09.30.12 8:45 AM ET
The Richest Woman in America: Hetty Green in the Gilded Age
If you’ve heard of Hetty Green at all, you probably vaguely recollect her nickname, “the Witch of Wall Street,” or once saw an old Guinness Book of World Records listing her as “the world’s greatest miser.” Janet Wallach mentions neither of those sobriquets in her cheerleading biography, which celebrates Green as a groundbreaking woman in a financial world full of men she loved to outsmart.
There’s no question Green was tight-fisted, but Wallach sees her sober Quaker garb and preference for boarding houses over swanky mansions as signs of a bold individual who didn’t care what other people thought. The author paints a surprisingly endearing portrait of someone who unabashedly stated that her main interest in life was making money.
She was born Hetty Robinson into a wealthy New Bedford, Mass., clan whose tensions undoubtedly shaped her quirky character. Her father and maternal grandfather were partners in a prosperous whaling company. Her passive, subservient mother, mortified by failing to produce a male heir, sent Hetty to live with her grandfather shortly after her birth in 1834. Soon she was reading stock quotations to the old man, whose eyesight was poor, and as a teen won her father’s approval by learning how to keep accounts.
“Money equaled affection,” in Wallach’s pop-psych assessment, which might be acceptable if she maintained the same standards throughout the book; instead, she offers a batch of snap judgments about Hetty’s youth, then rarely bothers getting inside her subject’s head again. Although Hetty was already a strong-willed young woman with an unusual interest in business, the deaths in 1865 of her father and a childless aunt, who both left the bulk of her inheritance in trusts controlled by others, completed her transformation into a driven financier. They also whetted her appetite for lawsuits to wreak vengeance on those who thwarted her; she tried to break her aunt’s will, and a suit against her father’s trustees dragged on for years.
Hetty’s fiancé, Edward Green, was an affable businessman who cheerfully signed a prenuptial agreement separating their finances. They spent the first seven years of their marriage in England, where their son, Ned, was born in 1868 and their daughter, Sylvia, in 1871. Edward served on the board of a bank; Hetty invested in U.S. government bonds and railroads. She established a lifelong principle of never borrowing, which served her well when the Panic of 1873 pushed thousands of debt-ridden firms into bankruptcy.
The Greens went back to New York, and Hetty headed down to John J. Cisco & Sons on Wall Street to deposit her stock certificates and cash—and to resume buying. Her other lifelong principle was “getting in at the bottom and out at the top,” a habit that leads Wallach to compare her to Warren Buffett. That comparison didn’t need to be drawn three times (on pages 71, 108, and 170); once would have been enough if the author had made the crucial point that Buffett, unlike Hetty, operated in a climate where the consequences of Wall Street’s excesses had been clear for decades and the benefits of conservative investing were manifestly obvious. The author’s fondness for contemporary parallels becomes even sillier when Hetty’s effort to “educate her children on the value of money” segues into “modern billionaire” Alice Walton declaring, “I have to manage my assets wisely, so that they create value.” A Victorian mother trying to instill thrift in young people is not at all the same as the heir of a retail empire talking about how to best invest her profits.
We get the point: the “wise financial ways” of Hetty and her alleged 21st-century counterparts contrast strikingly with the reckless speculation that led to the economic crashes of 1857, 1873, 1893, and 1907, to name only those that occurred during Green’s lifetime. Wallach obviously wants to make a connection with the meltdown of 2008, but all she can come up with is the shallow assertion that “as long as human beings are driven by greed and ego” they will be “driven to financial destruction.” It seems to have escaped Wallach’s notice—it definitely did not escape Green’s—that the cycle of boom and bust that fueled Wall Street throughout the 19th century (and until the advent of New Deal regulations) was not merely a manifestation of human weakness but an unhealthy and unsustainable structural problem with capitalism.
It’s probably unfair to expect substantive economic insights from a lively book that whisks readers through five decades of Green’s wheeling and dealing. She profited from every panic, using each one as an opportunity to consolidate her railroad holdings and on occasion making desperately needed loans to businesses and municipalities at favorable rates, if she thought their underlying finances were sound. There were no other women on Wall Street in her day, and even today, when female CEOs are still a rarity, few of them rebut the conventional financial wisdom of their times with Green’s unapologetic bluntness.
As for her legendary stinginess, Wallach relishes repeating some of the best stories, such as Green carrying $200,000 worth of bonds on a public omnibus and, when told she should have hired a carriage, replying, “perhaps you can afford to ride in a carriage—I cannot.” But the author points out that if required, particularly when trying to marry off her mousy daughter, Green was perfectly capable of dressing in elegant clothes and renting a suite at the Plaza Hotel.
Hetty Green died in 1916, worth some $100 million (about $2.5 billion today). She left behind no diaries or personal correspondence, which accounts for the slightly sketchy nature of all biographies of her. But Wallach, who did a nice job with another under-appreciated woman in Desert Queen: The Extraordinary Life of Gertrude Bell, brings a warm empathy to her account of Green’s life and times that makes it agreeable to read, though frustratingly superficial.