Business & Finance: Oil Gets Together

The Government made a beau geste to business when it did not appeal the decision of the Circuit Court of Appeals in St. Louis permitting Standard Oil Co. of New York and Vacuum Oil Co. of New York to merge (TIME, June 15). Straightway every oil merger rumor of the last three years came to life. Last week a gusher of oil news spouted on the front page of every newspaper. Of greatest magnitude was the announcement that

Walter Clark Teagle, president of Standard Oil Co. of New Jersey, and Kenneth Raleigh Kingsbury, president of Standard Oil of California, had kept a rendezvous at Lake Tahoe, Calif., each with his corps of clerks and lawyers and were "resuming discussions tentatively initiated more than two years ago." Should they come to terms, a $2,381,000,000 combination might result, largest oil unit in the world.

Full-blown and final, but later reduced again to uncertainty, was the week's next biggest oil story: that Harry Ford Sinclair had finally succeeded in putting together his company with Tide Water, the Prairie interests and Rio Grande into a billion-dollar structure.

Skelly Oil Co. furnished a third story by having its name mentioned in connection first with Texas Corp., then with the Sinclair group.

Men have attributed many ambitions to Harry Ford Sinclair: to clear his name of the Teapot Dome charges; to own another horse like his famed Zev; but mostly to build a billion-dollar oil company, an ambition worthy of his luck and judgment. Last week's report that Sinclair had succeeded, pictured a merger of the following:

Sinclair Consolidated Oil Corp., assets $404,000,000.

Tide Water Associated Oil Co., assets $248,000,000.

Prairie Oil & Gas Co., assets $195,000,000.

Prairie Pipe Line Co., assets $178,000,000.

Rio Grande Oil Co., assets $53,000,000.

Combined assets: $1,078,000,000.

The reported plan called for the formation of a new company to be known as Commonwealth Petroleum Corp. with 25,000,000 shares of common stock outstanding, and no preferred. Common stockholders of Sinclair and Prairie Oil & Gas would receive one share of the new company's stock for each share now held. Tide Water stockholders were to get eight new shares for ten old, Prairie Pipe Line ten for 14. The terms for Rio Grande were not estimated but at current prices of the "scratch" securities and Rio common it looked as though holders of the latter would be offered ten Commonwealth shares for 25 Rio Grande. Sinclair preferred, of which there were 141,290 shares outstanding, was to be retired at the call price, $110. What disposition would be made of Tide Water preferred was not suggested.