by David Nasaw
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Though Kennedy would continue his Cassandra-like pronouncements about postwar economic collapse, he and his family had little to fear. The bulk of their fortune was safely invested in trusts for Rose, the children, and the children’s children. Rosemary’s trust was handled separately from the others, and on his death, Joe Jr.’s had been divided among the other children. To provide for maximum growth, the children were not permitted to withdraw anything from the 1936 trusts until the boys reached thirty-one and the girls forty-one, at which time they would be permitted to spend the annual earned income only, the corpus being reserved for their children. The 1926 trusts allowed earlier withdrawals, at age twenty-five. What this meant was that by 1946, very little had been taken out of the accounts, allowing the principal to grow unimpeded. By the end of 1946, the sum total in the trusts was about $8 million, equivalent to almost $90 million today.34
Kennedy left nothing to chance. Because he had little or no expectation of strong economic growth in the immediate future, he reinvested his profits in what he believed to be the safest haven for his capital, commercial real estate, and chose as his primary broker John J. Reynolds, who bought and sold properties for Archbishop Spellman and the New York Archdiocese. With the city’s premier broker working for him, connections to the Catholic Church (one of the city’s largest real estate owners), cash reserves for down payments, easy access to large mortgages at low rates, and an almost uncanny ability to do the numbers and spot undervalued properties, Kennedy ended up defying his own expectations and making at least as much money from real estate as he had from trading stocks.
It was a very good time to buy prime urban real estate. For fifteen years, since the stock market crash of 1929, there had been little new construction. With increased war spending and inadequate and aging residential and commercial space, rental prices had soared.
Kennedy real estate deals were all big ones. From 1943 on, he purchased dozens of high-priced, prime real estate parcels in midtown Manhattan, several on Lexington Avenue between Forty-sixth Street and Fifty-ninth Street, the entire block front between Eighty-second and Eighty-third on the west side of Broadway, the Siegel-Cooper building between Eighteenth and Nineteenth on Sixth Avenue, and the old Fahnestock mansion at Madison Avenue and Fifty-first. He bought these properties not as income-producing investments, but with the intent to turn them over quickly. He sold the Siegel-Cooper building after a year to J. C. Penney for a healthy profit. He sold the Fahnestock mansion to Random House less than ten months after he had purchased it, again at a sizable profit. Had he held on to these properties longer, he would have made even more money. But that was not his style. Better to get out with a healthy profit than to hold on and risk a loss.35
The real estate market had become so lucrative—with rents rising so high and so fast during the war years—that both the federal Office of Price Administration and the New York State Legislature debated instituting rent controls. On September 28, 1944, at a hearing on rent controls held by the general welfare committee of the city council, Kennedy was “cited as a rent gouger” for raising rents in the Siegel-Cooper building when he purchased it. A week later, at a second public hearing, this one held by a joint state legislative committee investigating commercial rent increases, John J. Reynolds, representing Kennedy, struck back. “After Mr. Kennedy’s name had been mentioned several times,” the New York Times reported on October 4, “Mr. Reynolds retorted: ‘Why spread the name of Mr. Kennedy all over the case? Mr. Kennedy didn’t buy the property, and he never saw it. It was bought by John J. Ford of Boston, in trust for the children of Joseph P. Kennedy, and I operate it for him.” Reynolds’s defense of Kennedy was ludicrous. No matter whose name the trusts were in, he retained full control over them—and the properties they owned.36
The outcry against rent gouging was such that the New York State government passed commercial rent control laws for New York City that were signed into law and approved by the courts in early 1945. By the time they went into effect, Kennedy had diversified his real estate portfolio beyond the reach of the new legislation. By mid-1945, he had purchased a thirteen-story office building in Albany, a large commercial plot on Boston Post Road in Pelham Manor, and the crown jewel in the Kennedy real estate empire, the Merchandise Mart in Chicago.
