Once, just once, Armand Hammer tried to retire.

It was 1956. Hammer, then 58, was calling it quits after a successful career as an international trader, liquor magnate, breeder of championship cattle and art dealer. A millionaire several times over, he moved to California with his third wife, Frances, and settled into retirement.

A few weeks of boredom, and a need to shelter his millions, led him to Occidental Petroleum Corp., a failing Los Angeles-based oil company. He lent $100,000 to the company to drill two wells, figuring the investment would never pan out and he could write off the lost money.

But the two wells struck oil, and Occidental was revived. Today, it is a $19 billion-a-year giant, the nation's eighth-largest oil company -- and Hammer, anything but retired, is its peripatetic chairman.

Circling the world in the corporate 727 with OXY-1 painted on its tail, logging 300,000 miles a year, the 86-year-old Hammer negotiates deals with the leaders of Russia and China, preaches a strategy often at odds with the conventional wisdom of the American oil industry, plunges his company into controversial new ventures, and runs Occidental with an iron hand. Twenty-nine years after he retired to California, Hammer is one of the nation's most active, and controversial, business leaders.

In many senses Hammer is Occidental, by many accounts running the company virtually out of his head. One biographer described him as the one-man flying multinational.

"I think every successful business is a reflection of one man, one leader," Hammer said in an interview last week. "The chief executive officer of a successful business has to be that man."

With that philosophy, he brooks no interference at Occidental. No fewer than half a dozen potential successors have come and gone from Oxy in the past decade or so, lured by the promise that they would be his successor, then resigning in frustration or dispatched by the autocratic Hammer when he felt them coming too close to his throne. He is The Man Who Will Not Leave.

Hammer is more than just a businessman. He has become an extraordinary private diplomat as well, parlaying a relationship with the Russian leadership that goes back more than six decades into virtually unencumbered entree into world capitals from Washington to Moscow to London to Peking.

Occidental does business in a big way in countries whose philosophies many titans of capitalism find abhorrent. Libya is one of Occidental's major sources of oil, the result of a controversial deal Hammer negotiated with the government of Muammar Qaddafi shortly after a 1969 coup. The company has a $20 billion, 20-year deal with the Soviet Union to swap ammonia for fertilizer. And Occidental is also trying to finalize a deal to build the world's largest coal strip mine for China.

Hammer's influence with world leaders extends to personal affairs as well. Through a longstanding friendship with Prince Charles of England, he almost, but not quite, became godfather to Bonnie Prince Harry last year. He is an intimate of both Ronald Reagan and Konstantin Chernenko -- as he has been with generations of American and Russian leaders -- and is trying to assemble a summit meeting between the two, each of whom he has met with in recent weeks.

One of the major topics at a Reagan-Chernenko summit meeting, Hammer hopes, will be his long-held philosophy of peace through trade -- trade that would, not coincidentally, be of no small benefit to Occidental Petroleum.

For Hammer is, if nothing else, an opportunist, an entrepreneurial salesman always in search of the next big deal. In a profile a few years ago, the New York Times described him as "a curious amalgam of Yankee trader, circus barker, big-time entrepreneur and cultured devotee of the arts, a man whose modesty concerning his many philanthropies is in striking contrast to the bravura style of his business dealings."

Hammer is probably not, as many people think, a billionaire. Although he was once the majority stockholder in Oxy, his holdings were diluted as the company grew, and today he has just 1 percent of the company. Most of his money is tied up in other investments, or in his beloved art collection, and Forbes magazine estimated last year that his holdings were worth at least $200 million. "All I know is that I'm worth plenty," he says.

Throughout his long career, Hammer has shown an astonishing ability to make a buck, to take advantage of an unusual or unfortunate situation, and to have an enormous amount of luck on his side.

Occidental, for instance, has a reputation as perhaps the most serendipitous finder of oil in the world, a company able, at just the time when it seems to be at the low ebb of its oil holdings, to find petroleum where others have gone and come back empty-handed. Last year, on a piece of land that Exxon and British Petroleum had abandoned before it, Oxy found a mam moth 1 billion barrel oil field in Colombia that should keep the company rich in crude for years.

