The Very, Very Rich and How They Got That Way (12 page)

There is a vast amount of treasure buried underground as everybody knows: iron, copper, gold, uranium, oil, diamonds – a varied and fabulous array. But it’s treasure only when it’s brought up to the surface.

If all these romantic commodities were lying about on the surface where any fool could pick them up, they would be cheap. But they aren’t. They lie hidden. Finding them and bringing them up takes work, money and a willingness to live with high risk. Men who undertake this kind of task have a right to be well paid, and the world has always seen to it that they are – when they succeed.

The world’s richest treasure digger is oilman Jean Paul Getty. His story is a textbook study of how to get improbably wealthy by finding a valuable commodity underground and taking it to places where it can be put to use.

It might be argued that Getty, like Hughes, is out of place in this gallery. Getty had a rich father. But, as you’ll see in the story that follows, this gave young Getty few, if any, unusual advantages. It is a popular misconception that the senior Getty set his son up in business by handing him umpteen and a half million dollars and that young J. Paul simply invested this juicy fistful and spent the rest of his life sitting Buddhalike on his rump while great green mountains of money piled up around him. Not so.

The facts are quite otherwise. When the senior Getty died, he left his son just half a million dollars. That amount had little effect on the young man’s subsequent fortunes. J. Paul Getty had already made millions of dollars by himself.

Unlike Howard Hughes, Getty is a frank and talkative man. He enjoys telling his own story, for he believes the story embodies lessons for young men just starting the long climb. He is
Playboy’s
contributing editor for business and finance, and 34 of his articles have appeared in the magazine, plus three books. He obviously derives some kind of kick from this subsidiary career of writing. There was a time in his youth when he thought he might want to earn his living as a writer, and this old dream seems to be still with him. He turns out a clear, strong, straightforward brand of prose. Let’s listen now while he recalls his remarkable career in his own words.

I was still very young and quite green. My nervousness and excitement rose to an intolerable pitch. I became more hindrance than help to the men on my drilling crew. To get out of their way and ease my own tension, I beat a strategic retreat to Tulsa, the nearest city of any size. I decided to wait there until the drilling operation was completed and the results were known. In Tulsa J. Carl Smith, a close friend who was considerably older and far less excitable that I, volunteered to go to the drilling site and supervise the work there for me.

There were no telephones in the remote area where my well was being drilled. The single line between Stone Bluff and Tulsa seldom worked. Hence, J. Carl Smith promised to return to Tulsa on the last train from Stone Bluff the next day and inform me of the latest developments.

On the following day – a chill, blustery February 3, 1916 – I was at the Tulsa railroad depot, anxiously pacing the windswept passenger platform more than an hour before the train was due to arrive. At last it pulled into the station. Endless seconds later J. Carl Smith’s familiar figure emerged from one of the coaches. His face beamed, and my hopes soared.

“Congratulations, Paul!” he boomed when he saw me on the platform. “We brought in your well this afternoon. It’s producing 30 barrels!”

I automatically assumed he meant 30 barrels a day, and my elation vanished instantly. Thirty barrels a day – why, that was a mere trickle compared to the gushers other oilmen were bringing in at the time.

“Yes sir” – J. Carl grinned – “We’re getting 30 barrels an hour. . . ”

Thirty barrels
an hour
!

That made a difference, a world of difference. That meant the well was producing 720 barrels of crude oil daily. It also meant that I was in the oil business – to stay.

Being the son of a successful oilman, I had been exposed to the virus of oil fever since childhood. My parents, George F. and Sarah Getty, and I first visited what was then the Oklahoma Territory in 1903, when I was ten. While there, my father, a prosperous Minneapolis attorney-at-law, found it impossible to resist the lure of the Oklahoma oil rush, which was then in full swing. He formed the Minnehoma Oil Company and began prospecting for oil.

My father, a self-made man who had known extreme poverty in his youth, had a practically limitless capacity for hard work, and he also had an almost uncanny talent for finding oil. After organizing Minnehoma Oil, he personally supervised the drilling of 43 oil wells. Of which 42 proved to be producers!

I served a tough and valuable apprenticeship working as a roustabout and tooldresser in the oil fields in 1910 and 1911, but I didn’t go into the oil business for myself until September 1914. I had but recently returned to the United States after attending Oxford University in England for two years. My original intent was to enter the U.S. diplomatic service, but I deferred that plan in order to try my luck as an independent operator – a wildcatter – in Oklahoma.

The times were favorable. It was a bonanza era for the burgeoning American petroleum industry. A lusty, brawling pioneer spirit still prevailed in the oil fields. The great oil rush continued with unabated vigor and was given added impetus by the war that had broken out in Europe that year. Primitive boomtowns dotted the Oklahoma countryside. Many bore bare-knuckled frontier-era names such as those of the four “Right” towns: Drumright, Dropright, Allright and Damnright.

Streets and roads were unpaved – rivers of mushy clay and mud in spring and winter and sun-baked, rutted tracks perpetually shrouded by billowing clouds of harsh red or yellow dust in summer. Duckboard sidewalks installed outside the more prosperous business establishments and gambling halls were viewed as the very ultimate in civic improvements.

The atmosphere was identical to that which historians describe as prevailing in the California gold fields during the 1849 gold rush. In Oklahoma, the fever was to find oil, not gold, and it was an epidemic. There were few, indeed, who were immune to the contagion.

Fortunes were being made – and lost – daily. It was not unusual for a penniless wildcatter, down to his last bit and without cash or credit with which to buy more, to drill another 100 feet and bring in a well that made him a rich man. A lease that sold for a few hundred dollars one afternoon sometimes increased in value a hundredfold or even a thousandfold by the next morning.

