Stockholder Rich

It was foggy and icy in St. Louis, Mo., one morning a month ago. Even crows were walking. Fogbound at St. Louis Airport was small, pert, impish Leo Herbert Rich, industrial consultant. With a pocketful of proxies he had flown from New York City to make a fight at a stockholders' meeting of Barnsdall Refining Corp. The meeting was in Tulsa that afternoon, and unless he got there in time, a deal was going through whereby the individual stockholders were going to be reduced to a mere 13% minority and control of the company was going to return to Barnsdall Refining's onetime parent, Barnsdall Oil Co.

By midmorning Stockholder Rich, stewing in St. Louis, telephoned his attorney in Tulsa to get the meeting postponed. Advised that the meeting would not be postponed, he spent $8 wiring the proxies on the chance that the attorney would be allowed to vote them. Then the skies cleared. Stockholder Rich hopped a plane, landed in Tulsa, taxied from the airport to the Barnsdall offices, arrived only 15 minutes after the meeting had been called, found it had been concluded eight minutes before. In five minutes Barnsdall officers had cleaned up all business in the stockholders' meeting and voted in the recapitalization plan.

Stockholder Rich was sore. He owned 17,382 shares of Barnsdall Refining which the plan reduced to 1,738.2 The stockholders whose proxies he held were in the same boat. Stockholder Rich told Barnsdall Refining's President Oscar L. Cordell and Barnsdall Oil's President E. B. Reeser what he thought of the deal. They talked back. They pointed out that SEC had told Barnsdall Oil to consider the refinery a subsidiary and absorb its losses or divorce it altogether. Divorce would have meant bankruptcy. They showed him the refinery's books and properties. Last year Barnsdall Refining lost $150,000 (1938 loss: $1,432,520), and they argued that it should make a 1940 profit under the new setup, which halves its debt. The argument went on for two days. It ended when Stockholder Rich decided he was wrong. He backed his decision by buying 500 shares of Barnsdall Oil at 13-c- . Then he hurried back to Manhattan.

At home he faced a new worry: how to explain his about-face to the stockholders who had trusted him with their proxies. Fortnight ago he rendered his apologies. Into Manhattan's Bankers Club for lunch trooped 85 Barnsdall stockholders and well-wishers. Honor guest was President Reeser. Host was Stockholder Rich. After oysters, turkey and ice cream he explained his conversion. His fellow stockholders digested, applauded, forgave.

Totting up the cost of the proxy fight, Stockholder Rich found it had set him back about $500--not including a $542 unrealized loss on the 500 shares of Barnsdall Oil common which he bought at the time of his conversion. Last week Barnsdall Oil intimated to Stockholder Rich that he was being considered for a directorship of Barnsdall Refining (now Bareco Oil Co.).

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