Corporations: Double or Nothing

The long-smoldering feud between Texas’ Murchison brothers and the management of one of the nation’s biggest holding companies flamed last week. To the 23,000 stockholders of Alleghany Corp., which controls both the New York Central Railroad and Investors Diversified Services (the biggest U.S. mutual fund group), went 17-page proxy solicitations from Clint Murchison Jr. and his brother John, in an open bid for control of Alleghany. The Murchisons charged that Alleghany Chairman Allan P. Kirby has let Alleghany’s investment policy stagnate (except for an unsuccessful stock-buying race with the Chesapeake & Ohio Railway to gain control of the Baltimore & Ohio). They alleged further that Kirby has shown no leadership, and surrounded himself with men inexperienced in everything but saying yes to Kirby.

Kirby was braced. The brothers have been out after him since last fall, when Kirby’s settlement of a stockholders’ court suit forced them to give up control of I.D.S. and return it to Alleghany. Kirby has already sent out his own proxy solicitations, charging that the Murchi sons used I.D.S. as a “happy hunting ground for credit,” and that they are now seeking “a free hand with Alleghany’s millions.”

Though their famous father, Texas Oil Millionaire Clint Murchison Sr., has been ailing in Texas, many thought that they saw the old man’s skillful hand behind his sons’ maneuverings for control of Al leghany. The Murchisons and their back ers have already bought 868,667 shares of Alleghany, plus preferred shares and warrants that could bring their total to 2,168,811 shares, thus giving them a slight edge over the Kirby camp, which at last count controlled a potential 1,944,687 shares. With a Texas flair for gambling, the Murchisons are clearly going for double or nothing. They will know if their gamble paid off when the proxy ballots are counted at the annual company meeting May 1.