Let Them Eat Cake
The Eccentric Billionaire
By Nancy Kriplen
(Amacom, 224 pages, $24)
By Edward J. Renehan Jr.
(Basic Books, 364 pages, $28)
One of the unfortunate achievements of the current president and the recently unseated congressional majority is the gradual disappearance of the inheritance tax, which many Republicans (and the editorial page of the Wall Street Journal) have taken to calling the death tax. The term is intended to conjure up horrific images of a greedy and intrusive Uncle Sam-a government that dispatches briefcase-toting tax collectors to the deathbeds of entrepreneurs, the better to wrest them from their chambers and force them to settle with the I.R.S. before allowing them to share a private final moment with their descendants.
That the phrase is founded on a lie should be self-evident: It is neither the dying nor the dead who pay the tax but those who inherit their estates. This, however, has not quieted the demand from conservative millionaires like Mitt Romney (no doubt egged on by his 10 fortunate grandchildren) that the estate tax finally be abolished.
Two books shine a light, albeit inadvertently, on how the estate tax has worked to the United States' advantage. Each is a biography of a famously successful mogul. One is Cornelius Vanderbilt, the 19th-century riverboat captain turned railroad baron. The other is John D. MacArthur, a 20th-century insurance tycoon.
Both books present even the stalwart fan of the genre with serious challenges. Commodore, by Edward J. Renehan Jr., is a ponderous account of every ferryboat that Vanderbilt built, every rival he bested, and every (or nearly every) whore that he bedded. The architect of the New York Central Railroad and the creator of the original Grand Central Terminal in New York City is certainly worthy of a biography, and at 364 pages, Commodore is not overly long; it only seems so.
What defeats Renehan in his attempt to make of Vanderbilt a J.P. Morgan, an Andrew Carnegie, or an Andrew Mellon is his subject's inescapable shallowness. Vanderbilt may have been rich, but he was also petty, crude, virtually unlettered, and selfish-a "detestable lout," as one contemporary put it. A prodigious bootstrapper, Vanderbilt sneered at requests that he give alms to the poor with the curt reply, "Let them do what I have done." Mark Twain bitingly beseeched him to do at least one thing worthy of praise-"something you need not blush to see in print." Vanderbilt demurred. As the income tax had yet to be instituted, he left his entire fortune (about $2 billion in today's money) to his son. He expected it to survive as a monument to his name. For the most part, it did not. The money was dissipated over the generations, and only modest visible traces of it-or the man-remain. We are left with a statue of the commodore at the south entrance of Grand Central Terminal, as well as Vanderbilt University. That the well-respected institution bears his name at all owes not to his generosity but that of his (much) younger second wife, after his control over the purse strings had weakened.
We learn all of this in Renehan's well-crafted preface. The trouble is, short of a meticulous diary of Vanderbilt's voyages and conquests, there is little left to say about him. He had the robber baron's enthusiasm for monopoly (except when it worked to his disadvantage) and the striver's relentless ambition. He built nothing for posterity, and posterity's revenge is its disinterest.
John D. MacArthur, who died in 1978, 101 years after Vanderbilt, was a lonely penny-pincher who had a weakness for publicity stunts and a softer heart than he usually let on. Part P.T. Barnum, part Sam Walton, he had an instinct for appealing to the working class and got his start during the Depression by selling cheap life insurance to the poor. Nancy Kriplen's The Eccentric Billionaire has some nice (though in some cases, I suspect, apocryphal) vignettes, such as how MacArthur, when opening the office mail, used to pocket the insurance premium checks and nonchalantly throw out the claims, figuring that anyone with a legitimate claim would file again. But the book suffers from a serious lack of detail about how MacArthur came to be, at the time of his death, the country's second-richest man. A sign of how little Kriplen probes into the workings of MacArthur's Bankers Life & Casualty Co. is that she relies on a trade journal to tell us that the staff was "capable and experienced"-a rather insipid observation. Even after she pads the book with the irrelevant sidebar story of MacArthur's brother Charles, who co-wrote (with Ben Hecht) The Front Page and married Helen Hayes, The Eccentric Billionaire, at 224 pages, does not quite pass biographical muster.
What redeems this book, for me, is the pivotal scene in which MacArthur's lawyer warns the aging billionaire that his estate is destined to be carved up by the government. This spurs him to a singularly enlightened act: endowing the John D. and Catherine T. MacArthur Foundation with, coincidentally, $2 billion. Instead of spoiling his kids, whom he didn't much like, this stingy man and his wife created the country's 10th-largest foundation, which now supports, among many programs, the famous annual MacArthur "genius awards" of $500,000 to some two dozen exceptionally creative researchers, inventors, poets, and the like.
True, MacArthur himself is hardly more remembered than Vanderbilt. But I submit that the pressure of the estate tax motivated MacArthur in the direction of the general good-an enduring good-whereas, in Vanderbilt's case, the greed that built his fortune also consumed it. These are apt examples for Congress to reflect upon as it continues to debate whether the Romney grandchildren should be able to inherit all of Mitt's millions or only some of them.Visit Portfolio.com for the latest business news and opinion, executive profiles and careers. Portfolio.com© 2007 Condé Nast Inc. All rights reserved.