Painfully Rich

by John Pearson

  A further important clause which was to cause some trouble in the years ahead laid down that Paul, as principal trustee, was to have effective control of how all future payments should be made – either in the form of cash dividends, or further shares within the trust.

  As for the future beneficiaries of the trust, his as yet unborn grandchildren, he and Sarah wanted to ensure that they should earn their own livings before inheriting from the trust. It was stated that not until the last of Paul’s four boys was dead were the grandchildren as a group to inherit their share of the capital. Although Ronald’s inheritance was so strictly limited, there were no such limitations on his children, who would be treated exactly as their cousins.

  As it turned out, the founding of the Sarah Getty Trust was an historic moment for the Gettys. For the trust rapidly became a crucial factor in their whole financial future – by becoming the effective guardian of the family’s rapidly expanding fortune. What no one, Paul included, seems to have realized at first was the remorseless way the legendary trust would grow. Not only would it provide its principal trustee with precisely what he needed – a source of capital to use as and when required for his business acquisitions – it was also perfectly adapted to his obsession to amass ever larger sums of money for his family to satisfy his conscience.

  A ‘spendthrift trust’ like this was the ideal way to accumulate the great fortune he had set his heart on. Proof against taxation, bankruptcy and personal extravagance, the trust named after Jean Paul Getty’s mother would help create the greatest fortune in America.

  Chapter Seven

  Boom Time

  However Tough The thirties were upon America and the world in general, they were unusually kind to Paul Getty. Just as the death of his father in 1930 made him dedicate himself afresh to making money, so the creation of the Sarah C. Getty Trust and his acquisition of full control of the family businesses meant that his campaign to capture Tide Water Oil could start in earnest.

  On the face of it his chances of success were slim. In 1935 Tide Water had a turnover approaching $100 million against the $1.5 million of George Getty Inc., and by now Tide Water’s management were thoroughly aware of the threat Paul represented, and firmly set to block him.

  But Paul had the advantages of the small determined operator – speed, surprise, and the challenge of a personal encounter; and the creation of the Sarah C. Getty Trust had given him the financial weapon he needed. He was banned from using the trust to borrow money, but as its sole trustee was otherwise completely free to use its assets to acquire any oil shares he wanted.

  Like some modern takeover tycoon, he wanted Tide Water complete with all its assets – refineries, storage capacity, and the marketing network through which he hoped to sell his own oil products. In taking over Tide Water lay his best hope of acquiring the full-scale oil operation he had set his heart on.

  Early in the battle he shrewdly recruited David Hecht, a smart young corporation lawyer, and with Hecht beside him steadily wheeled and dealt his way towards acquiring the crucial shares he needed. He had his strokes of luck – like the New Year’s Eve party with Randolph Hearst in 1935 when he heard that the Rockefellers were disposing of a 20 per cent holding in the Mission Corporation and, with Hecht’s help, promptly snapped them up. But for the most part, acquisition was a painstaking, concentrated labour, which only somebody as driven and as dedicated as Paul could have accomplished.

  He worked inexorably, and by 1936, when he had built up sufficient equity within the Mission Corporation to give him a 25 per cent holding in Tide Water, the financial equivalent of trench warfare started between him and Tide Water’s directors. With his total single-mindedness this was something Paul was good at, and by the outbreak of war in 1939 he had practically succeeded.

  For by then the long-awaited upswing in the oil industry had come. US automobile ownership and, with it, gasoline consumption, had in fact begun to rise as early as 1936, despite the great Depression, so that the Tide Water shares he had bought for $2.50 at the bottom of the market in 1930 stood at $17.00 by 1938.

  It was a spectacular advance, which meant that as well as bringing him so near to controlling Tide Water, his share-buying operations had also made him very rich. By 1938, as owner of George Getty Inc., his personal fortune stood at $12 million, and true to his promise to his mother, he had made the Sarah C. Getty Trust richer still. The trust, which had begun with $3.5 million in 1934, was now worth $18 million.

