Do You Sincerely Want To Be Rich? (5 page)

    'He was always bringing round girls, I felt to show them off. They were the sort of girls you would expect, highly intellectual Jewish girls, not fashionably dressed, some rather nice. But you felt he just wanted to show them off.'

    The prime aim of the Norman Thomas campaign was to obtain enough voters' signatures to have their man placed on the ballot for President. Brooklyn produced more signatures for Thomas than any other part of the United States. But not all campus radicals accepted the aims of the Thomas campaign. The

    Trotskyite Socialist Youth League (syl), in particular, was bitterly anti-Thomas. In the infighting that ensued, Cornfeld showed few inhibitions. He went to the Faculty Committee on Student Affairs, and tried to have the Socialist Youth League bounced off the campus. The charges were damaging ones: that the syl's founder, Julius Jacobson, an ex-Gi, was not a genuine student, but a specially imported agitator, and that the syl was a revolutionary group aimed at overthrowing society.

    An afternoon was set aside to hear the case. Cornfeld made a speech in which he damned the syl as subversives. Jacobson followed with an eloquent address on intellectual liberty - and pointed out shrewdly that the Debs Society which formed the basis of syl had been on campus long before Cornfeld and the Yipsels showed up. The Committee threw the charge out.

    It seems fair to ascribe Cornfeld's denunciation of the syl to tactical necessity rather than any profound ideological principle. For when the Thomas bandwagon limped to a halt a few months later, Cornfeld and most of the Yipsels joined up with the syl, and remained dedicated members for something like a year. 'Yes,' says Jacobson, 'it is true. At one point in his life, Bernie really was a socialist revolutionary.'

    Bernard Cornfeld, like most of his contemporaries, was casting about intellectually and emotionally - 'looking for something', in the usual formulation. As he appears in the recollection of his contemporaries, it seems that he was not looking for political belief as such, but for some means of making an impact in the world.

    Cornfeld started at Brooklyn College under a considerable disadvantage. He had a stammer, which was bad enough for him to ask teachers not to put questions to him in public. This speech impediment, and the successful treatment which he received for it, may well have affected the whole course of Cornfeld's life.

    By the time he came back from the sea in 1947, his stammer was proving enough of a liability to make him seek treatment. He consulted a lay therapist named Willard Beecher and told him that he wanted to cure his stammer in order to become a salesman like his elder half-brother. He had made an interesting choice. For Beecher and his wife Marguerite were followers of Freud's great rival Alfred Adler, whose theories of 'Individual Psychology' were under-going something of a renaissance at that time. Adler's disciples often seem to be able to read as many meanings as they care to into his writings. But virtually all of them follow the master in being particularly interested in stammering, and Willard Beecher was no exception. The treatment he offered for stammering was a quintessentially Adlerian blend of elaborate theorizing and blunt common sense.

    Beecher declares that stammering is a 'plea for mercy'. He then divides stammering into two basic groups: there are those who open their mouths, and their eyes, and then splutter incoherently, and there are those who silently purse their lips. Cornfeld he placed in the group of mouth-pursers, who are supposed to be demanding 'exemption'. In Beecher's words, 'they want time to think while the other guys open their mouths and make idiots of themselves.' It is also part of his theory that the pursed 'rosebud' mouth is a signal meaning 'kiss me' or 'admire me'.

    At a practical level, Beecher told Cornfeld that he must cease asking his teachers to exempt him from questions. On the contrary, he must seek out every opportunity for public speech and performance. Cornfeld acted upon this advice, and within a very few months his stammer came under control and virtually disappeared. The experience was the starting-point in Cornfeld's love affair with applied psychology.

    The relationship with Willard Beecher swiftly widened. Cornfeld persuaded Beecher to give a lecture to the Brooklyn College Psychology Club early in 1948, taking some pride in presenting Beecher to fellow students as 'my psychologist'. Within a few weeks, a custom was firmly established in which Cornfeld and a dozen or so friends would go for long evening sessions with Willard and Marguerite Beecher. They became an informal study circle, endlessly discussing Adlerian theories of human motivations, and anatomizing their own personalities and actions. Richard Gangel was an early participant. Eli Wallitt, for some reason, long resisted joining the group, but joined up eventually. Off and on, the weekly Adlerian sessions at the Beechers' continued for more than a decade.

