The Patriarch (16 page)

Sarnoff, born in Russia, raised on the Lower East Side, apprenticed as a newsboy and telegraph operator, had developed an early expertise and interest in wireless radio communications. In 1921, he had been named general manager of General Electric’s subsidiary, the Radio Corporation of America (RCA). It was Louis Kirstein, the department store owner, Sarnoff’s friend from Boston, and an investor in FBO, who suggested that he talk to Kennedy about installing his RCA Photophone equipment in the FBO studios. Sarnoff met with Kennedy and came away enormously impressed with his “clear grasp of the opportunities in sound recording and talking pictures.”
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The two young chief executives, one tall and Irish, the other a small, broad-faced Eastern European Jew, quickly struck a deal. FBO agreed to install RCA Photophone equipment in its studios and produce sound pictures with it. In turn, RCA would purchase $500,000 of FBO stock, enough to pay for the installation and provide Kennedy and Guy Currier, the chief stockholders, with a sizable profit. To maximize those profits, Currier and Kennedy cornered as much FBO stock as they could, then pooled their holdings in a newly organized corporate entity, the Gower Street Company.

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A
s Kennedy had predicted long before, the men in New York who had invested in and now controlled the picture business had begun to merge, consolidate, and combine their studios into larger and, they hoped, more productive and profitable enterprises. To manage these new companies—and watch over the millions of dollars invested in them—they needed managers with the skill set Kennedy had brought with him to the picture business, businessmen who cared only for the bottom line and were not afraid to slash production costs to increase profits and boost stock and bond prices. The latest megadeals organized by Wall Street investment banker Elisha Walker, president of Blair & Co., and Jeremiah Milbank, a conservative Republican who had been attracted to the picture business after seeing DeMille’s
The King of Kings,
had brought together Pathé, which made newsreels and short films, and DeMille’s company, Producers Distributing Corporation, which made features. A year later, in a complicated cross-ownership and affiliation agreement, Walker undertook the near impossible task of consolidating into one enterprise the merged Pathé/DeMille studio in Hollywood and the Keith-Albee-Orpheum (K-A-O) chain of vaudeville theaters.

J. J. Murdock, the sixty-eight-year-old Scotsman who had managed the Keith-Albee-Orpheum theaters, was put in charge of the new company. A vaudeville theater man who knew nothing about producing pictures, Murdock, with Walker’s encouragement, approached Kennedy about running the Hollywood side of the operation. Kennedy had been selling Pathé stock short since the previous August through an account registered in Eddie Moore’s name at E. F. Hutton. He now demanded and was given access to the company’s financial records, which confirmed what he had guessed when he started selling the stock short. Pathé was badly in debt and desperately needed to cut operating costs at the studio.

Joseph Kennedy had learned through experience that the best way to get a job was to act as if one didn’t need or want it. This was what he had done with Swanson and what he did again with Murdock. In late January 1928, insisting that he could not possibly postpone his winter vacation, he cut off negotiations with Murdock and boarded a train at Grand Central for Palm Beach, via Jacksonville. If Murdock wanted to make a deal, he’d have to wait until Kennedy returned to New York.

As we shall see, it was not the best time to go on vacation, but Kennedy was a creature of habit and refused to let anyone or anything interfere with his schedule. Days before he boarded the train to Palm Beach, Rose had left Riverdale for Brookline to await the arrival of her eighth child under the care of Dr. Good, who had delivered her previous seven.

The Kennedy children who had arrived in Riverdale only months earlier would spend their first winter in a new home, new schools, and a new neighborhood, with mother, father, aunts, uncles, and grandparents hundreds of miles away. The older boys, Joe Jr., twelve, and Jack, ten, stepped into the breach and watched out for the younger Kennedys, as they had been raised to do. Kick kept an eye on her little sister Eunice. Mary Moore, Eddie’s wife, who lived nearby, and the nannies and nurses looked after three-and-a-half-year-old Patricia and two-year-old Bobby.

Though the family had relocated to Riverdale to be closer to Kennedy’s workplace, neither wife nor children would see very much of him for the next three years. His trips to the West Coast grew more frequent and of longer duration. He might have compensated by cutting back on his winter vacations. But this he would not do, and no one who knew how hard he worked, not wife or children or business associates, dared suggest that he give up or curtail his rest-and-recuperation pilgrimage to Palm Beach.

