HOME   SOCIAL CRITICISM LIBRARY   TABLE OF CONTENTS   NEXT CHAPTER   CHAPTER NOTES*

Two

    ROOM AT THE TOP:
    THE NEW RICH

   Were it not for the miscellaneous batch of hard-bitten, shirt-sleeved Texas oil-lease speculators and wildcatters that since World War I has risen on a tide of special tax privileges like science-fiction dinosaurs, it could well be said that the day of accumulating gargantuan new personal fortunes in the United States is just about ended; this leaves the tubbed, scrubbed, and public-relations-anointed inheritors of the nineteenth-century money scramble holding most of the chips. As it is, fortune-building continues--albeit at a greatly subdued pace outside the lushly flowing oil industry. For just about everything else of marketable value is tightly vaulted down, much of it resting comfortably in trust. But even in the oil industry, magnitudes are exaggerated, Texas-style, by writers who desire to bedazzle readers with a modern if oil-soaked Arabian Nights tale.

   New personal wealth is dealt with in this chapter-that is, great individual wealth that has shown itself since World War I and, more particularly, since World War II. For the most part it is wealth not known to Gustavus Myers, historian of the first waves of American fortunes and, partly because of the give-away oil depletion allowance, it postdates America's Sixty Families (1937). Classification of these new fortunes with respect to wealth and super-wealth and their comparison with the old fortunes are deferred until Chapter IV.

   Actually, before larger sums are bandied about in these pages, let it be noted that a person worth only $10 million (insignificant though $10 million is compared with many modern fortunes) is very, very wealthy indeed. If a prudent, hardworking, God-fearing, home-loving 100 per cent American saved $100,000 a year after taxes and expenses it would take him a full century to accumulate such a sum. A self-incorporated film star who earned 81 million a year and paid a 10 per cent agent's fee, 10 per cent in business expenses, a rounded 50 per cent corporation tax on the net and then withdrew $100,000 for his own use (on which he also paid about 50 per cent tax) would need to be a box-office rage for thirty-four unbroken years before he could save $10 million. Yet some men do acquire such sums--and much more. But never by offering mere talent, whatever it is, in a free market. Even the most talented bank robbers or kidnappers have never approached such an accumulation before being laid low by the eager gendarmerie.

   The incandescent Marilyn Monroe, as big as they come in filmdom and a veritable box office Golconda, died broke-an old story with the mothlike entertainers and professional athletes. She bequeathed 81 million to friends but, despite posthumous earnings of $800,000 accruing to her estate, nothing was left after taxes and creditors' claims. Clearly she was in need of a tax lawyer. There was even nothing left to establish a trust fund to generate a paltry $5,000 a year for her invalid mother. Yet Miss Monroe, obviously a true-blue American, reportedly drew $200 million to the box office from 1950 to 1963.¹ More recent reports indicate that something was salvaged for her mother.

   Hard to get, $10 million shows its power in another way. If invested in tax-exempt securities it can generate about $250,000 a year. Now if the owner exercises initial frugality and invests this income similarly each year, it will produce $6,250 the first year and (disregarding compound interest all along) $12,500 the second year, $18, 750 the third year, $25,000 the fourth year and so on, In the tenth year the income of the accumulated income of the original $10 million Will be $62,500 on a new capital sum of $2.5 million, which automatically doubles itself every ten years. The owner might even do a bit better by investing in taxable securities and paying taxes, particularly on the second accumulation, but I have focused on tax-exempt securities in order to keep to the simplest terms. Yet the ordinary man on his 4 or 5 per cent in the savings bank must pay full taxes. This sort of accumulating on the income of the income, thus generating new capital sums, has long been the investment style of old Boston and Philadelphia families. Careful to a fault, they own only small yachts, drive only old (but well-maintained) cars and are accustomed to wear old but expensive clothes of the first class so that they look quaintly dowdy. And they intermarry with old families, unfailingly. They are people who would rather study the fine engraving on a stock certificate than the brush strokes of an old master. They are, in short, respectably, unobtrusively rich.

   How the sizes of new fortunes were obtained will appear in the text. The Most conservative available figures are used throughout and are critically evaluated. For precise figures it would be necessary to get certified copies of net worth, which (not being voluntarily proffered ) could be obtained only in the unlikely event of a congressional subpoena with the acquiescence of the Supreme Court. The sacred right to privacy is used to screen the dimensions of great wealth, although privacy becomes expendable when young men are summoned into the armed forces for "police" duty at coolie pay and are unceremoniously ordered to strip naked for minute scrutiny and examination. And if subpoenaed the figures might not be even momentarily accurate because, owing to the undeveloped state of a part of many large holdings, the owners themselves honestly don't know how much, at going market prices, they are worth. Seeking such accuracy in the figures amounts to committing the fallacy of misplaced precision.²

   Fortune, stepping into the data vacuum decreed by a delicately sensitive Congress, has given us the latest précis on the largest individual contemporary fortunes.³ Beginning our exposition with it and selecting only the relative newcomers, we find that with few exceptions the newer fortunes rose on the basis of oil and its generous depletion allowances, and upper executive position in General Motors Corporation.

   Fortune assumed, reasonably enough, that an income of $1 million or more per year (some incomes range much higher--up to perhaps $25 to $50 million) might suggest asset-holdings of at least $50 million. But some large incomes are nonrepetitive, derive from unloading assets (which might have been procured very cheaply) at a large profit; they are not the same as continuing incomes from investments. The incomes swollen by relieving oneself of assets at higher prices (capital gains) are reflected in boom times in the sharp rise in million-dollar incomes-- from 49 in 1940 to 398 in 1961. But no steady million-dollar incomes at all blossom from the sale of services or talent; not even the most extravagantly rewarded executives or film stars pick up that much in straight across-the-board pay.

   The point of departure for Fortune was a Treasury official's estimate that in 1957 there were between 150 and 500 $50-million-plus asset-holders; there were actually 223 incomes of $1 million-plus, according to the Treasury's subsequently published Statistics of Income: 1957 (p. 20). Fortune to its own satisfaction identified 155 of them by name. Of this group it published the names of half, the ones thought to possess assets of $75 million upward, and gave estimates of their net worth in broad ranges. Fortune also named a few other steady big-income beneficiaries at random in its text, outside its list, giving no reason for this deviation. The list, confined to then living people, did not name all the big post-1918 fortunes, although here and there some persons who had recently died were mentioned. Some such fortunes omitted from the Fortune list will be mentioned further along.

   Before scanning the Fortune list and then noting qualifications of it, the reader will be better prepared if he ponders over the tables in Appendix A that provide a broad statistical background since 1940 on the larger incomes and lay the ground for some incisive observations. In the upper brackets at least, these income recipients abstractly impaled like skeletal insects in the tables are unquestionably included among Lampman's 1.6 per cent of adults that compose American wealth-holders. No doubt the Fortune list in its entirety, with some additions to be supplied, represents a part of the moneyed elite of the Lampman higher strata. But in the group of Appendix A incomes below $100,000 or so, many are only those of potential wealth-holders--for the simple reason that they are from salaries.

   Nonetheless the varying totals shown in Appendix A of incomes in excess of $25,000--numbering 49,806 in 1940 and 626,997 in 1961--certainly represent the cream of the take in the American svstem. This is not a large group and, in relation to a population of nearly 260 million, of which more than half are adults, it is not any different in relative size from the small group of tight-fisted landowners found in Latin American countries or from the Communist Party of Soviet Russia.

   In order to participate in politics in the Soviet Union one must be a member of the Communist Party. This is a formal condition. Similarly, in order to participate meanirtgfully in politics in the United States one must be a property owner. This is not a formal requirement; formally anyone may participate. But, informally, participation beyond voting for alternate preselected candidates is so difficult for the nonpropertied as to be, in effect, impossible. The nonpropertied person in the United States who wishes to attain and hold a position of leverage in politics must quickly become a property owner. And this is one reason why unendowed budding American politicians, not being property owners, must find or create opportunities (legal or illegal) for themselves to acquire property. Without it they are naked to the first wind of partisan adversity and gratuitous public spitefulness.

   Politically the nonpropertied carry little efficient influence in the United States--that is, they have at best only marginal individual leverage--which is not the same as saying that all property owners participate in politics. But, when all the chips are down, these latter rule or significantly modify the situation in committee rooms and cloakrooms, directly or through amply rewarded intermediaries, In the United States the ownership of property, often evidenced by possession of a credit card, gives the same personal amplitude that possession of a party, card confers in Soviet Russia.

   Although different, the political systems of Soviet Russia and the United States are not basically so different as widely supposed. The United States can be looked upon as having, in effect, a single party: the Property Party. This party can be looked upon as having two subdivisions: the Republican Party, hostile to accommodating adjustments (hence dubbed "Conservative"), and the Democratic Party, of recent decades favoring such adjustments (hence dubbed "Liberal"). The big reason third parties have come to naught--a puzzle to some political scientists--is simiply that no substantial group of property owners has seen fit to underwrite one. There is no Anti-Property Party.

BIG NEW WEALTH-HOLDERS

                    Stated Net     Financial           Age
                      Worth        Activity            in
     Name          (millions)                          1957      Schooling

1. J. Paul Getty   $700-$1,000     Integrated oil      65        Oxford (A.B.)
  (Los Angeles)				companies

2. H. L. Hunt        $400-$700     Oil operator        67        Fifth grade
  (Dallas)

3. Arthur Vining Davis ditto       Alcoa executive     90        Amherst (A.B.)
  (deceased 1962)

4. Joseph P. Kennedy $200-$400     Market operator     69        Harvard (A.B.)
  (Boston)

5. Daniel K. Ludwig    ditto       Ship operator       60        Public school
  (New York)

6. Sid Richardson*     ditto       Oil operator        60+       Some college
  (deceased 1959)

7. Alfred P. Sloan, Jr. ditto      General Motors executive 82   M.I.T.
  (New York)

8. James Abercrombie* $100-$200    Oil operator
  (Houston)

9. Stephen Bechtel      ditto      Public construction     57   Some college
  (San Francisco)

10. William Blakley*    ditto      Railway Express and airlines
  (Dallas)

11. Jacob Blaustein     ditto      Integrated oil companies 65  Some college
   (Baltimore)

12. Clarence Dillon     ditto      Investment banker       75   Harvard (A.B.)
  (New York)

13. William Keck*       ditto      Oil operator
  (Los Angeles)

14. Charles Kettering   ditto      General Motors executive 81   Ohio State
  (deceased 1959)

15. William L. McKnight ditto      Minnesota Mining and    70    Public school
  (St. Paul)					Manufacturing Co.

16. John Mecom          ditto      Oil operator            45    Some college
  (Houston)

17. C. W. Murchison     ditto      Oil operator            62    Some college
  (Dallas)

18. John L. Pratt*      ditto      General Motors executive
 (Fredericksburg)

19. R. E. Smith*        ditto      Oil operator
  (Houston)

20. Michael Benedum   $75-$100     Oil operator             88   Public school
  (deceased 1961)

21. Donaldson Brown     ditto      General Motors           72   Virginia
  (Baltimore)                      and Du Pont executive         Polytechnic
                                                                 Institute

22. George R. Brown     ditto      Public construction      59   Some college
  (Houston)

23. Herman Brown        ditto      Public construction      65   Some college
  (deceased 1962)

24. James A. Chapman*   ditto      Oil operator
  (Tulsa)

25. Leo Corrigan        ditto      Real estate and          63   Public school
  (Dallas)                         hotel operation

26. Erle F. Halliburton*           Oil well equipment      
  (Duncan, Oklahoma)

27. Henry J. Kaiser      ditto     Public construction       75   Public school
  (Oakland)

28. John W. Kicckhefer   ditto     Paper, containers   
  (Milwaukee)

29. John E. Mabee*       ditto     Oil operations
  (Tulsa)

30. John D. MacArthur    ditto     Insurance promotion      60   Public school
  (Chicago)

31. H. H. Meadows        ditto     Oil operator             58   Law school
  (Dallas)

32. Charles S. Mott      ditto     General Motors exec.     82   Stevens Institute
  (Flint)                                                        of Technology

33. James Sottile, Jr.   ditto     Banking                  44   Public school
  (Miami)

34. George W. Strake*    ditto     Oil operations
  (Texas)

35. Louis Wolfson        ditto     Financial operator       45   Some college
  New York)

   *Not listed in Who's Who 1956-57, 1964-65.

   In general, American politics are not nearly so brusque, arbitrary and doctrinaire as Russian politics. But those carried away by the lullaby of American democracy should consult the harsh experience of the Negro and other repressed groups in the American system. There matters begin to take on a distinctly Russian complexion.