Ever the salesman, Hammer delights in telling anybody who will listen about what a wonderful discovery the Colombia field is. Occidental has been known to announce other oil discoveries many times over, just to make sure nobody misses the news. (Such boosterism occasionally has gotten Occidental into trouble with the government. The Securities and Exchange Commission has come down on Hammer and the company at least twice for overplaying corporate developments.)

At 86, Armand Hammer shows no signs of slowing down. Although his walk and some of his other movements betray his age, he looks a decade younger. He has good days and bad in conversation, but he usually shows a keenness and grasp of both small details and large issues that would swamp an executive half his age. And he would just as soon talk about the future as reminisce about the past, as if he intends to spend as much time in one as in the other.

He was born to Russian immigrant parents on the Lower East Side of New York on May 21, 1898 -- a day still commemorated as the date of Occidental's annual shareholders' meeting. His name came not, as is popularly believed, from the baking soda brand -- with which he has no connection -- but from the name of the lover in "Camille."

Hammer's doctor father was an ardent socialist who for a time held Communist Party membership, but Armand grew up a dedicated capitalist. He made his first million running a pharmaceutical company while he was attending medical school at Columbia University, and decided he preferred business to healing. (He still likes to be called "Dr. Hammer," and one of the very few times he has ever practiced medicine was when he revived an elderly stockholder who fainted at an Occidental annual meeting a few years ago.)

In 1921, the 23-year-old Hammer sold his drug company for $2 million and made his first trip to Russia. Relying on the contacts of his father and his own persistence, he became one of the first outsiders to trade with that country in the wake of the 1917 revolution. He began by swapping food and drugs for Russian furs, and eventually became the agent in Moscow for dozens of major American firms.

His dealings attracted the attention of Lenin, and with the Soviet leader's blessings and encouragement -- not to mention a stack of Lenin-signed letters of recommendation that would come in handy for decades to come -- Hammer created a pencil-making industry in Russia, and made another fortune off that. He set up house and business in Moscow and stayed there for several years.

Stalin's ascendance to power chilled Hammer's Russian connection -- Stalin appears to be about the only world leader with whom Hammer never got along -- and he returned to the United States. Capitalizing on the end of Prohibition, Hammer beat the Depression by becoming the nation's largest producer of beer barrels, and then, in turn, one of the largest makers of alcohol. He and his brother Victor revolutionized -- some would say cheapened -- the art world in the 1930s and '40s by acting as agents for the sale of huge amounts of art -- including the massive collection of William Randolph Hearst -- through department stores such as Saks Fifth Avenue and Gimbels. Hammer liked to quote one customer as saying, "It was like walking through the Metropolitan and the Louvre and finding a price tag on every object."

His next venture was in cattle. Seeking to hawk a byproduct of his alcohol production as cattle feed, he put together a small but formidable operation breeding and showing Black Angus cattle. The hobby soon consumed him, and he became one of the nation's leading breeders of Black Angus.

By 1956, Hammer was ready to retire; he moved to California. But it wasn't long before his golden years became just that.

"After a few weeks I was bored," he recalled. "I said if I didn't find something to do, I'd be tempted to move back to New York. . . . Then a friend, at a cocktail party, told me about the tax advantages of oil drilling, for people in a high tax bracket."

Occidental stock then was selling at 18 cents a share, and Hammer says it was worth even less than that. At first, he declined an offer to buy part of the company, choosing instead to loan it money. "They said, 'We have two leases, we think there's oil on them, but we don't have money to drill. If you will lend us the money, we'll give you a half interest. We'll give you a note. We won't be able to pay it, so you can write it off on your taxes,' " he remembered. "With beginner's luck, both of them came in."

The stock soared to $1 a share, and Hammer began buying. Soon he was the largest shareholder, and then the president of the company. It wasn't easy -- at one point, the company needed money to develop a promising holding, "so we passed the hat around the directors, and we raised the money," he said.

"He really comes out of the sort of era of pioneering in the oil business," says Daniel Yergin, the longtime Harvard energy analyst and the author of a two-part profile of Hammer in The Atlantic magazine in 1975. "The difference between him and the other pioneers in the business is he did it in an era when a lot of other companies already existed."

Hammer has not found acceptance within the fraternity of oilmen, mostly because he has a habit of running against industry trends. Currently, for instance, at a time when most other oil companies have all but given up on attempts to produce oil from American shale, Hammer is pressing on with Occidental's efforts in the area.

