Hunt deeply admires
Candyman
Robert Welch, founder of the John Birch Society, George (Stand-in-the-doorway) Wallace of Alabama and others who stand forthrightly for the trammeling of common equity.
Lundberg - The-Rich-and-the-Super-Rich-by-Ferdinand-Lundberg
The John L.
Pratt Foundation of Fredericksburg, Virginia, however, at the end of 1962 had assets of only $88,753.
But this structure can be looked upon as a prepared financial tomb to receive a large portion of the Pratt fortune, ,which can be tentatively accepted as close to or in the range laid out by Fortune.
It is evident that the Fortune estimates as checked against available probates show extremely wide variations, approximately correct at times but at other times far off the mark. It would, in fact, be remarkable if Fortune had found an unofficial way to being even approximately correct in all cases.
Ambiguity of the New Wealth
Additionally, one must notice that much of this "new money" is concentrated in real estate, promotional effort and uncertain oil prospecting. The owner of real estate or of oil-producing land holds something not readily translated into dollars. The independent oil prospector is subject to price fluctations, curtailment of politically arranged tax privileges and, in many parts of the world, confiscation. In any event, his wealth consists largely of estimated below-ground reserves, which may be erroneous. The real estate operator, in order to cash in, must find for his properties buyers, who are relatively scarce; and often the big realty operator is sitting on a slippery cushion of bank loans and mortgages. His own equity is seldom as imposing as the facades of his properties.
Few men on the list are in manufacturing or banking, where there is not only solid evidence of what an enterprise is worth but where the heavy money is found. And even big oil operators fall on evil days. Glenn McCarthy, who in 1949 threw open the Shamrock Hotel of Houston to a less-than-astounded world and who is more recently financially in an ambiguous position, is a case in point. Hence I would place a question mark after the name of nearly every independent oil prospector on this list with respect to the rated extent of his wealth. I do this for two reasons: Most of them own purely private companies and few publish balance sheets and income statements. Those that do, such as Murchison's Delhi-Taylor Oil Corporation, have years of deficit operations alternating with profitable years. What nonfinancial observers do is to look at a heap of assets, usually no more than leases and land concessions, and put some figure on the heap. They do not take into consideration offsetting liabilities--cost of leases, drilling equipment, political contributions and the like. This is not to deny that the oil men mentioned are wealthy in varying degrees.
Nor is this a point made in passing. The issue underlying my remarks is this: Are large fortunes, solidly comparable in size to the inherited fortunes, still being made in profusion by free-as-air rugged entrepreneurs in the American economy? Fortune, the
Wall Street Journal and most newspapers that follow the "party line" laid down by these over-arching publications say "Yes. " I say, most respectfully, "No. " In the upshot, the reader can make his own choice.
We have already seen that Arthur Vining Davis drops like the proverbial plummet from Fortune's $400-million class to the $86-million class in probate autopsy and I venture to say that most of the independent oil operators will, when they throw in their final hands, show similar downward variations from ebullient outside estimates. But I incline to keep Jacob Blaustein pretty much in the position Fortune assigned him because be is a full-scale operator, is high in national political councils and is a known big stockholder of the muscular Standard Oil Company of Indiana--a solid, old-line Rockefeller enterprise.
The J. Paul Getty Story
J. Paul Getty may be worth less than Fortune rates him, but Getty does not belong to the list of new wealth. Getty himself provides this information as well as his own comments on the Fortune estimate. As wealthy people seldom contribute to the discussion of their affairs, Getty's action was most unusual.
Getty, incidentally, was scarcely known except to business associates until the Fortune article appeared, crowning him the world's richest man. "Illustrative of the extent to which I had been able to maintain my anonymity through the years," Getty writes in his memoirs, "was a chance encounter with a former classmate I had not seen since my undergraduate days at the University of California at Berkeley. Meeting accidentally on a Los Angeles street in 1950, we recognized each other and stopped to reminisce for a few moments. 'By the way, Paul,' my former schoolmate asked me at one point in our conversation, 'who are you working for these days? '"8
Right after the article appeared, Getty relates, he became a sitting duck for a parade of interviewers, cranks, money-seekers and spongers.
As to the source of his wealth, Getty writes, his father died in 1930, worth $15,478,137. As early as 1916 the elder Getty was a millionaire oil prospector. He left the bulk of his estate to his wife but by 1916 he had entered into a 70-30 partnership with his son, allotting the latter, gratis, 300 of 1,000 newly issued shares of the Getty Oil Company. By the terms of his father's will Getty got only $500,000; "but I had no real need for more money; I had several millions of my own. "9 He owned, in fact, more than 30 per cent of Getty Oil.
Getty, in brief, is an inheritor. The son of a wealthy oil operator, he completed his formal education at Oxford University before World War I and was brought in on the ground floor as a junior partner of a going business where he did well.
In 1930 Getty was elected vice president and general manager of George F. Getty, Inc. , but the controlling interest remained with his mother and former associates of the elder Getty. Young Getty, in order to protect the company's position, urged the acquisition of additional shares of companies in which the Gettys already had interests, but his elderly associates held back and young Getty went ahead on his own account. He first bought 160,000 shares of Pacific Western Oil Company at $7 a share: $1,120,000. He next started buying Tidewater Associated Oil Company in the open market at $2. 50 a share, depression-low prices, and acquired 285,004 shares for $923,285. 30 or an average price of $3. 59. 10
Getty, schooled by his father to reach only for aces, was out to get control of Tidewater. He found himself blocked by the powerful Standard Oil Company of New
Jersey but, with some unexpected luck, delicately outfenced this giant and finally got control of Tidewater and the Mission Corporation, which the New Jersey company had formed to hold its own Tidewater stock. He also picked up at bargain prices the Hotel Pierre in New York, and the Skelly Oil Company, which owned the Spartan Aircraft Company. In the meantime his mother had assigned her Getty shares to a trust for her grandchildren, with J. Paul Getty as sole trustee.
In 1963 Getty, after accepting Getty oil stock for his various independent holdings, held 12,570,939 shares of the Getty Oil Company, which now owns all or nearly all of Tidewater, Mission, Mexican Seaboard, Skelly and a good many others. 11 These shares in the same year, by the company's audited computation had a net tangible underlying value of $31. 21. This single holding alone, then, was solidly worth $392,339,006. 19 and is only part of the family holding. By late 1967 the market value of J. Paul Getty's Getty Oil holding's had advanced to around $1 billion $200 million.
As Getty personally has always liked to stand free and clear of banks, one may suppose none of it is up for collateral against hidden loans. Add here and there any stray properties Getty may own, consider that he has made. provisions for his sons and grandchildren going beyond those of his mother's trust fund, and one sees looming before one an authentic very large fortune, new in its latter-day magnitude at least, although not in its origin. Aside from the Sloan, Kettering, Pratt and Mott General Motors fortunes, all post-1918 jobs, it is one of the few so-called new big ones we can accept without demur (other than denying it is new) from the Fortune list. Had Getty not had money and insight provided by his father he could not have picked up these companies.
Getty, commenting on his elevation to hyperbolic billionaire status, said "there is no such thing as a billionaire among active businessmen, not in the sense that most people would understand the term, An individual may own or control business enterprises worth a billion dollars or even more, but little of his rated wealth is available to him in cash. A millionaire or billionaire does not have his millions on deposit in his personal checking account. The money is invested in his businesses.
"It is impossible for him to know what his investments are really worth at any given time. The values of a businessman's holdings fluctuate greatly. The price of stocks may rise or fall, corporations may show major increases or decreases in their net worth, innumerable variables may multiply the value of an investment or wipe it out completely. "12
Getty's entire life has been subdued in pitch. He went to school quietly--first to the University of Southern California, later to the University of California and then to Oxford. He traveled the world quietly, went into business with his father quietly and later bought large amounts of stock very cheaply--and quietly. He was married quietly seven times and as quietly divorced, with no hint of scandal. In his memoirs he quietly takes the blame for his marital failures and speaks with quiet commendation of his various wives. He appears to have quietly evaded politics and politicians at all times. In more recent years he has lived quietly in the baronial halls of Sutton Place, his English manor house, and will one day no doubt die quietly and quietly leave his swollen fortune to foundations and to his four sons and many grandchildren. Getty, beyond doubt, has been the all-time ghostly atypical presence in the procession of American wealth. When he speaks--and he has been interviewed on TV--he speaks, yes, very quietly.
H. L. Hunt and the Politics of Oil
Haroldson L. Hunt, No. 2 on Fortune's list, has been variously estimated as worth $250 million to $3 billion. 13 Forced to choose, I'd incline toward the lower figure; Fortune pegged him at $400-$700 million, leaving a good deal of leeway, But Hunt's fortune, like that of all the oil prospectors, rests literally in the sands and in money- inflamed politics, domestic and foreign. He no doubt holds a good hand, but one may doubt that it harbors a royal flush.
