It's a story of how one family went from almost literal slavery to being the richest in the world – before losing it all.
In this episode, we'll be talking about the rise and fall of one of the most influential families in American history – the Vanderbilts.
[00:00:00] Hello, hello hello, and welcome to English Learning for Curious Minds, by Leonardo English.
[00:00:11] The show where you can listen to fascinating stories, and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:20] I'm Alastair Budge, and today we are going to be talking about a family called the Vanderbilts.
[00:00:27] It’s a story of how one family went from almost literal slavery to being the richest in the world, before losing it all.
[00:00:36] OK then, the rise and fall of the Vanderbilts.
[00:00:42] In 1650, a Dutch farmer set sail across the Atlantic, hoping to find a new life in the so-called “New World”. His name was Jan Aertson.
[00:00:56] In all probability, he didn’t pay for his boat ticket.
[00:01:00] Instead, he would have signed a contract to work for free for a few years when he got there. In exchange, he would have been given a ticket to a new life, but only after paying off his debt in blood and sweat.
[00:01:17] He was what’s called an indentured servant, he was only one rung up from a slave.
[00:01:24] He settled in New Amsterdam, the city that would come to be called New York.
[00:01:31] He lived a humble life as a farmer, and it’s believed that he died in around 1705. Not much more is known about him.
[00:01:42] As he lay on his deathbed, having lived a relatively long but impoverished life in “New Netherland”, one imagines his thoughts might have turned to his children and grandchildren.
[00:01:56] What kind of lives would they lead?
[00:01:58] Would they find the riches and prosperity in the New World that their father and grandfather had not?
[00:02:06] Little did Jan know that his decision to cross the Atlantic would result in the creation of the richest family in America.
[00:02:16] Or at least, the richest family in America at one point in time, as it was a family that would go on to lose it all.
[00:02:26] This wealth creation all got started with Jan’s great-great-great-grandson, Cornelius Vanderbilt, who was born in 1794.
[00:02:37] He left school when he was a mere 11 years old, and started to work with his father, who had a small boat that transported passengers around New York harbour.
[00:02:48] As with many other American tycoons of the 19th century, it didn’t take long for Cornelius Vanderbilt to branch out into business on his own, and he started his own ferry service at the age of 16, transporting passengers between Staten Island and Manhattan.
[00:03:09] He was reportedly so hard-working and enthusiastic that the people working on other boats called him “The Commodore”, which is a high rank in the navy.
[00:03:21] It was meant to be a bit of a joke, but the nickname stuck; he would be known as The Commodore his entire life.
[00:03:30] Now, we could go through The Commodore’s business career in intricate detail, going through how he built his empire, but we’re not going to do that, as there are much more interesting things to talk about than the chronology and the ins and outs of how he made his millions.
[00:03:48] Long story short, this 16-year-old boy proved to be a shrewd and cut-throat businessman.
[00:03:55] He worked extremely hard, was not afraid to hammer the competition, and, like the subject of our previous episode, J.D. Rockefeller, he used all of the profits his businesses made to reinvest and grow his operations.
[00:04:12] His business was transport, essentially, first boats and then much later on expanding into railways.
[00:04:21] He offered low-cost fares to passengers, would undercut his competitors, and always made sure that his boats delivered great value for money.
[00:04:32] He was, of course, also very much in the right place at the right time.
[00:04:39] The expansion of his business coincided with the California gold rush, and a huge migration of people from the east to the west coast of America. Yes, it was possible to go overland, but it was much easier, quicker and cheaper to go by boat.
[00:04:59] Cornelius Vanderbilt, or should I say “The Commodore”, was perfectly poised to take advantage of this. His ships would take people to Panama or Nicaragua, where they would cross on land or up small rivers, then there would be another ship waiting for them on the other side.
[00:05:20] Although he made a fortune with his shipping company, it would be in an adjacent industry that he turned this fortune into, by some measures, the largest in the world.
[00:05:32] Starting in the late 1840s, Vanderbilt began buying up railway companies.
[00:05:39] And by the time of his death in 1877, it’s estimated that he owned 40% of the railroads in America.
[00:05:49] As you might expect, this turned him into a very rich man. In fact, the richest man in America at one point. By one estimate, he was worth $105 million, which is about $3 billion in today’s money.
[00:06:07] Now, in the modern era of billionaires being two a penny, of there being a lot of them, $3 billion dollars might not sound like that much, but let’s look at it in another way. At the time of his death, Vanderbilt was worth over 1% of US GDP. If someone today controlled that much, they would be worth around $300 billion.
[00:06:33] It’s not as much of a fortune as JD Rockefeller would go on to accumulate, but it is pretty substantial, so much money that it would be literally impossible to spend it all.
[00:06:45] Actually, we’ll see in a minute whether that last part is true.
[00:06:49] So, what happened next?
[00:06:51] Well, let me first tell you a little bit about what we know of the character of Cornelius Vanderbilt, of The Commodore. This is important as you might be able to make some guesses about how this impacted his children and grandchildren, and it’s also a fun thought exercise to think about what he might have thought about the subsequent actions of his descendents.
