3 – Henry Greenebaum – 1833 to 1914
3 – Henry Greenebaum – 1833 to 1914
Henry Greenebaum, during his twenty five year active business career starting in the early 1850s, culminating with his downfall starting in late 1877, and ending in mid-1880, was perhaps the most prominent Chicago banker of his day. In the period 1860-1880 he was likely the most widely known Chicago-based financier in Europe and especially in Germany. His story and business career extend forward that of R.K. Swift in reflecting the fascinating business, financial, political, and cultural development of Chicago in its first 30 years as the primary Western financial center. It is a story which is quite engrossing to those interested in the history of Chicago, and particularly the city's financial development.
A further reason to review, in some detail, the story of Henry Greenebaum, is that Herman Schaffner was a close associate and employee in the Greenebaum banking group, as was -- perhaps in a lesser role -- A.G. Becker. During the 1870s, they learned the banking business under Henry Greenebaum and his brothers. Greenebaum was a second cousin of Schaffner -- apparently Schaffner's paternal grandfather, and was a brother of Henry Greenebaum's mother. Greenebaum hired Schaffner into one of his banks within two weeks after the Schaffner family arrived in Chicago. Both Herman Schaffner and A.G. Becker were actively employed in a Greenebaum bank during the difficult and chaotic period of late 1877, as a prelude to the founding of the Herman Schaffner business in early 1878. It appears, too, that the Becker family maintained its friendship with Henry Greenebaum into the early 1900s, when both A.G. Becker's father and Henry Greenebaum died – a period well after the failure of the Greenebaum banks, and the extensive and unfavorable litigation which followed.
Thus, as the following "saga" unfolds, the reader will keep in mind that after about 1872, both Herman Schaffner and A.G. Becker must have followed very closely the events which were being publicly reported, and which we will narrate. In fact, Herman Schaffner was quite intimately involved, and by his own testimony clearly fully informed, as to the people, places, and details which we will describe. It is not clear how much A.G. Becker knew - but in each case, they both clearly knew more than we can ever know from our retrospective of over 130 years.
The below story of Henry Greenebaum was pieced together from various sources, primarily articles in the the Chicago Tribune, New York Times, and other newspapers, and from notes relating to the Greenebaum family history by James Greenebaum, whom the author thanks for his permission to draw on such notes. (1)
Early Years In Chicago
Henry Greenebaum was born in Eppelsheim, Germany, on June 18, 1833, the fifth son of Jacob and Miriam Greenebaum. As a young man, his father wanted him to study law, but at the urging of two older brothers already in America, he came to Chicago in 1848. He worked for two years in dry goods, and then as a clerk in the R.K. Swift banking firm where his brother, Elias, also clerked. He returned to Germany in 1852 to accompany his father and the rest of the family to America. In due course, perhaps working again for a period for R.K. Swift, Henry started a private banking business with his brother, Elias, in 1855. At about this he time married Emily Hyman. Some time before 1858, Henry Greenebaum was elected an Alderman from the western 6th ward. In 1857, the partnership, Greenebaum Brothers received a state bank charter.
The reader may remember that it was in late 1857 that the R.K. Swift bank failed. It is likely that the Greenebaum bank, to some extent, inherited some of the Swift bank's depositors and goodwill.
The Greenebaum banking business grew steadily in the next decade during which Henry became active, popular, and prominent in the city's political, civic, cultural, and business circles. Henry Greenebaum was a leader -- if not the primary leader -- of the Jewish, and more generally, the German immigrant community of Chicago, which group of citizens, it is reported, constituted one-third of Chicago's population in the 1870s. An interesting survey of Chicago's German population and institutions appeared in the Chicago Tribune in 1872.
Following in R.K. Swift's footsteps, Henry Greenebaum was very active in fostering immigration to Chicago from Europe, and especially from Germany. He used his business knowledge and contacts to bring many new citizens to the city, raising or providing personal funds for the costs of passage, welcoming newcomers, and assisting them in obtaining employment. In 1860, he was a founder and active supporter of the Chicago Industrial Association, a group of business leaders devoted to "developing home industry" and which worked particularly on immigration matters. By 1863, he had established a "Passage Office" at his bank where local residents could come in and pay for the passage of relatives and friends from Europe to Chicago, and be assured that all the many details of such a challenging journey would be taken care of with knowledge, experience and good will.
Although politically prominent as a Democrat, Henry Greenebaum was a great admirer of Abraham Lincoln and is recorded as being instrumental in bringing the Republican convention to Chicago where Lincoln had many supporters, and a good chance of being nominated. He went to Springfield to see Lincoln off to Washington. In May, 1861, as Civil War broke out, Henry Greenebaum joined other Jewish citizens in forming, fitting out, and funding the "New German Regiment," comprised of ten companies. In 1862, through the Concordia Club, of which he was a founder, he organized meetings to raise funds and recruit more volunteers into the Israelite regiment.
