Joseph Patrick Kennedy Sr. (September 6, 1888 – November 18, 1969) 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 the film industry, real estate and other lines of business. 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 (RKO) 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 (SEC), 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 [in the United States]." 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 Sr. was born on September 6, 1888, at 151 Meridian Street in East Boston, Massachusetts. Kennedy was the elder son of Mary Augusta (née Hickey) 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 became a bank examiner and commodity and stock investor. He reinvested much of his proceeds into the film industry, real estate, and shipping lines. 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 bank clerk, and later a bank examiner at Columbia Trust Bank. 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 (equivalent to $ million in ) 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.Kessler, p. 25. 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.
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.Beverly Gage, The Day Wall Street Exploded, Oxford University Press, 2009, p. 156. 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 (LOF), 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.Nasaw, p. 192.
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"."Essay: The Merits of Speculation", Time, September 22, 1967.
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 (equivalent to $ million in ). By 1935, his wealth had increased to $180 million (equivalent to $ in ). He also acquired enough capital to establish million-dollar trust funds for each of his nine children that guaranteed lifelong financial independence.Nasaw, p. 92, 131
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.Nasaw, p. 66 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."Beauchamp, Cari (2009) Joseph Kennedy Presents: His Hollywood Years p. 23, Knopf, New York. . One small studio, Film Booking Offices of America (FBO), 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 (KAO), which had more than 700 vaudeville theaters across the United States that had begun showing movies.Kessler, p. 53 In October 1928, he formally merged his film companies FBO and KAO to form Radio-Keith-Orpheum (RKO)Richard J. Whalen, The Founding Father, 1964. 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 (RCA). 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.
Keen to buy the Pantages Theatre chain, which had 63 profitable theaters, Kennedy made an offer of $8 million (equivalent to $ million in ). It was declined. He then stopped distributing his movies to Pantages. Still, Alexander Pantages declined to sell.Kessler, p. 57. 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 (equivalent to $ million in ). 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 (equivalent to $ million in ) from his investments in Hollywood. During his three-year affair with film star Gloria Swanson,Beauchamp, Cari (2009) Joseph Kennedy Presents: His Hollywood Years pp. 263–5, Knopf, New York. . he arranged the financing for her films The Love of Sunya (1927) and the ill-fated Queen Kelly (1928). 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.Kessler, p. 86.
Liquor importing Kennedy ventured into aspects of the legal liquor business during Prohibition in the United States. As soon as it became legal to do so, Kennedy ventured into liquor importing. One of the shipping ventures he was involved in was the importation of large shipments of high-priced Scotch whisky where he earned a handsome profit in the process. Various contradictory "bootlegging" stories surrounding Kennedy have circulated but historians have not accepted them.Nasaw, pp. 79–81. At the start of the Franklin Roosevelt administration in March 1933, Kennedy and future Congressman James Roosevelt II obtained the exclusive rights to import some alcoholic beverage brands to the United States from Great Britain, before Prohibition ended, and later founded Somerset Importers, a business entity that acted as the exclusive American agent for Haig & Haig Scotch, Gordon's Dry Gin, Dewar's Scotch, King William IV Scotch Whisky, and Riondo Puerto Rico Rum, and other imported drinks. Kennedy kept his Somerset company for years.Nasaw, p. 611. In addition, Kennedy purchased spirits-importation rights from Schenley Industries, a New York City liquor company with a Canadian distillery. Though he possessed substantial investments in various shipping lines that imported significant shipments of liquor, Kennedy himself drank little alcohol. He so disapproved of what he considered a stereotypical Irish vice that he offered his sons $1,000 not to drink until they turned 21.Leamer 308.