From the Archives of Time Magazine:
Articles about Ellsworth M. Statler
and the Statler Hotels

Letters - Jun. 22, 1925
Paunch Indeed!

Buffalo, N. Y. June 15, 1925

TIME New York, N. Y.

Sirs:

I object to your article on Lawrence Tibbett (issue June 15, Page 13) where you refer to "paunchy hotel proprietor." Here are the names of the five foremost hotel men in the business: John M ("Jack") Bowman, Lucius Boomer, E M. Statler, Ernest Stevens, Frank A. Dudley, the last named the head of the greatest hotel chain in the world. But where is their "PAUNCH." Even yours truly denies the possession of one. Gaze on the enclosed pictures of the youngsters in the Class in Hotel Management at Cornell University. Dockery is 6 feet 3; the graduates average just a trifle under 6 feet. Although there are only 110 in the class, one is captain ot the soccer football team, one is on the varsity "eight " one on the football team and one is the best lacrosse player in the university. "Paunch" indeed!

JOHN McF. HOWIE.

Proprietor Hotel Touraine, Buffalo.

 

Milestones - Nov. 9, 1925
Died. Mrs. Ellsworth M. Statler (nee Manderbach), wife of the famed hotel man, of pneumonia, in Manhattan.

 

Business | Notes - Apr. 12, 1926
Life Values. Last week Ellsworth Milton Statler (Hotels Statler at Buffalo, Cleveland, Detroit and St. Louis, and Hotel Pennsylvania in Manhattan) was vexed. Last November his private yacht Miramar disappeared with all eleven hands in stormy weather off the Florida east coast, and Mr. Statler immediately prepared, quietly and after suitable investigations, to provide for the families of the lost crew. His intentions doubtless were unknown to the inheritors of at least four of the eleven, for last week they sued him for $700,000—$250,000 for Martin Strandberg, chef; $200,000 for Arthur Swanson, chief engineer; $150,000 for Benjamin Hawes, chief steward; $100,000 for Frank J. Guile, assistant engineer.

 

Business | "For Jews" - May. 31, 1926
"Have you no reservation, sir?" It is a stock question in certain "Goyim" (Christian) hotels which discriminate against Jews. The dapper clerk, a trained ethnologist, addresses it to any prospective guest whose name, dress, manners or lineaments might indicate that he is a Jew. U. S. Jews, many of them wealthy, finely educated, have heard this question, turned away from the desk, and had the bellboy carry their bags back to the taxicab.

No, they had no reservations. There are numberless Goyim hotels that will give no reservation to a Bernstein or a Rosenthaler or a Silberblatt, though a Murphy or a Babbitt or a McDribble will be welcomed with the best. But last week a hotel opened its doors in Manhattan where this question, if it is ever asked, will be asked of Christians. It is Libby's hotel, unique of its kind, a $3,000,000 hotel whose slogan is "For Jews."

Libby's stands on Delancey St., a district of pushcarts and lunch-stands and faded, unclosed saloons. Its promoters believe that its magnificence will be enough to change the district, that other hotels for Jews will spring up beside it and bring with them restaurants, theatres, stores, turning back the city's surge to the north. Its stock, some $2,200,000 worth, is held by 25,000 Jews. It derives the name "Libby's" from "Die Liebe," a term of affection which its manager, Max Bernstein, applied to his mother.

Mr. Bernstein himself conducted a party of pressmen and notables on the night of the formal opening. He, a Manhattan Jew whose fine necktie bore witness to his shrewdness, explained that, in order to cater to that sense of Asiatic luxury which is "proper to every good Jew," he had built the hotel around a bath. The Christians who objected to sharing their public quarters with Jews had no such splendid bath as this—no, nor had Augustus Caesar, nor has the most pompous sybarite in Hollywood. The notables, the pressmen inspected the hotel—a steel and concrete Joseph's coat, a terraced temple of fantastic, incredible luxury.

Profiting by the work of such hotel-builders as Boldt, Haan, Sterry, Bauman, Bowman, Muschenheim, Statler, Mr. Bernstein has introduced a magnificence that could be the inspiration only of an able Jew. There are telephones at every turn, express elevators that fly up like harnessed rockets and drop down like oiled meteors. Lounge rooms, gorgeously decorated, allure business-weary limbs with divans and sofas and curving love-chairs; while upstairs, opening upon corridors carpeted with rugs into which feet sink as into perfumed snow, bridal suites and grand suites and supersuites await their imminent occupants with tapestries of many various colors, and furniture beyond the dreams of Park Ave. All these, the gilt dining-rooms clotted with music, the cool oasis of the lobby, and the long line of brilliantly-lighted cages wherein clerks work busily, adding up bills and putting diamonds away in steel lockers, these and the magazine-stall, shingled with bright colors, the crystal glory of the cigar-stand, the drug-annex with its hint of smells still unexplored—are all but promises, all but dramatic fingers pointing upward to that supreme enchantment of all, the bath.

A square of water, as blue as a banner, a liquid panel like a window into star-space, it dreams, moveless, in the white tile floor. Drawn up against walls patterned less purely with tiles of ochre and green and ruby, naked attendants in breech clouts wait to knead and oil the bathers in the hot rooms, steam rooms, medicated rooms, therapeutic rooms beyond.

