by David Nasaw
The very next day, Kennedy and Rose took the train north to Washington. They spent the afternoon at the racetrack with Jimmy and Betsey and the evening, as part of the president’s party, at the Gridiron dinner at the Willard Hotel. Upon his return to the White House at midnight, Kennedy was summoned by the president to meet with him, Jimmy, and Louis Howe in his private study, where for more than three hours they talked politics, pending legislation, and tax policy.
At 11:15 the following morning, the two men met again, this time by themselves in the president’s bedroom, where the president, suffering from a bad cold, was resting. “He told me,” Kennedy noted in the notes he made afterward, “he thought the time had come when I should come to Washington. I told him I was perfectly happy and willing to come to Washington to be of service to him, but reiterated . . . that my only interest was my personal affection for him, and that I was not interested in taking a position for any other reason. I said I had been rather annoyed at the coolness that had sprung up between us, and for which I blamed Louis Howe. He passingly referred to my connection with Wall Street.” Knowing that his reputation as a Wall Street manipulator was the major obstacle standing in the way of a possible appointment, Kennedy had come prepared with a detailed statement that he now presented to the president, “showing that the bulk of all my money had been made by business acumen rather than Wall Street operation.” Roosevelt didn’t want to look at it. He was not, he made clear, interested in rehashing the past. “He wanted me to forget all that and urged me to come to Washington. He suggested that it might be a very great idea to have me come down as charge of the Securities Commission, which bill was before Congress at that time. He made me no direct offer, and I made him no promise of acceptance.”3
The president asked Kennedy and Rose to have lunch at the White House before they took the train to New York. To demonstrate the high esteem in which he held the man he had ignored since the election, the only other guests Roosevelt invited to that lunch were Secretary of State Cordell Hull and his wife.
Kennedy felt as if he had been run over by a bulldozer, which he had. In his letter to Joe Jr. in London, he reported that during the course of their conversations, Roosevelt had mentioned several possible government positions in addition to the Securities Commission, including “going to South America as the head of the Commission to regulate tariffs for South America, where he feels the great bulk of the prospects for foreign trade lies. I told him that I did not think [that was] the kind of work I was particularly interested in; in fact, I told him that I did not desire a position with the Government unless it really meant some prestige to my family. I felt my responsibilities with my large family were so great that I would be obliged to remain out of the Government’s activities.” The president was unwilling to take no for an answer. “He said that he thought I had an obligation to do something, and then suggested that I go to Ireland as Minister. He thought it would be a very nice thing for me to go back as Minister to a country from which my grandfather had come as an immigrant. But Mother and I talked it over, and we decided that this wasn’t of any particular interest, and I told him so. Now he has in mind another position in Washington which he hasn’t made clear to me as yet.”4
From Washington, Kennedy traveled north to Bronxville, where he waited for Roosevelt to call and recuperated from a broken leg and smashed right ankle he had suffered while horseback riding. “By a strange coincidence,” he wrote Louis Ruppel, one of the journalists he had befriended on the Roosevelt campaign train, “the horse’s name was ‘Louis,’ named after you I hope, not after the President’s secretary, Mr. Howe. But then, after all, I have been thrown pretty consistently by Louises this year. I will recover, however, and press on to greater efforts. [Eddie] Moore suggests that I ride one of those horses that they put in swimming pools, and when I fall off, I can only get wet.”5
He was able to joke about Howe—who he believed had kept him out of the administration—only because he was convinced that a call to Washington was imminent. Roosevelt recognized the political pitfalls of inviting a former Wall Street plunger to regulate the other plungers, but he was ready to move forward with the appointment. As Harold Ickes, who opposed the nomination, confided to his diary, “The President has great confidence in him because he has made his pile . . . and knows all the tricks of the trade. Apparently he is going on the assumption that Kennedy would now like to make a name for himself for the sake of his family, but I have never known many of these cases to work out as expected.”6
