Wednesday, November 27, 2013

Charles M. Schwab and his mansion

Riverside House, the chateau of Charles M. Schwab, completed in 1906, at the southwest corner of Riverside Drive and West 73rd Street.
Wednesday, November 26, 2013. Raining heavily in New York, and cold, as the town prepares for the great holiday weekend.

When I was a young boy growing up in a small town in New England, my mother, and my father (who was a born-and-bred Irishman from Brooklyn) used to reminisce — much to the kid’s fascination — about the city where he grew up in the first two decades of the 20th century.  Among his memories was the wonder of “Mr. Schwab’s house,” the greatest mansion in New York.

My father was one of those New Yorkers, an inevitable expatriate as it happened, who loved the city and spoke of its wonders with an awe and respect that was separate from everything and everyone else he knew. Mr. Schwab had the greatest mansion ... stuck in my craw.

The young executive, Charles M. Schwab, president of Carnegie Steel which would soon become the main part of the newly formed United States Steel Corporation.
Charles M. Schwab, later in life.
About a year ago while researching something, I found myself reading about the man, Charles M. Schwab, and his mansion, which occupied the entire block on Riverside Drive and West End Avenue between 73rd and 74th Streets. That childhood memory intensified my curiosity and so I learned even more than my father knew about Mr. Schwab’s mansion and the remarkable man who built it. The following is a history that I wrote of that house which first appeared this month in Quest magazine.

He was a kid from Loretto, a little village in the Allegheny mountains of western Pennsylvania founded by Roman Catholic priests, and the first Catholic community in the United States. He was born Charles Michael Schwab on February 18, 1862 during the second year of the American Civil War, when the world was always dark at night, and quiet except for the sounds of animal life, the wind, and the weather. There was no electricity. There were no telephones, no cars, and no indoor plumbing for ordinary working people.

His parents were first generation Americans, both children of German immigrants. Father ran a coach service led by horses between the village and the railroad station in nearby Braddock.

As an early teenager, Charlie drove the stage occasionally until he got a job in the next town working for a man named A.J. Spiegelmire, who owned a general store. The pay: $3 a week. For the next couple of years, the boy sold calico and dried apples. He was a good worker, even earned extra money giving piano lessons to local children, but the job bored him.

One of his customers was Capt. Bill Jones, the superintendant in a nearby steel mill owned by a businessman named Andrew Carnegie. The steel business in the 1870s was in its infancy. It was going to revolutionize the world in myriad ways by the early 20th century.

One day Charlie asked Capt Bill if they needed anybody over at the mill. Capt Bill took a look at the boy and said something like: “You look husky enough to drive a stake. Answer the whistle on Monday morning.”

He started out sweeping floors, and quickly moved on to driving a stake. Charlie had a youth’s fascination for the new, and a natural curiosity about making steel, and its uses. He not only did his job well, and quickly learned about everybody else’s job, but he found the barely available books to learn more about steel.

His natural interest in reading continued throughout his life, and although he was no intellectual, he knew music and mathematics, and had a command of Latin and Greek culture and history. This impressed his new boss, Mr. Carnegie, who worked at “learning” all his life.

Carnegie soon realized the young man knew more about “making” steel than he did. He had not been a steel man; but rather an entrepreneur. He had vision. “The wise man puts all his eggs in one basket and watches the basket,” he once said; and steel was where he placed his bet.
Two aerial vistas of Riverside House on Riverside Drive overlooking the Hudson River.
When Charlie Schwab was 20, his boss and mentor, Capt Bill, died suddenly. Carnegie turned to the young man, appointing him superintendent of the Braddock mill. When he was 25, Carnegie made him the superintendent of the Homestead Steel Works in Pittsburgh. He was on his way.

A crucial aspect of Charlie Schwab’s success that began with Andrew Carnegie was his ability to motivate the workers to produce more. He gained their confidence by encouraging them, praising them, and criticizing them as thoroughly as he was otherwise fair. More importantly he also encouraged them with financial incentives. For the more that a team could produce above the daily quota, there was a reward — a percentage of the excess profit.