The Mart, a gigantic building with ninety-three acres of rentable space, had been built fifteen years earlier by Marshall Field. In 1945, Field, with excess profits tax liabilities he could not afford to pay, decided to sell the building at a loss, therefore reducing his excess profits and his taxes. Kennedy negotiated a price of $13.2 million on the property, which had cost $30 million to build and been valued on Field’s recent financial statement at $31 million. There was one catch. Before Field finalized the deal, Kennedy had to assure him that rumors that Congress might repeal the excess profits tax were false and that it indeed made sense for him to take a tax loss on the Merchandise Mart sale. Kennedy got such assurances—which he immediately relayed to Field—from John W. McCormack, the House majority leader, who had checked with his colleagues on the Ways and Means Committee and received confirmation that the excess profits tax would remain in effect for 1945.37
Kennedy secured a mortgage of $12.5 million on the property, which meant the Merchandise Mart cost him a little less than $1 million in cash. To protect himself from huge tax bills, he then asked for and received IRS approval to vest ownership of the Mart in the family trusts.
On a Saturday in mid-November 1945, Kennedy flew to Chicago to sign the final sales documents and take control of his new building, the largest in the country, save the Pentagon. At nine the next morning, a Sunday, he met with his new CEO, Wally Ollman, and looked over his purchase in person for the first time. “In pungent phraseology,” Ollman recalled, Kennedy “recounted that he had never been identified with a loser and did not intend to blemish that record in the operation of The Mart. Those desiring to work with him . . . were welcome to stay and those finding the task too difficult or demanding were invited to leave as all employees were informed on the following day in his first organization meeting.”38
This would be the first of many meetings between the two. They would begin with each man standing, then, according to Merchandise Mart insiders, go into their dance. Kennedy would sit down on the couch; Ollman, a large, imposing man, would perch on a chair and look down at his boss. Kennedy would then move to higher ground, on the arm of the couch, from where he would be the one looking down. Eventually, neither man willing to concede anything, they would rise to their feet and continue their meeting.39
At the time Kennedy purchased the Mart, 40 percent of the space was rented by government agencies that paid submarket prices for their leases. Ollman wanted to replace these tenants with corporations that would pay full market price, but he knew he would be taking a considerable risk, politically and fiscally, if he did so. Kennedy listened carefully to his presentation, then told him to go ahead. To make the property more attractive, Ollman suggested putting in air-conditioning, still comparatively rare in office buildings, at a cost of over $5 million. Kennedy agreed that air-conditioning was needed, then came up with a plan for raising the capital required by levying additional charges on Mart leases. The tenants agreed—and the Merchandise Mart became “the first and . . . still [as late as 1965] the largest property to supply this much-needed facility.”40
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From the outside, Kennedy appeared to be the same man. He did not talk about his losses: one son dead, another nearly an invalid; one daughter nearly destroyed by a botched lobotomy, the other a childless widow at twenty-five. He could still light up any room he entered, dominate the conversation no matter who was in that room. Though now retired from private business and public service, he dressed immaculately in bespoke dark suits up north, white ones in Palm Beach, but never brown (which he abhorred). His white tailored shirts from Sulka were always crisply laundered; his ties
were still those of the conservative Boston banker; his black shoes were always polished to a perfect shine. His cook, Mathilda Heddal, on seeing him for the first time in 1940 when he was fifty-two, had remarked that “he was handsomest man I had ever seen.” And he was still, at fifty-seven, a strikingly handsome man. His sandy brown hair was graying and thinning, brushed back now, not a strand out of place. His posture was military perfect. He wore spectacles, but only occasionally. With or without them, his eyes still shone the same piercing blue; his smile, when he chose to flash it, was as broad as ever.41
But inside, he had been changed forever by the death of his firstborn son.
Thirty-one
THE CANDIDATE’S FATHER
Every man in this room, because of the position he occupies, owes something to our state.” It was April 17, 1945, a week after Roosevelt’s death. Joseph P. Kennedy, on the invitation of Massachusetts governor Maurice Tobin, was lecturing Boston’s business and political leaders on what they had to do to rebuild their city and state economy.
