John J. Raskob papers1900-1956
The collection documents Raskob's business and political careers as well as his personal life. The papers document significant aspects of the histories of E.I. du Pont de Nemours & Company and the General Motors Corporation during the first half of the twentieth century.
300 Linear Feet
John J. (Jakob) Raskob was born on March 19, 1879, in Lockport, New York. His parents, John and Anna Frances (Moran) Raskob, were the children of immigrants. By the time of Raskob's birth, his father had established a successful cigar-production business in the city. By his own account, Raskob enjoyed a comfortable and enjoyable childhood in Lockport, at that time a thriving city along the Erie Canal and an important transit point for Great Lakes shipping. Raskob's studies at Lockport's parochial and public schools were enlivened by participation in local theater, explorations of the local countryside and vineyards, and regular part-time work as a newspaper-delivery boy and in seasonal agriculture. Lockport had a well-established Catholic community, and Raskob took part in many of its religious and social activities. He stayed connected with classmates and fellow-parishioners for many years.
John J. Raskob graduated from high school and entered a local business school. In June of 1898, his father died after a brief illness (complicated by a misdiagnosis of typhoid fever). The family had some financial resources but young John was the eldest of four siblings and his sisters and brother were still in school, so he chose to abandon his education in order to support his family. Raskob began the secretarial career which would eventually put him in the world of du Pont family heir Pierre S. du Pont.
Raskob first began secretarial work--at the time a common profession for men--with a Lockport lawyer and family friend, John E. Pound. This work was occasional, however, and Raskob soon took permanent positions--first with the Holly Manufacturing Company in Lockport and then as a stenographer for Arthur Moxham, of the Lorain Steel Company (formerly the Johnson Company) in Lorain, Ohio, west of Cleveland on Lake Erie. He moved with Moxham to his employer's new company, Dominion Iron & Steel Company, in Cape Breton, Nova Scotia.
Moxham, the various Johnson Company enterprises, and the du Pont family had long-standing financial and personal connections. One of the most dynamic Johnson Company entrepreneurs was Tom Johnson, who as an unschooled but quick-witted 15-year-old had been employed by Pierre S. du Pont's uncle and guardian Alfred Victor du Pont as a bookkeeper, and had gone on to play a critical role in building the successful and innovative company. Pierre S. du Pont's inheritance of Johnson Company stock had been partly brokered by Tom Johnson and had brought the young industrialist a measure of financial independence. Tom Johnson also persuaded du Pont to take up the presidency of the Johnson Company in 1899 in order to oversee its reorganization and then liquidation following the sale of its steel assets to Federal Steel.
Perhaps Johnson's example was in mind when du Pont considered Raskob's application for a position as stenographer and bookkeeper in the summer of 1900. Both Moxham and Pound strongly recommended the young man, and du Pont hired Raskob in August. By this time, Pierre S. du Pont had completed the reorganization of the Johnson Company and its continuing liquidation had become a routine endeavor. DuPont had been refining a business model for bond-financed consolidation and reorganization of street railways and was ready to put the plan into practice. He expected to spend considerable time traveling in pursuit of a suitable market for this project and, as a result, believed it would be more proper to have a male secretary. By the time negotiations began to buy two street railways in Dallas, Texas, in March 1901, du Pont had already developed an appreciation for Raskob's insight and facility with numbers. He allowed his young secretary to take a role in the negotiations.
Raskob accompanied Pierre S. du Pont to Wilmington in 1902 after du Pont's unexpected succession to leadership of the family business that had alienated him a decade before. Pierre became one of the triumvirate of young du Ponts hastily formed after Alfred I. du Pont's impulsive bid to save the company from being sold to competitors following the death of company president Eugene du Pont. As private secretary to the new treasurer of E.I. du Pont de Nemours & Company, Raskob assisted with the financial and organizational restructuring and powder-industry consolidation that consumed much of Pierre's efforts in his first few years at the new company.
In 1904, Raskob became Pierre S. du Pont's assistant in du Pont's new position as treasurer of the newly formed E.I. du Pont de Nemours Powder Company and traveled extensively with his employer. DuPont and Raskob visited San Francisco in 1904 to transact urgent business with the California Powder Company. From December 1904 until May 1905, Raskob and du Pont, along with other young company executives, traveled to Britain and France and then to Valparaiso, Chile, to negotiate the purchase of nitrates for the company. This was Raskob's first experience with foreign travel, which he would enjoy to the last year of his life.
During these busy and productive years, Raskob moved his mother and siblings to Wilmington. The family lived together at various locations in the city, including homes on Adams Street and on Gilpin Avenue. Raskob attended a number of Catholic churches in Wilmington, and it was at St. Mary's Church on Union Street that he first encountered Helena Springer Green. Helena was well educated, descended from some of the first Catholic settlers of Maryland, and a music lover who played the organ at St. Mary's Sunday services. Family tradition holds that Raskob, in order to catch the eye of the young organist, paid a substantial bribe to the organ-bellows operator in order to take the boy's place near her and thereby effect an introduction. The couple were married on June 18, 1906, and the first of their thirteen children was born the following March.