Hunt, a small-town cracker-barrel philosopher (in this aspect very much resembling the late Andrew Carnegie and Henry Ford) and overburdened with wildcatted possessions beyond his own wildest, wildcatting dreams, first came to national political notice during the 1950's (much as Henry Ford did in the early 1920's) as a rabble- rousing propagandist for hard-nosed right-wing political points of view. For Hunt takes seriously what he has heard around the town cracker-barrel. The violence of the diatribes in his subsidized radio programs--carried to 331 cracker-barrel stations--led many observers to see them as having at least helped nurture the mood for the assassination of President Kennedy. The programs, seeming overtures to schrecklichkeit, are prepared and taped by a stable of about twenty-five henchmen Hunt maintains in Washington, D. C. In general, views blandishing to the Ku Klux mentality are broadcast. 14
On the very morning of President Kennedy's assassination--in Texas--the Hunt radio program in Dallas and other areas predicted pessimistically that a day was soon coming when American citizens would not be allowed to own firearms with which they could oppose their rulers, an important function of red-blooded free citizens in the cracker- barrel point of view. Of a communist society (thought by cracker-barrel pundits to be imminent in the United States) the Hunt commentator said forebodingly: "No firearms are permitted the people because they would then have the weapons with which to rise up against their oppressors. "
Hunt staged his alarmist programs through a series of incestuous foundations--Facts Forum, Inc. , the Life Line Foundation and Bright Star Foundation, none of which is listed in the very complete Foundation Directory, 1964, issued by the Russell Sage Foundation. Until early 1965 (after the assassination of President Kennedy: that is), despite many strongly sponsored protests, Hunt seemed to have mysterious and powerful friends in or behind the Internal Revenue Service, which granted these propaganda foundations complete tax exemption. The Life Line Foundation originally got tax exemption as a religious organization! To his fingertips the pecuniary man as well as cracker-barrel philosopher, Hunt further improved his position by soliciting business donations for his foundations and giving his own food and patent-medicine companies reduced advertising rates on his radio programs. For H. L. Hunt believes in killing whole flocks of birds with a single stone.
One of Hunt's many immortal quoted sayings is: "Everything I do, I do for a profit. "
There is also the H. L. Hunt Foundation, founded in 1954, a financially anemic affair with assets at the end of 1961 of only $799,553, according to the Foundation Directory, and which in that year made charitable grants of a stupendous $17,500. No doubt it is this lithe creation that is destined to receive and immortalize any portion of Hunt holdings in flight from inheritance taxes.
Although Hunt--silver haired, soft-spoken, frugal, a food faddist-is very rich, few people are able to say they have ever seen the color of his money. He has never been known to contribute in the presence of witnesses more than $250 to $500 to any single political candidate; and in 1956 he gave the Republican Party, over the counter, a mere $38,000. In 1952 the Republicans tried to entice $300,000 from him, but Hunt came up
with only $5,000--this, at least, is according to the public role of penny-pincher that he plays.
But owing to the vastness of his landholdings, sprawling over the Southwest and the Middle East, and his seemingly uncanny ability to obtain high-level political chaperonage at crucial moments, realistic observers surmise that Hunt is passing out large sums under the table. "He must have a front man he spreads his money through," hostile Senator Ralph Yarborough of Texas has said. "A man with that kind of bank roll is bound to have. "
It is rumored in Texas, according to the New York Times (August 17, 1964), that Hunt put up $150,000 to get General Douglas MacArthur the Republican presidential nomination in 1952 and that he put up $100,000 for the Kennedy-Johnson ticket in 1960 owing to his longstanding friendship with Lyndon B. Johnson. Booth Mooney, the Hunt public relations man in Washington, wrote the authorized The Lyndon Johnson Story in 1956, updated in 1964; and Lyndon Johnson is an old friend of the oil depletion allowance as well as of Hunt. Although Senator Barry Goldwater in 1964 stood forthrightly for straight Hunt political wisdom, Hunt testily denied that he was supporting Goldwater against the old Huntsman, L. B. J.
One must agree with Senator Yarborough that Hunt and other Texas oil men are passing money (or some equivalent) to political figures. If they didn't, they wouldn't have the depletion allowance, ostensibly passed as a defense measure to stimulate the search for oil but also serving the useful function of providing a politician's entering siphon into the oil Golconda. There might instead be a special high tax on oil!
Here we touch the edge of a problem: Why, if the independent oil men are so favored by nature and politicians, do they show this political rancor? True, not all the oil men are so perturbed as Hunt and some others, who apparently feel that their easy-come wealth could as easily be whisked away; many of the more realistic, less anxiety-prone Texas oil crowd speak of themselves as just plain lucky and see no need for making the world safe for future wildcatters.
But H. L. Hunt is an expression in exaggerated form of the irritation and resulting apparent meanness of many oil independents, even though most oil men appear to regard him as more than a little kooky. What produces this irritation? There is, first, the annual tax bill. Some of the successful oil men write annual checks for the Internal Revenue Service in amounts that would stagger the ordinary man. And most of the oil men are ordinary men who early in their lives worked long hours for small wages. The men who write these checks still think in terms of the original $20-a-week roustabout. And while it is frequently said that one wouldn't mind writing big tax checks if one had the big incomes, to have worked in one's early life on the supposition that what one acquired one could keep and then to learn after hitting it big that one must share to some extent with the government--or politicians--is more than some persons can swallow gracefully. Some of the oil men, Hunt included, feel very much the way a man earning $60 a week would feel if he was told the withholding tax was to be $50. They just aren't psychically attuned to their new positions. On top of the tax bite, very much softened by the depletion allowance and drilling write-off, the oil men find they must share what is no doubt a good part of the depletion benefits with hungry politicians in the form of "campaign contributions. " And for these political contributions they feel the politicians ought to deliver more. The politicians, to extenuate their less than totalitarian success, no doubt report that there are various obstacles in the form of Liberalism, Communism, Socialism, Eastern Capitalists, Labor Unions, Welfarism and a world full of Wrong- Thinking People all the way from college professors and journalists to Supreme Court justices. The enormity of it all, the injustice of all these misguided people stirring a
witch's brew with which to annoy Horatio Alger's own darling boys out on the oil frontier, finally becomes more than human flesh--or at least H. L. Hunt's flesh--can stand.
Hunt has seen it all at first-hand, indeed. He has regularly attended the national conventions of both parties, keeping his ears close to the ground, his eyes sharp and his nose clean for any whiff of Godless un-Americanism. And there is, as God only knows, much of it around, in the very Constitution itself!
There is, too, the milieu of Texas as a force shaping Texas consciousness. For Texas has very much the economic and political status of a colony, as also have many far less bustling western states. In the words of Senator Wilbert (Pappy) Lee O'Daniel, Texas is "New York's most valuable foreign possession. "
The widely traveled John Gunther in 1947 found that "Texas reminded me a good deal of Argentina . . . cattle culture, absentee ownership, vast land holdings by semifeudal barons, a great preoccupation with weather, an under-developed middle class, interminable flatness and open spaces, and fierce political partisanship and nationalism. And . . . reaction closely paralleling that of Argentina. " 15
Most of the state is in fact absentee-owned by big eastern capital. The largest enterprise in the state is the Humble Oil and Refining Company, subsidiary of the global Standard Oil Company of New Jersey, the annual gross revenue of which exceeds the combined revenues of thirty state governments--$11. 471 billion versus $11. 375 billion in 19,65. The operations of the huge eastern enterprises--Du Pont, U. S. Steel, General Motors, Dow Chemical and various others--are splattered right and left. And many of the prominent men in the state, Hunt included, originate elsewhere, are in effect colonial concessionaires. Many Texas oil men are not native Texans at all.
With a thin layer of native wealthy and imported representatives of big corporations at the top, bellowing the glories of Texas in history and contemporary culture, most Texans find themselves somewhat dazedly in the low-income classes, dirt poor--in fact, colons. Gunther was told in Texas that twenty corporations ran the state, but he thought this exaggerated. I don't think so. At least, the rank and file colons, many close to peons, do not run it--and they know it.
Texas boastfulness, free-swinging behavior and loud talk about independence of spirit are all a compensatory reflex to the feeling, deep in many Texans, that they are dusty puppets manipulated from outside. Some informed Texans amuse themselves sardonically by giving visitors the home addresses in New York, Boston, Philadelphia, even Amsterdam, of the owners of prominent items of Texas property.
One word fits the general Texas political consciousness from high to low: resentment. And some of Hunt's outpourings have awkwardly expressed simply this.
As to colonialism, it shows itself everywhere in this way: One can see a great deal going out--cattle, cotton, oil, minerals, chemicals--but little or nothing coming in. The dividends go out, too. Texas, like Pittsburgh seventy-five years ago, is being bled grey, if not white.
The niggardliness of Hunt's known political handouts is thought to derive from the position that, although Hunt may like a man's political stance, he does not like to back losers. His political contributions, like those of the oldline magnates, are not made to support or propagate principles so much as to purchase instant influence in government. In this respect he seems, if reports are true, cut from the same bolt as the late Henry J. Havemever, the sugar magnate, who testified before the United States Industrial Commission that he habitually contributed to both political parties (as do the oil men) and explained: "We get a good deal of protection for our contributions. "
Hunt, lamentable to relate, has had some hard times with cruel politicians. When he bid $17 an acre on offshore oil tracts that the government ordinarily leased at $406 an acre he was unsympathetically rebuffed by Secretary of the Interior Frederick Seaton. Hunt thereupon procured Senator Everett M. Dirksen and Representative Charles A. Halleck, statesmen of the purest Republican strain, to convoy him to a protest interview with Seaton. This eyeball to eyeball confrontation came to naught, But after the tidelands were transferred under Eisenhower to state jurisdiction--for which the well- heeled oil lobby had worked every bit as hard as wildcatters on a hot tin roof--Hunt found Texas Governor Allan Shivers, a board member of Hunt's Facts Forum, far more accommodating. In this matter Shivers's land commissioner, Bascom Giles (before he was bundled off to the state penitentiary for getting caught cheating the state in another quarter), approved all of Hunt's bids for more than 100,000 acres of tidelands leases, even though Hunt bid an average of $6 an acre while the average over-all bid was $78. As I remarked, Hunt is frugal and this frugality--aided by his knowledge of governors-- has helped make him wealthy in a nation where people are so foolish as to pay whatever it says on the price tag.
