The old adage ‘from shirtsleeves to shirtsleeves in three generations’ is built on the premise that the first generation of family makes the wealth, the second spends it, and the third blows what there is left. Is it true?
For the Astors, the third generation was a turning point in the family’s fortune. John Jacob III, the grandson of the family patriarch, inherited the bulk of his father’s estate and migrated to England. His brother, William Backhouse Jr., became the less-entitled head of the family remaining in America. He spent much of his time in Florida aboard what was feted as the largest yacht in the world. His socialite wife presented herself as ‘the Mrs. Astor’ in New York.
Synonymous with the Astor family’s wealth was New York’s first Waldorf-Astoria Hotel which was sold to Alfred du Pont, of the chemical company dynasty, for around $15 million in 1929. The original hotel comprised two joined buildings. One had earlier replaced the family home inherited by William Waldorf, who succeeded John Astor III. The other building replaced Mrs. Astor’s home, after the death of her husband William Backhouse Jnr. After it was purchased by Alfred du Pont, the first Waldorf-Astoria hotel was demolished to make way for the Empire State Building. The reign of the Astors in New York was rapidly coming to an end at the time when du Pont fortunes were rising.
Of the poorer Astors, those remaining in America, John Jacob IV, the son of William Backhouse Jr., had two sons. On the ill-fated maiden voyage on the RMS Titanic, John Jacob IV died as its richest passenger. Surviving him were Vincent from his first marriage and John Jacob VI from a second marriage. Vincent Astor inherited the bulk of his father’s estate, and after three marriages died without an heir. His third wife, Brooke (d. 2007), earned the title as ‘the last Mrs. Astor’ and devoted her life and husband’s inheritance to philanthropic causes. John Jacob IV meanwhile, who was born after the sinking of the Titanic, received little of the family estate other than from a charitable trust and ironically made a career in shipping,
The loss of control in a founding business, as occurred when John Jacob Astor sold his fur trading business, is often tied to the demise of the family fortune. This is true of the Vanderbilt family whose Gilded Era wealth exceeded that of the Astors, making them America’s richest family. Like the Astors, whose New York real estate empire was also sold off by those who resided abroad, Vanderbilt money would make its way to England to fund the family’s entrance into society; namely Blenheim Palace where the wartime prime minister Winston Churchill was born.
History is repeating itself with the disconnection from ownership of the businesses upon which the twentieth century wealth of the du Pont and Ford families was built. Though much diminished, the Rockefeller family has survived for more than a century, despite the forced break-up of Standard Oil. Currently, we are seeing the devolution of the Murdoch family empire as the era of newspapers, in the conventional printed form, is replaced by the internet; meanwhile the empire’s founding patriarch, Rupert Murdoch, continues at the company helm. All of this can be contrasted with the English branch of the Rothschilds who retain ownership of the family’s banking business and their position as members of the English aristocracy.
The issue for a fourth-generation insider, Nelson Aldrich, Jnr., is that successive generations of wealth lose entrepreneurial imagination
through lack of hunger and distance themselves from the vulgarity of the market. Despite this, ‘Old Money’ often welcomes ‘New Money’ and elevates the latter’s aspirational social standing,1 which in itself is transactional.
[1] Nelson W. Aldrich, Old Money: The Mythology of America’s Upper Class (New York: Distributed by Random House, 1988), 91-92, 111.