The pioneering investor you've never heard of

Henrietta Howland (“Hetty”) Green (1834-1916) exemplifies the practice of investment that Benjamin Graham pioneered in the 1930s, Warren Buffett has advocated since the 1950s and Leithner & Company has practised since 1999. She bought quality assets that others shunned – particularly during the financial crises that punctuated her career – and during bull markets, when their prices rose unduly, she sold them. She was the principal owner of major enterprises; yet as a woman in a man’s world, she was never even considered for appointment to any board of directors. Thus she couldn’t – as did many men of her era – enrich herself at outsiders’ expense. No matter: Hetty was the only woman of her time (and one of the very few in any age) who single-handedly fructified a considerable inheritance into an epochal fortune. Yet most investors have forgotten her – and the few that recall her name parrot the canards of the men whom she bested.  

She Had What It Takes

“It takes a clear, cool head, a large amount of brains and unfaltering nerve to thread one’s way through the intricacies of finance,” an historian has written about New York during the final quarter of the 19^th century. Hetty possessed these attributes in spades. On 17 January 1885, The New York Times noted that

Mrs E.H. Green is well-known, by reputation, at least, on Wall Street. She is believed to be the richest woman in America, a title earned by her own business sagacity, energy and watchfulness. She has lived a frugal life, exercised extraordinary keenness in her investments, and by embracing every good opportunity that the stock market afforded her, she has more than quintupled her heritage.

One of her biographers, Charles Slack, adds:

Hetty was a fearless pit bull charging into a [mob] of frantic bears. True, she had a pile of cash when others were scouring for pennies, but she also had a deft mind and the colossal courage to push against the crowd.

She Had to Fight to Win a Part of What Was Hers … 

Born in New Bedford, Massachusetts, Hetty was the only child of Edward and Abby Robinson (née Howland) who survived infancy. During the first half of the 19^th century, New Bedford was one of the biggest ports in the U.S.; the Robinsons and Howlands, who were first merchants, then ship-owners and finally bankers, became among its wealthiest families. Because her mother was constantly ill, Hetty spent much time at her father’s side. At six years of age she read financial papers to him most evenings, and she became his bookkeeper when she was 13.

Abby died in 1860 and left her daughter $8,000. When Edward died in 1865, he bequeathed to her ca. $5 million (equivalent to ca. $82 million in 2020). This included a $4 million trust fund whose earnings she received but whose capital she could not control. Its trustees, Hetty soon became convinced, were incompetent and selfish; accordingly, she commenced legal proceedings – which lasted decades and were only partly successful – to restructure her legacy so that it served her rather than its trustees’ interests.

Hetty’s spinster aunt, Sylvia, the heir to the Howland fortune, also died in 1865. When she learnt that Sylvia had bequeathed most of her $2 million estate (equivalent to $33 million in 2020) to her doctor, domestic staff and local charities, Hetty challenged the will’s validity. She produced an earlier one which left to her Sylvia’s entire estate – and included a clause invalidating any subsequent wills. Robinson v. Mandell (which remains notable as an early example of the use of mathematics for forensic purposes) was ultimately decided against Hetty (The State of Massachusetts restricted the right of a witness to testify on his own behalf in an action involving a contract when the contract’s other party was deceased. Sylvia was no longer alive; hence Hetty could not give evidence against her. Without their testimonies, the court ruled that the available evidence was insufficient to justify Hetty’s claim.) After further years of bitter litigation, trustees grudgingly agreed to award her $600,000.

… And Therefore Took Steps to Protect It

On 11 July 1867, at the age of 33, Hetty married Edward Henry (“E.H.”) Green. Before the wedding, she required that he renounce all rights to her money; her father’s testament also stipulated that her husband would have no rights to his estate. The marriage produced a son (who as a young man moved to Chicago and then Dallas in order to act as her eyes and ears, and as an adult ran two of her railways) and a daughter (whose shy disposition Hetty’s forceful personality accentuated). While her husband gaily gossiped, recklessly borrowed and speculated and thus quickly frittered the relatively modest amount of capital he’d accumulated as a bachelor, Hetty thoroughly researched, carefully invested and steadily grew her substantial legacy into an astonishing fortune. More than money, from her father she inherited and perfected a potent strategy: she sought conservative investments, accumulated substantial cash reserves to finance them and remained calm during times of turmoil when the chickens of others’ debt-fuelled speculations came home to roost. 

