Bernard Baruch: The Adventures of a Wall Street Legend

by James Grant

  “Even while I . . .”: Willard to Baruch, Jan. 28, 1936.

  “Mr. Baruch’s method . . .”: Wall Street Journal, Mar. 8, 1918.

  Wilson letter: Quoted in Margaret L. Coit, Mr. Baruch (Boston, 1957), p. 698.

  “That he possesses . . . ” and ff.: E. J. Kahn, Jr., The World of Swope (New York, 1965), p. 200.

  Copper episode: The copper episode later became a source of contention between Baruch and Roosevelt. According to Henry A. Wallace, Secretary of Agriculture under Roosevelt, who quoted Rexford Tugwell (Columbia University Oral History Collection), Roosevelt “had his fingers very much crossed about Baruch as a result of Baruch’s manipulations of the regulations on behalf of high copper prices in World War I.” In the 1930s, Baruch heard the same story from his White House sources and once, in a joking way, from F.D.R. himself. Sensing that the President wasn’t joking, Baruch tried to set the facts straight in a letter (July 8, 1937): how he, personally (he made no mention of Meyer), was the “father” of the 16 ⅔-cent concessionary price, but how, after this initial coup, he had had no decisive voice in the fixing of any price.

  Roosevelt was still suspicious, and he asked the Navy Department to investigate. On July 21, 1937, the Bureau of Supplies and Accounts answered with a seven-page memorandum that concluded that F.D.R. and Baruch each had a point, but that they had in mind different episodes. Baruch was, indeed, responsible for thee 16 ⅔-cent price, the memo said, but it added that the WIB, on presidential authority, had subsequently allowed a higher price: a point for F.D.R. The memo continued that when Baruch and the Guggenheims and others came forward with their proposal to sell to the Navy at a very low price, the nation was at peace. The offer was intended to cover a year’s supply, and it was left up to the Navy to decide what the amount might be. The estimate given was 20 million pounds, which turned out to be less than one fifth of actual wartime demand. Nevertheless, the 20 million pounds was said by Baruch and the War Industries Board to have discharged thee 16 ⅔-cent obligation, and a new, higher price was decided on.

  Something that apparently escaped both Baruch and Roosevelt was the fact that copper-smelter output under the wartime price regime actually declined by 1 percent from the 1916 prewar level.

  “Baruch had not . . .”: Pusey, p. 139.

  “Gene,” said Baruch . . .”: Ibid., pp. 148–149.

  “The Chief . . .”: Memo to members of the War Industries Association from Howard P. Ingalls, Dec. 6, 1938; General Correspondence.

  “And then [she wrote] . . .”: Anonymous, The Mirrors of Washington (New York, 1921), pp. 145–146.

  Brookings’ attitude: Schwarz, p. 56.

  “I do not believe . . .”: Ibid., pp. 58–59.

  Spy for House: Baruch interview with Harold Epstein, Dec. 19, 1953, p. 166.

  “We did hear . . .”: Michael Teague, ed., Mrs. L.: Conversations with Alice Roosevelt Longworth (Garden City, NY, 1981), p. 162. Mrs. Longworth said that Franklin D. Roosevelt, her cousin and then Assistant Secretary of the Navy, had provided false “official” documents that were laid in the suspect’s path and that she allegedly forwarded them to an uncle in Bucharest. Mrs. Longworth continued: “Eleanor [Roosevelt] apparently knew about what was going on—as a great many people did—and years afterwards when Franklin was at the White House, we were both chuckling about the incident one time and Eleanor said, ‘You know, Alice, I have always disapproved of what you and Franklin were doing.’ Oh, we had a hilarious time! He really could be the greatest fun.

  “I think Bernie enjoyed the whole thing too. Once much later he said that he had heard I was involved in the matter and I said, ‘Yes, I was, and all I can tell you is I hope you got what you wanted.’ ”

  What, if any, espionage information the eavesdropping yielded and whether there was any attempt at blackmail, unfortunately, are questions without answers.

