HISTORY OF THE GREAT AMERICAN FORTUNES
For more than a quarter of a century, Gustavus Myers History of the Great American Fortunes has stood unassailed as a document that has recorded and made national history. As a source book, it has provided materials and reputations for many writers of the first rank.
When History of the Great American Fortunes was written in 1909, America was on the threshold of a flourishing iconoclastic era. The post-Civil War industrialization of the country had produced financial titans who inspired a literature of glorification. With the turn of the century, popular revulsion to the saccharine praises of the newly emerged plutocracy brought into favor a new and opposite type of writer. The reaction against panegyrics in behalf of the multimillionaires took form in a clamor against malefactors of great wealth. The books and articles of crusaders like Ray Stannard Baker, Ida Tarbell, Lincoln Steffens, Herbert Casson and Charles Edward Russell found immense public support. Their revelations were always sensational and vividly personalized. For the most part, they dealt with the private lives and individual vagaries of great magnates, and, in general, overlooked their social significance.
At the same time, Gustavus Myers was gathering and sifting his huge accumulation of solid facts. The incontrovertibility of his findings, when they appeared in book form, created a different and deeper sensation than did the more transitory exposÚs of mere personalities. There was no denunciation, no loose editorializing. The facts were all recorded and documented with references and direct citations from authentic official records. The reader was left to draw his own conclusions.
No one has yet challenged a single fact in Mr. Myers work. Every statement is made with the authority of corroborated and proven evidence. At no time did he indulge in tirades against personal traits, dispositions or temperaments. He was not concerned with the good or bad qualities of the individual founders and perpetuators of great fortunes. His only interest was in the means whereby great fortunes were acquired and the purposes for which they were used.
Where the vogue for the more lurid revelations of gigantic scandals has long since passed, the research and conclusions drawn in History of the Great American Fortunes have withstood every test of time. The book has the same vitality and accuracy it had in the first decade of the twentieth century. Moreover, the additions made to bring this work completely up to date make it a definitive history of the fortunes that have been amassed during and since the World War. In order to record the changes that have taken place during the last twenty-five years, Mr. Myers has made addenda and extensive revisions to every chapter of his book. Old fortunes are examined in their rise or fall. New ones are introduced and analyzed with the same objective scrutiny. This edition of History of the Great American Fortunes is, therefore, an entirely new book, retaining all of its original importance and acquiring even greater significance by the inclusion of data hitherto unrevealed.
John Chamberlain has said of Mr. Myers book that it is a classic, a masterpiece of digging in arch The Modern Library edition, complete and unabridged, with supplementary revelations on contemporary fortunes, is a lasting contribution to the literature of the whole social and economic pattern of America.
PREFACE TO THE 1936 EDITION
WHEN the research on History of the Great American Fortunes was originally undertaken, I was in no sense a radical. My state of mind was that of a political reformer, and some years were to elapse before I grasped the significance of economic considerations and changes. In the course of research upon my The History of Tammany Hall I had come across some documentary facts which severely shattered the inculcated conception that, with an exception here and there, the great private fortunes were unquestionably the result of thrift and sagacious ability. When The History of Tammany Hall was finished in 1900, I decided to devote further years to exploratory research upon the actual genesis and development of great American fortunes, and proceeded in the work.
But up to and at that time the fashion of romanticizing and eulogizing the careers of men of great wealth was fixed in the publishing world. Volumes had been issued presenting the magnates as marvels of achievement and as models for emulation by American youth. Naturally, therefore, I was desirous of ascertaining whether a work which told the truth would have any chance of publication. To this end, after I had continued in my research, I wrote to several leading New York publishers. The head of one of the oldest established houses wrote to me on November 12, 1901 :
My dear SirI am obliged to you for the suggestion in your favor of the 11th inst. concerning the publication of the volume you have in plan which would present a History of the Great American Fortunes. I judge that such a volume, prepared with adequate knowledge of the material to be considered, and with proper literary skill, ought to prove of no little popular interest. I doubt, however, whether would be the best people to handle effectively such a book as you have in mind. It seems to me (and I find on this point my partners are in accord with me) that if the narratives were presented with accuracy, they must, of necessity, contain certain statements or data which would be considered objectionable by the present representatives of the families concerned. [his firm] would be unwilling to print any book which could be criticized as incorrect or as attempting to whitewash more or less unsavory careers.
They would also, however, be unwilling to associate their imprint with any volumes which would give cause for offense to living persons who are, as a rule, entirely free from responsibility in regard to the actions of their ancestors.