Private elevators lead up to secret dining rooms where male guests may dine "without formally arraying themselves." This is the apex. All the builders of Babylon could do no more.

There is no great bathroom for women. The wives of guests, whether of those who sleep in the supersuites or the cheap beds in the dormitories, wash themselves in tubs, eat at ordinary tables.

Christians can ask for reservations.

 

Business | Innkeeping - Oct. 4, 1926
Ellsworth Milton Statler went to Port Huron, Mich., where Michigan Hotel Association members were in convention last week and explained the chief reason why innkeeping is not prospering. There are too many hotels. Hotels are built without adequate forethought or fore-consideration of a community's needs.

"No one, least of all myself would discourage the erection of a hotel when there is a need in the community for the additional rooms it will bring. But over and beyond such legitimate projects, the country is witnessing the building of scores of hotels in cities where no actual proof can be offered that the need for new hotels exists. These haphazard, over optimistic projects are the froth on the top of our present wave of prosperity. They are a menace."

Hotelmen know Mr. Statler, greyling, sexagenarian, for the most human of competitors. They know that they may come to him for advice on operating their inns. They send their sons to train in his hotels—the Hotels Statler of Buffalo, Cleveland, Detroit, and St. Louis, the Hotel Pennsylvania in Manhattan. They count on easy entree to the Hotel Statler now abuilding on Park Square, Boston. He conceals his affairs so little, that he often, without forethought has exposed to strangers confidential reports on which his associates have spent hours of labor. Yet he does not thereby endanger the success of his hotel business, for he has worked out a formula for building and operating hotels which no rival, no matter how well instructed, has been able to duplicate.

His basic business principle is: "The most service for a definite cost." The hotels he builds (it is impossible for him to operate old, unspecialized structures) are for guests expecting to pay from $3 to $5 for a room (few rooms are more expensive). For this fee he gives certain quarters (always with bath) and services. He knows that his rooms will always be 80% to 85% occupied, 60% being the average for most other hotels. (He insists on keeping some free for renovating.) The number of rooms must be large. Finally the land on which his hotels stand must not be too expensive.

It is in buying or leasing land that he finds his greatest difficulty. Realtors and mortgage underwriters dash at his office in Manhattan with flashing descriptions of their land values. Let Mr. Statler promise to build a hotel anywhere from Trenton to Tacoma. they will see that it is financed. They do not realize that he finances his new hotels from the operating profits of his old, and that, if he were to go to public financing, humanitarian that he is, he would want to be certain that not only were promoters prosperous and bondholders satisfied, but also that preferred shareholders received their dividends.

Few U. S. hotels pay dividends to their shareholders, a fact that was in Mr. Statler's mind when he ended his Port Huron talk by saying, "It is time cut-throat hotel building was stopped. New projects should be based on facts—not hopeful fancies."

 

Milestones - May. 9, 1927
Married. Ellsworth M. Statler, 63, famed hotel man; to Alice Seidler, 34, his secretary since 1916; privately, in Manhattan. The first Mrs. Statler died in 1925.

 

Milestones - Aug. 15, 1927
Died. Miss Marion Frances Statler, 20, daughter of Ellsworth M. Statler, famed hotelman; at Greatneck, L. I.; of heart disease.

 

Milestones - May. 7, 1928
Elected. Mrs. Alice Seidler Statler, 35, for eleven years secretary to Ellsworth Milton Statler; for one year his wife; to be chairman of the board of directors of the Hotels Statler Co.; succeeding her husband, who died three weeks ago.

 

Business | Business & Finance | Personnel - May. 1, 1933
Frank A. McKowne, president of Hotels Statler Co. Inc., Bernard Feurthmann Gimbel of Gimbel Bros. Inc., and William Francis Carey, president of Madison Square Garden Corp., were three of eight new directors of Manhattan's Fifth Avenue Coach Co. (buses) elected at the company's initiative to represent not the stockholders but "the public."

 

Business | Business & Finance | HOTELS | Bellhop's Paradise - Jan. 20, 1941
Hotel managers gulped last week at news unprecedented in their business since the '20s. Washington was to get two big new hotels: an $8,500,000 building announced by Hotels Statler Co., a $15,000,000 mammoth (including a shopping centre and movie theatre) planned by a company whose name remained undisclosed.

In most cities, residents would be hard put to remember when the last hotel went up; since 1935 the number of big hotels in the U. S. has increased not at all. The nation already has so many that the average occupancy rate is only 64%. But Washington, thanks to defense activities, is the best hotel town in the U. S. Since September its 28 first-class hotels (6,500 rooms) consistently have had an occupancy rate of 80% or better. Five had every room taken last week. Bellboys were getting rich on tips. New guests stood around lobbies in the morning waiting for old guests to clear out. The swank Carlton offered its regular morning waiting list of new arrivals in Washington the use of basement stalls where they could take showers if they had to go to early appointments.

Hotel business was even better than it was in 1933, when industrialists flocked to the Capital to work out NRA codes, and 1933 was some year. ("It was wonderful," one manager recalled. "Two businessmen who stayed at my hotel wandered around the Department of Commerce for two weeks before they found out they should have been in Agriculture.")

 

War & Terrorism | U.S. At War | THE PRESIDENCY | To the Finish - Feb. 22, 1943
...
At a White House correspondents' dinner (wartime note: no butter, no coffee) in Washington's new and flamboyant Statler Hotel, Franklin Roosevelt gave his first extended account of the Casablanca conference and what was planned there. It was a speech filled with the most self-assured phrases Franklin Roosevelt has yet uttered on the course of World War II.
...

