The Very, Very Rich and How They Got That Way (11 page)

Hughes fifth film was a staggering costly epic named
Hell’s Angels
, dealing with air fighting in World War One. It was first made as a silent at a cost of over $1 million. Just as it was about to be released, talkies abruptly caught the public’s imagination. To the horror of his financial advisors, including Noah Dietrich, Hughes scrapped the entire film and started it all over again as a talkie. The original lead actress had been a European who could barely speak English; so he hired an obscure blonde starlet named Jean Harlow. Some said Jean Harlow couldn’t act, but she could speak English and her every gesture spoke the universal language of sex.

Hughes worked on the film personally, constantly changing hats as he flitted from scriptwriting to directing to set designing to editing. He often worked more than 24 hours at a stretch without even pausing for a nap. “I never saw a man who could concentrate that hard or for that long,” said Jean Harlow, who seemed to be amorously interested in Hughes but who never received a tumble in return. (As a rich and moderately handsome young man, Hughes enjoyed an interesting and diverse sex life among the starlets. But he didn’t often become involved with the star actresses of his own shows. Such was his capacity for concentration that he viewed those particular ladies as strictly business properties. Jean Harlow’s bright-blonde hair and sultry eyes made him think of money, not sex.)

Hell’s Angels
was released in 1930. Critics grumped at it, as usual. But once again Hughes’s mental barometer had measured the public emotions climate with uncanny accuracy. The film became a smash hit, and Jean Harlow became a star of world renown whose very name meant female libido. Hughes had put more than $3 million into the film. It went on to gross some $8 million.

Meanwhile, Hughes Tool had been spinning along smoothly. It now manufactured not only oil-field drill bits but also a growing variety of other industrial tools and equipment. The value of its stock couldn’t be gauged accurately, since it had never been traded on a public market, but its worth had certainly risen sharply under the capable hands of Dietrich and the occasional attentions of the young semi-absent owner. The Hollywood properties were similarly rising in value as Hughes attempted ever-bigger ventures in the search for ever-bigger profits.

At the end of 1930 Hughes reached his 25
^th
birthday. He had inherited half a million dollars at the age of 18. His net worth now was conservatively guessed at around $20 million.

And once more his attention was wandering to a new field of business.

He had wound up Hughes Tool like a clock and walked away from it, and it had gone on ticking. He had then wound up a battery of Hollywood ventures and they were now ticking steadily. Leaving them under the command of handpicked managers, he now began to back away from them exactly as he had left Hughes Tool.

What new business had caught his curious eye? Aircraft.

He had apparently become fascinated by airplanes during the filming of
Hell’s Angels
. He had pestered pilots and mechanics with questions, had watched with childlike wonder as planes were taken apart for repair, had even taken flying lessons and earned a pilot’s license. “His mind is like a damned attic!” said an actor who played a bit part as a pilot. “He keeps storing stuff in it. I never heard a guy ask so many questions!”

Shortly after
Hell’s Angels
was finished, Hughes began to absent himself from Hollywood for long periods of time. He would be gone a month, would return for a few days to see that his clocks were still ticking, then would vanish again. Nobody knew where he went. When asked for explanations he would only say, “Oh, I’ve been traveling.”

In fact, this astoundingly knowledge-hungry man was busy learning more about airplanes. Using a false name, he had secretly gone to Texas and found a job as co-pilot with a small airline.

Airline wages in those days were meagre. The young millionaire, whose growing collection of businesses were then earning more in a day than he could earn in a year as a co-pilot, obviously had no need for the money. Though he never troubled to explain his motives to anybody, it seems evident that he had only one reason for taking this secret job: He wanted to learn.

When he felt he had learned enough, he quit. Over the next few years he bought himself a number of private planes. He established a small service-and-repair shop in California to keep the planes in flying condition. But basic service and repair weren’t interesting enough for Hughes. He was a compulsive tinkerer: He had to modify his planes, build more oomph into their engines, experiment with their aerodynamics. The service shop rapidly evolved into a rebuilding plant. Flying his own rebuilt planes, Hughes began to win air races. A rebuilt Lockheed, with Hughes at the controls, flew around the world and made headlines in 1938. Eventually other plane owners were coming to Hughes and asking whether he would do some tinkering for them. Thus, the onetime service shop grew into a small but rich operation eventually named Hughes Aircraft Company.