  The money in the Sarah C. Getty Trust was the core of the massive fortune he still needed to create if he was truly to ‘make Daddy eat his words’. An important part of his financial strategy was to plough all the profits back into the trust itself, thus ensuring that its capital steadily increased, untouched by spending or taxation.

  This was what Mama had wanted, and since the capital within the trust would benefit his children and his children’s children yet unborn, he could argue that the money more than justified him now against any criticism of his way of life.

  For the trust itself had become his excuse for living the life he wanted, at a time when he was becoming more opposed than ever to family life, which he saw as a dreadful obstacle to his success. Even in old age he was still insisting that life as an ordinary husband would have held him back and stopped him from succeeding – since a family would have diverted his attention, squandered his precious time, and sapped his concentration. As he put it in a moment of extreme exasperation, ‘A lasting relationship with a woman is only possible if you’re a business failure.’

  But if Paul Getty couldn’t offer his wives and children his presence or his love, success in business enabled him to give them something he considered more important – large amounts of money for the future. With so much money safely in the Sarah C. Getty Trust, he was free to turn his full attention to perfecting the extraordinary way of life that he was leading.

  He was still driven by two overwhelming urges – for sexual adventures, preferably abroad, and for acquiring very large amounts of money. To combine successfully these two activities, he needed to devise a way of managing his business interests – which included the day-to-day running of George Getty Inc. and the battle for Tide Water – during his lengthy periods in Europe.

  Since he loved anonymity, and much of his pleasure in travelling abroad was frankly sexual, the last thing Paul required round him was a staff of executives and aides. These were consigned to the Getty offices in Los Angeles, and he taught himself to operate alone or with a single secretary, storing whatever information he needed in his head. He believed that business wasted too much time on paperwork, committees and discussion anyhow. Forgetting nothing, and delegating what was inessential, he became a great exponent of the role of capitalist as self-sufficient one-man band, making the most minute decisions with a minimum of red tape and bureaucracy.

  Victor Hugo once called Alfred Nobel, the inventor of dynamite, who also loved living in hotels and hated families, ‘the vagabond billionaire of Europe’. Paul Getty, who was much the same, was fast becoming his successor.

  His favoured method of replying to a letter was to scribble a reply in the margin and mail it back himself in the readdressed envelope it came in. He had an obsession with saving stationery, particularly expensive manila envelopes, which he always kept and carefully re-used. Any documents he needed stayed in the old-fashioned steamer trunk which accompanied him everywhere. And a crucial item in his business armoury was the small black book which never left him, containing the telephone numbers, not only of his countless girlfriends, but also of key business contacts round the world through whom he personally conducted all his business.

  For the crucial instrument without which his way of life could not have functioned was the telephone; and as the transatlantic telephone service steadily improved throughout the thirties, so did the length of time he spent in Europe. It was the telephone that would finally enable him to leave America for ever.

  As long as the transatlantic
lines from Europe to America were open, Paul was fully operational – whatever else he happened to be doing at the time. The eight-hour time gap between Europe and California was in his favour, allowing him to meet a woman, feed her and enjoy her, and be on the telephone again before the Los Angeles offices closed for the evening.

  By combining this highly programmed life of pleasure with an otherwise puritanical attitude to his existence, he was not as hypocritical as he sounded. Promiscuous sex, he would have argued, was nowhere near as bad for a businessman as the marital variety. It took up far less time, cost less, was infinitely less demanding, and actually added to one’s prowess as a businessman. As he put it once, ‘Business success generates a sexual drive, and sexual drive pushes business.’

  The point was that for Paul, money and success remained the surest proof of virtue, and true to the very rigid rules by which he led his life, he was never profligate or rash in any of his personal behaviour.

  He was compelled to live in good hotels during his periods abroad, but this was principally because only good hotels had reliable telephonic switchboards. And even in his favourite Hôtel Georges V in Paris, he always made a point of bargaining for the cheapest suite on offer. He wasted nothing, ate economically, and recorded every cab-fare in his diary. He could fornicate, but not be profligate.

