Conrad Hilton Nearly Lost His Hotels in the Depression and Let Others Share the Ownership

Conrad Nicholson Hilton was born on December 25, 1887, in San Antonio, New Mexico. After serving in World War I, he bought his first hotel in 1919: the Mobley, in Cisco, Texas.

Through the 1920s he kept buying and building. According to the Texas State Historical Association, he opened a new Texas hotel every year from 1925 to 1930. By the end of the decade, Hilton hotels stood in cities across the state, and he had plans for more.

Hotels need travelers, and the Great Depression sharply cut how much Americans traveled. Hilton's fast-growing chain was suddenly carrying debts its empty rooms could not easily pay. By 1931 he was close to bankruptcy, and he was forced to close at least one of his properties.

He later described the period as a time to walk through 'a long, dark valley,' and noted that he was not alone in it, since the whole country was going through the Depression. The Philanthropy Roundtable reports that by 1933 he was barely holding on to a single hotel of his own.

Hilton's way through was not to hold on more tightly. It was to bring others in. Shearn Moody and William Lewis Moody Jr., of a Galveston business family, along with a number of other investors, stepped in to help. Hilton's hotels were merged with the Moodys' operations into a new firm, the National Hotel Company.

In that arrangement Hilton was no longer the sole owner of his business. He held one-third of the new company and served as its general manager. For someone who had spent a decade building his own chain, it meant accepting a smaller share in exchange for a chance to keep going.

The merger was not a clean rescue. According to the Texas State Historical Association, it failed, and the partnership came apart. In 1934 Hilton went back to operating on his own, this time with five hotels. In roughly three years he had gone from owner of a growing chain, to minority partner in someone else's company, to independent operator of a smaller group. Each step required him to adjust.

The Conrad N. Hilton Foundation, which he later endowed, states that he did not use bankruptcy as a way out and that he eventually repaid every penny he owed. The foundation's history also recalls that his mother encouraged him, during hard times, to turn to prayer.

Recovery came gradually. In 1938 Hilton bought the Sir Francis Drake Hotel in San Francisco, his first hotel outside Texas. In 1946 Hilton Hotels Corporation was incorporated, with Hilton as chairman, and in 1947 it became the first hotel company listed on the New York Stock Exchange. In 1949 he bought the Waldorf-Astoria in New York, and in 1954 he acquired the Hotels Statler Company, a deal the Philanthropy Roundtable puts at $111 million.

In 1944 he founded the Conrad N. Hilton Foundation. He died on January 3, 1979, in Santa Monica, California, and left almost all of his fortune to the foundation, whose purposes include helping children and supporting the work of Catholic sisters.