There was more than the difference between finished and unfinished roads that Joseph Seligman did not understand. But the above letter pinpoints one area of the Seligmans’ railroad difficulties: J. P. Morgan and his bank and friends. In allying themselves with Gould, the Seligmans had made a powerful enemy of Morgan. To be sure, Morgan, in return for a favor (but never otherwise), would sometimes help them out. But the Seligmans’ opportunities to perform favors for Morgan were rather few. Aligned with Morgan was August Belmont, a man never particularly eager to see the Seligmans succeed. Morgan, Belmont, and the Rothschilds formed an axis of financial power that Joseph Seligman was finding it increasingly difficult to beat.
*Curiously, when Joseph spoke of land-buying deals, he often contrasted them with “legitimate” business.
*F. Redlich, A History of Banking, Men and Ideas.
*Gould’s scheme was not unlike the gold-inflating plot devised by the late Ian. Fleming in his James Bond novel, Goldfinger.
15
“MY BANK’
Since Joseph Seligman was the leading Jewish financier in New York, the majority of his clients were also Jewish. This meant, of course, that when Joseph Seligman got nipped in one of his less successful ventures, many other New York Jews were also nipped. At the Harmonie Club, the select German Jewish counterpart of men’s clubs of the era, members took to singing, “An Seligman hab’ ich mein Geld verloren” when Joseph entered the room after one of his railroad misadventures. Joseph grew to care less for the Harmonie, and began to spend more time at the Union League Club, whose membership he sometimes seemed to prefer.
Around 1873 a curious change began to take place in Joseph Seligman. He was fifty-four and an established millionaire, but his outlook and attitude began to shift. Possibly it was a result of Grant’s Treasury offer a few years earlier, or of lunches at the White House, where people like Mrs. Potter Palmer found him amusing. It was not that he began to long for a place in New York society, exactly, but he was becoming more Americanized, more gentilized, losing some of his feeling of Jewishness. None of the Seligmans kept kosher households at this point. Joseph continued to be a member in good standing of Temple Emanu-El, but more often than not “the press of business” kept him away from Sabbath services. He had also met a young man named Felix Adler, a German rabbi’s son who advanced ideas of a society based on ethics rather than religious piety, which Joseph found interesting.
This changed frame of mind began to have a strong effect on Joseph’s approach to business. For years, the names dominating the note-issuing commercial banks—Willing, Morris, Hamilton (whose spiritual descendants still control commercial banking today)—were gentile. Commercial banking seemed the gentile banker’s private niche, just as Jewish bankers such as Joseph had found a niche of their own as note-trading merchant bankers. There had been little crossing over from these two banking areas until Joseph, in the 1870’s, decided that the Seligmans should re-establish their San Francisco business, and that this should be their first commercial bank. Joseph, aware that this would be a departure from what was considered “traditional” Jewish banking practice, chose a name with English overtones—the Anglo-California National Bank, Ltd.—and, to reinforce the bank’s Englishness, turned over its organization to his brother Isaac in London.
It is certainly a testament to Isaac’s financial ingenuity that he was able to plan nearly every detail of the bank in California (where Isaac had never been) by remote control six thousand miles away. In the process he became quite possessive about the project and began to refer to it as “my bank.” (When Abraham Seligman, who considered himself a West Coast expert, traveled to London to discuss launching the new bank, Isaac was quite nettled at his brother’s “interference,” and wrote home to say that Abraham had come to London “probably because he has nothing better to do.”)
In London, Isaac made a public offering of Anglo-California stock, and raised the impressive sum of £400,000—or about two million dollars in U.S. currency in those days. Isaac fussed endlessly over the tiniest matters and wrote to Joseph in a lecturing tone: “I need not call to your attention the great moral responsibility you now have. With God’s help our reputation will be enchanced by the Success of your management of the Bank.” He added sternly: “Should you mismanage affairs, you may rely upon it that our good name will suffer immensely, and nothing would be so deplorable as to suffer in reputation.” Clearly, in the back of Isaac’s mind through all this was his fear that Jews might be accused of overstepping themselves.
