Taken from The Wealthy 100: From Benjamin Franklin to Bill Gates, the afterword:
Afterword: Who Are the Wealthy 100?
These portraits offer a view of the diverse panorama of American wealth – from the merchants and landowners of the Revolution to the robber baron industrialists of the turn of the century to the whiz kids of Silicon Valley. The only rule for creating an American fortune is that there are no rules. Fortunes are not made by simple recipes, but there are some common characteristics of these individuals and their empires.
Most of the Wealthy 100 found their fortunes on the frontiers. It is there, rather than the clear and well-worn paths, where wealth is discovered or created. Some, like Elais Hasket Derby and other New England merchants, made perilous sea journeys to trade with China. Some, like William Andrews Clark and the Silver Kings, found wealth on the geographic frontiers of the mining camps of Montana or Nevada. Others, like James J. Hill or Wiliam Aspinwall, cut across unbroken territory to build the railroads or span the isthmus of Panama. Some built wealth by extending the frontiers of knowledge or invention – creating automobiles, aluminum, software, or computers. Some also pushed the limits of moral frontiers, stretching law and ethics in pursuit of fortunes. On each of these frontiers, they recognized opportunities. They drove forward brashly into these territories, for they knew wealth is not found by following the herd, but rather by finding a new direction.
Some of the great fortunes came from invention, but invention alone was not enough, as Eli Whitney, Charles Goodyear, and others learned. The Wealthy 100 often rode to success on a new innovation – the sewing machine, the automobile, the spinning mill, the personal computer – but many were not inventors. They were, instead, able to turn the inventions into commercial successes. It is clearly not enough to create the better mousetrap. The key is to find a way to capture the value generated from the invention – to get the world to beat a path to your door. This was the genius of marketing. Nowhere is it more apparent than in the story of Charles W. Post, who appeared to draw much of his early inspiration from his visit to the sanitarium run by the Kelloggs, and then beat them to the punch in taking healthy cereals and beverages to the market.
Once the frontiers are broken, when the footpaths became superhighways, the opportunities to create great wealth no longer existed. Once the cities such as New York, Cincinnati, or Chicago grew up, the opportunity was gone for an Astor, a Longworth, or a Field to buy farmland that would become the downtown. So, with each succeeding generation, old frontiers are civilized and new areas have to be found to conquer.
One characteristic almost all of the individuals in this book share is driving ambition. Sometimes this ambition was just to accumulate as much money as possible. At other times, it was directed toward accumulating power or building a successful enterprise. But it was this ambition and audacity that allowed them to pursue their goals and to survive the inevitable failures on the road to success. Also, this ambition allowed them to trample rivals, exploit employees, and ransack national treasuries.
They had extraordinary determination. Nowhere is this seen more vividly than in the story of Frank Woolworth. He suffered failure after failure as a salesman in retail stores. He couldn’t even hold down a decent job. He was discouraged and broken. Yet he rebounded to create the five-and-ten and found one of the most successful retail chains in the nation. Then there is Samuel Colt, a talented inventor, whose concept of a revolver was turned down time and again by the military. But he didn’t let go of the idea, and his six-shooter, with the encouragement of the Texas Rangers, became the standard issue in the West. This determination in the face of setbacks is a quality seen in almost all of the Wealthy 100.
Driving ambition was often linked to a broad vision or a daring plan. Some of the plans were nefarious, such as Jay Gould’s scheme to corner the silver market or Rockefeller’s plan to consolidate the oil business into his own hands. Others were just bold. Robert Dollar saw a worldwide shipping line, Edward Clark saw a sewing machine in every home, and Bill Gates envisioned personal computers transforming life and work.
One might think that these visionary, ambitious individuals would be loners, and a few were. But many of these fortunes were the result of effective collaborations. There were, of course, financial backers. There also were organizations that included a balance of personalities to realize the vision of the founder.
