The Richest Woman in America (14 page)

While Edward engaged in business for the bank, Hetty had her own business to attend to, concentrating on investing the interest from her father’s trust fund. Like Andrew Carnegie, who cried, “
Eureka! Here’s the goose that lays the golden egg” when he discovered the power of dividends, Hetty had already learned the magic of compound interest. As a child she used her allowance to earn interest in the savings bank and saw it grow. Now she used her money to earn a high yield, paid in gold, on Civil War bonds. Even better, she
could reinvest those dividends to earn more. And all the time she was compounding her return.

Abigail Adams, who had bought “State Notes” after the Revolutionary War when there was little confidence in the new government, found out the value of depreciated bonds. Against the objections of her husband, John, who put his money in land,
Abigail used her pin money to buy the bonds, which increased far more in value than her husband’s real estate. With Edward’s knowledge of railroads and banking, with American industry booming, and with inflation soaring, Hetty increased her share of railroad stocks and U.S. Treasury bonds. The bonds would prove to be an outstanding investment.

“I started out by buying government bonds and Rock Island stock,” Hetty said, describing her first year in London. Using the gold she received as interest, she bought the bonds at a discount and earned a solid dividend. Bonds yielding 6 percent that had sold in 1866 for a market price of $75 in gold were selling in 1868 for $82 in gold, and in 1869 for $90. “In one day of that year I added a clean $200,000 to my bank account. That’s the most I ever made in one day,” she boasted. By the end of a year in London, her profits reached $1.25 million.

The opportunities were enormous for those with the stomach to take the risks. “Never borrow,” Hetty’s father told her, and she obeyed. But men like Edward Green and J. P. Morgan speculated, borrowing money at low rates in London and using the funds to buy U.S. railroad bonds yielding higher rates, and then reselling them in Europe. Some traders were buying gold in London, packing it up, and shipping it to the United States, where operators like Jay Gould, eager to corner the market, were offering ninety-day notes at huge discounts in exchange for the gold. Gould and the others were cornering the market, buying all the available gold, pushing up the price, and forcing anyone who wanted to purchase gold to go to them. The American government broke the corner by putting more gold on the market, and many traders who had paid soaring prices for the gold lost their fortunes.

Opportunists in London were also buying greenbacks from local merchants: English businessmen were paid in paper money by American customers but could not exchange the greenbacks for a decent rate at the British banks. Promissory notes, cosigned by prestigious bankers, were being sold at discounts as high as 60 percent. Marcus Goldman,
an immigrant from Germany, set up an office on Pine Street to buy and sell this commercial paper. Later he would team with his son-in-law Samuel Sachs, forming the company Goldman Sachs, to raise capital for American companies. When the American government agreed to pay par value for greenbacks, making the paper money almost equal to gold, arbitrageurs like Goldman and the Lazard Brothers, based in California and London, made a fortune.

Only a small group of investors had access to as much information as Hetty did on the railroads and their maze of lines. Her transatlantic connections, her insistent research, her in-depth questioning, and her constant reading helped her decipher the complicated financial code and decide which rails to invest in and which to avoid. Some roads were expanding, increasing their lines across lucrative territory; others were laying useless track. The Louisville and Nashville, one of the few to survive the Civil War, was growing from a local line to an interstate road. The Union Pacific was building its transcontinental route, and the London and San Francisco Bank was offering the bonds to finance it at 7 percent interest.
The completion of the route, announced in May 1869, was “a most important event, national and international,” noted one observer. Americans celebrated not just the success of the venture, but the triumph of connecting the country: in Washington, officials fired cannons, in New York and Boston, church bells rang, and in Philadelphia, the city fathers clanged the Liberty Bell.

