How Henry Phipps Turned $800 into $100 Million

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How to Turn $800 into $100 Million

He was born in September in 1839 and his name was Henry Phipps, Jr. He began life in Pennsylvania as a poor cobbler’s son and as a childhood friend of Andrew Carnegie…until he invested $800 in a forge with Carnegie and that measly sum turned into millions in iron and steel.

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At first he had started as a messenger for a spike manufacturer. He was so efficient and so professional that soon he was promoted to bookkeeper. This is where he fatefully met another office worker: Andrew Carnegie. By the age of 21, in 1861, he became a partner at the firm. And I should mention that this firm was an agent for the DuPont Powder Company (you cannot escape the du Ponts here 😉 !). After joining his friend Carnegie in business Henry had accumulated one of the largest fortunes in America within 25 years. But he shared none of the dramatics, scandals or prickly personality that those industry titans (Frick, Carnegie, Rockefeller, Morgan, etc.) are remembered for now. And so his large fortune left him unsatisfied.
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Marriage and the Baby Carriage

In 1872 in the midst of his meteoric business rise, Henry married Anne Childs Shaffer (if you remember, Henry Frick’s wife was named Adelaide Childs…yes everyone seems to be related to everyone else). They would have five children together (their daughter Amy married Winston Churchill’s cousin the titled seventh Duke of Marlborough: Frederick Edward Guest).

Once married Amy didn’t settle in as a society lady; she was a keen aviator [her husband was too and was a pilot] and a tenacious suffragette. She owned a plane named “Friendship” which Amelia Earhart traveled in (though only as a passenger) in 1928 when she became the first woman to fly across the Atlantic. Amy wanted to go herself but her family put up a such a fuss that she set out to find “the right sort of girl” to make the historic trip instead. Amelia was an all-American girl and a pilot herself, just who Amy was looking for. Later in 1937, Amelia would famously disappear, lost at sea, after attempting a world flight around the equator line. Luckily, Amy never had such an accident herself.

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Amy and her husband settled into a palatial estate named “White Eagle” in Palm Springs where they spent most of their leisure time. In 1918 it took over a million dollars to build and needed a staff of 29 to keep it running. But the Guests didn’t exactly build it. Instead they bought it…from a du Pont. Alfred du Pont of Nemours to be exact, though his in-depth post is still up coming (soon, I promise). Amy and Frederick renamed it “Templeton.”

Another son of Henry and Anne’s was named for his old friend Andrew. Harry Carnegie Phipps grew up to be a thoroughbred horse breeder with his wife Gladys. She was known as the First Lady of Turf for her well-bred champion horses but her judgement was certainly not infallible. Discouraged with one of her horses who wasn’t winning enough she sold him for a measly $7,500. His name was Seabiscuit. Yes that Seabiscuit.

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It surely wasn’t the end of the world for Gladys. She lived in a “marble palace” on Fifth Avenue in New York, so her only disappointment was most likely that she hadn’t coaxed the winning out of her horse. Her marriage and her family (her father was a financier whose family money came from banking in California right after the Gold Rush in the mid-1800s; her sister lived in Ireland at the Countess of Granard; and her brother was Secretary of the Treasury in the Hoover Administration) made her so wealthy  that she raced horses not for money but for passion.

She was a pioneer too, a woman running her own thoroughbred stable and winning millions and millions on her best horses. Her obituaries totaled her winnings to be around $12 million.

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Back to Henry – The Princely Gift

Philanthropy appealed to Henry. He began to distance himself from business even more and signed his business holdings over to his three sons to focus on distributing his fortune to charities and to the poor communities from which he had sprung. And he wasn’t all talk. His original fortune was around $100 million and by the time of his death he left just around $3 million to his wife, still a comfortable bank account then and something they both worked towards but he had divided up the bulk of his fortune amongst his children and his charities.

Like the early du Ponts who are often mentioned here, Henry believed that the wealthy had a responsibility to do good deeds for the public. After his retirement he spent even more time as a philanthropist.

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In November of 1891, three years after his retirement, Henry sent a letter to the mayor of Pittsburgh offering $100,000 unconditionally to the city to build a conservatory. A “princely gift” the papers declared it. Two years later it would be completed and it is the one you see in all of these photos here.

