During the Gilded Age, the mass accumulation of money by families like the Vanderbilts changed the economic, social, and physical landscape of the United States. The Vanderbilt family's wealth grew out of the shipping and railroad industries, both of which were largely monopolized by the the family patriarch, Cornelius "Commodore" Vanderbilt, in the late 19th century. His hard work set the foundation for his sons and grandsons to continue making money, but their descendants became less inclined to earn and more likely to spend.
As it goes in many wealthy families—such as the Rockefellers, for instance—the Vanderbilts were prone to excess. The houses, the luxury, and the spectacle that defined the Vanderbilt family eventually brought about their decline from atop the financial and social ladders they once dominated.
As the Vanderbilts built homes in New York, Rhode Island, and other locations in the United States, they filled those structures with expensive works of art. William Henry had a large art collection, and his children continued his cultural interests. That said, they also spent a lot of money on yachts and cars and held lavish parties.
The Vanderbilt Ball, hosted by William Kissam Vanderbilt's wife Alva in 1883, was intended to boost the Vanderbilt family's position in New York society. The Vanderbilts weren't among the top 400 people in high fashion New York society, as determined by Caroline Schermerhorn Astor and Ward McAllister. Astor and McAllister deemed the family too nouveau riche.
Alva decided to hold a costume party and invite 1,000 people in an attempt to cement the Vanderbilt family name into the upper echelons of society. The event was described by the New York Times as a "fairyland." Guests wore beautifully embellished dresses, spectacular jewels, and fantastic costumes, all hoping to out do one another. The event was full of pageantry, ornamentation, and excess. According to the Museum of the City of New York, "most contemporary sources put the cost of the ball at $250,000 (nearly 6 million dollars in today’s money)."
During the late 19th and the early years of the 20th century, Fifth Avenue in New York City became a showcase of wealth and luxury. As new families made millions, they acquired and built magnificent mansions. The Vanderbilts owned numerous properties on Fifth Avenue, including Cornelius II's 130-room home. The Cornelius Vanderbilt II House, as it was known, included a small and a large salon, a two-story ballroom, a gallery, and separate dressing rooms, bedrooms, and bathrooms for Cornelius II and his wife. The entire mansion was decorated with imported European decor.
The house was torn down, however, in 1926. New York began changing as real estate developers bought land along Fifth Avenue in a clamor to build skyscrapers. The Vanderbilts were not in a financial position to maintain their land holdings. In addition to the Cornelius Vanderbilt II House, William Kissam Vanderbilt's Fifth Avenue home was sold and demolished in 1926.
By the time Cornelius "Commodore" Vanderbilt's grandchildren began inheriting the family's money, the Vanderbilts' economic dominance was declining. By the 1930s, the shipping industry was losing ground to other modes of transportation like cars, barges, and buses. The family sold shares of its railroad holdings, opening the door for competitors to have a majority share in their businesses. The Chesapeake and Ohio Railroad, for example, acquired a large amount of New York Central stock and took over leadership, only to drive the company into bankruptcy during the 1950s and 1960s.
Within thirty years of Commodore's death, no member of the Vanderbilt family was among the wealthiest people in the United States. By 1973, none of the 120 attendees at the Vanderbilt family reunion were millionaires.
Cornelius "Commodore" Vanderbilt wasn't particularly interested in giving his money away, but he did donate $1,000,000 to what would later be known as Vanderbilt University in Nashville, Tennessee. The Vanderbilts underwrote cultural enterprises such as art galleries and museums, but it was really during the Gilded Age that the Commodore's grandchildren established the family as a great philanthropic entity.
Frederick Vanderbilt's wife, Louise Holmes, was very generous in the Hyde Park area of New York. She helped young girls gain access to education and established a chapter of the Red Cross. The Vanderbilts did everything "from treating school children to an ice cream festival to buying a second hand motion picture machine so the residents of Hyde Park could view movies in the Town Hall." When Frederick Vanderbilt died, he left a significant amount of money to his employees.
William Kissam Vanderbilt gave money to Columbia University, the YMCA, and spent a million dollars on tenement housing in New York. George Washington Vanderbilt II was also a known philanthropist, who paid to design and support libraries as well as arts activities and educational institutions in New York City. Gertrude Vanderbilt Whitney was a trained artist that used her family wealth, and that of her oil-wealthy husband Henry Payne Whitney, to support female artists.
This philanthropic generation was the beginning of the end of the Vanderbilt family fortune.