Armand Hammer

Armand Hammer (1898-1992) was a physician turned entrepreneur and art collector whose natural talent for business made him a billionaire. His early, helpful relations with the Soviet Union made him an international figure.

Armand Hammer was born in New York City in 1898, one of three sons of Julius and Rose Robinson Hammer. Julius Hammer was the son of a Russian emigrant who worked his way through the Columbia University medical school, developed a successful medical practice, and then diversified into the wholesale drug business and retail drug stores. Armand Hammer also attended Columbia University, receiving his B.S. in 1919 and then entering the College of Physicians and Surgeons. While at the university Hammer worked with his two brothers to save and expand his father's pharmaceutical business. After World War I Hammer talked his family into buying up medical supplies after prices had plummeted. When the prices rose, the family earned a fortune; Hammer himself earned one million dollars. Hammer still found time to complete his medical degree in 1921, graduating among the top ten students in his class.

Impatient to begin medical practice and hearing of epidemics and famines in the Soviet Union, Hammer purchased a surplus army field hospital and set off to help. Upon arriving in Moscow in 1921 he concluded that the major problem was lack of food, and, using his natural business talent, he arranged a trade of Russian furs and caviar for a shipload of American wheat. He was invited to meet Lenin, who encouraged him to abandon medicine and, instead, to help the Soviet Union build up its economy. Lenin offered Hammer a concession to operate an asbestos mine in Siberia, which he was able to make profitable after several years. Hammer was also able to obtain sales concessions for several American firms, including Ford Motor Company, United States Rubber, Allis-Chalmers, and Underwood Typewriter. In 1925 the Soviet Union decided to handle its own foreign trade and offered Hammer a manufacturing concession in compensation for his agency, Allied American Corporation, which by then included 38 American businesses. Hammer asked for the right to manufacture pencils, at that time imported and expensive. He organized the A. Hammer Pencil Company, lured away the production manufacturer of a German company, started to operate in six months, and made a profit of $1 million at the end of the first year.

As the Soviet experiment with capitalism came to a close in 1926, the government asked Hammer to sell back his asbestos and later his pencil concessions. With the help and advice of his brother Victor, who had taken a degree in art history at Princeton University, Hammer used his profits to purchase Czarist works of art, which were disdained by the Soviets. Armand and his brother organized the Hammer Galleries in New York City and brought the works back with them in 1930 to sell here. As a result of that experience Hammer developed a passion for collecting and in 1936 wrote a book titled The Quest for the Romanoff Treasure. Hammer was forced by the Great Depression to adopt the radical technique of selling through department stores in order to move his merchandise. He used this same technique to dispose of a large portion of the William Randolph Hearst collection in 1940. He continued as president of the gallery into the 1980s.

Hammer also speculated successfully in Soviet promissory notes. Back in America, he cornered the market in Soviet oak barrel staves needed by the American liquor industry, reviving after the repeal of prohibition. He also saw opportunities in manufacturing the contents of the barrels. In 1940, noting a surplus of potatoes at the same time that there was a shortage of whiskey, he earned a multi-million dollar profit by turning the tubers into commercial alcohol and blended whiskey. He acquired 11 distillers and formed the J. W. Dant Distilling Company, making annual profits of $3 million before selling out to established distilleries in 1954.

Hammer married three times:Baroness Olga von Root in 1927 while he was in Europe; Angela Zevely in 1943, by whom he had a son, Julian; and Frances Barrett in 1956, with whom he retired to California. But retirement soon bored Hammer, and he began looking for new ventures. In 1957 he obtained control of the Mutual Broadcasting Company and turned it over for a profit. A year earlier he had agreed to finance two wildcat oil wells for tiny Occidental Petroleum Company, and when both were successful he increased his holdings and was soon named president and chairman of the board. The net worth of the company increased from $175, 000 in 1957 to $300 million in 1967. Under Hammer's leadership Occidental diversified into chemicals, coal, and fertilizers, and in 1973 he returned to his Soviet connection, signing a multi-billion dollar, 25-year chemical fertilizer agreement under which a fertilizer plant would be built in the Soviet Union from which Occidental would receive supplies for sale abroad.

Art collecting was Hammer's principal hobby starting in the 1920s, but his approach was always to share his collection with as many people as possible, based on his conviction that art is an important force for understanding among people of all cultures. In 1965 he donated a multi-million dollar collection of works by Dutch, Flemish, German, and Italian masters of the 15th through 17th centuries to the University of California at Los Angeles and other works to the Los Angeles County Museum of Art. In 1971 he added more paintings to the County Museum and gave a large group of old masters to the National Gallery of Art in Washington, D.C. In 1972 he donated a painting by Goya worth $1 million to the Hermitage Museum in Leningrad, which had none. Hammer also owned three important collections, including more than 100 works by such masters as Rembrandt, Renoir, and Rubens, which traveled for exhibition throughout the world.

