After Ben’s death his powerful brothers, Daniel, Murry, Solomon and Simon, put aside the differences they’d had with him during his life, and pulled together to help his widow and her family. Ben’s International Steam Pump Company, together with a variety of lesser business interests, not to mention his lavish personal tastes, the maintenance of his staff, his mistresses, and a Paris apartment, had absorbed almost all his capital.

As a temporary measure, without her knowledge, the brothers discreetly advanced money from their own pockets to Florette via a private account, and set about the business of unravelling Ben’s affairs. It took seven years to sort everything out and pay off the many creditors. By the time this had been done, all that remained was about $800,000 for Florette and $450,000 for each of the girls. The brothers estimated that Ben had run through about $8 million.

Although the inheritances were no mean sums, they were small compared with the wealth of the Guggenheim empire, and they dictated a change in Ben’s family’s way of living. Florette was proud, and when she discovered that the income she’d been receiving had come from her brothers-in-law, ‘she nearly had a fit’, according to Peggy. (When Florette’s father died in 1916, leaving her $2 million, her circumstances improved considerably, and she was able to repay the loan.) Since Ben had more or less permanently absented himself in 1911, the family had moved into a residential suite at the St Regis Hotel – a Guggenheim stronghold – and the house on East 72nd Street had been let to an aunt of Peggy. Now, in 1912, the St Regis became too expensive, and Florette moved with her daughters to a more modest place on the corner of 5th Avenue and 58th Street – though it did have a 5th Avenue number. Evidently the Seligman family couldn’t or wouldn’t help, and Florette reluctantly started to live on her own money. It is possible that her blood relatives thought she had quite enough to survive on, or perhaps, as she had married into the Guggenheims, it was felt that her maintenance was their responsibility. Either way, no one was going to starve.

But it was a blow to find out just how little Ben had left them with. Hazel Guggenheim told a friend, somewhat melodramatically, that ‘my mother made eggs by the hot water from the faucet’. Servants had to be dismissed, and paintings, tapestries and jewellery sold. Hazel remembered that her father bought paintings by Corot, and ‘owned gorgeous suits and shoes and ties, and wore slippers of Moroccan leather’, and that ‘my mother and he went to the opera every night’. That way of life was gone, and Peggy wrote, ‘from that time on I had a complex about no longer being a real Guggenheim. I felt like a poor relative and suffered great humiliation thinking how inferior I was to the rest of the family.’

The context in which she felt this is best understood by making comparisons. The oldest Guggenheim brother was Isaac. When he died in 1922 he left $10 million. Murry died in 1939 leaving $16 million; Dan in 1930 leaving $6 million. Although Peggy and Hazel were to inherit a further $500,000 apiece from their mother on her death in 1937 – their beloved older sister Benita having died ten years earlier – they still saw their cousins, Murry’s children Edmond and Lucille, coming into $8 million each, and Dan’s children Robert, Harry and Gladys getting about $2 million apiece. Everybody lived in close proximity in New York City and on Long Island, and it isn’t surprising that Peggy, at least, wanted to get away – with Hazel following suit. Benita, at seventeen significantly older at the time of Ben’s death, and gentler and more conventional than her sisters, would follow a different path.

‘After his death,’ Hazel recalled much later to Virginia Dortch, who compiled a portrait of Peggy through the reminiscences of her friends, ‘in order not to offend the Guggenheims, my mother would never marry or even sit alone in a room with a man. I suppose, if father had lived, Peggy would have married bourgeois men and I would have stayed married to them.’ However, this may be disingenuous, and does not take into account Florette’s own eccentricity, however mild it was by comparison with her own brothers’ and sisters’. In any case it isn’t helpful to speculate on what might have been. Peggy and Hazel were rivals for their father’s love and for Benita’s love; later they were rivals for fame and notoriety. For the moment, they turned to religion. ‘After my father’s death I became religious,’ wrote Peggy. ‘I attended the services in Temple Emanu-El regularly, and took great dramatic pleasure in standing up for the Kaddish (the service for the dead).’ The family went into mourning, and Peggy felt ‘important and self-conscious in black’.

