The Kennedy Legacy

Not just politics as usual

Joseph P. Kennedy



JOSEPH PATRICK KENNEDY

September 6, 1888 - November 18, 1969

'After all, my wife and I have given nine hostages to fortune. Our children and your children are more important than anything else in the world. The kind of America that they and their children will inherit is of grave concern to us all.'

Born in Boston, Massachusetts, on September 6, 1888, Joseph Patrick Kennedy was the son of Mary Hickey and Patrick Joseph Kennedy, an important figure in the Irish community of Boston. Familiarly known as “P.J.”, Patrick J. Kennedy had risen from common laborer to highly successful businessman, and was eventually instrumental in the organization of two different Boston financial institutions, the Columbia Trust Company and the Sumner Savings Bank. Early on, Patrick J. Kennedy had also entered politics, and Joseph, his first child, was born during “P.J.“‘s third term in the Massachusetts House of Representatives. Patrick J. Kennedy also served in the Massachusetts Senate, but his enduring political power was in the unofficial capacity of a “ward boss” who held sway in the East Boston Ward 2 for more than thirty years.

Young Joseph grew up in East Boston and attended Catholic schools until the eighth grade when his family enrolled him in Boston Latin School, a college preparatory academy in the Boston Public School system. Despite an aptitude for mathematics, Joseph P. Kennedy’s academic record at Boston Latin was mediocre at best. Nonetheless, he found favor with teachers and was popular with fellow students, who elected him class president during his senior year. Upon graduating from Boston Latin in 1908, he entered Harvard University, where he earned his B.A. in 1912. In the fall of 1912, Kennedy procured the position of assistant state bank examiner for Massachusetts, the first step in a career in finance that would bring him great wealth.

In his last years at Harvard and as he embarked upon his career, Joseph P. Kennedy began in earnest to court Rose Fitzgerald, daughter of Boston Mayor John F. “Honey Fitz” Fitzgerald. As the scions of important and influential men, the two had grown up in the same circles, and had even spent a summer vacation together when they were children. In their adolescent years, Joseph Kennedy started accompanying Rose to dances and parties; he would later say that he was “never seriously interested in anyone else.” But after Rose Fitzgerald’s debut in society and Kennedy’s graduation, the courtship became more firmly established. The couple was married on October 7, 1914 and after a two-week honeymoon, they settled in the Boston suburb of Brookline. Their first son, Joseph P. Kennedy, Jr., was born on July 28, 1915 while Rose Kennedy was staying at a summer cottage in Hull, Massachusetts.

Business Beginnings

In the meantime, Joseph Kennedy had taken a significant business step. Columbia Trust, the bank his father had helped start, was ailing and its stockholders were on the verge of selling out. Sensing an opportunity, the younger Kennedy sought and obtained the backing to purchase a controlling interest, becoming, according to the press, the youngest bank president in the country, at twenty-five. As head of Columbia Trust, Kennedy worked hard to cultivate connections both high and low, maintaining good relations with his working class client base but always seeking new links to Boston’s business elite. His entry into that circle was confirmed by his election to the Board of Trustees of the Massachusetts Electric Company, New England’s leading public utility at the time. He was named to the Board on May 29, 1917, the same day his second child, John Fitzgerald, was born.

Even apart from his election to the Board, however, Kennedy’s connections were beginning to pay off. In 1917, fellow Board member Guy Currier, a prominent Boston lawyer and counsel for Bethlehem Steel, recommended Kennedy to Bethlehem chief executive Charles M. Schwab for the position of assistant general manager at the company’s Fore River Shipyard in Quincy, Massachusetts. Already one of the largest shipyards in the country, Fore River was booming with orders as a result of the United States’ entry into World War I, and a companion yard was being built at nearby Squantum. Kennedy’s close supervision would keep this work under control. It was during his tenure at Fore River that Kennedy would first meet – and sometimes clash with – Franklin D. Roosevelt, then Assistant Secretary of the Navy.

