The Money Cure

Hadacol, in the words of its concocter, Dudley J. LeBlanc, is a dark brown patent medicine that tastes bad. Until the Federal Trade Commission told him to tone down, Medicine Man LeBlanc spent millions of dollars in advertising to imply that his mixture of B vitamins, minerals and honey, all bathed in alcohol, would cure almost everything. He also has a corps of gagsters turning out jingles and jokes insinuating that Hadacol is an aphrodisiac. In dry southern states, Hadacol has another virtue; its 24-proof alcoholic content makes it just the thing for binges. Medicine Man LeBlanc, who prefers straight bourbon himself, can hardly understand this last fact because, he says, Hadacol "tastes so bad I don't see how anybody could drink enough to get high on it."

All these wondrous virtues, spread in newspapers and on billboards and blared from radios and from a 17-car railroad caravan of patent medicine men and entertainers (e.g., Chico Marx, Mickey Rooney, Carmen Miranda) have made Hadacol the world's biggest selling "tonic." In four years--and on an investment of only $2,500--LeBlanc's sales have jumped from $75,000 to an estimated $25 million this year.

Last week, as Hadacol's super-colossal show marched through the Carolinas (with Jack Dempsey biffing Stooge Candy Candido as part of the act), Dudley LeBlanc announced that he had sold Hadacol lock, stock & bottle for $8.2 million. The buyer was a tax-free medical-research foundation in Manhattan that few doctors had ever heard of. Its name: the Tobey Maltz Memorial Foundation. Backed by four unidentified eastern businessmen, the foundation paid $1,100,000 in cash for a down payment, will pay the balance in ten to 15 years. The foundation is privately financed by Dr. Maxwell Maltz, 52, a gregarious plastic surgeon whose avocations have included play writing (The Unseen Scar) and an interest in black & white TV converters. Maltz says he set up the foundation to do medical research six years ago in memory of his mother who died of cancer.

The Maltz Foundation gets all of LeBlanc's 85,470 shares of capital stock, will license the four backers (formed into a new LeBlanc Corp.) to sell Hadacol. It will get a big slice of the company's profits, which, Maltz says, will go for medical research. LeBlanc was willing to sell for the tax advantages. Instead of paying high income taxes on company profits, he will pay only a 25% long-term capital-gains tax on the sale profit, and "make as much on this deal as I could have with Hadacol in 40 years." LeBlanc had another reason for selling. A Louisiana state senator for the last three years, he wants time to run against Earl Long for governor of Louisiana, although he will also stay on as sales head of Hadacol for 15 years, at a salary of $100,000 a year.

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