Obituaries IX – Notable Tycoons

Beginning in 1789, Anti-Federalists fears about the negative political effects of having a concentration of wealth in too few private hands are met by Alexander Hamilton’s commitment to capitalism. The success of his strategy is already evident by 1850 as the new nation moves into third place versus its European counterparts on per capita GDP.

Per Capita GDP* by Country in 1850 per The Madison Group

However, along with rewards for average citizens, comes the Anti-Federalist’s concerns about fabulous fortunes across a few individuals. These are the nineteen in total, including one woman, who become known as Tycoons, from the Japanese word for military leaders.

Their estate values at death range from a low around $300 Million (in 2011 $) to a high of $200 Billion. Their paths to these outcomes vary dramatically, starting with their birthplaces.

Birthplaces of Nineteen Tycoons

Eight of them come from wealthy families and seven others begin in abject poverty, with the remaining four growing up on relatively modest farms.

Relative Wealth Growing Up *

While all possess fabulous wealth, the levels vary widely.

The Size of Their Fortunes

Some remain singularly focused on the original industries that made their fortunes.

Single Minded Focus

Others leverage their profits by branching out into other opportunities.

Those Who Branch Out Across Sectors

Their differing paths to financial success prove fascinating.

1. Washington. In exchange for his military service in the Revolutionary War, the government cedes 70,000 acres (109 square miles) of land to him.
   
2. Girard. He risks his fortune by single-handedly funding the entire US government during the War of 1812.
   
3. Van R. As the 9^th Patroon, he inherits a large land grant made to his family by the Dutch West Indies Company in 1632. It is on the settlement of New Amsterdam at what later becomes the southern tip of Manhattan. His gracious treatment of tenants earns him the title of the “Good Patroon.”
   
4. Astor. He sets the stage for future entrepreneurs who turn their winnings in one industry into other investments leading to unheard of fortunes. Arriving in 1783 at twenty from Germany he learns the fur trapping and trading business first hand and in 1808 has built his American Fur Company into a monopoly running across Canada to the Pacific and on to China. Along the way he begins to buy up real estate in Manhattan including 120 city blocks extending north from 10^th Street to 125^th and east from Broadway to the East River. As such he is known as “the landlord of New York City
   
5. Peabody. Famous for his philanthropy, his original wealth traces to a dry goods wholesaler business specializing in imports from England. At forty-two he moves permanently to London and the start of a large banking firm that bears his name and later includes a partnership with Junius Morgan, father of J.P. Morgan.
   
6. Smith. His father’s partnership with JJ Astor in the fur trade ensures his status as a tycoon prior to his philanthropy on behalf of abolition, including the founding of the Liberty Party in 1840.
   
7. Stewart. His vision of extending limited dry goods outlets into diverse “department stores” is first brought to life in his seven story “Marble Palace” opening at 280 Broadway in NYC in 1846.
   
8. Vanderbilt. At age sixteen he captains a small steamboat ferrying goods and passengers around Staten Island and Manhattan, earning the half-in-jest moniker as “The Commodore.” But soon enough he earns the name by monopolizing all traffic around New York and New Jersey then expanding into international shipping during the 1849 Gold Rush. After which he again leverages his capital into a string of railroads, including the New York Central, and even a line across Nicaragua hoping to open a trade bridge between the Atlantic and Pacific oceans.
   
9. Taylor. His father’ role as real estate agent for JJ Astor leads to his rise in 1837 to Director of the City Bank of New York (later Citibank). Subsequent investments in the Atlantic Telegraph Company and the Consolidated Gas Company pay off further.
   
10. Gould. Born into poverty, he tries to build tannery and ice businesses before beginning to buy stock in small railroad companies. To defend his interests from Vanderbilt, he conspires with Boss Tweed and James Fisk in a failed attempt to corner the market on gold. He loses control over the Erie railroad, but secures his wealth with the Union Pacific, the eastern link in the 1869 transcontinental line.
    
11. Stanford. The Gold Rush brings him to California where he initially sets up a large general store catering to miners. Along with three other investors he plows his cash into taking control of the Central Pacific Railroad, starting in Sacramento and heading east as part of the transcontinental line.
    
12. Fair. His mining engineer talents pay off in the 1850’s by striking it rich in Nevada as the Comstock Lode yields the first major American source of silver. Fair proceeds to buy up valuable real estate in San Francisco and follows with control over the 78 mile long South Pacific Coast RR linking SF to Santa Cruz. In 1881 he is elected to the U.S. Senate from Nevada.
    
13. Blair. He converts early profits from general stores, banking and the Lackawanna Coal and Iron Company into ownership of some 16 different railroads. Riding the wave of America’s westward expansion he will control more miles of tracks than anyone else in the world. His philanthropy and humility gave him the nickname “Plain John I.”
    
14. Weightman. An English born chemist, he founds Powers & Weightman which achieves a near monopoly on manufacturing a synthetic form of quinine for the treatment of malaria. He then turns to real estate as the largest individual owner of plots in Philadelphia. In 1927 his firm merges with the modern pharma giant, Merck & Co.
    
15. Field. After working in a dry goods store at seventeen, he joins the Potter Palmer firm, then opens his own wholesale operation including his six story flagship retail emporium in Chicago in 1868. It promises quality goods at consistent prices, unconditional refunds and unique European imports. He opposes organized labor and leniency for the 1886 Haymarket Street rioters.
    
16. Sage. He retires in 1857 from two terms in the U.S House and enters Wall St. where he pioneers a hedging strategy of “puts and calls” that lead to a seat on the New York Stock Exchange in 1874. Specializing in railroad stocks, he associates with Jay Gould and serves as a corporate director on several of his lines, including the Union Pacific. In 1891 he is wounded in an assassination attempt by a disgruntled investor in railroad bonds.
    
17. Morgan. Around 1900 he turns his stock broker acumen into the creation of several leading American corporations including US Steel, International Harvester and some 21 railroad firms — while also establishing his own enduring J.P. Morgan Wall Street powerhouse.
    
    
18. Weyerhaeuser. Arriving from Germany in 1852, his experience and profits from working in sawmills translates into the Weyerhaeuser Syndicate of lumber companies by 1872. In 1900 he uses the proceeds to buy 900,000 acres of timberland in Washington, Oregon and southern Canada and emerges as the world’s largest seller of lumber – a title that still stands to the present.
    
19. Green. At thirteen she becomes bookkeeper for her Quaker family’s large whaling business before marrying a partner in a Wall St. firm and beginning to make her own investments. Her “contrarian strategy” spots temporary low prices for solid businesses and profitable buys, mainly in mining, real estate and railroad. This reduces her risk for big losses, along with an obsessive frugality on business and even personal costs. She says that it is the duty of women to manage their own wealth, and earns the title “Queen of Wall Street” for her willingness to make loans to governments and others during the 1907 financial panic which she accurately predicts.

Following are Obituaries for each of these Tycoons.

Obituaries: Nineteen Notable Tycoons