The Richest Woman in America (19 page)

The problem had become so horrific that doctors declared it was driving people crazy: they blamed the time confusion (as well as everything from dyspepsia to insomnia to tooth decay, and the stress from other modern technology, such as steam engines and telegraph wires) for a new illness called “neurasthenia.” The American neurologist George Miller Beard declared it “the disease of the age.” Though beneficial to some, “railway travel is injurious” to others, he said. “We are under constant strain,” he went on, “to get somewhere or do something at some definite moment.”

Yet the definite moment differed from place to place. The situation was so chaotic that the editor of a railroad guide appealed to a convention of railroad officials to standardize their clocks. After much argumentation, they agreed to four time zones across the country that would be based on Greenwich Mean Time.

At noon on November 18, 1883, at Union Station in Chicago, the assembled crowd watched and waited as the timekeeper stopped the clock. Hours seemed to go by until, exactly nine minutes and thirty-two seconds later, a telegraph signal from the U.S. Naval Observatory
announced the new noon. Americans across the continent reset their pocket watches and reconfigured the hands on their tall case clocks. Although some fearful souls declared it would bring on the wrath of God, and some dissident cities refused to go along, the country now functioned on the same system. Workers at offices and factories toiled by the same clock, businessmen arranged their meetings with synchronized watches, and salesmen planned their travels around similar schedules. The new zones set a new pace for the country; the railroad revolution raced ahead and America sped ahead with it.

Hetty Green put her money in the race.
The railroads’ dynamic potential, their promised return on capital, their unregulated operation, and their untaxed profits provided infinite possibilities for financiers. Since the end of the Civil War, Hetty had been investing in, among others, the Reading, Rock Island, Connecticut River Valley, and Louisville and Nashville railroads. The latter, based in the Union state of Kentucky, owned routes that ran straight through the South: occasionally during the Civil War it transported the Confederate army and was paid in Confederate notes; most of the time, however, it carried men and matériel from the North and received payment in greenbacks. By the end of the war its southern competition had been destroyed, but the L&N not only survived, it emerged financially strong. The profitable line was in a unique position to extend its reach.

Hetty’s investments were not always known: she purchased property under fictitious names, bought stocks under other identities, and was praised by shrewd observers for how closely she held her positions. By 1879 Edward Green owned thirty thousand shares—one-third of the stock—of the Louisville and Nashville Railroad: he was the company’s single largest shareholder. It is not known whether he bought it with his own money or Hetty really owned the shares, or if she owned a large block of bonds. But with his huge chunk of stock, in December 1879 Edward was elected to the board of directors and appointed second vice president. But Edward was doing more than buying stock in the L&N; he was secretly sweeping up shares of the competition. With his clever maneuvering and his talent for raising money, he was put in charge of the New York office, the financial end of the railroad’s operations.

The L&N expanded dramatically, laying new track and gobbling
up smaller lines. In a series of secret moves, Edward and a group of major financiers, including John Jacob Astor, managed to gain control of track that gave the L&N a direct line from Chicago to Mobile, Montgomery, and New Orleans, and an unbroken line from Chicago to Pensacola Bay in the Florida Panhandle. They were paving the way, said the
New York Times
, for the railroad to become “the largest aggregate under one management in the world.” At a time when no regulations existed, when oversight was unheard of, when the industry had the feel of the Wild West, this was “one of the most gigantic railroad operations of the age.” The newspaper called it “a brilliant coup.”

Within a short period, the Louisville and Nashville quadrupled its track to 3,500 miles extending from St. Louis, Missouri, to Savannah, Georgia, and from the freshwater lakes in the north to the Gulf of Mexico in the south, making it the only line to have an inlet to New Orleans. The lucrative monopoly was not only carrying profitable freight north to south, it was buying land, building towns, and developing coal and iron mines, making its operations more cost-effective and more self-sufficient. The routes were so extensive that the New York Central Railroad was eager to lease them. With the success of the line, Edward was elected president and given an annual salary of $5,000.

