CHAPTER SEVEN - BORN TO WORK

QUIETLY, POLITELY, AND FIRMLY, Frederick Christ Trump pushed his way into the back of a hot, packed courtroom on the afternoon of Monday, January 15, 1934. Surrounding him were dozens of anxious, frightened people who had recently discovered that they had lost their life savings. Small investors for the most part, they had found themselves left holding the bag in the biggest bankruptcy anybody could remember. Today, summoned by tiny-print newspaper ads, certified letters, and word of mouth, they had gathered at the Main Post Office Building in Brooklyn, which also served as the federal courthouse.1 Court officials had expected a quiet judicial proceeding. To their dismay, more than three thousand people showed up, overflowing the three-hundred-seat courtroom and clogging the marble-lined corridors and the stairwells. A front-page story in the next day’s Brooklyn Eagle called it the largest courthouse crowd in borough history.2

To accommodate the mob of unhappy creditors, officials had propped open the heavy courtroom doors, which were covered in dark leather and studded with brass nails. It was cold outside and chilly on the floors below, but here the severe crowding made the area unpleasantly warm and stale with the smell of overdressed, sweating bodies. Only someone determined could have shoved a way inside. But twenty-eight-year-old Fred Trump, tall and slim, with a mustache and straight blond hair, was very determined.

Courtroom 727, a recent addition to the post office, was an elegant room with a twenty-foot ceiling, patterned marble floors, and large windows that looked west toward the Brooklyn Bridge and the East River. Rich mahogany paneling covered the walls, and terra-cotta wreaths and decorative molding festooned the ceiling. But on this mid-January day no one was paying attention to the decor. Some of the people seemed too dazed to speak and simply stared into space. Others talked incessantly in loud, angry voices. Often the conversations were in German or German-accented English.

Waiting for the proceedings to begin, these spectators were outraged and vulnerable, equally ready to lash out in fury or burst into tears. The Depression had already lasted more than four years. It had long since taught them the cruel lesson that no job was safe, that a factory with production lines working double shifts one week could close the next, and that if you couldn’t pay the rent, you were on the street even if you had no place to go. But through the stock market crash, the unemployment lines, and the bank holidays, this group had clung to the apparent stability provided by a handful of corporate enterprises based in downtown Brooklyn and run by a German-American family called Lehrenkrauss.

Known as the House of Lehrenkrauss, this family conglomerate had begun back in 1878, twenty years before the city of Brooklyn merged with Manhattan. In a tiny closet in what was then Brooklyn City Hall, Julius Lehrenkrauss, a recent German immigrant, opened a travel bureau that sold steamship tickets to other Germans who wanted to bring their families to America. Because transferring funds abroad was a complex affair, he became his clients’ de facto private banker, holding their money, sending funds overseas, making investments on their behalf.3 As Germans continued to pour into the United States, the Lehrenkrauss operation expanded to fill a five-story building across the street from Borough Hall, as the old City Hall was renamed after Brooklyn was incorporated into New York City in 1898. In addition to the travel agency and private merchant bank, the business now included a safety deposit box department, an insurance company, and mortgage brokering.

After World War I Lehrenkrauss developed a brisk trade in what was known as “guaranteed” or “certificated” mortgages. To pay for the residential properties going up all over New York City, mortgage banks and title companies began to “certificate” mortgages—that is, to divide them into shares that were then sold to the general public like so many bonds. Available in denominations of $1,000 and up, these certificates appealed to people who wanted to cash in on the economic bonanza of the 1920s but had little money to invest. Although mortgage certificates would never create the overnight windfalls of the stock market, they returned a guaranteed 6 percent interest at a time when banks paid only 3 percent and were not insured by the federal government.4

In the early 1930s, as the nation plunged into economic turmoil, certificated mortgages from Lehrenkrauss appeared to retain their value. The firm, now headed by Julius’s son, also named Julius, held $30 million in Brooklyn and Queens mortgages, had forty thousand regular customers,5 and maintained five branch offices around the city as well as correspondents in more than a dozen European cities.6 Modest wage earners who had turned over their little nest eggs to Lehrenkrauss remained secure in the knowledge that on the first of every month an interest check would arrive in their mailboxes.

But on December 1, 1933, Lehrenkrauss investors reached into their mailboxes and found them empty.7 The fifty-five-year-old House of Lehrenkrauss had crashed to the ground, apparently without any warning whatsoever. Soon screaming headlines in the Brooklyn Eagle revealed that Julius Lehrenkrauss had been running a deficit operation for years, covering expenses and salaries with a haphazard assortment of schemes that included issuing watered stock, writing up mortgages based on either inflated or nonexistent evaluations, selling mortgage certificates worth more than the mortgages they represented, and taking out bank loans against mortgages that had already been certificated.8 When the Depression caused the mortgage market to contract, the Lehrenkrauss operation lost its cash flow—the constant inflow of new dollars that kept it afloat—and ended up drowning in a sea of financial obligations.

By law, bankruptcy falls under federal jurisdiction and regulations. Accordingly, Lehrenkrauss’s creditors had gathered at the U.S. District Court for the Eastern District of New York—in other words, the federal court in Brooklyn—to exercise their legal responsibility. As most of them were learning for the first time, they were not only entitled, but actually obliged to meet and elect trustees who would parcel out the company’s remaining assets. Shortly after two, a man in his mid-thirties who had a mustache and wore his thick brown hair plastered down and parted in the middle called the meeting to order. His name was Theodore Stitt, and he was the court-appointed referee in charge of the Lehrenkrauss bankruptcy case.9

After the crowd settled down, Charles J. McDermott, a prominent retired judge in his late sixties, began speaking. For the past six weeks he had been working on this case as a receiver, an interim official whose job was to inventory assets as bankruptcy proceedings unfolded. Standing in front of the room, he wasted no time getting down to business. The affairs of the House of Lehrenkrauss were so tangled, he said, that it was impossible to give even a general status report.10

To disguise the firm’s dire straits, Julius Lehrenkrauss had ordered the accountant to cook the books. Thus, for example, one division’s $19,000 deficit had magically turned into a net worth of $1.8 million.11 Julius regularly made out corporate checks to cash, with no accounting for where the money went. Whenever he could get away with it, he paid dividends by issuing more worthless Lehrenkrauss stocks. He left dozens of deeds unfiled, misfiled, and, in some cases, missing altogether. As a result, almost all McDermott could say was that the Lehrenkrauss bankruptcy was “the most interwoven, intricate and hopelessly muddled-up mess that I have ever had anything to do with.”12

“Appoint a trustee!” shouted one creditor in the mob.

“Who stole the money?” yelled another. “Put them in jail!”13

At this point, a short fat man with thick gray hair and a cigar stub in his hand stood up in front of the room. Archibald Palmer, a lawyer, had devoted his career to bankruptcy cases, a field that made up for its low prestige with handsome fees. Now in his forties, he had trained as a bantamweight fighter and was well-known for his combativeness in the courtroom. “I have to be punching all the time, even if I get licked,” he once said.14 Speaking on behalf of the creditors, he charged that family greed had caused the Lehrenkrauss downfall. The final collapse had turned into disaster and disgrace, he thundered, because of Julius Lehrenkrauss’s unwillingness “to face the music” when financial ruin was inevitable. “He was looking for a miracle,” Palmer said in a ringing voice. “God doesn’t send miracles to bad people.”15

The crowd applauded wildly when Palmer reported that police had recovered mining stocks that Julius had pocketed, but the lawyer quickly discouraged their jubilation. “Applause won’t do you any good because they owe you so much money,” he said, adding that the restored stock “would be of as much consequence as one wrinkle more or less on an old lady’s face.”16 Indeed, he said, “in this muddle we are doing a public service if we can salvage anything at all and more than anything at all from this mess.”17 The press, he declared, had covered only a small fraction of the “dirt and filth” involved, for it would take four newspapers to cover all the crimes committed.18

Unlike everyone else in Courtroom 727, Fred Trump could not have been happier. The eldest son of Frederick Trump, he was well acquainted with the intricacies of New York real estate. As he stood and listened, he became increasingly interested in one particular Lehrenkrauss operation, the mortgage-servicing department. For a small fee, J. Lehrenkrauss & Sons, the core company of the Lehrenkrauss conglomerate, had managed the buildings on which it held mortgages, providing maintenance, collecting interest, paying taxes, and handling routine administrative matters. Because this operation was still making money, court-appointed officials would sell it off to satisfy claims. Presumably it would continue to make money for the buyer. Better yet, it could lead to far greater profits in the future. To the knowledgeable observer, the list of mortgages maintained by the company could be a gold mine, for it identified hundreds of properties that in these Depression times were liable to foreclosure and subsequent auction at tax sales.

After the Lehrenkrauss hearing, the young observer boarded the elevated train out to Woodhaven, Queens, where he lived with his widowed mother. Riding past the old Lehrenkrauss building at the corner of Fulton and Myrtle, now dark and shuttered, he pondered how to proceed. It could be risky; he had learned firsthand that building had its down periods. And with such high stakes, there would be serious political, legal, and financial infighting. But he had already made his decision.

***

If Elizabeth Christ Trump had gotten her way, her son Fred would never have been in that Brooklyn courtroom, because he would never have been in America. But in July 1905, after her husband was unable to regain German citizenship, he, Elizabeth, and their one-year-old daughter returned to New York aboard the SS Pennsylvania. Three months later, on October 11, one day after her twenty-fifth birthday, Elizabeth gave birth to her second child and first son. His name on his birth certificate was Frederick Christ Trump, but he was known as Fred from the start.

The newborn’s parents had set up housekeeping at 539 East 177th Street. It was next to the recently electrified Third Avenue elevated train and not far from the Westchester Avenue apartment where they had lived with the Schusters.19 The new neighborhood was quiet, but because the building had been built under old zoning laws, the Trumps had only cold water and shared a bathroom with their neighbors. Two years later they had a third child, John George, and moved about fifteen blocks south to a spanking new five-story brick building on a corner lot in a newly developed section named Woodstock. There were six families on each floor and porcelain washbasins, bathrooms, and iceboxes in each apartment. Because they were on top of a hill, there was also a view out over the South Bronx. A dumbwaiter conveyed coal and wood to each apartment from a storage bin in the basement.20 A large farm at 152nd Street and Prospect Avenue provided fresh vegetables to the whole neighborhood, and a nearby Chinese hand laundry did the wash.21

After his return from Germany, Frederick Trump dusted off his barber tools and supported his growing family by giving shaves and haircuts. At first he lathered and snipped at home in the Bronx, but within a few years he had rented a room at 60 Wall Street, a large office building in lower Manhattan, and hired a tonsorial staff.22 The chairs in his shop were seldom empty, for the modern safety razor was not yet in general use, and being shaved by a barber was part of any successful businessman’s daily routine.

