They brought this up again in 1958 when I wanted to renew the ninety-day notes. ‘Sure, Howard,’ they said, ‘we’ll give you the money, but if you don’t complete the long-term financing within a set period of time, let’s think about that voting trust possibility.’
This was said by a man named Oates, who ran Equitable. I got the drift, and I said, ‘Thank you very much, Mr. Oates. I’ve decided I don’t need your $12 million anymore. You’ll have it back within a week.’
I dug into the till at Toolco and came up with the twelve million, plus interest, and paid them back. They said at the time I was gun-shy, and they were right. They didn’t exactly stick a gun in my ribs, but I could see it bulging in the holster under their collective armpit, so I paid them back.
What I didn’t realize then was that when the real tussle came they wouldn’t just whip out a .38 caliber automatic, they’d come at me with bazookas and Sherman tanks, and if I ducked behind a wall to hide there’d be ten guys in gray suits and sincere ties waiting for me with switchblade knives. And I also didn’t realize that these bankers and insurance company presidents were a gang. I made the mistake of assuming they operated semi-independently.
I bypassed Equitable and went to Ben Sessel at Irving Trust and borrowed $26 million from them. That was another major mistake, but I didn’t realize it at the time.
Meanwhile I got another estimate of what Toolco was worth. I got it from Merrill Lynch and a couple of those other brokerage houses I was always using to find out where I stood. ‘Fifty million,’ they said. The way they came up with their figure was based on a formula – a price-earnings ratio. In this case they’d figured the company was worth about fourteen times net earnings. Now, this meant that if you can raise the earnings, then the value of the company is that much higher. For every million dollars more that the company could earn each year, it would be worth fourteen million more in its stock price.
So in the middle of May 1957, I decided I wanted Noah to go down to Houston again and work with Toolco, because I was sure we could get more money out of Toolco, boost its earnings and therefore boost its potential sales price. I asked Noah to stop by my bungalow in the Beverly Hills Hotel so that we could discuss it.
I had started to grow long hair and a beard around that time. I hadn’t seen Noah for a month or two and when he came in the door he said, ‘Howard, you look like a gorilla.’
‘Noah,’ I replied, ‘if your knowledge of finance matched your knowledge of zoology, you’d be a poor man. A gorilla may have long hair, but as far as I know no member of the species has ever been able to grow a gray beard.’
‘All right,’ he said, ‘you look like a Neanderthal.’
‘The way I look,’ I told him, ‘is none of your goddamn business.’
This still had me annoyed when we got down to business, and then Noah said he didn’t want to go to Houston. He said he was comfortable in California and he saw no reason for it.
‘Hell, there’s a damn good reason for it,’ I said. ‘We need more earnings because we need a higher valuation.’
He told me he needed to discuss it with his wife, that she was tired of his running off on errands so often. The next day he called me and said, ‘I’ll go, but on one condition.’
‘What’s that?’
He wanted more money. Half a million a year plus expenses wasn’t enough for him. He had been nagging me for years for a piece of the company, stock options, and some way that his income could be capital gains. He was greedy, that’s common enough. Each time he would nag me I would eventually throw some bone his way to make him happy.
He sprang this to me on the telephone. I said, ‘You get the hell over here.’ I was furious. He was trying to hold a club over my head.
I was still at the Beverly Hills Hotel. But by the time he got there I decided I didn’t want to see him.
When he called me from the house phone in the lobby I told him to get to a public phone, which infuriated him. He insisted on coming out to the bungalow.
‘Noah,’ I said, ‘there’s absolutely no need for you to come out. I don’t want to hear any more remarks about my gorilla-like or Neanderthal-like appearance, and we can talk more easily on the telephone. Just get to a more private public telephone. Any hotel employee can listen in on a house phone.’
I moved him around to a couple more telephones until finally he was at one that I considered safe. By then he was nearly out of his mind with fury.
‘What kind of raise do you want?’ I asked.
What he wanted was profit-sharing and a capital gains agreement – a slice of the apple pie.
‘Noah, we’ve discussed this before and I said no. I’ve made you a rich man. Now you’re pushing me.’
And then he said something which instantly severed both our personal relationship and our business relationship. He made a speech to me about how I had been promising him this arrangement for years. That was not true. He wound up by saying that he had finally come to the conclusion that I had no integrity and he didn’t trust me. He wanted to send his lawyer to talk to my lawyer, and he wanted a decision within forty-eight hours.
‘Noah, you’re insulting me, and you’re trying to hold a gun to my head. Nobody does that. You’re fired. If you’re in this hotel five minutes from now, I’ll have the management throw you out onto Sunset Boulevard. If that happens, be careful. There’s a lot of traffic.’ And I hung up.
I called my people at Romaine Street and had the locks changed on his door and on his desk.
But you had such a long relationship with him – he’d worked with you for over thirty years. Didn’t it pain you to lose a man who was in many ways closer to you than most people?
He was never really close to me. At least I wasn’t close to him. And by then, not at all. There are other men who I’ve met more briefly, men with whom I’ve lost contact, or who have died, whose passing from my life I’ve mourned far more deeply than Noah Dietrich. He viewed me the way a stockholder views a stock he owns. He didn’t care about me, he cared about wringing as much profit as he could out of me. He pushed me too far.
And you didn’t miss him after that, as a business adviser?
I missed him all the time. I got into a lot of trouble because he wasn’t there to keep me in check with his narrow and conservative bookkeeper’s mind. I realize that all too well. But you have to draw the line somewhere. I drew it, and I took the consequences.
Who were you close to at that time?
Mostly Jean, my wife.
I’m glad you brought up her name. You’ve steadfastly avoided the subject of your second marriage to Jean Peters. Don’t you think it’s time you talked about it?
No, but I also think you’ll make my life more miserable than it is now if I keep on successfully dodging the marriage to Jean, so I’m willing to deal with it – up to a point.
Do you remember Groucho Marx’s famous remark when he was invited to join the Beverly Hills Country Club? He said, ‘I wouldn’t join any club that would have me as a member.’ That’s my feeling about marriage to me. I can’t truly fathom how a woman in her right mind would want to do it. I’m not good husband material. I’m too fixed in my ways. I’m generous, and when I get involved with a woman I take a great interest in her, but there’s too much else on my mind for me to satisfy a woman’s needs. And I do have my quirks.
Having said that, let me also say that Jean is one of the most delightful and loyal human beings on the planet. And she’s intelligent. Which makes me wonder why she married me. But she did, and that’s a fact. Why I married her is of course easier to understand. I was lonely, and tired of messing around with all those Hollywood beauties who were pursuing their careers nonstop and, no matter how fond of me they professed to be, basically out for what they could get. Jean wasn’t like that. She was a caring person. And I cared for her. I really loved her, respected her, and wanted the best for her. She reminded me a great deal of my first wife, Ella. Make of that what you will.