   As to the sources of the big incomes (those above $500,000 and over $1 million), Appendix A shows that the aggregate received in this category includes comparatively little in salaries or partnership profits. Receipts in the form of dividends and capital gains, interest and other forms of property return, were comparatively colossal. The 398 persons in the $1 million-plus income class in 1961, for example, took only $18,607,000 in salaries, an average of $46,753, and $10,503,000 in partnership profits but took $259,574,000 in dividends, $434,272,000 in capital gains, $8,754,000 in interest, $3,163,000 from trust funds (not including capital gains from such) and $2,371,000 from rents and royalties. The group as a whole also absorbed $7,915,000 of business loss, more than offset by the interest it received. This, in brief, is not a group of workers even of the upper executive class, and the same holds true of the $500,000-$1,000,000 group of income recipients.

   Fortune differentiated between inherited and personally assembled wealth. We will leave the inheritors for Chapter IV; examined above is the Fortune list of the new big wealth-holders, thirty-five in number.

   Left off the Fortune list but referred to in its text were Dr. Martin Miller, New Orleans surgeon, with a reported annual income of $7-$8 million from oil royalties; E. V. Richards, New Orleans real estate operator estimated by Fortune to be worth $50-$100 million; and Matilda Geddings Gray of New Orleans, who inherited an oil fortune of unstated present value from her father. Fortune also mentioned a sprinkling of new names in the $50-million bracket, but these persons need not detain us here.

   Under critical analysis, this list requires some pruning and rearranging, both with respect to the number of inclusions among the new big rich and to estimated size of holdings.

   Only the probates of estates of those who have died since 1957 can give .us a clue to the value of the fortune, although even they cannot be decisive. But Michael Benedum, "King of the Wild-Catters," died in 1961 at the age of ninety-two and the probate of his will in Pittsburgh showed a net estate of $68,199,539, putting him only some 10 per cent below Fortune's $75-$100 million range in which be appears.⁴ I count this estimate a direct "hit," as holdings of this size can easily vary in value by 10 to 25 per cent from year to year, up or down.

   Benedum left half his estate to the inevitable tax-evading foundation and after a number of specific bequests to relatives be left the residue to a nephew, Paul G. Benedum, who now ranks as a wealthy man of the lower ranks and directs the Benedum oil properties through his own holdings and those of the Benedum foundation. In passing, it may be noted that Benedum, as Fortune relates, had the amiable and rare habit of cutting younger and even menial employees in on some of his lucrative ventures; thus, a chauffeur who looked for no more than a steady $50 per week was so favored and predeceased his benefactor worth some $17 million.

   Arthur Vining Davis, former head of the Mellons' Aluminum Corporation of America, died in 1962. The press report of his will played back the Fortune estimate of $400 million on his wealth,⁵ but the probate showed that Fortune had missed wildly on this one; it was too high by about 370 per cent.⁶ The actual size of the Davis estate was $86,629,282.83, not including $5 million of Cuban property. As there is no record of early Davis gifts large enough to have ever put him in the $400- to $700-million class of wealth-holder, on this one Fortune must be debited with a very bad miss.

   There is no public evidence to justify such a high estimate by Fortune. As of December 11, 1939, according to a Securities and Exchange Commission study (TNEC study, Monograph No. 29, to be cited later), Mr. Davis owned 11.4 per cent of Aluminum Company of America common and a brother owned .96 per cent. Mr. Davis also owned 5.41 per cent of the cumulative preferred. At-the 54-3/4 close for 1962 a block of 12 per cent of Aluminum common then outstanding was worth $140,397,615; 5.5 per cent of the preferred was worth $3,128,547 at the year's high. At the record high of 133-1/2 in 1956, 12 per cent of Aluminum was worth $329,262,364.

   This block of stock never could have put Davis into the $400- to $700-million class even in a momentary market flurry. As it was, he had obviously sold much of it at lower levels or transferred it to others off the record. He could not have sold at or anywhere near its high point because then the proceeds exceeding $300 million would have been in his estate; he was too old at the time to divest himself of any by gift under the provisions of the tax code.

   The Davis will, after assigning $1 million and his home to his secretary, divided the estate into 100 shares. Of these, 50 were put into a public trust with the First National Bank of Miami, a nephew among the co-trustees; 25 were put into a public trust with the Mellon National Bank and Trust Company of Pittsburgh, the nephew and a son-in-law among the trustees. Ten shares went to the heirs of a deceased brother, 10 shares to a stepdaughter and 5 shares were set aside for inheritance taxes. Thus, 75 per cent of the estate escaped taxes. The tax-free income of the trusts was broadly designated for the usual charities and scientific, educational and religious work But the trustees, like those of many similar establishments, will continue to exercise the corporate voting power of the Davis holdings, which is what counts. Davis thus passed his financial power, diminished only by an overall tax of 5 per cent, on to his relatives.

   In 1952 Davis had established another foundation, the Arthur Vining Davis Foundation, which, according to the Foundation Directory, 1964, at the end of 1961 had assets of only $1,379,672. So no earlier Davis wealth of substantial proportions appears to have escaped notice.

   A report is not yet available on the estate of Herman Brown of the construction firm of Brown and Root, Inc., of Dallas, who died in 1962.

   Charles F. Kettering, research director of General Motors, died in 1958 and left an estate "conservatively" estimated at a little more than $200 million but no inventory was cited." The bulk went to the Charles F. Kettering Foundation and a trust. At the end of 1962 the Foundation had assets of $72,020,128, according to the Foundation Directory; and as Kettering in his lifetime placed large sums for medical research, there seems no reason to question seriously the Fortune rating of the $200-million range. (One of the surer ways of spotting truly big wealth is that it shows itself in huge public transfers of assets during the lifetime of the owner.)

   Alfred P. Sloan, Jr., also appears to be justifiably rated. By the end of 1962 Sloan had conveyed to the Alfred P. Sloan Foundation assets then worth $222,715,014 at the market. Charles Stewart Mott, also of General Motors, had at the end of 1960 put assets worth $76,754,317 into a foundation bearing his name. 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.

   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.

   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.

   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. . . .

   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 Piéta 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 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

   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.

   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 père 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 précis 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., in person, is a director of Canso National Gas Company, a subsidiary. Moody's assigns United Canso assets in 1963 of $10,599,807, net working capital of $1,474,118, net loss for the year of $304,562 and an accumulated deficit of $7,382,815, 45 employees and 10,400 stockholders.

   To what extent other stockholders divide the clouded prospects with the Buckleys the record does not show. But even if one concedes all these stated assets (less liabilities, such as accumulated deficits) to the Buckley family and doubles the total for good measure one doesn't get within rocket-range of $110 million. Nor have the Buckleys established the usual wealthy-man's foundation nor made telltale large transfers to universities or hospitals.

   This is not to deny that Buckley senior in his lifetime probably collected more legal tender than 95 per cent of Americans have ever eyed wistfully through the bank teller's wicket. But he was just not rich of the order of $110 million unless he held assets well concealed from public view. This is always possible but there are considerations for holding it improbable.

   That the elder Buckley was never a really large operator is strongly suggested by the history of his son's National Review, which the father admired as something of a time bomb under the pallid outlines of an American Welfare State projected by the New Deal. I reason that a super-wealthy father, admiring this curious publication so much, would have underwritten it completely, using any deficits to charge a tax loss against real income, This wasn't done.

   The National Review was founded in 1955. Capital of $290,000 was importuned from 125 angels, not from Buckley alone, although this was a trifling sum to a man reputedly worth $110 million even if he did have a wife and ten children. By mid-1958 the Review had accumulated a deficit of $1,230,000. How this was paid off or written off is not yet clear. But, in order to offset continuing deficits, in 1957 the parent company, National Weekly, Inc., bought a radio station in Omaha for $822,500 and in 1962 an Omaha FM station. These have reduced the deficits, it is said, although they continue--happily for liberalism, progressivism and plain reason.²⁸

   But a big fortune would hardly find it necessary to run around juggling obscure radio stations with which to offset relatively small publication losses, which could be used to reduce taxes on any very large income. A wealthy man might enjoy owning a minor money loser like National Review, with up to 77 per cent of the loss a tax saving. My conclusion, then, is that there are no vast Buckley assets.

   Buckley, Jr., has postured before the country in various guises, mainly as a neo-conservative with ill-concealed negative intentions toward the disconcessioned. But he has also made a public display of the fact that he is a particularly devout Catholic. His supposedly profound Catholicism, however, did not prevent him from teeing off on Pope John XXIII when that lamented pontiff, respected even by many unreconstructed Protestants and atheists, issued the humane encyclical Mater et Magistra, which urged aid for the underdeveloped peoples of the world via welfare programs. The encyclical, the Buckley concession-heir pronounced, was "a venture in triviality" and was not sufficiently alert to "the continuing demonic successes of the Communists." If these latter and their dupes have successes in odd corners of the world, life will manifestly be difficult for Pantepec.

   America, the Jesuit weekly, responded that to imply that "Catholic Conservative circles" accepted the Church as Mother but not as Teacher was "slanderous" and that "It takes an appalling amount of self-assurance for a Catholic writer to brush off an encyclical. The National Review owes its Catholic readers and journalistic allies an apology."

   Never at a loss for an unexpected word, Buckley stigmatized these comments as "impudent."

   All of which reminds one of the remark of John F. Kennedy when he found that he was opposed by wealthy Catholics: "When the chips are down, money counts more than religion."²⁹

   Owing to the many bizarre positions taken by the National Review in projecting its oddly tailored version of "conservatism," observers have wondered at odd moments about the Buckley motivations. Not only has he been opposed to the New Deal at home, with accents here and there of McCarthyism and Birchism, but in the foreign field he has stood forth valiantly as the defender of Moshe Tshombe of Katanga Province in his struggle with the United Nations (which Buckley despises) and as the defender of the white coup d'etat in Rhodesia. Buckley himself in 1961 organized the American Committee for Aid to Katanga Freedom Fighters, which had the ring in its name of an old-fashioned Communist front group.

   Critics rightly disparage as "vulgar Marxism" attempts to account for anyone's total personality in terms of direct economic motivation. But if anyone will read the National Review with the Buckley oil concessions in mind, the political mentality of William F. Buckley, Jr., will be at least partially explained. Whatever and whoever threatens the well-being and future of those concessions--Communism, liberalism, Socialism, New Dealism, the Supreme Court, Congress, the United Nations, the president, nay, even the pope--is going to feel the touch of the rhetorician's venom. Young Buckley--he is now past forty, is referred to as an aging enfant terrible-- in his political stances is almost an automaton of Marxist motivation who would have been clinically fascinating to Karl Marx himself. And this, in all simplicity, is neo-conservatism in a nutshell.

   The otherwise inexplicable Buckley infatuation for Moshe Tsbombe is readily understood the moment one recalls that Tshombe was the native proconsul in Katanga Province for the Union Minière du Haut Katanga, S.A., of Belgium, envied concession-holder to the rich mineral lands of the Congo. A blow at Tshombe was a blow at concession-holders everywhere, and Buckley brought the National Review phrase-crazy spears to bear on the United Nations as he did on the pope.

   All the neo-conservatives from H. L. Hunt and Barry Goldwater on down resemble Buckley in that, whatever their rated wealth (which is usually small), they are insecure. Some feel subjectively more insecure than others; all are objectively insecure in a changing world. They are caught between big corporations on the one hand and big government, Communist or liberal, on the other. But, envying the big corporations and wishing to be included among them, they direct most of their fire against the cost-raising social aspirations of the people from whom established capital does not feel it has so much to fear. (If necessary, entrenched capital can stand social reform as in Sweden, passing the costs on in price and taxes. It has, in any event, more room for maneuver and holds all the strong positions.)

   But the Goldwaters and Buckleys, with their obscure department stores and oil concessions, are in a different boat. They have begun to suspect that they may never make it to the top, there to preen before the photographers. Sad, sad. . . . Hence, they cry, government should not be used to meet the needs of the people, despite the constitutional edict that it provide for the common welfare; government should merely preside over a free economic struggle in which the weak submit to the strong stomachs. As for the Big Wealthy in the Establishment, in the Power Structure, the Power Elite, they should not, say the neo-conservatives, allow themselves to be deluded by infiltrating nurses, governesses, tutors, teachers, wandering professors, swamis, university presidents and others bearing the spirochita pallida of political accommodation. For accommodation has its own special word in the vocabulary of neo-conservatism. It is: Communism.

   The neo-conservatives or radical rightists, like the radical leftists, are discontented. There is, however, a different economic basis to the discontent of each. The leftists own no property, therefore see no reason to embrace a property system; the rightists still have some but feel their property claims slipping, feel they are being precipitated into the odious mass of the unpropertied. They foresee being thrown out of the Property Party; for many of them, in fact, are heavily indebted to the banks. The illusion of the radical rightists is that they can yet save their property claims, not by restoring free competition and subduing the rivalrous Rockefellers, Du Ponts, Fords and Mellons (whom they admire and fear as well as envy) but by inducing these latter to join in an all-out assault on the sans-culottes and descamisados.

   However, established wealth, seeing no good for itself in upsetting a smoothly running operation which it feels fully capable of controlling, is not interested in this vexing prospect, Hence the outcries of the neo-conservatives against "the Eastern Establishment" and the "socialism" of Nelson Aldrich Rockefeller. In Buckley's National Review these self-dubbed conservatives sound like inverted Marxists in yachting clothes.

