- Historic Sites
The American Heritage
A ranking of the forty wealthiest Americans of all time (Surprise: Only three of them are alive today)
October 1998 | Volume 49, Issue 6
He emigrated to the United States from Germany in 1852 and several years later found a job at a sawmill in Rock Island, Illinois, where he worked his way up to foreman. With money he had saved he entered into a partnership with his brother-inlaw. It was a good time to be in the lumber business; the growing nation was gobbling up wood for construction and fuel. His company accumulated more and more acres of forestland until at his death in 1914 it owned more than two million acres across Wisconsin, Minnesota, and the Pacific Northwest.
A self-made man whose fortune really took off when he began to speculate in railroad stock, Gould routinely engaged in hard-handed market tactics, such as corners, pools, and bear raids. On September 24, 1869, his attempt to corner the gold market triggered Black Friday, ruining many investors. He turned to Western railroads, starting with holdings in the Union Pacific and the Kansas Pacific, and by 1890 he owned half the trackage in the Southwest. He also picked up the New York World , Western Union, and the New York elevated railways.
Having started out as an errand boy at a dry goods store in Pittsfield, Massachusetts, by 1865 he was a partner in an established Chicago dry goods house. By 1881 he had bought out his two partners and renamed the business Marshall Field and Company, and by 1895, despite several severe setbacks, the store was grossing forty million dollars a year. He made up the slogan “The customer is always right,” and he introduced openly displayed prices, liberal credit, and the ability to return merchandise (and was first to put a restaurant in a store); he also knew how to both anticipate and create consumer demand.
The only member of this list ever to hula down Wall Street in a grass skirt—he did so after losing a bet to his employees that they couldn’t raise their pretax profits above 8 percent—Walton was a small-time shopkeeper who invented the superstore as the most efficient way to serve rural communities. His stores profited not only by serving places that others overlooked but also by employing innovative inventory-control techniques, using computers to monitor all the stock everywhere, and making all the stores satellites of warehouses within a day’s drive. His shelves were never empty of anything for more than a few hours, he negotiated directly with manufacturers to keep his costs low, and he always took care of his employees—even if it meant dancing down Wall Street.
The son of Anglo-Irish immigrants, Ford began building an automobile while employed as a machinist for the Edison Illuminating Company in Detroit; he presented his Quadricycle in 1896. In 1901 he entered a racer of his own design in a ten-mile match race and won, then persuaded investors to back the formation of the Ford Motor Company in 1903. In 1908 he introduced the sturdy and affordable Model T, and he constantly lowered its price, from $850 in 1908 down to $290 by the midtwenties, believing that greater volume would make up for the lower profit margin. He was right: By 1914 the company was selling 248,000 Model T’s a year, capturing close to 50 percent of the market. But he kept it in production far too long, nearly sinking the company before switching to the Model A in 1927.
After learning at the knee of the Columbia Graduate School of Business professor Benjamin Graham, the “oracle of Omaha” scraped together a hundred thousand dollars to start an investment partnership when he was twenty-five; it had increased its clients’ money an average of 30 percent a year when it was dissolved in 1969. By then Buffett had bought the small, worn-down textile firm Berkshire Hathaway; as a holding company it acquired undervalued companies whose stock values grew, and it is today a multibilliondollar powerhouse that owns stock in the Washington Post , Coca-Cola, American Express, and Capital Cities/ABC. Buffett retains a self-deprecating sense of humor and modesty: He does his own taxes, drives his own car, and says that Berkshire’s stock is overvalued.
ANDREW W. MELLON
RICHARD B. MELLON
When he was nineteen, Andrew joined his father’s bank, T. Mellon & Sons; his younger brother Richard came aboard as a partner after their father’s retirement in 1886. Thanks to their complementary personalities, they enjoyed a warm—and effective —family and business partnership. Andrew managed the books while Richard met with customers. Pittsburgh, where they did business, was the center of booming coal, steel, oil, and railroad industries. They had a keen eye for promising business ventures and backed a number of companies that became industrial giants, among them the Aluminum Company of America, Gulf Oil, and Union Steel. In 1921 President Harding appointed Andrew Secretary of the Treasury; his eleven-year tenure brought about a dramatic reduction in the national debt. In 1937 Andrew donated his impressive art collection, plus money for a building to house it, to create the National Gallery of Art. Richard’s passion was reviving rundown Pittsburgh.
JAMES G. FAIR