INVESTMENT: A Lot of Fertilizer

Of all the big deals between U.S. businessmen, few have proved more complex or mysterious than the $20 million New York Central stock deal that Texas Millionaires Clint Murchison and Sid Richardson made with Robert R. Young last year. With the help of a $7,500,000 loan from Young’s Alleghany Corp., the two Texas wheeler-dealers bought 800,000 shares of Central stock, then voted them to help Young win his proxy fight to take over the railroad (TIME, June 21, 1954). Last week, in a New York Supreme Court hearing brought by disgruntled Alleghany .stockholders on a charge that the company’s funds had been misused, some new and conflicting details came to light on the drama and its players.

Appearing in baggy tweeds and unshined shoes, Clint Murchison told for the first time how he had happened to buy the Central stock. It was, he insisted, a strictly run-of-the-mill investment, and not a slick maneuver to help Young win the Central. In fact, said Murchison, he had even done his best to see if Harold S. Vanderbilt, then a Central director bitterly opposed to Young, had first wanted to buy the 800,000 shares owned by the Chesapeake & Ohio Railroad. Drawled

Murchison: “There was a rumor in Texas Vanderbilt wanted to buy these shares. I got [my lawyer] to go to Vanderbilt. He said the rumor was fiction.” With that, Murchison went ahead with the deal. He asked Partner Sid Richardson, one of the world’s richest oilmen, to come in with him because $20 million “occurred to me as a pretty big bite to take alone.” Well, how much was Mr. Murchison worth? asked court-appointed Referee Robert J. Fitzsimmons. Answered Murchison : “About five, six or seven million.” As it turned out, though, he did not need any money, since the Alleghany loan plus two other loans, totaling $12.5 million, allowed him and .Richardson to buy the stock without putting up a penny of their own.

When he heard of Murchison’s testimony, ex-Central Director Vanderbilt told a diametrically opposite story. He admitted that he had indeed seen Murchison’s lawyer, but flatly denied that he had said he had no interest in buying the Central stock. Snapped Vanderbilt: “I not only never made any such statement, but I was interested in buying said shares when I saw him. I shortly afterwards made an offer to purchase all of said stock for $20 million.”

There the matter rested. But before he went back to Texas, Wheeler-Dealer Murchison got back on the stand and cleared up one point. When Referee Fitzsimmons tartly observed that a $20 million deal “was a pretty big bite for a man worth only one-third that amount,” Murchison amended his original estimate of his personal wealth. He was really worth, he guessed, “about $30 million.” Added Murchison: “I consider money to be the same as manure. If you pick it up and put it out in the fields and till it, you get good returns . . .” Cracked Referee Fitzsimmons, dryly: “$20 million is a lot of fertilizer.”