Villains, Scoundrels, and Rogues

by Paul Martin

  When her grandfather died in 1847, Hetty looked forward to a hefty bequest as Gideon Howland’s only grandchild. She was crushed to learn that the old sea captain had left her nothing from his estate of several hundred thousand dollars. Nearly everything went to Gideon’s two daughters—prompting Hetty to turn her avaricious eye on dear Aunt Sylvia. As Sylvia’s only niece, Hetty expected to inherit her share of the family fortune at some point. Consequently, she began lecturing her aunt about excessive household expenditures.4 Hetty wanted to make sure that her inheritance would be the maximum amount possible. If that meant serving guests skimpy portions of food, then so be it. Hetty had clearly inherited the greed gene, and she meant to make sure no one squandered what she thought she had coming to her.

  In 1860, the lust for money created a family rift when Hetty’s mother died without a will. Even though she was an heir to one of New Bedford’s preeminent whaling companies—which her husband had taken over after Gideon Howland died—Abby Robinson possessed a surprisingly modest estate of around $130,000 at the time of her death.5 Edward Robinson had assumed control of the rest of her money, arousing Sylvia Howland’s suspicions that her sister had married a fortune hunter. Sylvia argued that her sister’s assets should go to Hetty, but Edward claimed everything except for a house worth $8,000.6 The quarrel may have been one reason Edward decided to leave New Bedford (another being the decline of the whaling industry). In 1861, he moved to New York City and went to work for a shipping firm.

  Hetty also began living in New York around this time, although she returned often to New Bedford to keep tabs on Aunt Sylvia and her money, an estate that eventually ballooned to around $2 million.7 As she reached her late twenties, Hetty must have lain awake at night counting that money in her head—her money, she reasoned, if only her aunt didn’t waste it on fripperies such as food and clothing. When Hetty’s father died in June 1865, followed by her aunt just eighteen days later, Hetty expected to inherit a total of seven to eight million dollars (an amount equivalent to around $100 million today). As it turned out, she received about $1 million from her father plus a trust fund in excess of $4 million. Sylvia Howland bequeathed her a lifetime income from a trust fund of $1 million; the other half of her aunt’s estate went to a variety of charities and other beneficiaries.8 Reasonable people would have been ecstatic. Hetty, of course, was not.

  The grasping young woman spent more than two years trying to overturn her aunt’s final will, which had replaced an earlier will that would have given everything to Hetty free and clear. At first Hetty argued that her aunt was mentally and physically incapacitated when the new will was written. After that line of attack bogged down, Hetty miraculously discovered a codicil to the earlier will stating that its terms could not be changed by any later will. However, handwriting experts who examined Sylvia Howland’s signatures on the two copies of the codicil felt certain they were forgeries.9 Hetty had always been a clever girl.

  In July 1867, in the midst of the protracted legal proceedings, Hetty married wealthy commodity trader Edward Green, a business associate of Hetty’s father. The two made an unlikely pair. Whereas Hetty dressed like a charwoman and pinched every penny hard enough to leave her fingerprints in the metal, Edward Green reveled in luxury—enjoying lavish meals, fine wine, and elegant clothing. About all they had in common was their love of money. It’s said that Hetty made her fiancé sign a prenuptial agreement, even though he was worth $1 million at the time of their marriage. The pact reportedly obligated Edward to pay for all household expenses and made him responsible for his own debts.10 (Edward did pay for their living expenses, but that second stipulation would later be put to the test.)

  Before the trial over her aunt’s estate was settled, Hetty and Edward moved from New York to London. Some said the relocation was spurred by Hetty’s fear of being indicted for fraud over the dubious codicil she’d come up with.11 In London, the Greens took up residence in the grand new Langham Hotel. There, in November 1868, Hetty received the news that she’d lost the suit over her aunt’s will. The judgment was a bitter disappointment, but at least Hetty would now receive the income from the million-dollar trust fund her aunt had established on her behalf.