[00:07:17] Despite his huge wealth and riches, Cornelius Vanderbilt lived a relatively modest life. He worked very hard, and the only luxury he allowed himself was racehorses.
[00:07:32] He was also, by all accounts, not a particularly nice man.
[00:07:38] He married his cousin and they went on to have thirteen children, but he would reportedly frequently cheat on his wife with prostitutes, and he even sent her to a mental asylum when she refused to move house.
[00:07:53] For most of his life he was utterly uninterested in his children, especially his daughters. He also had little time for his sons, considering them to be too stupid to have any involvement in his business, and it was only later in life that he came to have any trust in their abilities.
[00:08:14] It was his oldest son, William, or “Billy” for short, that he ended up trusting to take over from him.
[00:08:22] And in his will he left 95% of his wealth to Billy, leaving the rest to be distributed between the 10 other surviving children, one son and 9 daughters.
[00:08:35] Although 5% of $105 million is still a pretty sizable inheritance, understandably, the children who had to fight over this last slice were a little miffed, confused and upset. They even tried to contest the will, saying that their father had not been mentally fit when he made it.
[00:08:59] It didn’t work, and the family’s riches passed to Billy and his children.
[00:09:05] Now, Billy, although he was initially criticised as being slow and unintelligent by his father, he proved to be quite the opposite after his father’s death.
[00:09:17] He made some savvy investments, he wasn’t initially a lavish spender, and by the time of his death a mere 9 years after his father, he had managed to turn his $100 million inheritance into $200 million; which is something like six and a half billion dollars in today’s money.
[00:09:39] Not bad going at all.
[00:09:42] Billy was good at making money, but he was also pretty good at spending it. He was an avid art collector, and he built himself a huge mansion in Manhattan.
[00:09:54] Merely the construction of this mansion cost around $70 million dollars in today’s money. It was vast, 58 rooms in total, and it was furnished to an unbelievable level of luxury - there were even doors inspired by the baptistry in Florence that cost a reported three quarters of a million dollars in today’s money.
[00:10:20] Billy perhaps subscribed to the view that, try as he might, there was no possible way his bank balance could go down.
[00:10:28] He had splurged on all these luxuries, but he had still managed to double his fortune.
[00:10:34] On Billy’s death, the by now $200 million Vanderbilt fortune was divided between his eight living children and his wife.
[00:10:44] And it’s here that things really started going downhill for the Vanderbilt family.
[00:10:51] Billy had clearly allowed himself some luxuries - he was one of the richest people in the world, after all - but it would be his children that would take luxury and opulence to an entirely different level.
[00:11:05] His eldest son, Cornelius II, built a huge house in Manhattan. It was at the time, and still is, the largest private house ever built in New York City.
[00:11:18] To give you some idea of the scale of it, it was six floors, not including the basement, it had 154 rooms, and required 40 servants to attend to its owners every whim and wish.
[00:11:34] And this was only one of Cornelius II’s residences.
[00:11:38] Others included a supposed “cottage”, his summer residence, called The Breakers with a mere 70 rooms.
[00:11:48] However, what The Breakers lacked in size, it made up for in style; it was built in the style of an Italian Renaissance palace, featuring opulent interiors, intricate woodwork, marble and gold leaf.
[00:12:03] The cost to build it, according to one report, was over $250 million in today’s money.
[00:12:11] And pretty much all of the children did this, with some even building bigger and more ostentatious residences than Cornelius II’s 157-room palace.
[00:12:23] The third son, George Washington Vanderbilt, ordered the construction of a 250-room mansion in North Carolina.
[00:12:34] But, try as they might, and despite all of this vast wealth and gargantuan residences, the Vanderbilts were looked down on by much of American “high society”.
[00:12:47] The Commodore had been known as rude and foulmouthed, and the Vanderbilt family was seen as having accumulated a lot of money in a short period of time.
[00:12:59] They might have been filthy rich, but they were considered “new money”, not having real “class”.
[00:13:07] Contrast this to the “old money” of New York, money that had been passed down from generation to generation, and the Vanderbilt family found themselves looked down upon by more established American family dynasties.
[00:13:23] But, money has a great way of fixing problems, and in one famous incident from 1883, George Washington Vanderbilt’s wife, Alva, decided to put her money to work.
[00:13:38] The Vanderbilt family had been spending like crazy, but Alva Vanderbilt still couldn’t get an invite to the most sought after party in New York society, an annual party held by a socialite called Caroline Astor.
[00:13:55] Every year, 400 people were invited to this party, and if your name wasn’t on the list you were not part of “society”.
[00:14:05] And Alva’s name, well, it wasn’t on the list.
[00:14:10] So, Alva Vanderbilt decided to throw her own party, but this time 1,200 people would be invited.
[00:14:20] It was a costume ball, and no expense was spared. The event cost today’s equivalent of $6 million.
[00:14:30] As the great and the good of New York high society received their invitations, Caroline Astor’s was nowhere to be seen.
[00:14:39] Of course, there was no way that Caroline Astor was not going to this party, so she was forced to pay Alva Vanderbilt a visit.
