Marriages in the Heyday of Entrepreneurial Dynasties
The size of the enterprise, whether measured by revenue or in some other way, organized family firms into a seemingly objective status hierarchy. But entrepreneurial dynasties were not content with just that: instead, they adopted the very same performances that the nobility used to manifest its status. Residences were particularly significant in this respect, growing in size along with the entrepreneurs’ rise to prosperity. While the founding fathers initially lived in quite modest accommodation, their firms’ expansion impelled them or their immediate successors to move into more lavish houses in more affluent environments (Guinness 2005, 44). For example, the Krupp’s first house (Manchester 2003, 38-9), the Stammhaus (ancestral home), was a modest building in Essen, but when Alfred, the founder’s son and heir, had accumulated enough wealth, he had Villa Hugel built for him in the 1870s in order to show off his upgraded status. The new house was a real monument that stunned all of Europe, a five-storey palace with some 300 rooms—the same number of rooms as in the Devonshires’ Chatsworth, home of the English aristocratic family we met in Chap. 3 (Hattersley 2013). Cornelius Vanderbilt (Vanderbilt II 2013, 21, 40, 271-7) originally had a modest house in New York, but when his riches grew he commissioned the building of a four-storey brick townhouse. In the second generation, more and more magnificent houses were bought and built, among them two chateaux, the small Chateau de Blois and the 250-room Biltmore. John D. Rockefeller moved in 1868 into a solid two-storey brick home to demonstrate his exalted status in business. He then swapped this house for a four-storey brown stone mansion in the best area in New York, despite his reluctance as a devoted Baptist and the mannequin of Weber’s Protestant ethic to parade his wealth (Chernow 2004, 119-20). Jack Morgan, a Morgan banker in the third generation, paid a lot of money in 1909 for a site on which to build a red-brick chateau modelled after Denham Place, a Buckinghamshire mansion in England, but Morgan’s mansion had only 45 rooms (Chernow 2010, 170). Perhaps unrivalled in collecting palaces for themselves were the Rothschilds, who bought and built palaces with a profuse hand, many of them copies of aristocratic palaces. Compared with all these palatial houses, the residences of the leading entrepreneurial dynasties in Sweden and Finland were quite modest in size: the Wallenberg’s Malmvik was a three-storey brick house and the Herlin’s house in Kulosaari, Helsinki, was even smaller (Olsson 2006, 345-7; Simon 2009, 96-7). House sizes consistently reflected the amount of wealth that the entrepreneurial dynasties had accumulated.
In addition to palatial residences, entrepreneurial dynasties had country retreats, their own ‘paradises’ where the children could have their mother and father to themselves. These country retreats were not small and cosy cottages, but again built to reflect the owners’ high standing in the entrepreneurial status hierarchy. Blunbach, for instance, the Krupp’s holiday home in the Alps, was a four-storey ivy-covered castle (Manchester 2003, 326). In 1872, Pierpont Morgan bought Gragston, a three-storey Victorian country retreat on the Hudson River near West Point (Chernow 2010, 32). The Agnelli family had a palatial 45-room villa, which they bought from a local noble family (Friedman 1989, 44). The Herlins’ Thorsvik, however, was actually a cosy two-storey farmhouse (Michelsen 2013, 130, 479). Yachts were another must-have, the bigger the better, but once again Swedish and Finnish dynasties lagged far behind their American counterparts (Vanderbilt II 2013, 141, 302; Olsson 2006, 394; Michelsen 2013, 55-6). Moreover, they had impressive art collections (Landes 2007). Despite Alfred Krupps dislike of painting, Villa Hugel was cluttered with works of art (Manchester 2003, 147). Pierpont Morgan, for his part, was a passionate art collector, putting together the largest art collection of any private individual of his day (Chernow 2010, 117). The Guggenheims, whose first businesses were in mining, built art museums for their large art collections in New York, Venice and Bilbao (Unger and Unger 2006).
The families of entrepreneurial dynasties were relatively small, and it was not out of necessity that they had so many rooms in their palaces. This was again about performing their high status. The idea was handed down from earlier times and the highest-ranking dynasties in state governance, the aristocracy. Entrepreneurial dynasties took this legacy as their natural right, as expressed by Alfred Krupp: like his father, he believed that industrialists were the natural successors of feudal barons (Manchester 2003, 59; see also Josephson 1962, 315). Indeed, it is clear from these impressive residences, country retreats and art collections that entrepreneurial dynasties saw themselves as the equals of noble dynasties as far as status was concerned.
