Business: Consolidated

Last week, Prairie Oil & Gas Co., Prairie Pipe Line Co. and Sinclair Consolidated Oil Corp. united to form a half-billion dollar oil company. There was little news in the mere event, for the merger had been brewing for almost two years (TIME, Jan. 27, 1930). Nor was there much news in the company’s size, for so gigantic is the oil business and so gigantic the constituent parts that it became only sixth biggest (see table). Nor was there anything but corporate dullness in the name which the new corporation took— Consolidated Oil Corp.

Nevertheless the event made many people happy. It cheered business. The more the oil industry can be consolidated the more hope there is of combatting its major problem—overproduction.

It cheered Harry Ford Sinclair. For the merger was the realization of his ambition to dominate a countrywide, integrated oil company. Ever since he began buying up and reselling oil lands many years ago with never-varying success he has looked forward to a unit like Consolidated. Harry Sinclair is of that second generation of oil pioneers who found the fat plums unknown to the Standard Oil Trust when they began to study synclines and anticlines. And his legion of friends were happy, for he had vindicated his reputation as one of the best-liked men in oil.

If Harry Sinclair, who will be Consolidated’s chairman, was the power back of the merger, the man who stepped into the spotlight last week was Herbert Richard Gallagher, who will be president. Since 1910 Mr. Gallagher has been selling oil on the Pacific Coast for Shell Union Oil Corp. His own talent was selling, and for that, particular reason Consolidated chose him. Nowadays it is no feat to produce oil, re fine it and transport it. Of Consolidated’s three component parts, two have made little effort to retail oil or gasoline. Prairie Oil & Gas owns almost 2,000,000 acres of rich producing lands in the mid-continent fields but has only a small retailing subsidiary. Prairie Pipe has about 13,000 mi. of trunk and gathering lines that honeycomb the country from the Gulf to the Great Lakes, but its business is to carry oil, not sell it. Thus, on Sinclair’s retail outlets depends Consolidated success and, as a great oil salesman, that is the new president’s problem.

Herbert Gallagher’s father was president of Canada Business College and Herbert’s first job was a lowly clerkship in the Bank of Hamilton when he was 17. After four years of that he left Canada, went to work as a cattle rancher for Butte Valley Land Co. in San Francisco which was partly owned by his. uncle James Horsburg Jr., then assistant general passenger agent of the Union Pacific. Several years later when the U. P. was anxious to please Sir Henri W. A. Deterding and a group of Royal Dutch officials, his uncle selected Herbert Gallagher to show them around. This he did so well that when Royal Dutch decided to open a California agency under J. C. Van Eck (who then spoke little English) he was made the Dutchman’s assistant. In San Francisco today he is a popular socialite, president of the San Francisco Golf Club. He is still kittenish with the Press but his famed smile has been known to sell many a barrel.