Ben’s death as a hero when they were both young girls, and the mythic element lent his death by the fact that his body was never recovered, led Peggy and Hazel to idolise his memory more than they might otherwise have done; but it is doubtful whether his death fundamentally affected the course their lives were to take. More important was the comparative lack of money. The youngest of the Guggenheim brothers, William, sued his older siblings in 1916 over what he considered his illegal exclusion from profits from ventures which had flourished since his departure, specifically a fabulously profitable foray into copper mining in Chile. Unfortunately, he and Ben had signed a disclaimer to participation in the mining ventures of the family firm in January 1912. Florette, loyal to the Guggenheims because of their kindness to her, would have nothing to do with William’s case. The other Guggenheim brothers settled out of court for $6 million, which William, with a reputation for poor investments which led Wall Street to nickname him ‘Willie the Plunger’, and a taste for starlets and beauty queens, big cars, a large staff and a big house, as well as a flirtation with vanity publishing, managed to reduce over the next twenty-five years to virtually nothing. After his estranged wife and her son by him had successfully claimed their rightful shares under New York State law, and after debts and taxes had been deducted, all that the two chorus-liners and two beauty queens who had hoped to be William’s principal heirs at his death in 1941 received was about $1000 apiece. Fortunately for William’s descendants, Simon Guggenheim, knowing his younger brother’s ways, had set up a $1 million trust for his heirs after the lawsuit.

Ben and William had been born and brought up under a less onerous burden than their brothers, to the latters’ resentment; but with hindsight they had cause to be grateful for their father’s severity. Ben and William were the ones singled out for university education before joining the family firm. William, for all his failings, had a sensitive and intellectual streak, and a sense of history which prompted him to write an eccentric but nevertheless important memoir of himself and, more importantly, the early days of the Guggenheim empire. And although Solomon Guggenheim was to demonstrate that an artistic sensibility existed within the family, it was Ben who was the principal inspiration for his middle daughter’s decision to live in artistic circles, and for her love of Europe.

Above all, despite all attempts at assimilation, Peggy was marked by her Jewishness. She belonged to a family within the Jewish New York community which was still regarded as arriviste despite its great wealth, and she was a member of the poorest branch of that family. She experienced anti-Semitism early on, and understood the refugee society’s eternal need to stick together and find security in money – Peggy was only second-generation American. Both her grandfathers had come from the middle-European Jewish peasantry and had started out in America as peddlers. From them she inherited two basic characteristics of the successful trader: a love of money and a disinclination to part with it without good reason. If she didn’t set out to make money, in the end what she invested in pictures repaid itself a thousandfold. In leaving Peggy without the fortune her cousins enjoyed, Ben, ironically, did her a favour.

CHAPTER 3 Guggenheims and Seligmans

Both Peggy’s grandfathers left Europe – Meyer Guggenheim in 1847, James Seligman in 1838 – to escape the financial and professional restrictions placed on Jews in the Old World. The Jewish communities of Europe were centuries old, but since the Crusades Jews had found themselves increasingly the object of mistrust, suspicion and fear. The communities defensively kept to themselves and did not integrate, but the countries in which they lived regarded them as at best unwelcome guests, and promulgated laws which ensured that life for them was as difficult and uncomfortable as possible. The majority of them lived in small rural settlements in eastern Europe and Russia, and were not allowed to farm or own land other than their own homes; even such ownership was subject to tariffs and taxes Christians were exempt from. Jews were not allowed to engage in mining, or the smelting of metal, or any other major industrial enterprise, or to practise in any of the professions outside their faith. The only jobs that remained open to them were tailoring, peddling, small-time retail in commodities, and moneylending. The Church permitted them to deal in moneylending because it considered Jews exempt from two tenets, ironically enough from the Old Testament: Exodus 22, verse 25: ‘If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury’; and Deuteronomy 23, verse 19: ‘Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury.’ Pragmatically, the Church acknowledged the necessity for moneylending, but also saw that it was unpopular, and so, with political acumen, accorded the right to practise it to the Jews.

