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