Hammer: Odyssey of an Entrepreneur
Thomas E. Gainor - First Vice President
Published August 1, 1987 | August 1987 issue
By Armand Hammer and Neil Lyndon
Anyone even mildly interested in the tumultuous history of the mid-20th century will find in Hammer a wealth of first-hand insights into events of the era from the perspective of one who was there. His remarkable involvement ranges from meetings with Lenin and Trotsky in famine-plagued Russia in 1921 to discussions with Reagan and Gorbachev over the Chemobyl incident in 1986. Written with the assistance of author Neil Lyndon, Hammer is a remarkable story of a committed capitalist whose energy, skill and entrepreneurial spirit propel him to frequent and sometimes significant involvement in the ebb and flow of relations between nations. In describing the human interaction he witnessed from behind the scenes in several world events, he emphasizes a dominant theme: that straightforward communications between nations cannot be allowed to break down and that a "trusted intermediary" can often accomplish progress when official channels are impotent.
Born on the lower east side of New York in 1898 to Russian immigrant parents, Armand Hammer was the second of three sons, a leader from his earliest years. His mother justified extra attention to his younger brother by saying "Armand can take care of himself and everyone else as well."
Hammer traces his family name to Judah Maccabee of ancient Israel, also called "Judah the Hammer," who led a rebellion that recaptured Jerusalem in 164 B.C. The family retained the name Hammer when they migrated to Russia and later to America. His father, Julius, a passionate socialist, claimed to have given him the name Armand in honor of the hero of a Dumas play. Hammer suspected, however, that his real motivation was the arm and hammer symbol of his beloved Socialist Labor Party. In later years the name Armand Hammer inevitably led new acquaintances to associate him with the manufacturer of household baking soda. He recounts with relish his later quixotic efforts, partially successful, to acquire ownership of that firmthereby allowing him to answer truthfully that he was, indeed, the "baking soda king."
In 1917, while studying medicine, Hammer was asked by his father to manage the family interest in a troubled pharmaceutical enterprise. Armand's entrepreneurial spirit quickly became apparent. Through a combination of skill, hard work and luck, his company, Allied Drug and Chemical, cornered the world market in ginger and became the principal supplier of tincture of ginger, a very profitableand legalalcoholic product during the early years of Prohibition. In the year 1919, when the average income in the United States was $625 a year, Hammer's personal income from his business was over $1 million net, all accomplished while continuing his medical studies.
In 1921, at age 23, Hammer reached a turning point in his life. Graduating that year from the Columbia Medical School, he was faced with a wait of six months before his much sought internship in medical research was to begin. Reading about the disastrous famine in Russia, he determined to go there to offer his medical services. During his travels in Russia, he was astonished to find stores of valuable furs, minerals and other goods going to waste while the people were starving. He offered to send a shipload of grain from the United States in exchange for goods of equal value. That was the beginning of a profitable trading relationship with the Soviet Union.
Hammer was and is a fervent defender of the American free enterprise system but he became, through his Russian experience, an unabashed admirer of Vladimir Lenin. He maintains to this day that Lenin was one of the great leaders of history, and he considers his personal acquaintance with Lenin and the mutual regard they developed for each other to be a highlight of his career.
Hammer left Russia in 1931 as the era of Stalinist purges and repression began. One can only speculate how the Russian revolution might have evolved if more realistic, humane leaders, one of whom, in Hammer's view, was Lenin, had held power during the 30s and 40s.
During his nine years in Russia, Hammer applied his entrepreneurial skill to a variety of enterprises including asbestos mining, the manufacture of pencils, the importation of Ford tractors and cars, and the purchase of numerous works of art that had belonged to those dispossessed by the revolution. Following his return to the United States with large quantities of Russian art, Hammer pioneered new marketing methods to dispose of these treasures, including department stores sales. Later he used the same approach to sell parts of the William Randolph Hearst collection when the Hearst empire was badly in need of cash.
A dominant theme of Hammer's life is his distaste for war. As a young boy he was appalled by stories of the trench warfare of World War I. In his later life he considered his efforts to promote trade as a major step toward building understanding between contending nations. He frequently quoted Benjamin Franklin's axiom: "trading nations seldom make war," and has been a consistent advocate of closer trade relations between the United States and communist countries.
In the days immediately preceding United States' entry into World War II, Hammer became a passionate advocate of aid to Britain. He "fell under the spell" of his greatest hero, Franklin D. Roosevelt, whose charm, intellect and wit completely captivated Hammer. In later years following Roosevelt's death, Hammer purchased the Roosevelt family cottage at Campobello, invited Eleanor Roosevelt to use it frequently during her lifetime and, following her death, donated it as an international park between the United States and Canada.
Hammer's business success was not matched by success in his personal life. His first two marriages ended in divorce and considerable personal unhappiness. When he married his third wife, Frances, while in his late 50s, he retired to California determined to separate himself from business activities. However, while managing their investments, Hammer became involved with a small, shaky oil company called Occidental Petroleum. Within a year, his flair for entrepreneurship rekindled, and he shortly became the majority stockholder, president and CEO of Occidental. Through astute handling of oil leases, aggressive drilling techniquesas well as his usual luckOccidental soon began to return sizable profits. Since then it has become a major player in the oil business. Hammer remains its chief executive officer today.
In the 1970s and early 1980s, Hammer, in the long twilight of his career, worked to promote political accommodation among world leaders. He met frequently with Brezhnev during the Nixon and Carter years and felt he contributed to the detente that existed during the 70s between the United States and the Soviet Union.
At the time of the Chernobyl incident in 1986, Hammer, then in his late 80s, saw an opportunity to improve Soviet/American relations. He sponsored a group of American doctors to work closely with their Russian counterparts in the intricate bone marrow transplants that were the only hope for many of the radiation victims. As a party trusted by both sides, he contributed to the resolution of the Daniloff case that opened the way to the Reykjavik Summit of 1986. Following a high-level meeting, Gorbachev was quoted as asking "Where does Hammer get his energy?"
Hammer is clearly proud of his life's accomplishments and takes relish in recounting the names of the great and near great with whom he's met and dealt. His story is a fascinating and easily read account of the power and influence exerted by one exceptional private citizen in the affairs of 20th century businesses and nations.