Herschell “Harris” Kempner (1837-1894)

Entrepreneurs Harris and Ike Kempner were heavily involved in mercantile ventures and the cotton and sugar trade in Galveston, Texas, and the surrounding area. The father and son were also active in local politics; local, regional, and national charities; and the local Jewish Temple. Between Harris and his son, the Kempner family was active in, created new elements of, and even directed the Galveston commercial sector for nearly a century.

Updated: February 10, 2015

Introduction

Entrepreneurs Harris (born March 7, 1837, in Krzepitz, Congress Poland; died April 13, 1894, in Galveston, TX) and Ike (born January 14, 1873, in Cincinnati, OH; died August 1, 1967, in Galveston, TX) Kempner were heavily involved in mercantile ventures and the cotton and sugar trade in Galveston, Texas, and the surrounding area. The father and son were also active in local politics; local, regional, and national charities; and the local Jewish Temple. Harris Kempner emigrated from Russian-controlled Poland and married a woman with a German-Jewish background. Ike Kempner was born in the United States. Between Harris and his son, the Kempner family was active in, created new elements of, and even directed the Galveston commercial sector for nearly a century. Their history reveals the story of an immigrant entrepreneur navigating an immigrant society in late-nineteenth-century Texas, passing the family torch to his eldest son, and his son’s efforts to continue, redirect, and enhance the overall growth of the Kempner family’s enterprises into the second half of the twentieth century.

Background and Family

Herschell “Harris” Kempner was born in Krzepitz, Congress Poland (today, Krzepice, in the Republic of Poland) in 1837.[1] Though Congress Poland was effectively a puppet state of the Russian Empire during the nineteenth century, Kempner most likely would not have identified as either Polish or Russian. The historical context of the area in which he was born has filled volumes, but a partial understanding is important in order to appreciate why Harris Kempner was likely influenced by Ashkenazic Jewish and German social and cultural traditions. Prior to Kempner’s birth, Krzepitz was on the border with New Silesia, a Prussian territory acquired during the partitions of Poland in the eighteenth century. With the advance of Napoleon Bonaparte’s armies across Europe and into Russia during the early nineteenth century, a new political organization was implemented in Poland. Krzepitz became part of the Duchy of Warsaw (1807-1815), a short-lived independent Polish state controlled by Napoleon’s supporters. After Napoleon’s retreat from Russia, Poland was divided between Russia and the German states at the Congress of Vienna in 1815. Russia incorporated the area that had been the Duchy of Warsaw into the Russian Empire and controlled it as Congress Poland (1815-1867). In 1832, Russia abolished Congress Poland’s constitution and placed it under direct Russian control.[2] Prussia maintained control of Silesia, whose border lay several dozen miles from Krzepitz. Given the community’s proximity to German (Prussian) territory, it would have been common to hear various dialects of German and Polish, as well as Yiddish, in the area around Kempner’s hometown.

Besides the political history of the area, which is complicated and makes it appear that Kempner was ethnically Polish, there is another consideration: culture. His family was Jewish, and it is likely that his native language was Yiddish (a language that borrowed many vocabulary elements from High German). His grandfather was reported to have been a rabbi, who taught Kempner the Jewish religion and cultural customs in secret. Although sources are not clear, we may assume that Kempner was from the Ashkenazic religious and cultural tradition like other Jews in the area. Of German origin, Ashkenazi Jews constitute their own ethnic group genetically, regardless of which country they inhabited.[3] While Yiddish is their language, Yiddishkeit, which means “Jewishness,” is the culture of Ashkenazi Jews. The culture is dominated by the Jewish religion, and spans Germany and Eastern Europe, including Poland and Russia. In this way, through his Jewish religion, Yiddishkeit lifestyle, and his Ashkenazic ethnicity, Harris Kempner would be more similar to his ethnic Jewish brethren in Germany and Prussia than to his Christian Polish and Russian countrymen.[4]

Little is known about Herschell Kempner’s early years, however. Family lore suggests that he moved to the United States to avoid forced service in the Russian military.[5] It seems he never personally acknowledged the reasons he fled across the Atlantic. Whatever those reasons were, he arrived in New York City in 1854 at the age of seventeen and, as another family legend reports, with no more than $1.75 in his pocket.[6] Perhaps this account is accurate or perhaps it should be understood as a symbolic expression of a larger “rags to riches” American success story.

Upon his arrival in the United States, Kempner adopted the anglicized name Harris. He found work as a bricklayer and attended English language lessons in the evening. When possible, he saved his earnings, eventually collecting enough capital to begin his own small contracting business on the side in New York. He began to perfect his English to the extent that in later years, he was more comfortable writing and speaking in it than in his native Yiddish tongue. In a few short years, Kempner managed to save several thousand dollars. It is unknown how he saved that amount, but by 1857 he had amassed enough money to be able to afford a move to eastern Texas. His family never learned the reason for the move to the small town of Cold Springs, Texas, a place that has almost faded from existence today.

Fifteen years later, Harris Kempner married Eliza Seinsheimer on March 6, 1872, in Cincinnati, Ohio. She was from a wealthy Cincinnati family, the daughter of a Bavarian-Jewish immigrant. Harris reportedly met Eliza at a dinner he attended in New York City while traveling on business. Her appetite astounded him and he was said to have exclaimed that a woman who could eat like that was worthy of marriage. Within a few years, Kempner made good on his statement. He moved Eliza to Galveston and, after about a year, they started a family. Harris and Eliza Kempner had eleven children in total, yet, sadly typical of the times, only eight survived into adulthood. Their four surviving sons were: Isaac “Ike” Herbert (1873), Daniel Webster (1877), Robert Lee (1883), and Stanley Eugene (1885); and their four surviving daughters were: Hattie (1880), Fannie (1888), Sara (1890), and Gladys (1893).[7] Kempner’s family was a source of pride and joy to him, and he strove to provide for his growing family in Galveston.

Early Years and Early Business

Harris Kempner’s early years in Texas, from just before the Civil War until 1871, were formational. This was the time when Kempner started his own business, began to accumulate wealth, and made important social and business connections in Texas and the South more broadly. He must have made, in his mind if not on paper, a business plan or strategy during this time. None survives today; we cannot know with certainty what Kempner’s business goals were, and few details of his life as a peddler in antebellum East Texas survive. What is clear is that his identity as an entrepreneur was solidified during this early period.

Upon Kempner’s arrival in Texas, he went to the town of Cold Springs (now Coldspring). The region’s economy relied heavily on cotton production and lumber harvested from the famous East Texas pines. He opened a store, apparently on credit, and hired a youth to tend it while he began peddling in the countryside. Peddling was a typical occupation for Jewish immigrants, and one in which many had engaged in Europe.[8] By roving from neighbor to neighbor on foot and later with a wagon, Kempner learned the particular goods the populace of eastern Texas needed and wanted most. Kempner adapted his stock and expanded his business outward, including more and more people on his rounds. He started with corsets and fabrics and, eventually with a wagon, expanded his goods to include medications, clothing and shoes, kitchen wares, and alcohol.[9] As he met with planters and farmers in the area, he learned that most needed access to credit.[10] Banks were sparse in the area, and worse, most were unwilling to gamble on the uncertain success of small agricultural ventures. Without access to credit, small planters were almost certain to fail. Farming and planting in southeastern Texas could be risky; rains were unpredictable and years of severe drought could be followed swiftly by years of deluge – sometimes both in the same season. Banner crop years were few and far between for growers of cotton and sugar, the two staple crops in coastal Texas. Loans were essential to help planters get past poor crop seasons and, in years of abundance, could be paid back with interest. Kempner recognized this reality and soon became a reliable source of credit to his neighbors.[11] 

When the American Civil War began, Kempner, who had left his home in Europe to avoid military conscription, volunteered for the Confederate Army. He joined a cavalry unit and, by all accounts, fought valiantly.[12] He was severely injured in battle and was discharged for his brave efforts. His voluntary service can be understood as an act of assimilation; the issues of the war were relatively new to Kempner, who had arrived in the United States roughly a decade before the conflict broke out. Further, Kempner did not own slaves and, as his family recalled, was personally adverse to the institution.[13] His neighbors and customers likely did own slaves and most certainly did have strong opinions on the political, economic, and social implications surrounding the war. By volunteering to fight, Kempner demonstrated solidarity with his fellow Texans.[14] 

Following the war, he returned to Cold Springs. While the war destroyed businesses and entrepreneurial ventures in much of the South, Harris Kempner’s mercantile enterprise continued to thrive. In the early 1870s, he decided to make the move approximately 100 miles south to the prospering city of Galveston, which was developing rapidly on Galveston Island, two miles off the Texas mainland in the Gulf of Mexico. Galveston was the largest port west of the Mississippi River and the main port for places as far away as Denver, Colorado. The city of Galveston became an important point of export for cotton and was called the “Wall Street of the South.”[15]   

Galveston Firms of Marx & Kempner and H. Kempner

Kempner’s move to Galveston in 1871 and his marriage to Eliza Seinsheimer the following year signaled the end of his formative period as an immigrant peddler. Kempner entered a well-developed social world in Galveston, as well as a complex and fast-paced business sector. In Galveston, Kempner found fertile ground for his entrepreneurial activities.

