A worker bolts beams during the construction of the Empire State Building, which was Raskob’s most famous financing project. The Chrysler Building, built in competition to be the world’s tallest skyscraper, can be seen in the background.
Romance, Wealth & Reaching for the Moon
By Anne McNulty
“Go ahead and do things, the bigger the better, if your fundamentals are sound.”—John Raskob
It’s abandoned now. Surrounded by an eight-foot steel fence and a padlocked gate, a magnificent 45-acre waterfront estate in Queen Anne’s County, was quickly shuttered on December 30th, 2016, on orders from President Obama.
Since 1972, Pioneer Point had belonged to the Russian government and used as a retreat for its embassy staff. With only 48 hours to pack up and leave, they had little opportunity to glance back at the two mansions built in 1932 by a financial genius named John Jakob Raskob. (As of this writing, subsequent effort by the Russian government to negotiate with the Trump administration the return of the properties has stalled.)
In 1925, Raskob purchased 1,600 acres with almost nine miles of waterfront on the Chester and Corsica Rivers, and during that time, Raskob was one of the most famous men in the country. Now mostly confined to history books, this is his story.
Born in Lockport, New York, in 1879, he was the son and grandson of cigar makers. Their high quality-hand-rolled cigars provided a comfortable life for the family and a happy childhood for Raskob. That all ended when his father died suddenly in 1898 at age 47.
According to his biographer, David R. Farber, when Raskob’s father’s short illness took a terrible turn his mother told him to run for the doctor. When he returned, his mother stood at the top of the stairs—agony written on her face. “Papa is dead.”
At age 19, Raskob’s carefree life was over. He had to provide for his mother and three siblings, which meant he had to go to work. With a year of business school under his belt, and after working for a few small companies as a typist and stenographer, his constant striving for better opportunities made him decide to apply for a bookkeeping position with the Johnson Steel Company in Lorain, Ohio.
John J. Raskob
His letter and references reached Pierre du Pont, company president, who later hired him in 1901. Thus, began one of the most successful partnerships and friendships during those times—a relationship that lasted more than 50 years.
Mr. du Pont, whose grandfather had begun a chemical company that manufactured explosives, was unhappy with how that creaky business was run and so he had struck out on his own. Already wealthy, he was intellectual, refined, and reserved. Raskob was gregarious, ambitious, and always running at top speed. Together they made a formidable team.
Early on, Raskob had a wizardry for reading numbers and analyzing company reports. With these skills, he could quickly assess a company's value. Soon realizing that earning a high salary wouldn't make him rich, he understood that real wealth came from grabbing opportunities and tolerating risk.
So, he and du Pont set out to conquer the world. Their first venture was to buy three Dallas trolley lines. Du Pont put in $225,000 cash, and loaned John $600 to invest. The rest of the $1,075,000 purchase price came from selling bonds. From there, they went on to buy and restructure other undervalued companies.
In 1902, the duo engineered a way to buy out the dilapidated Du Pont explosives business and with the help of two du Pont cousins completely reshaped it. With World War I looming, and with Raskob taking over the company's financial operations, it became an industrial giant, and by the early 1900s he was worth at least $20 million and was also an eligible bachelor.
The Raskob Family, circa 1940s. Patriarch John J. Raskob is in the foreground, far right.
When young John began working for du Pont, he moved to Wilmington, Delaware—the company's base. Ever on the lookout for pretty young ladies, the devout Catholic rotated among several Wilmington churches to meet one.
One Sunday, he spotted beautiful and elegant Helen Springer Greene, who, orphaned at six, was raised by a maiden aunt. Raskob was immediately besotted and by June 1906, they were married. The happy couple then went on to have 13 children and as their family and wealth grew, they built a magnificent home called Archmere.
As the years passed, however, Raskob's business interests mostly kept him away from home and took him to New York while Helen raised their family. Their relationship didn't improve when he bought a luxurious city apartment where he often entertained his friends.
Meanwhile, consumed by financial deals, Raskob always had his “ear to the ground,” while du Pont had his eye on Europe. Interested in creating formal gardens at his now famous Longwood Gardens Estate in Pennsylvania, du Pont wanted to study the great gardens of Europe, and he had complete confidence that Raskob could run the DuPont company.