  In his interview with Harold Epstein (p. 90), Baruch alluded to what might have been the same incident, saying: “Like in World War I they came to me with a story of how I was going to divorce my wife and my three children and marry a girl. And they had it all on the dictograph but it was another fellow. And he did divorce his wife. But the gang was trying to get me.”

  “May I not . . .”: Wilson to Lansing, Sept. 2, 1918, State Department No. 860F. 24/9–2.

  “Nothing will be gained . . .”: Baruch to Daniels, June 26, 1918, Daniels papers.

  “However harmless . . .”: The Ladies’ Home Journal (Sept. 1918), p. 29.

  “. . . by the time . . .”: Quoted in Grosvenor B. Clarkson, Industrial America in the World War: The Strategy Behind the Line (1917–1918) (Boston, 1923), p. 99.

  “civilian order of the day”: Kahn, p. 206.

  “It appears . . .” and ff.: Quoted in Cuff, p. 209.

  “We have every . . .”: Ibid., p. 218.

  “walking the streets . . .”: Nye hearings, p. 6296.

  “To Bernard M. Baruch . . .”: Ibid., p. 519.

  Baruch’s library: The visitor was David E. Lilienthal, The Journals of David E. Lilienthal, Vol. I, The TVA Years, 1939–1945 (New York, 1964), p. 226.

  Chapter Ten: Plainspoken Diplomat

  Plans to bring family: On Dec. 24, 1918, the American delegation in Paris had cabled Washington that Baruch was “anxious” to bring his wife and his nineteen-year-old daughter and that “in view of his position assume these passports should be granted.” For undisclosed reasons, however, the Baruch women sailed later. Baruch’s State Department personnel file, document no. 184.1.

  “Notify in Case . . .”: Ibid.

  “It was not easy . . .”: Bernard M. Baruch, Baruch: The Public Years (New York, 1960), p. 95.

  Largest contributor; He gave $25,000 and participated in a $150,000 loan, New York Times, Oct. 29, 1918; his gift represented 16 percent of the total funds raised by the Democratic National Committee.

  “Squeeze the lemon . . .”: and other diplomatic background: Howard Elcock, Portrait of a Decision: The Council of Four and the Treaty of Paris (London, 1972).

  “for the purpose . . .”: New York Times, Mar. 19, 1919.

  $150,000 loan: Anderson diary quoted in Jordan A. Schwarz, The Speculator: Bernard M. Baruch in Washington, 1917–1965 (Chapel Hill, N.C., 1981), pp. 110–111; also, Baruch to Senator William S. Kenyon, May 23, 1921.

  Office space and automobiles: Various State Department documents, including 184.13/134, May 14, 1919.

  “There has been . . .”: Quoted in John Brooks, Once in Golconda: A True Drama of Wall Street 1920–1938 (New York, 1969), p. 124.

  Complete trust: William Boyce Thompson, the mining entrepreneur, however, told Clarence Barron in 1920 that Lamont “was more relied upon abroad in financial matters than was Barney Baruch. In fact Baruch, I hear, did not see much of Wilson in Europe.” Arthur Pound and Samuel Taylor Moore, eds., They Told Barron: Conversations and Revelations of an American Pepys in Wall Street (New York, 1930), p. 328.

  “We went along . . .”: Edith Benham Helm, The Captains and the Kings (New York, 1954), pp. 131–132.

  Hoover flanked by women: Baruch reminiscences, Unit XV, Box 274, p. 362; Baruch papers.

  “A just and continuing . . .”: Quoted in Arthur Walworth, America’s Moment: 1918—American Diplomacy at the End of World War I (New York, 1977), p. 251.

  “We are all . . .”: Raw Materials Section, Supreme Economic Council, Sixth Meeting, Apr. 16, 1919; State Department No. 0064–0089, p. 3.

  “I say again . . .”: Ibid., p. 8.

  “The whole subject . . .”: Ibid., p. 12.

  “I have been . . .”: Ibid., p. 12.

  Harris episode: Ibid., p. 14.

  “In the happy . . .”: State Department document FW 180.05301/8, p. 2.

  “He stated . . .”: State Department document 180.05301/15, Minutes of an Informal Meeting of the Raw Materials Section Held in Mr. Baruch’s Room on the 21st of June.

