The war was over. The boom was on. In the South the cotton market was reviving, and soon the Seligmans opened another office in New Orleans. It was there that Joseph Seligman achieved a remarkable feat of postwar diplomacy. He invited General Ulysses S. Grant, former Commander of the Northern Forces, and Brigadier General Pierre Gustave Beauregard, former Commander of the Southern Army of the Potomac, the man who directed the firing on Fort Sumter, to dinner.
Certainly it is one of the great tragedies in Civil War history that the dinner-table conversation chez Seligman was not recorded. But it is known that dinner started with “delicious little prawns from the gulf,” and that the two generals “chatted amiably.” Grant drank rather a lot of Alsatian wine and, at one point, wanted to sing. After dinner the two generals played snooker in the billiard room. Grant lost, then the two old enemies went for a brief stroll, arm in arm, through the starlit garden while Joseph Seligman smiled benignly on.
*In 1931 Wells, a former Seligman staff member, completed a thousand-page manuscript, “The Story of the House of Seligman.” Never published, it reposes in the New-York Historical Society Library.
PART III
INTO THE MAINSTREAM 1866–1899
11
PEDDLERS IN TOP HATS
James Truslow Adams calls the years following the Civil War “The Age of the Dinosaurs.” In it, fortunes would amass in America on a scale never before imagined. Twenty years earlier there had not been five men in the United States worth as much as five million dollars, and there were less than twenty worth one million. Soon a New York newspaper would report that there were several hundred men in the city of New York alone who were worth at least a million, and some who were worth more than twenty million. The fortunes, furthermore, were being made in ways never before heard of—from steel mills, steam engines, and oil from the Pennsylvania hills. Telegraph lines were stretching across the country, the Cattle Kingdom was opening in the West, railroads were being built furiously and recklessly—parallel to each other and at cross-purposes with each other—to tie the sources of wealth together, and entrepreneurs from all over America were descending on New York to tap the money market.
To Old Guard New York, the situation was alarming. George Templeton Strong, a diarist of the period, bemoaned the “oil-rich shoddyites” from out of town who invaded the city,* and wrote:
How New York has fallen off during the last forty years! Its intellect and culture have been diluted and swamped by a great flood-tide of material wealth … men whose bank accounts are all they rely on for social position and influence. As for their ladies, not a few who were driven in the most sumptuous turnouts, with liveried servants, looked as if they might have been cooks or chambermaids a few years ago.
The ladies in their snappy turnouts and the men with their expanding bank accounts appeared to care nothing about the things that mattered to people like Mr. Strong. They seemed to consider “background” unnecessary. As a character called Mrs. Tiffany in the play Fashion, an ex-milliner whose husband had struck oil, commented, “Forget what we have been, it is enough to remember that we are of the upper ten thousand.”
Central Park had been carved out of the middle of Manhattan in 1856; if this move had been delayed for as little as ten years, there probably would have been no park at all; the land would have become too precious. Now the winding roads through the park became avenues where ladies paraded ritually every afternoon for the world to envy and admire. The park’s bridle paths made riding fashionable, though a Miss King complained that she received “disapproving glares” from the windows of the Union Club when she drove by, behind her own little pony phaeton. Men such as Theodore Roosevelt and DeLancey Kane used the park to show off their dashing four-in-hand coaches.
Society still lived well below the park, on lower Fifth Avenue, and Ward McAllister had announced that he really could not bother “to run society” north of Fiftieth Street (the park began at Fifty-ninth). Along lower Fifth, however, the mansions of Astors, Vanderbilts, Webbs, Jays, Roosevelts, Morgans, Morrises, Newbolds, and Rhinelanders were a marvelous fairyland of spired, turreted, gabled, and minareted castles in styles borrowed from every place and period imaginable. It all added up to “New York aesthetic,” and the street dazzled visitors. In New York drawing rooms Eastlake furniture with its cut-out gilt designs was being replaced by Venetian Gothic. Stylish decorative touches included elaborate vases filled with cattails, Japanese fans, and medieval suits of armor. Embroidery was fashionable, and heavy embroidered “throws” were draped languidly across velvet chairs and sofas. In the rich suburbs—Westchester County led in chic—it was the era of the cast-iron lawn animal—the deer, the elk, and the Saint Bernard dog being the beasts most favored.
