Hetty (16 page)

People found her modest living conditions in Brooklyn and, later, in Hoboken, New Jersey, endlessly fascinating and amusing. Hetty rarely lost sleep worrying what others thought of her, and yet there was a certain irony in the public’s reaction to her. For all of her faults, she was no snob. She sneered at all forms of pretense, and was unimpressed with titles
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She didn’t just mix with the common folk; she lived among them, ate at their restaurants, rode their streetcars and ferries. Clerks and storekeepers, delivery boys and washerwomen who would not
be allowed through the front door of Alva Vanderbilt’s Fifth Avenue mansion lived side by side with Hetty and her children. And yet it was her very reluctance to live like a queen that evoked derision and ridicule.

The public never seemed to begrudge Andrew Carnegie his sixty-four-room house on Fifth Avenue, a structure so large it required a special railroad track in the basement to move the two tons of coal needed for a single day’s heating in the winter. Carnegie himself justified personal extravagance in his 1889 essay, “Wealth”: “It is well, nay essential, for the progress of the race that the houses of some should be homes for all that is highest and best in literature and the arts, and for all the refinements of civilization, rather than that none should be so.” Untold thousands living in the same city but struggling to maintain their tenement flats seemed to agree with him, according to Carnegie’s biographer, Joseph Frazier Wall. Wall astutely assessed this public sentiment on wealth, using Hetty Green by way of example. The public, he wrote, “expected its millionaires to live in style in big houses; it looked with contempt upon Hetty Green, living penuriously in a small apartment in Hoboken.”

Nor did her lifestyle inure her to criticism from populists that she was just another self-important member of an overmonied class. A reporter once asked her why she lived the way she did. “I am a Quaker; my early training disciplined me towards pomp and show,” she replied. “My family has been wealthy for five generations. We need make no display to insure recognition of our position.” An editorial in the
New York World
went after her with a vengeance: “The insolence of this utterance would be astonishing if we had not been accustomed to it by the words and ways of our Plutocracy for years past.”

In 1883, after buying the
World
from robber baron Jay Gould, Joseph Pulitzer had made a point of beating the populist drums against all wealthy financiers, Gould included. The editorial continued:

It was a strong reaction to what had been, especially for Hetty, a fairly innocuous comment. And the irony, of course, was that, unlike Pulitzer and his editorial writers, Hetty Green actually did live in a tenement.

For all of her aversion or indifference to matters of society, Hetty’s one connection to the world of wealth and privilege was her lifelong friendship with Annie Leary, who lived in a large limestone house at 1032 Fifth Avenue. Leary, who had been a member of Hetty’s wedding party so many years earlier, was one of New York’s, and hence, the nation’s, leading philanthropists. She didn’t just throw money at good causes, or organize high-toned balls to support some home for the poor. She rolled up her sleeves and became active in a dizzying array of causes. Annie donated the Christopher Columbus monument at Columbus Circle in New York; she served as vice president of Stonywold, a home in the Adirondacks for sufferers of tuberculosis, and as president of the Flower Guild. She built churches and mission houses, and built a chapel at Bellevue Hospital
named for her late brother, Arthur. For her efforts with the Catholic Church, the pope conferred upon her the honorary title of papal countess.

Annie saw in Hetty a side that others did not—a side that ran contrary to her public image. Annie appreciated Hetty’s humor and loyalty as a friend. Annie was also secure enough in her social position not to care how her friendship with Hetty would reflect upon her. In some ways, Annie, the do-gooder, took on Hetty and her family as a social project. When Hetty appeared at parties or balls, or events at Newport, Annie Leary was the one who orchestrated it. Hetty’s daughter, Sylvia, was of particular interest to Annie, who was determined to bring her out of her shell. If Hetty believed she was bringing Sylvia up to respect money and to be wary of gold diggers who might be after her (and Hetty’s fortune), it was Annie Leary who saw clearly the devastating effect this was having on the girl.

The friendship with Annie notwithstanding, Hetty lived her life convinced that, as a businesswoman, if not as a woman, she was fundamentally and completely alone. Nobody else would watch out for her interests. She mistrusted all forms of alliances and cabals. Where other investors sought the safety of numbers, the soothing ring of consensus, Hetty felt most comfortable on her own, trusting her own judgment and instincts. She was a free agent in the truest sense of the term, and anyone going into a deal assuming he had Hetty Green in his corner, or that she could be pushed, harassed, or cowed into going along with a crowd, learned difficult and expensive lessons to the contrary. Her shrewd conduct during a takeover attempt of the Georgia Central Railroad a year after the Cisco failure offers an excellent glimpse at the tactics and style she would use over and over for the rest of her career.

Based in Savannah, the Georgia Central had been pieced together from a number of smaller southern roads. It was a large railroad, with some two thousand miles of track around the Southeast, but it was unwieldly, inefficient, and complacent. The
stock languished at $69 per share, and the company had been paying stockholders a meager 2 percent semiannual dividend. In a story that sounds more out of the corporate raider days of the 1980s than the 1880s, a group of wealthy investors, mainly from New York, spotted a ripe takeover opportunity. They were particularly interested in a steamship line, owned by the railroad, which ran regular service between Savannah and New York. The steamship line, they figured, had been badly undervalued among the railroad’s jumble of assets. The investors began buying up the stock during the summer of 1886 with the idea of installing their own managers and directors.