But Frederick Trump was no more content to remain a barber now than he had been back in Germany two decades earlier. He worked, he saved, and he searched for a spot where a quick, energetic fellow who’d already knocked around the globe a bit could use what he’d learned, where things were still open and there was a chance to get in on the ground floor. His sister Katherine would move back to Manhattan, where her husband, Fred Schuster, would continue a succession of low-paying clerk jobs. His other sister, Louise, would marry an older, well-to-do Schuster cousin, George, and move north of the city to Mt. Vernon. But Frederick Trump was still looking for the right opportunity for himself and his nest egg. By the end of 1906 he had found it. He was ready to stake his future on the growth of a section of western Queens called Woodhaven.

Before doing so, Trump made one last stab at returning to Germany. On December 20, 1906, he wrote again to the Royal Ministry of the Interior. Unlike previous unctuous missives, this letter was brief and to the point. He said that his life in America had been good and he had never intended to return to Germany, but his wife was unable to adjust to the New World. He did not emigrate to avoid military service, he said, but because he wanted to have “a profitable life” and to support his mother. He was “a quiet, peaceful man,” and his family was of a high moral character. The flowery closing of the previous pleas was reduced to a perfunctory “Obediently.”

In short order, the answer came back. The Royal Ministry was sticking to its guns. In a resolution dated January 10, 1907, the crown proclaimed him unwelcome as a resident in Bavaria. On March 13 the mayor of Kallstadt informed the Royal Ministry that he had given the required notice to this effect to Katherina Kober Trump and to Elizabeth’s father, Philip Christ. Two days later, on March 15, Frederick Trump opened an account at the Hillside Bank, a new institution on Jamaica Avenue in Queens. He had stopped looking back. His future, and that of his family, would not be across the Atlantic Ocean in Germany, but across the East River in Queens.

It was hardly a wild gamble. As the rest of the city had urbanized, Queens had remained “the cornfield borough,”23 a source of fresh produce and unspoiled countryside. As a result, although it was the largest borough in terms of land area, it had by far the smallest population, just 152,999 inhabitants, or 4 percent of the city’s total, in 1900.24 In large part this was because Manhattanites could reach the borough only by ferry or via Brooklyn. But now the city was building the Queensboro Bridge over the East River, and the Pennsylvania Railroad was digging a tunnel under it. When they were finished, Queens would be as accessible as the South Bronx. Surely, Frederick Trump reasoned, the real estate development that had occurred in the rest of the city would then touch Queens, creating opportunity for people like himself.

In September 1908, nine months before the completion of the Queensboro Bridge, he made his move, beginning the family’s New York holdings by purchasing a modest two-story frame structure in Woodhaven. It was on the north side of Jamaica Avenue, the Indian track that had served as the main east-west road across Long Island for more than two centuries. The first acquisition in a real estate portfolio that would expand manyfold over the next century, the building was in an area called Union Terrace in honor of a nearby racetrack, now gone, named Union Course.25 In choosing this site, Trump had, as in his northwest ventures, followed the primary rule of real estate: Location, location, location. With an electric trolley that ran down the center of Jamaica Avenue, this site was perfect for business. But his purchase violated real estate’s second rule: Never use your own money. He paid cash.

The next year the fledgling real estate magnate got a job as a manager at the Medallion Hotel, on the east side of Sixth Avenue at 23rd Street. The Medallion was one of many prosperous, thoroughly German business establishments in New York, and its majordomo was a champion sharpshooter named Gustav Zimmerman who was from Baden and lived near the Trumps in Morrisania. He saw in Frederick Trump the experienced hand he needed at the newly renovated hotel, which had just obtained a liquor license and was expanding its restaurant and bar operations. As always, the restaurant and hotel business meant long hours, made longer by the task of getting the new operation up and running. Frederick Trump spent most of his time at the hotel, and in the fall of 1909 he cast his vote in the city’s mayoral elections from that address.26

By 1910, however, he and his family were in Queens. After a few alterations, the Trumps moved into the building on Jamaica Avenue and rented out one floor to another barber and his family. Unfortunately the building was not well suited for housing. All day long Jamaica Avenue rang with the noisy clamor of commerce, including busy workers rushing to and fro and knickered boys hawking newspapers. The trolley roared deafeningly outside the windows, and Elizabeth worried about letting her young children outside to play. After months of fretting, fretting, Frederick Trump moved his business a few blocks farther east on Jamaica Avenue and bought a nearby house and vacant lot next to it. Located just south of Jamaica Avenue on First Street, the new Trump residence, a two-story frame dwelling, was in the middle of what had been Union Course, and the neighborhood was often referred to by that name.

Unlike the family’s previous address, this section was a quiet enclave, dotted with Queen Anne–style homes. The streets were unpaved and ungraded, the potholes so huge that a twelve-year-old girl supposedly fell into one and almost drowned just a few blocks from the Trumps’ house.27 Aside from such perils, though, First Street in 1908 was a wonderful playground for Elizabeth, now eight, as well as five-year-old Fred and three-year-old John. Every evening until twilight, they played tag on streets that still had few cars. It was time to go home when the lamplighter came and reached his long pole up to the wick of the gas lamps.28 Up First Street and across Jamaica Avenue was P.S. 97, the red brick elementary school all three children attended.

In winter they ice-skated and rode sleds on the golf course at nearby Forest Park; in summer they played games like ring-a-levio and cat, in which one team hit a stick up in the air and then tried to get to bases before the opposing team retrieved the stick. On Halloween boys turned their jackets inside out, scrawled on them with chalk, and then whacked each other with socks filled with flour.29 A few days later, on election night, families went to Forest Park and huddled around huge bonfires as the local newspapers projected results on special screens. Four weeks later, on Thanksgiving morning, children would dress as ragamuffins and go from door to door collecting fruit and candy before returning home and tucking into turkey.30

Such pleasant conditions ensured the borough’s rapid growth.31 Between 1910, when the bridge was finished, and 1915, Queens’s population increased 40 percent.32 Land prices soared, nearly all of the borough’s remaining farms quickly disappeared, and builders, most of whom worked on a small scale, began constructing one- and two-family homes and small apartment buildings.33

Frederick Trump had high hopes for the future, for he had his own savings to invest as well as possible funds from his sister Louise, who had backed his real estate ventures in the West. Weekday mornings he would walk the few blocks to his office, dressed, as was customary for businessmen at the time, in a spotless boiled white shirt, formal tie, and three-piece tailor-made gray suit. Often he stopped at a little two-room building across the street to visit Carl Louis Voeller, a first-generation German American who was fluent in German and English and specialized in second mortgages. Although Frederick Trump had now spent more than a quarter of a century speaking English, he preferred German and did considerable business, including his own will, with Voeller.34

Doing business in German was hardly unusual in Queens. As of 1900, one in four New Yorkers was German or of German ancestry, which added up to the world’s second largest population of Germans after Berlin.35 Queens was especially especially Teutonic, and along Jamaica Avenue German was at least as common as English. A few blocks from the offices of Trump and Voeller was the Triangle Hofbrau, a center of local gemütlichkeit. The restaurant’s wooden barrel heads came from Neustadt, a village only a few kilometers from Kallstadt, and carvings across the front boasted of wine from the Pfalz.36 Like many of their neighbors, the Trumps used German at home, and their children did not use much English until they went to school.37

Frederick Trump was working on Jamaica Avenue at a time of almost inconceivably rapid change.38 When he arrived, Long Island farmers still traveled the old road, taking produce to Manhattan at night in horse-drawn wagons. By 1915, though, the weeping willows and chestnuts that had lined Jamaica Avenue were gone, replaced by mounds of dirt from the construction of the elevated train. The farmers’ highway had become an urban landmark, a gloomy tunnel-like passageway on which the sun never shone and over which the elevated now roared with an unabated clatter.

With this enclosure of the old plank road, yet another wave of suburbanization ensued, bringing development and subdivision to the farther reaches of Queens.39 In keeping with the borough’s new, modern profile, Queens adopted a street-labeling system known as the “Philadelphia grid.” Gone were Suydam, Shaw, and other references to the Dutch and English inhabitants whose farms once covered Queens. Gone also were other plain but familiar street names, replaced by sequential numbers. The Trump home, originally 154 First Street (also known, in an era more familiar with Latin, as Unum Street), became 154 87th Road, amended later, as lots subdivided, to 1540 87th Road.

But the greatest changes occurred in August 1914, when World War I erupted. Americans were neutral at first. As time went on, though, they lined up with the British and against the Germans—and, inevitably, against German-Americans. On May 5, 1915, a German submarine sank the Lusitania, a British liner sailing under a U.S. flag. All 1,200 passengers died, including 124 Americans. So did any remaining American neutrality.

Well before the United States officially entered the war in April 1917, the country yanked up the wilkommen mat for what was now perceived as the domestic Hun. The German music that had filled concert halls and opera houses vanished. Cities with German names changed them. Ground meat, formerly called “hamburger,” became “Salisbury steak,” patties made from it turned into “Wilsonburgers” and “liberty sandwiches,” and “sauerkraut” became “liberty cabbage.” More than a dozen states summarily dropped German instruction in school, and others severely limited it. German-language newspaper editors and advertisers received threats, postal workers misdelivered their publications, and Boy Scouts burned German papers in huge public bonfires. Teddy Roosevelt, the former president who had originated the notion of the hyphenated American, now denounced anyone who qualified. President Woodrow Wilson banned German males over fourteen from all boats other than ferries as well as airplanes, balloons, and all areas of military import, including Washington, D.C. The government also ordered six hundred thousand German aliens to register with local police and not to change residences.40

Unlike their neighbors, the Trumps did not change their name. Theirs had always been a German-speaking household, and so it remained. Hunkering down to avoid suspicion, Frederick Trump and his sister Katherine stayed in contact with their Kallstadt relatives, and after the war was over, Katherine Trump Schuster and her daughter Elizabeth went back to Kallstadt for a visit.41 But the bitter experience of having been tarred by their German ancestry had left scars on the Trump children. Years later, the older son, Fred, would quietly promote the notion that the family was actually Swedish.