In Palm Beach, Kennedy stayed at the Royal Poinciana, one of the world’s great resort hotels, on thirty acres, with one thousand rooms, a twelve-hundred-seat dining room, gardens, tennis courts, golf courses, and the Coconut Grove with dancing every evening. The center of social life remained the hotels—and, a short walk from them, Colonel Edward Riley Bradley’s Beach Club, a members-only, evening-dress-required gambling resort with the best food in town. As Palm Beach grew in size and population through the 1920s, the richest of the rich moved out of the hotels and into wildly eclectic Spanish-Mediterranean “cottages” with terra-cotta tiles, stucco façades, and tastefully oversize turrets, columns, arcades, cloisters, and high wood-beamed ceilings. High-toned restaurants, nightclubs, and shops spread along Worth Avenue, anchored by the exclusive Everglades Club, designed as a convalescent hospital for Great War veterans but converted to the island’s most luxurious and exclusive private club.

Kennedy and his friends were not members of the Everglades or part of Palm Beach haute society. They came south to play golf, eat fresh seafood, soak in the sun and the air, swim in the pools and in the ocean, and do a bit of gambling at Bradley’s. Or such had been the program in past years. January 1928 would be different.

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J
oe and Gloria had spoken regularly on the phone since her return to Los Angeles. Simultaneously, Kennedy’s associates E. B. Derr and C. J. Scollard were doing their best to sort out Swanson’s business affairs, reincorporate her production company, renegotiate her film contracts and debt to United Artists, and reduce her financial obligations by firing several of her personal attendants, closing down her New York office, selling her furniture, and eliminating redundant and oversize insurance policies. On January 25, Derr wired Kennedy in Palm Beach that he had discovered Swanson employed a full-time production manager, accountant, publicist, stenographer, dressmaker, seamstress, secretary, chauffeur, butler, and three servants. “New bills [were] turning up every day,” he telegrammed Eddie Moore three days later. “Funds are getting short. Was not startled when partial payment bill came in on foreign car but new bill just arrived demanding immediately payment $700 to Professor Faust Squadrilli for three paintings Marquis supposed to have bought recently. Can I pay the bill by returning the paintings? Could he [the marquis] possibly make the supreme sacrifice by giving up the paintings until we get some money together?”
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In late December, the Marquis de la Falaise de la Coudraye returned to Los Angeles to celebrate Christmas with Gloria and her children. “There were,” Swanson recalled in the unpublished notes she wrote for her autobiography, “wild telephone calls for us to come to Palm Beach—there was of course lots to talk about and I supposed lots of business things to settle.” Swanson was due in New York City in early February for the premiere of her latest picture,
Sadie Thompson,
but she agreed to stop off in Palm Beach. Kennedy and Eddie Moore met her, Henri, and her full entourage on January 28 and escorted them to the Whitehall Hotel, which was as luxurious as (but a bit more exclusive than) the Royal Poinciana.

Kennedy and Swanson would see a great deal of each other during their week together. In handwritten notes for her autobiography, Swanson would later claim that while members of Kennedy’s entourage took Henri fishing, she and Kennedy had sex for the first time. “After every unruly storm you look for the damage. Was Henry [her husband] hurt or even aware?” she asked. “Apparently everything had happened so fast and the confusion so great that the obvious was buried for the moment at least. . . . Henry was being introduced to fishing in a very big way by the four shadows who were now shadowing him and I was being untrue to my husband—what a hell emotionally I was going through. It was against every fibre and my conscience gnawing at me—I loved Henry, he mustn’t be hurt—and at the same time I was completely caught up in this wild man’s passion and the world he represented rather than Henry’s.”
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While Swanson was vacationing with Kennedy and her husband in Palm Beach, Derr was in Los Angeles trying to renegotiate her contract with United Artists. Joe Schenck agreed to release her from her commitments, he told Derr, because “he liked Kennedy” and wanted to help him out. The truth was that Schenck knew he had no chance of holding on to Swanson and wasn’t sure she was worth the trouble.
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Swanson was free now to sign the papers Kennedy had prepared, giving him full power of attorney and placing her assets past, present, and future in Gloria Productions, a new company he had incorporated. After her week in the sun, Swanson and Henri, who was still not indicating that he had any knowledge of what had gone on between his wife and her new business manager, left Palm Beach for New York. Kennedy took a separate train north with Eddie Moore.

