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. He even gave money to the radical Nonpartisan League and its vociferous Congressman William Lemke.

In the 1930s he was a cautious fellow traveler of the New Deal. His protégés Hugh Johnson and George Peek ran Roosevelt’s initial programs for industrial and agricultural recovery; and, though they were eventually ejected from the administration, Baruch retained a belief in Roosevelt’s general purposes. This was partly because he wanted to preserve access to the White House. It was partly too because he thought that the capitalism he loved could not survive without prudent adaptation. Why, he asked Alfred P. Sloan of General Motors in 1938, had there “never been a law written in Washington to meet changing social conditions that has not been fought tooth and nail [by businessmen], instead of our people trying to work it out?… We cannot dam the tide of such reform, and it should not be dammed.” In the elation of these years Baruch gave $11,060 ($60,000 or so in current coin) to the Abraham Lincoln Brigade and later $100,000 to Russian war relief.

Through carefully targeted distribution of campaign funds, he also built up a senatorial clique. A few thousand dollars went a long way in politics half a century ago. Baruch, a southerner himself, specialized in southern senators—a shrewd investment since in those halcyon days southern senators, once elected, tended to stay in the Senate, ascending steadily in seniority, until they passed on to the great legislature in the sky. Roosevelt once told Rexford Tugwell that Baruch “owned” sixty congressmen. Invitations to Hobcaw, Baruch’s South Carolina plantation, helped to refresh the retainers.

Nor did he confine himself to American politicians. He first met Winston Churchill at the end of the First World War and saw him on his annual European trips in the 1920s. When Churchill arrived in New York, after the Wall Street crash, he went, as Colville tells the story, to Baruch’s office, sat down before the price indicator, and played the market. “He knew nothing of what he was doing: to him it was like playing roulette at Monte Carlo. He plunged deeper and deeper. Finally he stopped, for he had lost all he possessed.” Baruch came into the room, and Churchill said he was ruined. Baruch said that, “guessing what would happen, he had given instructions that every time Churchill bought Baruch would sell, and every time Churchill sold Baruch would buy. He was therefore all square. Presumably Baruch paid the commissions. Churchill never forgot the debt he owed.” During the war Baruch sent Churchill long rambling letters that Churchill rarely had time to read. They lay for weeks in his special black box “until he found the energy to dictate a short, appreciative reply which usually failed to take account of what Baruch had written.”


Baruch managed to get on with most of the influential people of his time, from Eleanor Roosevelt and Harry Hopkins to Cissy Patterson and William Randolph Hearst. His antipathies were few but vigorous. Oddly, or perhaps not, he disliked people who had some of his own qualities. He never forgave John Maynard Keynes, another successful speculator, for his attack on Wilson in The Economic Consequences of the Peace and was still denouncing him a quarter century later as “slippery” and “a menace.” He disliked Herbert Hoover, another successful self-promoter (at least till 1929), calling him once “a white livered yellow dog who was forever damning everybody else and taking all the credit for everything that was successful and shifting all the blame on the President or anyone he could find for his failures.” In 1924 he had an altercation with Jesse Jones, another Democratic businessman, over the size of Baruch’s contribution to John W. Davis’s presidential campaign and twenty years later backed Henry Wallace against Jones in the celebrated wartime feud. But these were signal exceptions to Baruch’s general policy of staying close to men of power.

He was a Jew in an era when Jewishness was a handicap. While taking care to avoid identification as what he called a “professional Jew,” he was proud of his ancestry, contributing generously to Jewish causes and, without ever becoming precisely a Zionist, remained in friendly touch with Zionist leaders. He had no religious belief and even, Mr. Schwarz tells us, “distrusted religion.” But because it pleased his mother, he closed his office and attended synagogue on the holy days. He enjoyed being called the American Disraeli. “He was the most famous American Jew of his time,” Mr. Schwarz writes. “He exploited that reputation without ever permitting it to interfere with his secularism.”

He never stopped working on his reputation. Though somewhat inarticulate, at least on paper, he took care to employ talent to put his wisdom into words. John Foster Dulles (for $10,000 in 1920—about $75,000 now) wrote the economic sections of Baruch’s The Making of the Reparation and Economic Sections of the Treaty (Versailles). The gifted editor Herbert Bayard Swope—Swope of the World—was his faithful publicist, speechwriter and counselor for forty years. The trenchant political analyst Samuel Lubell wrote his wartime reports and the first volume of his memoirs. Nor did Baruch ever cease to cultivate the press. Arthur Krock of The New York Times was only the most sedulous among his many acolytes.