The American Trumps survived the war, but they did not escape tragedy from another source: Blitzkatarrh, or influenza. At first the number of influenza deaths in the spring of 1918 set off no alarms, for people died of influenza and pneumonia every spring. Without a public health network continually coordinating national statistics, it was impossible for the medical community to know that fatalities were higher than usual, much less that one of the most fearsome epidemics in history was about to cut down millions around the world.42 The cases seemed to divide into two types, both fatal. Those who were sick for up to ten days or so before dying developed classic pneumonia, in which the normally whisper-thin membranes of the lungs become thickened, inelastic, unable to do their vital work of cleaning the blood of poisonous gases and providing it with oxygen. But those who died within only a day or two after the first sneeze had lungs full of a terrifying watery red liquid that poured out of the body and turned whole mattresses red.43

One Wednesday at the end of May 1918, Frederick Trump and his older son strolled down Jamaica Avenue. It was the eve of Memorial Day, and Fred, who was eleven, was delighted to honor the U.S. Civil War dead if doing so meant staying home from school. The next day there would be a big parade along this same street, and Fred could hardly wait. He and his father were doing what they often did in the afternoon, stopping in to chat with half a dozen realtors in the small storefront offices that now dotted Jamaica Avenue.

As Fred Trump recounted it many years afterward, his father turned to him and said he felt sick. They walked home, and the older man went to bed. “Then he died,” Fred Trump said later. “Just like that. It seemed so sudden to me.” At first, he said, he couldn’t believe that as the parade was marching down Jamaica Avenue, his father was lying dead upstairs. “It just didn’t seem real,” he said. “I wasn’t that upset. You know how kids are. But I got upset watching my mother crying and being so sad. It was seeing her that made me feel bad, not my own feelings about what had happened.”44

The cause of death was listed on the death certificate as “pleno pneumonia, dextra et sinistra”: full pneumonia, right and left lungs. Five days later, infected lungs caused the death of Frederick Trump’s brother-in-law Fred Schuster. To the Trumps, it seemed a sad coincidence. By the end of the summer, though, it was clear that both men had almost certainly been early victims of what came to be known as “Spanish influenza.” Ultimately, the influenza epidemic of 1918 claimed twenty-one million lives—six million more than all of World War I.45

***

Five and a half years later, on Tuesday evening, January 30, 1923, Frederick Christ Trump stood in the auditorium of Richmond Hill High School. Looking self-conscious in his formal attire, the thin blond youth marched into the hall to the strains of Mendelssohn, listened to the valedictorian expound on “Investment of Our Heritage,” received his diploma, and marched out to Sousa’s Washington Post March. He was through with his formal education.

Richmond Hill High, the largest in Queens, was about two miles from Woodhaven. Founded in 1898, it was one of the first tangible rewards Queens received for its incorporation into New York City. In a grand gesture, city officials had laid a cornerstone containing a set of U.S. coins, an engraving of the battleship Maine, and a portrait of Admiral Dewey and his fleet. Unlike a modern high school, this one had no cafeteria; students went home for lunch, brought their own, or ate in a diner attached to the school. But the school did boast a domed observatory, the only one in a city high school, and a brand-new $6,000 telescope. In the early years school life centered around the German club—Der Deutsche Kreis—and social events often featured German games, dances, songs, and readings.46 However, by 1918, the year Fred Trump entered Richmond Hill, the school had become Anglicized and German was rarely spoken.

Because there was little truancy and no vandalism, students did not have individual lockers. They simply left their coats and supplies in a coatroom, and apparently nothing was ever stolen.47 Rules were strict. There were no makeup tests, which meant that no matter how sick they might be, students either showed up for final exams or repeated the course. Teachers still scrupulously followed the classical curriculum, and the school papers bristled with literary allusions and Shakespearean wordplay.48 There were a few black students and a handful of Jews, but for practical purposes the school was white and Christian, with a Protestant majority.

Everything seemed to suggest that Queens would continue to grow and to improve, but not to change. Indeed, in many ways the area was still a nineteenth-century enclave. Some residents made forays into Manhattan, to see jazz at Gray’s Drugstore or the Pennsylvania Grill or take in plays on Broadway. But most saw that borough, known throughout Queens as “the City,” as a foreign land, distant and intimidating, and preferred to stay put amid traditional suburban familiarity.49

In early June, on Anniversary Day, the community celebrated its own existence.50 Local schools and businesses closed. Parents dressed children in white and decorated baby carriages. Here and there, groups got up a small float for the occasion. People congregated at their churches, joined an informal parade through the streets to Forest Park, and then circled back to the churches for ice cream.51 It was a glorious occasion, a moment to look around and savor a way of life so innocent and pleasant, it seemed that it would never end.

But it did. Economic development, population movement, and growth would inexorably change the face of all of New York City. As new businesses opened, new people would arrive. When Frederick Trump had come to America, he had naturally headed for the tenements of the Lower East Side and then out west, where opportunity was beckoning. But now new arrivals to New York, often from other parts of the United States, wanted to stay in the city and to have their own homes. As Fred Trump came of age, he saw an opportunity for himself in providing them.

***

When Frederick Trump died, his estate included the family’s two-story, seven-room home in Queens, five vacant lots, $4,000 in savings and life insurance, $3,600 worth of stock, and fourteen mortgages. The net value was estimated at $31,359, the equivalent of about $345,000 in 1999 dollars.52 He had come from nothing, and he had left something for his wife and children. Had he lived, he would probably have left much more. But he had accomplished a great deal in the time that he had. Above all, he had redirected the course of his life and that of his family and the descendants who would follow. Instead of being German, part of the Old World and the old order, they were American, in place to assume leading roles in the century now unfolding. By establishing his family in Queens and becoming involved in real estate, he had set the stage for what was to come.

Unfortunately his financial legacy quickly diminished, consumed by the drastic postwar inflation of 1919–20, during which consumer prices spiked up more than 50 percent. His small but thriving real estate business shrank to its outlines, forcing the family to scramble. As it turned out, his widow had a remarkable talent for doing just that.53 Beginning with the lot next door to her home, she arranged for a local contractor to build houses on the empty property remaining in her husband’s business, sell the houses, and provide home mortgages to buyers. For the time being, she would support her family with the income from the mortgages and whatever she could make by taking in sewing. Then, when her children finished school, they would continue the family business. Her older son, Fred, then fifteen, would be the builder; her younger son, John, thirteen, would be the architect; and her daughter, Elizabeth, sixteen, would run the office and keep the books.

Everything seemed to go according to her plan. Young Elizabeth left high school early, not an unusual step at that time, and enrolled in secretarial school. John busied himself with his schoolwork. Fred, who would have been happy to drop out of school, complied with his mother’s request that he obtain a diploma, but he did not let being a full-time student interfere with getting the head start he craved.54 While classmates belonged to school clubs and played on sports teams, he earned money caddying at the local golf course, whitewashing curbstones, and delivering groceries and papers to his Woodhaven neighbors.

For as long as he could remember, he had been drawn to building, partly out of respect for his father, but also because it seemed like the most interesting thing in the world. “I always wanted to be a builder,” he said years later. “It was my dream as a boy, just as some kids want to be firemen.” Now he took night courses at the local YMCA in carpentering and reading blueprints, and he studied plumbing, masonry, and electrical wiring in correspondence courses. He also built a garage for a neighbor. “Probably not the greatest garage ever put up,” he later acknowledged, “but the experience reinforced my hope of doing something creative with wood and bricks and cement.”55

He did not study any more than he had to. Unlike his younger brother, John, an excellent student and a member of his high school honor society, Fred Trump settled for average marks. He had no time to study, much less to practice the violin that sat gathering dust in his room. The yearbook entry under his name says simply “X”; he had no extracurricular activities. Next to his name appeared the phrase “Even the good Homer sometimes nods his head in sleep,” presumably referring to Fred’s exhaustion after working and attending night classes.

As soon as he graduated, he obtained full-time employment in construction. His first job was as a “horse’s helper” for a local builder. At the time, horse- and mule-drawn delivery wagons hauled construction materials to building sites along streets paved with flat wooden blocks fitted tightly together. The smooth surface meant easy travel in warm months but disaster in winter, when ice sheeted the roadway. On level ground the animals slipped and slid, and on hills they could not move at all.56 To keep Queens from closing down altogether, strapping young men like Fred Trump had to pull the loads themselves. “I replaced a mule,” he said later.57 Every day he towed lumber up steep hills too icy for horses to ascend safely and thought about the fact that those high school classmates who had pursued business courses were making $35 a week compared with his $11 paycheck.58

He got work as a carpenter and took courses at Pratt Institute in Brooklyn in engineering, estimating, and other construction-related subjects. “I learned how to frame walls more efficiently than other people, how to read a blueprint more accurately and faster,” he said years later. “They weren’t huge skills, but they gave me an edge. It meant I could offer something different, something the others couldn’t offer.”59 He learned his craft well. Within two years of his graduation he had built his first house, a simple one-family home in Woodhaven, and then two more in Queens Village.

The financial end of the operation was more problematic. Because he was still under twenty-one, his mother incorporated the business, known as E. Trump & Son, and signed checks.60 A more difficult hurdle was inadequate sources of credit. Even before the Depression, small-scale builders like Fred Trump had little access to what are known as “construction loans”—essentially the temporary bank loans used to cover architect fees, materials, and other construction costs.I The only place they could borrow money was from moneylenders who crowded the sidewalks across from Brooklyn’s Borough Hall year-round, rain or shine. Known as “the Court Street boys,” they had deep pockets and offered financing on a handshake. Their customers included the major developers of the day, whose office buildings lined Court Street and were beginning to fill lower Manhattan. But the interest rates charged by the Court Street boys went well into the double digits, far more than Fred Trump could pay.

Instead he contrived his own financing. He began one house, sold it before he had finished it, then used the money to get a second one going while finishing the first, constantly stretching funds to cover the costs that just as constantly threatened to overtake his fledgling operation. He worked from dawn to dusk. He raced the payment clock. By 1926, three years out of high school, he had managed to put up nineteen more homes in Hollis, another Queens neighborhood.

Ceil Raufer was a new bride when she and her husband bought one of these houses from Fred Trump in July 1926 for $7,500. Their house was one in a row of seven detached frame dwellings he built on 199th Street. Obviously designed by the same hand, all had two stories plus an attic and a basement, a driveway to the side, and a garage in the back. Yet each had distinct details: three windows across the second-floor front, three little steps leading up to the front door, a dormer, an asymmetric bit of cornice, a decorative touch on a front porch.

