by David Nasaw
Anxious as he was to return to the capital, he did not want to appear too needy a suitor. He made clear to Byrnes and others that he had turned down some “very profitable” assignments to return to government service, because he could not say no to the president. “I should love to tell you the story how I got into this mess, and you and Anna [Roosevelt] would have plenty of laughs,” he wrote John Boettiger, FDR’s son-in-law, who with Kennedy’s help had been appointed publisher of Hearst’s Seattle Post-Intelligencer. “I give up my business, give up my leisure to take up the most unworkable bill I ever read in my life, but you know that man’s winning ways. It is pretty good when you can give up a perfectly good reputation and throw it in the ash can when you can be of service, but you know, if you are going through with a guy you must go all the way through. Arthur Krock just telephoned me and he does not think my luck will hold and I probably will be confirmed, although there is still a great doubt.”2
His friends in the press treated his return as if he were Agricola leaving his farm for battle. Krock, who may or may not have remained on the payroll after completing work on I’m for Roosevelt, led the cheerleading. In his columns of March 10 and 17, he identified Kennedy “as one of the outstanding figures in American life” and one of the president’s “few ‘miracle-men.’” Time magazine went even further by noting in its March 22 issue that after asking others to chair the commission, “the President turned to his most effective and trusted extra-Cabinet friend, red-headed Joe Kennedy. Every night for two weeks a White House limousine met Joe Kennedy as he landed from Manhattan at the Washington Airport, whisked him off to be cajoled by that persuasive pleader, Franklin Roosevelt.”
While the press response to the nomination was near unanimous in its praise, there remained one serious obstacle to confirmation. The legislation that had established the Maritime Commission, though muddled on several particulars, was preemptively clear that only individuals who in the past three years had had no connection to or financial interest in any shipping company could serve as members. Kennedy had held on to the large position in Todd Shipbuilding, Inc., that he had purchased while at Hayden, Stone; he promised that if he was confirmed, he would sell it within sixty days. The solicitor general declared that possession of the stock did not render Kennedy ineligible for appointment. Several congressmen disagreed. To remove any doubts about Kennedy’s eligibility, Senate Majority Leader Joe Robinson of Arkansas introduced a joint resolution certifying that Joseph P. Kennedy “shall not be deemed to be in violation” of the Merchant Marine Act (of 1936). The resolution was passed and signed into law on March 30. Kennedy was confirmed and took office two weeks later.
During the month he awaited confirmation, Kennedy redoubled his efforts to reorganize the Hearst empire. With John Burns, former counsel at the SEC, and accountant Arthur B. Poole, who had worked with him at Pathé, he oversaw the preparation of the registration statements the SEC required for the approval of new bond issues. On March 29, Kennedy sent Hearst a four-page, single-spaced letter outlining his work to date. He recommended that Hearst formulate a long-range plan for the “future management of the financial affairs of your properties” and hire Arthur Poole as a vice president at $20,000 a year to execute it. Much hinged on the development of this plan—including, Kennedy added bluntly, “my own whole-hearted efforts to make important contribution to the financial management of your properties.”3
All through the spring of 1937 and into the summer, before and after he took office as chair of the Maritime Commission, Kennedy worked on the Hearst reorganization. Having submitted and gained approval for the registration statements, he and Poole tried to find an underwriter for the Hearst bond issue. While the bankers they talked to, including Elisha Walker, Harry Stuart of Halsey, Stuart, and top executives at Lehman Brothers and Lazard Freres, indicated interest in joining a consortium, not one of them was ready to take the lead. Ironically, as the Nation magazine pointed out on June 19, 1937, in an article titled “Will the SEC Wreck Hearst?” the rules that Kennedy had instituted had compelled the Hearst corporations to disclose information that frightened off potential investors. In the pre-SEC days, Hearst would have been able to float his issue without having to reveal the declining value of his assets, his indebtedness, or the fact that a considerable proportion of the money raised would be going to pay off debts he had personally guaranteed. But those days were gone now, a victim of the “blue sky” regulations that Kennedy had promulgated.
