Towers of Gold: History of the man indistinguishable from history of the State of California
It’s a personal family historian’s Best of All Possible Worlds scenario – follow a hankering to learn more family history for the sake of the kids, and go to the state historical society, discover not just one but dozens of boxes of archived materials about Great-Great Grandpa, and spend the next 8 years researching and writing a book about how that Great Great Grandpa, Isaias W. Hellman, helped make California. Frances Dinkelspiel’s book, Towers of Gold: How One Jewish Immigrant Named Isaias Hellman Created California was released last week.
I first learned of Frances Dinkelspiel and her Great Great Grandfather during Southern California’s record rainy season in 2005. Kevin Roderick, of LA Observed, published her rejected op ed about the rainiest season ever. I was blogging the wet season, so I linked to it in my research of writings about the wettest year on record (1861) in CA. From that time, I intermittently followed Ghost Word, the blog of Berkeley-based Frances Dinkelspiel, which covered writing, journalism, and her work researching and writing about Isaias Hellman.
The story of Isaias Hellman in California begins the decade after statehood (1850) and ends just after WWI. In 1859, Hellman emigrated to Los Angeles from Central Europe—modern day Germany. After working 6 years in his cousins’ dry goods store, he became a merchant himself, opening up a store in the small town of Los Angeles. The safe in the back of his store served as a location to hold gold belonging to his customers—an informal ad hoc arrangement. Hellman decided to formalize banking arrangements after an angry altercation with a customer over his dwindling stash of gold (“You’ve stolen my gold!” the man said, though he’d repeatedly withdrawn portions of his own funds while gambling under the influence). Once he formalized banking practices, Isaias became the first banker in Los Angeles.
The back-of-the-store bank eventually became a full-time business. Isaias Hellman founded the Farmers and Merchants Bank. Using loans from his bank, his customers bought land, supplies, and financed new business ventures. Two decades later, Hellman moved to San Francisco and took over Nevada Bank, another business bank. He also founded the Union Trust Company to serve as a bank for individuals. Later still, Nevada Bank merged with Wells Fargo to become the Wells Fargo Nevada National Bank. The list of developments in California that were funded or supported by Isaias Hellman is impressive:
- Real Estate
- First Synagogue/Jewish Cemetery in L.A.
- L.A. Times (Hellman loaned Otis some money; got paid interest, and some sympathetic press, too.)
- Utilities: Electricity, Water
- Urban Electric Trolley Cars
- University of Southern California
- University of California
I probably left out a thing or two from this list. Isaias Hellman forged relationships with just about every other major businessman who built California during this time; he made loans to them, he issued bonds to finance their efforts, and he invested his own money in some of their ventures. While reading the book, I paused to consider the question—Was I reading the story about this individual, or was I was reading the history of the development of the Golden State? Yes, Both. Towers of Gold tells the story of California’s development, centering the lens on Isaias Hellman and his actions.
Then and Now
Those stories of California’s development and financial dealings are timely in light of current events.
Hellman was a careful and prudent banker. He did not indulge in the waves of speculative investment that took place around him. He led the effort to reign in a real estate bubble, and single-handedly quelled two panics—runs on the bank—by making impressive displays of his bank’s assets in order to calm the people. Read the excerpt about the panic of 1893 on the book’s web site. Really. It’s very good.
About that real estate bubble: Once the Southern Pacific connected Los Angeles with the transcontinental railroad, people could easily travel to Los Angeles. To visit. To live. And, of course, to buy land, which they did in overwhelming numbers. This set off a real estate boom—L.A.’s first.
Promoters predicted that the boom would continue indefinitely, and land sales were vigorous in the first part of 1888—$20 million worth in the region.
Sound familiar, Southern California?
But then prices collapsed, mostly ruining the professional speculators. […] The end of the boom was due in part to the Farmers and Merchants Bank. Isaias believed that the run-up in land prices could not be sustained; …[he] took a cautious view of the growth and ordered the bank to cut back on its rate of lending. …In October 1887, Isaias announced that the Farmers and Merchants Bank would no longer lend funds for any real estate purchases. Other banks immediately adopted similar policies. When the boom collapsed in the second half of 1888, the city’s banks were in a strong enough financial position to weather the downturn.
That was then. This is now. About 100 years after the events described here, I bought a townhouse in Los Angeles County. It was near the end of another SoCal real estate boom that ended in 1990. Housing prices fell for a while, then a decade later or so they picked up again to climb higher… and higher… and higher. This past year’s collapse in prices revealed underlying problems with mortgage financing (to put it mildly). Our present situation is the opposite to what happened then: real estate boom collapses, and banks and financial institutions are not in a strong enough position to weather the downturn.
There are, it seems, no Isaias Hellmans at work today, clamping down on out-of-control lending before things get, well, out of control. Quite the opposite; we are in a serious downturn with nearly daily revelations of how appalling the financial situation is. I didn’t set out to read or even review this book to cry for an Isaias of our time.
But the parallels are striking. Scarily so.