“Fred Trump was too young to be at the closing, so his mother came,” Raufer recalled years later. She knew that her house was in the builder’s first development, but she had no qualms. Raufer knew the family, as her younger sister had been a classmate of John Trump’s in elementary and high school. More important, she was impressed by Fred Trump’s attentiveness to his customers. “He used to come around all the time and ask if I needed anything,” she said. “Once he connected something in the kitchen so I could turn on the hot water all the time. He always said, ‘Don’t tell the neighbors, but I’ll do it.’ ”61

All over Queens, groups of Fred Trump’s homes began to appear. With each cluster, the houses were a little larger and a little better designed. In part, this was because the Trumps learned firsthand of any shortcomings. After the mid-1920s the family became real estate gypsies, living in a succession of Fred’s own newly finished houses all over Queens. As Elizabeth Trump had planned, her daughter worked as a secretary, for an import-export firm. John worked at General Electric and, with some help from his brother, began studying architecture at Brooklyn Polytechnic Institute. But he soon found that working with his older brother was not easy. To Fred Trump, building was a business proposition that required selling each house as soon as possible, regardless of its state of completion, in order to get enough capital to start the next one. To John, building was an aesthetic act that meant finishing each house down to the final touches before putting it on the market. Over and over the older brother prevailed, and John became increasingly disenchanted. By the end of his freshman year he departed from his mother’s script and switched his major to engineering.

In June 1929 the younger Elizabeth Trump, then twenty-five years old, married William Walter, thirty-five, a tall, dark-haired bank trainee. His parents came from Germany, and his father, like Elizabeth’s, had been a barber. The newlyweds moved to another of Fred Trump’s Hollis homes, an expanded version of Ceil Raufer’s house with everything nicer, bigger, and better made. Fred Trump, just twenty-three, had already built scores of residences and had hundreds of satisfied customers. Now he was carving large building lots out of the undeveloped sections of Jamaica Estates, a rolling, wooded area near the Long Island border.62 Seeing an increase in demand for high-priced homes, he planned to build what he called “authentic architectural reproductions” of English manor and Georgian Colonial dwellings in stone, stucco, and brick. They would have up to five bedrooms and four bathrooms and sell for as much as $30,000.63

Frederick Trump’s sisters, Louise Trump Schuster and Katherine Trump Schuster, remained oriented to Manhattan. Both were widows, and their lives revolved around the Glad Tidings Tabernacle, a modest Pentecostal church in the Hell’s Kitchen neighborhood of “the City.” Geographically the parish was only a borough away from the Queens Trumps. But sociologically and economically, Glad Tidings, with its butchers and bakers, its mail carriers and store clerks, was light-years removed from the bankers and lawyers who came to live in Jamaica Estates.

But the Trumps did stay in touch. Louise and Katherine and their families came to dinner now and then, occasions Katherine’s grandchildren remembered fondly years later because of Tante Elizabeth’s excellent cooking and, especially, her apple torte. In the summer there were family outings to North Beach, to the fairgrounds and dance pavilions, later replaced by LaGuardia Airport, where German oompah music still rang out. Frederick Trump’s children never met his mother, Katherina Kober, who died in Kallstadt in November 1922 at the age of eighty-six, shortly before Fred’s graduation from high school. But they accompanied their own mother on a trip to Germany in 1929, just before the Depression made such journeys an impossible luxury.

That October, the stock market crashed, signaling the end of good times. Fred Trump kept putting up mock Tudor mansions, but the real estate market was drying up. The inflationary 1920s had been forgiving times, particularly in real estate; eager to clinch deals, banks had been willing to embrace chancy ventures because any cost overruns could be recouped in a seemingly ever-expanding economy. In the deflationary 1930s, though, banks became allergic to even modest risk taking. Almost no one could obtain capital. Abandoning residential real estate, Trump opened a food market in Queens. He modeled it on King Kullen, a new store a mile away. Unlike the old German-style markets, where customers handed a shopping list to a clerk and waited for it to be assembled, here they could walk around and select cans from the shelves and precut meat from a refrigerator refrigerator case.64 It was one of the first modern supermarkets in the city.

To attract customers, the erstwhile builder placed ads for Trump Market in local papers and published his own broadsheet advertising special bargains. But when his staff told him they could arrange his store better than that of his competitor, he told them not to bother. “I don’t want to do it better than King Kullen,” he said. “I just want to do it just as well.”

What could have been a new career was only a stopgap for Fred Trump. He wanted to build, not manage.65 It was the only time in his life that he did not put his utmost into what he was doing. His heart was in real estate, not refrigerator cases. The whole time he was running the supermarket, he kept looking for a way to return to his first love. With some energetic maneuvering amid the ruins of the House of Lehrenkrauss, perhaps he would be able to leave the grocery store behind.

• I. Upon completion of a project, such loans, usually from commercial banks that lend on a short-term basis and at a relatively high interest rate, are replaced by “permanent loans” from insurance companies, pension funds, or other institutions able to place money at a lower rate and for longer periods. At that time, banks loaned at most about two-thirds of construction costs, forcing even well-established builders to seek preliminary financing outside formal channels.

[...] CHAPTER EIGHT [...]

CHAPTER NINE - WASHINGTON TO THE RESCUE

LIKE HIS FATHER, FRED TRUMP was determined to better his station in life by the fastest route possible. By the time Fred Trump came of age, however, the physical frontier where his father met his biggest success was gone. So the son found another wealth-providing frontier: government. As he soon discovered, this frontier had many virtues, chief among them that, in the mid-1930s, it was not disappearing but growing. Greatly expanded by a host of New Deal programs, government offered rich opportunities to those, including Fred Trump, who proved particularly adept at figuring out how to use these programs to their own maximum advantage. This was not illegal or even particularly sneaky. Indeed, Fred Trump did exactly what the government hoped all the Fred Trumps in the land would do. And in so doing, he joined the ranks of entrepreneurs who constitute one of the oldest fraternities in the Republic: multimillionaires who owe their fortunes to subsidies from a grateful government.

Although he did not know it at the time, he set out on this new road shortly after nine o’clock on the morning of Tuesday, March 27, 1934, when the Brooklyn Federal Court approved his purchase of the Lehrenkrauss mortgage-servicing business. Although he would be managing a fraction of the mortgages once held by Lehrenkrauss, the fee—one-half of 1 percent of all monies collected on what remained—would allow him to leave the supermarket business.1 Even better, he would have an inside line on properties about to be foreclosed and available on the cheap at court auctions. With this one favorable nod, the court had provided him with what he needed to relaunch his real estate career. It was an enormous plum, for he would be reentering the field with access to a steady cash flow, permitting him to escape the perpetual mad scramble of the small-scale builder. At last he would not need to race the clock, frantically trying to sell each new house in order to pay off construction debts left from the last one.

That was how Fred Trump got his second start. What allowed him to keep going after the Lehrenkrauss purchase was that in short order he would receive a second and even larger plum. While he had been scheming to obtain control of the one salvageable piece of the Lehrenkrauss wreckage, New Deal economists in the nation’s capital were setting about the task of resurrecting the Depression-racked home construction industry. In the process they created a set of circumstances—in effect, a new frontier—in which builders could make money. Almost as an aftereffect, housing would be built.

The one thing developers like Fred Trump couldn’t do on their own was to stimulate consumer demand. Even Fred Trump’s formidable energy could not produce home buyers in the middle of the Depression. As an individual entrepreneur, he did not have the power. But national policy makers did. The same home-building industry collapse that had dealt a blow to Fred Trump had been a disaster to the country. To government officials trying to revive a moribund economy, helping the construction industry back on its feet was a high priority. They wanted to put the blueprints and bricks back in Fred Trump’s hands as much as he did.

Accordingly, at the same time Fred Trump was maneuvering in federal court in Brooklyn, President Roosevelt’s inner circle was trying to figure out how to jump-start the home-building business. After months of feverish discussion and sometimes bitter negotiation, they created the Federal Housing Administration (FHA), and within the next year the entire industry underwent a drastic change. What had been a relatively low-key, local affair became a bustling, large-scale enterprise. In the process, those who could adapt to the changed political and regulatory landscape had an enormous competitive advantage. One of the most successful among them would be Fred Trump. Over the next two decades he would use the FHA to provide homes, to enrich himself, and to help create a new quasi-suburban way of life in the outer boroughs.

***

By early 1934 there was no argument about the enormity of the nation’s financial crisis. From 1929 to 1933 income had fallen by 36 percent, which meant that, accounting for fluctuations in the value of the dollar, per-capita income was almost as low as it had been in the depression year of 1908. One out of every four workers in the nation was unemployed.2

The whole U.S. economy seemed in near free fall, but real estate was especially badly hit. Almost one-third of the jobless—the largest single category—were in the building trades.3 New housing starts, which had hit an all-time high of 937,000 units in 1925, plunged to 93,000 in 1933.4 One out of ten home mortgages in the United States was in default, and many more were in serious trouble.5

Meanwhile banks, the source of the capital needed for mortgages and new construction, were failing at an unprecedented rate. Those that stayed open were continuing to hemorrhage from withdrawals of cash by insecure American depositors and withdrawals of gold by jittery foreigners.6 By March 1933, on the eve of Roosevelt’s inauguration, the banking system was in such chaos that about half the states had declared bank “holidays,” the popular euphemism for official permission to keep the doors shut. Three days later the new president declared an unprecedented national bank holiday. In fact, it was more like a bank spring vacation, as it lasted more than a week. This hiatus provided breathing space and time for Congress to crank out emergency banking legislation, but it did not cure the country’s financial ills. Of the 17,800 commercial banks in the United States, more than 5,000 delayed reopening, and of these over 2,000 closed permanently.7

Everywhere the nation’s bankers were trying desperately to keep their institutions afloat. But out in Utah one of their number went further. Scrambling to keep his own establishment open, Marriner Eccles unexpectedly began formulating questions about the nation’s financial underpinnings that would shock his colleagues, intrigue the president, and have a profound effect on Fred Trump’s future. From the outside he seemed an unlikely innovator; the thirteenth of twenty-two children born to a practicing polygamist, he was a devout Mormon, a high school dropout, and a conservative Republican. A successful man who managed a number of family businesses, Eccles had never doubted the conventional economic wisdom that enough budget cutbacks would cure even the worst economic ills.

