J.R. Simplot, 99; Potato Magnate Invested Billions in Computer Chips

By Adam Bernstein
Washington Post Staff Writer
Tuesday, May 27, 2008

J.R. "Jack" Simplot, 99, who launched an agribusiness empire that supplied french fries to the McDonald's fast-food chain and then used his billion-dollar fortune to invest in computer chips, died May 25 at his home in Boise, Idaho. No cause of death was reported.

Mr. Simplot, an eighth-grade dropout, left his family's Idaho farm at 14 after an argument with his father and went into the potato-growing business for himself. He adapted quickly to new growing and processing techniques and was a millionaire by age 30.

During World War II, he reportedly supplied one-third of the dried potatoes and onions consumed by American troops.

In the postwar boom for frozen and packaged foods, the J.R. Simplot Co. became dominant in its industry.

He converted his equipment to handle the demand for frozen french fries, instant potatoes, dried hash browns and frozen shoestring potatoes.

Seeking assured supplies, he invested in timber to make potato-shipping boxes and invested in phosphate mines to lower the cost of phosphate-rich fertilizer used in his fields.

In the mid-1960s, he became one of the major suppliers of french fries to McDonald's and other restaurant chains. He joined the board of the McDonald's Corp. and urged the company to expand into Asia, with the belief that potatoes could overtake rice as the continent's dietary staple.

Venturing into beef cattle ranching, he accumulated one of the country's largest properties -- a 137-by-64-mile spread near Paisley, Ore. At one point, the land he owned or leased for growing or grazing was about the size of Connecticut.

"I guess I'm kind of a land hog," he told the Portland Oregonian newspaper in 1996.

As of 2007, his family's net worth was $3.6 billion, according to Forbes magazine, which ranked him No. 89 on the list of richest Americans. The magazine said he was the oldest living billionaire on its list of the 400 wealthiest Americans.

John Richard Simplot was born Jan. 4, 1909, in Dubuque, Iowa, and raised on a farm with four siblings near the south-central Idaho town of Burley. He left home at 14 after his father would not let him attend a basketball game, the final straw of many disagreements between them.

His mother gave him four $20 gold coins, and he moved to a hotel in Declo, Idaho, where he found work in the potato-sorting workhouses.

He showed an early flair for business by making a deal with teachers boarding at the hotel who were paid in interest-bearing scrip, or interim money. He bought the scrip at 50 cents on the dollar, raising enough capital to use as bank-loan collateral to buy 600 hogs at $1 each.

To feed the animals that brutal winter, he hunted wild horses and poured the meat and potato scraps into a converted boiler that he used to make slop.

The next year, hog prices were at a premium and, unlike many competitors whose surviving hogs were far skinnier, Mr. Simplot sold his fattened animals for $7,500.

The windfall provided his stake for potato farming. In 1928, he rented 160 acres from a local farmer, and they split the price of a new electric potato sorter.

The landlord protested Mr. Simplot's plan to rent the equipment to other potato growers. "We were arguing," Mr. Simplot, who abstained from alcohol, told the Oregonian. "He'd had a few drinks, and he said he'd flip me for the whole machine."

Mr. Simplot won and parlayed the device into a major processing business and soon bought or built more than 30 potato warehouses along the Snake River plains of Idaho and Oregon. Using a prune dryer, he also became involved in drying onions in 1939 and made $500,000 the first year.

Mr. Simplot was restless in searching for business opportunities. Some investments failed, including attempts to mine precious metals (and grow coconuts) in Latin America and to save a failing silver mine in Idaho.

In the 1970s, his business practices attracted the attention of law enforcement and led to penalties for tax fraud and manipulating Maine potato futures. In the second case, he was prohibited from commodities trading for six years, and he paid $50,000 in fines as well as an undisclosed amount to settle a lawsuit.

"I made out all right," he said years later.

Starting in 1980, he spent tens of millions of dollars to help Idaho-based Micron Technology become an important producer of memory chips widely used in personal computers. He worked to safeguard the company against competition. According to the Oregonian, he was instrumental in lobbying President Ronald Reagan to impose a $300 million tariff on imported chips.

Forbes estimated Mr. Simplot's current stake in the company at $250 million.

He had a reputation for bluntness on everything from business to religion, which he called "hocus pocus."

He enjoyed exerting his authority, and he sometimes clashed with others in command. After turning over J.R. Simplot Co. to his children in the mid-1990s, he was critical of their leadership, saying, "They've not done as good as I'd hoped." (A son, Donald, filed for Chapter 11 bankruptcy in 1996.)

His marriage to Ruby Simplot ended in divorce. A son from that marriage, Richard Simplot, died in 1993.

Survivors include his wife, Esther Simplot, and three children from the first marriage, Don, Scott and Gay.

Mr. Simplot continued to describe himself as an "old potato farmer" and drove a white Lincoln Town Car with "Mr. Spud" vanity plates. He ate several times a week at McDonald's, always asking for hash browns or french fries.

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