In late January 1885, what had been an unusually mild winter in New York suddenly took a turn for the worse. The temperature dropped seventeen degrees in a single day to well below freezing, and gale force winds battered the coast. Ships, unable to approach the harbor, rode out the storm just offshore. The brig W.N.H. Clements finally limped into the Atlantic Dock under tow after a terrifying night at sea with her sails shredded, her anchor cables snapped, her crew nursing frostbitten hands and feet, and her entire length encased in ice. On shore, winds whipped angrily around the banks and brokerage houses of lower Manhattan, kicking up clouds of sand and dust from the street that temporarily blinded carriage drivers and pedestrians and lodged into every fold of clothing. Brokers and traders could be seen dashing down streets chasing high hats blown from their heads. But Hetty, who had arrived in New York a few days earlier, alone, was far more concerned about the financial storm raging in the offices of John J. Cisco and Son at 59 Wall Street. Some celebrities burst onto the scene so suddenly and with such force that the Before and After of their fame is as obvious as two cities separated by a fissure in the earth. For Hetty Green, the precipitous time was that January, when Cisco and Son, where Edward invested and where Hetty kept her securities, collapsed. She was two months past her fiftieth birthday, a time of life when most people have already settled into the routines that will define the rest of their lives. But Hetty’s life would never be the same. After the Cisco failure, she would declare independence from her husband, and war on the world.
Both Hetty and Edward had a long history with the bank. John J. Cisco was an erstwhile dry goods merchant who had served as assistant United States treasurer before starting the bank in 1867. Edward had done his banking with Cisco for quite some time. Hetty trusted the bank’s conservative, staid reputation enough to place her securities there for safekeeping. Cisco was amused by Hetty’s eccentricities when she came to New York from Bellows Falls to check on her holdings or add something to them. He loved to tell of the day he was looking out the window of the company’s building at 59 Wall Street and saw Hetty stepping off of a public coach on Broadway, carrying a bulky parcel. He went to the front door to greet her, and learned that the parcel contained $200,000 in negotiable bonds.
“Don’t you think it was risky for you to have brought these bonds downtown in a public stage? You should have taken a carriage,” Cisco said.
Hetty arched her eyebrow. “Perhaps you can afford to ride in a carriage. I cannot.”
Since Cisco’s death in March 1884, the firm’s business had been handled by his son, John A. Cisco, and his partner Frederick W. Foote. As managers, the junior Cisco and Foote were less cautious and conservative than the elder Cisco. The bank had been financial agents for the Houston and Texas Central Railroad. Cisco and Foote didn’t just handle the financial arrangements; they bought heavily in the railroad’s bonds, both personally and on behalf of the bank. In 1884, a conglomerate bought the railroad as a possible link in a new transcontinental railroad, one that would mirror and augment the northern route. The man behind the conglomerate was Collis P. Huntington, the forceful, fiery, and headstrong leader of the Big Four, the cadre of tycoons that had carved the Central Pacific Railroad, the western portion of the first transcontinental line, through mountains and forests. But no sooner had the sale gone through than Huntington and his associates shocked investors by defaulting on a bond payment due January 1. The Houston and Texas Central, Huntington announced, was in far worse shape than originally thought. The railroad’s bonds plunged. The bank’s Houston and Texas Central holdings dropped in value from $304,000 to $182,400. Foote and Cisco had also invested heavily in another railroad, the Louisville and Nashville, which had run into trouble as well. In a short time, Cisco’s personal assets dropped in value from $77,000 to $32,000. Foote’s decline was even more dramatic, from $153,500 to $21,500.
Word that Cisco and Son was in trouble spread around Wall Street and made its way up to Hetty in Bellows Falls. She wasted no time in writing a letter to the principals. The bulk of her fortune—her securities—was not exposed, but her cash deposit of more than $550,000 might be in jeopardy if the bank failed. She demanded that the entire deposit be transferred at once to the Chemical National Bank. Cisco and Foote gulped when they read Hetty’s letter. She was not the only one to ask for a withdrawal as the rumors spread. But the desperate partners could not afford to lose their largest single depositor.
