Daniel Guggenheim (1856 - 1930)

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Birthplace: Philadelphia, PA, USA
Death: Died in Port Washington, NY, USA
Managed by: Carlos Federico (Cantarito) Bunge Molina y Vedia
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About Daniel Guggenheim

(1856-1930)

American Smelting and Refining Company

Overview

Daniel Guggenheim was one of America’s most powerful business leaders as well as one of the richest men in the world. His fame and fortune stemmed from the key role he played in exploiting the earth’s mineral resources and making them available almost exclusively to the United States. Although he subscribed to a style of management that was often harsh and dictatorial, he attempted to make up for his shortcomings as an employer by becoming a philanthropist (a person who donates money or other kinds of support to be used toward humanitarian efforts). He used his great wealth to endow universities, museums, opera houses, and other institutions for the betterment of mankind.

Personal Life

Daniel Guggenheim was born in Philadelphia, Pennsylvania, on July 9, 1856. He was the second of seven sons born to Meyer and Barbara (Myers) Guggenheim, who had emigrated to the United States from Switzerland in 1847.

Meyer Guggenheim had an enormous influence on his son’s life. Poor but ambitious, he worked a number of different jobs to support his growing family and was a peddler at the time of Daniel’s birth. Around that same time, however, he also went into business manufacturing stove polish and coffee essence. He ended up making a sizable sum of money selling his products on a wholesale basis to the Union army during the Civil War. He subsequently established an importing firm and eventually moved into the metallurgy industry.

Daniel Guggenheim shared his father’s business instincts and desire to succeed. Although small in stature (he stood barely five feet tall), he was gifted with boundless energy and self-assurance. Quick, bold, and adventurous, he had the demeanor of an European aristocrat and ordered others around like the general of an army. Guggenheim was totally convinced of the supreme value of material progress and desired above all to prosper financially. Thus, throughout his entire adult life, he worked a 16-hour day in pursuit of his goal.

On July 22, 1884, at the age of 28, Guggenheim married Florence Schloss. He and his wife were the parents of three Children: Robert, Harry, and Gladys. Described as stern and puritanical, he was nevertheless a devoted family man.

It was not until he had reached his mid-sixties that Guggenheim revealed any interest in the welfare of his fellow human beings. As a young man, he had never displayed a particularly spiritual or liberal bent. Yet as he neared the end of his days, he launched a number of philanthropic efforts, eventually gaining the admiration and respect of those who appreciated his willingness to share his wealth. He died at the age of 74 on September 28, 1930, at his home in Port Washington, New York.

Career Details

Guggenheim was not a particularly good student at the Catholic high school he attended in Philadelphia. Even then, he was focused on practical matters and making money. At the age of 17, he was sent by his father to Switzerland to perfect his German language skills, study the manufacture of Swiss lace and the embroidery business, and serve as a buyer and representative for the family’s importing business.

Guggenheim remained in Europe for 11 years before being called back home after his father’s modest investment in two lead and tin mines in Colorado resulted in a financial bonanza that demanded the entire family’s involvement. The mines had turned out to be enormously productive, so in 1888 the Guggenheims founded the Philadelphia Smelting and Refining Company and built their first smelting plant. Located in Pueblo, Colorado, it processed a number of different metals, including silver.

In 1889 all of the Guggenheims moved from Philadelphia to New York City, which was considered the financial capital of the nation. From 1890 to 1923 Daniel (the most energetic and ambitious of the Guggenheim brothers) presided over the family business. The smelting operation alone soon posted profits of about $1 million a year thanks in part to a rise in the value of silver and Guggenheim’s ability to secure cheap railroad freight rates.

Changes in the law eventually made it more lucrative to operate mines outside the United States. Guggenheim responded by expanding his business empire into Mexico and South America. To thwart the competition posed by other mining interests he encountered both at home and abroad, he sometimes resorted to various underhanded means, including bribery and dirty tricks. (At one point during his career, it was said that he had the power to topple governments by sending a single telegram.) In Alaska, for instance, Guggenheim mined copper and coal on land owned by the federal government that was not really his to exploit. Gifford Pinchot, the first head of the U.S. Forestry Service, denounced the practice and argued that the territory’s mineral wealth was the property of all Americans, not just one family. Using his influence on members of the Senate, Guggenheim was able to undermine Pinchot’s efforts and make sure his words fell on deaf ears.