Throughout the 1860s and 1870s, Henry Greenebaum spoke at at a range of gatherings, and wrote various letters to the editor, addressing such matters as religious liberty, discrimination against Jews, the importance of a proposed Young Mens' Association, the building of a Jewish orphanage, and the welcoming of General Sheridan to Chicago, among other topics. As a speaker, sometimes in German, he produced succinct, thoughtful and well reasoned comments. It was reported that he spoke with passion and eloquence. He also helped to found the Chicago Public Library and the Chicago Historical Society, according to James Greenebaum. He was one of the founders of the first B'nai B'rith lodge in Chicago and a leading figure in organizing the United Hebrew Relief Association.
Henry Greenebaum and his wife had no children but raised two orphaned nephews and a niece whom the Greenebaum family believes were the children of brother Jacob Greenebaum, Jr. The childrens' names are not anywhere recorded and nothing further is known about them, according to James Greenebaum. (2)
In October, 1871, major portions of downtown Chicago were destroyed by the Great Fire. The Greenebaum Bank building went up in flames and operations were shifted to temporary quarters while a new head office building was constructed. Meanwhile, Henry Greenebaum's civic activities went forth uninterrupted. In 1872, he was a founder of the Union League Club, and active as a Vice President of the United Hebrew Relief Association, which he helped to found. In 1874, he helped to organize the Chicago Atheneum, and was elected a Trustee of the University of Chicago, which in his own words, was the "chieftest" among his ambitions. In 1875, Henry Greenebaum was elected Chairman of The Citizen's Committee of Twenty-Five (prominent Chicagoans) to consider ways to reduce crime in the city. In 1876, Henry Greenebaum helped to found and became the first President of the Haydn Musical Society.
As will be noted in his obituary, Henry Greenebaum had a lifelong love of music and evidently provided direct financial assistance to many musicians. He fostered the musical culture of Chicago, was the first president in 1869 of one of the city's leading German choir groups, which generally carried forward the tradition of German singing societies, even as in Germany Wagner was completing the Ring. Perhaps, too, this love of musical performance led Henry to include an entertainment hall on the top floor of the new Greenebaum bank offices opened in 1872.
Development of the Greenebaum Banks
Turning now to the development and outcome of Henry Greenebaum's business ventures. After a few years of working together with Henry, brother Elias left the firm in the early 1860s to join with his brother-in-law Gerhard Foreman in the formation of Greenebaum & Foreman. In about 1868, Greenebaum Brothers invested in and started up a New York subsidiary, Greenebaum Brothers & Co., with brother David moving there to head the operation. The Chicago firm's name was then changed to Henry Greenebaum & Co. By 1870, the business of Greenebaum & Foreman, for reasons unknown, was not successful and was liquidated, at which time Elias apparently rejoined his two brothers as a partner in Henry Greenebaum & Co. (3)
By the mid-1860s, Henry Greenebaum & Co. was advertising what appears to have been new services as a member of the Chicago Stock Exchange, and as commission broker in "Gold, US Securities, Bank and other Stock . . .(and) soliciting and executing orders on a margin." In 1867, the firm's advertising promoted the firm as the "Oldest German Banking House in Chicago," and highlighted drafts and letters of credits which were good in a long list of U.S. and European cities. Also, the bank had become the "Northwest" agent for Guoin & Co's operating a weekly voyage of the steamship "Chicago" between Liverpool and New York City. Within a few months, in connection with that year's Paris Exposition, a major ad listing in bold type all the international correspondents of the Greenebaum bank, again following in the footsteps of R.K. Swift.
In 1870 and 1871, respectively, Henry Greenebaum received a newly legislated state charter to form the German Savings Bank and, under the also just new national bank laws, formed the German National Bank. In each case, controlling minority interests were taken in these new banks through investments from Henry Greenebaum & Co. and directly as a personal shareholder. All three related businesses essentially operated out of the same location in which building, as noted earlier, was shortly completely destroyed in the great Chicago fire of October 1871. Within months, work was underway on a new building, financed by Henry Greenebaum, to house his various enterprises. (Readers will note that Henry Greenebaum & Co. was perhaps one of the first -- if not the first --"bank holding companies" in America!).
After the Civil War, the United States entered a great period of industrial and commercial expansion. Chicago participated fully in this exciting growth especially due to the transportation systems being constructed into, out of, and within the city and its emerging suburbs. In some ways, Chicago and other western parts of the country were the "emerging economies" within the nation. In 1872, there was rampant land speculation and development with substantial new residential housing construction, and the Greenebaum interests were very active in this real estate spree. In June, a Humboldt Park development, financed by Greenebaum interests, was advertised and sold out quickly. An additional 30 acres containing 300 lots was offered within a few weeks. In August, 1872, a new development in south Chicago was underway, being sponsored by Henry Greenebaum and the German National Bank. A certain "land sale fever" is apparent in these reports.
Balance sheets for the relatively new German Savings and German National Banks, as of 1872 dates, were advertised in the Chicago Tribune and presumably other Chicago newspapers. (Note that the Cashier of the German National Bank was Herman Schaffner.)
In mid-January, 1873, there was a short-lived run by depositors on the German Savings Bank. The Tribune reported this development on January 16, and attributed it to "injudicious articles" published by two other newspapers, noting that the situation has now become serious. The article goes on to quote Henry Greenebaum who presents financial data and principal stockholder names in order to bolster confidence in the bank. The run apparently subsided and on January 19, Henry Greenebaum, in a small notice in the Tribune, ascribed the run to unknowing actions of a small group of German immigrant workers.