He had come home because there was nowhere else that he felt as comfortable, as beloved and respected. He had come home because nowhere else did he enjoy the same degree of political power. And he had come home to establish a power base for his son Jack, should he decide to enter politics. Two days earlier, he had marked his return with an almost ritual offering of $10,000 to the Guild of Saint Apollonia, the organization of Catholic dentists he had given money to when Jack recovered from scarlet fever twenty-five years earlier.
“Your future is in your hands,” he exhorted the businessmen in the main ballroom of the Copley Plaza. History, he warned them, was “not made by inaction, indifference and timidity.” Thousands of young men and women were about to return to New England, and they required jobs, good jobs consonant with their training and ambition. “If they do not find an opportunity to apply their skills here at home they will go elsewhere. . . . It is not a pleasant thing for a young man born and reared and educated in Boston to have to pull up his stakes and seek opportunities elsewhere. I know, for I had to do it.”1
Less than two weeks after his homecoming speech, Kennedy was invited by Governor Tobin to become chairman of a special commission to determine whether the state should establish a department of commerce.
As he toured the state that summer, giving speeches, granting interviews, and meeting with local bankers and businessmen, he attacked the “proper Bostonian” bankers and businessmen who refused to invest in the state’s future. His blunt talk disturbed some but charmed the newspapermen who followed him from town to town. He made for good copy wherever he was.
“I’m willing to come back to live because this is where my heart is. But I don’t expect to come back to stay until I think there has been a change for the better. For the past 25 years Massachusetts has consistently been losing business—in that time 2,300 industries have left the state. . . . We haven’t done a blessed thing to find out why they are leaving or to keep them here. During the next five years Massachusetts will have its last chance to keep itself out of the grave.” When he was asked why, if he was so concerned about his home city and state, he had spent millions of dollars buying the Chicago Merchandise Mart, he “shot back, ‘Because the condition of real estate is scandalous [in Massachusetts] and that of politics is worse.’”2
“Joseph Patrick Kennedy, now 57 and with red hair graying, came out of self-imposed political exile last week and went back to work for his native state of Massachusetts,” reported Time magazine on September 24, 1945. “Last week Joe Kennedy seemed to have his old zest again. In a midnight blue Chrysler, he rode like a Paul Revere through the textile, shoe and machinery-producing towns in Middlesex, Essex, and Berkshire counties. All the way from Greenfield to Salem, in some 30 speeches within ten days, he spread the alarm.”
Giving speeches, granting interviews, and grabbing headlines distracted him from his grief and relieved him of his boredom. It also gave him the opportunity to raise high again the Kennedy banner and extend it across the state, preparing the way for his son Jack, should he ever fully recover his health, to run for elective office.
In a game of political musical chairs that would have been inconceivable anywhere else, Boston’s politicians were changing places. James Michael Curley, after losing elections for mayor to Maurice Tobin in 1937 and 1941, had in 1942 run for and been elected to Congress. In November 1944, when Tobin ran for and was elected governor, replacing Leverett Saltonstall, who had run for and been elected to the Senate, Congressman Curley announced that he would be returning to Boston to run for Tobin’s seat the following year. (John Kerrigan, Boston City Council president, would preside as acting mayor in the interim.)
In declaring his candidacy, Curley made no mention of either his federal indictment for fraud or the six-year-old court order to pay back $37,000 plus interest he had “improperly received” from a city contractor. Six weeks later, on December 26, 1944, he announced that he had paid off all his debts. The funds, it has been whispered from that day to this had to have come from Joseph P. Kennedy, who had a very good reason to smooth Curley’s return to Boston. Should Curley be elected mayor in 1945, he would have to vacate the congressional seat in the eleventh district, once held by Honey Fitz.
If ever a district was made for a Kennedy candidacy, it was this one: the eleventh district included Cambridge, where Jack had gone to school; East Boston, the Kennedys’ ancestral home; the North End, the Fitzgerald bailiwick; and predominantly Irish wards in Brighton, Somerville, and Charlestown.