Occidental is suffering along with the rest of the oil industry from the sagging prices for oil, gas and coal, areas in which it is a major participant. But Hammer, unlike some others in the industry, believes the drought will be short-lived. "I've never lost faith in the oil industry, because oil is a depleting asset," he said. "I think it's only a question of time before oil prices will escalate." Hammer sees the price of oil going to $100 a barrel within the next few years, enough to make his company and others very profitable, and even make the now-expensive production of shale oil a going business.

In the meantime, however, Hammer believes that oil companies have to find oil wherever they can, even if that means buying it on the floor of the New York Stock Exchange. Occidental bought Cities Service two years ago for $4 billion, and earlier this month made an abortive attempt to put together a $3 billion merger with Diamond Shamrock Corp. The latter deal collapsed amid a welter of criticism of Oxy's management from Diamond Shamrock officials.

The Diamond Shamrock deal wasn't the only one of Hammer's escapades that didn't turn out the way he hoped. Analysts are particularly critical of some of his dealings with communist-bloc nations. The most widely questioned is Occidental's $20 billion deal with the Soviet Union, under which the company trades fertilizer phosphates for ammonia that can be used in the company's chemical operations to reduce its reliance on natural gas.

Analysts believe Occidental has lost money on the deal in the decade since it was signed, but Oxy President Ray R. Irani says the company turned a profit on the fertilizer-chemical swap in 1984 and calls the criticism "sour grapes."

Occidental also has had problems closing the deal to mine coal in China. Four years of negotiations and three preliminary agreements have yet to result in a final contract. Hammer, whose company is also drilling for oil off of China's southern coast, has said it takes patience to deal with the Chinese.

Hammer defends his dealings with Russia and China, no matter how frustrating the results, as an opportunity to get Occidental's foot in the door of two huge, virtually untapped markets. He makes no bones about his desire to turn the Soviet Union and China into Occidental profit centers, and dismisses any suggestion that there's something paradoxical about a Western capitalist working so hard to woo communist business.

"I think that one way we're going to have peace in the world is to trade with the socialist countries, with Russia," he said, striking one of his favorite themes. "We don't buy their ideology, they don't buy ours. We're not going to change them, they're not going to change us. I tell them I'm a capitalist. I like our system. I think it gives us the highest standard of living of any nation in the world. . . .

"I think that if we trade with the Russians and the socialist countries, and we have cultural exchanges, and we're patient, and above all avoid the risk of nuclear war, which will destroy all of us, I think we will be building a peaceful world."

That's the message Hammer has been shuttling back and forth between Moscow and Washington now for decades, most recently in a December meeting with Chernenko and in subsequent conversations with President Reagan.

Hammer believes the message is getting across. "If I could only get a meeting between [Chernenko] and Mr. Reagan, I think the history of the world will change, because both these men are warm, they're both kind men, and they both, I think, want peace," he said. "If these two men get to meet each other, I think they'll get to trust each other, and that's what it's going to take -- a certain amount of trust, and also a means of communicating with each other. When the people who are given the task of negotiating run into roadblocks, either on one side or the other, Mr. Reagan can pick up the hot line and call his friend Konstantin and tell him what's going on, and he'll give orders to the troops to modify their demands.

"I think that's the way things are settled. That's the way I do it in business -- when I have a big deal with another company, I try to deal with the chairman of that company while my subordinates are negotiating. I do the same with foreign countries. That's why I try to meet so many heads of state, because I find that one way to overcome the bureaucracy is to get to the top. If Mr. Reagan would only do that, I think that things will move, and he'll go down in history along with George Washington, Abraham Lincoln and Franklin Roosevelt as one of our great presidents."

But negotiating world peace is one thing; keeping the peace in Occidental's boardroom is quite another.

Hammer's revolving door of subordinates has become legend in American industry, and one of the things that has made him so controversial. "There trails behind him an extraordinarily long string of men who thought they were going to be his successor or heir apparent," says a longtime observer of the company. "He's survived them all."

The most serious of the challenges probably came last year from David Murdock, the Los Angeles financier who was behind one of Occidental's more unusual deals, the 1981 purchase of Iowa Beef Processors, the nation's largest meatpacker, of which Murdock was a part owner.

