How Did Lamar Hunt Make His Money

H. L. Hunt Turned $50 Loan Into an Oil Empire; Texan, 75, Commands a Big Family Business Domain; Millionaire Is Also Occupied With Right‐Wing Causes; H. L.Hunt Knew How to Turn $50 Loan Into Vast Oil Domain

Aug. 23, 1964

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August 23, 1964

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DALLAS.

A 32‐year‐old Arkansas cotton trader, who had been saddled with thousands of acres of valueless property by a cotton‐market crash, in 1021 overheard some business associates talking about a new oil discovery in a town 200 miles away.

Intrigued by this scrap of information at a time when his holdings were worth almost nothing, the trader borrowed $50 on a note signed by three friends, cranked up his Ford car, and headed for the oil field to see what was up.

In the 43 years that have passed since that chance conversation, the man involved has become one of the biggest oil tycoons in the United States. His name is Haroldson Lafayette Hunt, who at age 75 is a legendary figure of American business success.

H. L. Hunt's name has gained prominence lately because he has been a leading proponent of right‐wing causes. Interest in him has revived with the selection of Senator Barry Goldwater as the Republican Presidential nominee.

But the political side of H. L. Hunt is only part of his tale. The story of what the Hunt empire consists of, and how it came about, is another part.

Mr. Hunt was practically a recluse until 1948, when Life magazine published a fuzzy photograph of him, snapped on a Dallas street corner, and called him the richest man in the United States. This prompted him, at the age of 59, to grant his first interview to a Dallas Morning News reporter.

An authoritative source says Mr. Hunt personally is less wealthy than his six children each of whom has a trust fund and operates in his own right. This source estimates the family fortune at $700 million or more. He figures the family might produce 13 million to 15 million barrels of oil a year, with sales from all business exceeding $600 million a year.

Mr. Hunt's oldest son, H. L., Jr., now 46 years old, was a brilliant youth who went into the oil business at 19 and was a millionaire at 24. His health failed during the nineteen‐forties and he now lives at home.

Nelson Bunker Hunt, 38, "looks like the fat boy from an 'Our Gang' comedy but is smart as all get out," a friend comments. He devotes most of his time to international oil operations.

Handsome and engaging William Herbert Hunt. 35, supervises the Hunt Oil Company and, according to a former as‐ sociate, "does a beautiful job of it."

Slender and bookish‐looking Lamar Hunt, 32, is primarily interested in sports. He was founder of the American Football League and is owner of the Kansas City Chiefs in that league.

Mr. Hunt has two daughters. Margaret, 47 years old, is married to Albert G. Hill. Caroline, 41 years old, is married to Loyd B. Sands. Both women and their husbands are oil and gas operators.

The root of the Hunt fortune is the Hunt Oil Company, a Delaware Corporation formed in936 and moved from Tyler, Tex., to Dallas in 1937. This company has 16 affiliates, including the trust funds, and is owned almost wholly by Mr. Hunt, who is president.

Hunt Oil produces oil and natural gas in 12 states—mainly Texas, Louisiana and North Dakota—and Canada. It holds undeveloped acreage in 17 states, including Alaska, and in Canada and Australia.

Herbert Hunt, who runs Hunt Oil, says that it produces 17,000 to 18,000 barrels of oil a day and that about one‐third of its total sales come from natural gas. It holds interests in several natural gasoline processing plants and crude oil pipelines, he says, and has a small refinery at Tuscaloosa, Ala., that turns 9,500 barrels of low‐grade crude oil a day into asphalt products. Sources estimate Hunt Oil has about 40 million barrels of oil reserves in North Dakota.

The Placid Oil Corporation, which is owned by Mr. Hunt's six children, produces about the same amount of oil as Hunt Oil but is larger in over‐all sales because of other products, Herbert. Hunt says. About half of Placid's sales come from gas, he says. The company is based in Shreveport, La., but will move to Dallas next year.

The Hunt Petroleum Corporation, also owned by the Hunt children, is a small oil exploration and production company. It has a production of 2,000 to 3,000 barrels a day and is run by Thomas M. Hunt, a cousin. The Penrod Drilling Company owns 25 drilling rigs used by the Hunt companies and others. The Hunt International Petroleum Corporation is owned by three of H. L. Hunt's sons, with Bunker Hunt controlling more than half. This company has a 50 per cent interest in a Lybian oil field that has an estimated six billion barrels of reserves and drilling is expected to begin there in a couple of years. The company is doing geophysical work prior to drilling on a 50 million to 100 million‐acre lease in western Australia. The company hit unmarketable gas in a Pakistan venture and lost a Kuwait concession to the Japanese.

Aside from these major operations, members of the Hunt family have vast individual holdings in oil and gas, real estate and related fields. Three of Mr. Hunt's sons in 1961 set up the Hunt Electronics Company, which makes electronic light dimmers and has sales of about $ million. HLH Products, a food‐processing subsidiary of Hunt Oil, has 14 processing plants had had 1963 sales of about $22 million.