Edward’s reign was short-lived. After a few months as president, he was demoted to vice president, and then, a few months later, with his financial ties still needed, he was asked to take on the chief post once again. By the end of 1881, however, the stock was down, he had mortgaged his house, and his official duties were over. Nonetheless, he remained an important member of the board of directors: “E. H. Green,” said a historian of the railroad, was “an erratic financier whose influence upon the L&N extended far beyond his brief Presidency.”

As an officer of the L&N, Edward was expected to make inspection tours of the roads, and Hetty and the children sometimes traveled with him. For Hetty, an investor who kept a careful eye on her assets, it was an opportune way to see the railroad in full operation from its roadbeds to its rolling stock. Standing on the open platform at the rear of the company’s private car or sitting on the plush seats in its private, windowed lounge, she could look out, examine the track, and survey the bridges as the train rolled by. The trips also allowed her a chance
to visit her properties in the Midwest, which increased with the expansion of the railroads from Chicago to St. Louis to Cincinnati.

Young Ned and Sylvie loved steaming around the country with their parents in the opulent train. In the dining room, they sat at tables set with starched white cloths, sparkling crystal, and gleaming silver, while crisply uniformed Negro waiters served them tasty food; at night, they slept curled up in the new Pullman beds carefully arranged by the Negro porters as the rhythmic roll of the train rocked them to sleep. They weren’t the only ones who enjoyed the sumptuous private car: the sociable Edward often entertained other guests along the route.

Agnes Elmendorf and other members of his sister’s family were invited to join them if their travel plans coincided, and friends of Edward’s and Hetty’s were sometimes asked to come along. As always, Edward made an amiable and charming host. In fact, he was sometimes too charming, especially with other women. Hetty had known of
his reputation as a bachelor in the Philippines, but she thought he had finished his womanizing by the time he returned from the East. Along with his “loose habits” of drinking and playing cards, however, she discovered that not only was he very courteous to ladies when his wife was with him, he was touring with other women when she was not.

“I had heard stories about his life in Manila before I married him, about his sowing his wild oats out there, but those stories never bothered me. That was all before my time,” she told a friend. “But when I was traveling with him, I noticed he was always exceedingly polite to women. After I got back to New York, rumors about his doings came to me. When I thought it over, I thought that he had been a little too polite.” Deeply hurt by Edward’s deception, Hetty hired a detective from Chicago to follow him around. “I got a report on him,” she said. “It told me everything I needed to know.”

Hetty needed time away from Edward. In the summer of 1882, and again the following year, while he scampered around the country or lodged near the Union Club in New York, Hetty took the children on a six-week trip to New Bedford. Stepping off the train and into a carriage in the town where she grew up, she ordered the driver to take them to Pleasant Street. It would cost her more money, the man protested, but she brushed him off and told him to do as she said. Riding
along the familiar streets, she reminisced with Ned and Sylvie, pointing out the different sites: “Here is the house where I was born.” She motioned as they passed the big house on Seventh and Walnut streets. “And here is where your grandpa and I used to walk,” she recalled.

Hetty told the driver to turn onto a narrow road leading to Round Hills. Halfway there, she ordered him to stop and led the children a few feet from the side of the road to a thicket of bushes. Beyond the trees were rocks leaning along the banks of a brook. “Here is where Mama—that’s your grandma—used to take us picnicking when she felt well enough,” Hetty said. It was one of the few times she mentioned her mother; it was one of the few good memories she had of her. Hetty took off her shoes and stockings and told the children to do the same. The threesome dipped their feet into the sparkling water. A few minutes later they scrambled back into the cab.

She had inherited 140 acres and the house at Round Hills after Aunt Sylvia’s death. This was the place she always enjoyed as a child, where she learned to drive a horse and cart at the age of six, where she learned to ride sidesaddle, where she ran free in the fields. Her daughter Sylvie liked to ride too, but fourteen-year-old Ned was no longer able to ride or run; he and his sister enjoyed the salty air and the ocean breeze. Some of the time Hetty took him around to local doctors to see what they could do about his leg, but their response was always the same: they shook their heads and recommended amputation. Out at Round Hills, where Sylvie rode her horse, Ned sat on the big rocks, dangling his fishing rod in the waters of Buzzards Bay.

