But later, by 1932, because I was away in Hollywood, Reed Roller Bit came creeping up on us. I could see clearly that if their sales continued to increase at the same rate as in ‘30 and ‘31 they’d soon be the Hertz and we’d be the Avis of the drill-bit business.
I sent Noah Dietrich down there to find out what the trouble was, because Toolco was the backbone of my little empire. I told him that if Reed Roller Bit was selling nearly as many bits as we were, there had to be a reason for it, and that reason had to lie in the bit itself.
Noah disagreed with me. Noah thought it was bad morale and my being involved with making movies in Hollywood. But I said, ‘It’s in the bit, and you get down there and find out if it’s better than the Hughes bit, and if it’s better, why it’s better.’
Noah did that, and he found out their bit was a better bit than ours because it used a ball bearing. We didn’t have a ball bearing in the Hughes bit, because a ball bearing, my father had believed, wouldn’t stand up under pressure and would break apart after a while. But the Reed bits in 1932 weren’t breaking apart, and that’s what nobody could figure out.
I said to Noah, ‘Get my engineers to cut that Reed bit in half and find out what makes it tick.’ Sure enough, that’s all they had to do. They found out that the Reed ball bearings were soft, made of lead, and wouldn’t shatter. All we had to do was redesign our works for ball bearings of a similar type to the Reed bit. We held every patent there was.
But at the same time an even bigger problem cropped up. There was a palace revolt among my people down in Houston. Ray Holliday and Monty Montrose wanted me out. They felt that the place was being run by an absentee manager, and they were hamstrung in making important business decisions. The Toolco executives said to Noah, ‘We’re putting our life’s blood into this company here in Houston, and that kid up there in Hollywood is humping the starlets and making movies.’
Through Noah the Toolco executives made me an offer: $10 million in preferred stock if I’d get out and stay out. They’d pay me 5% on that preferred stock, which meant that I would have had an income of half a million dollars a year.
They didn’t see how I could possibly turn down such an offer.
‘For Christ’s sake,’ I said to Noah, ‘they want to make a fucking remittance man out of me!’
You could still have made movies and done whatever you wanted. You’re talking about 1932, and $500,000 a year then would be equivalent to ten million now.
I wasn’t interested in half a million or ten million. I said to Noah, ‘Holliday and Montrose can take their convertible stock and shove it up their ass. If they want to quit, that’s fine with me, I’ll find other people in Houston to run the company the way I want it run. I’m not giving away the Toolco, no, sir, and that’s final.’
Nobody quit. They were doing too well.
You may think I’m power-mad because I always want control. I’m not power-mad, but I do believe in power. Power can uplift, not just corrupt. If you have the power over a company or over a situation, and you know what you’re doing, then you can achieve amazing results which otherwise would be impossible. That’s proved by the fact that I’ve become, over the years, a billionaire. I can’t be modest about that. I had some breaks, like with the sale of my TWA stock, but the breaks mean nothing unless you’re there to seize them. Not physically there – that means nothing. I mean mentally there. And the billions didn’t fall from the sky. I went out and got them. I didn’t believe that crap that John D. Rockefeller handed out, that wealth was ‘a gift from heaven, signifying “This is my beloved son, in whom I am well pleased.”’
Wealth is an abstraction: a means to power and independence, nothing more. I got it through sweat, and daring, and foresight, and stubbornness, through knowing when to be patient but mostly knowing when to take risks.
As a result, I’m a billionaire three times over. But you can take my word for it – the first billion is the hardest.
5
IN THE LATE 1920s I was pretty well known, not only in Hollywood, but all throughout the United States, and a great many magazines and newspapers had nothing better to do than run stories about me. My personal habits and idiosyncrasies seemed to exert an amazing fascination on the American public, and I’ll never quite understand why – like my public image of the unshaven man in a rumpled suit and dirty sneakers.
Was that how you dressed in those early days?
Not at all. I was a fashion plate. I got all my clothes from Savile Row.
You mean you went to London?
London came to me. Twice a year my tailors would send over men with swatches of samples and I would tell them what I wanted. They had my measurements – I didn’t change much over the years and they’d go back and make a dozen suits at a time for me. My shoes were all bench-made on Jermyn Street in London.
Wearing sneakers came later, after it occurred to me that I really didn’t have to impress anybody. I also developed the worst case of athlete’s foot known to man, and sneakers are the only things I could wear with any comfort.
What about the stories they told about you not carrying cash?
Absolutely true. There are men out there that would knock you off for three dollars and fifty cents. I never carried money, not then or later, and I let it be known that I didn’t.
In my early years in Hollywood I decided to build up a bit of a reputation as an eccentric. I thought maybe it would protect me from robbers. I once gave both Ray Holliday and Noah Dietrich instructions what to do if they got ransom notes from a gang who claimed to have kidnapped me. I said, ‘Don’t pay a cent without my approval. If I think I’m in real danger of getting my throat slit, I’ll put down the amount to be paid on the ransom note, and I’ll sign it, and right down with my signature will be the letters P.D.Q. In that case, and in that case only, pay the ransom.’
Was that a code?
It meant ‘Pay Damn Quick.’ You’re laughing, but the United States is a violent country. I had a full-time bodyguard for a while, a former Texas Ranger. I figured they’re the best. I put him up in an apartment over the garage on Muirfield Road. He had his pocket picked of his first month’s salary. Then one day he was practicing quick draws in back of the house under the magnolia tree, and he shot himself in the foot.
Ella came to me and said, ‘Howard, this man is incompetent. You don’t need a bodyguard. You’re a young man. You’re tough, you’re able.’
I knew she was wrong, but since this guy was such a jerk I fired him and pretended to Ella that I was doing it for her sake. I was a better shot than the Ranger was, although hunting wasn’t in my catalog of interests.
My private life during the early Hollywood years was about on a par with my stock market experience and my steam car. In 1929, when I was still just twenty-three years old, Ella and I were divorced. She had actually left me during the filming of Hell’s Angels, because I was never around. I knew it was coming. I gave her a settlement of close to $1.5 million, and she went back to Texas.
What were the reasons for the marriage not working?