By the time he was making a name for himself he had acquired a reputation that for some was controversial. Thomas Edison called him the “master hustler,” especially strong words in that age.
The newly completed 75-room chateau with its 74th Street carriage entrance.
Aerial vista of the eastern side of the mansion facing West End Avenue.
The house, from the northwest corner, circa 1910.
At thirty-five, the young man, now Charles M. Schwab, was made President of the Carnegie Steel Corporation. Within the decade that had passed, Carnegie himself had become one of the richest men in the world. His mills were producing fifty times as much steel as when Schwab started in the Braddock mill fifteen years before.

In 1901, J. Pierpont Morgan, the banker, and Elbert H. Gary, founded The United States Steel Corporation by purchasing and merging Carnegie Steel with Gary’s Federal Steel and  William Henry Moore’s National Steel. The deal was worth about a half billion dollars in 1901 dollars (approximately $45 billion today).

The deal was negotiated by Schwab. Morgan offered him the job of President of the new company. He asked Schwab what he was making with Carnegie. Answer: $1 million a year. Morgan said he could never afford that — $300,000 was the best he could do.

Clockwise from top left: Morgan; Carnegie; Frick; Grace.
Schwab countered that he would accept Morgan’s offer provided he be granted a percentage of the profits above a certain figure. It was a no-brainer: Morgan agreed. In the brief time that Schwab worked for Morgan, he never made less than a million a year.

In 1904, Charles Schwab, now 42, a veteran in the core industry of the new century, and a business legend throughout and the industrial nations of the world, entered into a partnership with Philadelphia businessman Joseph Wharton, forming the Bethlehem Steel Corporation. The company had been in existence for a half century as an iron company.

Schwab was made president and chairman of the board. Wharton (who funded the business school at the University of Pennsylvania) was in his late 70s, and primarily an investor.

Under Schwab’s direction, the new corporation installed the grey rolling mill and produced the first wide-flange (H-beam) that was largely responsible for the success in building skyscrapers.

Bethlehem Steel became the largest supplier to the construction industry, and the second largest steel company in the world. For the next quarter century, the H-beams that Charlie Schwab’s Bethlehem Steel made built the colossus we know as Manhattan.

In the early days of the First World War, Bethlehem had acquired a shipbuilding company and Schwab was approached by the British Admiralty who were desperate to acquire 20 submarines.

They wanted to know how quickly he could produce them. His first question to them was: how quickly could they be built in England? They told him: fifteen months. He responded he could do it in less than nine months, IF they gave him a bonus for every week saved. He even offered to pay an indemnity of half the amount of the bonus for every week required over the initial nine months.

They agreed. The job was completed in five and a half months. The bonus Schwab reaped was $2.5 million ($80 million in today’s dollars) which he divided up among his workers. One man, a superintendent received $100,000.
The western side/front entrance. The steel and glass door on the 74th Street entrance.
The main hall and staircase with the great organ in the center.
In 1901, now a very rich man, President of US Steel, and long married to the former Eurana Dinkey, whom he met in Pittsburgh more than twenty years before, he decided to build a house in Manhattan. Until that time the Schwabs had occupied a large house in Pittsburgh — and a country estate outside his hometown.

Not coincidentally, Andrew Carnegie, and Carnegie’s associates, Henry Frick, and Henry Phipps, had already taken up permanent residence in New York which had become the financial center of the country. All of the men had a taste for the center of financial power as well as for the same European inspired residential grandeur that had affected the Vanderbilts.

Top: The bronze and marble staircase which could accommodate 18 members of a choir during concerts.
Above: The Schwabs' Christmas card.
Unlike the aforementioned, who would build their palaces along Fifth Avenue in the Fifties, Schwab chose a lot on the West Side — the entire block between West End Avenue and Riverside Drive, and 73rd and 74th Street. With a magnificent, uninterrupted view of the Hudson and the Palisades, before the turn of the century it was widely believed among New York real estate people that Riverside Drive would eventually become the haven for rich New Yorkers — far enough away from the hustle and bustle of what is now midtown.

Schwab commissioned the French architect Maurice Hebert to create a chateau resembling those in the Loire which had impressed him and Eurana, including the Chateau de Chenonceau and Blois. The result: a 50,000 square foot mansion of 75 rooms, with a granite facade.

The property cost around $800,000, and the building itself on completion came close to $6 million. The front faced the River and the Palisades. On the 50-foot lawn leading down to Riverside Drive were two immense bronze figures representing Science and Labor which were said to have cost $45,000 each (or about $3 million in today’s currency).