  As soon as she could, Hetty put that money to work, along with the funds she’d inherited from her father. While Edward Green enjoyed his London clubs, Hetty began investing in securities issued by the United States government after the Civil War. When the value of federal greenbacks fell to half their face value, Hetty snapped them up, confident that the notes would rebound, which they did. She invested heavily in government bonds, again turning huge profits. One year, she earned $1.25 million, and on one especially bountiful day, she made a profit of $200,000.12 It was the beginning of a nearly fifty-year run of successful investing, all based on a simple principle: “I buy when things are low and no one wants them,” Hetty told the New York Times. “I keep them . . . until they go up and people are anxious to buy.”13

  Hetty was never a borrower or a speculator. “More money is made in the end by an over-supply of caution than by indiscriminate recklessness,” she wrote.14 She relied on the conservative approach of value investing—buying the securities of companies that are trading for less than their intrinsic worth. It’s a philosophy that calls for shrewd judgment in gauging a company’s underlying value, which Hetty Green displayed to an uncanny degree. She excelled at sweeping up bargains during market crashes, when most investors were busy jumping out windows. The most unusual aspect of her success was that she achieved it essentially on her own: she had no partners, shunned financial advisors, hated the legal establishment, and was suspicious of most businessmen she dealt with.15 As far as Hetty was concerned, it was herself against the world.

  Around the end of 1873, the family—which now included two children, Ned and Sylvia—moved back to the United States, settling in Edward Green’s hometown of Bellows Falls, Vermont. By then, Hetty had increased her net worth many times over. Back in the United States, she began to focus on railroad and real estate investments. No matter where Hetty put her money, she usually reaped huge profits. Her free-spending spouse, however, wasn’t nearly as fortunate. Edward Green wasn’t averse to leaping into a risky speculative deal. By 1885, he’d depleted his fortune and run up $700,000 in debt at the Wall Street financial firm of John J. Cisco and Son. Hetty kept her own money at Cisco and Son in a separate account. When the bank managers asked her to pay them what her husband owed, she refused, telling the firm that she wanted to withdraw all of her deposits—more than $25 million in cash and securities.16

  Cisco’s managers wouldn’t allow Hetty to withdraw her assets until she’d settled her husband’s debts. She finally relented and paid up. Afterward, she personally removed every greenback, mortgage, and stock and bond certificate she owned from the Cisco vaults. Loading her stash into a hansom cab, she drove over to the Chemical National Bank and deposited it all. The Cisco bank, already in financial difficulty, immediately went under. And that wasn’t the only carnage. Hetty and Edward Green had recently been living apart, their marriage strained by disputes over money. After the Cisco bank incident, Hetty had no further use for her husband. “I wish I did not have him,” she declared. “He is a burden to me.”17 Though they never divorced, they went their separate ways. (Hetty did help nurse Edward during his final illness; he died in 1902.)

  After she shucked off Edward, Hetty continued to grow her fortune. During the financial panics of 1893 and 1907, she had sufficient cash reserves to provide high-interest loans to individuals, companies, and even governments. She acquired railroads in Texas and mines in California and other states. She accumulated a vast real estate empire worth tens of millions, with extensive holdings in New York, Boston, Chicago, and St. Louis. In Chicago alone, she collected more than $40,000 a month in income.18 (Hetty dispatched her son Ned, who’d graduated from Fordham University in 1888, to act as her Chicago agent, paying him a salary of $3 a day. He could have earned more shining shoes.)


  But even as Hetty increased her wealth, her personal behavior grew ever more eccentric. She began moving from one mean boardinghouse or apartment to another, partly to avoid the assassins she imagined were after her—which is why she went about armed with a revolver—but also to avoid establishing a permanent residence and being forced to pay taxes.19 In her efforts to dodge the taxman, she hopscotched around the New York area like a fugitive on the run, bouncing from lower Manhattan to Brooklyn to Hoboken, New Jersey. Usually renting under assumed names, Hetty was completely at home in the rundown neighborhoods she inhabited. She always wore the same tatty black dress and bonnet (legend says that to save money she only had the bottom edges of her long dress and petticoats laundered). She quibbled over pennies at local shops and cafés, and she avoided the luxury of taking cabs if she could walk or ride a streetcar.

