The Richest Woman in America (32 page)

The success of Gates’s consolidations inspired other entrepreneurs to follow his path. J. P. Morgan conducted a huge coup when he convinced Andrew Carnegie to sell him Carnegie Steelworks and then persuaded Wall Street to underwrite the purchase. As soon as the stocks and bonds were issued, the public grabbed its share: if it was good enough for Carnegie, it was good enough for the man on the street. In similar ways, John D. Rockefeller snapped up smaller companies to create Standard Oil, James Duke chewed up his rivals and spat out American Tobacco, Armour and Swift formed monopolies in meatpacking; others controlled sugar refining, utilities, and paper.

By 1901 hundreds of small businesses were folded into huge conglomerates. The number of companies within those fields shrunk from 1,800 to fewer than 200. As a result, America rose to become the world’s largest supplier of copper, cotton, corn, coal, steel, iron, and oil; but its position came at a high cost to the country. Prices were fixed and politicians paid off: Chauncey Depew, elected to the Senate in 1899, later admitted under oath that the Equitable Insurance Company had paid him “a substantial annual retainer” while he was a legislator. To Hetty’s fury, the small businessmen who made up much of the American economy could not compete and were sidelined; one or two men controlled entire industries. “They are ruining the chances of the people,” Hetty said.

With money readily available, investors and manipulators borrowed from the banks to buy stocks. The rash of buying sent prices zooming: men whispered hot tips in one another’s ears; rumors roiled of companies going sour; stories spread of huge amounts of money being made overnight. Hetty watched from the sidelines as America swirled in another carnival of speculation; rich and poor rushed to the carousel and reached for the brass ring. Corporate leaders and clerks bought and sold on margin; many bought shares being offered to bankroll the purchases of worthless firms. The irresponsible borrowing echoed the past: “I wasn’t worth a cent two years ago, and now I owe two million dollars,” mocked Mark Twain in
The Gilded Age
.
The reckless use of margin and the razzle-dazzle of new industrial stocks also predicted the future, foreshadowing the dot-com bubble and the frenzy for initial public offerings at the turn of the twenty-first century.

Everyone but Hetty seemed to be buying. She did not buy industrials, she said, and never bought with borrowed money. Once in a while she cornered a stock like Reading Railroad, but that was the exception, not the norm. “I don’t believe in speculating as a rule, and I don’t speculate as much as people think.” Her approach was far more cautious: “When good things are so low that no one wants them, I buy them and lay them away in the safe; when owing to some new development, they go up and my shares are so needed that men will pay well for them, I am ready to sell.”

She watched for bargains but never bought to be in style. In January 1903 when
a prominent art collection was put up at auction, Hetty attended the sale. For two evenings in a row, the formally attired crowd, polished and powdered, arrived at Mendelsohn Hall, eager for the art that would enhance their status. As, one after another, paintings by Gainsborough, Delacroix, Corot, and Breughel came on the block, some of the richest men and women in New York, along with agents of some of the most important museums in the country, raised their hands in a frenzy. Hetty refrained from bidding.

In the frantic heat of the market Hetty kept a cool head. She attributed her success chiefly to her basic rule: “always buying when everyone wants to sell, and selling when everyone wants to buy.” As easy as her motto appeared, it took restraint to keep from buying while others swooped up stocks in the euphoria of a boom; it took courage to remain calm while the crowd dumped their shares overboard in a wave of panic. She had stayed the course in the past; she would continue it into the future.

Along with her unruffled outlook and good judgment, her fierce focus, endless reading, and intensive research all helped her penetrate the complexities of the market. Determining when stocks were cheap demanded a thorough knowledge of “their history, their dividend-paying possibilities, and what they have sold for in the past,” she said. “If one can buy a good thing at a lower cost than it has ever sold for before, he may be fairly sure of getting it cheap.” She treated her
holdings as if they were jewels: “
I keep them just as I keep a considerable number of diamonds on hand until they go up and people are anxious to buy.” Indeed, as one acquaintance attested, her vault in Bellows Falls held a glittering pile of diamonds, emeralds, rubies, and other stones, some inherited, some acquired in business deals. But the deals being done by many entrepreneurs were more dissolute than dazzling.

