In 1926 he partnered with John M. Franklin whose father was head of the International Mercantile Marine (IMM) and Basil Harris, two well known shipping executives. Kermit’s personal friend and wealthy financier, William Vincent Astor provided the capital to secure a substantial interest in the company.
In 1927 when Kermit’s company was being denied fair access to India’s jute cargo, his competitive nature and aggressive business style triggered a rate war with the US Steel Company’s shipping subsidiary, Isthmian Line. Kermit, as president and his vice president, Philip Albright Small Franklin, pursued sixteen ship loads from Indian jute shippers claiming his organization was losing out to a disproportionate share of the business. When undermined by the entrenched companies, Kermit offered a greatly reduced rate of $4 per ton for jute shipment from Calcutta to New York while the going rate had been $7.90 per ton6 His competitors reduced their rate to $4.50 per ton and the rate war began. In 1928 a settlement was finally reached with both shipping organizations sharing an agreed upon volume of cargo. Kermit distrusted Isthmian’s willingness to adhere to the agreement, and in 1929 a New York-India conference was formed to discuss concerns. The Great Depression, however, emerged and severely affected world shipping and undermined any hope for the conference.
In 1928 Kermit and his business partner and friend, Vincent Astor, placed an initial bid on the West Africa Line for approximately $600,000 and a bid for purchase of American Merchant Lines. Other business acquisitions in 1931 were the Baltimore Mail Steamship Company to operate a Hamburg-Baltimore service where Kermit served as Vice President and control of IMM7 where he was titled as Director. Simultaneous to this flurry of shipping activity in his role as the head of the Roosevelt Steamship Company, he invested in the Deep Bay Lumber Company in Panama to ship lumber from Central America to Baltimore to offset the light loads of his vessels returning from Australia.
In 1933 he was elevated to President of Baltimore Mail. At that time, the Roosevelt Lines managed a fleet of 18 ships owned by the government operating to Australia, India, the Philippines and the Far East. Additionally, they managed under IMM a fleet of 46 steamers. By that year he was titled as Director of eight steam ship companies. In 1938 he was elected Director at the Atlantic Transport Company. Another business involvement of Kermit’s in this period was with the American Pioneer Line which provided service from New York to Havre and Hamburg.
Despite his extraordinary business schedule and world travel on distant expeditions in the 1920s and 30s, Kermit found time to serve on numerous boards and committees and maintain a hectic social and club schedule.
In 1921 he sat on the Managing Operators Committee of the United States Shipping Board with W. Averill Harriman and other major players in the US shipping industry.8 Not surprisingly considering his penchant for alcohol, in 1924 he sat on the advisory committee of the Association Against the Prohibition Amendment, an organization dedicated to repeal the Volstead Law which prohibited the sale and consumption of alcoholic beverages. Kermit was Vice President of the New York State Division and was active primarily in gaining new membership. From 1933 to 1938 he was on the boards of the Aberchrombie & Fitch Company, the Northern Dock Company, and the American Trust Company. Between 1933 and 1935 he sat on the board of the Atlas Tack Corporation of Fairhaven Massachusetts, and from 1935 to 1937 he was President of the National Audubon Society.9
His club activities define a mind boggling variety of organizations: the Harvard, Knickerbocker and Piping Rock clubs, the Missouri Pacific St. Louis Chess Club, the Seawanhaka Corinthian Yacht Club, the Porcellian Club of Harvard University and Hartford Hunt Club, the Tennis and Racquet Club, the American Society of Mammalogists and Wilderness Club. He also served on the board of the Boone & Crockett Club, an organization which his father started many years earlier. In the mid 1920s he was also a Director at the élite Explorer’s Club in New York. Other affiliations were the New York Zoological Society, the National Geographic Society, the Saint Nicholas Society, and the Reptile Society of America.
