Rumors Swirled For Years About Joseph P. Kennedy’s Money, But The Secret To His Wealth Is Surprising

What’s more, Joseph Sr. became extremely rich at a time when many others suffered greatly – during the Wall Street Crash of 1929 and the subsequent Great Depression. And from there, he began to invest his cash wisely – and perhaps illegally. Some say, for instance, that Joseph Sr. used Prohibition as an opportunity to make serious cash from bootlegging.

But the truth of the matter is a little more complex than that. After his time at Harvard, you see, Joseph Sr. set about making money in earnest, scooping up and selling stocks at just the right moments to profit handsomely. Even so, at that point, the head of the Kennedy family had a long way to go – and many more methods to try – before amassing a fortune that would see him join the ranks of the very wealthiest Americans.

How did Joseph Sr. start off on his journey to millions? Well, naturally, it all began with his birth in 1888 to Patrick Joseph “P.J.” Kennedy and his wife, Mary. Both P.J. and Mary had Irish immigrant parents, and this meant the American-born Kennedys were barred from mixing with high society in their hometown of Boston. Instead, P.J. and other Irish Catholics got involved in politics – more specifically, by working to promote the Democratic Party.

In any other world, though, the Kennedys would have easily slotted in with members of the upper crust. P.J. had investments and a thriving saloon, you see, as well as his place in the local political scene. And owing to that success, he provided a cushy life for Joseph Sr. and his younger sisters, Mary and Margaret. Ultimately, then, the eldest son of the family went to the prestigious Boston Latin School and then on to Harvard.

And while Joseph Sr. didn’t excel in the classroom, he nevertheless earned the grades needed to pass his courses. Furthermore, his time studying economics may also have honed his entrepreneurial prowess. During summer vacations, Joseph Sr. teamed up with a buddy to host city tours, and these would ultimately net him a cool $5,000.

Nowadays, such an accomplishment would likely make a résumé stand out from the crowd. After Joseph Sr. left Harvard, though, he actually had little luck in finding a job in his desired field of banking. That appeared to be down to prejudice, as Boston’s Protestant-helmed institutions repeatedly passed on the Catholic-raised graduate. In the end, then, Joseph Sr. began his career in an assistant bank examiner role instead.

Yet such slights may have helped to shape Joseph Sr.’s personal goals. In 1963 one of his friends told Fortune, “Coming of age in Boston, Joe Kennedy saw early what made the power and gentility he wanted. It wasn’t talent; it was ancient riches. Power came from money. Joe had a keen mind, and it was honed against the great cynicisms underlying rank and station in… Boston.”

What’s more, while Joseph Sr.’s first job didn’t exactly make him wealthy, it nevertheless gave him some of the information he needed to get ahead. Fellow Harvard alumnus Ralph Lowell explained to Fortune, “That bank examiner’s job laid bare to Joe the condition of every bank he visited, and what he learned about the structure and securities of state banks was valuable to himself – and to others.”

And Joseph Sr.’s time to shine would finally come in 1913. That year, Columbia Trust Bank – in which P.J. held a large stake – looked in danger of being bought out by First Ward National. So, in order to save their preferred financial institution, the Kennedys and their relatives raised $45,000 – or approximately $1.1 million today. Then, with that money, Joseph Sr. was able to buy enough shares in Columbia Trust Bank to help regain control of the financial institution.

Not only that, but at just 25 years old, Joseph Sr. became the bank’s president. And as the ambitious young man set his sights even higher, he began to court Rose Fitzgerald. Notably, Rose’s father, John F. Fitzgerald, was serving as Boston’s mayor at the time.

John presumably gave his blessing to Joseph Sr. and Rose, too, as the pair went on to marry on October 7, 1914. The newlyweds subsequently went on honeymoon before returning to Boston and moving to the city’s Brookline neighborhood. After the battle with Columbia Trust Bank, though, Joseph Sr.’s finances were in the red. In order to buy himself and his wife their new home, then, he took out a $2,000 loan.

Still, once the house had been purchased, it was quickly filled. Less than a year after the Kennedys’ wedding, they welcomed son Joseph P. Kennedy Jr, who was delivered while Rose was summering in Hull, Massachusetts. And in the 17 years that followed, the couple would have eight more kids: John, Rose, Kathleen, Eunice, Patricia, Robert, Jean and Edward.