Some analysts, and perhaps Hammer, saw Murdock as a logical heir to Hammer -- a similarly strong, entrepreneurial deal-maker. But Murdock apparently got impatient, asking Hammer to modify an agreement that prevented Murdock from buying more than 5 percent of Occidental's stock.

Hammer struck back at the perceived threat. Quelling rumors that Murdock planned a proxy fight for control of the company, Hammer bought out Murdock's stake in Occidental for $194 million -- considerably more than it was worth at market price -- and got an agreement from Murdock not to buy back into Occidental.

He then moved against other dissidents on the board of directors. The next target was then-president A. Robert Abboud, a Chicago banker hired by Hammer in 1980 as another possible successor. Apparently fed up with Abboud's criticism of some of Oxy's investments, Hammer canned the company's fifth president since 1968 and replaced him with Irani.

Hammer then tried to move against another executive reported to be an ally of Murdock and Abboud, Iowa Beef President Robert L. Peterson. Because he worried that the division would falter without Peterson's leadership, Hammer reportedly put the entire division up for sale, even though he has long thought the food business to be potentially as profitable as oil because each can benefit from shortages.

But Hammer couldn't find anyone who would meet his $1 billion price, and Iowa Beef and Peterson are still with Oxy. Hammer now says he doesn't really want to sell the division. "Iowa Beef is not on the market; it's not up for sale," he said. "If somebody came along and offered us $1 billion for Iowa Beef, we probably would consider it."

The flurry of departures from Oxy caused concern in the investment community that Hammer was tightening his grip on Occidental at a time when he probably should be trying to ensure an orderly succession. But Hammer sees corporate leadership differently. "I never saw a successful business that was run by a committee," he said. "It should be like the captain of a ship. He doesn't have to be at the rudder all the time -- he can have good mates, a good organization -- but only one man can run a ship, be the chief executive officer, or the captain."

Armand Hammer doesn't seem to be willing to abdicate that captaincy any time soon, at least by choice. He may delegate some duties in coming years -- Irani was sent to Moscow for last year's annual renegotiation of the fertilizer contract, for instance, a task Hammer previously had done himself -- but at 86, Hammer seems determined to run the company into the future he deems so bright.

"I don't think Hammer is ever going to retire in the sense that most people retire," said Bruce Lazier, an oil industry analyst at Prescott Ball & Turben.

"I don't think he'll retire," said Alan L. Jeffries, an analyst at the Dallas brokerage Schneider Bernet and Hickman. "He'll probably just expire." CAPTION: Picture 1, Occidental Petroleum Chairman Armand Hammer in the Washington office on K Street, with photograph of longtime friend Ronald Reagan in background. By Dudley M. Brooks -- The Washington Post; Picture 2 1921, At 23, already a millionaire, Hammer journeyed to Moscow to be one of the first outsiders to trade with the USSR after the 1917 revolution. Picture 3, 1923, Hammer demonstrates to Soviets the first shipment of Fordson tractors mad by Ford Motor C., one of several corporations Hammer represented in Russia. Picture 4, 1953, During days as one of the nation's leading cattle breeders, Hammer shows off Prince Eric, the king of his huge Black Angus herd. Picture 5, 1961, Nikita Kruschev was one of the many Russian leaders with whom Hammer negotiated. He still recounts with pride how, at Khrushchev's request he got crabmeat exports from the Ussr to the U.S. resumed. Picture 6, 1968, Hammer an extraordinary private diplomat once described as the one-man flying multinational, at the White House with Lyndon Johnson, one of the many U.S. presidents with whom the industralists was on close terms. Picture 7, 1974, A collection of autographed pictures of world leaders keeps Hammer company in his office at Occidental Petroleum's corporate headquarters in Los Angeles. He has parlayed friendships with those leaders into billions of dollars in business. Picture 8, 1976, Hammer negotiated with Soviet leader Leonid I. Brezhnev for a controversial $20 billion, 20-year swap of fertilizers produced by Occidental in exchange for Russian ammonia. Picture 9, 1978, Prince Charles reportedly considered making his lifetime friend Hammer the godfather of Prince Harry last year. Photos 2 through 9 by Marty Barrick for The Washington Post