Kempner began a business partnership with Marx Marx in 1872.[16] The partnership centered on a wholesale grocery and liquor importing business. Marx, a Prussian-Jewish immigrant and experienced entrepreneur himself, had sought his fortune in Central America and the California gold-rush. He had also worked in the British Columbia fur trade, in Nevada silver mining, and had opened wholesale grocery enterprises in Louisiana, Montana, and Utah.[17] Marx and Kempner held similar attitudes towards business and both had previously made positive reputations for themselves in their thriving ventures. Marx’s affiliation with another prominent Jew in Galveston, Sampson Heidenheimer, had recently ended, so Marx welcomed Kempner and his capital.[18] Within two months the men built a storefront for their goods in Galveston’s central business district. Marx and Kempner could “call up $100,000 worth of credit at almost any time because they ‘[were] regarded as good business men.’”[19] In late 1873, a Dun reporter wrote that the firm of Marx and Kempner had stock on hand that was worth more than $120,000, with a storehouse containing a further $40,000 in goods, and each of the partners’ homes were valued at roughly $20,000.[20]

The business rhythm of Marx and Kempner was set by the annual cotton crop.[21] As a descendent of Kempner recalled, “‘Marx and Kempner sold goods on credit to the wholesalers and big retailers throughout Texas and ultimately the farmers and they [the inland wholesalers and retailers] paid when the [cotton] crops came in.’”[22] By 1883, the partnership had expanded into the cotton trade while maintaining the grocery wholesaling business. Over time, Kempner grew eager to become more involved with cotton while Marx preferred grocery wholesaling. This divergence of business strategies was Harris Kempner’s prime reason for his buyout of Marx’s share of the company in 1886, which terminated their partnership.[23] There was undoubtedly a part of Kempner that wished to benefit from the profits of the cotton trade without a business partner.

Kempner’s solo firm, H. Kempner, focused on cotton factoring, a business model in which the firm represented growers and their cotton crops.[24] Factors worked as agents for the grower, and tried to make lucrative deals on the growers’ behalf with spinners, often located in Europe. Factors typically took a commission of 2.5 to 5 percent for their services. Kempner maintained the grocery wholesale business established by Marx and Kempner, although his success in cotton factoring was obvious: he confided in 1888 to his friend Charles Fry, president of the Bank of New York and a fellow Confederate veteran, that since he had made his decision to buy out Marx just two years prior, he had earned “‘clear of office and private expenses $160,000.’”[25]

In addition to earning commissions on cotton deals, Kempner’s firm acted as a private bank for cotton growers in the area. Growers and spinners alike sought loans from him as advances on future sales, and thus interest on loans increased Kempner’s profits. H. Kempner had access to hard credit in New York, as well as abroad, and listed Lazard Frères in Paris, Crédit Suisse in Geneva, and Kleinworth in London, among others, as its private credit sources.[26]

Kempner was active in the Galveston Cotton Exchange, an association of buyers, sellers, and middlemen (factors) formed in 1871. His involvement in the cotton industry practically required an exchange membership. He mastered the complex and confusing trade practices and enjoyed the mediation services that the exchange offered between growers and cotton factors. This service was offered as an alternative to litigation, something Kempner avoided at all costs throughout his life.[27] His prominence and business success in the Galveston cotton trade prompted his presidency of the Galveston Cotton Exchange. To facilitate his cotton deals, he acquired memberships in local and regional cotton exchanges outside of Galveston, including places such as in Houston, New Orleans, and Memphis, and even in the national exchanges in Chicago and New York.[28]  

Banking and Other Business Activities

Although his cotton factoring firm was financially successful, Kempner appears to have been restless when it came to business. Without documentation to provide clarity to his business decisions, we can only chalk up his seemingly haphazard dealings to his entrepreneurial spirit. Kempner diversified his business strategy and invested heavily in schemes and companies outside of the cotton trade in the final decade of his life.

For example, Harris Kempner was directly involved in several banks. In 1885, C. G. Wells, the president of the Island City Savings Bank, committed suicide; this absence of direction led to undercapitalization. Kempner, with Leon Blum and Joseph Seinsheimer (Kempner’s brother-in-law), both successful Jewish businessmen in Galveston, subscribed to a $100,000 capital stock offering. The following year, Kempner became the bank’s president.[29] His success at the helm of the Island City Bank rested, at least in part, on his connection to Charles Fry, who had long been a lender and source of credit for Harris Kempner and his firms. Kempner continued to be involved in banking in the region. Building on his success with the Island City Bank, he went on to invest in at least ten banks across Texas, and sat on the board of directors for more than a dozen banks, a typical position at the time for a large shareholder.[30]

Kempner’s investments also included two railroad schemes. In the 1870s and 1880s, city leaders were attempting to make Galveston a terminal for the Galveston, Harrisburg, and San Antonio Railway Company. Later the Gulf, Colorado, and Santa Fe Railroad became prominent on the island (of which Kempner was a charter member and life-long director). The impetus for the rail projects was Charles Morgan and his Direct Navigation Company’s efforts to dredge Galveston Bay and create a narrow ship channel to docks within just six miles of Houston in the 1870s.[31] Kempner and other Galvestonians invested heavily in railroads in order to counter Houston’s commercial growth during this period. Through investments, Harris sought to bring businesses and profits to the island. By ensuring that Galveston remained a relevant southern port and a serious competitor to Houston’s own rapidly-developing port, Kempner safeguarded his own future financial success.

Kempner’s business interests grew more varied over the years. In the late 1870s, he and Marx purchased Galveston’s Tremont Hotel. At the time, it was Texas’ largest and grandest hotel, a nod to the great hotels of New York City and Europe. The partners hired a “hotel man” to manage the venue.[32] Kempner invested substantially in other local businesses, such as the Galveston Shoe and Hat Company, the Island City Manufacturing Company (wholesale clothing), a cotton compress plant, and furniture manufacturing on the mainland using prison labor.[33] Harris Kempner was also an original incorporator of the Galveston Steamship and Lighter Company in 1881, with fellow Jewish businessman Leon Blum.[34]

Kempner invested heavily in Texas real estate as well. As his son Ike later wrote, “Father had great faith in Texas and in Texas lands. He came from the agricultural section of Poland and knew land was treasured there, but where those [of] his religious and social status could not (were not permitted to) acquire it. He had great esteem for his right in this country to acquire land; he had fine judgment to select land and a visible pride of possessing what land he could pay for. He would not buy on credit.”[35] Harris Kempner avoided urban properties, however; “he was averse to investing in city properties generally in Texas; he believed taxes for municipal improvements would absorb much of the profit from increased values.”[36] Kempner profited handsomely, though, when he sold the Kempner Building for $26,000 in March 1890.[37] He owned several ranches in Texas, and would often take his family to them on “working vacations.”[38] Because he did not reside at his ranches, and given his attention to detail where his business ventures were concerned, Harris Kempner’s letter to Nathan Bloom (his ranch manager) at a ranch in Mexia, Texas, (south of Dallas) is revealing.[39] The letter, dated December 1887, started with a reprimand of Bloom for not having written to Kempner in some time, and then launched into a barrage of ranch-associated questions: how is the grass; are the cattle in good condition to go into the winter; how much hay have you; how many calves were birthed; how much cotton has been ginned there; where is the cotton seed; are the cattle generally healthy; is there plenty of grass? He ended the letter by expressing the hope that Limestone County had received enough rain during the past season.[40]

Social Status and Civic Activities

The first house Kempner bought after his marriage to Eliza Seinsheimer was impressive. It covered seven city lots and was sizable in part because it had to accommodate Kempner’s large family, other relatives, and the servants who resided there. When this house met with disaster in the 1885 Galveston fire, the family moved into the home reserved for the president of the Island City Savings Bank, then under Harris’s control. This house had many porches for enjoying Gulf breezes and a prominent tower. The Kempners could afford a large domestic staff, enjoying the service of maids, cooks, a coachman-butler, and a governess for the children.[41] 

Harris Kempner acquired social status that was reserved for only the most affluent. Besides attending parties with the elite families of Galveston, Harris was a member of the Artillery, Harmony, and Garden (Garten Verein) clubs.[42] There were also important social events that the Kempners hosted or attended, such as the increasingly lavish Mardi Gras Balls, held at his Tremont Hotel, and the Jewish equivalent, the annual Purim Ball, which was attended by Jews and non-Jews alike. The Kempners hosted and attended dinners and family outings with a social circle of prominent Galvestonians that included George Ball, Henry Rosenberg, Col. William L. Moody, George Sealy, Leon Blum, and his former partner Marx Marx.[43] At his death in 1894, Harris Kempner had accumulated a personal wealth of more than $1.4 million, which is over $37.8 million at current value.[44]

Religion and Personality

The Jewish faith was extremely important to Harris Kempner throughout his life. His religion also informed his desire to pursue charitable causes. He valued education, and went to great lengths to ensure that his sons were given thorough and well-rounded instruction, not just while in classrooms, but also in his offices and while abroad in Europe. His religion kept him connected to his family, a portion of which remained behind in the German lands and Poland.

