(Excerpt from Raskob-Green Record Book, 1921 About the Pu...)
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John Jakob Raskob was born on March 19, 1879 in Lockport, New York, to John Raskob and Anna Frances (Moran) Raskob. His paternal grandfather, an Alsatian cigarmaker, had come to the United States in 1845; his father carried on the family trade. His mother's parents had been born in Dublin, Ireland. The oldest of four children, two of them boys, John grew up in a close-knit, devoutly Catholic family.
After leaving high school, he attended a local business college, where he learned accounting and stenography.
He worked briefly as secretary to a Lockport lawyer and in 1898 joined the Holly Manufacturing Company as stenographer to the chief engineer. He subsequently worked for a short time for Arthur Moxham, head of a steel company in Nova Scotia. Moxham was a former business associate of Pierre S. du Pont, and when in 1900 Raskob decided to return to the United States, du Pont took him on first as a bookkeeper and then as a personal secretary.
Du Pont, who was then managing the Johnson Company of Lorain, Ohio, which was involved in real estate and interurban railroads, was impressed by his young secretary's quick, sharp mind and his talent in the understanding and manipulating of financial data, and the two became fast friends. Raskob soon had an opportunity to demonstrate his financial skills.
In 1902 Pierre du Pont and his cousins Alfred I and T. Coleman du Pont took control of the family firm, E. I du Pont de Nemours and Company, which had been making explosives for one hundred years. It was still a small firm with only six stockholders, but the cousins immediately began to transform it into a modern, consolidated, vertically integrated enterprise. They bought out their largest competitor, Laflin and Rand, and merged their holdings into the E. I du Pont de Nemours Powder Company, which through exchange of stock with many smaller companies came by 1904 to control over two-thirds of the black powder and dynamite capacity and all of the smokeless powder capacity in the United States. Raskob worked closely with Pierre du Pont in devising the complex financial arrangements for this expansion-an expansion achieved with almost no outlay of cash and with the three cousins retaining full control. In the administrative centralization that followed, du Pont as treasurer and Raskob as his assistant concentrated on building the company's financial offices.
They created a large accounting and auditing department, which for the first time brought modern financial methods to the American explosives industry. They also devised policies to assure a steady flow of working capital and rational expansion of the company's productive capacity. They favored a high dividend policy in order to encourage the stockholders, still primarily members of the large du Pont clan, to reinvest their earnings. They advocated investment in plants, mines, and offices only if a 15 percent return was assured. In working out these procedures, particularly techniques for determining return on investment, du Pont and Raskob pioneered in developing many useful tools in modern corporate finance. When Pierre du Pont became acting president of the company in 1909, Raskob became de facto treasurer, receiving the title officially in 1914.
In this capacity he carried out the financing of the company's huge expansion after the outbreak of World War I in 1914. Meanwhile, in 1914, Raskob had invested in the General Motors Corporation and had persuaded Pierre du Pont to do the same.
A dispute in 1915 between William C. Durant, founder of General Motors, and his bankers led to the appointment of du Pont as a neutral chairman of the board and of Raskob and two other associates as neutral directors. After Durant regained control of his company in 1916 (without du Pont aid), he and Raskob began to work closely together. They had much in common. Each was small in stature and dapper in dress. Both were financiers rather than manufacturers, and both relished the building of industrial empires.
During a downward swing of the stock market in 1917, Raskob joined Durant in a syndicate to maintain the price of General Motors stock; and as the market continued to fall he arranged for the Du Pont Company to buy up $25 million worth of GM stock, in return for which Durant agreed to turn over financial management to the Du Pont interests. In March, 1918, accordingly, Raskob resigned as treasurer at the Du Pont Company to become chairman of the finance committee of the General Motors Corporation.
In his new post, Raskob introduced modern accounting and auditing procedures into General Motors, and indeed into the American automobile industry. He formed the General Motors Acceptance Corporation (1919), which provided extensive credit to dealers and customers, encouraging the installment buying of automobiles. His primary interest, however, was the huge expansion program that he and Durant launched immediately after the end of World War I. To fund this expansion Raskob relied on retained earnings and sold large blocks of stock to the Du Pont Company, Nobel Explosives Trades, and J. P. Morgan and Company.
When the sharp postwar recession struck in September 1920, drastically reducing the demand for automobiles, Raskob was able to prevent bankruptcy by using the newly raised funds, not for new plants and equipment but to meet current obligations. Durant once again attempted to hold up the price of General Motors stock, but soon sank more than $30 million into debt.
