The financier and investor Bernard Baruch was known for his large capital and serious political influence. Having achieved success on the New York Stock Exchange, he began working as an adviser to US presidents. His life is an amazing kaleidoscope of events and surprises.
Early years
The famous financier Bernard Baruch was born on August 19, 1870 in the US city of Camden (South Carolina). He came from a poor Jewish family. Simon Baruch became the father of four sons, the second of whom was Bernard Baruch. Children, as time has shown, turned out to be talented and hardworking. The brother of the future financier Herman even worked as the American ambassador to the Netherlands and Portugal.
Bernard's early years were during the Reconstruction period, when after the Civil War the southern United States was swept by a wave of crime and black riots. In search of a quiet corner, the Baruch family moved to New York. This is where Bernard went to college.
Baruch's first job in 1890 was A. A. Housman & Co. The 20-year-old was an errand boy who received $3 a week. He simply had no other opportunities for self-realization due to his social status and nationality.
Takeoff
Like many other brokers, Bernard Baruch got on the stock exchange quite by accident. His first experience was a failure. However, Baruch did not give up. He began borrowing money from friends and family. At some point, his father told him that the $500 donated was all that was left at home for a rainy day. Bernard was not afraid and, taking a risk, began a dizzying career on Wall Street.
Baruch did not fit into the usual picture of the exchange at all. He conducted business rather extravagantly: he entered into risky contracts, plunged into speculation. Professionals hostilely accepted the first successes of this upstart. The most famous banker and financier of his time, John Pierpont Morgan, considered Baruch to be a “card cheat”. It is wrong to think that under capitalism all entrepreneurs earned their capital in white gloves. J. P. Morgan himself was not the cleanest either. However, the methods with which Bernard Baruch armed himself surprised even the most notorious schemers.
Schemer
From his appearance on the stock exchange, the future conqueror of Wall Street abandoned the then-popular trading strategy. Baruch never took over weak companies for the purpose of their subsequent resale. In addition, he did not resort to artificially raising the price of his shares. The investor did not, as was customary, scrupulously take into account the fundamental factors of the stock market.
Despite the fact that trading was then on the rise, the financier was actively playing for a fall. For himself, Bernard Baruch formulated the simplest rule: “Sell at the maximum and buy at the minimumimpossible . As a result, he often went against the market trend, buying when many were selling, and vice versa.
On the road to we alth
Most of all, Baruch's style resembled that of another well-known speculator, Jesse Livermore. These two traders were known to periodically leave the market and wait for the best moment to resume trading. Once making such a difficult decision for a stock player, Bernard said: "Jay, I think it's time to go shoot partridges." After this remark, he sold all his positions and went on a long vacation to his Hobkaw Barony plantation in South Carolina. The s alt marshes and sandy beaches of the estate abounded with ducks, and on 17,000 acres there was not a single telephone with which one could contact New York. But even after the longest absence, the player returned to the exchange.
The eccentricity with which Bernard Baruch and Jesse Livermore mocked the generally accepted rules of traders made them famous even before the advent of big capital. One way or another, but the growth of the welfare of upstarts was not long in coming.
Investor and businessman
Starting from the bottom, Baruch has earned enough to start his own investments. Texasgulf Inc., a company specializing in services in the booming oil industry, was one of the first to appear at his expense.
But, as further developments showed, the broker did not like to manage companies. Trade remained his element, to which he devoted most of histime spent on Wall Street. Already by 1900. the entire financial district of New York knew who Bernard Baruch was. The story of his success inspired many, and simply frightened many. There were constant rumors about the huge fortune of the speculator. The scale of his figure has become equal to the scale of Joseph Kenedy and JP Morgan.
Lone Wolf
Today, the heirs of Bernard Baruch continue to enjoy the fortune made by their clever relative. In 1903, at the age of only 33, a newly unknown broker became a member of the millionaires' club. All his thorny path on the New York Stock Exchange Baruch went completely alone. He liked to keep everything under control and could not stand collective activity. For this, the investor was called “the lone wolf of Wall Street.”
During the years of his financial activity, Bernard Baruch experienced many ups and downs. The biography of a financier is an example of a person, despite everything stubbornly heading towards success. in 1907, Baruch acquired the international trading firm M. Hentz & Co., and as an adult he began to prefer investments related to reliable real estate.
Public Service
Having achieved significant success on the stock exchange and in business, Baruch began to look at politics. In 1912, he agreed to sponsor Woodrow Wilson's presidential campaign. The Democratic Party Foundation received $50,000 from a well-wisher. Wilson won the race and, in gratitude, appointed a financier to the National Defense Department.
On my ownBernard Baruch, whose photo began to appear in national newspapers, faced a serious dilemma in his first public office. Combining political and entrepreneurial activities has proved extremely difficult.