As a practical example, it would not be possible to present the career of Jay Gould without describing in pretty plain English certain noteworthy undertakings in which he was concerned. On the other hand we should be entirely unwilling to print anything that could possibly cause offense to his daughter, Helen Gould, who is one of the best citizens in this country.
It seems to us that this difficulty is fatal, at least as far as our connection with such a work is concerned. It is very possible that some more enterprising or less scrupulous house might be ready to give favorable consideration to the plan. I am, yours faithfully.
The writer of that letter was a member of political reform organizations ; he had served as a foreman of a noted grand jury which exposed Tammany corruption.
The next publishing house that I approached was a newer but large and prosperous concern which, in addition to an outpouring of books, published what was generally termed an uplift magazine. The reply, dated November 23, 1901, to me from a principal in this firm ran :
Dear Mr. Myers : I have been talking with my partners about your proposed book, and we all feel that theres a possibility for a volume on the subject you mention. Our chief fear is that it be of such a nature in some cases-notably that of Jay Gouldas to get us into a great deal of trouble. The most interesting point about it, commercially, would be its bearing on the idea of American achievement and the suggestion to the ambitious man of today as to how great fortunes have been madeand I know this is by no means the interesting part to you. Why not go ahead and lay out a very complete list of chapters, so that we can get an idea of the way in which you treat the subject : you might also write a chapter. If you can send us these we can probably be much more definite. Very truly yours.
I need not point out the attempt to hold out to me the financial rewards that would follow from presenting the conventionally alluring account of the careers of men of great wealth. The writer of this letter, who thus proposed to have me inform the ambitious as to how to repeat the process of making great fortunes, later became a noted figure in our national life, and after his death a highly laudatory book was written about him.
In the case of History of the Great American Fortunes I had the same experience as I had had with The History of Tammany Hall. Regarding the latter book, not a single publisher in New York or elsewhere would publish it, one New York publisher informing me that he did not care to lock horns with Tammany Hall. That book had to be brought out privately. But later young, fearless men came into the publishing world ; and in 1917 Horace Liveright brought out a regular edition of the book on Tammany with additions to date. History of the Great American Fortunes could not find a receptionoften it could not even get a hearing in any regular publishing house and it had to be brought out in Chicago.
When it did appear, most leading reviewers scorned or derided it. Mr. Myers book, wrote one of them in the New York Times, proves too much for his own case, and leaves such a bad taste in the mouth that readers may be cordially advised to read something else. Another announced in the New York Sun : Mr. Myers has unfortunately become afflicted with the plutophobia that prevails in some quarters. Concluding a screed in the New York Mail, the reviewer declared : As the American people, up to this time, are frankly and fully attached to this system, and all expect to get rich under it sometime themselves, it would undoubtedly have been better policy, if he hoped to be read and regarded, for Mr. Myers to conceal his opinions. So accustomed were the generality of reviewers to books of opinions that they became confused by a book of documentary facts, and did not know how to appraise facts when confronted with them. Although in editorial after editorial the New York World had, in the most unmeasured language, denounced the criminal looting done by certain individuals and corporations, its reviewer objected to my summing up of the facts as declamatory.
However, a few reviewers did recognize the force of those facts but they found other grounds for condemnation. The New York Evening Post found a lack of intellectual balance in discussion and of judicial care in the statement of facts in my book, and the Springfield Republican, while declaring of it that there is no question as to his facts, yet reprobated my language in dealing with them as intemperate. Why all this stirring up of foul pools ? asked a reviewer in the New Orleans Times. As for the professional groups they in general could not stomach a book which, avoiding the theorizing pussyfoot method common to them, gave facts and presented them in an outspoken, straight forward way. The Annals of the American Academy dismissed History of the Great American Fortunes as lacking scholarly finish; another academic publication waved it aside as devoid of the judicial poise of the historian; and a third condemned it as a very crude attempt.
However, the mass of such reviews was relieved by some throughout America that did speak well of the book, and I cannot better illumine the obstacles that it encountered than by quoting the beginning of a review by Ira B. Cross and published in the San Francisco Evening Bulletin, on July 23, 1910. He wrote : From time immemorial paid biographers, parasitical panegyrists, preachers and Sunday-school teachers have sung the praises of the rich and wealthy citizens of the land ; muckrakers have muckraked Rockefeller and members of the Standard Oil Company group until a magazine no longer sells merely because it is publishing stories of graft and corruption ; books have been published by the score telling magnificent and marvelous tales concerning the holders of great fortunes of the United States, but it has fallen to the lot of Gustavus Myers to write the first full and authentic account of the actual sources of these vast accumulations of wealth and to disclose the methods used in their acquisition. His History of the Great American Fortunes marks an era in the field of economic research. Mr. Myers is unlike most authors in that he has no axe to grind, has no philosophy to preach, he has no monthly check from capitalist or corporation. He is a searcher after truth, and unlike most writers, he does not hesitate to publish the facts when he finds them, be they good or bad.