During these early years Raskob carefully supplemented his salary through his first forays into the stock market. With his first-hand knowledge of prospects for the powder industry, he financed the first of his many investments in Eastern Dynamite and the new DuPont powder company through bank loans and personal loans from Pierre. These initial investments formed the basis of his eventual fortune. His growing wealth and close association with the du Pont family and the company brought Raskob an increasing (and perhaps unwelcome) social prominence in Wilmington, and he was frequently sought out to lend his name to city charities. His philanthropy grew with his wealth during this period; Raskob became an increasingly important benefactor to a number of local charities, particularly those involved in the relief of families and orphans, and to campaigns by various Catholic churches in the city. Raskob also gave widely, and discreetly, to needy individuals.
During his first ten years with the reorganized company, Raskob's primary role included supporting the endeavors and strategies of his employer. He was also open to new opportunities and pursued them as time and resources allowed. He was part-owner of the Bee Hive Company, a stationery and tobacco store that operated out of the new DuPont Building on Wilmington's Market Street, and also invested in a few small agricultural concerns in Delaware and Florida.
Raskob's fortunes continued to rise with the company and with Pierre S. du Pont's ascendancy within it. A period of diversification and reorganization in the company began around 1909, encompassed the divisive reorganizations of 1911 and 1914, and included the breakup of the company and division of its assets in accordance with anti-trust decrees of 1911 and 1912. Pierre S. du Pont's role at the company changed as well in this period; he unburdened himself of a number of day-to-day responsibilities by transferring them to Raskob, making him officially the assistant treasurer of E.I. du Pont de Nemours Powder Company in 1911 and treasurer in 1914. During this time Raskob also served in directorships and other executive capacities in several other company subsidiaries as the company's interests diversified; these included the DuPont Fabrikoid Company and the DuPont Nitrate Company.
Despite the interpersonal and familial turmoil that influenced much of the top-level management strategy and operations of the company at this time, the decade following the antitrust divestiture was phenomenally profitable for the company and its stockholders. Raskob continued to add to his large holdings of stock in the powder company and then in the DuPont Securities Company (later called Christiana Securities Company), the holding company for du Pont family investment interests that he helped organize in 1915 after Pierre S. du Pont's purchase of T. Coleman du Pont's stock holdings. Raskob negotiated the financing of this transaction and in return was allowed to join the company as the only non-du Pont family member.
These and other investments provided a luxurious standard of living for the Raskob household, which by the middle of the decade included eight children. Raskob had moved his family out of the increasingly crowded and dirty city in 1910 to property he purchased in Claymont, Delaware, at the far end of the Market Street streetcar line. Further purchases of lots and parcels followed, and in 1916 Raskob demolished the existing residence on the site. On what he called the Archmere estate, Raskob began the design and construction of a grand Italianate villa. Construction lasted for almost two years, and the family took up residence in their new home in the spring of 1918. The household, which included large domestic and grounds staffs, was managed through Archmere Inc., a holding company that Raskob established in January 1916 and which financed the construction of the house, held most of the assets of the estate, and managed retirement and savings funds for the employees.
Raskob retained a number of important positions in the DuPont Company and its subsidiaries throughout this period. He served as treasurer and on the executive and finance committees of the E.I du Pont de Nemours Powder Company from 1914 until the 1918 reorganization; was director, treasurer, and member of the executive and finance committees of E.I. du Pont de Nemours & Company from its incorporation in 1915; and was appointed a vice president in 1918. He held the positions of director and vice president of this company until 1946. From 1917 until 1920 he served as a director of the DuPont Engineering Company, which operated defense-contract production facilities at the Old Hickory powder plant near Nashville, Tennessee.
Through the pre- and post-war period, Raskob increasingly directed his entrepreneurial energies towards the nascent American automobile industry. While there were still periodic dramas and new directions at the old powder company as management and the company made the transition from explosives to chemicals, it was no longer a consuming day-to-day endeavor for either Raskob or Pierre S. du Pont. The automobile bug had bitten John Raskob in 1907, the year he retired his horse and buggy in favor of the first of a great many horseless carriages. He quickly identified the investment opportunities presented by this emerging industry, beginning his investments in automobile industry stocks from 1913. Raskob's involvement with and promotion of General Motors (GM) and its stock was a major factor in the company's transformation from a significant but financially vulnerable company into one of the historic giants of American industry.