On the other hand, there were men who invested all they owned in leases and drilling operations only to find that they had nothing to show for their money and efforts but a few dismally dry holes. Leases purchased at peak prices one day proved to be utterly valueless the next. It was all a gargantuan, supremely thrilling gamble for staggering stakes, and I plunged into the whirl hopefully. I had no capital of my own; my personal budget was $100 per month. My first year was anything but profitable. Large oil strikes were being reported regularly, and other wildcatters were bringing in gushers and big producers, but fortune seemed to elude me.

Then, in the late fall of 1915, a half interest in an oil lease near Stone Bluff in Muskogee County was offered for sale at public auction. I inspected the property and thought it highly promising. I knew the other independent operators were interested in obtaining the lease, and this worried me. I didn’t have much money at my disposal – certainly not enough to match the prices older, established oilmen would be able to offer. For this reason I requested my bank to have one of its representatives bid for me at the sale without revealing my identity as the real bidder.

Surprisingly enough, this rather transparent stratagem accomplished the purpose I intended. The sale, held in the town of Muskogee – the county seat – was attended by several independent oil operators eager to obtain the lease. The unexpected appearance of the well-known bank executive who bid for me unnerved the wildcatters. They assumed that if a banker was present at the auction it could only mean that some large oil company was also interested in the property and was prepared to top any and all offers. The independents glumly decided it would be futile to bid and, in the end, I secured the lease for $500 – a bargain-basement price!

Soon thereafter a corporation was formed to finance the drilling of a test well on the property. I, as a wildcatter with no capital of my own, received a modest 15% interest in the corporation. I assembled a crack drilling crew, and my men and I labored to erect the necessary wooden derrick and to rush the actual drilling operations. We spudded the well in early January 1916. I remained on the site night and day until the drilling went into its final stages. Then, as I’ve related, I found it impossible to stand the nervous strain and fled to Tulsa, where my friend J. Carl Smith brought me the news that the well had come in for an initial daily production of 720 barrels.

The lease on the property was sold to a producing oil company two weeks after that, and I realized $12,000 as my share of the profits. The amount was not very impressive when compared to the huge sums others were making, but it was enough to convince me that I should – and would – remain in the oil business as a wildcatter.

My father and I had previously formed a partnership. Under its terms he was to provide financing for any exploration and drilling I conducted and supervised for the partnership. In return he would receive 70% of the profits, while I received the remaining 30%. After my first success we incorporated the partnership and in May 1916 formed the Getty Oil Company, in which I received a 30% stock interest.

Many fanciful – and entirely erroneous – accounts of the business relationship between us have appeared in print. Contrary to some published reports, my father did not set me up in business by giving me any outright cash gifts. George F. Getty rejected any ideas that a successful man’s son should be pampered or spoiled or given money as a gift after he was old enough to earn his own living. My father
did
finance some of my early operations – but solely on the 70-30 basis. Insofar as lease purchases and drilling or other operations I conducted on my own account were concerned, I financed these myself. My father neither provided the money for my private business ventures nor did he share in the profits I received from them.

Incidentally, there is another popular misconception I’d like to correct once and for all. It has been said that my father bequeathed me a huge fortune when he passed away in 1930. Actually he left me $500,000 in his will – a considerable sum, I’ll admit, but nonetheless a very small part of his fortune. It was a token bequest. My father was well aware that I had already made several million dollars on my own, and he left the bulk of his estate to my mother.

After father and I incorporated our partnership in 1916, I went right on prospecting and drilling for oil. My enthusiasm was not dampened when my second well proved to be a dry hole. By then wildcatting was in my blood, and I continued to buy and sell leases and to drill wells. I usually acted as my own geologist, legal advisor, drilling superintendent, explosives expert and even, on occasion, as roughneck and roustabout. The months that followed were extremely fortunate ones. In most instances the leases I bought were sold at a profit, and when I drilled on a property, I struck oil more often than not.

There were no secrets, no mystical formulas behind these successes. I operated in much the same manner as did almost all wildcatters – with one important exception. In those days the science of petroleum geology had not yet gained very wide acceptance in the oil fields. Many oilmen sneered openly at the idea that some “damned bookworm” could help them find oil. At best, the vast majority of oilmen were sceptical about geology as a practical science and put little stock in geologists’ reports. I was among the few who believed in geology. I studied the subject avidly at every opportunity and applied what I learned to my operations.

The independent operator had to possess a certain amount of basic knowledge and skill. He also needed reliable, loyal and experienced men on his exploration and drilling crews. But, beyond these things, I believe the most important factor that determined whether a wildcatter would succeed or fail – whether he would bring in a producing well or wind up with a dry hole – was just plain luck.

There were some who didn’t consider it luck, among them T. N. Barnsdall, one of the great Oklahoma oil pioneers. Multimillionaire Barnsdall often expounded his favorite theory about what he thought made the difference.

“It’s not luck,” he maintained stoutly. “A man either has a nose for oil or he doesn’t. If he does, he smells the stuff even when it’s 3000 feet down!”

Perhaps. But I rather doubt it myself. Personally, I was never able to sniff out the presence of a subterranean oil pool. Nor do I recall that I ever tingled with an oil dowser’s extrasensory response while tramping across a potential drilling site. I still think my early successes were due mainly to pure luck.

However, lest there be those who imagine wildcatters had little to do but wait for the wheel of fortune to spin and then reap their profits, let me say that the oil business was never an easy one. It has always entailed work – hard work – and it has always been fraught with innumerable financial pitfalls, especially in the early days. Wells sometimes blew up, and profits – and often capital – were devoured with appalling speed by costly efforts to extinguish the resulting fires. Dry holes, equipment failures and breakdowns at crucial periods, squabbles and litigation over leases and rights-of-way – these were a few of the myriad problems and setbacks that frequently drained the independent operator’s financial resources down to a point well below the danger mark.