the anticipated improvements cost many thousands more. The entire refinery was shut down for six months. The previous expansion units had been shut down before, after only five years' operation. The thermal cracking unit, which had cost $250,000, was "shut down between 1954 and 1956 because it was not longer practical to run it." Danaho was seeking additional capital to replenish that depleted by its difficulties, and was then having difficulty in negotiating essential bank loans. It was required to exhaust operating capital in paying off its mortgage bonds and debentures.
Danaho's current liabilities exceeded its current assets every year from 1950 to 1963, its president testified. The "working capital was a red figure for each of the years 1950 to 1963 inclusive." No dividend was ever paid onits common stock. "In 1954 and 1955 Danaho Refining Company was broke" he said.
Danaho had been selling 40% of its output to the United States Air Force as jet fuel. It lost that business in 1954 when its contract was not renewed. Nearly half of its sales total was thereby lost. In 1958, Hovey testified, Danaho reduced its gasoline production in order to increase output of jet fuel, for which it had not market, in an attempt to diversify.
Beginning in 1954 another 20% of Danaho's total production was being sold to Humble Oil & Refining Co. In 1961 or 1962 Humble, which had been "Danaho's largest purchaser of gasoline", obtained its own supply source and built a recycling plant in the area, and Danaho consequently lost that business.
Danaho's