August/september 1981 | Volume 32, Issue 5
On the first day of April in 1905, according to the waspish account in the New York World , James Hazen Hyde drove “jauntily downtown in his private hansom cab, a bunch of violets nodding at the side of the horse’s head, another bunch nodding from the coachman’s hat and a third bunch breathing incense from the buttonhole of the young man himself.” This brave floral display belied the grimness of the errand: Hyde was on his way to surrender control of Equitable Life, the third largest life insurance company in the world. And all because of a party.
For the last two months, the twenty-eight-year-old Hyde had, said one magazine correspondent, “fairly shared the honors with President Roosevelt in being one of the most talked about men in the country.” There was “the Strenuous Life as exemplified by Mr. Roosevelt, and the Equitable Life as exploited by Mr. Hyde.” All this prominence would have disgusted James’s father, Henry Baldwin Hyde, who had founded the vast business and who liked to boast that he could walk any street of the city in total anonymity.
The elder Hyde had come down to Manhattan from his Catskill birthplace in the mid-1850’s at the age of sixteen. After putting in seven years at the Mutual Life Insurance Company, he decided he could do better. In 1859 he rented an office on the floor above his sometime employer, hung out a thirty-foot-long sign advertising THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES , and went to work. He paid claims promptly, and the business grew around him, but he continued to live frugally, drawing a salary of $1,500 a year. He imposed this same rigorous thrift on his son James, who was born in 1876; when the boy went to Harvard, he was so unworldly that his classmates called him by the rustic name of “Caleb.” Hyde graduated in 1898, taking honors in German and French. The next year his father died of overwork, leaving the twenty-three-year-old Hyde in charge of a billion dollars of life insurance, 600,000 policies, and $400,000,000 in assets.
He did not stay Caleb for long. He had access to one of the great nineteenth-century fortunes, but he did not care for the era that made it possible for a man to make that kind of money; he preferred to look back to eighteenth-century France and the court of Louis XV. He had his hair and beard worked over in the Parisian mode by a French barber; he took to wearing black silk frock suits and brightly colored spats and waistcoats; he became a familiar sight on Fifth Avenue in his gleaming four-in-hand.
He became a familiar sight, too, in the boardrooms of the city. Eager to flatter this exquisite figure who stood between them and four hundred millions, the financiers of the day offered him directorships: of fourteen railroads and traction companies, of nineteen banks, of Westinghouse Electric and Western Union—forty-six in all. It would have been enough to turn the heads of older and less impressionable men than Hyde.
Naturally he entertained on an increasingly lavish scale. At first, nobody disapproved; in an age more apt than ours to equate wealth with virtue, it was pleasant enough to see this picturesque young man making his way in society, and to read of his parties, covered by the newspapers as thoroughly as any political or sporting events.
But this benign mood changed with Hyde’s grandest effort, a costume ball— the theme, inevitably, to be the court of Louis XV—held in Sherry’s restaurant “le Mardi 31 Janvière 1905.” Slim and splendid in his “coat of bottle green … with the Revers of dove colored silk,” Hyde greeted his three hundred and fifty guests as they flowed past him into a ballroom thatched from floor to ceiling with roses. There they danced (those who could, at any rate: Mrs. Clarence Mackay was hung with so much jewelry that she required the attention of two black footboys to move about at all) until midnight, when they took in a short French bedroom farce composed for the occasion. At last bugles summoned them to dinner in a room so sumptuously tricked out with flowers and grass and fountains that the illusion of a Versailles garden might have been perfect had it not been for one guest stridently demanding hardboiled eggs and a glass of milk.
The papers reported that the ball had cost up to a quarter of a million dollars. Hyde himself called an estimate of $100,000 “considerably exaggerated,” and the World gave an “authoritative” figure of $70,000. Whatever the cost, it struck a lot of people as too much, and rumors began to circulate that Equitable policyholders had paid for the night of Old World foolishness. Joseph Pulitzer saw a story here, and the World , which a few days earlier had described Hyde as “a serious and an excellent man of business,” now changed its tune and decided he was “a little too Frenchified” for decent Americans.
Appalled by the growing publicity, members of the Equitable management demanded that Hyde surrender his control of a majority of the stock. This triggered a ferocious battle between the Equitable old guard and Hyde’s new friends. With men like E. H. Harriman in the latter camp, the battle was pretty much fought above Hyde’s head; later he said bitterly that he had been used as “a catspaw.” On March 31 Hyde was told that if he did not agree to a mutualization plan—in which he would turn over the election of the directors to the policyholders—the old management would demand an investigation. Hyde spent a furious night considering it, and the next morning tucked his violets in his lapel, went downtown, and abdicated.
But by now this was not enough; the papers wanted Hyde out altogether, and his allies, thoroughly demoralized, put up only a feeble defense: one loyalist claimed, with desperate cheer, that Hyde had done nothing a successful champagne merchant wouldn’t. The welter of charges and countercharges about Hyde’s management of Equitable brought on an investigation of the whole industry. With scalding vigor, young Charles Evans Hughes dissected the workings of the companies—the interlocking directorates, the inflated salaries (Hyde himself drew $127,000 annually), the nepotism, the fictitious loans. The next year new government regulations overhauled the entire business.
Hyde wasn’t around to see it happen. On December 28 he sailed for Paris, where he lived until the Nazi army overran it. He married a Frenchwoman, and was so fast a friend to his adopted country that he not only was awarded the Grand Cross of the Legion of Honor but also had a dessert named for him by Durand’s restaurant: “Poached peach à la James Hazen Hyde.”
Perhaps his love of the ancien régime had worn a little thin in his last days: before his death in the centennial year of Equitable’s founding, he had taken to describing himself as a “capitalist.” It was a title the young king of the insurance industry might have kept honestly throughout his life, had he paid more attention to the career of Louis XVI and less to that of his royal predecessor.