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As a result of this kind of clever maneuvering, Guggenheim essentially controlled the mining and mineral refinement industries throughout most of North America by 1898. Three years later, the family’s Philadelphia Smelting and Refining Company merged with nearly a dozen other mining and/or smelting companies to become the American Smelting and Refining Company (ASARCO). At the head of the new firm were Daniel Guggenheim and his brothers.

Guggenheim’s desire to make ASARCO the world leader in the mining industry was insatiable. He opened mining facilities on virtually every continent, ruling his company like a dictator and extracting vast quantities of mineral wealth from the ground as quickly and as cheaply as he could. He had no interest in the ecological impact of his operations, nor did he give a thought to the issue of workers’ rights.

Guggenheim’s plan, in short, was to own and manage the entire mining industry, from the digging of ore to the selling of the final product. By 1915, he had nearly achieved his goal—he controlled almost 80 percent of the world’s known silver, copper, and lead and had the power to dictate their prices on the open market.

Guggenheim’s profiteering became so outrageous during World War I that President Woodrow Wilson and the U.S. Congress had to step in and fix the price of copper. Also of concern to some people were the increasing number of strikes against Guggenheim’s operations. Working conditions had come to resemble slave labor, fostering discontent among miners.

In 1922 a rebellion within ASARCO saw Guggenheim come under fire for his ruthless and autocratic management style. Even members of his family abandoned him, worried that his misdeeds reflected poorly on all of them. Thus began the effort to redeem the Guggenheim name through philanthropy.

Social and Economic Impact

Guggenheim spent most of his life doing whatever was necessary to acquire vast sums of money and forge a dynasty that would outlive him. ASARCO did indeed become the largest industry of its type in the world. But the profits he extracted from that venture might be considered obscene by current standards, and his careless treatment of his workers and the environment would prompt many people to condemn him outright.

As he neared the end of his life, however, Guggenheim actively sought to repair his family’s tarnished reputation by sharing his immense wealth with others. It was a strategy that worked in the short term as well as in the long term, for his generosity helped temper the public’s view of the Guggenheims while providing for generations to come.

In 1924 the Daniel and Florence Guggenheim Foundation was chartered for “the promotion, through charitable and benevolent activities, of the well-being of mankind throughout the world.” Although the foundation existed only until 1929, it endowed many universities throughout the country and the world with aeronautical schools. (Guggenheim’s son, Harry, harbored a particular interest in high-altitude flight and rocketry and persuaded his father to support aeronautical-related endeavors.) Other monetary gifts were presented to European flying clubs, the Chilean government for aeronautical promotion, and the Library of Congress for the establishment of an aeronautical library. Guggenheim also donated money to the arts, some of which financed New York City’s Guggenheim Museum and free opera concerts in Central Park. In addition, he contributed funds for additions to Mount Sinai Hospital in New York City and the New York Botanical Gardens.

Chronology: Daniel Guggenheim

1856: Born.

1873: Studied and worked in Europe.

1884: Returned to America.

1888: Founded Philadelphia Smelting and Refining Company.

1901: Merged with several other firms to create American Smelting and Refining Company.

1922: Left American Smelting and Refining Company.

1924: Daniel and Florence Guggenheim Foundation chartered.

1929: Awarded the first aeronautical medal by the American Society of Mechanical Engineers.

1930: Died.

By year-end 1929, the fund exhausted its funds and terminated activities. During this year, the American Society of Mechanical Engineers awarded Guggenheim its first aeronautical medal for recognition of his generosity to the advancement of aviation. In 1930 New York University bestowed him an honorary degree of Doctor of Commercial Science.

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Daniel Guggenheim's Timeline

1856
July 9, 1856
Philadelphia, PA, USA
1860
1860
Age 3
Philadelphia Ward 17, Philadelphia, Pennsylvania, United States
1870
1870
Age 13
Philadelphia Ward 21 District 70, Philadelphia, Pennsylvania, United States
1870
Age 13
Philadelphia Ward 20 Dist 65 (2nd Enum), Philadelphia, Pennsylvania, United States
1880
1880
Age 23
Philadelphia, Philadelphia, Pennsylvania, United States
1880
Age 23
Philadelphia, Philadelphia, Pennsylvania, United States
1880
Age 23
Philadelphia, Philadelphia, Pennsylvania, United States
1880
Age 23
Philadelphia, Philadelphia, Pennsylvania, United States
1884
July 22, 1884
Age 28
1885
May 17, 1885
Age 28
New York, New York, New York, United States