Financial History 143 Fall 2022 - Page 17

Navigating Monetary Currents : The Telltale of a Financial Grandmaster
Library of Congress Prints and Photographs Division
Hetty Green ’ s residence in Bellows Falls , VT , circa 1900- – 910 .
also a caretaker . There are countless stories of her caring for sick neighbors , and she also played the role of Good Samaritan to complete strangers . For example , while residing in London , she bandaged a delivery man who had fallen from his carriage , while onlookers seemed content to watch him bleed out . When asked why she was viewed as a miser , she responded :
I am not a hard woman , but because I do not have a secretary to announce every kind act I perform , I am called close and mean and stingy … I am a Quaker , and I am trying to live up to the tenets of the faith . That is why I dress plainly and live quietly . No other kind of life would please me .
Hetty Green passed away on July 3 , 1916 . Almost her entire estate , which was valued at more than $ 100 million , was split evenly between her two children , Ned Green and Sylvia Ann Wilks . Neither of her children had heirs , and upon their passing , Hetty ’ s wealth was distributed to 63 different charitable organizations .
A Belated Tribute to an American Legend
Hetty Green was one of the most talented investors ever to brave the unforgiving securities markets of Wall Street . She was a pioneer of the value investing philosophy . Her nerves were tested in the Panics of 1873 , 1884 , 1893 and 1907 . Not only did she pass each test with hardly a flinch , but she profited from each crisis , while many men forfeited their fortunes . She refused to cheat investors by using market manipulation and insider trading tactics , which were the preferred weapons of Gilded Age stock plungers . She never yielded to the temptation to boost her returns by using margin debt , thereby avoiding the catastrophes experienced by most speculators — including her own husband . Finally , her modesty preserved her respect for the dignity of all human beings regardless of the size of their bank accounts .
It is uncommon for investors to possess any of these talents , but it is a true marvel when a single individual possesses all of them . There is no such thing as a perfect investor , but Hetty Green is a strong candidate for the one who came closest . At a minimum , this establishes her as the best female investor in US history , and among the best investors regardless of gender .
Mark Higgins , CFA , CFP ® is a seasoned investment advisor with more than a dozen years of experience serving large institutional investors , such as endowments , foundations , public pension plans , and corporate operating reserves . He is also an avid financial historian and is publishing a book on the full history of the US financial system with Greenleaf Book Group in 2023 .
“ I saw this situation developing three years ago , and I am on record as predicting it . I said the rich were approaching the brink , and that a ‘ panic ’ was inevitable .”
— Hetty Green
By the end of 1906 , Hetty Green sensed that the monetary tide in America was receding , and she began raising cash aggressively to prepare for the inevitable crisis . Hardly any other investors appreciated what was happening . At the same time , Hetty also feared that trust companies were particularly vulnerable to a financial panic . When one of her friends asked for her opinion on the health of the Knickerbocker Trust in the spring of 1907 , Hetty warned , “ If you have any money in that place get it out the first thing tomorrow ,” and then sarcastically added , “ the men in that bank are too good-looking . You mark my words .”
Hetty Green was one of the only Americans with plentiful cash in October 1907 . J . Pierpont Morgan is rightly credited for facilitating a heroic rescue of the financial system , but unlike Hetty Green , Morgan was caught by surprise . It was only after intense lobbying by several of his partners that Morgan finally grasped the gravity of the situation on October 19 , 1907 .
Recognizing her important role as a leading financier , Hetty Green was the only woman invited to attend a critical meeting at the Morgan Library during the height of the panic . If the times were different , perhaps she would have led this meeting .
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