Joseph P. Kennedy Sr.
Joseph Patrick Kennedy was an American businessman, investor, philanthropist, and politician. Known for his own political prominence as well as that of his children, he was the patriarch of the Kennedy family.
Kennedy was born into a political family in East Boston, Massachusetts. After making a large fortune as a stock and commodity market investor, he invested in real estate and a wide range of privately controlled businesses across the United States. During World War I, he was an assistant general manager of a Boston area Bethlehem Steel shipyard; through that position, he became acquainted with Franklin D. Roosevelt, who was the Assistant Secretary of the Navy. In the 1920s, Kennedy made huge profits by reorganizing and refinancing several Hollywood studios; several acquisitions were ultimately merged into Radio-Keith-Orpheum studios. Kennedy increased his fortune with distribution rights for Scotch whisky. He owned the largest privately owned building in the country, Chicago's Merchandise Mart.
Kennedy was a leading member of the Democratic Party and of the Irish Catholic community. President Roosevelt appointed Kennedy to be the first chairman of the Securities and Exchange Commission, which he led from 1934 to 1935. Kennedy later directed the United States Maritime Commission. He served as the United States Ambassador to the United Kingdom from 1938 to late 1940. With the outbreak of World War II in September 1939, Kennedy was pessimistic about Britain's ability to survive attacks from Germany. During the Battle of Britain in November 1940, Kennedy publicly suggested, "Democracy is finished in England. It may be here ." After a controversy regarding this statement, Kennedy resigned his position.
Kennedy married Rose Fitzgerald and had nine children. During his later life, he was heavily involved in the political careers of his sons. Three of Kennedy's sons attained distinguished political positions: John F. Kennedy served as a U.S. senator from Massachusetts and as the 35th president of the United States, Robert F. Kennedy served as the U.S. attorney general and as a U.S. senator from New York, and Ted Kennedy was a U.S. senator from Massachusetts. Kennedy was also the father of Special Olympics founder Eunice Kennedy Shriver and U.S. Ambassador to Ireland Jean Kennedy Smith.
Early life and education
Joseph Patrick Kennedy was born on September 6, 1888, at 151 Meridian Street in East Boston, Massachusetts. Kennedy was the elder son of Mary Augusta Kennedy and businessman and politician Patrick Joseph "P.J." Kennedy. Kennedy attended Boston Latin School, where he excelled at baseball and was elected class president before graduating in 1908.Kennedy then attended Harvard College, where he gained admittance to the prestigious Hasty Pudding Club but was not invited to join the Porcellian Club. Kennedy graduated in 1912 with a bachelor's degree in economics.
Business career
Kennedy set his future sights on embarking on a business career upon his graduation from Harvard. During his mid-to-late 20s, he made a large fortune as an active commodity and stock investor; he then reinvested much of his proceeds into film studios, real estate, and shipping lines. Although Kennedy never built a significant business from scratch, his timing as both buyer and seller was excellent.Various criminals, such as Frank Costello, boasted that they worked with Kennedy in mysterious bootlegging operations during Prohibition. Although his father was in the whisky importation business, scholars dismiss the claims. The most recent and most thorough biographer David Nasaw asserts that no credible evidence has been found to link Kennedy to bootlegging activities. When Fortune magazine published its first list of the richest people in the United States in 1957, it placed Kennedy in the $200–400 million group, equivalent to about $3.2 billion in 2023.
Early ventures
Kennedy's first job after graduating from Harvard was a position as a state-employed bank examiner. This job allowed him to learn a great deal about the banking industry. In 1913, the Columbia Trust Bank, in which his father held a significant share, was under threat of takeover. Kennedy borrowed $45,000 from family and friends and bought back control. At the age of 25, he was rewarded by being elected the bank's president. Kennedy told the press he was "the youngest" bank president in America. In May 1917, Kennedy was elected to the Board of Trustees of the Massachusetts Electric Company, New England's leading public utility at the time.Kennedy emerged as an astute businessman who possessed an eye for value, possessing shrewd entrepreneurial acumen and savvy investment foresight. For example, as an active real estate investor, he turned a handsome profit from his privately controlled ownership of Old Colony Realty Associates, Inc., an investment company which bought distressed real estate throughout the United States.
Although he was skeptical of American involvement in World War I, Kennedy sought to participate in wartime production as an assistant general manager of Fore River, a major Bethlehem Steel shipyard in Quincy, Massachusetts. There, he oversaw the production of transports and warships. Through this job, he became acquainted with Assistant Secretary of the Navy Franklin D. Roosevelt.