Kempner’s personal religious beliefs in his later life were probably informed by two sources. First, his upbringing as an Ashkenazic Jew focused heavily on religion, Yiddishkeit culture, and his grandfather, a rabbi, likely played a large role in teaching him the Old Testament and the Talmud.[45] Secondly, his marriage to Eliza Seinsheimer, from a wealthy Bavarian-Jewish family from Cincinnati, Ohio, may have drawn him towards Reform Judaism. Ashkenazic Jews typically were attracted to Reform Judaism once in the United States because the religion allowed them to participate in secular business and social activities, which were important to immigrants and their efforts to become Americans. Moreover, the Reform movement originated in Cincinnati, with Rabbi Isaac Mayer Wise in the mid-nineteenth century. Although it is not clear if the Seinsheimer family was influenced by Wise, there can be no doubt that they had heard of him and knew about his reformist religious views. Reform Judaism fit well with Kempner’s own social and business life, and strengthened his belief in social justice and charity. By the mid-1880s, he and his family adhered to the Reform approach to rituals.[46]

From his earliest days on Galveston Island, Kempner supported and participated in Temple B’nai Israel. For nearly two decades, there was no temple on the island; when it formed in 1870, it was the first in Texas.[47] Galveston was, overall, a temperate society for Jews, with little overt anti-Jewish sentiment. The city established a consecrated Jewish cemetery in 1852, and the next year the city elected a Jewish mayor, Michael Seeligson. By 1868 the island was home to more than one hundred Jewish individuals. As historian Harold Hyman pointed out, few “5 o’clock curtains” separated prominent men such as Kempner and Marx from their Gentile counterparts. The residents of Galveston belonged to several religions and denominations, and families interacted without caution.[48] Though Harris was firm in his religious convictions as a practicing Jew, he did not begrudge others their own religious convictions. In fact, when charity was required by other religious institutions, Harris often offered support. Harris met these demands because he appreciated that his own religious inclinations had not been stifled in his adoptive home, and “no discrimination had been practiced against him because of his Jewish faith.”[49] Whereas Harris’s parents and grandparents had practiced their faith in secret in Russian Poland, Jews in Galveston did not have to meet “underground.” 

Harris Kempner’s Jewish faith can be cited as the source of his belief in charity. Ike, his oldest son, wrote in a family memoir that his father repeatedly quoted that in the Talmud “charity” was synonymous with “justice.”[50] Harris was encouraged in this thought by Galveston’s Jewish leader, Rabbi Henry M. Cohen. Cohen was supported financially by the Kempner family, most especially by Eliza after Harris’s death, and throughout Ike’s tenure as family patriarch. Cohen was an advocate of social justice and helped to implant this notion in Harris. The tenets of social justice melded well with Kempner’s passionate belief that he had a duty – as a Jew and a wealthy member of society, perhaps even as a human – to ameliorate poverty and illness by giving to the deserving poor and victims of disasters.[51] Following the fire that swept Galveston’s central business district and residential neighborhoods in November 1885, Kempner and Marx opened their hotel to the many families who were left homeless due to the catastrophe.[52] Kempner regularly supported Galveston’s orphanages, public and parochial schools, the John Sealy Hospital for the “indigent,” and a refuge for distressed women and victims of epidemics or natural disasters. His donations to local charities did not serve one particular race or creed, and were usually offered quietly.[53] For this reason, many of his contributions are unknown.

In addition to his belief in charity, Harris Kempner valued both formal and technical (trade) education highly. Perhaps because he was not given a formal education, but rather only informal religious studies and evening English-language classes, Kempner sought an education from the best schools and universities in the United States for his children. Ike was sent to board at Bellevue High School in Virginia, considered a pipeline into a southern “Ivy league” of colleges. Harris, eager to be sure his son was receiving the best education, wrote the headmaster: “I note that [Ike’s] course of instruction includes only the following, viz: Latin, German, mathematics, orthography, and Bible lessons. Does he not study Geography, History, Rhetoric, or Composition, etc? Above all things I want him to have a good substantial foundation, plenty of useful knowledge, and be well prepared and fitted for the practical duties of life.”[54] Harris wrote that he was sure the headmaster could “appreciate a father’s interest and anxiety and advise [him] fully about [his] son.”[55] In anticipation of Ike’s twenty-first birthday and graduation from Washington and Lee University in Lexington, Virginia, Harris wrote to him, “Not only in years, but in education you are at the threshold of man’s estate. You have our hopes and prayers that you may be a useful man always honorable and distinguished in your day and generation.”[56] Harris also wrote that Ike was to travel to Europe and explore the height of Western culture over a period of two years. There he would meet his paternal grandfather and aunts in the German and Russian-Polish lands.[57] Ike then was expected to return home, as was typical for sons of successful businessmen, and begin working beside his father.

Harris Kempner made his own duty to family clear in the amount of time and energy he spent arranging for their comfort, education, and future. His children and immediate family had all they needed and wanted. Other relatives outside the United States sometimes received Harris’s support as well. One particular nephew, Isaac “Ike” Markowitz, a relative from his wife’s family, was particularly careless in his business efforts. Writing to Markowitz in January 1884, Harris advised him against entering into a proposed business venture due to his severe lack of capital. Harris admonished him, noting “you wrote explaining why your personal expenses were so much and you stated that if you had lived in Cold Springs your expenses would be less – allow me to state that the Principal of a man living within his income is good regardless wherever he may live even in Paris or London. No man can sustain himself by spending more than he makes. Now is your time to work and accumulate and spend your money liberally after you make it.”[58] When Markowitz signed a loan document from a bank for $500 and signed his uncle’s name as surety, then failed to pay, Harris initially refused to cover the loan. He told his nephew that “this is a free country and you are doing as you please. So far as I am concerned, I have done all I could to help you out of the present condition you are in. I have a wife, 6 children, and my parents, 3 sisters with their children to care for and many others which I do not care to enumerate. This is enough.”[59] Despite his harsh letter, Harris eventually covered the $500 note.

Harris maintained his familial connections in Germany and Poland, and he often sent money and packages across the Atlantic to relatives.[60] Harris was peppered with requests from distant relatives and other claiming to be related to him for jobs and money. He did what he could for relatives he knew and those who were in real need, but did not hesitate to refuse requests from others. As he wrote in one letter in 1885, “I owe a duty to do all in my power for my parents, sisters & their children - beyond this I do not feel it my duty. I have my own family to provide for. I live here and this community is entitled to my charity - we have plenty of poor people here. I am forced to draw the line of duty to my relations in Europe - I get from 5 to 10 letters every week and every one of these letters containing the same pleading. I am doing all that I ought to do and feel able to do.”[61] Harris enumerated his values within the letter: family came first, and his community came a close second.

Kempner took advantage of all the opportunities the United States allowed him, which were considerably more in number than his native Poland might have granted a Jew. Harris wrote in 1893: “‘I came to America to be an American, and I tried to adapt my ways to American ways. I was young, and the right to participate in all phases of American life - political, social, economic, even military – was as wonderful to me as the right of a people to govern themselves as they thought best. I knew what it was like not to have that right, either individually or collectively.’”[62] His acculturation and his understanding of the capitalist system were extremely important to the continued prominence of his sons and family following his death. Harris Kempner’s desire to become an “American,” and his skill at balancing his old customs with the culture of the United States, allowed his family to move easily within American and southern society during his lifetime and after his death.

Harris Kempner died just after 9 o’clock on April 13, 1894, surrounded by his family. The cause was Bright’s disease, a severe kidney disease for which there was no treatment.[63] His sons, Ike and Dan, were told to come home from school in Virginia “at once” by a telegram from their mother on April 6.[64] A subsequent telegram instructed them to pick up apples for their father because he had asked for some but none were available in Galveston. Importantly, both sons made it home several hours before he passed. After Kempner’s death, one of his friends wrote to the family, “The heirs of Harris Kempner do not have to build a reputation, but they have definitely a reputation to sustain.”[65]

It is tempting to discuss Harris Kempner’s life and career as unique among immigrants, and to celebrate the man and his legacy. He managed to find the success that every immigrant entrepreneur from the German lands and so many other countries attempted to achieve in the United States. He walked the fine line between acculturation and maintaining his ethnic and religious background. Among other successful immigrants and successful businessmen of his time, Kempner was absolutely typical in so many respects. Uniqueness and typicality are relative and subjective terms. Perhaps the best description of Harris Kempner’s life was given by his son Ike some sixty years later. Ike wrote that his father’s American experience “is in retrospect a saga of personal achievement, a demonstration of the potentialities and rewards of individual initiative, intellectual honesty, and free enterprise.”[66] 

In many ways, Ike Kempner continued this saga in his own leadership of the Kempner business ventures after his father’s death. His father had established largely successful businesses in Galveston, and Ike was placed in a position to not only maintain their success, but to expand and re-envision them over the course of his own life. The foundation which Harris Kempner created for his son was a financially comfortable launching pad for Ike Kempner’s own entrepreneurial spirit. The histories of Ike and his father are inseparable, two halves that complete a story. One without the other presents a truncated understanding of each man’s experience as an entrepreneur.

A Second-Generation Immigrant Entrepreneur: Ike Kempner

Isaac H. Kempner, called “Ike” by family, friends, and business associates alike, was the eldest child of Harris and Eliza Kempner (née Seinsheimer). He was born on January 14, 1873, in Cincinnati, Ohio, his mother’s hometown, but came to live in Galveston soon after, and was the only Kempner child born off the island. [67] Throughout his life, Ike navigated the complex society in Galveston and on the Texas mainland, working alongside and employing immigrants. He kept in touch with his extended family in Europe and participated in cultural organizations and festivities in Galveston. As an American-born businessman, Ike sought to maintain his father’s immigrant-entrepreneurial legacy.

