I had just come off the golf course in Beverly Hills and I was carrying my putter, and while I talked to him I was putting on the green rug in the reception room. I had a little cup, a little hole, built into the rug there. Noah thought this was all a little eccentric. I had two secretaries then, and one of them worked several hours a day retrieving golf balls for me. (I saw this same scene in a movie years later, and I got a big kick out of it.)
Every time my putter clicked against the ball, Noah jumped a little bit. It made him nervous.
I told Noah what my situation was, that I’d inherited Toolco and bought out the other heirs, and I was interested in making movies and in various other projects, and I wanted somebody to look after my financial affairs. And then I pulled a question out of the hat. I asked him to explain the principle of flight. This flummoxed him for a moment, but by God he came up with the answer, more or less, as much as I expected any non-flier to know.
Why did you ask him that?
I didn’t want just an accountant. I had this man do many jobs for me. I had him carry liquor during prohibition from Texas to California. I needed a man who could run a ticker tape through the streets of Los Angeles, which as it turned out, he couldn’t do. I needed a jack-of-all-trades with an accountant’s brain.
I hired him, started him off at $10,000 a year, and he went up from there until he was making half a million plus a few little extravagances like a Packard I once gave him because he got me to the railroad station on time.
But I had problems with Noah right from the beginning. Among other things, he had the ability to drive me crazy with his indecision. I got the feeling sometimes he enjoyed doing it, did it on purpose to get my goat. He was much older than me and he probably resented working for a younger man.
This goes back to shortly after I’d hired him, and it almost made me fire him on the spot. He was basically an accountant, so naturally one of the first things he had to do was prepare my income tax return. I’d told him I wanted to file in California because I was going to live out there, but he pointed out that if I filed in Texas, which I could do because I still had legal residence in Houston, it would save me $10,000 a year. It had something to do with the community property law. I said to myself, ‘He’s an accountant, he knows what he’s doing.’ But I was uneasy about it, because I wanted to establish permanent residence in Hollywood, and that’s what Ella wanted too. She wasn’t in love with Hollywood but at least she wanted the illusion of permanence.
We were down in Houston in the spring of 1927, looking into Toolco. We had two tax returns prepared – one for California and one for Texas. At the last minute, I told Noah, ‘No, damn it, file the California return.’ With a lot of muttering and mumbling, he dropped it off that night at the Internal Revenue office in Houston. There was a midnight deadline and he made it by less than ten minutes.
Early the next morning he called me and said, ‘Howard, you’ve made a big mistake. I’ve been up all night figuring it out, and it’s going to cost you more than just $10,000’ – and he started giving me one of those complicated analyses of blocked income and joint interest in property. I didn’t understand a word. I was only twenty-two years old.
‘All right,’ I said, ‘get the California tax return back and file the Texas return, but please, for the love of God, don’t bother me anymore with it.’
Noah rushed straight to the tax commissioner’s office and gave them some cock-and-bull story that he’d filed the wrong return for me, and please could he have the California return back and submit the Texas one, which he had in his pocket, together with my check for the right amount.
They said to Noah finally, ‘All right, mistakes can happen, and we don’t want you to lose your job, so we’ll take your money.’
When he came back to Houston we met for dinner. I asked him to please explain the whole thing to me in simple layman’s terms. I listened, and I think I must have gone white. It turned out that what he’d saved me, in hard cash, was about a couple of thousand dollars a year for the next three or four years, and I had to go back to Hollywood and still be a resident of Texas.
I wanted to beat my fists against the wall, but I said quietly, ‘Go back to Austin and switch the returns again. I was right the first time. I want to file in California.’
Now that was absurd of me, I know. You can’t go switching your tax returns from state to state three or four times. It’s not just that they’ll think you’re crazy, it’s that the tax people won’t bend over backwards until their spines snap. They won’t do it for John Doe and they won’t do it for Howard Hughes either.
Noah pointed this out and I left the dinner table without another word and went upstairs to my room in the Rice Hotel. I was in such a turmoil that I thought, I’m going mad. This man can rattle my brains like popcorn. There was only one thing to do. I dived into a cold bath and lay there until it was time to sleep, and then the next morning l left a note saying, ‘Noah, it may cost me a small fortune, but you manage the finances the way you think best, in my life and at Toolco. You make the business decisions. I’ll make movies.’
And I went back to Hollywood.
The real point of that story is this: that’s how and why I asked Noah to take over Toolco – all over this silly tax matter – and how I was freed to do the things I really wanted to do. Destiny works in strange ways.
3
THE FIRST MOVIE I made in Hollywood was called Swell Hogan, about a Bowery bum with a heart of gold. I knew an actor named Ralph Graves who had been a friend of my father’s. He took me to the Metro lot, and that time I got in.
Graves talked me into making Swell Hogan. In my office at the Ambassador he played out all the scenes for me, acted it out before it had been written, and convinced me it was a million-dollar picture. I was impressed with his performance, and he said it would cost only fifty or sixty thousand dollars to make.
‘I’ll go fifty,’ I said. ‘Let’s get to work.’
So I was in the movie business, and I made Swell Hogan. Or rather, Ralph Graves made it, and I watched and wept and paid the bills. When it was done, it had cost me $85,000, and it was a terrible movie. We couldn’t even get distribution. For a while I was a bitter and disillusioned young man.
But nothing could stop me, not even failure. After Swell Hogan I met Mickey Nielan again, my father’s old pal, and we made a picture together, my first movie that was released. It was called Everybody’s Acting. I guess by standards today it was a pretty flimsy picture, but it made money.
Then I hired Lewis Milestone, who had just quit Warner Brothers in a huff. He was a man whom I respected very much, and I hired him to direct a picture called Two Arabian Knights, a comedy set in the trenches of France during the First World War, and it won an Academy Award. That was the first year they had the Oscars and we won the award for best direction in comedy. It cost $500,000 to make – that was a lot of money, almost unprecedented, and people thought I was crazy, but it was a smash hit. If you take big risks there are big rewards. I knew that even then.
These films were made by and released through my own company, Caddo Productions, which was named after the Caddo Rock Drill Bit Company in Louisiana, one of my father’s subsidiary interests that I’d inherited. Through Caddo Productions, Lew Milestone and I then made a gangster film called The Racket. All the time I was learning from my mistakes. I used to write everything down in a little ten-cent notebook I’d bought in Woolworth’s.