Hetty had every right to expect Cisco and Foote to do as she had asked. But there was a complication, which the partners cited in refusing to honor her demand. It seemed that while Hetty was the largest depositor at John J. Cisco and Son, Edward Green was its largest debtor. The pride of Bellows Falls, Far East trader extraordinaire, owner of thirty-one suits, generous tipper, and man-about-town, owed the bank no less than $702,000. Green had been a close associate of Foote and Cisco’s, and had been involved with them in a variety of investments. Like them, he had been a major investor in the Louisville and Nashville Railroad, serving on its board of directors and even for a short time as its president. Doubtless the collapse of the L&N had hurt him badly, but the overall economy of the early 1880s offered any number of opportunities for a speculator to lose money. Whatever Edward’s specific investments, his performance during this time tells an all too familiar tale of a man chasing one doomed investment after another in a desperate bid to recapture a lost fortune. As Edward sank further and further into debt, John J. Cisco and Son was only too willing to continue extending credit to him. Edward never explicitly offered Hetty’s fortune as collateral—at least, the bank presented no evidence of this. Nevertheless, creditors did not hesitate lending money to a man whose wife sat on a pile of $25 million. Now, Cisco and Foote asked Hetty to make good on the debt.
It’s not clear just when Edward’s serious troubles began, but a quitclaim deed, buried in an old record book in the town clerk’s office in Bellows Falls, provides a clue. It is dated June 19, 1884, three months after the death of John J. Cisco. The deed, signed by Cisco’s son, relinquished the elder Cisco’s claim to the Tucker House, for the sum of one dollar. The new owner specified in the deed is Hetty Green. There seems only one reasonable (and utterly poignant) inference to draw from this document: Edward had put up his house, either as collateral or as direct repayment of a loan, and lost it. The New York bankers, with little practical need for a house in Vermont, in turn agreed to hand the house over to their largest depositor, as a gesture of goodwill. As of June 1884, Edward was living in his ancestral family home as a guest of his wife.
Hetty was sitting in that very house, seething, when she wrote a second, and much sterner, letter to Cisco and Foote. Her husband’s finances were his own affair. She had no intention of covering loans she had not taken out. Should the bank refuse to release her money at once, she would sue. When Foote and Cisco received this missive, they took what they saw as their only remaining recourse.
The New York Stock Exchange had already closed for the day on January 15, 1885. Moneymen from the city’s banks and trusts were already bundling on their coats against the winter chill in wind-whipped lower Manhattan. Cisco and Son issued a terse announcement that it was suspending operations. Then as now, bad news was usually relayed after the close of the business day, to allow traders to mull and sift and sleep on news before reacting to it.
Despite the rumors about Cisco that had circulated for days, the announcement took Wall Street by surprise. Cisco and Son was still known as a conservative house, not given to rash speculation. The New York World wrote the following day: “The fact that the firm did not do a speculative business to any great extent, that it received very large deposits from innumerable persons and corporations, that it had acted as fiscal agent for several railroads and as correspondent for many out-of-town bankers; that it did a large business in issuing letters of credit to travelers in Europe, made the failure a more than ordinary disaster.”
Bankers, investors, and financial reporters around lower Manhattan immediately began looking for the villain responsible for bringing the house of Cisco to its knees. As it turned out, there were several possibilities. They turned their anger and resentment first on Collis P. Huntington, the leader of the Houston and Texas Central. To anyone with more than a passing interest in the affair, the railroad’s failure to make the bond payment looked less like financial distress than a calculated and insidious plan by Huntington and his associates to marginalize outside bondholders and consolidate control of the company. No sooner had the bonds plummeted in value than the Huntington group started buying them up at bargain prices from distressed bondholders. It was the sort of act that today might earn Huntington and his cronies at the very least a hot seat before the Securities and Exchange Commission, various Senate and House committees, and an intimate examination by the Justice Department, if not jail time.
In the wilder and woollier nineteenth century, the average investor could do little but gnash his teeth in anger as Huntington himself pleaded ignorance and mild surprise at the whole controversy. In a self-serving letter to the New York Daily Tribune two days after the Cisco failure, Huntington wrote that his Southern Development Company had acquired the Houston and Texas Central indirectly, as part of a much larger acquisition of industrialist Charles Morgan’s Louisiana and Texas Railroad and Steamship Company. Huntington claimed that since he had neither built the railroad nor issued the bonds, he was not responsible for paying interest on them. “I have been and am wholly unable to bring myself to the conclusion that any legal or moral obligation existed for my payment from my own resources the maturing coupons upon bonds of a railway company with which I have become connected only in the indirect way which I have mentioned.” As for his subsequent eagerness to buy the depressed securities, Huntington explained that he did so only as a favor to investors who felt themselves “inconvenienced” by holding nonpaying bonds.
Two other obvious culprits in the episode were John A. Cisco and Frederick W. Foote. Their crime was one not of malice but of gross naivete. As one anonymous investor wrote the day after Huntington’s letter appeared: “The Messrs. Cisco were the financial agents of the Texas Railroad Company for a long series of years, and ought to have known precisely what was its financial condition.” What the letter writer didn’t say is that Cisco and Foot should also have been more wary in dealing with Huntington, whose reputation for devious tactics was already well established.
