Background
Daniel Guggenheim, second of the seven sons of Meyer Guggenheim, was born in Philadelphia, Pennsylvania, United States on July 9, 1856.
Daniel Guggenheim, second of the seven sons of Meyer Guggenheim, was born in Philadelphia, Pennsylvania, United States on July 9, 1856.
Daniel Guggenheim had entered high school when in 1873 his father, having formed a firm for the manufacture and importation of Swiss embroideries, sent Daniel and his older brother to Switzerland to study the business and act as his deputies in the factory at St. Gall. Daniel remained in Switzerland for eleven years, learning a good deal about the current methods of mercantile management in Europe.
Returning from Switherland to the United States in 1884, Daniel Guggenheim found that the Guggenheim money was rapidly being deflected from laces and embroideries to copper mining and smelting, and every son was needed to help establish the new business and liquidate the old.
He took his place easily as the outstanding personality and business intelligence among the seven sons and traveled about with his father from one plant to another, assisting him in the general supervision of the properties. The Guggenheim strategy—the integration of smelting and refining with exploration for and control of the sources of supply, and the establishing of intimate financial relations with producers—was to no small degree the product of Daniel’s planning.
It was chiefly due to him also that a consolidation with the “Smelting Trust” was effected in 1901 on terms which left to the Guggenheim brothers the control of the reorganized American Smelting & Refining Company.
His policy was a continuation of that which the firm of M. Guggenheim’s Sons had found so successful.
More and more, however, the trend of the firm was to combine mining operations with processing under a single control. Largely instrumental in this result was the Guggenheim system of forming exploration companies in various parts of the world, to examine mining properties for possible exploitation.
The mining survey was elevated to a crucial position in the sphere of operations, and no money was spared in hiring competent engineers for it.
Once exploitation was determined upon, the Guggenheim method was rapid and bold.
Huge sums were spent in overcoming engineering obstacles.
In 1912 a “mountain of copper” in Alaska, whose potentialities were considered staggering, was made accessible by building a railroad over a moving glacier and hauling the cumbersome machinery and the ore over it; in Chile, at Rancaqua in 1908, Chuquicamata in 1911, and later at Potrerillos, huge deposits of low-grade copper ore were finally treated after difficult engineering obstacles were met; the Chuquicamata mine was eighty miles from the sea, at an elevation of 9, 500 feet, forty-five miles from a water supply and eighty-five from a source of power.
Even more important than these engineering feats was the Guggenheim policy of ruthlessly replacing old production methods and technological processes by new ones.
They aimed at mass production, and thus often utilized ore of low-grade content which previous methods had found unprofitable.
The supremacy of the Chilean fields in the nitrate industry was challenged in the post-war period by the synthetic process developed during the War.
Guggenheim enterprise entered in 1924, however, acquired control of several large English and Chilean companies, discarded the old Shanks process and replaced it with a process involving electric shovels, large concrete tanks, mechanical refrigeration and centrifugal driers, thus making the 8% rather than the 16% ores marginal, cutting labor and fuel costs about 75%, and rendering possible competition with the synthetic producers.
There was also a skilful financial reorganization of the nitrate industry; the Chile Nitrate Company was formed to absorb the large number of individual producers, and the Chilean government, in return for removing the export tax on nitrate, was given 50% of the stock.
The international scope of his operations and the success of the industrial reorganizations he effected gave color and dash to Daniel Guggenheim’s career.
He continued his father’s tradition of scrupulous adherence to business ethics, and the episode of the repayment in 1906 of losses to the extent of $1, 500, 000 which had been incurred by outside investors on the strength of Guggenheim participation in a Canadian mining venture, has become a part of the folklore of Wall Street.
As chairman of the board of directors of this company or as president, until 1919.
He was also the head of or a director in the ganglion of miscellaneous corporations which, in the Guggenheim plan of operation, clustered about the central enterprise —among others the Guggenheim Exploration Company, the American Smelters Security Company, the Chile Copper Company and the Utah Copper Company. The Guggenheim business strategy—the integration of smelting and refining with exploration for and control of the sources of supply, and the establishing of intimate financial relations with producers brought him a fortune.
Many of his charities were anonymous. He developed tin mines in Bolivia, gold mines in the Yukon regions, diamond fields in the Belgian Congo and Angola, copper mines in Alaska, Utah, and Chile, nitrate fields in Chile, and rubber plantations in the Belgian Congo.
As chairman of the board of directors of this company or as president, until 1919, Daniel Guggenheim was its guiding head during the two decades when it spanned the American continent from Alaska to Chile and extended its operations to Africa; and in the third decade of the century, while he was not the active head of the company, his influence was still dominant. Although he was not primarily a banker or promoter and in the main restricted his operations to mining and metallurgy, he was one of the foremost representatives of American industrial imperialism. He developed tin mines in Bolivia, gold mines in the Yukon regions, diamond fields in the Belgian Congo and Angola, copper mines in Alaska, Utah, and Chile, nitrate fields in Chile, and rubber plantations in the Belgian Congo. Among his philanthropies that received notice were the Daniel and Florence Guggenheim Foundation, “to promote through charitable and benevolent activities the well-being of mankind throughout the world”; the subsidizing of free band concerts in New York City; and the Daniel Guggenheim Fund for the Promotion of Aeronautics. The last-named fund, aggregating four or five million dollars, did much to shift the emphasis in aviation from stunt flights to the development of safe and unsensational flying, and thus to make passenger traffic safe and commercially feasible. Often the success of his operations affected the prosperity of foreign countries, even the stability of governments. His rule over his enterprises was absolute, but it was that of a benevolent monarch.
His avowed labor creed included the passing of social legislation (unemployment, sickness and old age insurance) by the agreement of organized labor and organized capital, and through a similar concord of capital and labor the legislative enactment of industrial democracy including profit-sharing, but with the reservation that the bonuses be given the employees in lump sums at the end of the year, so that they might be saved and not squandered.
His attitude toward labor was undoubtedly liberal for his day.
He continued also the tradition his father had set with regard to charity and philanthropy.
Toward his employees his attitude was a liberal and wellmeaning paternalism. He knew very little about actual labor conditions in his plants, not even the approximate wage rate; he was an adherent of the open shop and individual bargaining; he had not instituted any of the industrial-democracy features in his own plants.
Daniel Guggenheim was a member of Congregation Emanu-El, in New York, and for many years a trustee.
Guggenheim was married on July 22, 1884, to Florence Schloss. They had three children. As he neared the age of seventy, he gradually turned over the management of his affairs to the younger of his two sons.
