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Friday, December 11, 2015

Martha Coston, Hetty Green, and Mme. C.J. Walker: Female Pioneers in American Business

Real Heroes: Martha Coston, Hetty Green, and Mme. C.J. Walker

Culture isn’t always pretty, and like almost everything else in human life, it evolves. At one time or another in every corner of the planet, almost every imaginable grouping of people has faced unfairness, unequal treatment, legal and institutional discrimination, or outright persecution. As we learn to reject the unwarranted prejudice that springs from collectivist stereotypes or primitive dogmas, we recognize that every individual is unique. He (or she) deserves to be judged by the content of his character and to pursue his dreams in the marketplace of free exchange.

America in its first century offered more liberty to more people than any other place in the world, but there was still plenty of room for improvement. It took decades, but we eventually ended the ancient evil of race-based slavery. Decades later, Jim Crow laws were abolished. Pick any immigrant group — Catholics, Irish, Chinese — and to a considerable extent, we’ve come to see that once-widespread prejudice against them prevented everyone else from enjoying the benefits of their productivity. We’ve made progress, lots of it, toward the ideal of unshackling peaceful people from the chains of injustice and intolerance.

The philosophy of liberty appeals to me because it says to all people, regardless of race, religion, place of birth, or sex, “If you want to dream, create, build, own, grow, or improve, go for it!”

FEE’s founder Leonard Read expressed the credo of a free society when he called for “no man-concocted restraints against the release of peaceful, creative energy!”

In this Real Heroes essay, I turn our attention to three pioneering women in American business. Each was born into a culture that assigned the “fairer sex” to home and family life. They couldn’t vote because they were female. They weren’t supposed to engage in business because, well, that was regarded (as it had been everywhere for centuries) as a “manly” pursuit.

These three women — Martha Coston, Hetty Green, and Madam C.J. Walker — each possessed a spirit to break barriers. They achieved success and respect in private enterprise. They opened doors for millions of other women to enter the marketplace and compete with men in the creation of wealth.

Martha Coston

Martha Coston
“We hear much of the chivalry of men towards women; but let me tell you dear reader, it vanishes like dew before the summer sun when one of us comes into competition with the manly sex.” — Martha Coston

“Extreme” describes the highs and lows in this remarkable woman’s life. Widowed with five children at the age of 32, Martha Coston was just beginning to recover from the unexpected loss of her husband when two of her children and her mother died. Depressed and penniless with three surviving children facing a bleak future, she managed to turn adversity into success through sheer pluck and willpower.

Coston was born Martha Jane Hunt in Baltimore in 1826 but moved to Philadelphia with her mother a decade later when her father died. When she was 16, she eloped with 21-year-old Benjamin Coston, a nautical engineer and promising inventor. His work in pyrotechnics and on early gas lighting earned him notable attention, but his life was cut short by a combination of pneumonia and chemical poisoning. Poring over his papers, Martha discovered drawings for a pyrotechnic signal (or “flare”) that would allow ships to communicate with the shore or with each other at night or in fog. Benjamin had labored over the idea while at the Washington Navy Yard but never progressed beyond plans on paper.

For 10 long years, Coston worked to perfect her late husband’s work, including the proper “recipe” for flares that burned red, white, and blue and then a system (a sort of “Morse code”) that would permit messaging by flare. In her own words,

It would consume too much space, and weary my readers, for me to go into all the particulars of my efforts to perfect my husband’s idea. The men I employed and dismissed, the experiments I made myself, the frauds that were practiced upon me, almost disheartened me; but despair I would not, and eagerly I treasured up each little step that was made in the right direction, the hints of naval officers, and the opinions of the different boards that gave the signals a trial.

On April 5, 1859, she presented her results to the world: a pyrotechnic signaling flare and code system. It worked beautifully. Reliable ship-to-ship and ship-to-shore communications were possible for the first time.

Inventing something useful, however, doesn’t translate into money unless the invention can be marketed, and Coston had no prior experience in business. That didn’t stop her from starting her own company, one that lasted for more than 125 years.

To the amazement of many, the widow and unexpected inventor blossomed into a successful and wealthy entrepreneur. At first, she felt the need to downplay her gender, even using a man’s name in initial communications to improve the chance that men would be willing to do business with her. In her autobiography she wrote, “We hear much of the chivalry of men towards women; but let me tell you dear reader, it vanishes like dew before the summer sun when one of us comes into competition with the manly sex.”

