No More Learning

Private wealth acquired by new entrepreneurs, new in the sense of first showing themselves since World War II or even World War I, does not amount to much relatively, as we have observed. The conclusion is evident: Although there are indeed new fortunes large and small, either post-1918 or post-1945, they are neither numerous, of unusual amplitude nor especially potent in politico-economic affairs. With the exception of the Kennedy fortune, none of the later fortunes has played a prominent role in public affairs, and the political activities of the Kennedys have not been a consequence of their financial interests. The Kennedys were political long before they had money, though money has proved to be a fortuitous aid to their political
inclinations. Except for Joseph P. , the Kennedys--grandfathers and grandsons--have all been political rather than pecuniary men.
Nearly all the current large incomes, those exceeding $1 million, $500,000 or even $100,000 or $50,000 a year, are derived in fact from old property accumulations, by inheritors--that is, by people who never did whatever one is required to do, approved or disapproved, creative or noncreative, in order to assemble a fortune. And, it would appear, no amount of dedicated entrepreneurial effort by newcomers can place them in the financial class of the inheritors.
Some 2,000 to 3,000 incomes, more or less, in the range of $50,000 to $500,000 (a very few higher) accrue to salaried corporation executives, the stewards and overseers of vast industrial domains for the very rich. These men came into these revenues rather late in life, in their late forties and fifties mostly, and face early retirement from the scene. Few are heavily propertied. Independent small businessmen--a small enterprise being generally accepted now by connoisseurs as one with assets below $50 million-- account for perhaps the same number of such incomes.
A considerably smaller number accrue to a scattering of popular entertainers and athletes, whose earning power usually diminishes steeply with the fading of their youth. Very few large incomes, contrary to popular supposition, accrue to inventors. None whatever, as the record clearly shows, accrue to scientists, scholars and trained professionals of various kinds; only a handful to highly specialized medical doctors working mainly for the propertied class, and to an occasional executive engineer. Top- rank military officers are paid meagerly, although some manage to find their way to the tag-end of the corporate gravy train for their few years remaining after official retirement. In brief, few members of the most highly trained professional classes even late in life receive incomes approaching the level of $50,000--or even $30,000. They are, income-wise, strictly menials, necessary technicians on the economic plantation. In the world's most opulent economy they, together with the less skilled bulk of the populace, must count their pennies in an economy of widespread personal scarcity.
Increases in the number of large incomes paralleling cyclical increases in prices and quickened economic activity therefore do not indicate, as naive financial observers conclude, that new fortunes are being made right and left. They signify only that established accumulations are profiting by the cyclical trend. Whether the income is high or low the property always remains, ready to show its truly magnificent earning power in upward cyclical phases, showing its brute staying power in downward slides.
In the combined Fortune, Saturday Evening Post and New York Times roundups of the new and established big-wealthy it turned out that about half of the seventy-five-plus given close scrutiny are new-wealthy and the other half old-wealthy. The situation, on the face of it, seems to be about half-and-half, evenly balanced as between the old and the new. This implication tacitly conveyed by the manner in which Fortune in particular presented its list in 1957 will be flatly challenged here, where it will be shown that even granting the new-wealthy all that Fortune claimed for them, they represent little more than a shadow on the surface of a deep, silent and generally unsuspected pool. This pool consists simply of the estates, including trust funds, shown to view by Professor Lampman, cited in Chapter I.
These estates, the owners comprising 1. 6 per cent of the adult population as of 1953 (the percentage is the same or smaller now owing to the disproportionate increase in the nonpropertied through the higher postwar birth rate) that held $60,000 or more of revenue-producing assets, constitute the nearly absolute bulk of the holdings of the propertied class. But more than half of this class own no more than $125,000 each of assets, as Lampman points out, bringing down to 0. 8 per cent those in the group holding
more than $125,000 of assets. And most of this 0. 8 per cent can be considered only moderately wealthy, what is usually meant by the sayings "well fixed" or comfortably off. "
The Fortune rainbow of individual inheritors holding $75 million or more of assets will now be presented but there will, first, be some further demurrer leveled against its categorization of new-wealthy and old-wealthy. It will be recalled that, according to the Lampman findings, there were 27,000 owners of at least $1 million as of 1953, so the Fortune list represents only a very small sample off the top. There were about 90,000 such as of 1967 owing largely to the rise in market values.
