Richard whitney worked on dairy farms after release in 1941, In August 1941, Richard Whitney, the former financier and New York Stock Exchange president, emerged from prison at Sing Sing, on parole after serving three years of a five- to 10-year sentence for grand larceny.
Whitney had stolen from the New York Yacht Club and from Harvard (where, as a member of the class of 1911, he had rowed for the crew team); from his wife’s family estate; as well as from the widows and children who depended on the Stock Exchange Gratuity Fund, of which he was trustee.
Dick Whitney had once been hailed as a “Great White Knight” of Wall Street. At the start of the terrifying market plunge of October 1929, he had bravely helped shore up the market by parading around the exchange floor, placing bids for shares of U.S. Steel, as well as other blue-chip holdings.
In the early 1930s, the top-hatted Whitney had a reputation as a “perfect snob,” quietly blocking Jewish aspirants from reaching important positions in his exchange. With a thoroughbred-horse-and-cattle farm in Far Hills, N.J. — he was also president of the Essex Fox Hounds — and a five-story, red brick townhouse at 115 East 73rd Street, his lifestyle required a formidable cash flow. And soon he found himself in severe debt.
Evidently intrigued that his Harvard schoolmate Joseph P. Kennedy, who had followed him by a year, had made millions selling Gordon’s Dry Gin and Haig & Haig Scotch, Whitney tried to achieve a similar trick — while Prohibition was winking out in 1933 — with Jersey Lightning applejack and Canadian rye. But these and other more fly-by-night gambits failed, and Whitney started his secret life of crime.
Both Whitney and President Franklin D. Roosevelt, who was six years his senior, were born into the old American, Northeastern, Protestant, moneyed patriciate; both had attended Groton School and Harvard. This shared inheritance, however, didn’t keep Whitney from leading a fierce campaign, summoning his full throw-weight as chief of the New York Stock Exchange, to attack Roosevelt’s proposed Wall Street regulations.
At the White House, Whitney warned the president that such drastic change could ravage the American financial system, with the result that “grass will grow in Wall Street.” Defending his organization, Whitney told United States senators and their staff members: “You gentlemen are making a huge mistake. The exchange is a perfect institution.” But Congress approved Roosevelt’s reforms, which were enforced by Joseph P. Kennedy, then the chairman of the new Securities and Exchange Commission.
On Halloween 1936, three days before his landslide re-election, Roosevelt signaled his intention to crank up more pressure against Wall Street. At a huge, raucous rally at Madison Square Garden, the defiant president declared that “government by organized money is just as dangerous as government by organized mob.” Using language that sounds almost contemporary in 2014, he said the “forces of selfishness,” of “reckless banking” and “class antagonism” were “unanimous in their hate for me, and I welcome their hatred.”
With the crowd shrieking, Roosevelt went on to exclaim, “I should like to have it said of my second administration that, in it, these forces met their master!”
Then, 16 months later, the president was informed of Whitney’s indictment for grand larceny, and details of the embezzlement. The president’s strategist-speechwriter Thomas Corcoran — whom Roosevelt called Tommy the Cork — recalled to me decades later that, in response to the news, the shocked Roosevelt lowered his head and murmured: “Poor Groton. Poor Harvard. Poor Dick.”
As in recent times, an American president had to make a decision about how personal he should get about the transgressions of Wall Street titans. The revelations about Whitney seemed to hand Roosevelt a powerful foil. Some of his advisers encouraged him to exploit and dramatize the Whitney scandal, making the financier a national avatar of Wall Street misbehavior.
But to their surprise and dismay, Roosevelt, in public, never cited Whitney, his offenses or his downfall. Although so often derided by many of his social peers as a “traitor to his class,” Roosevelt refused to exploit Whitney’s troubles; he did not instruct his staff and political allies to ask friendly journalists and legislators to help them make the fallen financier into a demonic household name. This is one reason that Whitney’s name is so little known today.Corcoran, who died in 1981, told me that he believed that the president had pulled his punches largely out of deference to his and Whitney’s similar bloodlines. Corcoran said that Joseph Kennedy — an Irish-American, like himself — emphatically agreed with this theory. Corcoran and Kennedy may have been at least partly right, but by his sixth year in office, Roosevelt, deadlocked by a hostile Congress, was already turning from domestic affairs to the dangers posed by Hitler and the imperial Japanese.
In April 1938, after pleading guilty to grand larceny, Whitney was handcuffed between two other freshly minted convicts (for rape and extortion) and hauled off to Sing Sing, where he enjoyed a few vestiges of privilege. Some inmates politely removed their caps when Whitney arrived, and even contrived for him to get a hit on the prison baseball diamond. (Whitney had played first base at Groton.)
But the Sing Sing psychiatrist was startled that Prisoner No. 94835 displayed no self-reproach. In “The Embezzler,” his 1966 novel, Louis Auchincloss wrote of his title character, Guy Prime, based on Whitney, that he “had not believed that he had done anything really wrong.”
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After parole, Whitney lived for decades in New Jersey with his wife (whom he outlived), serving as treasurer for a friend’s dairy and dabbling in other small ventures before his death in 1974 at the age of 86. In his book “Impeccable Connections,” Malcolm MacKay wrote of being told by Whitney’s daughter Appy that her mother had commanded her “never to speak to anyone” about her father’s “troubles.” After Whitney died, a few of his relatives responded to critical obituaries by pointing out that his well-publicized debts had been long ago repaid by his brother George, who had risen to become a top executive at J.P. Morgan.
Whitney’s scandalous demise left a lasting impression on a later American president. In March 1962, John F. Kennedy privately demonstrated that he shared his father’s opinion that when it came to ethics, there was sometimes an ethnic double standard. The Boston Globe had just revealed that as a Harvard freshman, Kennedy’s brother Ted had persuaded a friend to take a Spanish test in his name.
Referring to The Globe’s report about Ted — who was seeking his old Senate seat — the president sarcastically told his journalist friend Ben Bradlee: “It won’t go over with the WASPs. They take a very dim view of looking over your shoulder at someone else’s exam paper. They go in more for stealing from stockholders and banks.”