    Attempts by non-Adlerians to analyse the master's views are apt to incur the wrath of the faithful. But to a layman it sometimes appears that Adlerianism is as much as anything a style of language: there is much talk of 'goals' and 'strivings', of 'positive outcomes', 'negative outcomes' and 'interpersonal factors'. Nevertheless, some general propositions can be picked out.

    Adler rejected the Freudian notion that human personality is assembled from the id, ego and super-ego. He claimed that the personality is unitary, that is, individual in the sense of 'undividable'. He also rejected the Freudian idea of motivation by irrational 'drives', libidinous or other. Human motivation, for Adler, was a process of 'goal-seeking', and the most important goal for which people strive is 'superiority'. Adler does not make the nature of this 'superiority' very plain: it could mean some kind of ethical nobility, but more frequently it seems to be little more than success, wealth, or dominion.

    Adlerians believe that people who have suffered from 'organ inferiority', such as a stammer, are apt to 'overcompensate' by striving especially hard to achieve superiority. In the Adlerian world, you might expect an ex-stammerer to become a great orator.

    The striving for superiority is supposed to be moderated by another principle, which Adler called in German
gemeinschaftgefühl,
best translated as 'social interest'. By this he meant some kind of general desire on the part of the striving individual to order his actions for the benefit of the community. It was, by all accounts, extremely strong in Adler himself, who was a kindly doctor and a hardworking teacher. But it might well be absent in a person whose training had been unsuitable - in which case 'negative actions' might be expected.

    Whatever may be said about the clinical or moral validity of the Adlerian system, it obviously made an important impact on Cornfeld. It had helped him to overcome his most important personal disability. Now, the Beecher study group provided a framework for the real interest of his life, which, consciously or otherwise, had been developing for some years. This was the engineering of emotional relationships.

    From his high school days, for example, to the admiration of his friends, Bernie always pursued the most desirable and inaccessible of girls. Eventually he captured the affection of one particular extremely pretty girl. Having done so, however. Bernie became capricious.

    'She would be left waiting on her doorstep for hours when Bernie didn't show up,' recalls a contemporary. 'He broke dates without telling her, and then wouldn't call to her house for weeks. Then, out of the blue, he would arrive one night and get terribly upset that she was out with someone else.'

    There were to be many, many, other instances of the same phenomenon. No one who even came into his orbit ever quite knew how Bernie would receive them. You might be weighed down with charm and hospitality; or screamed at in merciless tirades; or put down, in such ways as being made to wait for six hours. 'He certainly is lovable when he wants to be,' says his cousin Hubert Cornfeld, 'and incredible when he doesn't.'

    Willard Beecher-who was himself considerably fascinated by the young acolyte he had acquired - described Cornfeld tolerantly, but bluntly, as 'a manipulator'.

    Cornfeld graduated in 1950 with a ba in psychology, but without any clear purpose in which to deploy his growing ability to command and manipulate. One might take him for the material of which politicians are made: but for all the radical coloration he had absorbed from his background, there is no evidence that he possessed even that spark of obsession with political ideas which is usually to be found in the most mechanical of party professionals. He did toy briefly with a vision of himself in the slightly similar role of union leader.

    After graduating from Brooklyn, Cornfeld made several more trips as a purser, chiefly on the European run. It is hard to believe that Cornfeld saw himself spending a lifetime as an ocean-going book-keeper. But the idea of organizing his fellow pursers into a union was more in his line, and he got as far as obtaining an introduction to Paul Hall, boss of the Maritime Union, and discussing tactics.