Living
Schooling
1. J. Paul Getty
Oxford (B. A. )
Children
5
Stated Net
Worth in
millions
$700-$1,000
$400-$700
$400-$700
$400-$700
$400-$700
$400-$700
$200-$400
$200-$400
$200-$400
$200-$400
$100-$200
Financial Age in
Activity 1957
Executive 65
Getty Oil Co.
Rentier
Director 50
Mellon National Bank,
etc.
Executive 58
Alcoa,
Gulf Oil, etc.
Rentier 54
Standard Oil Group
Stockholder 83
Executive 81
E. I. du Pont,
General Motors
President 61
Delaware Trust Co.
Rentier
Executive 52
Hughes Tool Co.
Real estate 66
owner
London
2. Mrs. Mellon Bruce
(Ailsa Mellon)
New York
3. Paul Mellon
Yale (A. B. ) 2
Upperville, Virginia
Cambridge (A. B. )
4. Richard K. Mellon
Attended 4
Pittsburgh
Princeton
5. Mrs. Alan M. Scaife*
2
(Sarah Mellon)
(Died, 1965)
6. John D. Rockefeller, Jr.
Brown (A. B. ) 6
(Died, 1960)
7. Ire? ne? e du Pont
M. I. T. (M. S) 8
(Died, 1963)
8. William du Pont
5
Wilmington
9. Mrs. Frederick Guest*
(Amy Phipps)
Palm Beach
10. Howard Hughes
Attended None
Houston
Caltech
11. Vincent Astor
Attended None
New York
Harvard
(Died, 1960)
INHERITED WEALTH-HOLDERS, 1957
12. Lammont du Pont Copeland $100-$200
Harvard (B. S. ) 3
Executive 52
E. I. du Pont
General Motors
Company Director
Rentier
Rentier
Corning Glass 58
Corning Glass
Executive 76
Alcoa
Rentier
Rentier
Rentier 54
Publisher 53
Investor
Executive 42
Chase Bank
Standard Oil
Chairman 51
Rockefeller Bros. Fund
Executive 47
Rockefeller interests
Rockefeller interests
Land dev. 45
Government 49
Real estate 57
operator
Chairman 96
Wilmington
13. Mrs. Alfred I. du Pont
Attended None
Longwood College
14. Mrs. Edsel Ford*
4 Detroit
15. Doris Duke*
New York
16. Amory Houghton
Harvard (A. B. ) 5
Ex-Ambassador to France
17. Arthur A. Houghton, Jr.
Attended 4
New York
Harvard
18. Boy Arthur Hunt
Yale (A. B. ) 4
19. Mrs. Jean Mauze*
(Abby Rockefeller)
$100-$200
$100-$200
$100-$200
$100-$200
$100-$200
$100-$200
$100-$200
20. Mrs. Chauncey McCormick* $100-$200
(Marion Deering)
Chicago
21. Mrs. Charles Payson
Attended 4
(Joan Whitney)
Barnard
22. John Hay Whitney
Attended 2
Ex-Ambassador to Britain
Oxford
New York Yale
23. David Rockefeller
Harvard (B. S. ) 6
Chicago (Ph. D. )
24. John D. Rockefeller III
Princeton (B. S. ) 4
New York
25. Laurance Rockefeller Princeton (A. B. ) 4
New York
26. Winthrop Rockefeller
Attended Yale 1
Governor, Arkansas
27. Nelson A. Rockefeller Dartmouth (A. B. ) 6
Governor, New York
28. John Nicholas Brown
Harvard (A. B. )
Newport
29. Godfrey L. Cabot
Harvard (A. B. ) 5
$100-$200
$100-$200
$100-$200
$100-$200
$100-$200
$100-$200
$100-$200
$75-$100
$75-$100
(Died, 1962)
30. Mrs. Horace Dodge, Sr. *
Palm Beach
31. John T. Dorrance, Jr.
Princeton (A. B. ) 3
Godfrey L. Cabot, Inc.