Many of Joseph Sr. and Rose’s children would go on to do exceptional things with their lives, too. Most notable of them all was John, who had been a Massachusetts senator before becoming the President of the United States. After a spell as U.S. Attorney General, Robert also ultimately joined the Senate, as did Edward – who usually went by Ted.

The women of the family similarly made an impact. Jean, for instance, would go on to become the U.S. Ambassador to Ireland, while Ethel became somewhat of a pioneer after starting up the Special Olympics. Yet although Joseph Sr. apparently shared his sons’ political aspirations, he contented himself with wielding power behind the scenes.

But, of course, the Kennedys wouldn’t have had as much influence without their deep pockets. And while Joseph Sr. and Rose’s married life started off fairly inauspiciously from a financial point of view, the Harvard graduate would soon turn things around in an extraordinary way – and by some unexpected means.

First, a job as the assistant general manager at Fore River Yard lured Joseph Sr. away from his career in banking. That role came with a $20,000 annual salary, which was an exceptional amount of money at the time. But even so, Joseph Sr. continued to display his flair for entrepreneurialism. When he realized that the yard’s tens of thousands of workers had practically nowhere to stop and eat, for example, he launched the on-site Victory Lunchroom. And the business boomed, too, as the cafeteria went on to serve 22,000 people daily.

Soon enough, the Harvard alumnus’ hard work caught the eye of a broker named Galen Stone. In fact, Joseph Sr. initially tried to rope Stone into business with the Fore River Yard – although this plan would come to no avail. Nevertheless, Stone had noticed the Irish Bostonian’s tenacity, and he ultimately asked him to join his brokerage firm. And even though he would be cutting his salary in half, Joseph Sr. couldn’t turn down the opportunity.

Stone had amassed a multi-million-dollar fortune while working in his field, you see, and the new job therefore offered Joseph Sr. a once-in-a-lifetime apprenticeship. The broker’s leadership even helped the Kennedy patriarch avoid making a huge investment mistake during the Florida real estate bubble of the 1920s. And as others lost money when the boom came to an end, Joseph Sr. then had the chance to buy the property that they left behind – at a steal, no less.

Then, when Stone retired, Joseph Sr. had the nous needed to start his own investment firm. That said, Wall Street in the ’20s operated in a very different manner to today. Back then, more unscrupulous types could easily meddle in and manipulate their investments in order to increase their value. And the father of nine had a knack for doing just that.

Specifically, Joseph Sr. became a pro at the stock pool technique. In a 1963 piece for Fortune, Richard J. Whalen elaborated further on this method, writing, “With a few others, [Joseph Sr.] would take options on, say, 100,000 shares of an idle stock at a price of, say, $20 a share. The pool would ‘advertise’ the stock by trading shares back and forth across the tape until outsiders, seeing this activity, leaped at a seeming good thing.”

On top of that, members of stock pools would often pay journalists to write favorably about their holdings. Then, once the public caught on, the stockholders sold their shares at inflated prices. In this way, they walked away with a huge profit; the buyers, meanwhile, would end up with investments that, in reality, had little value.

But Joseph Sr. didn’t put all of his money into the Wall Street basket. Instead, the investor made his way into Hollywood, funneling cash into studios and theaters. He’d had his start in this field while still in Boston, in fact. There, he and other local business people had all chipped in to snap up the Maine & New Hampshire Theatres Co., which had the rights to show Universal Pictures productions in the area.

In Tinseltown, meanwhile, Joseph Sr. set his sights on acquiring the flailing First Booking Offices of America (FBO). Yet the Kennedy family patriarch couldn’t buy out the studio’s beleaguered head with his own funds. Instead, he had to gather fellow investors in order to purchase FBO for $1.5 million.

FBO’s former owners were from the U.K., and their lack of connections Stateside had left them with no choice but to pay high interest rates on any money that they had borrowed. Joseph Sr. didn’t have this problem, however. Instead, he got four separate banks to loan him $500,000, with this cash injection making it easy for him to expand FBO’s output.

Buying up FBO didn’t make Joseph Sr. an instant success, though. In that era, you see, studio owners usually had to acquire exhibition companies, too, as these would ensure their films got played in theaters. So, Joseph Sr. purchased the Keith-Albee-Orpheum Theaters Corporation, and this enabled FBO movies to be screened in over 700 theaters throughout the nation.