Within a few days of the collapse, the press and the financial community had identified a new villain. The headline in the New York World of January 18 stated it succinctly:
HETTIE GREENS MILLIONS
HOW SHE CAUSED THE RECENT FAILURE OF
JOHN J. CISCO & SON
“John J. Cisco & Son have nearly eight hundred creditors,” the article began. “The report in yesterday’s WORLD that Mrs. Edward H. Green was the heaviest of these received further confirmation in Wall street yesterday. The amount of her deposit in the bank is about $475,000 [sic]. Curiously enough while she is a creditor of the firm her husband is its principal debtor.” The World’s story explained the crux of the argument against Hetty:
The friends of the house say that if Mrs. Green had taken up the loan made to her husband it would not have been forced to suspend. It makes her largely responsible for the failure and subjects her to much criticism for the selfishness which actuated her conduct towards a firm which for twenty years has acted as her financial agent, collecting her interest and looking after her interests, besides guarding with honor the securities held by it in trust for her, amounting to the enormous total of $25,000,000. The friends say that if, under a strong pressure, the firm had but used for a day or two a million or two of her securities in its possession, it might have bridged over the gulf and saved itself from financial wreck.
As the World thus praised Cisco and Foote for their gallantry in resisting the temptation to pilfer a million or two from Hetty’s securities (which, given their recent record, they might well have lost), the Tribune concurred that Hetty’s “peremptory demand for the transfer of a large sum of money precipitated the failure of the firm.”
The Times described the events like this:
Soon after rumors affecting the credit of the banking firm were started, Mrs. Green wrote from Bellows Falls, Vt., where she is residing, requesting the firm to close her account, stating that she desired to place her cash in other banks. The letter reached John J. Cisco & Son while a heavy run was being made upon them by their depositors. Friends of the firm say that to have paid the large amount called for by Mrs. Green at that time would have crippled the concern and caused a sacrifice of the interests of other creditors. The firm replied to Mrs. Greens letter informing her that her husband, Mr. E. H. Green, formerly Vice-President of the Louisville and Nashville Railroad, owed them more than $700,000 and requesting her to allow her deposit to remain for the time being as an offset to that loan. This she promptly declined to do, as it has always been her invariable rule to keep her own financial matters entirely separate from those of her husband.
The Cisco affair marked the beginning of the public fascination with Hetty Green that would follow her for the rest of her long life. At that point she was still referred to as “Mrs. E. H. Green.” Within a short time, as her fame eclipsed that of her husband, the papers would rarely refer to her as anything but “Hetty Green.” “Mrs. E. H. Green is well known, by reputation at least, in Wall-street,” the Times reported. “She is believed to be the richest woman in America, a title earned by her own business sagacity, energy, and watchfulness.” The article added later: “She has lived a frugal life, exercised extraordinary keenness in her investments, and by embracing every good opportunity that the stock market afforded she has more than quintupled her inheritance. Old Wall-street operators give Mrs. Green credit for having as intimate a knowledge of railroad securities as any person they know.” Her idiosyncrasies also were attracting attention: “The ‘richest woman in America’ has some strongly marked characteristics,” the Times said. “She does business on the strictest business principles, regardless of sentiment or relationship, and she is economical in the most elaborate sense of the word. She seems to have made it a rule of her life to indulge in no personal luxuries. She has been known to walk from her hotel in this city to a social reception through a heavy snowstorm rather than pay for the use of a coach.”
An enterprising reporter from the World journeyed to Bellows Falls. “Mrs. Green looks to be about forty-five years old [she was fifty], is of robust form, usually wears her iron-gray hair in a French twist and her sharp eyes continually dart from one object to another. She is a woman of tremendous will power, her determination being quite as remarkable as her parsimony. Overdress, according to the townspeople, is not one of her weaknesses…. Frequently she rides or promenades wearing on her head a hat with iridescent trimmings and in cold weather she invariably uses old hosiery for overshoes. She seems to have an innate desire for bartering, and notwithstanding the Yankee shrewdness of these Vermonters, Mrs. Green seldom loses a dollar by any of her small trades.”
The World was also among the first to suggest publicly what would become a stock characterization of Hetty—that she must be unhappy. “Health and wealth she may have, but there is scarcely a villager here who has less happiness or less of the things to be enjoyed in life than Mrs. Edward H. Green.”
