Success Story
First
Year Profits Big
In its first 14 months, Sinclair produced six
million barrels of crude oil worth $7.5 million.
It sold 252 million gallons of products through
wholesalers and 87 bulk plants, for revenues of
almost $17 million and a net income of almost $9
million. Dividends paid equaled $5 a share, and
assets employed in the business increased 40
percent. With some hyperbole, the president
announced: "The corporation is better
balanced, as to control of raw materials, pipe
lines, refineries, tank cars and distribution of
refinery products, than any of its large
competitors." In this statement, Sinclair
roseately anticipated the completion of a dream;
but he was on his way.
The instant
success of the venture attracted eager
investors. The first bond issue was convertible
into common stock, a maneuver profitable at $55.
When the common soared to $67, most of the bonds
were converted; the company was free of this
debt within a year. Harry Sinclair promptly
promoted another $20 million bond issue with
which to finance his new refineries and the pipe
line.
 The anticipated
construction would make Sinclair the tenth
largest oil company in America. Secure in his
strength, Harry Sinclair proved the independence
of his new enterprise. Throughout the
mid-continent fields, others had always set the
prices. On December 20, 1916, by now the
purchaser of 20,000 barrels of crude oil a day,
Sinclair posted a 10¢ per barrel price
increase. The pricing control was broken.
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