[00:14:50] In typical fashion, Alva said of course she had wanted to invite Caroline Astor, but she had never been invited to the Astor residence, so she didn’t know the address to send the invitation.
[00:15:02] No doubt terrible fake smiles were exchanged, but Alva Vanderbilt’s plan had worked. The party was the talk of the town; it was a huge success.
[00:15:15] $6 million dollars very well spent. The Vanderbilts were now officially part of society.
[00:15:23] As you might have guessed by now, The Commodore’s descendants were more concerned with building vast residences and throwing lavish parties than growing the family business.
[00:15:35] After all, they had vast amounts of money, a pot that seemed like it would never run out.
[00:15:42] Or so they thought…
[00:15:44] So, what happened?
[00:15:46] Well, a combination of poor planning, bad investment decisions, massive spending, lots of children, and inheritance tax chipped away at the fortune every time it was passed from one generation to the next.
[00:16:02] The Great Depression didn’t help things, and when the Vanderbilts realised quite how dire their situation was, it was too late. Just 50 years after The Commodore’s death, in 1877, the fortune he had built up was practically gone, evaporated into thin air.
[00:16:24] By the 1940s, the vast residences that the Vanderbilt family had built for themselves were either crumbling or being knocked down and sold. There was simply no money left to pay for the huge maintenance costs.
[00:16:40] Houses, yachts, paintings, statues, vases and racehorses had to be sold.
[00:16:47] What would The Commodore have thought of it all? Well, it’s hard to imagine he would have been impressed.
[00:16:54] Many of the Vanderbilts’ offspring drank and gambled their way through their inheritance, others squandered it on parties and ostentatious projects.
[00:17:05] After William, after Billy, pretty much nothing was done to grow the empire, and there seemed to be no acknowledgement or understanding of the fact that the money would eventually run out.
[00:17:19] Still, there are plenty of traces of the Vanderbilt legacy that are still around today.
[00:17:24] If you have heard the name “Vanderbilt”, it might well be because of Vanderbilt University, the university formed after a $1 million donation from Cornelius Vanderbilt.
[00:17:36] You can go and visit Biltmore Estate, the 250-room mansion built by George Washington Vanderbilt. And if you visit New York City by train, you might well pull into Grand Central Station, which was built by the Commodore himself.
[00:17:52] Still, it is a remarkable feat to go from all the riches of the world down to zero, especially in such a short period of time.
[00:18:02] So, to finish this episode about one of the most extreme stories of squandered riches in history, I will leave you with the words of the once great Egyptian pharaoh, Ramesses II, as imagined in the famous poem from Percy Bysshe Shelley:
[00:18:19] "My name is Ozymandias, King of Kings;
[00:18:22] Look on my Works, ye Mighty, and despair!
[00:18:26] Nothing beside remains. Round the decay
[00:18:30] Of that colossal Wreck, boundless and bare
[00:18:33] The lone and level sands stretch far away."
[00:18:40] OK then, that is it for today's episode on The Rise And Fall Of The Vanderbilts.
[00:18:46] I hope it's been an interesting one, and that you've learnt something new.
[00:18:50] As always, I would love to know what you thought of this episode.
[00:18:54] Are there any similar families in your country that have gone from huge riches and then lost it all?
[00:19:00] Is it possible to have any sympathy for the Vanderbilts?
[00:19:04] I would love to know, so let’s get this discussion started.
[00:19:07] You can head right into our community forum, which is at community.leonardoenglish.com and get chatting away to other curious minds.
[00:19:15] You've been listening to English Learning for Curious Minds, by Leonardo English.
[00:19:20] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
[END OF EPISODE]
[00:00:00] Hello, hello hello, and welcome to English Learning for Curious Minds, by Leonardo English.
[00:00:11] The show where you can listen to fascinating stories, and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:20] I'm Alastair Budge, and today we are going to be talking about a family called the Vanderbilts.
[00:00:27] It’s a story of how one family went from almost literal slavery to being the richest in the world, before losing it all.
[00:00:36] OK then, the rise and fall of the Vanderbilts.
[00:00:42] In 1650, a Dutch farmer set sail across the Atlantic, hoping to find a new life in the so-called “New World”. His name was Jan Aertson.
[00:00:56] In all probability, he didn’t pay for his boat ticket.
[00:01:00] Instead, he would have signed a contract to work for free for a few years when he got there. In exchange, he would have been given a ticket to a new life, but only after paying off his debt in blood and sweat.
[00:01:17] He was what’s called an indentured servant, he was only one rung up from a slave.
[00:01:24] He settled in New Amsterdam, the city that would come to be called New York.
[00:01:31] He lived a humble life as a farmer, and it’s believed that he died in around 1705. Not much more is known about him.
[00:01:42] As he lay on his deathbed, having lived a relatively long but impoverished life in “New Netherland”, one imagines his thoughts might have turned to his children and grandchildren.
[00:01:56] What kind of lives would they lead?
[00:01:58] Would they find the riches and prosperity in the New World that their father and grandfather had not?
[00:02:06] Little did Jan know that his decision to cross the Atlantic would result in the creation of the richest family in America.
[00:02:16] Or at least, the richest family in America at one point in time, as it was a family that would go on to lose it all.
