Wednesday, November 5, 2014

Thomas Maier's "When Lions Roar"

Thomas Maier's books include The Kennedys: America’s Emerald Kings and Masters of Sex, the basis for the Showtime series.

He applied the “Page 99 Test” to his new book, When Lions Roar: The Churchills and the Kennedys, and reported the following:
At this point in the book, the secrecy surrounding the past business deals of Joe Kennedy, the family patriarch, was making life complicated for him when President Franklin D. Roosevelt selected Kennedy to become the first head of the U.S. Securities and Exchange Commission, in effect as Wall Street's watchdog. One of the biggest deals for Joe was described earlier in the book. Just as Prohibition ended in 1933, Kennedy secured a deal to import British whiskey with the help of Winston Churchill as well as Jimmy Roosevelt, the oldest son of President Roosevelt.

As When Lions Roar details for the first time, Churchill obtained a lucrative amount of stock in two U.S. companies controlled by Kennedy and his associates in an apparent “pay to play” arrangement around the same time Kennedy received British approval to ship Scotch whiskey and other liquor to America. The two U.S. companies were National Distillers -- Joe Kennedy was its New England liquor franchise owner -- and a privately-owned New York City subway company, then controlled by Kennedy and another business associate, Bernard Baruch, who was a longtime Churchill ally in America.

The secret liquor deal was orchestrated during an October 1933 trip to England by Joe Kennedy and James Roosevelt that included a meeting with then financially troubled Churchill at his English estate, Chartwell Manor. As part of the arrangement with Kennedy, Jimmy Roosevelt also secured the insurance contract for the liquor shipments between America and Great Britain.

Kennedy wound up making millions from the British liquor deal once FDR signed the legislation ending Prohibition in December 1933. Joe Kennedy later sold his liquor company in 1946 for millions when his son John F. Kennedy first ran for Congress and began his march to the U.S. presidency.

Using previously unreleased documents, this book shows how both Kennedy and Churchill benefited from the British liquor arrangement and how President Roosevelt became alarmed a few months later when he learned that his son James was involved in this secret deal.

By Page 99, Kennedy's complicated financial past seemed to endanger his political future. Here's a short excerpt from Page 99 in When Lions Roar:
Within a month, however, Kennedy’s checkered Wall Street past began to haunt him. Reporters called attention to the Senate testimony of Henry Mason Day, who’d organized the deceptive pool in “alcohol stocks” that netted Kennedy a quick-hit profit in 1933. They wondered how Kennedy could regulate Wall Street abuses when he seemed so much a part of them. “He’s independently wealthy and his associations with Henry Mason Day and Charles M. Schwab (the latter during the war) rank him in Grade A speculative society,” wrote one columnist about Kennedy. Yet the press seemed to know only a little about Kennedy’s hidden deals. They hadn’t detected Day’s involvement with Kennedy and the president’s son to secure the liquor contracts for Somerset Importers. Nor did they seem unduly concerned when the SEC began a review of the stock transfers surrounding Brooklyn-Manhattan Transit—the obscure subway line whose investors happened to include Kennedy, Baruch, and an Englishman named Winston Churchill.

In September 1934, government officials blocked attempts by BMT to offer an eight-million-dollar bond issue on the New York Stock Exchange, claiming it violated the newly created federal securities regulations that the panel was charged with enforcing. In a press release, the SEC took pains to underline that Kennedy had recused himself from any proceedings examining BMT. The agency officials also noted that the value of Kennedy’s BMT stock—all of which he held before taking on the SEC post—had no direct bearing on the bond issue. Federal investigators focused on whether BMT had improperly tried to avoid registering its bond issue and had taken advantage of rules requiring these bonds be sold only to New York State residents. The SEC probers learned that more than a million dollars’ worth of bonds had found their way to investors outside of New York, in apparent violation of existing law. BMT argued that it had sold the bonds to New York bank distributing groups without violating any interstate commerce rules. But clearly, BMT had made a bold challenge to the rules Kennedy was now supposed to enforce.
Learn more about the book and author at Thomas Maier's website.

The Page 99 Test: Masters of Sex.

--Marshal Zeringue