If Cornelia Stewart had any misgivings, she did not express them. But the arrangement left her bereft of cash, and all her future personal expenditures had to come from Hilton. There was never any indication that Hilton refused any of her requests. However, it is important to note that all her expenses were charged to interest-bearing loans. In other words, Cornelia Stewart was borrowing her own money, at a price.
Hilton announced to the press that it was his intent and the intent of Mrs. Stewart to carry on with those charitable works started by the late Alexander T. Stewart and to finance others. The only two charities Hilton publicly committed to were the Working Women’s Hotel in New York City and an undisclosed religious project planned for Garden City. There was a public outcry over the lack of specifics regarding the potential charitable works being considered by Hilton and the widow Stewart, and in an effort to stem the tide of criticism, Hilton announced the distribution of the paltry sum of about $120,000 in total donations to a variety of charitable organizations in the city. This merely fanned the flames. One hundred twenty thousand dollars was a negligible amount considering the vast fortune Stewart had left behind. Soon, the plans for the religious project at Garden City grew into a full-blown charitable enterprise calling for the construction of an ornate Episcopal cathedral along with boarding schools for boys and girls and a rectory for the Episcopal bishop. The cathedral would cost millions, and for the time being, news of the endeavor quelled any further outrage regarding the size of the charitable contributions Hilton and Cornelia Stewart had made.
A. T. STEWART & CO.
The New Firm—Articles Of Copartnership
Between Judge Hilton And Mr. Libbey.
This is to certify, 1. That we, Henry Hilton and William Libbey, both of the City and State of New York, have this day formed a copartnership for the purpose of conducting a general mercantile business in the City of New York and in the cities of Boston, Philadelphia, Paris, Lyons, Manchester, Bradford, Nottingham, Belfast, Glasgow, Berlin, Chemnitz, and elsewhere in the United States and in the Kingdom of Great Britain and Ireland, and on the Continent of Europe and in other foreign countries. 2. That the principal place of said partnership will be in the City of New York. 3. That said business will be conducted under the firm name of A. T. Stewart & Co., which firm name it is hereby certified, will be continued in use by Henry Hilton and William Libbey, of the City and State of New York aforesaid; the said Henry Hilton being the assignee and grantee of Cornelia M. Stewart, devisee and legatee under the last will and testament of Alexander T. Stewart, late of the City of New York, now deceased, as to all the interest of said Alexander T. Stewart in the late firm of A. T. Stewart & Co., which firm had business relations with foreign countries.
Witness our hands and seals this 14th day of April, A.D. 1876.
HENRY HILTON
WILLIAM LIBBEY
—New York TimesApril 16, 1876
THE BUSINESS TO BE CONTINUED
An Important Statement By Judge Hilton—The Various Employees Resume
Work This Morning
The TIMES reporter called last evening on Judge Henry Hilton, one of the Executors of the late Mr. A.T. Stewart’s will, for the purpose of ascertaining to what extent the business and various enterprises of the deceased merchant would be conducted hereafter. Judge Hilton said there would be no change whatsoever in the extent or manner of carrying on the business in the two dry-goods stores and their various branches. He had visited the retail establishment yesterday, and given instructions to the various heads of departments to proceed with the transactions of business in their several departments precisely as they did before Mr. Stewart’s death. “To-morrow,” said he, “9,600 employes will resume work where they left off last Monday.” In connection with his business Mr. Stewart had fourteen factories in operation, which will not be limited in their functions.
Along with maintaining the entire retail operations, Hilton continued on with work started by Stewart at the Grand Union Hotel in Saratoga. Hilton awarded contracts for the reconstruction of the hotel.
—New York TimesApril 15, 1876
Alexander Stewart was dead and buried, and Henry Hilton was on his way.
4
A PROBLEM WITH HOTELS
In which Henry Hilton, as head of the A. T. Stewart business empire, commits the first of his many public relations blunders by refusing accommodations to Jewish banker Joseph Seligman and subsequently banning all members of the Jewish community from the Grand Union Hotel, the Stewart estate’s resort in Saratoga Springs, New York. Hilton’s actions lead to a boycott of Stewart’s stores by the Jewish community. Hilton also reneges on building the “Working Women’s Hotel,” causing a furor among New York City women, who also threaten a boycott.
Within months of the new partnership organized between Judge Henry Hilton and William Libbey to continue A. T. Stewart’s businesses, the enterprise proved profitable for the new owners. Under Hilton and Libbey’s leadership, the company earned a cash profit of more than six hundred thousand dollars within a mere two-month period, a sum the two men split between themselves, with Hilton receiving the lion’s share at 80 percent. But even with Libbey receiving just 20 percent of the profits, it was far more than he would have received if Stewart were still alive. Throughout his business relationship with the late retail magnate, Libbey, although a partner in the business, drew a hefty salary but did not share in the overall profits.