Yet, knowing that he would never become president of the family business, Raskob began looking elsewhere. In 1915, and by now 37-years-old, he found a poorly managed motor company in Detroit, called General Motors.
A devout Catholic, Raskob financed the construction of Our Mother of Sorrows Church in 1931 in Centreville, which he attended.
While others would have walked away, Raskob, after studying the company's books, convinced du Pont this would be a terrific opportunity, and as usual du Pont acquiesced. The pair invested millions into GM and when the company president, William Durant, was finally ousted, Alfred P. Sloan took the helm as president, while Raskob served as vice president and treasurer. Both he and du Pont, owning the majority of GM stock, also sat on the Board of Directors.
Raskob then floated a illiant idea. Instead of having their customers pay cash, why not lend them credit on an installment plan and charge them interest. When he founded the General Motors Acceptance Corporation, GMAC, it soon exploded with growth.
Using other people's money helped Raskob put millions into his own pocket—some of which he used to buy Pioneer Point as a family retreat and a working farm with a stable, dairy barns, pigs, chickens, and crops. He also built homes for his many employees who managed the farm—one of whom was a painter. His son, Bill Young, remembers the time when he lived on the farm.
“There were miles of white fences that needed constant repair. Every winter, my father would take the boards down to the horse barn and paint them.”
The centerpiece of the Raskob estate, however, was Hartefeld—a 19-room, three-story Georgian mansion. By 1932, he had also built Mostley Hall, an adjacent house for their 12 living children.
The story goes that when the kids first saw the house, one child remarked, “It's mostly hall.” Thus, the name.
Patricia Geuting, at 82, is Raskob's oldest living grandchild.
“I spent every summer there and we had the run of the place. We swam three hours every day, rode horses, boated, and biked. Grandpa was a tease, but he didn't stand for any nonsense. When he took his four-mile walks, we'd often go with him, but we'd better be ready or we got left behind. My grandmother lived mostly in Arizona then because of her asthma.”
It was also at Pioneer Point in 1929, that the Raskobs' son, Bill, was killed in an auto accident. With little comfort from her absent husband, Helen turned to their property manager, Jack Corcoran for solace. Although she was almost 20 years his senior, they fell deeply in love.
Raskob seemed unaware of this, however, because that year, he was beginning his most famous project—financing the construction of the Empire State Building. On August 29, 1929, he announced his intention to construct a building in New York City that would surpass any in the world.
Sitting in his office, he turned to his architect, William Lamb. Holding a pencil up in the air, he said, “This is what I want the structure to look like, Bill. How high can you make it so it won't fall down?”
Pierre du Pont, left, and John Raskob were dynamic business partners for more than 50 years.
Raskob was determined to have a spitting contest with his friend, Walter Chrysler, who owned the Chrysler Motor company, and who, too, wanted to build the world's the tallest skyscraper, which he would modestly name after himself.
Raskob was not to be outdone. When Chrysler's building went to 1,048 feet high, John told his men, “Make mine 1,050 feet.” But that wasn't good enough. “We'll add a column (spire) that will take it to 1250 feet.”
That same month, John wrote an article in the Ladies Home Journal, entitled “Everybody Ought to Be Rich.” He stated that the common person could secure a good living by investing in the stock market, rather than putting money in the bank. It was a right idea at a very wrong time.
The shrewd businessman, who worked magic with numbers, never saw it coming. When the bull market plunged on October 29, 1929, he bought more stock. A few days later the market hit bottom and the Great Depression fell over the land. His beautiful new building sat empty with few tenants. Yet much of his wealth stayed intact. In 1931, he built Centreville's Our Mother of Sorrows Catholic Church, which he attended.
In 1950, Raskob suddenly collapsed and died, at age 71. Helen and Jack soon married and moved to Arizona, and the property was sold.
Today, Pioneer Point stands empty, yet the Raskob name goes on. The Raskob Foundation for Catholic Activities is still run by his family members. Since its inception in 1945, it has donated more than $200 Million dollars in grants to Catholic organizations.
And still reaching for the clouds is Raskob's signature achievement—the iconic Empire State Building.
Source: Everybody Ought to be Rich by David Farber