On May 11, 1934, while the securities exchange bill was still being debated in Congress, Tommy Corcoran—the charming, slick, accordion-playing, brilliant, and solitary Irish member of the Frankfurter team who, with stolid, hardworking, and frighteningly intelligent Ben Cohen, had drafted the bill—wrote Felix Frankfurter in London that the “ticket for the Stock Exchange Commission on which the Skipper had secretly smiled [includes] your friend, Joe K. in Boston—Democrat. The last is particularly ‘deep well,’ comes straight from the Skipper through Ray [Moley].”7
If Roosevelt had had any doubts about Kennedy’s competence, they had been dispelled by Raymond Moley, whom he had brought back to Washington to lead the drive for the new legislation. Moley had submitted to the president eight names for the five slots on the commission. First on his list was Kennedy: “the best bet for Chairman because of executive ability, knowledge of habits and customs of business to be regulated and ability to moderate different points of view on Commission.”8
In late June, Jimmy Roosevelt telephoned Kennedy in Hyannis Port to say that the president wanted to meet with him at the White House on Thursday, June 28. Kennedy had by now made up his mind that he would accept the appointment as chair, but would not serve as one of the four other commissioners. Ferdinand Pecora, counsel to the Senate Committee on Banking and Currency, had indicated that he too wanted to chair the SEC, and there had been a groundswell of left New Deal support for him. “I can well remember Joe saying goodbye in the morning on his way to Washington,” Rose recalled later, “and his last words were, ‘I shall probably be back tonight, for I shall not stay unless I get the chairmanship.’”9
As word leaked out that Kennedy was the leading candidate for chairman, public and private opposition mounted, led by Roy Howard of the Scripps Howard newspapers, who visited the president in the White House and then followed up with an editorial in the Washington News declaring that Roosevelt’s appointment of Kennedy to the SEC chairmanship would register as “a slap in the face to his most loyal effective supporters.” In the face of such opposition, Kennedy was advised by friends and supporters, including Swope and Moley, to accept an appointment as commissioner if, as now appeared likely, Roosevelt decided he could not name him chairman. Only William Randolph Hearst, to whom Kennedy placed a long-distance call to his castle in Wales, agreed that he deserved the chairmanship and should accept nothing less.10
On June 28, Kennedy was driven to the White House for his five o’clock meeting. Roosevelt was at his sadistically charming best. He had decided to offer Kennedy the chairmanship and knew how eager Kennedy was to accept, but instead of getting down to business, he delayed endlessly in speaking his mind. First he invited Kennedy to sit silently in the Oval Office while he made small talk, signed bills, and conferred with various staff members. “At six o’clock, having said nothing to me about the matter he had called me down for, he invited me to have a swim with him in the pool and stay for dinner.” At dinner with Moley, Bernard Baruch, who was staying at the White House, Mrs. Roosevelt, and several others, the president continued to toy with Kennedy. There was more small talk and political gossip, but no mention of the SEC. “At the close of the dinner, Mrs. Roosevelt upon rising, said to the President, ‘Franklin, when are you going to talk to Joe?’ And he said, ‘About two o’clock tomorrow morning.’” The president then rose, leaving Kennedy to chat with Baruch and Moley. Moley was summoned first, and then, about fifteen m
inutes later, Kennedy and Baruch were asked to join him and Roosevelt upstairs.
Roosevelt played with Kennedy, telling him that he had put him first on the SEC list he had made up two weeks earlier, but not saying whether he had changed his mind since then. “He talked on for about fifteen or twenty minutes without indicating [whether] he intended to make me the Chairman,” Kennedy wrote in his notes of the meeting. “He finally said in a jocular manner, ‘I think you can be a great liberal on that, and I think you would do a great job running it.’” Kennedy asked if the president might want to reconsider, given the opposition to his appointment. “I told him that I had been involved in Wall Street, and, over a business career of twenty-five years, had done plenty of things that people could find fault with.”
