William Warren Gibbs: The Rise and Fall of A Gilded Age Promoter

William Warren Gibbs (1846-1925)

William Warren Gibbs arrived in Philadelphia around 1880 with little more than a smooth tongue and gas-making equipment for sale.  Born in 1846 in the small town of Hope, New Jersey, Gibbs dropped out of school to work in a local store, and then married Frances Ayres Johnson, the daughter of a prominent Hackettstown merchant.  Not content with a life in central New Jersey farm country, he wanted to move to the thriving “Workshop of the World “and become a wealthy entrepreneur.

Soon after arriving in Philadelphia, Gibbs quickly gained a reputation as one of the most persuasive men in the city, able to sell anything to anyone, especially influential men with money. Those around him realized that Gibbs had a real knack at setting up companies and issuing securities. He teamed up with another up-and-coming Philadelphia businessman — Peter Arrell Brown Widener — and formed the United Gas Improvement Company, a massive trust that sought control over the city’s gas mains.  Another vested interest in UGI was W.G. Warden of John D. Rockefeller’s powerful Standard Oil Company.  The arrangement worked well for Widener, who parlayed the fortune he gained supplying meat to the Union Army into trolley lines and new real estate development in North Philadelphia.   By the 1890s, UGI had helped make Widener and his cronies extremely wealthy.  According to contemporary reports,  UGI was “the most successful enterprise of its kind in the country, already owning and controlling the gas works of about fifty important towns and cities.” That year, the outstanding stock of the United Gas Improvement Company was worth $5 million and sold “at a high premium, while the actual assets will aggregate at a much larger sum.” Eventually, the United Gas Improvement Company solidified its position by getting a 30 year lease on Philadelphia’s entire gas lighting system.  It also had a reputation for political corruption. In 1903, for example, UGI was accused of making an illegal $20 million profit on the sale of stock in the United Electric Company of New Jersey.

The United Gas Improvement Company headquarters at 1401 Arch Street…conveniently close to City Hall.

The business and social bonds between Peter Widener and William Warren Gibbs probably explain why they owned neighboring mansions on North Broad Street during the 1880s– Widener at 1200 and Gibbs at 1216.

In 1888, Gibbs struck pay dirt again when he trotted out the Electric Storage Battery Company, which made batteries for industrial uses. According to business historian Alfred Chandler, Gibbs “quickly worked out an agreement with leading Philadelphia capitalists to raise $4.0 million” in 1893, much of it from Widener and Elkins, who needed batteries to power their electric streetcars. With this money, Gibbs purchased several smaller companies and bought out patents belonging to Brush Electric, Edison Electric, and other American electric manufacturers.” He then supervised the creation of a network of factories and distributers to manufacture and sell these electric batteries to big clients such as General Electric and Westinghouse.  The company proved to be a great success, bolstering its organizer’s reputation and enriching him further.

The Widener mansion at 1200 N. Broad Street. The Gibbs mansion is a few houses to the north at 1216 N. Broad Street. It may have had interiors designed by architect Frank Furness.

Yet Widener and Gibbs’s paths diverged by the early 1900s.  Widener invested in companies for the long term, branching out into steel, oil, and steamships (including his friend Clement Griscom’s International Mercantile Marine — owner of Britain’s White Star Line ).  By 1912, when Widener lost both his son George and grandson Harry in the Titanic disaster, he had a highly-diversified portfolio worth over $100 million. William Warren Gibbs, on the other hand, remained a serial entrepreneur, and had little interest in active management in his start up’s affairs after it went public.  He became known — perhaps somewhat mockingly — as the man who sat on more boards of directors than any other man in America.  One his more far-fetched schemes was financing the construction of a massive bridge across the Hudson River at Poughkeepsie. Although the structure was a wonder of engineering, the bridge company itself went into receivership and left Gibbs $100,000 poorer, and had “cost lots of big men big fortunes.”   This misadventure probably deepened Gibbs’s lack of respect for engineers.

The Drexel-Gibbs mansion at 1733 Walnut Street, when it was one of the grandest homes in the Rittenhouse Square area. It was torn down in 1913 and replaced by an apartment building.

