Peggy Guggenheim: The Life of an Art Addict

He didn’t stop there. Coffee was already taking hold as the favourite drink of America, but real coffee was extremely expensive. Poorer people drank coffee essence, a liquid concentrate of cheap beans and chicory. Meyer’s step-brother Lehman had already started to produce some of this at home, and now Meyer added it to his list of wares. By this time he was an experienced salesman with a reliable body of customers who trusted him. Four years after getting off the boat he was, at twenty-four, an established figure in the stoveblack and coffee-essence businesses. He married Barbara at Philadelphia’s Keneseth Israël Synagogue and the newlyweds set up house for themselves. It was a good match and a successful marriage. Barbara’s gentle and selfless personality made her the perfect complement to Meyer. She never questioned his authority and always supported him. She was a good mother to their children, and if she had a fault at all it might have been to over-indulge her younger offspring. Meyer, on the other hand, could be a stern disciplinarian. His youngest son, William, recalls in his memoirs that his father had ‘no tendency to spare the rod. Whippings were not infrequent; he employed a leather belt, a hairbrush, or any convenient paddle whenever the need suggested itself to him … None was allowed to doubt for long that his father’s word was law or to think that that law might be broken with impunity.’

From the start, Barbara showed an inclination to charitable work, which increased as her means did, though throughout her life she showed no inclination to use the money her husband earned to spoil or pamper herself. Just as Meyer established the business empire, ruthlessly developed by the more able of his sons after his death, so perhaps did their mother’s influence incline them to set up the charitable foundations for which the family remains famous, after they had made their fortune.

In the course of the next twenty years, Meyer and Barbara produced eight sons, including twin brothers, and three daughters. One of the twins, Robert, died in childhood, and their daughter Jeannette only lived to be twenty-six. But the survivors would grow up to be the heirs and developers of a business empire which was among the biggest half-dozen in America a century ago, and which was gathering strength when Meyer’s granddaughter Peggy was born.

Meanwhile, Meyer expanded and diversified his business interests, always driven by the desire to increase the security of his position in society by making ever larger sums of money. He didn’t necessarily cling to it – the years following his marriage would be punctuated by a series of house moves which tracked his rise in Philadelphia society – but he was extremely careful with it, and would never spend it unless there were some material, political, business or social gain to be made. One of his favourite proverbs came straight from the rural peasantry of his birth: ‘Roast pigeons don’t fly into your mouth by themselves.’ This dictum was one which he tried to inculcate into each of his sons: with Isaac, the oldest, born in 1854, he was not altogether successful, but with the three middle sons, Daniel (1856), Murry (1858) and Solomon (1861), he had greater success. The surviving twin, Simon (1867), also remained within the family fold; the surviving daughters, Rose and Cora, born in 1871 and 1873, following nineteenth-century practice both made good marriages and remained a credit to their parents. Benjamin (1865) and William (1868), however, followed their own paths, as we have seen.

As for education, Meyer, unlike his wife not particularly observant of his faith, chose the best for his children, regardless of religious affiliation, and they were sent to Catholic day schools, which paved the way for their disassociation from the religion and mores of their forefathers. Though Ben and William enjoyed the advantages of further education, only William showed any serious propensity for scholarship; the others were encouraged by their father to enter the family firm as soon as they could, and learn business through hands-on experience. The older boys, who worked hard alongside their father, were later aggrieved when Meyer decided to divide profits equally between all his sons; but Meyer countered their objections by pointing out that in time it would be the younger ones who would carry the burden of the work. He alluded to another piece of peasant wisdom: a bundle of sticks cannot be broken: individually, the sticks can be broken. The older boys knuckled under, but were not reconciled.