Henry often gave anonymously too. The conservatory wasn’t anonymous but he might have wished it could have been. He was so keen to not be the center of attention at the Phipps Conservatory’s opening day that he took refuge in a “dark corner for four hours while the crowds came and went.”

In 1905, Henry caused a stir by entering the real estate market in New York City…with affordable housing. Phipps Houses is still around today.

A Very Important Book

Henry and his wife were both hugely involved in social welfare. They donated large sums to libraries, founded the Phipps Institute to fight tuberculosis (the first organization ever formed to fight a single disease his obituary duly noted), and funded a progressive psychiatric hospital.  While visiting the tuberculosis center, Henry asked the Dean of Medicine if there were any other needs at the hospital. The dean replied by handing Henry a copy of A Mind That Found Itself by Clifford Beers.

Clifford and his four siblings all suffered from various mental illnesses. Clifford became increasingly frightened as he reached adulthood that he would begin to suffer the seizures and untimely death just as one of his siblings had. While working his way through Scientific School at Yale, Clifford did begin to suffer from depression but there would be no seizures. His health would take a different route.

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After graduation his condition worsened with paranoia, hallucinations and anxiety attacks. In 1900 he came home from work and immediately attempted to throw himself from the bedroom window in a suicide attempt. Eventually he stopped speaking, believing his family would be in danger if he did. They made the decision to commit him to an institution for treatment.

For four years off-and-on he spent time in overcrowded asylums where he was abused and mistreated as nearly all mentally ill patients were (two of his three surviving siblings committed suicide in these institutions). Once released he found it in himself to to fight for reform. In 1908 he published the book that Henry Phipps now had in his hand.

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Clifford detailed his terrible treatment and how it had actually hampered his recovery. In conjunction with his book he established the National Committee for Mental Hygiene. (He married in the midst of all of this but they decided not to have children due to the hereditary condition of his mental illness). Clifford continued his campaign for a new approach to mental healthcare but became overwhelmed and depressed while fundraising and committed himself to another institution in 1939. He died there four years later but his legacy lives on in better institutions (and if you had a guidance counselor in your school well he's the reason for them too).

Henry and his wife Annie were inspired by Clifford. Within a month of reading the book they gave $1.5 million to fund their own psychiatric hospital at Johns Hopkins in Baltimore, one that would spark a new era of mental healthcare. Theirs would forgo the cold clinical interiors and shackles traditional of asylums. Instead they aimed to provide a "homelike feeling;" a focus on patient lives and not their diagnosis. They installed fireplaces, swirling marble, porches, gardens and rooms for all sorts of recreation and leisurely activities; heck, he even threw in a pipe organ.

Many of their first patients paid no fees or minimal ones. The hospital had a public ward committed to serving the poor urban population. The Phipps were adamant their hospital be humane and nurturing. Rather than bar the windows they enclosed them with glass "like window conservatories" but not everything was to be thoroughly modern. The plaque on the hospital reads "1912" instead of its true opening date of May 1913 because the year ending in 13 was considered bad luck. On opening day a single patient was admitted, a 51-year old man whose wife dropped him off. By the end of the summer all 88 beds were filled and they were expanding.

Just like his New York City housing, this is also still in existence.

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More Giving

In the 1920s Henry bough Island Beach which was sold by his family during the 1950s to the state of New Jersey. It is one of the last remaining stretches of undeveloped land on the Jersey coast.

Henry Phipps, Jr. died in 1930 at the age of 91. His wife changed her name to Anne Henry Phipps soon after. She was a forward thinking woman herself. She continued her philanthropy after her husband's death as an early supporter and advocate of the birth control movement.

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Four years after Henry's death she would die too. She left behind a will of only 300 words leaving her estate to her husband...who had died four years earlier. The will was nearly 20 years old and obviously out of date, all of the witnesses signed to it were also deceased. But like always, there would be no dramatics in the Phipps family. It was quietly and amicably settled and their legacy are their charitable and learning organizations still running today.

Photo from here. Henry with his wife, source.

Sources: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17