Then, one day in the early 1930s, he faced a run on his own Ogden bank. On the day it was expected, he opened every window and coached tellers to look up every signature card, use small bills, and count slowly. When three o’clock approached and people were still in line, Eccles stood on top of a black-and-gold marble counter and announced that the bank would not close that evening as long as anyone desired service. The next day he reversed orders. The bank opened two hours early, and clerks ignored signature cards and made fast dispersals with big bills. No lines formed, and a business-as-usual atmosphere prevailed. “That was the end of that run,” Eccles wrote later. “I thanked God for the nerves I inherited from my father and mother.”8

Although his tightly scripted series of moves had saved his own bank, he began to question the traditional notion that continuous belt-tightening would eventually bring the economy around. Rather than helping, he said later, this policy seemed to be “throwing a double loop around the throat of an economy already gasping for breath.” Departing ever further from his past assumptions, Eccles declared that government should not be considered in the same light as a business or a family. The latter needed to balance their books or they would go bankrupt, but the government had the unique power to issue money, levy taxes, and in general change the rules of the game.

In fact, Eccles asserted, the government’s job wasn’t to balance the budget, but rather to put people and money to work. From there it was only a short leap to the distinctly heretical notion that getting the economy moving again meant accepting, and even embracing, an unbalanced budget, at least for the short term. At the same time, Eccles remained firmly on the side of private enterprise and a limited role for government. He wanted to get the country moving again by strengthening the private sector and using its resources, not by having the government sweep in and pick up the tab.

In February 1933, as Fred Trump was arranging supermarket shelves in Queens, Eccles attended an economic conference sponsored by the Senate Finance Committee. One after another, leaders of industry, finance, and labor reiterated that the best medicine for the economy was no medicine other than occasional relief for creditors and investors. When the man Fortune would later describe as a prophet spoke up and suggested a deliberately unbalanced budget, his audience was startled. Then he went on to speak of relief not for creditors, but for debtors—that is, the unemployed, laborers, and farmers. By the time he got to minimum wage laws and higher income and inheritance taxes, his listeners were thoroughly alarmed.9

Unrepentant, Eccles headed to New York to meet an economics professor at Columbia University named Rexford Guy Tugwell. The circumstances did not bode well. Tugwell was late because he had been sitting in a dentist’s chair. Obviously feeling guilty, he asked Eccles to share a lunch of sandwiches at a drugstore booth. Tugwell, his jaw throbbing, popped pain pills, listened as the renegade western banker outlined his unorthodox proposals, and then sent him on his way without comment. Unbeknownst to Eccles, the prominent English economist John Maynard Keynes had already advanced similar ideas, and Tugwell was receptive to them. But Eccles knew nothing of this until nine months later, when Tugwell, then serving as assistant secretary of agriculture, abruptly summoned him to Washington.

For three exhausting days Tugwell trotted Eccles around to meet other top Roosevelt administration officials, including Secretary of Agriculture Henry Wallace and Secretary of the Interior Harold Ickes. Because of what Eccles later called “my bizarre status as a reputed millionaire banker and industrialist who preached the gospel [of planned government deficits],” they were willing to listen to him.10 To Eccles’s dismay, they were not willing to implement his ideas immediately. But they did want him on board. After he returned to Utah he received an invitation to become a special assistant to Treasury Secretary Henry Morgenthau Jr., and in early 1934 he reported for duty.

In the meantime, a working group known as the National Emergency Council met in the Oval Office with the president to dismantle the Civil Works Administration, a public works effort whose price tag was frightening the old-line budget balancers. When Roosevelt was asked for more money, he threw up his hands in horror and asked with dismay if there was any way to get the government out of the whole lending and relief business. “Sure,” one of the men gathered around the president’s desk piped up. “A housing program.” And thus began what was to become the Federal Housing Administration, provider of homes for American families and fortunes for American entrepreneurs.11

In March of 1934 a national housing task force got to work. Like everything else in Washington, the guest list was heavily WASP. “It was all Jimmy Stewart in those days,” said one New Deal veteran afterward.12 The group included Secretary of Agriculture Wallace, Secretary of Labor Frances Perkins, railroad magnate and Democratic Party bigwig W. Averell Harriman, and Rexford Tugwell. Less well-known was the group’s economist, Winfield Riefler, a statistician who had come to the Federal Reserve after working as a commercial banker in Baltimore.13 Colleagues had already singled out Riefler, a tall, skinny blond, as the ablest economist in the entire Fed. He proved it immediately by hiking over to the Treasury and asking Eccles about housing. For the rest of the day and well into the evening, they dissected the nation’s financial paralysis. In the process, each found in the other someone willing to question economic shibboleths and to consider unconventional solutions.

When the two men finished talking, Eccles had signed up for the task force. But when he attended a meeting, he was dismayed to find what he called “social service worker” thinking, in which “housing” meant public housing, financed and owned by the government. When he pointed out that the group’s members were long on enthusiasm but short on actual know-how for producing real homes for real people, he became head of yet another subcommittee to get the job done.

Together Eccles and Riefler planned what would become the Federal Housing Administration. Among other distinguishing features, the FHA would bear no resemblance to the federal government’s only previous such effort, the thirty thousand housing units built for shipyard workers and their families during World War I and sold off at war’s end.14 Convinced that government-built housing could not generate enough financial activity to make the economy hum again, Eccles wanted private banks to pony up funds for private construction. Riefler, who had experimented with the idea of mortgage insurance back in Baltimore, suggested the extraordinary notion of having the federal government insure private banks against losses when making loans to home buyers. As Roosevelt had requested, the government itself would thus be out of the lending business. It would not actually lend or give away a dime. Instead it would act as a guarantor of last resort, promising banks they would no longer have to assume all the risk. Bankers could then turn on the fiscal spigots, and construction could resume.

On June 27, 1934, the Seventy-third Congress of the United States passed the Eccles-Riefler plan in the form of the National Housing Act. Title I, the smallest and most quickly operational section, insured bank loans of up to $2,000 for home and office modernization. Within months these loans, which did not require collateral, put nearly $1 billion into the spending stream.15

Title II changed forever the way houses were built and financed in America. Fearing losses, banks had traditionally avoided giving mortgages for more than half of the appraised value of a home. Because most buyers did not have the cash for the other half of the purchase price or for the extortionate interest rates charged by those building and loan associations that provided bigger loans, they had to take out second and third mortgages. Worse, these loans were generally short-term, usually for no more than five years, and payments covered only the interest. When the loan was up, the borrower would hand over a whopping “balloon payment” on the principal and get the loan renewed. Even in the best of times many homeowners remained stuck in an endless cycle of overlapping mortgages, never able to finish paying off their homes.

Title II changed this practice completely. Banks could lend as much as 80 percent of the value of a home and lot, up to a maximum of $12,800, a generous sum at a time when half that amount would provide solid middle-class comfort. Moreover, there was a ban on balloon payments. The interest rate could not be higher than 5 percent, and the loan was both long-term and amortized—that is, payments applied to both interest and principal.16

If banks agreed to follow such radically different rules, the government would insure the loans. For this service, the buyer would pay an extra one-half of 1 percent of the unpaid balance of the loan. The premium or insurance fee would cover FHA administrative costs and also provide a pool to cover any defaults. The same terms would apply to rental housing, but until after World War II the FHA covered mainly single-family homes.

In less than three months Eccles and Riefler had come up with an entirely new approach to home building, figured out the administrative framework, made provisions for financing, and seen the final product through Congress. Now it was the official law of the land. But they were still short people who knew how to build houses.

***

In early May of 1934 a thirty-six-year-old architect named Miles Lanier Colean was hurtling toward the nation’s capital in the backseat of an old jalopy. By virtue of the fact that he and several unemployed colleagues were willing to cover the cost of the gas, they were the official delegation from the Chicago chapter to the national convention of the American Institute of Architects. Colean, a lanky man with thick black hair and an architecture degree from Columbia University, was so broke that even his share of the expenses was a budget buster. The trip was a wild, desperate gamble that something would turn up.17

Upon arriving in D.C., the travelers crashed a party at a hot nightclub called the Troika. Because the host was Wisconsin’s Robert La Follette, who had inherited his name, his liberalism, and his Senate seat from his late father, the guest list was full of young New Dealers. Colean managed to snag an invitation to the next housing task force meeting and soon was on staff. As a student Colean had looked at grand projects, not middle-class housing, and he had later worked on some of the most spectacular examples of overbuilding, including the Palmer House and the Stevens Hotel (later the Conrad Hilton) in Chicago. But unlike most of his colleagues, he had at least thought about large-scale housing development, which he had begun to explore as the building industry of the 1920s shuddered to a dead halt.18

By the fall of 1934 the FHA had perhaps a hundred employees, scattered in empty government offices around downtown Washington. Many were in an upper floor of the spanking new post office building, a neoclassical columned behemoth at Pennsylvania Avenue and 12th Street. Decorated with elaborate sculptural programs, dozens of murals, mahogany wall panels, and cut-glass chandeliers, it was part of a complex known as the Federal Triangle. Originally planned by the Hoover administration as a central location for government employees, it was now crammed with New Deal agencies.19

Surrounded by near imperial splendor, Colean and others on the FHA staff labored all day and half the night, six and sometimes seven days a week, to come up with design and financing guidelines for modest single-family homes all across America. A standard joke around the office was to ask whether there was a doctor in the house—a ridiculous remark because the core staff was composed largely of Ph.D.’s unable to find academic employment.