The origin of the Guggenheim family is uncertain, but it is possible that they originally came from what is now called Jügesheim, to the south-east of Frankfurt-am-Main. By the end of the seventeenth century the Guggenheims had moved to Switzerland from Germany, where the treatment of the Jews was harsher. In Switzerland the Jewish community enjoyed a monopoly on moneylending; but as commerce grew and money increasingly began to be used as capital for ventures, the advantages of lending it on interest began to be seen as sound business practice, and the Church’s prohibition on Christian usury was relaxed at the Fifth Lateran Council of 1512–18. The principal function of Jews in Switzerland thus became superfluous, and, with a growing Christian population, the cantons began to expel them. By the end of the eighteenth century the Jewish population of the entire country was reduced to two small communities, in Ober Endingen and Lengnau.

It was in Lengnau, a small village about twenty-five miles north-west of Zürich, that the Guggenheims settled. The earliest of Peggy’s ancestors on her father’s side whom we can trace for certain was a man called Jakob. Jakob Guggenheim was an elder of the synagogue and a respected local scholar of the Talmud, whose acquaintance was sought by a relatively enlightened Protestant Zürich pastor called Johann Ulrich, who had taken his arthritic wife to the nearby spa town of Baden in about 1740. As a result of their meeting Ulrich, already interested in Judaism, became a friend, but unfortunately the pastor’s proselytising zeal led him to persuade one of Jakob’s sons, Josef, to convert to Christianity. The procedure took sixteen tormented years as the sensitive and intellectual Josef struggled with his conscience. It broke up the friendship; but the Guggenheims had had their first brush with the politically dominant religion. Jakob’s protest at his son’s conversion was so angry that he incurred the wrath of the Christian community, which obliged him to pay a massive six-hundred-florin fine in order to remain in Lengnau. That he could afford it shows how prosperous the family was.

Jews were still allowed to lend money, and another of Jakob’s sons, Isaac, displayed a particular gift for the business. When he died in 1807 at an advanced age, he left 25,000 florins in coin, plate and goods; but life continued to be hard for the Jews of Lengnau, and by the time Isaac’s grandchildren reached maturity his patrimony had all but disappeared.

One of them, Simon, worked as a tailor in the village for thirty years without any significant financial gain to show for it. He lost his wife in 1836, and had to bring up a son, Meyer, and four surviving daughters alone. By 1847 Meyer was nearly twenty and worked as a peddler, travelling in Switzerland and Germany. The younger daughters, though, presented a problem: Simon didn’t have enough of the money required by Swiss law (as applied to Jews) to provide them with dowries (which would then be taxed), so they were not allowed to marry.

The problem of matrimony touched Simon personally. He was fifty-five in 1847, but had become attached to a widow, Rachel Weil Meyer, fourteen years his junior. She had three sons and four daughters, but she also had a reasonable amount of capital. This, together with the value of Simon’s home and contents, should have been enough, they hoped, to persuade the authorities that they themselves had sufficient money to get married. But the authorities were unimpressed. Simon and Rachel had had enough. They began to look for a solution away from home.

In 1819 the Savannah, built at Savannah, Georgia, the first steam-assisted sailing ship designed to cross the Atlantic, had made the passage from her home port to Liverpool in twenty-five days. The ship had a full rig of sails, and only used her steam-driven paddles for the small proportion of the voyage when there was no wind; but her successful crossing suddenly brought the young republic of the United States much closer to Europe, and foreshadowed an era of relatively cheap, quick and reliable crossings of the ocean. Other, more sophisticated ships soon followed. America sought talent, labour and immigrants to bolster its still comparatively small European population, and to people its huge virgin territories. For the Jews of Europe the country had one massive attraction: there were no ghettos, and no discriminatory restrictions – unless, of course, you were a native American.

