December 10, 2008
Writer discovers California ‘Gold’ in banking ancestor Isaias Hellman
"Towers of Gold: How One Jewish Immigrant Named Isaias Hellman Created California" by Frances Dinkelspiel (St. Martin's Press, $29.95)|
Searching for ways to deal with the current economic crisis, Treasury Secretary Henry Paulson could take a cue from Isaias Hellman, banker, capitalist and California visionary. More than once during financial panics in the 19th century, when bank runs were a too-frequent and devastating occurrence, Hellman resorted to a dramatic ploy to restore calm and confidence. He stacked massive towers of gold coins on the counter of his Farmers and Merchants Bank in Los Angeles.
Half a million dollars in plain view "was a tonic," his great-great-granddaughter Frances Dinkelspiel writes in "Towers of Gold: How One Jewish Immigrant Named Isaias Hellman Created California" (St. Martin's Press). It was a sight that stopped withdrawals cold and even attracted deposits. Everyone, customers and competitors, seemed to trust Hellman's faith that better times were ahead.
A grand gesture, his towers of gold represented not only Hellman's keen sense of the public psyche when hard times arose but his own confidence in the opportunities and resources of California. Hellman was an essential part, according to Dinkelspiel, of the generation that built the economic engines and defined the social institutions of California. In that role and company, Hellman was arguably the single most powerful and influential Jew in the United States from the last quarter of the 19th century until his death in 1920.
A fifth-generation Californian and Bay Area journalist, Dinkelspiel grew up with little knowledge of her illustrious ancestor. She discovered in the Hellman papers at the California Historical Society "every reporter's dream: an unknown story about a critical chapter in the country's history."
Sifting through extensive correspondence, ledgers, newspaper clippings and diaries, she realized that Hellman was a titan of his time, "California's premier financier" when the state shed its isolation and became an economic force.
She soon was on a seven-year quest to re-insert Hellman into California history and expand the record of Jewish immigrant success beyond Levi Strauss (who was just one of several pioneer co-religionists helped by Hellman to build unimaginable fortunes).
Hellman arrived in Los Angeles from Bavaria in 1859, a few months shy of his 17th birthday. Still more Mexican than American and with a population of less than 5,000, Los Angeles was home to maybe 150 Jews, almost all merchants who belonged to a handful of extended families. Accompanied by his younger brother, Herman, and with less than $100 between them, Hellman went to work as a clerk in a cousin's store.
Within a few years, Hellman was buying his own store, developing commercial property in the center of Los Angeles and going into business with men "who considered themselves the problem solvers" of the region. Men such as John G. Downey, an Irish immigrant and former governor of California, were eager to capitalize on the sterling reputation and business acumen of the 29-year-old when Hellman invited them to become shareholders in the Farmers and Merchants Bank.
Farmers and Merchants proved to be the city's first successful financial institution. It also became Hellman's springboard to a West Coast banking empire that by 1915 had resources totaling more than $100 million. The crown jewel in that empire was the Wells Fargo Nevada Bank.
In 1890, Hellman was tapped to save the Nevada Bank, a San Francisco firm that counted the Southern Pacific Railroad among its biggest customers. When capitalist E.H. Harriman decided to spin off the banking business of Wells Fargo, he approached Hellman to take charge of merging two of the state's oldest establishments and creating one of the West's largest financial institutions.
While Hellman had family ties to New York and European capitalists (his brother-in-law was Meyer Lehman of the Lehman Brothers commodity house), the roots of Hellman's success were in his local connections. He persistently partnered with friends and neighbors, Jews and non-Jews, first in Los Angeles and later in San Francisco. As his success grew, he promoted California investment opportunities to Lehman Brothers and other prominent Jewish firms in the East and increased the wealth on both coasts.