Both Raskob and Pierre S. du Pont invested quickly and heavily in GM and reaped tremendous profits as the share price soared from 1914 to 1915. In the latter year, both men's relationship to the company changed radically because of an ownership dispute between William C. Durant, the founder of GM, and a voting trust of Boston banks that had controlled the company under a five-year financing agreement. Durant was eager to reassert full control over the company once again, and his efforts were supported by Lewis G. Kauffman, president of the Chatham and Phenix Bank of New York City. Pierre S. du Pont, Raskob, and the DuPont Company had all been valuable long-time clients of Kauffman and his bank, and Pierre was invited to join the board of GM, with Kauffman asserting that Durant's takeover was a done deal and GM's finances secure. Neither claim was true; and Pierre, accompanied by Raskob, was thrust into the midst of a contentious board meeting on September 16, 1915. Arguments over ownership and control were resolved through an eventual compromise wherein Pierre was called upon to name three neutral directors in order to break the deadlock between the Durant interests and the Boston bankers. Pierre's "neutral" directors were his brother-in-law Lammot Belin, the DuPont Company's J. Armory Haskell, and John J. Raskob. With this unexpected ascension, the curtain was raised on the second act of John Raskob's life: the corporate leadership of General Motors, which consumed his business energies and shaped his family life through the 1920s.
Raskob's and Pierre S. du Pont's first impulse was to reshape the corporate structure of a loosely consolidated GM along the lines of the DuPont Company. They came to this conclusion after a lengthy inspection of GM's facilities and offices in the fall of 1915. Durant was not, however, interested in diluting his own pervasive influence and control, as such restructuring would have done, despite his growing inability to administer the growing company during wartime expansion of production. As part of this expansion and corresponding restructuring, Durant had acquired a number of parts and supplies companies and had discovered and promoted Alfred P. Sloan, founder and president of one of these newly acquired subsidiaries, to lead the reincorporated General Motors Corporation.
Throughout this time of growth and profit at General Motors, Pierre S. du Pont was once again engaged with DuPont legal and operational affairs. Raskob represented Pierre's interests at GM then and throughout the critical period from mid-1917 when growing investor uncertainty threatened to precipitate a financial crisis at GM. Earlier attempts at securing liquidity had failed, so Raskob decided to approach the DuPont Company directly in an attempt to tap into its vast war profits. He proposed that the company purchase sufficient GM stock to stabilize the market and thus the positions of Raskob and Durant. The investment plan he drew up emphasized the potentially vast prospects for the United States automobile market as well as the potential market for DuPont's chemical, fabric, and paint products within GM's production facilities. The timeliness of presentation, coming as it did just as negotiations with the government for war-production contracts seemed stalled, helped to overcome initial reservations by some board members about the appropriateness and wisdom of such a dramatic departure from the company's traditional interests. Raskob's arguments were presented in Wilmington at DuPont finance and executive committee meetings on December 19 and 20, 1917. In response, the Company made the single largest corporate investment in an outside company in U.S. business to that time.
DuPont's $25 million bought much more than Durant and Raskob's financial security. The company obtained substantial control of GM and Chevrolet through its representation on the board of the corporation and through an equal say in selection of the directorates of subsidiaries. In the short term, dividends from GM stock and a privileged access for DuPont's Fabrikoid, pyralin, paint and varnish products helped avoid the potential dilution of profitability that DuPont's diversification efforts risked. More important for John Raskob's and Pierre S. du Pont's stories, DuPont took direct control over GM financial operations; Raskob became chairman of GM's finance committee, other members of which included Pierre, Irénée, and Henry F. du Pont. DuPont's interests were managed through the holding company DuPont American Industries, Inc., on whose executive committee Raskob served from 1918 until 1923.
By the end of 1918, Raskob had been appointed a vice president of GM and had resigned from the executive committee of E.I. du Pont de Nemours & Company. While he was still involved with the DuPont Company at many levels, this symbolized a shift in Raskob's allegiance and interests that was physically manifested in his increasing distance from his family in Wilmington. After GM's reorganization and refinancing in 1920, when Durant was cut loose from the company he had founded and Pierre S. du Pont, Alfred Sloan, and Raskob found themselves in charge, GM became a much more consuming business than the DuPont Company had been for several years. Raskob was required to spend a considerable amount of time in the company's New York offices. Residing in some style in an apartment at the Waldorf-Astoria Hotel that he shared with Pierre S. du Pont, Raskob was liberated from the conservative social and cultural life of Wilmington and threw himself into an exploration of jazz-age Manhattan. He became an habitué of Broadway, gaining acquaintances on the more respectable end of bohemia and becoming friends with emerging Catholic business and political leaders of New York City.
During the 1920s, Raskob was increasingly influenced by such figures as William F. Kenny, who exemplified a particular, uniquely New York type: self-made, brash, unencumbered by his humble origins and Catholic faith, and impatient with the establishment and its prejudices. Perhaps envying a lack of compromise and a personal confidence that he himself still lacked despite all his successes, Raskob gradually became involved in the social networks of New York's Catholic entrepreneurs that were tightly enmeshed in, and had a pervasive loyalty to, the Democratic Party. At the same time, Raskob became firm friends with other business and banking leaders then resident in the city: Walter Chrysler, Owen Young, and Michael Meehan among them. This circle offered an intoxicating mix of friendship, finances, business, and politics.
