Bernard Baruch: The Adventures of a Wall Street Legend Read online

  JAMES GRANT

  Brooklyn, New York

  August 1983

  One

  A Doctor’s Son

  Even when he was old and very deaf, Bernard Baruch liked to pass the time of day on the telephone with his stockbrokers. After the market closed he would stretch out in an easy chair, shut his eyes, and listen to the reading of long lists of quotations. Often he would talk about the menace of inflation (to the point of boring the party at the other end of the phone, because very few people were as worried about that problem as he was in the 1950s) or reminisce about himself.

  “I guess that you’ve met a lot of important people in your time,” he said one day, out of the blue, to his favorite broker.

  The man agreed. “Most of them thanks to you,” he said.

  “Well, of all those people, how important would you say that I am?”

  “Number two.”

  The answer jarred Baruch. In his Ptolemaic universe, he was the earth and other mortals were the lesser planets and moons. His vanity was pure and rarefied, and it hadn’t occurred to him that his own broker would fail to understand what he himself saw so clearly. He tried to coax an amplification from the man, but none was given. Some time passed before Baruch’s curiosity overcame his pride.

  “A while ago,” he ventured again, to the same broker, “you said that I was the second-most-important man you ever knew. Who was the most important?”

  “Why, my father.”

  Baruch was delighted and relieved.

  “You know,” he said, “my father was the most important guy I ever met too.”

  Dr. Simon Baruch, the father of four sons of whom Bernard Mannes was the second, was born in the Prussian village of Schwersenz in 1840. In 1855, dodging the Prussian draft, he made his way to a seaport and sailed to America. He settled in Camden, South Carolina, where another emigrant from Schwersenz, Mannes Baum, owned a general store. Baum made the boy his bookkeeper, helped to teach him English, and generously financed his education at the South Carolina Medical College and the Medical College of Virginia. By the time Baruch graduated the Civil War was on, and the erstwhile fugitive from the Prussian draft decided to volunteer his services to the Confederacy. He was commissioned an assistant surgeon in the Third Battalion, South Carolina Infantry, in April 1862.

  Without having so much as lanced a boil, as Dr. Baruch said, he was thrown into active service. He attended the sick and wounded at the Second Battle of Manassas, South Mountain, Fredericksburg, Chancellorsville, Gettysburg, Wilderness, Spotsylvania, Cold Harbor, Cedar Creek, and Petersburg. Twice he was captured by Union forces, occasions he remembered as the most agreeable of his Confederate service. A sense of his battlefield practice is conveyed by the title of an essay he drafted during a restful detention at Fort McHenry, in Baltimore: “Two Penetrating Bayonet Wounds of the Chest.” His advice to his younger brother Herman, who had followed him from Germany to South Carolina and was seventeen when war broke out, was to stay out of the army. When the brothers next met, however, each was in uniform, Herman in the garb of a Confederate cavalryman. The younger man explained that he had enlisted because he could no longer stand the reproach in the eyes of the ladies.

  Family lore has it that Dr. Baruch fell in love with his future wife during a wartime furlough at her father’s plantation in Winnsboro, South Carolina. Perhaps it was late in the war: Isabelle Wolfe, eldest daughter of thirteen children, was eleven when the fighting started. Her father, Sailing Wolfe, owned twenty-six slaves, and it was Belle’s luxurious lot never to have to dress herself. The war was the family’s financial ruin. Union troops burned its home, crops, and outbuildings, drove off its livestock, and freed its slaves. Many years later a friend of the Wolfes wrote to Baruch with her memories of that time:

  My first recollection I have of your family was the night your home in Winnsboro was burned by Sherman’s army; and my father, Dr. Robinson, was returning to his home after one of his long country visits, found your grandfather and grandmother with all their little children gathered around them offering up prayers in Hebrew.

  After the war the family home was rebuilt, but the Wolfe fortune (put by the census taken in 1860 at $13,000 in real estate and $67,750 in “personal estate”) was denominated irretrievably in Confederate money. Sailing Wolfe died, a poor man, at eighty-four, when the chair in which he was sitting to warm himself tipped forward into a fire.

