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:
Hetty Green has an automobile. It is a bright red, twenty horse-power one, and cost $12,800. Mrs. Green may be seen any afternoon riding up and down the Jersey turnpikes either side of Morristown. Her companion on these trips is either her son, Edward H. R. Green, president of the Texas Midland railroad, or her chauffeur. Thus far she has not been arrested for scorching [speeding]. The automobiling costume worn by Mrs. Green is a modest gown of dark material and a black poke bonnet. Here is her opinion of the sport:
“Some people who do not know me or my fondness for progressive as well as practical things may be surprised at my advocating what some still choose to call a fad. But since my son purchased a motor—they say it is correct to call them motors—I have discovered the practical as well as the pleasant side of automobiling. Are they dangerous? No more so than horses and carriages. More people are injured every day by runaways than in a week or month by automobiles.”
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.
Chapter 20
Panic Again
In September 1905, Hetty arrived in Boston embroiled in lawsuits against her father’s estate. During her stay at the Parker House, she agreed to attend a lecture with a friend at a Protestant church. “I was bred a Quaker, but I go to every kind of church,” she confided to a reporter sitting nearby. What counted was not the denomination but that the followers kept the commandments. “I believe in simplicity. It’s that, you know, that makes me what folks call ‘mean.’ The fact is, I prefer not to be extravagant.” Extravagance was hardly an issue. Unlike the rest of the women in the pews that night in the early autumn frost, she wore no gloves on her hands and no furs over the shoulders of her plain dress.
She attended the daily courtroom proceedings and confessed on the way back from the church to her hotel that “all this litigation makes me very tired.” She sighed and spoke in a plaintive voice: “I am all fagged out tonight. Yet I must be in court by ten o’clock tomorrow morning.” After spending five years on the case she won a payment of $75,000 with a promise from her to drop all proceedings in court. “I usually get the better of all people who oppose me in lawsuits,” she said.
Back in New York, in November 1905 she marked her birthday with another loan to City Hall. Once again, New York needed money, and it turned to the most dependable banker it had. Over the course of two weeks, Hetty loaned the city $2.5 million at 5 percent interest. “She is now,” declared the Los Angeles Herald, “the largest money lender in New York.”
From her perch at the rear of the Chemical Bank, Hetty carried out her moneymaking obligations. With the economy flourishing around the globe, from Europe to Asia to South America, demand was rising and prices escalating. U.S. railroads expanded their plans, increasing their need for new funds. Merchants and manufacturers widened the scope of their dreams, asking the banks for more money to build their businesses. As the boom continued, more and more Americans were eager to take part, borrowing money from the banks to buy stocks at prices that soared like out-of-control hot-air balloons.
At the same time, the cost of land skyrocketed around the country, as people raced to buy up real estate in cities, towns, and rural communities. Inevitably, the cost of borrowing the money to buy the land rose precipitously. While others bought, Hetty sold. “I saw the handwriting on the wall,” she said later. “Every real estate deal which I could possibly close up was converted into cash.”
In 1905 the call for money surpassed anything that had come before. The heavy requests pushed interest rates up, causing many people to owe the banks far more than they had. At the start of 1906, the financier Jacob Schiff was so outraged over the currency situation that he told the Chamber of Commerce: “If this condition of affairs is not changed, and changed soon, we will get a panic in this country compared with which the three which have preceded it would only be child’s play.” But businessmen and bankers continued to play.
Black clouds hung over the debtors; many had little choice but to divest their holdings. Hetty watched as rich men arrived at the Chemical; doffing their top hats, drawing out their expensive engraved cards, and handing them to the clerk at the door, they sought her out to sell off their possessions. As rates rose, more and more of “the solidest men in Wall Street,” she said, from “financiers to legitimate businessmen,” came to call, begging to unload everything from palatial mansions to automobiles.
“They came to me in droves,” she recalled. “Some of them I lent money to, and some of them I didn’t. That was my privilege.” Stories spread that she was lending money at usurious rates. “Those to whom I loaned my money got it at six percent. I might just as easily have secured forty percent. But never in my life, no matter what has been said against me, have I practiced usury, and no one knows it better than the wealthy men who have had business dealings with me.” Ironically, the woman who rarely shopped was besieged by retailers. “Nearly all the big department stores came to me and I loaned them money,” she said. She knew “a panic was inevitable.”
