Background
Robert Paxton McCulloch was born on May 9, 1911 in St. Louis, Missouri. He was the son of Mary Grace Beggs and Richard McCulloch; the McCullochs pioneered industrial development in the area.
developer Industrialist inventor speculator
Robert Paxton McCulloch was born on May 9, 1911 in St. Louis, Missouri. He was the son of Mary Grace Beggs and Richard McCulloch; the McCullochs pioneered industrial development in the area.
Even before attending Stanford University, where he received an M. E. degree in 1931, he had already developed the reputation for being a thinker and a tinkerer.
In 1936 he founded McCulloch Engineering, the first of many companies that would bear his name. McCulloch Engineering developed and refined small and medium motors and was especially successful in developing a centrifugal supercharger for its motors. In 1943, McCulloch sold the company to Borg Warner Corporation. Six months later, using the $1 million proceeds from the sale of his first company, he formed McCulloch Aviation, which specialized in manufacturing lightweight engines, especially those designed for the aviation industry. He later expanded the corporation to make gyroplanes, a cross between a helicopter and a small plane. Unfortunately, the company was never able to find a market for this product. Despite his success to this point in his life, it was the purchase of a tract of land near what was to become the Los Angeles International Airport, and the innovative products provided by a third McCulloch concern, the McCulloch Corporation, founded in 1945, that would make him a truly wealthy man and provide the riches for his future endeavors. Utilizing technology developed by his aviation company and adapting it to the two-cycle engine, in 1948 McCulloch produced the first portable chainsaw light enough to be used by an ordinary man. His company quickly branched out to produce gas heaters, post-hole diggers, golf carts, outboard motors, snowmobile engines, and even helicopters. In 1973 he sold McCulloch Corporation to the Black and Decker Manufacturing Company in a transaction that netted him stock valued at over $66 million. Meanwhile, in 1958, McCulloch founded the McCulloch Oil Corporation.
In 1960 he merged this closely held enterprise with the Cuban American Oil Company, which was listed on the American Stock Exchange. Clearly, one of the purposes of this $22 million transaction was to obtain the Cuban American Oil Company's listing, for barely a month after the merger, the new entity wrote off all its Cuban investments as worthless. In the following decade, the company acquired, by purchase or merger, a number of oil and gas concerns, interests in coal and silver mining, and two air transportation businesses. At its height, McCulloch Oil Corporation had oil, gas, and mining interests stretching from the North Slope of Alaska south to Colombia. McCulloch came up with a variety of creative means to finance the development of his properties. One of the first to sell limited partnerships to members of the general public, thereby enabling them to take advantage of tax incentives previously available only to the rich, he leveraged the oil company's resources by minimizing its risks and costs while at the same time enjoying a large percent of its profits. He also entered into an innovative agreement with Investors Diversified Services, a huge mutual fund organization, to sell shares in several joint oil and gas exploration programs. One of the first to see the synergies possible between the mining industry and other endeavors, in the early 1960's McCulloch began to develop mining land he owned. In December 1963 he initiated land sales at a site he called "Lake Havasu City" in the Arizona desert. Located on the shores of the Colorado River, this "instant" city had a population of tens of thousands scarcely a decade later. McCulloch hired C. V. Wood, Jr. , the creator of Disneyland, to build the city and spared no expense to ensure its success. He built schools and hospitals, created an artificial lake, and imported and planted 11, 000 palm trees. His promotional instincts were uncanny: he brought professional motorboat racing to the area and sponsored lucrative fishing tourneys on his man-made lake. He utilized a McCulloch-owned airline to fly prospective homeowners to Lake Havasu City from all corners of the country. What would make Lake Havasu City different from all the other land-development schemes of the time (including other McCulloch projects in Colorado, Arizona, and Nevada) was the purchase of London Bridge from the City of London in April 1968.
McCulloch spent $2, 460, 000 for the property itself and $7, 500, 000 to disassemble it, transport it halfway around the world, and then reassemble it over his man-made lake. The landmark proved to be an unbelievable coup, for it garnered publicity from the media and provided an identity and an attraction that was lacking in all other similar projects. At the height of its prosperity, McCulloch Oil had over a dozen affiliates involved in all aspects of mining; oil and gas discovery, recovery, and transmission; and land development. In consideration of the firm's impressive record of profit growth, investors accorded it a high price-earnings ratio, enabling the company to issue stock for other acquisitions on most favorable terms. All, however, was not well. As did most other land-development companies, McCulloch Oil accounted for real estate sales in full in the year in which they were made, even if they had been made on an installment basis--as most were. This accounting convention resulted in the immediate reporting of huge profits, thus supporting a bloated price-earnings ratio. At roughly the same time the desert states' land boom cooled, the Accounting Principles Board forced McCulloch Oil Company to restate its earnings figures to reflect only actual payments. As a result, corporate earnings fell precipitously, the gloss on the stock tarnished, and its price fell by nearly 80 percent. In an effort to stimulate sales, the company increased its sales force and began to engage in practices of dubious legality. Even this did not turn the company around. In 1976 the McCulloch Oil Company was forced to take a $60 million write-off when it abandoned the land-development business and sold its real estate operations. By the time of McCulloch's death, many lawsuits had been filed against his company and investigations were under way by the Securities and Exchange Commission, the Federal Trade Commission, and the Department of Housing and Urban Development. Originally his death was thought to have been caused by a heart attack, but an autopsy revealed that it was the result of a fatal mixture of barbiturates and alcohol. There was one final act to the tragedy of the McCulloch Oil Company: shortly after McCulloch's death, Black and Decker sold its shares in the company to a group that used this block of shares to gain control of the company and then effectively liquidate it.
McCulloch married Barbara A. Briggs on September 8, 1934; the couple had four children.