-Caveat Lector- an excerpt from: The Founding Fortunes Michael Patrick Allen�1987 All rights reserved. E. P Dutton ISBN 0-525-48484-1 ----- An excellant and interesting book. Om K --[3]-- -2- Three Dynasties in Transition Fame and fortune may be transitory phenomena, but for some families, especially the richest of the corporate rich, wealth and the fame that is often attached to it have a more enduring quality. For the past half century or more, three families have loomed larger than all the rest among the corporate rich in America. They are, of course, the Rockefellers, du Ponts, and Mellons. All three were, without any doubt, among the wealthiest families in America during the 1930s. Despite a precipitous decline in the stock market, which deflated their fortunes, they did not share the privations experienced by millions of families during the Great Depression. According to one official government estimate, the Rockefellers, du Ponts, and Mellons were worth altogether over $1.2 billion in 1937. This estimate was based solely on the value of their principal stockholdings in major corporations and did not include the value of other stocks, bonds, bank accounts, real estate, and personal property owned by family members. These families have been almost forgotten in recent years. Only those family members with political ambitions, like John D. Rockefeller IV and Pierre S. du Pont IV, have attracted much public attention. Although they have gained a measure of obscurity in recent years, neither the families nor their fortunes have disappeared. In point of fact, they are still extremely wealthy. Precise figures are not available, but these three families are almost certainly worth together over $15 billion today. In short, it appears that these three families have succeeded in gaining an almost permanent niche among the corporate rich in America. It is precisely the continuity of families like the Rockefellers, du Ponts, and Mellons and their fortunes over successive generations that makes them the closest equivalents to dynasties that America is ever likely to produce. Like all dynasties before them, these families have possessed great wealth and have occasionally exercised the often enormous power inherent in such wealth. Because of their prominence in American society, each of these dynasties has been the subject of more than one history. Although these family histories provide intriguing glimpses into the lives of the-corporate rich in America, they usually fail to provide much detailed information about their wealth and the manner in which that wealth has been transmitted from one generation to the next. In particular, these accounts only rarely mention any of the strategies that family members have adopted to avoid taxation and to. retain a measure of control over family -companies. Like all families, these three corporate rich families have become larger and less cohesive as kinship groups over time. Consequently, the wealth held by them has been redistributed among a larger number of family members with each passing generation. In order to cope with these common problems, corporate rich families have often resorted to very similar strategies for perpetuating their fortunes. It is only by observing the historical evolution of a number of wealthy capitalist families that it is possible to understand the problems they have faced and the efficacy of the various strategies they have employed to resolve them. These problems are nowhere more difficult and the adaptive strategies more elaborate than among the Rockefellers, du Ponts, and Mellons. THE ROCKEFELLER FAMILY No other family in recent American history has engendered as much public adulation or provoked as much public condemnation as the Rockefellers. The mere mention of their name conjures up images of power and wealth on a colossal scale. The man who accumulated this fortune was, of course, John D. Rockefeller. In the last years of his life, he was portrayed in the press as a wizened old miser who amused himself in the midst of the Great Depression by doling out dimes to children. In his heyday, however, J. D. Rockefeller was the epitome of the shrewd and utterly ruthless "robber baron." Although he is now celebrated as a great philanthropist for his endowment of the Rockefeller Foundation and a number of smaller charities, his most notable achievement was certainly the creation of the formidable Standard Oil Trust. He and his partners succeeded in creating the largest monopoly in the country by using a series of predatory business tactics to destroy their competitors. At the height of its power around 1900, the Standard Oil Trust controlled over 80 percent of the oil refining capacity in the United States. J. D. Rockefeller alone had a 24 percent interest in this trust. After several years of litigation, the Supreme Court finally called for the dissolution of the Standard Oil Trust in 1911. As a result of this decree, the participants in the trust received their proportionate share of the stock in the various Standard Oil Companies held by the trust. Consequently, J. D. Rockefeller soon became the largest single stockholder in a half dozen of the largest oil companies in America. By 1913, his stockholdings in these oil companies were reportedly worth $900 million. For all this, John D. Rockefeller was surprisingly poor when he died in 1937. The man who had once been proclaimed the richest man in the world left an estate of only $26 million. Of this, $16 million went to state and federal taxes. The man who had built the mighty