Good Hunting

Pheasant-shooting at John Daniel Hertz's 1,000-acre farm near Gary, Ill. last weekend were Host Hertz (Lehman Bros.), Guest Floyd Odium (Atlas Corp.), Guest Leo Spitz (new president of Radio-Keith-Orpheum), many another happy huntsman. Good cause had they to be pleased with themselves, for last week Lehman Bros, and Atlas concluded three potent deals, made news reminiscent of 1929's boom days. C, By purchasing 81,204 shares of Transcontinental & Western Air, Inc. from General Motors, they secured operating control of the "Lindbergh Line." P:By naming Leo Spitz, Chicago lawyer, to succeed Merlin Aylesworth as president of Radio-Keith-Orpheum, they took their first management step in the debt-ridden cinema company whose control they had just bought from Radio Corp. of America (TIME, Oct. 21).

P:By disposing of a large portion of Atlas Corp.'s 6,500,000 shares of Blue Ridge Corp., they profited by selling in Recovery what they had purchased in Depression. Transcontinental & Western Air squeezed $77,000 profit out of the first six months of 1935. It has the shortest coast-to-coast air route and the technical advice of Col. Charles A. Lindbergh, but its proudest possession is a fleet of 29 new, fast (220 m.p.h.) twin-motored planes built by Donald Wills Douglas. Transcontinental was the first air line to use the Douglas plane and in August 1934 inaugurated the first overnight coast-to-coast passenger service. When the Air Mail Act of 1934 prohibited airmail carriers from continuing to be affiliated with each other or with plane-equipment manufacturers there was a general unscrambling of aviation holding companies. TWA stock was, as Lehman Partner Hertz said, "scattered from hell to breakfast." Largest holder became General Motors, with 81,204 shares inherited from North American Aviation. Purchase of this block gave Lehman Bros, and Atlas a 13% interest in TWA. In the absence of other large holders, this interest amounted to control. Purchase price was not specified, but at last week's market the shares were worth about $1,200,000. Radio-Keith-Orpheum went into receivership in January 1933, is now trying to reorganize under Section 776. Last month, Atlas and Lehman bought half of Radio Corp.'s RKO interest (for $5,000,000 cash) and took an option on the rest. Last week David Sarnoff, RKO chairman, resigned; Mr. Aylesworth, RKO president, moved over to the chairmanship, and new President Leo Spitz prepared to change his home from Chicago to Manhattan and his job from the law to the cinema. No cinema producer is dark, dapper, large-eyed Leo Spitz, but he has been connected with cinema theatre chains for 15 years. Born in 1888 on Chicago's Clark Street, he worked as delivery boy in his father's meat & grocery store, handled a Sunday newspaper route on what would otherwise have been his day off. In 1909 he graduated, cum laude, from the University of Chicago with degrees of Doctor of Philosophy and Doctor of Jurisprudence. He took his bar examination just before his 21st birthday but became 21, and therefore eligible to practice, by the time the papers were corrected. In 1912 he rented office space with Henry Horner, now Illinois' Governor. First acquaintance with the theatre came when he handled the legal affairs of Lubliner & Trinz, small Chicago theatre company. In 1925 Lubliner & Trinz was taken over by Balaban & Katz, a much larger operator in the same field, and in 1926 Balaban & Katz was taken over by Paramount. By 1930 Mr. Spitz was director and vice president of Paramount. Mr. Spitz is a bachelor, lives at the Congress Hotel, looks younger than his years. He was nominated for his present job by his friend and Paramount associate, John D. Hertz. Blue Ridge Corp. is an investment trust organized in the summer of 1929 by Waddill Catchings (then of Goldman, Sachs) and Harrison Williams (North American Co.). A typical blossom on the New Economics tree, Blue Ridge was put together just in time to acquire a great many stocks at the top of the 1929 market. Its assets dwindled at the rate of $25,000,000 a year and in 1933 Mr. Odium added it to his collection of Prosperity's withered flowers. In addition to a general line of stocks & bonds, Blue Ridge also had some 1,800,000 shares of Central States Electric, which in turn had an interest in Mr. Williams' North American Co. As Mr. Williams was one of the members of last week's purchasing group, he will presumably get back his Central States shares and Mr. Odium will be pretty well out of North American. But chief reason for sale of Blue Ridge was the large profit returned on the investment. Lehman Bros. The banking house of Lehman Bros, dates from 1850, when Brothers Mayer and Emanuel Lehman, emigrating from Germany, started a cotton commission business in Montgomery, Ala. The Civil War ruined the cotton business; in 1867 the brothers moved to New York. They helped form the Cotton Exchange, floated bonds for traction and ferry companies, backed early issues of Sears, Roebuck and Woolworth preferred. Mayer died in 1897, Emanuel in 1912. The present partnership includes four Lehmans, five non-Lehmans. Philip Lehman, 74, son of Emanuel, is patriarch and senior partner, presides at meetings in the partners' room on the third floor of Lehman Bros, eleven-story building at No. 1 William St. Senior Partner Lehman has a collection of Madonnas which is probably worth even more than his interest in the firm.