[00:02:26] This wealth creation all got started with Jan’s great-great-great-grandson, Cornelius Vanderbilt, who was born in 1794.
[00:02:37] He left school when he was a mere 11 years old, and started to work with his father, who had a small boat that transported passengers around New York harbour.
[00:02:48] As with many other American tycoons of the 19th century, it didn’t take long for Cornelius Vanderbilt to branch out into business on his own, and he started his own ferry service at the age of 16, transporting passengers between Staten Island and Manhattan.
[00:03:09] He was reportedly so hard-working and enthusiastic that the people working on other boats called him “The Commodore”, which is a high rank in the navy.
[00:03:21] It was meant to be a bit of a joke, but the nickname stuck; he would be known as The Commodore his entire life.
[00:03:30] Now, we could go through The Commodore’s business career in intricate detail, going through how he built his empire, but we’re not going to do that, as there are much more interesting things to talk about than the chronology and the ins and outs of how he made his millions.
[00:03:48] Long story short, this 16-year-old boy proved to be a shrewd and cut-throat businessman.
[00:03:55] He worked extremely hard, was not afraid to hammer the competition, and, like the subject of our previous episode, J.D. Rockefeller, he used all of the profits his businesses made to reinvest and grow his operations.
[00:04:12] His business was transport, essentially, first boats and then much later on expanding into railways.
[00:04:21] He offered low-cost fares to passengers, would undercut his competitors, and always made sure that his boats delivered great value for money.
[00:04:32] He was, of course, also very much in the right place at the right time.
[00:04:39] The expansion of his business coincided with the California gold rush, and a huge migration of people from the east to the west coast of America. Yes, it was possible to go overland, but it was much easier, quicker and cheaper to go by boat.
[00:04:59] Cornelius Vanderbilt, or should I say “The Commodore”, was perfectly poised to take advantage of this. His ships would take people to Panama or Nicaragua, where they would cross on land or up small rivers, then there would be another ship waiting for them on the other side.
[00:05:20] Although he made a fortune with his shipping company, it would be in an adjacent industry that he turned this fortune into, by some measures, the largest in the world.
[00:05:32] Starting in the late 1840s, Vanderbilt began buying up railway companies.
[00:05:39] And by the time of his death in 1877, it’s estimated that he owned 40% of the railroads in America.
[00:05:49] As you might expect, this turned him into a very rich man. In fact, the richest man in America at one point. By one estimate, he was worth $105 million, which is about $3 billion in today’s money.
[00:06:07] Now, in the modern era of billionaires being two a penny, of there being a lot of them, $3 billion dollars might not sound like that much, but let’s look at it in another way. At the time of his death, Vanderbilt was worth over 1% of US GDP. If someone today controlled that much, they would be worth around $300 billion.
[00:06:33] It’s not as much of a fortune as JD Rockefeller would go on to accumulate, but it is pretty substantial, so much money that it would be literally impossible to spend it all.
[00:06:45] Actually, we’ll see in a minute whether that last part is true.
[00:06:49] So, what happened next?
[00:06:51] Well, let me first tell you a little bit about what we know of the character of Cornelius Vanderbilt, of The Commodore. This is important as you might be able to make some guesses about how this impacted his children and grandchildren, and it’s also a fun thought exercise to think about what he might have thought about the subsequent actions of his descendents.
[00:07:17] Despite his huge wealth and riches, Cornelius Vanderbilt lived a relatively modest life. He worked very hard, and the only luxury he allowed himself was racehorses.
[00:07:32] He was also, by all accounts, not a particularly nice man.
[00:07:38] He married his cousin and they went on to have thirteen children, but he would reportedly frequently cheat on his wife with prostitutes, and he even sent her to a mental asylum when she refused to move house.
[00:07:53] For most of his life he was utterly uninterested in his children, especially his daughters. He also had little time for his sons, considering them to be too stupid to have any involvement in his business, and it was only later in life that he came to have any trust in their abilities.
[00:08:14] It was his oldest son, William, or “Billy” for short, that he ended up trusting to take over from him.
[00:08:22] And in his will he left 95% of his wealth to Billy, leaving the rest to be distributed between the 10 other surviving children, one son and 9 daughters.
[00:08:35] Although 5% of $105 million is still a pretty sizable inheritance, understandably, the children who had to fight over this last slice were a little miffed, confused and upset. They even tried to contest the will, saying that their father had not been mentally fit when he made it.
[00:08:59] It didn’t work, and the family’s riches passed to Billy and his children.
[00:09:05] Now, Billy, although he was initially criticised as being slow and unintelligent by his father, he proved to be quite the opposite after his father’s death.
[00:09:17] He made some savvy investments, he wasn’t initially a lavish spender, and by the time of his death a mere 9 years after his father, he had managed to turn his $100 million inheritance into $200 million; which is something like six and a half billion dollars in today’s money.
[00:09:39] Not bad going at all.
[00:09:42] Billy was good at making money, but he was also pretty good at spending it. He was an avid art collector, and he built himself a huge mansion in Manhattan.
