Bad Behavior

John Raskob Makes Money & A Mess During the Jazz Age

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“The Patio” is named for its most enchanting feature, which you can see in these photos is quite mesmerizing. It was, in its own way, the introduction of the Raskob family to the moneyed set. They had made their money and now you could see it.

John Raskob was born in 1879 along the Erie Canal in Lockport, New York. After badgering Pierre du Pont {of Longwood Gardens} for a vacant secretarial job John, with his talent for numbers and detail, began a career trajectory that would make him a very rich man and Pierre’s trusted business partner for their entire careers.

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THE PATIO

John had come from a middle-class family that was secure but by no means rich. Now he had money to spare. He and his wife Helena (and their 13 children!) decided to build their dream home in Delaware.

John bought a country estate called “Archmere” just outside of Wilmington where he worked for the DuPont Company. They felt the existing home was too small and when they saw a Spanish Renaissance Revival hotel in St. Augustine called the Ponce de Leon they had their inspiration for a new home {see the hotel here and here}. Most of all they loved the idea of a large open inner courtyard where they could entertain. Helena was a trained classic pianist and gave many concerts in the patio.

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In today’s money the home with its retractable glass ceiling cost over $9 million dollars. It also took over two years to build and raze the old one so the Raskobs nonchalantly bought the mansion next door to live in in the meantime.

Helena studied all the details she could about architecture and design in order to make informed decisions for her new Florentine palatial home. The best wood paneling was selected, velvet covered the music room’s walls and Persian bookbindings lined the shelves in the library. There was no modesty in building this house. It was fit for Italian Renaissance royalty with Medici-like money.

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THE JAZZ AGE IN FULL SWING

In 1918 John engineered a massive deal to take over General Motors with the DuPont Company’s backing. He had his sights on the top positions in corporate, something that would never come at DuPont when things were still kept strictly in the family. After the GM deal John’s profile rose to new heights in the financial world, now he was a power player on the national stage.

Then in March 1918 the “Spanish flu” pandemic frighteningly spread throughout the world killing around 30 million people. It’s almost a footnote in history now but in the United States it claimed 650,000 lives. The deadliest strain began infecting people in November of 1918; 25% of the United States’ population had the flu and millions around the world suffered too. It was a cruel sickness where after suffering from fever and other symptoms the fever would ease, the patient much improved. Then it would mutate into sometime much worse and often fatal.

As the deadliest strain passed through America John’s baby daughter Catherine fell ill. Then Helena did and so did John’s brother-in-law and assistant William. In the Raskob family, Will would be the first to die. A few days later Will’s wife (John’s sister Edith) gave birth to a daughter. A week later the newborn was dead from flu, the next day John’s baby Catherine was too. Helena survived and John and the rest of his children somehow escaped infection.

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This fountain in the middle of the patio features all 13 of the Raskob children.

John emerged from the family tragedies by working even harder and turning around GM during the recession of 1920. With his financial acumen cemented he now dined at the White House, met regularly with the top corporate men of New York and gambled with America’s wealthiest. Unfortunately, he was almost never at home.

When he could find a spare moment he spent his weekends traveling home to Archmere to see Helena and the children. He was still devoted to his family, buying the kids all the latest toys like the pogo stick…which he played with too to his children’s amusement.

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Still John’s absences were noticeable. Helena became more and more independent and she only occasionally joined John up in New York without the children. As he spent more time alone in New York he became a Broadway regular, gambled at upscale speakeasies and was even seen in the company of showgirls.

Despite his New York life straining towards impropriety, or maybe because of that, he rededicated himself to his Catholic faith and sharing his wealth with his diocese and the Vatican.

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EVERYBODY OUGHT TO BE RICH

Somehow, in between all of his work, John found the time to write an article of his own. He had recently been profiled in several national magazines for championing his idea of the average hourly worker buying into the stock market. He was making a killing in the stock market, surely others could too. Economists argued that the stock market was still risky business but none of these worries seemed to bother John. He was cautious but like most people he could not possibly foresee the scope of what would happen next.

John’s article, backed up by his (slightly exaggerated) rags-to-riches story of $5-a-week stenographer to multimillionaire, garnered extensive publicity and convinced many Americans to put their money into the stock market.

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POLITICS & TRAGEDY

Since 1919 John had made his primary residence in New York, but he was more familiar still with Delaware politics and issues. He travelled home often now and cared little about government in New York. That all changed in 1928 when John began to explore the world outside of business, specifically politics. He was about to gain the power he had always craved at DuPont.