Before Jack could even consider running for office, however, he had to get his health back. “Jack told me . . . something about his plans” to spend the winter recuperating at a resort in Arizona, John Burns wrote Kennedy in Palm Beach on December 29, 1944. “I think he is very wise in taking a Boston residence now and when he returns from the West he ought to be off to a flying start for whatever objective he should determine upon. . . . He certainly has real stuff.”3
By that spring, after several months in Arizona, Jack was feeling well enough to relocate to San Francisco, where with the help of his father he was hired by Hearst’s Chicago Herald-American to cover the founding conference of the United Nations. That June, he relocated across the Atlantic to report on postwar British elections and Ireland, again for the Hearst papers.
Though Jack was good at his job—his articles were informative, nicely crafted, and rather persuasive—no one believed that he had any real desire to become a full-time journalist. Reporting for the Hearst papers was a temporary diversion, one that allowed him to improve his writing skills, add to his already extensive knowledge of European affairs, and visit his sister Kick in England. His father, hoping to find a temporary resting place for his decorated war hero son in the Department of the Navy, arranged for James Forrestal (whom Truman had retained as secretary of the navy) to meet with Jack in Paris during the secretary’s post-surrender tour of the continent. Jack traveled with Forrestal to Berlin for the Potsdam Conference, continued on to Bremen, and then flew back on the secretary’s plane to Washington following an emergency stopover in London, where he was hospitalized with severe abdominal pains, nausea, and fever—debilitating and frightening symptoms that, as in past episodes, vanished undiagnosed.4
Secretary Forrestal was sufficiently impressed with young Kennedy to invite him to visit Washington in mid-September to “see what there is in hand.” Jack did not follow up on the offer. Other options, more attractive than sitting at a desk at the Navy Department, had presented themselves.5
“Jack arrived home,” Kennedy wrote Sir James Calder on August 22, 1945, “and is very thin but he is becoming quite active in the political life in Massachusetts. It wouldn’t surprise me to see him go into public life to take Joe’s place.”6
In 1945, when he made the decision to run for Curley’s seat in Congress should Curley be elected mayor, John Fitzgerald Kennedy was twent
y-eight and old enough to represent the eleventh district in Congress, though he looked five to ten years younger. He was frighteningly frail-looking and skeletally thin. No matter how well tailored his suit jacket and shirt collar, he looked like a child in his father’s clothes. He had never lived in the eleventh district—or, for that matter, anywhere else in Boston. (Brookline was outside the city lines.) And he had no political experience of any sort; he had never been to a precinct meeting or a ward hall, never stumped for a candidate or rung a doorbell, never shaken a stranger’s hand and asked for a vote.
That fall, Jack Kennedy moved into a two-room suite at Boston’s Bellevue Hotel, where his grandfather lived. Honey Fitz, though white-haired and stouter, was the same garrulous firebrand at eighty that he had been at twenty-eight when he was elected to the Boston Common Council. He intended to act as his grandson’s chief adviser and counselor, to give speeches for him. His excitement was such that he had to be restrained from taking over the campaign.
Election day was more than a year away, but there was an enormous amount of work to be done for a candidate who was unknown in the district and unschooled in politics. Father and son put together a campaign team, with advice from Honey Fitz; cousin Joe Kane, a skilled local political operative who had always thought Jack Kennedy a golden boy and candidate; “the Commish,” Joe Timilty, former police commissioner and now Kennedy retainer, errand boy, and golf partner; and Eddie Moore, who had retired briefly after London but was now called back into Kennedy service. John Dowd, who ran the agency that handled the Somerset advertising, was brought in to do the initial public relations and advertising work. Billy Sutton and Patsy Mulkern, whom Honey Fitz knew and trusted, and a few other young streetwise politicos such as Dave Powers were put on the payroll. Jack, who understood the need to surround himself with men whose first loyalty was to him, not his father or grandfather, recruited his old friends Lem Billings, Torb Macdonald from Harvard, and Paul (“Red”) Fay, whom he had met in the South Pacific.