It is intriguing how many of the fortunes are the result of a combination of talents. Brothers such as the Mellons or the Dodges were like Siamese twins, living and working together, reading each other’s thoughts. There were also the vinegar and water combinations such as the bohemian Isaac Singer and the button-down Edward Clark, or the lyrical Richard Sears and the practical Julius Rosenwald. There were quarters of partners such as the Silver Kings in Nevada or the Big Four railway builders in California, with each member contributing a distinct capability. Sometimes it was the chemistry of diametrically opposed characters that reacted to produce great wealth.
Some, like Andrew Carnegie, established even broader organizations – organizations that combined many talented individuals and produced many great fortunes. As Carnegie commented, his greatest talent was surrounding himself with “men far cleverer than himself.” Loyal lieutenants such as Henry Frick and Henry Phipps earned a place among the wealthiest Americans for their services.
Others, like J.P. Morgan, built institutions that have far lasted their founders. These companies continue to grow, and are a source of wealth and employment to this day.
The only woman on this list is Hetty Green, who plated the man’s fame of Wall Street investment, building a $10 million inheritance into $100 million. Because of the way this list was defined, with a bias against inheritance, it is natural that there should not be extraordinarily wealthy women on it. Many women play a prominent role in the stories of these fortunes – Marjorie Merriwether Post, the Astors, Vanderbilts, and others. Even today, their opportunities are often less than those of men, with very few women other than inheritors at the top of the Forbes 400.
This situation is slowly changing, and will do so even more rapidly as women entrepreneurs continue to expand their firms. Oprah Winfrey and other women are beginning to move into the ranks of the wealthiest Americans based on their own fortunes.
Where Their Money Came From and Where It Went
Half or more of the members of the list started out with nothing or almost nothing. Rockefeller, Vanderbilt, Astor, Girard, and Carnegie – the first five – all were born to families of modest means, and some immigrated to the United States with little more than the clothes on their backs. One, Stephen Van Rensselaer, gives us a glimpse of a different kind of old-style American wealth, with huge land grants from Europe that were given away at the start of the nation. Other members of the Wealthy 100, such as Howard Hughes, inherited millions of dollars, but then built their fortunes larger.
Some lived in splendor, others held on to every cent. Remember that Nicholas Longworth dressed so shabbily that when he stopped to mop his brow on a hot Cincinnati street, a passerby dropped a quarter into his outstretched hat. (Longworth replied with good humor that it was the easiest quarter he had ever earned.) Hetty Green used to carry stale sandwiches in the capacious pockets of her black dress, a dress that had turned a greenish color from neglect. Russell Sage pilfered fans and other small items from his Western Union board meetings, which he attended punctually to receive his free lunch.
Others built extraordinary pleasure domes – fabulous marble mansions that lined Fifth Avenue, ornate carriages, beach homes, and private railway cars. William Randolph Hearst managed to spend an estimated $15 million per year. Others indulged in horse racing, yachting, and other hobbies. Some were as visible as the Vanderbilts, and others as secretive as Howard Hughes.
Many – either directly or through their heirs – demonstrated generosity commensurate with their fortunes. The names of the founders of these great fortunes are also the names of some of the most prominent foundations in the world – the Carnegie Foundation, the Ford Foundation, and Packard Foundation, among others. Some of the Wealthy 100 contributed to charity after their deaths, in spite of themselves – thus there is even a Russell Sage Foundation, named for a notorious tightwad who was uninterested in philanthropy.
For many families, the great wealth was not a blessing but a curse. The Singers, the Dodges, the Gettys, the Dukes, and others suffered from the burden of being born into wealth. They also struggled with the often challenging personalities of the men who built their fortunes. Some couldn’t get rid of the family fortune fast enough, while others carefully managed and built it.
Where Will the Next Wealthy 100 Come From?
The next great American fortunes will likely be derived from some of the same combinations of vision and ambition as in the past. But the details will be different. There will be some new technology that will launch its owner into the financial stratosphere, as the fortunes of Bill Gates and Harry Ellison were made in the past. There will be new opportunities for future Warren Buffetts, investors who can read opportunities in the market and capitalize on them. Every time a frontier closes, a new frontier opens up. And every new frontier offers the possibility of a new American fortune. The question is not whether these fortunes will be created, but rather by whom?
