Book Review: The Richest Woman In America

Recently the Gilded Age has been cropping up in economic and social discourse as a parallel to today’s wealth inequality and ostentatious elite. So it seems quite timely to review a biography of a woman living in this very era.

The author of The Richest Woman in America, Janet Wallach, describes the Gilded Age as an era of “avarice, opulence, and easy credit, [one which] burst from gluttony” (p. 201). But the biography focuses on a woman whose critics would not dare mention opulence and easy credit alongside her name: Hetty Green.

A Savvy Investor

Hetty Green, circa 1900.
Hetty Green, circa 1900.

Hetty was thoughtful, astute investor who never strayed from her own advice: buy when everyone is selling and sell when everyone is buying. She was a one-woman example of how to resist herd behavior: trust your instincts and don’t worry other people’s decisions. When it came to how she did business, Hetty did not care in the least what people thought about her. In his classic, The General Theory, Keynes would write of the long-term investor, “worldly wisdom teaches that it is better for reputation to fail than to succeed unconventionally” (as cited in Scharfstein and Stein, 1990). It is almost as if he is describing the public reaction to Hetty a half century earlier.

Hetty succeeded – well beyond the wildest dreams of most men – and yet, because her approach was so unconventional, her reputation suffered. She was often vilified and mocked in the press and became known as the Witch of Wall Street (though oddly, Wallach chooses not to mention this moniker in her book; perhaps this indicates a soft spot for Hetty). A 2001 article in The New Yorker noted that this nickname was not fully derogatory – there was a certain awe that came with Hetty and her approach. And indeed, as a lone woman succeeding in a man’s world, Hetty should inspire awe.

With Genius Comes Oddity

Part of Hetty’s reputation came from how she presented herself to others. She dressed in shabby old clothing and spent most of her time living in a New York boarding house, even though she was incredibly wealthy and moved among wealthy circles. In a 1930 article in the New York Times, the authors write that she seemed incapable of spending money, and frugality was a constant theme in Wallach’s biography.

To me, her severe frugality, existing alongside paranoia and mistrust, seems to be part of a mental illness. Today, the term “underspender” describes a person who has a compulsion to never spend money, even if it is against his best interest. Wallach provides many anecdotes that could suggest that Hetty suffered from the same compulsion. One such story revolves around Hetty’s son, Ned: after he had a bad fall, Hetty refused to summon a doctor, supposedly due to cost. Ultimately Ned had to have his leg amputated.

How true this and other anecdotes are is hard to say. Wallach writes in her introduction that she considers the biography like an Impressionist’s painting – broad strokes to create an overall image, rather than focusing in on small details. This is, in large part, due to the fact that personal diaries and correspondence do not exist. Wallach’s account of Hetty’s life is primarily pieced together through the many, many newspaper and magazine articles that appeared during her lifetime. In these articles, Hetty becomes larger than life, a caricature even, and separating fact from fiction (or at least embellishment) is difficult.

Quaker Influence

While Wallach captures Hetty and her position among the broader excitement and tensions of the Gilded Age, a deeper exploration of the link between Quakerism and wealth would have enhanced the biography.

Discussion of Hetty’s personal views on religion is sparse. As a child she attended a Quaker boarding school. On page 16, Wallach writes that, as a child, Hetty was taught the “Quaker values of justice and thrift,” which stayed with Hetty during her lifetime. However, beyond the initial chapters we don’t hear much about how that background might have influenced her. It’s not until page 253 that we learn Hetty once remarked to the press, “I am of the Quaker belief and although the Quakers are all about dead, I still follow their example.” Without letters or a diary to consult, we cannot be sure of what exactly Hetty means by this statement but I would argue that she carried Quaker business ethics with her throughout her life.

I visited the Friends Historical Library at Swarthmore College earlier this fall hoping to gain more insight into her Quaker roots. The incredibly knowledgeable staff helped me search for records in monthly meeting minutes from the New England chapters. We were unable to find specifics about Hetty’s attendance and participation, but the staff were confident that Hetty would have been an ethnic Quaker, coming from a long line of Quakers on both sides. This corroborates Wallach’s account of her upbringing (not that this was ever was in doubt!). Such an upbringing would almost certainly instill particular values in Hetty – and perhaps begins to explain her simple, modest lifestyle and her preference for frugality. The staff handed me a copy of The Old Discipline: Nineteenth Century Friends’ Discipline in America, pointing me to the New England section that discussed the ethics and discipline New England Quakers strived to follow in all aspects of life.  This would very likely be what Hetty’s New Bedford family followed when conducting business and raising children.

Sure enough, I found many parallels to Hetty’s behavior as a financier. Take a look at the brief excerpt below:

Advised that a conscientious care dwell on all our minds, not only to be just in our trade and dealing, neither deceiving the buyer in what we sell, or falsifying the balances; but that we keep to our promises, and pay our debts in due time; not exceeding our circumstances or reasonable expectations in our way of living, nor engaging in hazardous things more out of vanity and necessity (p. 210-211).

This immediately reminded me of Hetty, always one to pay her debts and avoid speculative mania. It adds a new perspective to Wallach’s anecdotes of Hetty’s stingy behavior, especially regarding her husband’s accounts. She refused to bail him out when he got in over his head and would not associate herself with his failings. Rumor has it she even made him sign a pre-nuptial agreement absolving her of all responsibility of his debts (Menand, p. 70). It’s plausible that her shrewd, arguably impersonal, business acumen is in part due to being raised by Quakers who followed this discipline.

So too, did she follow the discipline’s recommendation of “moderation and plainness, in gesture, speech, apparel, and furniture of their houses” (The Old Discipline, p. 197). She was ridiculed in the press for her drab attire, but it’s not that strange coming from a Quaker background. Of course, if Hetty was influenced by the Quaker discipline advocating frugality and modesty, she did it to a fault.

Final Thoughts

I found myself turning to newspaper articles and other accounts to learn more about various anecdotes Wallach presents to readers. The biography is thoughtful and engaging, and readers leave with a sense of Hetty’s character and her eccentric ways. Perhaps one of its biggest strength, not discussed as much here, is Wallach’s beautiful, sweeping view of the Gilded Age – and the mania and inequalities that came with it. That alone makes it worth reading, and the lessons are arguably even more relevant now.

Further Reading

Scharfstein D. S. and J. Stein. (1990) Herd Behavior and InvestmentThe American Economic Review, Volume 80, pp. 465 – 479.

Menand, L. (2001, April 23.) She Had to Have ItThe New Yorker, pp. 62 – 70.

The Old Discipline: Nineteenth Century Friends’ Discipline in America. (1999.) Quaker Heritage Press, Glenside PA.
*Note: I specifically looked at the section “Rules of Discipline of the Yearly-Meeting Held on Rhode-Island for New England.” This was first published in New Bedford in 1809, but this volume covers language and rule edits made in 1809, 1826, 1840, 1849, 1856.

Thompson, C.W. (1930, April 27.) The Strange Case of Hetty Green. The New York Times, pp. 4, 12.  

Wallach, J. (2012.) The Richest Woman in America: Hetty Green in the Gilded Age. New York: Random House.

Image: Retrieved from Wikimedia Commons on September 29, 2014. Hulton Archive/Getty Images

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