The financier and investor Bernard Baruch was known for his big capital and serious political influence. Having achieved success on the New York Stock Exchange, he began to work 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 American city of Camden (South Carolina). He came from a poor Jewish family. Simon Baruch became the father of four sons, the second of which was Bernard Baruch. Children, as time has shown, were 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 came during the Reconstruction period, when after the Civil War the south of the USA was swept by a wave of crime and black riots. In search of a quiet corner, the Baruch family moved to New York. Here Bernard went to college.
The first place of work of Baruch in 1890 was the brokerage house AA Housman & Co. The twenty-year-old was an errand boy who earned $ 3 a week. He simply did not have other opportunities for self-realization due to his social status and nationality.
Takeoff
Like many other brokers, Bernard Baruch entered the stock exchange quite by accident. His first experience was a failure. However, Baruch did not give up. He began to borrow money from friends and family. At some point, his father told him that the transferred $ 500 was all that was left at home on a rainy day. Bernard was not afraid and, taking a chance, began a dizzying career on Wall Street.
Baruch did not fit into the usual picture of the exchange. He led affairs rather extravagantly: he entered into risky contracts, plunged into speculation. Professionals hostilely accepted the first successes of this upstart. The famous banker and financier of his time, John Pirpont Morgan, considered Baruch a "card cheater." It is wrong to think that under capitalism all entrepreneurs earned their capital in white gloves. Not even the most neat was J.P. Morgan himself. However, the methods by which Bernard Baruch armed himself surprised even the most notorious schemers.
The machinator
Since its appearance on the exchange, the future Wall Street conqueror has abandoned the then-popular trading strategy. Baruch never absorbed weak companies for the purpose of their subsequent resale. In addition, he did not resort to artificially raising the prices of his shares. The investor did not, as was customary, carefully consider the fundamental factors of the stock market.
Despite the fact that trading was on the rise then, the financier was actively playing for a fall. For himself, Bernard Baruch formulated the simplest rule: "It is impossible to sell at a maximum and buy at a minimum." Because of this, he often went against the market trend, bought when many sold, and vice versa.
On the way to wealth
Most of all, Baruch’s style was like the style of another famous speculator Jesse Livermore. These two traders were known for periodically leaving the market and waiting for the best moment to resume trading. Once having made such a difficult decision for an exchange player, Bernard said: "Jay, in my opinion, it's time to go shoot some partridges." After this replica, he sold all his positions and went on a long vacation to his Hobcau Baroni plantation in South Carolina. The salt marshes and sandy beaches of the estate were replete with ducks, and on 17 thousand acres there was not a single phone with which you 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 appearance of large capitals. One way or another, but the increase in wealth of upstarts was not long in coming.
Investor and businessman
Starting from the bottom, Baruch earned enough to make his own investments. One of the first to use his funds was Texasgulf Inc., a company specializing in services in the booming oil industry.
But, as further developments showed, the broker did not like to manage companies. His element remained the trade, to which he devoted most of his time on Wall Street. Already by 1900 the whole financial quarter of New York knew who Bernard Baruch was. The story of his success inspired many, but simply scared many. Constantly rumors arose about the huge state of the speculator. The scale of his figure became equal to the scale of Joseph Kennedy and JP Morgan.
"Lone wolf"
Today, the heirs of Bernard Baruch continue to use the fortune knocked together by their clever relative. In 1903, at the age of only 33, a recently unknown broker became a member of the club of millionaires. All his thorny path on the New York Stock Exchange Baruch was completely alone. He loved 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 survived many ups and downs. The financier’s biography is an example of a person, despite everything stubbornly heading for success. in 1907, Baruch acquired the international trading company M. Hentz & Co., and already in adulthood, 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 Fund received from the well-wisher 50 thousand dollars. Wilson won the race and, in gratitude, appointed a financier to the Department of National Defense.
In his first public office, Bernard Baruch, whose photo began to appear in national newspapers, was faced with a serious dilemma. The combination of political and entrepreneurial activity was extremely difficult.
Problems with law
On the stock 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 classified documents. Investigators concluded that using his position, he illegally earned about a million dollars.
In response to law enforcement claims, Baruch said that he received his last money on the sale in the same way as he did before he appeared in public service. The defense was reinforced concrete - the speculator managed to get out of the water dry.
President's advisor
As an official, Bernard Mannes Baruch was responsible for the distribution of military orders. Then he left his native New York stock exchange. The financier stopped selling and buying, but continued his investor activity, redirecting it to the mainstream of the military industry. Baruch money flowed into companies engaged in the production of various weapons and ammunition. Certainly, part of the dollar supply from the state budget to military factories remained in the pocket of a clever civil servant. According to various estimates, by the time of the defeat of Germany, Baruch was the owner of a fortune of 200 million.
In 1919, the leaders of the victorious countries gathered at the Paris Peace Conference. Baruch also went to the capital of France. He was part of the official U.S. delegation led by President Wilson. The Economic Advisor opposed excessive indemnification with 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 resigned as president in 1921. The rotation in the White House did not prevent Baruch from remaining in 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 information about the state of the market. The heirs of Bernard Baruch could have been penniless if not for his timely agility. On the eve of the Great Depression, Baruch sold all his securities, and acquired a large number of bonds with the money received.
On October 24, 1929, American stock exchanges were hit by a collapse. The whole market was shocked by the crisis and an 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 along with Winston Churchill. The visit was not accidental. The financier wanted to show his enviable economic insight to British politics.
Gold and silver specs
One of the most profitable frauds of Bernard Baruch was the chain of his actions in 1933, when the gold standard was abolished in the USA. By that time, the country had been living in a state of terrible crisis for several years. She was excited by the colossal unemployment and bankruptcy of the largest companies. Under these conditions, the government announced the widespread redemption of gold from citizens. In exchange for a noble 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 bought gold at an increased price. The president’s closest adviser Bernard Baruch knew about all the upsets. Quotes of the then press clearly demonstrate that society was in a fever from frequent cardinal changes. And only the “lone wolf" skillfully used every new circumstance. He invested a significant part of his funds in silver just on the eve of raising the price of the state buyback of this metal.
The Second World War
In the last years of the life of Bernard Baruch, his political activity dominated financially more and more. With the outbreak of World War II, he again found himself in the role of military-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 influence of the adviser was so significant that in 1944, President Roosevelt spent a whole month at his famous South Carolina estate.
The president even invited Baruch to head the U.S. military industrial committee. The adviser longed to be in this post and, just for the sake of formality, he asked the doctor to check the time to make sure that he was working properly at the most important post. However, while Baruch was pulling with an answer, another Roosevelt adviser Harry Hopkins persuaded the president to abandon this venture. As a result, at a decisive meeting, the first person withdrew his proposal.
The Baruch Plan
In 1946, succeeding Roosevelt Truman appointed Baruch to the post 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 controlled by a common body. The package of initiatives became known as the Baruch Plan.
With the outbreak of the Cold War, the issue of nuclear safety was becoming increasingly urgent. The fear of atomic bombings was great, because only a few years ago the United States tested these weapons in two Japanese cities, demonstrating the terrifying 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 did not intend to find himself 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 about the Cold War, it should be noted that it was Bernard Baruch who gave birth to this phrase, although, according to a common point of view, the expression “cold war” first appeared in Winston Churchill's speech. After the termination of work at the UN, an elderly adviser continued to work in the White House. He died on June 20, 1965 in New York at the age of 94.