Along with J. P. Morgan, Andrew Carnegie, and Commodore Vanderbilt, Hetty had amassed a substantial stake in the railroads. Correspondence in Hetty’s handwriting that has recently been found suggests the extent of her transactions from London. Hetty was buying railroads like a giddy girl buying gumdrops. In a letter from Paris dated February 16, 1868, and sent to the firm of S. F. Goodridge at 81 Pine Street in New York, she ordered the delivery of eighty-eight shares of Western Railroad and thirty-four shares of Boston and Worcester Rail Road to John J. Cisco’s bank. Four months later from London she ordered the delivery to Cisco of 1,250 shares of the “
Pittsburg Fort Wayne & Chicago Railroad and 700 shares of Reading Railroad which you now hold belonging to me.” In October 1868 she ordered $13,000 worth of Chicago and Rock Island Rail Road
bonds delivered to Cisco. In January 1869 she wrote to Goodridge: “Please deliver to the order of Mr. John J. Cisco & Son one thousand three hundred and seventy shares of the Rock Island & Pacific Rail Road belonging to me … Hetty Howland Robinson Green.” The following month she ordered Goodridge to deliver to Cisco more than five hundred shares divided among eight different railroads, including the Boston & Maine; Boston & Providence; Vermont & Canadian; and the Philadelphia, Wilmington & Baltimore (the predecessor to Amtrak). Hetty was no frivolous young wife wandering aimlessly through her inheritance; she was a brisk investor plowing her money into America’s future.

Active in finance, Hetty was also flourishing on the personal front. She and Edward traveled across the continent and visited friends in the English countryside. At their London hotel, they could enjoy elegant meals in the brocaded dining room, or read in the palm-fringed lounge, or relax in their lavish suite. On August 22, 1868, in her bed at the Langham, she gave birth to a son, Edward Howland Robinson Green. Her mandate was to protect the family fortune and keep it intact for the next generation. Her son’s birth ensured her an heir; she would make certain he inherited her wealth. Hetty’s wish for Ned, his nickname for life, was that he be the richest man in the nation. She would do everything in her power to make that wish come true. But even before Ned was two months old, Hetty received news that posed an obstacle to her goal.

Hetty’s Massachusetts lawsuit against the trustees of her aunt’s estate was founded on the idea that she and Sylvia had made a contract to draw up mutual wills. The trustees had countered with charges that Sylvia’s signature on the will was fake. In the end the judge ignored both sides and surprised them all when he declared a mistrial based on a technicality.

The state’s law restricts the right of a witness to testify for him- or herself in an action involving a contract when one of the other parties is dead. With Sylvia no longer alive, Hetty could not testify on her own behalf. But without her testimony, the court declared there was not enough evidence to justify her claim. Nonetheless, the judge predicted, the case would serve as an example for establishing rules of evidence in other forgery cases. Indeed, the Howland Will Case, the
first proceeding to use statistical evidence, continues to be read and discussed in legal textbooks and lawsuits.

Hetty’s case was dismissed, but she was unwilling to accept the decision and filed an appeal. A few weeks later the two sides compromised. Hetty agreed that the parties would receive what they were bequeathed plus 6 percent interest annually from the date of Sylvia’s death. Upon Hetty’s death, the money would revert to the estate and be distributed to all her grandfather Gideon Howland’s heirs. She insisted, however, that the taxes on the money be paid from the principal, not from the income, and resolution of the case was delayed again.

On January 7, 1871,
Hetty gave birth to a daughter: Hetty Sylvia Ann Howland Green. To those who thought it strange she had named her child after the woman whose will she had allegedly forged, Hetty insisted it was proof of her innocence. “Why do you suppose I’d have named my daughter Sylvia Ann Howland if I had forged my aunt’s name?” she snapped. “I’d have had a living picture of forgery before me all these years.” Her daughter would be less an image of her aunt Sylvia, more a reminder of her mother, Abby: overshadowed by the rest of her family, the girl clung to her family’s side, hesitant to speak, fearful of making friends.

With the birth of Sylvia, Mama and Papa, as they affectionately called each other, moved their residence from the Langham Hotel near Portland Place to a private house off Fitzroy Square, not far from the British Museum. The census that year listed the four Greens and their eighteen-year-old servant, Elizabeth Williams, as living at 33 Charlotte Street, noting that Edward’s business was “East India merchant.” But he was far more than that. He was an affable member of London’s clubs, a speculator in the financial markets, and a prospering director of three banks that now included the German Bank of London and the London Banking Association, whose interlocking directorates boasted some of the world’s most influential financiers.

Edward’s business took him to the Continent, where the London and San Francisco Bank had agents in Paris, Amsterdam, Antwerp, Berlin, and Frankfurt. Hetty sometimes joined him, crossing the channel through the narrow Dover Strait, watching the white cliffs fade away as the boat hurtled toward the French coast. In Calais they boarded a train for Paris, Holland, or Germany, where Edward marketed
his railroad bonds and together they attended concerts and visited galleries. Later Hetty told a reporter: “I have seen art as it is in Paris, in London, in Munich, in Holland, and there is real art there, as you no doubt know.” There was real art in America too, she added.