It was an era when a display of wealth was considered perfectly proper. A fashion note was the “peek-a-boo” ladies’ shirtwaist, which allowed the wealthy lady to display a bit of herself along with her costly clothes. A great deal of formality, even stiffness, characterized all social occasions. Society families dressed for dinner even when dining alone. Food was heavy, plentiful, but unimaginative—August Belmont’s meals were an exception—and eight-course family dinners were no surprise. It was an era so well tended that guests, arriving at the Frank Vanderlips for dinner on the wrong evening, were, to spare them embarrassment, not advised of their mistake, and were simply ushered in to a customary eight-courser. The calling-card ritual became so elaborate that only a few people could remember all its rules, and most women had to keep the little manual in their reticules to look up which corner of which the card should be turned down for which occasion and so on. Symbolic of the heaviness of the period was the moment at the ball given for the visiting Prince of Wales in 1860 when the ballroom floor started to collapse from the weight of the gathering and had to be hastily shored up from beneath.
It was a society also that was eager to classify itself, to decide who was who, who “mattered” and who didn’t. The personality of Ward McAllister suited this new attitude perfectly—he may even have invented it. McAllister had decided that there were two elements of importance in New York—the “nobs,” as he called them, or the old families who had more position than money, and the “swells,” a newer-rich group who “had to entertain and be smart” in order to hold their own. A Morris or Van Rensselaer, in other words, was a nob. A Vanderbilt was a swell. McAllister decided that a coalition society should be formed out of these two groups, in order to form “a fixed upper class” that would resist the invasions of “profiteers, boorish people, people with only money.” McAllister did not say that this included people like the Seligmans, but the implication was clear.
McAllister’s formula was as good as any, and, since society needed formulas to reassure itself of its importance, it was adopted. There were no Jews at all in McAllister’s combined group,* and the unspoken sentiment began to be felt that, though Jewish bankers would be tolerated in the financial community of Wall Street, they would not be welcomed on Fifth Avenue. New York’s patrician Sephardic families quickly noticed that their names were not included in McAllister’s collection either. Some Sephardim expressed relief at this. But others resented it. They blamed the new exclusivity on the behavior of the “loud, aggressive, new-rich Germans.” To the Sephardim, the Germans had become the toplofty, arrogant “Mrs. Tiffanys.”
Society might be able to overlook the German Jews, but the business community no longer could. The Seligmans were a fact of Wall Street life, and now the Lehmans began to emerge. Despite the setbacks of the war, the Lehmans had quickly revived their cotton business. Emanuel re-established himself in Fulton Street, and Mayer—with his Southern partner, Mr. Durr—reassembled Lehman, Durr & Company in Montgomery, and simultaneously opened Lehman, Newgass & Company in New Orleans (with his brother-in-law, Benjamin Newgass), once again around the corner from the Seligmans. Montgomery was the center of the Alabama-Georgia-Piedmont cotton trade, while New Orleans served the rich Mississippi-Louisiana area. In 1866 n
early a third of the cotton shipped from American ports passed through the port of New Orleans, and in the inflationary postwar period cotton soared to the unprecedented price of fifty cents a pound. But New York was still the money capital of cotton, and in 1868 Mayer Lehman decided to join his brother, leaving Newgass and Durr to handle affairs in the South. Lehman Brothers took new offices in Pearl Street, just off Hanover Square, center of the cotton trade.
One thing was noticed that had not been apparent before: the two brothers looked almost exactly alike, with bright eyes, full beards, and high foreheads. The effect of twinship created the impression of one Lehman being several places at once, and their attitudes of bounce, ebullience, and good nature soon earned them the quaint nickname of “the Cheeryble Brothers.” (In their portraits which hang in the partners’ room at Lehman Brothers, they do not look very Cheeryble; they look properly bankerly and stern, but doubtless being together after a long separation made them Cheeryble in 1868. At Lehman Brothers the bearded faces in the partners’ room are called “the Smith Brothers,” since there is a certain resemblance to the cough drop pair.)