What, then, about marriages and the imperative of status equivalence, which in the nobility so compellingly directed spousal choices as late as the late nineteenth century? Just as entrepreneurs’ residences grew in size and splendour along with their growing fortunes, so their choices of spouse reflected their rising status. Let us start with Oscar Wallenberg (Nilsson 2005), whose three alliances with offspring well illuminate the logic of the marriage market of entrepreneurial dynasties in the nineteenth century. Oscar’s first marriage was to his housekeeper. According to the imperative of social equivalence, this marriage was a mismatch in the rank to which he belonged: his father was a bishop, his mother a professor’s daughter and he himself promisingly engaged in business. Oscar’s mother—his father died as early as 1833—did not accept Oscar’s marriage to Mina, but when she became acquainted with Mina, she grew close to her and to her and Oscar’s children. Oscar’s next choice fell upon Mina’s sister, Lovisa, who had been living with Mina and Oscar since they moved together as a couple. After Mina’s death, Lovisa became Oscar’s mistress and bore two children by Oscar. Once more the Wallenberg family found themselves debating whether they could accept Oscar’s choice, and this time they refused to. Oscar, nonetheless, continued his common-law relationship, but he did not marry his companion. This was perhaps the first sign of Oscar complying with the imperative of status equivalence. As we have seen, high-ranking men hardly ever married their low-ranking mistresses. Then, when Lovisa and Oscar had their second child in 1860, Oscar did what was expected of him: he turned his amorous attentions to a suitable bride candidate, Anna von Sydow, who was a half-sister of Oscar’s close friend. Anna came from a lower noble family and seemed to be an acceptable spouse for a banker who had already begun to win his spurs in banking. Anna and Oscar married in 1861, after Oscar had confessed to an ignorant Anna that he had two out-of-wedlock children borne by Lovisa. Oscar’s decision to keep secret his out-of-wedlock children was a clear performance of their dishonourable status and of the shame that Oscar Wallenberg felt about their existence, at least in front of his fiancee.
In the other top ten entrepreneurial dynasties, the rise to a higher status was made manifest in second-generation marriages, as most founders had married before they had established their prosperous-to-be enterprises. They therefore mainly chose their wives from lowly families, in fact from similar commercial families that the founders themselves represented at the time. In the next generation, with the growth of prosperity, the matrimonial strategy distinctly changed: spouses were now chosen from amongst highly connected families. Three patterns emerged, all of which are important to the perception of status equivalence in entrepreneurial dynasties.
The first pattern is a replica of the most common pattern adopted by sons in successive generations as far as their occupations were concerned:
63 per cent of them in the second and third generations and 53 per cent in the fourth and fifth generations carved out their careers in their own family firm. In the marriage market, this pattern would imply that sons married daughters of entrepreneurs and daughters married entrepreneurs. Surprisingly perhaps, this pattern did not work very well in the marriage market, for only one-third of sons married daughters of entrepreneurs, exactly the same proportion as the share of daughters who married entrepreneurs. This was the situation in the second, third and fourth generations, but in older family firms also in the fifth generation, that is, in the nineteenth century and the first half of the twentieth century. However, there was marked variation between entrepreneurial dynasties. Entrepreneur-to-entrepreneur marriages were favoured particularly in the Rothschild dynasty, but very rarely in the Herlin, Wallenberg and Agnelli dynasties. The Rothschilds were almost on a par with the nineteenth- century higher nobility, as 65 per cent of Rothschild daughters’ marriages were to entrepreneurs, and 50 per cent of Rothschild sons took entrepreneurs’ daughters as their wives.
Although it is difficult to ascertain identical status equivalence in the marriage market, there were marriages in which the spouses seemed equal in status. In the Rothschild dynasty, the high number of cousin marriages obviously meant an increased frequency of identical status equivalence, but Rothschilds also married other rich or leading merchants or industrialists or their daughters. In the Warburg dynasty, where entrepreneur- to-entrepreneur marriages were around the average for the top ten entrepreneurial dynasties, the principle of identical status equivalence was closely followed in the third generation, but even more so in the fourth generation. In 1895, Paul Warburg married Nina Loeb and Felix Warburg married Frieda Schiff—aunt and niece (Chernow 1994). Nina was the daughter of Salomon Loeb, who was a partner of the Kuhn, Loeb Investment Bank in New York, while Frieda was the daughter of Jacob Schiff, director and partner of the same bank. Before these two marriages, the Loebs, Kuhns and Schiffs had already intermarried in two generations (Wikipedia.org). Moreover, Paul and Felix Warburg not only married a Loeb and a Schiff, but they entered into an advantageous partnership in their investment bank. Together with some other bankers, they also established S.G. Warburg & Co., which upgraded the Warburgs’ status internationally. In-laws were welcomed into the firm if they brought along new capacity and capital, but not automatically. The Ford Company and the Firestone Tire and Rubber Company did not associate with each other (Bak 2003) when Edsel Ford’s younger son William (b. 1925) and Martha Parke Firestone, granddaughter of the Firestone empire’s founder, got married, even though one of them produced cars and the other one made car tyres. There were also other impressive marriages of identical status equivalence (Chernow 2010, 64), but more often than not high- level status equivalence remained unattainable. However, my data set shows that, even though marriages into lesser entrepreneurial families were accepted, sons and daughters of magnates were not married into small business families. A small status difference was acceptable, but a huge status gap not.
