Cracking Wealth

A daring financier was Jonathan Ogden Armour, heir to the meat-packing fortune of famed, hard-boiled old Merchant Philip Danforth ("P. D.") Armour (1832-1901). Sometimes J. Ogden would rush in and buy where more conservative tycoons feared to tread. Result: The great packing concern his father and he had built up found itself at the War's end overstocked with high-priced meat for the Allies. Armour's personal $150,000,000 fortune, involved in grain as well as meat, dwindled by $1,000.000 a day for some 130 days. He died in London in 1927 insolvent, owing much money. It was the most awful financial tragedy in the personal history of onrushing Chicago.

His widow, Lolita Sheldon Armour, sold their beautiful 838-acre estate, Mellody Farm (on the "North Shore" near Lake Michigan, in Lake Forest), and almost all her private securities, but still there were creditors. Then she offered them 400 shares of Universal Oil Products Co. for which, when he was most needy, she had paid her husband $1,500,000 of her own fortune. The creditors laughed, said the stock was a liability.

Last week Mrs. Armour sold that stock, as part of a larger deal (see below), for $8,216,058. She moved back to Lake Forest to a five-acre estate about two miles east of Mellody Farm, which is being converted into a country club. She prepared to have the record of her husband's insolvency stricken off the county books, crying: "I guess this shows that Mr. Armour was justified! . . . And those bankers who called my stock a liability! Well, I can laugh now at them!"

Universal Oil Products. Only a financier as daring as Mr. Armour would have possessed 400 share's of that stock at the outset. He it was who, during a trip west in 1914, gathered together a few associates and formed the company (originally as National Hydro-Carbon Co.) to take over certain oil refining patents of Pennsylvania Inventor Jesse A. Dubbs. In 1916 Promoter Hiram J. Halle was made president. Halle's entire staff consisted of Jesse Dubbs, two assistants, and the two Dubbs sons, Carbon and C. A. No attempts were made to operate with the patents. Chief business was the perfecting of the patents and the attempt to license them to oil companies, toward which Armour laid out about $3,000,000.

"Cracking." The Dubbs patents were based upon one type of a process of refining crude oil known as "cracking the molecules." The heavy oil is pumped through a steel-pipe coil, the interior of which is kept at about 900DEG F. heat and under great pressure. Dubbs's invention: making the oil compress itself. Suddenly this heated and compressed oil passes into an insulated chamber. There it breaks down into gasoline. The latest Dubbs "cracking" unit will convert 3,000 bbl. of oil per day, making 60% or more high-test antiknock motor fuel.

Son Carbon. Technical name for the condensed oil is "hydro-carbonated vapors." Therefore Inventor Dubbs had named one of his sons "Carbon." When Son C. A. and Son Carbon worked together in Universal Oil Products, fellow-workers were confused, so Son Carbon took a middle initial, "P." They expanded it to "Petroleum." After his father's death, Carbon Petroleum Dubbs worked hard to perfect the invention. He increased the company's patent holdings to more than 1,000, issued and pending. Last week he, 49, once poor, grey now and serious-eyed, received $3,582,045 for his share of these assets.

Promoter Halle. Had it not been for bigheaded, grey-wigged, hooknosed, bespectacled little Promoter Halle, now 62, even Ogden Armour's daring would not have borne fruit. Promoter Halle rushed back & forth between his Chicago and Manhattan apartments and his farmhouse in Westchester County (all full of expensive antiques, which he collects passionately) to promote Carbon Petroleum Dubbs's inventions and to direct patent suits such as the one against Standard of Indiana, which already has cost $1,800,000, is still to come to trial. Previously he had helped Armour retrieve a failing investment, Standard Asphalt & Rubber Co., and sell it to Oilman Henry Latham Doherty. His share in the profits last week: $3,219,411.

The Deal. When Dubbs's "cracking" was perfected, President Halle began in 1922 to grant oil companies rights to use Dubbs's patent and pay him royalties. Last year some 250 scattered units "cracked" about 40.000,000 bbl. of gasoline from the residue of crude oil left when other refining processes in use had finished. Among the operating companies were Standard of California and Shell Union; the royalties they had to pay were tremendous. So a holding company for them, called United Gasoline Co., negotiated to buy Universal Oil Products for $22,249.999. Halle, Dubbs, et al and most of a modern staff of 350 go with it. Mrs. Armour and they retain some stock interest in it and in its huge dividends, so that Mr. Halle says: "$22,000,000 does not tell the whole story of what we all made of it." Last week's proceeds were as follows:

Mrs. Armour $8,216.058

Carbon Petroleum Dubbs 3,582,045

Hiram J. Halle 3,219,411

Notoma Corp 3,219.411

Lawyers--

Alexander F. Reichmann 1,402,794

Frank L. Belknap. 755,350

Other Stockholders 1,854,930

$22,249,999

To distinguished-looking, keen-eyed Mrs. Armour this good fortune meant the added satisfaction of being able to receive her old friends under more fitting circumstances than she had been able to in the modest Sheridan Road flat she has occupied (though with pride and dignity) for almost four years. To Inventor Dubbs, who has been living quietly on his Universal Oil Products salary and dividends at Wilmette, III. it meant wealth on which he may take his first vacation in 20 years and by which he may give his three children future advantages. That he will not spend it lavishly is indicated by his only hobbies: listening to his violinist wife and playing Canfield.

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