In February, 1873, perhaps by now shaking off the stress of the January run, Henry Greenebaum hosted the grand opening of a splendid new bank building housing the three Greenebaum enterprises. A month later, there was an interesting story about the close-knit German-American community in Chicago, the Greenebaum family being a central pillar in that community.
In late September and early October, 1873, one of the nation's most severe financial panics took place, as summarized in Business Environment. Many banks and businesses throughout the nation suspended operations or went bankrupt. Major problems occurred in a number of Chicago banks. Interestingly, however, the Greenebaum banks were not much affected. In fact, at this time, Henry Greenebaum was broadly viewed as a civic minded, even tempered, cool headed and competent banker. It is interesting to follow, in a few select clippings, the local Chicago banking scene as bank suspensions and then relief took place. (CI#783) (CI#784) (CI#785) (CI#786) (CI#787) (CI#788)
In December, 1873, shortly following the Chicago bank panic, it became news that a major shortage in the City's accounts had been experienced due to a defalcation by the former Treasurer, Mr. David A. Gage. A Grand Jury was summoned and Mr. Henry Greenebaum was appointed Foreman.
For the period of years 1874-77, there is little information in the public press or other sources as to the progress of and developments within the Greenebaum banks. Generally, the country as a whole was in a period of business depression and slow recovery following the exuberance and speculative bubble of 1872-73. It was apparently a period of sobriety, unsettled confidence, unemployment, and anxiety, as the effect of wide ranging bank suspensions, business bankruptcies, and a collapse in commodities prices unfolded.
The Greenebaum enterprises were mostly in the news in early 1875 by reason of a nasty family feud the essence of which can be grasped in a few clippings.
Some of the charges by brother Isaac, whether true or not, were a precursor to very adverse developments starting in mid- to late 1877 which would soon affect Henry Greenebaum, his brothers, and his employees, including Herman Schaffner and A.G. Becker.
Failure of Greenebaum Banking Group
For some years, Henry Greenebaum had been a member of the West Chicago Park Commission and until sometime in 1876 or early 1877, was the Board's Treasurer. In April, 1877, in what appears to be primarily a political vendetta, Mr. Greenebaum was accused of permitting or overlooking a shortage in the Boards' accounts while Treasurer. In early September, upon the publication of an investigation into this matter, Henry explains extensively in a Tribune article his side on this matter and concludes that the WCPC accounts which he turned over to his successor were accurate and in good order. However, a few days later, a Tribune article reports in a backhanded way that some depositors are withdrawing funds from the German Savings Bank.
Within a few weeks, a brief Tribune story appears hailing the attraction of the West Chicago Park Commission ("WCPC") bonds available through Henry Greenebaum & Co. A few days later, there were reports in successive Tribune editions aimed at defusing any suggestion of illiquidity or lack of soundness of the Savings Bank.
Nothing further appeared in the Tribune about these matters until November 17, on which date there was a report of possible Grand Jury indictment of Henry Greenebaum for unspecified reasons. In early December, an indictment was levied against Henry Greenebaum and two co-conspirators charging fraud with respect to various WCPC land and securities transactions taking place in the early 1870s.(4) Over the next few days, the following articles appeared detailing the history, development, current suspensions, and related steps and issues involving the various Greenebaum banking enterprises. (CI#796) (CI#797) (CI#798) (CI#799).
Henry Greenebaum, with counsel at hand, soon petitioned for the bankruptcy of the two central units owned by him and his two brothers as co-partners, and for his own personal bankruptcy, also petitioning that his two brothers were bankrupt, to which petition they in due course joined. His comments were poignant and in many ways capture the spirit of the man -- a mixture of decisiveness and realism, but with fundamental optimism and confidence.
". . . we went on as long as we could. I had hoped to pull through, but late last week I gave it up. The failure of the New York house (and) the troubles here in the German National and German Savings simply made it impossible to go on . . . I considered (going to friends) but concluded that it was the worst thing I could do, both for myself and my friends. No, I preferred to give up all, and start over again. You may say I don't intend to give up. I am in about the same position as Chicago after the fire -- destroyed -- and now I've got to build up again. It's rather hard, but I don't feel discouraged. I have no complaints to make against anybody, and I'll go to work and rise again . . . It was no use to run on any longer . . . I resolved on the only course left open for me -- to go into bankruptcy." (Tribune, December 18, 1877).
A Tribune report in mid-December, 1877 succinctly summarized the effect of bank failures in the City in late 1877, estimating a total loss to depositors and shareholders of some $5 million. The Tribune characterized these losses as "frittered away in land and other speculations." This was an enormous amount of money at that time. Looking at the ups and downs of U. S. banking and financial services problems over the last fifty years, one might conclude that nothing ever changes.
As matters moved into 1878, the German National Bank was in the process of orderly liquidation by the board and management, whereas the German Savings Bank, Henry Greenebaum & Co. (Chicago) and Greenebaum Brothers (NYC) were in the hands of receivers. Under the banking laws at the time, all shareholders in GNB (and perhaps, too, the GSB) were liable to depositors in an amount equal to their share of capital investment (and possibly above that amount, under joint and several liability, in such amount as might be needed to cover the liability of any shareholders who were deemed to be not "responsible" for (not able to meet) their liability). Thus, every GNB (and possibly GSB) shareholder had a real stake in the outcome of the two liquidations then underway.
