Financial Expert and “Diplomat in the Park”
Nine US presidents corresponded with Bernard Baruch, exchanging approximately 1200 letters. Winston Churchill alone sent him an impressive 700 letters. Over the course of his nine decades of life, Bernard M. Baruch established connections with all significant statesmen and business leaders of the Western world, all of whom sought his advice. They received this advice – with the exception of Lenin, Hitler, and Stalin.
Baruch’s substantial wealth resulted from skillful maneuvers in the markets and astute management of his investments. The legendary figure of the stock market considers himself both a speculator and an advisor, excelling in both realms and standing among the best of his time.
In those days, the era of the great money trusts prevailed: financial magnates like John Pierpont Morgan or the Lehman Brothers controlled entire industries through their banks. The Dow Jones Index was then trading around 30 points and was regularly published in the Wall Street Journal. Bernard Baruch quickly caught the Wall Street fever and, after a few years, was appointed as a junior partner in the firm. The future stock market guru actively traded with his own money, but his initial successes were limited.
In 1897, Baruch speculated on the rising prices of American Sugar. He invested $300 in stocks and expanded his position as prices rose. After three months, he sold all shares with a profit of $60,000. With this money, he covered his wedding expenses and debts to his father. Even though the profit was quickly spent, his marriage to Annie Baruch lasted until her death in 1938. In 1903, Baruch founded his own brokerage firm in the New York Stock Exchange district and was elected to the board of the New York Stock Exchange.
The Wall Street Legend
Shortly after the turn of the 20th century, Baruch entered an extremely successful era. “Wealth overflowed me,” he declared. Baruch speculated skillfully with railroad and copper stocks, becoming a millionaire in his early thirties. Bernard Baruch traveled in his own railway car, and his first car struck fear into the horse-drawn carriages of Wall Street.
By 1910, he had become one of the foremost traders, soon earning the title “King of Wall Street.” His influence was so immense that even stock prices fell when Baruch traveled to Europe and the press reported on it. Politicians sought his advice, and Bernard Baruch engaged in the business through benevolent favors.
Bernard Baruch: From Financial Expert to Statesman
During World War I, Baruch was appointed as an advisor to U.S. President Wilson. As the head of the War Industries Board, he was responsible for the entire organization of national defense. Hindenburg considered Baruch to be the actual conqueror of Imperial Germany due to his activities. Bernard Baruch shrewdly utilized insights into his work for successful stock speculation. In 1919, he participated as an American advisor in the Versailles Peace Conference and, through generous lobbying, was able to further expand his influence in society even after the war.
The definitive turn to politics came with the crisis of 1929. Initially, the stock market expert Baruch underestimated the significance of market movements and telegraphed Churchill too early, saying, “Financial storm definitely over.” The Dow Jones stood at 300 points and would fall to 48 points in the next two years. Baruch had changed, and so had the economic conditions. As an advisor, he became a recognized public figure, and Wall Street was increasingly held responsible for the economic problems of the time. Bernard Baruch publicly demonstrated this change by selling his house on Wall Street and moving with his family to another neighborhood.
Baruch as the “Statesman on the Park Bench”
In the early thirties, Bernard Baruch observed the emerging anti-Semitism in Europe. Sensitized by his Jewish roots, he recommended measures against Germany but found little reception. In World War II, he was once again entrusted with an oversight role in wartime economy. He maintained a friendly relationship with President Roosevelt, and Mrs. Roosevelt was even an honorary guest at the funeral of his wife, Annie Baruch. Although he declined Roosevelt’s offer to become Secretary of the Treasury, Baruch continued to serve as an unofficial advisor. In 1946, he was appointed as the United States representative to the United Nations Atomic Energy Commission.
In a powerful speech, he proposed placing atomic weapons under the control of the United Nations. “We are here to choose between life and death,” proclaimed Baruch, echoing a Bible quote. In a later address, he coined the term “Cold War,” which would dominate the relations of superpowers for many years. Until the Vietnam War, Baruch remained a political advisor to U.S. presidents. Since he never held an official political office, his admirers spoke of an “office on the park bench” across from the White House. This bench in Lafayette Park was officially dedicated to him on his 90th birthday, and Bernard Baruch went down in history as the “Statesman on the Park Bench.”
Bernard Mannes Baruch was a man of finance and economics who dedicated himself to politics when the homeland and the world needed his help. After his death on June 20, 1965, The New York Times wrote, “We have no one among us of his genius and humanity to give us counsel and leadership.”