Perhaps his most enigmatic involvement that would portend his son Kermit Jr.’s involvement in espionage a generation later was his membership in a mysterious group known as “The Room.” The Room was an exclusive, secret organization that centered around monthly luncheons and dinner meetings in a rented townhouse in New York City. To remain completely anonymous, the apartment even contained an unlisted telephone number and mail drop.10 Both Kermit and Vincent Astor were charter members and general organizers since the club’s inception in 1927 with Astor being the prime mover. William Vincent Astor was a remarkably wealthy and socially active member of upper crust New York society. A descendent of the legendary 18th Century fur trader, John Jacob Astor, William (generally referred to as Vincent) inherited the family fortune at the tender age of 21 when his father perished on the Titanic. A New York Times article in 1912 listed his wealth at the tidy sum of $150,000,000 – mostly in New York real estate including the posh Waldorf Astoria Hotel. Astor’s fortune enabled him to “…control more millions than any man of his age in the country.”11
Kermit and Astor’s The Room, was partly a social gathering for like minded upper-class Brahmins and doubled as a meeting place where the members, as amateur spies, could exchange intelligence information on topics of note from international finance to foreign relations.
“At their monthly meetings, ROOM members gathered for dinner and conversation. When members returned from their continual series of world travels, they reported observations to The ROOM. ‘It is hoped to learn from Suydam [Cutting] what he has been doing in China,’ Kermit noted before one session. Indeed, the entire atmosphere surrounding The ROOM resembled that of an intelligence office, albeit in an informal and somewhat romanticized manner.”12
The group was also notable for its prominent membership. In 1927 charter members included Kermit’s brother, Theodore Jr.; world traveler, Sydam Cutting; business magnate and wealthy benefactor, Marshall Field; yachtsman and inheritor of the Astor fortune, William Vincent Astor and other leaders of society, commerce and the sporting world. In later years, publisher Nelson Doubleday; wealthy Wall Street investor, George Mason Grant; British sportsman and member of the Fourth Hussars, Captain H. Nugent Head and others would socialize and share experiences over lunch or dinner. Occasionally guests would be invited to recount their interesting adventures and perhaps secretly disclose their personal observations of world affairs. In 1928 a dinner was held to honor and wish good luck to Richard E. Byrd for his upcoming expedition to explore Antarctica:
“The visit to The ROOM of British author and veteran intelligence officer Somerset Maugham evoked the most enthusiasm, because many members had themselves worked for Allied intelligence during the first world war. (sic)”13
Although not directly involved in the secret society’s activities, Kermit’s cousin, Franklin Roosevelt was frequently an interested and grateful recipient of information gathered by the members. As world travelers, bankers and heads of business and industry, the like-minded and politically conservative members of The Room would coordinate any facts, figures or fantasy gained via their privileged positions and report back to FDR whose appetite for both rumor and factual secrets knew no bounds.
Vincent Astor*[21] with his 264-foot yacht Nourmahal would occasionally entertain Room members and FDR on board the Nourmahal. Kermit was a frequent guest of his friend. With support from the U.S. Navy, Astor and Kermit even cruised to the Pacific with the intent of spying on the Japanese in the Marshall Islands. Kermit’s ongoing drinking problem was temporary curtailed during the cruise, prompting Astor to inform cousin, FDR : “He has had hardly anything to drink – and then only beer and sherry - and is in the best shape in years. When you see him, I think you will agree.”14
Upon returning from the trip FDR was amazed at Kermit’s improvement. In a letter to Astor he commented, “He looks infinitely better than before he left and I do hope the result will be permanent.” This was not to be; following
the cruise, Kermit once again began his excessive alcohol consumption. Despite Kermit’s light libations, the motive for the trip was not for pleasure. Astor and Kermit planned to visit the Marshalls and gather intelligence for both FDR and the Office of Naval Intelligence reporting on any military buildup. The Japanese Government denied the Nourmahal any access to their Marshall Island territories. The two seagoing amateur spies cruised to Bikini, Eniwetok, Wotje and Jaluit. Astor relayed information back to FDR about the island’s dock facilities, fresh water availability, permanent structures, etc. Upon returning to the states, Kermit met to debrief his cousin at the White House and hear the President voice his concern that they may have “touched at the Marshalls.”15 Although without any documented evidence, some speculate that they may also have been searching for the fate of Amelia Earhart who disappeared a couple of years before over the Pacific.