  “. . . remember me . . .”: Baruch to Renée Baruch, Mar. 13, 1919, Ame
rican Commission to Negotiate Peace Papers (Baruch). (Hereafter cited as American Commission papers.)

  “I would suggest . . .”: Herter to Grew, Feb. 4, 1919, and related documents; State Department No. 184.00101/4.

  “ruling mind”: New York World, Feb. 10, 19Í9. The unnamed foreign delegate also said of Baruch: “He is, in my impression, one of the most remarkable men we have met at the Peace Conference. His knowledge, his quickness of mind and of decision and his business acumen have made a great impression on every one.”

  Cecil exchange: Raw Materials Section, Minutes of Seventh Meeting, Apr. 24, 1919, State Department No. 180.05301/7, p. 5.

  “There was a long . . .”: Quoted in Schwarz, p. 123.

  “Even after peace . . .”: Baruch to BMB, Jr., Mar. 13, 1919; American Commission papers.

  “Have you any . . .”: Arthur Krock, Memoirs: Sixty Tears on the Firing Line (New York, 1968), p. 53.

  “Arthur, you’re . . .”: John Baragwanath, A Good Time Was Had (New York, 1962), p. 158.

  “in disgust” and ff.: Baruch reminiscences on Grayson, p. 647.

  Baruch’s views on taxes and labor: Quoted in Schwarz, p. 149.

  “Siegmarious” cable and ff.: State Department Nos. 862.51/1202 and 862.51/1199.

  “I do not wish . . .”: Quoted in Schwarz, pp. 128–129.

  “for all damage . . .”: Quoted in Bernard M. Baruch, The Making of the Reparations and Economic Sections of the Treaty (New York, 1920; reprinted by Howard Fertig, Inc., 1970), p. 291.

  “Let us all take . . .”: Baruch, The Public Years, p. 107.

  Illness of Dr. Baruch: Herman Baruch, the family’s other doctor who went into Wall Street, wired his brother in Paris on Apr. 2, 1919: “Father has double pneumonia and severe heart attack. Greatly improved today and personally feel now chance excellent for complete recovery. Please don’t consider returning to New York under any circumstances . . .”; American Commission papers.

  “It is not . . .”: Senate Foreign Relations Committee, hearings on the treaty, Washington, 1919, p. 45.

  “The terms . . .”: Ibid., pp. 69–70.

  “And Baruch, too.”: Baruch, The Public Years, pp. 138–139.

  Rumors of Baruch’s career: New York Times, July 17, July 22 and Sept. 6, 1919.

  “blind and deaf . . . ” and ff.: John Maynard Keynes, The Economic Consequences of the Peace (New York, 1920), pp. 40, 41, 42, 52–53, 54–55.

  John Foster Dulles as ghostwriter: Schwarz, p. 158.

  “Somebody said . . .”: Baruch to David Lawrence, Sept 6, 1927.

  “possibly legalistic”: Baruch, Making of the . . . Treaty, p. 28.

  “One must be . . .”: Ibid., p. 54.

  The Nation’s review, Nov. 3, 1920; The New Republic’s, Dec. 1, 1920; The Spectator’s, December 11, 1920.

  Keynes’s review: The Literary Review of the New York Evening Post, Dec. 4, 1920.

  29 “Though the peace . . .”: Baruch, Making of the . . . Treaty, p. 5.

  “Perhaps it was . . .”: George Allardice Riddell, Lord Riddel’s Intimate Diary of the Peace Conference and After, 1918–1923 (London, 1933), p. 409.

  Chapter Eleven: Farming, Money, McAdoo

  “I’m through with politics . . .”: New York Times, July 19, 1919.

  “in copper alone”: Ibid., May 28, 1920.

  “pro-consul of Judah . . .”: Bernard M. Baruch, Baruch: The Public Tears (New York, 1960), p. 162. For a time Baruch apparently weighed legal action against Ford. His papers contain a five-page document that describes some causes of libel in the Independent articles (In re Baruch v. Ford, General Correspondence, Vol. III). On Jan. 4, 1921, Baruch wrote Josephus Daniels, “Thus far I have not taken any notice of his action. I may decide to go after him, and if I do somebody is going to get his head cracked.” But nobody did.