The event in September that heralded the current crisis was the fall of Lehman Brothers. What does Lehman Brothers have to do with Isaias Hellman? Isaias Hellman’s brother in law was Meyer Lehman, founder of Lehman Brothers. Isaias’s wife, Esther had a sister, Babette, who married Meyer Lehman. In September, Frances Dinkelspiel wrote an LA Times editorial describing how Lehman Brothers helped Isaias during a bank panic in 1875.
History – and biography – make fascinating reading when the issues of then are the same as the issues of now. I’ll resist further temptation to say “We need an Isaias Hellman today” but I recognize that my yearning is an acknowledgment of the man’s prodigious accomplishments, in addition to his financial wisdom.
Towers of Gold lays out the events in California between 1859 and 1920; it does not attempt any commentary on current day events. But like all good history, it is instructive. It says to us, “your generation is not the first one to confront these kind of issues. It happened before here. See?”
Private vs. Public
One current-day issue is the conflict between private versus public— Should common infrastructure be owned by municipalities, states, nations – the public— or should they be owned by the private sector? Should we have armies run by the government or should they be outsourced? Should insurance and medical care fall under the umbrella of government services or private enterprise?
During the formation of Los Angeles, government-owned utilities were frowned upon, so private companies ran the water and gas and rail companies. Eventually this changed, and Los Angeles bought the assets of the power company. As a major stockholder of the private water company, Hellman was a central figure in the maneuverings and negotiations of the purchase.
Hellman was involved with another infrastructure concern—rail. He built a trolley line which grew into a company called Los Angeles Railway (and several more lines), and maneuvered to bring Southern Pacific Railway to Los Angeles. Southern Pacific had quite the grip on the state. Southern Pacific purchased the Los Angeles Railway—the network of rail lines within the city of Los Angeles, which eventually grew to become the famous Red Car Lines . The news of the purchase highlighted the perennial and troublesome issue of the corporate “heavyweight” who wielded so much control over the city and the state: Southern Pacific’s major shareholder, businessman and magnate was Collis Huntington; his nephew Henry Huntington expanded the Los Angeles trolley car line. [image source]
On Friday, September 16 , the [Los Angeles]Times ran a large cartoon on the front page picturing a sweating bearded Huntington holding the entire earth in his arms, with a Los Angeles Railway trolley car gripped in one hand. The cartoon had a caption: “The Earth. This Property is Owned by the Southern Pacific Railway.” In the cartoon, Huntington is thinking to himself: “I wonder if there is anything else I have forgotten?”
Jewish in California
Another theme of the book is being Jewish in California. Tower of Gold begins in mid 19th century Germany, describing the restrictive environment toward Jews— (a good reason to emigrate). Small-town Los Angeles was a contrast—the sparsely populated town wasn’t built up enough to shut out persons from this or that group; Hellman and fellow Jews from Germany had unrestricted freedom to work and succeed. Hellman was part of the group of movers and shakers in Los Angeles. They founded the first Jewish synagogue in Los Angeles and formed charitable societies. They weren’t ostracized by the powers-that-be; they were part of the powers-that-be.
What’s fascinating is the unfolding of events with further waves of immigration to Southern California. The next phase is tinged with irony—these movers and shakers lobbied and moved and shook to bring the Southern Pacific railway, which enabled a westward migration, and an explosion in the Los Angeles-based population. The new and larger mix brought with it discrimination as the new wave of Angelenos established clubs that excluded Jews.
A subsequent influx of Jews from Eastern Europe brought different norms than the ones by the earlier Central European Jews who came, who mixed, and who assimilated. The established and assimilated group offered assistance to the recently-arrived Jews, bringing uneasy feelings. The actions that one group saw as benevolent were received as condescension. The uncertainty between these two groups disappeared as both responded to the early 20th century news of violence against Jews in Europe, working together to raise funds to aid survivors of the events.
The sociological dynamics of successive waves of migration captivated this shiksa reader; I imagine the history tracing Jews in California will have deeper resonance with Jewish readers of Towers of Gold.
Glimpses of the man
What sort of man was Isaias Hellman? He was more a man of action than a contemplative person, so his interior life is revealed in his response to actions and events as recorded by letters, correspondence and notes. We get a sense of his business acumen (careful and prudent), his commitment to create and maintain a reputation for financial soundness, his desire to see an overall improvement in the conditions in California, and his devotion to his wife, Esther, and his children.
Dinkelspiel sketches the arcs of larger themes in his life—his conflict with his younger brother Herman (11 months younger than Isaias), and the way in which Isaias would forge partnerships with men of prominence to establish his footing in a new sphere, and then grow in stature and move away from the now-limiting partner. Too, there are controversies that raged around some of his actions and positions, especially in his later years. Dinkelspiel explains the back-story to the particular conflict. She doesn’t side with her great great Grandfather too much; she spells out perspectives of both sides and presents the facts, ma’am.
Within the strict limits of biography and historical narrative, Dinkelspiel heightens the dramatic tension of the events by deft foreshadowing of future events as she unwinds the story. In one account of conflict between the brothers, Dinkelspiel hints that there’ll be more conflict “To avoid a confrontation Isaias finally pulled Marco out of active management of the Farmers and Merchants Bank. But the truce with Herman would be only temporary.” (p 168) If the events themselves are not reason enough to read Towers of Gold—and they are—her storytelling art keeps the pages turning.