Recently the Raskobs had purchased a new summer home in Centreville, Maryland. An estate where John invited the family in July of 1928 to gather for some big news. His son Bill was a student at Yale and while they had had a complicated relationship now that Bill was succeeding at Yale their bond was particularly strengthened.

But a few miles away from town while driving to meet with the family, Bill drove off the road. A driver spotted the accident from a few hundred yards away but could not see what caused the mishap; he only saw an ominous cloud of dust. When he arrived at the scene he found Bill lying dead on the ground. He had been ejected from the open car and hit his head on a large stone. John and Helena buried their son a week later in Wilmington.

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His son’s death, and the news he’d been traveling to hear, was announced to the country soon after. John had been named the campaign manager of presidential candidate Al Smith from New York. He would also be the head of the Democratic National Committee. In the moments between Bill’s funeral, before he once again left for business in New York, John had not had the chance to tell his family of his new appointment. They found out like everyone else, in the newspaper.

The news coverage was tremendous. Many believed that someone like John represented a pairing with big business and the DNC they didn’t like. Others focused on his Catholicism (anti-Catholicism was still well-established in the U.S., especially in the South and with the KKK).

archmere-patio-raskob-mansion-ceiling-wooden-flowersA carved wood ceiling in the Patio.

GM was also angry. They had discovered their spokesman was now running the DNC too, making them seem politically invested. Only a few months before the announcement “some old gal” had sent Alfred Sloan, President of GM, a photo of Raskob in a rolling chair with a beautiful woman that had been printed in Atlantic City’s Boardwalk News.

Sloan wasn’t one to judge, his best friend Walter Chrysler was a serial philanderer of epic proportions anyway, but this was different. This discretion tied in GM publicly.

Sloan insisted Raskob resign. John told him he was being ridiculous. The du Ponts stood by John so Sloan brought the issue to the GM board for a formal vote. John was outnumbered and lost the vote. It would cost John a great deal of money in salary and stock options but he chose politics and promptly resigned.

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A MAN NAMED JACK

While all this was playing out John had left Helena back home, all alone as she grieved for her son. She was lonely and without his emotional support. But Helena was not a passive woman; her nickname was “Skipper” for her take-charge and capable manner. So she looked for emotional support elsewhere. And she found it in Jack Corcoran.

Corcoran was only a few years older than Bill had been when the Raskobs had hired him to manage their extensive estate grounds. Though he worked for them, he had been close friends with Bill and could reminisce with Helena over their shared fondness for her son.

It started as maternal affection, sometimes she called Corcoran Bill’s twin (in personality, not looks), but their relationship changed when Corcoran made it known that he did not think of her as his mother. At 43-years old and after 13 children Helena was still remarkably trim, fit, stylish and youthful.

archmere-patio-raskob-mansion-carved-ceiling-crossesA painted, wooden carved ceiling. Each room features its own unique beautifully decorated ceiling.

The pair became even closer when they both mysteriously began to receive letters from a man in Philadelphia. In one letter the writer claimed to be behind Bill’s death and threatened to blow up Archmere if he was not paid $100,000 immediately. In the same letter he apologized for threatening them but said he desperately needed the money.

They had ignored his previous letters but the mention of Bill was too much. Jack had the head of DuPont security work with the Philadelphia police to track the man down. After laying a trap they caught the career criminal who confessed and was sent to prison.

archmere-patio-raskob-mansion-painted-ceilingAnother decorative ceiling.

The arrest caught the interest of the newspapers and they published the full story, inspiring copycats (many of them nearly illiterate) who sent threatening letters to Helena demanding money. In the new letters they explained they were asking for money because of her husbands’ supposed indiscretions with women in New York. Helena left Archmere with her children and Jack for the estate in Maryland.

John was too busy in New York to notice that Helena had fallen in love with a much younger, handsome, outdoorsy employee back home. Of course, he had had plenty of casual relationships of his own in New York and one very serious one…with his work. Both were devout Catholics though. None of this would push either into a divorce but their relationship had, of course, changed forever.

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THE CRASH

In the meantime, the four months of Al Smith’s presidential campaign flew by. His “wet” stance against Prohibition had aided fundraising efforts but Smith’s New York way of speaking had not played well against Hoover over the newest campaign tool, the radio. Anti-Catholic bias had played a larger part than anyone expected too.

John moved past the defeat by proposing the DNC become a year-round operation. He poured serious amounts of his own money into the organization and began to work on ways to further fundraising.

After a leak about his new idea for a stock investment company for the common man made it into the papers with a number of errors, John moved quickly to give his corrected side of the story. He arranged an interview where he could share his ideas of a stock investment company that would allow working people to invest their savings with better choices and assistance instead of with swindlers.