Use of the plush yacht was not confined to surreptitious voyages, however. On occasion, the civic-minded Astor would cruise to distant locales with Kermit such as the Galapagos Islands for scientific research on behalf of museums and often would invite his friends, Kermit and FDR on other pleasure cruises. On these occasions alcohol would flow freely and locker room high jinks would prevail. Indicative of the close relationship between Kermit and Astor is demonstrated by a humorous five page list in 1934 of “fees owed” by Kermit for indiscretions he supposedly committed on one cruise:
“Loss of tennis balls through knocking into water - .50; Damage to tennis balls - $6.00; Damage to outer edge of court - $10.00; Ordinary services of Gwendolyn – no charge; Unusual services of Gwendolyn – ($25.00 per day for 7 days) - $175.00.16
In 1933, Kermit, Astor, President-elect, Franklin Delano Roosevelt, and a group of friends were in Miami and planning to board the Nourmahal when Roosevelt stopped to make a speech from the back seat of his car. Kermit was riding a few cars back in the entourage when shots rang out and a deranged unemployed construction worker attempted to end the life of the President-elect. The shots missed Roosevelt. However, Chicago’s Mayor Anton Cermak, who was shaking hands with the President-elect, was struck by one bullet and died shortly after. In the late 1930s, as the Japanese Empire spread across the Pacific, Southeast Asia and into China, FDR and Room members became more worrisome, even changing the organization’s name to the Club with some members stepping-up their worldwide snooping operations. Before the Central Intelligence Agency and even before the OSS, Astor envisioned himself organizing a formal national spy service under FDR. Although never rising to official status, during the war he eventually managed to have FDR assign him certain formal intelligence tasks within the New York area.
Kermit’s participation in the clubbish and otherwise questionable activities of The Room and other organizations were not his only social and entertainment focus. Throughout the 1920s and 30s he engaged frequently in many upper-class athletic activities: squash, tennis, polo and bridge. He maintained a close friendship and corresponded with many influential persons, worldwide. In 1927 he dined with the King of Spain. On another occasion, he dined with Bertrand Russell and Priscilla Auchincloss. Some of his lunch guests of 1928 were the writer Ford Madox Ford; the humorist Will Rogers and the architect, Grant La Farge. He maintained a long standing correspondence and friendship with the British writer, Rudyard Kipling. Kermit was continually besieged to endorse products or speak on behalf of various causes – many he declined. Since returning from his many adventures, he became a considerable public celebrity. In 1929 he dined with Gilbert Grosvenor and lectured to an audience of 5000 at the National Geographic Society.
Kermit’s personal magnetism was one of his greatest assets. With a flair for adventure and an articulate manner of speech, he could entrance a group of friends or acquaintances with his stories of distant, exotic travel. Similar to his father, his adventurous peregrinations enabled him to relate an endless repertoire of danger derring-do and knowledge of arcane facts on indigenous tribes or man-eating carnivores. When visiting family, he would keep younger members of the Roosevelt clan enthralled with his stories and present little gifts of unique trinkets from far-off places.
The boom years of the 1920s enabled Kermit and Belle to enjoy a high lifestyle and amass a considerable amount of financial independence. Both enjoyed world travel and maintained servants. They lived in a large home, Mohannes, in Oyster Bay, not far from Sagamore Hill and the property where brother Ted’s mansion would be built. In 1930 Kermit even purchased a 1920 Rolls Royce Touring Car from Vincent Astor. During the 1920s his continual cash deposits totaled many tens of thousands of dollars in the Bank of America in New York. On one occasion in 1928 he deposited the lump-sum amount of $30,000. This was at a time, even during the prosperous “roaring twenties” when the average yearly net income was $6,078.9317 Kermit’s investment portfolio in this prosperous decade held many shares of stock with Carter & Company of New York representing a significant holding in the maritime industry along with other investments. However, the stock market crash of 1929 and the ensuing economic depression of the 30s began to take an insidious toll on Kermit and Belle’s financial wellbeing. Many of their investments began to suffer devaluation as the economic debacle spread through the nation and across the world.
