Joseph P. Kennedy, Sr.
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Joseph "Joe" Patrick Kennedy, Sr. (September 6, 1888 – November 18, 1969) was a prominent United States businessman and political figure, the father of President John F. Kennedy and Senators Robert F. Kennedy and Ted Kennedy. As a leading Irish American Democrat, he was the patriarch of the Kennedy political family.
Background, education and marriage
Joseph was born in Boston, the son of Patrick J. Kennedy, a successful businessman and Irish Catholic community leader. Kennedy was born into a highly sectarian environment where Irish Catholics saw themselves as the victims of Yankee exclusion. Many were active in the Democratic Party, including Patrick and numerous relatives.Patrick Kennedy's home was a prosperous and comfortable one, thanks to his successful liquor business and an influential role in local politics. At the city's most prestigious public high school, Boston Latin School, Joe was a below average scholar but was popular among his classmates, winning election as class president and playing on the school baseball team.
Kennedy, like several older relatives, attended Harvard College where he focused on becoming a social leader, working energetically to gain admittance to the prestigious Hasty Pudding Club. While at Harvard he joined the Delta Upsilon Fraternity.
In 1914 he married Rose Fitzgerald, the daughter of John F. Fitzgerald, the Democratic mayor of Boston and probably the most recognized politician in the city.
Business career
Kennedy made a great deal of money as a stock market and commodity speculator and by investing in real estate and a wide range of industries. He never built a significant business from scratch, but his timing as both buyer and seller was usually excellent. Sometimes he made use of inside information in ways which would later become illegal, but regulations were lighter in his era. When Fortune magazine published its first list of the richest people in the United States in 1957 it placed him in the $200-400 million band, meaning that it estimated him to be between the ninth and sixteenth richest person in the United States at that time.Early ventures
After graduating from Harvard in 1912, he took his first job as state-employed bank examiner. In that role, he learned that a certain bank was trying to take over the smaller Columbia Trust Bank, in which his father was a minority shareholder. Borrowing $45,000 he bought control and at age 25, he became the youngest bank president in the country.Kennedy emerged as a highly successful entrepreneur with an eye for value. For example he turned a handsome profit from ownership of Old Colony Realty Associates, Inc., which bought distressed real estate.
During the World War he was supervisor of a major shipyard in Quincy, Massachusetts where he oversaw the production of transports and warships. The job brought him into contact with the Assistant Secretary of the Navy, Franklin Delano Roosevelt.
In 1919, he joined the prominent stock brokerage firm of Hayden, Stone & Co. where he became an expert in dealing in the unregulated stock market of the day, engaging in tactics that would later be labeled insider trading and market manipulation. In 1923 he set up his own investment company and became a multi-millionaire during the bull market of the 1920s.
David Kennedy, author of Freedom From Fear, describes the Wall Street of the Kennedy era:
- (It) was a strikingly information-starved environment. Many firms whose securities were publicly traded published no regular reports or issued reports whose data were so arbitrarily selected and capriciously audited as to be worse than useless. It was this circumstance that had conferred such awesome power on a handful of investment bankers like J.P. Morgan, because they commanded a virtual monopoly of the information necessary for making sound financial decisions. Especially in the secondary markets, where reliable information was all but impossible for the average investor to come by, opportunities abounded for insider manipulation and wildcat speculation.
The Crash
Kennedy formed alliances with several other Irish-Catholic money men, including Charles E. Mitchell, Michael J. Meehan and Bernard Smith. He helped establish the Libby-Owens-Ford stock pool, an arrangement in which Kennedy and colleagues created an artificial scarcity of Libby-Owens-Ford stock to drive up the value of their own holdings in the stock. Using inside information, and the public's lack of knowledge, a pool operator would bribe journalists to present that information in the most advantageous manner. The stocks would then change in price up or down depending on the position favoured by the pool.Kennedy got out of the market in 1928, the year before the Crash, locking in multi-million dollar profits. Indeed when the 1929 crash did come, he made money due to his short positions.
Liquor importing, movie production, property
During Prohibition, Kennedy's company Somerset Importers became the exclusive American agent for Gordon's Dry Gin and Dewar's Scotch. Anticipating the end of Prohibition he assembled a large inventory of stock that he sold for a profit of millions of dollars when Prohibition was repealed in 1933. He invested this money in residential and commercial real estate, the Merchandise Mart in Chicago and Hialeah Race Track in Hialeah, Florida.Kennedy made a huge amount from reorganizing and refinancing several Hollywood studios. Some speculated he enjoyed the industry because of the attractive women involved in it. Film production in the U.S. was a lot more decentralized than it is today, with many different movie studios producing film product. One small studio was FBO, the Film Booking Office of America, which specialized in Westerns produced cheaply. Its owner was in financial trouble and asked Kennedy to help find a new owner. Kennedy liked the business so much he formed his own group of investors to buy it for $1.5 million.
