HAMMER, Armand

(b. 21 May 1898 in New York City; d. 10 December 1990 in Los Angeles, California), controversial twentieth-century industrialist, art collector, and philanthropist with business and family ties to Soviet Russia, who, during the 1960s, rescued Occidental Petroleum Company from the brink of financial ruin.

Hammer was one of two sons of the Russian immigrants Julius Hammer, a physician and the owner of a pharmaceutical outlet, and Rose Lipschitz. (Rose Lipschitz also had a son from a previous marriage.) An interesting legend that circulated about Hammer's name is that Hammer's father, leader of the U.S. Communist Party, named him for the Communist Party arm-and-hammer symbol. Hammer operated the family pharmaceutical firm while earning his medical degree from Columbia University Medical School and developed the company into a million-dollar venture.

After graduating in 1921, Hammer went to Soviet Russia, where he developed a unique rapport with Vladimir Lenin, the first premier of the USSR, and secured the rights to export grain to Russia. In 1925 Hammer built a successful pencil factory in the Soviet Union, which he sold back to the Soviet government before returning to the United States in 1928. Over the next few years, Hammer continued to travel back and forth between the two countries, nurturing a variety of business interests. Hammer married Olga van Root, a singer he met in the Soviet Union, in 1927; they had a son, Hammer's only legitimate child, and divorced in 1943. He married his second wife, Angela Carey Zevely, an opera singer, the same year; they divorced in January of 1956. Hammer had a daughter out of wedlock in 1956 with Bettye Murphy, his mistress of many years.

During the Great Depression, Hammer sponsored a series of retail art sales at prominent department stores in New York City and elsewhere. The first of these sales featured pieces of the treasure of the Romanovs, the last Russian royal family, assassinated in 1918 when the Bolsheviks came to power; the treasure had been secured by Hammer while he was in Russia. In 1941 he used a similar method of retailing fine art to liquidate the art treasures of the millionaire American publisher William Randolph Hearst. At that time Hammer was also a breeder of prize Angus cattle and a manufacturer of whisky.

In the late 1950s Hammer acquired Occidental Petroleum, a faltering oil firm dating back to the 1920s. He invested $50,000 to purchase a 50 percent interest in the development of two new wells for the company in 1956, when Occidental stock was valued at $100,000. Hammer anticipated a loss and subsequent tax write-off from the exploration venture; instead he realized a profitable oil find, which launched Occidental stock into a growth pattern. Company shares increased from a low of eighteen cents to $1 per share, inspiring Hammer to speculate on a field of nine existing wells, which he acquired for $1 million. By 1960 Occidental's red ink ledger was reduced to a small loss of only $127,000, and by 1961 Occidental stock had appreciated to $10 million—although some critics maintained that Hammer buoyed stock prices to his advantage by exaggerating unsubstantiated rumors of lucrative geological discoveries on the part of Occidental.

In the wake of this early success, Hammer diversified and embarked on an aggressive acquisition strategy, buying and selling other companies and utilizing Occidental stock like a form of private currency to purchase each new enterprise. In December 1961 Occidental acquired an exploration site in Lathrup, California. One high-volume well discovered in that field was estimated to contain $200 million worth of crude oil and an unprecedented reserve of natural gas. It was the largest petroleum find in the history of California. The rising value of Occidental Petroleum stock reflected Hammer's fortuitous risk taking, and the shares increased in value to $15 per share, up from $4 in a matter of months.

Hammer in 1963 set off a boom in the sulfur market when Occidental purchased Best Fertilizer Company. In need of sulfur to manufacture the fertilizer, Hammer mined sites in northern Florida. The Florida mines realized sufficient product to supply another Occidental acquisition, Jefferson Lake Sulfur Company of Texas, which Hammer had acquired in a deal to purchase 70 percent of Jefferson Lake Petro Chemicals of Canada. The stabilization of Hammer's fertilizer empire generated a spike in the price of sulfur, causing it to quadruple. Hammer then built a concentrating plant in Florida and arranged an $8-billion deal with the USSR for the export of sulfur. After completing a stock-based purchase by Occidental to acquire International Ore and Fertilizer Company (Intercore), Hammer began exportation to fifty-nine nations. The fertilizer export operation by then accounted for 90 percent of Occidental's earnings.

