Inch by Inch

The Big Inch and Little Big Inch pipelines had just closed down nine months ago when the War Assets Administration began to get tongue-in-cheek bids for them. One jokesmith wanted the lines for piping grapefruit juice from Texas to New York. Another thought tough Texas jackrabbits could be profitably run to eastern markets since "anything becomes a delicacy if it is moved far enough." Even harried WAA officials took time out to join in the fun. Their proposal: start carbonated water through the pipes in Texas, spike it with bourbon in Kentucky, route the piped highballs through the "ice mines of Pennsylvania, and so to the bars of Manhattan.

But last week in Washington when WAA publicly read the 16 pipeline bids, it was clear the kidding was at an end. The Big Inch Natural Gas Transmission Co offered $85 million in spot cash. A group headed by big-time gas men E. Holley Poe and Dr. Everette De Golyer topped the $146 million cost of the lines by offering $260 million for a 40-year lease.

Both bidders want to use the 2,815-mile system for natural gas transmission, are favored by Wall Street to win. But the Government will accept their proposals only as a last resort. It wants the lines used for petroleum products, will give first choice to buyers or lessors who promise to use it for them. One reason: Big Inch's daily throughput of 300,000 barrels of crude, Little Big Inch's 235,000 barrels of gasoline would be on tap for any national emergency.

Who Will Win? With natural gas bidders handicapped, the real race will probably be run by the petroleum men. Frank M. McGraw offered $146 million* on a lease-sale basis. Ryford Pipeline Co Chicago, representing a group of independent producers, refiners and marketers, offered to buy Little Big Inch for $30 million and lease Big Inch.

In a class by itself was the Big Inch Oil Inc.'s bid of $110 million: $1 million down payment, $65 million on the sale-closing date, $44 million in corporation income debentures. Intending to act as a common carrier (i.e., not engaged in producing refining or marketing petroleum products), Big Inch Oil, Inc. has the added advantage in Government eyes of falling under ICC regulations.

* Less 4% depreciation annually from the date of the lines' full operation: Aug. 1943 for Big Inch and March 1944 for Little Big Inch.

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