The house was equipped with three heating systems — hot water, steam, and hot air — and a six-panel fuse board with about a hundred switches on it which controlled the electric lights. It generated its own electricity, filtered its own water, and required the services of six men — including a fireman and a licensed engineer to run its light and heat plants.

There was storage space for 100 tons of coal to start a fire. Every time the driers were turned on in the laundry, it took a half ton of coal. It was not unusual to use a ton of coal on any given day that the Schwabs were in residence, and more than 100 tons annually. And even on a warmish day in autumn or winter, the house could be rather chilly.
Two views of the main hall (top) and the art gallery (above).
The mahogany doors and marble pilasters were salvaged and are installed in Brooklyn's Our Lady of Lebanon Cathedral.
In 1906, Charles and Eurana Schwab, who were childless, moved into their chateau with their two dogs and one parrot. For the next 33 years the couple spent practically every winter in the house, with a staff of thirty-five, and burning up to five tons of coal a day to keep warm.

Although the massive steel and glass front door faced the river, the carriage entrance was on the 74th Street side where guests ordinarily came in. On entering the foyer, hung with heavy Italian curtains and full of palms and flowers, the visitor saw a marble statue of a heroic Greek goddess, flanked by two gigantic colored jars.

The main entrance hall, which was two and a half stories high and hung with tapestries woven to fit in with the woodwork, was the most impressive feature of the house. It was also decorated with copper plaques of St. Paul and St. Thomas, busts of Roman emperors, great jars, paintings and statues.
The Schwabs on the lot of Metro-Goldwyn Mayer Pictures in Culver City, California (circa 1927). Schwab is standing with his elbow on the rear door, with his wife seated. The man with the glasses in the front seat watching the shoot is Louis B. Mayer, head (and founder) of the studio.
Tthe limousine on the set.
At the foot of the hall was the main stairway of bronze with a marble base, which led to the organ room above and then divided into two stairways which turned in the opposite direction, up to the second floor.

To the right of the hall was a reception room containing a full length portrait of Schwab, along with French pictures of cows and school children. South of the reception room at one end of the great entrance hall was the Riverside Drive entrance (rarely used) with a marble foyer, an ornamental plaster ceiling, and iron and glass doors a foot thick and hung with lace.

Off the main hall was a huge art gallery also two stories high and fifty feet long — its walls covered with red silk damask more than two centuries old which came from a Spanish cathedral. At the head of the gallery was a full length portrait about 12 feet by 7, of Eurana Schwab. Its walls were hung with Titian, Rembrandt, Turner, Corot, Hoppner and Romney and others. One of the best paintings was Turner’s “Rockets and Blue Lights.”
Victory gardening on the Charles Schwab estate. New York, New York. June 1944.
Because he was a great lover of music, Schwab wanted the finest private organ in the world — and he knew what that meant. He wanted it to have no pipes visible and to be heard throughout the entire 50,000 square foot building — a forerunner to an in-house sound system today. This was a highly complex architectural project because the house’s construction had to accommodate the pipes rather than vice versa.

He hired Archer Gibson, the choir-master and organist of the Brick Presbyterian Church, and also one of the leading organists in the United States to work with the architects and engineers to achieve his vision.

There were organ pipes behind walls, under floors, in closets, in shaftways, everywhere from the basement to the attic, and not one in sight. The house was, in effect, a gigantic musical instrument. Even the steel framework of the mansion was designed to allow for the pipes. Some of the girders were curved instead of straight to accommodate this matter.

Mr. and Mrs. Schwab would sit on rocking chairs on the balcony overlooking the organ at the top of the main staircase.
A close up of the great organ.
Because private residential organs were fashionable among the very rich in the early years of the 20th century, Gibson was in demand in the homes of Fricks, Tiffanys, Vanderbilts, Rockefellers and Sloanes. He billed by the hour and was paid in the tens of thousands. He used to play the organ every Sunday afternoon while Schwab and his friends played bridge downstairs.

There was also a mechanical organ installed, on which rolls were often played when Gibson wasn’t there. Some of the rolls included: “Hungarian Rhapsody,” “the Merry Widow Waltz,” the “Overture from Tannhauser," “The Merry Wives of Windsor," and the “Moonlight Sonata."