As an investor, adviser and leader, Hellman extended his success and influence over several other major industries in California. He partnered with Collis and Henry E. Huntington to develop railroads and trolley lines in Los Angeles and San Francisco. He loaned Charles Canfield and Edward Doheny $500 to purchase the land where they sunk the first free-flowing oil well in Los Angeles.
Hellman was the largest shareholder in the Los Angeles Water Co., a private firm that developed the city's water system in the 19th century, and personally sold a $14.5 million bond issue for the Spring Valley Water Co. that supplied San Francisco. Having early in his career invested in vineyards, in 1901 Hellman took control of the California wine industry, standardizing the product and elevating the reputation of the industry around the world. In addition, he developed land all over Los Angeles County, owned property in San Francisco and built a vacation retreat at Lake Tahoe that eventually became a state park.
Hellman's influence on Los Angeles is still evident today. In an instance where capitalism and philanthropy met, Jewish Hellman, Protestant Ozro Childs and Catholic Downey donated 110 acres to the Methodist founders of USC. The land was in the center of the partners' subdivision at the southwest edge of the city. They also extended the trolley line they owned from downtown to the new campus.
Their generosity gave potential land buyers a destination and a convenient way to get there. The city had a university, and the partners saw their land triple in value.
Hellman helped create another L.A. institution when he advised Harrison Gray Otis to buy out his partner in the Los Angeles Times and then provided the $18,000 loan required to put the paper in Otis' hands. Otis' descendants, the Chandler family, sold the massive media company that evolved for $8 billion in 2000.
Hellman's leadership went beyond the world of finance and business. When Los Angeles' first synagogue was built in 1872, he was president of Congregation B'nai B'rith, now known as Wilshire Boulevard Temple. He served as a regent of the University of California for more than 30 years and endowed a scholarship fund still supporting students. He took a leading role in the recovery of San Francisco after the 1906 earthquake. Beneficiaries of his philanthropy ranged from Catholic orphans to World War I Jewish European refugees.
While unquestionably Hellman achieved the immigrant's dream of success and acceptance in America, there were times when he was the target of anti-Jewish sentiments and anti-Semitic behavior. He and his companies also were subject to the wrath of unionists and socialists, progressive reformers and even betrayal by family members. His wealth, influence and fame brought both friends and enemies.
In its plain sense, the biography of Hellman is a story of nearly unfettered opportunity to apply one's skills and realize one's ambition. The openness of the American frontier stood in stark contrast to the restrictions on livelihood and residency most Jewish Europeans left behind. At a deeper level, Hellman's story is a reminder that it took skill, ambition and connections to transform that frontier into part of the United States and create a state that today has a gross domestic product larger than all but eight countries in the world.
Jews were notably among the diverse contributors of those necessary ingredients, as they have continued to be, for example, the Stern, Haas and Goldman families in San Francisco and the Factor, Taper, Casden and Lowy families in Los Angeles.
To her credit, Dinkelspiel presents a well-developed and even-handed portrayal of Hellman and his extended family. The biography maintains a solid historical context in which to understand the perspectives, philosophy and values of a gilded-age capitalist. His German-American-Jewish sense of responsibility to family, community, customers, investors, competitors and the future comes through clearly. Through the vehicle of one man and his networks of family, friends and associates, the foundational place in California history of Jewish immigrants generally is illuminated, as well.
Well-researched and highly readable, "Towers of Gold" makes an important contribution to both the history of the Golden State and the history of Jews in America. It is a very strong case for the veracity of the volume's subtitle -- "How One Jewish Immigrant Named Isaias Hellman Created California" -- demonstrating the key role of Hellman in the urban and economic development of California.
It also adds a fresh perspective on the Jewish immigrants from Central Europe who in the mid-19th century joined in the continental expansion of the United States and set down roots in emerging communities. As historian Kevin Starr has noted, frontier California was influenced by "Jewish values and sensibility" in ways unprecedented anywhere else in the nation.
Hellman's life and accomplishments illustrated that influence, and this biography brings attention to its still-unfolding consequences.
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