The Patriarch (75 page)

All through the war, he had privately criticized Roosevelt for his reliance on Jewish advisers like Felix Frankfurter. Now, in 1945, after the world had learned of the death camps, he complained once again at what he still believed was the overrepresentation of Jews in high positions. As always, he disguised his criticism as concern.

In March 1945, he told his cousin Joe Kane that he had warned Arthur Krock, who happened to be Jewish, that he “couldn’t think of anything worse for the Jewish people” than that so many of them had been appointed by Roosevelt to postwar planning positions. A month later, in April, he complained about Bernard Baruch, whose trip to Europe as the president’s “special economic adviser,” he claimed, “makes a perfect answer for the German charge that the Jews control the situation.”
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His relief was almost palpable when Truman took office in mid-April 1945 and, as he had promised, dismissed Henry Morgenthau as treasury secretary, removed Samuel Rosenman from the White House, and sidelined Felix Frankfurter as presidential adviser. “The Jews are crying that they’ve lost their greatest friend and benefactor,” Kennedy wrote Kick soon after Roosevelt’s death. “It’s again a clear indication of the serious mistake that the Jews had in spite of their marvelous organizing capacity. They made all their bets on one man rather than on some real social improvement. Then the man dies, and their hope for social improvement dies with him. . . . Fundamentally, what has happened in this country is that the people believe that the day of free spending and the power of certain groups to control the future life of this country are finished.”
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K
ennedy was temporarily invigorated by the accession of the new president and would not have been surprised, he told Kick, if Truman offered him a position. “If it’s anything I can do, I’ll probably take it on the basis that everybody should help if they can.”

Still, he preferred sticking to his plan of retiring from public life in favor of his children. If Truman did get around to offering him a job, he was “seriously considering . . . whether I might not say to him that I’d like to help any way I can; but if he’s going to give me a job, I’d rather have him give it to Jack and maybe make him the minister to some country or Assistant Secretary of State or Assistant Secretary of the Navy, or something of that sort. I haven’t mentioned it to Jack yet, but I’m thinking it over.”
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For a brief moment that spring, it was almost as if the old days had returned and his advice, friendship, and support were again valued in Washington. On May 15, he met with Herbert Hoover, who had heard that Truman wanted to see him but didn’t think it appropriate for a Republican ex-president to request an appointment with the Democratic president. Kennedy agreed that the invitation should come from Truman and called a contact at the White House to suggest as much. When Truman subsequently invited Hoover to the White House, Kennedy took it as a sign that he was a Washington insider again. “My observation to Rose . . . was that it is a strange thing that a little fellow from East Boston, who had been out with the Administration for four or five years because of his war position, should be called upon to bring an Ex-President of the United States and the new President of the United States together for the first time.”
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J
oe Jr. was gone, Jack was an invalid, and Rosemary was still at Craig House, able to walk but unable to speak, write, or perform the simplest tasks, and in need of twenty-four-hour custodial care. Kick had decided that she was going to remain in England and was attempting now to build a life for herself. Her father wrote her long letters every week. There was little more he could do for his oldest children. But he had five others who were approaching adulthood and needed his guidance.