  As the war ended, Dr. Baruch was penniless and weakened by typhoid but eager to build a country practice in Camden. He came home on crutches to discover that not only had the Yankees borne off his surgical tools (he had been presented with an initialed set by a Confederate sympathizer in Baltimore) but also that a Union officer had insinuated himself into the good graces of Belle. This Yankee, a Captain Cantine, had performed some act of chivalry for Belle’s sake, but Dr. Baruch was six feet tall and had blue eyes and claimed the advantage of proximity. On November 28, 1867, he and Belle were married. (Fifty-one years later, a visitor asked Bernard Baruch, then chairman of the War Industries Board under President Wilson, to help him get to the fighting in France. He bore a letter from Baruch’s mother which said: “The bearer of this is a son of Captain Cantine. I know you will do what you can for him.”)

  Baruch put small store in genealogy but was pleased to repeat the family history that he was descended from priests and kings. In Germany his namesake and paternal grandfather, Bernhard Baruch (our Baruch came by his middle name from Mannes Baum), stated that the Baruchs were a rabbinical tribe of Portuguese-Spanish origin that was augmented by Polish or Russian blood. “Grandfather,” wrote Baruch, “also claimed descent from Baruch the Scribe, who edited the prophecies of Jeremiah and whose name is given to one of the Books of the Apocrypha. On this claim Father himself was silent.” After repeatedly being mistaken for Senator William E. Borah on a trip to Poland in 1931, Baruch lightheartedly offered the Idaho Republican an honorary membership in the Baruch clan, observing that among the advantages thereof was a presumptive link to King David.

  Bernhard Baruch, who stood six feet tall and wore thick spectacles, was an amateur student of Sanskrit who loved to sit dreaming in beer gardens. Baruch’s grandmother was a very different type, short, blue-eyed, and (as her grandson found her on a visit to his father’s German home) matriarchally thrifty and hardworking. Her maiden name was Theresa Gruen, and she was, Baruch thought, a Pole.

  Never a hostage to the literal truth in matters involving him, Baruch implied that he was descended half from immigrants and half from early Americans. This was literally a half-truth. On Baruch’s mother’s side, Sailing Wolfe was a first-generation American: he was born in Prussia. Sailing’s wife’s family, however, was indeed established early in the New World. Its first colonial forebear, a ship owner named Isaac Rodriguez Marques, made landfall in New York in the 1690s. His vessel, the Dolphin, sailed between New York and England and also bore slaves to the New World from Africa. This commercial blot was disclosed by Baruch in his autobiography without apology but with the ameliorating fact that, on one voyage, the Dolphin was known to have carried a surgeon. Furthermore, in Baruch’s view, Marques’s sins were amply expiated by his descendants through their suffering in the Civil War. As Baruch was later to do, Marques bought a large house in a fashionable Manhattan neighborhood. His family was of Spanish and Portuguese descent, the Jewish strain known as Sephardic. A genealogical joke that was told at the expense of Baruch’s vanity was that he (Baruch) was the only Sephardic Jew, ever.

  The first of Baruch’s maternal ancestors to turn up in South Carolina was Samuel Marks (as he spelled his name), who arrived about 1800. A daughter of his, Deborah Marks, married Rabbi Hartwig Cohen. It was their daughter Sarah who married the immigrant Sailing Wolfe. On the birth of Isabelle Wolfe, on March 4, 1850, it was written in the family Bible, “God grant her a blessing.” When, in short order, she married Simon Baruch, whose surname is the Hebrew word for “blessed,” the union was seen to be propitious. Hartwi
g, the first of their four sons, was born in 1868. Our Baruch followed on August 19, 1870. Herman was born in 1872 and Sailing in 1874.

  The most elegant of men, Bernard Baruch was a chubby little boy called “Bunch.” He had blue eyes, black hair, and freckles, and was prone to tantrums. Once in a fury he reached across the breakfast table and spitefully stuffed a piece of meat down his throat. He recalled losing fights. A favorite of his mother’s, he insisted on sitting at her right hand at meals (a domestic custom he continued in marriage by stationing himself at his wife’s right hand). A childhood ordeal he recalled with special clarity was an evening at the home of his father’s old benefactor, Mannes Baum. His mother, who held high forensic hopes for her sons, led him to the center of the room.

  “Now say something, dear,” she said.