Chemicals
Rentier
Beneficiary 38
Campbell Soup Trust
Ford Motors 38
Vice President
Ford Motors 40
Chairman
Ford Motors 27
Government, 66
Investments
Cattle, oil 61
Executive 65
Olin Mathieson
Chemicals
Executive 57
Olin Mathieson
Chemicals
Executive 75
Sun Oil Co.
Executive 71
Sun Oil Co.
Director 70
General Foods
Executive 68
Coca-Cola, etc.
As a beginning, the name of J. Paul Getty will be placed now on the list of inheritors, where it properly belongs; he was placed on the list in Chapter II only to appease, temporarily, those who suppose on the basis of public reports that he made the grade strictly on his own. One other name will be included among the inheritors that Fortune classified as new-wealthy; reasons for the reclassification will be given and the reader may judge for himself as between Fortune and this writer.
The name added to the list, termed one of the new-wealthy by Fortune, is that of Godfrey L. Cabot of Boston, who died in 1962 at 101. He was a member of the famous Cabot family of Boston (who proverbially speak only to God) that was founded by Jean Cabot or Chabot who came to America in 1700 from the Anglo-French island of Jersey.
Philadelphia
32. Benson Ford
Attended
Detroit
Princeton
33. Henry Ford II
Attended Yale
2
2
$75-$100
$75-$100
$75-$100
$75-$100
$75-$100
$75-$100
$75-$100
$75-$100
$75-$100
$75-$100
$75-$100
Detroit
34. William C. Ford
Yale (B. S. ) 2
Detroit
Vice President
35. W. Averell Harriman
Yale (A. B. ) 2
New York
36. Robert Kleberg, Jr
Attended 1
King Ranch, Texas
Univ. Wisc.
37. John M. Olin
Cornell (B. S. ) 3
Alton, Illinois
38. Spencer T. Olin
Cornell (M. E. ) 4
Alton, Illinois
39. J. Howard Pew
Attended None
Philadelphia
M. I. T.
listed
40. Joseph N. Pew, Jr.
Cornell (M. E. ) 4
41. Mrs. M. Merriweather Post $75-$100
Finishing 3
Washington, D. C.
School
42. Robert Woodruff
Attended Emory
$75-$100
Atlanta
*Not listed in Who's Who, 1956-57, 1964-65.
Cabot soon became one of the large landowners of the new colonies, and the family ever since has been distinguished by propertied business and professional men, diplomats and political figures. It and the allied Lowell and various other Boston families have been "in the money" all along, some from earlier than Paul Revere's ride.
Godfrey Cabot, after his graduation from Harvard in 1882 and some study abroad, went to western Pennsylvania where he engaged in the new oil and gas business and soon, responding to his chemist's training, became interested in carbon black, a byproduct of natural gas that to others was plain soot. He invested money, of which he had more than a little, in carbon black plants (he soon owned ten), and in natural gas pipelines. He could well be called "Cabot the Carbon Black King. " Carbon black has many uses in the chemical industry, in which Cabot and a brother were long leading figures. Cabot, in short, was a moneyed investor-entrepreneur, as good as they come, and ran his original stake up to a level recently worthy of notice from Fortune. He clearly classifies as an inheritor, albeit personally more creative than most. All the extant Cabots are inheritors. 1
An Incomplete List
There is no way to guarantee that this list of forty-two exhausts all individuals with inherited holdings, improved or unimproved, of $75 million or more. The list is probably incomplete even within the terms laid down by Fortune. Thus, not included on it was William Rand Kenan, who died July 28, 1965, aged ninety-three, leaving an estate for probate tentatively estimated at $100 million. He was a founder of the Union Carbide Company. 2 That the Kenans were no financial midgets is attested by the fact that William Rand Kenan, Jr. , is at present chairman of the board of the Niagara County National Bank and Trust Company; president of the Peninsular and Occidental Steamship Company, the Florida East Coast Railway Company, the Florida East Coast Hotel Company, the Florida East Coast Car Ferry Company, the Model Land Company, Perrine Grant Land Company, West Palm Beach Water Company, Carolina Apartment Company and Western Block Company; and a director of various other companies including the Florida Power and Light Company.
So many presidencies suggest large personal holdings.