Once a week they trooped over to the University Club, a few blocks away, and over lunch they filled each other in on what they’d accomplished over the past seven days. To save time they ordered in advance, skipped dessert, and brought along a secretary who entered the men’s club by a separate door and took notes on their discussions.20 On Sunday nights the planners gathered again at the home of Fred Babcock, an insurance underwriter and Republican from Chicago. Exhausted from work and homesick, the men who were going to put the building industry back on its feet relaxed over a home-cooked meal and listened to Babcock, a portly fellow who was blind in one eye, play violin and piano trios with his children.21

Early Monday morning they started right back in again arguing and negotiating over how to go from half a dozen pages of legislation to concrete procedures that would attract loans and prevent cheating. The one thing they all agreed on was the need for rules that were, in the words of one participant, like a good farm fence—“pig tight and bull high.”22

One major departure was to focus not only on the builder’s ability to command a loan, but also on what was being built. For the first time, there was an emphasis on land planning rather than simply adopting a standard gridiron plan. There was also research on which designs had the best track record. They collected data showing that small, well-planned, well-built houses that adhered to simple standards, like making the bathroom accessible without having to pass through a bedroom, held value better than large, elaborate homes that became white elephants in a slump.23 Market studies on the number and cost of houses in different parts of the country were another innovation. Ernest Fisher, a bespectacled older economist from the University of Michigan, sent researchers to Charleston, West Virginia, to ring every doorbell—including those in the large red-light district—and ask questions.24

Fred Babcock pioneered another important change. Every day he came in, carefully removed his jacket, rolled up the sleeves of his white shirt, and worked on the first nationwide standards for real estate appraisal. In part, this meant figuring out how to assess the creditworthiness of the borrower. Determined to avoid the stranglehold of loans made for unrealistically short time periods, Babcock devised a system of level payments that stretched out over a number of years and covered both interest and principal. To figure out if a mortgage had an acceptable level of risk, a lender could check whether the prospective buyer made enough money to cover the monthly payment—now a routine procedure, but novel at the time. Using this approach, borrowers could feel secure that by paying the same amount each month for a set number of years, they would eventually own their homes, and lenders could feel assured that monthly payments would arrive and they would not have to resort to foreclosure.25

Babcock and Colean also worked on methods to assess the real estate itself. Colean made sure there was an architectural examiner in each local FHA office, hardly a problem in the depths of the Depression. “I became known as the relief agency for the architectural profession,” Colean said later.26 Because many areas lacked building codes, the FHA put together its own minimal standards for key elements like indoor plumbing, fire protection, sewage disposal, lot size, and subdivision planning. In doing so, it was essentially providing the first nationwide structural standards.27

Colean and Babcock’s chief concern was for the economic soundness of FHA-insured mortgages, not for those who would actually be buying the houses. Indeed, they and their colleagues regarded the FHA not as a do-good government agency, but as an independent, professional insurance program, run on sound businesslike principles. Real estate refugees who had fallen on hard times made up much of the staff, and they understood their clients to be other members of the same real estate fraternity—that is, builders, mortgage bankers, and insurance brokers. Hardly surprising, the culture that developed within this new agency was oriented toward business interests rather than toward consumers or social reform. Thus, for example, the FHA had firm guidelines on what was called “neighborhood homogeneity,” based on the premium Babcock’s risk appraisal system placed on communities whose families had similar economic, religious, ethnic, and racial backgrounds. In practice this meant that the FHA went along with the restrictive covenants against Jews, Armenians, and other minorities that were common in that era. Its underwriting manuals also strongly discouraged “inharmonious uses of housing,” a code phrase for selling homes in white areas to blacks.28

Wary of the FHA’s unconventional approach and unconvinced by the businesslike nature of the enterprise, the large insurance companies continued to hold back. It was an enormous problem, for they alone had the resources to lend on a nationwide basis. “The FHA was still a brand-new outfit, with people bumbling around trying to figure out what to do,” recalled Philip Brownstein, an FHA staffer and later agency head. “Here you had this crazy Roosevelt determined to bankrupt the entire country—most people thought this program was just too risky.”29

Then Stewart McDonald, a car manufacturer who had at one time been police commissioner of St. Louis, took charge. A big, fat man, he considered himself, probably correctly, to be tougher and richer than most of his critics. “This job wouldn’t keep me in cigarettes, if I smoked cigarettes,” he once told a hostile congressional committee.30 Appointed FHA administrator on September 5, 1935, he quickly dispatched junior underwriters to beat the bushes for prospective FHA customers. At community centers and schools, churches and civic groups, the staffers touted what the FHA had to offer. When they couldn’t find a meeting to address, they called one themselves.31 Gradually smaller insurance companies jumped in and started making money. Soon major league outfits in New York City were wading in as well.32 By 1939, five years after Win Riefler went over to the Treasury and talked to Marriner Eccles, the agency that came from their efforts was insuring about one-quarter of all new homes in the country. In 1935, the FHA’s first full year of operation, it insured only about twenty-three thousand home mortgages; in 1941, it was covering over two hundred thousand loans.33

In turn, mortgage banking changed from a strictly local form of investment to a nationwide industry. Mortgage bankers could handle FHA-insured loans at the local level, then sell the mortgages on the so-called secondary market to large national institutions like insurance companies and big northeastern banks. Because of FHA standards as to the quality of construction and the terms of financing, FHA-insured mortgages were now marketable commodities all over the country. For the first time, capital in large financial centers could flow out to local banks and home buyers in distant locations.34

One of the busiest locations for FHA-insured mortgages would be New York City, and one of the most active builders there would be Fred Trump. Working in Brooklyn and using FHA-insured mortgages, he produced two thousand single-family homes between 1935 and 1942. Well designed and well built, these dwellings became known as Trump homes. As the public grew to know the name as a symbol of quality, within real estate and financial circles it was becoming known for shrewd business practices and entrepreneurial skill.

CHAPTER TEN HOME BUILDING’S HENRY FORD

TUCKED DEEP INTO THE RECESSES of page thirty-six, The New York Times on August 12, 1936, carried a brief story, just three paragraphs long, that laconically described the most important event of Fred Trump’s life.1 At eleven o’clock the day before, Thomas G. Grace, New York State Federal Housing Administration director, had officially inaugurated the Trump Holding Company’s new development in a section of central Brooklyn known as East Flatbush. Standing before more than one hundred invited guests, the FHA director waved his arm at an immaculate one-story model house and declared the first forty-eight homes open. Then he presented Fred Trump and his new partner, Charles A. O’Malley, with a plaque commemorating FHA approval of their 450-home project.

In the audience that hot, muggy day was Fred Trump’s wife, Mary Anne, a twenty-four-year-old with brown hair and bright blue eyes.2 Born Mary Anne Macleod and the youngest of ten children, she had emigrated six years earlier from Stornoway, an island in Scotland’s Outer Hebrides known for herring, sheep, and Harris tweed. Scot Gaelic was her first language, and when she arrived in New York, on the day after her eighteenth birthday, she spoke English with a heavy burr. Unskilled and unemployed, she lived with her married sister in Astoria, Queens. One night she went with her sister to a party and met a blond man with a mustache who was half a dozen years her senior. His name was Fred Trump, and when he went home that night he told his mother he’d just met the woman he was going to marry.

Mary Anne was immediately attracted as well. On a visit to Scotland soon afterward, she told her parents she had met her future husband. They married in 1936 on the second Saturday in January, celebrated at the Carlyle Hotel, and went to Atlantic City for their honeymoon. Characteristically, Fred Trump was too busy to take more than the weekend off. On Monday he was back at work, and Mary Anne had become a housewife. Now it was eight months later, and she was four weeks pregnant with her first child. Smiling graciously despite the August heat, she greeted her husband’s friends and colleagues.

Also present at the dedication was Elizabeth Christ Trump. Fifty-six years old, her blond hair turning gray, she was a well-dressed and imposing figure. Just before the bottom fell out of the building industry, she had returned to Germany to see her family and show off her children. Looking around at them today, she felt even more proud than before. By working hard, her older son had found his way back into real estate. Her daughter’s husband, Bill Walter, had become a successful banker, and they had produced two grandchildren, both boys. Her younger son, John, had a doctorate in electrical engineering, an appointment as an assistant professor at MIT, and a wife named Elora Gordon Sauerbrun. A church organist in Queens, she, too, was from a German background.

Fred Trump was happy to have his entire family in attendance. But the real proof of his success was the men who were there because they did business with him. Charles O’Malley, who had replaced William Demm as Trump’s partner, was sixty years old, exactly twice Trump’s age, and the official real estate appraiser for New York City. O’Malley brought big-league credibility and status to the partnership, for he had appraised $2 billion worth of property, including the remains of the House of Lehrenkrauss.3 Bill Hyman, the real estate lawyer Trump had met during the Lehrenkrauss hearings and subsequently retained, was also there. Other guests included the district director and main underwriter for the FHA’s Brooklyn office.

The biggest coup was the personal appearance of Tommy Grace. A lawyer from Bay Ridge, near Coney Island, Grace, thirty-eight years old, had received an appointment as the first state FHA director the previous year. A decorated war veteran, law professor, and, despite his diminutive stature, former football coach, he had rung doorbells, tallied support, and pulled out the vote on election day. As recognition for his unstinting effort, the local Democratic machine had pushed for his ascension to the FHA.4

As with the awarding of the Lehrenkrauss mortgage-servicing business, politics and, especially, the Madison Club played a major role in the history of the new development in East Flatbush. “Freddy,” as Trump was called by Madison pals, never missed a political event, willingly shelled out for every dinner and benefit, and occasionally paid a personal visit to the three-story brownstone that served as club headquarters. Downstairs was a big meeting room full of folding chairs and a lounge with old leather-covered seats; upstairs, in a warren of tiny offices, club officials worked the phones and the mimeograph machines. Out on the surrounding streets, ambitious young club members like Abraham Beame, a high school accounting teacher and later mayor of New York, spent their evenings dropping in on registered voters to see what could be done to keep them in the Democratic fold.5

Through these political contacts, Trump had explored the status of a large vacant tract on the southern edge of Madison Club territory. A stretch of old swampland, it was in East Flatbush and had been the dumping ground for dirt excavated during the construction of the Nostrand Avenue subway. Each year the Ringling Brothers circus camped there for a few weeks after its run at Madison Square Garden. The rest of the time local residents used the area for truck gardens and ball fields—soccer in the fall and baseball every spring.

Working out of one of the unsold houses he had built in Jamaica Estates, a sizable mock Tudor stucco affair on Devonshire Road, Fred Trump had learned all he could about two things: the new FHA mortgage insurance program and the Flatbush site. Over the months he tracked down individual properties that were either in foreclosure or about to be, including some from the Lehrenkrauss connection. In the past, he had built on a relatively small number of lots at any one time, sometimes only a single parcel. But with the FHA behind him, he was able to get loans based on the soundness of his plans rather than the size of his bank account. As a result, for the first time he could put together whole packages of adjacent lots.