The last president of whom Hunt fully approves was Calvin Coolidge; even Herbert Hoover he finds too soft. Both Eisenhower and Kennedy he regards as disasters of virtually Rooseveltian proportions. Although backing haughty Douglas MacArthur for the presidency, Hunt literally doted on Senator Joseph McCarthy, with whom he zestfully played cards and exchanged fraternal favors. For governor of Texas he backed morose General Edwin Walker, whose right-wing propagandizing forced him out of the Army, to the regret of a considerable congressional bloc. The political ideology of William Buckley, Jr. , himself a scion of a small-bore Texas oil fortune, makes a strong appeal to Hunt although he believes the volubly rhetorical Buckley uses too many big words. Hunt, unlike Buckley, sees nothing to be gained by repackaging a muted kluxishness in fancy language as a tortured endeavor in high moral aspiration.
Hunt deeply admires Candyman Robert Welch, founder of the John Birch Society, George (Stand-in-the-doorway) Wallace of Alabama and others who stand forthrightly for the trammeling of common equity. According to the New York Times, Hunt's ideal Democratic ticket of 1964 would have been Harry F. Byrd of Virginia for president and Frank J. Lausche of Ohio for vice president with a Republican ticket consisting of Bourke B. Hickenlooper of Iowa and Roman L. Hruska of Nebraska.
Showing the earnestness of his beliefs, Hunt spends a good deal of priceless wildcatting time bombarding newspaper editors with cracker-barrel messages. For he believes that if the American people would only remove the scales from their eyes they would see that the nation is being subverted right and left. Among the subverters, as he sees it, are the governesses, nurses, tutors and teachers of the children of the established rich who grow up to become extreme leftists like W. Averell Harriman, Nelson Rockefeller, John Lindsay, G. Mennen Williams and John F. Kennedy--all alien to the cracker-barrel. One can see what they did even to language-frenzied William Buckley, Jr. It is very insidious. But although he almost from the first unpatriotic rejection of his cheap bid for valuable tidelands disliked Eisenhower, Hunt has not yet turned on his close friend Lyndon B. Johnson, of whom he said early in 1964:
"Johnson is the kind of President who can lead Congress around by its nose. I wouldn't mind seeing him in there for three terms. "
Hunt was born in Vandalia, Illinois, in 1890. He could read at age three and early displayed a phenomenal memory, which he has retained throughout the years. Like Henry Ford basically an intelligent but very partially informed man, he quit school in the fifth grade and became a drifter at thirteen. After wandering through the West as a barber, cowhand, lumberjack and gambler (Hunt still likes to gamble and claims to
trounce the racetrack bookies) he settled in Arkansas, where he became a moderately prosperous cotton farmer. Ruined by the collapse of cotton prices in 1921, he turned for lack of anything better to oil, and was literally swept off his feet toward riches. According to the Hunt legend, he struck oil on the first try with a drilling rig he bought with a $50 loan. Another version is that he won the money, or the rig itself, in a card game.
A wildcatter with little or no money must strike oil right away because, as Hunt himself testifies, only one in thirty attempts to get oil succeeds and the average cost of each attempt now is about $250,000. Hunt attributes his continued success to following the law of averages: If one keeps trying, one will eventually strike oil. He claims he has drilled as many as 100 dry holes in succession, which at $250,000 average per hole is $25 million.
After much successful drilling in Arkansas, Hunt shifted to East Texas, not then considered likely territory. But there aging C. M. (Dad) Joiner brought in the world's largest producing field. Hunt bought Joiner's discovery well, took a lease on 4,000 nearby acres and wound up with most of the Joiner land in a deal that many chroniclers profess to find mysterious. Hunt says he paid $1 million for the lands, money he had made in Arkansas. But Joiner, like most wildcatters, died broke, while the bubbling East Texas field swirled Hunt upward to oildom's Pantheon. He now, like most of the Texas oil men, operates all over the world, hobnobs with the Arab sheiks and plays oil politics wherein the white chips cost anything from $1 million to $10 million.
Suspected of being the financial angel of various far-out right-wing agitational groups, Hunt is regarded by some observers as dangerous. And in a sufficiently intense atmosphere he might be. But all of the various right-wing groups to which some politically unsophisticated wealthy people contribute as yet show no signs of being more than money-cadging rackets set up to squeeze a profit out of the fears of rich neurotics, No doubt they stir passions but their leaders couldn't stage a cracker-barrel putsch, much less set fire to the Capitol wastebasket. If Hunt is giving any of them money, it can only be his version of a share-the-wealth movement.
Hunt has been overheard introducing himself to strangers by chirping: "Hello, I am H. L. Hunt, the world's richest man. . . .
Clint Murchison and Sid Richardson
Joseph P. Kennedy is sufficiently recognizable as the sire of the late president to need no further identification. His career has been exhaustively investigated by Richard J. Whalen in The Founding Father, which is almost clinical in its penetration. Fortune seems to me to rate him on the high side. Many of the people on the Fortune list deliberately avoid public notice, attempting to blend, chameleonlike, into the background. One who confesses to this sort of shyness is Daniel K. Ludwig. The General Motors fortune-hunters and Henry J. Kaiser are rather fulsomely known to the public through newspaper reports and need not detain us.
Two oil men of a cut somewhat different from H. L. Hunt perhaps should be noticed. They are Clint Murchison and Sid Richardson, who often made a team with the Murchison sons. In some ways more ambitious than Hunt, they have also been more realistic. Although rightists politically, they have never showed a desire to play the role of a Fritz Thyssen in the American system. "
Murchison is the plain man as a multimillionaire, shirtsleeves, unassuming manner and all. His grandfather and father owned the First National Bank of Athens, Texas,
which Clint now owns, and Clint had a short stay at Trinity University, Texas, before entering the bank. Upon his demobilization from the Army in 1919 he encountered his boyhood friend Sid Richardson, who had also tried college and who was now dealing in oil leases. Because he liked trading for the sake of trading he joined Richardson. After a period of buying, selling and exchanging leases throughout the Southwest, barely keeping ahead of the game, Murchison pulled Richardson out of a poker game in Wichita Falls one night to investigate the rumor of a wildcat well near the Oklahoma border. They sneaked past guards close enough to smell oil, and the next morning they spent $50,000 buying regional leases. The following day they unloaded the leases for more than $200,000 and were off and running in a business way.
During the depression Murchison built up the Southern Union Gas Company and the American Liberty Oil Company, both later sold. Then he formed the Delhi-Taylor Oil Corporation, always rising higher on a flood of new oil.
Murchison is distinguished from most of the other Texas oil men by the breadth of his diversified non-oil interests and by his participation in a number of national financial coups with the alert Allen Kirby and the late Robert R. Young of the Alleghany Corporation.
As to his diversified interests, fie is virtually the sole owner of the Atlantic Life Insurance Company of Richmond, Martha Washington Candy Company of Chicago and Dallas, Waco and Austin taxi, bus and transit lines among various smaller interests. He is or was the dominant owner of the American Mail Line, Ltd. , of Seattle; Delhi-Taylor Oil Company; Holt, Rinehart and Winston, New York publishers; Diebold, Inc. , office equipment; and a chain of small Texas banks as well as miscellaneous other goodies. He has a substantial interest in the Transcontinental Bus System; American Window Glass of Pittsburgh; and Southeastern Michigan Gas Company. Of course, even as this is being written, his holdings and those of his sons may shift in the unending succession of deals for which he is noted. His general strategy appears to be to pick up cheaply properties that do not appear to be living up to their potential and to make them into good earners by installing skilled managers. He gets wind of these properties, as do most wealthy men, through professional investment locators.
He was approached by the late Robert R. Young, a fellow Texan and the financial mentor of Woolworth's Allen Kirby in the Alleghany Corporation, and was asked to join the Young-Kirby forces in the 1950's in seeking control of the Morgan-Vanderbilt New York Central Railroad, the Pie? ta of railroad cognoseenti. Alleghany already controlled the Chesapeake and Ohio Railroad, a lush earner. Murchison joined Young and brought Richardson with him. Between them Murchison and Richardson put $20 million on the line.
Clint, after talking with Young over long-distance, told Sid about the transaction on the telephone. "When the calls were over," says Cleveland Amory, who researched the Texans in their native habitat, "Richardson thought the deal was for only $10,000,000. Informed it was twice that, he called his partner back. 'Say, Clint,' he said, 'What is the name of that railroad? '"
The capture of the prize New York Central by this group made financial history, as they say.
Murchison and his sons also followed Alleghany Corporation and took a position in the stock of Investors Diversified Services, which controls a tangle of investment trusts with aggregate assets of more than $1 billion.
Richardson, Amory informs us, was a bachelor and lived around in various hotels and clubs. Amory assigned him a wealth exceeding a billion dollars, a figure few others
agree with. But he owned an island in the Gulf of Mexico where he hunted and fished. He declined to write letters and had no secretary; his office was in his hat. He owned a fleet of Cadillacs in Dallas and one each in every city he regularly visited.
