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From: warinner@typhoon.xnet.com (Robert Warinner)
Newsgroups: alt.folklore.urban
Subject: Cecil vs. the FAQ
Date: 11 Feb 1997 18:10:05 GMT

Consider the following entries from the FAQ:

Fb.Kennedy family made their pile thru a Scotch import monopoly Tb.Kennedy family made their pile thru smuggling Scotch during prohibition.

There I was, minding my own business, reading Cecil Adams's "Return of the Straight Dope" (ISBN 0-345-38111-4) when I noticed that Mr. Adams had something to say about the source of the Kennedy's wealth:

Joseph P. Kennedy was the ambitious son of a prosperous Boston saloonkeeper and ward boss. He married the mayor's daughter, went to Harvard, and generally made the most of his ample connections and talent. He ran a bank at twenty-five and was number two man at a shipyard with more than two thousand workers during World War I. At thirty he became a stockbroker and made a fortune through insider trading and stock manipulation. He was a master of the stock pool, a then-legal stunt in which a few traders conspired to inflate a stock's price, selling out just before the bubble burst.

Kennedy may also have traded in illegal booze, although the evidence is circumstantial. His father had been in the liquor business before Prohibition, and Joe himself got into it (publicly, that is) immediately after repeal. Some believe the family business simply went underground during the dry years. He may have been strictly a nickel-and-dimer; Harvard classmates say he supplied the illicit booze for alumni events.

But there might have been more to it than that. In 1973 mob boss Frank Costello said he and Kennedy had benn bootlegging partners. Other underworld figures have also claimed Joe was in pretty deep. At least one write (John Davis, 1984) thinks bootlegging enabled Joe to earn his initial financial stake, but that's hard to believe; he had plenty of chances to make money more or less legally.

Whatever the truth of the matter, Kennedy's real strength wasn't his alleged criminal ties but his business smarts, notably an exquisite sense of timing. In the mid-1920s he became a movie mogul (taking time out for a celebrated dalliance with Gloria Swanson), then organized a merger anda sold out just when the industry was consolidating, clearing $5 to $6 million all told. He pulled out of stocks early in 1929 and sold short following the crash, actually making money while others got creamed. Just before Prohibition was repealed he lined up several lucrative liquor-importing deals.

By the 1930s Kennedy was rich, but he didn't make serious money by modern standards until he got into real estate in a big way during World War II, raking in an estimated $100 million. _Return of the Straight Dope_, pp 159-160.

It seems that Cecil confirms the Fb but refutes the Tb.

Who is right, Cecil or the FAQ?

Andrew "crisis of confidence" Warinner
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From cmeck@cs.tu-berlin.de Thu Mar 6 01:15:27 1997 Date: Tue, 18 Feb 1997 14:34:00 +0100
From: Robert Pohl <cmeck@cs.tu-berlin.de>
To: ekelly@acpub.duke.edu
Subject: Kennedy made money bootlegging

Encouraged by Phil's statement that some of the early entries in the FAQ are not as well-documented as they should be and quite possibly wrong, I dug out my copy of _JFK:Reckless Youth_ (By Nigel Hamilton, ISBN 0-679-74880-6) and found the passages pertaining to Joe Kennedy Sr.'s money.

It appears that Joe Kennedy was a fair businessman, even in college he was making more money than his father ever did. However, he was not someone with staying power. Furthermore, his executive ability was nil:

"Joe Kennedy's arrival at Fore River caused the first major shipbuilding strike of World War I." [p.37]

He is demoted and sent to another shipyard. Here, he found his metier in the careful control of all bills. After the war, he joined the firm of Hayden, Stone and Company in Boston as a stockbroker. The investments that he had made during the war had been mixed, so now

"...he set about mastering the secrets of insider trading, management pools, and selling short. Soon he was hhead of the stocks department and on his way to his first million..." [p. 41]

"Joseph P. Kennedy had made his first big killing in the winter of 1923. For an outlay of only $24,000---on credit---he'd used insider information given him by Galen Stone and had reaped a profit of more than a half a million dollars---$675,000---in fact---on Pond Creek Coal Company shares. [...] Sitting in his office, [...] Joe Kennedy now indulged in financial larceny on vast an unseen scale, manipulating share pricess with other hands in secret stock pools designed specifically to hoodwink investors. His growing expertise neeted him a second fortune in the spring of 1924..." [p.51]

Joe's further dealings are many and varied, including film deals, and not all as profitable as the insider trading. He also tried to become a wire-puller in politics, and helped to elect Roosevelt president in 1932. However, he often overrated his talents and achievements.

The next quote is the only on in the whole book that actually mentions liquor at all:

"...November 1933. Mr. Kennedy had abandoned plans to see Mussolini. Instead, having used Jimmy Roosevelt to open doors that would have otherwise been closed to him, Kennedy managed to obtain the exclusive United States distributership for Haig & Haig, Gordon't Dry Gin, Pinchbottle, and other British liquors in anticipation of the repeal of Prohibition." [p. 101. Footnoted as coming from David E. Koskoff, _Joeseph P. Kennedy_ (Englewood Cliffs, NJ, Prentice Hall, 1974]

And finally, a little irony:

"On June 28, 1934, President Roosevelt finally rewarded Kennedy for his work in the 1932 election campaign. Countering all objections with the words "it takes a thief to catch a thief," he appointed Joeseph P. Kennedy the first chairman of a new regulatory agency to tidy up the nation's stock market: the Securities and Exchange Commission, or SEC. To the consternation of all, the notorious stock-market swindler Joeseph P. Kennedy would become stock-market reformer." [p. 109]

In short, Joe Sr. was a pretty ruthless and unethical businessman who made his pile with shady stock deals. He later tried to buy respectability in the political scene. He, however, never appears to have smuggled liquor, and, quite frankly, as he was making money hand over fist with the stock market (in many cases quite legally doing what the SEC was later set up to stop from happening) it seems unlikely that he would have bothered with something so patently illegal.

Robert "Outsider trading" Pohl