John
Nicholas
Brown
Harvard (A.
Harvard (A.
Lundberg - The-Rich-and-the-Super-Rich-by-Ferdinand-Lundberg
" This is much as though a man charged with a three-year-old burglary were to claim that authorities were not dealing with current crime but were harassing him, since he had been "going straight" ever since.
50
A few days later another federal judge fined four leading makers of steel forgings and a steel trade association a total of $150,000 after finding them criminally guilty of price fixing and bid rigging in the sale of open die steel forgings to the Army and Navy as well as to private companies from 1948 to 1961, an interval that embraced the Korean War. Bethlehem Steel, second in the industry, was fined $40,000; United States Steel, $35,000; the Midvale-Heppenstall Company of Philadelphia, $35,000; the Erie Forge and Steel Corporation, $25,000; and the Open Die Forging Institute, Inc. , $15,000. The defendants did an estimated $100-million business a year in this line.
While ship shafts for the Navy and cannon for the Army were involved in the forgings, an interesting sidelight was that the defendants were found to have illegally set identical prices for rotors and generator shafts sold to General Electric, Westinghouse and Allis-Chalmers, the top defendants in The Great Electrical Industry Conspiracy. The difference in the size of fines in the steel and electrical cases stemmed from the number of indictments on each charge. The Sherman Act as amended permits a
maximum fine of $50,000 on each charge. In the electrical case there were twenty charges in all, although every company did not fall under each charge.
Asked by the Times whether they intended to start civil suits for treble damages against the steel companies, General Electric said nothing had been decided and Allis- Chalmers said it had no comment; but Westinghouse valiantly reported: "So far as we know, we have received full value for our purchase of steel which we believe to have been made at competitive prices. "
In this case five executives of the companies were fined an aggregate of $44,000 on October 25, 1962, on the same criminal indictment, which they did not contest. 51
The fines in these cases, in relation to the amount of illegal business done, were obviously of the order of a $5 slap on the wrist for grand larceny.
The number of big recent cases-in oil, asphalt, milk, steel, electrical goods and the like--is too great to detail here. No fewer than ninety-two antitrust suits, a record, were begun in 1960 under the Republicans, although enforcement actually eased off sharply under President Kennedy and came to a virtual halt under President Johnson. 52 The Johnson Administration has practically given Big Business the green light on mergers and regulation in general, in return for which the presidential Business Advisory Council, composed of about 100 chairmen and presidents of the biggest corporations, appears to have given its full endorsement of Mr. Johnson's personally engineered disastrous Vietnam war. 53
In these upper reaches of power everything is strictly on a quid pro quo basis. The New Higher Politics
Let us look at all this lawbreaking from another point of view. Perhaps the statutes are somehow misbegotten, as many corporation heads freely assert, even though they are simple expressions of the common law upon which the entire Anglo-American legal system rests. But possibly this legal system, too, is misbegotten and should be scrapped or radically overhauled.
In his devotional biography of John D. Rockefeller I, Professor Allan Nevins, the Columbia historian, suggests that the common view of Rockefeller as the epitome of ruthless Pecuniary Man, freely breaking the law in quest of profits in any and every accessible field, is entirely mistaken. Professor Nevins in his summation (which may be taken as applying just as well to any industrial tycoon) indirectly suggests that Rockefeller is representative in his way of Political Man--that is, a person planning and providing for the entire community even if in ways not readily understood by lesser mortals. This is evident, for example, when Professor Nevins says: "Behind this organizing genius, which has analogies with Richelieu's or Bismarck's, lay a combination of traits not less interesting because of their simplicity, conspicuity, and harmony. " And Rockefeller's single-mindedness, says Professor Nevins, "reminds us of Cecil Rhodes. " 54 In brief, Rockefeller reminds Nevins of commanding political leaders.
Had Professor Nevins chosen for comparison political personalities from nearer home, readers might more readily have detected the untenability of offering Rockefeller as an example of Political Man, acting according to some conception of the general welfare of society rather than milking society for personal gain through the most effective monopoly of all time. Rockefeller in his heyday in fact stood adverse to the common interest and this was formally found to be so by United States courts.