  Bond holdings: General Correspondence, Vol. Ill; in general, on Baruch’s postwar finances, see Baruch to Senator William S. Kenyon, May 23, 1921.

  “I ‘cottoned’ . . .”: Baruch to Krock, May 28, 1920; Krock papers.

  Baruch in Topeka: Kansas City Post, Sept. 4, 1920.

  “You can depend . . .”: Baruch to Meredith, Oct. 8, 1920.

  “In closing . . .”: Baruch to J. C. Mohlen, Dec. 3,1920; Selected Correspondence.

  Agricultural background: Baruch, The Public Years, pp. 149–170, and Jordan A. Schwarz, The Speculator: Bernard M. Baruch in Washington, 1917–1965 (Chapel Hill, NC, 1981), pp. 227–241.

  The Outlook: Aug. 8, 1923; Meyer to Baruch, Aug. 9, 1923; Meyer papers.

  Baruch notes and bond holdings: Securities inventory; General Correspondence, Vol. III.

  “establishment of an export . . .”: Quoted in Gilbert C. Fite, George N Peek and the Fight for Farm Parity (Norman, Okla., 1954), p. 96.

  “I do hope . . .”: Baruch to Rougemont, May 13, 1924.

  “I have always . . .”: Baruch to F. G. Bonham-Carter, Apr. 16, 1923.

  “I am hooked . . .”: Baruch to Robinson, June 26, 1923.

  Fetteresso bag: Game book, Unit XVIII, Box 287.

  “because . . .”: Baruch to Ritchie, Dec. 4, 1923.

  “Please do not . . .”: Baruch to Richard Manning, Oct. 15, 1925.

  Robinson wire: Baruch to Robinson, May 19, 1924.

  Pulitzer doggerel: Pulitzer to Baruch, Jan. 20, 1926.

  “I would like . . .”: Tardieu to Baruch, Dec. 7, 1925.

  “you asked me to”: Baruch to Krock, Mar. 26, 1926.

  New Yorker profile: “Ulysses Ashore—For a While,” Aug. 7, 1926.

  “. . . whenever the request . . .”: Arthur Krock, Memoirs: Sixty Tears on the Firing Line (New York, 1968), p. 62.

  Not yet published: Ronald Steel, Walter Lippmann and the American Century (New York, 1980), pp. 200–201.

  “It is . . .”: Quoted in E. J. Kahn, Jr., The World of Swope (New York, 1965), pp. 291–292.

  “Tall, architectural head . . .”: Ibid., p. 23.

  “I have all . . .”: Swope to Baruch, Sept. 12, 1923.

  “the responsibility . . .”: Baruch to Swope, Oct. 19, 1923.

  Swope’s subsequent losses: Baruch to Swope, May 24, 1924.

  “As for Baruch . . .”: Kahn, p. 276.

  McAdoo’s complaint: Baruch wrote Sullivan (Feb. 8, 1923): “. . . you know that nobody can control the news columns through Herbert Swope. . . . I hope you cannot too strongly refute anybody who says I am controlling The World or any other publication.”

  Young letter: Young to Baruch, June 27, 1925.

  “munificent” gift: Radiogram from Young to Baruch, July 9, 1925.

  “because of the infinite . . .”: Hugh S. Johnson, The Blue Eagle from Egg to Earth (Garden City, NY, 1935), p. 111.

  Muscle Shoals matter: Preston J. Hubbard, Origins of the TVA: The Muscle Shoals Controversy, 1920–1932 (Nashville, Tenn., 1961), p. 82.

  Tax views: Baruch to Joseph T. Robinson, May 16, 1924.

  Baruch’s wine list: Vol. XIV, General Correspondence, 1926; Baragwanath’s recollections in John Baragwanath, A Good Time Was Had (New York, 1962), p. 157.

  “We have been . . .”: Baruch, The Public Years, p. 197.

  “I do hope . . .”: Baruch to Hull, Oct. 29, 1925.

