Watch this to see how the Vanderbilt Family lost their entire fortune.
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00:00The Vanderbilts were once the richest family on the planet.
00:05The family made their millions in shipping and railroads, but its decline was rapid.
00:10By 1973, when 120 Vanderbilts came together for a reunion, there wasn't a single millionaire
00:17in attendance.
00:18Here's how the Vanderbilt family lost its entire fortune.
00:23Part of a New York farming family of modest means, Cornelius the Commodore Vanderbilt
00:28was 16 when he borrowed $100 from his mother in exchange for plowing eight acres of soil.
00:35The year was 1810, and the $100, which is the equivalent to a little over $2,100 today,
00:43per the Official Data Foundation, was spent on a boat that he used to start his own transport
00:48and freight business.
00:50Over time, the Commodore moved on to invest in steamships and then railroads.
00:55Before he knew it, the Commodore had built up the shipping and railroad empire New York
00:59Central.
01:00He would eventually go on to become the richest person in America.
01:05At the time of his death in 1877, the Commodore's fortune was valued at $100 million, equal
01:12to nearly $2.5 billion today, via the Official Data Foundation, which was more money than
01:19was held in the U.S. Treasury at the time.
01:22The Commodore is said to have told his oldest son, William Henry Billy Vanderbilt,
01:26"...any fool can make a fortune.
01:29It takes a man of brains to hold onto it."
01:31"...Vanderbilt would be ruthless in competition, and he was better at it than anyone else."
01:39Billy took the advice to heart and doubled the family fortune before his death in 1885,
01:44but his own descendants would dwindle it all away in just a few decades.
01:50When his father died in 1877, Billy Vanderbilt inherited the bulk of his dad's estate, including
01:56the 87 percent stake in New York Central.
02:00While Billy was able to prove his business sense to his father, it would be a mistake
02:04to assume that the two men had similar characters.
02:08As told by Arthur T. Vanderbilt II in his book Fortune's Children, The Fall of the House
02:13of Vanderbilt, the father and son duo couldn't have been more different.
02:18While the Commodore was abrasive and money-hungry, Billy was more inclined to compromise and
02:23saw money as a source of anxiety.
02:27Ownership of New York Central came with publicity and conflicts that Billy hated.
02:32By 1879, he was ready to sell some of his shares so that he would no longer be considered
02:37the company's sole owner.
02:39With the $35 million he made from the sale, he invested in government bonds, a comparatively
02:45safe move that was uncharacteristic of a Gilded Age tycoon.
02:50While Billy wasn't as ambitious as his father, he was obsessed with preserving his wealth
02:55and would nitpick over expenses.
02:57It was perhaps with smart budgeting and a strong business acumen that Billy was able
03:02to double his inheritance to nearly $200 million, making him the richest man in the world by
03:081883.
03:10For him, though, the money was a terrible burden.
03:13When he died in 1885, rather than entrusting the fortune to the most business-savvy descendant,
03:19Billy Vanderbilt divided it between his two eldest sons so they could share the heavy
03:24responsibility.
03:26Gilded Age New York, the period where the Vanderbilts were most prominent, was dominated
03:31by a strict social hierarchy.
03:34With so many newly rich families popping up after the Civil War and Industrial Revolution,
03:39the upper class had to quickly take stock of who could be accepted into their elite
03:44society.
03:45According to the Museum of the City of New York, the main gatekeeper was Mrs. Carolyn
03:50Shermerhorn Astor and her right-hand man Ward McAllister.
03:55The two created the famous List of 400, which determined just who could be considered part
04:01of New York society.
04:03The Vanderbilts, still newly rich and with a reputation for crassness from their patriarch
04:08Cornelius Vanderbilt, were not on that list.
04:12Despite this, William K. Willie Vanderbilt, the son of Billy Vanderbilt and grandson of
04:17the Commodore, was married to Alva Smith, a social-climbing force who was determined
04:23to be accepted into New York's high society.
04:26She spent millions of her husband's inheritance building a huge mansion on Fifth Avenue's
04:31Millionaire Row, one of the largest homes there at the time.