   Those interested in more on William F. Buckley, Jr., and his success in selling his Pantepec-conservatism to a goodly number of unwary college students as well as seven million buyers of cracker-barrel newspapers that carry his weekly column should consult Forster and Epstein, Danger on the Right.

   These writers say, however, "There is a unanimity as to Buckley's attractiveness, erudition, charm, intelligence and wit." On this, permit me to register a demurrer. As to erudition and intelligence, nobody would claim it for him who had counted up his frequent logical fallacies, semantic confusions, apparent inability to distinguish between fact and value and his historical gaffes, such as tracing the political disequilibrium of the world to Wilsonian "idealism." Buckley is, in fact, a free-flowing wordsmith, a rhetorician, with a property fetish.

   Other names that have been put forward here and there as new wealth-holders of the first magnitude, like that of the senior Buckley similarly disintegrate under analysis.

   Some new rich who died before Fortune staged its round-up ought, in the interests of a fully rounded picture, to be noticed. There were a few, mainly Texas wildcatters and General Motors executives.

   It will be recalled that the American political economy went into a severe decline in the 1930's and was brought out of its long coma only by World War II. What happened was reflected by the million-plus incomes. These numbered only twenty-one in 1921, but under the expert ministrations of the Harding-Coolidge Administrations, installed by big wealth as the public list of campaign contributions shows, millionaires-plus numbered 207 in 1925. They rose to 290 in 1927.

   In Spanish bullfights there comes a moment when the bull, maddened, bleeding and covered by darts, feeling his last moment has come, stops rushing about and grimly turns to face the man with scarlet muleta and sword. It is known to Spaniards as "The Moment of Truth."

   It seemed for a while in 1928 that this was the Moment of Truth for the American economy, when stocks in the bull market were pushed up to unprecedented heights, discounting not only the future but the hereafter. In that year there were 511 million-dollar incomes.

   But this was a tough bull. Thousands of people, as they said, "believed in" the United States--by which they meant they thought there was no limit to American expansion and, most importantly, free-and-easy money-making.

   Gushing blood-money from every orifice, the bull market again in 1929 faced its tormenter, the big American money-maker. There was again the swift, profit-taking thrust that produced 513 million-dollar incomes for the year, a record.

   But the sacred bull, though dying now, was not cleanly slain. In 1930, million-dollar incomes, as the blood drained from the bull, sank to 150; in 1931 to 77; and in 1932 to 20 (all figures from United States Statistics of Income). The market had come full circle since 1921; millions of dollars had been made and put away in the final push (for not everybody lost money in 1929) and millions were trudging the streets out of work in an extremely flexible labor market--that is to say, employers could name their terms in a way delightful to all neo-conservatives. Put another way, alien to economists, millions of Americans were crying into their pillows at night--that is, those who did not merely set their jaws and lose all feeling or give up the ghost.

   What the Moment of Truth disclosed about the American economy was this: It can't take any and every kind of abuse, can't be left to the infinitely greedy wheeler-dealers and over-reachers of the market place.

   The 1930's were not good times for fortune-building. Million-dollar-a-year incomes gradually rose to sixty-one in 1936 and then sank to a dull fifty-two in 1940. But the vultures were still getting scraps from the old bull and would try their hands again with sword and cape after the war.

   Against this background of economic carnage, few new fortunes could have been assembled, although we have seen how J. Paul Getty vastly reinforced his family holdings by picking up tidbits from the dying bull.

   Largish new fortunes of recent contemporaries who died prior to 1957, similar to the living snared in the Fortune survey, stemmed mainly from General Motors and from oil wildcatting and lease-trading. There were, of course, exceptions.

   But Fortune, too, appears to have missed completely a few of the big onthe-surface post-1918 money-piles of interest to connoisseurs.

   Neither the public record nor Fortune, for example, showed how Henry R. Luce himself, late founder and head of the Time-Life-Fortune-Sports Illustrated complex of high-powered mass media, deployed his assets; but even though his enterprises were initially bank-financed, his reported net worth exceeded $100 million upon his death in 1967. Again, Mr. and Mrs. DeWitt Wallace, founders and sole owners of the multilingual, globe-circulating Reader's Digest, deserve more than a pious thought in this connection; for they have already conveyed some small fortunes to various schools and colleges. The Wallaces have more giving-away money than many well-heeled persons have spending money.

   Just how far, if at all, the following stalwart entrepreneurs fell below the $75-million mark at their peaks would be a quest to put a crew of accountants on their mettle:

   Donald W. Douglas, chairman of the Douglas Aircraft Company, born in Brooklyn in 1892, M.I.T. graduate, an Episcopalian and a Republican. ³⁰

   Walter E. (Walt) Disney, motion picture producer, born in Chicago in 1901, died in 1966; although he never attended college he was graced by honorary degrees from Yale and Harvard.³¹

   William S. Paley, born in Chicago in 1901, son of a successful cigar manufacturer and an apprentice in that business. A graduate of the University of Pennsylvania, he joined the now opulent Columbia Broadcasting System at its modest inception and became president, chairman and chief stockholder as well as a power in the land. He is president and director of the William S. Paley Foundation (assets as yet nominal), trustee and director of numerous important educational boards, an officer of the Legion of Honor, holder of the Legion of Merit, Croix de Guerre with Palm, Order Crown of Italy, etc., etc.³²

   Juan Terry Trippe, born in New Jersey in 1899. A Yale graduate, he became president, then chairman of the emerging Pan American World Airways; a director and member of the finance committee of the Metropolitan Life Insurance Company; trustee of the Yale Corporation, the Carnegie Institution, the Phelps-Stokes Fund, etc., etc."³³

   All these men, like nearly all on the Fortune, Saturday Evening Post and New York Times lists and like most of the nineteenth-century acquisitors, were escalated financially by organizing readily available new technology which they did not create. This observation does not hold true of such rare birds as Dr. Edwin H. Land nor the late George Westinghouse and George Eastman (Kodak), themselves skilled technologists and inventors. Nor would it apply to merchandisers like the late Frank Woolworth, who simply took advantage of urbanization (based on technology). Steady population growth on a resource-rich continent was, of course, a necessary pre-condition to the organization of emerging technology. Few of these people could have made their marks in such a noisesome way if they had been confined to the limits--and laws--of Switzerland or Holland--or even England or Germany.

   It is the general time-tested assumption that the chief of an enterprise is taking care of himself in rococo style. But this assumption would have been wrong if applied to Amadeo P. Giannini (1870-1949), the Italian Catholic fruit and vegetable peddler who built the colossal Bank of America of San Francisco, still the biggest in the world; the Transamerica Corporation, chain-bank super-holding company; and beat the Morgan interests in their attempt to wangle into control.

   Giannini, although he had plenty of opportunities at the hands of grateful directors who pressed upon him the customary slushy stock bonuses (which he refused), believed that $500,000 was a sufficient personal fortune for any man. And his estate at his death was under $600,000. He was succeeded at the helm of his enterprises by his son Lawrence.³⁴ From the outside looking in one would have thought that Giannini, because he was in a position to do so, would have helped himself greedily to all sorts of fiscal bon bons. But Giannini, in his lordly disdain for personal gain and his personal pride in the vast enterprise he had built, was one of the few American moneymen with a truly aristocratic view of his role.

   There were, too, a number of recently deceased men that Fortune did not mention, although their accumulations by no means passed out of existence with their deaths. They should be reckoned.

   First, there was little noticed William L. Moody, Jr. (1865-1954), with a rated net worth of $400 million at his death." According to the Foundation Directory, 1964, The Moody Foundation of Galveston, which he established, retained tax-sheltered assets of about $188 million at the end of 1962. Among the trustees were two sons, William L. III and Robert L., chairman of the board. Moody III was grimly cut off with $1 in his father's will but through litigation was able to get a settlement of $3,640,898; most of the residual estate went to the tax-saving foundation. ³⁶

   Moody was in banking, cotton-processing, real estate, insurance, printing and newspapers. With his father he founded W. L. Moody and Company, bankers of Galveston, later merged with the National Bank of Texas. He founded in 1920 the American Printing Company, which he owned; bought the Galveston News and Tribune; founded and owned the American National Insurance Company, one of the biggest such enterprises in the Southwest; and founded and owned the National Hotel Company. He built various skyscrapers here and there, and at his death owned thirty sizeable hotels--any one of which spelled Easy Street for the owner. What he did not put into his foundation he left to two daughters and one son. As this big fortune had its roots back in the nineteenth century it should probably not be considered new, although awareness of it is new. Like many others, Moody mushroomed with the region around him. He was in the mainstream of American property acquisition.

   Hugh Roy Cullen (1881-1957), Texas wildcatter, left more than $200 million, according to common report. He established the Cullen Foundation to which be assigned $160 million, say standard sources; 37 but the Foundation Directory, 1964, accords the foundation a net worth of only $2,434,610 at the end of 1961. Possibly the estate was still being processed. Cullen also allotted more than $30 million to the University of Houston, specializing in vocational training, there to establish a memorial for his only son, and at least $20 million more to hospitals and the like.

   Cullen, a man of little schooling, son of a cattleman, went to work at age twelve and eventually emerged as a cotton broker. He went into oil in 1917 and at various times was closely associated with Rockefeller and Mellon companies. His personal instrument was the Quintana Petroleum Corporation, and with it be found many big new fields. But he followed the lead of someone else in applying scientific methods to the discovery of oil.

   Like H. L. Hunt he believed the American public needed instruction in political basics, and in 1951 be bought the Liberty Network of radio stations with outlets in thirty-eight states, to facilitate the flow of cracker-barrel interpretations of the Constitution.

   Cullen was one of the earliest of the ultra-conservatives. He was against the New Deal from the beginning. Like Herbert Spencer, he was opposed to all government regulation, was opposed to the Marshall Plan, to the United Nations, to unionization and to the lowering of tariffs. In this latter respect an inner contradiction shows in his theory of self-effacing government, for tariffs are a government regulatory device in favor of domestic producers. Cullen's true position, like that of almost all the anti-regulation business people, is that he opposed government regulation that in any way might conceivably sandpaper business profits but he joyfully favored any sort of government regulation, interference, intrusion, intervention, support or action if it was price-raising or promised to be directly profitable to business. This is the actual principle governing the pecuniary man, who is at bottom an unconscious anarchist, hostile to all government not his personal instrument.

   Back in the 1930's Cullen organized what was known as the Texas Regulars, still the hard core of the ultra-conservative movement. In 1948 he supported the Dixiecrats, but in 1952 he led the revolt in the Texas Republican delegation against Taft in order to get on the ground floor with Eisenhower. He gave money lavishly in politics to any counter-clockwise movement.

   Cullen, like H. L. Hunt, took his acquisition of wealth as a sign from on high that he possessed unique virtue, that he was of the elect, a prophet to lead the boobs to the Promised Land. His sudden riches not only gave him an excess of confidence but a feeling of omniscience and clairvoyance in all human affairs. Although he had never studied these matters, was indeed like Hunt anti-intellectual, he thought he knew all about foreign affairs, world politics, history and, above all else, the needs of the domestic political economy. These were quite simple: What was needed was a general application of the Horatio Alger philosophy within a simple Spencerian setting, each individual striving upward toward the kindly light of money with no intervention from government either to block or assist (except established businessmen).

   In seeing the businessman as omniscient, Cullen was simply echoing an early American point of view. It was often said by the bullying Major Henry Lee Higginson, founder of the Boston banking firm of Lee Higginson and Company, that "Any well-trained businessman is wiser than the Congress and the Executive." ³⁸ And, if one gives full value to the operative word "well-trained," the major may have had an arguable point of view even though some fastidious minds might consider it faint praise to concede anyone more wisdom than Congress. But businessmen rarely limit omniscience to the well-trained and tend to feel that anyone who has made some money has given ample proof of his general wisdom.

   Although a simple but forceful mentality such as Cullen's may evoke uneasy smiles among the more knowledgeable, it must not be forgotten that such men, by reason of their ability to put up money, have much to say in politics. Arrogating to themselves the role of supreme legislators, they use formal legislators, chosen in the catch-as-catch-can political process, as their cat's paws, mainly to block socially necessary measures. Cullen and his cracker-barrel colleagues placed their distinctive stamp on the internal colonialist politics of Texas, and they had more than a little to do with returning the Republican Party to power in 1952-60. They are always working at it, with money and main, and will never be satisfied until they install the straight Coolidge-McKinley ticket. They keep the lambent glow of the horse-and-buggy age bright in the thermonuclear-missile-automation-computer age.

   Still another oil baron whose fortune reached awesome dimensions was James A. Chapman of Tulsa, Oklahoma. Chapman died in 1966, aged eighty-five, leaving about $100 million, most of it to the University of Tulsa, the balance to other educational and medical institutions.

   Self-floated with $700 in 1907 on a tide of oil, Chapman was rated by insiders as Oklahoma's most successful oil operator. During his lifetime Chapman, said his attorneys, had secretly "given away" more than $75 million. His will made no provision for his wife and conveyed only $1,000 to his forty-seven-year-old son because, as it noted, "adequate provisions" had already been made for them (New York Times, October 15, 1966; 1:1).

