Bernard Baruch: the history of the American financier

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 to work as an advisor 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 wealthy Jewish family. Simon Baruch became the father of four sons, the second of whom was Bernard Baruch. Children, as time showed, turned out to be talented and hardworking. The brother of the future financier Herman even worked as an American ambassador to the Netherlands and Portugal.

The early years of Bernard fell at the period of Reconstruction, 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 family of Barukhov moved to New York. Here, Bernard went to college.

The first place Baruch worked in 1890 was the brokerage firm AA Housman & Co. The twenty-year-old boy was an errand boy who received $ 3 a week. He had no other opportunities for self-realization because of his social status and nationality.

Takeoff

Like many other brokers, Bernard Baruch got to 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, the father told him that the $ 500 transferred was all that was left at home for a rainy day. Bernard did not get scared and, taking a risk, began a dizzying career on Wall Street.

Baruch did not fit into the usual picture of the exchange. He was doing rather extravagant things: he made risky contracts, plunged into speculation. Professionals were hostile to the first successes of this upstart. The most famous banker and financier of his time John Pierpont Morgan considered Baruch "card cheater". It is wrong to think that under capitalism all entrepreneurs earned their capital in white gloves. Not the cleanest was himself, JP Morgan. However, the methods used by Bernard Baruch, surprised even the most notorious machinators.

The Machinator

Since its appearance on the stock exchange, the future conqueror of Wall Street has abandoned the then popular bidding strategy. Baruch never absorbed the 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 take into account the fundamental factors of the stock market.

Contrary to the fact that the auctions were then on the rise, the financier actively played down. For himself, Bernard Baruch formulated the simplest rule: "Sell at the maximum and buy at a minimum is impossible." Because of this, he often went against the market trend, bought when many sold, and vice versa.

Towards 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 time to resume trading. Once, having taken such a hard decision for the stock exchange player, Bernard said: "Jay, in my opinion, it's time to go to shoot the partridges." After this remark, he sold all his positions and went on a long vacation to his plantation Hobkau Barony in South Carolina. The saline swamps and sandy beaches of the estate were replete with ducks, and on 17,000 acres there was not a single phone with which to contact New York. But even after the longest absence, the player returned to the stock exchange.

That eccentricity with which Bernard Baruch and Jesse Livermore mocked the generally accepted rules of traders, made them famous even before the advent of large capitals. Anyway, but the growth of the well-being of the upstarts did not take long.

Investor and businessman

Beginning from the very bottom, Baruch earned enough to do his own investment. One of the first on its funds appeared firm Texasgulf Inc., specializing in service services in the rapidly developing 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 the time spent on Wall Street. By the 1900's. The entire fiscal quarter of New York knew who Bernard Baruch was. The history of his success inspired many, and many simply scared. There were always rumors about the huge condition 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, made by their clever relative. In 1903, at the age of only 33 years, a recently unknown broker became a member of the millionaire club. Baruch passed all his thorny path on the New York exchange completely alone. He loved to keep everything under control and could not tolerate collective activities. For this, the investor was called the "lone wolf of Wall Street."

Over the years of his financial activity, a lot of ups and downs went through Bernard Baruch. The biography of the financier is an example of a man, despite everything stubbornly bound for success. In 1907 Baruch acquired the international trading firm M. Hentz & Co., and already in adulthood, he began to prefer investments related to reliable real estate.

Public service

Having achieved considerable success on the exchange and in business, Baruch began to look at politics. In 1912, he agreed to sponsor the presidential campaign of Woodrow Wilson. The Democratic Party Foundation received 50 thousand dollars from the well-wisher. Wilson won the race and in gratitude appointed a financier to the National Defense Department.

In his first state post, Bernard Baruch, whose photo began to appear in national newspapers, faced a serious dilemma. The combination of political and entrepreneurial activity turned out to be extremely difficult.

Problems with law

At the exchange, Baruch began to be accused of abusing his own official regulations to obtain insider information about the market. Moreover, in 1917 the investor was accused of disclosing secret documents. Investigators came to the conclusion that, using his office, he illegally earned about a million dollars.

In response to claims of law enforcement agencies, Baruch claimed that he received his last money for sale in the same way as he did before appearing in the civil service. The protection was reinforced - the speculator managed to get out of the water.

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 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 for military plants, remained in the pocket of a cunning civil servant. According to various estimates, by the time of the defeat of Germany, Baruch was in possession 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 French capital. He was part of the official US delegation, which was headed by President Wilson. The Economic Adviser argued against excessive indemnity from Germany and supported the idea of creating the League of Nations, which is necessary to stimulate cooperation between different states.

Baruch and the Great Depression

Woodrow Wilson resigned as president in 1921. Rotation in the White House did not prevent Baruch from remaining on the US political Olympus. He was an adviser to Warren Harding, Herbert Hoover, Franklin Roosevelt and Harry Truman. Balancing between power and business, the financier continued to enrich himself, using insider data on the state of the market. Bernard Baruch's heirs could have remained penniless in his pocket, had it not been for his timely haste. On the eve of the Great Depression, Baruch sold all his securities, and he received a large number of bonds for his money.

October 24, 1929, American stock exchanges struck the collapse. The whole market was in shock because of the crisis and uncertain future. All - but not Baruch Bernard. The 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 insight to British policy.

Speculation with gold and silver

One of the most lucrative machinations of Bernard Baruch was the chain of his actions in 1933, when the United States abolished the gold standard. By that time, the country had been living in a state of terrible crisis for several years. It was excited by the colossal unemployment and bankruptcy of the largest companies. In these circumstances, 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 was buying gold at an increased price. The closest adviser to President Bernard Baruch knew about all the twists and turns of the course. Quotations of the then press clearly demonstrate that society fevered from frequent cardinal changes. And only the "lone wolf" skillfully used every new circumstance. He invested a significant part of his money in silver just on the eve of raising the price of state redemption of this metal.

The Second World War

In the last years of Bernard Baruch's life, his political activity more and more dominated the financial. With the outbreak of World War II, he again found himself in the role of military and economic adviser to the US authorities. The investor made a significant contribution to the change in 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 in his famous South Carolina estate.

The president even suggested that Baruch lead the Committee of US military-industrial production. The Counselor longed to be in this post and only for the formalities asked for time to examine the doctor to make sure his own performance at the most important post. However, while Baruch was pulling with an answer, another adviser to Roosevelt, Harry Hopkins, persuaded the president to abandon this venture. As a result, at the decisive meeting, the first person withdrew his offer.

The Baruch Plan

In 1946, the successor to Roosevelt Truman appointed Baruch as 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 first meeting of the commission Baruch proposed banning nuclear weapons and making the work of all countries in the nuclear sphere under the control of the general body. The package of initiatives became known as the "Baruch Plan".

In the conditions of the cold war that began, the issue of nuclear safety became more and more urgent. The fear of nuclear bombing was great, because just a few years ago, the US tested this weapon in two Japanese cities, demonstrating the appalling consequences of using the latest warheads. Nevertheless, the restrictive initiative of Americans was criticized in the Kremlin. Stalin did not want to end the nuclear race and was not going to be in a position dependent on the United States. The Baruch Plan was rejected. The UN's influence was not enough to subordinate international nuclear weapons development projects.

Speaking of the Cold War, it should be noted that it was Bernard Baruch who gave life to this phrase, although, according to the widespread view, the expression "cold war" first appeared in the speech of Winston Churchill. After the termination of work in the United Nations, the elderly counselor continued to work in the White House. He died June 20, 1965 in New York at the age of 94 years.