With the coming of the Civil War, Coston found a large and ready market by selling her signaling flares to the US Navy. She traveled around Europe, securing customers in both the government and private sectors. In the late 1860s, she struck a lucrative deal with the United States Life-Saving Service, which made her product standard equipment at its lifeboat stations.

Her biggest disappointment in business involved one of her biggest customers, one that took advantage of her good will and patriotism. To help the Lincoln administration’s war effort, Coston sold her flares and signaling system at below cost and sometimes accepted nothing more than a government IOU as payment. Washington ripped her off through its Civil War greenback inflation, eventually compensating her, in real terms, at about a quarter on the dollar. Had it not been for her skill at marketing elsewhere, she would have been bankrupt by war’s end.

When Martha Coston died in 1902, she was widely honored as a great inventor, a competent capitalist, and a model citizen. She overcame huge challenges and proved that a woman could be just as good in business as any man — and far better than those who defrauded her with their depreciating paper money.

Hetty Green

Hetty Green
As Hetty Green’s riches grew, so did the attacks of the envious.

Martha Coston was rich by any measure, but by the late 19th century, the title of “richest woman in the world” belonged to Henrietta Howland Robinson Green, known widely as simply Hetty Green.

Born to a Quaker whaling family in 1834 in New Bedford, Massachusetts, Hetty Robinson learned a lot about money long before she ever married a man whose last name was, at least for Americans, its most familiar color. By the age of six, she was regularly reading the financial papers to her father and grandfather. “In this way I came to know what stocks and bonds were, how the markets fluctuated, and the meaning of bulls and bears,” she later recalled.

When her parents died in the 1860s, Hetty inherited a fortune of about $6 million (about $120 million in 2015 dollars). What she did with it made her a legend in her own time as one of the savviest investors and independent financiers ever. Combining a conservative approach with a canny sense of timing, she bought and sold bonds, railroad stocks, and real estate and parlayed her inheritance over 30 years into what would be well over a billion dollars today. She was her own adviser, her own bank, and what one biographer would later call “a one-woman Federal Reserve.” In an arena dominated by men like J.P. Morgan, she dazzled the financial world with her golden touch.

Green loaned so much money to so many people, companies, institutions, and municipalities that headlines would announce “Hetty Cuts Rates” or “Hetty Raises Rates” with regularity. The City of New York on numerous occasions asked her for loans to keep the city from going broke. During the Panic of 1907, she wrote a check to the Big Apple for $1.1 million and took her payment in short-term revenue bonds.

Green kept debtors honest. “She would travel thousands of miles alone — in an era when few women would dare travel unescorted — to collect a debt of a few hundred dollars,” writes one observer. Her collection efforts included churches, to whom she often loaned money at below-market rates as a charitable contribution. But when the First Presbyterian Church of Chicago defaulted on a $12,000 loan and the pastor tried to shame her into forgiving the debt by publicly denouncing her as a ruthless capitalist, she told him to pay up or she would foreclose — and that’s exactly what she did. Other pastors came to her defense — one of them declaring, “To expect the holder of a church mortgage to cancel it upon the grounds of Christianity, after the money has been lent in good faith, is nothing less than a hold-up.”

As Green’s riches grew, so did the attacks of the envious. Because she always wore black, she was derided as “the Witch of Wall Street.” Rumors of her miserliness circulated widely but were largely debunked in later years by her own family and by the many people and organizations that generously benefited from her quiet charity.

As she explained in a 1913 magazine profile,

One way is to give money and make a big show. That is not my way of doing. I am of the Quaker belief, and although the Quakers are about all dead, I still follow their example. An ordinary gift to be bragged about is not a gift in the eyes of the Lord.

Next to her extraordinary skill at creating wealth, Green’s personal lifestyle fascinated people then and biographers to this day. She was the opposite of ostentatious. Her frugality was astonishing in a day when her great wealth could have bought her anything. Home was never more than a small, modest flat in New York City. When she traveled, she stayed in cheap boarding houses. She lived the way she wanted to and never bent to any custom of modernity she didn’t like. She was, in every sense of the phrase, “her own woman.”