In late June, with the bond issue still without underwriters or subscribers and Hearst in desperate need of cash to stave off bankruptcy, Kennedy, as an act of friendship and because it was a solid investment, offered to buy one or both of Hearst’s Boston newspapers for cash. He also renewed his offer to take over the financial management of the organization. Hearst thanked Kennedy “for the excellent and valuable advice you have given me so freely and so helpfully” and promised that he would give his proposals “the most thoughtful consideration.”4
Kennedy never heard back from him.
In late July, Kennedy came up with another plan to rescue Hearst from his financial difficulties and provide the Kennedy family with a new income stream. He arranged a tentative deal with a Chicago bank, which agreed to lend the Hearst Corporation $2.2 million for ninety days, predicated on Kennedy “taking over the financial management of all the Hearst properties.” The loan would be used to pay off the creditors, after which Kennedy would reorganize the Hearst empire and spin off the magazines into a new company that he would control.5
Hearst’s advisers barely considered the plan before turning it down. Kennedy was disappointed. He had made a good-faith offer, one that would have benefited him and saved Hearst from bankruptcy. “Boy, that offer . . . still looks pretty good doesn’t it,” he wrote Tom White, the only one of Hearst’s lieutenants he trusted, seven months later. “All those secret conversations that our friends had to the effect that this was stealing the magazines from Mr. Hearst sound like a joke. As I look at the picture, I still believe that every bit of advice I gave you and him is the best advice he will ever get. . . . I could cry when I think of his having turned the proposition down.”6
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As involved as he was with the Hearst reorganization, it was little more than a sideline. He was fully occupied that spring and summer in his new position, as the first chairman of the Maritime Commission. By 1937, it was impossible, even for an isolationist Congress and nation, to ignore the war clouds gathering over Europe. Hitler had quit the League of Nations in 1933, renounced the Treaty of Versailles, rearmed, and in 1936 seized the Rhineland; Italy had invaded Ethiopia; Japan was threatening China; there was civil war in Spain. Should a larger European or world war develop, American trade would be severely impacted, perhaps even cut off as the European-flagged ships that transported the bulk of goods across the Atlantic would be called into service.
To prepare for the worst-case scenarios, it was imperative that the American maritime industry be reorganized and revitalized. American shipbuilding had been in a sorry state for decades now. Most of the merchant vessels engaged in international trade had been built during or immediately after the Great War. It was estimated that within five years, 85 percent of them would be ready for retirement.
For the past eight years, federal aid to the moribund maritime industry had come in the form of lucrative contracts to deliver the mail from Europe. These subsidies had resulted in healthy profits for a few shipowners, but no new ships. In 1936, in an attempt to stimulate domestic shipbuilding, Congress had passed legislation establishing the Maritime Commission and directing it to replace the mail contracts with direct subsidies for new ships. Unfortunately, as Kennedy announced to reporters on arriving in Washington, the new maritime law was “lousy.” The subsidies intended to stimulate shipbuilding had been saddled with onerous conditions, including restrictions on the salaries the shipbuilders could pay their executives (no more tha
n $25,000) and the profit margins they could retain (no more than 10 percent). On taking the job, Kennedy declared that he would undertake his own survey of the industry and offer Congress recommendations on how it might amend and improve the 1936 law.