As was typical for sons of a prosperous businessman, Ike Kempner and his brothers were educated and trained in the Kempner businesses from an early age. Family vacations to Harris’s ranch, south of Dallas, were in effect working trips for father and sons.[68] As they grew older, Harris brought his sons along on business trips. Ike had a “ringside seat” in New York banks as his father handled transactions and meetings.[69] The same was true in the Galveston Cotton Exchange. Summer vacations were spent in the H. Kempner cotton factoring offices, with Ike learning his father’s trade first-hand. In later years Ike recalled: “From the time I was thirteen I spent almost every summer in his office in a sort of apprenticeship to his business policies and practices, absorbing the objectives of his study and hopes.”[70] 

Harris Kempner enrolled Ike in Saint Mary’s, a Catholic preparatory school in Galveston, which was the most prestigious school on the island.[71] When Ike graduated from this institution, his father sent him to board at Bellevue High School in Virginia. He graduated in 1889, and immediately entered Washington and Lee University in Lexington, Virginia, where he studied law. It was anticipated that after a grand European tour, Ike would begin working beside his father. Harris Kempner died before Ike could finish his schooling at Washington and Lee, however, and Ike returned to Galveston to fill his father’s position without a degree in hand.

Not quite a decade later, Ike married Henrietta “Hennie” Blum, on December 17, 1902. Ike and Hennie, who was born on Galveston Island, had been childhood acquaintances.[72] Soon after their marriage, a son, Harris, was born in October 1903; another son, born in April 1905, lived only a few days; and I.H. Kempner Jr. was born in 1906; the first daughter, Cecile was born in 1908; Lyda, in 1911; and Leonora in 1913. In similar fashion to his own upbringing, Ike involved his sons in the Kempner family businesses, shaping them to be the next generation of business leaders.

H. Kempner and Cotton-related Business Activities

With the death of Ike’s father in April 1894, Ike, as the eldest son, was left in charge of not just the Kempner family, but the Kempner business activities. Ike immediately called for the strengthening of his father’s firm, H. Kempner, in the cotton industry. In fact, he envisioned a new direction for H. Kempner: Ike hoped to shift the operations from cotton factoring to merchant services. As a cotton factor, which H. Kempner had been under Harris’s leadership, the firm represented growers and their cotton crops. Cotton factors negotiated deals between spinners and growers, and hoped to make lucrative deals on the growers’ behalf, from which the factor would take a commission. As a cotton merchant, a firm such as H. Kempner would purchase the cotton outright from the grower, store it in a company warehouse temporarily, and then resell the cotton to spinners at a profit. The risk in this business stemmed from a volatile market: cotton values fluctuated violently from month to month, and week to week.[73] In the time between when H. Kempner purchased a load of cotton bales from growers and the time those bales were sold to spinners, the bales could represent record profits or record losses for the middleman firm. In 1919, several German spinners refused to abide by their contracts, forcing H. Kempner to sue them, a process which dragged out for over a decade. Ultimately, the spinners’ litigation cost H. Kempner more than $1 million in bad debts and law suits.[74]

H. Kempner took a major step towards becoming a cotton merchant firm when the company acquired a substantial cotton press in Galveston in 1898. Ike named it “Merchants and Planters Compress and Warehouse Company” (called “M&P” for short), and it was a manifestation of his goal of creating a vertically integrated company. Compresses served multiple purposes for a cotton merchant. The machinery physically compressed and baled the raw cotton, and compresses typically included warehouse facilities for the storage of baled cotton. Over the next several years, with Ike’s brother Dan at the helm, M&P modernized its facility. By 1917, M&P had two compressors that could compress 200 bales per hour, and a fireproof warehouse capable of storing 100,000 compressed bales.[75] The only time the company showed a loss was during the Great Depression of the 1930s. M&P helped Galveston outlast other cotton exporting coastal cities at a time when the compressing industry moved into the Texas interior. A downside of the success of M&P and others like it, such as Moody Cotton Compress and Warehouse Co., was that those firms kept Galveston nearly a one-industry city. Other industries, such as wool, wheat, and hides moved inland, along with their skilled workers and specialized facilities, to railroad shipping centers. Without other non-cotton, labor-intensive industries, Galveston continued to be a community dependent on cotton. This created a vicious cycle, as it reinforced the dominance of the cotton trade in Galveston yet discouraged other industries from developing there.

Ike was elected as a director of the Galveston Cotton Exchange in 1895, at the age of twenty-two.[76] After his directorship term ended in 1902, he alternated between positions as vice president, president, and director for the next four decades.[77] Galveston’s success as a cotton exporting port continued with Ike’s leadership of the Cotton Exchange. For example, in 1912 Galveston shipped more cotton from its port than New Orleans, and only New York surpassed Galveston in that year.[78] Ike’s own cotton firm continued to thrive as well. In 1945, H. Kempner capital and surplus totaled almost $5 million; by the end of 1961, it was over $24.5 million.[79]

Imperial Sugar and Sugar Land, Texas

The largest business venture that Ike Kempner and his brothers undertook, and for which they are likely best known, was the founding of the Imperial Sugar Company, and the planning and construction of Sugar Land, Texas, a company town.[80] Ike invested in several small sugarcane farms in the area around the year 1900; soon afterward, Ike’s brothers learned that two other sugar plantations, totaling twenty-five thousand acres, were in financial distress. Both plantations had lease agreements with a local prison for some 600-convict laborers in total.[81] In late 1904, a man named William T. Eldridge approached Ike about forming a partnership in order to take control of the plantations, and Ike accepted the offer in 1905.[82] 

The Kempners provided the financing, and Eldridge volunteered to move to Sugar Land and manage the day-to-day operations of the sugar plantations and their respective refineries and mills.[83] By 1908 the acquisitions were complete and the disparate plantations and mills were reincorporated as one holding company, Imperial Sugar.[84] Though Eldridge was often called a “ruthless” businessman, he was extremely resourceful and knew how to run an efficient company.[85] By 1920, the Imperial Sugar Company had made $2 million. The Sugar Land Railroad, which Eldridge purchased, could handle 8,000 carloads of sugar per year. In 1924, the company proposed expanding from one million pounds of processed sugar per day to 1.5 million pounds, and by 1950 the company processed 2.8 million pounds of sugar daily.[86]  Imperial Sugar built a warehouse capable of storing 60 million pounds of raw sugar, which covered some five acres of land, at the wharves in Galveston. The company began to import raw sugar because its production had outgrown the local sugar crop. A full trainload of sugar travelled from Galveston to Sugar Land daily for processing.[87]

In 1926 the company began to produce pre-weighed cotton bags of sugar in two, five, ten, twenty-five, fifty, and 100 pound increments, and thus added retail consumers to its pool of customers (See Image 2.3).[88] Company workers unionized in 1938 without strong resentment from the Kempners.[89] The easy unionization process allowed productivity to remain high and continue without interruption. Few Imperial employees were ever laid off or discharged from employment; rather, if a certain department streamlined by eliminating positions, new jobs were found for those workers elsewhere in the company or in the company town until another refinery job opened up.[90] Even during the Great Depression, no employees were laid off; instead, management cut hours back to a minimum and supplemented the lost work with WPA projects, such as brush cutting.[91]

Eldridge and Kempner formed another holding company called Sugarland Industries, also known as “The Industries,” in 1919. The Industries covered a complex conglomeration of service, agricultural, and industrial entities related to Imperial Sugar and the Sugar Land company town.[92] It was a “catch-all company” which allowed Eldridge and Kempner to control all of the businesses that developed in the company town, such as the Imperial State Bank in 1907, a feed mill, cotton gin, telephone company, paper mill, and a building for the Sealy Mattress Company, among many others.[93] By the end of 1929, the combined value of The Industries and the Imperial Sugar Company exceeded $12.5 million.[94]

Prior to Kempner’s interest in sugar, the settlement at what would become Sugar Land had been known as the “Hell-hole of the Brazos.” Immediately after the Kempner-Eldridge partnership formed, tent cities and rotten scrap-wood structures were razed. To attract “dependable, family type workers,” Kempner and Eldridge financed and constructed the company town and all of its facilities, with the goal of maintaining a permanent workforce in Sugar Land.[95] For white workers, the tents were replaced with wood-frame, two- or three-bedroom buildings with indoor baths, metered water, electricity and gas connections, and septic tanks, though minority homes lacked these luxuries and were located in a separate section of the town. There were no heating or cooling systems in any of the homes, but the roofs were made of metal and the walls were made of lumber – the buildings were said to have been “made to last.”[96] The town itself was nearly self-sufficient: in addition to the businesses operated by The Industries, the town featured the Imperial Mercantile Company, a lumber yard with a tool store, meat and vegetable markets, a bakery, restaurant, barbershop, shoe repair shop, soda shop, drugstore, a small hotel, a doctor’s office, and two rooming houses. In 1918 the town’s main school was completed, as well as two smaller institutions, one for black students and the other for Hispanic students, and a modern hospital building was constructed in 1922.[97] Imperial Sugar and Sugar Land are examples of Ike Kempner’s entrepreneurial vision. Kempner created a town out of nothing and combined several small sugar plantations into a streamlined sugar refining enterprise. Both stand as testaments to his business and personal values. They also were among the first examples of Ike’s strategy of business diversification.

Banking, Insurance, and Other Business Ventures

Kempner founded new companies in the banking and insurance fields, and acquired others when opportunities presented themselves. All were added to the H. Kempner umbrella. We cannot know his exact motives for the diversification strategy, but the banking and insurance trades typically offered low-risk means to make dependable profits.

