November 1997 | Volume 48, Issue 7
How a tireless impresario parlayed a cloud of smoke into several fortunes
If you walk through the business districts of American cities these days, in even the worst of weather, you will see underdressed people huddled in doorways. No, they’re not homeless; they’re smokers. Not since the glory days of Prohibition (that is to say, when it was still a theory, not a fact with consequences) has a widespread American habit been under such sustained assault.
But, curiously, while the consumption of cigarettes has been declining in this country for years, their older, larger, smellier cousins, cigars, are undergoing a renaissance. The oversized, glossy magazine Cigar Aficionado has been a surprise success. Cigar bars are proliferating, although they can’t (at least in New York City) serve much in the way of food. That would make them restaurants, and smoking is banned in New York restaurants. (On the theory that while two vices are okay, two vices plus food is contrary to good public policy?)
Interestingly, however, the association between one of New York’s most famous crossroads, Times Square, and one of its most famous industries, the theater, is due in no small measure to cigars. And that is because of one man who had a lot to do with all three. Oscar Hammerstein came to New York in 1863, under circumstances that would prove typical of the man. He had skipped a violin lesson in order to go skating, and his father had beaten him with the skate strap as punishment. So Hammerstein pawned the violin and bought passage to America.
By this time he probably had already discovered his passion for theater. But at the age of sixteen, in a strange land that spoke a language he was wholly ignorant of, there were no jobs in the theater he could aspire to. So he got work making cigars, earning two dollars a week.
He learned the cigar business so fast that his pay was doubled after only three weeks. Within six months he was earning the wages of a skilled worker.
At that time all cigars were handmade. But Hammerstein had an inventive mind. Over the course of his life, he would obtain no fewer than fifty-two patents. Some of them were trivial, such as a reversible necktie that allowed its owner to spill gravy twice before needing to have it cleaned. But others revolutionized the cigar industry. Time and again during his chronic financial emergencies, he would invent another machine to improve the manufacture of cigars and be back in the money.
The first of these was a wooden mold that ensured uniform product size. He sold it for three hundred dollars, then quickly developed one that could make a dozen cigars at a time. This invention he patented. Soon Hammerstein saw another opportunity, and in 1874 he founded a trade paper for the tobacco industry, titled United States Tobacco Journal . It was an immediate success and is still published. Within a decade it was providing Hammerstein with an income of twenty-five thousand dollars a year, a vast sum by the standards of the 1880s. Fortunately for history, if not for the Hammerstein family finances, money meant little to him. It was only a means to an end. And his end was always theater. He began investing in shows.
In Hammerstein’s early days in New York, the lower-priced theaters showing popular fare, often in such languages as Yiddish and German, were concentrated on the Bowery. But the main theater district was centered on Fourteenth Street and Broadway, around Union Square.
Hammerstein badly wanted to build and operate his own theater but couldn’t afford to do so in the city proper. So he put his first theater in Harlem, then a suburban village far to the north. But to build it he had to sell the Tobacco Journal , for sixty-one thousand dollars. It is typical of him that he not only sold what had become a cash cow in order to open a dubious economic proposition—a large theater in a thinly settled area—but also forgot to include a box office when he designed the building. One was hastily improvised, and after a shaky start the Harlem Opera House, as it was called, became a success. Hammerstein was in the theater business for good.
Soon he had enough money to build downtown, and he erected the Manhattan Opera House where Macy’s is today. It was vast, clearly intended to accommodate the production of grand opera, but Hammerstein still couldn’t afford that, and the theater was too large to sustain lesser productions. Hammerstein, ever resourceful, soon found a solution. One of the most successful theatrical enterprises in New York then was Koster and Bial’s concert hall. Basically it was a vaudeville theater except that people sat at tables and ate and drank while enjoying the show. Koster and Bial’s was so popular that it often had to turn people away for lack of space.
So Hammerstein offered Koster and Bial his theater. He would run the theatrical end while they looked after the food and drink. Hammerstein proved an inspired vaudeville manager, and the theater was packed every night. For the first time he was making big money in the theater business.
But Hammerstein was not temperamentally suited to having partners, and he soon quarreled bitterly with Koster and Bial. A blizzard of lawsuits ensued; in the end they paid Hammerstein $375,000 in cash together with a mortgage of $300,000 on the theater and took over sole operation.
As he was leaving the lawyer’s office a very rich man, Hammerstein turned to his erstwhile partners and said, “When I get through with you, everybody will forget there ever was a Koster and Bial’s. I will build a house the like of which has never been seen in the whole world.”
Hammerstein was as good as his word. He built the Olympia, the first major theater north of the Metropolitan Opera, in what would in a few years’ time be called Times Square. As so often happened to Hammerstein, however, his reach exceeded his grasp. The Olympia was no regular theater. Indeed, it had no fewer than three theaters in it, not to mention billiards rooms, smoking rooms, and a roof garden. One ticket, costing fifty cents, bought admission to what was, in many ways, the world’s first entertainment multiplex.
There was just one problem: The Olympia Theater complex was hopelessly uneconomic. With at least six thousand seats to fill, only the top acts and biggest hits could hope to fill them steadily enough to make a profit. Moreover, many of the productions Hammerstein put on, some with music he wrote, were less than hits. As Hammerstein himself ruefully admitted, “There is no limit to the number of people who will stay away from a bad play.” Meanwhile, other theater managers, seeing the Olympia’s troubles, thought it was too far uptown and stayed away from Times Square.
By June of 1898, three years after the Olympia’s opening, it was all over. The New York Life Insurance Company foreclosed on the mortgage, and Hammerstein had lost everything—except an endlessly inventive mind, an unquenchable spirit, impressive powers of persuasion, good luck, and a profound knowledge of the cigar business. He would make Times Square the center of the American theater yet.
The northwest corner of Forty-second Street and Seventh Avenue, at the very heart of Times Square, had long interested him. Only shacks and rundown boarding stables covered it, but he thought it “the finest site in New York for a theater.” Hammerstein managed to rent it with no money down.
Then he invented a machine that split and made usable the stems of tobacco leaves, formerly a waste product. Royalties from this would probably have made him millions over the years, but he needed cash then, so he sold it for twenty-five thousand dollars.
However, Hammerstein still needed two thousand more. He took a ride on a trolley car, as he often did when he needed to think. A young woman in the next seat recognized him and told him she had been in the chorus of one of his productions. “You were very good to me,” she said. Learning of his problem, she promptly lent him the money. As Hammerstein explained, “If opportunity does not come knocking at your door, you may be sitting beside her in a street car.”
Still, the Victoria Theater, as it was named, was built on a shoestring. Its red plush came from a fire insurance company, its seats from an old theater, its carpets from a retired transatlantic liner. The color scheme was white and gold so that the white plaster didn’t need to be painted.
Astonishingly, the Victoria opened in March 1899, less than ten months after the debacle of the Olympia, and was an immediate hit. When it began showing vaudeville a couple of years later, it became one of the most successful theaters in the country, often throwing off a net profit of four thousand dollars a week, when forty dollars a week was a middle-class income.
Hammerstein and others began building more theaters in the immediate area. (Many of them are now being restored, after years as movie theaters and porno palaces.) Times Square’s destiny was assured. Hammerstein’s, almost needless to say, was not. In the last twenty years of his life, he would go broke twice more, and he died as poor as he had been the day he arrived in New York more than half a century earlier. The city, of course, was vastly the richer because of him.