(7 of 9)
Shortly after, Hilton decided that Dallas needed a new hotel—and he built it by a fabulous deal that Dallas still recalls with wonder. He started by persuading George Loudermilk, an ex-undertaker and a large landholder, to give him a 99-year lease on some Dallas property he owned. Then he used the leased land as collateral for a $500,000 bank loan. Hilton put up $100,000 of his own money, and raised $200,000 from friends. He needed another $150,000, and he borrowed it from the contractor who was to build the hotel. Then he ran out of money and his troubles began. When a secretary mistakenly mailed a $50,000 check to pay a plumber's bill, Hilton dashed to a friend who knew the postmaster to get the check back before it was delivered. Without being asked, the friend lent Hilton $50,000 to cover the check. When Hilton ran out of money again, he went back to his landlord and persuaded him to finish and furnish the building. Then Hilton rented it back from him at $100,000 a year.
Dark Days. It was worth all the trouble; the Dallas Hilton was a whopping success. Hilton branched out throughout Texas and formed Hilton Hotels, Inc. (succeeded in 1946 by Hilton Hotels Corp.). When the depression hit, and an estimated 80% of all U.S. hotels went bankrupt, he was far overexpanded. He hurried from hotel to hotel, yanking out the room telephones and closing off some of the floors to cut costs. When a guest asked for ink, a bellhop would ceremoniously pour out enough to write one letter.
Finally, the American National Insurance Co. of Galveston, Hilton's biggest creditor, took over his hotels. But Hilton still kept a foot in the door; American National gave him an $18,000-a-year job running their hotels. Gradually he raised enough cash to get back five of his nine hotels. By 1939 things were going so well that he built the Albuquerque Hilton and was on the move again.
Free Rein. Hilton runs his sprawling empire with the help of a crack team which includes Executive Vice President Robert P. Williford, 49, who started as a desk clerk in 1931; Vice President James B. ("J.B.") Herndon Jr., 50, who was the first manager of the Albuquerque Hilton; Vice President Spearl ("Red") Ellison, 36, who started as a $5-a-month bellhop; Vice President Joseph P. Binns, 43, a relative newcomer to the corporation, who managed the Stevens before Hilton took over. Hilton's son Nick, 23, is learning the ropes from them (his other sons by his first marriage, Eric, 16, and Baron, 21, are not in the business). Hilton lets his managers run things pretty much as they please. He merely sets the targets. When he bought the Palmer House, he installed Binns as manager, told him: "This place should net another $600,000 a year." Then he took off for the Coast, leaving Binns to figure out how to do it.