October 1998 | Volume 49, Issue 6
How we chose the richest Americans
Who are the wealthiest Americans across all U.S. history? That question led us to begin a wideranging exploration that became our 1996 book The Wealthy 100: From Benjamin Franklin to Bill Gates—A Ranking of the Richest Americans, Past and Present . In it we ranked wealthy Americans since the start of the nation. Among the surprises was that George Washington (No. 59) and Ben Franklin (No. 86) turn up there. Throughout U.S. history there have been attempts to define the financial pecking order, from the lists of wealthy New Yorkers by Moses Yale Beach in the 1840s to the guest list of the annual 400-person Astor ball that later defined New York society and on to today’s systematic rankings in FORBES. Yet there had never been a list across the history of the nation.
The general concept of our ranking, here brought up to date, is simple: After estimating the size of each fortune at the time of death, or in the current year for living members of the list, we compared that fortune with the total gross national product (GNP) at the time. The ratio tells how the wealth of the individual compared with the total wealth of the entire nation. For example, Rockefeller’s fortune added up to about one sixty-fifth of the GNP, a record Bill Gates still has a long way to go to match. Finally, we have divided the wealth-to-GNP ratio into today’s GNP to come up with an equivalent fortune in today’s economy.
Beneath these simple formulas lies tremendous complexity. First of all, the official government figures for the’ GNP date back only to 1929, so we used estimates for earlier years; the GNP is admittedly a crude instrument, but other measures make even less sense when comparing the early post-Revolutionary War economy with today’s. Any way of comparing the value of money across eras when the meaning of money changed so much can be questioned, but the best yardstick we can produce must be better than none. Second, estimating the size of individual fortunes is also challenging. Their sizes were often masked by legend and braggadocio, not to mention more deliberate obfuscation. We did not count lost fortunes, but philanthropic gifts were added back in; to do otherwise would have seriously skewed the fortunes of Carnegie, Rockefeller, and others. We also did not include family fortunes, unless they were clearly the work of an individual.
If Caroline Astor—granddaughter-in-law of John Jacob Astor and founder of the Astor ball—were to open her ballroom again today, to a more intimate gathering of the very wealthiest Americans past and present, the American Heritage 40 might well represent the guest list. Everything they did was on the largest scale. If the ruthlessness and avarice of some of them was at times unsurpassed, so too was the magnitude of their generosity. Welcome to the party.