   But not all of the oil men are cracker-barrel fugitives from textbooks, it is gratifying to report. Some are impressive figures and would unquestionably have risen to prominence in any socio-political system. One such was Everette Lee De Golyer (1886-1956), of remote French descent, who compares with most oil hunters as does a Stradivarius with a banjo.

   De Golyer, a geologist and a geophysicist, was many times a millionaire, and is indeed credited with bringing applied geophysics to the United States. He is known in scientific circles, where he was very much at home, as "The Father of American Geophysics." To De Golyer more than to any other one man goes the credit for the discovery of so much underground oil since 1910. Without De Golyer--or some counterpart--the world oil supply would unquestionably be much lower than it is today. For the oil industry from the beginning was very wasteful, haphazard and slapdash, full of apprentice barbers performing as surgeons.

   De Golyer's father was a mineral prospector and De Golyer, born in a Kansas sod hut, initially took an interest along these lines. 'He joined the Wyoming Geological Survey in 1906 and later worked with it in Colorado and Montana. But soon tiring of rule-of-thumb methods, he enrolled in the University of Oklahoma where he was graduated in 1911 at the age of twenty-five. In the summers he worked as a field geologist and in 1909 joined the Mexican Eagle Oil Company, then owned by British interests and later, sold to Royal Dutch Shell.

   On his first trip out in the area near Tampico, later known as "The Golden Lane," relocating the search in accordance with his knowledge of structural trends, he brought in Potrero del Llano No. 4 well, one of the most spectacular gushers of all time. This well produced 110,000 barrels daily and cumulatively produced more than 100 million barrels. De Golyer was promoted to chief geologist and then chief of the land department.

   Some sources say he was a millionaire before finishing college; others relate that Mexican Eagle put him on a salary of $500 a month--fairly good money in 1909--while he went to school. He continued with the company in a consultative capacity until 1919, although he left it officially in 1914 to open his own offices as a consulting engineer to the petroleum industry.

   Called to England in 1918 to participate in the sale of Mexican Eagle to Royal Dutch Shell, he was then backed by Lord Cowdray of Mexican Eagle to form the Amerada Petroleum Corporation, of which he was made vice president and general manager, then president and finally chairman. He retired from highly successful Amerada in 1932. He continued, however, with the Geophysical Research Corporation, which discovered oil fields by scientific methods for the big oil companies. He also formed Core Laboratories, Inc., and the Atlatl Royalty Corporation to carry on oil discovery and ownership.

   De Golyer's method was to apply the knowledge of a trained, scientific mind nourished widely in the theoretical literature about the causal processes of earth formations. He picked up some of his most valuable insights by applying early European theory to his work. The presence of underground salt domes is now known to predict the presence of oil. How are salt domes formed? Then prevalent theory held them to be of volcanic origin, the result of the expansion of growing salt crystals or deposits from rising columns of brine from deep sources. De Golyer came to accept the European theory that they are formed by plastic flow, the salt having flowed owing to the weight of overhanging rocks. Once the salt dome has been found, the oil prospector must determine the formation of the underlying rocks in order to get through. All this careful inquiry was quite out of harmony with the practical, common-sense, feet-on-the-ground, down-to-earth, no-nonsense, rule-of-thumb guesswork in the field by the boys who had just recently left the cracker barrel.

   De Golyer implemented his insights by introducing the use of the seismograph, gravimeter, torsion balance, electro-magnetic surveys and explosives to send shock waves through the varieties of underground formations, thereby determining their texture. Using these appliances he found field after rich field in Texas, Oklahoma and the Gulf region. Cullen and others, sweating for money, copied his methods, which are now standard all over the world in oil prospecting.

   Basically a scientist, a student and a scholar, De Golyer was widely read, not only in his technical specialty but in the literature of the Southwest. He published a long, impressive list of original scientific papers and wrote about the history and personalities of the Southwest. From a money-making point of view he wasted tens of millions of dollars of time reading and writing. He collected priceless rare books--on the Southwest, on geology and geophysics and on scientific method and the history of science--and left them, a treasure, to the University of Oklahoma, the University of Texas and other institutions. He established the De Golyer Foundation to add to these valuable collections of books.

   In the late 1940's, hearing that the Saturday Review of Literature was in financial straits, he came forward to give it a lift and was made chairman of the board. De Golyer served on literally scores of national and local cultural and scientific bodies and boards, lectured to serious audiences at M.I.T. and Princeton and served in 1940 as Distinguished Professor of Geology at the University of Texas. He held well-deserved honorary degrees from many American and foreign universities and was frequently decorated.

   Although a moderate Republican, he served willingly under Franklin D. Roosevelt as oil adviser to the New Deal, later in the war, and as chief of the technical mission at the Teheran Conference. The number of his trusteeships, directorships and organization memberships was far too extensive to list here.

   He is memorialized by the National Academy of Science (of which he was a Fellow) in Volume XXXIII of its Biographical Memoirs together with Thomas Hunt Morgan, the biologist; Robert A. Millikan, the physicist; Lewis M. Terman, the psychologist; and Josiah Royce, the philosopher. He was clearly much more than an oil prospector, businessman or capitalist. The Memoirs give a bibliography of his writings from 1912 onward, encompassing fifteen pages of titles.

   After an illness of six years De Golyer shot himself at the age of seventy.³⁹

   What De Golyer was worth is less interesting than what he could have been worth had he devoted himself solely to accumulating wealth. There is no doubt be could have been worth billions had he been interested in nailing down for himself every likely claim. As it was, his retained wealth was estimated at $10 million to $100 million at his death, a wide range.⁴⁰

   Looking on his fellow oilmen with considerable reserve, De Golyer "frequently remarked that the talent for making money can imply a lack of talent for leading a useful life."⁴¹ De Golyer certainly did not suffer from this deficiency.

   But like some of the other oil men, De Golyer did believe in luck. "I hate to tell you," he once said, "how many times I've made money by going against my own judgment ."⁴² On this same theme realistic R. E. Smith, one of the Fortune listees, said, "My West Texas oil field was solely luck. It has 38 million barrels in reserve and cost me $5 an acre. It was the same with Hugh Roy Cullen. The first money he made was on some land he didn't want; the oil company kept the 'A' acreage. They gave him some 'D' property--the lowest grade--as consolation and he hit. The company never did hit anything on their 'A' property. The lesson you learn as you get older is that it's luck." Again: "The fortune of Matilda Geddings Gray," explained a Louisianian, "came mostly from her father. He made it on a herd of cattle; found an oil well under every cow."⁴³

   Without some element of luck, no matter how hardworking, ingenious, greedy or unscrupulous the protagonist, nobody ever made much money. The general luck of the nineteenth century entrepreneurs was to have a great deal of new technology thrust under their noses--steam engines, steel-making processes imported from abroad, internal combustion engines, new electrical apparatus and the like. Few of the entrepreneurs participated in the creation of any of this but they did know how to convert it under lucky circumstances into titles of extravagant ownership--in their own names.

   John J. Raskob (1879-1950), one of the upper executives of the General Motors Corporation, prepared with a knowledge of stenography, got his start by becoming secretary to wealthy Pierre S. du Pont. Raskob's big coup some years later was to suggest General Motors as a likely investment for surplus Du Pont money, and he thereafter alternated risingly lucrative employment with General Motors and E. I. du Pont de Nemours and Company. The leading figure in trying to make Al Smith president in 1928 and the Democratic Party a replica of the Republican, he was made Private Chamberlain to the Pope. He founded the tax-shy Raskob Foundation for Catholic Activities in 1945; it had assets of $29,281,060 in 1960 and four Raskob sons among its officers. On his death he left his wife and each of ten surviving children trust funds of unspecified amounts.⁴⁴ One presumes they were generously proportioned. As Raskob was a pecuniary man to his fingertips with no other apparent interest in his life, his fortune before he started redeploying it may well have exceeded $75 or $100 million.

   William S. Knudsen (1879-1948), former president of the General Motors Corporation and Director General of the Office of Production Management during the war, had one of the "ten biggest incomes in the country"⁴⁵ but the expanse of his holdings at the end is fogged. Standard reference media, including the New York Times, give no accounting of his estate, which was presumably disposed of before his death; he established no foundation, left three daughters and one son, all presumably financially soigné.

   There is nothing conclusive about the probate of an estate, In his lifetime a wealthy man might make tax-free dispositions to foundations or other endowments (which usually show on the record) or he might make regular low-tax distributions to members of his family. At a gift-tax cost of $325,700 as of 1965, an unmarried person could transfer $1 million to an individual. If he did this every year for twenty-five years to five persons, thus transferring $125 million cumulatively, he would have to pay $40,712,500 additional in taxes, a tidy sum. If he waited to bequeath $165 million at death to individuals, the tax bite would be $125,438,200, or about $85 million more than by the installment-transfer procedure.

   But by halving his individual gifts each year and putting the other half of the money into a tax-free foundation (which his heirs could play with as it suited their tastes) he would pull his total transfer taxes down to a low, low $6,119,375 or a little less than 4 per cent on $165 million. His saving over the first procedure, for the benefit of his heirs and their foundation, would be $34-plus million; over the second procedure, a little under $119 million.

   Delightful though this prospect is, if the man is married he can make the original transfer of $125 million solely to individuals at only double the cost of 4 per cent, paying a little more than $12 million, under special provisions for estate division written into the law in 1948. His saving here over the first direct transfer is $28-plus million, which he can slam into a foundation for so much extra gravy. Whoever said we didn't have a thoughtful Congress to write such thoughtful laws? In the meantime, newspapers and "spokesmen"--that is, paid propagandists--go about talking loosely about high taxes on the big estates. When one gets down to the fine print, those high taxes just aren't there.

   A man might, indeed, die stony broke and still have ruled over a large fortune if he had concentrated a goodly sum in a foundation. As head of the foundation he would naturally set himself a substantial salary. He would not, legally, own anything; he'd just control the assets of the foundation by charter and the disposition of its income. Until he drew his last breath, even though he was only on straight salary, he'd have corporate, political and other power through his foundation as well as the satisfaction of knowing that he hadn't helped the rustics in Congress with their eternal problem of budget balancing. So the mere fact that a man dies without leaving traces of large assets really proves nothing.

   Jesse H. Jones (1874-1956) was for many years a power in the land and a top-level, hard-bitten wheeler-dealer. A banker and politician based in Houston where he owned the Chronicle, banks, buildings and other properties as well as properties in Dallas and Fort Worth. Jones became chairman of the Reconstruction Finance Corporation and Secretary of Commerce under Roosevelt II. As chairman of the RFC he is said to have made the decisions to lend more money than any other man in history, getting himself involved, too, with some of the borrowers. His father was a Tennessee tobacco planter, and young Jones came to Dallas at age twenty to find a place under an uncle in the lumber business. His estate at death was only $8,765,302,⁴⁶ but he had earlier made large distributions to children and a foundation, The Houston Endowment (1937), which in 1962 had assets of $43,939,169 and had just made grants of $7,249,765.

   Amon G. Carter (1879-1955), son of a blacksmith, went to work at age twelve selling newspapers á la Horatio Alger, graduated into selling photographs and then, in 1904, into the not-so-great game of advertising. In 1906 he became advertising manager for the Fort Worth Star and by 1923 was president and publisher of the merged Star-Telegram. He also weaseled into radio and television but made his biggest money in oil wildcatting. Under his ownership was drilled the discovery well of the big pool in the Wasson lease in Gaines and Yoakum counties, Texas. He sold out there for $16.5 million and put the money into the Amon G. Carter Foundation, which at the end of 1962 had total assets of $32,519,275 (Foundation Directory, 1964). An aviation enthusiast, he was a founder of American Airlines and a major political influence in bringing various military aviation installations, bomber plants and missile enterprises to Texas. He is credited with using his influence to make Texas second only to California as an aviation center. He was a noisy Fort Worth and Texas booster and was said hyperbolically to own all of Fort Worth. He left two daughters, a son, the Star-Telegram, various pregnant properties and the foundation. No probate of his will was published in standard reference media available to this inquirer but if one assumes only half his wealth was left in the foundation he was worth more than $65 million at some time in his later life, probably a bit more.⁴⁷

   William H. Danforth (1870-1955) of all American millionaires probably most deserves the much-abused characterization of philanthropist. For Danforth genuinely liked people in general and was obviously stimulated by them.

   Born in the backlands of Missouri, Danforth went to St. Louis at fourteen to go to school and remained to be graduated from Washington University. With $4,000 borrowed from his father he went into a horse-feed partnership with two men in 1894: the Robinson-Danforth Commission Company. A natural salesman, Danforth traveled through the Middle West selling Purina Horse Feed in a folksy way ("Purina Feed will make your horse laugh," one of thousands of bucolic Danforth slogans) and buying ingredients from farmers. The day after one of the partners sold out to Danforth in 1896, the business already booming, a tornado blew down their sizeable plant. With an unsecured bank loan of $25,000 he rebuilt, and the business extended into all varieties of farm feeds Under the Purina label. It also went into the production of whole-wheat cereals for human consumption (the new health fad) under the familiar checkerboard label. This latter was adopted from a farmer's shirt design and for some reason had such an hypnotic effect on customers that it was widely infringed but successfully defended in the courts.