“
The captains of industry who have driven the roadway systems across the continent, who have built up our commerce, who have developed our manufactures, have on the whole done great good to our people,” said Theodore Roosevelt when he inherited the presidency after McKinley’s assassination in 1901.

But corruption had corroded the country. He followed his praise by firing a warning shot: “Great corporations exist only because they are created and safeguarded by our institutions, and it is therefore our right and our duty to see that they work in harmony with those institutions.” Roosevelt’s trust busting had begun. It started with the support of men who knew how rotten the system was: Thomas Lawson had worked for thirty-four years as a banker, a broker, and a corporate man; he hoped, he said, that Roosevelt would “
shake the largest trusts and corporations until their teeth chattered and their backbones rattled.”

Almost immediately the Justice Department filed suit against Northern Securities, the railroad holding company that controlled three of the largest rails in the country: the Northern Pacific, Union Pacific, and Burlington railways. Formed by J. P. Morgan, E. H. Harriman, and James Hill, Northern Securities set the fees and left little room for smaller rails to transport freight or passengers. Within months of the case and for several years after, the government pursued monoliths like Standard Oil, American Tobacco, and more than forty other monopolies. Still, the president tried to find a balance between the need to stamp out fraud and the need to stimulate American enterprise. His aim was not to destroy business but to rein in the trusts. Hetty shook her head, calling Roosevelt “a trust buster who didn’t bust trusts.”

Hetty had no fear of standing up to large corporations or other institutions. Over the course of several years she had acquired mortgages
on twenty-eight churches in Chicago; after the church of a wealthy congregation went into default, she announced she would foreclose. The church’s pastor told her she would not be welcomed in heaven if she did. Hetty promptly wrote back, asking his help to get there: “as long as you are in a threatening mood, you’d better climb up on your cornerstone and pray for my soul, because I am going to foreclose.” And she proceeded.

The story made news across the country. When the reverend criticized her on the pulpit for taking over the property of “a poor little church,” a fellow Chicago pastor took umbrage at the charge. “To expect the holder of a church mortgage to cancel it upon the grounds of Christianity after the money has been borrowed in good faith is nothing less than a hold-up. Churches should expect to pay their debts,” he was quoted in the
St. Louis Republic
. A New York editorial concurred: “If churches are to borrow money from people who make a business of lending it, there is no imaginable reason why they should not pay their debts.” In March 1903, Hetty took over the property and sold it for the amount of its debts to another congregation.

Three months later the indomitable woman was portrayed in the
Chicago Daily Tribune
:

A lively Hetty Green turned seventy years old in 1904. As with many events in her life, the press reported it wrong and pronounced her a septuagenarian the following year. “Seventy years rest lightly on Hetty Green,” declared the
New York Times
in 1905. When a clerk at the Chemical Bank tried to congratulate her, she told him, “If I am seventy years old today, this must be my seventy-first birthday.” Whatever her age, she was spry, spirited, and assertive. In more than one interview, she reflected on women and business:

“
Every girl should be taught the ordinary lines of business investment,” she said. Whether rich or poor, a young woman should know how a bank account works, understand the composition of mortgages and bonds, and know the value of interest and how it accumulates. For the moment, at least, she suggested that men should be the ones to do the teaching. “I think fathers should always talk such things over with their daughters as well as with their sons. If they did so, girls would learn to think along business lines, and not be at the mercy of business sharps who prey upon the weaker sex.” As for choosing investments, “Railroads and real estate are the things I like,” she said. “Government bonds are good,” she acknowledged, then added, after a pause, “though they do not pay very high interest. Still, for a woman safe and low is better than risky and high.”

