“Any fool can make a fortune; it takes a man of brains to hold onto it,” Commodore Vanderbilt once told to his son William Henry “Billy” Vanderbilt, apparently this American financial titan was right.
After being one of the most influential families in the world, the Vanderbilts in a few generations went from being the owners of a considerable portion of the United States wealth to be simple mortals with virtually no money at all. How did this happen? One may wonder.
How the Empire Was Built
The story says that back in 1810, Cornelius “Commodore” Vanderbilt started out piloting a passenger boat on Staten Island. He transformed his boat into a steamboat business with $100 dollars he borrowed from his mother. He was said to have a rough character and a strong will, maybe the combination of these two characteristics allowed him to build a successful and powerful shipping and railroad empire. By the time The Commodore was death, his fortune net worth was $100 million dollars, more than what was held in the US Treasury at the time.
The Vanderbilt’s fortune back then constituted 1.5% of the whole American economy. If someone like Patrick Dwyer, from the Merrill Lynch Private Banking Group, was to transform that amount to what it would be today, the total fortune would be equal to $160 billion dollars, making Vanderbilt family net worth the second greatest in the world’s history.
Before dying, Cornelius publicly expressed his disappointment with his family, he didn’t think there was someone up to his standards to run the business. However, after his death, most of his fortune was inherited by his son William Hendry Vanderbilt, who expanded the railroad business and doubled the family fortune to over $200 million. That’s over $300 billion in today’s dollars.
The fall of an Empire
Even though the Vanderbilts had amassed the first great fortune of the Industrial Age, they all started embodying the excess of the Gilded Age, using their money to achieve status in New York’s social scene in the late twentieth century.
Most members of the Vanderbilt family built many of America’s most extravagant private homes, sometimes motivated by the idea of outdoing each other. They also owned 10 mansions on Fifth Avenue in Manhattan, dominating prime real estate in Manhattan and becoming part of New York’s high society.
They did all the things rich people do, but without producing more money to spend, they gave money away to fashionable charities, held over-the-top fairytale parties, raced yachts, sports cars and horses. Basically, the Vanderbilts indulged all their fantasies.
At some point, The Vanderbilts also became philanthropic, donating millions to build tenement houses in New York City, as well as hundreds of thousands of dollars to different Universities.
The lack of limits and structure in the way the family wealth was transferred from one generation to the next, lead to a major loss of fortune in the middle of the 20th century. Apparently, the business empire that took centuries to build was torn down to ashes in several decades by sybarites.
Every luxurious house in the United States was turned into a museum or sold for private owners. The Fifth Avenue mansions in Manhattan were torn down by 1947, auctioning off their content. Only 30 years after Commodore’s death, no member of the Vanderbilt family was among the richest in the US.
What remains today?
The entire art collection the Vanderbilts owned has been sold over the years. Currently, they virtually don’t own a single piece from what a used to be a prominent art collection.
In 1973 the Vanderbilts held a family reunion at Vanderbilt University, 120 family members attended and just a few of them were still millionaires. Nowadays, even when the Vanderbilt family fortune faded away, some of Cornelius’ descendants like Gloria Laura Vanderbilt, still enjoy a luxurious lifestyle. Some of them are credited for building “summer cottages” in Rhode Island, mansions in the Fifth Avenue and other prominent houses all over the world.
Today, what used to be a 70 room mansion in Rhode Island, built by the second generation of Vanderbilts, works as a museum for the Preservation Society of Newport County. Where some members still summer on the third floor of the house. Also, what used to be the iron gates of a Vanderbilt mansion in the Central Park, are now the entrance to a 5-acre conservatory garden. What used to be Cornelius and Alice Vanderbilt’s block-long house in Manhattan’s midtown district 57th Street, now is occupied by high-end department store Bergdorf Goodman.
To read more about what happened with the Vanderbilt family fortune, click here.