Ike Kempner took his first step into the banking world in 1902 when H. Kempner purchased over three-quarters of the Island City Saving Bank’s outstanding stock. The bank was renamed the Texas Bank & Trust Company, and its capital quickly doubled.[98] Ike’s brother Lee became the cashier of the bank in 1904.[99] After 1905, the firm of H. Kempner organized several banks in small communities, and Ike encouraged local leaders to purchase stock and take control of them. State banks were chartered in ten regional communities and H. Kempner was bought out by local interests in the majority of the locations.[100] Additionally, the Texas Bank & Loan Company was converted under a new charter in 1924 to the U.S. National Bank of Galveston. In 1923, H. Kempner financed a new high-rise office building in downtown Galveston for the business. The building was a modern skyscraper, and at twelve stories it was Galveston’s tallest at the time. Ike, Dan, and Lee Kempner all had offices there.[101]

Besides diversifying into banking, Ike directed H. Kempner’s involvement in insurance ventures. For instance, in 1910 the company purchased a San Antonio insurance company, and relocated it to Galveston. It was founded there as a “strictly industrial” insurance firm, renamed the Texas Prudential Life Insurance Company. Ike placed the company under the control of his brother, Stanley, and it flourished well into the 1960s.[102] 

One last example of diversification hints at Ike Kempner’s civic ventures, as well as those of his family’s business. Wishing to attract wealthy tourists to Galveston Island, Ike invested H. Kempner money and his own time and energy into planning, funding, and building the Hotel Galvez, a luxury hotel, directly across from the beach. Ike and his brothers “inaugurated efforts” to build this modern, premier hotel in 1909, and it opened in 1911. Ike was then elected president of the Galveston Hotel Company, the proprietor of the Hotel Galvez.[103] 

The Galvez was not Kempner’s only venture into the tourism industry on behalf of his home city. In the 1920s, he envisioned a “Great Lakes to Gulf” highway system that could funnel tourists north-to-south, from Winnipeg, Canada, to Galveston on the Gulf of Mexico. The idea had beneficial implications for trade, with predictions of an increase in exports to the Caribbean, Latin America, and Europe by providing a primary route through central North America. Ike became the chairman of a city commissioners’ advisory advertising committee in 1926, and the committee undertook a small feasibility study of the idea. Ike offered to invest $35,000 from H. Kempner over the next five years, with the idea that a few other prominent businessmen in Galveston would match his contributions.[104] The goal was to fundraise between $70,000 and $100,000 to cover advertising costs. This type of local booster effort was typical at the time, occurring in communities across the United States. Kempner’s contributions were not matched adequately, though, and the city commissioners did not fully support or fund the idea, so the plan faded by the late 1930s.[105]

Political Career in Galveston

In 1899, Ike Kempner entered politics when he served as the campaign manager for a Republican congressional candidate.[106] What motivated him to enter politics is not clear, although his advancement in Galveston politics after this humble start provides at least a partial answer. Kempner’s views were in line with the Progressive movement sweeping the country, and he envisioned a similar reform movement occurring in Galveston. By 1899, Galveston’s mayor and aldermen were perceived by many Galvestonians as corrupt politicians.[107] 

Kempner threw his hat in the ring at a dinner party his mother hosted in January 1899, noting that Galveston’s city finances, tax rates, and records were in a chaotic state.[108] Later that year, he was elected as the city treasurer, at twenty-seven years old.[109] Ike was swift in bringing about changes to the dynamics of city governance. He brought order to city bookkeeping and provided fodder for journalists, confirming fears that city offices were “major sources of bribes and graft for venal politicos and shoddy contractors.” Politics at this time in Unites States history were often intertwined with business, and businessmen often were political leaders, especially in local politics. With the aid of his H. Kempner banker connections in New York and Cincinnati, Ike Kempner negotiated new issues of city bonds that paid for street paving and sanitary projects. One banker in Cincinnati reported that the new city treasurer was “a good officer and a man who understands his business.”[110] 

On September 8, 1900, a deadly hurricane thundered ashore on Galveston Island. Its inhabitants were caught completely unprepared for the terrible destruction.[111] Perhaps Ike himself put it best: “Here stood on September 9, 1900, the day after the hurricane, in the wake of receding waves and diminished wind, a community where, within ten hours, one-half of its total taxable values had been physically erased, where 7,500 souls (one-fourth of its population of the previous morning) were found dead; where within a few weeks another one-fourth of its inhabitants left the city to seek some place of abode.”[112] First estimates from insurance officials reported over 3,600 residences, stores, and warehouses worth more than $5 million had completely disappeared. In addition, public buildings such as schools, hospitals, and churches were heavily damaged or gone, and floodwaters inundated Galveston’s electric and gas works.[113] Worse yet, the city government – the mayor and aldermen – completely shut down, it members perhaps too shocked by the devastation to continue performing their duties.

Following the storm, an organization called the Central Relief Committee was formed to manage recovery efforts. Ike Kempner served as the finance minister for the group, which was made up of other prominent Galveston businessmen. As he recalled, “Our municipal political situation was recognized to be, in hands of a mayor and alderman, incompetent to deal with the city’s problems and there was some suspicion that incompetency was accompanied to no little extent by dishonesty.”[114] In order to rectify this, Kempner and his political allies proposed replacing the mayor-aldermen plan of government with the commission form of governance: a city led by a mayor and four commissioners.[115] Ike and the others in the reform movement formed a political party called the City Club. While not explicitly Progressive, City Club party members were proud of the reforms they were bringing to Galveston, and used their party to “sell the public (and the state legislature) on the advantage of the commission form of government, then get its candidates appointed to office.”[116] Texas Governor Joseph D. Sayres appointed the mayor and two commissioners, while the remaining two commissioners were elected at large. Sayres appointed Ike as the commissioner of finance and revenue, a position echoing his pre-hurricane role as city treasurer.[117] One historian wrote that the hurricane presented “Kempner and his friends” the opportunity to lead a “bloodless coup” against the ineffectual Galveston city government and to decide what its replacement ought to be.[118]

With Galveston’s reformed charter finalized on April 18, 1901, Ike began his fifteen-year tenure as revenue commissioner. Galveston was under immediate threat of defaulting on its debt and could not pay its payroll and other bills. Ike and two others were authorized by the Board of Commissioners to go to New York City and negotiate a settlement with the bondholders who held Galveston’s bonded debt.[119] The settlement meant that no creditor of the city lost a penny of his principal, and was a strong factor in upholding Galveston’s municipal credit following the 1900 Hurricane.[120] 

During Kempner’s time on the city commission, Galveston undertook three major public works projects which changed the island forever. First, the city commissioners ordered a seawall to be built along the Gulf shore to break major waves and block storm surges from washing across the island. Money was needed to fund the project, and Kempner subscribed $50,000 to the seawall bonds, stipulating that eight other families do the same.[121] Starting in July 1902, a wall roughly three and a half miles in length and seventeen feet high, curved on the Gulf side to intercept waves, was constructed over the next two years.[122] Secondly, the commissioners also decided to raise the grade of the island some fifteen to seventeen feet to meet the height of the top of the new sea wall, and gently slope it over a two mile stretch to meet the bayside of the island. This project, truly a daunting task to imagine, was undertaken over the next five years, from roughly 1905 to 1910, by the City of Galveston.[123] Every structure on more than 500 city blocks was either torn down or jacked up to meet the height of the new ground level, some 2,150 buildings in total.[124] The third undertaking – a pet project for Kempner – was the erection of a new causeway bridge across the bay to the mainland. Opened in May 1912, the nearly eight-thousand-foot causeway permitted automobiles direct access to the island for the first time.[125]

During his sixteen years as a trusted city treasurer and city revenue commissioner, Ike received repeated requests to run for mayor of Galveston. He won the mayoral election in 1917, having refused to personally ask anyone to vote for him, and subsequently refused to accept the salary the position offered.[126] Despite his popularity as a wartime mayor during World War I, he was defeated in his bid for a second term in 1919, at which time he retired from city politics.[127]

Religion

Ike Kempner was a devout Jew, and was extremely active not only in Temple B’nai Israel, but on the regional and national levels of Jewish organizations as well. Prior to U.S. entry into World War I, he helped to promote donations to the Jewish War Relief Agency, to which Texans gave $500,000 in 1914.[128] During the war, President Wilson proclaimed a Jewish Relief Day in 1917, and Ike served as the Texas-Oklahoma treasurer for contributions to the effort.[129] He was elected as director in two national Jewish organizations in 1939: the American Jewish Committee and the United Jewish Appeal.[130] In February 1954, Ike was awarded, at the Southern Division of the Order of B’nai B’rith, the “B’nai B’rith Humanitarian Award” for all of his efforts.[131] 

Ike was a quiet yet active proponent of the Jewish immigration scheme called the “Galveston Movement.” The plan was a complex “immigration-acculturation-resettlement effort” that was developed by New York City Zionist writer Israel Zangwill and German-American immigrant banker Jacob Schiff, with an important role in Galveston played by Rabbi Henry Cohen.[132] In short, the movement called for “diverting immigration of European Jews from the more thickly Jewish populated areas tributary to New York, to what Mr. Schiff described as ‘the Great Hinterland of the United States.’”[133] As an active, religiously devout businessman, Kempner served as a model for Jewish immigrants arriving in Galveston. From July 1907 to September 1914, some ten thousand Jewish immigrants, the majority from Germany and Eastern Europe, came to the United States through the port at Galveston.[134] Ike participated in the movement by providing funding for the local programs and by placing immigrants in positions within the H. Kempner conglomerate. This was, though, one of the main criticisms of the Galveston Movement: immigrants were, as the critics saw it, “dumped” in Galveston and then took local jobs, such as at Kempner’s M&P Compress or at Imperial Sugar. The program’s original goal was for Jewish immigrants to spread throughout the American West.[135] Perhaps because of criticisms like this, Kempner chose to maintain a role that was behind the scenes, and he did not actively stump for the movement in Galveston or elsewhere in the United States.