H. L. Hunt is a large land owner, and once was the largest pecan grower in the nation. He owns a large ranch at Cody, Wyo., which is stocked with 9,000 cattle and 12,000 sheep.

H. L. Hunt was born on a farm near Vandalia, Ill., on Feb. 17, 1889, one of eight children. His father, a Confederate Army enlisted man, had moved north from Arkansas after the Civil War and became a prosperous farmer. His mother was the daughter of a Union Army chaplain.

He learned to read by the aga of three and attended public schools through the fifth grade. He left home at the age of 15 to work as a lumberjack and farm hand through Canada and the Dakotas.

When Mr. Hunt's father died in 1911, the son inherited several thousand dollars and invested it in land around Lake Village, Ark. By 1912, he had bought some additional farm land in the Louisiana delta. In 1914, he got into cotton trading and later, land speculating.

Mr. Hunt was married in 1914 to Lyda Bunker of Lake Village, Ark., a woman three weeks older than he. She died in 1955.

In November, 1957, he married Mrs. Ruth Ray Wright, who met him many years before when working for his lawyers. She is in her 40's and has four children: Swanee, 13; Helen, 15; June 18, and Ray, 20.

Mr. Hunt suffered a setback in 1920 when the price of cotton plunged from 44 to 10 cents a pound. This depressed land values in Arkansas and left him with 15,000 acres of practically valueless property. He was dickering to buy more land, hoping values would later snap back, when those he was dealing with mentioned an oil gusher had just come in at Eldorado about 200 miles away. How Ho Operated

This intrigued Mr. Hunt more than the land deal. So he canceled that and headed for Eldorado. His technique was to talk with a farmer and find out how much he would take for some land. Mr. Hunt then would drive back to town and offer the land at a price slightly higher than the fanner was asking. He then would buy from the farmer and sett at a profit without investing a dollar.

Operating this way, Mr. Hunt raised enough money to buy half an acre of his own. He paid $50 demurrage on an old rig, drilled and hit oil. He continued buying land in the field south of town, but recalls that "I wasn't a very good oil man and didn't make out very well." Mr. Hunt's real break came in the winter of 1923, when he got word of a new oil strike north of the Eldorado east field. Mr. Hunt says he trudged six miles through snow, "from farm house to farmhouse, and bought everything that was unleased." By the end of his journey, he had bought 800 to 1,000 acres at $15 to $20 an acre.

"As quick as the thaw came," he recalls, "the oil fraternity flocked out there and I had everything leased. I could have sold it easily at 10 to 20 times what I had paid for it." But he refused to sell, drilled three wells, and they all produced. Mr. Hunt later that yearbought some acreage that was part of the big oil boom at Smackover, Ark., and in 1924 added more in western Arkansas. By this time, he says, he had learned the oil business and was building his own facilities to market the product. In 1924, he sold a 50 per cent interest in some of his production properties to a major producer for $600,000, and at 35 had become a millionaire.

Throughout the following years, Mr. Hunt gradually expanded his land and oil holdings. He traded in Florida real estate in 1925 and began oil drilling in Louisiana in 1926. In 1929 he moved on to eastern Texas to buy land around the edges of a Pure Oil Company strike. By 1930 Mr. Hunt had 100 producing oil wells in the South.

Perhaps Mr. Hunt's most memorable deal was the acquisition of the eastern Texas property owned by C. M. (Dad) Joiner, who was the first to hit oil in that vast field. In 1930, Mr. Joiner had a small well and leases on about 4,000 acres of land. But he had no money, Mr. Hunt recalls, and since his land titles were not in good order he couldn't borrow to do more drilling.

Mr. Hunt says Mr. Joiner finally decided to sell out, but the major oil companies were reluctant because of the title problems. "So I made a deal with him and paid him $3,000 cash, three short‐term notes of $15,000 each, and $1.2 million out of future production on this land," Mr. Hunt says. In addition, Mr. Hunt, paid $20,000 cash and $50,000 out of future production for the discovery well.

This property, which still is producing, could net Mr. Hunt $40 million to $100 million by the time the field is played out. "Anybody could have had it," Mr. Hunt recalls. "He was certainly approached, and was approaching, every one of the companies. But none of them would deal with him. These were hard times, and I guess there weren't any other independents who thought they could do anything with it. There was no competition at all."

Mr. Hunt's one pleasure, outside the oil business, has been gambling. From his youth, he was an ardent card player. The story persists that as a young man, he was a Mississippi river‐boat gambler and a croupier at a New Orleans caino. Mr. Hunt smiles emigmatically at that suggestion, and says only that he beat all the professionals in New Orleans in 1919.

"I was a fine card player," Mr. Hunt says. "I can beat about anybody. But I quit playing poker in 1921. I went into the oil business then, and anything else is like penny ante. The reason I quit playing poker was that it wasn't any contest."