(5 of 10)
Paul was not overly distressed—he was well on the way to making his fourth million. But, overwhelmed by admiration for his father's accomplishments, he set out to prove that he could do much better. His formula was simple: "Be thrifty, save a little money, and leave a small surplus for investment." When the Depression hit, Getty decided to invest the small surplus, figured it was a lot cheaper and safer to buy stocks of oil companies than to take chances searching for oil.
Life with Mother. Getty's timing was perfect. Says he: "I made my money by buying when other people didn't want to buy." His eye lit on Pacific Western Oil Corp., a holding company with huge oil reserves and plenty of cash. Its stock had hit bottom at 2⅞. Paul bought 520,000 of its 1,000,000 shares, took control in 1932. He ruthlessly cut expenses, used the company's working capital for expansion or to buy into other Depression-harrassed companies. Pacific Western's top-heavy executive force was fired, then rehired at half the former salaries. Flushed with success, Getty got into the habit of making his executives stand at attention when they came into his office. For such conduct, even in a business noted for hard, ruthless tactics, he soon got a reputation as something special. Says a former associate: "Paul Getty was a one-man man. He was for himself, first, last and always."
Getty also began a battle with his mother for control of the Getty fortune. He wanted to put the money to work buying new properties, but mother Getty did not completely trust her son's judgment. Though she occasionally relented enough to back a few of his deals, she kept a tight hold on the money. Once, when Getty drilled a hole on California's Signal Hill that bottomed out on someone else's property, he tried to sell it to his mother. A friend warned her against buying. Said Mrs. Getty: "What you're trying to tell me is that Paul is a crook." Then she added proudly: "But he's awfully smart, isn't he?" Finally, she became convinced that her son was too smart to buck indefinitely. She sold her controlling interest in George F. Getty, Inc. to the company—in effect, to Paul, who was president—and threw in $1,200,000 in stock and notes the company owed her. Noted Getty in his diary: "Mother rather thankfully resigned as director of George F. Getty, Inc."
"I Can Wait." Paul Getty now had plentiful oil reserves and cash for further conquests. For his next victim he picked one of the giants of U.S. oil: Tidewater (then called Tide Water Associated Oil Co., with assets of $192 million), which was dominated by Standard Oil Co. (New Jersey). Tidewater stock was selling at only $2 a share when Getty began picking it up; between 1932 and 1934 he put out more than $8,000.000 to buy the stock.