Finding out exactly who owned what was a complicated business, and more than once Bill Hyman had to trace titles back to the original Dutch land grants. It was also a delicate business, for if owners found out that they had the last few parcels within a larger area, they could hold out for higher prices. But creating such packages was a business Hyman was good at. Poring diligently over dusty records and then standing unobtrusively at the back of city auctions, he was able to buy up tax liens, many on old farmland on which owners had stopped paying taxes long ago. To avoid detection, he used pseudonyms, stand-ins at auctions, even dummy subsidiary corporations.6 He would do whatever it took. “Whenever you went to a closing with your dad,” Fred Trump later told Hyman’s son David, “the deal always closed.”7

Once Trump had secured the East Flatbush tract, he hired an architect and put him to work with a set of the FHA guidelines produced by Miles Colean. They spelled out official requirements, such as the inside bathroom reachable without going through a bedroom; elsewhere Trump learned about the unofficial requirements, like a brick exterior. Plans in hand, he then went to Tommy Grace. For the initial development of 450 houses, Grace approved $750,000 in mortgage insurance, making Fred Trump one of the first New York builders to get such an FHA commitment. He could then proceed to a commercial bank such as Dime Savings, with which he had established a close relationship, and get the money he needed to go into high gear.8

By mid-1936 Fred Trump had four hundred workers digging out the foundations for houses that would be priced from $3,000 up to $6,250. Unlike many other builders, he did not hire someone else to oversee his jobs. Instead he acted as his own general contractor, reporting to the job site every morning at seven-thirty and watching his crews frame the houses one by one. Within crews, which were all white and a hodgepodge of nationalities, specific craft was usually a matter of ethnic origin. Thus, for example, Swedes were woodworkers and Italians were plasterers. But Fred Trump, who had constructed whole houses by himself, knew how to do every job. Whenever he spotted something being done badly, he stepped in and showed how to do it better and faster.9

To get maximum value out of the land, he built attached row houses with common walls. He avoided corner lots because they were expensive; fortunately East Flatbush blocks were so long that there was room for dozens of row homes to stack up in the midblock sections. Every weekend eager buyers crowded his sales office. Within months he had expanded to similar projects in other Flatbush neighborhoods, again using FHA mortgage commitments to obtain construction loans from banks. To speed up the work, he installed floodlights and hired a second shift of workers to put up houses, lay sidewalks, and pave streets.10

By the time he opened his first section of houses, in August 1936, he was looking into doing more projects nearby. Soon long rows of what became known as “Trump homes” dotted central Brooklyn. Built of dark red brick, they had a distinctive, recognizable look: a beach-towel-size swatch of front lawn, three front steps, and a tiny porch. At the same time, each house was slightly different from those of its neighbors. Faux gables and peaks ornamented the roofline, but not in a uniform fashion. Rusticated stone surrounded a window here and a door there, and minichimneys sat on top of some houses but not others. Every so often one or two homes sat a few feet closer to the street, breaking up the solid line of house fronts. The brick balustrades in front of the porches had a variety of patterns, including stylized key slots or crosses that created long stretches of large capital T’s, prefiguring his son’s constant use of both initial and name.

Inside the houses there was a similar attention to detail. The front door did not open directly into the living room, but into a minuscule foyer with a coat closet that had a mirror inside the door. Between the small living room and the smaller dining room was a rounded archway rather than the standard squared-off opening. Instead of using linoleum, Trump laid down hardwood parquet floors, and around the kitchen sink was ornamental tilework. The plumbing fixtures used high-quality copper pipes, and in some houses the stairs came carpeted.11

Sitting beneath each house was the emblem of the twentieth century, a garage. Entered by a steep ramp from the street, it had heat in the winter and its door was wonderfully visible year-round. The garage was a source of pride for Fred Trump’s customers, even though most could not afford a car and did not know how to drive. Indeed, one of the big draws of Fred Trump’s first development was its proximity to the Nostrand Avenue subway and the Utica Avenue bus. Nevertheless, said Marian Kelley, who in 1936 bought the second home Fred Trump built in East Flatbush, the garages meant that these houses “were the big thing—the modern home.”12

The garage was hardly the only up-to-date touch. Instead of old-fashioned dormer windows, the houses had casements with small glass panes. In the bathroom the tub was framed with chrome, and there was a hand-painted landscape on the wall instead of the usual wallpaper. Some houses had stall showers, a novelty at the time; others had living rooms with shallow false fireplaces and electric logs that lit up when plugged into an outlet. The basements were not rough storage areas, but finished “recreation rooms” that could be rented out to help pay off the mortgage. Many had a bar with a mirror and a little foot rail in front. “Back then,” said homeowner Kelley, “that was real class.”

This classiness, which came from Fred Trump’s sense of craft, was his new competitive edge. The FHA had launched several builders in Brooklyn, and the most direct competition came from two brothers named Match. “We’d have a front porch, and the Matches would put in a front porch,” Fred Trump later told one interviewer. “We’d have a back porch, they’d have a back porch. Toilet upstairs, toilet downstairs. In the beginning, our houses sold for $2,990, $300 down, but they were always quality. . . . Do you know what I mean?”13

The people who lived in Trump homes were the middle of the middle class, or “middle-middle” as one former resident described her neighbors. Mostly young married couples with kids, they included teachers, lawyers, doctors, dentists, middle managers, small-business owners, accountants, a funeral director, and lots of housewives. The center of social life was the porches. All day long kids climbed over, under, and across them. At dusk their parents and, in some cases, grandparents sat there and talked as the kids threw and kicked balls against stoops and up and down the sidewalk and street. “Moving there was a nice step up,” said novelist Lynne Sharon Schwartz. “My parents would say proudly, ‘We live in a Trump home.’ ”14

As he had done earlier in Queens, Fred Trump periodically returned to the neighborhoods he had built, checking on how the houses were holding up. Dressed in a coat and tie, he would drive around the streets in a late-model car—at one time a red convertible, later a black Cadillac—and talk with his customers. When he visited Marian Kelley, he would chat with her husband, a store manager for A&P, about the supermarket business. Two years after they purchased the house, he helped them switch to gas heat, which was cleaner than the coal they had been using. “We were young, and we knew nothing about purchasing a house,” she said. “He was so pleasant and reliable—it meant a lot to us.”15

***

Within a year after that August day when Fred Trump opened his first Flatbush home, the country was once again in a recession.16 The rosy picture at the end of 1936—270,000 new homes that year, and predictions of another 400,000 to 450,000 in the year to come—turned dark only a few months into 1937. By April it looked as though the country would be lucky to stay at 1936 levels. A worried Marriner Eccles lobbied the president to do something, and they both began looking to the FHA to get the economy moving again. Coming back from a White House meeting, FHA administrator Stewart McDonald relayed to his staff their marching orders: “Tell the old girl to paint her face, pull up her skirts, and get out on the stage.”

Early in 1938 Congress passed liberalized FHA regulations. Borrowers could have up to twenty-five years to pay back mortgage loans, which could cover up to 90 percent of the purchase price for homes costing $6,000 or less. Such changes had a salutary effect, but they worried agency staffers. The FHA had barely gotten started, and this was an enormous new burden. The FHA’s original purpose was to stimulate construction by helping bank activity reach normal levels. Now the agency was supposed to rev up the entire economy.17

Fred Trump had no such qualms. Despite his optimistic comments to the press, he had taken a hit during the economic downturn. Now, though, with changed FHA regulations, he was back in business. In March 1938 he joined other builders to form the Brooklyn Home Builders Association, a trade group intended to promote FHA-insured mortgages. Immediately the FHA committed $1 million in mortgage loans for another cluster of Trump homes in Flatbush.18

That July Fred Trump made his five hundredth sale in Brooklyn, and the Eagle hailed him as “the Henry Ford of the home-building industry.”19 It was an apt description. Although he was in an industry long dominated by small operators working off the back of an envelope and still worked that way himself, he belonged to the new breed of producers who were putting together their own version of mass production. He built in multiple units, which allowed economies of scale such as ordering bricks by the carload and equipment in large enough shipments to earn discounts. Similarly, he bought lumber in bulk quantities and cut it to size in his own lumberyard, paid in cash to lower costs, and staggered construction to keep crews busy year-round.

By 1938, Fred Trump reported proudly, these methods had lowered his costs from twenty-nine to twenty-five cents a cubic foot.20 By keeping costs down and taking advantage of the new FHA regulations, he was able to produce good homes at such low prices that people were literally jamming the streets to buy his projects—or so he bragged to the New York Evening Post. Indeed, the builder claimed, there was such a commotion one day at his sales office that he had to call in the police to handle the mobs of eager buyers.21

In 1941 he was working on three hundred homes at once and took in $1 million in sales.22 Having run out of empty land in East Flatbush, he had moved his operation to Brighton Beach, on the other side of Brooklyn and one block from the Atlantic Ocean. There he unleashed tractors, derricks, steam shovels, and cement mixers on land that had once been a terminal on the Long Island Railroad.23 Working day and night, hundreds of bricklayers, carpenters, painters, and plumbers raced to meet tight deadlines. To keep up morale and productivity, he installed bathing lockers so workers could go swimming on their breaks,24 and to keep sales up, he promoted his homes constantly. Once he put on a public wedding ceremony for four couples and offered prizes for babies born in Trump homes; other ploys included a push to get “Own a Home” on license plates, a beachfront barge with Trump ads, and, at Coney Island, the release of balloons with coupons for $50 off on one of his $4,990 bungalows.25

Stories on every one of these initiatives appeared in the media, for Fred Trump had learned how convenient newspapers found short news releases for filling news holes. He generously provided item after item. Brief summaries of his sales reports, his market predictions, his “survey” of what had attracted buyers to his homes, and his opinions about everything from family values to national national defense went to local media, which often reprinted the pronouncements verbatim. In this way New York newspaper readers learned, among other things, that Fred Trump considered it a patriotic act to build one-family homes—but not apartments—for Americans26 and that in his opinion renters were mere drifters capable only of brief friendships. To be well-balanced, he declared, children needed to grow up in homes owned by their parents; luckily, his developments were especially child-friendly. Elsewhere he explained that in inflationary times, instead of postponing buying a home, people should snap one up right away as a hedge against further inflation.27 He did not limit his remarks to industry concerns; when Roosevelt overturned historical precedent and ran for a third presidential term, Fred Trump sent a letter of endorsement to home-builder organizations across the country.28

Within Brooklyn and Queens, Fred Trump had become a public figure. In June 1937, when a stooped and shabby Julius Lehrenkrauss emerged from Sing-Sing prison with $20 to his name, Fred Trump was a highly prosperous businessman. Only in his mid-thirties, he had already built more than two thousand houses and expected to erect thousands more. By 1943, when Lehrenkrauss died alone and impoverished, Trump had become a millionaire.29 Now a father, he would pass on this wealth and property to his children. He would also pass on to them something else equally valuable: what he had learned about the usefulness of the media.

