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With Commercial Solvents and the U.S. Government as his partners, Estes envisioned a scandalous cycle: he would keep using the proceeds from ammonia sales to buy or build grain-storage facilities; the federal grain-storage fees would keep flowing to Commercial Solvents; Commercial Solvents would keep shipping him anhydrous ammonia. The more ammonia he sold, the more warehouses he could control, and the more grain he stored, the more ammonia he could get, and so on in an unending spiral.
One of the flaws in this perpetual-motion machine was that other companies also manufactured anhydrous ammonia, and a lot of distributors were selling the stuff to West Texas farmers in competition with Estes. But Estes had an answer to that difficulty: smash the competitors. Estes used a characteristic gesture to illustrate a point in his business philosophy: he would hold out his left hand, doubled into a loose fist, and slap it sharply with the palm of his right hand. "If you shatter an industry," he would say, "you can pick up all the pieces for yourself."
The wholesale price of anhydrous ammonia was $90 a ton, and a local distributor had to charge more than $100 a ton to break even. So it stirred up some commotion when Estes, shortly after setting up his deal with Commercial Solvents, started selling the stuff for $60 a ton. In some intense price battles, he slashed his price down to $40 and even $20. One after another, he drove rival dealers out of business, sometimes picking up the pieces for himself by buying up the failed or failing firm's assets cheap. In a few years, Estes became the biggest anhydrous ammonia dealer in West Texas, and one of the biggest in the U.S. He lost millions of dollars in the process. But for Estes the losses seemed only a temporary inconvenience on the way to a grand and profitable future.
If Estes failed to make money out of his ammonia dealings, so did Commercial Solvents. In 1959-61 some $7,000,000 in grain-storage fees flowed from the U.S. Government to Commercial Solvents by way of Estes' bank accounts, but anhydrous ammonia flowed to Estes even faster. By the time of his downfall, Estes was into Commercial Solvents for something like $5,700,000. Despite the unprofitability of the joint venture. Texas Attorney General Wilson last week brought an antitrust suit against Estes and Commercial Solvents on the ground that they had conspired to monopolize the West Texas market for anhydrous ammonia. "Commercial Solvents is named in the suit," said Wilson, "because in our judgment they made possible the whole thing and knew what they were doing."
Imaginary Tanks. To raise capital to expand his grain-storage domain even faster, Estes dreamed up a scheme for raising money on