  In a singsong voice Baruch began to recite the first few lines of “Hohenlinden” by Thomas Campbell:

  On Linden when the sun was low,

  All bloodless lay the untrodden snow;

  And dark as winter was the flow

  Of Iser, rolling rapidly.

  His father, squirming with embarrassment, raised a finger to the side of his nose and made a derisive noise. The boy ran out of the house and all the way home and cried himself to sleep.

  The Baruchs lived in the town of Camden in a spacious three-story house with tall windows and a pillared balcony. At first they made do without much cash. The doctor’s patients, as hard hit by the war as he was, sometimes paid in kind—some chickens or cotton, a day’s work in the experimental garden behind the Baruch home, or a dog. Mrs. Baruch taught piano and voice and sold butter and milk. However, the family fared no worse than most in postwar South Carolina and in fact, one gathers, considerably better. The doctor’s means increased and he accumulated some land and livestock. A black nanny, Minerva, attended the boys. Baruch recalled that she was simple, superstitious, and loving, and that she was the exclusive administrator of household spankings. When Dr. Baruch grew severe, his wife admonished him, “Now, Doctor, don’t be hard on the boys or they won’t love you.”

  The impression that Camden made on Baruch was profound and disproportionate to the ten years he spent there as a boy. He was a derivative southerner, taking his loyalty from his mother and father (she with her membership in the Daughters of the Confederacy, he with his rebel yell) and from the state of South Carolina, to which he returned as a millionaire to buy a barony. Seventy years after he came to New York he still hadn’t relinquished a trace of a southern accent.

  In his reminiscences of boyhood, Camden appears as a fair copy of Mark Twain’s Hannibal. In the springtime the Wateree River obliged young raftsmen by flooding its banks. There was everyday swimming at Factory Pond and a regular baseball game between the uptown and downtown gangs. The Baruch boys, doctor’s sons, belonged to the affluent uptown side. In his autobiography Baruch wrote little about his younger brothers, Herman and Sailing, but a great deal about Hartwig. Harty fought and won, swam distances, recited coolly before adults, and had a dog, a white mastiff named Sharp, in his own sporting image. When Baruch started school, attending a kind of kindergarten with the schoolteacher’s wife, Sharp escorted him to the schoolhouse door and obediently went home again. “I have the most distinct impression of my sitting on the floor deciphering such things as ‘I see the cat,’ and ‘I see the dog,’ while she had her baby on her knee feeding it porridge,” wrote Baruch of that time to the journalist Mark Sullivan. “And how the lessons were interrupted by the squalls of the children!”

  The Camden of Baruch’s boyhood was a tiny county seat in the north-central, or pine belt, region of South Carolina. In the year of his birth its population was 1,007. By 1880, it had grown to 1,780. The local economy was supported by a backward agriculture (in which, for example, crop rotation was largely unpracticed). An eclectic and public-spirited man, Dr. Baruch interested himself in the improvement of farming. He raised experimental crops of cotton, corn, and sugar cane in a three-acre plot behind the house and subscribed to farm journals that accumulated in yellow piles in his medical office.

  Mrs. Baruch, who suggested that this agricultural energy might be profitably rechanneled into his medical practice, was a force for domestic gentility. Her religious appetites were prodigious, and she tried to imbue a sense of art and religion in her sons. She herself worshiped impartially among Christians and Jews, and she asked that her sons observe the Sabbath on both Saturday and Sunday. Baruch, more than his brothers, indulged his mother in her religiosity, but at last he followed his father into agnosticism. He was unable to carry a tune, refused to study piano, and liked to steal birds’ eggs and shoot rabbits (he picked cotton in order to earn the money with which to buy powder and shot). He had one other boyhood interest. At his grandfather’s house in Winnsboro, he was enchanted by the passing trains of the old Charlotte, Columbia & Augusta line. Watching the cars rumble by, and throwing rocks at them, he imagined the glory of actually owning a railroad—an acquisitive daydream for a child rising ten.

  In the early 1870s South Carolina was conquered territory. It was a mark of the violence of the politics of the day that Dr. Baruch, who disliked firearms and had no truck with slavery, was moved to the idea of insurrection against Reconstruction rule. “There is one recourse when all is lost,” he wrote to a former Confederate colleague in a moment of despair or romanticism. “I mean the sword. What boots it to live under such tyranny, such moral and physical oppression when we can be much happier in the consciousness of dying for such a cause?”