Just how many similar big fish may have escaped our dragnet one cannot be sure. The big-wealthy Rosenwalds of Sears, Roebuck were omitted. We have already seen how J. Paul Getty moved along in shadowy anonymity most of his life. The Mellon family, already astronomically rich, was nationally unknown until Andrew Mellon, his name never before printed by the New York Times, was made secretary of the treasury by President Warren G. Harding. (This was much like making Casanova headmaster of a school for young ladies, as the sequel showed. For Mellon dished out with a lavish hand huge unexpected tax rebates to the surprised rich and, as a distiller himself, did not prevent distillers' stocks from inundating the Volstead Act, which was under his official jurisdiction. )
Although the list, then, is not exhaustive, it may be taken as tentatively indicative of those who in 1957 individually possessed inherited wealth in excess of $75 million. But the prime value of the list is that it points the way to far larger concentrations of wealth that Fortune chose to ignore.
Family Holdings: The Key
It is noticeable that most of these individuals belong to a financially prominent family, their fortunes a slice from a single source. As the holdings are now vested in individual names they each, from one defensible point of view, hold a single fortune. Generically, however, their family-derived holdings together constitute a single fortune. And without the family holdings they would amount to little financially.
On a generic basis, indeed, many clusters of individually inherited fortunes, no single one as large as $75 million, do in fact exceed some of the strictly individual large ones such as that of Howard Hughes. For five related and cooperating persons holding a mere $50 million each from a single source--and there are many in this pattern--would represent a generic fortune of $250 million.
What I term super-wealth is prominently, although not completely, represented on this list. Super-wealth simply consists of a very large generic fortune that may or may not be split into several parts. It has other characteristics: First, it generally controls and revolves around one or more important banks. It absolutely controls or has a controlling ownership stake in from one to three or more of the largest industrial corporations. It has established and controls through the family one to three or four or more super foundations designed to achieve a variety of stated worthy purposes as well as confer vast industrial control through stock ownership and extend patronage-influence over wide areas. It has established or principally supports one or several major universities or leading polytechnic institutes. It is a constant heavy political contributor, invariably to the Republican Party, the political projection of super-wealth, It has extremely heavy property holdings abroad so that national, foreign and military policy is of particular interest to it. And it has vast indirect popular cultural influence because of the huge amount of advertising its corporations place in the mass media.
Critics mistakenly blame a shadowy entity called "Madison Avenue" for the culturally stultifying quality as well as intrusiveness of most advertising. But here it should be noticed that Madison Avenue can produce only what is approved by its clients, the big corporations. If these latter ordered Elizabethan verse, Greek drama and great pictorial art, Madison Avenue would supply them with alacrity.
Beyond this, the dependence upon corporate advertising of the mass media-- newspapers, magazines, radio and television--makes them editorially subservient, without in any way being prompted, to points of view known or thought to be favored by the big property owners. Sometimes, of course, as the record abundantly shows, they have been prompted and even coerced to alter attitudes. But the willing subservience shows itself most generally, apart from specific acts of omission or commission, in an easy blandness on the part of the mass media toward serious social problems. These are all treated, when treated at all, as part of a diverting kaleidoscopic spectacle, the modern Roman circus of tele-communication. As Professor J. Kenneth Galbraith aptly remarked, in the United States it is a case of the bland leading the bland. No doubt it would be bad for trade if there was serious stress on the problematic side of affairs. It would disturb "confidence. "
On this Fortune list, valuable in its way, we find among the super-wealthy, among others less prominent, the Du Ponts, Mellons, Rockefellers and Fords as well as the Pews. The primary but not exclusive sources of their wealth have been E. I. du Pont de Nemours and Company, the Aluminum Corporation of America, the Standard Oil group of companies and the Ford Motor Company. Each of these companies has many times been formally adjudicated in violation of the laws, the first three repeatedly named in crucial successful prosecutions charging vast monopolies. Aluminum, Standard Oil and Du Pont achieved their positions precisely through monopoly, as formally determined by the courts.
The Du Pont Dynasty
The combined wealth of four Du Ponts, as given by Fortune, was minimally $600 million and at a maximum stood at $1. 2 billion. But here, it becomes clearly evident, it is possible to understate greatly the size of a generic fortune by singling out for notice only a few of its most prominent representatives.