In New York, Raskob indulged in his long-standing passion for the theater with visits to an astounding number of Broadway productions, and his hospitality to visiting executives from Detroit, Flint, and Wilmington almost always included tickets to the latest shows. Raskob had supported the theater in Wilmington, through his promotion and financing of the Playhouse Theater in the DuPont Building. In New York, his passion and pocketbook ensured that all the stage doors of the Great White Way were opened to him. Raskob dabbled in producing with the young star and agent Eddie Dowling; dined with Elizabeth Marbury and her lover, the famous designer Elsie de Wolfe; and enjoyed the hospitality of the infamous "Tiger Room," which William Kenny had built as a private retreat offering both entertainment and politics.
During these exciting years, Raskob worked closely with Pierre S. du Pont in implementing organizational restructuring at GM and heading off periodic crises caused by inventory slippages, stock forecasting, and the long shadow of Durant--who, it was widely rumored, wished to reassert leadership of GM and whose wily genius could never be discounted. Raskob helped develop financial strategies, including an executive bonus plan, that reduced the vulnerability the company to speculation and ensured the loyalty of top GM staff in an extremely competitive market for automobile executives. As the plan's most fervent booster, over the reservations of Sloan and other key figures, Raskob became known as the "millionaire-maker"; the company's market success translated into staggering dividends and bonuses for those covered by the plan through the Management Securities Company. Raskob also revolutionized the auto trade through the introduction of installment financing, first offered in 1919 through the Raskob-designed General Motors Acceptance Corporation.
General Motors responsibilities did not consume all of Raskob's time, resources, or inventiveness. Thanks to his connections with the entertainment world, he was well aware of the burgeoning motion-picture industry from its very earliest days. He participated in speculative technological ventures in this field as early as 1912, particularly the development of synchronized sound recording and playback in movie theaters. During the 1920s, with his broader interests and greater liquidity, Raskob played the stock market in a much edgier way. Through connections such as Michael Meehan, Raskob took part in a number of the most infamous trading syndicates of the mid- to late 1920s--including the extremely profitable RCA syndicate of 1929. At the same time Raskob steadily accumulated a very large block of stock in Warner Brothers, spawning recurring rumors of an imminent Raskob-led takeover of the company. Raskob's strategy with this investment is unclear; but in many letters boosting the stock to friends and business acquaintances he suggested that he simply saw it as a good speculative investment. The investment should also be considered in the context of his increasingly activist Catholicism during this time, the Catholic Church's growing concern over "decency," and the influence of the cinema on American's social attitudes. The Society for the Propagation of the Faith, the Loretto Foundation, future Cardinal Francis Spellman, and the North American College of Cardinals were among the many individuals and groups for whom Raskob arranged Warner investments.
Indeed, Raskob was very publicly Catholic during the 1920s, and he supported and promoted Catholic causes in a variety of ways. He provided considerable financial support to the Calvert Associates publication Commonweal, which from its founding in 1924 led the struggle against populist anti-Catholic sentiment. In 1928, Raskob worked with the Bishop of Wilmington, Edward FitzMaurice, to establish the Catholic Foundation of the Diocese of Wilmington, Inc., a trusteeship organization of clergy and laity. The foundation secured the finances of the Diocese through a large gift from Raskob, which he specified was to be administered in a businesslike manner to promote Catholic education and parish needs in the Diocese. It was his model for financial organization within the American church; Raskob aggressively promoted the role of the laity in the church's public and financial life and often sharply criticized the manner in which local churches and dioceses approached their financial concerns through crisis and mendicancy.
Raskob's prominence as a leading American Catholic was recognized in his induction into a number of Catholic confraternities and societies, including the Order of Malta. In 1928, Pope Pius XI appointed Raskob to the honorary position of private chamberlain in the Papal Household in recognition of his support of Catholic institutions in the United States and his involvement in political and financial interests of the church in the United States and Mexico and at the Vatican.
The Raskob family was completed in 1922 with the birth of John and Helena Raskob's thirteenth child, Benjamin Green Raskob. The family still resided at Archmere, although a number of the older children attended Catholic boarding schools. The younger children lived at Archmere in classic American aristocratic style under the care of housekeepers and nurses and attended Catholic day schools in Wilmington. One such school, the Ursuline Academy, was another long-standing Catholic institution that enjoyed Raskob's philanthropy during the 1920s.
