Irving Gould was a Canadian financier and chairman of Commodore International. Although it’s an oversimplification, journalist Robert X. Cringely dismissed the once high-flying computer company, which had 60% of the market in 1984, as Irving Gould’s stock scam.
Gould was a bit of an odd fit to be running a computer company. He knew finance, but admitted in 1988 that he didn’t know how to use a computer.
Gould never sought the spotlight, but with Commodore, the spotlight found him. Gould had other financial interests, including a shipping company called Interpool. He sold Interpool in 1978 and made $25 million. Michael S. Tomczyk, a former Commodore employee who wrote a book about Commodore in 1984, estimated Gould’s personal wealth at that time at $100-$250 million.
Information about the enigmatic Gould was always difficult to find. As old news content becomes computerized, it becomes possible to piece together some details. Writing in New York magazine’s May 13, 1985 issue, Dan Dorfman noted Gould was readily accessible to the press when Commodore was doing well, then disappeared from view when the company struggled. Dorfman estimated that Commodore’s woes decreased the paper value of Gould’s share of Commodore by $300 million.
Gould owned about 17.9 percent of Commodore’s outstanding stock. Its peak value was about $35 per share, so his Commodore holdings may have been worth nearly $400 million at one time, but Commodore’s share price was volatile even during its best years. That helps explain the wide range of Tomczyk’s estimate.
It’s likely we’ll always know more about the engineers who worked for Gould than we will about Gould himself.
What was Irving Gould hiding?
Gould saved Commodore in 1966 and at various points afterward, including 1975 when he sunk $3 million into the company. He is also credited with running the company into the ground. In its final 18 months, Commodore lost $374 million. Among their final purchases was an insurance policy at the price of $2.6 million to protect the personal assets of Gould, Mehdi Ali, and the members of the board of directors.
Toward the end, Gould paid himself well. In 1988, his compensation was $500,000. In 1989, it increased to $1.25 million, and in 1990, it increased again to $1.75 million. Commodore’s profit for the entire year of was $1.5 million. So he made more than his company did in 1990. For comparison, Gould’s counterpart at IBM made $713,000 in 1990, a year that IBM pulled in a profit of $6 billion.
To avoid paying taxes in the United States and Canada, Gould divided the time he spent living and working between Canada, the United States, and the Bahamas. Commodore had a private jet, which at various times it owned or leased from Scientific Packaging, another one of Gould’s companies, to accommodate his travels.
This seems in character, as Irving Gould was not the most honest of men. In 1960, he had pleaded guilty to perjury that covered up his brother’s defrauding Cabanga Investments Ltd of $456,000. Irving Gould, then 40, received a suspended sentence. His older brother, Albert, received a sentence of six years.
Financing Gould’s tax evasion and lavish lifestyle was a luxury Commodore could ill afford. The plane cost $2,150 an hour for Commodore to fly. Meanwhile, Commodore’s rival Atari, run by his former business partner Jack Tramiel, kept itself afloat in 1985 by selling its surplus office furniture. Every dollar counted in those days, and Commodore burned a lot of them.
How Irving Gould became involved with Commodore
Irving Gould entered the picture at Commodore in 1966 following a complex scandal. Bear with me. Starting in 1958, Commodore had borrowed money from Atlantic Acceptance Corporation, a $150 million Canadian finance company. A series of shady deals allowed the struggling typewriter company to remain in business and even make acquisitions while the powers in charge of Commodore and Atlantic Acceptance bought up Commodore stock cheaply. Then, in 1965, Atlantic Acceptance failed, and nearly took Commodore with it. Gould swooped in, invested $500,000, and kept Commodore from failing with it. He kept a diminished Jack Tramiel, the company founder, second in charge, to himself.
It’s important to note that Atlantic Acceptance was Tramiel’s scandal, not Irving Gould’s.
It was Gould’s idea to have Commodore manufacture adding machines. As that market declined, Tramiel came up with the idea to manufacture calculators. Gould said the calculators were the easiest money Commodore ever made. Unfortunately for Gould, Texas Instruments, Commodore’s main supplier of chips, noticed the same thing. In 1973, TI started making its own calculators. Commodore couldn’t compete on price.
Commodore solved the problem by buying chips from MOS Technology. Eventually MOS’ fortunes fell to the point where Commodore could buy the whole company, allowing Commodore to duplicate TI’s vertical integration. Gould kicked in $3 million to help the purchase.
Commodore and computers
MOS also made the 6502 CPU, used in, among other things, the first Apple computer. This led to Commodore making computers as well, starting with the Commodore PET.
Commodore was an also-ran in the market until the VIC-20 and its hugely successful follow-on, the Commodore 64. Thanks to those two machines, Commodore went from selling thousands of computers a year to millions.
But once Commodore was successful, Gould wouldn’t issue stock to grow the company. Instead, Commodore relied on its profits and loans from Gould or other companies Gould controlled to run. Eventually this led to Tramiel leaving the company in 1984.
Gould replaced Tramiel with a revolving door of executives he poached from other companies, or knew from his other business interests. Only Mehdi Ali lasted more than 2-3 years. Commodore’s market share steadily dropped as the C-64 aged and Commodore failed to replicate its success.
Gould’s problem was that he chased the easy money, even when the conditions that created the easy money changed. Commodore duplicated TI’s business model, but then calculators became cheap commodities. And if the conditions existed in the late 1980s to replicate the 64’s success, Commodore no longer had the means.
Admittedly some of these problems were beyond Gould’s control. Getting into calculators wasn’t his idea. Neither was getting into computers. Commodore lost key engineers due to disagreements with managers other than Irving Gould. Their loss made it harder to follow up on the company’s successes.
Commodore’s market share declined steadily from 1984 to 1994. In 1993, its final full year, its market share was less than 5 percent. Commodore’s financial history tells the sad story in another way. Gould disappeared from the news after Commodore liquidated. He had other business interests, but none had Commodore’s high profile.
Irving Gould’s personal fortune
So what, exactly, did Gould do with the millions that he plundered from Commodore and didn’t pay taxes on? Tomczyk mentioned he collected art. Oriental art, in particular.
What kind of art? Miniature sculptures from Japan called Netsuke, for one. Netsuke were carved sculptures, produced from about 1615 to around 1868, that served as fasteners to attach a pouch or case to kimono sashes since traditional Japanese clothing lacked pockets.
Tomczyk’s clue leads to some rare insight into Gould. Or at least how he spent his time.
It turns out Gould’s collection of Netsuke Japanese miniatures, or 212 pieces from it at least, were exhibited from February 20, 1988 to October 23, 1988, at the Royal Ontario Museum in Toronto. And the museum published a catalog that remains available on the secondhand market. If you collect vintage computers and are looking for a piece of offbeat Commodore memorabilia, that book is hard to beat. There can’t be many people who’ve made that particular connection. And it seems appropriate to be able to see how Gould spent the money he made from controlling the company that sold millions of Commodore 64s. At the time, an unremarkable piece sold for $500, while pieces from noteworthy artists sold for thousands of dollars.
The earliest reference I could find to Gould’s Netsuke collection was in a book published in 1973, so it appears Gould long had some prominence among Netsuke collectors. Another news article from 1988 called Gould a “Canadian industrialist and business commuter to Japan for the past twenty years,” which implies he started collecting sometime in the 1960s.
Irving Gould died at Mount Sinai Hospital in Toronto in 2001. Some of Commodore’s creditors still had lawsuits pending against Gould’s estate years after his death.