The decade of the 20s was a period of unbridled enthusiasm, prosperity and development leading many people to believe the good times would never end. The euphoric sense of wellbeing and wealth lead many to engage in excessive spending, much of it haphazard and careless. Many new technical innovations were being developed such as radio, new home appliances, improvements in automobiles and an endless variety of modern luxuries providing outlets for people to part with their money. The belief that financial investments in the stock market were a sure method of gaining financial independence increasingly encouraged a large segment of the population to cash in their savings, mortgage their houses or borrow money to buy stocks. Between 1922 and 1929 the Dow Jones Industrial Index Average increased from 91.0 to 290.018 – an astonishing 300 percent rise. Unfortunately, much of the overpriced stock acquisitions were based upon margin buying enabling a very small down payment on the purchase with the expectation of gaining a windfall profit on the stock to finance the initial cost. In the end when the value of many of these stocks plummeted the buyer was obligated to cover the full purchase price. This unanticipated development in speculation forced many into bankruptcy who could not make good on the purchase.
A second probable cause of the market crash was the great expansion of investment trusts and public utility holding companies.19 As utility regulation increased, the value of their highly inflated and leveraged stocks dropped drastically. The combination of these events precipitated a selling panic and in 1929 on October 24th and 29th, “Black Thursday” and “Black Tuesday,” the stock market crashed under a massive selloff. “By the time the crash was completed in 1932, following an unprecedentedly large economic depression, stocks had lost nearly 90 percent of their value.”20 During the decade of the 1930s following the Wall Street debacle, many banks across the nation failed in the era before the Federal Deposit Insurance Corporation, leaving their depositors penniless. Bank loans were extremely scarce, money was tight or non-existent, with an unemployment rate reaching 25 percent people were losing their homes and businesses, manufacturing ground to a halt and jobs in many areas were scarce or non-existent – the nation was suffering deeply.
This dreadful set of events cascaded around the world and severely affected the world shipping industry. Although gainfully employed through this difficult period, Kermit’s investments and general economic condition began to fail precipitately requiring a major change to his lifestyle and retrenchment of his spending habits.
Between 1929 and 1933 his investment portfolio showed a flurry of investment activity for International Mercantile Marine. Following the October market crash he held a highly leveraged account (at 30 percent) of 7500 shares of IMM with a debit balance of $144,440. The account listed a credit balance of o
nly $1,024.21.21 In 1933 he suffered a net loss of $27, 424.50 for IMM. His 1929 purchase of Aviation Corporation of Delaware, purchased for $2000 was sold in 1933 for $1200. Between September and December, 1930 the Roosevelt’s received dunning letters for numerous small, household bills in arrears totaling over $16,000.22 Checks were written for $884.34 but not sent due to a lack of funds in their Fifth Avenue Bank account. Throughout 1930, their account was overdrawn on many occasions totaling thousands of dollars. Even his son, Kermit Jr. was informed of an overdue payment to B. Altman for a $33 charge on a new suit.
By the early 1930s, Kermit and Belle were “cutting their budget drastically”23 as many others across the nation were desperate for jobs and resorting to soup kitchens for their meals. Although continually employed throughout the decade of the depression and still earning a sizeable salary in the shipping industry, Kermit and Belle were forced to balance their investment losses and living expenses against his income. In 1930 Belle discontinued her membership in the Child Study Association of America for a yearly savings of $20.00 as the Book of the Month Club was complaining about unpaid bills. Kermit resigned his membership in the Explorers Club in 1931 and began to curtail unnecessary expenses. In 1937 Kermit cancelled his subscription to the New York Times and resigned from the Tennis and Racquet Club.
Lost in the Shadow of Fame Page 12