Hammer's concern for understanding among peoples led him in 1962 to donate the former Campobello Island estate of President Franklin Roosevelt, whom Hammer served as an adviser during World War II, as an international peace park. He also sponsored international conferences to bring experts together to discuss solutions to problems of human rights and world peace. In 1982 he founded the Armand Hammer United World College of the American West in Montezuma, New Mexico, the only U.S. campus of a movement dedicated to enhancing world peace and understanding through education.

Another of Hammer's concerns was the effort to find a cure for cancer. He was a board member of the Eleanor Roosevelt Cancer Foundation starting in 1960. He endowed the Armand Hammer Center for Cancer Biology at the Salk Institute in La Jolla, California, in 1969 and sponsored the annual Armand Hammer Cancer Conference there. In 1982 he established the Hammer Prize for cancer research, a 10-year, $1 million program to reward the scientists who do the most each year to advance cancer research. Hammer also pledged a $1 million prize for a cure for cancer, and he served three terms as the chairman of the panel which advises the U.S. president on the status of cancer research in the United States.

In his 80s Hammer still put in 16-hour days, seven days a week. (He once remarked that he would be willing to pay Occidental Petroleum for the privilege of letting him work.) In 1986 he sponsored medical aid for the Russians injured in the Chernobyl nuclear catastrophe. Along with his humanitarian work, Hammer also left himself open to severe criticism regarding his use of funds from Occidental stockholders. It is said he used company funds for many personal amenities and to buy works of art. He earned a reputation as a "teflon tycoon, " to whom charges of improprieties did not stick, though in 1976 he pleaded guilty to making illegal contributions to the Nixon 1976 presidential campaign and was fined. Hammer spent much of the 1980s trying to remove the blot on his good name, and in 1989 George Bush granted him a presidential pardon. However, some people continued to speculate about Hammer's ethics and he received his share of criticism.

Hammer made his last public appearance on November 25, 1992, at the grand opening of The Armand Hammer Museum of Art and Culture Center in Los Angeles, located just behind the Occidental Petroleum headquarters. (The museum has since come under the direction of the University of California-Los Angeles.) He died only two weeks later at the age of 92. He had suffered from chronic anemia, bronchitis, prostate enlargement, kidney ailments, an irregular heartbeat, and, most fatally, bone marrow cancer.

Further Reading

Additional information may be found in Bob Considine, The Remarkable Life of Dr. Armand Hammer (1975); the autobiography Hammer (1987); and Steve Weinberg, Armand Hammer:The Untold Story (1989).

Additional Sources

Art News (June 1997).

Christie Brown, "The Master Cynic, " Forbes 400 (October 17, 1994; November 18, 1996).

Edward J. Epstein, "The Last Days of Armand Hammer, " New Yorker (September 23, 1996). □

HAMMER, ARMAND 1898-199O

International entrepreneur

Giant

Armand Hammer was a millionaire for seven of his nine decades, and a most unusual one at that. Physician, pharmacist, mine operator, grain merchant, tractor manufacturer, pencil maker, trader of fine arts and furs, distiller, cattle rancher, oil tycoon—Hammer did many things in his life, all of them with a remarkably deft capacity for negotiation, all of them with unflagging energy, all of them to enormous profit. He was an opportunist, in every dimension, both negative and positive, of that term. He had the capacity to see profits where others saw only loss; he prided himself on doing the impossible; he created a wide network of associates from which to angle every possible gain. He was also ruthless, perhaps unprincipled, constantly fending off lawsuits and indictments. His friends included some of the most important figures of the twentieth century: V. I. Lenin, Eleanor Roosevelt, King Farouk of Egypt, King Faisal of Saudi Arabia, Prince Charles of England, Nikita Khrushchev, Jonas Salk, Leonid Brezhnev, Jimmy Carter, Deng Xiaoping, Margaret Thatcher, Mikhail Gorbachev. He moved among the circle of giants, and was one of them: the century's most intriguing entrepreneur.

Son of Immigrants

Hammer's parents were Russian Jews who immigrated to New York to avoid the pogroms. His father, Julius, was a physician and pharmaceutical manufacturer active in the Socialist Labor Party and, later, in the Communist Party. Armand was born in New York in 1898. Family lore holds that Julius named his son for the symbol of the Socialist Labor Party, the arm-and-hammer. Following in his father's footsteps, Hammer entered Columbia Medical School in 1915. By the time Armand graduated, Julius Hammer had made millions. His critics found Julius a shady figure, a capitalist active in left-wing causes, a pharmacist whose best-selling concoction was a tincture of ginger that, during Prohibition, had the advantage of being 85 percent alcohol, The government monitored him closely because of his radical activities, a practice they would extend to his son. Julius Hammer was also headed to prison, found guilty of performing an illegal abortion that resulted in the death of the patient. Thus, at the age of twrenty-two, Armand Hammer prepared to take over his father's pharmaceutical business.