The Archmere Estate was coming under increasing pressure from residential and industrial development, and its proximity to the DuPont Company headquarters was less important to Raskob as his business and personal interests blossomed in New York City. In 1925 the family began to acquire land near Centreville, in rural Queen Anne's County, Maryland, first as a summer retreat but increasingly as a permanent residence. A number of Raskob's children, as well as Helena herself, suffered serious allergies and from asthma and other respiratory issues, and the industrialization of the Marcus Hook area just north of Archmere became a problem for them. These health issues, the elitist appeal of maintaining a country estate, and extortion threats against Helena Raskob and the children by thugs in Philadelphia eventually combined to create the family's decision to relocate to their Centreville property, which they named Pioneer Point Farms, year-round.
Raskob's emergence as a political figure was influenced by his immersion in New York's confident, entrepreneurial Catholic culture and his deepening friendship and respect for a number of key Catholic businessmen in the city. His oldest sons attended the Newman School in Lakewood, New Jersey, in the early 1920s, and at this prestigious institution's fundraising and social functions Raskob was introduced to a number of wealthy coreligionists outside of the automobile industry. William Kenny hosted a number of meetings of Newman School fathers at his Tiger Room, which was by no coincidence the central focus of post-Tammany Democratic Party organizing in New York City. At the same time, Raskob also become more active in the city's financial institutions, taking director's seats at the Bankers Trust Company and County Trust Company in early 1927, the American International Corporation later in the year, and the almost exclusively Catholic Emigrant Industrial Savings Bank in 1928.
Many of Raskob's new business partners and friends were longtime supporters of the "Happy Warrior," Alfred Emanuel Smith, one-time Bowery Boy turned governor of New York State. Raskob and Smith quickly became friends; when Smith decided to seek the Democratic Party's presidential nomination in 1928, he selected Raskob as his campaign manager and urged the party to elect Raskob chairman of the Democratic National Committee (hereafter DNC).
Politics represented a new field of endeavor for Raskob. He had been involved in local and state races in Delaware, particularly since these were often du Pont family affairs, but the Smith campaign required of Raskob an unaccustomed public prominence. Along with Pierre S. du Pont and other du Pont family members, Raskob had developed strong political views on the issue of national Prohibition since the mid 1920s; and since Smith was known to be "wet," his candidacy was especially appealing to those who favored repeal.
Raskob's financial skills and personal resources played an important role in the 1928 campaign both nationally and in New York. Years later James A. Farley and the columnist Westbrook Pegler, among others, suggested that Raskob had been instrumental in persuading Franklin D. Roosevelt to seek the governorship in that year by ensuring the viability of Roosevelt's Warm Springs Foundation through a large donation. At the time, this may have seemed like a straightforward tactic to keep New York in the Democratic camp under a reliable leader, one who was somewhat unserious and amenable to the interests of his political patrons. If Pegler and Farley's claims were true, then Raskob's importance to the evolution of American political history in the 20th Century should not be overlooked; although since Raskob may have placed Roosevelt on the path to a presidency and a power that he would come to fear and despise, the irony cannot be ignored.
Raskob's political involvement precipitated a management crisis at GM. Alfred Sloan's stated concern was that Raskob's public allegiance to Smith would imply the support of GM; that would be risky politically, given the company's size and prominence, and Sloan may have feared that Raskob's position might precipitate a politically motivated antitrust investigation. Sloan was also concerned that corporate political partisanship might alienate potential purchasers. Sloan's insistence that "General Motors is not in politics," stated at an address in Flint and published and distributed to GM shareholders and the press, made Raskob's ouster inevitable; the board quickly accepted his resignation as chairman of the finance committee. Out of loyalty to the friend who had first drawn him into the business, and perhaps seeing an opportunity to make his own long desired break with corporate life, Pierre S. du Pont resigned his position as chairman of the board. Both men remained on the board of GM, and Raskob rejoined the finance committee after the Smith campaign ended, but neither man was ever really key to the company's successes thereafter. Pierre S. du Pont effectively retired from active business life and became increasingly engaged with his horticultural projects at Longwood and his interests in social and educational reform, projects that did not require Raskob's assistance or advice.
The year was one of tragedy for Raskob, as well as transition. On July 5, 1928, William Frederick Raskob II--John and Helena's second eldest child--was killed in an automobile accident just outside Centreville as he returned with schoolfriends from Yale University. Bill Raskob was a bright and beloved sportsman and scholar, and his sudden death was hard for the family to bear. That it came at the height of Raskob's social, political, and economic prominence was even more poignant. In memory of their son the Raskobs created the Bill Raskob Foundation, with an initial funding of one million dollars, to provide grants and loans to needy and deserving college students and prospective students.
For the next four years, Raskob concerned himself primarily with building the DNC as a permanent organization, preparing for a 1932 Smith candidacy and a campaign to repeal Prohibition. Repeal remained a thorny issue for the national party. Many Southern Democrats were adamantly opposed not only to the idea of repeal in itself but also to Raskob's attempts to craft a national policy that could be seen to favor regional and religious interests. Many members of Congress were cautious about the professionalization of the party, which had not formerly been a permanent organization with a fixed headquarters, and resented incursions upon their ideological independence in matters of policy.
