Master Illusionist

The Speculator: Bernard M. Baruch in Washington, 1917-1965

by Jordan A. Schwarz
University of North Carolina Press, 679 pp., $27.50

Bernard Baruch
Bernard Baruch; drawing by David Levine

Does anyone under fifty now remember Bernard Baruch? Yet he was a national icon in his time. “Ever since World War I,” as John Kenneth Galbraith writes in his recent memoirs, Baruch had been “the accredited, more precisely the self-accredited, sage. It is not easy now to convey an impression of his influence. Public deference was universal. At the same time private skepticism was also nearly obligatory. A number of New Dealers held that he was a highly accomplished fraud, but none ever said so in public.” The older generation will still recall him, the perennial adviser of presidents, dispensing wisdom from a bench in Lafayette Park across from the White House.

Sage or fraud? Jordan A. Schwarz, in this astute and fascinating book, presents evidence on both sides. There is a strong case for fraudulence. Baruch was a master of self-promotion, manipulation, and intrigue. With inexhaustible diligence and skill he assumed the role of the republic’s all-purpose elder statesman. For this role he had natural advantages. First of all, he looked the part. Tall, white-haired, “distinguished,” with penetrating eye, he was benign of visage, courtly in bearing, charming in manner. “Many notable men are physically disappointing,” observes Galbraith. “No one was ever disappointed by Baruch.” He combined emphatic personal authority with a capacity, adroitly exercised, for unexpected candor. When the House Rules Committee investigating his short selling on Wall Street in 1916 asked him his occupation, he replied “speculator” and cherished the self-description for the rest of his life.

Successful enough as a speculator, he was far from infallible. In his diverting book Winston Churchill and His Inner Circle, Sir John Colville, Churchill’s wartime private secretary, recalls that on November 15, 1929, Baruch cabled Churchill, “Financial storm definitely passed.” A year later Baruch wrote Churchill that the Depression had hit bottom. “It’is surprising,” Colville dryly comments, “that he made so great a fortune.” Baruch was no more infallible on public policy. His record is filled with misjudgment, from his continuing advocacy of a “high court of commerce,” a thorough nonstarter, to his support for the Morgenthau Plan.

But the myth overrode the mistakes. He cast himself from an early point as the enlightened capitalist, the rare businessman with broad and humane social views, the angel of the Democratic Party. There was a good deal to it. He had been a loner in Wall Street, and this gave him, as it gave his friends and fellow loners Eugene Meyer and Joseph P. Kennedy, a confident freedom from regnant orthodoxies. In the 1920s, when the business of America was business, Baruch had the imagination to make agriculture an important part of his own business. He understood that a depressed farm economy threatened the balance of the system. He became an ardent advocate of farmers’ cooperatives and lent wary support to the McNary-Haugen bills that filled Coolidge and Hoover with such virtuous horror.…

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