Professor Nevins has generalized beyond Rockefeller: "The architects of our material progress [if such they ever were--F. L. ]--the men like Whitney, McCormick, Westinghouse, Rockefeller, Carnegie, Hill and Ford--will yet stand forth in their true
stature as builders [if indeed they ever were--F. L. ] of a strength which civilization found indispensable. "
In this connection Professor Nevins went on to contend grotesquely that these and other men like them "saved the world" in World War I and later helped the world meet "a succession of world crises. " He thereupon called for a revision of history, at which historians so far look with deep reserve, to give these unjustly evaluated men their proper due as builders and saviors of civilization. 55
As to the role in 1914-18 of the industrial tycoons, American and foreign, far from saving the world, they were the chief operative factors in producing World War I, as a wealth of research conclusively shows. Again, it was the American business leaders who pushed the United States into that war from far out in left field on fantastic grounds of insuring freedom of the seas, terminating militarism and saving the world for democracy. 56 Nearly every major difficulty of the contemporary world can be traced directly to the governments of the major powers, the United States included, in 1914-18, and the leading property holders who stood solidly behind them. They produced, among other things, totalitarian communism as an outgrowth of the situation.
But even though Professor Nevins and others who argue like him are not plausible, there does exist this view that Corporate Man is a disguised Political Man. And if this were so, then the lawbreaking in question might not only be condoned but might even be praised. For if these men are merely trying to get rid of a series of progress-stifling, retrograde laws by wholesale violation and evasion in order to establish industrial feudalism, they may be looked upon as forward-planning political saboteurs, even revolutionaries, who should be compared with and differentiated from Lenin, Trotsky, Gandhi and Mao Tse-tung. It is true that no such general intention has been openly avowed; but perhaps the intent is secret. Perhaps there exists a clandestine political conspiracy to undermine the present form of government and produce the Good Society according to the conception of the U. S. Chamber of Commerce--that is, industrial feudalism. As for Richelieu, Bismarck and Rhodes, none of them was at odds with the system in which he found himself. None was ever found guilty of serious crimes in his nation's courts.
But although the corporation leaders do not seem to be consciously political beyond seeking at all times to install opportunistic puppets and cat's-paws in office, it is a fact, as Professor Sutherland notes, that:
During the last century this economic and political system has changed. The changes have resulted principally from the efforts of businessmen. If the word "subversive" refers to efforts to make fundamental changes in a social system, the business leaders are the most subversive influence in the United States. These business leaders have acted as individuals or in small groups, seeking preferential advantages for themselves. The primary loyalty of the businessman has been to profits, and he has willingly sacrificed the general and abstract principles of free competition and free enterprise in circumstances which promised a pecuniary advantage. Moreover, he has been in a position of power and has been able to secure these preferential advantages. . . .
The restriction of free enterprise has also come principally from business men who have constantly sought to increase government regulation in their own interest, as in the case of tariffs, subsidies and prohibition of price-cutting on trademarked items.
In fact, the interests of businessmen have changed, to a considerable extent, from efficiency in production to efficiency in public manipulation, including manipulation of the government for the attainment of preferential advantages. . . . But the most significant result of the violations of the antitrust laws by large business concerns is that they have made our system of free competition and free enterprise unworkable. We no
longer have competition as a regulator of economic processes; we have not substituted efficient government regulation. We cannot go back to competition. We must go forward to some new system--perhaps communism, perhaps co-operativism, perhaps much more complete governmental regulation than we now have. I don't know what lies ahead of us and am not particularly concerned, but I do know that what was a fairly efficient system has been destroyed by the illegal behavior of Big Business. 57
One can, then, take these various behaviors of the corporations, owned 80 per cent by 1. 6 per cent of the populace, in one of two ways. If the corporate men and their principals are struggling to undermine the political system of 1789, the one established by the Founding Fathers, in order to achieve a new one nearer their heart's desire, they may be looked upon as political engineers and (at least from the point of view of the big property interests) as admirable men such as Professor Nevins finds Rockefeller to have been. But, on the other hand, if the system of 1789 is the good one, and to be defended (as in my own prejudice I suppose it generally to be), then the corporate men stand before history as convicted habitual criminals, true subversives and enemies of established society.
In any event, returning to our initial inquiry, in looking for criminals in the business system one need not look for denizens from the underworld who have wormed their way in. There is, furthermore, no concrete evidence that underworld figures have done so, although anyone may buy stock in the open market. The big criminals consist of the ordinary corporations and their officers--agents and instrumentalities of the rich--and this is a fact repeatedly certified by the federal courts and the quasi-judicial tribunals of the United States of America.
We must confess, then, to failure in the attempt to find members or agents of any Mafia, Cosa Nostra or underworld syndicate of any kind high in the business world, although the established entrepreneurs, securely installed, give a lusty account of themselves in the matter of lawbreaking. Comparatively they make Mafias and Crime Syndicates look like pushcart operations.
