Seligman was born in Baiersdorf, Germany. As a small child, he worked in his mother's dry goods shop. Present-day Germany consisted of many independent states in the early 19th century, most of which issued their own, differing coinages; and young Joseph made a profit at his mother's store changing money for travelers for a small fee.
Joseph's father wanted him to enter the family wool business, but circumstances made this difficult; in particular, migration of the peasant class (Seligman's father's customers) from rural areas to urban meant a loss of job opportunities and a shrinking economic base in Baiersdorf. At fourteen, Seligman attended the University of Erlangen. At seventeen, he boarded a steamer at Bremen and sailed to America.
In 1837 he traveled to the United States and settled in the outpost of Mauch Chunk, Pennsylvania, where he found employment with a builder of canal boats. He branched out on his own as a peddlcrand was soon joined by his brothers William and James. In 1840 he opened his own store and the following year moved to Mobile, Alabama, where he opened a dry-goods store. In 1846 J. Seligman and Brothers, Merchants, opened in New York and Saint Louis.
By 1851, Joseph Seligman, together with his family (all of whom were by then in America), had enterprises scattered throughout the United States. The Seligman brothers progressed from immigrant merchants to banking. Theirs was the only commercial bank in New York to survive the panic of 1857, because Joseph Seligman kept his assets in gold and silver at home under his bed. His own rags-to-riches career and ideology was reflected in the fact that he was the first to employ Horatio Alger as tutor to his children.
During the Civil War the Seligman’s acquired contracts for the manufacture of army uniforms and Joseph Seligman sold more than 200 million dollars of United States government securities in Europe. In 1865, he set up the international Seligman banking house along the lines of the house of Rothschild. He assigned his brothers to Paris, Frankfurt, London, San Francisco, New Orleans, and New York. By 1869 the company had a working capital of over six million dollars and entered the field of railroad securities. Seligman was involved in the scandal of the Gould group (owners of the Erie Railroad), which caused gold prices to crash, but he emerged from the government investigation almost unscathed. His “railroad fever” brought him on to the boards of directors of several railroad companies which competed with each other — a fact which seemed to have escaped his notice. In the course of time Seligman made a fortune from his investments in over one hundred railroad companies. He himself seldom traveled on railroads as he considered them an unsafe means of transportation!
He believed that he had “arrived” in the world of banking when, in 1874, his bank combined with the Rothschilds to back an issue of U.S. bonds; by the end of the decade, they had a monopoly on the sale of U.S. bonds in Europe.
Under presidents Abraham Lincoln and Andrew Johnson, the Seligmans enjoyed excellent relations with the secretaries of the Treasury, and when Ulysses S. Grant became president in 1869, his secretary of state, Hamilton Fish, offered Seligman the position of secretary of the treasury. Seligman was flattered but, considering himself unable to cope with the position, he turned it down. He became involved, however, in the administration’s plan to refund the public debt, stabile the currency, and build American credit abroad. Seligman also refused an offer to run on the Republican ticket for mayor of New York. In 1877 a plan he submitted to the secretary of the treasury for the refunding of the balance of the government’s war debt was so successful that within two years the dollar was quoted at par for the first time since 1861.
The Saratoga affair in the summer of 1877 severely taxed Seligman’s health. He had gone to spend a vacation in Saratoga Springs, New York, in his own railroad car. and was refused accommodation at the Grand Union Hotel. Run by Judge Hilton, an old business rival, the hotel refused to have Jews on its premises. The affair stirred up anti-Semitic feelings and set off a nationwide controversy.
After Joseph’s death, his brother Jesse (1827-1894) became head of the firm. He not only continued Joseph’s financial policy, but also contributed generously to philanthropic enterprises.
With Jesse Seligman’s death, J. and W. Seligman and Company began to decline from the great international banking house it had been to a small, but prestigious investment house in New York.
Joseph Seligman's siblings were, in order of birth, William (born Wolf), James (born Jacob), Jesse (born Isaias), Henry (born Hermann), Leopold (born Lippmann), Abraham, Isaac, Babette, Rosalie, and Sarah.
He married his cousin Babet Steinhardt in a ceremony in Baiersdorf in 1848. Together, they had five sons, David, George Washington, Edwin Robert Anderson Seligman, Isaac Newton Seligman, and Alfred Lincoln, as well as four daughters, Frances, Sophie and two others.