In the 1870s, having made small fortunes by the standards of the time in ventures as diverse as lye (used in soap-making) and the burgeoning railroads, Meyer turned his attention to lace. In 1863, all proscriptive laws against the Jews in Switzerland had been repealed, and one of Barbara’s uncles had established a lace factory back home. With a supplier established, Meyer now entered the lucrative lace business. His flair for diversification once again paid off, to the extent that by 1879 he was worth approaching $800,000. But his greatest gamble was yet to come. Two years later he was offered a third of the interest in two silver and lead mines outside the boom town of Leadville in Colorado by a Quaker friend, Charles Graham. Graham had borrowed money to buy two-thirds, but the mines, called the ‘A.Y.’ and the ‘Minnie’ after the original prospector and his wife, who had sold out for very little, were not doing well, and Graham couldn’t afford to repay the loan on half his share when it became due. William Guggenheim records that Graham’s price was $25,000, though it may have been as little as $5,000 – sources differ. In any event Meyer, who knew nothing about mining, thought it was worth the risk. His other partner was one Sam Harsh.

Before too long Meyer made his way to Leadville, in the wake of the disturbing news that the mines were flooded. To pump them out would cost $25,000, more than his two partners could afford. Meyer hesitated, but reflected that after all the investment in relation to his capital was still relatively small – and maybe too he was following what had so far proved to be an unerring instinct. He had steam-pumps developed for the job, the forerunners of a hydraulic power system which would be the cornerstone of his son Benjamin’s later business interests. He bought out his partners, had the mines cleared and repaired, watched the expenses mount, and worried and waited. But he didn’t have to wait long. In August 1881 rich seams both of lead and silver were struck. Soon the mines were bringing in $200,000 a year; by the end of the decade the yield had risen to $750,000.

Based on his experience with stove polish, Meyer saw that if he established his own smelting business, he need not pay anyone to process his ore for him. With the help of his then twenty-three-year-old son Benjamin, a smelter was established at Pueblo at the end of 1888. In the same year the family moved to a new home and new offices in New York, which had by now gained the ascendancy over all other cities in the east as the centre of commerce.

Lace was forgotten. Mining became the centre and the soul of the Guggenheim firm. The world was its unexploited oyster, and with the funds available to them over the years that followed they would gain control of the American smelting industry, and expand their mining operations to Mexico, Chile, Alaska and Angola. Profits would run into the hundreds of millions. They were not always good or ethical employers, their business practice could be sharp, and in those days nobody gave a damn about the ecological effects of mining operations; but they were phenomenally successful. Simply as a family they were formidable: Meyer and Barbara had to remember the birthdays of twenty-three grandchildren. The Guggenheim fortunes would continue to prosper until Peggy’s generation, less interested in business, came into its own.

Barbara, who had contracted diabetes, died on 20 March 1900. Ben and Will pulled out – and were partly pushed out – of the family firm soon after. The other brothers were only too happy to be rid of the interference of their pampered, college-educated siblings, whose ideas of how to run the business clashed with their own. Furthermore, Will, who fancied himself something of a ladies’ man, had blotted his copybook by making a very ill-advised marriage late in 1900, to a woman of dubious virtue. The older brothers coerced him into divorce, but then had to stump up a hefty $78,000 to satisfy the aggrieved ex-wife, although the whole business dragged on for another thirteen years, and in 1904 even threatened to bring scandal upon Will’s second and only slightly more successful marriage. Ben and Will were left with handsome incomes and some interest in the business, but only as far as it had come by the turn of the century. They were cut off from the vast amounts that would accrue to the Guggenheim companies after 1900.

Meyer, growing old, increasingly left the reins of the business to his son Daniel, dabbling in the stock exchange as a means of recreation. ‘When my grandmother died,’ Peggy wrote, ‘my grandfather was looked after by his cook. She must have been his mistress.’ This is a typical Peggy-ism, and need not necessarily be true – she always loved amorous intrigue. ‘I remember seeing her weep copious tears because my grandfather vomited. My one recollection of this gentleman is of his driving around New York in a sleigh with horses, he was unaccompanied and always wore a coat with a sealskin collar and a cap to match.’ The cook-mistress may be an exaggeration by Peggy, but a woman servant called Hannah McNamara sued Meyer for $25,000 shortly after Barbara’s death, claiming to have been his mistress for the past twenty-five years. Meyer denied the whole thing, and the unfortunate business blew over; but the servant’s allegations are not outside the bounds of possibility, and most of Meyer’s sons had one mistress or more at some stage in their lives.