 

War & Terrorism | The U.S. At War | It Seems to Will White - Mar. 8, 1943
....
That night, Will White sat with 800 others in the new Statler Hotel as Franklin Roosevelt made his Lincoln's Birthday speech. Will White found a different man: "In the five hours he had grown tired. As his speech went on his voice seemed to lose its fire. . . . In the final sentences his voice dropped and I could not hear his last three words. But I could see then that the steam in the old boiler chugging along for ten years had taken its toll of rust.
...

 

War & Terrorism | U.S. At War | THE CAMPAIGN | The Old Magic - Oct. 2, 1944
In the Presidential Room of Washington's Statler Hotel were gathered the elite of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, and the elite of the city's political society—assorted czars, administrators and politicians. They were met together to eat roast chicken, Virginia ham, peas, potato croquettes, salad, ice cream and coffee, to drink California sauterne and, more important, to get an answer to the biggest of the Democrats' political questions: has The Old Master still got it?
...

 

War & Terrorism | U.S. At War | THE CAPITAL | Battle of the Statler - Oct. 9, 1944
After Franklin Roosevelt's crashing speech to the Teamsters' union fortnight ago, happy Teamsters streamed out of the Statler Hotel's Presidential Room, full of good food and high enthusiasm. On the hotel's mezzanine, some of the Teamsters met two naval officers, bound for a Navy dance.

What happened then was suppressed for a week. This week Cissy Patterson's Times-Herald, which likes neither Franklin Roosevelt nor unions, disclosed that the result had been a first-class brawl.

First reports of the fracas definitely identified only one participant. He was Lieut. Randolph Dickins Jr., of Bradenton, Fla., 6 ft. 2 in., a hero of the Battle of Midway, who had been a combat-fatigue patient at the Navy's Bethesda for ten weeks, after 42 months' service. After the story had broken, Navy superiors permitted Lieut. Dickins to tell his side:

"While we were on the mezzanine lounge a group of men accosted us, telling us that they were members of the Teamsters' union and that the President had just made a fine speech. They then asked my friend and I what political party we belonged to and who we would like to see get elected in November.

"We retorted that it was none of their business; that it wasn't their affair. They then seemed to get rather angry at the fact that we didn't come out and state we were for our Commander in Chief. . .. We were surrounded by an increasing number at about their Commander in Chief. We reiterated we didn't know and it was still none of their business. . . . Several of them accused us of being disloyal. . . . My friend and I attempted to leave. . . ."

But before they could leave, Lieut. Dickins said, a fight had begun. His friend was pinioned in a chair and slugged by a bystander. Going to his friend's help, he himself was hit, and he hit back. Lieut. Dickins, onetime footballer at the University of Miami, said he "knocked down four or five." Then a flying wedge of bell hops stopped the fight.

Lieut. Dickins continued: "A man shouldered his way in. He apparently was the hotel manager. He then proceeded to tell my friend and I that he couldn't expect much more than this from the Navy and that this was a typical gesture of gratitude by the armed services. He then threatened to call the shore patrol. . . ."

The shore patrol came, and escorted the two officers out. One of the attackers stopped him, Lieut. Dickins said, told him he had "beaten up a personal friend of the President," said that "severe punishment" would follow.

The Times-Herald account said "it was believed" that the Teamsters' greying, pink-cheeked president, "Uncle Dan" Tobin himself, had been one of the participants in the fight. It said further that Uncle Dan had promptly called Presidential Secretary Steve Early and demanded that the news of the brawl be suppressed.

Steve Early hotly denied having had a call from Dan Tobin, said he knew nothing of the brawl until called by newsmen. Lieut. Dickins, shown a picture of Dan Tobin, was unable to identify him as one of the brawlers.

In New York, Dan Tobin called the whole thing "a criminal falsehood." Cried he: "This is a dastardly attempt to turn the services' vote against Mr. Roosevelt."

 

War & Terrorism | U.S. At War | THE VICE PRESIDENCY | The Social Life of Harry T. - Feb. 5, 1945
...
The party pressure really started on Inauguration Day. A few hours after he had unassumingly assumed office and had been told by his mother, "Now, you behave yourself," the V.P., in a neat, dark blue double-breasted suit, set off for a round of receptions. He went to the swank Federal Room of the Statler Hotel, to the Shoreham, to the home of a friend. Sunday, it was the Statler again.
...

 

Business | Business & Finance | STATE OF BUSINESS | Facts & Figures - Jul. 12, 1948
Mop-Up. The Hotels Statler Co., second largest hotel chain in the U.S., mopped up behind its fast extending lines. From the Pennsylvania Railroad, for an undisclosed sum, it bought Manhattan's 2,200-room Hotel Pennsylvania, which Statler has managed since it was built in 1919.

 

Business | Business & Finance | RESTAURANTS | New Chef at Childs - Dec. 13, 1948
At Childs, one of the largest U.S. restaurant chains, the mashed potatoes and the balance sheets have been equally soggy. Last week, Childs had a new chef who should be able to whip up both. Into its presidency went John L. Hennessy, 62, a white-haired, genial gourmet with a nice hand at serving up profits.