Over the next few months, an increasingly bitter and nasty battle ensued, as the New York group tried to round up a majority of the voting stock in time for the directors’ election in January. The New Yorkers charged the railroad with sloppy management and failing to properly reward stockholders. The Georgians dismissed the New Yorkers as greedy manipulators and outsiders who would simply break the company apart for a quick profit. Hovering in the near background, informing and inflaming sentiments on both sides, was the Civil War, barely twenty years past and still fresh in everyone’s mind. The Yankees, it seemed, were marching across Georgia once again.

Hetty got wind of the plan early on and began quietly buying up Georgia Central stock at around $70 per share. By early summer she held 6,700 shares. She waited patiently as passions reached their peak. She took no sides. True, she was a New Yorker, and a Yankee, but people who mixed sentimentality with business were fools. If these breast-beating old soldiers wished to relive Bull Run and Gettysburg in the boardroom, so much the better.

By November, the stock had shot up to $100 per share. She could easily have sold at this point for a quick $200,000 profit. She chose to sit tight, figuring that, as the clock ticked, the New Yorkers would grow ever more nervous. In a close election, her chunk of stock might just mean the difference. E. P. Alexander,
the New Yorkers’ handpicked candidate for president following the planned takeover, approached Hetty with an offer of $115 for each of her shares, a $15 premium over the already inflated going rate. He was offering her more than $300,000 above what she had paid.

Hetty told Alexander he could have the shares—for $125. It was a bold gamble. After all, the New Yorkers might simply decide they could win without her and leave her with wads of shares and no buyer. But part of Hetty’s genius was to recognize when the other side was sweating. Alexander did the frightening math—$837,500—in his head, declined the offer, and left. Hetty waited. A short time later, Alexander returned with a new offer. She could have her $125, but not until after the election. Instead of selling her shares now, she would promise to vote their way. When the election was over, she would get her money, in full, regardless of the results of the election and the going rate of the stock. Alexander could hardly believe he was making such a generous offer to this stubborn woman.

Hetty replied, “If I have to wait for my money, the price is $130.”

Alexander had come too far, the election was too near, for him to go away empty-handed again. He countered with $127.50. Hetty agreed. First, as was her custom, she demanded that Alexander’s group post collateral for the entire amount in advance of the vote. On January 3, shareholders elected E. P. Alexander president of the Georgia Central Railroad, and installed a new board of directors. Hetty’s shares provided nearly half of Alexander’s 15,000-share victory. The new managers went about trying to salve wounds of the previous months’ battles, assuring Georgians that southerners, not northerners, would continue to operate the railroad and that the new owners wished only to improve, not dismantle, the company. Hetty Green washed her hands of the entire affair, having sold her shares for $854,250
—31
a profit of $385,200.

NINE
GROOMING A PROTÉGÉ

H
etty disproved the prevailing idea that women were incapable of handling finances. Her skill, tenacity, and fearlessness made her a feminist long before that term became a rallying cry for generations. Her money gave her power over men and companies and financial markets, and yet she never proclaimed herself an example, or even an advocate, of women’s rights. And when it came to deciding which of her children would succeed her in handling the family fortune, her choice couldn’t have been more conventional; from the start, it was going to be Ned.

Hetty explained her position on women in business years later in a
Harper’s Bazar
article that ran under her byline in 1900. “Mentally, I do not believe woman to be inferior to man, save as she has become so by a mistaken course of training,” Hetty wrote. “A certain amount of business training would be an excellent thing for women, but it should be begun in their infancy.” She frequently cited her own training from reading the financial papers to her father and grandfather. “A mother will say to her boy, ‘Go out and play,’ while to the daughter of the
house she observes, ‘Do this piece of sewing and I will give you a pretty ribbon,’ thus incidentally sewing the seeds of vanity, and imparting a restricted and wrong view of the value of things in relation to life and labor. The boy becomes broadened mentally and physically by his robust out-door life, while the girl’s natural inclinations are cramped to a narrow groove, which, after a time, becomes second nature to her.”

Judging by the plain, unfashionable clothes Sylvia wore as a child, Hetty spared her daughter the developmental problems associated with pretty ribbons. But neither did she encourage her daughter to “go out and play” in the sense of discovering the world and making her own decisions and mistakes. Sylvia did get a financial education—nobody spent more time with Hetty over the years; nobody had a better view of Hetty’s methods; nobody endured as many of Hetty’s homilies and maxims on the value of thrift and avoiding waste. But Sylvia remained a half-formed person, painfully shy, socially stunted, and lacking any great curiosity about the world and its inhabitants. When in Hetty’s presence, as she was most of the time, Sylvia was as unremarkable as a shadow.

Ned was different. Though Hetty intended for her children to share equally in the money she left behind, she expected Ned to act as shepherd of the fortune. And so as Ned entered adulthood Hetty prepared for him a trial by experience, thrusting him into positions where he could make business decisions, without jeopardizing too much real money, at least at the beginning. But before Ned could enter the adult world, he would have to face one particularly difficult and punishing trial, the matter involving his bad left leg.