But appearances can be deceptive. Temperamentally, the brothers were quite different, Emanuel the “inside” money man, Mayer the outgoing contact-maker. Emanuel was conservative and cautious, Mayer speculative and bold. Members of the family have said that Emanuel would study the financial picture and say, “It’s a good time to sell.” Mayer would look at the same evidence and say, “It’s a good time to buy.” Once, at the height of a panic on the Cotton Exchange, Mayer was seen striding out of his office in silk hat, frock coat, and striped trousers, with his heavy gold watch fob swinging at his waist, wielding his gold-handled stick and wearing a smile on his face and a general air of confidence. A young associate ran up to him and said, “Mr. Lehman, aren’t you worried?” Mayer replied, “My dear young man, I see you have had no experience with a falling market,” and strode on. Others in the family summed up their differences, saying, “Mayer makes the money and Emanuel conserves it.” (In the portraits, one notices that Emanuel wears a dark and sober cravat; optimistic Mayer wears a jaunty, Cheeryble bow tie.)
Nor were the Seligmans and Lehmans the only immigrants in New York who were making the great transition from peddling and store-keeping in the provinces to banking in the big city. Now, in 1867, the downtown financial district noticed a new firm called Kuhn, Loeb & Company, and its top-hatted little proprietor, Solomon Loeb. At his wife’s insistence, Loeb had moved from Cincinnati—the “Porkopolis” she hated—had bought a brownstone in East Thirty-eighth Street (though he was warned that it was “too far uptown” and was “sure to be a bad investment”), and had opened his private banking offices in Nassau Street. The firm had a starting capital of $500,000, and the original Kuhn, Loeb partners were listed as “A. Kuhn, J. Netter, S. Kuhn, S. Loeb, S. Wolff”—all relatives. (Loeb’s original partner in the Cincinnati clothing business, Abraham Kuhn, soon retired from the firm and returned permanently to Germany.)
Marcus Goldman, another cloak-and-suiter, also yielded to his wife, and removed her from the city she disliked so much, which was Philadelphia. In New York, Goldman hung out a shingle in Pine Street announcing that he was now “Marcus Goldman, Banker and Broker.” The Goldmans entered the brownstone world of Murray Hill, and joined the group of families whose spiritual center was Temple Emanu-El, and whose acknowledged social leaders were named Seligman.
Marcus Goldman’s downtown “office,” like those of most fledgling bankers of the day, was in sharp contrast to the way he lived uptown (around the corner from the Astors) and the way he dressed. Sumptuous downtown offices were still a long way off, and Marcus’ was a cellar room next to a coal chute. In these dim quarters he installed a stool, a desk, and a wizened part-time bookkeeper (who worked afternoons for a funeral parlor).
In what was the standard banker’s uniform—tall silk hat and Prince Albert frock coat—Marcus Goldman started off each morning to visit his friends and acquaintances among the wholesale jewelers in Maiden Lane, and in the “Swamp,” where the hide and leather merchants were located. Marcus carried his business in his hat. He knew a merchant’s chief need: cash. Since rates on loans from commercial banks were high, one means New York’s small merchants had of obtaining cash was to sell their promissory notes or commercial paper* to men like Marcus at a discount. Commercial paper was then being discounted at 8 to 9 percent, and Marcus purchased these notes in amounts ranging from $2,500 to $5,000 and tucked the valuable bits of paper inside the inner band of his hat for safekeeping. As his morning progressed, his hat sat higher and higher above his forehead.
Then, in the afternoon, he would head uptown to the commercial banks. He would call on the Commercial Bank in Chambers Street, the Importers & Traders in Warren Street, or the National Park Bank in John Street. He would see the cashier, or perhaps the president, deferentially remove his hat, and they would begin to dicker.
Marcus was doing what Solomon Loeb was doing, what the Lehmans were doing with their cotton bills, and what the Seligmans were doing on a somewhat grander scale with their bonds (which in essence are simply government, or industry, promises to pay). Marcus, however, didn’t seem to need partners. From the very beginning, he was able to sell as much as five million dollars’ worth of commercial paper a year.
