchants and Planters Oil Company at 3800 Clinton Drive caught fire on December 2, 1940. The enterprise had survived the Great Depression, but a fire in the cottonseed storage and equipment warehouse put the company out of business.