To save both Durant and the company from financial disaster, Raskob and Pierre du Pont made arrangements by which the du Ponts and J. P. Morgan and Company raised the funds Durant needed, in return for the control of a large block of his holdings of General Motors stock and his retirement as president. After the crisis of 1920 Raskob had less influence at General Motors.
Pierre du Pont, who took Durant's place as president, turned over the management of its operations to Alfred P. Sloan, Jr. , and of its finances to F. Donaldson Brown, a Raskob protégé who had succeeded him as treasurer at Du Pont. Thus Raskob played a relatively minor role in the massive reorganization that soon made General Motors the largest manufacturing company in the world; but he continued to have a major say in dividend policy and in shaping the corporation's basic financial structure.
He devised a plan to provide large stock bonuses to many senior executives through the formation of the Management Securities Company. Increasingly, however, he turned to outside investment and speculation, to accepting directorships of railroads and other corporations, and to developing an interest in politics. The bent to politics came from his association with a group of New Yorkers, including William F. Kenny, James J. Riordan, and Gov. Alfred E. Smith, who were, like himself, successful Catholics and sons and grandsons of immigrants. In 1928 Smith, the Democratic presidential candidate, decided to aim his campaign at the Northeast by exploiting the prohibition issue and by identifying his party with business and prosperity. Raskob, an outspoken "wet" and a nationally known businessman, was thus a logical choice for Democratic national chairman. Resigning from General Motors to accept the post, he concentrated on raising funds and building an effective organization but took little part in shaping campaign strategy.
After Smith's defeat, Raskob, unlike his predecessors, maintained a permanent headquarters for the Democratic National Committee in Washington, with Jouett Shouse as director and Charles Michelson as publicity chief. Over the next four years the Committee hammered away at the failure of the Hoover administration to combat the depression and, reflecting Raskob's conservative views, advocated such policies as repeal of the Eighteenth Amendment, tax cuts, and a five-day week. Raskob remained close to Al Smith.
He joined with him to build and operate the Empire State Building in New York City and to take over Riordan's County Trust Company after Riordan committed suicide in 1929. Ever loyal to Smith, Raskob sought, as the 1932 Democratic convention approached, to block the nomination of Franklin D. Roosevelt by encouraging a number of local favorite sons. But at the convention he and Shouse found themselves time and again outmaneuvered, and with Roosevelt's nomination Raskob was replaced as the party's national chairman by James A. Farley.
The years after 1932 were for Raskob ones of frustration. His investments, especially the Empire State Building, did badly, and he sold his estate, Archmere, overlooking the Delaware River at Claymont, Del. He had little understanding of the deep and complex political and economic changes going on about him. He remained a director of General Motors and Du Pont until 1946, but his ties were now much closer to Smith and other New York associates.
In 1934 Raskob, with Pierre du Pont, Alfred P. Sloan, Smith, and other friends, helped found the American Liberty League to "defend and uphold the Constitution" and protect "individual and group initiative and enterprise" by vigorously combating the New Deal. Raskob, however, after arranging for Shouse to become president of the League, took little part in its affairs aside from contributing funds and making an occasional speech. Instead, he began to travel widely, to expand his investments in mining, and, as prosperity returned, to contribute to civic and Catholic causes. For such contributions he had been made Private Chamberlain in the Papal Household in 1928, and he was later twice knighted by the Pope.
In 1950, at the age of seventy-one, Raskob died of a coronary occlusion at his Eastern Shore farm near Centerville, Maryland, where he often spent weekends; he was buried in New Cathedral Cemetery, Wilmington, Delaware. Most of his $5 million estate was left to the Raskob Foundation for Catholic Activities, which he had established in 1945.
He was chairman of the Democratic National Committee from 1928 to 1932 and a key supporter of Alfred E. Smith's candidacy for President of the United States. After Franklin D. Roosevelt became President, Raskob was a prominent opponent of the New Deal through his support of a number of anti-Roosevelt organizations including the American Liberty League. Raskob was also a leader in the Association Against the Prohibition Amendment.
(Excerpt from Raskob-Green Record Book, 1921 About the Pu...)
On June 18, 1906, Raskob married Helena Springer Green of Galena, Maryland. They had thirteen children: John Jakob, William Frederick, Helena Mary, Elizabeth Ann, Robert Pierre, Inez Yvonne, Margaret Lucy, Josephine Juanita, Nina Barbara, Catharine Lorena (who died in infancy), Patsy Virginia, Mary Louise, and Benjamin Green. In later years Raskob and his wife separated but were not divorced; his wife moved to Arizona and he continued to live in New York.
