Smart Money at Home

In northwestern Pennsylvania near Renovo, drillers were ready this week to bring in a new gas well. The well--one of scores drilled within two years--would be more evidence that the area, which had once produced gas but was thought to have been sucked dry, was coming back to life with a rush. From the wells, enough gas is flowing to start supplying suburban Philadelphia and Pittsburgh. East Coasters began to hope that there might be a big new gas supply close to home.

No one is more hopeful than the man bringing in the latest well. He is John Fox, a 44-year-old Bostonian who has whooshed up in the world of high finance almost as fast as his gas. He and his companies have brought in 27 wells in the Pennsylvania area, are planning to drill "a great many" more. But Fox is much more than a gas man. His multitudinous deals, financial maneuverings and big paper profits have already made him something of a mystery man of high finance.

A plump, feverish worker, Fox has such a passion for anonymity that his name is not listed on the directory of the old Boston building where he has his headquarters. Inside, the office is piled high with paintings (Utrillo, Hassam, Dufy, etc.); in one corner is a grand piano which Fox likes to play. But his real fun is what he calls "dealing in special situations." By such deals, Fox has gained control of U.S. Leather Co., holds a dominating, if not controlling, interest in Western Union, has his finger in a handful of other companies, including one which is about to start prospecting for oil in Newfoundland.

Leather into Gas. A graduate of Harvard in 1929, Fox started selling securities in Boston, and "caught the tail of a toboggan just as it started over the top of the hill." He spent his evenings getting a law degree at Harvard, got his start in real estate in the early '40s, buying low and selling high. One such property was a Manhattan building at 61 Broadway, which he bought at a bargain in 1944, sold in 1950 for $9,000,000.

After a stint as a Marine flyer in World War II, Fox took his first flyer in gas. He tried to get control of the New England Gas & Electric Assoc. in 1948, lost out by 1/2 of 1% of the votes in a bitter proxy fight. But he salvaged something from defeat; the company stock he had bought to further his fight had climbed in value and he sold out with a profit estimated at close to $1,000,000.

Next, U.S. Leather caught his eye. Its common stock was selling for only $4. Fox figured that it was way undervalued, since its assets were worth much more than the price of all the stock outstanding. He started buying Leather stock, discovered that the company held oil & gas rights on 500,000 acres in Pennsylvania, where Fox had already started prospecting for gas. He bought control of the company, promptly prepared to change it. He sold off its leather inventories and eleven tanneries for $15 to $16 million, says he will soon distribute $13 to $14 million in cash to the stockholders. With part of the remaining cash, he is plunging deep in Pennsylvania natural gas, plans to change the company's name soon to U.S. Gas & Oil. As yet, his operation of U.S. Leather has shown no great profits. But, with the stock selling at $24, he has a paper profit in millions.

Gas into Oil. Western Union looked like another "special situation." Its stock was down to 20 in early 1950 because the company had lost $3,363,000 the year before. Fox knew that Western Union had plowed $90 million into modernization, thought its prospects good and started buying. Western Union soon climbed into the black and its stock climbed too. Last week it stood at 39, and Fox, holding 121,800 shares or 9.9% of total, had made a big paper profit again.

The value of Fox's holdings in Pennsylvania is hard to run down, chiefly because he has so many personal drilling deals, works through so many individuals and companies other than U.S. Leather. For those reasons, Wall Streeters are still skeptical of his latest projects. But Fox thinks the pot worth the gamble, especially since a subsidiary of Standard Oil of California is spending more than $500,000 to drill a deep well near some of Leather's holdings. By going deep enough, it hopes to find a new oil pool that was missed before. Says Fox enthusiastically: "Standard has almost 100% of the gamble. If it strikes oil, U.S. Leather will start drilling madly."

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