[00:09:54] Merely the construction of this mansion cost around $70 million dollars in today’s money. It was vast, 58 rooms in total, and it was furnished to an unbelievable level of luxury - there were even doors inspired by the baptistry in Florence that cost a reported three quarters of a million dollars in today’s money.
[00:10:20] Billy perhaps subscribed to the view that, try as he might, there was no possible way his bank balance could go down.
[00:10:28] He had splurged on all these luxuries, but he had still managed to double his fortune.
[00:10:34] On Billy’s death, the by now $200 million Vanderbilt fortune was divided between his eight living children and his wife.
[00:10:44] And it’s here that things really started going downhill for the Vanderbilt family.
[00:10:51] Billy had clearly allowed himself some luxuries - he was one of the richest people in the world, after all - but it would be his children that would take luxury and opulence to an entirely different level.
[00:11:05] His eldest son, Cornelius II, built a huge house in Manhattan. It was at the time, and still is, the largest private house ever built in New York City.
[00:11:18] To give you some idea of the scale of it, it was six floors, not including the basement, it had 154 rooms, and required 40 servants to attend to its owners every whim and wish.
[00:11:34] And this was only one of Cornelius II’s residences.
[00:11:38] Others included a supposed “cottage”, his summer residence, called The Breakers with a mere 70 rooms.
[00:11:48] However, what The Breakers lacked in size, it made up for in style; it was built in the style of an Italian Renaissance palace, featuring opulent interiors, intricate woodwork, marble and gold leaf.
[00:12:03] The cost to build it, according to one report, was over $250 million in today’s money.
[00:12:11] And pretty much all of the children did this, with some even building bigger and more ostentatious residences than Cornelius II’s 157-room palace.
[00:12:23] The third son, George Washington Vanderbilt, ordered the construction of a 250-room mansion in North Carolina.
[00:12:34] But, try as they might, and despite all of this vast wealth and gargantuan residences, the Vanderbilts were looked down on by much of American “high society”.
[00:12:47] The Commodore had been known as rude and foulmouthed, and the Vanderbilt family was seen as having accumulated a lot of money in a short period of time.
[00:12:59] They might have been filthy rich, but they were considered “new money”, not having real “class”.
[00:13:07] Contrast this to the “old money” of New York, money that had been passed down from generation to generation, and the Vanderbilt family found themselves looked down upon by more established American family dynasties.
[00:13:23] But, money has a great way of fixing problems, and in one famous incident from 1883, George Washington Vanderbilt’s wife, Alva, decided to put her money to work.
[00:13:38] The Vanderbilt family had been spending like crazy, but Alva Vanderbilt still couldn’t get an invite to the most sought after party in New York society, an annual party held by a socialite called Caroline Astor.
[00:13:55] Every year, 400 people were invited to this party, and if your name wasn’t on the list you were not part of “society”.
[00:14:05] And Alva’s name, well, it wasn’t on the list.
[00:14:10] So, Alva Vanderbilt decided to throw her own party, but this time 1,200 people would be invited.
[00:14:20] It was a costume ball, and no expense was spared. The event cost today’s equivalent of $6 million.
[00:14:30] As the great and the good of New York high society received their invitations, Caroline Astor’s was nowhere to be seen.
[00:14:39] Of course, there was no way that Caroline Astor was not going to this party, so she was forced to pay Alva Vanderbilt a visit.
[00:14:50] In typical fashion, Alva said of course she had wanted to invite Caroline Astor, but she had never been invited to the Astor residence, so she didn’t know the address to send the invitation.
[00:15:02] No doubt terrible fake smiles were exchanged, but Alva Vanderbilt’s plan had worked. The party was the talk of the town; it was a huge success.
[00:15:15] $6 million dollars very well spent. The Vanderbilts were now officially part of society.
[00:15:23] As you might have guessed by now, The Commodore’s descendants were more concerned with building vast residences and throwing lavish parties than growing the family business.
[00:15:35] After all, they had vast amounts of money, a pot that seemed like it would never run out.
[00:15:42] Or so they thought…
[00:15:44] So, what happened?
[00:15:46] Well, a combination of poor planning, bad investment decisions, massive spending, lots of children, and inheritance tax chipped away at the fortune every time it was passed from one generation to the next.
[00:16:02] The Great Depression didn’t help things, and when the Vanderbilts realised quite how dire their situation was, it was too late. Just 50 years after The Commodore’s death, in 1877, the fortune he had built up was practically gone, evaporated into thin air.
[00:16:24] By the 1940s, the vast residences that the Vanderbilt family had built for themselves were either crumbling or being knocked down and sold. There was simply no money left to pay for the huge maintenance costs.
[00:16:40] Houses, yachts, paintings, statues, vases and racehorses had to be sold.
[00:16:47] What would The Commodore have thought of it all? Well, it’s hard to imagine he would have been impressed.
[00:16:54] Many of the Vanderbilts’ offspring drank and gambled their way through their inheritance, others squandered it on parties and ostentatious projects.
[00:17:05] After William, after Billy, pretty much nothing was done to grow the empire, and there seemed to be no acknowledgement or understanding of the fact that the money would eventually run out.