Hilton was a better friend of Stewart’s, however, than he was a manager of Stewart’s retail empire. Despite the early profits, his leadership of A. T. Stewart & Co. was marred by one dubious blunder after another, beginning with his decision to enter the retail market in Chicago, a market dominated by the business icon Marshall Field. In July 1876, Hilton leased space in several buildings in downtown Chicago. The move proved disastrous. Clearly the refrain in real estate is now and was then, “location, location, location.” The sites that Hilton was able to rent were far outside the retail district for most Chicago shoppers. Following the Chicago Fire in 1871, Field and other retailers established their operations on the west side of the city, creating a whole shopping district. By the time Hilton ventured into the market, west side commerce had been fully established. Since Hilton was unable to rent or buy retail space in the district, he opted to lease outside of it, hoping the Stewart name would attract shoppers. It didn’t. Hilton opened his Chicago store with approximately $1.3 million worth of inventory displayed within a dozen departments. During his lifetime, Stewart had kept his distance from Chicago rather than go head to head with the established retailers like Marshall Field, and conversely, Field knew he would be no match for Stewart on his own turf of New York City. This standoff benefited both men, but Hilton had other ideas.
Although a shrewder businessman than Hilton, Field offered to share the wealth in the Chicago market by proposing to Hilton that the two retail giants agree to an arrangement that would avert a price war, which would prove disastrous for both concerns. Hilton did not agree to the arrangement, and so a price war ensued, with Hilton receiving the worst of it. Within four years the Chicago branch of A. T. Stewart & Co. was operating at a loss. In 1882, the branch was closed for good as part of the company’s overall liquidation.
If the Chicago foray proved to be a huge business mistake, Hilton’s handling of the Grand Union Hotel in Saratoga Springs, New York, was a devastating public relations blunder that accelerated the downfall of A. T. Stewart & Co.
Work on Garden City continued just as Stewart had planned, including the laying of some fourteen miles of water pipe. Hilton told newspapers that additional homes would be built and streets laid out. The railway line to and from Garden City would be completed, allowing residents to travel to Wall Street in a matter of twenty minutes.
Hilton also promised that work would continue on the Working Women’s Hotel on Thirty-second Street and tha
t affordable, clean, and safe living conditions for working women would be completed strictly according to Stewart’s original plans and intentions. The hotel would be fireproof and have a steam-driven elevator. When asked by reporters to provide specifics regarding other intended charitable works using Stewart’s fortune, Hilton said, “Actions will show for themselves. Mr. Stewart despised alms-giving and preferred to assist people to maintain themselves by their own industry.”
Indeed, Hilton’s actions did speak for themselves but ultimately produced a firestorm of condemnation.
Following Stewart’s death and Hilton’s takeover of the company, Hilton decided to replace the previous manager of the Grand Union Hotel in Saratoga Springs. James Breslin, who had successfully operated the hotel under Stewart, was asked to leave. Stewart had never found fault with Breslin’s management of the place, but because the 1876 season at Saratoga was so poor, Hilton decided that Breslin had to go.
Saratoga was a summer resort; its mineral springs, spas, and the Saratoga Race Course—the oldest thoroughbred racetrack in America—attracted scores of the rich and famous every year. They came to gamble, relax, and vacation surrounded by the gay, rich Victorian elegance of the town. Saratoga was chockablock full of ornate mansions, which the wealthy owners referred to lovingly as their “summer cottages.” Stewart’s Grand Union Hotel, regarded as the largest hotel in the world, and the United States Hotel were the two most elegant and massive buildings in the town.
During the late spring of 1877, Hilton noted that despite the many improvements made to the Grand Union Hotel, more and more of Saratoga’s wealthy visitors were checking into the United States Hotel down the street. Through some wrong-headed process of deduction, Hilton attributed the competitive disadvantage to the large number of Jewish visitors who frequented the Grand Union Hotel. Looking for someone to blame for the hotel’s terrible performance and without Breslin at the helm to be a scapegoat, Hilton conveniently decided to prohibit the many members of the New York Jewish community who frequented the hotel. Hilton’s actions were unnecessary and deplorable, only further propelling the downfall of the company.
In June 1877, New York City banker Joseph Seligman, who had been a frequent guest at the Grand Union, was refused accommodations. Despite his protests, Seligman was told that under Hilton’s orders, all Jewish guests were being excluded from the hotel. Hilton’s actions and refusal to withdraw his orders produced a firestorm of protest that spread not only throughout New York’s Jewish community but through other religious groups as well. It was a stunning blow to Hilton and his hotel, but there was more: The protest carried over to A. T. Stewart & Co.’s retail and wholesale businesses.
A SENSATION AT SARATOGA
NEW RULES FOR THE GRAND UNION
No Jews To Be Admitted—Mr. Seligman, The Banker, And His Family Sent Away—His Letter To Mr. Hilton—Gathering Of Mr. Seligman’s Friends—An Indignation Meeting To Be Held
On Wednesday last Joseph Seligman, the well-known banker of this City and a member of the syndicate to place the government loan, visited Saratoga with his wife and family. For ten years past he has spent the summer at the Grand Union Hotel. His family entered the parlors and Mr. Seligman went to the manager to make arrangements for rooms. That gentleman seemed somewhat confused and said: “Mr. Seligman, I am required to inform you that Mr. Hilton has given instructions that no Israelites shall be permitted in the future to stop at this hotel.”