For there are many additional wealthy, soigne? Du Ponts. Perhaps they do not individually hold as much as $75 million, but many of them out of a total group (exceeding 1,600 persons descended from Pierre-Samuel du Pont [1739-1817] ) hold somewhat lesser fortunes that stem directly or indirectly from the central Du Pont financial complex. Not included on the Fortune list were Alexis Felix du Pont, Jr. , born 1905; Alfred Rhett du Pont, born 1907; Alfred Victor du Pont, born 1900; Edmond du Pont, born 1906; Henry B. du Pont, born 1898; Henry Francis du Pont, born 1880; Pierre S. du Pont III, born 1911; and a variety of active highly pecunious Du Ponts bearing the Du Pont name or alien names brought into the golden dynastic circle through exogamous marriages of Du Pont women. Endogamous marriages among the Du Ponts, however, have been frequent.
The financially elite among the Du Ponts number about 250 "and most of the family's riches are in their hands. " 3 There are, then, 250 Big Du Ponts and many Little Du Ponts.
The generic Du Pont fortune appears to be the largest, now, of the four here under scrutiny. Not only is the Du Pont company the oldest of them, but as a prolific clan the Du Ponts have included many individual entrepreneurs, none perhaps individually as outstanding as Rockefeller or Ford but collectively more persistent. Again, as an ordnance enterprise in an era of big wars Du Pont grew astronomically, attaining its biggest growth in World War I, and thus provided the sinews for branching out into at least four of the biggest modern industries: chemicals, automobiles, oil and rubber. It is the American Krupp.
But, the question should be raised, is any violence being done the facts in examining a generic fortune rather than its individual slivers? The picture would indeed be distorted if the individual heirs had gone their separate ways and an analyst nevertheless insisted upon treating them collectively. But the Du Ponts, as well as others, have not gone their separate ways with their inheritances; they have, despite intra-family feuds, acted as a collectivity. In Note 2, Chapter II, I mentioned a C. Wright Mills reference to an earlier work of mine in which he says chidingly that I once generalized "cousinbood only" into political and economic power. In the Du Ponts, however, we have a literal, closely cohering financial and political cousinhood, as in the case of the Mellons. In the case of the Fords and Rockefellers we have, staving within these terms, brotherhoods.
The Du Pont cousinhood coheres, tightly, through a network of family holding companies and trust funds which, under a unified concentrated family management, gives a single, unified thrust to the family enterprises. There is danger of distortion in treating any single one of this cousinhood, financially, as an individual. It is misleading because it shows only a few facets on top of the huge iceberg, neglects the concealed major portion below the surface.
The precise size of the generic Du Pont fortune would be difficult to determine. But the Christiana Securities Company alone, largest of the family holding companies, at the end of 1964 held investments valued by itself at $3. 271 billion in E. 1. du Pont de Nemours, the Wilmington Trust Company, the Wilmington News-Journal and the Hercules Powder Company. 4 This, be it noted, was after E. 1. du Pont had divested itself of sixty-three million shares of General Motors common, in which others than the Du Ponts, of course, had some equity.
The Christiana portion of this GM distribution was 18,247,283 shares, 5 worth $1. 788 billion at a closing price of $98 a share for 1964. At that time the whole original E. I. du Pont GM block had a market value of $6. 174 billion.
E. I. du Pont paid an average price of $2. 09 a share for this stock, according to Senator Harrison A. Williams, Jr. , of New Jersey, or $131,670,000 in all. 6
With 10,026 formally registered separate common stockholders at the end of 1964, Christiana has stockholders other than Du Ponts and their in-laws; these other stockholders are mainly company officers and employees. But the extent of Du Pont family participation in Christiana before World War II, according to a government investigation of dominant owners of the 200 largest nonfinancial corporations, was 74 per cent. 7
Assuming that the financial core of the Du Pont family still held 44 per cent of E. 1. du Pont de Nemours stock (as per the TNEC study), the recent record stands approximately as follows:
Market Value
31, 1964
44 per cent family interest in
45,994,520 E. 1. du Pont shares
at 247-1/2 for end 1961, 241-3/4
for end 1964
$4,892,433,792
44 per cent family interest in
63 million General Motors
shares divested by E. I. Du
Pont at 1964 closing price of
98. (Individual Du Ponts hold-
ing GM not included)
$2,716,560,000
Christiana Securities direct
holding in GM (added since
TNEC study) at 57-7/8 for end
1961, 98 a share for end 1964
52,430,000
Market Value
Dec. 31, 1961 Dec.
