Do You Sincerely Want To Be Rich? (4 page)

    The most durable of all the legends about Bernard Cornfeld concerns his original financial motivations, and the impulse which started him along the road to Geneva and People's Capitalism. The story is usually told like this:

    Bernard Cornfeld, an idealistic young Socialist, is the son of a widowed immigrant to New York. Fresh from Columbia University, he takes up a post as a social worker in Philadelphia. The exact nature of his duties is not stated, but 'slums' are mentioned. His income as a social worker is slender, and in order to have enough money to take girls out, he begins selling mutual fund shares in his spare time. Now, the young socialist experiences a conversion, he perceives that the open-end investment fund can be made to resolve the cruel contradictions of capitalism.

    Why is it that only the rich can invest in the wealth created by capitalism and thus increase their wealth? It is because the poor have few dollars left over from purchasing the necessities of life. They cannot afford to tie up this slender surplus in investment. To sell shares successfully, you need expert brokers. And there is the eggs-in-one basket-problem: what about the widow who had invested her $50 in the shares of a company which collapses?

    But now the mutual fund salesmen goes among the people. Through him, they are enabled to turn their savings into shares in a Fund. Many mites are thus assembled into a great whole. Wise men invest this ample Fund in the shares of many industrial concerns. And if, as should normally be the case, most of these investments rise in value, then the rise increases the value of each of the shares of the Fund. Thus the savings of the poor are multiplied, without risk. And the Fund undertakes that it will always redeem a customer's shares, immediately, for cash. Thus the advantages of investment are combined with the blessings of its great opposite, liquidity.

    In the legend, at least, Bernard Cornfeld, accepted with religious fervour the excellence of this vision. He has himself recalled the birth of a conviction that 'money possesses a strange kind of purity', and the further conviction that capitalism could now be employed to bring about that equitable distribution of wealth which was the aim of socialism.

    This idealized portrait of the open-end fund mechanism is not totally at odds with reality. But there are some important variations possible, such as the size of the cut that the salesman takes for himself, and the manner of ensuring that the little people's savings are deployed with suitable wisdom. The picture of Cornfeld's youth similarly differs in some significant ways from what actually occurred.

    Cornfeld, did spend the better part of one year as a social worker, but it was nowhere near the slums. He worked amid the middle class as a youth leader, and he had already made his acquaintance with mutual funds before he reached Philadelphia.

    Cornfeld's father, Leon, was a Romanian: he was an actor, impresario and film producer. He must, in the Twenties, have been one of the pioneers of the movie business in Central Europe, he had offices in Vienna and in Istanbul, where Bernard was born on August 17, 1927. Leon Cornfeld had been married once before when he met Sophie, Bernard's mother, in Vienna, and he already had four sons by his first wife. In Istanbul, the family suffered an appalling setback, when Leon fell through a defective pavement grill into a basement. His injuries ended his acting career at once.

    The family removed to America - first to Providence, Rhode Island, and then to New York. Leon began teaching German literature, but died three years later, aged over seventy. Bernard can just remember his father taking him to the Yiddish theatre. Sophie Cornfeld, who was clearly a woman of great character, went to work as a nurse, which in those days required 'working for twenty hours a day and sleeping four'. It was a role that she apparently bore with considerable fortitude, although it was not one for which she was especially prepared by her family background. Her own family were Russian Jews who had enjoyed a moderate prosperity until disturbed by the Revolution.

    Bernard Cornfeld thus belonged by birth to the displaced intelligentsia of Central Europe, not to the wave of immigrants who came to America from a background of real poverty. There is little doubt that Sophie Cornfeld consistently expressed a belief that the Cornfelds were entitled to something rather better than the shabby gentility which they endured in Brooklyn. It is tempting too to guess that Cornfeld inherited important traits of character from his actor father: a flair for taking on whatever role would best enable him to manipulate a situation to his advantage. He can talk like a broker among brokers, a film producer among film producers, a banker among bankers.

