Bernard Baruch

by James Grant

  The outcome was assumed to be foregone—10–2, with the Soviet Union and Poland opposed and the United States and its allies in favor. Just before the polling, however, Sir Alexander Gadogan called Baruch aside and told him that His Majesty’s government would be unable to support the United States. Baruch threatened him with a public tongue-lashing if that should happen, and for one reason or another it didn’t. On the surface Baruch remained the epitome of the composed if ulcerous diplomat. He walked into the United Nations Council chamber with a bottle of milk under his arm and some saltines in his hand. He spotted Gromyko.

  “Here’s the atomic bomb I promised you,” he said, pointing to the bottle.

  “What, milk?” said the Russian.

  “Yes. I expect it will be a long meeting, and I need my milk.” In the event Russia and Poland abstained, and the vote was 10–0. (Not that it made much difference. The Soviet Union exploded its first atomic bomb in September 1949.) On January 4, 1947, Baruch resigned his commission. A week later he declared, again prematurely, that his public career was over.

  In the spring of 1942 on the floor of the Senate, Bennett Clark of Missouri, citing the record of the War Industries Board under Baruch and reviewing some of his apposite if unheeded advice in the Second World War, rhetorically put up his name in nomination for the Congressional Medal of Honor. By the close of 1947 that award, the nation’s highest (and one for which Baruch as a noncombatant was technically ineligible), was among the few that had not been given to him. In the year that followed his A-bomb work he was honored, cited, awarded, or invested by the following entities (among others): South Carolina, the City of New York, the American rubber industry, Jewish Educational Commission Fraternal League, National American Boy Scout Council, Tau Epsilon Rho (the national legal fraternity), US Jewish War Veterans, American Legion of New York County, National Conference of Christians and Jews, College of the City of New York, Columbia University, Princeton University, Rutgers University, and Yeshiva University. The New York Times subtly conferred its own high praise on Baruch on May 27 by choosing to run the following item, in toto, on page 3:

  BARUCH HAS ANKLE INJURY

  Bernard M. Baruch turned his ankle yesterday and has been ordered by his physician to “keep off it for a few days.” Reached by telephone at his home, the 77-year-old financier and adviser to Presidents declared, however, that he was not bedridden and said, “There’s nothing wrong with me.”

  In June a bust of Baruch was presented to the National War College. George Marshall, then Secretary of State, had heard that some such project was in the wind (Swope had been working on it since at least 1940, even before there was a National War College) and had tried to defeat it. As he had pointed out to Acheson, his Under Secretary, the only other sculptures on the college premises were those of Caesar, Alexander, and Napoleon.

  One day Marshall handed Acheson a card.

  “Read it,” he said.

  It was an invitation to attend the presentation of the Baruch bust at the National War College.

  Acheson dryly remarked that his boss certainly knew how to “handle” Baruch.

  “Yes,” said Marshall, “and to top it off it seems I am going to make a speech at the unveiling.”

  Ironically, it was at the height of his public adulation that Baruch reached the nadir of his White House influence. Truman had exasperatedly explained his private position toward Baruch in response to a suggestion in 1947 that he consulted him on a foreign-policy question: “I’m just not going to do it. I’m not going to spend hours and hours on that old goat, come what may. If you take his advice, then you have him on your hands for hours and hours, and it is his policy. I’m just not going to do it.” More or less cordial relations were maintained on both sides until the summer of 1948. Then, on Baruch’s seventy-eighth birthday, August 19, Truman asked for a favor. In that election season, Baruch’s name had been proposed for a place on the Democratic Party’s finance committee. It was exactly the kind of thing that Baruch usually didn’t do, as Truman undoubtedly knew, but Thomas E. Dewey was running strong, and Truman needed help. The President asked Baruch to serve.

  A week later Baruch replied pleasantly that he had never before served on any party committee, nor, for that matter, had he ever made a political statement, and that his friends, including President Roosevelt, had agreed with him that his policy was the best one. He mistakenly closed by asking a favor of Truman. He said that he hoped the President would feel obliged to send nobody to the coronation ceremony of Princess Juliana of the Netherlands except the US Ambassador to the Netherlands, who happened to be his brother Herman.