Hetty cared far less what people were saying of her than she did about the fate of her money locked away at a now-bankrupt firm. Since his financial difficulties started, Edward had been spending more and more time away from the family, at the Union Club in New York. One hopes for his sake that he was in New York rather than Bellows Falls when these events transpired. Hetty always had a temper, especially when she felt her money compromised, and her reaction to the Cisco fiasco must have bordered on pyrotechnic, the walls shaking with every colorful epithet she had soaked up on the New Bedford docks. She packed a bag and marched down to the Bellows Falls station to await the next train to New York.
By the time she arrived, control of John J. Cisco and Son had passed from Cisco and Foote to Lewis May, an appointed assignee. May issued the following announcement upon taking charge: “The rumors started some ten days since about the old established banking house of John J. Cisco & Son, and which were telegraphed all over this country and Europe, have caused a very severe run upon them on the part of their depositors. In addition to this, they were largely interested in the bonds of the Houston and Texas Central Railroad, which have been greatly depreciated by the severe blow against the credit of that company caused by the action of C.P. Huntington in purchasing the coupons of the first mortgage bonds. These matters with the general great depression of all securities have compelled them for the benefit of all their creditors to make an assignment without preferences for the purpose of a gradual liquidation of all their affairs. All the depositors will undoubtedly be paid in full as soon as the securities can be realized upon. The firm has no outstanding contracts at the Stock Exchange.”
The assurance that all depositors would be paid hardly mollified Hetty. As soon as she arrived in New York, she marched into the Cisco offices at 59 Wall Street, looked May in the eye, and said, “I’ve come to get what’s mine.”
Hetty might have been able to browbeat the dispirited Cisco and Foote into complying, had they still controlled the bank. But May did not flinch. A familiar and respected figure on Wall Street, he had been a partner in May and King, an investment house, and, more recently, had presided as assignee over the failure of a large dry goods company. He had, in the words of the Tribune, “won a reputation for prompt business methods.”
An extraordinary scene developed over the next several days. Hetty threatened, screamed, and pleaded, stomping her foot and at times sobbing. May matched her fire with a cool (and, to Hetty, infuriating) calm. Bystanders gathered at the windows of the Cisco headquarters to watch. Many more followed the saga in the newspapers. Hetty’s $25 million in securities were not technically among Cisco’s assets, and were therefore not part of May’s jurisdiction in settling Cisco’s affairs. Hetty’s cash deposit of $558,851 accounted for more than a quarter of the firm’s total. The next largest depositor, the estate of founder John J. Cisco, had a mere $218,593 on the books. In a rather pathetic footnote, at the bottom of the list of depositors was Edward Green, holding in trust for his son $1,106. But the physical presence of Hetty’s securities at the locked-up bank gave May a powerful negotiating tool. However much Hetty valued her cash deposit, May knew that the securities represented virtually her entire net worth.
May said he would be pleased to release Hetty’s massed securities—as soon as she made good on her husband’s $702,000 debt. At first, Hetty haughtily repeated what she had told Cisco and Foote—that her husband’s finances were no concern of hers. She demanded to examine the securities. May agreed. Hetty sat for several hours, meticulously counting, and found to her relief that nothing had been taken.
As Hetty twisted and writhed, May let it be known (both in person and through the papers) that he had all the time in the world. Quoting “a friend of the assignee,” the Tribune reported: “Mr. May could wind up the affairs of the depositors in four weeks, but he prefers, for the sake of all, to nurse matters, and is willing to devote a year to bringing things out straight. Not a man of the depositors has asked for his money; on the contrary, most of them are willing that the assignee should take his time about payment.” The line about “not a man” may or may not have been a sly reference to Hetty’s gender, but the article closed with this: “No information as to Mrs. Green’s attitude was furnished by the assignee.”
The prospect of having no control over her fortune for weeks or even months at last wore Hetty’s resistance down. In early February, she curled her fingers around a pen and forced herself to scrawl out a check for $422,143.42. She also agreed to relinquish half of her deposit, or, $280,015.62. This brought her total payment to $702,159.04. With that, she packed up her securities and took them in a hired cab—an unaccustomed luxury, but a necessary one, considering the size of the bundle—to the offices of the Chemical National Bank.
Hetty would never forget the many indignities done to her through the Cisco fiasco. She held a grudge against Lewis May and, in particular, against Collis P. Huntington, the railroad magnate. She patiently planned her revenge on May, waiting almost two years to the day from the time of the Cisco failure, when May had at last sorted out the finances and was preparing to pay off the long-waiting creditors. Hetty filed objections with the New York State Supreme Court, claiming that May had defrauded the creditors by paying himself inflated commissions as assignee. According to the New York Times, Judge William S. Keiley had agreed to hear Hetty’s objections, but only on the condition that she pay all court expenses should she lose. The fact that the costs would easily reach $10,000 shows the depth of her anger.
