Lavish homes, luxurious parties, and colorful characters, the Vanderbilt were the poster family
of the Gilded Age. Thanks to a booming railroad business “Commodore” Cornelius Vanderbilt wrote
the perfect “rags to America’s richest” story. But then, almost in a snap all of their dollars…
turned to dust. Today on Nutty history let’s explore how the Vanderbilt family squandered
their vast fortune. And do not forget to like the video or Anderson Cooper might ban you from
watching CNN. Cornelius Vanderbilt was one of the many who took advantage of the social and
technological changes in the late 19th century to become ridiculously rich and he did it better
than anybody else. Starting with a small loan of $100 from his mother he bought a passenger boat
and ended up building the largest railroad empire America had seen. Cornelius once said to his son:
"Any fool can make a fortune; it takes a man of brains to hold onto it.” But, ironically,
when Cornelius had the chance to set every future generation of his family up for success,
he completely messed it all up. Cornelius may have been a brilliant businessman but being a
father was DEFINITELY not his cup of tea. It is quite ironic as he fathered thirteen children
from two marriages. He was notoriously harsh on his children and expected them to learn things on
their own instead of teaching them. The kids may have been born and brought up wealthy but they
never learned to maintain it. He never set up any terms and conditions on how his descendants can
use his inheritance and this led to mismanagement of the family fortune. And if that wasn’t enough
“The Worst Dad of the Year” award goes to... Drum roll please. Cornelius. He bestowed 87%
of his wealth to only one of his children leaving the others furious. But luckily,
William proved his dad’s decision right as he doubled the inheritance over his lifetime
despite the two-year-long legal battle he had to fight with his siblings and cousins.
He learned from his father’s mistakes and split his wealth evenly amongst his sons.
This is when Alva Vanderbilt enters the party. Married to Cornelius’s grandson,
Alva was a socialite eager to get into the elite circle of snobby New York’s wealthy families.
Unfortunately for her, Vanderbilts were too “new money” to make it. So, just to prove a point, Alva
ordered the construction of the largest mansion in New York. The mansion wasn’t supposed to be
just a new home for Alva’s family, it was meant to be a battering ram to break into the elite society
of New York. The grand and gorgeous mansion cost Vanderbilts a whopping 3 million dollars
but still, sadly it wasn’t enough to buy the approval of Vanderbilts’ old wealthy neighbors.
Still uninvited to mingle with other elites, Alva decided to throw her own party
and spared no expense to impress the guests. And... it worked! Alva became the talk of
the town after the party that cost the Vanderbilts two hundred and fifty grand
which would be roughly 6 million dollars today. As the word spread, the need for such
recognition became infectious among the rest of the Vanderbilts as in no time, the fifth avenue
was filled with multiple Vanderbilt mansions belonging to everyone and anyone in the family.
The desire for social approval consumed Alva and the rest of the family as they seek new ways of
spending their money for fame and recognition. After the death of William Vanderbilt,
his sons dabbled into philanthropy and spent their grandfather and father’s fortune in charities.
Cornelius the II and George Vanderbilts made huge donations to Universities,
Art Societies, and Libraries over their lifetime. The other brother William Kissam along with
his wife Alva spent their fortune on cultural activities like yacht racing, art-collecting,
and operating the Metropolitan Opera. The spending habits worsen with the next generation
as they indulge in gambling, promiscuousness and luxurious paid appearances. Reginald Vanderbilt,
father to Gloria and grandfather to news anchor Anderson Cooper, died at the mere age of 45,
broke and in debt after gambling away most of his fortune. His widow and daughter lived off
the interest payments of Gloria’s trust fund which was too exhausted by the time Anderson was born.
Cornelius and William grew their wealth in the era when business regulation was hardly a thing. As
they monopolized entire industries, their wealth saw no bounds because they had no taxes to pay.
However, things began turning around at the break of the 20th century when the Vanderbilts’ fortune
was already declining. Income tax, Gift tax, and estate tax brought no joy to the Vanderbilts and
it was another kick to the knees. Suddenly, the Vanderbilts' fortunes and inheritances were cut,
and their expensive lifestyles became harder to fund. To make matters worse, the Great Depression
made it very difficult for the Vanderbilts to maintain their lifestyles and huge estates.
But still reluctant to give up their lifestyle, they were forced to open Biltmore to the public
in 1930 to "increase area tourism" and to "generate income to preserve the estate".
The Vanderbilt fortune diminished among the descendants of every generation due to their
crave for a lavish lifestyle. The New York Central Railroad went off the rails in the first half of
the 20th century. The freight industry peaked in the 1920s, but began to slump in the 1930s. By the
end of World War II, other modes of transportation began overtaking railroads leaving the Vanderbilt
with their back against the wall. The family kept selling their shares in the company over the years
and in 1954, they lost the ownership to Chesapeake and Ohio Railway's Robert Young.
From being the second-largest railroad in the United States New York Central went bankrupt
in 1970. The Vanderbilts luck ran out as they failed to establish any
significant businesses that would have them maintain their status
as one of America's wealthiest families. Thanks for watching Nutty History.