Standard Oil Trust died with only one share of common stock in any Standard Oil company, a certificate for the first share issued by the predecessor Chevron Corporation. In order to account for this state of comparative poverty, a family spokesman explained that J. D. Rockefeller had given $530 million to charity during his lifetime. The bulk of this went, of course, to family philanthropies such as the Rockefeller Foundation and the Rockefeller Institute. If there was any public concern about the financial security of the Rockefeller family, it was laid to rest three years later with the publication of a report issued by the Temporary National Economic Committee appointed by President Roosevelt. In this study of the concentration of stock ownership among the two hundred largest nonfinancial corporations in America, it was disclosed that the Rockefellers held stock worth $274 million in six oil companies, including the predecessors of such giant corporations as Exxon, Mobil, Amoco, and Chevron. Moreover, this was only a partial estimate of their wealth, as it did not include any of their stockholdings in other companies or their holdings of bonds and real estate. This report also disclosed that the members of the Rockefeller family did not share equally in the Rockefeller fortune. Of the $274 million in oil stocks held by the descendants of John D. Rockefeller, almost $250 million was held by his only son, John D. Rockefeller, Jr., and his children. The three daughters of J. D. Rockefeller, Sr., got much less. Two of his daughters, Alta Rockefeller Prentice and Edith Rockefeller McCormick, were the income beneficiaries of trusts that held oil stocks worth a relatively modest $24 million in 1939. The children of his third daughter, Bessie Rockefeller Strong, who had died several years earlier, received $9 million in cash and bonds from his estate in the form of a trust. Perhaps because he wished to keep the bulk of his fortune in one piece, J. D. Rockefeller, Sr., decided to ,give almost all of his enormous wealth to his son. He apparently felt that his son was the only one adequately prepared for the task of managing such a fortune. After all, J. D. Rockefeller, Jr., had worked for his father ever since his graduation from Brown University. Beginning in 1917, J. D. Rockefeller, Sr., began transferring large amounts of stock and cash to his son. Within five years, he had given him securities then worth roughly $400 million. Because there were no federal gift taxes at the time, the Rockefeller fortune was transferred from one generation to the next virtually intact. Although he soon became the largest stockholder in the various Standard Oil companies, J. D. Rockefeller, Jr., never served as an officer or director of any of them. He was content to let others run the companies for him while he devoted himself to managing the massive Rockefeller fortune and overseeing the various Rockefeller philanthropies. One of the most important decisions that J. D. Rockefeller, Jr., made as the head of the family was to diversify the Rockefeller fortune. This decision may have been motivated in large part by a desire to remove from the family the stigma associated with the Standard Oil Trust. Although the Rockefellers attempted to dissociate themselves from the former Standard Oil companies, they remained major stockholders in them for many years following the dissolution decree. The full extent of their control over these companies was revealed in 1928, after the president of Amoco was charged with perjury by a Senate committee. When he refused to resign, J. D. Rockefeller, Jr., initiated a proxy contest in order to assert his control over the company. Even though he won the contest easily, the bitter struggle for control brought the family more unwanted publicity. In the years following the death of his father, J. D. Rockefeller, Jr., quietly began selling much of his stock in the Standard Oil companies and reinvesting the proceeds in a diversified portfolio of stocks and bonds. He also directed some of the Rockefeller fortune into real estate. In the midst of the Great Depression, he invested $125 million in the construction of Rockefeller Center, a giant complex of fourteen office buildings constructed on three city blocks in the middle of Manhattan. Although he borrowed $45 million to finance part of the construction, J. D. Rockefeller, Jr., was able to raise the rest of the funds simply by selling some of his oil stocks. John D. Rockefeller, Jr., and his wife raised their six children in an atmosphere of almost puritanical morality. Despite the fact that they were constantly surrounded by a small army of servants, governesses, and bodyguards, J. D. Rockefeller, Jr., insisted that his children learn a sense of responsibility, particularly in matters of money. Consequently, he required all of them to keep an account book of their weekly allowance and expenditures, just as he had done as a child. He also kept their allowances low so that they were forced to perform menial chores in order to earn extra money. Despite this enforced frugality, the children were inevitably raised in an environment of quiet but uncompromising luxury. Home was a huge nine story town house in New York City, not far from Central Park, but weekends were often spent at Pocantico, the lavish 3,500-acre estate in the Hudson River Valley built by their grandfather. The estate had its own golf course, stables, riding paths, swimming pool, and squash court. Part of every summer was spent at the large mansion their father built at Seal