“At this point,” Moley would recall in his memoirs, “knowing what was in F.D.R.’s mind as well as if he had put it in writing for me, I said ‘Joe, I know darned well you want this job. But if anything in your career in business could injure the President, this is the time to spill it. Let’s forget the general criticism that you’ve made money on Wall Street.’ Kennedy reacted precisely as I thought he would. With a burst of profanity he defied anyone to question his devotion to the public interest or to point to a single shady act in his whole life. The President did not need to worry about that, he said. What was more, he would give his critics—and here again the profanity flowed freely—an administration of the SEC that would be a credit to the country, the President, himself and his family—clear down to the ninth child.”11
The initial reaction to Kennedy’s appointment was hostile, as predicted, then grew worse after July 15, when the first chapters of the report of the Senate Committee on Banking and Currency investigations of Wall Street fraud were published and named Kennedy as a participant in the highly questionable, if not fraudulent, Libbey-Owens-Ford stock pool. New Dealers were outraged that their president had chosen a Wall Street denizen to regulate Wall Street. “Had Franklin D. Roosevelt’s dearest enemy accused him of an intention of making so grotesque an appointment as Joseph P. Kennedy,” the New Republic editorialized on July 11, 1934, “the charge might have been laid to malice. Yet the President has exceeded the expectations of his most ardent ill wishers.”12
While New Dealers were distressed by the appointment, conservatives within and outside the Roosevelt camp were delighted. “He is all right,” journalist Mark Sullivan, one of the most influential and outspoken of the New Deal opponents, wrote Swope on August 1, 1934, after an interview with Kennedy. “He is an unusual combination of Irish temperament to an extreme degree, with an exactness of mind and a head of figures which the Irish don’t always have. . . . He can tell a long story carrying dramatic development hand in hand with logical development. I think he could have been a showman had he started out that way, but I suspect all that characteristic of him has been rather submerged by the traits of mind he developed in business. When he is tired he has a priest-like look that often comes to Irishmen of the intellectual type. That he will make friends goes without saying.” What was most encouraging to Sullivan, who had publicly excoriated members of Roosevelt’s brain trust for trying to turn America into Russia, was that Kennedy was a true conservative. “In the past the radicals have had it almost all their own way due largely to their greater energy and earnestness. . . . From now on, I imagine, Kennedy can be depended on as the conservative influence that will press on Roosevelt all the time. If Kennedy presses harder than the radicals, then Roosevelt will take the country reasonably to the right. . . . Kennedy is at once fighter enough and Irish enough and flexible and resourceful enough, to lick the radicals although the radicals may outclass him a little in steady persistence.”13
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Kennedy’s meeting with Sullivan had been part of the carefully orchestrated media campaign conducted by his friends Bernard Baruch and Herbert Swope, who also arranged a long, one-on-one interview for him with Arthur Krock, the Washington bureau chief and columnist for the New York Times. This was the start of the Krock-Kennedy alliance, one of the stranger partnerships in the history of American politics and journalism. Arthur Krock, a stately, somewhat pompous man of medium height and nondescript, certainly not handsome, features, had been born in Kentucky of a not particularly prosperous Jewish father and half-Jewish mother. He had spent a year at Princeton, then dropped out and gone to work for the Louisville Herald. He eventually moved to the New York World, where he wrote editorials until Walter Lippmann, the editorial page editor, already upset with him for blatantly boosting Bernard Baruch, accused him of disclosing information about a future editorial to brokers from Dillon, Read, where he moonlighted.14
Krock left the World for the New York Times in 1927. In January 1932, he was named Washington bureau chief and the following year was given an opinion column. The Washington bureau was his fiefdom; the reporters who worked there did as he told them. In his column as well, he had complete autonomy. By 1934, Arthur Krock was one of the most powerful men in Washington. A born and bred southern conservative, he opposed big government, big spending, northern liberals, Franklin Roosevelt, and many, if not most, of the New Deal programs that he slyly but not subtly critiqued in his columns.
