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Born Florence Rabe in San Antonio, Texas, the second child of Jewish immigrants, Bates showed musical talent as a child, but a hand injury inhibited her from continuing her piano studies. She graduated from the University of Texas with a degree in Mathematics in 1906, after which she taught school. In 1909 she met and married her first husband and gave up her career to raise their daughter. When her marriage ended in divorce, she began to study law and passed the bar in 1914, becoming at the age of 26 the first female attorney in her home state.

After the death of her parents, Bates left the legal profession to help her sister operate their father`s antique business. She became a bilingual radio commentator whose program was designed to foster good relations between the United States and Mexico. In 1929, she closed the antique shop and married wealthy oil baron William F. Jacoby. When he lost his fortune, the couple moved to Los Angeles and opened a bakery.

In the mid-1930s, Bates auditioned for and won the role of Miss Bates in a Pasadena Playhouse adaptation of Jane Austen`s Emma. When she decided to continue working with the theatre group, she changed her professional name to that of the first character she played on stage. In 1939 she was introduced to Alfred Hitchcock, who cast her in her first major screen role, the vain dowager Mrs. Van Hopper, in Rebecca.

Bates appeared in more than sixty films over the course of the next thirteen years. Among her credits are Kitty Foyle, The Moon and Sixpence, Mr. Lucky, Heaven Can Wait, Since You Went Away, Kismet, Saratoga Trunk, The Secret Life of Walter Mitty, Winter Meeting, I Remember Mama, Portrait of Jennie, A Letter to Three Wives, On the Town, and Les Misérables.

Bates had a regular role on the early television sitcom The Hank McCune Show and made guest appearances on I Love Lucy, My Little Margie, and Our Miss Brooks.

Bates died of a heart attack in Los Angeles.