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Reagan was soon back in the big money, earning about $150,000 a year from Warners. That catapulted him into the 95% income tax bracket. It was partly his irritation about these taxes, says one friend, that began changing him from a New Deal liberal into a conservative. After 1949 a string of box office flops sharply cut his earnings, and his film career virtually ended three years later.
Savings and occasional TV appearances got the Reagans through 14 relatively lean months until he was hired by General Electric. In addition to supervising, acting as host and at times starring in the television program General Electric Theater, he made speeches to the firm's employees and various civic groups. Though the terms of Reagan's employment with GE have not been disclosed, it is estimated that by 1962 he was making between $125,000 and $150,000 annually. In that year, however, his contract was not renewed. Not only was General Electric Theater dropping in the viewer ratings, but Reagan's increasingly conservative speeches were offending some of the firm's customers. After GE, Reagan took a cut in salary and became the popular host of Death Valley Days, a weekly TV drama of the frontier era.
Though Reagan's earnings were substantial throughout most of his show business career, his finances were often in a mess. He apparently saved little, made few investments and seemed constantly to be battling the IRS. According to a report made public during the Watergate investigation, Richard Nixon obtained confidential tax data on his political rivals in 1971. The information showed that Reagan owed $13,101 in taxes for 1962 through 1965. This did not mean that Reagan was cheating on his taxes, only that he was disputing the IRS view of his tax liability.
Reagan had made one extremely good investment, however. In 1951, with the money from his last films, he made the down payment on a $65,000, 290-acre ranch in Malibu Canyon. Fancying himself a rancher and being very fond of horses, he was charmed by the rugged land (some parts slope 50°) and by a meandering creek that could be dammed to form a pond from which his horses could drink. The Reagans eventually created the pond, built a barn and corral and dubbed it Yearling Row.
Reagan's finances might have remained perpetually chaotic if it were not for the intervention of a small group of wealthy, conservative businessmen. They were attracted to Reagan after his famous televised speech on behalf of Barry Goldwater in 1964. That speech reaped $8 million in small contributions for Goldwater's presidential campaign and persuaded the business group that Reagan could become an important force on the political right. They became his financial managers and in some cases close personal friends. This group today consists of Harvard-educated William French Smith, who is one of the West Coast's most influential attorneys and serves as Reagan's personal lawyer; Justin Dart, the founder of Dart Industries, which last month merged with the giant Kraft, Inc.; Holmes Tuttle, a Los Angeles Ford dealer; and William A. Wilson, a California rancher and land developer. All but Tuttle are also the trustees in what became the Ronald Reagan Trust.