When mentioning the name Charles Schwab, many people will think of the investor and founder of Charles Schwab Corporation. However, there is another rich man named Charles Schwab in American history. Charles Michael Schwab was a 19th-century businessman and steel magnate who built Bethlehem Steel into America’s second-largest steel producer.
Charles Michael Schwab was born in Williamsburg (Pennsylvania, USA) in 1862. He was the son of John Anthony Schwab, a wool worker and blanket manufacturer, and Pauline.
From an ambitious boy to a steel tycoon
Although not rich, the family of Charles M. Schwab still led a comfortable life. Unlike his father, who was content with a comfortable life, Charles M. Schwab was an ambitious boy with big dreams.
Charles M. Schwab started out as a grocery store clerk. He later left this job to take up a position as an engineer at Edgar Thomson Steel Works, a company owned by industrialist Andrew Carnegie.
Thanks to his skilled skills, Schwab was quickly promoted, becoming an assistant plant manager at the age of 19. In the years that followed, he rose to the position of superintendent of Housing Works in 1887, and superintendent of steel works Edgar Thomson in 1890.
Schwab is not only smart and hardworking, he also knows how to treat people. He has communication skills and gets along with people of different age groups. Businessman Andrew Carnegie was impressed by the young man’s potential at the time and named Schwab president of the Carnegie Steel Company in 1897. Schwab was only 35 years old at that time.
Steel magnate Charles M. Schwab. Photo: Wikimedia Commons.
In 1901, he played a key role in negotiating the sale of Carnegie Steel to a corporation led by the financier J. Pierpont Morgan. When the United States Steel Corporation (US Steel) was born, Schwab was appointed its first president.
Schwab and Morgan had many arguments in the months that followed. After 2 years of employment, Schwab left the United States Steel Corporation. According to Britannica, Schwab earns more than $2 million a year as head of US Steel.
Schwab joined Bethlehem Steel (Bethlehem Steel Company) in Bethlehem, Pennsylvania. He decided to devote all of his time and efforts to the smaller business of US Steel.
Under the leadership of Charles M.Schwab, Bethlehem Steel became the second largest steel producer in the US. At the same time the company is one of the most important heavyweight manufacturers in the world. He chose to praise rather than criticize his workers. Schwab’s belief in making the most of the little things has made him one of the country’s most powerful men.
During World War I, he supplied steel to the US army for military purposes. This has brought the company great benefits.
The famous tycoon plays and has a lot of debt even after his death
Thanks to his great success in his career, Schwab became a very rich man. He moved to New York City. The steel tycoon built his own giant Riverside home on the Upper West Side. Famous French architect Maurice Hebert was “chosen to send gold” by Schwab, to design a 75-room house worth $7 million.
But the mansion isn’t Schwab’s only retreat. He also owns the $4 million $3 million 44-room summer estate in Loretto, Pennsylvania. The house is called “Immergrün” (which in German means “evergreen”). The house features luxurious gardens and a nine-hole golf course.
Schwab likes to enjoy the lavish life. He organizes luxurious parties, participates in high-risk gambling. Notably, Schwab also had a series of extramarital affairs and he had a child outside of marriage. This, of course, influenced Schwab’s marriage to his wife Emma Eurana Dinkey, whom he married in 1883.
Schwab became infamous when he defaulted on his debt in Monte Carlo and rode in a $100,000 private carriage called the “Loretto”. However, he is also a philanthropist and very supportive of the arts.
Bethlehem Steel was hit hard by the Great Recession. Over the next few years, the company suffered huge losses, amounting to millions of dollars. The stock market crash of 1929 took a toll on his fortune. But by that time, Schwab had spent most of his fortune, estimated at $25-40 million. Adjusted for inflation, this equates to $500-800 million in the first decade of the 21st century.
By 1933, he was unable to pay property taxes on the Riverside mansion in New York City. Although he paid about 7 million USD to build, he tried to sell it in 1936 for only USD, but no one bought.
After the death of his wife, he lost his Riverside house and moved into a small apartment on Park Avenue. He died in 1939, of a heart attack at the age of 77. He was buried in Loretto, Pennsylvania, at Saint Michael’s Cemetery in a private mausoleum with his wife. He and his wife never had children.
Charles M. Schwab’s Riverside mansion in New York City. Photo: Legends of America.
Despite his death, Schwab still owes more than $300,000. His properties at Bethlehem Steel were at the time virtually worthless. Ironically, if Schwab lives a few more years, he could see his fortune restored as Bethlehem Steel is flooded with orders for war materials.
Over the next few years, Schwab’s shares were sold out. The Immergrün estate in Loretto was sold at auction for Friends of St. Francis College in 1942. They were the sole bidders at the property auction. Today the property is still part of St. Francis College.
The Riverside Mansion in New York has been made available as the official mayor residence to New York Mayor Fiorello La Guardia. The mayor rejected it, feeling that the property was too grandiose. It remained vacant until it was purchased by Prudential Insurance Company for $1.5 million. It was eventually razed and replaced with an apartment complex.