  Sex helped business, which in turn brought yet more conscience-money into the sacred coffers of the Sarah C. Getty Trust.

  Unsurprisingly in these circumstances, his fourth marriage now collapsed like all the others, the only difference being that Ann Rork Getty was a tougher proposition than her predecessors. In this garrulous would-be actress, Paul had more than met his equal in the marriage stakes.

  She would marry four times herself; and even first time round she made it clear that she had no intention of enduring her husband’s philandering and bullying for ever. She was gregarious and popular, and instead of gazing sadly from the beach house at the ocean, was soon inviting friends from Hollywood to come and see her. So when Paul did come home, it was often to face a houseful of his wife’s guests who treated him with scant respect. Sometimes he even heard them encouraging Ann behind his back.

  ‘He should give you a Rolls, darling.’

  ‘He should dress you in sables instead of mink.’

  Unable to cope with such behaviour, he stayed away more than ever – and after one particularly lengthy absence, one of Ann’s friends from Hollywood introduced her to the toughest lawyer in town, who opened proceedings in what Paul called ‘an unusually noisome divorce’. ‘Noisome’ was his word for being publicly taken to the cleaners.

  Whatever her failings as an actress on the screen, Ann Rork Getty was a star in the witness-box and made the most of the horror tale of courtship and marriage with Paul – her suicide attempts, his behaviour on Vesuvius, and his unorthodox notions on the role of a father and a husband.

  She began by suing for a portion of his fortune, so he was lucky that the massive divorce settlements of the present day State of California hadn’t started. As it was she caused him much worry and annoyance before finally agreeing to what she termed ‘a beautiful settlement’ of $2,500 a month, and $1,000 a month for each of the two children.

  Although he was now the father of four young sons, he showed not the faintest interest in any of them; and with the Los Angeles newspapers feasting on the lurid details of his divorce, he decided to escape to New York before continuing abroad. Thanks to his god, the telephone, his affairs could be conducted just as well from there as from Los Angeles, and with the money he was now amassing, he felt justified in taking one of the smartest addresses in the city.

  It would be wrong to think that Paul Getty’s freshly acquired wealth would make no difference to his way of life. In fact a number of important changes now occurred in his behaviour. But all of them were governed by two crucial principles – they were not to affect his balance-sheets, and not to deflect him from the great financial game that he was playing. Otherwise he seemed quite anxious to upgrade his life in keeping with his earnings.

  In New York he moved to an address which by a strange coincidence was the same as the Tudor mansion where he would end his days, Sutton Place. But instead of purchasing an apartment in this fashionable New York block beside the river, he preferred to rent – which was tax deductible and could not be paid for by the company. Also the apartment appealed to snobbish elements within his nature, being owned by the wife of Winston Churchill’s cousin, the former heiress Amy Phipps, by this time Mrs Freddie Guest.

  Mrs Guest’s eighteenth-century paintings and French furniture also appealed to him, enough to make him think about collecting on his own account – which in fact he did, starting buying with considerable knowledge and success. Businesslike as ever, through reading and by visiting museums, he made himself a considerable expert on French eighteenth-century furniture. As he soon realized, the Depression had forced it down in value and he was able to purchase a number of important pieces at knock-down prices.

  This would become the principle behind almost all his subsequent collecting. Whatever else, anything he bought had to be a bargain – for only with a bargain could he convince himself he wasn’t wasting money. This applied to almost everything he bought – from his socks, for which he refused to pay more than $1.50 a pair, to perhaps the biggest single bargain of this period: the Pierre Hotel, on the corner of 5th Avenue and 61st Street, facing Central Park. When built in 1930, as New York’s most exclusive luxury hotel, it had cost more than $6 million. Paul bought it for $2.35 million, for the simple reason that it was such a bargain that he knew that he could never lose on the deal.