[00:17:19] Still, there are plenty of traces of the Vanderbilt legacy that are still around today.
[00:17:24] If you have heard the name “Vanderbilt”, it might well be because of Vanderbilt University, the university formed after a $1 million donation from Cornelius Vanderbilt.
[00:17:36] You can go and visit Biltmore Estate, the 250-room mansion built by George Washington Vanderbilt. And if you visit New York City by train, you might well pull into Grand Central Station, which was built by the Commodore himself.
[00:17:52] Still, it is a remarkable feat to go from all the riches of the world down to zero, especially in such a short period of time.
[00:18:02] So, to finish this episode about one of the most extreme stories of squandered riches in history, I will leave you with the words of the once great Egyptian pharaoh, Ramesses II, as imagined in the famous poem from Percy Bysshe Shelley:
[00:18:19] "My name is Ozymandias, King of Kings;
[00:18:22] Look on my Works, ye Mighty, and despair!
[00:18:26] Nothing beside remains. Round the decay
[00:18:30] Of that colossal Wreck, boundless and bare
[00:18:33] The lone and level sands stretch far away."
[00:18:40] OK then, that is it for today's episode on The Rise And Fall Of The Vanderbilts.
[00:18:46] I hope it's been an interesting one, and that you've learnt something new.
[00:18:50] As always, I would love to know what you thought of this episode.
[00:18:54] Are there any similar families in your country that have gone from huge riches and then lost it all?
[00:19:00] Is it possible to have any sympathy for the Vanderbilts?
[00:19:04] I would love to know, so let’s get this discussion started.
[00:19:07] You can head right into our community forum, which is at community.leonardoenglish.com and get chatting away to other curious minds.
[00:19:15] You've been listening to English Learning for Curious Minds, by Leonardo English.
[00:19:20] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
[END OF EPISODE]
[00:00:00] Hello, hello hello, and welcome to English Learning for Curious Minds, by Leonardo English.
[00:00:11] The show where you can listen to fascinating stories, and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:20] I'm Alastair Budge, and today we are going to be talking about a family called the Vanderbilts.
[00:00:27] It’s a story of how one family went from almost literal slavery to being the richest in the world, before losing it all.
[00:00:36] OK then, the rise and fall of the Vanderbilts.
[00:00:42] In 1650, a Dutch farmer set sail across the Atlantic, hoping to find a new life in the so-called “New World”. His name was Jan Aertson.
[00:00:56] In all probability, he didn’t pay for his boat ticket.
[00:01:00] Instead, he would have signed a contract to work for free for a few years when he got there. In exchange, he would have been given a ticket to a new life, but only after paying off his debt in blood and sweat.
[00:01:17] He was what’s called an indentured servant, he was only one rung up from a slave.
[00:01:24] He settled in New Amsterdam, the city that would come to be called New York.
[00:01:31] He lived a humble life as a farmer, and it’s believed that he died in around 1705. Not much more is known about him.
[00:01:42] As he lay on his deathbed, having lived a relatively long but impoverished life in “New Netherland”, one imagines his thoughts might have turned to his children and grandchildren.
[00:01:56] What kind of lives would they lead?
[00:01:58] Would they find the riches and prosperity in the New World that their father and grandfather had not?
[00:02:06] Little did Jan know that his decision to cross the Atlantic would result in the creation of the richest family in America.
[00:02:16] Or at least, the richest family in America at one point in time, as it was a family that would go on to lose it all.
[00:02:26] This wealth creation all got started with Jan’s great-great-great-grandson, Cornelius Vanderbilt, who was born in 1794.
[00:02:37] He left school when he was a mere 11 years old, and started to work with his father, who had a small boat that transported passengers around New York harbour.
[00:02:48] As with many other American tycoons of the 19th century, it didn’t take long for Cornelius Vanderbilt to branch out into business on his own, and he started his own ferry service at the age of 16, transporting passengers between Staten Island and Manhattan.
[00:03:09] He was reportedly so hard-working and enthusiastic that the people working on other boats called him “The Commodore”, which is a high rank in the navy.
[00:03:21] It was meant to be a bit of a joke, but the nickname stuck; he would be known as The Commodore his entire life.
[00:03:30] Now, we could go through The Commodore’s business career in intricate detail, going through how he built his empire, but we’re not going to do that, as there are much more interesting things to talk about than the chronology and the ins and outs of how he made his millions.
[00:03:48] Long story short, this 16-year-old boy proved to be a shrewd and cut-throat businessman.
[00:03:55] He worked extremely hard, was not afraid to hammer the competition, and, like the subject of our previous episode, J.D. Rockefeller, he used all of the profits his businesses made to reinvest and grow his operations.
[00:04:12] His business was transport, essentially, first boats and then much later on expanding into railways.
[00:04:21] He offered low-cost fares to passengers, would undercut his competitors, and always made sure that his boats delivered great value for money.
[00:04:32] He was, of course, also very much in the right place at the right time.
[00:04:39] The expansion of his business coincided with the California gold rush, and a huge migration of people from the east to the west coast of America. Yes, it was possible to go overland, but it was much easier, quicker and cheaper to go by boat.
