Grande Dame of the Gulf
A belle among the roughneck cities of Texas, Galveston is caught between a relentless ocean and an imperious past. If one doesn’t get it, the other will.
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Three Good Funerals
Texas has not been fertile soil for dynasties. The few families who survived the change from agriculture to oil were mostly rural — the Kings and Kleburgs, the Temples, the Waggoners. In Houston the most prominent names of the nineteenth and early twentieth centuries — Rice and House, Kirby and Jones — had no successors. But on the Island the three most powerful families of the nineteenth century extended their lines far into the twentieth. Two are into the fourth generation today and still going strong. The names are Sealy, Kempner, and Moody, and in time they came to rule not only Galveston’s business and politics but also its attitudes and its view of itself.
The Sealys were patricians. They built Open Gates, one of the greatest of the nineteenth-century mansions, a temple to aristocracy, with first-floor windows topped by soaring arches and castle towers that opened onto second-floor balconies. The attic, underneath a steep red-tile roof almost as high as the main portion of the house, contained a children’s theater. In this house the last of the Galveston Sealys concentrated on his real love, developing new strains of oleanders, while the port that was his business responsibility slipped further and further into decline.
The Kempners were much less ostentatious, as one might expect of the leading Jewish family in an immigration center. The world that comes to mind is “proper,” always proper. Their homes were substantial but not spectacular. The Kempners were to Galveston a model for emulation.
The Moodys had more money but less grace. Like the Sealys, they lived in a mansion, but not of their own making; they bought it for a distress-sale price — 10 cents on the dollar, it is said — after the 1900 storm. The Moodys were give-no-quarter nineteenth-century capitalists long after the nineteenth century ended, as frugal and ruthless as Andrew Carnegie but without (at least until the last twenty years) any of the steel magnate’s philanthropic impulses.
Each of the families ruled through four generations, though in the case of the Sealys the genealogy was not lineal. John Sealy became president of the port shortly after the Civil War, followed by his brother, followed by his own son, followed by his brother’s son; not until 1945 did someone other than a Sealy run the port of Galveston. By that time either death or desertion had removed all Sealys from the Island.
W.L. Moody earned his rank and his later nickname, “the Colonel,” in the Confederate Army. Born in Virginia in 1828, Moody came to Galveston as a cotton broker during Reconstruction and lived to be 92. But it was his son, W.L. Moody, Jr., known as Old Man Moody or sometimes just as the Old Man, who put the family on the map. When he died, at 89, Time magazine cited him as one of the ten wealthiest people in the United States. The Moody legacy avoided Billy, as W.L. III was known, whose financial ups and downs were too much for the Old Man; it passed instead to the younger son, Shearn, the meanest and toughest Moody of them all. (Hotel baron Conrad Hilton, after some unhappy dealings with the Moodys in the thirties, described Shearn in his autobiography as the kind of person who liked the Depression.) But Shearn died of pneumonia in 1936 at age 40, and when the Old Man gave up the ghost in 1954, the empire fell into professional hands. There it remained for a quarter of a century while Shearn’s sons, Robert and Shearn Junior, maneuvered to see who would be the premier Moody; Robert won.
The Kempner mantle has passed without interruption, mainly because of the longevity of I.H. Kempner, the scion of the second generation. Mr. I.H., as he was known, took over upon the death of his father, Harris Kempner, in 1894 and lived until 1967. Harris Junior and Harris III have followed.
The Sealys were the principal owners of the port, the Moodys either built or bought every major hotel, and the Kempners controlled city hall. But that was only the beginning. Each family had at least one bank — until 1963, the only banks in town. Among them they dominated cotton warehousing in the days when Galveston was the leading cotton port in the world. The UT Medical Branch fell into the Sealys’ sphere of influence, for their largesse alone thwarted Houston’s ongoing attempts to pilfer the school from the Island. The Moodys owned the newspapers and the largest private employer in town, American National Insurance Company (ANICO), which grew into the biggest insurer in Texas. The Kempners were civic leaders whose orbit encompassed charity drives and bond campaigns as well as city government.
Thousands and thousands of Galvestonians lived their entire lives under that regime. It was in place by the 1880’s, didn’t even begin to change until after World War II, and has life in it yet. The staying power and the vast influence of the three families have contrasted sadly with Galveston’s own history — its inability to hold on to its glory and its assets over time. As in prerevolutionary France, the middle class assigned blame for the decline of their civilization to the upper: “What Galveston needs,” the saying went, “is three good funerals.”