While this was happening, in the late 1930s, Hughes was looking around the airline industry for a possible investment. The industry was young and not very healthy. The Great Depression had slowed – in fact, nearly halted – the growth that had begun amid the euphoria of the 1920s. Most airlines were desperately short of customers and cash. If anyone was foolish enough to want to buy an airline, he could choose from a large, ragged and droopy-winged assortment on the bargain counter.

Hughes was convinced that somebody, someday, would make a lot of money from intercontinental airline service. He figured it might as well be he. And so, for a sum of money reputed to be in the neighborhood of $10 to $15 million, he bought roughly three-quarters of the outstanding common stock of a seedy but (he thought) promising little outfit called Transcontinental and Western Airline.

The name may have attracted him. Later he changed it to Trans World, reflecting the little company’s expanding horizons but keeping the initials that were eventually to become one of the world’s best-known trademarks. (When he finally sold his TWA stock in 1966, the bundle brought him considerably more than half a billion dollars. Subtracting the long-term capital-gains tax, his profit on the deal was presumably somewhere near $400 million.)

By the time of World War Two, Howard Hughes was shuttling back and forth between so many business ventures that some were likely to suffer. At this point he may have been overdiversified. There were many men in the federal government who complained that this was indeed the case. Hughes Aircraft Company got involved in several design-and-development contracts for warplanes of various kinds, spent millions of the government’s dollars but ended by producing not one usable plane for the war effort. Frustrated military officers howled that the main reason was Hughes’s ghostly habit of vanishing.

Whenever the aircraft company’s executives and engineers needed Hughes’s OK on some key decision or his signature on a document, nobody could find out where he was. Frantic phone calls would be made to his Hollywood headquarters or to Hughes Tool in Texas, and the pleasant young lady on the phone would promise to pass on the message, and days or weeks later Hughes would call in from New York or Toronto or some remote town nobody had ever heard of. Meanwhile, the aircraft work would have ground to a shuddering stop, and engineers and military procurement officers would be running around in circles weeping with impotent rage.

The Hollywood business fared better. Following the smash success of
Hell’s Angels
in the early 1930s, Hughes produced an equally successful gangster film called
Scarface
. This film was made at a time when Hughes was getting involved with the airplane business. There was a lull in the Hollywood operation for the next few years. Then, abruptly, in the midst of World War Two, when everybody assumed Hughes was so busy with his aircraft problems and his tool company’s defense contracts that he couldn’t find an hour to call his own, he plunged into what was to be his most colossal Hollywood success.

The film was called
The Outlaw
. The plot was barely noticeable, as Hughes himself acknowledged: just another horse opera dealing with Billy the Kid. But the star was a young woman, hitherto unknown, who had been working as an obscure photographer’s model until she was spotted by Hughes’s unerring eye. Her name was Jane Russell.

As an actress Miss Russell was, to put it charitably, less than brilliant. She had a rather uninteresting face. When she strove for the look of sultry passion that Jean Harlow had achieved so well, it somehow came across as a look of either dyspepsia or boredom. Her voice had an irritatingly mechanical quality. But she had something that very adequately made up for all these drawbacks: a mammary development the likes of which had never before been exposed to the popeyed gaze of the movie-going public.

As one of Hughes’s own press agents put it a later year, “She had only two things to recommend her. Either one would probably have been enough.”