He then moved to Hollywood in March 1926 to focus on running the studio. Movie studios were then permitted to own exhibition companies and often found it necessary to get their films on the big screen. With that in mind, in a hostile buyout he acquired the Keith-Albee-Orpheum Theaters Corporation (KAO) which had more than seven hundred vaudeville and movie theaters across the United States . He later acquired another production studio Pathe Exchange, owned by the French giant, Pathé.
In October 1928, he formally merged his film companies FBO and KAO to form Radio-Keith-Orpheum (RKO) and made a large amount of money in the process. Then, keen to buy Pantages Theater chain which had sixty-three strong-performing theaters, Kennedy made an offer of $8 million. It was declined. Joe then stopped distributing his movies to Pantages. Still Alexander Pantages declined to sell. When Pantages was charged and tried with rape though, his reputation took a battering and he accepted Kennedy's revised offer of $3.5 million.
It is estimated that Kennedy made over $5 million from his investments in Hollywood. During his affair with film star Gloria Swanson he arranged the financing for her films The Love of Sunya (1927) and the ill-fated Queen Kelly (1928).
New Dealer
Joseph's first active involvement in a national political campaign occurred during Franklin D. Roosevelt's bid for the Presidency. He donated, loaned, and raised a substantial amount of money for FDR's presidential campaign. President Roosevelt rewarded him, with an appointment as the inaugural Chairman of the U.S. Securities and Exchange Commission (SEC). Kennedy had hoped for a Cabinet post, such as Treasury.Even Kennedy's critics acknowledged the reforming work he performed as SEC Chairman. His knowledge of the financial markets equipped him to identify areas requiring the attention of regulators, like a poacher turned gamekeeper. One of the crucial reforms was the requirement for companies to regularly file financial statements with the SEC which broke what some saw as an information monopoly maintained by the Morgan banking family. He resigned in 1935, after which Roosevelt then asked him to chair the Maritime Commission.
Relationship with Radio Priest Charles Coughlin
Charles Coughlin was an Irish American priest from Detroit, who became perhaps the most prominent Catholic spokesman on political and financial issues in the 1930s, with a radio audience that reached millions every week. However, due to disagreements with Roosevelt, Coughlin became a bitter opponent of the New Deal, and gradually shifted his direction to spread polemical anti semitic, anti-New Deal, anti-capitalistic radio talks.Roosevelt sent Kennedy and other prominent Irish Catholics to try to moderate Coughlin, but they failed. Leamer 93; Brinkley 127.. Coughlin shifted his support to Huey Long and then a third party in 1936. Kennedy strongly supported the New Deal and believed as early as 1933 that Coughlin was "becoming a very dangerous proposition" as an opponent of Roosevelt and "an out and out demagogue." Kennedy worked with Roosevelt, Bishop Francis Spellman and Eugenio Cardinal Pacelli (the future Pope Pius XII in a successful effort to get the Vatican to shut Coughlin down in 1936. Maier pp 103-107. Coughlin later returned to the air and in 1940 Kennedy battled against his influence among the Irish regarding isolationism.Smith pp 122, 171, 379, 502; Alan Brinkley, Voices of Protest (1984) p 127; Michael Kazin, The Populist persuasion (1995) pp 109, 123.During the Spanish Civil War Kennedy helped persuade Roosevelt to keep America out of the conflict, noting that the American Catholic community sympathized with the forces of Francisco Franco.
Ambassador to Britain
In 1938 Roosevelt appointed Kennedy as the United States Ambassador to the Court of St. James's (Britain). Kennedy's Irish and Catholic status did not bother the British; indeed he hugely enjoyed his leadership position in London society, which stood in stark contrast to his outsider status in Boston. His daughter Kathleen married the heir to the Duke of Devonshire, the head of one of England's grandest aristocratic families. Kennedy rejected the warnings of Winston Churchill that compromise with Nazi Germany was impossible; instead he supported Prime Minister Neville Chamberlain's policy of appeasement in order to stave off a second world war that would be a more horrible "armageddon" than the first.As Roosevelt shifted away from neutrality toward a more aggressive anti-German policy, Kennedy had to resign in November, 1940. Regardless, Kennedy was active in rallying Irish and Catholic Democrats to vote for Roosevelt's reelection.
Kennedy was a strong supporter of offering aid to Britain and testified before Congress in January, 1941 supporting the Roosevelt administration's Lend Lease proposal, and gave a well received radio address supporting the same legislation.
Joe Jr., newly appointed ambassador Joseph Kennedy, and future president John F. Kennedy in 1937, on their way to Great Britain ([Larger Version])