By 1900, William Warren Gibbs had amassed enough clout (and a $15 million fortune) to purchase a mansion from banker Anthony Drexel Jr.  at 1733 Walnut Street, on the northeast corner of Rittenhouse Square.  The house, built in 1847 when Rittenhouse Square was on the edge of the countryside, was now surrounded by some of the finest homes in the city,  Gibbs and his made their own lavish improvements to the house, which already boasted ceiling frescos, plaster moulding, solid walnut doors, and gold and silver leaf stenciling.  They also added a high iron fence, gate, and a new stone port-cochere at the rear of the house, and a raised portico at the Walnut Street front door.  Mr. and Mrs. Gibbs, as well as their five children still living at home, enjoyed the most modern amenities: electronic service bells to summon five live-in servants, steam heat, hot and cold running water, and gas lighting.  He joined the Union League, his wife threw lavish parties at hotels, and his young boys William Francis and Frederic Herbert learned how to play tennis at prestigious suburban country clubs.  Their eldest daughter Augusta May married the son of a prominent banker in 1899, and a local paper described her as “a splendid musician [who] paints beautifully and rides and drives well.”

Yet Gibbs’s inability to invest in a company for the long-term finally caught up with him.  He invested in more and more peculiar ventures — dye, gunpowder, and cellulose battleship insulation —  and seemed more interested in playing the market than creating sustainable companies that actually made things.  The Philadelphia Inquirer observed in 1901 that, “the days of skylarking for these stocks are over, and lacking the support of Mr. Gibbs, each issue is heavy in the market.  Not, so far as is known, are they likely to receive any support which will make them attractive as speculative issues, stocks which a person may buy and sell quickly at a handsome profit…” The same article also noted due to some suspect financial activities, “It is quite likely that some of the shareholders of record of the Alkali Company unite in a defense and make a test case.”

In 1902, Gibbs’s wheeling-dealing caught up with him, when one of his companies, the American Alkali Company, was found out to be little more than a stock-jobbing scheme in possession of worthless patents.  The company went bankrupt, and Gibbs was accused of concocting a “fraudulent scheme,” in which he illegally pocketed  over $350,000 in cash.

The 2100 block of Pine Street. The Gibbs family lived in the building on the right during the late 1910s.

It took another eight years for the downfall of William Warren Gibbs to reach its tragic finale. The Philadelphia Inquirer noted snarkily a few years after the Alkali scandal in its “Clubs and Clubmen” section that, “W.W. Gibbs is said to have made half a million in diamonds.  He collected a big bag of them, laid them aside in his safe until the price went up 50 per cent, and then sold them out.”   In 1910, the family suddenly deserted their enormous house and retreated to a small cottage on the Main Line.  Creditors swiftly foreclosed on the house for nonpayment of two mortgages.  Three years later, the deteriorating mansion was torn down and replaced by a luxury apartment building.

The Gladstone Hotel, just prior to demolition in 1971.

The Widener family does not appear to have offered assistance following this very public downfall.  The Gibbs family kept on the move, taking up residence at an apartment building at 21st and Pine, and then in the Gladstone Hotel at 11th and Pine. Despite his best efforts, William Warren Gibbs never made a come-back. The once-wealthy and powerful financier died in abject poverty in 1925 while residing in a North Philadelphia sanitarium.

 

His son William Francis Gibbs (1886-1967) dropped out of Harvard following his father’s financial ruin.  He moved to New York and rose to became America’s greatest naval architect, even though his father considered engineers inarticulate and financially inept.   The man who designed the fastest, safest, most beautiful ocean liner in history — the SS United States — said that he “never would have amounted to anything” had his father not gone bankrupt.

 

Note: Steven Ujifusa is the author of A Man and His Ship: America’s Greatest Naval Architect and His Quest to Build the SS United States, published in July 2012 by Simon & Schuster.  To learn more, click here.

Sources:

“Allege $20,000,000 Fraud,” The New York Times, October 4, 1903.

Philadelphia and Popular Philadelphians (Philadelphia, PA: The North American, 1891), p.166.

“Elegant Wedding at St. James: Miss Augusta M. Gibbs Becomes the Wife of Mr. W.H.T. Huhn,” The Philadelphia Inquirer, April 9, 1899.

“New Suit Against Alkali,” The Philadelphia Inquirer, March 12, 1902.

“Now Seeking a Receiver,” The New York Times, October 29, 1891.

“Skylarking Over; Now for Business,” The Philadelphia Inquirer, December 9, 1901.

“Suit Against W.W. Gibbs,” The New York Times, April 20, 1902.

Alfred Dupont Chandler, Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, MA: Harvard University Press), 1990, p.403.

Winthrop Sergeant, “Profiles: The Best I Know How,” The New Yorker, June 6, 1964, p.73.

Stuart Wells, “The Residence at 1733 Walnut Street,” HSTVP 600 Documentation and Archival Research, Dr. Roger Moss, December 12, 1986, Collection of the Philadelphia Athenaeum, HR 86.4., p. 8.

John Russell Young, Memorial history of the city of Philadelphia from its first settlement to the year 1895 (New York: New York History Company), 1895-1898, pp.457-58.

 

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