Harbor, Maine. There they often played with children from other prominent and wealthy families, including the children of Edsel Ford. All of the children were sent to exclusive private schools, and the five boys eventually attended elite private universities. Even after they reached maturity and went their own ways, the children of J. D. Rockefeller, Jr., maintained a degree of family unity. Four of his sons eventually built separate homes on the sprawling grounds of the Pocantico estate, where they took turns visiting their father for Sunday dinner. While the family was gaining national recognition for its charitable contributions, J. D. Rockefeller, Jr., was busy safeguarding the rest of the family fortune from the threat of gift and estate taxes. He was particularly quick to react to the progressive "wealth tax" proposed by President Roosevelt in 1934. In December of that year, only a few days before the imposition of the new gift taxes, he established massive trusts, each worth approximately $20 million, for his wife and six children. These trusts, which consisted initially of stock in the various Standard Oil companies, were typical generation-skipping trusts. His wife and children were to receive the income from these trusts during their lifetimes, but the assets held by these trusts were preserved for his grandchildren. According to the terms of the trusts, they are not to be dissolved until the death of the last of the four grandchildren of J. D. Rockefeller, Jr., who were alive at the time of their creation in 1934. Only then will the trusts be dissolved and their assets distributed, without any gift or estate taxes, among the grandchildren of J. D. Rockefeller, Jr., or their survivors. In 1952, J. D. Rockefeller, Jr., created another series of smaller trusts to provide his grandchildren with independent incomes while their parents were still alive. The resulting legal labyrinth of overlapping trusts was a masterpiece of tax avoidance. When he died in 1960, J. D. Rockefeller, Jr., left an estate of $160 million, which was split between the Rockefeller Brothers Fund and his second wife. In this way, there were virtually no estate taxes levied against his estate. Of the six children of J. D. Rockefeller, Jr., the best known was Nelson Rockefeller. He was, without any doubt, the most sociable and energetic of the five brothers. Despite the fact that he suffered from a reading disorder, he graduated with honors from Dartmouth. Soon after his graduation, Nelson went to work for his father at the newly constructed Rockefeller Center. He later served as assistant secretary of state under President Roosevelt and under secretary of Health, Education and Welfare under President Eisenhower. In 1958, Nelson was elected to the first of his four terms as governor of New York. He never hesitated to use family money to finance his political campaigns. Between 195 8 and 1970, Nelson contributed just over $1 million to his own gubernatorial and presidential campaigns. In a convincing display of family solidarity, his parents, brothers, and sister contributed another $14 million to these same campaigns. When he was later asked about these family contributions to his various campaigns, he lamented that "it is very difficult for a Rockefeller to raise any money for a campaign." Finally in 1974, after four unsuccessful attempts to become the presidential nominee of the Republican party, Nelson Rockefeller was nominated vice president of the United States by President Ford, who had been nominated to the same office by President Nixon. Only two of the brothers demonstrated any interest in business. One of them, of course, was David Rockefeller, the youngest of the five brothers. After his graduation from Harvard, David spent two years at the London School of Economics before going on to the University of Chicago for his Ph.D. in economics. He later joined Chase Manhattan Bank as an assistant manager, but was soon promoted to the rank of vice president. Within nine short years, he was vice chairman, a post he held for five years, until he was appointed president of the bank. His rapid advancement was assisted, no doubt, by the fact that the Rockefeller family was a major stockholder in the bank. As chairman of one of the largest banks in the world, David Rockefeller became an important figure in the arena of international finance. In recent years, David has augmented his fortune by investing in several large real estate developments, including L'Enfant Plaza in Washington, D.C., and Embarcadero Center in San Francisco. The other brother to enter business was Laurence Rockefeller. Within a few years of his graduation from Princeton, Laurence bought a seat on the New York Stock Exchange and declared himself a "venture capitalist." He was fascinated by aviation and became one of the original investors in both Eastern Airlines and the forerunner of McDonnell Douglas. By 1975, he had made a total of $48 million from his investments in seventy new companies. Laurence also managed to combine his abilities as a businessman with his interest in conservation. The result was Rockresorts, a chain of exclusive resort hotels with developments bordering on national parks in such locales as Hawaii and the Virgin Islands. The eldest brother, John D. Rockefeller III, avoided both business and politics. After his graduation from Princeton, he became involved with several family philanthropies, including the Rockefeller Foundation. Over the years, he developed a genuine interest in a series of charitable causes. He was instrumental