In March, 1878, the Tribune was regularly reporting the meetings of the creditor's committee as it examined and questioned Henry Greenebaum about his affairs and assets, toward the goal of resolving a settlement with him and his two brothers. In one of these articles, Henry goes into some length his history as a Chicago citizen and banking pioneer; the blunders (mistakes) he made along the way; and what he has learned through many "trials and tribulations" over twenty five years, from his early 20s to age 45.
By the end of May, 1878, the court approved a settlement ("composition") of the Henry Greenebaum personal and business bankruptcy (including his brothers as co-partners) on the basis of 25c on a $1.00 of approved liabilities, payable in part immediately and the balance over time.
In connection with approving this settlement, it is interesting to note that the court determined that the transfer to Herman Schaffner of title to certain real estate owned by the Greenebaum interests (such transfer being made on the day before failure), as security for $80,000 Schaffner advanced to the Greenebaum banks during late 1877, did not constitute a "fraudulent conveyance." The transfer could not be considered capital provided by Greenebaum to Schaffner for the purpose of helping him to go into his "present business as a broker."
By July, the preliminary report of the examiner of the German National Bank's failure was published. The Tribune's editorial review of this report was quite critical of Henry Greenebaum's management of the GNB and the family's apparent use of bank funds to support personal and affiliated operations and real estate investments. The newspaper's conclusion was that "the bank (German National) was loosely and recklessly, if not fraudulently, managed."
First Trial of Henry Greenebaum
In October, 1878, just when it was perhaps reasonable for Henry Greenebaum to have thought (wrongly) that his bank failures and personal bankruptcy were for the most part history, a bombshell landed on his doorstep.
The trial of Henry Greenebaum for embezzlement commenced on October 15, 1878, and was reported on almost daily through the month of October and into November. The complaint was filed by a certain Theodore B. Weber, a German American citizen who had been a shareholder in both the German National and Savings Banks. Weber had just returned to Chicago after a two year stay in Europe. With his brother, a manufacturer of boots and shoes, Weber, along with this company's bookkeeper, seemingly was skilled at bank accounting and procedures, and related financial analysis. He retained as counsel Colonel Edmund Jussen (sometimes spelled Juessen in the press), a German lawyer/litigator apparently well known in the Chicago legal fraternity. The testimony before the Judge was for the purpose of determining whether the matter should be taken before a Grand Jury to seek an indictment.
The charges against Henry Greenebaum were detailed in six specifications, including, that in 1873, (1) Greenebaum sold the bank building he owned to the German Savings Bank at well more than it was worth; that (2) in the stresses of late 1877 he substituted his own worthless notes for good paper owned by the GSB; that (3) he was responsible for false entries in the German Savings Bank's books; and that (4) generally, he removed funds from the GSB for his own use. Details relating to each charge were covered extensively in court, involving many witnesses, and reported in detail in the Tribune, to the extent that the court reporter began to critique the trial as long, drawn out, and tedious.
In November, the Judge decided, to Henry Greenebaum's dismay, to continue to hold him under bail, and in fact to refer the charges to a Grand Jury. Over the next few months, into early 1879, there is only brief mention of the follow-up with a Grand Jury. Subsequent Tribune articles suggest that this particular litigation ultimately failed to receive Grand Jury attention for an indictment, and thus was dropped by the State.(5)
However, while the Greenebaum/GSB/embezzlement litigation was proceeding, and in due course fizzling out, a national bank examiner was completing an examination of the German National Bank failure, which Bank until December, 1878, was being voluntarily managed by Henry Greenebaum, but in that month, was turned over to a receiver. In a Tribune article in early March, 1879, complainant Weber and his counsel visited Washington to offer assistance to the completion of the investigation of the GNB failure. At the time, it might have been surmised that Weber's effort to assist in the GNB investigation was solely due to his lack of success in the GSB litigation. However, a subsequent Tribune article reported that Weber was asked to be the representative of a group of GNB shareholders who were angry with Henry Greenebaum. As mentioned, depending on the outcome of the liquidation, which had been for one year under Greenebaum's supervision, GNB shareholders were exposed to the substantial liability of assessible share ownership. Upon request, the Comptroller of Currency authorized Weber with his bookkeeper to review and analyze the GNB books and assist the examiner in completing his report. The preliminary findings of this investigation were apparently leaked to the Tribune and other parties in late April, through the publication of some kind of a "pamphlet" authored and printed by Weber (and possibly some backers of Weber).
No sooner did this article appear, the whole Greenebaum-Weber-Jussen contest of wills and publicity took a bizarre and tragic turn. Rather obscurely in the Court's section of its publication, in late December, 1878, the Tribune printed notice of a Superior Court suit initiated by a Mrs. Ada(laide) Robert against one Theodore B. Weber, alleging the breach of an agreement by Mr. Weber to provide Mrs. Robert personal financial support following the death of their illegitimate child, born in 1864, and who died in 1876, pursuant to the terms of their agreement. By coincidence, just a few days after the Tribune report of the GNB investigation results published and promoted by Weber, including quite inflammatory charges against Henry Greenebaum and other family members, testimony in the Robert vs. Weber suit was beginning. By chance, Henry Greenebaum learned that this testimony was underway and, as he later confessed, by reason of being terribly upset by the personal vindictiveness of Weber (6), suggested to a Tribune reporter that he look into the testimony underway in the Robert/Weber matter.