The adage was a reference not only to the closed-shop nature of the Galveston establishment but also to the bitter infighting among the rival dynasties, especially the Moodys and the Kempners. The trouble dated back to the Kempners’ participation in the founding of ANICO in 1903 and their conviction that the Moodys snookered them into selling out five years later. Subsequently they quarreled, with paralyzing consequences for the rest of the city, over what Galvestonians have quarreled over ever since: what is wrong with Galveston. The Kempners were always coming up with cures for Galveston’s malaise — building the Pelican Island bridge, filling mud flats, extending the seawall — while the Moodys recognized no malaise and liked Galveston just the way it was. (When the Colonel was approached about moving the city to the mainland after the 1900 storm because so many people were leaving the Island, he said, “Let them all leave if they wish. Fewer people around will give us better hunting and fishing.”) In the twenties and thirties the Moodys, led by Shearn, mounted challenge after challenge to the Kempner hold on city hall, where Mr. I.H. had been in charge of city finances in 1899, another Kempner would be in charge in 1958, and Kempners were in charge for most of the years in between. Invariably the Moodys lost. In return they frequently opposed bond issues and declined to aid Kempner-led charity drives, which consequently fell far short of their goals. To the Kempners the Moodys were Snopeses who exhibited, as Mr. I.H. put it in a not-so-veiled reference in his autobiography, “the smugness of the self-conceit of those whose wealth so far exceeds their civic pride.”
The hostilities between the Moodys and the Kempners were so intense and lasted so long — until Old Man Moody died in 1954 — that old Galvestonians still regard the feud as a principal reason for the Island’s stagnation. But the problem was much larger; the feud was symptom as well as cause. Looking not just at the Island but at Galveston compared with the rest of Texas, it is clear that the real problem was not just the differences among the families but what they had in common. They shared the fatal preference for safety over risk that is the inherent weakness of dynasties after the first generation. This propensity for caution — the antithesis of the freewheeling, expansive philosophy of the rest of Texas — was augmented by the ever-present awareness of the sea and the knowledge that in Galveston investment was particularly precarious. As a result the families came to prefer monopoly over competition, lending over borrowing, cotton over oil, and philanthropy over investment — all with tragic consequences for Galveston.
Years passed, decades passed, and still there were no new players on the Island. This led to another of Galveston’s endless supply of aphorisms — old money kept new money out of town. The supporting evidence all centers around the Moodys: the Colonel’s going to New York to dissuade his son from entering a partnership with Houstonian William Marsh Rice, the Old Man’s talking the Maceos out of building a modern luxury hotel on the beachfront, W.L. III’s getting disinherited because, among other misfeasances, he built the Jack Tar — which, unlike the Old Man’s hotels, was air-conditioned. For the most part, though, the families didn’t resort to overt discouragement of outsiders. They didn’t have to. Their example was deterrence enough; the pattern of their investments displayed little faith in their city.
The Sealys put so little money into the wharves over the years that in 1940 the city finally decided to buy them out. The Moodys ran their hotels the way the Sealys ran the wharves. The Old Man kept such a close watch on spending that he once told the maids at the Buccaneer Hotel they were too generous in handing out toilet paper. The Moodys did start some businesses, but only to keep money in the family by servicing the larger Moody firms with smaller Moody firms, not to develop new empires. The Kempners underwrote the Galvez Hotel, but for the most part they invested their money inland, in agricultural land, in banks as far away as Wichita Falls, and in their Imperial Sugar plant in Sugarland.
The family banks adopted the same conservative policies. Their loan-to-deposit ratios traditionally were among the lowest in the state — and in some cases still are. Successful merchants couldn’t get loans to expand their businesses. ANICO was notorious for not lending money in Galveston (a $425,000 advance to the Maceos was a notable exception), and it remains so. It turned down a chance to underwrite a Hilton hotel franchise just last year.
The families stuck to ventures that didn’t put their capital at risk — banking, insurance, and middleman operations like brokering and warehousing cotton. When they did put money into the town, it was in the form of philanthropy. The Sealys gave a hospital, the Kempners gave a park, the Moodys set up their foundation. Industry, the economic base Galveston needed most of all, was not for them. Nor was speculation, which is one reason they stayed away from oil, the most speculative business of all. Another reason: the people in oil were the wrong kind of people, high rollers but lowbrows. Cotton was the profession of gentlemen. Old Man Moody, who looked so much the part of the nineteenth-century tycoon that he might have been the model for the little man on the Monopoly game cards, once turned down an early oil deal because one of the offering partners bragged about spending $10,000 on a single painting. Good-bye, Texaco. John Sealy, Jr., organized an oil company but quickly got out, although it retained his aunt’s name. Good-bye, Magnolia. The Kempners dabbled in oil in 1903, lost money, and didn’t try again for twenty years. By that time it was far too late; Houston was on its way to becoming an oil center, and Galveston remained just Galveston.
Born on the Island
Galveston in pursuit of progress has been reminiscent of a car trying to pass a truck on a winding two-lane road: just when a straightaway finally appears, along comes a string of opposing traffic. This past summer alone Galveston had to contend with a recession, a hurricane, and a major downtown fire. Change has not come rapidly to Galveston, but at least it is coming.
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