   Danforth was quite spontaneously an enthusiastic extroverted Christian, a YMCA man (he served in France as a YMCA secretary in World War I), a believer in the social gospel and a true, corn-ball do-gooder. He seemed to feel that good will, good humor, enthusiasm and energy were all that were needed to put the world to rights. A Congregationalist Sunday School teacher and superintendent, he believed in helping young people help themselves. He gave thousands to finance camping trips and outings in the woods and on the shores for the young. He was a pioneer in helping finance mostly somewhat bucolic college educations, for which in 1927 he established the Danforth Foundation (assets in 1962: $125,694,089, mainly in Ralston Purina stock). Danforth believed in college as much as he believed in the Bible.

   Danforth ran his business pretty much like a folksy husking bee with plenty of homespun high jinks. He required his employees to exercise together and sing together, and was the originator of widely copied employee welfare programs such as contests, office messages and personal items, employee theatricals, awards, parties, picnics, square dances and general one-big-happy-family stuff. He produced mottoes tirelessly and wrote inspirational books and pamphlets in the school of Dr. Frank Crane, Elbert Hubbard and Orison Swett Marden.

   Everybody around Danforth was caught up in a blizzard of activity, all happy Christian soldiers marching onward and upward and holding forth the holy grail of Purina. Somehow, money filtered artlessly through the whole like molasses in a bran mash. Danforth unquestionably believed in everything he did. There was probably not an insincere bone in his body. And the good Lord just made that cash register ring, ring, ring.

   Danforth was extremely wealthy by 1929, when Jehovah suddenly signaled that he was unaccountably displeased. All of Danforth's holdings were wiped out in the stock market crash with the exception of his ownership of Ralston Purina. The sign probably meant that the good Lord wanted him to stay out of the wicked stock market and stick to healthy, whole-wheat food.

   After the crash, business for Purina slacked off so badly that Danforth, depressed, had to lay off old employees. As grain prices continued to tumble Danforth found that he was constantly having to sell for less than he paid for the raw materials and labor. He was, in short, going broke in a big way. Satan was in command.

   But the Lord had not forsaken His earnest worker. In 1932 Danforth relinquished control of the business to his son Donald, recently out of sleek Princeton University and in his father's estimation not much of a businessman. But the boy's mother spoke up staunchly on his behalf, Donald took hold and, giving the business the old college try, he made good in such a way as to amaze the elder. In the general inflation, sales were whirled tip from $19 million in 1932 under Donald's shrewd Ivy League ministrations to $400 million in 1956, when Ralston Purina chugged into eighty-seventh place on Fortune's list of the mightiest corporations. In the distance such giants as AT&T, General Motors and Standard Oil of New Jersey could dimly hear the corn-belt juggernaut slowly creeping up on them.

   Danforth himself was a "natural" in a world of counterfeits. Personally likeable and uncomplicated in his views, he was simple-minded and naïve and perhaps just lucky never to fall into the sights of the financial sharpshooters all around him. He took no visible interest in politics. His early heroes were Hill, Harriman, Rockefeller, Astor, McCormick, Carnegie and their like, whom he saw as builders of the nation, Daniel Boones of the dollar. He longed to emulate them. He always sought out the business great in an effort to learn their "secrets." He looked up John Wanamaker, whom he admired both as a businessman and as a Christian layman. (In Danforth's view "businessman" was just about synonymous with "Christian." Jesus was after all, as it has been said, a salesman. Danforth would gladly have given him a job selling Purina.) Once Danforth followed Henry M. Flagler, the Standard Oil tycoon and Florida promoter, around a golf course in Florida, pencil and notebook in hand, and asked the great man many questions, to which he was graciously given answers. Danforth also sought out Henry Ford for prayerful discussions about philanthropy.

   As far as the record shows, Danforth (unlike many of his prominent business contemporaries) never engaged in any shady practices, was never involved in any swindles, was never the defendant on criminal charges and was never accused of exploiting his workers. Nor was he, it seems, ever seriously criticized, knocked, called to account or rebuffed in good times or bad. For a portrait of the American capitalist as an extremely good, wholesome, honestly Christian earnest outgoing do-gooder one must turn to William H. Danforth,

   The name of Ralston got into the Ralston Purina label in a curious way. Early in this century there was a Dr. Ralston who established health-food clubs around the country. Danforth, in order to get into the human food market with his whole-wheat cereals made a money-for-name tie-in with the good doctor and Ralston Purina was off on the heels of Quaker Oats and Kellogg's Corn Flakes. Health foods, big money and religion all gathered at the shore of the mighty Mississippi river. ⁴⁸

   Although all these noninherited fortunes have been treated as new, they are new only in a relative sense. Almost all the big individual noninherited fortunes mentioned in this inquiry date back before World War II and, indeed, the bulk of them date before 1929. Most of the Texas oil fortunes were founded between 1910 and 1925. The General Motors fortunes were all in foetal existence in the 1920's. Although the names of the owners are less familiar than Rockefeller, Morgan and Vanderbilt, every single one was already rich on the eve of Pearl Harbor and nearly all were rich in 1929.

   Many clearly date from before World War I--Danforth, Moody, Jones, Getty.

   Unless processes are going on inaccessible to inquiry it can be said that big new individual property accumulations are now taking place, if at all, at a decidedly diminished pace. And this is understandable in view of the entrenched position established by hereditary wealth. No man, however puissant, can come along and simply say "move over" to the Standard Oil Company of New Jersey, E. 1. du Pont de Nemours and Company or dozens of similar enterprises, Nor can such a puissant man by any method yet disclosed take them over as his own.

   Although the barrel has been scraped in the search for new or nonhereditary wealth on the American scene, and just about every likely candidate appears to have been noticed, there can be no guarantee that some big "sleeper" has not been overlooked. We have ignored, for reasons of space, stuff ranging from $25 to $75 million.

   Most of the names of new fortune-builders put before the public are those of men who are little more than speculative entrepreneurs backed by banks or some syndicate. As long as these whirling dervishes stand upright they receive rapt attention. But most of them vanish in a cloud of debt and tears to become skeletons in the Death Valley of newspaper files.

   Newspapers are interested in such worthies for at least two reasons:

   1. They want new names and faces to present to the public, and many people as well as editors seem to find it thrilling to read of some immigrant who arrived in this country with five dollars and went to work as a rag picker , quietly saved his pennies, gradually bought real estate and finally emerged as the greatest real-estate tycoon of all time. Or so they say until the banks start calling loans.

   2. They cite these putative geniuses of pecuniary derring-do in order to prove that anyone who is willing to work hard, live right and tend to business can make at least a million and probably more in the United States--the American dream. A curious feature of this thesis is that the money-cult editors and writers who expound it are themselves not notably pecunious, are apparently unable to apply their own profound insight.

   In the 1920's, in the aftermath of World War I, names to conjure with in the press were William C. Durant, founder of General Motors and possessor of a fresh fortune several times in his life; Jesse L. Livermore; Arthur W. Cutten; Frank E. Bliss, "The Silver Fox of Wall Street"; Benjamin Block; Michael J. Meehan; Joseph E. Higgins; Louis W. Zimmerman; George Breen; and Harry Content. ⁴⁹ All went down the financial drain without a gurgle.

   Arthur W. Cutten, as big as they used to be verbally blown up, died in 1936 while under indictment for income-tax evasion. His estate of $350,000, once reputed to be worth $100 million (press reports of the holdings of market operators are usually vastly exaggerated, thus attracting more suckers), had tax liens against it of $644,000 and was confiscated.⁵⁰ Rumors that he had funds in Canada, where he was born, were checked without affirmative result.

   Cutten, for years a drab bookkeeper in a Chicago brokerage house, in the early 1920's became a speculator-manipulator in the grain pits. He finally had perhaps a few million drably to his credit and drably came to New York in 1925 at the age of fifty-four in search of drab new puddles to conquer, He engaged in buying and bulling stocks, assisted by hordes of even drabber men and women who bought anything they heard Bookkeeper Cutten was buying. Distributing to the suckers as the top he had set was approached, Cutten pocketed the profits. This process was endlessly repeated and would no doubt still be going on if the "Moment of Truth" had not come in October, 1929. Cutten was, with poetic justice, one of the many picadors and bandilleros whom the dying bull managed to gore fatally before expiring. His career may be summarized as a transit from bookkeeper to gambler to nothing. There is no hard evidence that I can find that Cutten was ever worth $100 million, $50 million or even $10 million net; he was carried by the banks.

   There were, too, in those salad days, high-flying dervishes like Samuel Insull, Charles E. Mitchell, Ivar Kreuger, Albert Wiggin, Howard Hopson, Edward Doherty--all men with complex Rube Goldberg schemes afoot and in the end all speculative flat tires, personally as undistinguished as any pushcart peddler. But in their day the newspapers ecstasized over them as proof positive that under the great American system of godly democracy any right-thinking, right-living man who had faith in the United States should, could and would acquire a fortune.

   The biggest flops of all, as one would expect, were those men widely regarded as the soundest. The superlatively sound men of the time were Oris P. and Mantis J. Van Sweringen of Cleveland, presented in the press as masters of railroading (although they were actually two obscure provincial real estate brokers). With the backing of the J. P. Morgan bloc the Van Sweringens busily floated vast railroad holding companies, busily issued watery securities, busily merged, unmerged and submerged railroads and busily carried on general financial wildcatting in search of profit. Their bubble burst in the depression, removing two geniuses of bank-press creation from the scene.

   Just how big the Van Sweringens were considered in the 1920's may be seen in the fact that they were listed in 1930 by James W. Gerard, former ambassador to Germany, as one of the sixty-four shoguns who "ruled the United States." President Herbert C. Hoover was, correctly, not on this list, which was headed by John D. Rockefeller I, Andrew W. Mellon, J. P. Morgan II, George F. Baker, John D. Ryan (copper), Henry Ford I, seven Du Ponts of high dynastic numbering, the five Fisher brothers of Detroit ("Body by Fisher"), A. P. Giannini, Daniel Guggenheim, a few corporation executives and some dubious elements no doubt included by the diplomatic Gerard to be complimentary: William Green, Matthew Woll, Roy W. Howard, William Randolph Hearst and, of all people, Adolph Zukor and Harry F. Warner, the film moguls.

   But although one might quarrel with the catholicity of Gerard's choices, he did adhere to the theory, bitterly denied by all party-liners of the American myth, that some sort of dimly visible shogunate lies behind major trends in American policy. The country was not being run from Washington by duly elected representatives of the people, Gerard sensed, but by a group of remote-control drivers, masters of the cash register. Its ringing was, to them, the Liberty Bell, signaling their own freedom from want.

   One could go on for many pages reviewing the lists of the financial also-rans, a fevered crowd-all duly celebrated in their day. In order to bring things down to date, we may notice in parting the name of William J. Zeckendorf, the big builder, operator and general juggler of office buildings and hotel properties, since World War II given much press attention as an authentic coast-to-coast tycoon. The Zeckendorf story, a reader's thriller for many years, may be now told very briefly: His enterprise went decisively bankrupt in 1965 as the banks called the loans, a process irreverently known as "pulling the plug."⁵¹

   The notion that new fortunes are being made right and left in the United States, selectively documented from time to time by Fortune and the Wall Street Journal, may now be looked at briefly. In general, these publications perpetrate several fallacies in logic in supporting this thesis, notably those of untypical instances and of neglected aspect.

   Fortune (January, 1952) presented a survey titled "The New Rich," cueing it in with the substatement that "A lot of enterprisers you probably never heard of are proving you can still strike it rich in America."

   "Since 1945," said Fortune, "a brand-new crop of rich men has risen in the U.S. Mostly shirt-sleeved enterprisers who started from scratch, they are hardly more than well off compared to the 'Pittsburgh millionaires' of the nineteenth century or the 'Detroit millionaires' of the Twenties. What makes them spectacular is their profusion. Every state in the Union has them by the hundreds, and their collective wealth, glittering from coast to coast, has given the whole country a pleasant golden hue."

   (I find it difficult to believe that any responsible writer of such a line is not being exaggeratedly ironic.)

   "They are the core of that fast-growing group whose 15,000-odd members report incomes between $100,000 and $300,000 a year; their affluence is neither freakish nor unstable. Right behind them, ready to step into their shoes, are roughly 50,000 individuals who in 1948 reported incomes of $50,000 to $100,000 a year, and 175,000 who reported $25,000 to $50,000." Fortune takes no account of the carefully established fact that most of these incomes are old-line asset-incomes, not the incomes of new men.