Jews from rural Germany, especially rural Bavaria, a very hard-pressed region, started emigrating early on, and their letters home carried nothing but praise for the New World. It was a huge step for Simon and Rachel, by the standards of the time already both well advanced in years, and rural Swiss-Germans with no other experience of the world; but repression at home offered them little alternative. Here was a place where they could live freely, not as barely tolerated and exploited ‘guests’, even though their family roots reached back centuries. They sold Simon’s property, pooled their resources, and set off with their children overland for Koblenz.

From there they continued to Hamburg, where they spent only a short time before taking steerage berths on a sailing ship – the cheapest passage they could find – bound for America. The voyage took eight weeks, the conditions were cramped and the travellers had to share them with a flourishing population of rats. Although dried fruit was supplied, the food was basic – chiefly hard-tack – and water was rationed very strictly. There was no privacy.

For Simon’s son Meyer and Rachel’s fifteen-year-old daughter Barbara, however, the discomfort of the journey was eclipsed by something far more important: they fell in love. By the time the American coastline rose on the horizon, they had decided – as soon as they could afford it – to marry. This strengthened Meyer’s resolve to do well. He was a small, energetic man, with strong features and a bulbous nose which many of his descendants, including his granddaughter Peggy, would inherit. Capable of kindness, and not averse to the finer things in life (good cigars and fine white wine featured in his later prosperity), he had a liberal side and a certain sense of humour. As a businessman, however, he was habitually mistrustful, cold and acute. He was obsessed with making money, and though he had an aptitude for it, he also worked at it relentlessly.

The joint families’ destination was Philadelphia, where they may already have had friends or relatives – it was the usual method for second- or third-wave immigrants to follow to where cousins or neighbours from the old country had already established bridgeheads, one reason being that few immigrants spoke the language of the new country when they arrived. Away from the north-east, the United States in 1848 was still more or less unexplored: the rapid colonisation and urbanisation of the next seventy years or so was only just getting under way. Philadelphia, however, founded by William Penn in 1682, was by now a prosperous and important city of some 100,000 people, including 2500 Jews. The Jews were integrated into the local community, but only held positions of minor social and financial standing.

Once they had disembarked, organised their modest baggage and adjusted to the unfamiliar, exciting and frightening environment, the large family set about finding a place to live. They rented a house in a poor district outside the city centre, and immediately Simon and Rachel married. The next thing to do, before their slender savings were exhausted, was to find work. Rather than seek employment, Simon and Meyer decided to work for themselves. As it would take more capital than they could afford to set up a tailor’s shop for Simon, they both took to peddling, the work Meyer already had experience in. Stores were few and far between and transport was hard, so most people, especially in outlying areas, tended to buy whatever they needed from travelling salesmen. Old Simon worked the streets of the town, while young Meyer left home each Sunday with a full pack for the country districts, not returning until the following Friday. It can’t have been easy, walking miles on foot, sleeping in the cheapest lodgings, with robbery and abuse a constant worry, but before long he had established both routes and a routine.

The Guggenheims had to learn fast – both the language and local business practice – but on the other hand they were free of all the laws and taxes imposed on Jews back in Switzerland, so there was a sense of liberation which made the graft easier to bear, and also motivated them. For Meyer especially this new beginning was stimulating, and he quickly discovered within himself a great aptitude for business. Iron stoves were rapidly replacing the old open hearths, and one of his best-selling lines was a form of blacklead for cleaning them. Meyer saw that if he could find a way of making his own polish, rather than buying it from the manufacturer, he could make a far greater profit while keeping his retail price low. In those days there was no law restricting such a practice, and history doesn’t relate how the manufacturer reacted to the loss of one small client, but Meyer took a can of the stuff he was buying to a friendly German chemist, who analysed it for him. Thus armed with the recipe, and after several messy experiments in his scant time off, Meyer not only produced his own stove blacking, but improved upon the original by making a version that would stay on the stove, but not on the hands of the person cleaning it. Before long he was selling his polish in such quantities that Simon gave up his own round and stayed home to produce it, using a second-hand sausage-stuffing machine. Soon Meyer was making eight to ten times the profit he had formerly made.

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.

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Anton Gill

Empire’s Children: Trace Your Family History Across the World