Mr. Seligman was so astonished that for some time he could make no reply. Then he said: “Do you mean to tell me that you will not entertain Jewish people?” “That is our orders, Sir,” was the reply.
—New York Times
June 19, 1877
Seligman and his family had spent their summers at the Grand Union Hotel for a decade. There was no reason for him to imagine that registering at the hotel in June 1877 would be any different. When told that Jews were now being barred admittance, Seligman demanded to know why.
“Are they dirty?” he asked the manager at the front desk. “Do they misbehave themselves, or have they refused to pay their bills?”
The manager told him that it had nothing to do with those things.
“The reason is simply this: Business at the hotel was not good last season and we had a large number of Jews here. Mr. Hilton came to the conclusion that Christians did not like their company, and for that reason shunned the hotel. He resolved to run the Union on a different principle this season and gave us instructions to admit no Jew.”
The outraged banker returned to New York City and immediately wrote a letter to Hilton demanding to know why Jews were being excluded from the hotel. In the letter he said that if Hilton did not see Jews worthy to enter his hotel, then it would be wise for him to send a circular to all Jews informing them not to make purchases at his stores. He charged Hilton with bigotry and said Hilton was not worthy of and lacked the ability to run a hotel like the Grand Union.
In his letter Seligman wrote, “A little reflection must show you that the grievous falling off in your business is not due to the patronage of any one nationality, but to the want of patronage at all, and that you, dear Judge, are not big enough to keep a hotel nor broad enough in your business views to run a department store.”
According to Hilton, Seligman had been spoiling for a public fight because A. T. Stewart & Co had previously done nearly all of its foreign banking business with Seligman’s bank but had discontinued the arrangement. Hilton claimed that Stewart himself had intended the Grand Union Hotel to be a family home during the summer where his 2,500 guests expected security and satisfaction. The concerns of these guests, Hilton said, had to be considered. The hotel, according to Hilton, was run for them and not for those for whom they have expressed dislike. Mr. Seligman, according to Hilton, represented not a class of Hebrews, but of Jews, with whom many of his other guests, especially the female guests, did not wish to associate. These other guests, Hilton claimed, did not wish to be forced to engage with this class of Jew.
“It is the fault,” Hilton said in the New York Times, “of this class of ‘Jews’ themselves that they are discriminated against. … Families like the Hendricks and Nathans are welcome everywhere, while those Jews (not Hebrews) of whom Joseph Seligman is a representative are not wanted any more at any of the first-class Summer hotels. They have brought the public opinion down on themselves by a vulgar ostentation, a puffed-up vanity, an overweening display of condition, a lack of those considerate civilities so much appreciated by good American society, and a general obtrusiveness that is frequently disgusting and always repulsive to the well-bred.”
A group of Seligman’s friends and business acquaintances met to discuss the ugly affair and determine what action they might take. The group decided that New York’s Jews, or for that matter Jews from across the country, could not afford to let the matter rest. Something had to be done.
JUDGE HILTON’S STATEMENT
In the evening a reporter of the TIMES called upon Judge Hilton at his residence and found him willing to speak upon the subject. He said that Mr. Seligman was not ejected from the Grand Union. He had been boarding at the Clarendon up to the time of the opening of the Grand Hotel. He then came over and “in an ostentatious manner,” it seems, demanded the best apartments. … Judge Hilton does not consider Mr. Joseph Seligman a Hebrew. Years ago, he said, Mr. Seligman absolutely threw overboard the Hebrew Bible and Moses … he but plays the mountebank if he attempts to arouse the prejudices of the Orthodox Hebrew Church by circulating any stories or insinuations to the effect that he was turned out of the Grand Union Hotel simply because he belonged to that ancient faith. … Mr. Seligman is a “Jew” in the trade sense of the word, and the class of Jews he represents, while they are not forbidden to come to the Grand Union are not encouraged.
—New York TimesJune 19, 1877
The refusal of the Grand Union Hotel at Sarat
oga to admit Mr. Joseph Seligman and family as guests and Judge Hilton’s explanation of it … have created a profound sensation in this City and in all sections where there are Summer hotels or people who patronize them. … The general position taken is decidedly opposed to that of Judge Hilton although there are a few hotels in this City where Jewish custom is openly discouraged on grounds similar to those stated by Judge Hilton.
—New York TimesJune 20, 1877
When asked whether he would clarify his order excluding Jews, Hilton said that the new rules were adopted after a great deal of deliberation and for purely business reasons alone. According to Hilton, his action had the approval of a majority of “the better class” of Americans and many first-class hotel proprietors. Hilton said many of his hotel associates were glad to be rid of a “ruinous evil.”
Addressing the controversy, the New York Times ran an article that included interviews with local hoteliers who generally disputed Hilton’s claims that many, if any, hotels approved of Hilton’s behavior.
According to the Times, Mr. Waite, the general manager of the Windsor Hotel, was asked if the hotel discriminated regarding the admission of guests.
“We have not the slightest possible objection to Hebrews as guests at this hotel,” Waite said. “We have always found them, as a class, the promptest paying customers and have never had an account outstanding against them on our books.”
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