INTERESTING FACTS ABOUT
THE VANDERBILT EMPIRE
G'day folks,
January 4, 1877 — Cornelius Vanderbilt,
the first of the “robber barons” and at one time the richest man in
America, died on this day. He left $100 million – equivalent to $2.5
billion today – to his son William, who went on to become the richest
man in the world.
Cornelius was a descendant of Dutch settlers and was born on Staten
Island, New York, in 1794, in what can best be described as humble
circumstances. His father was a farmer who made extra money by ferrying
produce between Staten Island and Manhattan.
Cornelius, who went to school only occasionally, helped his father on
the water, and by the time he was a teenager he was transporting cargo
around New York harbour in his own boat, which he had bought with a $100
loan.
In 1817, aged 23, he
got a job operating a steamboat but after his employer died, Vanderbilt
began his own steamboat operations, buying up competitors and entering
untapped markets.
Fiercely aggressive, he undercut the fares of his rivals, forcing some
out of business. He was reported to have remarked, “there is no
friendship in trade”, but in his 2009 Pulitzer Prize-winning biography,
The First Tycoon: The Epic Life of Cornelius Vanderbilt,
T.J. Stiles goes further. He describes his subject as “a tough guy,
getting into scraps with other men, beating the hell out of them and
knocking them unconscious.”
By the mid 1840s Vanderbilt was running more than 100 steamboats, and in 1855 he began a transatlantic steamship business.
This was the Gilded Age, named after the novel of that title written by Mark Twain
in 1873, which tells of greedy industrialists and corrupt politicians.
The real-life Gilded Age was presided over by entrepreneurs known as
“captains of industry” or “robber barons” according to different
viewpoints.
What is not disputed is that they grew extremely rich through the
monopolies they created in the steel, petroleum, transportation and
banking industries. Apart from Vanderbilt, the best known included John D. Rockefeller, Andrew Carnegie, Leland Stanford and J.P. Morgan.
Vanderbilt, having earned the nickname “Commodore”, created the largest
shipping empire in the world. But the Civil War was looming and in the
1860s he decided to invest in railways, believing they were the key to
uniting America.
It proved to be a shrewd move and by the end of the war Vanderbilt had
become the richest man in America with a net worth of over $65 million
{nearly $75 billion today).
He purchased railroads in New York, improved the services, cut fares,
and reportedly made $25 million. He was the driving force behind
Manhattan’s Grand Central Depot, which opened in 1871. The station was
replaced by present-day Grand Central Station in 1913.
Before Vanderbilt, a traveller from New York to Chicago had to change
trains 17 times. Then the Commodore forced the small operators out of
business, built his own lines and consolidated a route between the
Atlantic Ocean and the Great Lakes. He carried seven million passengers
each year.
At the time of his death in 1877,
Vanderbilt’s fortune was valued at $100 million (equal to nearly $2.5
billion today). That was said to be more money than the U.S. Treasury
held at the time.
His eldest son William "Billy" Vanderbilt inherited most of it. The
Commodore is said to have told him: "Any fool can make a fortune; it
takes a man of brains to hold onto it." Billy did more than that. With
strong business acumen he doubled his inheritance to nearly $200
million, making him the richest man in the world by 1883.
Billy had no competition when it came to the inheritance. In his 1989
book, Fortune's Children: The Fall of the House of Vanderbilt,
descendant Arthur T. Vanderbilt II says: “Despite the Commodore's great
success as a businessman and investor, the man was notoriously harsh and
rarely trusted his family with his business and money.
“His eight married daughters were ignored since they no longer bore the
family name, but, of course, that was just one factor that barred his
daughters from taking over the business.
“One time, after a daughter sold her house and asked him to invest the
money for her, the Commodore doubled it and then refused to return her
money. ‘Women are not fit to have money anyway,’ he said.”
Despite massive wealth, the Commodore always occupied a relatively
modest home. Some of his descendants, however, spent the Vanderbilt
money lavishly, building grand mansions on Fifth Avenue in New York
City, including three massive townhouses called the "Triple Palaces."
They also built luxurious "summer cottages" in Newport, Rhode Island;
the palatial Biltmore House in Asheville, North Carolina; and other
opulent homes.
The Breakers, built by the Commodore’s grandson Cornelius, as a “summer
home” in Newport, is a 70-room mansion completed in 1895. The building
became a National Historic Landmark in 1994 and now attracts thousands
of visitors every year.
Biltmore, finished in 1895, is a 30,000-acre estate with a 250-room
French Renaissance castle. It all took six years to build at a cost of
nearly $6 million (about $1.6 billion today). Now a tourist attraction,
it is the largest privately owned home in the United States and is still
run by Vanderbilt descendants.
Arthur T. Vanderbilt II confessed to “absolute amazement” when he was
researching his book and realised just how much money had been earned in
two generations of the family – and how quickly much of it was spent by
the next two generations.
Within 30 years of the Commodore’s death, he said, the Vanderbilts had
fallen off the list of the wealthiest families in the United States, and
less than a century later, in 1973, when 120 members of the family came
together for a reunion, there wasn't a single millionaire among them.
Clancy's comment: Mm ... wealth does not make you happy.
I'm ...
