Guggenheim, Daniel

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GUGGENHEIM, DANIEL

Daniel Guggenheim (1856–1930) dominated the U.S. mining industry in the first half of the twentieth century. One of ten surviving children in an immigrant household, he took over his father's successful mining interests and turned them into one of the great U.S. family fortunes.

Guggenheim's father, Meyer, emigrated with his family to the United States from Switzerland in 1847, and settled in Philadelphia. With his father, Simon, Meyer worked as a peddler, carrying packs of household goods into the coal-mining region of Pennsylvania. Soon realizing that stove polish was the most popular item he sold, he located a chemist who taught him how to make the product. Simon then stayed home to produce stove polish while Meyer sold it at a substantial profit. Within four years Meyer made enough money on his peddling business, stove polish, and a product called "coffee essence" to marry and open a grocery store.

During the American Civil War (1861–1865) Meyer speculated successfully in supplies required by the Union troops and began to accumulate a comfortable nest egg. His subsequent business ventures in spices, lye (needed for the manufacture of soap), railroads, and imported Swiss lace and embroidery were each more successful than the last. By 1880, a little more than thirty years after arriving penniless in the United States, Meyer had put together an $800,000 bank account.

As a teenager, Daniel Guggenheim, the second son in a family of eleven children, was sent to Switzerland to learn the lace and embroidery business. Like his brothers, he later joined the family embroidery and lace importing firm, M. Guggenheim's Sons. Beginning in the early 1880s Meyer began to invest money in two Leadville, Colorado, lead and silver mines. According to Guggenheim family biographer, John H. Davis, the mining operation hit a great silver lode in 1881. The strike produced nine million ounces of silver and 86,000 tons of lead by 1887, earning Meyer Guggenheim about $750,000 per year. Meyer closed the embroidery business and invested everything he had in mining and the refining of metals. He acquired a smelter and channeled the efforts of his seven sons into the new family enterprise.

Of all the sons, Daniel Guggenheim was the most energetic and ambitious. Together he and his brothers sought to dominate the Western mining industry. Both their mines and the smelter were immensely profitable. But they took no chances. They beat back the railroads on transportation charges, aggressively evicted miners who squatted on their property, and used armed thugs to force striking mineworkers back to work. The brothers also expanded into Mexico, where Guggenheim had managed to obtain a concession for the family to "undertake the exploration and exploitation of any mine they may want to lease or buy." By 1895, due to the great success of the smelters they built in Monterey and Aquascalientes, the Guggenheim family established a strong industrial presence in Mexico.

In 1891 the Guggenheims formed a trust, the Colorado Smelting and Refining Company, to consolidate their various enterprises. They were now faced with competition for control of the U.S. mining industry. A rival trust, the American Smelting and Refining Company (ASARCO), was formed with the financial backing of the Rockefellers. Daniel Guggenheim led his brothers in several battles for power against the new trust. By 1901 he won the struggle. The Guggenheim family assumed control of ASARCO and achieved dominance over the U.S. mining industry, including its largest metal-processing plants, for the next two decades.

Until 1919 Daniel Guggenheim was chairman of the board and president of ASARCO. He convinced financiers J. P. Morgan (1837–1913) and Jacob Schiff (1847–1920) to form a syndicate to mine the great copper deposits at Kennecott Creek in Alaska. By the end of 1912 the Kennecott copper mine had paid dividends of $3 million to Morgan, Schiff, and the Guggenheim family. Meanwhile the Guggenheims were mining tin in Bolivia, diamonds in Africa, and copper in Utah. Their worldwide domination of the mineral industry gave them great international power. It was said that Daniel Guggenheim could make or break a government with one telegram.

Because the family controlled so many essential natural resources the Guggenheims emerged from World War I (1914–1918) with a fortune estimated between $250 million to $300 million, enough to rank them second only to the Rothschilds as the richest Jewish family in the world. In 1923, although the brothers no longer involved in the day-to-day administration of ASARCO, the family still controlled vast international holdings. They sold a large copper mine in Chile to the Anaconda Copper Corporation for $70 million in cash, the largest private sale of a mining property in world history at that time. With that sale the surviving Guggenheim brothers retired from active business and turned to philanthropy.

By the last half of the twentieth century the scale of the family's charitable activities through their various foundations became their greatest legacy. Medicine, education, and the arts all benefited from their largesse. Among them was the Daniel and Florence Guggenheim Foundation, established in 1924 to advance the "well-being of mankind throughout the world." The Foundation supported Robert Goddard's work on the development of liquid-propelled rockets and established many research centers and scholarly activities concerned with the aerospace sciences and exploration. Daniel Guggenheim died in 1930, a successful businessman who led his family to success in American industry.