(2 of 4)
THE new uranium boom on the Colorado Plateau has spawned another crop of big rich, led by Vernon Pick, who sold his uranium mine to Floyd Odium's Atlas Corp. for $9,000,000 (75% of which Pick kept under capital gains), and Charles Steen, whose Utex Exploration Co. (90% owned by Steen) has an estimated $150 million worth of uranium underground. Hollywood's high-paid stars, who by tradition blow their wealth on caviar and Cadillacs, have also learned how to join the ranks of the new millionaires. Bing Crosby, for example, was able to buy 20,000 shares in Minute Maid stock for 10¢ a share in return for singing on the company's radio programs (the stock later sold for $15). Since then he has gone on to many other fields, including electronic tape recorders. Such cowboy stars as Roy Rogers, Gene Autry and Hopalong Cassidy have set up their own corporations to license some 300 manufacturers who want to use the actors' names on products. In return the stars get either an equity in the company or straight cash on royalties, which in any event are not taxable as personal income since they go into the star's company, but at the lower corporate rate.
One traditional way to make a million has been to buy an ailing company cheap and put it on its feet. The new way is to buy a prosperous company cheap. Despite the big bull market, the book value of a large number of U.S. companies is greater than what the stock is selling for.
For example, Louis E. Wolfson, who is now waging a proxy war to take over the $999 million Montgomery Ward Co., bought control of Washington's Capital Transit Co. five years ago for $2,100,000. Since then Wolfson has paid out $5,911,200 in dividends from cash in the till. As a result, the stock has soared, bringing Wolfson and his associates a whopping $4,378,320 profit on the stock alone.
Another road to riches has been found by Thomas M. Evans, 44, boss of Pittsburgh's H. K. Porter Co. He paid only 10¢ to 15¢ on the dollar when he bought H. K. Porter in 1937. Porter has since expanded into eleven divisions (wire rope, industrial rubber products, electrical equipment, etc.), as Evans bought up successful small companies, often with sizable cash reserves, then put them to work making more money. Porter stock, which was selling for less than $1 in 1944, last week was selling at $100 a share, as Tom Evans announced a 4-for-1 split. His overall profit on his Porter deals: some $20 million.
SOME OTHER NEW millionaires who have hit the magic mark:
LOS ANGELES' AHMANNSON, who started out with $588 from selling insurance and was well on his way to his $50 million fortune by the time he was 30. Ahmanson's big secret is keeping plenty of hard cash on hand to invest in profitable deals. In 1947 Ahmanson plunked down more than $100,000 for the city's Home Savings & Loan Association. Today it boasts assets of $220 million and is the world's biggest loan company. After World War II, Ahmanson bought up the 290-acre Baldwin Hills district in Los Angeles, the last big undeveloped piece of residential property in the city. He paid $5,500 an acre, two years later sold it for $18,000 an acre.