Unclogged Arteries

When aging Harry F. Sinclair stepped out of the presidency of the Sinclair Oil Corp. in early 1949, his company was held in small esteem on Wall Street. Over it still hovered some of the onus of Harry Sinclair's jailing for contempt in the Teapot Dome oil scandal of the '20s. And in its later years the company seemed to have developed hardening of the corporate arteries. It lagged behind in expanding its production and oil reserves.

Percy C. Spencer, an ex-Wyoming ranch hand turned lawyer who stepped into Harry Sinclair's shoes, soon had the company prancing like a yearling bronco. Spencer had been the company's general counsel since 1943; he was no expert on production, but he knew how to organize it. He launched Sinclair on a five-year $250 million expansion, picked up some 2,000,000 acres of unproved oil leases, started a big drilling program. To make its 13,500-mile pipeline network even bigger, he put the company to work this year on a new 700-mile, 22-in. petroleum line between Oklahoma and East Chicago.

Spencer's rejuvenation paid off. Sinclair's crude oil production has risen 25%. Earnings last year climbed from $54 million in 1949 to $70.1 million, and are still climbing. In 1951's first quarter, they reached $18.3 million, $5,000,000 more than in the same quarter last year. Sinclair stock, which had dropped to 18 7/8 the year Spencer took over, has shot up to 39, the highest point since 1929.

At 57, "Spence" Spencer still has his eye on the future. Last week when he gave a luncheon to announce his latest stake in it, some of Wall Street's most potent bankers attended: Chase National's Winthrop Aldrich, J. P. Morgan's Henry C. Alexander, National City's Howard C. Shepherd. So did a New Dealer, Senator Joseph C. O'Mahoney, a friend of Spencer's Wyoming days. Spencer's news made both bankers and New Dealer applaud.

Sinclair, announced Spencer, will open the facilities of its huge Harvey, Ill. research laboratory to any U.S. inventor with a promising idea in the field of petroleum. The company will test such ideas free of charge, and if the results justify it, provide the technicians and money for research to push them to completion. In return, the inventor will be required to let Sinclair use the process royalty-free, but since the inventor holds the patent, he may also sell it to anybody else. The news was hardly out before scores of ideas began flooding Sinclair's Manhattan offices. An inventor in Plymouth, Wis. phoned in his idea to use asphalt in making metal molds. Another inventor in Chicago phoned in his scheme for a new use of oil in the ceramics industry. Some sounded promising, others did not. All will get careful attention. Said Spencer: "You can't afford to ignore the crackpot. His work may turn out to be the gold pot."

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