Bertha Goldman was able to afford, in 1869, one of the “sumptuous turnouts with liveried servants” described by Mr. Strong to take her on her morning rounds of shopping and errands. But Marcus chose to walk. So did Solomon Loeb. So did the Lehmans and the Seligmans. “Trading on the Street” meant just that. As the pedestrian bankers met each other, they bowed to each other solemnly. On their daily tours they appraised the altitudes of each other’s hats.
Walking was becoming a tradition among the Jewish bankers. They all had wives who believed in feeding their husbands hearty breakfasts, enormous midday meals, and Lucullan dinners. Walking countered some of the effects of these. There was a point of dignity, too. Carriages were for lazy men and men of little consequence. The splendor of the conveyance could dim the splendor of the passenger folded up within. Walking toughened the physical and moral fiber, but it was also a social form of locomotion. Walking, a man could meet his friends. Afoot, he could keep abreast of what the competition was doing. One did business while one walked, and one walked even when one sailed. In a few years’ time, Jacob Schiff—who would tower above every financial figure in Wall Street—would be able to boast that he had made a million dollars while doing his morning constitutional about the deck of the Berengeria. (The Jewish bankers were remarkable among nineteenth-century travelers because they talked to people; gentile society of the period was antisocial when it traveled, afraid of strangers, foreigners, parvenus, and other dangerous shipboard alliances.)
Of course it also may have been true that the bankers walked out of habit. The grandiose phrase for men like Marcus Goldman, Solomon Loeb, and the Seligmans was “merchant bankers.” But they were, in many ways, still peddlers covering their routes, only now they were peddling IOU’s.
* Mr. Strong himself, however, owned ten thousand shares of Kenzula Petroleum.
* Unless, of course, a persistent bit of gossip one still hears in New York is true–that the Astors themselves were originally Jewish. There is also a little band of old New York families who make the same assertion about the Vanderbilts.
* One way to visualize a piece of “commercial paper” is to think of a post-dated check. If, today, you drew a check for $100 dated six months from now, based on funds you expected to have by then, you would find few people who would give you a full $100 for that piece of paper. But you might find someone willing to pay you $90, and that person, in turn, might find a more affluent source willing to buy it from him for $95. It is illegal to trade personal checks this way, but commercially it is quite a legal operation.
12
THE “OUR DEAR BABETTE” SYNDROME
By the war’s end Joseph Seligm
an’s wife had presented him with a total of nine children, five boys and four girls. Joseph’s brothers and sisters, and their wives and husbands, were following Joseph’s prolific example, and having seven, eight, nine, even thirteen children apiece. From the original eleven immigrant Seligmans, the combined Seligman family—husbands, wives, and children—had swollen to number 104, or, as Joseph reminded his brothers, a profit in people of 845 percent.
Dynastic Joseph mother-henned all the pregnancies in the family, which was quite a job since there were often several at once. Naturally he preferred male children to female, and he seems very nearly to have gotten his way. Of eighty-two Seligman children, forty-four were boys. The Seligman children also defied infant-mortality rates of the period. Of the four score plus who composed the second generation, only two did not live to maturity. This healthy and numerous tribe would, one might think, provide personnel to staff an operation of almost any size.
There was only one trouble, one which affects all dynasties, and one which New York German Jewish families, who drew an equation between the family and the business, would all encounter. Joseph encountered it early, long before he was required to tackle the job of fitting sons, sons-in-law, nephews, and nephews-in-law into the slots he had ordained for them. No sooner had he got his transatlantic and transcontinental table of organization set up, with each brother-in-law and brother in his appointed place, than he discovered he had men who were unhappy at, or unequal to, their duties. There was Max Stettheimer, for instance, Joseph’s sister Babette’s husband.
The position of a Seligman sister was a difficult one to begin with. She was totally dependent on her brothers for money, and though they were generous, it was in a high-handed way which left the girls in the dark as to how wealthy the family really was. Monetary matters were considered damaging to a woman’s brain, and so the Seligman brothers spared their womenfolk all financial details that they believed were beyond their grasp. Whenever business went badly, the women’s allowances would be cut, but never with an explanation. The women resented this, but there was nothing they could do. The men were making the money, and were their benefactors.
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