In 1947 Richardson established the Sid W. Richardson Foundation of Fort Worth, Texas, which for the end of 1962 reported to the Foundation Directory net worth of $69,554,801. Benevolent grants for the year totaled $14,500, which hardly spread much sunshine among the heathen. In the meantime the income on this big accumulation most of the time since the fund was started would have been subject to maximum tax rates up to 91 per cent, more recently 77 per cent. The foundation, however, in a neat stroke, preserved all this income intact and saw to it that none of it went to paying for the costs of sacred national defense.
Murchison, widowed and remarried, owns a 75,000-acre ranch in Mexico's Sierra Madre Range. Here he has entertained the Duke and Duchess of Windsor and other ultra-magnificoes. In fact, he owns several homes; one has a room with eight beds "so a group of us boys can talk oil all night. "17
The Wolfson Story, in Brief
The only other person of special interest on the Fortune list is Louis Wolfson, assiduous wheeler-dealer of Miami Beach who has engaged in much shuffling about with New York Shipbuilding Corporation and the construction-dredging firm of Merritt-Chapman & Scott among others. Wolfson is one of the standard Roman-candle phenomena of American society, one of hundreds that come and go across the financial horizon like fireflies, and Fortune itself demoted him from the list of heavyweights in 1961. 18 Having no reason to gainsay Fortune here, I accept its last judgment on Wolfson.
Wolfson and an associate were convicted on September 29, 1967, in federal court on nineteen counts of criminal conspiracy and illegal stock sales. Gaudily overdramatizing, newspapers pointed out that Wolfson faced a possible ninety-five years in jail. When it came to sentencing the judge meted out sentences of one year on each of the nineteen counts, with the sentences to run concurrently. If over-ruled on appeal, Wolfson will then serve one year with the customary time off for good behavior
Nominees of the Satevepost
Thus far I have confined myself to the Fortune list of alleged new builders of alleged
big fortunes; but others, too, have their candidates.
Accepting and endorsing Fortune's nominations of John D. MacArthur, John Mecom, Daniel K. Ludwig, Leo Corrigan, William Keck, R. E. Smith and James Abercrombie as financial big-shots and dispensing a bit of scuttlebutt about them, the Saturday Evening Post in 1965 put forward six additional candidates: Dr. Edwin Land, inventor of the Polaroid camera, whom the Post credits with $185 million, a doubtful figure despite the soaring market prices of Polaroid stock; Henry Crown, head of the General Dynamics Corporation (government contracts) and dabbler around in building supplies, real estate and railroads, whom the Post says is worth $250 million; Howard Ahmanson, California insurance and savings-and-loan wizard, worth $300 million according to the Post; and W. Clement Stone, insurance promoter, worth $160 million on the Post's nimble abacus. The Post did not turn up any new information on ultra-shy Ludwig (who it averred had made a round billion dollars since World War II); none on Charles Allen,
Jr. , Of the investment banking firm of Allen and Company, other than that he is a "financier. " And no more on John Erik Jonsson than that he is the major stockholder in market-zooming Texas Instruments Company and the possessor of a "huge fortune. " 19
All these figures, even those bearing on Land, are little more than curbstone estimates. Land's could be about right, for he owned 51 per cent of the Polaroid Corporation stock at the inception of its productive phase. But one does not know yet to what extent he may have revised his holdings. As Land is a technical man, an inventor who sticks closely to his work and has ready access to all the capital he thinks he needs (he was bankrolled to the tune of $375,000 by the old-line heavy money of W. Averell Harriman, James P. Warburg and Lewis Strauss, all vastly enriched by their Polaroid stock) he retains a large interest. Precisely how much we shall see later.
Of all the persons named thus far in this chapter, Land is the only one who has created a ground-up new free enterprise. All the others jumped aboard existing merry-go-rounds or hung onto government coat-tails, although Kettering and Donaldson Brown did significantly creative jobs at General Motors.
Land did far more than invent the Polaroid camera, which develops its own pictures. He has more than 100 inventions to his name in the field of optics and was inventing while still a student at Harvard, which he quit. He is not a bit interested in money and resents being categorized primarily as a rich man. He lives in moderate middle-class style in Cambridge, Massachusetts, and has a small farm in New Hampshire. Like Pasteur, Edison and other creators, he lives mainly in order to work.
His impact on the world has been far more than adding to its marketable gadgetry, for he played the chief role in developing cameras (such as those used in the famous U-2 espionage plane) that would take detailed pictures at more than 70,000 feet of altitude. It was his cameras that exploded the idea of a "missile gap" and detected the Soviet missiles in Cuba. He is currently interested in ways of humanizing machine society, eliminating the "problem of mass boredom and mental stagnation" in American life, particularly among industrial workers. Whether he cracks this nut or not, his mind is soaring in an empyrean far above that of Hunt, the wildcatters and the wheeler-dealers.
Most of the men mentioned on both the Fortune and the Post lists are obviously of wheeler-dealer stripe, the kind that can well be, financially speaking, here today and gone tomorrow. In a steadily continuing inflation they will all no doubt come through with burgees flying; in the event of a substantial recession, some could find themselves in disturbed relations with their banks if not on the streets selling apples.
The New York Times, September 13, 1963, offered a few additional names of supposedly new rich: Thomas J. , Jr. , Arthur K. and Mrs. Thomas J. Watson, their mother, collectively then worth $108 million in International Business Machines stock; Sherman M. Fairchild, son of a founder of IBM and dominant owner of Fairchild Camera and Instrument and Fairchild Stratos; Archibald G. Bush, with a $103 million holding in Minnesota Mining and Manufacturing; Cyrus Eaton, Cleveland banker; and a variety of others.
But very few of the names mentioned by the Times additional to those named by Fortune and the Post are of men who made their own fortunes. Like the Watsons and Fairchild, they are mostly inheritors: Howard Heinz II, the pickle king; Joseph Frederick Cullman III of Philip Morris, Inc. ; J. Peter Grace of W. R. Grace & Co. ; Lewis S. Rosenstiel of Schenley Industries; Norman W. Harris of the Harris Trust and Savings Bank (Chicago); and others.
More Entries for the Pantheon of Wealth
These are by no means the only names of possible new big-money nabobs that could be mentioned. And while there can be no guarantee that some sleeping prince has not been missed--a super-solvent wraith like J. Paul Getty--the law of diminishing returns sets in after these listings. We are not, of course, stooping to mention the ignoble wretches, the proletariat of Dun & Bradstreet, evaluated at less than $75 million by wealth-watchers, even though some of them are interesting characters and are given compensatorily reverent treatment by Fortune from time to time. 20 We'll run into a few occasionally further along, resolutely plowing their golden ruts.
But, to consider one of a number of rejected nominations and the reasons for banishing him from the financial Pantheon (lest the reader suppose I am being arbitrary in those I flunk out), let us consider the late William F. Buckley, Sr. , publicly saluted as having been worth $110 million on his death in 1958. 21 Money of this specific gravity should have put him high in the Fortune hierarchy; but Fortune did not so much as mention him, with what to me seems ample justification.
Buckley, an authentic on-the-spot imperialist concession-hunter, before his death stirred desultory attention by founding a private school in Sharon, Connecticut, dedicated to safeguarding small children "against contamination by the theories of so- called 'liberalism. '"22 His son, William F. Buckley, Jr. , carries his father's torch of anti- New Dealism in the oil-slick National Review and in books embarrassingly revelatory of elementary intellectual inadequacies such as God and Man at Yale, McCarthy and His Enemies and Up from Liberalism. A McCarthy-lover, the son has also collaborated on a rousing defense of the House Un-American Activities Committee. Education, to the son as to the father, is guided indoctrination with ancient unwisdom.
Apart from the elder Buckley's authoritarian views on education (he decreed that his children be trilingual and study the piano whether musically inclined or not), he was reportedly an ardent admirer of Theodore Roosevelt, particularly of Roosevelt's penchant for sending threatening battle cruisers to objectionable (small) countries. 23
When he gave up the ghost, Buckley pe`re was not widely known. It is hardly an exaggeration to say that his death recalled him from oblivion to obscurity. He was not immortalized in Who's Who, Current Biography 1940-1960 or Poor's Register of Corporations, Officers and Directors. The New York Times carried no pre? cis of the probate of his will, which it usually does on large estates. It seems fair to say that attention has focused on him retrospectively only because of the verbal political posturings of his son and namesake.
While there is no reason to doubt that the elder Buckley may have left his ten children and twenty-eight grandchildren (as of 1957) more money than might be good either for them or for the country, there is no external evidence justifying his placement in the $110-million, the $50-million or even the $25-million class. Compared with grizzled Clint Murchison or old Sid Richardson, he simply does not rate. I omit any detailed analysis of the Buckley enterprises, all small. 24
Buckley's Pantepec Oil, of which John W. Buckley is now the family director, in 1962 had total assets of only $3,435,011 and working capital of $35,544. It had three million shares outstanding, all valued on the market as low as $600,000. But in 1956 it sold its Venezuelan concessions to the Phillips Petroleum Company for $4. 9 million, a respectable sum to which I genuflect. Priced a while back in the $2. 00 range, the stock of Pantepec slid down to 20 cents a share in 1963. 25
Coastal Caribbean Oils, Inc. , another Buckley company, in 1962 had total assets of $3,632,216 and a deficit in working capital of $138,286. Like Pantepec it was pretty much a hollow shell consisting of (1) stock issue and (2) arbitrarily valued exploring concessions. It boasted 3 employees and claimed 16,453 stockholders, no doubt all
praying madly for the blessed increment in the form of gushers. 26 Canada Southern Oils, Ltd. , a holding company, in 1964 had stated assets of $9,653,393, a working capital deficit of $469,704, 10 employees and 15,000 stockholders. 27
James L. Buckley is an officer and director of some Pantepec subsidiaries but he is also vice president and a director of United Canso Oil and Gas, Ltd. William F. Buckley, Jr.