Only a few weeks ago Hennessy, who has taken just three vacations in 48 years of hard work, announced that he would retire as the $85,000-a-year chairman of the Hotels Statler Co., Inc. Ever since, he has been worrying about what to do with his spare time. Accepting the Childs job, he said: "Childs . . . has a great name, but has slipped financially and in popularity. It should be brought back to its rightful place."

No More Rhubarb. Few businesses grew more spectacularly. In 1889 the Childs brothers, Samuel and William, opened their first restaurant in Manhattan's old Merchant Hotel. Within ten years they earned enough to open ten more; then, on $1,000,000 put up by Oil Promoter A. W. Harris, their white-tiled restaurants mushroomed over the East.

Between 1920 and 1926, Childs never netted less than $1,500,000 a year. The Magazine of Wall Street called it one of the five most depression-proof stocks in the U.S. Then William Childs (Sam had died in 1925) turned faddist, and tried to turn Childs's customers into vegetarians. No more sausages with griddle cakes; no more rhubarb pie (someone had told him rhubarb was poisonous). Customers stayed away in droves, and the depression left Childs stranded with high-priced real estate and leases signed at boom-time rentals.

Through the lean '30s, successive managements did their best to nurse Childs back to health. Such appetizers as "Eat all you want for 60¢" helped Childs eke out small profits in 1935-36-37, but the next four years found the chain back in the red. During World War II it made money, but not enough to satisfy its stockholders. Last year the company was reorganized. This year sales and profits have dipped below 1947—chiefly because of the flat food.

Behind the Counter. Childs could not have picked a better man than Hennessy to put back the flavor. In his 35 years with the Statler chain, where he began ,as a steward, he spent most of his time showing cooks and waiters how to improve food and service. When the new Hotel Statler opened in Washington, white-aproned Chairman Hennessy put in six months as head chef. Hotels are generally glad to break even on food sales, but Hennessy managed to make 8-10% profit on Statler dining rooms.

To improve Childs's fare, he plans to get behind the service counters himself. Says he: "Nothing burns me up like the abuse of food."

 

Business | HOTELS | No. 9 for Statler - Jun. 19, 1950
Ever since the Depression caught U.S. hotelmen overexpanded, they have been chary of risking money on new hotels. In 20 years, only three big new hotels have gone up: Cincinnati's Terrace Plaza, Washington's Statler, Houston's Shamrock.

In Manhattan, big (6 ft.), drawling Arthur F. Douglas, president of the Hotels Statler Co., Inc., thought it was time for a change; the nation's growth had made the caution of hotelmen shortsighted. Last week he signed construction contracts for a new $20 million Statler in downtown Los Angeles. It will be the biggest new U.S. hotel since the Waldorf-Astoria.

The new Statler, ninth in the chain, will have an outdoor swimming pool, hotel shops on three levels; each of its 1,275 air-conditioned rooms will have an outside exposure and a built-in television set. Travelers who dislike the nuisance of parking their cars and entering a lobby in rumpled clothes, won't have to. They will be able to drive into a 475-car underground garage, register as they alight and take a special elevator direct to their floor.

Some rival Los Angeles hotelmen shook their heads at Douglas' "big gamble." They thought that his heart-of-downtown location was a "decaying" area, and his building costs were much too high (about $12,500 a room v. $9,000 for Washington's Hotel Statler built in 1943). But Douglas was counting on big convention trade, extra business from a big office building which will adjoin the hotel, and most of all on the nomadic U.S. people, whose travel has greatly increased. Said Douglas: "Our rates will be on a par with those of other leading Los Angeles hotels. And if we did not think we could make money on it, we wouldn't build it."

At 47, Art Douglas had proved that he generally knew what he was talking about. Like his better-known older brother, U.S. Supreme Court Justice William O. Douglas, he had always had to scratch hard. Art Douglas worked his way through Washington's Whitman College (1924), earned a law degree at Columbia University (1927). In a Manhattan law firm, he did so well that he caught the eye of the Statler Co., which hired him in 1937 as secretary-treasurer. Within two years he was executive vice president, became president in 1945.

To the hotel "firsts" of Founder Ellsworth Statler, father of the modern U.S. hotel, Douglas added some firsts of his own, e.g., television sets in hotel rooms. He also boosted the income of the chain* by renting wasted ground-floor space to shops. Quiet and reserved, Douglas has none of the flamboyance of his chief rival, Conjad Hilton (TIME, Dec. 12). But last year Statler earned more money. It rang up a record gross of $49.2 million and a net of $4.1 million to Hilton's $42 million gross and $3.9 million net. (Hilton's Waldorf has since put him ahead.) Art Douglas still sees to it that Statler-men do not forget old Ellsworth's stern rule: "No employee of this hotel is allowed the privilege of arguing any point with a guest."

*Including: Hotels Statler in New York, Boston, Buffalo, Cleveland, Detroit, St. Louis and Washington.;' Pittsburgh's William Penn.

 

Nation | National Affairs | NEW HAMPSHIRE | Out of the Sticks - Oct. 30, 1950
In its best legal manner, the staid old law firm of Root, Ballantine, Harlan, Bushby & Palmer harrumphed out a letter. It went to John K. Hill, an innkeeper in Center Ossipee, N.H. "It has come to the attention of our client, Hotels Statler Co., Inc., that you are using for your own inn the term 'The Statler of the Sticks' ... It is contrary to the policy of the Statler Co. to permit the use of its name," etc., etc.