The political and popular fixation on Prohibition was abruptly ended by the Crash of 1929 and the onset of the Great Depression. Formerly important issues and aspects of the Prohibition debate such as the undermining of respect for the law, rights of states to self-govern, and the replacement of consumption taxes with income taxes were largely swept away as the U.S. polity demanded relief and resolution of an unprecedented level of want and poverty. Political figures who tried to continue the pre-Depression arguments became increasingly marginal, and proponents of traditional laissez-faire remedies within the domestic economy were eclipsed by individuals and organizations willing to propose populist and progressive programs to combat the nation's ills.
Raskob weathered the Crash and the onset of Depression. His speculative investments, while profitable, were a small part of his assets, which had from the earliest days been concentrated in steady performers and large industrial concerns and in holding companies such as Christiana with relatively staid but secure portfolios. General Motors and DuPont were the foundation of Raskob's wealth, and he had often stated his opposition to buying on margin, shorting stock, and other risky strategies that caused such hardship in the immediate post-Crash market.
It was Raskob's bad luck, however, to have made his famous statement that "[e]veryone ought to be rich" immediately before the Crash, in an article in the August 1929 Ladies Home Journal. In this article, Raskob had laid out proposals for working- and middle-class wealth building through cautious and rational investment strategies. In many ways, these proposals reflected the practice of his Archmere and Pioneer Point Farms employee savings programs and Raskob-designed employee investment plans at DuPont and General Motors as well as the extraordinarily lucrative Managers Securities Company. Raskob had long been rumored to be working on perfecting a national "workingman's investment fund," and the magazine article suggested the likely philosophy of such a scheme. In other circumstances, Raskob's reputation as the "millionaire-maker" of GM would have given this plan quite a deal of credibility; but in the aftermath of Wall Street's panic and widespread ruin of small investors, Raskob was popularly criticized as a "plunger" and speculator, a pied piper leading widows and workers to financial disaster. The rumor that Raskob avoided deeper losses in his investment portfolio through a complex series of stock sales and repurchases to and from Pierre S. du Pont, in order to provide tax-deductible paper losses to offset the share value lost, also proved damaging and became a weapon used by his political enemies against Raskob a decade later.
The Depression marginalized Raskob's political concerns. Like many others in trade and industry, he was inclined towards laissez faire economic policy, supported entirely local or philanthropic relief programs, and tentatively proposed technocratic solutions to perceived consumption and production problems. His insistence on continuing to promote Prohibition repeal as a Democratic Party priority and on lobbying for another Smith candidacy in the 1932 presidential election left him increasingly out of step with the national party. The pro-Roosevelt faction led by James A. Farley ruthlessly outmaneuvered Raskob during the run-up to and proceedings of the party's 1932 national convention. Along with his skillful choreographing of support for Roosevelt, Farley disrupted Raskob's plans for the DNC succession. With the committee now increasingly central and important, Raskob intended to place his loyal lieutenant Jouett Shouse in the chairman's seat. The Roosevelt faction exercised the traditional prerogative of the official candidate, however, and placed Farley in that position. While Raskob publicly declared his support for Roosevelt during the early stages of the New Deal, he became thoroughly disenchanted with politics; and whatever political aspirations he might have had (many friends and fans had touted him as a potential secretary of the Treasury) were wiped out with the emergence of the Roosevelt ideology.
His political ascendancy halted and his greatest business successes behind him, Raskob entered the Roosevelt era curiously rootless. Along with his work for the DNC, Raskob had also been an influential figure in the Association Against the Prohibition Amendment (AAPA). The AAPA was the preeminent national organization of Prohibition opponents, strongly backed by Pierre S. du Pont and other du Pont family members and company executives, and Raskob had been part of its vigorous campaign of lobbying state legislatures, promoting repeal ballots, and publicizing the injustices of the Volstead Act. Roosevelt swiftly moved to effect an end to national Prohibition without alienating dry Democrats or diverting energy away from his economic reform agenda, and the AAPA quite suddenly had the victory it had been working toward--although it was a victory without laurels which did not advance the political philosophy which underlay the AAPA's opposition to Prohibition. Raskob remained unwillingly enmeshed in DNC financial issues, primarily in lengthy attempts to secure promised campaign underwriting funds from a number of party backers who had been put in straitened circumstances by the Depression. Some of these individuals spent many years attempting to avoid their obligations, a circumstance that was troubling for Raskob personally because he had provided substantial campaign loans to the DNC secured by the promises of the individual underwriters. Farley appeared to feel little obligation to assist Raskob in this matter, and that may have influenced his increasing alienation from the party.