It is evident that the Fortune estimates as checked against available probates show extremely wide variations, approximately correct at times but at other times far off the mark. It would, in fact, be remarkable if Fortune had found an unofficial way to being even approximately correct in all cases.
Ambiguity of the New Wealth
Additionally, one must notice that much of this "new money" is concentrated in real estate, promotional effort and uncertain oil prospecting. The owner of real estate or of oil-producing land holds something not readily translated into dollars. The independent oil prospector is subject to price fluctations, curtailment of politically arranged tax privileges and, in many parts of the world, confiscation. In any event, his wealth consists largely of estimated below-ground reserves, which may be erroneous. The real estate operator, in order to cash in, must find for his properties buyers, who are relatively scarce; and often the big realty operator is sitting on a slippery cushion of bank loans and mortgages. His own equity is seldom as imposing as the facades of his properties.
Few men on the list are in manufacturing or banking, where there is not only solid evidence of what an enterprise is worth but where the heavy money is found. And even big oil operators fall on evil days. Glenn McCarthy, who in 1949 threw open the Shamrock Hotel of Houston to a less-than-astounded world and who is more recently financially in an ambiguous position, is a case in point. Hence I would place a question mark after the name of nearly every independent oil prospector on this list with respect to the rated extent of his wealth. I do this for two reasons: Most of them own purely private companies and few publish balance sheets and income statements. Those that do, such as Murchison's Delhi-Taylor Oil Corporation, have years of deficit operations alternating with profitable years. What nonfinancial observers do is to look at a heap of assets, usually no more than leases and land concessions, and put some figure on the heap. They do not take into consideration offsetting liabilities--cost of leases, drilling equipment, political contributions and the like. This is not to deny that the oil men mentioned are wealthy in varying degrees.
Nor is this a point made in passing. The issue underlying my remarks is this: Are large fortunes, solidly comparable in size to the inherited fortunes, still being made in profusion by free-as-air rugged entrepreneurs in the American economy? Fortune, the
Wall Street Journal and most newspapers that follow the "party line" laid down by these over-arching publications say "Yes. " I say, most respectfully, "No. " In the upshot, the reader can make his own choice.
We have already seen that Arthur Vining Davis drops like the proverbial plummet from Fortune's $400-million class to the $86-million class in probate autopsy and I venture to say that most of the independent oil operators will, when they throw in their final hands, show similar downward variations from ebullient outside estimates. But I incline to keep Jacob Blaustein pretty much in the position Fortune assigned him because be is a full-scale operator, is high in national political councils and is a known big stockholder of the muscular Standard Oil Company of Indiana--a solid, old-line Rockefeller enterprise.
The J. Paul Getty Story
J. Paul Getty may be worth less than Fortune rates him, but Getty does not belong to the list of new wealth. Getty himself provides this information as well as his own comments on the Fortune estimate. As wealthy people seldom contribute to the discussion of their affairs, Getty's action was most unusual.
Getty, incidentally, was scarcely known except to business associates until the Fortune article appeared, crowning him the world's richest man. "Illustrative of the extent to which I had been able to maintain my anonymity through the years," Getty writes in his memoirs, "was a chance encounter with a former classmate I had not seen since my undergraduate days at the University of California at Berkeley. Meeting accidentally on a Los Angeles street in 1950, we recognized each other and stopped to reminisce for a few moments. 'By the way, Paul,' my former schoolmate asked me at one point in our conversation, 'who are you working for these days? '"8
Right after the article appeared, Getty relates, he became a sitting duck for a parade of interviewers, cranks, money-seekers and spongers.
As to the source of his wealth, Getty writes, his father died in 1930, worth $15,478,137. As early as 1916 the elder Getty was a millionaire oil prospector. He left the bulk of his estate to his wife but by 1916 he had entered into a 70-30 partnership with his son, allotting the latter, gratis, 300 of 1,000 newly issued shares of the Getty Oil Company. By the terms of his father's will Getty got only $500,000; "but I had no real need for more money; I had several millions of my own. "9 He owned, in fact, more than 30 per cent of Getty Oil.
Getty, in brief, is an inheritor. The son of a wealthy oil operator, he completed his formal education at Oxford University before World War I and was brought in on the ground floor as a junior partner of a going business where he did well.
In 1930 Getty was elected vice president and general manager of George F. Getty, Inc. , but the controlling interest remained with his mother and former associates of the elder Getty. Young Getty, in order to protect the company's position, urged the acquisition of additional shares of companies in which the Gettys already had interests, but his elderly associates held back and young Getty went ahead on his own account. He first bought 160,000 shares of Pacific Western Oil Company at $7 a share: $1,120,000. He next started buying Tidewater Associated Oil Company in the open market at $2. 50 a share, depression-low prices, and acquired 285,004 shares for $923,285. 30 or an average price of $3. 59. 10
Getty, schooled by his father to reach only for aces, was out to get control of Tidewater. He found himself blocked by the powerful Standard Oil Company of New
Jersey but, with some unexpected luck, delicately outfenced this giant and finally got control of Tidewater and the Mission Corporation, which the New Jersey company had formed to hold its own Tidewater stock. He also picked up at bargain prices the Hotel Pierre in New York, and the Skelly Oil Company, which owned the Spartan Aircraft Company. In the meantime his mother had assigned her Getty shares to a trust for her grandchildren, with J. Paul Getty as sole trustee.
In 1963 Getty, after accepting Getty oil stock for his various independent holdings, held 12,570,939 shares of the Getty Oil Company, which now owns all or nearly all of Tidewater, Mission, Mexican Seaboard, Skelly and a good many others. 11 These shares in the same year, by the company's audited computation had a net tangible underlying value of $31. 21. This single holding alone, then, was solidly worth $392,339,006. 19 and is only part of the family holding. By late 1967 the market value of J. Paul Getty's Getty Oil holding's had advanced to around $1 billion $200 million.
As Getty personally has always liked to stand free and clear of banks, one may suppose none of it is up for collateral against hidden loans. Add here and there any stray properties Getty may own, consider that he has made. provisions for his sons and grandchildren going beyond those of his mother's trust fund, and one sees looming before one an authentic very large fortune, new in its latter-day magnitude at least, although not in its origin. Aside from the Sloan, Kettering, Pratt and Mott General Motors fortunes, all post-1918 jobs, it is one of the few so-called new big ones we can accept without demur (other than denying it is new) from the Fortune list. Had Getty not had money and insight provided by his father he could not have picked up these companies.
Getty, commenting on his elevation to hyperbolic billionaire status, said "there is no such thing as a billionaire among active businessmen, not in the sense that most people would understand the term, An individual may own or control business enterprises worth a billion dollars or even more, but little of his rated wealth is available to him in cash. A millionaire or billionaire does not have his millions on deposit in his personal checking account. The money is invested in his businesses.
"It is impossible for him to know what his investments are really worth at any given time. The values of a businessman's holdings fluctuate greatly. The price of stocks may rise or fall, corporations may show major increases or decreases in their net worth, innumerable variables may multiply the value of an investment or wipe it out completely. "12
Getty's entire life has been subdued in pitch. He went to school quietly--first to the University of Southern California, later to the University of California and then to Oxford. He traveled the world quietly, went into business with his father quietly and later bought large amounts of stock very cheaply--and quietly. He was married quietly seven times and as quietly divorced, with no hint of scandal. In his memoirs he quietly takes the blame for his marital failures and speaks with quiet commendation of his various wives. He appears to have quietly evaded politics and politicians at all times. In more recent years he has lived quietly in the baronial halls of Sutton Place, his English manor house, and will one day no doubt die quietly and quietly leave his swollen fortune to foundations and to his four sons and many grandchildren. Getty, beyond doubt, has been the all-time ghostly atypical presence in the procession of American wealth. When he speaks--and he has been interviewed on TV--he speaks, yes, very quietly.
H. L. Hunt and the Politics of Oil
Haroldson L. Hunt, No. 2 on Fortune's list, has been variously estimated as worth $250 million to $3 billion. 13 Forced to choose, I'd incline toward the lower figure; Fortune pegged him at $400-$700 million, leaving a good deal of leeway, But Hunt's fortune, like that of all the oil prospectors, rests literally in the sands and in money- inflamed politics, domestic and foreign. He no doubt holds a good hand, but one may doubt that it harbors a royal flush.