  Evidence of their father’s convictions was uncovered one day by Baruch and Harty in the family attic. Rummaging through a horsehair trunk, they turned up a Confederate uniform and, beneath it, a white hood, and a robe with a crimson cross—the regalia of the Knights of the Ku Klux Klan. In its heyday in the 1920s the Klan filled its ranks with lost souls from the Middle West. In Reconstruction days it was led by former Confederate officers, landed gentry, and professional men (even if louts and ruffians helped to fill out its ranks). In Kershaw County, of which Camden was the county seat, blacks outnumbered whites by two to one; this electoral imbalance the Klan sought to redress by terrorizing black militias, black voters, northern schoolteachers, Union Leaguers, Republican candidates, and others allied to the cause of equal rights (as it was known to one camp) or carpetbag rule (as it was known by the other). When Mrs. Baruch discovered the boys, bug-eyed, in the attic, she swore them to secrecy, for the Klan was outlawed and its members were wanted men. Harty and Baruch felt very grown up and extravagantly proud of their father.

  Baruch saw something of the violence of the Reconstruction era with his own eyes. On an election night when his father was away, his mother became alarmed at ugly noises from the street. He wrote in his autobiography:

  She told Harty and me to get our guns.

  We got them—one a single-barreled and one a double-barreled muzzle-loader. Mother told us to load them and to take a position on the second-floor porch.

  “But do not shoot,” she cautioned, “unless I tell you to shoot.” We stood there, our hearts pounding, each with a gun almost as tall as himself, watching the crowd of colored people milling about the street. Drunk on cheap whiskey, they were on their way to the polls or to a rally.

  I have a blurred memory of what happened next. I recalled seeing a Negro fall from behind a tree. Suddenly everyone fled. We ran down to where the man lay to see what had happened. His head had been split as with an ax. Mother brought a basin of water and dressed the wound. I do not know what became of him, but he could not have lived long with his head as it was. . . .

  Understandably, Mrs. Baruch wanted to raise her boys in a more peaceful setting, but for one reason or another Dr. Baruch had resisted the idea of a move. His mind was changed, according to Baruch, by the death of a friend, Colonel William M. Shannon, an attorney and father of thirteen, in a duel. The shooting occurred in July 1880, when Baruch was still young enough to be impressed with the marksmanship
of the victor’s son, Boggan Cash, of the notorious dueling Cashes of Chesterfield County. Although no evidence has been found to support Baruch’s recollection that his father played a part in trying to head off the killing, and later a role in defusing a movement to lynch Cash, it is likely that the episode shocked him. Camden was a Mecca for dueling in that day, and with Shannon’s death, perhaps, Dr. Baruch decided that he had had enough of it. At all events the family made ready to leave. Late in 1880, the doctor sold his practice and house and amateur farm, the total, with his savings, yielding the tidy sum of $18,000. Minerva was to stay behind, and Sharp was given away to friends. Mrs. Baruch, asked what she was going to do in New York, said she meant to find her boys the best overcoats that money could buy.

  Bernard M. Baruch’s first appearance in the city of New York occurred on an unknown date in the dead of winter 1881. It is safe to assume that he found the city too cold, because as a grown man he wore an overcoat, and sometimes long underwear, in order to ward off summertime drafts. Also, probably, he found the city too big and the pair of rooms that his father had rented in a boardinghouse at 144 West 57th Street too small.

  New York City at the census of 1880 was more populous than the state of South Carolina. In one teeming square mile there were 222,000 souls, ten times the number in the entire county of Kershaw. The city’s black population numbered 20,000, or 1.7 percent of the total. Foreign-born New Yorkers, on the other hand, amounted to 479,000, or 40 percent of the whole. In Kershaw County it had been the other way around. Blacks had been greatly in the majority. The foreign-born element (presumably including Dr. Baruch) numbered exactly 74.

  Everything in New York, by Baruch’s lights, was unfamiliar, or upside down, or both. Water ran from taps, everyone wore shoes all the time, and steam locomotives rumbled overhead on elevated tracks (ladies emerged from the smoky cars with the outline of their veils etched on their faces in ash). Baruch, not yet eleven, was awestruck and frightened but more than ever buoyed by the courage of Harty.