In February 1961 Hammer visited the Soviet Union, marking his first visit to his family's homeland in more than twenty-five years. Before his departure he attempted unsuccessfully to secure an endorsement from President John F. Kennedy in support of any anticipated industrial venture that might transpire. When he failed in this effort, he made an arrangement instead to represent Kennedy's secretary of commerce, Luther Hodges. Traveling as a private citizen, Hammer departed for the Soviet Union on 11 February. Through personal influence with the deputy prime minister, Anastas Mikoyan, Hammer secured a meeting with Soviet Premier Nikita Khrushchev to discuss trade. Hammer returned to the Soviet Union in June 1964, and at that time he developed a plan with Khrushchev to build ten sulfur-processing plants in Siberia. The facilities were slated to provide $1 billion of concentrate for use in the production of fifty million tons of fertilizer annually by the Soviet Union.

Hammer solidified the deal by sending two Angus heifers and two bulls to Khrushchev, but just weeks after finalizing the agreement, Khrushchev was deposed, and the fertilizer project was shelved during the transition to a new administration. The following year Hammer established Occidental International, a government relations firm, which made successful inroads in influencing the administration of President Lyndon B. Johnson, always with the goal of entrenching Hammer's position as a primary conduit for commerce with the Soviet Union, a function he accomplished admirably throughout his lifetime.

In 1961 Hammer also had established a wholly owned subsidiary of Occidental in Libya. The Arabian oil industry at that time was the bastion of the so-called Seven Sisters cartel, consisting of Standard Oil of New York, Standard Oil of California, Standard Oil of New Jersey, Rockefeller Holding, Gulf Oil, Texaco, and Anglo-Persian Oil. These companies controlled all of the Arabian oil wealth with the exception of those in Libya, a new state organized by theUnited Nations in December 1951. With only one million people, an impoverished economy, and a vast desert waste-land, Libya was a no-man's-land among petroleum speculators. In 1955 the Libyan government had allotted the first of eighty-five oil-drilling concessions to private developers, but in 1965 the concessions automatically reverted to the Libyan monarchy of King Idris. As the head of the government, Idris reopened the bidding on the newly apportioned concessions, and Hammer returned to Libya in 1966 for the purpose of finalizing the acquisition by Occidental of some of these oil fields once operated by Mobil Oil.

With characteristic persistence and shrewd bartering, and as a result of clandestine deal making, Hammer successfully upstaged the Seven Sisters and secured the drilling rights to two rich inland oil fields. When Occidental made its original bid on 26 July 1965, it offered Libya a water-drilling project, to be located in al-Kufrah, which would provide desert irrigation at no charge to the Libyan government in return for the oil concession. When the oil fields were awarded in February 1967, Occidental received two rich sites. The company struck oil in December, with the strike estimated at three billion barrels in the two fields combined. Oil at that time was selling for $1 per barrel; the discovery caused Occidental stock to jump to $100 per share.

Hammer then contracted with Bechtel Corporation in San Francisco to finance and build a forty-inch-diameter pipeline across the desert to bring oil from the exploration site to the Mediterranean coast. Also contracted was the construction of floating docks at Ez Zueitina, from August 1967 through February 1968. Following a strike in December 1967, Occidental Petroleum started shipping by the spring of 1968. As Occidental stock peaked, Hammer traded company shares in return for new industrial acquisitions, including Island Creek Coal. The Libyan oil fields, meanwhile, were pumped to a capacity of 600,000 barrels per day and increased to 800,000 barrels by 1969.