[00:04:59] Cornelius Vanderbilt, or should I say “The Commodore”, was perfectly poised to take advantage of this. His ships would take people to Panama or Nicaragua, where they would cross on land or up small rivers, then there would be another ship waiting for them on the other side.
[00:05:20] Although he made a fortune with his shipping company, it would be in an adjacent industry that he turned this fortune into, by some measures, the largest in the world.
[00:05:32] Starting in the late 1840s, Vanderbilt began buying up railway companies.
[00:05:39] And by the time of his death in 1877, it’s estimated that he owned 40% of the railroads in America.
[00:05:49] As you might expect, this turned him into a very rich man. In fact, the richest man in America at one point. By one estimate, he was worth $105 million, which is about $3 billion in today’s money.
[00:06:07] Now, in the modern era of billionaires being two a penny, of there being a lot of them, $3 billion dollars might not sound like that much, but let’s look at it in another way. At the time of his death, Vanderbilt was worth over 1% of US GDP. If someone today controlled that much, they would be worth around $300 billion.
[00:06:33] It’s not as much of a fortune as JD Rockefeller would go on to accumulate, but it is pretty substantial, so much money that it would be literally impossible to spend it all.
[00:06:45] Actually, we’ll see in a minute whether that last part is true.
[00:06:49] So, what happened next?
[00:06:51] Well, let me first tell you a little bit about what we know of the character of Cornelius Vanderbilt, of The Commodore. This is important as you might be able to make some guesses about how this impacted his children and grandchildren, and it’s also a fun thought exercise to think about what he might have thought about the subsequent actions of his descendents.
[00:07:17] Despite his huge wealth and riches, Cornelius Vanderbilt lived a relatively modest life. He worked very hard, and the only luxury he allowed himself was racehorses.
[00:07:32] He was also, by all accounts, not a particularly nice man.
[00:07:38] He married his cousin and they went on to have thirteen children, but he would reportedly frequently cheat on his wife with prostitutes, and he even sent her to a mental asylum when she refused to move house.
[00:07:53] For most of his life he was utterly uninterested in his children, especially his daughters. He also had little time for his sons, considering them to be too stupid to have any involvement in his business, and it was only later in life that he came to have any trust in their abilities.
[00:08:14] It was his oldest son, William, or “Billy” for short, that he ended up trusting to take over from him.
[00:08:22] And in his will he left 95% of his wealth to Billy, leaving the rest to be distributed between the 10 other surviving children, one son and 9 daughters.
[00:08:35] Although 5% of $105 million is still a pretty sizable inheritance, understandably, the children who had to fight over this last slice were a little miffed, confused and upset. They even tried to contest the will, saying that their father had not been mentally fit when he made it.
[00:08:59] It didn’t work, and the family’s riches passed to Billy and his children.
[00:09:05] Now, Billy, although he was initially criticised as being slow and unintelligent by his father, he proved to be quite the opposite after his father’s death.
[00:09:17] He made some savvy investments, he wasn’t initially a lavish spender, and by the time of his death a mere 9 years after his father, he had managed to turn his $100 million inheritance into $200 million; which is something like six and a half billion dollars in today’s money.
[00:09:39] Not bad going at all.
[00:09:42] Billy was good at making money, but he was also pretty good at spending it. He was an avid art collector, and he built himself a huge mansion in Manhattan.
[00:09:54] Merely the construction of this mansion cost around $70 million dollars in today’s money. It was vast, 58 rooms in total, and it was furnished to an unbelievable level of luxury - there were even doors inspired by the baptistry in Florence that cost a reported three quarters of a million dollars in today’s money.
[00:10:20] Billy perhaps subscribed to the view that, try as he might, there was no possible way his bank balance could go down.
[00:10:28] He had splurged on all these luxuries, but he had still managed to double his fortune.
[00:10:34] On Billy’s death, the by now $200 million Vanderbilt fortune was divided between his eight living children and his wife.
[00:10:44] And it’s here that things really started going downhill for the Vanderbilt family.
[00:10:51] Billy had clearly allowed himself some luxuries - he was one of the richest people in the world, after all - but it would be his children that would take luxury and opulence to an entirely different level.
[00:11:05] His eldest son, Cornelius II, built a huge house in Manhattan. It was at the time, and still is, the largest private house ever built in New York City.
[00:11:18] To give you some idea of the scale of it, it was six floors, not including the basement, it had 154 rooms, and required 40 servants to attend to its owners every whim and wish.
[00:11:34] And this was only one of Cornelius II’s residences.
[00:11:38] Others included a supposed “cottage”, his summer residence, called The Breakers with a mere 70 rooms.
[00:11:48] However, what The Breakers lacked in size, it made up for in style; it was built in the style of an Italian Renaissance palace, featuring opulent interiors, intricate woodwork, marble and gold leaf.
[00:12:03] The cost to build it, according to one report, was over $250 million in today’s money.
[00:12:11] And pretty much all of the children did this, with some even building bigger and more ostentatious residences than Cornelius II’s 157-room palace.
[00:12:23] The third son, George Washington Vanderbilt, ordered the construction of a 250-room mansion in North Carolina.
