Russell Sage was an American business titan, railroad tycoon, multi-millionaire financier, Wall Street innovator, and two-term U.S. Congressman (1853-1857).
Biographical fast facts
Date and place of birth: August 4, 1816, Verona, New York, U.S.A.*
Error corrections or clarifications
* Both "Scanandoah, New York" and "Shenandoah, New York" are erroneously reported as his birthplace by some sources. In 1899, Russell Sage specifically addressed his birth in a New York Times article: "They have, I see, got out a pleasant enough story about my having been born at Shenandoah .
. . but this is wrong. My parents Elisha and Prudence Sage were well settled at Verona, two miles from the Oneida Castle when I was born . . ."
Russell Sage was born into poverty late in the afternoon of August 4th, 1816. He was the youngest of seven children born to Elisha Sage, Jr., a farmer, and Prudence (Risley) Sage. Russell had a head for figures even as a young child and showed far more interest in reading and math, than the hunting, fishing and farming interests considered essential for his rural upbringing.
His eldest brother, Henry, established a grocery store in 1825, and was joined by Russell a short time later. He was an industrious young man and made his first real estate purchase at the age of 13. His frugal ways, even as a teenager meant he always had plenty of cash to make loans. Sage was considered a relatively easy touch when it came to making loans, but he charged high -- some would say exorbitant -- interest rates. Over the course of his life, his money lending operations netted him a fortune. His rates for short-term loans ranged from 40-80 per cent, while long-term rates averaged 14-20 per cent.
In 1835, Russell and his brother Elisha became co-owners of the store when their eldest brother, Henry, was forced to sell due to illness. The grocery store and meat market at the corner of Hutton and River streets in Troy, New York, thrived. His initial investment of just $700 would return $25,000 in 1839 when they sold the business. Flush with cash, his next business venture was a partnership with lumber dealer John Bates. Their company, Bates and Sage, engaged in private banking, acted as a business broker, and wholesale dealers in horses, groceries and grain. As had all previous business ventures, this enterprise prospered. Throughout his life, good fortune seemed to follow him on just about every business venture he embarked. This incredible luck became known as "Sage luck" by those familiar with his accomplishments.
January 23rd, 1840, Sage married Marie Winne, the one true love of his life. She was there to support him in his assent to political power, and his rise as a business mogul.
In the 1840s, he became increasingly involved in public affairs, serving as alderman, president of the Troy Common Council, and treasurer of Rensselaer County. He was a rising star within the Whig Party when he made his first run for Congress in 1850. He was defeated by David Seymour, a Democrat, but two years later he was successful in winning the seat in the U.S. Congress. By that point in time he was already president of one railroad, vice president of another, and one of the founding members of the board of directors of the New York Central Railroad.
On the floor of Congress, December 15th, 1853, Sage became the first person to advocate the purchase of Mount Vernon by the government as a permanent memorial to President George Washington. In his second term, Sage was appointed to the powerful Ways and Means Committee.
After serving his two terms in office, Sage returned to the business world. He supervised the construction of railroads that would eventually include twenty-seven different corporations with over twenty thousand miles of railroad lines. He often partnered with Jay Gould in the development and sale of railroads. Over the course of his career, Russell Sage served as a director of several New York banks, was a founding director of the Fifth Avenue Bank of New York City, and was president of New York's Standard Gaslight Company. He either took an active part in management, or was one of the largest stockholders of Western Union Telegraph Company, Atlantic & Pacific Telegraph Company, Minnesota Construction Company, Mercantile Trust Company, Importers' and Traders' National Bank, Hastings & Dakota Railway Company, Manhattan Elevated Railway Company, Metropolitan Elevated Railway Company, La Crosse & Milwaukee Railway Company (later, the Chicago, Milwaukee & St. Paul Railway Company), Missouri Pacific, New York Central Railway Company, Pacific Mail Steamship Company, Poughkeepsie & East Shore Railroad, Schenectady & Troy Railway Company (S & T), St. Louis & Iron Mountain Railway Company, Union Pacific, and many others.
In the early 1860s, he and his ailing wife moved to New York City. Though railroads would always be his central focus, Wall Street soon came under his spell. He quickly became the master of stock market puts and calls (options to buy or sell a set amount of stock at a fixed price and within a specified time limit). Sage was dubbed the "Father of Puts and Calls" and "Old Straddle" for his invention of the "spread" and the "straddle." As he had in so many ventures before, Mr. Sage made a fortune on Wall Street, though some felt he did so at the expense of others. He was occasionally blamed for the financial ruin of investors due to his frequent and skillful stock manipulations.