Isaac went on to instruct Joseph to send him “weekly summaries” of transactions and “intelligible reports,” and urged him to be “exceedingly careful not to incur any bad debts, not to lock up your money in any unnegotiable security, and not … to lend money to prominent politicians with the prospect of having to wait years before getting it back”—all of which sounded like Joseph’s advice to his brothers several years before.
In the spring of 1873, the bank was getting ready to open its doors and Isaac wrote a series of insistent letters to say, “You will find some A-1 man to become head manager.” Joseph replied that he had found two A-1 men—his oldest son, David, just twenty-two, and his brother-in-law (who was also his first cousin), Ignatz Steinhardt. Isaac was unhappy with these appointments. David, Isaac said, was “too green” to run a bank, “though at least he is American-born.” Ignatz, said Isaac, spoke English poorly and “must be kept in a back room.” He added that he hoped the boys would hire “a good corresponding clerk who can write a faultless business letter, for I should be ashamed to let the Directors read such rigamarole as dear David writes, and such ungrammatical English as Ignatz sends at present.”
Just before the opening, Joseph made a surprise trip to San Francisco to check on things—a move Isaac had “scarcely anticipated,” and which he considered scarcely necessary. But Joseph’s inspection tour convinced Joseph that Isaac was right: David was not experienced enough to handle the assignment, and the whole family was astonished to see Joseph withdraw his own son and replace him with a man nobody had ever heard of, Richard G. Sneath, the first gentile and first nonfamily member to be given a place of importance in a Seligman enterprise.
Isaac was startled, but he understood. “There is not the slightest objection to the appointment,” he wrote, “only the Board had better wait until form letters of resignation from David arrive, and some statement is received from you as to the gentleman intended to replace him.… You must bear in mind that things here are done systematically, and not reckless and slipshop [sic].”
During the early months of the bank, the New York stock market was unsteady. By September, prices began to drop and a number of firms failed. Joseph wrote to Isaac telling of “numerous failures, and the end is not yet. Jay Cooke & Co. suspended yesterday noon.… Let us thank God that we have made no losses.” Banks were in desperate need of cash, and Joseph tried to persuade President Grant to deposit government funds in private banks, even though, as Joseph admitted, such a move would be “clearly illegal.” By September 23 Joseph was writing Isaac: “Things look decidedly blue this evening, most of the banks decline to pay out Greenbacks or currency today, and the Chicago banks are reported suspended.” The Great Panic of 1873 was under way.
Joseph now received word from Ignatz Steinhardt in San Francisco that he and Mr. Sneath were squabbling. The point of the dispute was which man was to receive top billing; Ignatz did not see why Sneath’s name had been placed above his own on the bank’s letterhead. A weary Joseph wrote to Ignatz: “Your letter, coming as it does in the midst of an unprecedented panic gives me such a pain … you must try to get along.”
Ignatz wanted his name not only in the top spot on the stationery but also, of all things, in larger letters. Sneath’s arguments for having top position were in themselves unsettling. It would “look better,” Sneath insisted, in the San Francisco banking community if a “Christian name” headed the bank’s list of managers. Joseph had foreseen such a
n argument, and had hoped to avoid it. To Isaac Joseph wrote: “Our friend Sneath imagines there is prejudice in the American mind against foreigners and Israelites (which we are sure there ought not to be and is not among intelligent Americans).” He added: “Last summer we discovered that he [Sneath] had an exalted opinion of himself. Steinhardt has also the same trait of character.”
Joseph couldn’t decide which man was right, or—perhaps—which to blame more. He could not bring himself to dismiss his wife’s brother. In Sneath’s case, there was a year’s contract with the bank which had to be honored. Joseph wrote strongly worded letters to both men, whereupon Sneath, pronouncing himself outnumbered by Seligmans and their in-laws, huffily resigned. Joseph, aghast, wrote to Sneath saying:
Your letter … has shocked and grieved me greatly … after your promise to give the bank a trial for twelve months, you suddenly ask the acceptance of your resignation, ostensibly for the reason that you disapprove of a co-manager.… You are now pleased to say that the Bank would have more friends among the Americans but for their foolish prejudices against the religion of the bank.… Don’t you think, Mr. Sneath, that you err in this respect and do injustice to the mercantile community of San Francisco?
It was no use. Sneath refused to withdraw his resignation.