Bobby had enlisted in the navy and was in training in Lewiston, Maine. In January 1945, put off because he was nineteen and his father still wrote to him as if he were a child, he asked him to “write me a letter as you used to Joe & Jack about what you think about the different political events and the war as I’d like to understand what’s going on better than I now do.” Kennedy was only too happy to oblige. The main point of tension between father and son remained Bobby’s burning desire to get into the war. Kennedy was able to delay that moment by convincing Bobby to go to officer candidate school, as his brothers had. “I should like to have him get as far along in his school as possible and then get him out as reasonably soon after the war as I can,” Kennedy wrote Joe Kane on March 19, 1945. “I want Bobby to have a college education and then really get busy. With Joe gone and Jack still a long way from being well, there is plenty of slack for Bobby to take up.”
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Ted, at thirteen years of age, was too young to even contemplate military service, but not too young, his father believed, to think seriously about his future. “When I was thirteen or fourteen years old, Dad called me into his room for a chat. I must have done something that prompted the conversation, but I don’t remember what it was.” He had expected some sort of reprimand. Instead, he got a gentle lecture on what it meant to be a Kennedy. “There are a lot of children in this family and they are all trying to do useful things. If you don’t want to do important and useful things, that’s your choice, but I don’t have time to waste. If you want to do something important and useful, then I’ll help you out.” Ted left the room, ecstatic that instead of scolding him, his father had offered his assistance.
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He held his daughters to the same standard. At a time when most American parents, particularly those who were rich and Irish Catholic, pushed their daughters to find husbands, Kennedy encouraged and assisted his in finding work. Although the median age at which women married in the 1940s and 1950s was twenty, the three youngest Kennedy daughters would go into the workplace first, then marry later: Eunice at thirty-two, Pat at thirty, and Jean at twenty-eight.
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Eunice’s first job, secured for her by her father, was at the State Department working with returning POWs in the Special War Problems Division. Her next job, which her father also got for her, was with the Justice Department. If she wasn’t happy with it, he advised her, she should “have no hesitancy in dropping it. Don’t stick it out just because you think you should. The important thing is to be happy with your job.” When Eunice, as Bobby had, asked her father to send his thoughts on politics and the economic situation, he happily complied, answered her questions, and sent her a copy of a recent speech he had given in Boston.
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Because Patricia was particularly good with numbers, when she graduated, Kennedy found a place for her at the Bache firm on Wall Street. When she decided not to take it, he found her work with Father Patrick Peyton, “the Rosary Priest,” who staged radio, television, and live theater performances to promote the praying of the family rosary.
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After Jean, the youngest of his daughters, confided to her father that she had no idea what she wanted to do when she graduated, he suggested that she start out in public relations and see if that kind of work suited her. She agreed and he found jobs at the Merchandise Mart, which he now owned, and a place for her and a friend to live in Chicago. After two years in public relations, Jean took a position with Father James Keller on his weekly television show,
The Christophers
.
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T
hough Kennedy would continue his Cassandra-like pronouncements about postwar economic collapse, he and his family had little to fear. The bulk of their fortune was safely invested in trusts for Rose, the children, and the children’s children. Rosemary’s trust was handled separately from the others, and on his death, Joe Jr.’s had been divided among the other children. To provide for maximum growth, the children were not permitted to withdraw anything from the 1936 trusts until the boys reached thirty-one and the girls forty-one, at which time they would be permitted to spend the annual earned income only, the corpus being reserved for their children. The 1926 trusts allowed earlier withdrawals, at age twenty-five. What this meant was that by 1946, very little had been taken out of the accounts, allowing the principal to grow unimpeded. By the end of 1946, the sum total in the trusts was about $8 million, equivalent to almost $90 million today.
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Kennedy left nothing to chance. Because he had little or no expectation of strong economic growth in the immediate future, he reinvested his profits in what he believed to be the safest haven for his capital, commercial real estate, and chose as his primary broker John J. Reynolds, who bought and sold properties for Archbishop Spellman and the New York Archdiocese. With the city’s premier broker working for him, connections to the Catholic Church (one of the city’s largest real estate owners), cash reserves for down payments, easy access to large mortgages at low rates, and an almost uncanny ability to do the numbers and spot undervalued properties, Kennedy ended up defying his own expectations and making at least as much money from real estate as he had from trading stocks.

It was a very good time to buy prime urban real estate. For fifteen years, since the stock market crash of 1929, there had been little new construction. With increased war spending and inadequate and aging residential and commercial space, rental prices had soared.