It was precisely because of the propaganda system of adulation here described that I felt impelled to write this book forcefully, driving home the truth from the facts that the wealth of magnates came from sources altogether different from those represented by the crews of puffers and the staffs of adroit publicity men.
Apart from the squads of paid or acquiescent eulogists, there were many persons who had been taught, or somehow imbibed the idea, that no matter how acquired, great fortunes were a blessing to the American people. Thus typically a reviewer in the magazine Smart Set passed his judgment on my book : I am firmly convinced that the growth of great fortunes has been of enormous net advantage to the United Statesthat is to say, that the average American has gained thereby a good deal more than he has lost. True enough, he has been looted unmercifully, day in and day out, but the money thus wrested from him by guile has been spent for national comforts and conveniences in which, in the main, he fully shares. . . What difference does it make to the common people whether their money is extracted from them by the government or by peculiarly enterprising private citizens, so long as a fair portion of it is spent for their good ? And he descanted upon the hospitals, colleges, Foundations and other institutions endowed by men of great wealth as proof of his contention that great private wealth was indispensable.
Since that was written, more than a quarter of a century ago, the spirit of a large part of the American people has advanced a long way. In at least one notable respect the rich man is no longer allowed a privilege that he long enjoyed. Wealth, once regarded as a vested and sacred right, has ceased to be so considered. Heavy tax levies, both Federal and State, on inheritances, incomes and on corporation profits have cut heavily into the larger fortunes. Since 1924, surtaxes have been increased from a relatively low amount to a present rate which progresses so rapidly as incomes grow that on a net income of $500,000 the surtax is nearly one-half. Of every net income over $1,000,000 surtaxes and normal taxes in 1935 took a total of 63 per cent. But that same law has had loopholes of which advantage has often been taken, and there have been many cases of evasion otherwise. The rich man has to pay a gift tax if he hands over his wealth to his family, and he cannot effectively resort, as ultra-rich men long did, to preserving fully that wealth by gifts for philanthropies and the consequent glorification of their names, since only 15 per cent of income donated for charity is free from tax. Inheritance taxes take a considerable share of estates.
Thus recent years have seen introduced what is the equivalent of a limitation on income from wealth. Now there is the proposal to go a step further. We heard President Franklin D. Roosevelt, in a message to Congress, on June 19, 1935, declare the principle : The transmission from generation to generation of vast fortunes by will, inheritance or gift is not consistent with the ideals and sentiments of the American people. Great accumulations of wealth cannot be justified on the basis of personal or family security. Such inherited economic power is as inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our government.
What part History of the Great American Fortunes had in influencing public opinion is not for me to say. But this much is proper and justifiable : For years this book had what might be called an underground circulation. That is to say, it was barred by colleges, ignored by publicists, received no notice, and was altogether left to an uncertain fate. But as time went on colleges and universities and public libraries found that they had to have it, professors used and quoted it, public reference to it became more and more frequent, it was used on the floor of Congress, and there came a new generation of reviewers who (I suppose I may say so) found contents and treatment conform to their views and liking, and gave the book increased prominence. Nor should I fail to addwhat is the strict trutha number of authors in recent years have patterned their books on wealthy men along the lines of History of the Great American Fortunes, and some have pirated liberally from the original facts there set forth.
To deal with the methods by which some of the great American fortunes have been amassedfortunes such as the Rockefeller, Andrew W. Mellon and some otherswould be superfluous in this new edition. They have been dealt with, more or less adequately, by other writers. I have, however, made revisions and enlargements, and have included additional material as to several great fortunes not covered in the previous edition.
If we may accept President Franklin D. Roosevelt as the spokesman of dominant American sentiment, we at least have arrived at the point of not approving the hereditary transmission of wealth. His stand in this respect is fully confirmed by the historic facts of the development of Americas career. These facts, I may here interpolate, were the substance of my History of American Idealism, published in 1925. That book showed how in successive stages the American people at large had abolished one kind of inequality after another, and it pointed out that the next logical step indicated was the establishment of some practicable measure of economic equality. In an article published in Century Magazine, in November, 1926, I elaborated upon this conclusion and moral of the book.
Whether the next pronounced development of American sentiment will be to effect changes making impossible the accumulation of great private wealth during lifetime, as well as the holding thereafter, is a matter for future determination. My business is purely that of a historian, relating what has been done, and not venturing into theoretical or speculative fields as to the adoption of this or that system.