The second reason the family lost the fortune seems to have stemmed from one person, Alva Vanderbilt. Alva Vanderbilt married the grandson of the Commodore. Soon after the wedding, Alva went to work spending the fortune. The Vanderbilts were not invited to any of the balls and functions of the wealthy families of New York. So she decided to build the largest mansion in New York hoping to win their approval. She wanted a weapon: a house she could use as a battling ram to crash through the gates of society.
The home ended up taking 3 years and was completed in Alva decided to host her own party at her new mansion inviting over 1, of the richest families in New York.
She won the approval of the elite social set. This social acceptance and mansion were the start of the fall, as other family members now wanted to achieve the same status. The first of these Fifth Ave mansions was completed in , the first was demolished in , and by every one had been broken to rubble. From this point forward, it was a downward spiral of various family members competing to build the largest and nicest homes that were hardly ever occupied.
And an added bonus of real estate would have meant less liquidity. Lower liquidity might have prevented such a rapid demise of the Vanderbilt fortune, simply because it would have been more time-consuming and difficult to sell assets.
Two other families I am familiar with built up massive fortunes during this time. And both of those dynasties are still thriving years later. Both of these family companies started out in concentrated businesses — but diversified into a range of different businesses.
Jardine started out selling opium, cotton, tea and silk. Today, the company is involved in motor vehicles, property investment and development, food retailing, home furnishings and luxury hotels, just to name a few sectors. There are more. Meanwhile, Swire started out in the textile trade. Real estate also became a vital core business of both companies. Both invested in Hong Kong back when it was a proverbial backwater. These families did the two things that the Vanderbilts did not.
And today, many generations later, both of these families are still worth billions of dollars. With a well-diversified portfolio that includes hard assets like real estate , you can survive just about any crisis… and grow your wealth for years to come. This is a guest post by Stansberry Churchouse Research , an independent investment research company based in Singapore and Hong Kong that delivers investment insight on Asia and around the world.
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Best credit cards Best rewards credit cards. Best cash back credit cards. Best airline credit cards. Best small business credit cards. Best balance transfer cards. Best student credit cards. For his many achievements at home and abroad, Vanderbilt's coveted U. Over the next decade he continued to focus on his various maritime dealings. With a great sense of patriotism he even played a key role during the Civil War. More than once Vanderbilt was offered top positions within President Abraham Lincoln's staff.
However, always fiercely against the politic arena he declined each time. His primary contribution to the war effort involved lending his maritime expertise and gifting the United States his most prized steamship, the five-decked Vanderbilt. This enormous boat was placed into service on May 5, where it competed in the transatlantic arena. It was not only large but also fast, able to reduce the New York-Liverpool run from eighteen days to nine. At first, the Navy rejected his offer. As an added protection against the Rebels' new creation, President Lincoln and the War Department acquired the Vanderbilt.
While it would never engage the CSS Virginia directly the titanic sidewheeler nevertheless kept her from wreaking further havoc. On May 10, Union forces captured Norfolk, denying the Virginia port facilities. With nowhere to refit and reequip itself, Confederate forces scuttled the ship on May 11th to avoid its capture. This sloop-of-war earned recognition as one of the war's most successful raiders.
Once again, the Vanderbilt never engaged the Alabama although she did prevent the vessel from creating further trouble along the U. For the service to his country, Vanderbilt was awarded a special gold medal following a resolution passed by Congress on January 28, While the Commodore's direct involvement with railroads did not begin until age 70, he had nevertheless maintained a long history in the industry.
At the time the new technology was little more than a novelty although that would soon change. In a decision that nearly killed him, Vanderbilt rode the new contraption that day. The train derailed en route and despite the traumatic event he held no serious grudge against the iron horse. In fact, Vanderbilt remained keenly interested in the newfangled device. By , he had ascended to the presidency of the Stonington.
While the system was well-managed under his direction, the Commodore's interest in railroads remained subdued as he pursued the Nicaragua canal project. This led to his resignation from the Stonington on May 14, It was the city's first such system, incorporated on April 25, Only after Vanderbilt's involvement O n May 18, he won a directorship and the following day was elected president. In he took control of the nearby Hudson River Railroad, which maintained a roughly parallel route between Albany and New York City.
Interestingly, as Mr. Stiles notes, Vanderbilt's business tactics changed as his railroad involvement deepened. Perhaps, in part, due to his advancing age he often chose diplomacy over open hostility. Another reason was a result of railroading's very nature; unlike steamships, where one could simply chart a course between two points, railroads operated on fixed infrastructure.
Since no singular company then owned a through route between major cities, companies were forced to work together. Corporate America of the 19th century was a cutthroat affair with speculators and Wall Street magnates constantly undercutting one another in an attempt to line their own pockets.
This was especially true with railroads, the largest businesses in the country. Unfortunately, with little government oversight, executives like Jay Gould, Daniel Drew, and Collis Huntington often put profits ahead of public service. Even Vanderbilt could be rightfully accused of this although his empire was not the result of direct conquests. Time and again he added systems as a defensive measures.
Following Vanderbilt's Hudson River conquest he stated: " I said this is wrong, these roads should not clash. Then step-by-step I went into the Hudson River. Typical of Vanderbilt he was concise and to the point although the actual process of acquiring the system was a chess game, one in which he had become a master. As his railroad portfolios grew, Vanderbilt left the ocean for good in Interestingly, his railroading career was predominantly from a leadership level.
Vanderbilt was rarely involved in the day-to-day, operational management of his properties; instead, he delegated these responsibilities to subordinates. He did, however, regularly take inspection trips. Faye Copeland Criminal.
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