Saturday, March 7, 2009

The Panic of 1819 (5)

However those who would stand much to lose on a larger scale with these financial crises that would occur over the years, were the wealthy class. Large amount of families made great fortunes from their investments before the war of 1812 and throughout the second half of the 19th century.

The Astors were one of the landholding and mercantile families that made great private fortunes during the early nineteenth century. John Jacob Astor made about two millions dollars by his trade in furs and teas. The bulk of his immense fortune was made by investments in real estate. At the time of his death his estate was valued at twenty million.

Cornelius Vanderbilt and Andrew Carnegie, giants in the nation's growth, were multimillionaires resulting from their investments in transportation and industry. J. P. Morgan came to the forefront of American finance. Other business giants of the era were Rockefeller in oil, the Armours, Swifts, and Morris in meat-packing, the Havemeyers in sugar, and the Dukes in tobacco. The peak of power and wealth of these financial giants was during the years 1866-1897.

This world of prominent people of great wealth that lived in staggering opulence during the prosperous economical years were those who inherited their fortunes from their ancestors; while others became wealthy through their ownership of valuable real estate, investments in transportation and industry and finally the social ladder climbers who married someone with a title, or a large bank account in order to establish their presence in a highly competitive society. They all had the money and leisure to indulge in conspicuous consumption.

Assuming their prosperous life would last forever, many of the wealthy families accustomed to the social treadmill, a life of idleness, spending fortunes every year on lavish dress, entertainment, and opulent house luxuries; living beyond their actual means in order to stay in society would be devastated by the financial crashes resulting from sudden reverses of fortune. These terrible financial storms would wreck so many of the best of the city firms.

To be continued: (6)


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