  Herman had made a successful career in his older brother’s shadow, starting with medicine, then Wall Street, then various diplomatic posts, including ambassadorships to Portugal and Holland. He was a humorless septuagenarian who wore precise nose pincers and a white Vandyke. He stood in awe of his brother’s poise and self-control, with which he unhappily contrasted his own anxieties. In 1945 he and Truman had chatted for a few minutes, Herman leaving a vivid but unfavorable impression. The President described him in his diary: “Flatterer. Wants to be ambassador to France. Conniver like his Brother.”

  Baruch’s reply to Truman set in motion an unintended chain of events. The first of these was a rocket to Baruch from Truman, who might have suffered either the refusal or the request for a favor, but not both at once. The President wrote on August 31: “I read your letter of the twenty-seventh with much disappointment. A great many honors have been passed your way, both to you and to your family, and it seems that when the going is rough it is a one-way street. I am sorry that this is so.” There was a postscript: “I’ve appointed Mrs. William G. McAdoo and Mr. Thomas J. Watson to be Special Representatives at the coronation of Princess Juliana, along with the Ambassador to the Netherlands.”

  The dispute smoldered privately until Westbook Pegler disclosed its existence in his syndicated column. The columnist was convalescing in a hospital bed in Brookline, Massachusetts, at the end of October when Joseph P. Kennedy visited and told him of the epistolary row. As Kennedy stood by his bed, Pegler called Baruch in South Carolina to get his version of the story. Baruch came to the phone and roughly confirmed what Kennedy had said. As the call proceeded and Baruch grew madder and more intemperate, Kennedy, listening in at Pegler’s end, was seized with laughter. Baruch spoke straight from the heart, charging that Truman was a “rude, uncouth, and ignorant man.” Just those words appeared in Pegler’s column on the eve of the election. Reminding his readers that Baruch was the “number one layman” of the American Jewish community, Pegler claimed that “his language was the strongest that has been directed against any occupant of the White House by any man of comparable prominence and leadership in modern times.”

  Nothing like this had happened to Baruch before. Jesse Jones had accused him of ingratitude to the party in 1924, but there had been no public airing of charges then. In 1941, when he challenged Roosevelt’s defense program by faintly praising the Supply, Priorities, and Allocation Board as a “faltering step forward,” White House aides were astonished at his candor. His lifelong policy on quotation was to keep partisan, scurrilous, and combative matter off the record. He would no more have calculatedly abused a President of the United States to a newspaperman for quotation than a deacon would have uttered a public blasphemy.

  According to Baruch, Pegler broke his word by quoting him. This Pegler denied. The accuracy of the “rude, uncouth, and ignorant” remark was never denied, however, and Pegler continued to use it, sometimes in ironical praise of Baruch’s outspokenness. Krock took the columnist’s side in the argument. “The incident reflects one of his worst faults,” he wrote Pegler concerning Baruch, “a needless fault as well because he should neither fear a President nor strive so desperately to be ‘in’ at the White House. It should be the other way around.” Despite an attempted reconciliation between them at the home of General Marshall in 1951, the breach between Baruch and Trum
an was never closed. In 1952, Baruch endorsed the Republican presidential candidacy of Dwight D. Eisenhower.

  Swope, who thought Baruch ought to do less conciliating and more punching, tried to foment a public-policy debate with Truman after the President’s victory in the 1948 election:

  Let us find a subject in which there is a real margin of disagreement—in which your views are opposed to HST, then publicly disagree [urged Swope]. Let us, first, assure ourselves that we’ve got certain Senatorial and journalistic support. Do you see what I mean? I am getting tired of the manner in which a childish egotism pervades certain sections of Washington. It may be time to demonstrate that your long devotion to the true Public Interest has brought with it a public confidence and a faith, not to be ignored. This course might be helpful, too, in showing the public that you still have the right of individual assessment and independence of judgment.

  When Communist troops swarmed across the 38th parallel into South Korea on Sunday, June 25, 1950, Baruch was propelled into just the kind of controversy that Swope had wanted to invent. The Truman Administration, expecting to fight a limited war, sought correspondingly limited controls on the home front. Baruch rejected that counsel as timid. In July 1950, less than a month before his eightieth birthday, he provided the Senate Banking and Currency Committee with his usual emergency prescription: controls on wages, prices, and profits; rationing; a tax boost double the size of the Administration’s suggestion.

