Joseph Seligman

During the American Civil War, Seligman was responsible for aiding the Union by disposing of $200,000,000 in bonds "a feat which W. E. Dodd said was 'scarcely less important than the Battle of Gettysburg'".[6]

Later historians have suggested that Seligman's role in financing the war through bonds has been exaggerated. According to Stephen Birmingham, Seligman was obliged to accept "7.30 bonds" from the government as payment for the uniforms his factory was delivering. Union defeats, combined with a suspiciously high interest rate, lowered confidence in the bonds, making them difficult to sell.[7]

In the post-Civil War Gilded Age, J. & W. Seligman & Co. invested heavily in railroad finance, in particular acting as broker of transactions engineered by Jay Gould. They underwrote the securities of a variety of companies, participating in stock and bond issues in the railroad and steel and wire industries, investments in Russia and Peru, the formation of the Standard Oil Company, and shipbuilding, bridges, bicycles, mining, and a variety of other industries. Later, in 1876, the Seligmans joined forces with the Vanderbilt family to create public utilities in New York.[8] In 1877, Seligman was involved in the most publicized antisemitic incident in American history up to that point, being denied entry into the Grand Union Hotel in Saratoga Springs, New York, by Henry Hilton.

Seligman's firm made a number of investments in railroads. Among these were the Missouri Pacific, the Atlantic and Pacific Railroad (A&P), the South Pacific Coast Railroad, and the Missouri–Kansas–Texas Railroad. They also helped finance New York's first elevated railway.

After the American Civil War, nothing generated as much financial excitement as rail transportation, and the Seligmans were, at that time, the country's leading financiers. Joseph started conservatively in this sector, selling railroad bonds, but this led them to owning and operating railroads in order to protect their investments. Joseph served as director of the A&P, the Missouri–Kansas–Texas, as well as the South Pacific railroads, and in 1872, claimed that they had made a fortune in the business of start-up railroads. However, he never felt comfortable here, and suspected that they were over-invested in the sector. After the Panic of 1873 he swore never to sell another railroad bond, but in 1874 was again selling A&P bonds, touted as the only snow-free route to the Pacific. In 1875, the A&P failed, and its franchise was taken over by the St. Louis–San Francisco Railway, which was forced to sell half its A&P interest to the Atchison, Topeka and Santa Fe Railway (AT&SF). Joseph unfortunately died, five years before being able to see the AT&SF reach Los Angeles.[9]

The Seligmans tended to generally lose money on their equity investment in railroad ventures. An example is the purchase of land in Arizona to be used for grazing cattle, which would then be transported to market on the A&P. The aridity of the desert made it unsuitable for the venture, but there remains a town by the name of Seligman, Arizona.

President Ulysses S. Grant, who befriended Jesse Seligman when he was a First Lieutenant near Watertown, New York, offered Joseph Seligman the post of United States Secretary of the Treasury, which he declined, possibly due to shyness. George Sewall Boutwell accepted the position and eventually clashed with the Seligmans.

In 1877, President Rutherford Hayes asked Seligman, August Belmont, and a number of other New York bankers to come to Washington, D.C., to plan a refinancing of the war debt. Each banker submitted a plan, but Secretary of the Treasury Sherman accepted Seligman's plan as being the most practical. It involved retaining gold reserves totaling forty percent of circulating greenbacks through bond sales.

In 1877, Judge Henry Hilton, the owner of the Grand Union Hotel in Saratoga Springs, New York, denied entry to Seligman and his family because they were Jews, creating nationwide controversy. It was the first antisemitic incident of its kind in the United States to achieve widespread publicity.

During the 1870s, several incidents made Alexander Stewart hostile towards Seligman, although the two men had served together on the board of the New York Railways Company, whose president was Judge Henry Hilton, a Tweed Ring associate.[10]

The first incident involved Seligman's declining the post of Secretary of the Treasury. Stewart, who was a friend of President Grant, was then offered the post. However, because he was associated with Henry Hilton, and Hilton with Tammany Hall, the Senate declined to confirm him.

Seligman was invited to serve in the Committee of Seventy, a group of New Yorkers who banded together to fight the Tweed Ring. Stewart's company, in retaliation, stopped doing business with Seligman.

Stewart died in 1876, having placed Hilton in charge of his estate, the largest American fortune recorded to that date. The estate included a two-million-dollar stake in the Grand Union Hotel in Saratoga, as well as A. T. Stewart's department store on Astor Place. Hilton himself was unhappy with Seligman, as he was annoyed that Seligman had not invited him to a dinner given for Grant after he became president.[11]

After helping refinance the war debt in Washington, D.C., Seligman decided to vacation with his family at the 834-room Grand Union Hotel in Saratoga Springs, New York, where he had stayed before. Saratoga at the time was a well-regarded resort area for wealthy New Yorkers, and the Grand Union Hotel itself was the best available.

Nevertheless, by 1877 the hotel had suffered a drop in business. Stewart and, after his death, his manager Hilton believed that the cause of the decline was the presence of "Israelites" (that is, Jews) at the hotel; Christians, their theory went, did not wish to stay at a hotel that admitted Jews. Seligman was told he could not stay at the hotel.

Historians disagree as to whether the Seligman family were physically turned away from the hotel, told not to come to the hotel, or advised that they could stay only one final time. However, it is clear that the Seligmans were made to feel that their presence at the hotel was not desired and would not be tolerated long, if at all.

The New York Times, on June 19, 1877, ran a headline set entirely in capital letters:[12]

A SENSATION AT SARATOGA.

_____

NEW RULES FOR THE GRAND UNION.

NO JEWS TO BE ADMITTED--MR. SELIGMAN,

THE BANKER, AND HIS FAMILY SENT AWAY--

HIS LETTER TO MR. HILTON--

GATHERING OF MR. SELIGMAN'S FRIENDS

AN INDIGNATION MEETING TO BE HELD.

A month later, The New York Times disclosed a letter in which Judge Hilton told a friend, "As [yet] the law ... permits a man to use his property as he pleases, and I propose exercising that blessed privilege, notwithstanding Moses and all his descendants object."[13]

The case became a national sensation. Seligman and Hilton both received death threats. A group of Seligman's friends started a boycott against A. T. Stewart's, eventually causing the business to fail; a sale to John Wanamaker followed.[14] This prompted Hilton to pledge a thousand dollars to Jewish charities, a gesture mocked by the satirical magazine Puck.

Hilton was also castigated by Henry Ward Beecher (who knew Seligman) in a sermon entitled "Gentile and Jew". After praising Seligman's character, Beecher said, "When I heard of the unnecessary offense that has been cast upon Mr. Seligman, I felt no other person could have been singled out that would have brought home to me the injustice more sensibly than he."[15]

Whether or not Seligman meant to be turned away from the hotel to cast a light on growing antisemitism in America, the resulting publicity emboldened other hoteliers to exclude Jews, placing advertisements saying "Hebrews need not apply" and "Hebrews will knock vainly for admission".[16]