But if there was someone who consoled him during his final years, Meyer kept her secret. He died in Florida, where he’d gone to recover from a cold, in 1905, nearly five years to the day after Barbara.

When Ben Guggenheim successfully wooed and won Florette Seligman in 1894, his family was already substantially richer than hers. But the Seligmans, though they had only arrived in the States about ten years earlier than the ‘Googs’, formed part of the Jewish élite of New York, and looked down on the family which had made so much money from mining and smelting. A Seligman family telegram to cousins back home in Germany may have been deliberately miswritten to show their contempt: ‘FLORETTE ENGAGED GUGGENHEIM SMELT HER’. However, no objection was raised to the match. No one could fail to respect the Guggenheim wealth, or the speed with which it had been made. Benjamin was a bit of a dandy and a bit of a womaniser; he had a warm personality and a delightful smile. Florette was on the plain side and her temperament was difficult. But from each family’s point of view, the union was advantageous.

Despite the difference in the status of the two families in New York, the story of the Seligman origins is remarkably similar to that of the Guggenheims. The little town of Baiersdorf lies midway between Bamberg and Nuremberg in Franconia, Germany. There was a Jewish community there from at least the mid-fourteenth century, and the last Jews belonging to it were deported to a concentration camp in Poland, where they died, in 1942. A large Jewish cemetery remains, and the town, as so many in Germany do, has its Judengasse – Jews’ Street. The Seligmann family – they would drop the second ‘n’ on arrival in America – arrived in Baiersdorf around 1680. In 1818 David Seligmann, a local weaver, married Fanny Steinhardt. The couple set up house in the Judengasse, and over the next twenty years produced eight sons and three daughters, just as the Guggenheims had done. Today there is a Seligmannstrasse in Baiersdorf, and a David and Fanny Seligman Kindergarten, endowed by the family.

Using some of her dowry, Fanny bought a stock of bed linen, bolts of cloth, lace and ribbons. With them she set up a small shop in the family home, and did so well that David’s none-too-impressive fortunes improved. He called himself a wool merchant, and started a sideline in sealing wax. He had to travel frequently on business, so that the upbringing of the children was left, to his misgiving, to his wife.

Travellers from outside Baiersdorf started to use Fanny’s shop, and by the mid-1820s their oldest son, Josef, had begun a modest currency-exchange business. In those days much of Germany consisted of small principalities, and coinage was not standardised, so Josef did a brisk trade, taking a small profit from each exchange. It was a short step from changing money for the convenience of users of his mother’s dry-goods store to running a regular currency exchange, and by the age of twelve the precocious Josef was even handling the occasional US dollar, among other truly foreign coinage.

Fanny was ambitious for all her children, but Josef was the apple of her eye. However, by the mid-1830s, the German rural economy was declining, as more and more people migrated to the increasingly industrialised cities, and Jews, subject to severe legal restrictions, found it ever harder to make ends meet. Some moved to the cities, but received no welcome there. Others began to look outside their native land. As Jewish migrants moved through the country westwards from oppression farther east, in Poland and Russia, word spread about the opportunities awaiting those who could afford, or who dared, to emigrate to America. In time, so great was the emigration that a duality arose in New York Jewish society not only between the insiders and the outsiders, but between those ‘older’ emigrants with German names, and those who mainly came later, with Russian and Slavonic names – these last being at the bottom of the social heap.

Fanny Seligmann had a strategy. Joseph was now fourteen, and she took the unprecedented step in her family of sending him to university in nearby Erlangen, where for two years he studied German literature, and learned some Latin, Greek, English and French. By the time he had graduated at sixteen he wanted nothing more than to spread his wings and go to the United States. Father David, now forty-six years old, a conservative, dour man, raised objections: emigrants were widely regarded as failures, and besides, there were rumours that Jews in America lost sight of their religion. But Fanny was adamant, and although it took her some time to persuade her husband, Josef was allowed to set off, aged eighteen, in July 1837, in the company of eighteen other men, women and children from the town. Fanny had managed to scrape together the money for his passage, and from somewhere too – possibly relatives in her home town of Sulzbach – she’d obtained $100 in US currency, which she carefully sewed into Josef’s knee-breeches. Then she waved him goodbye. She would never see him again. In 1841, aged only forty-two, Fanny died. She had given birth to her eleventh child, a daughter, two years earlier. It was clear that Fanny had been the backbone of the family. Soon after her death, her widowed husband, with several children still at home to look after, ran into financial difficulties.