Hetty’s Modus Operandi

From the mid-1860s to the early-1870s, Hetty focused upon U.S. Government bonds and “Greenbacks” (the notes issued during and immediately after the Civil War). The notes were backed not by gold but rather the “full faith and credit of the U.S. Government;” and although the bonds paid interest in gold, at maturity they repaid principal only in Greenbacks. As a result, many distrusted them and their price slumped. Her investigations convinced her that the government’s finances were improving and that before long it would return to the gold standard; hence she bought every bond and Greenback she could. In stages from 1873 to 1879, the U.S. returned to gold and the bonds’ and Greenbacks’ prices soared. Her stakes were so large that it took several years to reap her massive profits.

Over the next 40 years, Hetty focused upon CBD real estate (primarily in Chicago and New York) and railways’ stocks and bonds (particularly the Great Northern, Louisville & Nashville, Texas Central and Texas Midland); she also lent money and acquired numerous mortgages – whose defaults added considerably to her portfolio of land and buildings. The City of New York came to her repeatedly – most notably during the Panic of 1907 – for loans to keep itself afloat. More generally, she sowed what became her most profitable investments during financial crises. She almost constantly travelled – in an era when very few women did so unescorted – to scout investments, seek advice, collect debts, etc.

After the financial house, John J. Cisco & Son, in which Hetty was the largest investor, collapsed in 1885, an investigation revealed that her husband had been one of the firm’s biggest debtors – and that it had furtively used her wealth as collateral for his loans. Insisting that her finances were separate from her husband’s, Hetty paid his debts, withdrew her securities from Cisco and lodged them at Chemical Bank – of which she soon became a major owner – and ejected Edward from their residence. Tellingly, she also ceased to sign correspondence and contracts “Mrs Edward H. Green;” henceforth she was “Mrs Henrietta Green.”

Frugal and Generous – Not Miserly

To the extent that people recall her at all, Hetty’s been remembered as an extreme miser. It’s true that in order to avoid local taxes she refused to own a home or reside in New York City; instead, she patronised boarding houses in Brooklyn and New Jersey, regularly stayed with relations in New Bedford and her husband’s hometown in Vermont – and shifted abode regularly in order to escape constant demands for money and occasional death threats. Yet her detractors forget that at that time many people – not just well-to-do professionals, but also multi-millionaires – acted similarly. She spurned fancy dress, high society and what was later dubbed “conspicuous consumption;” what’s been ignored is that although she left her mother’s faith, Quakerism never left her. In other words, she wasn’t miserly: she was merely frugal – and in most respects wasn’t thriftier than the prudent person of average means.

One of her biographers, Janet Wallach, writes:

Hetty skimped on her spending, but instead of calling her frugal, gossips … called her mean. When her milliner made her first trip to New York, Hetty gave her the name of a restaurant that charged ten cents for a bowl of soup "good and thick on the bottom." Instead of thanking [Hetty] for the advice, the woman mocked her for being cheap. When her cleaning lady gave birth to a son, Hetty gave her a gold piece and told her to deposit it in the bank. “Keep it there until he is twenty-one,” she advised. Instead … the woman scorned her for saving instead of spending.

“I believe in simplicity,” Hetty said. That “makes me what folks call ‘mean.’ The fact is, I prefer not to be extravagant.” Also forgotten are her many acts of private kindness and Christian charity:

One way is to give money and to make a big show. This is not my way. I am of the Quaker belief and although the Quakers are about all dead, I still follow their example. An ordinary gift bragged about is not a gift in the eyes of the Lord.

How to Succeed as a Woman in a Man’s World

Above all, and as her recent biographies have noted, if Hetty had been a man then her habits would likely have been tolerantly dubbed – and fondly recalled – as eccentricities; but because she was a woman her many detractors – not least the embittered men whom she had repeatedly bested – mocked her as “the Wicked Witch of Wall Street.” Wallach recounts an episode in 1886:

Two men from the Richmond [Terminal Railway Co.] made her an offer that seemed too good to refuse. She had bought the stock at $70; now it was selling for $100. The [men] offered to by her shares at $115; to seal the deal they showed her a certified cheque. Hetty wrinkled her nose and declared that she would be willing to sell, but only if they paid her more: she would accept $125 a share. They declined and left, but soon appeared again. This time they said that if she would agree to support their candidate for president of the railroad, they would sign a contract secured by collateral to buy their shares at $125. Oh no, she sniffed, dismissing their bid, she could not do that: their offer was not in cash. If they wanted her vote, they would have to pay her $130. Further negotiations led to triumph: in true Hetty style, she sold her stock for $127.50 cash. It was hard to know which Hetty enjoyed more: making money or outsmarting men. By the late-1880s, Wall Street’s titans “had sheepishly to admit she managed her business far better than most men.”