$5,001,257,472
______________
$7,661,423,792
Totals for above
30,962,102
______________
$5,032,219,574
______________
$5,032,219,574
______________
Less: Sales of 1,050,000 shares
GM by Christiana Securities
for taxes and cost of distribu-
tion at average price of about 62
62,193,750
______________
$7,599,230,042
Corrected totals
Less: Further planned sale of
457,312 GM shares by Christi
ana at beginning of 1965 at
estimated minimal price of 100
45,731,200
______________
$7,553,498,842
Add: 10. 5 per cent Du Pont
interest in U. S. Rubber Co. , as
shown by TNEC study held by
individuals and the Du Pont
owned Rubber Securities Company
$38,232,179
Add: Holdings of Christiana
Securities other than E. 1. du
Pont and General Motors
$37,749,136
Add: Various assorted individ-
ual investments by Du Pouts
and ownership in extensive
landed estates
?
______________
$7,629,480,000 plus
$34,316,836
?
______________
Revised totals
$5,032,219,574
Total
The figure of $7. 629 billion for 1964, as indicated above, is an approximation, but one close to the figures available. In view of the many individual Du Pont investments not included-for various of the Du Ponts have long branched into other fields-it is beyond doubt an understatement.
On what grounds can one assume that the family investment in E. I. du Pont de Nemours remained at 44 per cent? First, the investment of this company in General Motors itself was not diminished. Second, since the TNEC study, a new investment was made in General Motors by Christiana; whether this represented an increase in over-all General Motors holdings or a transfer from some other part of the Du Pont exchequer is not shown, but presumably it represented an enlarged investment. If anything, the family investment, through individuals, was increased since 1937, the date of the TNEC data. For the Du Ponts in the intervening years were in receipt of vast cash dividends. In the meantime, many of them had reduced their once-opulent and ultra-expensive scale of living. Unless they had, off the record, somehow disposed of large sums it would seem inevitable that their investment position was enlarged. Their foundations did not, in the meantime, show any large new accretion of funds.
It is true that the family participation in General Motors cannot be computed accurately at the figure given for the end of 1964 even after allowing for the sales of GM by Christiana because the Du Pont trust funds were also required to sell whatever GM they received in the distribution. But the equivalent value in money, depending upon what point in the rising market GM was sold, would remain in Du Pont hands.
Taking into consideration various factors such as these, and others, the entire family holding should be at least $7. 629 billion, rather than the vague recent estimate of $3 billion by a family historian. 8
I conclude, therefore, that the financially cohesive Du Pont family is capable of throwing something around a $7. 5-billion "punch" at any time in the American political-economy on the present price level. Its members should not, despite their partial setback in General Motors, be looked upon as a miscellaneous collection of
financial tabby cats. The individual Du Ponts, it, should be noticed, retain their GM holdings, constituting the largest identifiable block in General Motors stock.
The Du Pouts have additionally established a string of at least eighteen foundations, 9 the most recent assets of which are reported by the Foundation Directory, 1964, at an aggregate of $148,046,401. These foundations are Bredin, Carpenter, Chichester du Pont, Copeland Andelot, Crestlea, Good Samaritan, Ire? ne? e du Pont, Jr. , Eleutherian Mills-Hagley, Kraemer, Lalor, Lesesne, Longwood, Nemours, Rencourt, Sharp, Theano, Welfare and Winterthur.
The largest of these, Longwood and Winterthur, with combined assets of $122,559,001, are largely devoted to maintaining in all their splendor former Du Pont estates as public museums and botanical gardens. 10 The estates, thus dedicated to public uses, were not required to pay ad valorem inheritance taxes.
But the invested voting power of these assets, funneled through banks and trustees, provides some additional Du Pont strength in politico-economic decision-making.