The journey from Baiersdorf to Bremen, where Josef’s party was to take ship, took seventeen days, travelling overland in two wagons. The crossing on the schooner Telegraph took a further sixty-six days. Including Josef’s party, there were 142 people crammed on board. Passage cost $40, and included a cup of water and one meal a day – which unfortunately consisted of pork and beans, so Josef quickly had to ignore his father’s parting injunction not to forget the Jewish dietary laws. Even so he lost weight on the journey – no bad thing, as he always had a tendency towards corpulence. On the journey he also fell in love, with the daughter of his group’s leader Johannes Schmidt. But unlike Meyer’s, it was simply a shipboard romance, ending in a tearful parting when the Telegraph docked at New York.

Josef, who immediately anglicised his name – to Joseph Seligman – on arrival in America, as all his brothers who followed would, had more on his mind than regretting the girl. He was a young man driven by ambition, and with a similar motivation to Meyer’s: in money lay security. Soon after his arrival he set off on a hundred-mile hike – he wasn’t going to waste any money on transport, and must have been innocent of the perils of the road – down to Maunch Creek, Pennsylvania, where he had an introduction to a cousin of his mother’s. Maunch Creek wasn’t much of a place, but Joseph quickly got a job, at $400 a year, as financial clerk to a canal-boat building company. He made friends with the boss; the Seligmans would always have the knack of striking up good relationships with the right people, in this case Asa Packer, a small-town businessman who would prove to be an invaluable contact. Packer went on to become a multi-millionaire, the founder of a university, the president of a railroad, and a US Congressman.

After a year, Joseph turned down the offer of a generous pay-rise and invested the $200 he’d saved in various portable goods. With them he set off on foot, carrying a two-hundred-pound pack, peddling to farms in the region. It was hard and sometimes dangerous work, but Joe was tough and single-minded. He was also a brilliant salesman, and within six months he had made a profit of $500, part of which he sent off to his two next-eldest brothers, Wolf and Jakob, who were longing to join him, as their passage-money.

Wolf and Jakob – renamed William and James on their arrival in America – were not all-rounders like Joseph. William was idle, and liked the good life, which annoyed his older brother. James however, while not particularly good at accountancy, turned out to be the best salesman of all of them. By 1840 the brothers had bought a place to use as their headquarters in Lancaster, fifty miles west of Philadelphia; the following year the next brother, Jesaias (who became Jesse), came over aged fourteen, and quickly proved to be the accountant the enterprise needed. Over the next two years, growing profits enabled Joseph to get the rest of his family, including his father, over to the New World.

James, handsome, confident and intelligent, showed an aptitude for salesmanship which surpassed even his oldest brother’s, and in 1846 he was delegated to open the New York branch of the family’s fast-expanding dry-goods business. At about the same time Jesse and his youngest brother Henry (Hermann) were establishing another branch at Watertown, in upstate New York. There, Jesse made friends with an army lieutenant stationed nearby. This would turn out to be another fortunate relationship, since the lieutenant’s name was Ulysses S. Grant.

The Seligmans continued to live modestly, even after their business expanded to cover most of the country. As a result of the Gold Rush to San Francisco in the 1850s they were able to reap mighty profits, since gold fever led to enormous price hikes. A blanket bought for $5 could sell for $40, and a quart of whiskey went for $25. Profits from California became the mainstay of the Seligman organisation.