04:35Once the mansion was finished, she spared no expense, throwing an extravagant ball that
04:40would successfully land Willie and Alva on the List of 400 in March 1883.
04:46The cost of the ball was estimated to be over $250,000, more than $6 million today.
04:54With expenses like that, it's no wonder the Vanderbilts would soon find their fortune
04:59dwindling.
05:01In contrast to the Commodore and Billy Vanderbilt, the third and fourth generations grew up lavishly
05:06and spent their fortunes like crazy.
05:09What they loved splurging on were assortments of grand mansions, townhouses, and estates.
05:15The Vanderbilt family owned multiple Gilded Age mansions on Fifth Avenue's Millionaire
05:20Row, including the massive three townhouses called the Triple Palaces.
05:25They also were prone to bouts of family competition.
05:30For example, after Alva Vanderbilt had her petite chateau constructed, her sister-in-law
05:38Alice Vanderbilt set out to build an even larger mansion that ended up being the largest
05:44single-family house in New York City at the time.
05:47Unfortunately, most of these would be demolished in the late 1920s after being sold to real
05:53estate developers.
05:55While his sister-in-laws were building some of New York City's biggest mansions, George
06:00W. Vanderbilt and his wife Edith looked to Asheville, North Carolina, to build Biltmore.
06:06Finished in 1895, the 30,000-acre estate, with a 250-room French Renaissance castle,
06:14took six years and cost nearly $6 million to build, which would be approximately $1.6
06:20billion by today's standards.
06:23Now open to the public as a tourist attraction and national landmark, Biltmore House is considered
06:29the largest privately owned home in the entire country, and is still operated by Vanderbilt
06:34descendants today.
06:36The Vanderbilts also spent quite a bit of money on philanthropy and exploring their
06:41personal interests, especially the Vanderbilts of later generations.
06:45The Commodore was known to have made one big donation in 1873, a $1 million gift to Nashville,
06:52Tennessee's Central University, which would then be founded as Vanderbilt University.
06:58His son, William Billy Vanderbilt, would continue to donate to Vanderbilt University, and even
07:04left gifts in his will to organizations like the YMCA and the Metropolitan Museum of Art.
07:11Three of Billy Vanderbilt's sons were particularly known for contributing to philanthropic or
07:16cultural causes.
07:18Cornelius Vanderbilt II, who was most prominently in charge of the family investments and businesses,
07:25donated huge amounts to the Metropolitan Museum of Art, Yale University, and Columbia University's
07:32College of Physicians and Surgeons.
07:35His younger brother, William Kissam Vanderbilt, helped manage the family business for a while
07:40but shifted control of the railroads to an outside firm in 1903.
07:46After that, he spent most of his time and money on sports and cultural causes, including
07:50yacht racing, art collecting, and operating the Metropolitan Opera.
07:55Finally, the youngest, George W. Vanderbilt, who contributed very little to the Vanderbilts'
08:01investments and enterprises, would make large donations to Columbia University, the American
08:07Fine Arts Society, and the New York Public Library.
08:12The Vanderbilts, particularly the Commodore, grew their wealth during an era where business
08:17regulation was practically nonexistent.
08:20By being able to monopolize entire industries, they became unimaginably rich, with no restrictions
08:27or taxes affecting their fortunes.
08:30The turn of the century, however, saw a push for more public services, as well as a global
08:35conflict that was cutting into trade tariffs.
08:38Needing new revenue sources, the United States government formally introduced the modern
08:43estate, gift, and income taxes in the early 20th century.
08:47Suddenly, the Vanderbilts' fortunes and inheritances were cut, and their expensive lifestyles became
08:53harder to fund.
08:54To make matters worse, when the Great Depression hit, the Vanderbilts had to find different
08:59ways to maintain their lifestyles and huge estates.
09:03For example, they had to open Biltmore to the public in 1930 to increase area tourism
09:09and generate income to preserve the estate.
09:13While other wealthy families made it through this period just fine, the Vanderbilts' excessive
09:18spending and lack of zeal toward growing their family wealth meant that the taxes and depression
09:23affected them much more seriously.