Four
THE INHERITORS: I
Large sums and wealthy individuals have been scrutinized for two chapters, but the concentrated core of private American wealth is yet to be examined. This chapter reports the findings of such an examination.
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.
A few days later another federal judge fined four leading makers of steel forgings and a steel trade association a total of $150,000 after finding them criminally guilty of price fixing and bid rigging in the sale of open die steel forgings to the Army and Navy as well as to private companies from 1948 to 1961, an interval that embraced the Korean War. Bethlehem Steel, second in the industry, was fined $40,000; United States Steel, $35,000; the Midvale-Heppenstall Company of Philadelphia, $35,000; the Erie Forge and Steel Corporation, $25,000; and the Open Die Forging Institute, Inc. , $15,000. The defendants did an estimated $100-million business a year in this line.
While ship shafts for the Navy and cannon for the Army were involved in the forgings, an interesting sidelight was that the defendants were found to have illegally set identical prices for rotors and generator shafts sold to General Electric, Westinghouse and Allis-Chalmers, the top defendants in The Great Electrical Industry Conspiracy. The difference in the size of fines in the steel and electrical cases stemmed from the number of indictments on each charge. The Sherman Act as amended permits a
maximum fine of $50,000 on each charge. In the electrical case there were twenty charges in all, although every company did not fall under each charge.
Asked by the Times whether they intended to start civil suits for treble damages against the steel companies, General Electric said nothing had been decided and Allis- Chalmers said it had no comment; but Westinghouse valiantly reported: "So far as we know, we have received full value for our purchase of steel which we believe to have been made at competitive prices. "
In this case five executives of the companies were fined an aggregate of $44,000 on October 25, 1962, on the same criminal indictment, which they did not contest. 51
The fines in these cases, in relation to the amount of illegal business done, were obviously of the order of a $5 slap on the wrist for grand larceny.
The number of big recent cases-in oil, asphalt, milk, steel, electrical goods and the like--is too great to detail here. No fewer than ninety-two antitrust suits, a record, were begun in 1960 under the Republicans, although enforcement actually eased off sharply under President Kennedy and came to a virtual halt under President Johnson. 52 The Johnson Administration has practically given Big Business the green light on mergers and regulation in general, in return for which the presidential Business Advisory Council, composed of about 100 chairmen and presidents of the biggest corporations, appears to have given its full endorsement of Mr. Johnson's personally engineered disastrous Vietnam war. 53
In these upper reaches of power everything is strictly on a quid pro quo basis. The New Higher Politics
Let us look at all this lawbreaking from another point of view. Perhaps the statutes are somehow misbegotten, as many corporation heads freely assert, even though they are simple expressions of the common law upon which the entire Anglo-American legal system rests. But possibly this legal system, too, is misbegotten and should be scrapped or radically overhauled.
In his devotional biography of John D. Rockefeller I, Professor Allan Nevins, the Columbia historian, suggests that the common view of Rockefeller as the epitome of ruthless Pecuniary Man, freely breaking the law in quest of profits in any and every accessible field, is entirely mistaken. Professor Nevins in his summation (which may be taken as applying just as well to any industrial tycoon) indirectly suggests that Rockefeller is representative in his way of Political Man--that is, a person planning and providing for the entire community even if in ways not readily understood by lesser mortals. This is evident, for example, when Professor Nevins says: "Behind this organizing genius, which has analogies with Richelieu's or Bismarck's, lay a combination of traits not less interesting because of their simplicity, conspicuity, and harmony. " And Rockefeller's single-mindedness, says Professor Nevins, "reminds us of Cecil Rhodes. " 54 In brief, Rockefeller reminds Nevins of commanding political leaders.
Had Professor Nevins chosen for comparison political personalities from nearer home, readers might more readily have detected the untenability of offering Rockefeller as an example of Political Man, acting according to some conception of the general welfare of society rather than milking society for personal gain through the most effective monopoly of all time. Rockefeller in his heyday in fact stood adverse to the common interest and this was formally found to be so by United States courts.