Keiley, who had been appointed by the court to approve May’s handling of the Cisco failure, had already found his work exemplary. But Hetty claimed his commissions of $139,500 to be exorbitant. She claimed that the law firms handling the case had earned too much—$27,000—and that May had erred hiring Frederick Foote, one of the Cisco partners, for $10,000 per year, to assist him in handling the case. As with the earlier Aunt Sylvia trial, the action against May had the practical effect of holding up payments to a large number of potential recipients, in this case depositors who now had to wait another year to get their money. Her goal, no doubt, was to embarrass May. Hetty hired a New York lawyer named Nelson Smith to handle the proceedings, but she took practical control herself, attending every hearing and often personally questioning witnesses. Her conduct exasperated the judge and left even her own lawyer groping for words.
May added fuel to Hetty’s anger by boasting on the witness stand that he may not, in retrospect, have been able legally to force Hetty to cover her husband’s debts. His acknowledgment that Hetty might have been able to walk away with all of her cash, in addition to her securities, was a double slap, both in the loss of money and in the gleeful implication that Hetty had been bested in a deal. May called his and his lawyer’s handling of Hetty, “One of the greatest things ever accomplished in the city of New York, and I was daily complimented for it.”
Hetty was still steaming when she assumed the duties of questioning John A. Cisco on the witness stand. According to the Times account, “she went for him like a tigress and nothing could hold her.”
“May I ask you a few questions?” she began, brushing past her attorney, Nelson Smith. She launched an attack accusing the witness and his late father of deliberately hiding the fact that Edward had used Hetty’s money to staunch the flow of his own losses. “When your father was writing to me did he ever say to you that he was writing me? Here are these letters where he says none of my money will be used in anything. Yet Mr. Green was using it all the time.” She even suggested that the Ciscos had “sent a man” to Bellows Falls to intimidate her. “Then did you think when you had a sham failure and a sham assignment and sham lawsuits—”
“Mrs. Green!” The objection came not from May’s attorney nor the judge, but from Hetty’s own counsel, trying to prevent her from self-destructing.
May’s lawyer, delighted by Hetty’s outburst, objected to her lawyer’s interruption and urged her to continue. She did so, now accusing both Cisco and Foote of participating directly in the attempts to intimidate her, or worse.
“Did you think I had a tendency to heart disease, and you would put me out of the way and get all the money?” At the audible gasps from various corners of the room, Hetty explained, “I am only asking him if this was a nice little game, because the people in the country said my life wasn’t worth it. I only want to give him an idea of that.”
Finally, a bewildered Cisco was able to respond: “All I can say is that I have no knowledge of any of the circumstances Mrs. Green speaks of.”
Hetty offered this blanket explanation of her own conduct, repeated several times during the proceedings: “I come of good old Quaker blood. All I care for is to do right. Then I am sure to go to heaven.”
Judge Keiley, unmoved by the protestations of righteousness, sided with May, finding his conduct in handling the Cisco failure exemplary. Hetty was required to pay the court costs—estimated at $10,000–$15,000. For all her frugality, she always seemed to consider such expenses money well spent, if she was able to turn the screws a bit on her enemies.
If the financial community had settled on Hetty as scapegoat for the Cisco failure, Hetty herself blamed Collis P. Huntington. His actions had caused the collapse of the firm, putting her deposits, and perhaps even her $25 million, in jeopardy. Hetty’s seething, burning, spitfire hatred of Huntington was inevitable. She set about slowly to take her revenge on the well-known bully, who frightened her not in the least. In time, Huntington’s dislike for Hetty would grow to match hers for him.
But the Cisco failure caused another turning point in Hetty’s life, a more personal one; it marked the effective end of her marriage to Green. Actually, that is not quite so. Hetty and Edward never officially were divorced. In fact, over the years they effected a sort of reconciliation; things would be cordial between them, and for stretches, at least, they would stay under one roof. But it was the effective end of anything resembling a conventional marriage. Hetty had had enough of convention; she had had enough of the masquerade of herself as the dutiful wife and Edward as the financial brains behind the family. He had violated a trust through his mismanagement of money. He had not simply squandered his own fortune; he had sliced into hers. Even at his most confident and robust, Edward was hardly a match for Hetty’s steel-minded determination. When she packed up her two children and walked out, Edward was left, for all intents and purposes, a broken man, without money of his own, reduced to a sort of genteel subsistence. Following the Cisco failure, Hetty was a free agent, in her personal and financial life.