HERITAGE THE ART OF THE (HANDSHAKE) DEAL

MOST OF THE BANKERS, drummers, land promoters and wildcatters who built Dallas grew up on farms, and when farmers agreed to share-crop the back forty, they did not record the terms of the arrangement on a wax-sealed parchment. They more likely stood in the middle of acorn field and shook hands while the mule swatted flies with its tail. When these destiny makers unhitched the plow for the last time and moved to town, they brought this tradition with them; they preferred a handshake deal with someone they could trust over a notarized agreement witnessed by 12 bishops.

Robert L. Thornton, Fred Florence and Nathan Adams, who presided respectively over Mercantile, Republic and First National banks, were handshakers. Though fiercely competitive when behind the desk, their informal agreement, coupled with tacit understandings with the business establishment and the City Hall crowd, brought to Dallas a milestone event in 1936- the Texas Centennial. A year later. Thornton spearheaded the formation of the Citizens Council, a powerful organization of business leaders that set about charting the path of the city’s growth, striking deals that were informal in appearance but very formal in effect. Fifty years later, during the last days of the Texas banking shake-out, when old rivals Republic and First National agreed to merge, the logo chosen for First Republic Bank was the handshake.

“Uncle Bob” Thornton’s way of doing a deal rubbed off on Conrad Hilton, founder of the worldwide hostelry chain. In the 1920s, Hilton wanted to lease the Waldorf Hotel here but had just half of the required funds. Thornton convinced him to play double or nothing with his stakes and Hilton won. He leased the Waldorf and a couple of years later, the first of many hotels to be built by Hilton took root at the corner of Main and Harwood, where it is now known as [he Holiday Inn-Aristocrat.

By the 1950s, Dallas hotels were showing signs of wean which was causing conventioneers to grumble, so Thornton persuaded the folks from the Statler Hotel Corporation to come to town and look around. He cornered them in the back seat of his Cadillac and drove them around for hours until they finally found a spot they admitted was a good one. He got them to agree to build here if he could get a commitment on the site-which he had by noon the next day. Hilton bought the 1,001-room hotel at Commerce and St. Paul (now the Dallas Grand Hotel) before it opened and without ever having laid eyes on it. firming up the city’s position as a major player in the convention market.

Dallas’ reputation as the land of the band-shake deal was given a Texas-size boost by oil tycoons H.L. Hunt. Toddie Lee Wynne. D.H. “Dry Hole’” Byrd and Clint Murchison, Sr. At the turn of the century. Murchison trapped raccoons to ship to Sears. Roebuck and traded cattle on the town square of Athens, Texas. He was released from the Army after World War I just in time to wade knee deep into the oil boom resulting from the discovery of the Burkburnett held near Wichita Falls. By the late 1920s, he had moved to Dallas and made a fortune.

When Dad Joiner’s gusher. Daisy Bradford No. 3. came in. the action shifted to East Texas, and Murchison hightailed it through the piney woods, leasing and partnering so many handshake deals that he would later receive six-figure checks in the mail on arrangements he had forgotten about and had no record of. He had little patience with Eastern bankers and was quoted by Jane Wolfe in The Murchisons as complaining that the “trouble with you guys up here, you’re too slow…We trade, make the deal and let the paperwork catch up later.”

Many of the legendary oil deals were made over sirloin steak at the exclusive Petroleum Club, founded in Dallas in 1934. Wolfe quotes a longtime member: “It was just a place for a guy to get a good lunch and a million-dollar deal.” Others made agreements they would never think of reneging on while fudging on their golf scores at Brook Hollow Golf Club.

One might not see much in common between the pitch darkness of black gold and the glitter of diamonds, except that both grow in the ground. But in fact, handshake deals in diamonds were going on while the Hunts and Murchisons were still reading by the light of coal oil lamps. A Russian immigrant named Morris Zalefsky, who opened a small jewelry store in Wichita Falls in 1924, had lopped off the last part of his name and moved the headquarters of the Zales Jewelry Co. to Dallas in 1946. By the 1950s, he had developed a reputation for stability and integrity among diamond traders, which gave him entree to the elite fraternity of international diamond traders, unprecedented for a retailer. By cutting out the middleman, Zale could buy cheaper and sell for less. By the 1960s. Zales was a $ 100 million-a-year operation, prompting a lengthy article on the company in Fortune in 1964 called “Diamonds for the Masses.”

Zale’s diamond deals were based on blind trust. As was the tradition among those in the inner circle, he would buy a million dollars’ worth of diamonds in a sealed bag. sight unseen, consummated by a handshake and the seller’s traditional Yiddish salutation of “mazel und brucha.” meaning “luck and blessing.”

A less exotic undertaking, the neighborhood convenience store, originated here without benefit of pencil and paper. In the 1920s, the Southland Ice Company had 16 docks scattered throughout the Oak Cliff section of town, the one at the comer of 12th and Edgefield being under the tutelage of an irascible entrepreneur called “’Uncle Johnny” Green. His customers were always complaining about the inconvenience of going to the grocery store just to buy a loaf of bread, so he stocked a few loaves and then added milk and eggs.

In the fall of 1927, Green and Southland boss Joe C. Thompson struck a gentlemen’s agreement-Green would keep the ice house open over the winter and Thompson would stock it with a few basic groceries, then in the spring they would settle up. On May 1, 1928. Green returned with $1,000. the company’s share of the winter’s bounty, and the first of a chain of stores that would become known to the world as 7-Eleven was born.

Gene Street, son of a Brown wood. Texas, laundry man and pig farmer, also had a simple idea-upscale country cooking. In 1971, Street, then a shock absorber salesman, and Phil Cobb, who sold printing presses, met by chance at the Knox Street Pub where they commiserated over their boring lives and agreed, on the spur of the moment, to join hands and conquer tedium. A friend of Cobb’s had a car christened J. Alfred Prufrock in honor of T.S. Eliot’s love song, so the company was named Prufrock, and its first offspring, a small bar on Oak Lawn, was called J, Alfred’s. The “’corporate office” consisted of a door laid across two file cabinets, and major financing was provided by Street’s Aunt Wilma. a Baptist missionary who thought she was financing a mail-order business.

The company grew to feature such historic Dallas culinary emporiums as The Dixie House, The Wine Press. The Old Church, and the down-home granddaddy of them all. The Black-Eyed Pea.

One of the most determined, hardhead-ed and tenacious undertakings in Texas business history was the founding of Southwest Airlines. The only written memorial of the original agreement is the cocktail napkin on which the proposed triangular route between Dallas. Houston and San Antonio was penciled.

Herb Kelleher was practicing law in San Antonio in 1966 when one of his clients, businessman Rollin King, suggested that the two start an airline. Skeptical, but bored with the fine print of the legal profession. Kelleher shook hands on it. These were the clays of strict regulation, and between federal regulators. Congressman Jim Wright and competitor Bran iff, it would be five years before Southwest ever left the nest, but since that time, the friendly skies have never been the same.

Except for a few areas of the law. mostly involving real estate, handshake agreements are legally binding in Texas, even without the whereupons and heretofores- and messing with a fellow’s handshake agreement can be risky business. During the takeover craze of the 1980s, Pennzoil reached a verbal understanding with the J. Paul Getty interests to buy a massive chunk of Stock in Getty Oil; the price was agreed upon and the mechanics of the deal were left to be ironed out by the lawyers and accountants. When Texaco jumped in with a higher offer. Pennzoil sued for “tortuous interference.”Texaco claimed there was no contract, since it was not in writing. However, a Texas jury upheld the verbal agreement, awarding Pennzoil more than $10 billion.