In Center Ossipee (pop. 1,500), Innkeeper Hill hitched up his trousers and made reply:

"Gentlemen—Now I suppose that if I do not write and tell you that I will stop using the name 'Statler' in my advertising . . . you will make trouble for me. That will be an awful hard thing for you to do for several reasons, viz., as follows and to wit: there is a substantial mortgage on this place. I do not keep any checking account, holding my cash in my left and right pants pockets and keeping my accounts on a clear pine board which I burn on March 16, after having made a true and honest accounting of my net income, if any . . . My legal advisers are two of the Justices of the New Hampshire Superior Court and the Chief Justice of the Supreme Court of New Hampshire . . . These gentlemen help themselves to coffee and doughnuts in my kitchen when the spirit so moves them . . ."

Rattrap in the Room. "In fact, I have always given, and do now give, a level of personal service far beyond any offered by the Statler organization ... I always furnish the guest a rattrap for his room, free of charge. No charge is made for cheese for same. Of course, if the guest requests Camembert, Gruyère or Roquefort, a nominal charge is made ...

"I run a clean and moral house. I ain't had but one regular house guest hung for murder—that was Fred Small who was dropped in 1918 over in Concord ... I made a special trip to Concord and gave him my suit and that is a damned sight better service to the guest than . . . the Statler people have in the past, or will in the foreseeable future render a guest . . ."

Hidden Ash Barrels. This bracing breath of New England air, wafted into the sedate shadows of a Wall Street law firm, set one of the senior partners to writing a reply in doggerel, the kind of doggerel that a senior partner would be expected to write. A Statler publicity man reacted as a member of his species should, installed the Yankee innkeeper grandly in the Statler's most expensive suite when he came down to New York for a television appearance. Innkeeper Hill didn't seem to be completely taken in by all this attention, but did his best to oblige. After a look around the real Statler, he asked: "Where do you put your ash barrels?" At week's end, he headed back for the New Hampshire hills after agreeing to change the slogan of his inn. New one, unless he heard from another set of lawyers: "The Ritz of the Sticks."

 

Nation | National Affairs | THE ECONOMY | Shave & a Haircut--$2.35 - Dec. 25, 1950
...
No Second Coffee. In the restaurants, there was mounting bad news on the menu. Robinson's in Kansas City abandoned its historical attachment to the 49¢ " '49er lunch" and renamed it the " '59-er," with price to match. In Santa Fe, N. Mex., the "Special Mexican Plate" jumped from 75¢ to a dollar. In Manhattan's Hotel Statler, the breakfast that cost 80¢ one morning was up to 95¢ the next.
...

 

Business | Time Clock | Time Clock - Aug. 31, 1953
TWO big hotel chains have drawn up ambitious building plans. Statler, which has started work on a 450-room, $7,000,000 hotel in Hartford, Conn., will soon begin a $15 million, 1,000-room hotel in Dallas. Sheraton, in addition to its new $14 million Philadelphia hotel (TIME, July 6), will add 200 rooms each to its hotels in Baltimore and Rochester, 600 rooms to the Chicago Sheraton.

 

Nation | National Affairs | THE LAW | Diamond Jubilee - Sep. 7, 1953
From four-year-old John Hancock Hall to 211-year-old Faneuil Hall, Boston was crowded with lawyers last week. Occasion: the 75th (diamond jubilee) Anniversary of the 50,000-member American Bar Association, top organization of the legal profession and one of the major opinion makers in the U.S.

In honor of the convention, the Secretary of the Navy (a lawyer himself) ordered the aircraft carrier U.S.S. Tarawa to lie off Boston, open for inspection. The Post Office dedicated a new purple 3¢ stamp, depicting the scales of justice, the owl of wisdom, the mirror of truth. A historical society put on display the records of the Salem witch trials. And the Statler Hotel thoughtfully stocked its rooms with such legal bedtime stories as a Nero Wolfe mystery in which the senior partner of a law firm gets knocked off (Murder by the Book).
...

 

Business | REAL ESTATE | Potomac Plaza - Sep. 28, 1953
...
The man behind Potomac Parkway Plaza is George Preston Marshall, laundryman and owner of the Washington Redskins football team. For years he has thought that the land should be developed, and last year he persuaded Builder John W. Harris, who put up Washington's Statler Hotel, to form a syndicate to take an option on the land. Though the financing of the development is not completed and only the hotel and one office building (to cost a combined $30 million), and the plaza and garage have reached the blueprint stage, construction is expected to begin within six months.

 

Business | REAL ESTATE | Statler to Zeckendorf - Jun. 28, 1954
William Zeckendorf, whose deals have probably made him the No. 1 U.S. realtor, last week clinched his biggest deal yet. In Manhattan, President Arthur F. Douglas of the Statler Hotels announced that the board of directors had accepted an $80 million offer to sell out to Zeck-endorf's Webb & Knapp.