By the time the War entered its final months, the weight of work at Fore River had pushed Kennedy to exhaustion, which was compounded by worry over Rose who was expecting in the midst of the deadly Spanish flu epidemic that was proving a particular threat to pregnant women. But Rose safely gave birth to her first daughter Rosemary on September 13, 1918, and within a couple of months the war had ended and the flu had subsided. Observing the inevitable peacetime slackening of pace at Bethlehem Shipbuilding, Kennedy realized that there would not be the same challenges and, more importantly, prospects with the company. He determined to return to finance, and cast about for the best option. He found it in the person of Galen Stone, an associate from the Massachusetts Electric Company Board and a partner at the brokerage firm of Hayden, Stone and Company. With Stone as mentor, Joseph Kennedy absorbed the precepts and practicalities of the stock market, increasingly investing his own capital. Setbacks occurred, but Kennedy’s progress – and success – were notable. When Stone retired at the beginning of 1923, Kennedy decided to move on. He left the firm of Hayden, Stone – though not the physical address – and established himself in his own right as “Joseph P. Kennedy, Banker,” offering a range of financial services based on the knowledge and skills he had developed working with Galen Stone. For the next three years, on his own behalf and that of others, Kennedy would undertake a series of business ventures that would make him a wealthy man, with a net worth of 2 million dollars.

Making Movies

Kennedy’s next career step appears, at first sight, like a radical departure. In 1926, engineering a deal to buy the company Film Booking Offices, he stepped fully into the still-new and burgeoning movie industry. But as with most of Kennedy’s business moves, the decision had long roots and was the result of careful observation. As early as 1919, Kennedy had purchased the Maine and New Hampshire Theatres Company, a small chain of New England movie houses. His experience with the chain showed him the promise of the movie business but also that the real money was being made in production rather than distribution. His first connection with FBO was through Hayden, Stone, which had been approached by a British firm that held a controlling interest in the Robertson-Cole Company, the parent organization for FBO. Dissatisfied with the money-losing habits of Robertson-Cole/FBO, its British owners looked to Hayden, Stone for help in finding a buyer in the United States. Because of his interest in the film industry, the project was assigned to Joseph Kennedy, who was also retained as a financial advisor to Robertson-Cole. Although he was unsuccessful in finding a buyer, his position with Robertson-Cole/FBO gave Kennedy further insight into the movie business and fueled in him the ambition to purchase the company himself. But it was not until the summer of 1925 that Kennedy could put together an offer, in a consortium that included Guy Currier, Louis Kirstein, head of the Boston chain of Filene’s department stores, and even his own father-in-law, “Honey Fitz” Fitzgerald. The million-dollar offer was turned down flatly as insufficient; yet a little more than six months later, the British owners, perhaps finally discouraged by the many ways FBO found to lose money, suddenly chose to accept the bid.

Joseph Kennedy represented a new and coming thing for Hollywood. Moviemaking had always been a business, and often a cutthroat one at that, but its newness had worked against it, encouraging lax business practices and deterring stable investment. When he took over FBO, Kennedy brought both the stability and the expertise of an established businessman. With the creation of a finance company, Cinema Credits Corporation, Kennedy could tap into his many contacts in the financial world. At the same time he enforced a fiscal discipline on FBO that was new to the company and, indeed, Hollywood in general.

Marking his new position as movie mogul, Kennedy made a major move personally, taking his family from Boston to the New York suburb of Riverdale. The family had doubled in size. Three more girls had followed Rosemary – Kathleen (February 20, 1920), Eunice (July 10 1921), and Patricia (May 6, 1924) – before a third boy, Robert, was born on November 20, 1925. Another girl, Jean (February 20, 1928) would be born not long after the family settled in New York. In later years, Kennedy would state that the social constraints on his Irish Catholic family in Yankee-dominated Boston had motivated the move, but at least as much of a factor was Kennedy’s need to enter a broader, more varied business arena now that his own interests had widened and enlarged.

For the most part, Kennedy spent 1926, his first year as a studio owner, getting FBO on a sound business footing. He did undertake an advantageous side venture, arranging for a series of lectures at Harvard, subsequently turned into a book, on the history of film, to be given by some of the most notable names in Hollywood. These men, many of whom had little organized education beyond elementary school, were immensely flattered by the invitation to speak at one of the great universities of the country. Despite Harvardites who grumbled at a connection with anything so disreputable as the movies, the university also benefited, not least from a sizable donation by Kennedy to help set up a film library. As the recipient of gratitude from all sides, Kennedy profited most of all, gaining an introduction to and the confidence of some of the most powerful men in the film industry.