[00:12:34] But, try as they might, and despite all of this vast wealth and gargantuan residences, the Vanderbilts were looked down on by much of American “high society”.
[00:12:47] The Commodore had been known as rude and foulmouthed, and the Vanderbilt family was seen as having accumulated a lot of money in a short period of time.
[00:12:59] They might have been filthy rich, but they were considered “new money”, not having real “class”.
[00:13:07] Contrast this to the “old money” of New York, money that had been passed down from generation to generation, and the Vanderbilt family found themselves looked down upon by more established American family dynasties.
[00:13:23] But, money has a great way of fixing problems, and in one famous incident from 1883, George Washington Vanderbilt’s wife, Alva, decided to put her money to work.
[00:13:38] The Vanderbilt family had been spending like crazy, but Alva Vanderbilt still couldn’t get an invite to the most sought after party in New York society, an annual party held by a socialite called Caroline Astor.
[00:13:55] Every year, 400 people were invited to this party, and if your name wasn’t on the list you were not part of “society”.
[00:14:05] And Alva’s name, well, it wasn’t on the list.
[00:14:10] So, Alva Vanderbilt decided to throw her own party, but this time 1,200 people would be invited.
[00:14:20] It was a costume ball, and no expense was spared. The event cost today’s equivalent of $6 million.
[00:14:30] As the great and the good of New York high society received their invitations, Caroline Astor’s was nowhere to be seen.
[00:14:39] Of course, there was no way that Caroline Astor was not going to this party, so she was forced to pay Alva Vanderbilt a visit.
[00:14:50] In typical fashion, Alva said of course she had wanted to invite Caroline Astor, but she had never been invited to the Astor residence, so she didn’t know the address to send the invitation.
[00:15:02] No doubt terrible fake smiles were exchanged, but Alva Vanderbilt’s plan had worked. The party was the talk of the town; it was a huge success.
[00:15:15] $6 million dollars very well spent. The Vanderbilts were now officially part of society.
[00:15:23] As you might have guessed by now, The Commodore’s descendants were more concerned with building vast residences and throwing lavish parties than growing the family business.
[00:15:35] After all, they had vast amounts of money, a pot that seemed like it would never run out.
[00:15:42] Or so they thought…
[00:15:44] So, what happened?
[00:15:46] Well, a combination of poor planning, bad investment decisions, massive spending, lots of children, and inheritance tax chipped away at the fortune every time it was passed from one generation to the next.
[00:16:02] The Great Depression didn’t help things, and when the Vanderbilts realised quite how dire their situation was, it was too late. Just 50 years after The Commodore’s death, in 1877, the fortune he had built up was practically gone, evaporated into thin air.
[00:16:24] By the 1940s, the vast residences that the Vanderbilt family had built for themselves were either crumbling or being knocked down and sold. There was simply no money left to pay for the huge maintenance costs.
[00:16:40] Houses, yachts, paintings, statues, vases and racehorses had to be sold.
[00:16:47] What would The Commodore have thought of it all? Well, it’s hard to imagine he would have been impressed.
[00:16:54] Many of the Vanderbilts’ offspring drank and gambled their way through their inheritance, others squandered it on parties and ostentatious projects.
[00:17:05] After William, after Billy, pretty much nothing was done to grow the empire, and there seemed to be no acknowledgement or understanding of the fact that the money would eventually run out.
[00:17:19] Still, there are plenty of traces of the Vanderbilt legacy that are still around today.
[00:17:24] If you have heard the name “Vanderbilt”, it might well be because of Vanderbilt University, the university formed after a $1 million donation from Cornelius Vanderbilt.
[00:17:36] You can go and visit Biltmore Estate, the 250-room mansion built by George Washington Vanderbilt. And if you visit New York City by train, you might well pull into Grand Central Station, which was built by the Commodore himself.
[00:17:52] Still, it is a remarkable feat to go from all the riches of the world down to zero, especially in such a short period of time.
[00:18:02] So, to finish this episode about one of the most extreme stories of squandered riches in history, I will leave you with the words of the once great Egyptian pharaoh, Ramesses II, as imagined in the famous poem from Percy Bysshe Shelley:
[00:18:19] "My name is Ozymandias, King of Kings;
[00:18:22] Look on my Works, ye Mighty, and despair!
[00:18:26] Nothing beside remains. Round the decay
[00:18:30] Of that colossal Wreck, boundless and bare
[00:18:33] The lone and level sands stretch far away."
[00:18:40] OK then, that is it for today's episode on The Rise And Fall Of The Vanderbilts.
[00:18:46] I hope it's been an interesting one, and that you've learnt something new.
[00:18:50] As always, I would love to know what you thought of this episode.
[00:18:54] Are there any similar families in your country that have gone from huge riches and then lost it all?
[00:19:00] Is it possible to have any sympathy for the Vanderbilts?
[00:19:04] I would love to know, so let’s get this discussion started.
[00:19:07] You can head right into our community forum, which is at community.leonardoenglish.com and get chatting away to other curious minds.
[00:19:15] You've been listening to English Learning for Curious Minds, by Leonardo English.
[00:19:20] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
[END OF EPISODE]