Raskob was also occupied by the troubled prospects for his most visible and enduring legacy, New York City's Empire State Building. While the building symbolized business optimism in the darkest days of Depression, it placed a tremendous drain on Raskob's fortune and ran the risk of bringing him close to financial ruin. Raskob had envisioned the skyscraper in more prosperous times, and he had invited a number of his closest friends and associates to invest in what must have seemed at the time a sure thing. Al Smith was almost entirely dependent on his investments in the building and his position of chairman of the building's holding company. A convoluted sequence of refinancing and bond issues kept the concern viable for a number of years, but rental income never met projections and maintenance; repair and improvements were constant drains. By 1938, the Empire State Building appeared to be on the verge of bankruptcy, since the bonds and promissory notes that financed the building's operations and serviced its debt were essentially fictions agreed upon by the partners and investors. If stock fell into unfriendly hands, the liquidation and sale of the building would be inevitable. Raskob went one last time to his mentor and friend Pierre S. du Pont, who had been one of the original investors in the building but had since the Depression become less certain of Raskob's advice concerning investment strategy and who had divested his investments into various holdings without seeking the advice of his one-time protégée.
In response to appeals from Raskob and Smith, among others, du Pont agreed to sell to the partnership a very large annuity-bearing life-insurance policy held jointly with his wife Alice Belin du Pont. The two received in return periodic cash payments from the Empire State partners, and the policy provided a valuable asset and much needed income for the building. With the du Ponts' help, the building weathered its last storm; in the pre-war recovery of New York business and real estate, it became as profitable an enterprise as Raskob had originally conceived it to be. The Empire State Building became the core of Raskob's wealth in his last years as well as the foundation of his enduring charitable legacy.
From 1932, Raskob's business interests were much less monumental in scope, if not in form. Even at the height of his involvements with the DuPont Company and GM, Raskob had always been aware of and active in a large number of smaller scale, diverse ventures in New York State, Delaware, and further afield. Many of these enterprises took advantage of Raskob's knowledge of and involvement in the product and production chain of the chemical and automobile industries, and they were also typically characterized by support of investment or occupational interests of old friends, relatives, and acquaintances. From his earliest years with the DuPont Company, Raskob endeavored to find positions in Wilmington and New Jersey for old schoolfriends from Lockport, coworkers from Lorain, and family members from New York State and Indiana. As his wealth grew and his interests diversified, he gladly supported friends' business ventures--including insecticide factories in New York State, auto dealerships, and floor-product companies, among many others--as long as the old friends in charge could convince him that the enterprises were on some kind of sound footing and had reasonable market prospects and management competency. From the early 1930s, Raskob began to apply this critical but faithful model of support to his adult sons, John Jakob, Jr. and Robert Pierre Raskob, in their attempts to make their own business careers.
A confluence of disparate circumstances and coincidences combined from the 1930s on to interest Raskob more and more in investment opportunities, particularly mining and ranching, in the southwestern states. Raskob's eldest son, John, Jr., moved to Nevada with his young family after brief terms with a number of GM subsidiary companies, and Raskob was interested in his son's business success and ability to provide for his family. Raskob's young acquaintance Acquin Feeney was also speculating in Nevada at this time, and Raskob saw Feeney, a friend of his son's, as a potentially reliable business partner. Since the 1920s, Raskob had been involved in a number of groups advocating monetary policy based on the silver standard and had struck up a friendship with Key Pittman, U.S. Senator from Nevada, who owned extensive mining interests in his home state. Speculation in precious metals became increasingly attractive with the government's entry into the silver market during the early years of the Depression, while mining businesses also provided a hedge against taxation because investment losses in this field were tax-deductible. Raskob was convinced that a number of formerly marginal or outright abandoned mines could be made profitable because of improvements in refining technology, and in 1934 he began to purchase mining claims for the newly incorporated Raskob Mining Interests, Inc., managed by his oldest sons and Feeney. The mining concern was run as a family operation until 1938-1939, and then Raskob brought in seasoned mining professionals to manage the business as it expanded through the wartime years.
While he was building a portfolio of silver mines, Raskob also engaged in ranching and real-estate development in New Mexico, Arizona, and California. In the late 1920s, Raskob had formed a friendship with Thomas D. Campbell, the "Wheat King" of Montana. Campbell was a lively, self-made man, wealthy and adventurous, with political and business interests in New York. He was reputedly the first man to mechanize and industrialize farming in the western states. In 1936, Raskob and Campbell formed an investment partnership to purchase and develop extensive land grants in the southwestern states for ranching and farming. Raskob was also interested in development of the Palm Springs area in California and purchased a great deal of property in this area during the late 1930s.