There was a library overlooking the Hudson, and a music room on the other side of the house, its walls cream-colored and full of mirrors giving the room extra light. In it was a cream and gold piano, with gold pedals, and with a cover which had been a bedspread belonging to Queen Marie Antoinette, and a vitrine containing bowls, miniatures, and two encrusted gold cups which had once belonged to Napoleon whom Schwab greatly admired.

The music room had 9 electric-light buttons — one marked “mantle,” two marked “Auto,” and the others marked “South Brackets,” “East Brackets,” “Columns,” “Alcove,” and “Floor.”  This was at the dawn of domestic electrical use, comparable to and as rare as a completely computerized residence today.

There were “Auto” switches throughout the house, connecting not with the garage but with indirect lighting in the ceilings and under the paintings. Every room had a bright-red button with a removable cap over it with the word “Fire” and connected to the pantry.

The pantry telephone served 10 rooms in the house and the pantry bell box received signals from 56 rooms, including Mr. Schwab’s Rooms, Mrs. Schwab’s Dressing Room, Mr. Schwab’s Room Nook, the Natatorium (the swimming pool), South West Guest Bath, and North West Guest Room Nook. The nooks were tower rooms, corresponding to those off the library and music room. In the basement there was also a bowling alley and a gymnasium, and the swimming pool which years later was boarded over and made into a billiard room. On a table in the bowling alley was an inscription “Table made from oak timbers of U.S. Frigate Independence 1812.”
The 44-room main house, cascades and gardens of "Immergrun," the 1000-acre summer estate of Mr. and Mrs. Charles Schwab in Loretto, Pennsylvania.
The servants had their own entrance on the 73rd Street side of the house. The kitchen, dining room, servants’ sitting room covered enough space for a moderate sized house.

In its heyday, the house was full of flowers and plants from the Schwab greenhouses from their country estate.

Mr. Schwab’s bedroom contained three pictures of Napoleon — one reviewing his troops, another at the battle of Austerlitz — one of Napoleon’s greatest victories; and the third, a portrait engraving. There was a library between the two master bedrooms, known as the Italian Room, decorated with pictures of Italian villas and painting of a Madonna by Botticelli.
A longer vista of the main house and gardens.
Schwab loved biographies, especially of his French hero. He owned ten huge books which had been published in 1809 by order of Napoleon, called “Description de l’Egypte, ou Recueil des Observations Qui Ont Ete Faites en Egypte pendant L’Expedition de l’Armee Francaise.”

The Schwabs spent four to five months a year at the house. Mr. Schwab figured out that it cost him about $3000 a day to live there, or about $400,000 a year (about $20 million in today’s dollars). During the warmer months, they lived in Loretto and at their house in Pittsburgh.

Nevertheless, the couple lived comparatively simply. Mr. Schwab liked preserves and his wife, taking from their gardens, put these up herself, especially for him. There was one guest room on the second floor which Mr. Schwab’s mother occupied when she visited, and the third floor which consisted entirely of guest rooms.
The Schwabs' house in Pittsburgh, circa 1900.
One of the couple’s favorite spots in the house was on the balcony in front of the organ. There were two tapestried rocking chairs where they’d sit and rock and listen to Archer Gibson’s playing.

Although he was one of the most famous businessmen in the world, a man who knew and had dealings with many others of high rank in business, banking, politics and in the musical world, the couple never competed for a place in New York society. They limited their social entertainment to occasional musicales, family parties, dinners for Roman Catholic dignitaries, and informal suppers for Mr. Schwab’s bridge cronies.

By the 1920s, Schwab began to feel the house was too large for two people. Because he traveled so frequently, usually spending no more than a few weeks a year in the house, he was tempted more than once to sell it. But Mrs. Schwab — who did not travel with her husband on his business trips was attached to it, and so, while she lived, there was no serious thought of giving it up.
The Schwab house in Pittsburgh today.
When they were both in residence on Sunday afternoons, for almost twenty-five years they maintained a musical salon. Although they never made a bid to be part of New York society, their guests included many business associates, card-playing associates (Schwab was a longtime president of the Whist Club), politicians, and musician friends such as Fritz Kreisler and Madame Schumann-Heink, the celebrated German operatic contralto (Schwab himself, ironically  was not a lover of opera).