The deal would give Webb & Knapp, which already controls $250 million in property (including Manhattan's Chrysler Building), and has operated in 30 states, one of the choice hotel systems in the world. Founded by the late E. M. Statler in Buffalo in 1908, the chain is now the third biggest (after Hilton, Sheraton) in the U.S., with eight hotels and two office buildings, in Boston, Buffalo, Cleveland, Detroit, St. Louis, Washington, New York and Los Angeles, worth $67 million. Having already built four of the seven major U.S. hotels put up in the last 25 years, the chain is working on two more: a 455-room, $7,000,000 Statler tailored to fit medium-size Hartford, Conn.; a 1,000-room, $15 million Statler for booming Dallas.

Zeckendorf has offered Statler's 2,700 stockholders two ways to hand over control. They can either sell him their stock at $50 a share (v. over-the-counter value of $43.50), or sell him all Statler assets for $80 million, enough to pay them $50 a share.

 

Business | CORPORATIONS | Hilton Rides Again - Aug. 9, 1954
Hotelman Conrad Hilton, who hates to pass up a good deal, last week was busy roping still another hotel into his bulging corral. Hilton announced that he had bought Houston's lavish (TV, air conditioning, Muzak, a 165-ft. swimming pool), 1,100-room Shamrock Hotel, opened in 1949 by Wildcatter Glenn McCarthy. The seller was the Equitable Life Assurance Society, which took over the $21 million hotel in 1952 as part payment on a defaulted $34 million loan to McCarthy Oil & Gas Corp. Equitable's price to Hilton: $18 million, including $7,000,000 for 500 surrounding acres of land.

The Shamrock brings busy Connie Hilton's string to 19 hotels with 18,344 rooms in the U.S. and abroad. He has five more hotels abuilding (Havana, Beverly Hills, Mexico City, Acapulco, Istanbul), and three others in the planning stage (Rome, Cairo, London). But Connie Hilton is not ready to settle back just yet. Though Hilton is not talking, rumors are buzzing that he is in a hot bidding battle with Real-Estate Operator William Zeckendorf (see below) for control of the $67 million Statler chain of eight big U.S. hotels. Zeckendorf has already bid $50 a share for Statler's outstanding stock. Hilton's reported offer: two shares of Hilton stock (latest price: $27) for each share of Statler stock (about $46).

 

Business | REAL ESTATE | The New Super Connie - Aug. 16, 1954
In the hurly-burly world of real estate, no one fancies himself a bigger operator than smooth-talking William Zeckendorf, president of Manhattan's Webb & Knapp. Says Zeckendorf: "I like to turn peanuts into bananas." Last week, reaching out for a new piece of fruit, Top-Banana Zeckendorf bumped into another big operator. In the collision, Zeckendorf's feet went skidding out from under. Zeckendorf's opponent: Conrad Hilton, who in about a dozen years has risen from an obscure Southwestern innkeeper to a position as the world's biggest hotelman (TIME, Dec. 12, 1949 et seq.). The prize was the Statler hotel chain (eight hotels, two more abuilding in Dallas and Hartford, Conn.), which Hilton snapped away from Zeckendorf in history's biggest hotel deal. Price: $78 million.

Open for Bids. The battle started three months ago, when word got out that the Statler family, headed by Mrs. Ellsworth Statler, widow of the founder, would listen to bids for the country's third-biggest hotel chain. Zeckendorf promptly offered $50 a share for the 1,551,226 shares of Statler stock outstanding, then selling at $43.50 a share. The Statler board of directors snapped up Zeckendorf's offer, and sent a letter to stockholders advising them to accept. But it turned out that Zeckendorf was talking to the wrong people.

While Zeckendorf was dealing with the Statler directors, Connie Hilton had been quietly making friends with the Statler family itself. When Hilton heard of Zeckendorf's offer, he hopped on a plane, flew from California to New York to talk to "the people who really counted"—Mrs. Statler and other big family stockholders. Hilton's secret weapon: his argument that he could run the Statler chain better than anyone else. Living in Hilton's Waldorf Towers in Manhattan, Mrs. Statler had watched and admired the way Hilton did business, and was inclined to agree.

Last week Hilton sprang his big surprise. By matching Zeckendorf's price, he had won over the Statler family and bought their 753,000 shares (49% of the total) for $37.6 million. Stockholders owning the remaining 798,226 shares got the same offer of $50 a share.

In & Out. In Manhattan, somewhat dazed by Hilton's speed, Zeckendorf first seemed about to fight, then gracefully surrendered when it turned out that Hilton had already lined up another big block of Statler stock. Wired Bill Zeckendorf: "Sincere and warm congratulations." Into a stockholders' meeting originally scheduled to consider Zeckendorf's offer walked Hilton's lieutenants, with proxies for 1,061,731 shares. Out went most of the Statler's board of directors, including Chairman William L. Marcy, formerly (until his recent divorce) a member of the Statler clan. Three Hiltonians, headed by Connie Hilton as chairman, were voted into their seats, and the battle was over. Smiled Zeckendorf: "A motion for adjournment is in order, wouldn't you say?"

Hilton was not saying where he would get the cash to finance his latest coup. But the Manufacturers' Trust Co. promptly lent him $8,000,000 to make a down payment on the 753,000-share Statler-family block, and the word was that insurance firms might lend him another $66 million. The remainder will probably come from debentures and a small Hilton stock issue.

Five Are Better Than One. Why had Hilton bought the Statler hotels? For one thing, says Hilton, "they're our kind of hotel, big and comfortable." The money-making chain also gives Hilton his first foothold in such important cities as Boston, Cleveland, Detroit, Buffalo, Hartford, and Dallas. Furthermore, Hilton is a great believer in owning two or more hotels in one city (he now has five in Manhattan alone), feels he can cut costs drastically by combining facilities where Statler and Hilton hotels now compete.