That same year Colonel Muammar al-Gadhafi (a Libyan revolutionary) accomplished a bloodless coup over the Libyan monarchy, leaving Occidental dramatically disadvantaged in bargaining for oil rights. The new Libyan government coerced Hammer to slow the output from Occidental's wells by threatening to expose the illicit deal making, which had clinched Hammer's oil contract with Libya in 1967. Hammer attempted, but failed, to procure additional oil from the Seven Sisters cartel, a situation that left him with few options but further dealings with the new Libyan government. Before the end of the summer of 1970, Hammer had agreed to a deal that gave Libya virtual control over the output from the national oil fields, regardless of which concessionaire might be mining the sites at any given time. The agreement between Occidental and Libya set a precedent, and it was not long before the Seven Sisters cartel fell prey to similar strategies imposed by other Arab governments. By means of such agreements, Libya and a growing consortium, called the Organization of Petroleum Exporting Countries (OPEC), took control of Middle Eastern oil and acquired the power to effect future pricing and supply. Hammer was criticized roundly for his dealings with Libya, which were considered to have had a huge impact on the increase in oil prices worldwide due to the strengthening of OPEC.

Hammer entered into an impressive round of philanthropic ventures during the 1960s, influenced by his third wife, the socialite Francis Tolman, whom he had married in 1956. (The couple had no children.) Among these charitable projects was a sizable grant to the Jonas Salk Institute to fund the establishment of the Armand Hammer Cancer Center. The Hammers also donated the twenty-acre family retreat of President Franklin Delano Roosevelt at Campobello—including the original furnishings—as a joint gift to the U.S. and Canadian governments. The estate was opened to the public officially on 20 August 1964; it is known as the Roosevelt Campobello International Park. Hammer died of bone cancer at the age of ninety-two and is buried at Westwood Village Cemetery in Los Angeles.

Armand Hammer wrote his autobiography, Hammer, with Neil Lyndon (1987). Bob Considine chronicles the life of Hammer in The Remarkable Life of Armand Hammer (1975). Edward Jay Epstein paints a dubious picture of Hammer in Dossier: The Secret History of Armand Hammer (1996). An obituary is in the New York Times (12 Dec. 1990).

Gloria Cooksey

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

It is the dream of some Americans to become rich and powerful, to live a jetset lifestyle and to brush shoulders with the great leaders of the world. Armand Hammer (1898–1990) lived the American Dream.

Armand Hammer was born on May 21, 1898, in New York. His father Julius Hammer was a Russian immigrant, a doctor, a socialist activist, and the first card carrying member of the U.S. Communist Labor Party.

Armand Hammer was working toward his medical degree at Columbia University when he made his first $1 million through his father's pharmaceutical company. He received his medical degree from Columbia
University in 1921. After he earned his degree, Hammer took his money and journeyed to the Soviet Union to give medical aid to famine victims.

While there, Russian leader Vladimir Ilyich Lenin (1870–1924) took a personal interest in Hammer and persuaded him to apply his business talents to Russia. In 1925 Hammer, with a concession from the Bolsheviks, began to manufacture pencils for the Soviet Union. Soon thereafter, his firm became the largest supplier of inexpensive and durable pencils in the Soviet Union. By the late 1920s the Soviet's bought out Hammer's businesses, and he returned to the United States in 1930. He returned to the United States with many paintings, jewelry, and other art pieces said to be formerly owned by the Romanov imperial family. During the 1930s Hammer sold most of these items and turned the profits into business ventures that became profitable after the Prohibition era. Among these ventures included cattle raising, the building of whiskey barrels, and the production of whiskey.

In 1956 Hammer retired, having grown tired of his hectic business lifestyle. In the same year, however, he was approached by a friend who persuaded him to finance two wildcat oil wells being drilled in Bakersfield, California, by Occidental Petroleum Corporation, which was near bankruptcy. With Hammer's financial support, Occidental began drilling the wells. Unexpectedly, the wells struck oil. Hammer immediately increased his interests in Occidental. By 1957 he was the corporation's chief executive officer (CEO) and chairman of the board. Hammer remained chairman of the board and CEO for the next 33 years, turning the once near bankrupt company into a billion-dollar conglomerate.

Hammer, using his long-standing relations with the Soviets, helped to champion U.S.-Soviet relations throughout the Cold War. He was able to promote cultural and commercial exchanges, as well as represent the United States in trade negotiations. He often became an unofficial ambassador during complicated moments between the two superpowers. In 1986 Hammer personally financed the dispatch of a relief team of physicians to the Soviet Union to assist in the wake of the Chernobyl nuclear disaster.