Though he would complain often—and in doing so call attention to his perseverance and dedication to his job—he was pleased to be back in harness and perversely delighted that he had been handed what everyone considered to be another impossible task. Even Harvard took notice of the distance he had traveled from East Boston and the reputation he had acquired as a Washington problem solver, a man who got things done. Barely a month after his return to Washington and his second “chairmanship,” he received the highest honor his classmates could offer, an invitation to speak at his twenty-fifth reunion. His career at Harvard had been less than stellar—as a student or an athlete—but none of that mattered any longer. “I won’t be like a coy debutante,” he answered Bob Fisher, who had issued the invitation on behalf of the reunion committee, “but will say I’ll be there. It is certain however, I’ll not talk more than fifteen minutes and for the honor and glory of Kennedy . . . Fisher and Company, I’ll do the best I can. Rose is in Boston this week and I told her to contact somebody to talk to seriously as to the arrangements to be made for the children there.”7
Fisher asked Kennedy to get in touch with Robert Benchley, who, with Kennedy, had been a member of Delta Upsilon, and, like him, had become notorious as a Harvard graduate for doing something decidedly un-Harvard-like, writing humor pieces and screenplays for MGM in Hollywood. “There are forty-six mail contracts which have to be settled for the United States government in the amount of $400 million before June 30th,” Kennedy bragged to Benchley, “but they are selling me the idea of coming to the reunion if only for a couple of days. . . . If I have to be there, there is no one I’ll miss more if he isn’t there than you. I could talk with all your bosses and get you a leave of absence if you wanted it. It is a long tough hot trip here . . . but after all you are the great boy of the class and my particular pet. So leave all the beautiful women or bring two on if you want to and try to come, if only for Saturday night dinner. I have to make the address and I want you to introduce me. My past is safe in your hands.”8
Kennedy gave his speech at the reunion weekend’s closing dinner. Instead of rehearsing (as was customary) the ways in which his success in life could be attributed to his four years on campus or telling silly stories and flattened-out jokes about his classmates, he delivered an uncalled-for, unexpected, and unpardonably political speech. Before an audience that was largely anti-Roosevelt and anti–New Deal, he defended not only big government, but Social Security and organized labor. And then, to add provocation to provocation, he praised John L. Lewis, the principal organizer of the Congress of Industrial Organizations (CIO) and perhaps the single most hated man in banks, boardrooms, and Harvard clubs. He had, he told his classmates, recently had lunch with Lewis and come away from the table with “a distinctly favorable impression of the man’s character. . . . On the fundamental issues, that is—his faith in the democratic form of Government and his personal integrity—I entertain not the slightest doubt. We are reaping the whirlwind of a quarter century of mishandling of labor relations. We complain about the lack of responsibility of labor and for years we did our best to render labor organizations impotent.” He closed by emphasizing to his classmates, “particularly to those . . . who have children that the scene is not as bad as it looks. Without wishing to appear in a ‘Pollyanna’ role, I frankly see nothing which justifies the hate and the despair which are all around us.”9
It was a brave speech and a foolish one. Given the opportunity to demonstrate to his classmates that he was not an outsider, but one of them, he could not quite do it. Instead, he felt called upon to tell them—to their aristocratic, “proper Bostonian” Republican faces—that they had got it all wrong about Roosevelt and the New Deal, that he was their savior, not their executioner. Whether intended or not, and whether he knew it or not, he had insulted them all by bringing politics—and decidedly the wrong kind of politics—into the sanctified space of a Harvard class reunion.
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His new position was not nearly as high-profile as his former one. He would have to make his own headlines, which, with the help of Arthur Krock, he did. He delivered his first official speech to the Propeller Club at the Hotel Astor on May 21, 1937. As the New York Times reported on its front page the next morning, he pledged a MERCHANT MARINE TO EQUAL ANY RIVAL. MARITIME BOARD HEAD PLANS TO BUILD NEW AND FASTER SHIPS IN IMMEDIATE FUTURE. AID OF CAPITAL ASKED. GOVERNMENT IS READY TO TAKE INITIATIVE . . . “SQUARE DEAL” FOR LABOR. MEN AFLOAT TO BE TREATED AS THOSE ASHORE, BUT LOYALTY WILL BE DEMANDED OF THEM. There was nothing especially controversial or even interesting in what Kennedy proposed, except, as the Times reported, for his “enunciation of the commission’s labor policy.”
The industry had been convulsed by two major strikes in three years, the first of which had escalated into the general strike that had virtually shut down San Francisco in the summer of 1934 and lasted a full eighty-three days; the second, less than two and a half years later, had paralyzed West Coast shipping for ninety-nine days and cost the industry some $700 million. Had the labor problems that roiled the industry been confined to labor/management disputes, they might have been settled more easily and quickly. But through the 1930s, maritime labor had been engaged in an internal civil war between newly established and usually more militant locals with allegiance to the CIO and older ones affiliated with the American Federation of Labor.