Soviet Capitalist

Armand Hammer also shared his father's interest in radical causes. In 1921, his medical degree in hand, Hammer traveled to the Soviet Union to help treat victims of starvation and typhus, which was sweeping Russia. He also investigated business opportunities there. Little was available in pharmaceuticals, but Hammer was sufficiently quick to concoct a scheme whereby the Soviets traded mining and fur concessions for badly needed American grain. Surmounting the hurdles to trade imposed by Soviet and American bureaucrats, Hammer became the first American concessionaire in Russia and the first American businessman to establish a bank account in Moscow. So astonishing were Hammer's activities that he became the confidant of Lenin and was granted the sole right to represent American businesses in Russia. Despite Henry Ford's militant anticommunism and even more militant anti-Semitism, Hammer negotiated a deal to import Ford tractors to Russia, and later to build them within Russia. He became a formidable trader in Russian furs. In 1926, with no prior experience, Hammer began manufacturing pencils in the Soviet Union. Hiring German experts, he quickly earned a fortune, eventually exporting pencils to England, Persia, and China.

Trader

Although Hammer left Russia in 1930, he continued to use his Soviet connections to his benefit. In Paris he opened a bank specializing in Soviet bonds. He became the foremost exporter of Russian art treasures, selling them through high-profile galleries and mass-marketing retailers such as Gimbels and Lord and Taylor. For the remainder of his life he would be known as one of the world's foremost art collectors and dealers, Anticipating the end of Prohibition in 1933, Hammer bought a barrel manufacturer. Most barrel manufacturers had gone out of business during Prohibition, so Hammer had the market virtually to himself. The Soviets sold him high-quality white oak for barrel manufacturing at below market cost, and once again Hammer made a fortune. In 1941 he went into the distilling business in earnest, developing innovative refining techniques for vodka, which, naturally enough, he had first learned in Russia. By the end of the 1940s Hammer was one of the nation's leading distillers.

Oil Magnate

Hammer dabbled in several businesses during the 1950s, including cattle ranching and radio. In 1956 he became involved in Occidental Petroleum Corporation, a small Los Angeles-based oil company. Hammer invested in the company thinking it was a tax writeoff, but with the usual Hammer luck Occidental began striking new wells throughout California. Hammer took the helm and transformed the company, diversifying its interests into other natural resource production, such as mining and fertilizer. As he had with the Soviet Union in the 1920s, Hammer offered developing nations badly needed goods in trade for access to their raw materials. As he had with pencil manufacturing, Hammer raided other petroleum companies for talent. It was savvy business. By 1966 Occidental had annual sales of almost $700 million. By the 1970s Occidental would have lucrative contracts with Libya, Saudi Arabia, Venezuela, and Singapore. In 1972 Hammer resurrected the deal he had made with Lenin, this time trading the Soviets fertilizer for $20 billion in nickel and other raw materials deliverable over twenty years. Critics and admirers alike called it "the deal of the century."

Teflon Tycoon

The esteem with which Soviet officials held Hammer made him an uncredited American ambassador to Russia and extremely valuable during the 1970s and 1980s. He tried unsuccessfully to resolve Soviet/ American tensions over the 1979 invasion of Afghanistan. He marshaled humanitarian assistance to Russia after the Chernobyl disaster. He acted as a mediator negotiating the status of Russian Jews for Israel. He was a lifelong champion of international peace, nominated for the Nobel Peace Prize in 1984. His diplomatic activities provided Hammer with the political support necessary to survive four court challenges to Occidental by the Securities and Exchange Commission. He earned a reputation as a "teflon tycoon/' to whom charges of improprieties did not stick, though in 1976 he pleaded guilty to illegal contributions to Richard Nixon's 1972 presidential campaign and was sentenced to a year's probation and a three-thousand-dollar fine. While he continued to enjoy the confidences of the powerful and dismissed the conviction as no more troubling than a speeding ticket, Hammer spent much of the 1980s trying to remove the blot on his good name. On 14 August 1989 his efforts paid off, with a presidential pardon from George Bush. Hammer died absolved on 10 December 1990.

Source:

Steve Weinberg, Armand Hammer: The Untold Story (Boston: Little, Brown, 1989).

Armand Hammer 1898–1990, American business executive, b. New York City. He began in his father's pharmaceutical business and then expanded it into the Soviet Union. He returned (1930) to New York, where he invested in whiskey, cattle, and broadcasting. He invested in Occidental Petroleum Corporation in the 1950s and expanded it into a company with over $10.1 billion in annual revenues. In the 1970s, a subsidiary of the company was involved in lawsuits concerning the dumping of toxic wastes into the Love Canal . Throughout his life, Hammer was an active promoter of peace and economic ties between the United States and the Communist countries. His extensive art collection is housed in the Armand Hammer Museum of Art and Cultural Center in Westwood, Calif.

Bibliography: See his autobiography, Hammer (1986); biography by S. Weinberg (1989).