Wall Street and stock market investments
In 1919, Kennedy joined Hayden, Stone & Co., a prominent stock brokerage firm with offices in Boston and New York, where he became an expert dealing in the unregulated stock market of the day, engaging in tactics that were later considered to be insider trading and market manipulation violations. He happened to be on the corner of Wall and Broad Streets at the moment of the Wall Street bombing on September 16, 1920, and was thrown to the ground by the force of the blast. In 1923, he established his own investment company. Kennedy subsequently became a multi-millionaire as a result of taking "short" positions following the 1929 stock market crash.Kennedy was enlisted in 1924 to help stabilize the stock of John D. Hertz's Yellow Cab Company, a taxi cab operator, against a bear raid; afterward, Hertz suspected Kennedy of carrying out such a raid against the stock himself. In 1933, he helped establish a "stock pool" that bought large quantities of stock in Libbey-Owens-Ford, an auto-glass manufacturer, and wash-traded huge volumes of stock among themselves while promoting the outright fraud that their company was related to Owens-Illinois, a glassmaker that made bottles which presumably would have profited from the imminent repeal of Prohibition.
1929 Wall Street Crash
Kennedy later claimed he understood that the rampant stock speculation of the late 1920s would lead to a market crash. It is said that he knew it was time to get out of the market when he received stock tips from a shoe-shine boy, but no evidence has been found of the anecdote and the first known version of the same tale was associated to Bernard Baruch in 1957. Kennedy survived the crash "because he possessed a passion for facts, a complete lack of sentiment and a marvelous sense of timing".During the Great Depression, Kennedy shrewdly increased his wealth by devoting most of it to investment-grade real estate. In 1929, Kennedy's fortune was estimated to be $4 million. By 1935, his wealth had increased to $180 million. He also acquired enough capital to establish million-dollar trust funds for each of his nine children that guaranteed lifelong financial independence.
Investments
Hollywood
Kennedy generated windfall profits from reorganizing and refinancing several Hollywood film studios. He began with film distribution in New England, buying first movie theaters in Massachusetts, but quickly moved on to industry-wide arrangements and production. While still at Hayden, Stone & Co., Kennedy boasted to a colleague, "Look at that bunch of pants pressers in Hollywood making themselves millionaires. I could take the whole business away from them." One small studio, Film Booking Offices of America, specialized in Westerns produced cheaply. Its owner was in financial trouble, and asked Kennedy to help find a new owner. Kennedy formed his own group of investors and bought it for $1.5 million.In March 1926, Kennedy moved to Hollywood to focus on running film studios. At that time, film studios were permitted to own exhibition companies, which were necessary to get their films on local screens. With that in mind, he bought controlling shares in Keith-Albee-Orpheum Theaters Corporation, which had more than 700 vaudeville theaters across the United States that had begun showing movies. In October 1928, he formally merged his film companies FBO and KAO to form Radio-Keith-Orpheum and made a large amount of money in the process. Kennedy had no interest in vaudeville; he just wanted the theaters, which he planned to convert to movie houses for the film booking interests he ran in cooperation with 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.
File:Sadiethompsonlobbycard.jpg|thumb|upright=0.7|left|alt=Lobby card for Sadie Thompson with head high portrait of woman in her thirties|Kennedy, along with fifteen others, signed a telegram warning that the release of Sadie Thompson starring Gloria Swanson would jeopardize the ability of the film industry to censor itself. Swanson needed financing for her film production company, and Kennedy began a three-year affair with her when he met her for lunch in New York after the film's release.
Keen to buy the Pantages Theatre chain, which had 63 profitable theaters, Kennedy made an offer of $8 million. It was declined. He then stopped distributing his movies to Pantages. Still, Alexander Pantages declined to sell. However, when Pantages was later charged and tried for rape, his reputation took a battering, and he accepted Kennedy's revised offer of $3.5 million. Pantages, who claimed that Kennedy had "set him up", was later found not guilty at a second trial. The girl who had accused Pantages of rape, Eunice Pringle, was rumored to have confessed on her deathbed that Kennedy was the mastermind of the plot to frame Pantages. This rumor was later debunked by Pringle's daughter, Mary Worthington. Kennedy made over $5 million from his investments in Hollywood. During his three-year affair with film star Gloria Swanson, he arranged the financing for her films The Love of Sunya and the ill-fated Queen Kelly. The duo also used Hollywood's famous "body sculptor", masseuse Sylvia of Hollywood. Their relationship ended when Swanson discovered that an expensive gift from Kennedy had actually been charged to her account.