Hunt, a small-town cracker-barrel philosopher (in this aspect very much resembling the late Andrew Carnegie and Henry Ford) and overburdened with wildcatted possessions beyond his own wildest, wildcatting dreams, first came to national political notice during the 1950's (much as Henry Ford did in the early 1920's) as a rabble- rousing propagandist for hard-nosed right-wing political points of view. For Hunt takes seriously what he has heard around the town cracker-barrel. The violence of the diatribes in his subsidized radio programs--carried to 331 cracker-barrel stations--led many observers to see them as having at least helped nurture the mood for the assassination of President Kennedy. The programs, seeming overtures to schrecklichkeit, are prepared and taped by a stable of about twenty-five henchmen Hunt maintains in Washington, D. C. In general, views blandishing to the Ku Klux mentality are broadcast. 14
On the very morning of President Kennedy's assassination--in Texas--the Hunt radio program in Dallas and other areas predicted pessimistically that a day was soon coming when American citizens would not be allowed to own firearms with which they could oppose their rulers, an important function of red-blooded free citizens in the cracker- barrel point of view. Of a communist society (thought by cracker-barrel pundits to be imminent in the United States) the Hunt commentator said forebodingly: "No firearms are permitted the people because they would then have the weapons with which to rise up against their oppressors. "
Hunt staged his alarmist programs through a series of incestuous foundations--Facts Forum, Inc. , the Life Line Foundation and Bright Star Foundation, none of which is listed in the very complete Foundation Directory, 1964, issued by the Russell Sage Foundation. Until early 1965 (after the assassination of President Kennedy: that is), despite many strongly sponsored protests, Hunt seemed to have mysterious and powerful friends in or behind the Internal Revenue Service, which granted these propaganda foundations complete tax exemption. The Life Line Foundation originally got tax exemption as a religious organization! To his fingertips the pecuniary man as well as cracker-barrel philosopher, Hunt further improved his position by soliciting business donations for his foundations and giving his own food and patent-medicine companies reduced advertising rates on his radio programs. For H. L. Hunt believes in killing whole flocks of birds with a single stone.
One of Hunt's many immortal quoted sayings is: "Everything I do, I do for a profit. "
There is also the H. L. Hunt Foundation, founded in 1954, a financially anemic affair with assets at the end of 1961 of only $799,553, according to the Foundation Directory, and which in that year made charitable grants of a stupendous $17,500. No doubt it is this lithe creation that is destined to receive and immortalize any portion of Hunt holdings in flight from inheritance taxes.
Although Hunt--silver haired, soft-spoken, frugal, a food faddist-is very rich, few people are able to say they have ever seen the color of his money. He has never been known to contribute in the presence of witnesses more than $250 to $500 to any single political candidate; and in 1956 he gave the Republican Party, over the counter, a mere $38,000. In 1952 the Republicans tried to entice $300,000 from him, but Hunt came up
with only $5,000--this, at least, is according to the public role of penny-pincher that he plays.
But owing to the vastness of his landholdings, sprawling over the Southwest and the Middle East, and his seemingly uncanny ability to obtain high-level political chaperonage at crucial moments, realistic observers surmise that Hunt is passing out large sums under the table. "He must have a front man he spreads his money through," hostile Senator Ralph Yarborough of Texas has said. "A man with that kind of bank roll is bound to have. "
It is rumored in Texas, according to the New York Times (August 17, 1964), that Hunt put up $150,000 to get General Douglas MacArthur the Republican presidential nomination in 1952 and that he put up $100,000 for the Kennedy-Johnson ticket in 1960 owing to his longstanding friendship with Lyndon B. Johnson. Booth Mooney, the Hunt public relations man in Washington, wrote the authorized The Lyndon Johnson Story in 1956, updated in 1964; and Lyndon Johnson is an old friend of the oil depletion allowance as well as of Hunt. Although Senator Barry Goldwater in 1964 stood forthrightly for straight Hunt political wisdom, Hunt testily denied that he was supporting Goldwater against the old Huntsman, L. B. J.
One must agree with Senator Yarborough that Hunt and other Texas oil men are passing money (or some equivalent) to political figures. If they didn't, they wouldn't have the depletion allowance, ostensibly passed as a defense measure to stimulate the search for oil but also serving the useful function of providing a politician's entering siphon into the oil Golconda. There might instead be a special high tax on oil!
Here we touch the edge of a problem: Why, if the independent oil men are so favored by nature and politicians, do they show this political rancor? True, not all the oil men are so perturbed as Hunt and some others, who apparently feel that their easy-come wealth could as easily be whisked away; many of the more realistic, less anxiety-prone Texas oil crowd speak of themselves as just plain lucky and see no need for making the world safe for future wildcatters.
But H. L. Hunt is an expression in exaggerated form of the irritation and resulting apparent meanness of many oil independents, even though most oil men appear to regard him as more than a little kooky. What produces this irritation? There is, first, the annual tax bill. Some of the successful oil men write annual checks for the Internal Revenue Service in amounts that would stagger the ordinary man. And most of the oil men are ordinary men who early in their lives worked long hours for small wages. The men who write these checks still think in terms of the original $20-a-week roustabout. And while it is frequently said that one wouldn't mind writing big tax checks if one had the big incomes, to have worked in one's early life on the supposition that what one acquired one could keep and then to learn after hitting it big that one must share to some extent with the government--or politicians--is more than some persons can swallow gracefully. Some of the oil men, Hunt included, feel very much the way a man earning $60 a week would feel if he was told the withholding tax was to be $50. They just aren't psychically attuned to their new positions. On top of the tax bite, very much softened by the depletion allowance and drilling write-off, the oil men find they must share what is no doubt a good part of the depletion benefits with hungry politicians in the form of "campaign contributions. " And for these political contributions they feel the politicians ought to deliver more. The politicians, to extenuate their less than totalitarian success, no doubt report that there are various obstacles in the form of Liberalism, Communism, Socialism, Eastern Capitalists, Labor Unions, Welfarism and a world full of Wrong- Thinking People all the way from college professors and journalists to Supreme Court justices. The enormity of it all, the injustice of all these misguided people stirring a
witch's brew with which to annoy Horatio Alger's own darling boys out on the oil frontier, finally becomes more than human flesh--or at least H. L. Hunt's flesh--can stand.
Hunt has seen it all at first-hand, indeed. He has regularly attended the national conventions of both parties, keeping his ears close to the ground, his eyes sharp and his nose clean for any whiff of Godless un-Americanism. And there is, as God only knows, much of it around, in the very Constitution itself!
There is, too, the milieu of Texas as a force shaping Texas consciousness. For Texas has very much the economic and political status of a colony, as also have many far less bustling western states. In the words of Senator Wilbert (Pappy) Lee O'Daniel, Texas is "New York's most valuable foreign possession. "
The widely traveled John Gunther in 1947 found that "Texas reminded me a good deal of Argentina . . . cattle culture, absentee ownership, vast land holdings by semifeudal barons, a great preoccupation with weather, an under-developed middle class, interminable flatness and open spaces, and fierce political partisanship and nationalism. And . . . reaction closely paralleling that of Argentina. " 15
Most of the state is in fact absentee-owned by big eastern capital. The largest enterprise in the state is the Humble Oil and Refining Company, subsidiary of the global Standard Oil Company of New Jersey, the annual gross revenue of which exceeds the combined revenues of thirty state governments--$11. 471 billion versus $11. 375 billion in 19,65. The operations of the huge eastern enterprises--Du Pont, U. S. Steel, General Motors, Dow Chemical and various others--are splattered right and left. And many of the prominent men in the state, Hunt included, originate elsewhere, are in effect colonial concessionaires. Many Texas oil men are not native Texans at all.
With a thin layer of native wealthy and imported representatives of big corporations at the top, bellowing the glories of Texas in history and contemporary culture, most Texans find themselves somewhat dazedly in the low-income classes, dirt poor--in fact, colons. Gunther was told in Texas that twenty corporations ran the state, but he thought this exaggerated. I don't think so. At least, the rank and file colons, many close to peons, do not run it--and they know it.
Texas boastfulness, free-swinging behavior and loud talk about independence of spirit are all a compensatory reflex to the feeling, deep in many Texans, that they are dusty puppets manipulated from outside. Some informed Texans amuse themselves sardonically by giving visitors the home addresses in New York, Boston, Philadelphia, even Amsterdam, of the owners of prominent items of Texas property.
One word fits the general Texas political consciousness from high to low: resentment. And some of Hunt's outpourings have awkwardly expressed simply this.
As to colonialism, it shows itself everywhere in this way: One can see a great deal going out--cattle, cotton, oil, minerals, chemicals--but little or nothing coming in. The dividends go out, too. Texas, like Pittsburgh seventy-five years ago, is being bled grey, if not white.
The niggardliness of Hunt's known political handouts is thought to derive from the position that, although Hunt may like a man's political stance, he does not like to back losers. His political contributions, like those of the oldline magnates, are not made to support or propagate principles so much as to purchase instant influence in government. In this respect he seems, if reports are true, cut from the same bolt as the late Henry J. Havemever, the sugar magnate, who testified before the United States Industrial Commission that he habitually contributed to both political parties (as do the oil men) and explained: "We get a good deal of protection for our contributions. "
Hunt, lamentable to relate, has had some hard times with cruel politicians. When he bid $17 an acre on offshore oil tracts that the government ordinarily leased at $406 an acre he was unsympathetically rebuffed by Secretary of the Interior Frederick Seaton. Hunt thereupon procured Senator Everett M. Dirksen and Representative Charles A. Halleck, statesmen of the purest Republican strain, to convoy him to a protest interview with Seaton. This eyeball to eyeball confrontation came to naught, But after the tidelands were transferred under Eisenhower to state jurisdiction--for which the well- heeled oil lobby had worked every bit as hard as wildcatters on a hot tin roof--Hunt found Texas Governor Allan Shivers, a board member of Hunt's Facts Forum, far more accommodating. In this matter Shivers's land commissioner, Bascom Giles (before he was bundled off to the state penitentiary for getting caught cheating the state in another quarter), approved all of Hunt's bids for more than 100,000 acres of tidelands leases, even though Hunt bid an average of $6 an acre while the average over-all bid was $78. As I remarked, Hunt is frugal and this frugality--aided by his knowledge of governors-- has helped make him wealthy in a nation where people are so foolish as to pay whatever it says on the price tag.