09:26Alfred Gwynne Vanderbilt was the third son of Cornelius Vanderbilt II and the grandson
09:32of Billy Vanderbilt.
09:34When his father died of a cerebral hemorrhage, Alfred was the primary inheritor of his $72
09:40million estate.
09:43Despite being the third eldest son, Alfred was thought to be the one who would best handle
09:48the family fortune.
09:50His oldest brother had died young, and his second eldest, Cornelius Vanderbilt III, had
09:55been disinherited after getting married without his parents' approval.
10:00Unfortunately, at the young age of 38, Alfred died as a passenger of the RMS Lusitania on
10:07May 7, 1915, when it was torpedoed and sunk by a German submarine during World War I.
10:15His early death meant that the family fortune was quickly divided among his wife and young
10:20children before it was able to grow significantly under his direction, with his other brothers
10:25doing little to contribute to the Vanderbilt fortune themselves after his death.
10:31Reginald Claypool Vanderbilt was the great-grandson of the Commodore and the younger brother of
10:36Cornelius Vanderbilt III and Alfred Vanderbilt.
10:40As the youngest son of the family, Reginald had little involvement in the family business.
10:46He contributed nothing to the Vanderbilt family fortune and instead squandered his own inheritance
10:51away on gambling and alcohol until his death.
10:56There are several anecdotes that describe his reckless lifestyle.
11:00On his 21st birthday, the night he came in to his $15.5 million inheritance, he lost
11:06$70,000 gambling.
11:09When he was 42, he was told by his doctors that he would die soon if he refused to stop
11:14his alcoholic ways.
11:16Instead, he continued and even married a 17-year-old socialite named Gloria Morgan.
11:23Just a few years later, Reginald died from liver cirrhosis at the age of 45 in 1925.
11:30Having gambled away most of his inheritance, Reginald was broken and dead, leaving behind
11:36a widow and baby daughter who would have to live off of the interest payments of the young
11:41girl's $5 million trust fund until she was 21.
11:46While the Vanderbilt fortune was being split among more and more descendants who loved
11:50to excessively spend their inheritances, the original source of their family's wealth,
11:56New York Central, began to decline in the first half of the 20th century.
12:02Peaking in the 1920s, the transport and freight industry began to slump in the 1930s.
12:08By the end of World War II, other modes of transportation began overtaking railroads.
12:14The family sold their shares in New York Central, and in 1954, Chesapeake and Ohio
12:20Railway's Robert Young took over.
12:22For the employees of the New York Central, it was the end of an era.
12:27However, various owners and mergers couldn't save it.
12:31New York Central went from being the second-largest railroad in the United States to having its
12:36then-current iteration go bankrupt in 1970.
12:40Throughout all of this, the Vanderbilts had failed to establish any significant businesses
12:45that would have them maintain their status as one of America's wealthiest families.
12:51The baby girl that Reggie Vanderbilt left behind by his death in 1925 would grow up
12:56to be fashion designer, writer, artist, actress, and socialite Gloria Vanderbilt, famous for
13:03her jeans in the early 1980s.
13:05I think the whole point of fashion and the whole fun of fashion is that it makes a woman
13:09feel easy, at ease with herself, and also her best self."
13:14With her father dead and her young widowed mother something of a ghost herself, Gloria
13:19was raised by nannies in France knowing very little about her Vanderbilt family roots and
13:25the money that she was poised to inherit.
13:28While Gloria had a publicly successful career, she made it clear to her son, news anchor
13:33Anderson Cooper, that, quote,
13:35"...there's no trust fund," according to the Los Angeles Times.
13:39By the late 20th century, barely 100 years after the Commodore had become the richest
13:45man in America and his son the richest man in the world, the Vanderbilt family fortune
13:50had dwindled into insignificance.
13:52You know, when you think about how many people's names history just never remembers, and people
13:58whose stories are never told."
14:00After Gloria died in 2019, Cooper inherited most of her estate, which, despite being publicly
14:07estimated to be worth $200 million, only had a value of about $1.5 million.