Ike was a religiously tolerant individual. He boasted to dinner guests about his children and grandchildren’s mixture of religious creeds as an “exhibition of tolerance of faith differences in which increased practice would find merit.”[136] Yet, he wrote in the 1960s: “Regretfully, I have never been able, as my parents were, to impress my children much less my grandchildren with the pride and privilege they should have in being practicing Jews and Jewesses,” and further regretted that “‘not one of our grandchildren either celebrated his “bar Mitzvah” or was confirmed in the synagogue ritual.’”[137] Despite this, the Jewish faith played an important role in his life, and shaped his values, especially where his civic activities were concerned.

Civic Activities and Personal Status

Kempner was involved in non-religious charitable causes as well. He was elected in 1947 as a two-term chairman for the Galveston Community Chest. He raised $166,000 for local charities. In 1948, he was elected for the sixth time as the local chairman for the President’s Ball, held annually in Galveston, to raise money for the treatment of infantile paralysis.[138] 

The largest charitable action that Ike Kempner and his siblings undertook followed their mother’s death on September 26, 1947.[139] Ike and his brothers and sisters wanted to honor their parents and the charity work each had done, and thus created the Harris and Eliza Kempner Fund, in February 1950. One year later, the Fund gave a $100,000 donation to the Woman’s Home in Galveston, and $90,000 to build a new synagogue for Temple B’nai Israel’s congregation.[140] Over the next six decades, H. Kempner money, stocks, and real estate, as well as private donations by Kempner descendants, raised the total in the Fund to $42 million (as of 2010).[141] The Fund is still active in Galveston.

Ike and his family maintained a high social status in Galveston society. He was involved in several clubs and organizations. Like his father, Ike was active in the Artillery Club and especially the Artillery Club Balls from the late 1890s onward, for over twenty years. Similarly, he was a member in Galveston’s elite Harmony Club and Garten Verein.[142] Ike described it in his writings as a “mecca of social weekly journeys.”[143] Ike and his wife built a new house, which was finished in August 1906, located at 1502 Broadway (extant) and used it to host lavish dinners. The Kempner family began to live more conspicuously. The family enjoyed cotillions, balls, extravagant annual Mardi Gras festivals, sailboat regattas, and evening beach parties. During Prohibition, bootleggers supplied the Kempner household with alcohol for dinners and parties. Some family members opted for chauffeured cars.[144] In 1933, the Philadelphia Public Ledger identified Ike Kempner as a “Texas genius of Finance and Industrial Life,” calling him the “‘richest man in Texas, if not in the South. Certainly he is one of the ablest.’”[145]

The Kempner Legacy

The citizens of Galveston held a testimonial dinner for Ike Kempner on his eighty-eighth birthday in 1961. He had had extremely severe health complications in March 1955, which had almost resulted in his death. He recovered, though, and lived to ninety-four years of age. Kempner died quietly in Galveston on August 1, 1967.[146] 

Though Ike Kempner was often celebrated as an individual and an entrepreneur, there were those members of Galveston’s society who found fault with him and his actions. Some criticized Ike and the Kempner family’s prominence in, and influence over, Galveston society and politics. One historian wrote “‘the Sealys, Kempners and Moodys ran the Galveston economy, ruled society, and directed politics until after World War II. They reigned because the economy was stagnant and the population grew but slowly. There was no new blood, no one to rock the boat, and people of vitality went to Houston.’”[147] Another historian reprimanded Galveston’s wealthy families for their “overweaning [sic] pride of accomplishment and arrogant optimism,” and a journalist claimed that the Kempners, among others, held Galveston “‘within their grip, deliberately sought to keep it from expanding and competing with Houston. Today [Galveston is] a fly in amber—not decayed, but arrested.’”[148]

A second criticism of the Kempner family revolves around their practice of nepotism, awarding family and friends with special favors and advancements. One does not have to look very hard to find evidence of nepotism within the Kempner enterprises – all of Ike’s brothers were heavily involved in Kempner ventures, almost always in executive leadership positions: H. Kempner, the U.S. National Bank, and the Imperial Sugar Company, for example. Ike and his brothers trained their own children, nephews, and grandchildren from a young age for positions within the family business hierarchy, just as Harris had done for Ike and Dan.[149]

Lastly, some Galvestonians condemned Ike Kempner’s efforts while in political office to solve the city’s problems in the early 1900s as creating other “enduring woes.”[150] One example of this, with malignant side effects, was the advent and encouragement of automobile-based tourism in Galveston (aided by the new causeway, which Ike supported). In many ways this changed the fabric and atmosphere of the island. With the introduction of tourism came an increase in tourist trades, the introduction of organized crime and centers of vice such as casinos, and an increase in the transient population on the island who had no concern for Galveston’s local issues and needs.

In evidence of their prominence, the Kempner family name has been applied to a street (Twenty-Second Street is also known as Kempner Street) and to a park (purchased and given to the city by Ike’s brother, Stanley), both in Galveston. There is a Kempner High School in Sugar Land,[151] and in 1961, Ike’s sisters and remaining brother donated $100,000 from the Harris and Eliza Kempner Fund in Ike’s name to the University of Texas Medical Branch (UTMB), which was used to construct “The Kempner Research Center for Life Span Health” in Galveston.[152] The Kempner family continues to be active in the Galveston community – Lyda Ann Thomas, Ike’s granddaughter, was Galveston’s mayor from 2004-2010, and Harris L. “Shrub” Kempner Jr., Ike’s grandson, is a civic and business leader on the island.

Although he was not an immigrant as his father had been, Ike Kempner faced the difficult task of navigating Galveston’s social and business worlds. As a first-generation American, he was charged with maintaining and growing his father’s business ventures, as well as advancing his own entrepreneurial enterprises. The societal influence, business activities, and entrepreneurial vision of the Kempners spanned two generations in Galveston. One cannot understand Ike’s history without knowing that of his father, Harris Kempner; similarly, one cannot fully appreciate the entrepreneurialism and business savvy of Harris without knowing how his son, Ike, continued, grew, and re-envisioned his father’s entrepreneurial legacy in Galveston. All immigrants who came to the United States searched for opportunities for success. Not all immigrants found such prospects, however, and in this way, the Kempner family was exceptional. The opportunities that Harris Kempner identified, developed, and engaged in helped him to position his family as an influential force in Galveston. Ike ensured throughout his tenure that the family maintained a level of authority in Galveston through to the present day. Both men shaped the social, religious, and commercial fabric of their island home.

Notes

[1]  The surname “Kempner” is German in origin. From various letters, we know that Harris had relatives throughout Germany as well as Poland.

[2] For more information about the history of Poland, see: Mieczyslaw B. Biskupski, The History of Poland (Westport, CT: Greenwood Press, 2000), Chap. 3, especially pages 5-6, and R. F. Leslie, Reform and Insurrection in Russian Poland 1856-1865 (London: The University of London, Athlone Press, 1963).

[3] Biographer Harold Hyman mentions several times that Kempner came from a German-speaking region in Russian Poland. Harold M. Hyman, Oleander Odyssey: The Kempners of Galveston, Texas, 1854-1980s (College Station: Texas A&M University Press, 1990), 4-5; M.F. Seldin, R. Shigeta, P. Villoslada, C. Selmi, J. Tuomilehto, et al, “European Population Substructure: Clustering of Northern and Southern Populations,” in  PLoS Genet  2, 9 (2006). 

[4] Given the lack of source evidence, we cannot be completely certain that Kempner identified most closely with his Ashkenazic background. Given the extent of the Ashkenazi culture in his home region, and given his religious attitudes throughout the rest of his life, we can make an educated supposition that he did identify with the Ashkenazic culture.

[5] In 1827, Tsar Nicholas I decreed that Jews no longer had to pay double taxation in order to avoid military service, but would be eligible as forced recruits in the Imperial Russian military. Harris quite possibly left to avoid fighting for the Russian Empire in the Crimean War, which started in 1853.

[6] Hyman, Odyssey, 3. Some accounts say the total Kempner carried might have been as much as $100; MeasuringWorth,  $1.50 in 1854 would correspond to a little more than $41.50 in 2011 dollars.

[7] Hyman, Odyssey, 40.

[8] For more information on immigrant peddlers, see Hasia Diner’s entry in Vol. III, “German Jews and Peddling in America.” 

[9] Hyman, Odyssey, 8.

[10] In this area of the country, unlike the Deep South, the words planter and farmer were often synonymous for men who worked the land but did not enjoy the luxury of a plantation lifestyle.

[11] Hyman, Odyssey, 10-11.

[12] Harris reportedly had two horses shot out from under him during battle. Gary P. Whitfield, “Confederate Stories: The Sanger Brothers of Weatherford, Dallas, and Waco,” in Lone Stars of David: The Jews of Texas, ed. Hollace Ava Weiner and Kenneth D. Roseman (Waltham, Massachusetts: Brandeis University Press, 2007), 34.

[13] I. H. Kempner, “H. Kempner: The First One Hundred Years,” Texas Gulf Coast Historical Association Publications 2, no. 1 (March, 1958), 4.

[14] Kempner also created connections with other Southern businessmen. One example is Charles Fry, who eventually became the president of the Bank of New York.