Another big reason for the purchase was the tax advantage the Statler chain will bring Hilton. For tax purposes, it was almost the same as building a brand-new group of hotels; Hilton can start depreciating them at the full purchase price and not just the value at which they are carried on the Statler company's tax books. The tax advantage for Hilton amounts to about $2,200,000 a year, which, with the $2,200,000 Statler can already charge off, raises Hilton Hotels Corp.'s total annual depreciation figure to $8,200,000.

With the Statler chain in his pocket, Connie Hilton has pulled far into the lead as the world's biggest hotel operator (27 hotels around the globe, 30,000 rooms). Says he: "When you consider how big the hotel business really is, we've got a long way to go. We're just starting."

 

Business | --THE BIG GET-TOGETHER | Reasons Behind the Merger Spree - Aug. 23, 1954
US. businessmen, who like nothing more than getting together at trade conventions, recently have been getting together in another way. They have embarked on the greatest merger spree in history. In the past few months, by stock swap or outright purchase, Nash and Hudson became American Motors, Hilton Hotels took over the Statler chain, Mathieson Chemical and Olin Industries combined. Still more big mergers are in the making throughout industry. Packard and Studebaker stockholders vote this week on consolidating. Bethlehem Steel is talking merger with Youngstown Sheet & Tube, and Textron is working on a three-way merger with American Woolen and Robbins Mills.
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Tax advantages often play an important part in creating the urge to merge, as in the Hilton-Statler combination (TIME, Aug. 16). So do changing business tides.
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Business | Time Clock | Time Clock - Sep. 13, 1954
CONRAD HILTON, who bought out the ten Statler hotels (for $8,000,000 down, $70 million on credit) only last month, will soon sell them to private investors and insurance companies, lease them back to operate. Hilton, who wants to avoid issuing more Hilton stock to finance his purchase, will retain full operational control.

 

Business | BUILDING | Porcelain Walls - Sep. 27, 1954
In Hartford, Conn, the Statler chain opened its newest hotel, and displayed a spectacular use for a new, fast-growing building material. The hotel's outside walls are sheathed with brilliant, blue-green porcelain-enameled steel panels. Statler is so pleased with the effect that it plans to use forest-green panels on its Dallas hotel, now abuilding.

 

Business | GOVERNMENT | Enter the House Detectives - May. 9, 1955
Conrad Hilton did not know it, but almost since the day he began courting the Statler company's nine hotels, the house detectives have been snooping into the affair. Last week they broke right into the bridal chamber, crying that the Hilton-Statler marriage (TIME, Aug. 16) was illegal. Attorney General Brownell and his antitrust assistant, Stanley Barnes, filed a civil antitrust suit charging that the merger 1) eliminated competition, particularly for convention business, between Hilton and Statler; 2) may give Hilton a competitive advantage over other hotels; 3) "substantially increased" concentration in the hotel industry. Brownell and Barnes asked that Hilton Hotel Corp. be required to sell Statler hotels in four cities, (New York, Washington, St. Louis. Los Angeles) where the two chains had formerly competed, along with any "such other acquired properties . . . as the court deems necessary."

The suit came as a surprise to almost everyone in the hotel business—and especially to Conrad Hilton. The day it was filed he was in Paris, on his way back from Berlin, where he had inspected the site for a proposed new hotel. When he first announced the Statler merger, said Hilton, he got a letter from the Justice Department asking for information, which he gave. Then came another "very polite" letter asking for more information, which was supplied. Finally, a third letter arrived saying that that was all the information they wanted. Said Hilton last week: "We never heard any more from them until they announced this suit."

Hilton had a strong answer to the Government's case. For one thing, said he, "we don't think we're in interstate business." For another: "In the U.S. there are 30,000 hotels with 1,500,000 guest rooms, which make an annual gross in excess of $2 billion. We operate 23 hotels in the U.S. [with] 24,680 rooms, and in 1954 their gross was $119 million. That is not a monopoly. We will vigorously defend the action of our corporation in acquiring the Statler company." Added Hilton: "Most of our future expansion will be outside the U.S."

 

Business | GOVERNMENT | Friendly Warning - Feb. 20, 1956
Trustbuster Stanley N. Barnes last week solved a problem that had been worrying him in another big industry. Hotelman Conrad Hilton, whose growing empire (25 U.S. hotels, three more overseas with another five abuilding) now stretches halfway around the world, signed a consent decree formally ending the antitrust suit filed against Hilton last April after he acquired the Statler Hotel chain. Hilton agreed to sell two hotels (probably Washington's Mayflower, Manhattan's Roosevelt or New Yorker) in addition to the two (Los Angeles' Town House, St. Louis' Jefferson) he has already sold. Hilton also promised not to buy any more hotels in these four cities before 1961 without first checking with the Justice Department.

 

Milestones - Mar. 19, 1956
Died. Arthur F. Douglas. 53, onetime (1945-54) president of Hotels Statler Co., Inc. (until it was sold to Hilton Hotels Corp.), younger brother of U.S. Supreme Court Justice William O. Douglas; of a heart attack; in Cuttingsville, Vt.