According to this reporter's story, and many subsequent Tribune articles, the testimony started in the prior day and was being continued on May 1 in the office of a court stenographer. Present were Mrs. Robert, her attorney, a Mr. Schaffner (reported later to be in some way a relative of Herman Schaffner), Colonel Jussen, and some other witnesses. The session was then adjourned and everyone walked over to Col. Jussen's office. On the way the reporter left the group to attend to other business. The group arrived at Col. Jussen's office, where Theodore Weber was waiting, and shortly after arrival, Mrs. Robert approached Weber, pulled a gun out of her cloak, and shot him in the abdomen. He died the next day in the presence of his brother and Col. Jussen, who, purportedly, received the dying man's last words that Henry Greenebaum was the indirect murderer. Within a few days, Henry Greenebaum answered the various charges and gossip with respect to his relation to Mrs. Robert and the Weber murder. (CI#805) (CI#806) (CI#807) (CI#808) (CI#809).
During this period, as the coroner's inquest proceeded, the Tribune was filled with the daily testimony being given as to the various aspects of the murder and events leading up to it, including detailed backgrounds of Mrs. Robert and Mr. Weber, their relationship, her relationships with former husbands, and her mental condition -- all quite sensational content. Henry Greenebaum's name would appear occasionally in these reports, even after his public letter. The coroner's jury determined that Weber's death was due to internal bleeding after a gunshot by Mrs. Robert and she was held over to the Grand Jury which quickly indicted her for the murder.
Investigation and Second Trial
Within a few weeks of these unexpected events, the Tribune received a "special dispatch" from Elmer Washburn, the national bank examiner investigating the GNB, to the effect that he had completed his final sixty-page report and delivered it to Comptroller of Currency Knox. However, the report was not at this time to be made public. The dispatch goes on to say that the report differs in some particulars from that issued by the deceased Weber, but that it agrees with the Weber report that "there were a great many extraordinary irregularities in connection with the Greenebaum management of (the GNB)" and "whether or not the Government will consider these irregularities of a criminal nature, or as warranting prosecution, remains to be seen." The article ends by suggesting that, in due course, Congress should investigate the GNB failure.
On October 17, the Tribune reported that a subcommittee of House of Representatives Banking Committee had in fact been formed to investigate the GNB (along a New York bank) failure. After two days of taking testimony in the Palmer House, the committee, with Col. Jussen acting essentially as counsel, adjourned with the plan to meet again in Washington on Dec. Well before this date, on Wednesday, November 5, 1879, possibly without any advance warning, the Attorney General for U.S. District Court for Northern Illinois announced a Grand Jury indictment of Henry Greenebaum on twenty-one counts for the "misapplication and embezzlement of funds of the German National Bank for his own use and that of friends." The full indictment in all its detail was published in the Tribune.
It is rather ironic that on Thursday, November 6, the trial of Ada Robert began, some half year after her murder of Henry Greenebaum's tormentor, Theodore Weber. During the period from May, there were regular short newspaper reports as to her doings in jail and as to her mental condition. Over the next week, witness after witness, including a number of "experts," testified to a lifetime of apparent epilepsy (with all the symptoms), spastic episodes, extreme somnambulism, delusion and visions, regular occasions of hysteria, and extensive examples of aberrant, unpredictable and "crazy" behavior as well as many salacious details as to her personal life over the years. The testimony gave no reason to question the rather straightforward details of the murder itself. On Monday, the 17th, after further and final testimony, the prosecution announced that it "was satisfied that the defendant was insane at the time of the homicide, and insane now." The judge charged the jury with an "agreed form" of verdict (presumably "not guilty by reason of insanity") and the jury retired. When the jury did not rather quickly return the judge sent for them and the foreman reported that some of the jury were were not willing to sign the agreed upon verdict since it would "commit this lady" to the insane asylum "from which there would be no redemption." Counsel for the defendant suggested that the verdict meant, of course, that "if Mrs. Robert recovered from her present insanity, she would be discharged." The jury then went back into session and after a short period returned with the following finding:
"We the jury find that the defendant did commit the act of killing Theodore Weber, as charged in the indictment against her, but that at the time of committing the same the said defendant was insane, and therefore, we find her not guilty, and that the said defendant has not entirely and permanently recovered from such insanity."
With this unusual jury decision, the judge ordered Mrs. Robert to be delivered to the Northern Asylum in Elgin, Illinois, and that she should be kept safely in said Asylum"until she have fully and permanently recovered from such insanity."
Meanwhile, back to the course of the Greenebaum indictment, the trial would not take place for many months, during which period the Congressional committee, in February, 1880, completed its investigation and published its report, including the conclusions that "great irregular(ities) had been practiced in conducting the affairs of the bank" and that "they were so numerous and so great as to impress the minds of the Committee with the suspicion that they were intentional." On the next day, Henry Greenebaum provided the Tribune a letter of rebuttal to this report as sent to the Chairman of the Committee. And at the same time, the committee recommended that the GNB directors "utterly failed" in their duty" and they be held to a "stricter accountability" and that shareholders whose duty it is to elect such directors should "in no case be relieved of their personal responsibility to creditors" to pay into a national bank an amount of their shareholder investment to help cover any shortage of creditor funds on liquidation.