Opportunities emerged wherever she looked. Of all she was offered, she felt most comfortable with real estate and mortgages. “I would advise any young woman with $500 at her command to invest in real estate,” she said. “She should buy at auction on occasion when circumstances have forced the sale. If she will look out for such opportunities, they will surely come, and she will find that she can buy a parcel of land at one third its appraised value.” She followed her own advice and purchased land in upstate New York for $400,000, one-third the normal price. She donated the land to build a school for boys; Hetty was proud that the project gave work to many men at a time when jobs were scarce.
She owned real estate and mortgages all around New York: hotels, office buildings, brownstones, and townhouses such as 838 Fifth Avenue, 8 East Sixty-ninth Street, and 110 West Fifty-seventh Street; like most big real estate investors in the city, then and now, she bought them under various names to limit her liability. It was rumored that she was the real purchaser of Annie Leary’s new house; more likely, she held the mortgage.
Whether she owned it or not, Hetty spent much of her time in the lavish, five-story townhouse, where her daughter also lived. There, in the marble house with its sixty-eight gilt-framed mirrors, the philanthropically minded Annie Leary, newly appointed a papal countess by the Church, entertained Catholic leaders. And there she hosted New York socialites and European aristocrats, praying that one of them would marry the tall and stocky Sylvie Green. A brief glimmer of hope arrived with the Prince del Drago, an Italian aristocrat working on Wall Street, who devoted time to the heiress. But the romance soon dried up. Three years later the twenty-seven-year-old prince married a wealthy widow nearly twice his age.
The news of the San Francisco earthquake on April 8, 1906, stunned the country and rocked its financial institutions. Within one minute, the ground heaved and pressed, heaved and pressed, and with each groan, wooden structures disintegrated and tons of stone crashed from the steel frames of buildings. In that early-morning nightmare, families rushed from their beds to the streets: mothers clutched their babes; fathers stood agape watching their homes collapse. The rumbles brought the city to ruins.
The worst quake in the country’s history destroyed two-thirds of San Francisco—everything from factories to office buildings to private houses to City Hall. A mass of rubble covered the streets; the water mains broke and cut off the water supply; fires broke out and for three days smoke belched from burning buildings; 2,500 people were killed; 250,000 people were displaced and destitute. As a result of the catastrophe, factories and businesses were forced to shut, and railroads suffered losses of hundreds of thousands of dollars. The calamity, which cost insurance companies $100 million, in due course drained hundreds of millions more from the banks. It took an immediate toll on Wall Street as fearful investors sold off stocks in its wake.
The increasing need for funds came at a high cost to municipalities and individuals. Banks raised their rates, forcing borrowers to pay more and more for their loans. Once again New York City came to Hetty; once again she loaned the money at favorable rates. “She is a grand little woman,” said the deputy
chamberlain. “We can always rely on her.” Added one newspaper editorial: “With the aid of Mrs. Hetty Green, the richest woman in America, Controller Metz has been enabled to beat the financiers of Wall Street and save the city thousands upon thousands of dollars.”
Months before, Hetty had loaned the city $4.5 million at a rate well below those established in Wall Street; “she would have been ready to lend more if the city needed it,” noted the New York World. Indeed, with the death of Russell Sage, the city’s leading lender, in July 1906, it was confirmed: Hetty Green was number one. For all his reputation as a shrewd financier of ready wealth, a cool, immovable calculator, a person who could deal with heartless corporations in a corresponding manner, Hetty was his equal, said the paper. “The King is Dead; Long Live the Queen,” cried a Wall Street operator.
The balloon began to sink in the spring of 1907. A stock market crash in Egypt, which led to a run on the banks, was followed by bank failures in Japan, Germany, and Chile. Throughout the world, a hoarding panic seized the markets. But the phenomenal increase in America’s economic strength, along with the establishment of the gold standard for its currency and the great resources of its banks, reassured everyone that the United States was safe from a similar fate.
With few regulations to restrain them, U.S. banks continued to loan more and more, lowering their reserves, at greater and greater risk of not having ready money if customers wished to redeem their deposits. But the bankers weren’t worried. “It had been a cardinal doctrine, in American banking circles, that a panic like those of 1893 and 1873 would never again be witnessed in this country,” wrote Alexander Noyes, the financial editor of the New York Times.
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