in the formation of several civic organizations, including the Population Council, but his most ambitious project was the construction of Lincoln Center. As its first chairman, J. D. Rockefeller III gave $10 million of his own money to the project and convinced other family members and foundations to donate another $34 million. The only rebel among the brothers was Winthrop Rockefeller. He dropped out of Yale after his freshman year and went to work as a roughneck in the Texas oil fields. In the years that followed, Winthrop earned a reputation as a playboy. He also developed a serious drinking problem. His estrangement from the rest of the family was further exacerbated after he married and quickly divorced a young actress. To establish his own identity, he moved to Arkansas, where he built Winrock Farms, a 31,400-acre farming and ranching operation. Thirteen years later he became the first Republican governor of the state since Reconstruction. Almost forgotten among the five famous Rockefeller brothers was their older sister, Abby Rockefeller Mauze. She led an extremely private life interrupted only by the publicity of two divorces. Nevertheless, she participated in most of the financial and philanthropic ventures initiated by her brothers. It is ironic that, as a direct result of their political power, the financial affairs of the Rockefellers are more public than those of any other corporate rich family in America. In his confirmation hearings for vice president, Nelson Rockefeller and his financial advisers were forced to provide the House Judiciary Committee with a detailed, albeit conservative, accounting of the Rockefeller fortune. To begin with, Nelson disclosed that he and his wife had a net worth of $62 million, about half of that in art. In addition, Nelson was the sole income beneficiary of two trusts worth a total of $116 million, even in the depressed stock market of 1974. Moreover, his wife and six children held securities and were the beneficiaries of still other trusts holding securities worth another $39 million. In all, Nelson and his branch of the Rockefeller family were worth at least $218 million. Later in the confirmation hearings, a representative of Rockefeller Family and Associates, the family investment office, provided the committee with a summary of the stockholdings of the entire Rockefeller family. The descendants of John D. Rockefeller, Jr., and their spouses, eighty-four individuals in all, were worth slightly more than $1 billion in securities. This figure excluded real estate and personal property, including jewelry and art, worth at least another $200 million. Most of this fortune, $738 million to be exact, was held by trusts created by John D. Rockefeller, Jr. By 1980, four of the grandchildren of John D. Rockefeller had passed away. Winthrop Rockefeller died of cancer in 1973. In his will, he left most of his estate, appraised at $81 million, to a charitable trust. This trust later sold Winrock Farms to Winthrop Paul Rockefeller, his son by his first marriage. Abby Rockefeller Mauze too died of cancer three years later. She left the bulk of her estate to a charitable lead trust, which would pay all of its income to charity for thirty-five years, after which the principal would be distributed free of taxes to her grandchildren. The eldest brother, John D. Rockefeller III, died in an automobile accident on the family estate at Pocantico in 1978. His will stipulated that part of his art collection, worth about $25 million, be donated to two museums. The rest of his approximately $100 million estate, after estate taxes, went to a trust for his wife and children. Later that same year, Nelson Rockefeller died of a heart attack under somewhat mysterious circumstances while in the company of a young female assistant. His personal estate was valued at approximately $66 million. Most of his art collection went to museums, and his share of the Pocantico estate was given to the federal government as part of a park. The rest of his estate, after taxes, went to a trust for the benefit of his second wife and their two sons. Upon the death of their parents, of course, the children of the two Rockefeller brothers and their sister immediately became the income beneficiaries of the massive trusts created by John D. Rockefeller, Jr., in 1934. As the children of J. D. Rockefeller, Jr., fade from the scene, they are being replaced, on a somewhat less obtrusive scale, by their children. It is the cousins, the twenty-two surviving grandchildren of J. D. Rockefeller, Jr., who will eventually inherit the bulk of the family fortune. The best known of all the cousins is, not surprisingly, a namesake of the founder of Standard Oil. John D. Rockefeller IV, or Jay as he prefers to be called, became interested in politics while serving on the staff of the Peace Corps soon after his graduation from Harvard. After a brief stint in the State Department, he decided to enter politics at the state level, as his uncles Nelson and Winthrop had done so successfully. He also decided to go a state where his wealth might be appreciated rather than scorned. Jay Rockefeller moved to West Virginia in 1964 and, two years later, was elected to the state legislature. In 1976, he was elected governor. After two terms as governor, he was elected to the Senate in 1984. Like his uncles, he did not hesitate to use his wealth to further his political career. In all, Jay spent over $20 million of his own money on his last two campaigns alone. By and large, the cousins are a diverse group. Several of