  Hetty was just as cheap in conducting her business affairs. She never paid for office space, preferring to squat for free at the Chemical National Bank, whose managers were happy to oblige someone with her astronomical deposits.20 Whenever she left town for any length of time, Hetty moved all her personal belongings to the bank so she wouldn’t have to pay rent on an empty lodging. At one point, she even stashed a wagon and a buggy there. The bank’s managers must have developed the skills of Broadway actors in order to hide their shock over their prize customer’s persistent nuttiness.

  Perhaps the most bizarre thing Hetty Green ever did was to attempt to cage free medical care for her son. (Hetty also made repeated attempts to obtain free treatment for herself.)21 When he was a teenager, Ned hurt his knee sledding. At first, Hetty thought she could treat the injury, but when the problem lingered, she disguised Ned in ragged clothing and took him to a charity ward. To her chagrin, someone recognized her. The doctor insisted that she pay for Ned’s treatment, which naturally infuriated her. She left and never returned. Although she took Ned to other doctors, his leg didn’t heal properly. Years later, it had to be amputated. (Edward Green ended up paying for the operation.) For the rest of his life, Ned wore a prosthesis.

  Decade after decade, the black-clad figure of Hetty Green haunted the streets of New York’s financial district like a fierce old crow. Despite her incredible miserliness, she seems to have found her own sort of happiness. She had one or two close friends, and, surprisingly, a touch of wit (she sometimes rented rooms using her dog’s name, C. Dewey). She obviously took delight in besting her rivals and amassing riches. She was just unable to find pleasure in spending money or sharing it with others. Aside from being female, what set her apart from her contemporary financial titans—the Rockefellers, Carnegies, Vanderbilts, and Morgans—was the fact that she never leavened her insatiable desire for money with any notable acts of philanthropy.22 All her life, she hoarded her fortune like a storybook dragon sitting alone in its cave atop a pile of gold.

  Hetty Green’s historical stature is revealed by the lack of public memorials in her honor. Only one such monument exists, a building on the campus of Wellesley College, and that was paid for by Hetty’s children. Were it not for her vast wealth and legendary stinginess, Hetty Green might be completely forgotten. At times, it almost seemed as if she suffered from savant syndrome, excelling at the single skill of making money but deficient in other realms of mental and emotional development. English writer Ladbroke Black called her “an artist among misers.”23 When she died in July 1916 at the age of eighty-one—from a series of strokes brought on by an argument with a friend’s cook over some petty household expenses—she was worth at least $100 million, an amount equivalent to nearly $2 billion today. She’s said to have been the world’s richest woman at the time.24

  Writers have praised Hetty Green for her financial acumen and her pioneering role on Wall Street. There’s no denying her ability to make money, but that alone has never represented much of a case for a life well spent. And then there’s the matter of her tax avoidance/evasion. Although Hetty Green came by her fortune without the outrageous manipulation of financial markets common to the robber barons of her day, that didn’t stop her from becoming a member of that tiny subspecies of American: the super-rich tax dodger.

  In her gyrations to elude tax collectors, Hetty Green skirted the law and likely broke it.25 Her rolling stone lifestyle provided a boon to her heirs: New York and New Jersey both failed in their separate attempts to levy around $5 million in state inheritance taxes; Vermont, meanwhile, collected a paltry $58,000. New Jersey did collect $60,000 in transfer taxes on assets Hetty owned within the state, and another $1.5 million in transfer taxes were levied on her New York assets.26 All told, the taxes on the mammoth estate were miniscule. A New York Times editorial fumed that Hetty had never paid her yearly taxes in any of the states in which she’d lived. The editorial implied that she was a freeloader, a deadbeat citizen—a charge Congressman William Jennings Bryan had leveled in his successful argument for the institution of a federal income tax in 1894.27 (Hetty Green was in good company: most of the plutocrats of her day were adept at tangoing past the taxman—seemingly a genetically transmitted trait among the rich.)

  Virtually all of Hetty Green’s immense fortune was divided between her son and daughter. Ned, who took after his father, spent freely on every indulgence that struck his fancy, although he did engage in some philanthropy and public-spirited projects as well. Still, he wasn’t quite able to blow through the entire pile of loot his mother left him. When Ned died in 1936, his widowed, reclusive sister inherited more than $10 million from her brother’s estate. When Sylvia passed away in 1951, her estate was worth roughly $100 million, which she lavished on a long list of charities, friends, former employees, and distant relatives (both she and Ned were childless).28

  And so at last, Hetty Green’s relentlessly accumulated, fiercely guarded fortune finally trickled out into the world to do some good. It just took someone other than the dour old Witch of Wall Street to make that happen.