To further expand his pictures’ reach, Joseph Sr. tried to procure Pantages Theatre, which had a string of money-making venues to its name. And to begin with, he was unsuccessful, as owner Alexander Pantages rejected the investor’s $8 million offer. In time, though, Pantages’ reputation was tarnished by an allegation of rape for which he ultimately went to court.

And while Pantages was found not guilty following a second trial, paying for the defense team that he had hired had taken its severe financial toll. So, the disgraced impresario finally sold his theater chain to Joseph Sr. – even though he believed that the investor had set up his demise. And, reportedly, that did indeed turn out to be the case. Eunice Pringle – the woman who had made the allegation against Pantages – admitted just before her death that the father of nine had been behind the whole nefarious scheme.

Nevertheless, Joseph Sr. raked in a huge sum of cash as the result of his Hollywood wheelings and dealings. It’s said, in fact, that he added more than $5 million – the equivalent of nearly $75 million today – to his accounts. Yet despite the huge success of his Hollywood takeover, the Boston native grew tired of his involvement with the film industry. Ultimately, then, he would go back to investing.

Interestingly enough, Joseph Sr. returned to Wall Street in 1928 – just before the market crash that spurred the Great Depression. And unlike other investors whose instincts had told them to plunge more cash into the stock exchange, the Irish American had a feeling that he should start selling his shares. According to Whalen’s Fortune piece, Joseph Sr. had once told a friend, “Only a fool holds out for the top dollar.”

So, when other investors lost everything in October 1929, Joseph Sr. walked away unscathed. Back then, he had at least $4 million to his name, or what would be $60 million in the current day. By 1935, however, the savvy patriarch had managed to exponentially increase his wealth to $180 million – or an astonishing $3.36 billion in modern money.

And Joseph Sr.’s booming bank balance during a period of severe deprivation for most Americans has led some to believe that the Kennedy patriarch involved himself in bootlegging. As of yet, however, historical experts haven’t found any evidence linking him to the trade, which was illegal during Prohibition.

That said, Joseph Sr. did in fact invest some of his money in alcohol. When Prohibition was seemingly on the verge of being repealed, the businessman put funds into Scottish distilleries so that he could bring the high-class booze into the U.S. as soon as possible post-embargo. That idea would go on to earn him another big return on his investments.

Joseph Sr. made huge dividends on real estate, too. As he accumulated more and more money, he looked to find a sound way to grow his funds. Luckily for the Harvard graduate, then, broker John J. Reynolds convinced him that putting his cash into housing was the best way to go. It helped, too, that Manhattan’s property prices had plummeted since the 1920s.

And Whalen’s piece for Fortune claimed that these side investments ended up earning Joseph Sr. a stunning $100 million – or so Reynolds claimed, anyway. In just one example of his business acumen, the father of nine purchased a $600,000 property in the Big Apple – only to turn it around for almost $4 million.

Then there was Joseph Sr.’s most lucrative real estate purchase – which didn’t actually happen to be New York City-based. In the mid-1940s, the shrewd investor snapped up Chicago’s Merchandise Mart, which had once been a holding of Marshall Field & Co. That building proved itself to be a money-spinner, going on to rake in approximately $13 million per year for the Kennedys. In 1963 Merchandise Mart was also estimated to be worth an impressive $75 million – a sum that dwarfed the $12.9 million Joseph Sr. had paid for the structure.

Plus, while investing in oil was a riskier prospect then dabbling in commercial buildings, Joseph Sr. put some cash into the fossil fuel industry as well. Most notably, he launched Mokeen Oil Co., Inc. with Jack Modesett, with the firm doing roughly $3 million worth of business in 1962.

And, perhaps inevitably, some of Joseph Sr.’s cash would ultimately fuel his family’s political aims. When John ran for president in 1960, for example, his father led the money-raising and planning strategies for the campaign. More specifically, he kept the budget in line and built relationships between the Democratic candidate and prominent businesspeople, journalists and party bigwigs.

But Joseph Sr. didn’t just help his son win the presidency. You see, at least one of John’s policies appeared to echo a specific belief of his father’s. In particular, the commander-in-chief was a firm advocate of the gold standard – a system that Joseph Sr. had preached about ever since John was small.

Yet Joseph Sr.’s legacy extends far beyond the political realm. As you may expect, the Kennedy family patriarch left his children, their children and future descendants with a healthy flow of cash from his investments. And even today, the clan’s money continues to come from trusts that are managed, tellingly, by a company known as Joseph P. Kennedy Enterprises.