them are actively involved in civic and philanthropic organizations. Although none of the rest has pursued a career in politics, some of the cousins have contributed generously to various political causes. Only one of them, Rodman Rockefeller, the eldest son of Nelson Rockefeller, works for any of the family corporations. Although the Rockefeller family may never again have the wealth or the unity of purpose that it once possessed, it will remain a potent political and economic force for generations to come. The Rockefeller cousins no longer see each other frequently, but many of them meet twice each year at reunions to discuss family matters. The matter of common interest to all of them, of course, is Rockefeller Family and Associates, the family office that administers most of their wealth. In the meantime, the Rockefeller fortune continues to grow, slowly but surely. The investments of the family have increased greatly in value since the nomination hearings for Nelson Rockefeller in 1974. The market value of their stockholdings in major corporations has, in all likelihood, risen from $653 million in 1974 to over $1.7 billion. These totals exclude the family stockholdings in Rockefeller Group Inc., the holding company for their real estate and broadcasting properties. In a complex financial transaction designed to raise additional cash, Rockefeller Group recently sold a 71.5 percent interest in twelve buildings in Rockefeller Center to the public for $1.3 billion. Rockefeller Group still retains a full or half interest in four other buildings in Rockefeller Center as well as Outlet Company, which owns and operates seven television and four radio stations, and Cushman and Wakefield Inc., a real estate management firm. The total net worth of Rockefeller Group is at least $2.5 billion. In addition, individual family members probably own at least another $500 million in municipal bonds, real estate, and art. In all, the Rockefellers are now worth close to $5 billion. THE DU PONT FAMILY Of all the corporate rich families in America, few are richer and none is older than the du Ponts. The founder of this prolific and sometimes profligate clan was Pierre S. du Pont de Nemours, a prosperous French businessman who migrated to this country in 1800. At last count in 1977, there were about sixteen hundred du Ponts. Although they share a common ancestry, they do not all share in the du Pont fortune. Most du Ponts are at least somewhat affluent, but only a couple of hundred of them are truly rich. Indeed, most du Ponts no longer have any affiliation with the giant chemical company of the same name. For the first hundred years of its existence, E. I. du Pont de Nemours and Company was simply a family partnership owned by those family members who were actively engaged in the business of making munitions and explosives. The foundation for the present concentration of wealth within a few branches of the du Pont family was laid in 1902 when three young cousins, Alfred I. du Pont, T. Coleman du Pont, and Pierre S. du Pont II, bought majority control of the company from four older cousins. In all, they acquired 72 percent of the Du Pont stock for $12 million in promissory notes. The du Pont fortune was consolidated even further thirteen years later when Pierre organized a holding company, later to be known as Christiana Securities, to buy out Coleman, the largest stockholder in the company, for $14 million in cash and notes. This stock purchase, which gave Pierre effective control of Du Pont, was later challenged in the courts by his cousin Alfred. The ensuing legal battle, which Pierre eventually won, created a family feud that lasted for decades. As a result of these two transactions, the bulk of the du Pont fortune is held by the descendants of the brothers and sisters of Pierre S. du Pont II, a great-great-grandson and namesake of the first du Pont to migrate to America. More than any other person, it was Pierre who oversaw the growth of Du Pont into a giant corporation. He also managed to accumulate much of the current du Pont fortune. After his father was killed in an explosion at a Du Pont plant, the young Pierre apparently decided that it was his responsibility, as the oldest son, to ensure the welfare of his eight siblings. As he had no children of his own, Pierre proceeded to amass a fortune of staggering proportions, only to distribute most of it to his brothers and sisters and their children. For example, when Pierre first organized Christiana Securities in 1915 to buy out Coleman du Pont, he brought in two brothers and the husbands of two sisters as major stockholders. Eight years later, Pierre organized another holding company, Delaware Realty and Investment, to which he transferred the bulk of his holdings in both Du Pont and Christiana Securities. He then distributed the stock in this holding company equally among his brothers and sisters, as well as the children of two deceased brothers, in exchange for an annuity of $900,000 a year for him and his wife. By 1938, the stock in Delaware Realty and Investment alone was worth $145 million in Du Pont stock. In addition, Pierre and his brothers and sisters owned other stock in Christiana Securities worth another $141 million in Du Pont stock. The Du Pont Company grew and prospered under the leadership of Pierre du Pont. As John Gates, a historian of the du Pont family, observed, "he was, to be sure, the right man at the right time in the right place, and he was surrounded by other right men in the right places, but Pierre made it all happen." As