The American men of wealth exist today as they did a quarter or a half a
century ago. The old multimillionaire families who made their fortune at the dawn
of monopoly capitalism have been preserved in the main and many of them have
greatly increased both their wealth and their influence.
It is not an easy task to detect a millionaire and ascertain his wealth. It is
even more difficult to determine the exact number of people who could be put in
the category of ‘top wealth-holders’ in America. The American magazine Fortune
did such an investigation. The magazine did not resort to statistical calculations
and based its estimates on a poll of income tax experts and the millionaires
themselves, on materials of government archives and information about the wealth
of millionaires which appear in the press from time to time. According to various
estimates, to which Fortune refers, the number of persons owning more than
$50,000,000 ranged from 150 to 500. Studying for several months the biggest
fortunes, the magazine succeeded in definitely establishing the names of 155
persons who owned capital of that size. The magazine remarked that most likely
there is another 100. Fortune thus estimated that there were approximately 250
persons each owning more than $50,000,000.
Among these people there are so called ‘Old Fortunes’ whose owners are
famous and known all over the world.
The Rockefellers. At the beginning of the 20th century, John D. Rockefeller,
Sr., himself calculated his fortune with precision up to one cent and set it at
$815,600,000.
Today the Rockefeller fortune consists, as it were, of three parts. The first
part is the assets inherited by the wife, children and grandchildren of John D.
Rockefeller, Jr.; these are mostly the stocks of oil companies and the Chase
Manhattan Bank. Under the term of the will, this capital is secured to each
member of the family in trust for life. They can use the income but not the capital
itself. After their death this part will be inherited by their children, and as
American authors consider, will be broken up between them. But even if this
prediction comes true, it is clear that the size of the Rockefeller assets will increase
because of the mechanism for the self-growth of fictitious capital. At least in the
next ten years this wealth will be managed jointly as the combined capital of the
quite large financial clan. As for the rates of the self-growth of this part of their
capital, it can be judged from the fact that between 1946 and 1958 it increased by
140 per cent owing to the stock market boom.
The second part consists of several philanthropic foundations fully
controlled by the Rockefeller brothers. Since this family continues to allot large
sums to philanthropy there is every ground for assuming that this part of their
capital will continue to increase swiftly.
The third, perhaps most interesting, part of the Rockefeller assets is the
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capital fully owned by the sons of John D. Rockefeller, Jr. Having no right to
spend the inherited capital they utilize for enrichment the income they get from it
and also the extensive credit they can receive. In the 1960s, the independent new
personal fortune of the children of John D. Rockefeller, Jr, not counting the
inherited capital, amounted — not less than $200 million and continued to mount
swiftly. In 1968, Fortune estimated the total of the capital belonging to the six
Rockefeller brothers and one sister at from $1,200 million to $1,800 million.
The Fords. In the mid-1920s their fortune was estimated at $660 million
and consisted almost exclusively of the personal capital of Henry Ford invested in
the Ford Motor Company. Nowadays the personal fortune of the Fords can be
estimated at $1,200-1,500 million and together with the assets of the Ford
Foundation, at $3,800-4,000 million.
Some details of the ‘tax strategy’ of the Fords are of interest. Since the
estates of Henry and Edsel Ford were passed on to the heirs in 1943-48, when the
Ford Motor Company was fully in the hands of the family, the value of the
company's stock was obviously underestimated. The entire capital bequeathed by
them, including the money turned over to the Ford Foundation, was evaluated
altogether at $450 million, while the real market value of the company's assets
could not be less than $1,500 million at that time. Were the heirs directly to inherit
it all, they would have had to pay the Treasury about $320 million even on the
greatly undervalued estimate of the company assets ($450 million), to which by
the way the Treasury officials did not object. By handing over the biggest part of
the estate to the Ford Foundation, the estate tax was reduced to $42 million. But
even this money was not paid from the personal capital of the Fords. An American
author tells us that the ‘Ford family's lawyers, finally, saw to it that their clients did
not have to pay the inheritance tax on the shares they did inherit. Henry and
Edsel's wills provided that the bequests to the members of the family entire tax
free, thereby, in effect, imposing the entire tax burden on what was left to the Ford
Foundation. The tax bill came to $42,062,725 which was about equal to the total
spent by the Foundation on all its charity through 1950. Sweet are the fruit of
philanthropy.’
Vocabulary
make a fortune
men of wealth
dawn
to ascertain
to resort
estimate
poll
income tax
archives
with precision
assets
oil
under the term of the
will
trust
prediction
fictitious
owing to
philanthropic
foundations
to allot
enrichment
заработать состояние, разбогатеть
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богатые люди
рассвет, заря
устанавливать, выяснять
прибегать, обращаться к кому-либо
оценка
опрос, подсчет голосов, число голосов
подоходный налог
архивы
с точностью
капитал
нефть
по условиям завещания
доверительное управление
предсказание, прогноз
фиктивный, вымышленный
благодаря
филантропические организации, фонды
раздавать, предназначать
обогащение, увеличение
to amount
exclusively
estate
heir
value
to underestimate
to bequeath
to evaluate
the Treasury
officials
to object
estate tax
inheritance tax
in effect
to impose
burden
bill
charity
составить, равняться
исключительно
имущество; поместье, имение
наследник
ценность, цена
недооценивать
завещать; передавать потомству
оценивать
государственное казначейство, министерство
финансов
чиновники, служащие
возражать
налог на имущество
налог на наследство
в сущности, в действительности, в конце концов
облагать; налагать
ноша, бремя
счет
благотворительность
Exercises
Ex.1. Find the false sentences and correct them:
1. The old multimillionaire families have greatly increased both their wealth and
their influence.
2. To detect a millionaire is quite an easy task.
3. The American magazine Fortune resorted to statistical calculations and
ascertained the fortunes of ‘top wealth-holders’ in America.
4. Fortune estimated that there were approximately 250 persons each owning
more than $50,000,000.
5. John Rockefeller is considered to be an ‘old fortune’.
6. His fortune consists of 4 parts.
7. Each member of the Rockefeller's family can use the capital, but not the
income.
8. The Rockefellers continue to allot large sums to philanthropy.
9. The entire capital bequeathed by Henry and Edsel Ford to their heirs was
evaluated at $450 million. It was its real market value.
10. The estate tax was reduced by handing over the bigger part of the estate to the
Ford Foundation.
Ex.2. Write questions for these answers according to the model:
Model: 250 - How many persons owned more than $50,000,000
according Fortune estimates?
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1) 20th century; 2) $815,600,000; 3) 140 per cent; 4) $200 million; 5) $3,800 -
4,000 million; 6) $450 million; 7) $1,500 million; 8) $42 million; 9) $42,063,725
Ex.3. Answer the following questions to the text:
1. Why is it no easy task to detect a millionaire and ascertain his wealth?
2. What were Fortune estimates based on?
3. How many parts does the Rockefeller fortune consist of?
4. What was the term of his will?
5. What did the Fords fortune consist of?
6. Do you find Ford's ‘tax strategy’ wise? Why?
7. Would you allot large sums to philanthropy if you were Rockefeller?