Diamond wrote this song about his second wife, Marcia Murphey, whom he married in 1969 (they divorced in 1995). He needed a three-syllable name to fit the melody, however, so "Sweet Marcia" didn't work. The name Caroline is one he had written down, and it fit the song perfectly, so that's what he used.
Neil Diamond is a great manipulator of the media, and has shifted his story about this song to fit the occasion. There was longtime speculation that the song is about Caroline Kennedy, the daughter of the American president John F. Kennedy. Diamond has since revealed that this Caroline gave him the idea for the name, but had nothing to do with the song's inspiration. In 2007, however, Diamond performed the song via satellite at Caroline Kennedy's 50th birthday party, and said that the song was about her. He told the Associated Press: "I've never discussed it with anybody before - intentionally. I thought maybe I would tell it to Caroline when I met her someday. I'm happy to have gotten it off my chest and to have expressed it to Caroline. I thought she might be embarrassed, but she seemed to be struck by it and really, really happy." Diamond added that he was a young, broke songwriter in the '60s when he saw a cute photo of Caroline Kennedy in a magazine. Said Diamond: "It was a picture of a little girl dressed to the nines in her riding gear, next to her pony. It was such an innocent, wonderful picture, I immediately felt there was a song in there." A few years later, Diamond wrote the song in a Memphis hotel in less than an hour. Caroline was 11 years old when the song was released.
David Wild wrote in his book He Is...I Say: How I Learned to Stop Worrying and Love Neil Diamond, "Diamond says that 'Sweet Caroline' just seemed to come out of 'the excitement of the moment.' More specifically, Diamond's excitement seemed to focus on a chord in the song's 'touching hands' section, a relatively unusual A6 chord that he had never played before."
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