    All the four earlier sons of Leon Cornfeld are now dead, one having been killed in the us Navy in the Second World War. One of the sons, Eugene, became sales director of a paint firm in Boston, but both Sam and Albert (who spelled the name
Cornfield)
were in movies like their father. Quite clearly it was from his family connection that Bernard Cornfeld acquired his life-long fascination with show business. Albert Cornfield became a fairly successful movie executive and an intense conservative in all business affairs, who consistently maintained for many years, that his young relative Bernard was financially crazy. In particular, Albert was horrified by Bernard's famous advertisement in the Paris
Herald-Tribune,
which asked for salesmen 'with a sense of humour'. But in the end, the old gentleman's scepticism was eroded, and according to his son Hubert, he put some money into IOS not long before his death last summer (1970). 'The crash came as a blow to my father.' Hubert recalls. 'He could have said to Bernie; "I told you so." But he didn't.'

    Bernard Cornfeld grew up as a plumpish boy of rather less than middle height. Probably Sophie Cornfeld's most important influence on her son derived from her powerful devotion, which accustomed him early in life to occupying the centre of the emotional stage. Her political sympathies, which Cornfeld once described as 'czarist', clearly made little overt impression. As a small boy in the Thirties, he claims to have been an avid collector of nickels and dimes to support volunteers of the Abraham Lincoln Brigade, who were fighting against the Fascists in the Spanish Civil War.

    Cornfeld derived his early political coloration from influences outside his home. He grew up in an energetic and attractive Jewish community in which a liberal, frequently socialist cast of thought was accepted as part of the norm.

    The Cornfelds lived in several apartments in Brooklyn, winding up with the ground floor of a house at the corner of Faragut Road and Avenue H. The environment was seedy and depressing, rather than poverty-stricken; Cornfeld recalls taking nightwork in a fruit store to earn money for a bicycle, and spending his weekends selling lollipops at Coney Island. He went first to Public School 153, and then to ps 225, and then, when the Cornfelds moved to Brighton Beach, to Abraham Lincoln High School. Archie Roth, an almost exact contemporary, first met Bernie at the Ten Mile River Boy Scout camp at Tustan, in upper New York State, during the early 1940s.

    Roth recalls that Cornfeld the Boy Scout 'wasn't the outdoor physical type… He was a very independent cuss. He knew what he was after, and could be very single-minded. He wasn't a robust guy as I remember it. In fact I seem to remember he had some trouble getting his life-saving certificate. He wasn't studious either. To sum up Bernie, I'd say he liked crowds, and he liked organizing people.'

    In Cornfeld's own recollections of youth and childhood, he sees himself as a dominant, organizing personality. In 1970, he told James Fox, a colleague of ours:

    ‘I was always the neighbourhood leader. I was the leader of my neighbourhood club, then I became leader of my boy scout troop…

    'You know, a lot of these things are elected kind of roles. Kids choose their leaders, and I was chosen as their leader.

    'Every now and then you had to make your point in a fist fight… But in almost every situation, there is a kind of group protectiveness. You always operate in groups, and in any group there are some big guys and some little guys.'

    There is an anecdote, from scouting days, of Cornfeld the organizer, aged fourteen or fifteen. Each summer the Scoutmasters and Scouts used to choose the Scout who has most notably 'given cheerful service' during the period of the camp. This award was regarded as a considerable honour. One year, Cornfeld decided to win it and began to organize support. He had not understood that an award given to recognize uncalcu-lating generosity becomes pointless if people calculate to win it.

    This youthful manoeuvre is said to have failed because the canvassing became too blatant. (Cornfeld did acquire an authentic distinction in his scouting career: in October 1944 he became an Eagle Scout, having reached a suitable level in map-making, knot-tying and tests of initiative.)

    Brooklyn College, where Bernie went after Abraham Lincoln High School, was naturally important in the formation of his early political attitudes. But even before that, he came under the influence of the Three Arrows Camp.