In the early 1930s, he allowed the newly formed and popular NBC radio network to use the house for a weekly broadcast. NBC provided the choir, the orchestra and broadcasting equipments and Schwab provided the organ and organist. The program was called “Echoes of the Palisades” (across the river — get it?).

Despite having earned a great fortune in his lifetime, once he began making his millions, still a young man, Schwab lived luxuriously, and spent heavily on lifestyle — a yacht, cars, the Pittsburgh property, the 1000 acre country estate (which contained another world class organ) where they raised prized cattle, maintained huge greenhouses; and the large staffs needed to run them smoothly.
Charles M. Schwab aboard the Europa.
He was a man of enormous charm, personality and creative energy. The multitude of responsibilities required in his enterprises and personal interests no doubt took their toll. In middle-age there was a point where he was reported to be near a breakdown from the pressures of his peripatetic and industrious lifestyle. He took up golf and built a private golf course.

He was known to play a “bold, brilliant” game of bridge. Some of his club members considered it too bold, echoing Edison’s sentiments about his character. He had a reputation in business for playing long chances. He once said his only regret was refusing to invest in a couple of brothers named Wright who were making an airplane.

He was a believer in luck and “the breaks.” “Luck, opportunity, chance – call it what you will,” he once told a reporter, “there is certainly something more than an even break. In my lifetime I have known thousands of men with more ability than I. Some were better executives. Others more able engineers. Things somehow or other did not go with them. I have always looked upon industry as an art.”

All fall down; Riverside House, demolished in 1948.
The First World War made him even richer than before. Each time he crossed the Atlantic to London (more 60 times), he returned with a portfolio of orders for Bethlehem Steel. His compelling personality drew the fascinated attention of men like Kitchener, Winston Churchill, Lloyd George and other leaders of the day.

Orders from Russia, England and France were made and delivered without so much as a written word or contract. Charlie Schwab was known to be a man whose word could be relied on. During the war, Bethlehem secured orders from the Allies amounting to many billions of dollars. Bethlehem’s stock rose from $45 a share to more than $700. The plant on the Lehigh River doubled and then quadrupled in size, becoming the center in the US for the manufacture of Cannon, projectiles, armor plate, etc.

Then came 1929 and the stock market crash. Charles Schwab lost a fortune in the market. By the  early 1930s, he was semi-retired from Bethlehem Steel although still receiving what was then a huge salary of more than quarter million a year (many millions in today’s dollars). Nevertheless, his income was now far exceeded by his out-go.

In 1935, at a stockholder’s meeting, a small stockholder named Mary Gallagher suggested that Schwab, now “an old man” (he was 73) and no longer useful to the company, should retire. Two years later, in 1937 it was suggested by a stockholder at the annual stockholders’ meeting that Schwab’s salary be cut or even dismissed. This came as a shock to the executives attending. Schwab responded by noting that in the past 25 years he had founded and devoted himself to the company, and felt the company owed him something. The salary was cut shortly after to $180,000. The stockholder did not press for more after Schwab admitted that he was “hard up."
Charles and Eurana Schwab photographed in their great house, dressed for one of their famous musical entertainments, circa 1931.
Eurana Schwab died in January 1939. Her husband’s financial situation by that time had worsened radically. He was now in debt and the great chateau he called Riverside was in foreclosure. He had offered the house to the City of New York as a Mayor’s residence but Fiorello LaGuardia turned down the offer because he felt the house was too “grandiose” for a public servant. Mr. Schwab moved out of the house to an apartment, and decided to close it forever.

Charles Schwab died eight months after his Eurana on September 18, 1939, at age 77. The big house sat there until the property was finally sold to a developer. In the early '40s, the house was dismantled, and eventually in 1948, it was demolished. The entire block was of course a very valuable piece of real estate, upon which was built a brick apartment house covering the block, still standing, and known as “Schwab House.”

Postscript. Ironically, although Charlie Schwab died “broke,” the family heirs' (nephews and nieces) holdings in Bethlehem Steel remained in their hands providing them with millions in income  for another forty years until the early 1980s when the company filed for bankruptcy.
Schwab House, the apartment complex that covers the property today, photographed by JH, 11.26.13.
 

Contact DPC here.