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NOTE 33. The Miser Hurts No One but Herself

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The miser hurts no one but herself.

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The latest chapter of John T. Flynn's Men of Wealth that has my head spinning concerns

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someone I probably should have known about, except that late 19th century Wall Street

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law is in short supply these days.

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But thanks to Flynn, I now know all about Hetty Green, 1834-1916, whose weird and creepy

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She was the richest woman of the Gilded Age, and sometimes the richest person, having died

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with a solid $200 million.

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But she was a miser.

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In fact, if the term describes her, it should describe no one else, or else we need some

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other modifier, like extreme miser or hypermiser.

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This is a woman who refused to pay the doctor to treat her son's leg wound, so it later

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had to be amputated.

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She was once offered a horse for $200, and she was outraged at the price, so she found

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out everything terrible she could on the seller and intimidated him down to $60.

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She rode the ferry with the cars rather than pay the passenger fee.

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She lived in a dumpy house in Hoboken.

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She had two changes of clothes, both black and tattered.

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She would travel hundreds of miles to collect debt payments.

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She never tipped.

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She was wicked smart – emphasis on wicked – she was called the witch of Wall Street.

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On the smart part, her key to success was rather simple.

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So simple, says Flynn, that everyone preaches, but hardly anyone practices it.

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She bought things that no one wanted and sold them when everyone wanted them.

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Nothing was permanent in her mind.

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So she bought bonds when they were crashing and dumped them when they were in high demand.

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She did the same thing with real estate and railroads.

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She seemed to have money to lend when no one else did, so a long line of borrowers was

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was always at her door.

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She offered tough terms and charged a high price.

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Before she invested a dime in anything, she would find out the names of all the principals

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of the company.

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She would dig up every bit of dirt she could find.

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She would then take all the accusations against each person and interview them at length,

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demanding detailed answers.

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She would do the same when people came to her to borrow money.

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She wouldn't lend unless she felt she effectively owned the person in question.

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As Flynn writes, she was not a builder.

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She projected no great productive industry.

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Her business was to stand on the side and take her toll from those who were producers

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and builders and needed her money.

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She was crazed with paranoia.

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She was convinced that everyone was out to kill her.

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When a wood beam fell nearby, she was sure that it was intended for her.

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Same with every mishap, the entire world was organizing against her in her mind.

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She hated everyone and everything, truly.

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Normally, in a market economy, such people don't thrive, but she did, if only because

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she had the goods.

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She had been fascinated by finance when she was a young girl, as she read aloud the stock

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pages to her aging family members.

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She inherited some of their money made from the whale oil trade.

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She turned that into an enormous financial empire, with which she did absolutely nothing

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except spend it on litigation.

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She loved the courtroom and sued many people.

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She insulted them in the courtroom with venomous comebacks and cruel words.

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She always lost.

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Did she love?

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Briefly, apparently.

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Edward H. Green was a wealthy bachelor who, for some odd reason, took a liking to her.

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He wrote her a love letter, and on the same day wrote a cheque for a cheap suit of clothes

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from a tailor.

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He inadvertently switched the letters so that Hetty got the letter intended for the tailor.

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She was so touched that he would spend so little on a suit that she agreed to marry

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him.

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Later, he lost all his money.

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She provided no help and let him languish in poverty the rest of his days.

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One Good Thing She Hated Politicians

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When they asked her railroad officials for free passes, she instructed the officials

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to hand them a card that read, Monday, Thou Shalt Not Pass, Numbers 20, 18, Tuesday, Suffer

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For Not a Man to Pass, Judges 3, 28, Wednesday, The Wicked Shall Pass No More, Naham 1, 15,

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Thursday, This Generation Shall Not Pass, Mark 8, 30, Friday, By a Perpetual Decree

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It Shall Not Pass, Jeremiah 5, 22, Saturday, None Shall Pass, Isaiah 24, 10, Sunday, So

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he paid the fare thereof, and went, Jonah 1, 2.

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What became of her money?

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Part of the estate was divided up in a thousand directions owing to a complication in family

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will.

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What can we say about this Miser?

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I think we can say that she did much good despite her wickedness and despite her horrid

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ways.

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She lent money at a profit.

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She bought when no one was buying, and sold when everyone was.

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She engaged in mutually beneficial exchange.

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She was a pill to work with, but evidently people were happy enough about what she had

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Now, people on the left sometimes think that the market economy breeds such types. Not

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so. Hetty was famous for being unlike all her colleagues. Everyone was liberally minded

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by comparison. Indeed, the Gilded Age gave rise to the accusation that vast wealth makes

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What we can observe from the life of Hetty Green is that there are bad people in all

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kinds of institutions.

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Capitalism doesn't create misers, it turns their ways toward productive good.

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Hetty hurt no one but herself and those dear to her.

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The market economy localized the effects of her sins and contained them.

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She created massive value to society and was rewarded for it.

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It is even hard to argue that she hurt herself.

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She was as happy as she could be just the way she was, and no amount of forcing her

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to be otherwise could have improved the situation.

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She embodied traits that we think of as being awful, but she worked in an industry that

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and allowed these traits to be turned to good for all.

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That is a credit to the market economy.

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Indeed, it is the highest praise of the free market that it can find a place even for someone

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so awful as this.

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A note about Flynn's extraordinary book.

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It was published in 1941.

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Flynn was an old-time progressive, a journalist deeply suspicious of the business class.

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He was disgusted at the truth he saw about the New Deal.

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It was a racket concocted by the corporate class.

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He turned against FDR.

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He was shocked to see that his fellow liberals did not follow suit.

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Then he opposed US entry into World War II.

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I suppose this book was written during his period of sadness, as a way of investigating

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the complex relationship between government and business.

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He gradually came around to a full-blown embrace of the free market as the only means to check

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the power of the government-business combine.

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This is only one chapter.

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Every chapter is just as great.

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It is a phenomenal work, and it is a mystery to me that it seems to have been forgotten.

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Thank goodness this reprint is now available again.