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Annals of Wealth (part 3)

November 05, 2007

Vanderbilt_4BusinessWeek (citing the Business Standard, India's leading business daily) reports that the title of Richest Man in the World passed, on October 30, from Mexican tycoon Carlos Slim Helu to Indian industrialist Mukesh Ambani. I don't know how these things are calculated, but thanks to the strong performance in 2007 of the Bombay stock exchange, Ambani, chairman, managing director, and largest shareholder of Reliance Industries, now apparently boasts a net worth of $63.2 billion, edging out Slim and Bill Gates, number three on the list, each with a net worth of about $62.3 billion.

Ambani -- who gave his wife an Airbus jetliner for her birthday, is rumored to be building a $1 billion residential compound for his family in Mumbai, and, according to The Independent in London, has left "no obvious evidence of any philanthropy" -- denies the claim and is said to be "very upset by all the speculation about his wealth..."

Understandable, though I find it difficult to muster much sympathy for him. The problem, as I see it, is that Mr. Ambani is too much a product of our multicultural, hyper-sensitive, post-modern times. Imagine how much easier his life would be if he just followed the example of Cornelius Vanderbilt (1794-1877), America's first industrial-age tycoon.

When he died in 1877 at age 83, writes Edward Renehan on George Mason University's History News Network, "The Commodore" was worth $105 million. To control the same percentage of GDP today, says Renehan, the author of Commodore: The Life of Cornelius Vanderbilt (Basic/Perseus, 2007), one would have to have $168.4 billion in the bank -- almost three times what Bill Gates is worth.

But Vanderbilt was no bleeding heart philanthropist. As Renehan writes:

No cult of charity claimed [him]; no temptation toward benficence beckoned. Once, when asked to give aid to people standing on line for a distribution of free food, he noted his own impoverished beginning on Staten Island and, without a hint of irony, said: "Let them do what I have done." Not long after this, in an editorial for Packard's Monthly, Mark Twain admonished Vanderbilt to "go and do something [that will] shine as one solitary grain of pure gold upon the heaped rubbish of your life....Go, boldly, grandly, nobly, and give four dollars to some great public charity."

Several years before he died, the Commodore gave $1 million (less than 1 percent of his net worth) to fund what became Vanderbilt University. And though he didn't bother to attend the dedication ceremonies in the autumn of 1875, his gift was hailed as "the largest single act of philanthropy in American history to that time." But it wasn't without strings. Says Renehan:

Attention to the fine print...revealed that a substantial percentage of the $1 million endowment was, by Vanderbiltian order, to be kept in the first mortgage bonds of Vanderbilt's own New York Central & Hudson River Railroad.

It would be hard to imagine, say, a Texas oilman doing something like that today. But Vanderbilt wasn't through. Not long before his death, writes Renahan, the Commodore confided to one of his doctors that he had been "insane on the subject of money-making" all his life. He then drew up a will that left 95 percent of his fortune to just one of his eleven surviving children. Says Renahan:

Vanderbilt said he intended to keep his property "compact...I will not have it scattered. I will leave it as a monument to my name." Thus he left behind him the legacy he most coveted: a vast hoard of stocks, bonds, greenbacks and railroads, but next to nothing in the way of good works or improvement of society.

In other words, he died, in Andrew Carnegie's formulation, disgraced.

-- Mitch Nauffts

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