The Past, Reimagined
How The Wall Street Journal of 2014 might have covered the news of July 8, 1889.
By JASON ZWEIG
July 7, 2014 4:40 p.m. ET
NEW YORK—Women have been trying their hand at trading stocks, and the swish of their ruffled skirts is ruffling feathers on Wall Street.
In 1880, Mary Gage, a friend of the women’s-rights activist Elizabeth Cady Stanton, opened a stock exchange on Broadway for women seeking to speculate in railroad and mining stocks. Ms. Stanton herself is believed to have been an active trader.
Several bucket shops in Manhattan, in the residential areas well north of the financial district, are said to be frequented exclusively by wealthy women who prefer placing their speculations there rather than on Wall Street itself, where they fear “exciting adverse comment.”
Foremost among the new breed of female financiers is Mrs. Hetty Green, believed to be the richest woman in America and almost certainly the largest female stockholder. She curses like a sailor and lives like a miser.
Mrs. Green wears the same black dress nearly every day, stuffing it with old newspaper scraps during the winter months to keep her coal charges low. She often munches on a raw onion all day as if it were an apple, explaining that it simultaneously staves off hunger and saves on grocery bills. She moves constantly from one cheap, dingy apartment to another, relocating from Brooklyn, N.Y., to Hoboken, N.J., and then down to the poorest blocks of the Bowery in Manhattan, all in an effort to prevent New York and New Jersey authorities from taxing her enormous dividend income.
Investor Hetty Green Getty Images
Worth tens of millions of dollars, Mrs. Green refused to pay for a hospital visit to treat her young son after he injured his kneecap. Instead she repeatedly applied hot sand to his wound. When it didn’t heal, Mrs. Green, dressed in her customary rags, finally brought the boy to Bellevue Hospital and asked for him to be treated as a charity patient. But the damage was done, and her son’s leg was eventually amputated.
When her son grew up and became her business assistant, he ran low on money and telegraphed Mrs. Green for assistance. His mother sent a three-word reply: “Not a cent.” And she sent the telegram collect.
Mrs. Green almost never trades. Buying and holding stocks for years, even decades, at a time, she calls herself an “investor”—a relatively new term that, so far at least, is rarely used on Wall Street.
To the shock of male financiers, Mrs. Green says her first rule of success is “Never speculate in Wall Street.” The others are: “Never maintain an office. Eat slowly. Don’t stay up all night. Don’t drink ice water. Stay out of drafts. If a man owes you $956.17, don’t accept $956.16. And don’t close a bargain until you have reflected upon it overnight.”
That is just what Mrs. Green did when she struck a deal with the renowned short seller Addison Cammack.
In short selling, a trader sells borrowed shares in hopes of buying them back later at a lower price and pocketing the difference. If the price goes up instead, the trader suffers a loss.
Mr. Cammack, betting that shares in the Louisville & Nashville Railroad Co. were bound to fall, sold the stock short in massive quantities. Mrs. Green, who owned millions of dollars’ worth of the stock, watched and waited until no shares were available on the open market. Caught in a “short squeeze,” the stock took a sudden jump upward. Mr. Cammack tried calling on Mrs. Green to borrow or buy some shares to cover, but she refused to see him, leaving him to squirm overnight. The next day the great short seller begged again to see her, and she relented, handing him a slip of paper showing him what she had paid for each of 40,000 shares. She told Mr. Cammack that “just to be neighborly,” instead of taking every penny he had, she would part with her stock for a mere $10 per share over her purchase price.
Elizabeth Cady Stanton Getty Images
Mr. Cammack handed her a check for approximately $400,000 and pronounced himself lucky to escape with his hide intact.
Henry Clews, the renowned banker and raconteur who is chief executive of Henry Clews & Co., admires some aspects of Mrs. Green’s record but withholds full praise. He is incredulous at any suggestion that a woman could ever thrive at the stock exchange. As speculators, says Mr. Clews, women have so far been “utter failures” and “parasites.”
Mr. Clews admits with grudging admiration that Mrs. Green “has done some fine work in manipulating Louisville & Nashville,” given how formidable Mr. Cammack is. “Without attempting to detract from the abilities of this eminent and wealthy lady,” he says, “I hardly think she has the mental power of any of the great [stock] operators.”
Female traders, says Mr. Clews, lack “the mental qualities required to take in the varied points of the situation upon which success in speculation depends” and “are entirely unable to take that broad view of the whole question and situation which the speculator has to seize at a glance.”
He concedes, of course, that women “often arrive at correct conclusions in the ordinary affairs of life with amazing rapidity” and that “through craft and subtlety” women “rule the male sex to a large extent.”
But Mr. Clews thinks that the increasing involvement of women on Wall Street is a passing fad. In the long run, he says, “women are too impulsive and impressionable” to succeed.
Source: The Wall Street Journal