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The prime example of this is Murchison's Southern Union Gas Co., the foundation stone of his empire. Started as a gas producer and distributor, Southern Union's earnings were strictly limited by state utility commissions. Murchison "spun off" its gas-and-oil holdings into separate corporations, including Delhi Oil, Barker Dome, Aztec Oil & Gas, Arkansas Western Gas and Texas Southeastern Gas, whose earnings as producers were not regulated. Delhi Oil, the biggest of the children, has since wildcatted its way into 215 producing oil and gas wells in six states and oil reserves of more than 11 million bbls. It started hunting oil and gas in Canada through a subsidiary, but the subsidiary was spun off (with Murchison retaining control) when the Trans-Canada pipeline deal shaped up. The pipeline's future seemed so solid to Murchison that he thought it had no place in wildcatting Delhi. Said he: "Canadian Delhi is so conservative we kicked it out of Delhi." Such corporate spin-offs have well profited Murchison and his stockholders. A man who paid $1,000 for 1,000 shares of Southern Union in 1943, and exercised all rights and options since then, would have spent a total of $31,688 (easily borrowed against his holdings). By now, his dividends would have amounted to more than $10,000, and his stock (including the offspring companies) would be worth close to $150,000. (Murchison himself sold out of Southern Union in 1950 with a $5,500,000 net profit.)
Daring & Reason. Wheeler-Dealer Murchison deals in such big figures that, like many other oilmen, he automatically drops off the zeros when talking about his business. Recently, when asked how he made out on a certain deal, he smiled and held up seven fingers, meaning that he had made $7,000,000.
Murchison, in all likelihood, would have been a success—and probably a millionaire—no matter where he lived. The proximity to Texas oil, plus the depletion allowance, gave him a chance to pyramid his millions. He has a trader's shrewd knowledge of human beings and a gambler's quiet ability to calculate the odds. He also has a banker's cold logic and an optimist's faith in U.S. business enterprise. A little bit of all these qualities is apparent in most of his deals.
He bought 49% of the stock of Manhattan's Henry Holt publishing house for $760,000 between 1945 and 1951, in the correct belief that the World War II baby crop and the G.I. Bill of Rights meant a big boom in textbooks. With another eye on the moppet market, he bought 4% of Lionel Corp. for $630,000. Field & Stream Magazine ($1,300,000) and the James Heddon's fishing-tackle company in Michigan ($2,400,000) were naturals for Murchison, and not merely because of his abiding interest in rod and reel. Among other things, he was figuring on a basic change in the U.S. economy: "Shorter hours mean more fishing." Following the same line of thought, he leased Colorado's Royal Gorge Bridge, a tourist attraction complete with an amusement ride for children, bought a string of outdoor movie theaters, and a resort hotel in La Jolla, Calif. With Robert R. Young in 1951, he bought control of Seattle's American Mail Line, because government subsidies made it look good. Says he: "I'm always a little bit bullish." "