Hetty was pragmatic rather than doctrinaire: “common sense,” she insisted, “is the secret of making money.” Indeed, it “is the most valuable possession anyone can have.” She understood that politics isn’t salvation and politicians aren’t saviours. On these grounds she rejected women’s suffrage and dismissed the very idea of a female president: “I haven’t any respect for women who dabble in such trash.” A girl “ought to be careful about the man she marries, especially if she has money;” further, she “oughtn’t to marry until she’s old enough to know what she’s doing.”

Yet Hetty wasn’t reactionary; indeed, her view of women was decades ahead of its time. “Every girl should be taught the ordinary lines of business investment,” she urged; further, “it is the duty of every woman to take care of her own business affairs.” Indeed, experience taught her that “some young women do better in business than men.” She was frugal. She often quoted Benjamin Franklin: “watch your pennies and the dollars will take care of themselves.” According to Janet Wallach,

at lunch she went alone, not to Delmonico’s or Sherry’s, where society ladies dined at damask-covered tables, but to restaurants with bare tabletops where hardworking men scarfed down their midday meal. They not only offered an economical repast; they kept her in touch with the real world. She much preferred common people to the stuffy socialites of the upper class.

Hetty’s frugality was part of a whole: she was also conservative and methodical. Never borrow, her father taught her, and she always remembered the lesson. “Before deciding on an investment,” she advised, “seek out every kind of information about it.” And “in business generally, don’t close a bargain until you have reflected on it overnight.” Wallach adds:

When she had read, quizzed, grilled, interrogated and investigated enough, when she had studied the costs, analyzed the assets and dug through the debts, when she had found the answers to suit her, when she knew the worth of a company and understood its weaknesses, when she was satisfied that its basic values were sound and its assets strong, that the downside risk was low and the upside high, then she invested her money.

Because Hetty was always conservative, at critical junctures she was also bold. Like Warren Buffett, she attributed her prodigious success to a basic rule: “always buy when everyone wants to sell, and sell when everyone wants to buy.” She and Buffett demonstrate that a successful contrarian mustn’t merely act prudently; he – or she! – must also maintain a level-headed and even stoic disposition. “In the frantic heat of the market,” concludes Wallach,

It took restraint to keep from buying while others scooped up stocks in the euphoria of a boom; it took courage to remain calm while the crowd dumped their shares in a wave of panic. She had stayed the course in the past; she would continue it in the future.

Hetty’s Death and Legacy

On 3 July 1916 Hetty died at her son’s home in New York City. According to the longstanding – and grossly false – “World’s Greatest Miser” entry in the Guinness Book of World Records, she died of apoplexy after arguing with a maid over the virtues of skimmed milk. Her obituary, published in The New York Times the next day, stated:

Mrs Hetty Green, generally believed to be the world’s richest woman, died yesterday in her eighty-second year after an illness of several months. The woman whose great business acumen had built up a fortune … and had made her name known in the market places of the world faced death as she had life: militantly and unafraid.

As a final act of reconciliation, late in life she converted to her deceased husband’s Episcopalian faith so that she could be interred at his side.

For approximately fifty years, through thick and thin, Hetty compounded her capital at an average rate of 7% per year. She benefited greatly from the fact that her heyday was an era of little regulation and no federal income tax. Yet she could access only the income (not the capital) of the bequest from her father; moreover, during her heyday severe depressions and panics occurred frequently. Estimates of her net worth in 1916 vary from $100 million to $200 million (equivalent to $2.3-$4.6 billion today); that sum clearly ranks her among the richest Americans – and probably the world’s wealthiest woman – at the time. 

One comparison is instructive: at his death in 1913, executors valued the estate of J.P. Morgan – the most powerful financier of the Gilded Age – at $68.3 million (including ca. $15-20 million he’d inherited from his father in 1890, but not including an art collection worth ca. $50 million). Upon hearing that figure, Andrew Carnegie – who bequeathed more than $350 million, the equivalent of ca. $76 billion in 2020, before his death in 1919 – expressed disappointed surprise: “why, [Morgan] wasn’t even a wealthy man!”

Hetty’s two children inherited her massive estate. Although he wasn’t as frugal and prudent as his mother, Edward Jr. (“Ned”) preserved most of it and survived the Great Depression largely unscathed; as a result, the net worth of his sister and heir, Sylvia, was ca. $200 million (ca. $3 billion today) when she died in 1951. Her will directed that all but $1.4 million be donated to 64 churches, colleges, hospitals and charities. Both children were buried near their parents.

Further Reading

• Charles Slack, Hetty: The Genius and Madness of America's First Female Tycoon (2004)
• Janet Wallach, The Richest Woman in America: Hetty Green in the Gilded Age (2012)

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