***

Soon the gathering conflict in Europe would sweep up nearly everyone in the country, including Fred Trump. In January 1941, six months after the fall of France, the president established the Office of Production Management (OPM). Its mandate was to mobilize American industry for defense. Across the nation it impounded construction materials, and most private housing came to a dead halt. Fortunately for Fred Trump, the presence of the Brooklyn Navy Yard allowed the borough to qualify as a “defense housing area.” In order to provide homes for defense workers, Brooklyn builders could still obtain supplies and FHA mortgage insurance.30 In October 1941 the first OPM priority in New York for a major building operation went to Fred Trump for a new project in a section of Brooklyn called Bensonhurst. He had paid cash for a fifty-five-acre tract on which he proposed to build seven hundred houses, the biggest project so far for him and for the New York FHA office.31

Bensonhurst would also be his first project to fall behind schedule. After the bombing of Pearl Harbor in December 1941 and the American declaration of war, the OPM hurriedly withdrew Brooklyn’s priority, and local construction sputtered out. But Fred Trump was hardly in trouble. The government had asked him and other developers from the New York area to build defense housing at Norfolk, Virginia, the center of naval operations for the entire East Coast. To sweeten the invitation, Congress added a new provision to the National Housing Act, used to create the FHA back in 1934. Known as Section 608, it provided generous mortgage insurance for multifamily rental housing—apartment houses—for war workers, particularly when located near war plants.32 Fred Trump patriotically decided that the nation needed more apartment buildings.

His turnabout on the desirability of apartments rapidly followed his discovery that building them would let him be an owner, not just a builder. After he finished a development, he would not simply visit every now and then. He would collect rent every month, and he would have equity. Duty had called, and Fred Trump had answered with alacrity. Even before the enactment of Section 608, he was supervising five hundred construction workers at a new apartment complex. Called Oakdale Homes, it was located in what had been an old barroom and red-light district outside the Norfolk Naval Base and Naval Air Station in coastal Virginia.33

Norfolk, an ice-free, deepwater port at the south end of Chesapeake Bay, had long been an important center for shipping and shipbuilding. Over the years the city had expanded at a slow and stately pace, growing to about 140,000 inhabitants at the time of the 1940 U.S. census. But when Fred Trump arrived only two years later, the city had nearly doubled in size and was a boomtown bursting at the seams. During the frantic last-minute American defense buildup, the Pentagon had sent 30,000 men and women in uniform to Norfolk-area bases, and the city continued to swell with the arrival of more soldiers, sailors, shipyard workers, and their families. “There were so many servicepeople here, I hardly knew anybody who had a spare room who didn’t take people in,” recalled Carol Melton, a Norfolk grande dame who was a young housewife at the time. “You never drove anywhere without picking up sailors or servicepeople. I wore out the upholstery in my new car the first year.”34

Fred Trump was stunned. “Norfolk is like a beehive,” he told the New York Herald Tribune. There were long lines at stores, and it was standing room only at the movies every night. When it was his turn at a phone booth, getting a call through to New York could take hours. The housing shortage was so drastic that landlords resorted to “hot beds,” rooms rented to one tenant during the day and another at night. Local builders had responded with a sprinkling of new homes, but they couldn’t possibly meet the overwhelming need on their own. Nor did they want to. They had been stuck with empty housing after a big buildup during World War I, and they were wary of ending up in the same predicament once again.35

For Fred Trump and other outside builders coming to Norfolk, the overcrowding meant he was in the right place at the right time. “Rents are still soaring here,” he reported elatedly to the Herald Tribune. Newcomers were so desperate for housing, they weren’t waiting to see finished apartments. They lined up for the privilege of renting and signed leases based on blueprints. The previous weekend, Trump noted, forty naval officers showed up at his job site looking for places to live.36 Nearly half a century earlier Frederick Trump had found Seattle and the Yukon to be where the action was; now his son Fred was discovering the same thing in Norfolk.

Fred Trump’s partner in Norfolk was James Rosati, a former plastering contractor in Queens. After the Depression Rosati had switched to road construction and had supervised the relocation of dozens of homes that were in the path of the Van Wyck Expressway and Idlewild Airport (later renamed for John F. Kennedy). Watching as war fever mounted across the United States, Rosati headed for Norfolk just before Pearl Harbor and snapped up property near the naval base. When Fred Trump, who had met Rosati in New York, arrived soon afterward, the two builders from Queens teamed up to develop Rosati’s land.

Although they were both New York born and bred and only three years apart in age, they were an unlikely pair. The older of the two, Rosati was short and chubby with dark hair, dark eyes, and a big nose. A gregarious man, he was so outgoing that almost as soon as he arrived anywhere he knew everybody’s name. Trump, his blond hair turned light brown, was reserved, a ramrod-straight figure with little to say. When he did speak, though, people listened, for his voice was loud and commanding.37 “He was already wealthy, but he wasn’t flashy,” said Rosati’s son, James Jr., years later. “He never tried to impress anybody with his wealth. He didn’t seem to care if anybody had ever heard of him.”

Each man brought something important to the table. James Rosati had a talent for locating land in a new place, and Fred Trump had a track record of having successfully financed large developments through the FHA. Both were experienced at dealing with large projects and deadlines, something Norfolk builders had never before encountered. Both also knew the value of lining up local politicians, and they quickly made their way to the offices of key figures in Norfolk city government. “Nobody down there had ever seen the level of production and amount of work that went into the way things were done in New York,” said James Jr. “It really took outside people coming in to get things moving the way they had to move.”

Attorney Bill Hyman came south as well, and he and Fred Trump rented houses near the ocean at the resort community of Virginia Beach. Hyman brought his family, including two young sons who went to school at Virginia Beach, while Trump tried commuting back and forth to New York by train, plane, and, occasionally, his big black Cadillac.38 But driving nearly five hundred miles on preinterstate, two-lane roads took much too long, and getting priority for train and plane travel was too difficult. Eventually Mary Anne and the three children joined him.39 They were a handful: Maryanne, named after her mother, was five years old and ready for kindergarten, but Fred Jr. was only three, and Elizabeth, named after her paternal grandmother and born shortly after her father had begun building in Norfolk, was an infant.

Almost every day the children of the neighborhood played on the wide, white beach. But the most exciting activity was to watch as the navy practiced amphibious landings and sailors manned the machine-gun emplacements installed at the end of residential streets. “Thousands of sailors would be running up and down the beach,” David Hyman recalled years later. “Norfolk was a sea of white hats, wherever you went. My father would come home from work and his little Chevy coupe would be like a circus car, filled with sailors on their way to Virginia Beach and the amusement park.”40

As the children searched the skies for Messerschmitt planes, Fred Trump was silent about his own German background. Although he had spoken German when he had visited Kallstadt just before the Depression, in America only his parents’ generation spoke the language in public. He began to deny that he knew German and did not teach it to his children. Eventually he started telling people that he was of Swedish ancestry.41 Mindful of the growing prominence of Jews in the real estate industry and local politics, he became so active in Jewish philanthropies that people often assumed he belonged to that faith.42

While Fred Trump was building housing for American military families, his brother was also contributing to the war effort. John Trump, who led the MIT High Voltage Research Laboratory, had already made a name for himself through his work with Robert J. Van de Graaff on the first million-volt X-ray generator. Used for radiation therapy, this invention would prolong the lives of cancer patients around the world. During the war John Trump worked on microwave radiation and served as director of the British branch of the legendary MIT Radiation Lab. There he played a key role in the development of high-resolution radar, the same technology that would replace the citizen plane spotting so eagerly provided by the young Hymans and Trumps.43

***

Oakdale Homes, Fred Trump and James Rosati’s first project, was half a mile from the Norfolk navy base and consisted of 216 garden apartments. Seemingly overnight, block after block of trim two-story brick buildings with two complete three-room apartments on each floor began to appear amid vast muddy expanses that would someday be tidy swaths of green. It was Fred Trump’s biggest development yet, and one of the largest in eastern Virginia. It was also his baptism in multifamily rental housing.

Working with his partner, several secretaries, and a handful of superintendents in a small office on the outskirts of Norfolk, Fred Trump was in his element. “He knew more about construction even back then than most people,” James Rosati Jr. recalled later. “My father was an expert. He knew so much himself that most people came to him for advice, but he looked up to Fred Trump. Fred was one of the only people my father would listen to.” Years afterward Rosati Jr., still remembered his awe when he saw Fred Trump add up long columns of figures in his head.44 Trump also knew more about how to get what he needed than most people. When sudden shortages occurred, as they did frequently in everything from toilets to steel girders, he used his clout back home to get items like steel stairwells, fabricated in steelworking facilities in New York, rerouted to Norfolk.

Rosati was hardly the only one who found Fred Trump’s facility with numbers and details awesome. “He was like a computer,” said W. Taylor Johnson Jr., whose father handled Trump’s insurance in Norfolk. “He ran everyone else ragged. How he could keep all these facts and figures in his head was just unreal. Different locations, different trades, dealing with union people—he could just keep changing gears and still keep the conversation going. I almost never saw him refer to notes.”45 Co-owner as well as builder, Fred Trump monitored his buildings for waste day and night, turning out lights and getting up on a stepladder to remove any bulbs he deemed unnecessary.46

Norfolk would provide many New York builders with their first experience working on low-cost, high-volume housing. One Long Island builder, Bill Levitt, who had done only custom homes, found this new focus an intriguing novelty. As Fred Trump was building Oakdale Homes, Levitt was finishing off Oakdale Farms, a nearby development of 750 two- and three-bedroom houses. Little more than a roof and four walls, these bungalows were his first with carports, a money-saving garage substitute that would become a signature on future Levitt homes.47 “Our marching orders were to come up with the cheapest livable housing that could be done,” Levitt said many years later. “It gave us a whole new slant on life.” After the war, this experience would produce Levittown, an enormous Long Island suburban development that would become an important symbol of the postwar era.48

Fred Trump had already built enough low-cost, high-volume housing to be dubbed “Brooklyn’s outstanding builder” by the Brooklyn Eagle. But now he had a large, cheap labor force, little competition, and a drastically expanded market, and he was building even bigger, even faster, and even more inexpensively.49 Talbot Park was his second Norfolk project. Although it had only 496 units, the cost was $4 million, a new high,50 and the buildings, which housed from eight to twenty families, were the largest he had ever constructed.51 In a newspaper interview he heaped praise on the FHA’s liberal new provisions for mortgage insurance, which included advances during construction and no limit on rates of return for builders. “Red tape is cut to a minimum,” he said excitedly, “and costly delays are eliminated.”52

By 1944 Fred Trump had built 1,360 units, nearly 10 percent of all the wartime housing created in Norfolk.53 As long as there was a housing shortage, he declared, he would put up at least 2,000 units a year.54 Or maybe more. His goal, he told the Eagle, was “to achieve the same position in the field of building homes for war workers that Henry Kaiser now occupies in shipbuilding.”55 And Fred Trump was doing everything he could to accomplish it.