When Hetty Green died at the age of 81 in 1916, the New York Times editorialized in a way it’s tough to imagine the same “progressive” paper would today upon the death of a wealthy person:

If a man had lived as did Mrs. Hetty Green, devoting the greater part of his time and mind to the increasing of an inherited fortune that even at the start was far larger than is needed for the satisfaction of all such human needs as money can satisfy, nobody would have seen him as very peculiar — as notably out of the common. He would have done what is expected of the average man so circumscribed, and there would have been no difficulty in understanding the joys he obtained from participation in the grim conflicts of higher finance. It was the fact that Mrs. Green was a woman that made her career the subject of endless curiosity, comment and astonishment.… Probably her life was happy. At any rate, she had enough courage to live as she chose and to be as thrifty as she pleased and she observed such of the world’s conventions as seemed to her right and useful, coldly and calmly ignoring all the others.

Christ’s famous Parable of the Talents is found in Matthew 25. Three people are entrusted with significant sums of money. Later, what they each did with it is assessed. The one who invested it well and earned the greatest return is regarded in Christ’s story as the hero to be rewarded. That one could just as well have been Hetty Green.

Madam C.J. Walker

Madam C.J. Walker
Millions of black women were inspired by her example and tens of thousands were directly empowered by working for the company she founded.

When, in December 1867, Sarah Breedlove was born the sixth child of parents who had been slaves a few years before, Martha Coston and Hetty Green were already wealthy Americans ensconced in business. But this enterprising black woman came on fast and strong as a wealth creator before she died at the young age of 51 in 1919. Biographer John Blundell, in his book Ladies For Liberty: Women Who Made a Difference in American History, says, “It is reliably claimed she was the first woman ever to make a million without an inheritance, husband or government intervention. She did it on her own.”

Orphaned at seven, married at 14, then widowed at 20 with a young daughter in tow, she was determined that her daughter A’Lelia would get a good, private education. “I got my start from giving myself a start,” she later said. Employed as a washerwoman for about a dollar a day, she worked long and hard and saved enough to actually make that dream a reality. She later took the name “Madam C.J. Walker” (derived from her second husband, Charles James Walker).

Growing up, every day was a “bad hair day” for Walker. Because of poor diet, infrequent washing and damaging hair products, her hair had thinned dramatically by the time of her second marriage. She realized at the same time that the market for quality hair products for black women was nonexistent. She decided to do something about it.

Learning everything she could about hair and its proper care, she experimented with various concoctions of her own making. In 1905, she formed the Madam C.J. Walker Manufacturing Company, selling a line of hair care products and cosmetic creams. She assigned daughter A’Lelia to run the mail order operation out of Denver while she and her husband traveled the country recruiting saleswomen.

Eventually, after a stint in Pittsburgh, Walker settled in Indianapolis in 1910, where she built her headquarters, a factory, a laboratory, a hair salon, and a beauty school to train the company’s sales agents. By this time, her business was selling products in virtually every state as well as throughout the Caribbean. Her vision was to cure scalp and hair problems and empower black women with both beauty and economic opportunity.

Walker’s most famous formula included a shampoo and a pomade that “transformed lusterless and brittle hair into soft, luxurious hair.” The women she employed wore uniforms of white shirts and black skirts and carried black satchels of product samples as they made house calls all over the United States and the islands of the Caribbean. Her name and image were well known to women both black and white. John Blundell writes,

With wealth she became an active serious philanthropist for charities from Booker T. Washington’s Tuskegee Institute to the NAACP, but her philosophy was very much self-respect through self-support, a hand-up not a hand-out. She believed in entrepreneurial, bottom-up, self-help economics. At the end of her hair care sales training lessons she showed future agents photo slides of great African-American entrepreneurs to educate and enthuse them.

While she left her corporate headquarters and plant in Indianapolis, she finally moved to 108/110 West 136th St. in New York City where she had a salon larger than those of Helena Rubinstein or Elizabeth Arden. She had a six-figure income, 10,000 agents, new ventures in the Caribbean and Central America, and was hailed as the “World’s Richest Negress.”

Walker died of hypertension in 1919, but left behind a legacy of economic success, generous philanthropy, and political activism on behalf of equality before the law. Millions of black women were inspired by her example and tens of thousands were directly empowered by working for the company she founded.

Though widespread discrimination against both blacks and women taint stories of life in America early in the 20th century, Madam C.J. Walker’s story stands out as a remarkable testament to the spirit of the great civil rights anthem of later years, “We Shall Overcome.” She surely did, by any measure.

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  • Lawrence W. Reed is FEE's President Emeritus, having previously served for nearly 11 years as FEE’s president (2008-2019). He is also FEE's Humphreys Family Senior Fellow and Ron Manners Global Ambassador for Liberty. His Facebook page is here and his personal website is