Even if one were able to pinpoint the value of the family holdings at $7. 629 billion this would not be especially significant. The big fortunes rise and fall in value with the economy so that in one decade their values are up and in another down. But the significant fact is that throughout economic changes the big fortunes, and the companies underlying them, outperform expansions of the economy. Put another way, more and more of the economy is constantly being preempted by fewer and fewer generic interests even though through inheritance the generic property income is distributed among a greater number of individuals. There are, in brief, more Du Ponts, Rockefellers, Mellons and their like today than there were in 1900. But they each share in much enlarged central stakes.
The divestiture of General Motors stock took place after the United States Supreme Court ordered it upon finding E. I. du Pont de Nemours and Company guilty of violating Section 7 of the Clayton Act, which forbids any stock acquisition whose effect "may be substantially to lessen competition or tend to create a monopoly. " This case of closing the barn door after it had been wide open for more than thirty years began in 1949 under President Harry Truman. The Supreme Court, overruling a lower court, found that Du Pont's ownership of 23 per cent of GM, which it controlled, placed it in a favored market position in the sale of automobile finishes and fabrics, to the detriment of competitors. GM, in fact, was a captive customer. As the New York Times incidentally reported, "Few if any large companies have been the subject of so many anti-trust suits as du Pont. " 11 Since 1939 nineteen have been counted.
But Du Pont holdings, as indicated, are by no means all channeled through Christiana Securities. During the GM proceedings it was reported to the court, for example, that William du Pont, Jr. , personally owned 1,269,788 shares of E. I. du Point de Nemours. And, unless the family investment pattern has changed greatly since the TNEC study, other Du Ponts are heavy individual holders in E. I. du Pont de Nemours and other companies.
The TNEC study showed the following individual Du Ponts directly holding stock in E. I. du Pont de Nemours: Pierre S. ; Eugene; Archibald; M. L. ; H. F. ; Eugene E. ; Ernest; trustees for Philip F. ; trustees for Elizabeth B. ; trustees on behalf of William du Pont, Jr. , and Mrs. Marion du Pont Scott; and Charles Copeland. This group held 5. 75 per cent. 12
One member of the family and the Broseco Corporation, another family holding company, held stock directly in General Motors, substantial even by Du Pont standards. 13 A family trust held much more.
But twenty-two other Du Points, none named above, held stock in the Delaware Realty and Investment Company (since absorbed by Christiana Securities), which in turn held 2. 75 per cent of E. I. du Pont de Nemours stock.
Thirty-nine other Du Ponts, none named above or included in the Delaware Realty group, held stock in Almours Securities, Inc. (since dissolved), which held 5. 24 per cent of E. I. du Pont de Nemours stock as well as an interest in the Mid-Continent Petroleum Corporation. 14
The TNEC study uncovered eight Du Pont family securities holding comparties 15 and seven separate trust funds. 16 This variety of financial instruments was in part at least the residue of earlier feuds and financial squabbles in the family with charges of individual overreaching and tricky dealing aired in public. In recent decades most of these quarrels appear to have been composed in favor of consolidating family interests.
The government in its General Motors case held that the Du Ponts were a "cohesive group of at least 75 persons. " But it named 184 members of the Du Pont family in its complaint.
Spokesman for the Du Ponts, after the GM decision was given, said that GM stockholders closely affiliated with the Du Pont management would sell an additional three million shares of General Motors. 17
The TNEC study showed that individual Du Ponts, their family holding companies and/or their trust funds held stock in many other companies. The largest of these additional stockholdings was in the giant United States Rubber Company, which the Du Ponts in effect controlled. Here the Rubber Securities Company, a Du Pont family company, and seven individual Du Ponts owned 10. 5 per cent and constituted the largest cohesive stockholding group. The continued presence of the Du Pont interest in the United States Rubber Company as of 1965 is signaled by the presence on the board of directors of J. S. Dean, president and director of the Nemours Corporation and a director and member of the executive committee of the Wilmington Trust Company, and of George P. Edwards, chairman of the Wilmington Trust Company. Other companies in which various of the Du Pouts, their family companies and/or trust funds held smaller ownership positions were the American Sugar Refining Company, the Mid-Continent Petroleum Corporation, Phillips Petroleum Company and the United Fruit Company.