  Swope needn’t have worried about Baruch’s standing in the nation. Following his testimony there was a giant outpouring of pro-controls sentiment from people who thought that prices were running away. (As they were; in the second half of 1950 the wholesale price index climbed at the annual rate of 22 percent.) With the memory of World War II rationing and money printing still fresh, businessmen and consumers bought things preemptively. As they bought, prices naturally rose, with the result that people demanded the very policies that had inspired the fear that had caused them to bid up the prices in the first place. Thanks in good measure to Baruch’s testimony, the Defense Production Act of 1950 contained what the Administration hadn’t asked for and said it specifically didn’t need, namely, the authority to control wages and prices. Senator Harry Byrd of Virginia paid prompt tribute to the witness: “You performed a miracle in arousing the country in 24 hours to the need for controls.”

  Albert D. Lasker, a Chicago advertising executive who was Baruch’s financial peer but his public-relations inferior, marveled at what he had wrought, and commended it as an object lesson in keeping one’s name in the papers. (Once Pegler, observing that Baruch had “scored” in papers all over the country by speaking up for hard work, drew an invidious comparison between the two rich man: “For every paragraph that Albert Lasker gets, BMB gets a page.”) Said Lasker to David Lilienthal, who was then leaving public life: “Look at Baruch, our mutual friend. With no actual power or responsibility in his hands, he has just changed a whole Congress—one man.”

  More and more, Baruch was achieving his archimedean publicity feats without Swope, or with a brooding and unhappy Swope. In June 1947, the month of the installation of Baruch’s bust in the National War College, the former editor wrote himself a series of memos on the state of his relations with Baruch. The first was dated June 3: “In March I begged him to duck further publicity. I said he had had too much. Then came comments from General Gruenther [Major General Alfred M. Gruenther, deputy commandant of the War College] and others. What affects me is that I am blamed for it when it’s he who wants blood. He even leaks to B. Rose, who plants the stuff for him.” Billy Rose, the former WIB stenographer turned showman, was too close to Baruch for the taste of Swope. Baruch had an image to maintain, and Rose, whom a member of the underworld once described as “halfway honest,” was jarringly inconsistent with it. Again, on June 10, Swope reflected that he (Swope) was “. . . generally regarded as being B’s shadow. . . .” And on June 18, five days after the War College ceremony, there was this: “He gave me no special thanks for the bust presentation, which he wanted very much, nor the speech I wrote for him and which I had to force down his throat. [Mary] Boyle and BMB Jr. both opposed the speech—as usual.”

  A complicating feature in the Baruch-Swope association was money. Swope’s continuing indebtedness to Baruch marred what was otherwise a partnership of equals. Having helped to make Baruch a living legend, Swope was one of the few men who could treat him like an ordinary mortal, interrupting him or shouting him down as the mood struck. Once, catching a glimpse of him in a tattered dressing gown, he shouted pungently, “You son of a bitch, can’t you afford a better one?” Baruch could afford it, but chose not to buy (for years he wore a topcoat without its full complement of buttons). Swope, on the other hand, bought a lot of things that he couldn’t afford. As debtors and creditors so often do, Swope and Baruch came to resent each other. It irked Baruch that Swope spent as much as he ever had in the face of reduced income, and it seemed to Swope that a greater man than Baruch might have forgiven him his debts for the sake of love and loyal service. In the spring of 1948, having missed a deadline for the payment of $5,000, Swope wrote Baruch emotionally about their career together:

  It has been an association of affection; of ambition; of service; and of effectiveness. I found my own desire to be helpful answered by what we were able to do together. I was happy in your successes; happier still to be assured by you that I had made contributions to them.

  As one grows older, life has few compensations to give. One of the greatest is faith—and friendship. Affection is a major element, and in that pride is always present, aroused by the records of your friends, in whom the bitter; the unpleasant; the disparaging are not to be found.

  Life will be less worthwhile if our relationship is to be disturbed. Between us, whatever either does should be—and has been—right. You can do no wrong in my eyes. In this I am merely restating what you have always said:—“You seen him! He drew a knife on me, didn’t he?”

  You have my love and respect.