 

Business | HOTELS | Closing the Gap - Jun. 4, 1956
Sheraton Corp.'s President Ernest Henderson and Vice President Robert L. Moore signed an agreement to buy the 22-hotel Eppley chain, largest and oldest personally owned hotel group in the U.S. Its 22 properties in six states range from Pittsburgh's 1,500-room William Penn to the 123-room Tallcorn in Marshalltown, Iowa. Price: $30 million. (In the biggest deal, Conrad Hilton paid $78 million for the Statler chain in 1954.)...

 

Business | Time Clock - Nov. 12, 1956
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HILTON HOTELS CORP., which already controls three Manhattan hotels (WaldorfAstoria, Plaza, Statler), will take over the Savoy-Plaza early next year.
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Business | BUILDING | Battle of the Codes - Dec. 5, 1960
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Since building costs have skyrocketed (the Washington Statler Hilton built before World War II cost $6,700 a room;
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Society | Modern Living | TRAVEL | Just Stay in the Room - Mar. 2, 1962
Feature of the well-appointed hotel room is closed-circuit television. At Manhattan's Statler Hilton, guests jaded with westerns and private-eye shows can now watch Telad Corp.'s repeating half-hour program on what to buy, do and see in New York; this week and next, Telad will open shop on Channel 6 (normally a blank on the dial) in two other New York hotels. A rival outfit, Teleguide, will start broadcasting via its own coaxial cable to some 12,000 rooms at a dozen Manhattan hostelries this week. Its basic one-hour program will include entertainment, shopping and sightseeing news
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Business | U.S. Business | CORPORATIONS | The Turnaround Boys - Jul. 16, 1965
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and courtly, French-born President Walter Pierre Margulies, 51, onetime chief designer for Statler Hotels. Says Margulies: "Designers in general have too high a taste level
....

 

Business | U.S. Business | BANKING | The Improbable Bostonian - Jul. 21, 1967
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He helped swing Hilton's acquisition of the Statler hotel chain, and got more than his usual share of public attention
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Business | Economy & Business | His Name Meant Hotel - Jan. 15, 1979
Dash and panache made Conrad Hilton innkeeper to the world

He attributed his success to his rather square and old-fashioned philosophy that "man with God's help and personal dedication is capable of anything he can dream." But who could argue with the shrewdly audacious small-town boy who put together the world's foremost chain of luxury hotels and became a multiple millionaire and one of the most colorful American businessmen? From New York to Istanbul and from Las Vegas to Addis Ababa, the name of Conrad Nicholson Hilton was synonymous with hotel, as in "I'm staying at the Hilton."

When he died of pneumonia last week at a wizened 91, his perennially profitable Hilton Hotels Corp. owned, managed or franchised 185 hostelries in the U.S. with revenues of $372 million in 1977. (The overseas subsidiary, Hilton International, was sold to Trans World Airlines in 1967.) Though Hilton's son Barren, 51, took over as chief executive more than a decade ago, Papa kept the title of chairman and continued to turn up daily at his Beverly Hills office to answer fan mail and assist charities. Besides Barron, another son, Eric, and 14 grandchildren, Hilton is survived by his third wife, Mary Frances, 63, a former United Airlines saleswoman he married two years ago.

Tall, lean, moustachioed and permanently suntanned, Hilton had the courtly manner of a Spanish grandee. "Connie" was a man who loved ballroom dancing and opened almost all new Hilton hotels by taking to the empty dance floor with an attractive partner to perform an obscure European dance, the Varsoviana, which he regarded as a good-luck ritual.

Hilton was twice divorced; his second marriage to Zsa Zsa Gabor was a tempestuous union, punctuated by well publicized donnybrooks. Though Zsa Zsa's divorce settlement cost him an estimated $275,000, Hilton, a Roman Catholic, was relieved; by shedding Zsa Zsa he got back into the good graces of his church (his first wife died in 1966).

Hilton had an ego as big as his chain, and he kept the vanity press busy printing books praising himself; his folksy upbeat autobiography, Be My Guest, is in every one of the company's 64,000 hotel rooms, right next to the Gideon Bible. He lived regally in a 61-room mansion named Casa Encantata in the Bel-Air area of Los Angeles, where 19 servants filled his every need, including buying his clothes. Yet Hilton retained an almost childlike wonder at the world around him. He also had some simple tastes, preferring corned beef hash or pork chops to any of the fancified dishes served in his hotels.

Hilton was born in San Antonio, N. Mex., on Christmas Day, 1887, when the state was still a territory. In 1919 he plunked down his entire savings of $5,000 to buy a small hotel in oil-rich Cisco, Texas, and eventually put together a small chain before the Depression wiped him out. With borrowed money he bounced back and bought up hotels at distress prices before and during World War II. He acquired a prestigious lineup: Los Angeles' Town House, Chicago's Palmer House, New York's Waldorf-Astoria and in 1954, the entire Statler chain.

At the same time, Hilton led the way overseas for other U.S. chains by opening hotels and widely introducing such novelties as coffee shops, self-service elevators, health clubs and swimming pools in Europe, the Caribbean and the Far East. He once wrote: "I like the tumult of life. I like its problems, its ever changing stresses." It was a zest that was reflected almost daily in Conrad Hilton's long, full and useful life.

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©2007 by David Statler of StatlerWeb
Last Updated: February 29, 2008