In Paris, William Seligman now chose this worst of all possible moments to announce that he wished to quit his brothers’ firm too, and for suspiciously vague reasons. Angrily, Joseph turned William’s problems over to Isaac, saying:
Now I shall not have time to write Bro. Wm. It is criminal of him to bother us now when all our intellect and energy are required in a crisis of unprecedented dimensions. I shall invite that selfish Bro. Wm. to carry out his threat. Please inform him that he is mistaken when he expects that we will buy him out. We shall do no such thing. We shall want him to come here in Jan’y and take his ⅛th share of assets consisting of railroad bonds and shares, mining shares, property, bad and good debts, and attend personally to collecting them and, my word for it, he will find himself in better health than by eating heavy dinners, drinking heavy wines, writing heavy letters to us, and doing nothing else.
From Paris, William airily explained that one reason why he wanted his brothers to buy him out was that he wished to buy his wife a diamond necklace. William seemed unaware of the panic, and had the impudence to say that he was “disappointed” with the size of his “one-eighth share of assets” at the close of 1873, the panic year. (In those days, all Seligman businesses were run as one and the profits divided among the brothers equally.) Joseph wrote to Isaac:
Now Brother William has no practical sense and if he would only act as he preaches, things would go better. I am informed that while greatly discouraged at our statements he persists in giving grand balls and dinner parties which are in bad taste and do him (nor us) no good. We don’t do it, and while the expenses of our three families with so many grown children are necessarily quite large (my own not larger than those of James and Jesse) we are trying to reduce them and certainly don’t throw away money in parties, balls, and dinners, which lead to no benefit.
In the end it usually fell to Joseph to untangle family matters when they became too intricately knotted, when the “our dear Babette” syndrome made its familiar presence felt. Joseph sent Abraham, his best-natured brother, to San Francisco, and also hired Frederick F. Low, a former Governor of California, to comanage the bank with Abraham and Ignatz. Joseph had always wanted a gentile name on the bank’s roster, and, interestingly enough, Low’s name was now given top spot on the letterhead. Abraham didn’t mind. Why didn’t Ignatz? A sum—£3,000—was credited to Ignatz’s personal account to get him to accept second billing. Joseph directed that this should be subtracted from his own share of the profits (but his brothers insisted that the £3,000 be deducted from all of them equally). Regine Seligman got her diamond necklace. Though a family rule forbade private speculation, an exception was made in William’s case. He was allowed to speculate in a certain stock; it went up, and there was enough from the profit for the jewels—and for more parties. Richard G. Sneath vanished from financial history. The Panic of 1873 subsided, and the economy started up again.
But the trouble the Seligmans had opening their first commercial bank was prophetic. In the long run, the Anglo-California Bank was not so much a financial loss as a time-consuming nuisance. In a few years they relinquished control of the bank, though they held on to some of its stock. It exists today as the Crocker-Anglo Bank.
Joseph Seligman went on becoming more Americanized, more gentilized. His letters home to his wife during his 1873 inspection tour to San Francisco revealed a wholly new—for him—appreciation of the value of land. Along with the beauties of California scenery, he pondered the joys of real estate:
My Beloved Babet:
Last evening we went out to the country to see our friend Sneath, about 25 miles from here. How I wish you might have been with us! He owns 110 acres, for which, four years ago, when the land was still a desert, he paid 11,000 dollars. Just picture to yourself groves of the finest oaks and other trees, some of which branch out 100 feet. Then imagine as many kinds of roses, pinks, violets and numberless other flowers … all sorts of German berries and plums, oranges, figs, pears, various kinds of nuts and olives, in short everything the heart could desire!… A veritable paradise!!! Moreover, there are the horses and cows, four of which latter were valued at 800 dollars apiece and yielded 16 quarts daily.