The second pattern that gained momentum in the marriage market of entrepreneurial dynasties was shaped by cousin marriages—this was in fact a version of the former pattern. Cousin marriages were virtually non-existent in American entrepreneurial dynasties as well as in many European entrepreneurial dynasties, rather common in the Warburg dynasty, but conspicuously common in the Rothschild dynasty. In the third Rothschild generation, cousin and uncle-niece marriages rocketed to 92 per cent for sons and to 83 per cent for daughters. These are all-time records in the proportion of cousin marriages. In the fourth generation, the proportion of cousin marriages dropped to 48 per cent for sons and to 50 per cent for daughters, but the percentages were still high, even by royal standards. It is often said that cousin marriages were good matches in the business sense in that they meant fortunes were kept within the family. However, this kind of rational explanation seems insufficient or an exercise of hindsight, because the Rothschild fortunes were mainly passed on to the sons and, moreover, cousin marriages came to an abrupt end in the fifth generation. And besides, in most other entrepreneurial dynasties cousin marriages were not contracted at all. Rather than seeing cousin marriages as a rational choice, it is better to regard them as a performance of the dynasty’s heyday, but only as one performance that the Rothschild dynasty in my sample happened to apply.
The third pattern in the marriage market was formed when marriages into noble families began to find favour with entrepreneurial families
(Landes 2007, 19). Again, as was the case with cousin marriages, marriages to nobles were not contracted in all top ten entrepreneurial dynasties. Interestingly, even though marriages between American businessmen’s daughters and English peers would be the emblem of one era, the Gilded Age at the turn of the twentieth century, marriages to nobles were conspicuous by their absence in the American dynasties of my sample, except the Vanderbilts. The marriage between the beautiful Consuelo Vanderbilt and the Ninth Duke of Marlborough was contracted in 1895 (Vanderbilt II 2013, 163-75; Vanderbilt Balsan 1953). It is quite some coincidence that they are not included in my data set, since it is estimated that some 500 American women of entrepreneurial background married English noblemen around the turn of the twentieth century, and many of them were widely publicized. On the other hand, the Register of 117 American heiresses who married English noblemen between 1872 and 1911 shows that not all of the heiresses were very rich, nor were all the noblemen peers (MacColl and Wallace 2012, 323-57). Moreover, my data set shows that the main part of entrepreneur-to-noble marriages were national, as verified by the Swedish Wallenberg and Italian Agnelli dynasties.
These two dynasties were unrivalled in terms of the frequencies of marriages into noble families. In Italy, the founder’s only child, Eduardo Agnelli, married in about 1920 Virginia Bourbon del Monte, the Princess of San Faustino, who hailed from one of the oldest and greatest Italian noble families (Friedman 1989, 30). They had seven children: six of them married and they married nobles, including Gianni, the future managing director of Fiat. He married Marella Caracciolo di Castagneto, a Neapolitan princess whose family’s ancient heritage puts her on a par with the Bourbon del Montes. It is illuminating that both of these princesses were born of marriages between noblemen and American women from entrepreneurial backgrounds (Friedman 1989, 38). All eight marriages in the fourth generation were contracted in the 1940s and 1950s, but even in the fifth generation two of Gianni Agnelli’s grandchildren married nobles, among them John Elkman, who is the current chairman of Fiat S.p.A. Excluding the founder’s marriage, marriages to nobles in this family amount to 68 per cent, 56 per cent for the sons and 80 per cent for the daughters.
The Swedish Wallenberg family is another exemplar case of the third pattern. Marriages in the second generation were of two kinds. Oscar and his first wife’s children, including the future general manager Knut, as well as Oscar and Lovisas out-of-wedlock children, married commoners, whereas Oscar’s children borne by Anna von Sydow mainly married nobles. Oscar and Anna had altogether 14 children, of whom three died in early infancy. Five of the six daughters married noblemen, whereas only two of the five sons married noblewomen. Taking into account all the marriages in the second, third and fourth generations when the daughters’ marriages to noblemen were at their highest, 46 per cent of daughters married noblemen. Sons’ marriages to noblewomen, on the other hand, were only contracted in the second and third generations, and their proportion was no more than 18 per cent. The gender difference in marriages to nobles was thus conspicuous, as it was in marriages between American heiresses and English noblemen. On the other hand, in the Rothschild dynasty, where marriages into noble families replaced cousin marriages in the fifth and sixth generations, 46 per cent of the sons and 41 per cent of the daughters married nobles. These figures do not include Rothschilds who were ennobled as barons in the second generation.