Kennedy real estate deals were all big ones. From 1943 on, he purchased dozens of high-priced, prime real estate parcels in midtown Manhattan, several on Lexington Avenue between Forty-sixth Street and Fifty-ninth Street, the entire block front between Eighty-second and Eighty-third on the west side of Broadway, the Siegel-Cooper building between Eighteenth and Nineteenth on Sixth Avenue, and the old Fahnestock mansion at Madison Avenue and Fifty-first. He bought these properties not as income-producing investments, but with the intent to turn them over quickly. He sold the Siegel-Cooper building after a year to J. C. Penney for a healthy profit. He sold the Fahnestock mansion to Random House less than ten months after he had purchased it, again at a sizable profit. Had he held on to these properties longer, he would have made even more money. But that was not his style. Better to get out with a healthy profit than to hold on and risk a loss.
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The real estate market had become so lucrative—with rents rising so high and so fast during the war years—that both the federal Office of Price Administration and the New York State Legislature debated instituting rent controls. On September 28, 1944, at a hearing on rent controls held by the general welfare committee of the city council, Kennedy was “cited as a rent gouger” for raising rents in the Siegel-Cooper building when he purchased it. A week later, at a second public hearing, this one held by a joint state legislative committee investigating commercial rent increases, John J. Reynolds, representing Kennedy, struck back. “After Mr. Kennedy’s name had been mentioned several times,” the
New York Times
reported on October 4, “Mr. Reynolds retorted: ‘Why spread the name of Mr. Kennedy all over the case? Mr. Kennedy didn’t buy the property, and he never saw it. It was bought by John J. Ford of Boston, in trust for the children of Joseph P. Kennedy, and I operate it for him.” Reynolds’s defense of Kennedy was ludicrous. No matter whose name the trusts were in, he retained full control over them—and the properties they owned.
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The outcry against rent gouging was such that the New York State government passed commercial rent control laws for New York City that were signed into law and approved by the courts in early 1945. By the time they went into effect, Kennedy had diversified his real estate portfolio beyond the reach of the new legislation. By mid-1945, he had purchased a thirteen-story office building in Albany, a large commercial plot on Boston Post Road in Pelham Manor, and the crown jewel in the Kennedy real estate empire, the Merchandise Mart in Chicago.

The Mart, a gigantic building with ninety-three acres of rentable space, had been built fifteen years earlier by Marshall Field. In 1945, Field, with excess profits tax liabilities he could not afford to pay, decided to sell the building at a loss, therefore reducing his excess profits and his taxes. Kennedy negotiated a price of $13.2 million on the property, which had cost $30 million to build and been valued on Field’s recent financial statement at $31 million. There was one catch. Before Field finalized the deal, Kennedy had to assure him that rumors that Congress might repeal the excess profits tax were false and that it indeed made sense for him to take a tax loss on the Merchandise Mart sale. Kennedy got such assurances—which he immediately relayed to Field—from John W. McCormack, the House majority leader, who had checked with his colleagues on the Ways and Means Committee and received confirmation that the excess profits tax would remain in effect for 1945.
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Kennedy secured a mortgage of $12.5 million on the property, which meant the Merchandise Mart cost him a little less than $1 million in cash. To protect himself from huge tax bills, he then asked for and received IRS approval to vest ownership of the Mart in the family trusts.

On a Saturday in mid-November 1945, Kennedy flew to Chicago to sign the final sales documents and take control of his new building, the largest in the country, save the Pentagon. At nine the next morning, a Sunday, he met with his new CEO, Wally Ollman, and looked over his purchase in person for the first time. “In pungent phraseology,” Ollman recalled, Kennedy “recounted that he had never been identified with a loser and did not intend to blemish that record in the operation of The Mart. Those desiring to work with him . . . were welcome to stay and those finding the task too difficult or demanding were invited to leave as all employees were informed on the following day in his first organization meeting.”
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This would be the first of many meetings between the two. They would begin with each man standing, then, according to Merchandise Mart insiders, go into their dance. Kennedy would sit down on the couch; Ollman, a large, imposing man, would perch on a chair and look down at his boss. Kennedy would then move to higher ground, on the arm of the couch, from where he would be the one looking down. Eventually, neither man willing to concede anything, they would rise to their feet and continue their meeting.
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