If God grants us health you must surely spend a winter here.…
Farewell, Beloved,
Your Joseph
He had actually studied the figures of that least Jewish of businesses, farming. A few days later, he grew more enthusiastic, with more statistics:
My Beloved Babet:
Day before yesterday Abe and I went by train to San José and Santa Clara. Impossible to describe to you what a paradise is that tract of land sixty miles long and six miles wide where the farmer can glean two harvests of wheat, oats, corn in one summer and twelve crops of grass and hay, and all that without a drop of rain between April and October. Who does not see it cannot imagine it. I saw there a century plant which ten weeks ago was two feet high and now measures thirty-three and a half feet and is still growing taller.* There are farmers who sell in one year $100,000.00 worth of grain, and a gentleman whom we met told us that he makes 30,000 gallons of wine each year.…
Of course when Joseph got home he was met by the panic, and Babet never got her winter in California.
One of the gloomiest days of the panic coincided with Joseph’s and Babet’s twenty-fifth wedding anniversary. They had always lived in rented houses, and were at that time living at 26 West Thirty-fourth Street, where their landlord was John Jacob Astor. Almost opposite, and next door to the Astors, a forty-five-foot wide mansion was for sale. Joseph (whose personal finances were unaffected by the panic) bought it for $60,000 and presented it to Babet as an anniversary gift. But, unlike her husband’s, little Babet’s heart still lay in the Old World. She was too much in the habit of hiding from the tax collector to live in a mansion. She was dismayed by the gift, and refused to move, so that Joseph sadly sold the house a few months later, at postpanic prices, for $62,000. (A number of years later, the building brought $750,000; Ohrbach’s now stands on the site.)
It is hard to see how Joseph found time for philanthropy during these busy years, but he did. In his growing thirst to be considered an American more than a Jew, he had backed one particularly touching cause. The irascible and sharp-tongued Mary Todd Lincoln had not endeared herself to Washington during her years in the White House and, after the President’s assassination, officialdom in the capital preferred to ignore her. Lincoln had left an estate of over $80,000, which should have been enough to keep his widow in comfort, if not in style, and yet, in 1868, she considered herself in such financial straits that she advertised in the New York World for aid. She followed this with an unsuccessful attempt to sell her personal
effects, including her clothes, at auction, which further shocked and disgusted the public. One of the few people to come to Mrs. Lincoln’s assistance was Joseph Seligman.
When she and her young son Tad moved to Europe, Joseph paid for the cost of the voyage. When she settled in Frankfurt, Joseph directed his brother Henry to look after her, and for several years Joseph and his brothers sent money to her. In 1869 a pension bill to care for the widows of Presidents was introduced in, and rejected by, Congress, whereupon Joseph Seligman wrote to Grant:
The enclosed letter of Mrs. Lincoln was transmitted to me by my brother residing in Frankfurt, with the request to intercede with Your Excellency in her behalf. My brother states that Mrs. Lincoln’s means are apparently exhausted and that she lives quite secluded. If your Excellency can consistently recommend to Congress to alleviate the pressing wants of the widow of the great and good Lincoln, I have no doubt that the bill now pending would pass to the satisfaction of the party and all good citizens.
From Frankfurt, in English grown rusty from his years in Germany, Henry Seligman wrote an even more moving letter to Senator Carl Schurz:
My object in taking the liberty of writing you today is to plead on behalf of the widow of our late good and lamented President Lincoln. She is here living in a most retired and economical way, and has to the best of my information not enough to live comfortable.… I know it is not a popular matter to vote away money or grant pensions except to Parties deserving them and I can assure there is no more worthier object that our Government can bestow than by giving to the wife of that great and good man who died in the service of his country sufficient means to live at least respectable. Why, had you dear Sir seen her as I have done last New Year living in a small street in the third floor in dirty rooms with hardly any furniture, all alone grieved and nearly heart broken, you would have said with me Can it be possible that the wife of our great man lives in such a way, and is our Nation not indebted to him, who gave up his life for the sake of freedom, that our great and rich Country cannot show at least its gratitude to his sacred Name by some small testimonial in giving to his family a comfortable Home. She … lives very retired and plain, sees hardly any one, and the shock of that terrible night’s affair, which robbed us of one of the greatest and best of men has terribly affected her health and mind.… I have written also to the Oregon Senators … also Senator Corbil from California.… My brother Joseph can inform you that we all urge the matter only on account of our devotion to the Name of Lincoln whom we all loved and respected so much, and we should not like to see his family in want for anything—With my kindest regards to your honored self wishing you continued health and prosperity, I remain yours most respectfully
The Jews in America Trilogy Page 15