Shortly thereafter, the Tribune published an editorial in which they applauded the the verdict that Greenebaum was “guiltless of any criminal intention . . and promptly acquitted.”
For the over five month period between November 11, 1879, and April 19, 1880, the first day of the People vs. Greenebaum trial, there were no Tribune reports concerning the pending trial except as alluded to the above mentioned Congressional report, the trial apparently having been regularly pushed forward by continuances. However long this period, the trial was short and intensive, and was covered daily and comprehensively in the Tribune, as well presumably in many other Chicago papers of that time. As noted, the indictment specified twenty-one charges, three of which were withdrawn in pretrial procedures. Col. Jussen, who had been selected by the District Attorney Leake to assist him in the prosecution on behalf of the government, made the opening statement. (Later it is learned that Jussen served pro bono). He detailed the history of GNB, gave a "long and exhaustive analysis" of each charge, and generally mocked and pilloried Henry Greenebaum as the "Napoleon of Finance." These opening remarks of Jussen and the charges against Mr. Greenebaum were in due course addressed and answered sharply and effectively by his able joint counsel, a Mr. Small and Mr. Swett. The dual was on.
In each of the five days of the week of April 19, 1880, witnesses -- perhaps upwards to 35 in total -- appeared either for the government or for Henry Greenebaum. Examinations, cross examinations, and witness responses were reported in detail in daily Tribune articles. The minutia of each transaction in each charge was reviewed meticulously by counsel and witnesses. In reading all this it is hard to imagine that the jurors, many of whom were farmers, were able to understand all the fine points, insights and explanations which were presented or rebutted. After a few days of rather dry financial analyses, colorful humor and clever sarcasm began to emerge from the mouths of counsel and some witnesses. A more relaxed atmosphere became apparent. The whole process must have become quite engaging to the daily audience, especially as the trial moved forward.
Henry Greenebaum apparently sat through each session. Toward the end of the week, he was on the stand, and defended himself quite handily. Some fourteen leading commercial and banking leaders appeared as witnesses on his behalf, attesting to his character and probity, to the difficulties of the banking environment in which GNB found itself. They all expressed a disbelief in any dishonest intent of Greenebaum. A leading and effective witness in explaining many of the complex GNB transactions which were centrally questioned by the government was the former GNB cashier, Herman Schaffner. In his testimony, it came out that his father was a cousin of Henry Greenebaum, and that Schaffner was currently in a brokerage business with a partner, "Baker" (presumably A.G. Becker), who had been a bookkeeper of GNB and who was also a relative of Henry Greenebaum.
On Monday, April 26, each counsel summed up his case in a relatively brief, substantive, and cogent final argument. As it was the end of the day, Judge Blodgett said he would give the jury its charge the next morning. As hard as it might be to understand, after a comprehensive search of the complete Tribune microfilm for Tuesday, April 27, there is for that day's issue no report of Judge Blodgett's instructions to the jury, and their action (or for subsequent days). Further research may determine that there was more than one issue of the Tribune for April 27, 1880 and that such an issue was not microfilmed, or that there is some other reason for this absence!
However, the report of the last day of the trial was published in the Chicago Times, the microfilm copy of which at the Chicago Public Library, however, is only partially readable. One can determine however, according to the report, essentially, that Judge Blodgett went over each count with the jury very carefully, explaining the charge and some of the details, and in this process, rather repeatedly, instructed the jury that unless it could find an "intent to injure and defraud," or some intention to "conceal," "gain personal benefit," or other similar action or motivating factor, using various phrases and repetitions in doing so, that the jury must acquit the defendant. He regularly mentioned that the government must prove its charges through evidence "beyond a reasonable doubt." The following quote could be read rather clearly in some final summarizing by the Judge:
"It comes back to this: Does the testimony in the case applicable to these several counts, under which defendant is on trial, when all considered together, satisfy you that the defendant acted in regard to each or any one of the transactions, set out in these several counts, with an intent to injure and defraud the German National Bank, or its stockholders? If so, it will then be your duty to find defendant guilty as to the charges which such fraudulent intent is clearly and satisfactorily proven beyond reasonable doubt. While on the contrary if you do not find such fraudulent intent proven beyond reasonable doubt, then defendant is entitled to an acquittal." (Chicago Times, April 27, 1880)
The Chicago Times report goes on to say that the jury retired a little before noon and stayed out until 4:15 p.m. at which time the jury reentered the courtroom "in solemn file." The roll was called and the judge asked if a verdict was reached? The the answer being "Yes," the judge ask that it be heard. The foreman reported: "We find on all the counts the defendant not guilty." With this, the court and the defendant were simultaneously discharged.
The report then says " "Little Henry" was considerably pump-handled and wore an "I Told You So" expression of countenance in the midst of congratulations." The report went on to say that verdict was reached in six ballots in all, apparently the first three being 9:3, but then 10:2, 11:1, and finally all 12 in agreement on the sixth ballot. And thus ended this chapter in the saga of Henry Greenebaum. Within a few days, the Tribune published an editorial noting that the jury and court had determined that Greenebaum was "guiltless of any criminal intent" and that he was "promptly acquitted."