   "Nationally their presence is recorded in the 400,000 Cadillacs sold since 1945, the 37,000 pleasure craft registered since 1946, the doubling of Chris-Craft's 1951 big-boat sales (forty-two feet and up), and the introduction, under the pressure of demand, of a sixty-two-footer, priced at $125,000. A score of the splashier restaurants have become fabulously successful as a result of their patronage; their private planes, as many as two hundred at a time, fly in for the bigger Texas football games; and their dexterity with an expense account since pleasures and business are bard to sort out in wholly owned enterprises, gives them a spending power far above others making the same amounts in straight salary."

   Fortune soberly names some of the new paragons as follows:

   William Mullis (frozen shrimp, Georgia); Jeno Paulucci (frozen chop suey, Minnesota); Sam Joachim (burlap bags, Texas); Boss Sams (church furniture, Texas); Abe Katz (plastic toys, New York); Ralph Stolkin (punchboards, oil, cattle, movies, TV, Chicago, valued by Fortune at $35 to $50 million with no source evidence cited); Vern Schield (power shovels, Iowa); Dr. Earl Carpenter and John C. Snyder (baby beds, Wisconsin); Winston Smillie (floor cleaners, Missouri); Malcolm Lee McLeod (timber, South Carolina); Milton Brucker (plastics, California); Harry E. Umphrey (French fried potatoes, Maine); Hugh B. Williams (earth-boring machines, Texas); "Smiling Jim" Moran, "The Courtesy Man" (auto dealer, Illinois); Sam Eig (real estate, Maryland); Kenneth Aldred Spencer (chemicals, Kansas); Herman Delmos (Breezy) Wynn (sporting goods, Georgia); Fred Hervey (supermarkets; restaurants; bog farms; mayor of El Paso, Texas).

   All these are instances, says Fortune, of "individual success." What they all are, in fact, are fairly run-of-the-mill marginal businessmen, hailed by Fortune as the new rich. No balance sheets are revealed, no listing of bank loans. How many will emerge with a substantial net worth is not shown, nor how many will go the way of Zeckendorf and thousands of others.

   In many cases, especially where annual sales are cited, one can make certain hard deductions. The baby-bed makers, said Fortune, had run their sales up to a million dollars a year. Now, some of the most successful U.S. enterprises regularly have around 14 per cent profits on sales, an envied figure even if sometimes exceeded. If we gratuitously give this superb percentage to the baby-bed makers they were making $140,000 a year. Split two ways this is $70,000, which after taxes leaves less. Allowing each entrepreneur to live very frugally, let us say he saves $50,000 a year. In ten years he will then be worth $500,000, in twenty years $1 million. The point is that few small businesses keep up this way. They run into competition and other vicissitudes, mostly from larger enterprises.

   But Kenneth Aldred Spencer is doing well, says Fortune. "Besides a 850,000 salary, in 1950 he received $377,000 in dividends on his 236,000 shares of common stock and realized $118,000 through sale of the purchase rights of a new issue. 'Smiling Jim' Moran has set up a $1,450,000 trust fund for the children." Not too bad but, really, chicken feed.

   But these simple annals of the merely well-to-do, whom we always have with us, hardly prove that new fortunes are in the offing. Successful business entrepreneurs though all these men may be, one can scarcely regard them as "the new rich." They are small fish in a pond full of large fish. And the odds against any of them becoming big fish--authentic barracudas--are enormous.

   As instances of the ability to make new fortunes on the American scene, we must pronounce a Scotch verdict: not proven.

   Where the reportorial fallacy enters in is the citation only of these minor winners, no losers. But of the many who answer the siren call to riches few are chosen, as the record of bankruptcies shows. Business failures in the United States, according to annual reports by Dun & Bradstreet, national credit raters, have in most years since 1950 exceeded 10,000 and in some years 15,000. Between 1950 and 1953 they ranged between 7,611 and 9,162 and have not to date fallen below 10,000. In 1963 they totaled 14,374 with total liabilities of $1.3 billion, the value of a largish super-corporation. For every businessman in a given year who makes enough of a splash to come to the attention of Fortune's editors, about 10,000 split a got trying and cough blood in the bankruptcy court. If it weren't committed to dispensing sunshine, Fortune could write a melancholy article every year on business failures and issue a thick supplementary directory merely giving names and addresses.

   Nor do these figures show the panorama in its full sweep. The special monograph on small business of the Temporary National Economic Committee, a joint Senate and Securities and Exchange Commission operation, in 1939 revealed that "in the first thirty-nine years of this century, 19 million enterprises opened their doors and 16 million closed them." This was a four-decade failure rate of 85 per cent.

   Henry Thoreau, writing in Walden in the mid-nineteenth century, concluded that the failure rate of businesses in his day was 97 per cent.

   In business, under the American system, each year the failures exceed the new successes by a very, very, very wide margin. In business, under the American system, hundreds of thousands more have failed, generation after generation, than the few who have succeeded. If we are to judge by the preponderance of individual successes over failures or vice versa, then the American system, businesswise, is a record of steady, almost unrelieved failure. It has failure literally built into it. It is indeed a near-miracle, front page news, when anyone really makes it. This judicious observation sounds paradoxical only because it contradicts conventional propaganda.

   As it is observed by Professor Paul A. Samuelson of M.I.T. in his standard textbook, Economics (McGraw-Hill, N.Y., 7th edition, 1967, p. 76), the average life expectancy of an American business is six (6) years!

   While it is true that no particular blame attaches to anyone for the high rate of small business mortality, blame can be leveled for the misleading propaganda about the business system. By the one-sided stressing by propaganda organs of the few successes, many are led to lose their hard-earned savings in establishing new businesses. Sound advice to 85 to 95 per cent of Americans contemplating opening their own businesses would, in the light of the facts, simply be: "Don't."

   The belief of a wide public that it can succeed in business supplies a lucrative crop of suckers for established equipment suppliers, usually big corporations. Banks, too, participate in this merry game by making loans against resalable equipment. The same fixtures are sold and resold to a long string of losers incited into action by florid accounts of success in the Wall Street Journal, Fortune and other media.

   Today, the new man going into business, like the individual consumer, does not realize that all the possibilities in almost every situation have been determined down to decimal places by batteries of computers and the results have been evaluated by staffs of exceedingly acute experts. In pitting himself against these computers and highly paid experts, the ordinary man is very much like an amateur chess player who elects to pit his skill against a consulting collection of chess masters. His doom is virtually sealed with his very first move.

   Fortune's valedictory for its inspiring group of minor successes was that "The new rich symbolize the abundant health of the U.S. economy, for they have been pushed up by a general prosperity below. A fair guess is that money in the hands of millions at the base will keep them at the summit and in the decade ahead swell their number by the thousands."

   The editors of the Wall Street Journal in 1962 put somewhat similar findings about thirteen men and one woman into the form of a book. ⁵²

   The foreword by Warren H. Phillips, managing editor, makes it clear that the presentation is designed to prove something: that it is as easy as it ever was to make a fortune in the American economy, that it is desirable to do so and that fortunes are being made right and left. Like the Fortune group of 1952 the Journal's group of 1962 embraced only modest fortunes, men who might be called the "poor man's millionaires." They did not pretend to be like the all-time heavyweights of the Fortune 1957 list.

   As Mr. Phillips observed, "It is often said that today it is infinitely more difficult to amass great wealth than during earlier periods in the nation's history; that the nation's economy has matured, and the rags-to-riches legend belongs to its period of youthful growth; that business opportunity today is highly limited, not only by high taxes, but by stiffer competition from large corporations and by pronounced restrictions based on education, race, religion, sex and age.

   "The evidence sharply contradicts this impression." ⁵³

   The only "evidence" Mr. Phillips cites is the number of postwar million-dollar incomes that we have already examined, incomes from established assets.

   "All such statistics suggest that the opportunities for making fortunes in this country are as wide today as in any earlier period of history." ⁵⁴

   The statistics on large incomes provide no evidence whatever for concluding that new fortunes are being made or that there are opportunities for making fortunes. Without the identities of such large income receivers one cannot tell whether the income is from an old or a new fortune, from asset-wealth or from earnings in the form of salaries or commissions. In view of the fact that, despite pertinacious work by Fortune, the Saturday Evening Post, the New York Times and myself, so few authentic recent fortunes have been turned up, it is a practical certainty that nearly all the million-dollar incomes as well as $50,000 and $100,000 incomes come from old fortunes.

   An individual fortune may bring in $500,000 one year and, as business conditions boom and dividends rise, increase its income to more than $1 million. It is then a new million-dollar income but not indicative of a new fortune. It may, too, have had a million-dollar income many times in earlier years. But it is always the same good old fortune, whatever the income. Nothing new has been added.

   In the United States, Mr. Phillips also wants us to believe, "Material success is more within the realm of the possible than in most European societies, with their cartelized business systems and more rigid social class structures." ⁵⁵ And with this statement it is easier to agree, but on other grounds; for "most European societies" takes in a group that either has no business system at all or one so rudimentary--as in Spain, Portugal, Greece--as to afford few trading opportunities. If one adds Russia, Poland, Hungary, Czechoslovakia, Bulgaria and Yugoslavia--all under statist regimes--and looks at small places like Finland, Austria, Switzerland, Lichtenstein and Denmark, there isn't much of a playground left for "material success." The United States could outdistance this combination with one new millionaire a decade.

   As for the rags-to-riches legend being still valid, none of the names presented by the Journal editors supports it. Nearly all were merely non-asset-holders before they started their modest climbs.

   Although only one of the cases cited comes within hailing distance of heavy money--$34 million, if this is his authentic net worth--it may be interesting to peep at some of these small operators briefly as a contrast with our coming glimpses at truly impressive super-wealth,

   Thomas F. Bolack, says the Journal, was an oil-field laborer before he rose to become lieutenant governor of New Mexico and a gentleman farmer. He did it by buying oil leases at 25 cents an acre in the San Juan Basin, which he sold for $5,000 an acre. He was worth $3 million in 1951, says the Journal, and possibly more later.⁵⁶

   Then there is Winston J. Schuler, Michigan restaurateur, who was worth only $50,000 in 1946 but is now worth more than $3 million.⁵⁷ Schuler got a lift toward immortality when his father gave him and a brother a run-down restaurant. The upcoming entrepreneur sagely added a bowling alley and generally refurbished the place. It was a hit and began to boom. Schuler opened other restaurants and soon had a chain. A prudent man, he formed a separate corporation for each restaurant, say the Journal editors, thus avoiding any large cumulative taxable income. He also decreed that the corporations not pay out any dividends and although each one necessarily paid corporation taxes (each getting the initial deduction) he would not be taxed on any dividend income. Earnings were ploughed back into expansion, so that Winston J. Schuler is presumably getting richer and richer minute by minute.

   Peter Kanavos of Dedham, Massachusetts, presents a simple story to the, Journal editors. His father was a Greek barber and Pete started with a lowly saloon on borrowed money in 1947. He went into real estate on the side and in a decade had made $5 million, so they say.⁵⁸

   A stalwart woman, Mrs. Catherine T. Clark, baked her way to new-found wealth. Finding a chink in the capitalist armor in the form of soggy corporate bread, she decided in Oconomowoc, Wisconsin, to bake a palatable whole-wheat loaf. She began in 1946 and by the time the Wall Street Journal got around to her she was head of Brownberry Ovens, Inc., selling nonsoggy bread to an insatiable market, had moved to San Francisco and was now, the Journal editors guarantee, wearing $50 hats and Paris clothes. The account is vague about her net worth but it seemed to be biggish.⁵⁹

   Again, there is James J. Ling of Ling-Temco Electronics, Inc., now Ling-Temco-Vought, of Dallas, Texas, who quit school at fourteen, the son of an oilfield laborer. He learned electronics in the Navy, began business in 1947 and was worth around $14 million when the Journal editors got to him. He has since gone much higher, may become a terrific tycoon.

   Robert Peterson, his father an immigrant mechanic, found himself in 1948 low man on the totem pole as a California press agent. But he started Hot Rod Magazine, which was such a success among teen-agers that it swept him up to a reported net worth of $3 million in short order.⁶⁰

   Ralph E. Schneider, in the 1940's a lawyer from the Harvard Law School, '32, with at most a meager $15,000 a year income, started the Diner's Club credit-card system and was worth at least $7 million by 1960.^{6< SIZE=4>1} The Journal editors also suspect that he has a string of other juicy investments.