He had met Kennedy on the campaign trail in 1932 and been readily “impressed with the fact that for vigor, intelligence, forcefulness, political sagacity, and charm, this tall, red-haired, red-faced, boy-eyed man was outstanding in the circle dedicated” to electing Roosevelt president. Still, he did not, in his words, “become really acquainted with him” until 1934, when Kennedy accepted the appointment as chair of the SEC. Within a year, Krock was “an intimate of the family.” For the next quarter century, while working as Washington bureau chief and as columnist, would serve as Kennedy’s unofficial, clandestine press agent, speechwriter, political adviser, informant, and all-purpose consultant. Whenever Kennedy had something to say, Krock helped him say it and gave him space in his column or in those of the reporters in his bureau.
In his memoirs, Krock insisted that Kennedy “was as scrupulous as I in excluding material considerations from this relationship,” but as we shall see, this may not have always been the case. In Kennedy’s letters, there are offers to pay Krock generous weekly salaries for his editorial assistance, but no letters from Krock refusing such salaries. On the whole, the correspondence reveals something quite disturbing, if not corrupt, about Krock’s willingness to do Kennedy’s bidding, to advise him or write a speech for him, then praise it in his column, to take money for ghostwriting Kennedy’s I’m for Roosevelt campaign book in 1936, to assist Jack in turning his college thesis into a book, Why England Slept, to allow Kennedy to pay for vacations in Palm Beach and travel to London, all without any acknowledgment to his superiors at the Times or his readers.15
The first fruits of the Krock-Kennedy relationship or partnership were a pair of New York Times articles, by Krock and by S. J. Woolf, who published an extended profile on August 12, 1934.
“His manner is buoyant, his spirit exuberant and his clear blue eyes are merry,” Woolf reported. “As he discussed the future of the country’s financial activities he interrupted his remarks with tales of his nine children. It is evident that he regards them as the best dividends he had ever received. One senses that he is solicitous of the future for their sakes; that the improvements for which he is striving are improvements which they will enjoy.”
Kennedy pleasantly surprised Woolf, as he did Washington’s other reporters, by answering “good-naturedly questions about his former activities—questions which might never have been asked had he been less free and candid in his manner.” He claimed that he had “operated in stocks, but . . . with his own money.” This was not quite true. Much of the money he invested was borrowed, in the early days largely from his own East Boston bank. Kennedy insisted as well that he had never been in a “bear pool.” This too was untrue. He had taken part in almost every kind of investment scheme on Wall S
treet over the past two decades. As Kennedy proudly admitted at the end of his SEC tenure, “The President had appointed me as chairman of the SEC because he knew that I knew all the angles of trading, that I had studied pools and participated in them and was aware of all the intricacies and trickeries of market manipulation. . . . I had engaged in many a furious financial fight and knew the formulas—when to duck and when to hit.”16
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After being sworn in, Kennedy took a week off to get his affairs in order. He flew to Hyannis Port to kiss the children and Rose good-bye, then, in late July, returned to Washington with Eddie Moore, who would function as his personal secretary and chief of staff and whose salary he paid out of his own pocket.
Every step he took was now covered by reporters, columnists, and magazine writers who took great delight in reporting the comings and goings of the newest sensation on the Washington scene, a man who was not only highly accessible and quotable, but photogenic and the father of nine gorgeous children. He leased Marwood, the faux French Renaissance “near-palace,” as the papers described it, which had been built by Chicago millionaire Samuel Klump Martin III for his wife, Mary Jane, who among other achievements had danced in Eddie Cantor’s Whoopee! When Martin died, his widow sold Marwood to the Pulitzer family, who rented it to Kennedy. Everything about the mansion overlooking the Potomac was extraordinary. The “near-palace” was approached through “an arched gatehouse, which guards a mile-long roadway lined with trees.” There was a pool, where Kennedy would swim naked every morning, and several bathhouses. Inside the mansion was an “enormous hotel-like living room. . . . The dining room is the kind in which sat King James I of England. A large library, dressing rooms, lavatories, and a sound-proof office completes the ground-floor symphony.” Upstairs were fourteen master bedrooms and fourteen baths, each with gold fixtures, which delighted Rose. In the cellar was the game room. Below it, in the subcellar, was a “motion-picture theatre with lounges for 100 guests.”17