What is the true source of the wealth of the Kennedy family of Hyannis, Massachusetts? I have heard several stories about Joe Senior having made a killing in Prohibition rum, sleazy stock market practices, or the Boston construction industry. I heard the other day that he made the seed money for all this by selling opium to China, and that takes the cake. Also, what is the Kennedy money doing today? Besides the Democratic party, is there a family business? Do they have a foundation or something? Why don’t I see the Kennedy Trust as a sponsor of quality public television? –Peter Greenberg, Jackson Heights, New York
Cecil doesn’t ordinarily go in for this People magazine stuff, but Lord knows I like dishing the dirt as much as the next guy, and Joe Kennedy is a target the size of Rhode Island. J.P. was what we call an operator. He made his money by (1) pulling various hustles before it had occurred to anyone to make them illegal, and (2) possibly pulling other hustles that were definitely illegal but generally winked at. His stock-market shenanigans were an example of the former, his Prohibition liquor business (never proven, by the way) an example of the latter. That said, let’s not get ridiculous. He didn’t sell opium to the Chinese; the British did. Nineteenth century. Very famous. Trust me.
Joseph P. Kennedy was the ambitious son of a prosperous Boston saloon keeper 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 (admittedly two-bit) at 25, and was number-two man at a shipyard with more than 2,000 workers during World War I. At 30 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 nickle-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 been bootlegging partners. Other underworld figures have also claimed Joe was in pretty deep. At least one writer (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 and sold out just when the industry was consolidating, clearing five to six million dollars 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. In 1945 he made the deal that remains the centerpiece of the Kennedy fortune: for a measly $12.5 million he bought the Merchandise Mart in Chicago, a huge wholesale emporium that had cost $30 million to build. Within a few years the annual gross in rent exceeded the purchase price. In 1957 Fortune declared Kennedy one of the richest men in America, with assets of 200 to 400 million dollars.
The Kennedy family’s wide-ranging business affairs are now run by hirelings at Joseph P. Kennedy Enterprises in New York. Joe did establish a number of charitable ventures, several of which help retarded children (his daughter Rosemary was retarded). But he put most of his money in trust for his family. Being the odd combination of stud and monomaniacal family man that he was, he figured his real legacy to the country was the fruit of his loins.
Art accompanying story in printed newspaper (not available in this archive): illustration/Slug Signorino.