[15] For further reading on Galveston’s history, see: Gary Cartwright, Galveston: A History of the Island (New York: Atheneum, 1991); David G. McComb, Galveston: A History (Austin, Texas: University of Texas Press, 1986); Susan Wiley Hardwick, Mythic Galveston: Reinventing America’s Third Coast (Baltimore: The Johns Hopkins University Press, 2002); Early Wesley Fornell, The Galveston Era: The Texas Crescent on the Eve of Secession (Austin, Texas: University of Texas Press, 1961); Charles W. Hayes, Galveston: History of the Island and the City. 2 vols. (1879; repr., Austin, Texas: Jenkins Garrett Press, 1974).

[16] The rumor about Marx’s double name was that his mother “liked the name so much she named him twice.” It is less frequently written as “Marks Marx.” Ibid., 22-3.

[17] Ibid., 23. Marx was born in Prussia in 1837.

[18] The firm of Marx & Heidenheimer was reported by R. G. Dun & Company in 1869 as having “good credit with some of the leading Jew houses” in the region. Hyman, Odyssey, 24.

[19] Ibid.,26. $120,000 in 1873 was worth approximately $2.33 million in 2011; $40,000 is worth approximately $776,000 in 2011; and their homes valued at $20,000 was equivalent to more than $388,000 in 2011! MeasuringWorth.

[20] Hyman, Odyssey, 27. R. G. Dun & Company formed in 1841 and issued credit reports on companies across the United States; in 1933, the company merged with John M. Bradstreet, forming today’s Dun & Bradstreet, Inc., which keeps statistics on over 220 million companies worldwide.

[21] I have chosen to italicize the firms of “H. Kempner” and “Marx and Kempner” for clarity. The italics are not original to the companies, but are mine.

[22] Hyman, Odyssey, 28.

[23] Ibid., 36-8.

[24] Ibid.,52. An explanation of the complex system of cotton factoring is on pages 52-54. For further reading on the cotton industry in the United States, see: Mansel G. Blackford and K. Austin Kerr, Business Enterprise in American History (Boston: Houghton-Mifflin, 1986) and Joseph C. Pusateri, A History of American Business (Glenwood, Illinois: Davidson, 1988).

[25] Hyman, Odyssey, 38; James A. Tinsley, “Select Letters of Harris Kempner,” Texas Gulf Coast Historical Association Publications 2, no. 1 (February, 1957), 38. This amount was equivalent to approximately $3.90 million in 2011, MeasuringWorth.

[26] Hyman, Odyssey, 63.

[27] Ibid., 53-6.

[28] Ibid., 60.

[29] Hyman, Odyssey, 48; I. H. Kempner, Recalled Recollections (Dallas: The Egan Company, 1961), 8.

[30] Hyman, Odyssey, 36, 49. These banks were located in Athens, Ballinger, Belton, Gatesville, Groesbeck, Hamilton, Marble Falls, Mexia, Temple, Velasco, and Wichita Falls. Kempner also became the president of the Texas Land and Loan Company, in 1890. Ibid., 63.

[31] Ibid., 43.

[32] Ibid., 47.

[33] Ibid., 35, 47-8; Kempner, Recollections, 5.

[34] Hyman, Odyssey, 48.

[35] Kempner, Recollections, 15.

[36] Ibid.

[37] Hyman, Odyssey, 64. From a newspaper article, March 15, 1890. In Galveston, the street “Postoffice” is written as one word.

[38] Ibid., 42.

[39] Ibid., 64.

[40] Tinsley, “Select Letters,” 37. Letter dated December 15, 1887, Kempner to Bloom.

[41] Hyman, Odyssey, 41.

[42] Ibid., 19, 69.

[43] Ibid. For further reading on these wealthy and influential Galvestonians, see Hayes, Galveston: History of the Island and the City. Originally printed contemporaneously with Harris Kempner’s early days on the island, a biographical section of prominent men begins on page 907 in the second volume.

[44] Tinsley, “Select Letters,” 46-7. March 5, 1894; from March 1: assets of $1,904,937; liabilities of $506,093; balance of $1.398,844; these values are in 1894 dollars. The inflation for Harris’s total wealth at the time of death is for 2011: MeasuringWorth.

[45] Kempner, “Hundred Years,” 5; Hyman, Odyssey, 5.

[46] Ibid., 80-1. For more information about American Reform Judaism, see: Dana Evan Kaplan, American Reform Judaism: An Introduction (Piscataway, NJ: Rutgers University Press, 2003), especially Chap. 1.

[47] Ibid., 17; Steve Gutow and Laurie Barker James, “Most Politics is Local,” in Lone Stars of David: The Jews of Texas, ed. Hollace Ava Weiner and Kenneth D. Roseman (Waltham, Massachussets: Brandeis University Press, 2007), 212. Harris was a founding member when Temple B’nai Israel was chartered in 1868; Whitfield, “Confederate Stories,” 34.

[48] Hyman, Odyssey, 68-9.

[49] Kempner, “Hundred Years,” 6.

[50] Ibid. Harris probably meant “social justice,” a main tenet of American Reform Judaism. Kaplan, Reform Judaism, 15.

[51] Kempner, Recollections, 15.

[52] Hyman, Odyssey, 34. Kempner’s own family was burned out of their house during this event.

[53] Ibid., 70, 72.

[54] Tinsley, “Select Letters,” 33-4.

[55] Ibid.

[56] Kempner, Recollections, 18-9.

[57] Hyman, Odyssey, 98.

[58] Tinsley, “Select Letters,” 14-15. Letter dated January 21, 1884, Harris Kempner to Ike Markowitz.

[59] Hyman, Odyssey, 76-7. Letter dated February 10, 1887, Harris Kempner to Ike Markowitz.

[60] Ibid., 71.

[61] Tinsley, “Select Letters,” 28.

[62] Hyman, Odyssey, 236.

[63] Ibid., 101.

[64] The Rosenberg Library (Galveston), The Galveston and Texas History Center, Collection 75-0010, Dan W. Kempner (DWK) Scrapbook 1 (1894-1915), removed documents, folder 2, document 6-3.

[65] Kempner, “Hundred Years,” 8. Harris’s legacy also includes a namesake town: Kempner, Texas was one of fourteen towns named after the founders of the Galveston, Colorado and Santa Fe Railroad, Galveston Tribune, June 1, 1945.

[66] Kempner, Recollections, 14; Hyman, Odyssey, 101.

[67] Although it may seem odd, Galveston society was small and regarded itself as exclusive. Those not born on the island (“BOI” in Galveston-speak) were often seen and treated as immigrants. Harold M. Hyman, Oleander Odyssey: The Kempners of Galveston, Texas, 1854-1980s (College Station: Texas A&M University Press, 1990), 40.

[68] The ranch was in Mexia, Texas. Hyman, Odyssey, 42; I. H. Kempner, Recalled Recollections (Dallas: The Egan Company, 1961), 9.

[69] Hyman, Odyssey, 60.

[70] I. H. Kempner, “H. Kempner: The First One Hundred Years,” Texas Gulf Coast Historical Association Publications 2, no. 1 (March, 1958), 5.

[71] Hyman, Odyssey, 92-3; Kempner, Recollections, 6. It may seem odd for a Jewish family to send their children to a Catholic school, but Hyman maintained it was common in Europe for “emancipated” Jewish families.

[72] Aaron Blum, Hennie’s father, had been a friend of Harris Kempner, and formed a partnership with Marx Marx when Harris ended his own partnership with Marx. Ibid., 37.

[73] This was in part due to the effects of the Panic of 1893, an economic recession which was the worst the United States had experienced to that date. Banks failed and unemployment was high throughout the remainder of the 1890s. For more on this topic, see: Seymour E. Harris, editor, American Economic History (Washington, D.C.: Beard Books, 2002), 163, and William Jett Lauck, The Causes of the Panic of 1893 (New York: Houghton, Mifflin and Company, 1907).

[74] Hyman, Odyssey, 297-313, 340; Kempner, “Hundred Years,” 111.

[75] Hyman, Odyssey, 200.

[76] Ibid., 113.

[77] Ibid.; Kempner, Recollections, 24. Ike was involved a total of more than 40 years in the Galveston Cotton Exchange: Director, 1895-1902, 1920-6, 1932-3, 1942-4; Vice President, 1906-7, 1926-8, 1945; President, 1907-20, 1928-32, 1945. Ike was “retired” from the Cotton Exchange from 1933-1942, according to his own account in Recalled Recollections.

[78] Gary Cartwright, Galveston: A History of the Island (New York: Atheneum, 1991), 193.

[79] Hyman, Odyssey, 351, 416.

[80] Robert M. Armstrong, Sugar Land, Texas and The Imperial Sugar Company (Sugar Land, Texas, 1991), 62-3. The name “Imperial Sugar” is said to have derived from the Imperial Hotel in New York City, an establishment that Ike stayed in several times throughout his early lifetime, and an institution he held synonymous with “high quality and excellent service.”

[81] Ibid., 210-211. Eldridge and Kempner sold a portion of land to the State of Texas, which developed a prison on the site. The convicts housed there were then leased out to Imperial Sugar as laborers. The state furnished the men, tools, and guards, while Imperial Sugar furnished food and paid a small amount per day per convict. A law was passed in 1910, which took effect in 1914, that forbade convict leasing in Texas. Ibid., 219-25.

[82] Armstrong, Sugar Land, 69.

[83] Ibid. The Ellis plantation was purchased for $10,000 by the Ellis widow and $150,000 by the family’s creditors; the Cunningham Sugar Co. was purchased in 1908 for $1.476 million. Combined, the two plantations totaled nearly 18,000 acres of sugar fields. It is interesting to note that the sugar mill on the Ellis plantation had, for years, been called Imperial Mill. Ibid., 70-3.