But a new dimension soon crept into their interests. Much of the profit from the west coast took the physical form of gold bullion, which the New York branch used not only to buy new stock, but also to trade on the market. Banking in the United States didn’t become formally regulated until after the Civil War, and there was no bar to anyone entering the field. It didn’t take long for the Seligmans to realise that interest never stopped earning. They loaned, bought and sold IOUs, and eventually offered deposit accounts. By 1852 Joseph, aged thirty-three, was a major New York banker and investor. The only mistake the family made, based no doubt on their traditional thinking, was to avoid tying anything up in property: by and large, they rented. Thus at one point they passed up the chance to buy about one-sixth of Manhattan.

The Seligmans were now solidly established. During the Civil War they sold uniforms to the Union Army, and took the risk of being paid in Treasury Bonds. It paid off, and when the war was over, with their old friend Grant a Yankee hero, they were able to cash in on the post-war boom. Although New York high society was riddled with elaborate rules and regulations, which tacitly excluded Jews from its inner sanctum, no one in business could afford to ignore them. By the mid-1860s the Seligman brothers and sisters had produced about eighty children between them. When Grant became president in 1869, he offered Joseph the post of Secretary to the Treasury. For the first time Joseph faltered. He may have been a millionaire at fifty, but at heart he was still an immigrant Jewish kid, and his confidence failed him. On his own turf, however, he remained king, and the linchpin of the clan’s business activities.

Although by no means on a par with the Astors, Morgans, Vanderbilts or Whitneys, the Seligmans continued to expand. They never had as big a break as the Guggenheims had in mining, but like them they diversified into railroads, and, famously, into the Panama Canal venture. After the builder of the Suez Canal, Ferdinand de Lesseps, failed to achieve the same success in Central America, the Seligmans were able not only to divert interest from a rival canal construction in Nicaragua, but to finance a revolution for Panamanian independence from Colombia in return for the canal contract.

The Guggenheims were always out-of-towners, and were thus less affected by the implicit anti-Semitism of New York society than the Seligmans were. As the Seligmans’ wealth increased, so did their desire to be accepted. Joseph had long since forgotten his father’s injunctions to be strictly observant of his faith, and he and his brothers wanted nothing more than to be accepted by the great and the good. Being Jewish and having a German accent didn’t help, no matter how much money one had, and however much one learned which knives and forks to use when and how to hold them properly, and the correct manner of presenting a calling card. As in the Great Plague of the Middle Ages, so in the temporary financial panic year of 1873, Jews were blamed.

Oddly enough, Sephardic Jews were more likely to be accepted. Moses Lazarus had been one of the founders of New York’s Knickerbocker Club, second in exclusivity only to the Union Club. His daughter Emma even wrote the verse that adorns the Statue of Liberty: ‘Give me your tired, your poor …’ For Ashkenazi Jews, especially those from Germany, it was a different matter. Just as in time they would look down on the Slav and Russian Jewish immigrants, so now they were the newcomers, and their financial acumen meant that they were the victims of envy and its attendant spite.

Still they longed to be accepted. Their synagogue, the Temple Emanu-El on 5th Avenue, was reformed and Americanised. But they also took pride in their old country. They founded their own exclusive clubs: until 1893 the Harmonie Gesellschaft hung a portrait of the Kaiser on its walls. And although the Seligmans had anglicised their first names, they wouldn’t touch their surname (except for dropping the second ‘n’). When William once suggested it, Joseph retorted that if he wanted to, he had better change his to schlemiel. By the late nineteenth century the Ashkenazi Jews of New York comprised a formidable group, including the Contents, the Goldmans, the Kuhns, the Lehmans, the Lewinsohns, the Loebs, the Sachses and the Schiffs. However, when it came to names for their children, Gentile and patriotic American ones were chosen. The thing to do for prominent Jews was to play down their Jewishness. But whatever they did, anti-Semitism remained a core element of society, and Jewish new arrivals found it impossible to avoid or ignore. That it rankled long with Joseph is proven by one dramatic incident.

The Grand Union Hotel in Saratoga had been owned by one Alexander T. Stewart. On his death in 1876 Stewart had left its management to a friend, Harry Hilton, who shared his right-wing views. Stewart had envied Joseph Seligman from the time that Seligman had turned down the Treasury post, which Stewart coveted. It hadn’t helped that Stewart’s subsequent application for the job had been rejected by the Senate.