  One place where Paul’s social aspirations showed around this period was over sex. With matrimonial fever once more in the air, it was quite in character for him to start courting Louise ‘Teddy’ Lynch – a buxom, twenty-three-year-old night-club singer. But Miss Lynch was no ordinary night-club singer. Another Churchill connection, Bernard Baruch the financier, was her uncle, and Teddy herself had serious ambitions as an opera singer.

  For Paul, the prestige of having such a smart fiancée led him to contemplate the horror of matrimony once again, for he took unusual care to court Teddy’s mother, who didn’t object to having this four times married, forty-four-year-old as a potential son-in-law. But neither he nor Teddy seemed in a hurry to get married after the engagement was announced at the end of 1936.

  She was an independent young woman who wanted to perfect her singing, and as long as Paul would pay for her singing lessons, she seemed perfectly content to treat him rather as an oversexed avuncular figure, without making great demands upon his time or his fidelity.

  This was exactly what he wanted, and his engagement didn’t interfere with his womanizing forays to Europe. While he was pursuing Helga and Trudi and Gretchen in Berlin, Teddy would be taking singing lessons back in London. For despite the trouble over Fini, Paul retained his love of Berlin, which, like many foreigners in this period, he treated as his brothel. Like many foreign businessmen he also had a fairly uncritical attitude towards the Nazis, frankly admiring the efficiency with which they seemed to run the country.

  He was not an active Nazi sympathizer, but he might all too easily have become involved with them in ways that could have been uncomfortable for his future, had Teddy not diverted his interest and attention to a slightly safer country. In 1939 she wished to study singing in Italy and, tolerant as ever, Paul accompanied her to Rome. It was a strange episode in both their lives. Intent for once on keeping up appearances, Paul suggested that they stayed in separate hotels; while she was singing, he was conscientiously visiting Rome’s ruins and museums.

  It was during this period that he first became infatuated both with Rome and with Fascist Italy. One evening he took Teddy to Rigoktto, and was excited to see Mussolini in the audience. ‘The greatest son of Italy since the Emperor Augustus,’ he wrote that evening in his diary.

  But however much he admired Mussolini, h
e was becoming highly concerned now about the effect of war on his personal safety, and was anxious to return to America. Teddy was equally anxious to continue singing. Neither would budge an inch, and the result was the curious compromise of Paul’s fifth and final marriage.

  At midday on 17 November 1939, he and Teddy met before the mayor of Rome in the historic Campidoglio, the Roman Capitol, and were made man and wife. Afterwards they lunched quietly at the Ambassador Hotel, then said goodbye. Instead of waiting to consummate the marriage, Paul had to catch the afternoon train to Naples, where he boarded the Conte di Savoia for New York. Teddy remained in Rome.

  Chapter Eight

  War and the Neutral Zone

  America’s Entry Into the war in 1941 had a strange effect on Paul Getty. Although he was rising fifty, he wrote like a schoolboy in his diary about doing his duty so that ‘dearest Mama and Papa can be proud of me’. But with age he had been growing increasingly fearful for his safety – and what he had seen in Europe had made him obsessed about the power of Nazi Germany.

  He volunteered for active service with the US Navy, but must have known he was too old to be accepted. Once rejected, he then made an extraordinary compromise between doing his bit and staying as far as possible from danger for the war’s duration.

  One of the incidental assets of the Mission Corporation, which he now controlled, was the small, half moribund Spartan Aircraft Company at Tulsa, Oklahoma. Manufacturing aircraft for the war effort was a patriotic occupation, Tulsa was familiar territory, and if anywhere was safe from the threat of the German Luftwaffe during the Second World War it had to be Oklahoma.

  Even so, when Paul took personal command of Spartan Aircraft he treated it like some perilous wartime posting, and built himself a bomb-proof, four-roomed concrete bunker by the factory. It was here that he lived and from here that he personally directed Spartan Aircraft from 1942 until the war was over.