  There is one final memento of Hetty Green’s life. Her lengthy record of tax avoidance helped spur the passage of a federal estate tax, enacted two months after her death.

  David O'Keefe

  David Dean O’Keefe was not a man to run afoul of. The hulking Irishman had a temper as fiery as his shock of red hair and flowing mustache. After making his way to America in 1848 at the age of twenty-four, O’Keefe had migrated to Georgia, where he worked for a short time on a railroad gang, a backbreaking job he abandoned to become an apprentice seaman aboard a windjammer. In a few years, he earned his master’s license and began skippering coastal steamers out of Savannah. Some said he was a blockade runner for the South during the Civil War, a story he tried to quash by claiming he wasn’t old enough then to have been a captain, although that was clearly a lie, since now, in February 1866—not yet a year after the end of the war—he was the master of the schooner Anna Sims.1

  On this mild winter’s day, Captain O’Keefe was livid. One of his crewmen had failed to follow his orders. O’Keefe’s face flushed crimson as he upbraided the sailor. Suddenly O’Keefe struck the man. The sailor retaliated, pummeling O’Keefe and knocking him to the deck. Such insubordination was more than O’Keefe could tolerate. He jumped up and ran to his cabin, reappearing moments later with a pistol. O’Keefe leveled the weapon and pulled the trigger. Nothing happened—a misfire. O’Keefe tried once more, but again the pistol misfired. With a roar, the seaman charged O’Keefe, just as—on the third try—the pistol went off. The bullet struck the sailor in the forehead, killing him instantly. When the police arrived, they escorted O’Keefe to the county jail. He spent the next eight months in custody, until he was tried and acquitted. The jury ruled that the killing had been in self-defense.2

  O’Keefe was freed, but his reputation around Savannah suffered greatly, and his finances took a hit as well. Those setbacks didn’t prevent him from marrying Catherine Masters in April 1869. The new Mrs. O’Keefe was almost two decades younger than her husband, who would have been around forty-five by then. Another O
’Keefe quickly made an appearance, a baby girl named Louisa—little Lulu. David O’Keefe was now a family man, although his fortunes were still spiraling downward.

  In 1871, O’Keefe tried to change his luck by signing on as first mate aboard the merchant ship Belvidere. The vessel took him to New York, Liverpool, and, finally, Manila. From there O’Keefe sailed for China on another ship. Fetching up in Hong Kong in September 1871, he sent word to his wife that he would be home before long. As it turned out, O’Keefe never returned to Savannah. He spent the next thirty years among the islands of the western Pacific—building a reputation as a wily trader and accumulating a horde of money, property, wives, and children. Along the way, someone decided he’d become, more or less, a king (O’Keefe may have helped plant this notion with his own fanciful yarns).3 Whatever his status may have been, O’Keefe left an imprint on the islands that’s still in evidence.

  O’Keefe launched his adventures in paradise by going to work for a Hong Kong trading company. By the summer of 1872, he’d become the captain of a Chinese junk bound for the Caroline Islands in Micronesia. In a valedictory nod to his old life, he named the junk after his wife. Around the end of the year, O’Keefe reached Yap, an island complex twelve hundred miles southeast of Manila (some versions of the O’Keefe legend say he washed ashore there after a shipwreck).4 Although Yap was a trading center for bêche-de-mer (the edible sea cucumber) and copra (dried coconut meat, used to produce cooking oil and animal feed), the eight thousand or so residents of the islands remained aloof from the foreign merchants.

  Organized socially into several castes, the Yapese were ruled by village chiefs. They lived in huts, wore loincloths and grass skirts, and spent their time fishing and raising taro—just as they had for centuries. Their most striking trait was the use of large stone discs, called rai, for money. The discs, measuring up to twelve feet in diameter, took several men to carry. (The islanders still revere the ancient stones and continue to attach value to them. However, they don’t cart this cumbersome cash about like pocket change. Since everyone knows who owns which stones, exchanges can take place without the money ever moving.)5