“Hey, listen to this!”
The book was fascinating. It brought many “Hey, listen to this!” moments as I read some snippet to my boyfriend. (We both recently read Nothing Like It in the World—the story of the building of the transcontinental railroad, which introduces us to the Big Four that ran the California-based Central Pacific: Leland Stanford, Collis Huntington, Charles Crocker and Mark Hopkins.) Too, the pages brought me little aha moments in the descriptions of the Women’s Clubs of the era—my own reading of my great-great grandmother’s letters have raised questions about what those women did in those clubs, and thanks to Frances Dinkelspiel’s research, I’ve gotten a clue or two.
Towers of Gold held some fun—probably unintended on Dinkelspiel’s part. From the moment Isaias Hellman landed at San Pedro, the book offered a trivia scavenger hunt for this southern Californian, from the game of Match the name of the person with the place in your Thomas Brothers Guide to other (heh) nuggets, such as how the early riches of the Californios who sold beef to gold miners and used the proceeds to adorn their horses with silver. These fascinating factoids make sudden sense when I recall Rose Parade equestrian commentary—Bob Eubanks and Stephanie Edwards, take note!
The epilogue is astonishing, as Dinkelspiel gives us a “where are they now?” tour of the businesses and concerns described in the book, and traces the descendents of the main figures. That home purchase I described earlier? I got my loan through a bank started by Isaias Hellman—which was also my parents’s family bank. Later in life, I’ve banked at Wells Fargo. And the day before I set down to finish reading the book, I purchased some goods at a store that was founded by a Hellman relative. More than I ever realized, I grew up and live in a world created by Isaias Hellman.
Since I know this book was birthed out of eight years’ labor, I acknowledge that labors must cease (or even be abandoned*). Still, I found myself wishing for a few things as I read: The networks of family and finance were intertwined, and I wished to view a type of hybrid pedigree chart that set out how this person was related to that one, and how this business grew out of that. I also would have liked to view a timeline of the major events described in the pages of Towers of Gold. Finally, even though I posses an extensive mental map of Los Angeles, San Francisco, and California, so I knew the locations described, I still wished to double-check a locale on a map. I figure that someone with less familiarity with all the locations would appreciate that map all the more. Happily, we live in the age of The Internets, and there’s a website for the book, so once Frances Dinkelspiel is revived following her book-writing labors, such wishes may see fulfillment? (hint, hint) Please?
Just Read It
The book has much to offer. If you’re interested in the history of California and the West, or history of Jews in America, or the history of railroads, banking or how large economies are built, or if you wish to contrast the dynamics of today’s economic gloom with yesteryear’s boom, you will find Towers of Gold to be an eminently worthwhile read. Additionally, if you’re a personal or family historian, this is a valuable reference for those whose ancestors crossed paths with Isaias Hellman. Finally, Towers of Gold is a triumphant example of the best possible outcome from a visit to your local historical society.
This is a book I intend to read and thank you for the very interesting review.
Yes, it is every family historians dream to find those boxes filled to overflowing. I see myself finding just that in many of mine.
I don’t know where you’re located, but author Frances Dinkelspiel will be featured at our bookstore, Metropolis Books, on Thursday, December 11th. (It’s in downtown Los Angeles, about a block from the Hellman Building).
Excellent work - I have put the book on my Christmas wish list and added it to my blog post.
Thank you for alerting me to your post - I don’t read every post completely, I know, and this one slipped past my radar.
Cool, Randy. Glad you came and saw and found something to interest you (and, based on a comment on your blog, there’s a remote family connection?).
BTW, I also know I’ve not been on anyone’s radar much, because this site has been quiet for a goodly while. A trend I’m reversing right now. So it’s totally understandable that I slipped past your notice. But then, that’s what your “did I miss anything?” and comments are for.
Great write up of this great read. It is on my holiday reading list and I’ll probably place the order on Amazon when I return from Lake Tahoe this weekend.
I have a connection with Hellman but it is more a Six Degrees of Separation thing: I worked for the law firm Heller Ehrman for the past eight years before they shut down this past month. One of the founders, Emanuel Heller was the attorney who helped Isaias Hellman structure many of this business deals. And Stuart Ehrman, the other name founder married one of Hellman’s daughter.
Frances Dinkelspiel wrote a great editorial for the San Francisco Chronicle on October 2, 2008 about the demise of my former law firm which for 118 years was able to survive the Great Quake and two world wars but was taken down by the latest financial panic.
I have been researching my sister-in-law’s family for her and her parents.
Hellman’s daughter Clara married Emanuel Heller. Emanuel is the brother of my sister-in-law’s 2nd great grandfather!
I have contacted Frances and hope to hear from her soon.
Great writing Susan!
I love these kind of stories, I’m a history buff. Thanks for sharing.
Fasinating article. Wish we were all so lucky to find such readily accessible information! I’m afraid I am struggling with my own research.
All the very best
Thanks so much for the review, Ill give it a look when I have a free chance. Thanks