[84] Hyman, Odyssey, 216.

[85] Ibid., 215.

[86] Armstrong, Sugar Land, 107, 117,147, 154.

[87] Ibid.

[88] Ibid., 121.

[89] Ibid., 132-3; Diane L. Ware, “Creating a Company Town: William T. Eldridge, Isaac H. Kempner and Sugar Land, Texas (1906-1947)” (master’s thesis, University of Houston, 1994), 149.

[90] Ibid., 98.

[91] Ware, “Creating a Company Town,” 147.

[92] Hyman, Odyssey, 216. For whatever reason, the town was called Sugar Land, and the company was Sugarland. See: Armstrong, Sugar Land, Texas and The Imperial Sugar Company.

[93] Armstrong, Sugar Land, 103-4.

[94] Ibid., 122. Armstrong makes the following comparisons for the year 1929: daily wage, $.25; bread, $.05; and beef, $.06 per pound. $12.5 million in 1929 was over $164 million in 2011, MeasuringWorth.

[95] Ibid., 77. The area was once called the “Hell-hole of the Brazos,” named for the Brazos River nearby.

[96] Ibid., 77-8. The buildings described were built between 1908 and 1930, and as of the printing of Armstrong’s book in 1990-1991, the homes were still occupied. The community remained segregated in the first few years, boasting a population that was roughly 50% white, 25% black, and 25% Hispanic.

[97] Ibid., 89-92. Workers could choose to have $1.50 taken from their pay monthly to pay for complete hospital services and medical treatment.

[98] Kempner, Recollections, 35.

[99] Hyman, Odyssey, 184.

[100] Kempner, Recollections, 45.

[101] Ibid., 66-67; Kempner, “Hundred Years,” 9; Hyman, Odyssey, 366. The building was completed in 1925.

[102] Kempner, Recollections, 52; Hyman, Odyssey, 185, 419.

[103] Kempner, Recollections, 50-1; Hyman, Odyssey, 391-2. The hotel is still in operation today.

[104] Rosenberg Library (Galveston), DWK Scrapbook 2 (1924-29), unnumbered page, unknown newspaper clipping with the headling “Kempner proposes advertising fund,” dated January 22, 1927.

[105] Hyman, Odyssey, 393-6.

[106] Ibid., 115.

[107] For more information about the political situation in Galveston during this time period, see Cartwright, Galveston, 183.

[108] Hyman, Odyssey, 123

[109] Kempner, Recollections, 27.

[110] Hyman, Odyssey, 128-129.

[111] This hurricane is still considered to be the deadliest in United States history. For further reading on the 1900 Hurricane, see: Hyman, Odessey, Chap. 6; Patricia Bellis Bixel and Elizabeth Hayes Turner, Galveston and the 1900 Storm: Catastrophe and Catalyst (Austin, Texas: University of Texas Press, 2000); Erik Larson, Isaac’s Storm: A Man, a Time, and the Deadliest Hurricane in History (New York: Crown Publishers, 1999). The latter is a work of historical fiction but adheres largely to the facts.

[112] Kempner, Recollections, 29-30.

[113] Hyman, Odyssey, 145.

[114] Kempner, Recollections, 30.

[115] Ibid., 31; Hyman, Odyssey, 146-7. See also, Bradley R. Rice, “The Galveston Plan of City Government by Commission: The Birth of a Progressive Idea,” Southwestern Historical Quarterly 78, no. 4 (April, 1975).

[116] Cartwright, Galveston, 185.

[117] Kempner, Recollections, 31, 34.

[118] Cartwright, Galveston, 183-84. These included Morris Lasker, John Sealy, and Bertrand Adoue.

[119] Rosenberg Library (Galveston), DWK Scrapbook 1 (1894-1915), page 32. A letter to Ike and Adoue commissioned them on May 12, 1902. On May 20, just over a week later, the commissioners in Galveston sent their congratulations for the settlement Ike and the others reached with the bondholders in New York.

[120] Rosenberg Library (Galveston), DWK Scrapbook 2 (1924-29), page 5.

[121] Cartwright, Galveston, 188-9.

[122] Jodi Wright-Gidley and Jennifer Marines, Galveston: A City on Stilts (Chicago: Arcadia Publishers, 2008), 15.

[123] Hyman, Odyssey, 166-171.

[124] Wright-Gidley, City on Stilts, 11; Hyman, Odyssey, 169.

[125] Wright-Gidley, City on Stilts, 137.

[126] Kempner, Recollections, 58-60; Hyman, Odyssey, 256.

[127] Hyman, Odyssey, 251. During the war, the government stationed men at several military installations in the Galveston area. Against ineffective government decrees which called for closing down brothels, as mayor, Ike advocated controlling the situation through licensing and medical examinations for prostitutes, which was an overall successful wartime policy in Galveston. Ibid., 256-8.

[128] Hyman, Odyssey, 249. Ike, like his father, adhered to American Reform Judaism.

[129] Ibid., 261.

[130] Kempner, Recollections, 82. Kempner had been a director for the American Jewish Committee in 1909 as well. Hyman, Odyssey, 49.

[131] Ibid., 113.

[132] For a detailed account of the Galveston Movement, see: Hyman, Odyssey, Chapter 9, 231-249. Quoted information, 231.

[133] Kempner, Recollections, 50.

[134] Of that number, approximately three thousand remained in Texas, with a tenth of that number settling in Galveston itself. Henry Cohen II, “‘The Man Who Stayed in Texas’: Galveston’s Rabbi Henry Cohen, a Memoir,” in Lone Stars of David: The Jews of Texas, ed. Hollace Ava Weiner and Kenneth R. Roseman (Waltham, Massachusetts: Brandeis University Press, 2007), 84. It is interesting to note that the program came to a halt upon the election of Woodrow Wilson, who had fervent backing by anti-immigration labor unions. Schiff thus lost his influence in Washington, D.C. Ibid., 86.

[135] Hyman, Odyssey, 247.

[136] Kempner, Recollections, 72, 82; Hyman, Odyssey, 429. Ike and Rabbi Cohen were both described as “convinced secular assimilationists and anti-Zionists” in the pre-WWI years; the latter attribute was tempered during WWII. Ibid, 261-2.

[137] Kempner, Recollections, 3; Hyman, Odyssey, 429.

[138] Kempner, Recollections, 93, 95, 102. The ball was originally held in honor of President Franklin .D. Roosevelt, who had since died, in 1945.

[139] Ibid., 93.

[140] Ibid., 102. The fund was originally created as “The Galveston Fund,” in honor of Ike’s mother’s nonagenarian status in the Galveston community, in 1946. Upon her death, the Fund was renamed and reorganized to maximize profitability, Hyman, Odyssey, 422-3. Rabbi Cohen was able to enjoy this gift before his death on June 12, 1952, Kempner, Recollections, 103.

[141] Hyman, Odyssey, 423. By the early 1990s, the fund was valued at over $32 million. http://www.tshaonline.org/handbook/online/articles/vrhls; in 2010, the fund was valued at over $42 million. http://www.kempnerfund.org/financials/Financial_Statements_2010.pdf 

[142] Ibid., 115; Kempner, Recollections, 25, 96.

[143] Ibid., 64.

[144] Hyman, Odyssey, 274, 386-8. Ike’s daughter, Cecile, was crowned Mardi Gras Queen in March 1928. Rosenberg Library (Galveston), DWK Scrapbook 2 (1924-29), unmarked page, newspaper clipping.

[145] Hyman, Odyssey, 355. The article is available for viewing at Rosenberg Library (Galveston), DWK Scrapbook 1 (1894-1915).

[146] Kempner, Recollections, 113-5. In March 1955, it was discovered that Ike had several ulcers and bleeding ulcers in his stomach – in the end, doctors removed two-thirds of his stomach. Ike spent roughly a month in the hospital recovering from an extremely critical condition, during which time it was at several times uncertain if he would survive.

[147] David G. McComb, Galveston: A History (Austin, Texas: University of Texas Press, 1986), 44; Hyman, Odyssey, 173. The Moodys and Sealys were two other prominent families in Galveston, contemporaneous with the Kempners.

[148] Hyman, Odyssey, 173. Referenced is journalist John Gunther, Taken at the Flood: The Story of Albert D. Lasker (New York: Harper, 1960), 18.

[149] Hyman, Odyssey, 180-1.

[150] Ibid., 438-9.

[151] Kempner High is part of the Fort Bend Independent School District.

[152] Kempner, Recollections, 145.

 

Cite this Entry

APA Style

"Herschell “Harris” Kempner." (2018) In Immigrant Entrepreneurship, Retrieved February 20, 2018, from Immigrant Entrepreneurship: http://www.immigrantentrepreneurship.org/entry.php?rec=220

Chicago Style

Gustafson, Andrew R. "Herschell “Harris” Kempner." In Immigrant Entrepreneurship: German-American Business Biographies, 1720 to the Present, vol. 2, edited by William J. Hausman. German Historical Institute. Last modified February 10, 2015. http://www.immigrantentrepreneurship.org/entry.php?rec=220

MLA Style

"Herschell “Harris” Kempner," Immigrant Entrepreneurship, 2018, Immigrant Entrepreneurship. 20 Feb 2018 <http://www.immigrantentrepreneurship.org/entry.php?rec=220>

Photograph of Harris Kempner, n.d.

  • Photograph of Marx Marx, n.d.
  • Galveston Cotton Exchange building
  • Harris Kempner Residence
  • Congregation B'nai Israel, ca. 1894

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