Some of Hughes’s film advisors, watching Jane Russell’s early screen tests, argued vehemently against hiring her. But Hughes had once again gauged the public mood with uncanny precision. Sexual taboos were being stretched and, in fact, were breaking in the turbulent wartime society. The public in general was starting to talk of sex as a type of entertainment, a means of escape from the harsh realities of war. The ponderously solemn attitude with which it had once been approached was now being laughed at. Moreover, millions of men who were heading for combat, and the women who were being left behind, were swinging to the view that one might as well enjoy one’s sexual adventures while the chance was still at hand, for another chance might not come for a long time, or, indeed, forever. For reasons that psychiatrists are still arguing about today, these changing attitudes found overt expression in a thunderous, nationwide obsession with the female breast.

The Outlaw
was by no means a pornographic film – certainly not by today’s standards and not even by those of the 1940s. The only element to which bluenoses of the time could object was the camera’s tendency to linger for what seemed like unnecessarily long periods of time on Miss Russell’s magnificent cleavage. Hughes carefully and cleverly capitalized on this minority objection. He instructed his publicity agents to pose as offended bluenoses. They phoned the police and other authorities in cities where the film was being shown, demanded that the theatres be closed in the name of public decency, raised so loud a hue and cry that the film became famous around the world.

It was really just a run-of-the-mill western. Hughes, through his expert handling of it, made it into perhaps the biggest box-office success in all the history of movies up to that time. His profit on it over the years is reputed to have added up to something like $15 million.

Most of Hughes’s other ventures were similarly profitable during the 1940s and 1950s. Though his aircraft company failed ever to produce a warplane that the U.S. government wanted to buy, the company kept busy during and after the war by producing aircraft gun turrets, machine-gun parts and other armaments. Hughes Tool continued to grow during the war and in the peacetime boom that followed, and by 1950 its estimated net worth was at least 500 times what it had been when the teenage Hughes inherited it.

TWA went through hard times after the war, as did almost all airlines throughout the world. Hughes wanted it to be become a major intercontinental carrier. Another growing airline, Pan American, nurtured the same ambition. The two fought fiercely for routes. They pegged fares at ridiculously low levels, granted all kinds of financial concessions to various national and city governments. TWA lost so much money in 1946 that its stock price (adjusting for subsequent splits) fell from a wartime high of above $50 to less than four dollars.

Hughes, hospitalized in 1946 after the crash of an experimental airplane, was urged to sell his TWA stock before the bottom dropped out completely. (He had bought it at the equivalent of less than two dollars.) He refused. He could enjoy the comfort of diversity: Though this one venture was suffering, he didn’t need to panic. He also understood the very interesting position in which TWA stock then found itself. Since he held 78% of the stock, there wasn’t much left for trading on the public market. If TWA ever recovered from its financial ailments and began to show a profit (which Hughes was certain would happen eventually), the small amount of available stock would be sought by a large number of buyers. The price might then rise precipitously.

In fact, this was precisely what happened. Other investors who saw the picture as Hughes did were treated to a gorgeous ride uphill. By the time Hughes sold out in mid-1966, the stock was trading in the range of $100 a share.

(TWA stock warrants offered an even better ride during four short years in the 1960s. If you had put $1000 into TWA warrants at the right time in 1962 and sold out at the right time in 1966, you’d have ended with some $26,000. Nobody but Hughes’s broker knows for sure whether Hughes or his companies invested in these warrants, but the likelihood is that they did.)

One would have thought Hughes had enough to do in the late 1940s. He was busy doctoring TWA, experimenting with new airplanes, negotiating new contracts for Hughes Tool, making more movies, planning sundry other investments such as a purchase of RKO movie studios and theaters. But apparently this wasn’t enough for him. He abruptly plunged into a new field: electronics.

Both Hughes Tool and Hughes Aircraft had been moving into the fringes of the electronics business. Hughes, guessing the business would grow over the coming decades, now founded an electronics company as a subsidiary of Hughes Aircraft. And once again he demonstrated his amazing ability to pick people for jobs he wanted done. Among those he hired for the infant company’s top management team were Charles B. (“Tex”) Thornton, a clever administrator who later became chief architect of the mighty conglomerate named Litton Industries, and Drs. Simon Ramo and Dean Wooldridge, brilliant young scientists who later founded their own string of companies.