Raskob, like many others in the business world, was initially supportive of Roosevelt's economic reforms in the early stages of the New Deal. While he had been upset and offended by Roosevelt's political maneuverings during the lead-in to the 1932 Chicago convention and disappointed with the treatment of political protégées such as Al Smith and Jouett Shouse, Raskob expressed some measure of admiration for Roosevelt the man, particularly for his struggle against polio. In some of his dealings with Roosevelt as New York's governor, Raskob often seemed to express a mixture of appreciation and a sense of an obligation owed. But as the New Deal seemed to take on a sense of class struggle, Raskob's opinion hardened in accordance with those of his mentors and business acquaintances. They expressed their alienation from the new political order in the formation of the American Liberty League in 1934.
The League initially portrayed itself as a nonpartisan group interested in educating the electorate on issues of economic freedom, individual and property rights, and constitutional government. Many of the group's positions closely reflected the theoretical underpinnings of the Alliance Against the Prohibition Amendment, and many of the League's leaders had been officers and major supporters of the repeal movement. The League's ideological position placed them in opposition to many of Roosevelt's and Congress's initiatives--particularly as the government became, in their view, increasingly confiscatory and statist. By the time of the 1936 election, the League was obliged to support actively the Republican candidate for President, Alf Landon. Earlier, the League had confined itself to producing numerous publications, providing analysis and editorial comment for national and local newspapers, and organizing and broadcasting speeches by League members. Raskob had as high hopes for the League in 1936 as he had had for his friend Al Smith in 1928, and he was just as surprised by the outcome of the election. Raskob also endured a vitriolic response by the public and by politicians to the League's attempts to influence the election. The founders and members of the organization were portrayed and perceived as representatives of America's hereditary privileged elites, quite out of touch with the economic realities of everyday Americans. The public's response to the League was in part genuine and spontaneous, in part skillfully manipulated and orchestrated by Democratic Party operatives both locally and nationally.
After the public's response to the Liberty League's agenda, Raskob never again took part in any prominent political issues; he continued to support quietly a number of organizations that opposed the Roosevelt administration and the expansion of federal government power in general. His enthusiasm for politics was also sapped by what he perceived as a retaliatory inquiry ordered by the Internal Revenue Service against Pierre S. du Pont and himself, which alleged that the two had conspired to offset investment losses after the Wall Street crash by manipulating income-tax deductions from stock trades.
Throughout the 1940s, Raskob continued to develop his mining and ranching interests, which by 1947 included silver mines in Mexico as well as grazing and mineral rights in New Mexico and Arizona. He also developed earlier investments in the aeronautical industry, becoming enthusiastic about plans to develop and market rudderless aircraft suitable for personal use and local commuting.
During World War II, all of Raskob's sons, as well as several of his son-in-laws, served in the U.S. armed forces. His youngest son, Benjamin, saw service at Guadalcanal in the Pacific. Raskob divided his time between New York and his various business enterprises in the southwest. Helena Raskob stayed in Arizona for longer periods, and there were no Raskob children at home, so Raskob rarely visited Pioneer Point Farms. He even considered selling the property to the government for war use. After the war, though, the farm again became a central place for the family, a popular summer gathering place for Raskob's children and increasing number of grandchildren. In his final decade of life, Raskob took great pleasure in the time he spent there with friends and family. He still resided mainly in New York City, managing his business and financial interests from his splendid office in the Empire State Building. Having weathered the difficulties of the 1930s, the building was by the postwar period an obvious success, and upon his death it was the core asset of Raskob's estate. Empire State stock was also integral to the founding of the Raskob Foundation for Catholic Activities.
Raskob died at home on October 15, 1950, and was buried in Wilmington. Family lore holds that Pierre S. du Pont and his brother-in-law, R.R.M. "Ruly" Carpenter were not at the service in St. Peter's Cathedral in Wilmington. When the family emerged from the church after the funeral mass, they were greeted by the sight of those elderly captains of industry, once the family patriarch's closest business associates who had built two of the world's greatest companies with Raskob's advice and acumen, struggling along behind a broken-down automobile as it was pushed or towed to the door of the church. The automobile, it was noted by all, was not a General Motors model.
Arranged alphabetically by subject and correspondent.
Scope and Content
The collection documents Raskob's business and political careers as well as his personal life. The papers document significant aspects of the histories of E.I. du Pont de Nemours & Company and the General Motors Corporation during the first half of the twentieth century. Raskob played a crucial role in the creation of these two industrial giants. His papers trace the transformation of these companies into modern decentralized corporations and the relationship between business strategy and corporate structure. The Raskob Papers also describe the relationship between DuPont and G.M. in the years between 1915 and 1950.
The papers also describe Raskob's political career. His election as head of the Democratic National Committee at Alfred E. Smith's request in 1928 is documented as well as the role he played in raising money for Smith's presidential campaign. The papers document Raskob's work with the American Liberty League. There is also considerable documentation on the role that Raskob played in the construction and management of the Empire State Building during the 1930s and 40s. The collection also provides an interesting perspective on business opposition to the New Deal.
Language of Materials
Finding Aid & Administrative Information
- John J. Raskob papers
- Richard James
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