If you missed Part 1, click here.
When we last left Nellie Bly, she’d risen to fame as an intrepid female journalist. Then, after eight successful (though exhausting) years as a reporter and columnist, she suddenly eloped with Robert Seaman, a multimillionaire forty years her senior.
After Seaman’s death in 1904 when Bly was almost 40, she was confronted with two new problems. One, her husband’s relatives were crying foul over his will and wanted to contest it; and secondly, there were problems brewing at her husband’s company she was now president of…
As for the unhappy relatives, they presented at probate an older version of Seaman’s will showing they were to receive sizable inheritances. They argued that Seaman, eighty years of age, had been “incapacitated” when he signed the newer will in Wiesbaden.
They even said Bly had exerted control over her aging husband, preventing him from distributing his assets as he wished.
For five years, the case dragged on. Eventually, because Seaman’s largest assets had been placed in Bly’s name long before his death, the court ruled in her favor.
It must have been a huge relief for Bly, for at the time, there were other legal battles she was fighting.
The Iron Clad Manufacturing Company
Back when she returned from Europe in 1899, Bly had thrown herself into understanding Robert Seaman’s company, the Iron Clad Manufacturing Company. Founded by Seaman and a partner in 1869, the company first began making milk containers for transport by train.
As Seaman’s health declined, Bly ratcheted up her own involvement, working 11- to 12-hour days at the company’s location in Brooklyn, often bringing work home in the evenings. She learned how to operate every machine and designed new ones. She sent employees overseas to study more modern machinery and then had them installed.
She stream-lined processes, erected new buildings, and even wrote the law that would eventually pass allowing the Brooklyn Rapid Transit Company to come into the Iron Clad’s factory yard for loading and unloading.
She discarded steam in favor of electricity, and expanded the Iron Clad’s product offering to include, among other things, dairy supplies, boilers, hot water heaters—even kitchen sinks.
All told, she would hold 25 patents in her name.
When Seaman died, she calculated her improvements had not only brought the company out of debt, but had increased its sales to one million dollars, year on year.
Social Benefactress
But it wasn’t just sales she improved. She made great strides in social welfare for the company’s 1,500 employees: she instituted weekly wages for every employee instead of payment per piece; she built a recreation center, gymnasium, bowling alley, and library for the workers on the company grounds; she even provided entertainment for the workers on Saturday nights.
Her old friend from the Dispatch, Erasmus Wilson, was quoted in the Pittsburgh Gazette-Times saying, “One might find her ready to retire from the business world. But that is not her way. One of her pet schemes, and one she has long nursed, is to start a model town…those who know her best think she will yet build it. For there is no such word as fail in her lexicon.”
All this she accomplished without spending any time looking over the company’s books. It was the one aspect of the business she knew nothing about. She had no affinity for accounting and left the finances in the trusting care of the general manager, Edward Gilman. Though she was on the company payroll earning $25,000 per year annually ($710,000 today), she claimed she never withdrew the whole amount any year.
It was all about to come crashing down.
Suspicion
Even though the company appeared to be doing well, “there never seemed to be any money on hand,” Bly would later remark. Starting in 1909, she began to suspect something wasn’t right. She would go to Gilman many times. He would always reassure her that growth required expenditure of capital.
When the Brooklyn real estate market took a downturn, the Iron Clad’s property suffered a 40% depreciation, drastically reducing the company’s net worth. Gilman had been securing loans using the real estate as security.
With almost no money on hand, the real estate situation had the potential to force the Iron Clad into bankruptcy.
Things worsened in 1910 when Gilman grew ill and was hospitalized with stomach cancer. Bly felt responsible, for the doctors believed his condition was aggravated by his worry over the business.
Perhaps this is why she brought it upon herself to look after him in her spare hours, hiring doctors and caregivers to look after Gilman at her own expense.
More Bad News
Not long after, a fire broke out in the factory, causing an estimated $30,000 (or $815,000 today) in damages. Still suspicious about the company’s finances, Bly took the precaution of putting her townhouse in her mother’s name to protect it from creditors.
As Gilman’s health deteriorated, Bly became aware that several of the company’s checks had bounced. Finally, an auditor she had hired told Bly: “Mrs. Seaman, you have been surrounded by lots of rogues and scoundrels, the biggest one of them Gilman. You have been robbed right and left.”
Gilman, according to the auditor, had used $65,000 (over $1.7 million in today’s money) to pay his brother’s debts in St. Louis.
If Bly had been hoping for a deathbed confession from Gilman, she never got it. He died in February, 1911, never uttering a word of wrongdoing.
Bly’s troubles were just beginning.
Forgery and Larceny Charges
Bly soon became embroiled in litigation that is hard to follow even now given the people, shady bookkeeping, and dishonesty involved. She hired a new auditor to look over the books. After unraveling some of the entries, he revealed that her company had paid for, among other things, Gilman’s personal yacht for $30,000 ($815,000 today).
It was the tip of the iceberg.
Three company cashiers confessed to Bly that they had forged company checks using her signature. One of them fled to Germany. The other two, Charles Caccia and Stanley Gielnik, were arrested for larceny. In spite of their private confessions to Bly, they plead not guilty at trial. It was estimated that money lost to theft was a whopping $400,000 ($10 million today).
By 1911, the company creditors were growing nervous. The press was having a field day reporting on what Nellie Bly and her company were going through. A group of creditors filed a petition for involuntary bankruptcy. A U.S. Bankruptcy Commissioner appointed Appleton Clark as company receiver, and he took possession of the plant the next day.
From this point onward, Bly acted to keep the company, and another company on the premises she had created called the Steel Barrel Company, open for sales. She believed that open orders alone would propel both companies back into solvency in a matter of months.
And she hated the idea of putting over a thousand employees out of work.
From Bad to Worse
Even though Bly nor the Iron Clad had accounts at some of the banks, they had still regularly cashed the forged checks. She believed these banks were just as much at fault and were potential sources for compensation.
The criminal case against the two cashiers dragged on. With her company virtually shut down, Bly became emotional, often telling reporters she had been treated unfairly because she was a woman and that some papers, rather than describing the good she had done for the company over the years, only focused on the trial and her mistakes in trusting Gilman and the others.
She became so petulant, she refused to answer questions in court and produce the company’s books, which she believed had been doctored and would have been used against her.
She said in court, “The representatives of the…creditors have plotted to cheat me, wreck me, crush me. I have given my time, money, health, and, I fear, my mind to these proceedings.”
The judge was not persuaded. He fined her $600 and declared her in contempt of court. When she failed to pay, he sent officers out to arrest her for nonpayment. Before they could find her, she paid the fine.
In March of 1913, two years after the company cashiers had been arrested, the case came before the New York State Supreme Court. After a week of proceedings, the jury was unable to reach a verdict. The cashiers were released.
Bly’s dreams of saving the Iron Clad were dashed. She was bitterly disappointed, exhausted, and broke.
New Horizons
The following summer, she set sail for England to visit a friend she hoped would agree to finance the Steel Barrel Company which she still owned and hoped to revive. She planned to stay no more than two weeks.
But the first world war was about to erupt and she was headed straight into the fray.
If you missed Part 1, click here.
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Tonya Mitchell is the author of A Feigned Madness. For more on her and her book, visit her website. To order her book about Nellie Bly and her 10-day undercover stay in an insane asylum in 1887, click here.