   Kell H. Qvale, born in Norway in 1919, his father a Norwegian sea captain, in 1947 found himself a California jeep salesman and rapidly getting nowhere in typical American style. But he became an M-G dealer, had vast success with a restless public and now owns British Motor Car Distributors, Ltd. His net worth: $3 million at least.⁶²

   James A. Ryder, a day laborer in 1935 and later a truck driver, now owns the Ryder System, Inc., of Miami, truck, car and equipment leasers and highway freight haulers. His stated net worth: $7 million.⁶³

   And now comes Sydney S. Baron, whose father owned but lost a shoe factory in the 1929 smash-up. Baron is a public relations man who in 1949 was worth only $25,000. He has since handled various accounts, but the most talked-about have been Tammany Hall and the Dominican dictator, Rafael Trujillo, whose points of rare excellence were put before the American people by Baron. By 1959 Baron had a net worth of at least $1 million, say the Journal editors, and wore $160 suits. And say what one will about Trujillo, and echo if one will the French saving that money has no odor, it isn't everyone who can wear $160 suits. But in the United States a successful moneyman wears them like a halo.⁶⁴

   The most impressive of the Journal's meager bag appears to have been Samuel Rautbord, a lawyer who before World War II drew up some papers for a partner of the American Photocopy Equipment Company of Evanston, Illinois, Interested, Rautbord bought a share and in time became president, chairman and principal stockholder, with the company now listed on the New York Stock Exchange. Worth only $20 million the year before the Journal's editors spotted him, his holdings at press time were worth $34 million .⁶⁵

   'This is by no means all of the Rautbord saga. The former lawyer also had paternally conveyed to his two sons $35 million in securities in two trust funds and had induced friends to invest and become rich. One, Edward Flann, invested $20,000 in 1944 and was at press time worth $3 million. A sister did likewise, with similar consequences. As the Journal editors say, he has "the Midas touch."

   Rautbord found the taxes of the partnership running so high in 1953--91 per cent--that he reorganized as a corporation, which brought taxes down to the 52 per cent corporation bracket. Then be astutely formed the Clay-Bob Realty Company and exchanged much of his Apeco stock for its stock. The advantage here apparently was that Clay-Bob paid a lower tax than his personal tax would have been. The proceeds received by Clay-Bob, as the Journal tells the story, are not paid out to Rautbord, who has plenty of other lucre, but are invested. That ends all nonsense about taxes and helps Rautbord keep his head above water.

   The way this worked is as follows: Apeco as a partnership had roughly only $9 left after taxes out of every $100 of income. As a corporation it had $48 left (disregarding any other unstated circumstances). Now, as the Journal editors indicate, Clay-Bob received it and as a personal holding company, if it merely retained and reinvested it, was entitled to an 85 per cent tax credit. For under Section 243 of the Internal Revenue Code of 1954 personal corporations receiving dividends from qualified companies are entitled to such a tax credit. Any income Clay-Bob paid out would be taxed at the full rate to individuals, manifestly a self-penalizing process that would not rationally be adopted for more than part of income at most. What remained taxable to Clay-Bob at 52 per cent was $7.20, leaving $44.26 for reinvestment--much more retained value than if the owner had taken dividends direct from Apeco. In such a situation an owner gets richer and richer by declining to take cash income as an individual.

   Naturally all this affluence has wrought some changes in Rautbord's life. He owns a Rolls-Royce, a big yacht and seventy pairs of cuff links.⁶⁶

   Hans Fischer, born in Vienna, heads H. Fischer and Associates of Cleveland. A consulting engineer, he came to the, United States in 1939, as yet, alas, a non-American. Around 1950 he had only $4,000 and with only that much was practically an un-American but--such had been his success when the Journal editors looked him over--he, now fully American, was worth $1.2 million, owned a Cadillac, a Jaguar and a forty-five-foot Chris-Craft, and lived in a big house in Shaker Heights, Ohio, near other true-blue Americans.

   But J. W. Walters did somewhat better, possibly because he was American-born and therefore by nature anointed. A Navy veteran driving a truck in 1946, he was looking for a really cheap house, all he could afford. He saw an ad for a "shell" structure at $1,195 and went with borrowed money to buy from a man named Davenport. Instead, he went into partnership with this man. Davenport, evidently a person of little faith or having other worlds to conquer, sold out to Walters in 1948 for $48,000; Walters was then thirty-eight years old.

   The lowly enterprise went on to become National Homes Corporation, producer of prefabricated homes, which the Journal men say has made more than $1 million for each of seven persons and left Mr. Walters with a net worth in 1960 of $8,700,000.⁶⁷ Walters, who quit school after the twelfth grade, has acquired a 1,700-acre Florida hunting ranch as well as other dazzling properties. National Homes now makes prefabricated apartment buildings, shopping centers and schools as well as individual houses. It will build whole prefabricated towns, and has done so, at the drop of a nail.

   But these people, though we salute them as true-blue American enterprisers, are all really small potatoes, hardly worth a feeble cheer from the House Un-American Activities Committee. The new crop, either the one of Fortune, 1952, or the Wall Street Journal, 1962, simply does not rate on the scale of wealth even though its members may be having the time of their lives in their cruisers, jaguars, $50 bats and $160 suits.

   The New York Times in 1965 introduced two formidable contenders into the arena of big new wealth, as if to replace the void left by the departure of bulky William Zeckendorf.

   These new tycoons, said the Times, are Sol Goldman, forty-seven, and Alex Di Lorenzo, Jr., forty-eight, who have built a real estate empire on a pyramid of mortgage loans.

   When the Times studied them in April, 1965, they quietly owned more than twenty office buildings, including the seventy-seven-story Chrysler Building; extensive harbor terminals; a growing flotilla of hotels; various "sprawling" industrial buildings; shopping centers; and large apartment houses. More than 20,000 persons were employed in keeping these properties operative.

   Cruising under the firm name of Wellington Associates (presumably it would be unlucky to be Napoleon Associates), they have followed the technique of "mortgaging out"--that is, borrowing enough money with first and second mortgages to cover the full purchase price of a property, literally nothing down." If, through improvements or other devices, the buyer can increase the rent rolls, he can go to a bank in a year or two and borrow enough money on a new mortgage at lower rates to wipe out the high-interest mortgages, sometimes leaving a surplus above the original purchase price. This surplus is then invested in other properties and the process goes on like a rolling barrage. A neat feature is that the surplus is tax-free because it is technically borrowed money, on which one pays no tax, naturally.

   Wellington Associates bought the Chrysler Building in 1942 for $42 million, mostly carried on first and second mortgages charged against them. Some four years later they borrowed $47 million at 5-1/2 per cent from a Wall Street syndicate, which spread the paper around the country, and paid off on the old paper. In the meantime by amortization out of rents they had reduced their original obligation by $3 million, so they had $8 million of technically borrowed nonrepayable tax-free money to play with, the best kind there is.

   Now the Chrysler Building alone is producing for them $1.5 million a year, tax-free, for their investment in other properties.

   Proceeding in this way, if nothing goes wrong (such as an interruption in rents or balkiness of the banks), Goldman and Di Lorenzo should in time own all of the United States, cost free. They have already bought more than 250 pieces of property in Manhattan and own more than 450 properties "conservatively estimated," says the Times, to be worth more than $500 million. The equity of the two partners in this chunk is set at about $150 million, a worthy figure. But it could shrink--or expand.

   The Times got wind of Wellington Associates because its swift rise had set alarm bells ringing in nearly every investigative agency in the country, including the FBI. The latter was instantly fascinated because of the persistent rumor that underworld money is finding its way into American business, that "bad guys" born in Sicily and other unhallowed places are infiltrating "good guys" with names reminiscent of Astor, Vanderbilt and Rockefeller. No basis whatever for these rumors was found in the Goldman-Di Lorenzo set-up, which emerged smelling as sweet as any real estate empire ever smelled. It appeared, indeed, to be the sweetest-smelling real estate empire that the investigators had ever encountered. ⁶⁸

   But wealth is apparently rising around us like a tidal wave even as inquiry proceeds. Herman P. Miller, assistant to the Director of the Census Bureau, reports that "The rich among us are flourishing as never before. And not only millionaires, but multi-millionaires." The figure of 27,000 persons owning $1 million or more of property in 1953, according to the Lampman study, must now be raised to close to 90,000 in 1965, says Miller.

   It is this increase in the wealth of wealth-holders that is taken to prove that newcomers are making big money in droves.

   "The 90,000 millionaires are a diverse lot," says Miller. "They include men and women, young and old, creators and contrivers, new rich and established rich.

   "Since their number is rapidly growing, it suggests that the new millions are largely earned [sic!] and not simply passed down through inheritance--that is, they come from the creation of goods and services we can all enjoy. A large proportion of today's new millionaires derive their wealth from scientific inventions, home construction, new products and other things that enrich our lives in many ways." ⁶⁹

   There is nothing in the set of figures presented to justify this disarmingly pleasant conclusion. The simple fact is this: In the general rise in prices holdings previously valued below $1 million are now valued at $1 million or more. No doubt some new earning properties have been created out of inventions and the like but most of these million-dollar-plus properties are owned by the same people who in most cases inherited them. It is not the case, as far as these bare statistics show, that "the new millions are largely earned"; that remark is thrown in from nowhere, with no evidential basis cited. A man worth $200,000 in 1940 may now be worth $2 million and may in five or fifteen years be worth $800,000 or $5 million, depending upon the swing in the economy and the nature of his property.

   But it is not the case that there are 90,000 newly moneyed millionaires, 9,000 or even 900. It is clearly incumbent upon anyone who contends this to show it, Some few persons have in the past twenty years come up from nothing to $1 million or more; but they represent only a minor fraction of this phalanx of 90,000, who are simply the old-line upper property holders.

   But reports such as these are quickly followed by others, all with the same message but a different cast of characters. Thus Time, December 3, 1965, under the title "Millionaires" presented a new list of men who had allegedly made a million or more before they were forty. Editors should notice that there is still to be presented a list of women, like Lucille Ball, who have made a million or more before forty and even of children who have become worth more than $10 million before they are five years old.

   Said Time:

   "As a land passionately devoted to free enterprise, the U.S. has always been the best place for a man to make his million. The fabled 19th century millionaires . . . all began poor. Despite their often controversial actions, they, like most American millionaires, basically enriched themselves by enriching a growing nation [a statement that might be seriously questioned.-- F.L.].

   "The U.S. still offers countless opportunities for the man who wants to accumulate a personal net worth of $1,000,000 or more--and thousands [sic!] seize them every year. The number of U.S. millionaires, reports the Federal Reserve Board, has swelled from 40,000 in 1958 to nearly 100,000 at present. How do they do it? In a variety of individual ways, but their common denominator is that they find an economic need and fill it."

   My readers are aware, to the contrary, that nearly all of these 90,000-plus do it by inheriting, with the increasing number of millionaires traceable to the rise in prices.

   But Time goes on to present its own meager bottom-of-the-barrel list of new wealthy:

                                                                   Net Worth*
Arthur J. Decio, 35, Elkhart, Ind., Skyline Homes                 $5 million
Charles Bluhdorn, 39, N.Y.C., Gulf & Western Industries           $15 million
Harold Smith Prince, 37, N.Y.C., Broadway producer                $1 million
Arthur Carlsberg, 32, Los Angeles, real estate                    $5 million
Merlyn Francis Mickelson, 38, Minneapolis, computer parts         $47 million
John Diebold, 39, N.Y.C., management consultant                   $1 million +
Eugene Ferkauf, 44, N.Y., Korvette, Inc., cut-price stores        $55 million
Jerry Wolman, 38, Philadelphia, football impresario               "Millions"
Art Modell, 41, Cleveland, football impresario                    "Millions"
Michael Mungo, 37, South Carolina, ex-cottonpicker, real estate   $2 million
John F. Donahue, 41, securities salesman                          $1.5 million
Alvin Weeks, 41, Atlanta, frozen pastries                         Not stated
Joseph McVicker, 35, Cincinnati, toys                             "Millionaire"
Walter Davis, 42, Texas, trucking                                 $7 million
Ernest Stern, 45, Pittsburgh, theater magnate                     Not stated
Robert K. Lifton, 37, N.Y.C., real estate                         $4.75 million
Fletcher Jones, 34, Los Angeles, computer programme               $20 million
Del Coleman, 40, Chicago, jukeboxes                               Not stated
James Thomas, 37, Los Angeles, real estate                        "Millionaire"
Michael Rafton, ?, Oakland, portable classrooms                   "Huge profit"
Charles Stein, 37, Chicago, orange juice                          "Millionaire"
Al Lapin, 38, Los Angeles, coffee vending, pancakes               "Rich"
Jerry Lapin, 36, Los Angeles, coffee vending, pancakes            "Rich"
Fred Bailey, 39, Los Angeles, ordnance parts                      $2 million
Charles Gelman, 33, Michigan, chemist, filter manufacturer        $1.3 million

       * Time cites no public record for its figures.

   Accepting all these valuations as authentic, what do they prove? Not , surely, that big wealth is new wealth or vice versa. Nobody denies that a few score or even a few hundred men in business ventures make a temporary million or more. The point is that most of these sums mentioned are chicken feed and the larger figures might require some further examination. Again, how many of these will survive economic downdrafts? How many will follow William Zeckendorf into sterile impecuniosity?

   A list of hundreds of names could be drawn up under the title "Men Once Worth a Million or More Who Went Broke." As Thomas Mellon remarked, it is harder to hold onto money than to make it.

   What remains to be said about this heterogeneous collection of names? Some have arrived, some are in the process of arriving (or departing), some are only pseudo-arrivistes.