The last president of whom Hunt fully approves was Calvin Coolidge; even Herbert Hoover he finds too soft. Both Eisenhower and Kennedy he regards as disasters of virtually Rooseveltian proportions. Although backing haughty Douglas MacArthur for the presidency, Hunt literally doted on Senator Joseph McCarthy, with whom he zestfully played cards and exchanged fraternal favors. For governor of Texas he backed morose General Edwin Walker, whose right-wing propagandizing forced him out of the Army, to the regret of a considerable congressional bloc. The political ideology of William Buckley, Jr. , himself a scion of a small-bore Texas oil fortune, makes a strong appeal to Hunt although he believes the volubly rhetorical Buckley uses too many big words. Hunt, unlike Buckley, sees nothing to be gained by repackaging a muted kluxishness in fancy language as a tortured endeavor in high moral aspiration.
Hunt deeply admires Candyman Robert Welch, founder of the John Birch Society, George (Stand-in-the-doorway) Wallace of Alabama and others who stand forthrightly for the trammeling of common equity. According to the New York Times, Hunt's ideal Democratic ticket of 1964 would have been Harry F. Byrd of Virginia for president and Frank J. Lausche of Ohio for vice president with a Republican ticket consisting of Bourke B. Hickenlooper of Iowa and Roman L. Hruska of Nebraska.
Showing the earnestness of his beliefs, Hunt spends a good deal of priceless wildcatting time bombarding newspaper editors with cracker-barrel messages. For he believes that if the American people would only remove the scales from their eyes they would see that the nation is being subverted right and left. Among the subverters, as he sees it, are the governesses, nurses, tutors and teachers of the children of the established rich who grow up to become extreme leftists like W. Averell Harriman, Nelson Rockefeller, John Lindsay, G. Mennen Williams and John F. Kennedy--all alien to the cracker-barrel. One can see what they did even to language-frenzied William Buckley, Jr. It is very insidious. But although he almost from the first unpatriotic rejection of his cheap bid for valuable tidelands disliked Eisenhower, Hunt has not yet turned on his close friend Lyndon B. Johnson, of whom he said early in 1964:
"Johnson is the kind of President who can lead Congress around by its nose. I wouldn't mind seeing him in there for three terms. "
Hunt was born in Vandalia, Illinois, in 1890. He could read at age three and early displayed a phenomenal memory, which he has retained throughout the years. Like Henry Ford basically an intelligent but very partially informed man, he quit school in the fifth grade and became a drifter at thirteen. After wandering through the West as a barber, cowhand, lumberjack and gambler (Hunt still likes to gamble and claims to
trounce the racetrack bookies) he settled in Arkansas, where he became a moderately prosperous cotton farmer. Ruined by the collapse of cotton prices in 1921, he turned for lack of anything better to oil, and was literally swept off his feet toward riches. According to the Hunt legend, he struck oil on the first try with a drilling rig he bought with a $50 loan. Another version is that he won the money, or the rig itself, in a card game.
A wildcatter with little or no money must strike oil right away because, as Hunt himself testifies, only one in thirty attempts to get oil succeeds and the average cost of each attempt now is about $250,000. Hunt attributes his continued success to following the law of averages: If one keeps trying, one will eventually strike oil. He claims he has drilled as many as 100 dry holes in succession, which at $250,000 average per hole is $25 million.
After much successful drilling in Arkansas, Hunt shifted to East Texas, not then considered likely territory. But there aging C. M. (Dad) Joiner brought in the world's largest producing field. Hunt bought Joiner's discovery well, took a lease on 4,000 nearby acres and wound up with most of the Joiner land in a deal that many chroniclers profess to find mysterious. Hunt says he paid $1 million for the lands, money he had made in Arkansas. But Joiner, like most wildcatters, died broke, while the bubbling East Texas field swirled Hunt upward to oildom's Pantheon. He now, like most of the Texas oil men, operates all over the world, hobnobs with the Arab sheiks and plays oil politics wherein the white chips cost anything from $1 million to $10 million.
Suspected of being the financial angel of various far-out right-wing agitational groups, Hunt is regarded by some observers as dangerous. And in a sufficiently intense atmosphere he might be. But all of the various right-wing groups to which some politically unsophisticated wealthy people contribute as yet show no signs of being more than money-cadging rackets set up to squeeze a profit out of the fears of rich neurotics, No doubt they stir passions but their leaders couldn't stage a cracker-barrel putsch, much less set fire to the Capitol wastebasket. If Hunt is giving any of them money, it can only be his version of a share-the-wealth movement.
Hunt has been overheard introducing himself to strangers by chirping: "Hello, I am H. L. Hunt, the world's richest man. . . .
Clint Murchison and Sid Richardson
Joseph P. Kennedy is sufficiently recognizable as the sire of the late president to need no further identification. His career has been exhaustively investigated by Richard J. Whalen in The Founding Father, which is almost clinical in its penetration. Fortune seems to me to rate him on the high side. Many of the people on the Fortune list deliberately avoid public notice, attempting to blend, chameleonlike, into the background. One who confesses to this sort of shyness is Daniel K. Ludwig. The General Motors fortune-hunters and Henry J. Kaiser are rather fulsomely known to the public through newspaper reports and need not detain us.
Two oil men of a cut somewhat different from H. L. Hunt perhaps should be noticed. They are Clint Murchison and Sid Richardson, who often made a team with the Murchison sons. In some ways more ambitious than Hunt, they have also been more realistic. Although rightists politically, they have never showed a desire to play the role of a Fritz Thyssen in the American system. "
Murchison is the plain man as a multimillionaire, shirtsleeves, unassuming manner and all. His grandfather and father owned the First National Bank of Athens, Texas,
which Clint now owns, and Clint had a short stay at Trinity University, Texas, before entering the bank. Upon his demobilization from the Army in 1919 he encountered his boyhood friend Sid Richardson, who had also tried college and who was now dealing in oil leases. Because he liked trading for the sake of trading he joined Richardson. After a period of buying, selling and exchanging leases throughout the Southwest, barely keeping ahead of the game, Murchison pulled Richardson out of a poker game in Wichita Falls one night to investigate the rumor of a wildcat well near the Oklahoma border. They sneaked past guards close enough to smell oil, and the next morning they spent $50,000 buying regional leases. The following day they unloaded the leases for more than $200,000 and were off and running in a business way.
During the depression Murchison built up the Southern Union Gas Company and the American Liberty Oil Company, both later sold. Then he formed the Delhi-Taylor Oil Corporation, always rising higher on a flood of new oil.
Murchison is distinguished from most of the other Texas oil men by the breadth of his diversified non-oil interests and by his participation in a number of national financial coups with the alert Allen Kirby and the late Robert R. Young of the Alleghany Corporation.
As to his diversified interests, fie is virtually the sole owner of the Atlantic Life Insurance Company of Richmond, Martha Washington Candy Company of Chicago and Dallas, Waco and Austin taxi, bus and transit lines among various smaller interests. He is or was the dominant owner of the American Mail Line, Ltd. , of Seattle; Delhi-Taylor Oil Company; Holt, Rinehart and Winston, New York publishers; Diebold, Inc. , office equipment; and a chain of small Texas banks as well as miscellaneous other goodies. He has a substantial interest in the Transcontinental Bus System; American Window Glass of Pittsburgh; and Southeastern Michigan Gas Company. Of course, even as this is being written, his holdings and those of his sons may shift in the unending succession of deals for which he is noted. His general strategy appears to be to pick up cheaply properties that do not appear to be living up to their potential and to make them into good earners by installing skilled managers. He gets wind of these properties, as do most wealthy men, through professional investment locators.
He was approached by the late Robert R. Young, a fellow Texan and the financial mentor of Woolworth's Allen Kirby in the Alleghany Corporation, and was asked to join the Young-Kirby forces in the 1950's in seeking control of the Morgan-Vanderbilt New York Central Railroad, the Pie? ta of railroad cognoseenti. Alleghany already controlled the Chesapeake and Ohio Railroad, a lush earner. Murchison joined Young and brought Richardson with him. Between them Murchison and Richardson put $20 million on the line.
Clint, after talking with Young over long-distance, told Sid about the transaction on the telephone. "When the calls were over," says Cleveland Amory, who researched the Texans in their native habitat, "Richardson thought the deal was for only $10,000,000. Informed it was twice that, he called his partner back. 'Say, Clint,' he said, 'What is the name of that railroad? '"
The capture of the prize New York Central by this group made financial history, as they say.
Murchison and his sons also followed Alleghany Corporation and took a position in the stock of Investors Diversified Services, which controls a tangle of investment trusts with aggregate assets of more than $1 billion.
Richardson, Amory informs us, was a bachelor and lived around in various hotels and clubs. Amory assigned him a wealth exceeding a billion dollars, a figure few others
agree with. But he owned an island in the Gulf of Mexico where he hunted and fished. He declined to write letters and had no secretary; his office was in his hat. He owned a fleet of Cadillacs in Dallas and one each in every city he regularly visited.
In 1947 Richardson established the Sid W. Richardson Foundation of Fort Worth, Texas, which for the end of 1962 reported to the Foundation Directory net worth of $69,554,801. Benevolent grants for the year totaled $14,500, which hardly spread much sunshine among the heathen. In the meantime the income on this big accumulation most of the time since the fund was started would have been subject to maximum tax rates up to 91 per cent, more recently 77 per cent. The foundation, however, in a neat stroke, preserved all this income intact and saw to it that none of it went to paying for the costs of sacred national defense.