      
W
hile Hetty was with her children, Edward still struggled with the L&N. Like so many other speculators, he and his friends at the Union Club had bought their shares on margin, and like so many other railroads, the Louisville and Nashville had overexpanded and built unprofitable lines. The company fell into debt, and the stock fell with it. In the autumn of 1883, Jay Gould tried to bring down the price of the stock even further, hoping to buy up shares, take control, and enhance his own Union Pacific and Missouri Pacific lines. Over the next twelve months Edward and the other members of the L&N’s finance committee fought hard against Gould, trying to support the
price of the stock, but the debt kept growing and the earnings continued to shrink.

Edward was a gambler at heart, and his adrenaline soared with every risky move he made. When Henry Watterson, editor of the
Louisville Courier-Journal
, came to see him in his office, he told Edward that he had bought some stocks. Edward asked him how he bought them. Watterson did not understand the question. “
Do you buy long or short?” Edward asked. “You are talking Greek to me,” said the editor. “Didn’t you ever put up any money on margin?” “Never,” Watterson said. “Bless me! You’re a virgin,” Edward exclaimed, adding that he wanted Watterson to look over a list of stocks and pick one. He wanted to try the editor’s luck; whichever stock he chose Edward would buy for himself and Watterson. “All I make we’ll divide, and all we lose I’ll pay,” he said. The editor told him that he could do even better; he was having lunch with Jay Gould and would ask him for a tip. Edward paused for a minute. “I don’t want any tip—especially from that bunch. I want to try your virgin luck,” he said. But his curiosity was piqued; he told the man to let him know that afternoon what Gould recommended.

At lunch, when Watterson asked Gould what stock he liked, the infamous operator leaned over and said, “Buy Texas Pacific.” The editor relayed the message. Within two days, the stock dropped sixty points. Six months later, Edward sent Watterson a check for thousands of dollars, half the profit on his purchase.

When Watterson relayed the story to Gould two years later, the stock manipulator admitted that he thought someone else had bought the shares that day; he had pushed the price down to get even with the man. When Gould heard who the buyer was, he was taken aback. Edward Green was a popular fellow. “Dear, dear,” he said. “Ned Green! Big Green. Well, well! You do surprise me. I would rather have done him a favor than an injury.” He was pleased to learn that no harm was done and that, even though the stock had dropped, it had come back, and “after all, you and he came out ahead.” Edward won the admiration of Watterson and was held in esteem by investors and scoundrels alike. But his wanton ways lost him the respect of his wife.

In May 1884, when Edward’s colleague and friend C. C. Baldwin, the prominent head of the Louisville and Nashville, was accused
of irregularities, the stock dropped fifteen points in a week. Baldwin later admitted to the board of directors that he had borrowed more against company stock than had been avowed; furthermore, he had falsified the company’s statements, claiming far less debt than the real amount. In truth, the losses were $5 million, not the $2 million he reported. The directors were responsible for covering the difference. Many of Baldwin’s friends, including Edward and other members of the Union Club, were caught in the mesh of Baldwin’s lies: they had used the stock as collateral and were now forced to cover their margin accounts. “The Union Club is a funereal assemblage,” said the
New York Times
. Edward was in mourning.

Inside the management of the L&N, the fighting continued between the Louisville office, which oversaw the railroad operations, and the New York office, which backed them. The financiers in the East, obliged to raise more money, issued more stock and bonds, but rumors flew that the railroad was verging on bankruptcy. The money men found it difficult to find buyers for the bonds. Weak business conditions in 1884 did not help. Factories were forced to cut their wages, coal miners declared a strike, and freight receipts were dropping. The price of L&N shares was in free fall.

As the value of Edward Green’s shares declined, the Cisco bank demanded more money to cover his losses. Forced to provide more collateral on his margin accounts, Edward delivered more shares of the L&N and gave Cisco the deed on his house in Bellows Falls. But the shares kept heading downward and Edward was drowning in debt. Once again he called on Hetty to bail him out. In return
she demanded the house. Edward may have been her husband, but business was business. In June 1884 the deed for Tucker House was turned over to her.