In the fall of 1927, Kennedy began in earnest his efforts to advance his position in Hollywood by approaching David Sarnoff, head of Radio Corporation of America. As the developer of Photophone, a sound system for the new “talkies,” RCA needed to forge a connection with Hollywood to sell its product. At the same time Kennedy knew that he needed to compete in the new market of sound films and to do so he would have to have access to a technology that was not proprietary, which was the case with Warner Brothers’ Vitaphone, the most successful sound process to date. The corporate alliance between FBO and RCA was cemented with the purchase by FBO of the Keith-Albee-Orpheum theater chain, which would provide the venues for Photophone process pictures. In the meantime, Kennedy’s success with FBO had been noticed, and he was invited in to perform the same kind of corporate turnaround, first for Pathé-DeMille, a production company that already had an uneasy affiliation with KAO, though Kennedy’s role was independent, and then with First National. As a condition of his work, Kennedy demanded absolute power in the companies, and in fact wound up in control of Pathé, but the requirement did not sit well with the board of First National, which ultimately dispensed with his services. Still, for a brief period of time in 1928, Joseph P. Kennedy was the de facto head of four different companies.

The degree of vertical integration represented by the FBO-KAO combination suggested to observers an imminent merger, especially because of the connection KAO already had with the production company Pathé-DeMille. The deal that eventually developed involved the purchase by RCA of a major stakeholding in KAO to complement the majority holding it already had in FBO. Pathé for the moment remained outside of the compact, and Kennedy continued to run that company. What emerged in late 1928 was the holding company Radio-Keith-Orpheum, which became a subsidiary of RCA. The prime movers in the merger, Kennedy and Sarnoff and their investors, profited handsomely although there were complaints from smaller and less well-connected shareholders.

Despite these abundant and complex business interests, Kennedy did not ignore opportunities to engage in independent production. As early as 1923 he had arranged a personal corporation to manage the film career of FBO cowboy star Fred Thomson. But his most important independent work was with Gloria Swanson, one of the biggest stars of the silent era. Kennedy met Swanson in late 1927 when the actor was in considerable financial difficulties because of a disastrous attempt at self production under the aegis of United Artists Corporation, difficulties she aggravated with her extravagant lifestyle. Kennedy took over Swanson’s personal and professional finances, creating Gloria Productions to oversee her filmmaking opportunities. In early 1928, Kennedy hired director Erich von Stroheim to direct Swanson in a lavish film designed to restore her somewhat dimmed star power. Although the film, Queen Kelly, was never completed, Kennedy and Swanson produced two other films, including Swanson’s first talking feature, “The Trespasser” before ending their business relationship in 1930.

Nineteen thirty also saw Joseph P. Kennedy extricating himself from his other Hollywood commitments. From a personal sense of foreboding and on the advice of trusted associates, Kennedy had already divested himself of virtually all of his stock holdings, including the stock he held in Pathé, before the October 1929 crash. He would spend the next year sounding out potential buyers for the company, culminating in a sale to RKO, which already had business connections to Pathé that it had inherited from KAO.

Politics and Government

Kennedy’s lengthy foray into Hollywood had brought him a large and significantly liquid fortune that allowed him to continue his investments in real estate, notably his personal homes in Hyannis Port and Palm Beach, as well as a share in the Hialeah race track in Miami, even as he was scaling back his activities in Hollywood and the stock market. But at the beginning of the 1930s, the real focus of Kennedy’s energies became politics. As a successful businessman, Kennedy’s expected allegiance would have been to Hoover and the Republicans in the 1932 election, but the breadth and depth of the Depression had shaken Kennedy’s faith in Republican solutions. Believing that a change to the system was necessary to preserve the system, and willing to accept the toll on his own personal wealth that might be involved, Kennedy threw his personal and financial support behind Franklin D. Roosevelt’s presidential campaign. He rode on Roosevelt’s campaign train and by some accounts his intercession brought about the support of powerful newspaper magnate William Randolph Hearst.

In 1933, with the election won and Roosevelt inaugurated, Kennedy took a trip to Europe with James Roosevelt, the new President’s son. The end of Prohibition had been implicit in Roosevelt’s election, and Kennedy saw in it a new business possibility. While in England he obtained rights to become the U.S. agent for Haig & Haig Ltd., John Dewar and Sons, Ltd. and Gordon’s Dry Gin Company Ltd. When Prohibition officially ended, with the ratification of the 21st amendment, Kennedy and his company, Somerset Importers, were poised to take advantage of the country’s rehabilitated thirst with an enormous stockpile of liquor imports. But Kennedy was not satisfied with business success; his work on the campaign had whetted his political ambitions and it was a source of disappointment that Roosevelt had not yet found a place for him in his administration. That changed in July 1934, when Roosevelt appointed Kennedy chair of the newly created Securities and Exchange Commission (SEC). Despite widespread qualms about the appointment of an ex-speculator to an influential regulatory position, Kennedy’s tenure proved to be just the start necessary for the new agency. Kennedy knew the business community and understood the business practices he was charged with policing. Though he had been appointed for a five-year term, Kennedy resigned from the SEC in September 1935, believing that he had accomplished what he needed to do.