Legal Trouble
On the exchange, Baruch began to be accused of abusing his own official positions to obtain insider information about the market. Moreover, in 1917 the investor was accused of revealing secret documents. Investigators concluded that, using his position, he illegally earned about a million dollars.
In response to claims from law enforcement, Baruch claimed that he received his last money from the sale in exactly the same way as he did before his appearance in the public service. The protection was reinforced concrete - the speculator managed to get away with it.
Advisor to the President
As an official, Bernard Mannes Baruch was responsible for distributing military orders. Then he left his native New York Stock Exchange. The financier stopped selling and buying, but continued his investment activities, redirecting it into the mainstream of the military industry. Baruch's money flowed into companies engaged in the production of various weapons and ammunition. Certainly, part of the dollar mass coming from the state budget to military factories remained in the pocket of a clever civil servant. According to various estimates, at the time of the defeat of Germany, Baruch was the owner of a fortune of 200 million.
In 1919, the leaders of the victorious countriesgathered at the Paris Peace Conference. Baruch also went to the capital of France. He was part of the official American delegation led by President Wilson. The economic adviser opposed excessive contributions from Germany and supported the idea of creating the League of Nations, necessary to stimulate cooperation between different states.
Baruch and the Great Depression
Woodrow Wilson left the presidency in 1921. The rotation in the White House did not prevent Baruch from remaining on the political Olympus of the United States. He was an adviser to Warren Harding, Herbert Hoover, Franklin Roosevelt and Harry Truman. Balancing between government and business, the financier continued to enrich himself using insider data on the state of the market. The heirs of Bernard Baruch could have been left penniless if not for his timely agility. On the eve of the Great Depression, Baruch sold all his securities, and with the money he received, he bought a large number of bonds.
On October 24, 1929, the American stock markets collapsed. The entire market was in shock from the onset of the crisis and the uncertain future. All - but not Baruch Bernard. A book written by him at the end of his life about himself says that on that day the speculator came to the New York Stock Exchange with Winston Churchill. The visit was not accidental. The financier wanted to demonstrate his enviable economic acumen to British politics.
Gold and silver speculation
One of Bernard Baruch's most lucrative scamsbecame the chain of his actions in 1933, when the US abolished the gold standard. By that time, the country had been living in a state of terrible crisis for several years. She was disturbed by the colossal unemployment and bankruptcies of the largest companies. Under these conditions, the government announced the widespread redemption of gold from citizens. In exchange for precious metal, people received paper money.
In October 1933, when most of the gold was transferred to the treasury, President Roosevelt announced the devaluation of the national currency. Now the government was buying gold at an increased price. Bernard Baruch, the President's closest adviser, knew about all the ups and downs of the change in course. Quotes from the then press clearly demonstrate that society was in a fever from frequent cardinal changes. And only the "lone wolf" skillfully used each new circumstance. He invested a significant part of his funds in silver just before the increase in the government buyback price of this metal.
World War II
In the last years of Bernard Baruch's life, his political activity more and more dominated the financial one. With the outbreak of World War II, he again found himself in the role of military and economic adviser to the American authorities. The investor made a significant contribution to changing the US tax system. In fact, he initiated the economic mobilization of the country. The adviser's influence was so significant that in 1944, President Roosevelt spent a full month at his famous South Carolina estate.
The President even invited Baruch to head the MilitaryUS industrial production. The adviser had been longing to be in this position for a long time, and only as a formality asked for time for an examination by a doctor in order to make sure of his own efficiency in the most important post. However, while Baruch was delaying the answer, another adviser to Roosevelt, Harry Hopkins, persuaded the president to abandon this idea. As a result, at the decisive meeting, the first person withdrew his offer.
The Baruch Plan
In 1946, Roosevelt's successor Truman appointed Baruch to the position of US representative to the UN commission responsible for nuclear energy. In this capacity, the presidential adviser became widely known in the USSR. The fact is that at the very first meeting of the commission, Baruch proposed to ban nuclear weapons and make the work of all countries in the nuclear sphere under the control of a common body. The package of initiatives became known as the Baruch Plan.
In the context of the beginning of the Cold War, the issue of nuclear security became more and more urgent. The fear of atomic bombings was great, because only a few years ago the United States tested these weapons on two Japanese cities, demonstrating the horrific consequences of using the latest warheads. Nevertheless, the restrictive initiative of the Americans was criticized in the Kremlin. Stalin did not want to stop the nuclear race and was not going to be in a position dependent on the United States. The Baruch Plan was rejected. The influence of the UN was not enough to subjugate international projects for the development of nuclear weapons.
Speaking of the Cold War, one cannot fail to note what exactly Bernard Baruch gavelife of this phrase, although, according to the popular view, the expression "cold war" first appeared in a speech by Winston Churchill. After the cessation of work at the UN, the already elderly adviser continued to work in the White House. He died on June 20, 1965 in New York at the age of 94.