Intermarriages between nobles and rich heiresses drew a lot of public attention—they were like modern fairy tales—and a flow of explanations followed. The most popular explanation was and still is that these marriages were highly advantageous for both parties. Noblemen benefited from the riches that the daughters of big businessmen brought into their new families, while entrepreneurs took full advantage of the prestige that their new noble relatives conveyed to their families (Collins 2009, 194). This sort of rational explanation is not without sense, because the dowries that American heiresses brought were handsome, but I still insist that marriages to nobles manifested the rise of entrepreneurs to the foremost rank in their own status hierarchy, the standing that, for a while, seemed to be equal to that of the nobility. This equalization was possible because the nobility’s status was in decline, one performance of which was that they no longer stuck to noble-to-noble marriages as keenly as before. In this historical situation, the nobility regarded opulent entrepreneurs as their equals, especially as they were eager to imitate the nobility’s way of life, fabricated by the same performances that the nobility used when manifesting its own high status.
Marriages between well-off entrepreneurs, on the one hand, and between entrepreneurial dynasties and noble families, on the other, reflect the social networks of entrepreneurial dynasties, but the intersection of many other high-ranking quarters was also lively. Histories of entrepreneurial dynasties hardly ever forget to mention the guests that the protagonists of the book invited to their homes. In the Krupp dynasty, for example, Alfred, owner of the Krupp Empire in the second generation, established a close relationship with King William I of Prussia. Originally he came into contact with Alfred because he needed Krupp guns, but their relationship grew ever closer until Alfred was virtually a member of the court at the Potsdam Palace (Manchester 2003, 87). A close relationship also developed between Fritz, Alfred’s successor, and Emperor Wilhelm II, with whom the next inheritor of the Krupp fortune, Bertha, also created a close relationship (Manchester 2003, 227). Moreover, in the 1930s, Bertha established, albeit originally reluctantly, a relationship with Reich Chancellor Hitler. Bertha’s son and heir, Alfried, maintained this relationship with Hitler, which led to Alfried’s imprisonment after World War II. Other high-level guests also attended the banquets organized by the Krupps. For example, at a luncheon that Fritz Krupp once hosted for 250 guests, nearly all cabinet ministers were present, together with a large number of politicians and many members of the Berlin aristocracy (Manchester 2003, 227). Alfried, whose position as the sole owner and head of the family firm was restored in the 1950s after his curtailed imprisonment, was no lesser than Fritz, with the exception that in place of emperor was now chancellor (Manchester 2003, 716-18). The lists of rulers and heads of state invited to Villa Hugel demonstrate the unique station and prestige that the Krupp dynasty enjoyed in its heyday. The guest lists also reveal why palatial mansions were needed: they were built for rulers who would visit Villa Hugel and other grand mansions. Rulers were thought to deserve an apartment worthy of their status.
The Krupp dynasty was not the only one whose heads were visited by rulers. In Italy, Giovanni Agnelli, founder of the Fiat Company, was brought into contact with Mussolini. In Sweden, the Wallenbergs socialized with the kings of Sweden and in Finland Pekka Herlin socialized with the president of Finland. The Morgans in their heyday socialized with the president of the United States, Queen Victoria and Edward VII.
Among the Vanderbilt’s guests were Theodore Roosevelt, Herbert Hoover, the Prince of Wales, every British monarch from Queen Victoria to George VI, King Albert of Belgium, the King and Queen of Spain, the crowned heads of Scandinavia and the Netherlands, Winston Churchill, princes and presidents, grand dukes, emperors, tsars and so on (Vanderbilt 2013, 310). The ensemble of guests also included great artists, brokers and bankers as well as socialites. The same people attended the salons that noblemen and noblewomen set up, in fact at the same time as the heads of the biggest enterprises gave their excessive parties. In the United States Mrs. Astor from an old shipping family, who was married to the wealthy hotel proprietor, orchestrated high society’s social life by keeping lists of people who were considered acceptable guests at balls and parties (MacColl and Wallace 2012, 13-14).
Invitations were a performance of status par excellence, but when I looked at whom the sons and daughters of top-ranking entrepreneurial dynasties married, I found that they did not marry princes or princesses, nor presidents, and very rarely ministers, but sometimes politicians, that is, Members of Parliament. This, I suggest, marked the emergent separation of the high-ranking marriage market from the social circles that met at more informal parties. Another good indicator of this was that the status alliance between entrepreneurial dynasties and noble families came to an almost abrupt end in the 1920s: the Gilded Age was over, which I suggest indicates significant changes in the statuses of the nobility and entrepreneurial dynasties, but also the growing indistinctness of marriage markets.