From the end of 1935 through 1936, Kennedy acted as a consultant in business and government. After a six-week tour of Europe in the fall of 1935, he reported to Roosevelt on the European economic situation. He followed up that work with a more formalized stint as a paid advisor to David Sarnoff of R.C.A., which had suffered dangerous setbacks in the early Depression years. Kennedy also returned briefly to the movie industry, preparing a business review at the request of Paramount Pictures.

The 1936 presidential campaign brought Kennedy back into politics. Roosevelt sought his help on the campaign, and Kennedy responded with his book I’m for Roosevelt, which he had published and made sure was widely distributed. Written with the help of his friend, New York Times columnist Arthur Krock, the book presented arguments for why businessmen should support Roosevelt and the New Deal, told from the perspective of Kennedy’s own personal endorsement. The book had significant impact in the business community and after his re-election, Roosevelt appointed Kennedy chair of the United States Maritime Commission. Created by the Merchant Marine Act of 1936, the Commission was expected to rejuvenate America’s merchant shipping industry, which was crippled by an outdated fleet and a difficult labor situation. Kennedy spent only ten months at the Commission. In early December 1937, Roosevelt named Kennedy the new ambassador to the Court of St. James, the United States’ representative to Great Britain. Kennedy officially resigned from the Maritime Commission in February 1938.

In many respects the ambassadorship represented the pinnacle of Joseph P. Kennedy’s personal success. Accompanied by his wife and children, now numbering nine since the birth in 1932 of the fourth son and last child, Edward M. Kennedy, Joseph P. Kennedy was greeted with enthusiasm by the British public, and for a while Kennedy and his family were popular celebrities in England. But Kennedy’s tenure as ambassador soon ran into difficulty. European tensions were already running high when he arrived in 1938, and Kennedy’s personal aversion to war put him firmly in the appeasement camp, a position that was losing favor in Britain. When war broke out in 1939, Kennedy’s firm and outspoken commitment to U.S. neutrality put him increasingly at odds with the British Government, and eventually his own. Kennedy ultimately resigned in November 1940.

The War and Its Aftermath

The advent of war brought much grief and tragic loss to the family of which Joseph Kennedy was justly proud and for which he had worked so hard. Kennedy’s two eldest sons served in the Navy, Joe, Jr. as a pilot and John as the commander of torpedo boat PT-109. In August 1943, John was badly injured and narrowly escaped death in an attack on his boat by a Japanese destroyer. A little more than a year later, on August 12 1944, Joseph P. Kennedy, Jr. was killed when his plane, packed with explosives for a top-secret bombing raid, exploded over southeast England. Only a month afterwards, the second Kennedy daughter Kathleen lost her husband of just four months, William John Cavendish, Marquess of Hartington, killed in action in Belgium. Kathleen herself would die a few years later in a plane crash near Sainte-Bauzille, France while traveling with her intended second husband.

As the war ended, Kennedy continued with his business interests, but became more focused on real estate; even as he was divesting himself of Somerset Importers, in one of his most inspired investments, he purchased and renovated the enormous Merchandise Mart building in Chicago, which grew to become a cornerstone of his wealth. In addition he began serious, organized philanthropic activities, largely through the recently founded Joseph P. Kennedy, Jr., Foundation. Most importantly, Kennedy turned his energies to the careers of his remaining sons, especially his second son, John, convincing him to run in 1946 for the Massachusetts’ eleventh congressional district. John F. Kennedy won that election and went on to serve three terms (1947-1952) in the House of Representatives and two terms (1952-1960) in the U.S. Senate before his election as President of the United States in 1960. Joseph Kennedy also worked to advance the political careers of his younger sons, Robert and Edward, who would both become U.S. Senators.

On Dec. 19, 1961, Joseph Kennedy suffered a stroke that paralyzed the right side of his body and left him barely able to communicate, although his intellect was unimpaired. In this condition he lived another eight years, enduring through the assassinations of his sons John and Robert. Joseph P. Kennedy’s health deteriorated from further strokes and heart attacks, until on November 18, 1969, he died in his Hyannis Port, Massachusetts home at the age of 81.