a result of soaring munitions sales during World War I, Du Pont Company profits increased almost sevenfold between 1914 and 1918. Even before the war was over, Pierre used some of these profits to diversify the company into the production of paints, dyes, and chemicals. In search of another investment opportunity for the remainder of the wartime profits, he also engineered the purchase by Du Pont of a 23 percent stake in General Motors in early 1918. For the next several years, Pierre was to exercise enormous economic power as the president of both Du Pont and General Motors. By the time he died in 1954, his brothers and sisters had produced thirty-four children, many of whom had children of their own. It was a large family, to be sure, but he had provided it with a large fortune. The stock in Delaware Realty and Investment was then worth $858 million in Du Pont stock. His brothers and sisters and their children also held stock in Christiana Securities worth another $629 million in Du Pont stock. In all, this branch of the du Pont family alone owned, either directly or indirectly through holding companies, over 26 percent of the stock in Du Pont in 1954. Moreover, the family was actively involved in the management of the company, with eight family members serving as either officers or directors. Although Pierre du Pont was an extremely astute businessman, he was aided and abetted throughout by other family members. When he stepped down as president of Du Pont in 1919, Pierre was succeeded by his younger brother, Irenee du Pont. Following family tradition, Irenee graduated from M.I.T. with a degree in chemical engineering before joining Du Pont. Although he did not possess Pierre's genius for organization or finance, Irenee proved to be an effective chief executive officer with an undeniable talent for making money. For example, it was Irenee who initiated the du Pont family investment in the U.S. Rubber Company. In 1927, he organized a syndicate of family members, which purchased almost 30 percent of the stock in U.S. Rubber. Not surprisingly, the company soon became the largest supplier of tires to General Motors. As a result of his early participation in Christiana Securities, Irenee became extremely wealthy. He bought a sixty-foot yacht and built Granogue, a lavish 500-acre estate outside Wilmington, Delaware. However, his most extravagant purchase was Xanadu, a $2 million oceanfront estate in Cuba, where he raised pet iguanas. When he died in 1966 at the age of eighty-four, Irenee left an estate of approximately $200 million. Of this, $90 million went to taxes, $32 million went to a family foundation, and $64 million went into trusts for his children. However, he had already given his children the bulk of his stock in Christiana Securities. In all, Irenee du Pont was survived by eight children and thirty-seven grandchildren. Altogether, they are worth approximately $800 million. When Irenee du Pont resigned as president of Du Pont in 1928, he was succeeded by Lammot du Pont, the youngest of the three brothers. In a family in which eccentrics were common, Lammot was almost in a class by himself. He was the first and probably the last president of Du Pont to ride to work on a bicycle. At home, he often chopped firewood or sharpened knives for recreation. His main contribution to the company was the commitment of substantial funds for research and development. This effort eventually led to several profitable discoveries by Du Pont chemists, including the invention of nylon in 1938. Along the way, Lammot accumulated a fortune that finally eclipsed the considerable fortune amassed by his brother Irenee. Although he did not flaunt his wealth on the same scale as Irenee, he did permit himself the minor extravagance of a ninety-six-foot yacht. Lammot was also a family man of sorts. In all, he had ten children by his four wives. Because of the size of his family, he took great care to minimize the taxes on his estate. When he died in 1954, he left an estate of only $75 million. In his will, he took full advantage of the tax laws and left half of his estate, tax free, in trust for his wife. He also stipulated that the remainder of his estate, after taxes, was to go into a series of trusts for his children. Of course, Lammot had already placed the vast bulk of his fortune in trusts for his descendants. His ten children and twenty-seven grandchildren are worth, in the aggregate, roughly $1 billion. Perhaps the richest of all the nephews and nieces of Pierre du Pont was Lammot Copeland. He owed this distinction to the fact that he was the only child of Louisa du Pont Copeland, the older sister of Pierre du Pont. His father, Charles Copeland, was an investment banker who later served as the secretary of Du Pont. Lammot joined the company after graduation from Harvard, and, because he was talented and because he was a du Pont, he rose quickly through the managerial ranks at Du Pont to become president and later chairman. He resigned as chairman in 1972, not long after it was disclosed that his son, Lammot Copeland, Jr., had filed for bankruptcy, listing liabilities of almost $60 million against assets of only $26 million. The son had become involved in a number of questionable business ventures and had incurred massive debts, largely by guaranteeing loans to several unprofitable companies. Lammot Copeland, Sr., lent his son over $8 million in order to bail him out but to no avail. In the end, they decided that bankruptcy was the quickest and the cheapest way out of an impossible situation. Although