    This had its origins in the Jewish community of Parkchester, in the Bronx. These were wealthier people than the Cornfelds of Brooklyn. They were successful doctors, lawyers and business men, with a sprinkling of teachers and social workers. During the Thirties, the Jewish people of Parkchester lived in an atmosphere of continuous political debate. The aftermath of the Depression, and the rise of anti-semitism in Europe combined to engender a powerful left-wing mood.

    Just before the outbreak of the war, some 75 families from Parkchester got together and bought some cheap land in the north of New York State, where they established the Camp of the Three Arrows to combine holidaymaking with a practical experience of communal socialism. The tradition was for the men to take strenuous walks, to fell trees and till the soil, while the women sunbathed and prepared meals over open fires. The evenings, naturally, were devoted to animated and wide-ranging political debate.

    The Three Arrows became one of the more important social centres of American left-wing politics. Norman Thomas was a frequent guest. Naturally, the relatively well-to-do people who founded the Three Arrows were determined that its benefits should be available to all, and so a tradition was rapidly established in which members of the Young People's Socialist Leagues (who were known as 'Yipsels') were invited to the camp from all parts of New York. Cornfeld enjoyed at least one such holiday in the late 1940s, sleeping on the floor of a barn.

    The aspirations expressed at the Three Arrows were more vehemently expressed at Brooklyn College, where Cornfeld arrived in 1948 after serving two years as an assistant purser in the merchant navy. (He made several trips in tankers down to the Maracaibo oilfields in Venezuela. From this experience would seem to date Cornfeld's interest in foreign currency and his seminal observation that 'no matter what it looks like, it's all money'.)

    Brooklyn College at the time was in a state of fierce political ferment. The students were united in a desire to avoid the classroom at all costs. Julius Jacobson, who was a student at that time, says: 'We were all engaged in one basic course. We wanted to major in cafeteria.'

    Majoring in cafeteria - where one table carried the slogan, 'Peasants and Workers' Soviet of Brooklyn College' - meant strenuous mental exercise. It was a matter of hours of merciless political debate, of producing leaflets, setting-up meetings, writing tracts. As one veteran of the period put it: 'All you needed in those days was a nut and a mimeograph machine, and you were in business as a party on the American Left.'

    Cornfeld's time at Brooklyn straddled the presidential year of 1948, which sharply intensified the political ferment. To the Brooklyn radicals, naturally, the Democrat Harry Truman was only slightly, if at all, less contemptible than the Republican Thomas Dewey. But there was little agreement on which tactics would most suitably expose the hollowness of Establishment pretensions. The Communists on campus came out without hesitation for Henry Wallace of the Progressive Party. But for most other people, Wallace's approval of Stalinist Russia was too much. The American Socialist Party decided to try to draft

    Norman Thomas, and the enterprise is now remembered with affection as one of the great lost causes of the Left.

    Cornfeld had arrived on campus as a member of the Yipsels, which decided his loyalties, and he threw himself enthusiastically into the task of organizing for the Thomas campaign. It appears that Cornfeld and a young man named Shim Levy were the effective leaders of the Brooklyn College Socialists.

    Already, the nucleus of the IOS high command was beginning to assemble. Two prominent members of the group that Cornfeld and Shim Levy led were Richard Gangel and Eli Wallitt, both of whom became IOS sales chieftains of the first rank. These young people had a political mentor a few years older than themselves. In 1970, he remembered them with some clarity:

    'The first time I met them half a dozen of them came to the house when I was living in a basement apartment and we had a huge discussion about Thomas as opposed to the capitalist candidates. The leader of the group was a guy called Shim Levy. The only time I came across him later he was selling mutual funds, oddly enough, but for some outfit that was nothing to do with Cornfeld as far as I knew.

    'Anyway, these young kids were clawing and searching for some kind of role for their idealism in a confusing world. They were just young enough that I felt I could help them, being a little bit detached from their problems and so on. What I am coming to is that Cornfeld struck me - and I saw quite a lot of him for about a year - as one of the most egocentric people I had ever met and I found him very irritating. It was inconceivable for him ever to admit that he was wrong about anything.