Incredibly rich, Hammer made many donations to Columbia University, the National Gallery, and the Metropolitan Museum of Art. He also supported numerous philanthropies through the Armand Hammer Foundation. In Los Angeles he founded the Armand Hammer Museum of Art and Cultural Center, which housed the bulk of his art collection.

Often praised for his humanitarianism while he was alive, Hammer has been criticized since his death. It is now believed that Hammer may have been a Soviet spy. The Central Intelligence Agency (CIA) and the Federal Bureau of Investigations (FBI) suspected him of being a full-fledged Soviet agent. It is also believed that his ventures in the petroleum market may have found success, due in some part to of his ability to bribe officials and leaders in Libya. After bribing his way into a favorable position, Hammer would then offer a humanitarian act to sweeten the deal, such as drilling water wells for the King of Libya's parched ancestral village.

Armand Hammer died in Los Angeles, California, on December 10, 1990.

FURTHER READING

"Armand Hammer," [cited June 30, 1999] available on the World Wide Web @ www.biography.com.

Blumay, Carl. The Dark Side of Power: The Real Armand Hammer. New York: Simon & Schuster, 1992.

Epstein, Edward Jay. Dossier: The Secret History of Armand Hammer. New York: Random House, 1996.

Farnham, Alan. "Armand Hammer: Tinker, Traitor, Satyr, Spy." Fortune, November 11, 1996.

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

HAMMER, ARMAND

HAMMER, ARMAND (1898–1990), U.S. industrialist and art collector. When studying at Columbia Medical School in his native New York in 1918, he joined his father's business, a chain of drug stores which was about to go bankrupt. Hammer demonstrated his business acumen when he bought quantities of medicine cheaply at the end of World War i and sold them as the price rose quickly, making $1 million.

After graduating medical school in 1921, he took off six months before beginning his internship and went to the U.S.S.R. His father was a member of the Communist party of America and a strong supporter of the Russian Revolution. Hammer went to help set up medical clinics in Moscow and other Russian cities. In the aftermath of the Revolution, the health-care system no longer existed and he made a significant contribution.

A businessman by nature, Hammer began arranging business deals for the Soviet Union. The first major one was an American wheat purchase in exchange for Russian furs and caviar. When Lenin saw Hammer's capabilities, the Russian leader gave the young man mining rights in Siberia. To show his appreciation, Hammer engineered deals involving Ford, U.S. Rubber, and other large companies with the Soviet Union.

Remaining in Russia for nine years until 1930, he and his brother, who had joined him, bought up Russian art treasures which were available for needed cash. He made another $1 million when Lenin granted him the exclusive rights to manufacture wooden pencils in the Soviet Union.

On his return to the United States with an enormous horde of art treasures, many from the royal Romanov family, he had trouble selling the works because of the Depression. To be innovative, he merchandized the paintings and other art objects through major department stores such as Macy's and Gimbels. His first book dealt with his adventures collecting art in Russia and was entitled The Quest for the Romanoff Treasure. During the next 25 years, he earned a major fortune buying and selling distilleries. He retired in California in 1956, but within a short time he bought the controlling interest in Occidental Petroleum Company, a company about to fail. He struck oil with several new leases, soon registering major profits amounting to $300 million a year. This company, under his leadership, became the largest oil company in the world under private ownership.

In the early 1970s his close relationship with the Soviet government resulted in his negotiating a major fertilizer purchase by the Russians from an American company worth $8 billion. His ties with Russia helped to reawaken his Jewish roots. Although secret at the time, it is now clear that Hammer intervened to seek to persuade Russian leaders to permit Soviet Jews to leave the U.S.S.R. in the 1970s – ultimately almost 200,000 then emigrated.

Although publicly non-committal about Israel and his Judaism until the 1980s, he visited the country secretly and also tried to help develop certain business ties for Israel with various countries, which had no relations with her. From the mid-1980s, he was active in getting refuseniks released and he flew Ida Nudel to Israel in his own plane when she was finally freed. He also invested in oil explorations in Israel and in offshore sites nearby, none of which produced any marketable finds. He died in his sleep only a few days before he was to have had a belated bar mitzvah.

[David Geffen (2^nd ed.)]