There were, as Kennedy acknowledged in his inaugural speech, reasons for labor strife in the maritime industry, primary among them the low and irregular wages crewmen were paid and the impossibly poor working conditions they were forced to endure. The Maritime Commission had been empowered to rectify these conditions—and would—by setting minimum hours and wage rates for seamen who worked for companies that received government subsidies. Kennedy promised to give the seamen “a square deal” and asked them, in turn, to “give the Commission and the tax-paying public a square deal. . . . Labor, the commission believes, must demonstrate that it is worthy of the special treatment which the American public is willing to give it. . . . There can be no excuse for costly and bitter factionalism which is harmful to everyone in the long run. . . . In particular, labor ought to be willing to forego resort to extreme measures when there exists peaceful machinery for adjusting its grievances.”10
It was not difficult to read between the lines here. In asking the seamen to “forego resort to extreme measures,” Kennedy was requesting that they give up their right to strike and accept arbitration in its place. In involving himself directly in the industry’s labor problems, Kennedy believed he was doing what Roosevelt expected of him. In June, the president had forwarded to Kennedy a four-page letter he had received, detailing the deplorable conditions the letter writer, a distinguished author, had found on an American ship bound for China. The crew had been surly, incompetent, and undisciplined. Roosevelt noted that such conditions were “all too common on American ships.” The implication was that Kennedy should do something about it.11
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In May, Kennedy, who until now had received only praise for his work in Washington, was given a draft of a cover story that Earle Looker, a well-respected journalist, had written for Fortune magazine’s forthcoming survey of the shipping industry. He immediately wrote Russell Davenport, the managing editor of Fortune, that the article was “permeated with distrust of my character, dislike of my occupations and social prejudice against my origin. . . . I have marked fifty-four inaccuracies in as many places.” Davenport invited him to elaborate, which he did in a long letter, written with Arthur Krock’s help, listing the false “statements” with his “observations” and corrections. He was particularly incensed at the characterization of his father as a saloon keeper who had entered government
service to increase his “opportunities for the acquisition of wealth.” “The inference here [that P.J. had been a corrupt politician] is mean and contemptible. My father’s reputation could never be touched by any such aspersion.” He was also disturbed by Looker’s charge that he had been an operator of the Libbey-Owens-Ford pool and a “cold blooded Bear of exceptional shrewdness.” The fact that Looker had gotten this part of the portrait right was beside the point.
Davenport sent an associate to placate Kennedy, then wrote him personally to assure him that the article would be redrafted to incorporate his corrections. That wasn’t enough. Kennedy demanded that the article be taken away from Earle Looker, “whose presentation of me is so cheap and tawdry that a rereading of the script sickened me. There are so many deliberate misrepresentations that I believe that either Looker has an ingrained hatred of the Irish, or a resentment against me personally. The only basis for personal antagonism I could think of might be Looker’s anger at my failure to arrange for him a sale of his book to a moving picture company. The request was made to me in writing while he was engaged in working on the present draft. If such is the explanation for the article, the word ‘blackmail’ despite all its ugly imputations is not too extreme a characterization. After consulting with some friends in Washington, I am convinced that it would be useless to attempt to revise a draft so permeated with bias and incompetence.”12
The implications were clear. Kennedy did not identify his “friends in Washington,” but he didn’t have to. They included the most powerful men in the Roosevelt administration and columnists like Arthur Krock and Drew Pearson. Davenport backed down, withdrew Looker’s draft, and assigned the article to another author. In early August, he sent Kennedy the new draft and a copy of the photograph that was to run with it. Kennedy’s threats had gotten him precisely what he wanted, a puff piece in a major financial magazine. He segued now from bullying Davenport to flattering him. “My dear Mr. Davenport,” he wrote on August 6. “I want to tell you how very much I appreciate the picture. It will remind me of a great many things, not least of which is your masterful handling of a very difficult situation with a very irritable young man named Kennedy. . . . My warmest personal regards and assuring you it has been a great pleasure working with you.”13