both father and son lost several million dollars in the settlement, neither of them was severely affected by the bankruptcy. Under Delaware law, the creditors were unable to invade the trust established for Lammot Copeland, Jr., which held approximately $14 million in Du Pont and Christiana Securities stock. Lammot Copeland, Sr., who died in 1983, had three children who are probably worth close to $400 million. Most of the descendants of the other brothers and sisters of Pierre S. du Pont are also quite wealthy. Pierre's youngest sister, Margaretta du Pont, married Robert R. M. Carpenter, who developed a close relationship with the childless Pierre. He eventually served as a vice president and director of Du Pont. One of their four children, Robert R. M. Carpenter, Jr., gained national attention in 1943 when he purchased the Philadelphia Phillies baseball team for about half a million dollars. His son, Robert R. M. Carpenter III, gained even more attention when he sold the team for more than $30 million in 1981. The four children of Ruly and Margaretta du Pont Carpenter eventually had eleven children of their own. Overall, the Carpenter branch of the du Pont family is worth at least $500 million. Although the descendants of the other two sisters and two brothers of Pierre du Pont are not quite so rich as their cousins, most of them are nevertheless very wealthy. Neither of Pierre's two other sisters, Mary and Isabella du Pont, or their respective husbands, William W. Laird and H. Rodney Sharp, was ever a major stockholder in Christiana Securities, other than through Delaware Realty and Investment. Neither was any of the children of his two older brothers, William and Henry du Pont, both of whom died before the creation of Christiana Securities. Consequently, the children of Mary du Pont Laird, Isabella du Pont Sharp, Henry B. du Pont, and William K. du Pont owe the bulk of their wealth to the shares of Delaware Realty and Investment, which they or their parents received from Pierre S. du Pont in 1925. These four brothers and sisters had twelve children and twenty- seven grandchildren, who are worth, in the aggregate, about $1.2 billion. Despite their great wealth, the du Ponts have established very few charitable foundations comparable to those created by other corporate rich families. This limited philanthropy may be due to the fact that the du Pont family was much larger than most of these families almost from the outset. The greatest philanthropic gesture by any member of the family was the creation of Alfred I. du Pont. One of the most dynamic and colorful members of the entire du Pont clan, it was Alfred who encouraged Pierre and Coleman to join him in purchasing majority control of Du Pont in 1902. However, after Pierre gained control of the company by buying out Coleman, Alfred severed his ties with many members of the du Pont family. He resigned as a director of Du Pont and moved to Florida, where he began amassing large tracts of undeveloped land. When he died in 1935, Alfred left most of his estate to the Alfred I. du Pont Testamentary Trust. Almost all of the income from this trust went to his wife until her death in 1970. The primary income beneficiary of the trust is now a hospital for crippled children located on the grounds of his Nemours estate in Delaware. In addition to large blocks of General Motors and Du Pont, the main asset held by the trust is a 74 percent interest in St. Joe Paper Company, which, in turn, controls Florida East Coast Railway and owns over a million acres of timberland in Florida and Georgia. In 1979, the trust conservatively valued its assets at $1.1 billion. The only other major du Pont foundation is the Longwood Foundation, which was created out of the residual estate of Pierre S. du Pont. This foundation, with assets of $112 million in 1983, is devoted to the maintenance of his Longwood estate outside Wilmington, Delaware, as a public garden. As a group, the heirs of Pierre S. du Pont are the richest members of the du Pont clan, but they are by no means the only ones to share in the du Pont fortune. The other really wealthy branch of the clan consists of the descendants of William du Pont, a first cousin once removed of Pierre. William inherited a relatively small block of Du Pont stock from his father, Henry du Pont, one of the four du Pont cousins who retained a minority interest in the company after selling out to Pierre, Alfred, and Coleman du Pont in 1902. Although William resigned as a director after Pierre gained control of the company, he kept his Du Pont stock. With his cousin, Alfred I. du Pont, he also founded the Delaware Trust Company to compete with the Wilmington Trust Company controlled by Pierre and his relatives. When William died in 1928, his will stipulated that his entire estate be placed in trust for his two children. By 1937, this trust held over $32 million in Du Pont stock alone. His son, William du Pont, Jr., established a national reputation as a horse breeder while his daughter, Marion du Pont, gained some notoriety by marrying and later divorcing the actor Randolph Scott. When William du Pont, Jr., passed away in 1966, his five children each received over $50 million from the trust created by their grandfather. Because their aunt, Marion du Pont Scott, never had children, they also received her share of the trust, probably worth another $60 million apiece when she died in 1983. In all, the William du Pont branch of the family is probably worth at least $600 million. By and large, the younger du Ponts, the grandnephews