When Gilded Age Billionaires Die Broke: The Rise and Fall of The Schwab Dynasty

In this in-depth, full-length documentary, we explore the rise and fall of Charles M. Schwab — the Pennsylvania butcher's son who entered the steel business at a dollar a day, became the first president of U.S. Steel, built Bethlehem Steel into the arsenal of two world wars, and died in 1939 with debts that exceeded his assets by more than $338,000. We trace his career from the cigar counter in Braddock through Andrew Carnegie, J.P. Morgan, the Monte Carlo scandal, the H-beam bet that built the Manhattan skyline, the 75-room château on Riverside Drive, and the five mechanisms that dismantled a $200 million fortune in under thirty years. --------------------------------- Gain FREE access to secret full-length documentaries on wealthy families "too scandalous for YouTube" by joining our newsletter: https://www.substack.com/@oldmoneyluxury --------------------------------- When Charles M. Schwab died in September 1939, his debts totaled $2,262,280 against assets of $353,810. Among the items sold to satisfy creditors were a set of carpenter's tools, which brought four dollars, and an old automobile, which brought twenty. A man who had once been worth $200 million died with enough negative equity to wipe out a small business. TIME observed that Schwab had left no more to his heirs than if he had kept working at the dollar-a-day job in which he entered the steel business in 1881. He was born in 1862 in a Pennsylvania mountain village. At seventeen, working a store counter in Braddock, he sold cigars to Captain Bill Jones — the most feared man in American steelmaking — and was offered a starter job at Andrew Carnegie's Edgar Thomson works. By thirty-five he was President of Carnegie Steel. On December 12, 1900, eighty of New York's most powerful financial figures gathered at the University Club to honor him. What Schwab delivered was an hour-long thesis on industry consolidation. J.P. Morgan drew him aside. Andrew Carnegie's asking price — $480 million — was written on a slip of paper. Morgan said: "I accept this price." The United States Steel Corporation was announced in March 1901, capitalized at $1.4 billion. Schwab was its first president. In January 1902, he escaped Carnegie's moral supervision for the first time in twenty years and sat down at the roulette tables in Monte Carlo. The scandal forced his resignation in 1903. He had been quietly acquiring Bethlehem Steel as a personal investment. In 1905 he bought the American rights to the wide-flange H-beam. "If we go bust, we'll bust big." Bethlehem was the sole manufacturer of wide-flange beams until 1927, and an estimated eighty percent of the skyscrapers built in 1920s New York — Rockefeller Center, the Waldorf-Astoria, Madison Square Garden — were built on Schwab's beam. The First World War transformed Bethlehem into an industrial colossus. In 1901 he had paid $865,000 for a block on Riverside Drive — the highest price ever paid for a building lot in New York. Riverside contained 75 rooms, a 116-foot tower, six elevators, and a chapel with a custom pipe organ played by a private organist on $10,000 a year. Carnegie observed: "Have you seen that place of Charlie's? It makes mine look like a shack." His second estate, Immergrun, added 44 more rooms and nine cascading waterfalls on a thousand Allegheny acres. The two estates consumed over $200,000 per year before a single servant was paid. The destruction of the fortune was the compound product of five mechanisms: lifestyle spending at industrial scale, casino gambling, concentrated risk in Bethlehem stock, amateur stock market speculation, and an invincible optimism that could not be taught to believe in permanent decline. His wife Rana died in January 1939. Eight months later, Schwab died in a small Park Avenue apartment. The war that would have saved his fortune had begun seventeen days earlier. Riverside was demolished in 1948 — in its place rose a red-brick apartment building named, in an act of either tribute or mordant irony, The Schwab House. Immergrun sold at auction for $57,000. Carnegie, who feared dying rich, gave away ninety percent and was not disgraced. Schwab, who feared dying poor, spent one hundred percent and then some. One man built 2,811 libraries. The other built one mansion so large it required its own power plant, and could not pay the taxes.