COMING OF THE BILLIONAIRE.

Greymouth Evening Star, Volume XXXI, 7 December 1901, Page 4

COMING OF THE BILLIONAIRE.

Money Makes Money

Some Stupendous Calculations

There lately died in the United States Mr Henry Bradley Plant, late President of the Plant system of railways and steamship lines. Mr Bradley left an estate worth 20,000,000 dollars, £4,000,000 and by his will placed it in trust for a period of 60 or 80 years, ordaining that, the fortune should remain intactj until a son of his infant grandson shall have reached tho age of 21 years. It is not surprising to learn that a suit has instituted in the courts with tho object of setting this extraordinary will aside. Counsel supporting the suit calculated that if the terms of the will were obeyed, the Plant fortune in 60 years will have increased to £32,000,000; and in 80 years to £64,000,000. This estimate is based on an uninterrupted increase of 4 per cent. Calculated at the same steady rate of increase tho 10 greatest fortunes in the United States—those of J. D. Eockteller, Andrew Carnegie, W. W. Astor, J. J. Astor W. K. Vanderbuilt, Russell Sage, H. M. Flagler, W. A. Clark, J. T. Hill, and W. Rockefeller —which now aggreguto £305,000,030, will present the astounding totals of £3,280,579,200 at the end of 80 years. These figures represent a sum so stupendous that the human mind can hardly comprehend it. They mean, for example, that 80 years from now the world’s supply of gold and silver will fall £3,400,000,000 short of enough to measure the wealth of these 10 estates. Tho world’s supply of precious metals is reckoned to increase at the uniform rate of £40,000,000 a year. All of the accumulated store of 5000 years, added to the product of 80 years to come, will not pay tne toll of the 10 richest Americans,

In 80 years more these combined fortunes would amount to £3 12s per capita for every man, woman and chi'd in existence.

If Adam had had 10 sons, and they had set to work at half a sovereign a day to earn this gigantic sum, each would still have 5,895,000 years of toil before him. This sum would buy and store up the entire food crop of the United States for 40 years. In gold it would weigh nearly 100,000,0001 b. To move it 2.427 railway trucks would bo required, and it would need 72,000 farm waggons to carry it. Working 12 hours a day and counting £25 a minute, one man could not reckon the J. D. Rockefeller estate of 80 years hence short of 212 years. Andrew Carnegie's estate could, in 80 years, finance seven billion-dollar steel trusts and still have £100,000,000 left for libraries.

Astounding as these aggregates appear, the estimated rate of increase is very much less than the pace at which these fortunes have grown to their present size. It is the stride at which they would move without the touch of whip and spur. How a great fortune grows makes a wonderful story. It may be compared to the life history of a polyp down under the sea. It grows in an ever-widening circle of accretion. Roughly speaking, the great American fortunes of to-day have grown and are now growing in four kinds of investments —industrials, railways, real estates, and mines.

Under all these the fire of speculation burns continually, so that the commercial world bubbles and roars in the heat like a veritable witch’s cauldron. The vast power of speculation, and speculation that can hit with rare precision on the winning side of the market, belongs to every great fortune. It may be used, or it may not be used, but it is there. An analysis of the list of the 10 richest Americans shows that their 10 fortunes may be classified as to their origin in this manner : Industrials, John D. Rockefeller, William Rockefeller, Andrew Carnegie, and H. M. Flagler; railways, W. K. Vanderbilt, Russell Sage, and J. J, Hill; real estate, William Waldorf Vstor, and John Jacob a stop; mines, W. A. Clark.

The story of the growth of John I) Rockefeller’s fortune is the history of an economic policy. Thirty years ago th* re were no trusts. Rockefeller blew a shrill defiant blast upon a brassy trumpet. “ Let there be trusts,” he said. And that was the beginning of trusts and of a new and marvellous way to concentrate capital. In 1870 a combination of the bigge-t oil producers was formed, and Rockefeller engineered the project. Nobody objected to the combination until it iranspired that the Pennsylvania Hailway bad an agreement by which it hauled crude petroleum for the combination at a much less rate than for other producers,

Then war began between Rockefeller and the_ independent producers, but within six years the oil king and Iris associates had acquired conhol of 80 per cent of the oil refineries. Obviously this meant also the control of the output of ■■rnde oil.

To-day Mr Rockefeller owns a majority of tire stock of the Standard Oil Company, which monopolises the world’s oil trade, and pays a dividend of over 50 per cent, and is never subject to speculation. Mr Rockefeller’s income from this source alone is about £15,000,000 a year. It was Mr J. D. Rockefeller’s money, and particularly his plan, that retired Andrew Carnegie from the steel industry. -Above all, his banks hold the currency of the United States. Mr Rockefeller is the directing force in ten bands, headed by the huge National City and Hanover National. In one day these banks held in their vaults gold to the amount of £86,418,440. Their deposits equal one-fifth the money in circulation in the United States.

As an example of how a fortune grows by real estate investment, the Astor property stands most conspicuously. For four generations the fixed family policy has been, “An Astor sells no land.” John Jacob Astor the first bought a lot on the Bowery, New York, for £5. Twenty years later he had £50,000 in real estate. That represented the source of all the money that the Astors have made. As the income from rentals accrued it was invested in Manhattan real estate, Slowly steadily, almost without a pause, the Astor fortune, lias grown at the rate of 19% per annum, until to-day it is a marvellous structure amid the architecture of great wealth. About 20 New York estates, worth from £1,000,000 to £20,000,000 sterling each, have grown up in the same manner —upon the natural increase of land values. The possession of large resources makes the big speculator safe where the little one sinks. He can hold stocks through periods of depression. Being upon terms of intimacy with the leaders of finance, he knows when to sell and when to buy. During lulls ho can invest a big amount of money temporarily in bonds on which he can get 4%, and which are instantly convertible into cash. Whether in trade or in speculation, a vast fortune owes much of its steady growth to its latent, resistless power. The man with the pile of money can stand on the defensive for any length of time. Years make no difference—he can wait; and he can force the hands of other players. Up to five years ago the greater number of the immense fortunes ofiAmerica had grown from the railways, the shares of which it is estimated to-day make a net return of 20 per cent upon the original investment. The Vanderbilt property is an almost perfect illustration of the building up of a property through legitimate railway investments and speculation, The union of the Michigan Central with the New York Central gave the one a route westward and the other a track to the east. That one stroke of the late W. H. Vanderbilt increased his wealth by millions. The J. J. Hill fortune, like that of the Goulds, Russell Sage, and others, is also based upon railway speculation.