Later Long Life
Shortly after his 1880 trial ended, Henry Greenebaum turned 47 years old. Although still appreciated for all he done for the Chicago community over almost 30 years and respected as a financial and civic pioneer, he had lost his standing and capital with which to become once again the central force he particularly enjoyed in the previous two decades. Shareholders in his two main banks, according to various reports, came out whole, even though he and his family and other shareholders in the central Henry Greenebaum & Co. operation lost significant funds. In 1882, and for many years, he was General Agent for the Equitable Life Assurance Company. Until 1890, Henry Greenebaum's name was hardly again in the Tribune, and then only to report on settlements he was continuing to have to make with creditors. In some ways, it must have been a relief to be out of the limelight. Starting in about 1890, he appears, from occasional news sitings, to have returned to some active involvement in civic matters including Jewish and German causes, the 1893 World's Fair planning, matters relating to the Humboldt Park community of which he had been the founder and which by now was thriving, and in various political campaigns. He is alluded to as a "private banker" from time to time which was probably due to some affiliation with banking business by then being carried on by his brother Elias and his sons. In 1887, he must have read in the newspapers of the death of R.K. Swift, and the tribute to Swift in the Tribune in 1887, and the formation of A.G. Becker & Co., Inc., in 1893.
Henry Greenebaum died at his residence, 4059 Michigan Boulevard, on February 2, 1904, at age 80 years and 7 months, as reported in the Tribune and the New York Times. His many civic and religious activities were noted and particularly his aid to struggling young musicians. The funeral took place on February 4 at Sinai Temple, 46th and Grand. He was buried in Rosehill. As noted in the Tribune article, he was estimated to have had a fortune of $1 million at one time (in the late 1870s). At the end of April, 1904, his estate was settled in the amount of $13,600 which funds were to go charities, grandnieces, and grandnephews.
In its life as a financial center for over 150 years, Chicago has had few personages possessing the force of personality and breadth of civic participation of Henry Greenebaum. He was energetic, creative, optimistic, and perservering. He was an early developer of a residential community with its own homeowners' association; in later years the Greenebaum Park was named in his honor. He was clearly a poor financial manager and probably too kindhearted to be an effective organizational manager. He had little regard for financial controls. He was clearly an extended family man -- as was said in one of his trials, almost every Greenebaum bank employee was a relative. Even at his high point, despite his wealth, he apparently lived relatively modestly and was always generous with his time and money. His contribution to the founding and development of many Chicago cultural institutions was outstanding, unique, and broadly based. He loved music. He was an eloquent speaker. He was a patriotic American who supported the Union. He was proud of his Jewish and German heritage and became a religious and community leader. He extended help to new immigrants, never forgetting his own journeys. Even after intense public scrutiny and adverse publicity, he stayed on his feet time after time. He took blows but he could rebut accusations with sensible arguments. He was a unique man. Hopefully this narrative will provide the reader with just a brief glimpse into the "saga" of Henry Greenebaum.
A brief notice in the September 16, 1881 Tribune reported that Mrs. Robert, who two years prior shot and killed Theodore Weber, was seeking to be released from the Elgin asylum on the ground that she was (now) sane. The Tribune went on to suggest that there was not the slightest reason why she should be permitted her liberty. Notwithstanding the Tribune's view, Mrs. Robert, now 40 years old, shortly appeared in court seeking a discharge from Elgin on the basis of habeas corpus (unlawful imprisonment). Her case was continued to October 29 so that experts could appear. However, at that hearing, she appeared first on the stand and in her testimony, she calmly reviewed in some detail and with good memory her personal history and the "killing." In conclusion, she said that that she "had never been out of her mind." Later she was again on the stand, "exhibiting considerable intelligence, discrimination, memory, and judgment," in the opinion of the judge. Various experts, along with layman who had known her over time, testified that whereas they thought her to be insane a few years back, that she had "recovered" and was now very sane. Other witnesses, particularly Elgin staff, testified that Mrs. Robert was still insane and sited various instances of continuing unusual and abnormal behavior. The Medical Superintendent of Elgin observed that Mrs. Robert continued to show "manifestations of insanity" through various enumerated behaviors. She was not, in his opinion, "fully and permanently restored from her insanity." She was not a "safe person to be at large." Her insanity was "incurable." Others testified that Mrs. Robert had periods of excited insanity between periods of calm saneness. On October 31, the Judge went over the conflicting and confusing testimony and noted that often in murder trials "insanity . . . as a defense . . . is frequently the last refuge of our incredulous and too sympathetic jurors" as they seek an "escape from a verdict of willful murder." He was of the opinion that these circumstances applied to the Robert case. He finally determined as follows:
"What may have been the guilt of this unfortunate woman in taking the life of Theodore B. Weber, I cannot by law consider. If she was criminally responsible for her act because of sanity at the time, then the verdict was wrong. Yet under the law I would have to discharge her as a sane woman. The statute provides for confinement only until sanity is restored, and recognizes that sanity is curable. If she was insane to a degree that satisfied the jury (that) she was not responsible, still I am as well satisfied that she is now a sane person, fully restored, and not at all likely to be subjected in (the) future to the causes which disturbed her mind and led to the act for which she has been confined for two years . . . (thus) I am bound by law to discharge her (from Elgin). Such is my order."