She saw a rapidly changing role for women, who were replacing men as stenographers and typists in banks and as cashiers in stores. With a nod to herself and a hint of the future, she said, “
There is no reason why the married woman should not also be a business woman.” As important as business was, however, she agreed with the prevailing attitude: “the chief sphere of woman is [the] home; her most important duties are that of wife and mother.” She added, with some exaggeration: “I took care of my husband and his stomach and he lived to be eighty-three years old.”

She believed a knowledge of business would make a woman a better wife. In the past, said Hetty, at the end of the day the only thing a woman could do to relieve her husband’s strain was “to make herself
as pretty as a wax doll. But there is no reason why that primitive idea … should continue to exist in the sense it once did.” A woman who understood the pressures on her husband would be a far more sympathetic spouse.

In spite of her strong words, she had little support for women’s suffrage and no desire to see a woman president. “I should hope not,” she said, piercing the interviewer with her steely eyes. “I don’t believe much in so-called women’s rights. I am willing to leave politics to the men.” Indeed, she had never taken office on any corporate board, nor had she been the public face of any company she controlled; she left it to her husband and son to hold those positions. Nonetheless, she wished women had more rights in the world of commerce. “I could have succeeded much easier had I been a man. I find men will take advantages of women in business that they would not attempt with men.”

Still, she prized the life she led. “
I enjoy being in the thick of things. I like to have a part in the great movements of the world and especially of this country. I like to deal with big things and with big men.” Unlike society matrons, she said, “I would rather do [this] than play bridge or whist. Indeed, my work is my amusement, and I believe it is also my duty.” Imagine, she said, if someone gave her money to invest and she stuck it in the bank or frittered it away. “What would you think of me?” she asked. “I feel that I am doing my duty in taking care of and increasing the trust left me by my family, and the Lord is blessing me in it.”

John D. Rockefeller thought the Lord had done even more: “
God gave me my money,” he said. “I believe it is my duty to make money and still more money and to use the money I make for the good of my fellow man according to the dictates of my conscience.”

Said Hetty: “One way is to give money and to make a big show. That is not my way of doing. I am of the Quaker belief and although the Quakers are about all dead, I still follow their example. An ordinary gift to be bragged about is not a gift in the eyes of the Lord.” Despite her denials, it was reported that she had given half a million dollars to the Nurses Home in New York and $50,000 to their settlement house. And more often than not, her gifts were loans to public institutions and jobs for individuals.

Nevertheless, Hetty was happy to receive a gift from her friend Edwin Hatch. She had met the head of Lord & Taylor when she moved from her flat in Hoboken to Annie Leary’s new house on Fifth Avenue at Eighty-fourth Street. Hatch, who lived next door and summered in Vermont, sometimes saw her at Annie’s soirees and often joined her in an early-morning constitutional. If Hatch did not appear on time, Hetty would rap at his door and tell his butler to rouse him. Together the dapper merchant and the dowdy matron paced around the Central Park reservoir or down the street’s smooth pavement. As they walked along one day, she turned to Hatch and asked, “Is it true that I look ragged and terrible as the newspapers say?” Hatch pondered the question for half a block. “Mrs. Green,” he finally replied, “just consider that veil through which you are looking at me. It is torn. It is faded. It looks like hell. You come down to the store some morning and I’ll give you one of the best veils we have in stock.”

Hetty wasted no time. The next morning, making her way down Fifth Avenue to Nineteenth Street, she arrived at Lord & Taylor and told the liveried floor boy she wanted to see the head of the store. At Hatch’s direction, the young woman behind the counter showed her the very best veils. When Hetty found the one she liked, Hatch told the clerk, “Charge it to me.” Delighted by the gift, Hetty asked to see some skirts—“at reduced rates,” she added. Upstairs, amid the ruffled shirtwaists and long skirts laid out on tables, the salesclerk found an item that had been returned. The ticket was marked eight dollars, but Hatch told Hetty it was fifty cents. She was more than pleased as she left the store, new clothes in hand, and worked her way down to Wall Street.