Hail and Farewell

The homecoming was not what bald Ernest Humphrey Scott, president of Chicago's E. H. Scott Radio Laboratories, Inc., had expected. Back from a trip to Australia, he found the Scott Company's capitalization increased from 6,000 to 251,850 shares on the strength of wartime sales to the Navy. Almost 225,000 shares had already been sold to the public for $703,125. And Founder Scott found himself demoted from his $18,000-a-year job as president to advertising & sales manager.

In a 3,500 word letter, Scott turned down the job. Then he bought two-column advertisements in Chicago's Sun and Daily News announcing his resignation and disclaiming responsibility for the stock sale. Next day, Scott stock sank from $4.62 1/2 to $3.50.

Out Scott, In Darr. These fiscal shenanigans were the climax in a two-year-old squabble between eccentric Mr. Scott and a lean, hard-headed ex-flier named Hal S. Darr, who now controls the company which Scott once owned and headed. Darr became board chairman in 1943. At that time the company was doing a $2,800,000-a-year business, principally with the Navy, and Scott was still the boss. But when he totted up the profits on his Navy business he found, what with renegotiation, ($300,000), taxes, etc. that he had only $90,000 left. To Mr. Scott, discouraged by previous deficits and dubious about the immediate postwar future of radio, this seemed too littleSo he sold out to Darr and friends for $260,000. By the stock sale, which so riled Scott, Darr and friends got back $204,000, while still retaining control of the company.

Sleep, Gentle Sleep. This was more than Scott had made on his company in recent years. New Zealand-born, Scott fought in France as an Anzac corporal, came to the U.S. and wrote a syndicated newspaper column on how to build homemade radios. In 1924, he organized his company. It flourished erratically. So did the Scott legend.

A sleep-lover, Scott once dozed while driving, and crashed into a North Chicago bungalow. To remind himself that sleep can be dangerous, he had an artist do a painting of the wreck, hung it in his office. A worrier, he devised ways to check on his salesmen's selling talks. One way: he hid microphones behind pictures and under display radios so that he could listen in on the sales spiel in the privacy of his rooftop office. He pioneered in the building of super-duper radios, sold them to wealthy householders for as much as $15,000 each.

The company did slightly better after Scott sold out. Last year the company pocketed $106,000 in profits on sales of $4,200,000. The stock sale had brought Darr a clear $147,000. Darr, who is slated to take over the presidency, was undisturbed by Scott's fireworks, especially as Scott stock rose to $4.25 at week's end. Said Darr:

"[Scott] is like a kid who can't be captain, so he quits and hopes the team will lose every game. I should be sore, but I'm not. Fighting with Scott is more fun than going to see Oklahoma!"

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