Professor Nevins has generalized beyond Rockefeller: "The architects of our material progress [if such they ever were--F. L. ]--the men like Whitney, McCormick, Westinghouse, Rockefeller, Carnegie, Hill and Ford--will yet stand forth in their true
stature as builders [if indeed they ever were--F. L. ] of a strength which civilization found indispensable. "
In this connection Professor Nevins went on to contend grotesquely that these and other men like them "saved the world" in World War I and later helped the world meet "a succession of world crises. " He thereupon called for a revision of history, at which historians so far look with deep reserve, to give these unjustly evaluated men their proper due as builders and saviors of civilization. 55
As to the role in 1914-18 of the industrial tycoons, American and foreign, far from saving the world, they were the chief operative factors in producing World War I, as a wealth of research conclusively shows. Again, it was the American business leaders who pushed the United States into that war from far out in left field on fantastic grounds of insuring freedom of the seas, terminating militarism and saving the world for democracy. 56 Nearly every major difficulty of the contemporary world can be traced directly to the governments of the major powers, the United States included, in 1914-18, and the leading property holders who stood solidly behind them. They produced, among other things, totalitarian communism as an outgrowth of the situation.
But even though Professor Nevins and others who argue like him are not plausible, there does exist this view that Corporate Man is a disguised Political Man. And if this were so, then the lawbreaking in question might not only be condoned but might even be praised. For if these men are merely trying to get rid of a series of progress-stifling, retrograde laws by wholesale violation and evasion in order to establish industrial feudalism, they may be looked upon as forward-planning political saboteurs, even revolutionaries, who should be compared with and differentiated from Lenin, Trotsky, Gandhi and Mao Tse-tung. It is true that no such general intention has been openly avowed; but perhaps the intent is secret. Perhaps there exists a clandestine political conspiracy to undermine the present form of government and produce the Good Society according to the conception of the U. S. Chamber of Commerce--that is, industrial feudalism. As for Richelieu, Bismarck and Rhodes, none of them was at odds with the system in which he found himself. None was ever found guilty of serious crimes in his nation's courts.
But although the corporation leaders do not seem to be consciously political beyond seeking at all times to install opportunistic puppets and cat's-paws in office, it is a fact, as Professor Sutherland notes, that:
During the last century this economic and political system has changed. The changes have resulted principally from the efforts of businessmen. If the word "subversive" refers to efforts to make fundamental changes in a social system, the business leaders are the most subversive influence in the United States. These business leaders have acted as individuals or in small groups, seeking preferential advantages for themselves. The primary loyalty of the businessman has been to profits, and he has willingly sacrificed the general and abstract principles of free competition and free enterprise in circumstances which promised a pecuniary advantage. Moreover, he has been in a position of power and has been able to secure these preferential advantages. . . .
The restriction of free enterprise has also come principally from business men who have constantly sought to increase government regulation in their own interest, as in the case of tariffs, subsidies and prohibition of price-cutting on trademarked items.
In fact, the interests of businessmen have changed, to a considerable extent, from efficiency in production to efficiency in public manipulation, including manipulation of the government for the attainment of preferential advantages. . . . But the most significant result of the violations of the antitrust laws by large business concerns is that they have made our system of free competition and free enterprise unworkable. We no
longer have competition as a regulator of economic processes; we have not substituted efficient government regulation. We cannot go back to competition. We must go forward to some new system--perhaps communism, perhaps co-operativism, perhaps much more complete governmental regulation than we now have. I don't know what lies ahead of us and am not particularly concerned, but I do know that what was a fairly efficient system has been destroyed by the illegal behavior of Big Business. 57
One can, then, take these various behaviors of the corporations, owned 80 per cent by 1. 6 per cent of the populace, in one of two ways. If the corporate men and their principals are struggling to undermine the political system of 1789, the one established by the Founding Fathers, in order to achieve a new one nearer their heart's desire, they may be looked upon as political engineers and (at least from the point of view of the big property interests) as admirable men such as Professor Nevins finds Rockefeller to have been. But, on the other hand, if the system of 1789 is the good one, and to be defended (as in my own prejudice I suppose it generally to be), then the corporate men stand before history as convicted habitual criminals, true subversives and enemies of established society.
In any event, returning to our initial inquiry, in looking for criminals in the business system one need not look for denizens from the underworld who have wormed their way in. There is, furthermore, no concrete evidence that underworld figures have done so, although anyone may buy stock in the open market. The big criminals consist of the ordinary corporations and their officers--agents and instrumentalities of the rich--and this is a fact repeatedly certified by the federal courts and the quasi-judicial tribunals of the United States of America.
We must confess, then, to failure in the attempt to find members or agents of any Mafia, Cosa Nostra or underworld syndicate of any kind high in the business world, although the established entrepreneurs, securely installed, give a lusty account of themselves in the matter of lawbreaking. Comparatively they make Mafias and Crime Syndicates look like pushcart operations.
Four
THE INHERITORS: I
Large sums and wealthy individuals have been scrutinized for two chapters, but the concentrated core of private American wealth is yet to be examined. This chapter reports the findings of such an examination.
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.