The article then reports that spectators applauded as Mrs. Robert cried.
(1) Subsequent to the original publication of this Appendix, the author received a comprehensive and scholarly memorandum from Mr. David McCarthy, who for family reasons has completed substantial genealogical research regarding Michael Greenebaum, a brother of Henry. In the course of that work McCarthy logically developed biographical details about Henry. The original text of the Appendix has thus been corrected for greater accuracy and typographical errors, and through the footnotes below, as provided by McCarthy, the Henry Greenebaum story has been enhanced. Special thanks to David McCarthy for finding typos and inaccuracies and adding to the saga of Henry Greenebaum.
(2) David McCarthy reports that subsequently it has been confirmed that the children were in fact those of Jacob Greenebaum, Jr. (brother of Henry) and their names were Henry, Milton, and Lina. They were cared for by “Uncle Henry” and “Aunt Emily” and loved and nurtured as if they were their own.
(3) With respect to the date and the reasons for the liquidation of Greenebaum & Foreman, David McCarthy reports as follows:
“Elias joined Henry Greenebaum & Co. and Greenebaum Brothers & Co. in May 1874, not 1870. (Tribune and Inter-Ocean, 10/24/78, Daily Jewish Courier, 7/27/19 (in the Newberry Foreign Language Press Survey), and In re Greenebaum et al., bankrupts (approving the composition), which can be found via the link below). The court opinion states that the Greenebaum Foreman partnership had “recently” been dissolved at this point, for the purpose, “it would seem,” of enabling Elias to rejoin his brothers. Far from not being successful, Greenbaum & Foreman had a value of $1,300,000 at the time of its dissolution, in which Elias had a half interest. (Tribune, 4/10/80). Elias contributed $250,000 of cash to the capital of the Henry Greenebaum and Co. and Greenebaum Brothers & Co. from the proceeds of the liquidation, and also contributed $50,000 owed him by his brothers.
“It seems to me, given the timing (following the 1873 panic and the earlier bank run), that Elias joined his brothers in order to bail them out. Elias realized that even with his large capital contribution there was a substantial risk of failure, so, prior to joining his brothers, he transferred the remainder of his wealth (about $250,000 to 300,000) to his wife Rosina. The transfer to his wife only became public knowledge after the bankruptcy. The Greenebaum creditors who approved the composition were aware, if belatedly, of the transfer and still overwhelmingly approved the composition, which indicates that they thought it likely that the transfer would stand up if challenged as a fraudulent conveyance. (As an aside, if the gift was made prior to the time Elias joined his brothers, it’s hard to see how any creditor was harmed.)
“Elias seems to be the good guy here, and for his pains he lost $250,000 — if not more. Since assessment liability on the GSB and GNB stock held directly and through the Greenebaum firms was not known and not scheduled in the bankruptcy, it was not discharged, and it came back to bite Elias. In December 1879, the GNB receiver got judgments against Elias directly and against Elias, Henry and David (as partners in the Greenebaum firms) totaling over $32,000. In April 1880, the GNB receiver, not being able to locate assets, sued to void the transfer to Rosina. (Tribune, 4/10/80.) (I’ve been unable to learn the resolution of this litigation.) In July 1882, certain GSB depositors brought suit against the GSB shareholders for an assessment. The Trib indicated that “a few of the stockholders have died, many more have become insolvent”, so that the remaining stockholders would be subject to an assessment of 100% of par value. I suspect Elias was a primary target. (Tribune, 7/4/82) (Again, I’ve been unable to learn the resolution of this litigation.)”
(4) David McCarthy adds to this matter:
“The conclusion of this matter never seemed to have been reported, which is puzzling, given that it seems to have been a precipitating event of the bank failures. The Inter-Ocean reported that the indictment also alleged petty corruption (West Park crews used to work on Greenebaum’s private property.) The Inter-Ocean interviewed Greenebaum, and when confronted with this last charge, he was at a loss for words — a rarity for him."
(5) David McCarthy adds the following information.
“Henry testified that the grand jury voted “no true bill” (i.e, no indictment) in January. (Congressional testimony in relation to the German National Bank in October '79). It’s unclear why, after heavy coverage of the proceedings, the papers went silent on the matter.
“To give some indication how toxic the environment was, Henry twice had to public defend himself against reports of tampering with the grand jury. (Inter Ocean, 10/29/78, Tribune 2/11/79). Colonel Jussen repeated the allegation in a letter to the US Attorney General, as read into the Congressional testimony."
(6) McCarthy reports that at about this time,
“Henry was accused by Weber for the first time of financing the Robert suit, which he vehemently denied. (InterOcean, 12/10/78). It also appears that Henry was also considering a suit against Weber for blackmail (ibid; also, Inter Ocean 10/28/78), presumably in connection with Weber’s threats to have Greenebaum jailed if he didn’t repurchase Weber’s GNB stock. (The threats are recounted in Greenebaum's Congressional testimony.)”