Arthur Lehman, No. 2 partner, son of Mayer (and brother of New York's Governor Herbert Lehman) is head of The Lehman Corp., an investment trust which the brothers founded in September 1929. He collects tapestries, heads Jewish charity drives, gave Lehman Hall (administration building) to Harvard in 1924, married Adele Lewisohn. Allan Lehman, grandson of Mayer and son of the late Sigmund Lehman, likes tennis, squash, fishing. From the Restigouche River in New Brunswick he sends home salmon to his friends, his acquaintances, his barber. Robert Lehman, grandson of Emanuel and son of Philip, married Ruth Owen Meeker, daughter of Ruth Bryan Owen, collects Italian primitives, plays occasionally on the Greentree and Sands Point polo teams with Tommy Hitchcock. John Milton Hancock, long-distance runner at the University of North Dakota, Wartime Naval Commander and supply-purchaser, hunts mountain sheep in British Columbia. He specializes in the affairs of Lehman Bros, clients such as Sears. Loose-Wiles, Jewel Tea, other national merchandise distributors. Mr. Hancock rehabilitated Jewel when the chainstore seemed headed for the rocks. Paul Mazur looks after department store clients--Gimbels, Hahn's, Associated Dry Goods. He wrote The Crisis and Some Ways Out (1931), other economic books and articles. William J. Hammerslough is head of the firm's investment advisory service. Monroe Gutman is the statistician and analyzer of corporate statements. To this group of conservative, capable, quiet bankers in 1934 went John Daniel Hertz, Chicagoan who collects race horses rather than Madonnas, who is a businessman, not a banker, who has been unsuccessful in business only in his two attempts to retire from it. Born in Austria, arriving in the U. S. at 4, he grew up to write sports for a Chicago newspaper, manage prizefighters, pick losers at racetracks, lose his job when his paper went into a merger. Then he became an automobile salesman with his sporting friends his best customers. He entered the taxicab business when he turned four old trade-ins into hacks. Cabstands were located at hotels, and cabmen paid hotel-operators large concessions. Mr. Hertz took his cabs away from the hotels, cruised them around the streets, painted them yellow, cut fares from 40-c- to 20-c- a mile. He organized additional Yellow Cab companies, at one time controlled 95% of U. S. cabs outside New York. He also went into the taxicab, bus and truck manufacturing business with the Yellow Cab Manufacturing Co. and started the Hertz Drivurself hired-car system. In 1925 he sold the manufacturing and Drivurself business to General Motors for $43,000,000, also disposed of his Yellow Cab holdings.

In 1931 he came back from his first retirement to handle finances of Paramount Publix. He slashed costs, reduced rentals, made executives turn in expense accounts. But he cut off so many heads and stepped on so many toes that in 1933 he resigned, reputedly over the question of John Hertz authority versus Adolph Zukor authority. The second retirement also failed to take, and in January 1934 he became a Lehman partner.

This file is automatically generated by a robot program, so reader's discretion is required.