Murchison, widowed and remarried, owns a 75,000-acre ranch in Mexico's Sierra Madre Range. Here he has entertained the Duke and Duchess of Windsor and other ultra-magnificoes. In fact, he owns several homes; one has a room with eight beds "so a group of us boys can talk oil all night. "17
The Wolfson Story, in Brief
The only other person of special interest on the Fortune list is Louis Wolfson, assiduous wheeler-dealer of Miami Beach who has engaged in much shuffling about with New York Shipbuilding Corporation and the construction-dredging firm of Merritt-Chapman & Scott among others. Wolfson is one of the standard Roman-candle phenomena of American society, one of hundreds that come and go across the financial horizon like fireflies, and Fortune itself demoted him from the list of heavyweights in 1961. 18 Having no reason to gainsay Fortune here, I accept its last judgment on Wolfson.
Wolfson and an associate were convicted on September 29, 1967, in federal court on nineteen counts of criminal conspiracy and illegal stock sales. Gaudily overdramatizing, newspapers pointed out that Wolfson faced a possible ninety-five years in jail. When it came to sentencing the judge meted out sentences of one year on each of the nineteen counts, with the sentences to run concurrently. If over-ruled on appeal, Wolfson will then serve one year with the customary time off for good behavior
Nominees of the Satevepost
Thus far I have confined myself to the Fortune list of alleged new builders of alleged
big fortunes; but others, too, have their candidates.
Accepting and endorsing Fortune's nominations of John D. MacArthur, John Mecom, Daniel K. Ludwig, Leo Corrigan, William Keck, R. E. Smith and James Abercrombie as financial big-shots and dispensing a bit of scuttlebutt about them, the Saturday Evening Post in 1965 put forward six additional candidates: Dr. Edwin Land, inventor of the Polaroid camera, whom the Post credits with $185 million, a doubtful figure despite the soaring market prices of Polaroid stock; Henry Crown, head of the General Dynamics Corporation (government contracts) and dabbler around in building supplies, real estate and railroads, whom the Post says is worth $250 million; Howard Ahmanson, California insurance and savings-and-loan wizard, worth $300 million according to the Post; and W. Clement Stone, insurance promoter, worth $160 million on the Post's nimble abacus. The Post did not turn up any new information on ultra-shy Ludwig (who it averred had made a round billion dollars since World War II); none on Charles Allen,
Jr. , Of the investment banking firm of Allen and Company, other than that he is a "financier. " And no more on John Erik Jonsson than that he is the major stockholder in market-zooming Texas Instruments Company and the possessor of a "huge fortune. " 19
All these figures, even those bearing on Land, are little more than curbstone estimates. Land's could be about right, for he owned 51 per cent of the Polaroid Corporation stock at the inception of its productive phase. But one does not know yet to what extent he may have revised his holdings. As Land is a technical man, an inventor who sticks closely to his work and has ready access to all the capital he thinks he needs (he was bankrolled to the tune of $375,000 by the old-line heavy money of W. Averell Harriman, James P. Warburg and Lewis Strauss, all vastly enriched by their Polaroid stock) he retains a large interest. Precisely how much we shall see later.
Of all the persons named thus far in this chapter, Land is the only one who has created a ground-up new free enterprise. All the others jumped aboard existing merry-go-rounds or hung onto government coat-tails, although Kettering and Donaldson Brown did significantly creative jobs at General Motors.
Land did far more than invent the Polaroid camera, which develops its own pictures. He has more than 100 inventions to his name in the field of optics and was inventing while still a student at Harvard, which he quit. He is not a bit interested in money and resents being categorized primarily as a rich man. He lives in moderate middle-class style in Cambridge, Massachusetts, and has a small farm in New Hampshire. Like Pasteur, Edison and other creators, he lives mainly in order to work.
His impact on the world has been far more than adding to its marketable gadgetry, for he played the chief role in developing cameras (such as those used in the famous U-2 espionage plane) that would take detailed pictures at more than 70,000 feet of altitude. It was his cameras that exploded the idea of a "missile gap" and detected the Soviet missiles in Cuba. He is currently interested in ways of humanizing machine society, eliminating the "problem of mass boredom and mental stagnation" in American life, particularly among industrial workers. Whether he cracks this nut or not, his mind is soaring in an empyrean far above that of Hunt, the wildcatters and the wheeler-dealers.
Most of the men mentioned on both the Fortune and the Post lists are obviously of wheeler-dealer stripe, the kind that can well be, financially speaking, here today and gone tomorrow. In a steadily continuing inflation they will all no doubt come through with burgees flying; in the event of a substantial recession, some could find themselves in disturbed relations with their banks if not on the streets selling apples.
The New York Times, September 13, 1963, offered a few additional names of supposedly new rich: Thomas J. , Jr. , Arthur K. and Mrs. Thomas J. Watson, their mother, collectively then worth $108 million in International Business Machines stock; Sherman M. Fairchild, son of a founder of IBM and dominant owner of Fairchild Camera and Instrument and Fairchild Stratos; Archibald G. Bush, with a $103 million holding in Minnesota Mining and Manufacturing; Cyrus Eaton, Cleveland banker; and a variety of others.
But very few of the names mentioned by the Times additional to those named by Fortune and the Post are of men who made their own fortunes. Like the Watsons and Fairchild, they are mostly inheritors: Howard Heinz II, the pickle king; Joseph Frederick Cullman III of Philip Morris, Inc. ; J. Peter Grace of W. R. Grace & Co. ; Lewis S. Rosenstiel of Schenley Industries; Norman W. Harris of the Harris Trust and Savings Bank (Chicago); and others.
More Entries for the Pantheon of Wealth
These are by no means the only names of possible new big-money nabobs that could be mentioned. And while there can be no guarantee that some sleeping prince has not been missed--a super-solvent wraith like J. Paul Getty--the law of diminishing returns sets in after these listings. We are not, of course, stooping to mention the ignoble wretches, the proletariat of Dun & Bradstreet, evaluated at less than $75 million by wealth-watchers, even though some of them are interesting characters and are given compensatorily reverent treatment by Fortune from time to time. 20 We'll run into a few occasionally further along, resolutely plowing their golden ruts.
But, to consider one of a number of rejected nominations and the reasons for banishing him from the financial Pantheon (lest the reader suppose I am being arbitrary in those I flunk out), let us consider the late William F. Buckley, Sr. , publicly saluted as having been worth $110 million on his death in 1958. 21 Money of this specific gravity should have put him high in the Fortune hierarchy; but Fortune did not so much as mention him, with what to me seems ample justification.
Buckley, an authentic on-the-spot imperialist concession-hunter, before his death stirred desultory attention by founding a private school in Sharon, Connecticut, dedicated to safeguarding small children "against contamination by the theories of so- called 'liberalism. '"22 His son, William F. Buckley, Jr. , carries his father's torch of anti- New Dealism in the oil-slick National Review and in books embarrassingly revelatory of elementary intellectual inadequacies such as God and Man at Yale, McCarthy and His Enemies and Up from Liberalism. A McCarthy-lover, the son has also collaborated on a rousing defense of the House Un-American Activities Committee. Education, to the son as to the father, is guided indoctrination with ancient unwisdom.
Apart from the elder Buckley's authoritarian views on education (he decreed that his children be trilingual and study the piano whether musically inclined or not), he was reportedly an ardent admirer of Theodore Roosevelt, particularly of Roosevelt's penchant for sending threatening battle cruisers to objectionable (small) countries. 23
When he gave up the ghost, Buckley pe`re was not widely known. It is hardly an exaggeration to say that his death recalled him from oblivion to obscurity. He was not immortalized in Who's Who, Current Biography 1940-1960 or Poor's Register of Corporations, Officers and Directors. The New York Times carried no pre? cis of the probate of his will, which it usually does on large estates. It seems fair to say that attention has focused on him retrospectively only because of the verbal political posturings of his son and namesake.
While there is no reason to doubt that the elder Buckley may have left his ten children and twenty-eight grandchildren (as of 1957) more money than might be good either for them or for the country, there is no external evidence justifying his placement in the $110-million, the $50-million or even the $25-million class. Compared with grizzled Clint Murchison or old Sid Richardson, he simply does not rate. I omit any detailed analysis of the Buckley enterprises, all small. 24
Buckley's Pantepec Oil, of which John W. Buckley is now the family director, in 1962 had total assets of only $3,435,011 and working capital of $35,544. It had three million shares outstanding, all valued on the market as low as $600,000. But in 1956 it sold its Venezuelan concessions to the Phillips Petroleum Company for $4. 9 million, a respectable sum to which I genuflect. Priced a while back in the $2. 00 range, the stock of Pantepec slid down to 20 cents a share in 1963. 25
Coastal Caribbean Oils, Inc. , another Buckley company, in 1962 had total assets of $3,632,216 and a deficit in working capital of $138,286. Like Pantepec it was pretty much a hollow shell consisting of (1) stock issue and (2) arbitrarily valued exploring concessions. It boasted 3 employees and claimed 16,453 stockholders, no doubt all
praying madly for the blessed increment in the form of gushers. 26 Canada Southern Oils, Ltd. , a holding company, in 1964 had stated assets of $9,653,393, a working capital deficit of $469,704, 10 employees and 15,000 stockholders. 27
James L. Buckley is an officer and director of some Pantepec subsidiaries but he is also vice president and a director of United Canso Oil and Gas, Ltd. William F. Buckley, Jr.