When his first wife died of stomach cancer, May 7th, 1867, he was truly heartbroken. Some historians point to her death as the source of the shift in Sage's behavior. He threw himself into his work like never before, and his singular focus seemed to be the acquisition of wealth.
In 1869, Sage was arrested for violating New York state usury laws. Usury is the practice of lending money at an unconscionable or exorbitant rate of interest. The 14-20 per cent interest rates he charged for long-term loans, and 40-80 per cent for short-term loans, was not only high, it was actually in violation of New York state law. Initially he received a fine and a five-day prison sentence, but a series of legal maneuvers convinced the judge to suspend the jail sentence.
Following his arrest and trial, he became a social pariah in New York's elite circles. This is believed to be one of the reasons he entered into a loveless marriage to Margaret Olivia Slocum late in 1869. It was hoped the marriage would rehabilitate his public image, and return him to favor with New York's upper crust. To that end, the undertaking was successful.
His life was to take a turn December 4th, 1891, as a man carrying a bomb appeared in his office threatening to blow up the building if he didn't give him more than one million dollars in cash. The demand was refused, and the bomb exploded. Two were dead, including the bomber, who was later identified as Boston stockbroker Henry Norcross. Sage escaped with only minor injuries, but his reputation would suffer another setback when Sage refused to pay damages to one of those injured in the blast. He was labeled a skin-flint, miser, and heartless millionaire, by the public, and was vilified in the press. Worse than his refusal to offer compensation to the injured William Laidlaw, Jr., Sage was accused of using the gentleman as a shield to protect himself from the explosion. After four trials, Sage was ordered to pay the man more than $40,000 in compensation. The Court of Appeals later reversed the judgment, leaving his penny-pinching reputation intact.
Many have criticized him for being tightfisted with donations to charitable causes, and Sage personally encouraged his image as a miser, embellishing many stories of his miserly ways. The fact of the matter is, he gave generously to charities, theaters, and schools for Indian children, yet was still branded a stingy miser. Skin-flint, miser, heartless, ruthless, unscrupulous, shylock and crook are but a few of the terms often used by his contemporaries to describe Russell Sage. He was also dubbed The Sage of Troy, the Money-King, the Greatest of Modern Financiers, the Meanest Miser in the Land, the Father of Mount Vernon, Uncle Russell, Father of Construction Companies, Father of Puts and Calls, Old Straddle, and the Master Spirit in the World of Finance.
Sage possessed an encyclopedic knowledge of horses, and reportedly owned at least 7 horses throughout his life. In addition to being a lifelong horse lover, toward the end of his life, six dogs and seven cats filled the Sage household. As if acting as surrogate kids to the childless multimillionaire, when any of his pets died, an undertaker was hired, a custom casket was constructed, and a proper funeral was held. Officially Sage had no children, but he was accused of fathering a child out of wedlock with one of his young chambermaids.
He remained active in business affairs until just before his death at age 89. July 22nd, 1906, at 4:30 in the afternoon, he died at the Lawrence Beach, Long Island summer home he built back in 1888.
At his death he'd amassed a fortune said to be worth at least $70 million. Some accounts place the figure as high as $100 million, though pinpointing an accurate figure is difficult in light of his distrust of banks. It is reported that he had numerous steamer trunks full of cash stored in various locations, rather than trust his entire fortune to banks.
Dedicated "to the improvement of the social and living conditions within the United States," the Russell Sage Foundation was founded by his widow April 11th, 1907. It was initially endowed with $10 million of his money, to which Olivia Sage later added $5 million.
Quotes - In his own words:
In 1869, Russell Sage offered the following account of his business affairs:
"I am not a broker or money lender by profession or occupation, but am engaged in the active management of four of the largest railway transportation companies in the country, in the construction of four other large and important railroads, as trustee for various railroad companies and their creditors to the extent of more than $20,000,000, and in the purchase and improvement of real estate in the City of New York, where I am now engaged in the construction of twelve dwelling-houses and the said business occupations and relations occupy my whole time and attention."
Residences of Russell Sage:
Note that these residences may no longer exist, and it's possible the addresses have changed over the years. This is not to suggest that Mr. Sage owned each and every one of these structures. We're only reporting the fact that he resided in them at one point or another in his life.
474 Fifth Avenue, New York City, New York, U.S.A.
506 Fifth Avenue, New York City, New York, U.S.A.
632 Fifth Avenue, New York City, New York, U.S.A.
Fifth Avenue Hotel, 24th Street and Fifth Avenue, New York City, New York, U.S.A.
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