and grandnieces of Pierre du Pont, have led private lives. Certainly the best known grandnephew is Pierre S. du Pont IV, the former governor of Delaware, who prefers to be called "Pete" by his constituents. His father, Pierre S. du Pont III, once served as a vice president and director of Du Pont. Pete too joined the company soon after graduation from Harvard Law School but quit after seven years. He then decided to enter politics by running unopposed for a seat in the Delaware legislature. It was something of a feat, inasmuch as the du Pont name was almost as great a liability in Delaware electoral politics as the du Pont fortune was an asset. With the help of a professional campaign-management firm, Pete was elected to three terms as the sole member of the House of Representatives from Delaware before being elected governor of the state in 1976. When he first entered the House of Representatives in 1971, he released a list of his stockholdings; it was a relatively modest portfolio worth less than $2.2 million. He did not reveal, however, the value of trusts for his benefit, which probably account for the bulk of his personal wealth. Only one of the heirs of Pierre S. du Pont still works for Du Pont. H. Rodney Sharp 111, who is a grandson of Isabella du Pont Sharp, is a manager in charge of the computer operations division for the company. However, unlike most lower- echelon managers, he is -also a director of Du Pont. By and large, the other descendants of Pierre S. du Pont have pursued independent activities, ranging from coin collecting to horse breeding. All of them are able to subsist quite nicely on the income from their trust funds and investments. Despite the fact that it grew to become one of the largest corporations in America, Du Pont has remained, until relatively recently at least, a family enterprise. The heirs of Pierre du Pont have not only held a controlling block of Du Pont stock, they have also been active in the management and direction of the company for several decades. Several of Pierre's nephews and even a few of his grandnephews have served as officers and directors of Du Pont. In recent years, however, the du Ponts have been content to let others manage the company for them. Lammot Copeland was the last member of the du Pont family to serve as president. The gradual withdrawal of the family from active control of the company was accelerated by the dissolution of the pyramid of holding companies created by Pierre to consolidate the stockholdings of the family. Delaware Realty and Investment was merged into Christiana Securities in 1961 through an exchange of stock, Sixteen years later, Christiana Securities itself was merged into Du Pont in exchange for Du Pont stock. In explaining the decision to merge Christiana into Du Pont, Irenee du Pont declared cryptically that "the original reasons for establishing Christiana have run their course and no longer prevail." In point of fact, these mergers were motivated primarily by a desire to reduce the income taxes paid indirectly by family members through these holding companies. As the result of the merger between Du Pont and Conoco in 1981, the heirs of Pierre S. du Pont currently control only about 12 percent of the stock in Du Pont. However, three members of the du Pont family still serve as directors of the company. The du Pont family, which eventually comprised 34 first cousins and at least 107 second cousins, is the largest of the corporate rich families in America. As a result, the current du Pont fortune is distributed among a large number of individuals who are only distantly related to one another. The only entity that represents the interests of the entire family is Wilmington Trust Company, which is controlled by the du Ponts and which provides them with various financial and fiduciary services. Nevertheless, the family as a whole has slowly divided itself into a number of separate branches. The only cohesive kinship groups are now those involving the descendants of each of the eight brothers and sister of Pierre du Pont, most of whom are either siblings or first cousins to one another. Even today, the mainstay of the du Pont fortune is the Du Pont stock distributed to family members and their trusts after the dissolution of Christiana Securities in 1977. This stock has a current market value of roughly $1.8 billion. Another major asset is the General Motors stock distributed to family members after the divestiture by Du Pont of its General Motors stockholdings beginning in 1962. The market value of this stock is now about $800 million. Moreover, these major stockholdings represent only part of the du Pont fortune. For example, the heirs of Pierre du Pont received over $1.5 billion in dividends from Christiana Securities alone in the years between 1925 and 1977. Although some of this income went to income taxes and to maintaining a comfortable standard of living, much of it was undoubtedly reinvested in stocks, bonds, and commercial real estate. As a result, the heirs of Pierre S. du Pont alone are now worth at least $4 billion. --[cont]-- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End Kris DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance�not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credeence to Holocaust denial and nazi's need not apply. Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at: http://home.ease.lsoft.com/archives/CTRL.html http:[EMAIL PROTECTED]/ ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED] To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED] Om