Of all the experiences she had, there was one in particular that she liked to relive. Edward’s colleague Milton Latham, the head of the London and San Francisco Bank in California, was building a home for his new bride. The million-dollar house on Nob Hill was being furnished by the well-known Herter Brothers in the Second Empire style, and Latham wanted five thousand yards of curtain lace to cover the windows in the fifty-room mansion. He asked Hetty to purchase the lace for him in Paris.

Staying at the Hotel du Louvre, in the shadow of the museum and the Palais Royal, Hetty had samples brought to the room and proceeded to order the delicate fabric. As always, she was wary of the shopkeeper. To make sure she received exactly what she wanted, she laid the piece of duchesse lace across a cushion and worked for hours pushing pins inside the cutouts to retrace the pattern. A few days later her order arrived, and just as she suspected, the fine lace had been replaced with a coarser one. Take it back, she told the owner, who informed her she knew nothing about lace. “I may know nothing about lace but this is twice as rough,” she said. When the shop owner threatened to sue, the Quaker lady produced the pin cushion and the pattern she had laid out. “I’ll sue you,” she said (another pattern she would follow for life). With that, the shop owner produced the delicate lace she demanded. Hetty enjoyed almost nothing as much as outwitting a man, especially when the man was trying to outwit her.

Back in England, she and Edward enjoyed the company of W. Wetmore Cryder and his wife, and chose him to be godfather to their newborn daughter. Cryder, who came from a family of merchant shippers involved in the opium trade in the Far East, was now a colleague of Edward’s. The two men planned a shipping company that would run a line of steamers from China and Japan to a U.S port on the Pacific that would connect with American railway lines, but the business venture never took off.

The Greens sojourned in the country and at the seaside and spent time in Sussex with Hetty’s cousin Sylvia Grinnell. The daughter of
Henry and Sarah Grinnell, she was married in England in 1871 to Captain William Fitz-Herbert Ruxton, a British navy man. Hetty and Edward most likely attended her wedding and Sylvia Ruxton served as godmother to the Greens’ daughter, Sylvia.

They visited their friends Robert Rodger, a British barrister who carried the titles Lord of the Manor of Hadlow and Peckham and High Sheriff of Kent, and his wife, Sophia, who was godmother to Ned. There was not only space for the children to poke around Hadlow Castle, the Rodgers’ huge Gothic home in Kent, there was more than enough room to accommodate the Greens and their maid. The philosopher Edmund Burke, an eighteenth-century visitor, found the apartments “lofty and spacious”; few guests could ignore the eleven bedrooms or the 120-foot corridor illuminated by stained-glass windows, the sculpture court lined with ancient Greek statues, and the awesome tower inspired by Burke’s
Sublime
. And as if staying in a castle were not enough, her friends arranged something even better: with an engraved invitation in hand, Hetty dredged up her debutante days and practiced her curtsy before she was presented to Queen Victoria.

In town, she enjoyed more pedestrian pleasures, taking the children on strolls to Regent’s Park, to the zoo, or along the city’s leafy streets. On a long walk from their house to Knightsbridge, Hetty noticed a delivery man suddenly fall from his cart. A crowd quickly gathered around and stared as the man lay bleeding, but no one did anything to help. Hetty, dressed as usual in plain, outdated clothes, told the children to stay near a tree while she rushed to the wounded man’s side. Years of caring for her mother, father, and aunt had taught her skills in nursing, and she quickly ordered an onlooker to run for a doctor, told another to bring some water, and cleaned the man’s cuts with her handkerchief.

As she returned to her children, a footman approached and asked that she follow him to his marchioness’s house. There, the lady complimented the rumpled Hetty, explained that she volunteered at a charity hospital, and offered her a job as superintendent. When Hetty politely declined, the footman followed her home. Later, he returned with an apologetic note. The marchioness did not realize who she was; would she please accept the tickets to the bazaars and entertainments enclosed in the envelope? Hetty returned them all and later called on
the woman, thanking her for the compliment of a job offer. She told the story often: more than an accolade, it was recognition of Hetty as a worthy human being.