  E. J. Kahn Jr. wrote that Swope “thrived on contention. He needed no flaming issue to goad him into action; argument gratia argument sufficed.” In the early 1950s Swope was still contending with his own feelings toward Baruch. To a good part of the world the two men seemed inseparable (at a sports broadcasters’ dinner in 1953 Swope was mistakenly addressed by four people as “Mr. Baruch”), but the truth was that they’d been going their own ways for years. Not wanting to be in Baruch’s shadow, yet at the same time wanting to be nowhere else, Swope conceived and nurtured anxieties. He worried about the invitations to his home at Sands Point that Baruch had declined, and he resented Rose. He remembered that when Helen Millar, his secretary, was dying, there had been no flowers from Baruch, and that there had been no gift for Maggie and himself on their fortieth wedding anniversary, although Baruch had hinted at something “substantial.” So much did Swope need money that in 1954 he stooped to lend his name, for a price, to harness racing (a drastic step indeed for a former New York State Racing Commissioner). But at the end of that year, it was Baruch who wrote emotionally to Swope: “I have sensed for a long time our drifting apart, but there is nothing either in my heart or mind that should cause that. Sometime[s] people say things to me, as I am sure they say things to you, for the purpose of raising some doubts, but I soon shut them up for there are no doubts in my mind about you, except on one point and that is that you never use, or nobody has ever seen you use, an ability that you have of sensing and expressing public reactions.” Baruch said that he had instructed Miss Boyle to write off Swope’s debt at the rate of $3,000 a year and to expunge it altogether if he happened to outlive Baruch (he didn’t). “I do not want to leave any evidence in my will that you had ever been in my debt. I thought I ought to tell you that for I know at that time it was troubling you.”

  Even in his intimate personal communications, Baruch was liable to go off on some public-policy tangent (to Swope, between professions of friendsh
ip and the forgiveness of his debts, he had briefly digressed on the unhealthy growth of spending by city and state government in New York). As usual it was no easy thing to predict where Baruch would wind up on issues of the day. As he endorsed federal health insurance, conscription, peacetime wage-price controls, and a national priorities board (his High Court of Commerce modernized), he issued stinging denunciations of socialism and of the oppression of the individual by the state. Swope in 1946 had used the phrase “cold war” to describe the diplomatic twilight that had fallen over the world, and Baruch believed that so long as the Soviet threat persisted there was nothing to do but put the nation’s affairs on a quasi-war footing. He criticized the Eisenhower Administration for letting the price-control law lapse in 1953, and he was regularly on the telephone with free-market newspaper editors, seeking converts. On August 16, 1955, three days before his eighty-fifth birthday,[60] he conferred his public blessing on the House Un-American Activities Committee by dropping in, unannounced, to a hearing it was conducting at the Federal Court House in Foley Square. Francis E. Walter, Democrat of Pennsylvania, was questioning a folk singer about Communist penetration of the theater when Baruch arrived at the back door of the hearing room. Ushered to a seat behind the court reporter, he directed his hearing aid alternately to the inquisitor and his witness. At a recess, he rebuked unfriendly Fifth-Amendment-pleading witnesses with the remark, “Any person who hasn’t anything to fear can answer anything. In this great country of ours the only thing to fear is guilt.” On his way out the door he shook hands with Walter, the chairman, and complimented him on a job well done.

  To some people the jump of the stock market in 1954 and 1955 was no less alarming than the threat of the nation’s enemies, and Baruch had been called upon for his expert financial judgment by the Senate Banking and Currency Committee a few months before he stopped in to see Walter. In March 1955, when he took his place before the senators (saying that he’d testified before no committee of Congress more frequently than he had theirs), the Dow Jones Industrial Average stood at 415, up 38 percent from the same time a year before, a rate of rise that had prompted some worried analogies of the mid-1950s with the late 1920s. Accompanied by Samuel Lubell, who was along to make sure that he got the questions, Baruch began by saying that nobody could predict the stock market and that he wouldn’t try. He sketched some of the bull market’s features, including the growing role of financial institutions in it, and he veered off to national economic policies, urging a strong Army and Navy and taxes sufficient to balance the budget. He defended the right of Walter Winchell to tip stocks over the radio and adjured the lawmakers against trying to “legislate against human folly or against the adventurous spirit that helped to make America great.” Later on in the hearing, J. William Fulbright of Arkansas, the committee chairman, tried to get Baruch to say something positive about John Kenneth Galbraith, who had testified earlier. This Baruch declined to do, explaining that he hadn’t read the gentleman’s books and that he didn’t pay much attention to economists. “I think economists as a rule—and it is not personal to him—take for granted they know a lot of things,” said Baruch. “If they really knew so much, they would have all the money and we would have none.”