   To return to the Fortune list of thirty-four, taking it at face value and disregarding any of the qualifications offered, most of the men on it are neither builders, inventors, constructors of new-type industries nor job creators. The predominant oil crowd play an enlarged version of the childhood game of finders-keepers under a big tax shelter. They provide little employment, at most pour low-tax high-price oil into a pre-existent world pipeline.

   Kaiser and the Browns of Brown and Root, Inc., are construction men, buoyed up a long part of the way by politically wangled government loans and contracts. Kaiser has shouldered his way heavily into private enterprises of various kinds--aluminum, plastics, cement, steel. Perhaps he has bulldozed a pattern for the future in which government will finance new private enterprises via low-cost loans, contracts, tax schemes and other aids, thereby providing jobs lower down for the multitudes that the old-line monopolists allowed to spawn without reckoning on the ability of the economic system to sustain them.

   Stewart Alsop found that all on his Post list but Land had made good in a big way mainly by taking advantage of special government shelters over oil, insurance and real estate. All the oil men--Mecom, Keck, Smith and Abercrombie--get the depletion allowance and are able to take large deductions for "intangible drilling expenses." "Thus," as Alsop remarks, "an oilman with a good tax lawyer can pay little or no income tax on a real income of millions of dollars." In real estate, depreciation plays the role of depletion in oil and there is always "mortgaging out." In insurance, the key word is "reserves"; for in order to build reserves generous tax allowances are made which apply as well to the equity of the owners of insurance companies such as Stone, MacArthur and Ahmanson. The latter, doubling in the building and loan business, is propped up also by government insurance up to $15,000 per individual depositor.

   Kettering, as I have noted, was an inventor; Mott and Sloan, engineers; Kennedy, Wolfson and Getty are market operators who, like most of Alsop's list, never made any weighty contribution to the gross national product. Getty became king-size by buying underpriced shares in the Depression. Halliburton, Ludwig and MacKnigbt are company organizers and rationalizers, able to find chinks in an established market. MacArtbur simply offered through mass advertising as little insurance as anyone wished to buy, from $1 per month up, Like the Woolworth plan this one was admirably suited to an economy in which few people have money beyond immediate pressing needs.

   All the noninheritors on the Fortune list were born in the United States. Of the twenty-three for whom the information is of record, thirteen were born in small towns or semi-rural areas.

   A few started as poor boys, notably H. L. Hunt, who was dirt-poor. But most had comfortable beginnings. Getty's father was rich, Richardson's and Murchison's were well-to-do, Sloan's father was a successful small-businessman and Kennedy's father a prosperous-enough saloonkeeper-politician. In general, those who never entered college appear to have had the more modest beginnings; but except for Hunt the rags-to-riches theme applies to none. At least one married well from a financial point of view, although he was also endowed with technical ability.

   A notable pattern emerges in the large number of school dropouts on the list, from early grades to college. Stewart Alsop noticed the same thing in his Saturday Evening Post list of thirteen, of which five are on the Fortune list.

   Most of the Fortune men identify themselves educationally as having attended "public schools," which may mean anything from first grade to completing high school. And most of those I have added--Amon G. Carter, Jesse Jones, John J. Raskob, Hugh Roy Cullen, William L. Moody and even A. P. Giannini--had scant schooling. With few exceptions, the fortune-builders of more recent date, like their nineteenth-century forerunners, had little interest in school even when it was available to them. Not especially well-educated or well-read either, they are obviously truants from high culture. Many who weren't high school dropouts were grade-school dropouts.

   Educators, trying in desperation to rally popular support for education and mulling over statistics, like to point out to rugged philistines that on the average educated people earn more than the meagerly educated. And this is true when it comes to offering marketable skills and personalities at modest salaries in an existing Establishment that requires ever-increasing skilled personnel for its complex operations. But it has never been true where really big money is concerned. An education can be a severe handicap when it comes to making money.

   The reason for this is that in the process of being educated there is always the danger that the individual will acquire scruples, a fact dimly sensed by some of the neo-conservatives who rail against the school system as "Communistic." These scruples, unless they are casuistically beveled around the edges with great care, are a distinct handicap to the full-fledged moneymaker, who must in every situation be plastically opportunistic. But a person who has had it deeply impressed upon him that he must make exact reports of careful laboratory experiments, must conduct exact computations in mathematics and logic, must produce exact translations and echoes of foreign languages, must write faithful reports of correct readings and must be at least imaginatively aware of the world in its diversity, and who has learned these lessons well, must invariably discover that some element of scrupulosity--even if he hasn't been subject to moral indoctrination--has been impressed on his psyche. If he enters upon money-making in a world bazaar where approximate truths, vague deceptions, sneak maneuvers, half promises and even bald falsehoods are the widely admired and heavily rewarded order of the day he must make casuistic adjustments of his standards. The very process of laboriously making the adjustment, even if he succeeds, puts him at a disadvantage vis-a-vis the unschooled, who need waste no energy on such adjustments, who pick up anything lying around loose as easily as they breathe. Some educated people can't make even a partial adjustment to the market bazaar, and their disgraceful bank accounts show it. They are, as even their wives sometimes kindly inform them, failures, though they are doing something conceded to be useful such as instructing children or enforcing the law. They can inscribe after their names a big "F" and go stand in a corner under a dunce cap as the propaganda dervishes scream about success.

   But, so as not to alarm appropriations-conscious educators, mere schooling (which is not the same as an education) may prove no great handicap in the race for money, which is one reason some heavily schooled persons turn out to be pecuniary successes. For many persons dutifully put in the required number of years in a national school system noted for its permissiveness without ever acquiring dangerous scruples. One could cite hundreds of names. Among other things, they learn to cheat handily in examinations--excellent training for the market, They learn to bluff overworked teachers with verbal balderdash. And they do well subsequently as loose-talking salesmen, jobbers, advertising men, promoters, agents, brokers, morticians, lobbyists, fixers, officeholders and smooth workers in the film and television industries. They all learn to be practical--that is, judiciously unscrupulous. After all, as any of them can testify truthfully, the world isn't perfect and they piously feel no obligation to alter its skewness. They may even become tycoons, and it is only other tycoons who stand in their way.

   An education, it is widely and correctly thought, should prepare the individual for life. But the preparation is not for life as the philistines preconceive it. Educators have prolixly explained what an education is so many thousands of times without denting the popular notion that it is vocational preparation that it would be piling prolixity on prolixity to attempt it again. Put most briefly perhaps, an education is designed solely to humanize the individual, and if it has done that it is a "take." The idea of an education is to raise the individual above the level of mere animality, or at least to qualify his animality significantly. If such an individual makes out better-than-average financially it may be due to recognition of his worth. But thousands of thoroughly educated people have never been appraised by their contemporaries as worth a living wage. T. S. Eliot, Harvard-schooled and widely hailed as the most significant poet writing in English in the past half century, earned his living as a bank teller and, much later, as a publisher's reader. Financially speaking, Eliot as poet, teller or editor wasn't worth so much as a cuss word. Yet it seems probable that his writings will be appreciatively read long after every single existing American corporation and bank, and the memory thereof, has passed out of existence. Curious. . . .

   An education, truth to say, has nothing whatever to do with making or not making money, except perhaps as a hindrance. The educators, in extolling the money-rewarding features of education, are indulging in a benevolent deceit, trying to hornswoggle a public with a peasant view of life to support the schools and perhaps lift themselves by their bootstraps above simple animality. Vocational trainees sometimes get sidetracked into true educational paths.

   There is no evidence that any of the men on our list who had a higher education, except the General Motors engineering group, ever made use in their careers of what, if anything, they learned at college. There is little in the careers or expressions of either Getty or Kennedy to reflect the influence of Oxford or Harvard. Each could as well have finished off in a business college just as Raskob did. Harvard never endorsed either stock market pools or the general conduct involved in such pools. These were strictly extracurricular.

   The General Motors men were all technicians and applied their knowledge of technology strictly to making money, not to engineering the best possible cars. Donaldson Brown, who married a Du Pont girl, is credited by Alfred P. Sloan, Jr., in his memoirs with developing a penetrating method of ascertaining rate of return on investment by company subdivisions, a method taken over as well by Du Pont. ⁷⁰

   Most of the men on the Fortune list, as on Stewart Alsop's list, were unsuitable employees, a facet that Alsop takes note of. Few of these men could fit into a pre-arranged job, except for the General Motors executives. As far as employment was concerned, they were maladjusts, nonorganization men. In whatever brief employment some of them had early in their careers, they were like restless panthers, looking only for a chance to break out and track into the jungle. Again except for the General Motors crowd, who were team workers, nearly all the others mentioned were "loners." And most of them remained "loners," detached, nongregarious. Exceptions would be found among some of the Texas oil men, although Hunt is very much of a "loner."

   Alsop found other peculiarities among those he interviewed, which apply, with some exceptions, to the Fortune listees. None played golf, supposedly the businessman's game. All were physically restless, standing up, moving about, scratching themselves, drumming their fingers, chain-smoking cigarettes, twiddling and twitching--all of which may merely have been restiveness at having to submit to an interview. Alsop takes it as a general character trait.

   Some who have been in the armed forces made out poorly under military discipline, couldn't take it. John D. MacArthur, Alsop reports, was discharged from the Navy in World War 1, "unsuited to naval discipline." Despite the many big wars the United States has fought in the lifetime of all these men, none stands forth as a major or minor military figure. Where a Who's Who record is available it shows few in military service even when by age classification one would have expected to find a man in uniform. But some perhaps common deviant characteristic appears to have led the military to pass them by. Money-making and military service do not appear to mix.

   As to religion, few on the Fortune list make a point of mentioning it. Two were Jews and one was a conspicuous Catholic, Mr. Kennedy. While a few of the others who do not give such information may be Catholics, the probability is that all thirty-one are at least nominally Protestants or religiously disinterested. Catholics do not appear among money-makers proportional to their numbers in society probably for the same reason that they do not loom large in any department of upper-hierarchical American life except local politics and trade-union leadership: They have been self-segregated from the mainstreams of American life by a clergy apparently afraid that contact with non-Catholics will cause their submissiveness to the Church to diminish. With the history of Europe before us we cannot conclude that Catholics as such are not interested in money and power.

   Many of these men, dead or alive, are saluted as philanthropists by newspapers (that carry the advertising of their enterprises) because they have, before or at death, established foundations formally classified as charities under the law. Of these Kennedy, Sloan, Kettering, Kaiser, Benedum, Richardson stand out thus far, although virtually all of them will in the normal course of operations establish foundations. Such action has now become standard procedure in reducing estate taxes and keeping controlling shares either in a family or a friendly group, at the same time previsioning considerable posthumous social influence through the financial patronage the foundation is able to bestow.

   Who among the noninheritors has made the deepest national impress? This question is easy to answer and one must say Mr. Kennedy, at second remove, mainly through his children. Although John F. Kennedy was not trained by his father to become what he became, not merely president of the United States but a president fantastically visualizing the United States as something more than a pettifoggers' paradise, the father did not impede him and in many ways must be conceded to have indirectly helped him, as the sire's biographer, Richard J. Whalen, skillfully brings to light. Through JFK, and possibly through his other sons, Mr. Kennedy (and his wife) enters History (that is, he comes under analytical individual consideration of the historians) instead of merely being part of history like his financial contemporaries and the rest of us. Between History and history there is a vast difference: The former invokes the canons of aesthetics and morality; the latter is nonevaluative, shapeless. Mr. Kennedy also made a signal contribution as the aggressive first chairman of the Securities and Exchange Commission.

   If we continue beyond the Fortune list we find no significant alteration in these patterns although we do, here and there, run into odd variations in the form of Land, De Golyer and Danforth. These are untypical cases, sports.

   As to the general human type of American wealth-builder, new and old, it can be said that he is usually an extrovert, given to little reflectiveness until perhaps he approaches senility. He is more often unschooled than schooled, and unread, and has for the most part a naive view of the world and his role in it. A man of action, he is compulsive and repetitive in his single-minded acquisitiveness. He simply does not know what else to do. As De Golyer remarks, he substitutes money-making for living and often believes that he is engaged in a great crusade. He rarely, as far as the record shows, has qualms or doubts about himself. He is almost invariably devoid of a sense of humor. Color him grey.

   "Beyond certain minima, economic gain is inevitably associated with prestige and status, self-validation called 'success,' opportunities for assertion against others, autonomy from disliked persons, tasks, or situations, and so forth. What gives economics its power to command such energy as is invested in the pursuit of gain is often its instrumental value as a means to some other objective. Money buys more than commodities; it buys psychic gratifications of all sorts-although never so completely as the money-seeker thinks it will."⁷¹

   The winner is consequently usually restive. For he evidently feels that with all his wealth he ought to strike a blow for something tremendous. But what? And how? Christianity? Science? World peace? Progress? Education? Free enterprise? Democracy? Health? In many cases he ends up feeling frustrated and morosely retires to some House and Garden paradise to meditate on the freakishness of the world and its people. In no case yet of record has he developed a sense of mission that the world can identify itself with. By his position alone he is alienated. For all he has, in fact (apart from deviants like De Golyer, Land and Danforth), is money.