    Comfeld's union of pursers was never organized. He was, however, right to think that he was cut out for some considerable career. Inheritance had provided him with an actor's ear and sensitivity to mood. His upbringing had accustomed him to predominance. One might wish to be sceptical about some of Alfred Adler's claims, but it must be said that the thesis of organ inferiority and compensation seems remarkably suggestive when applied to the case of his student Bernard Cornfeld.

    Cornfeld's education and environment had provided him with the jargon, and some of the mechanism, of psychological analysis, and with the exciting rhetoric of equality and social reform. His capacity to use such tools had been refined by vigorous experiences in dialectic and manoeuvre.

    And at least one 'goal' was beginning to come into focus even before the end of Cornfeld's Brooklyn period. Bill Kolins studied English literature at Brooklyn at the time that Cornfeld studied psychology, and they shared some classes. 'Bernie's ambition,' he says, 'was always to make a very great deal of money.' Kolins is quite sure of this, because it was a most unusual ambition for a Brooklyn student to have - or at least to admit -in those days.

    Cornfeld would not have to wait long for an opportunity to match his talents to his ambitions. Financial revolution was brewing, and he was an early recruit to the cadres.

    

    

    

    
The rise of the mutual fund idea, and Bernard Cornfeld's early days, both as social worker and fund salesman. In which a young lawyer named Edward Cowett also learns about mutual funds.

    Walter and Ruth Benedick were active members of the Three Arrows community. Walter Benedick arrived in America in 1932, from a tiny town in south Germany, and worked for the First Investors Corporation throughout the Depression.

    Towards the end of 1952 Benedick was approached by a member of the New York Stock Exchange named John Kalk, with the suggestion that they might start a mutual fund business together. In June of the following year, they established the Investors Planning Corporation, with a capital of $320,000. ‘I feel sick whenever I think about the shoestring we started on,' says Benedick in recollection. And indeed, the organization was to experience an awkward infancy. But ipc could not easily have been a total failure, for it had behind it the power of an idea whose time had very definitely come.

    Over the next decade and a half, open-ended investment companies were to alter the financial landscape even in countries so un-American as not to call them mutual funds. But at first the mutual fund revolution was confined to the United States, and ipc was launched remarkably near to the actual moment of take-off. At the start of 1953, exactly six months before ipc began operations, there were about four billion dollars in mutual funds throughout America. Within five years, that figure more than trebled, passing thirteen billion dollars at the end of 1958 - and everything that happened in the Fifties, was, it turned out, mere curtain raising for the Sixties. It was thought

    remarkable in 1955 when, for the first time, the public put a billion dollars into the mutual funds in a single year. But ten years after that the mutual funds received, in one year, five billion dollars to be channelled into investments. As this was comfortably more than twice the value of the new stock which America's corporations made available for investment that year, some people became uneasy about the progress of the revolution. The majority of professionals in the investment business, however, merely admired the very large increases in stock exchange prices.

    In the latter years of the Sixties, some very hard questions were asked about the mutual fund concept. But at the start of the boom, the mood of the business was evangelical. Everybody involved was convinced that the benefits of capitalism were at last being brought to ordinary folk. It had always seemed the most convincing claim against capitalism that the ownership of industrial wealth should be concentrated in the hands of the few: who could deny that spreading ownership more widely must be a noble, as well as a rewarding task? Again, it had always seemed inexcusable that the money of the rich, deployed with skill and security, should multiply rapidly, while the small surpluses of the un-rich should gather slow increments in savings banks, or dwindle in mattresses. The mechanism of the open-ended fund appears at first glance to abolish these inequities. It was entirely possible in the early Fifties to regard the mutual fund as a promising engine of social justice. It was for this reason that stalwarts of the Three Arrows community, like Walter and Ruth Benedick, should find the idea an acceptable and exciting one, and also find that many of their salesmen - and customers - should be drawn from among the socialist and liberal connections of the Three Arrows. 'If we couldn't sell them a programme, we recruited them,' said Richard Roberts, an early ipc salesman and a veteran of the Yipsels and the Three Arrows. And it also meant that the concept was ideally suited to the talents and interests of Bernard Cornfeld, a young man of identical background.