All these things made him a national presence. With his adoration of power, he schemed to move in on Democratic presidents. His one wholehearted commitment was to Woodrow Wilson, who first brought him to Washington. Wilson liked Baruch, and Baruch worshiped Wilson. And Wilson, by placing Baruch in charge of the War Industries Board, laid the basis for his national reputation. Actually mobilization in the First World War was rudimentary, and Baruch’s role was more that of an impresario with Alexander Legge of International Harvester making the hard decisions behind the scenes (if the testimony of Henry Dennison as cited by Galbraith can be believed, as it surely can; The Speculator, however, does not address the Legge point).

In 1932 Baruch made the mistake of not being for Roosevelt before Chicago. Partly for this reason but mainly for others, Roosevelt kept him at a distance, playing him like a master fisherman, shamelessly drawing on his influence without ever giving him a central job. “Well, the big show will be on very soon,” Churchill told Baruch in 1938. “You’ll be running it in America and I will be on the sidelines here.” A reasonable but poor prophecy. Roosevelt worked, Mr. Schwarz notes, on two principles: “never share power with Baruch and/or his surrogates; and never allow even the emergency of war mobilization to become the occasion for erecting power bases that might rival the White House.” He treated Baruch “as a handy conniver who, although unworthy of public trust, could be of personal service if dealt with carefully, or a public nuisance if unnecessarily alienated.” Baruch, baffled and frustrated, found solace in Eleanor Roosevelt, with whom he had relations of genuine affection and mutual respect.


Harry Truman, a simpler man than Roosevelt, soon tired of playing games with Baruch, thought him “an arrogant, opinionated man,” and stopped inviting him to the White House. Eisenhower was willing to play the game, however, and Baruch, as was his nature, moved with the times. In the 1950s he even watched Joe McCarthy with sympathy and gave $10,000 to the furiously right-wing American Jewish Anti-Communist League. By 1960, however, times were changing, and Baruch was chatting affably with Galbraith as Kennedy’s emissary. Both Kennedy and Johnson, out of courtesy rather than need, enabled Baruch to go on playing the national sage until he died in 1965 at the age of ninety-four.

The Speculator rests on solid and exhaustive research. The Baruch papers are mined to splendid advantage and are richly supplemented by the papers of his leading contemporaries. Mr. Schwarz tells the story with dispassionate and intelligent irony. He generally writes well, though his economic discussions sometimes strike one as merely glib, and he succumbs to that awful usage “convince…to” and that nonword “torturous.” He also manages to misquote Lincoln Steffens’s famous remark to Baruch, which correctly reads, “I have been over into the future, and it works.”

His particular triumph is to define the guiding theme of Baruch’s life—the theme that in retrospect gives that life, for all the endless vanity and self-promotion, a certain dignity and consistency. Baruch’s abiding effort, Mr. Schwarz argues, was to educate the American people to accept planning for economic stabilization. He believed in free enterprise but considered laissezfaire an obsolete and dangerous creed. He favored voluntarism whenever possible, but, unlike Hoover, was realistic in recognizing when voluntarism could not do the job and government had to step in. War in his view presented the supreme crisis, and he had a lucid conviction of the necessity for firm priorities and controls.

As Galbraith handsomely acknowledges in A Life in Our Times, Baruch was right in insisting on a general price-wage freeze in the early war years when the young Keynesians were committed to piecemeal price-fixing. Inflation was Baruch’s King Charles’s head; someone wrote him in 1958, “You remind me of Cato. You always end up everything you say with some statement against inflation.” But who, looking at the economic landscape today, can say the old man was so wrong? Baruch’s intuitions generally expressed the logic of modern markets.

His belief that planning is compatible with private ownership is widely disdained these days—by the right as statism, and by the left as corporatism. We are having our fling now with deregulation and monetarism; but if the market’s invisible hand withers before inflation, as it almost certainly will, we will be back with Baruch and some form of planning. And, in view of the horrors attendant on planning under total state ownership, what alternative, if we care about political freedom, is there to working out some form of government-business-labor coordination in a mixed economy—an incomes policy, for example?

The question remains, as always, Who whom? For every Baruch, the republic needs a Franklin Roosevelt. Still countervailing power is inherent in the democratic process, which corporatism, unlike communism, cannot easily abolish. This reviewer, contrary to his expectation, finished Jordan Schwarz’s excellent book with the feeling: “Who would have thought the old man to have had so much blood in him?”

This Issue

October 8, 1981