  “head and shoulders . . .”: Quoted in Robert K. Murray, The 103rd Ballot: Democrats and the Disaster in Madison Square Garden (New York, 1976), pp. 42–43; for additional information on the politics of the day, Herbert A. Gelbart, The Anti-McAdoo Movement of 1924; unpublished doctoral dissertation (New York University), 1978.

  Star clipping: Joseph T. Robinson to Baruch, Jan. 12, 1924.

  “right gallantly . . .”: Frank R. Kent, The Democratic Party: A History (New York, 1928), p. 482.

  “I am, of course . . .”: Baruch to Pat Harrison, Apr. 16, 1924.

  “I should also . . .”: Baruch to Davis, Mar. 24, 1924.

  “my restless . . .”: McAdoo to Baruch, Nov. 21, 1928.

  “Shut up . . .”: New York Times, July 5, 1924.

/>   “desire not to . . .”: Baruch to Mark Sullivan, Sept. 22, 1922.

  “bums”: Baruch to Daniel Roper, Apr. 21, 1923.

  “Jesse Jones asked . . .”: Baruch to Krock, Aug. 29, 1924; Krock papers.

  “All I can say . . .”: New York American, Sept. 24, 1924.

  “You have . . .”: Jones to Baruch, Oct. 1, 1924.

  “Lots of people . . .”: Baruch to BMB, Jr., Feb. 27,1919; American Commission to Negotiate Peace Papers (Baruch).

  “Your letter . . .”: Baruch to Jones, Oct. 9, 1924.

  “I think . . .”: McAdoo to Baruch, Nov. 21, 1928; McAdoo papers.

  “I got 500 . . .”: McAdoo to Baruch, Nov. 30, 1928.

  “Is it not . . .”: Baruch to Daniels, Mar. 21, 1941; Daniels papers.

  Chapter Twelve: “I Would Stand Pat”

  Financial data and stock transactions: Unless otherwise noted, information is drawn from Baruch papers, Unit XVIII, Memorabilia, Miscellany: Financial Records.

  “I am 55 . . .”: Baruch to Morron, July 1, 1925.

  “There was always . . .”: Fred Schwed, Jr., Where Are the Customers’ Yachts? or, A Good Hard Look at Wall Street (New York, 1940), p. 28.

  “General Motors . . .”: Quoted in John Brooks, Once in Golconda: A True Drama of Wall Street, 1920–1938 (New York, 1969), p. 87.

  “I told you . . .”: Baruch to Pershing, Mar. 3, 1927.

  Baruch’s twenty-six brokerage firms: They were: Appenzellar, Allen & Hill; Sailing W. Baruch & Co.; Benjamin, Hill & Co.; Campbell, Starring & Co.; H. Content & Co.; Edey & Gibson; Foster, McConnell & Co.; Goldman, Sachs & Co.; Hallgarten & Co.; Harriman & Co.; Harris Winthrop & Co.; Hayden, Stone & Co.; H. Hentz & Co.

  Also: Herrick, Berg & Co.; Hibernia Securities Co., Inc.; F. B. Keech & Co.; Lehman Brothers; Mabon & Co.; Peter P. McDermott & Co.; Otis & Co.; Pyn-chon & Co.; Redmond & Co.; Salomon Brothers & Hutzler; E. H. H. Simmons & Co.; Tucker, Anthony & Co.; Winthrop, Mitchell & Co.

  Account number 19: Source of the story is a former Hentz clerk who asked that his name not be divulged.

  “he does not . . .”: New York Times, May 25, 1928. About this time, in response to a story in the London Daily Express that described Baruch as “the stock market operator,” Arthur Krock drafted a letter to be sent over Baruch’s signature to the editor of the offending newspaper. “It has been, I think, many years since that could be called descriptive,” wrote Krock rather pompously. ”I am disposed to believe that, if you asked for a description of my activities from any five of the men with whom I have been associated in war and peace during the last ten or twelve years you would not be told that I am a ‘stock market operator.’ More generally I am referred to as a financier or economist, or as former chairman of the War Industries Board and member of the Economic Commission of the Peace Conference.” Whether this was ever sent to anybody is unclear. Krock papers, undated.