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“A factory mechanic in Detroit with $200 to invest” could play the market to make a secure nest for his family. The average American should invest $15 a month John counseled.

“I now have all the money I want and now I want to help a lot of other people make some,” he told the paper. The interview became headline news. The average American only made around $20 a month total after all.

Privately John was not moving ahead with the company just yet because he thought the Dow-Jones was currently overpriced. In the past two years Raskob had been playing the market more cautiously himself.

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By mid-1929 John was ready to launch his “working man trust” and contacted a friend to write a publicity piece for the Ladies Home Journal. The title of the article came directly from John’s explanation of his trust: “Everybody Ought to be Rich.” He mostly repeated what he had said in previous articles with more specificity and hype that there would be rapid economic growth just around the corner.

When the stock market dove a few weeks later no one saw the Great Depression coming just yet. Still it was spectacularly bad timing and John’s hope to help the working man was used against him.

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SKYSCRAPER CRAZY

If the stocks were going down another industry would go up John believed, maybe now was finally the time to move into real estate. New York had recently gone skyscraper crazy, it appeared to be a solid investment. The increasing vacancy rate didn’t seem to worry John in this exciting high-stakes real estate game. His experience working on the Du Pont Hotel and the Wilmington Playhouse gave him a sense of confidence.

Coleman du Pont, who owned the Waldorf-Astoria, put the property up for sale in 1928 as the hotel became untrendy and a Victorian relic. By July of 1929 John was working on a deal with his associates to take over the project plans to tear down the hotel and build a skyscraper there. They named their new partnership the “Empire State Inc. board.”

The Empire State Building would cost $60 million, be a thousand feet high and open in spring of 1931. At the time it would be the largest office building in the world.

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A few months later “Black Thursday” arrived (which is nothing like Black Friday 😉 ). The stock market turned into a chaotic panicked mess. The market dropped over $9 billion in a couple of hours. By the end of the year, just like everyone else, John’s stock portfolio had plummeted. He had lost tens of millions of dollars. Before the crash he had been worth around $100 million ($1 billion in today’s money). He would never have that kind of money again.

Arthur Robinson, a Republican Senator from Indiana took the Senate floor to lay the blame of the crash on John, still head of the DNC. He had convinced everyone, even those with little money, to throw their money into the market too. It had unbalanced everything, he argued against John. We know that is nonsense now but it stung at the time.

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archmere-patio-raskob-mansion-bathroom-vaultThis huge, thick vault is in the basement {now in the ladies bathroom!}

THE NEW NORMAL

While John had suffered severe losses he was by no means in the poorhouse, he was still a rich man. An uneasy richness, never sure when a bank would call in a loan, but still rich. Many of his friends and business partners had been hit much harder. His friend James Riordan who ran a bank in New York for Irish Americans primarily could not face calling in all his loans to the small businesses he had funded for his fellow countrymen. Instead he shot himself. John and several friends took control of the bank and saved it and many of the businesses it financed.

In 1932 the Raskobs sold Archmere* to the Norbertine Order for a small sum so that a Catholic school for boys could be founded. Archmere was no longer the home of their dreams. {You can see historical photos of Archmere in its early days on their flickr account here}.

*I can’t quite confirm it but I did hear that a steel magnate had built a steel mill just down the street from the house too. A business enemy of Pierre and John’s, this was his act of revenge. The once scenic countryside was now cloudy with factory smoke and a busy hustle.

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John spent the next years, partially retired and spending more time with his children; though he did devote quite a bit of energy to arguing against the New Deal and President Roosevelt. He also took his son and two daughters on a world trip in 1935 but any fun to be had was tempered by a message from back home: the sickly 22-year old Yvonne, his precious daughter, had died.

During WWII, rationing kept the Raskobs’ travels to a minimum. Helena stayed mostly out West in Tucson, Arizona (with Jack) for the dry air that soothed her chronic asthma. John spent most of his time in New York.

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In the fall of 1950 John had his old friend Will Bewley over to reminisce about their youth in Lockport, New York. During the night John suddenly collapsed, dying in Will’s arms.

After the funeral service, outside the church, the crowd spotted a broken-down car (and not a GM one they pointed out) being slowly pushed by a chauffeur. Next to it was the 81-year old Pierre du Pont. Though he was tired, he had insisted on saying goodbye to his old friend.

In July of 1952 Helena married John Corcoran.

Source: “Everybody Ought To Be Rich” by David Farber