On his return, he sat down with Murdock and Elisha Walker and concluded the negotiations over Pathé that he had suspended when he’d left for his winter vacation. Anticipating that the Pathé stock price would rise once the news of his hiring was officially confirmed, Kennedy bought eight hundred shares of preferred, in Eddie Moore’s name, on February 14. The following day, after the official announcement, he sold all his Pathé stock for a profit of $16,318 on an investment of $21,772.50.
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On February 20, his fifth daughter and eighth child, Jean Ann, was born at St. Elizabeth’s Hospital in Brookline. This time, the Boston newspapers put the father’s name first and left out his father-in-law’s. Befitting Kennedy’s new status in the moving picture industry, even
Variety
reported on Jean’s birth. Fred Thomson telegrammed his “congratulations and very best wishes to Rose and the daughter. My road to fame is now clear. In future years I will be able to say I knew Joe and Rose Kennedy when they had only seven children.” Bill LeBaron, FBO’s production chief, joked in his telegram to Rose that he had just telephoned Joe, who was so excited and so busy “that he doesn’t know whether this is his eighth or ninth child. Think you should wire him correct information as I hate to see an otherwise good father so demoralized by the movies.” Gloria Swanson de la Falaise sent flowers.
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Though he had told the
Los Angeles Times
that he was working for Pathé “without compensation,” he had negotiated a healthy salary, $2,000 a week, equivalent to more than $3.4 million in purchasing power today, “plus out of pocket expenses and disbursements.” The real reward for his new part-time job was “100,000 fully paid shares” of Pathé stock, which was to be delivered to him in four installments: 25,000 shares on May 15, 1928; another 25,000 on August 15; the third installment on November 15; and the final one on February 15, 1929. The net profits from the sale of these shares, which Kennedy disposed of at or just before delivery, totaled a little over $579,000, worth more than $7 million in purchasing power today.
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On February 15, Kennedy announced that he would be traveling to the West Coast to reorganize the Pathé studio and meet with Cecil B. DeMille, the putative studio head and major culprit in the cost over-runs. A week later,
Variety
reported that weekly overhead at the Pathé studios had been reduced from $110,000 to $80,000 and fifty salesmen and two division managers in the distribution department had been let go. What was not reported then or subsequently was that simultaneously with slashing costs in Hollywood, Kennedy had created a position in Paris for Henri as Pathé sales representative, thereby removing him from Gloria’s payroll and from the United States for longer periods of time.
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Kennedy’s major achievement that spring was working out a mutually acceptable exit strategy with Cecil B. DeMille. With his $7,500-a-week salary, his $100,000 bonus for each finished feature, and the outrageous luxuries he lavished on subordinates, retainers, and his mistress/screenwriter, DeMille had to be taken off the payroll. DeMille was furious that Pathé executives—including, he suspected, Joe Kennedy—had leaked stories about his profligacy as a producer and studio head, and he demanded that all derogatory comments cease at once and that from this point on, Pathé executives praise his production unit as the only efficient and profit-making one in the conglomerate.
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Kennedy agreed and wrote Elisha Walker, demanding that chatter out of New York stop at once. If he was to run the company, as he had been hired to do, he had to have complete control of everything, including publicity. “I do not wish to appear arbitrary in the matter of this DeMille settlement but the conduct of this business must either be left in our hands here or else we cannot make any promises as to its success. We are more vitally interested in any publicity which vitally affects future success of the Company than anybody can possibly be in New York. We realize if the wrong statements get out the future success of the Company is seriously in danger and therefore I think it necessary that the question of publicity be left to [the Pathé publicist] and me. We of course will try to get it to you if possible.” Walker made sure the DeMille chatter ceased in New York. The deal was signed and DeMille exited, leaving the studio in better, but far from perfect, financial circumstances.
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