Who were our richest presidents?
Published 12:00 am Friday, February 3, 2012
By David Post
How rich is Mitt Romney compared to other presidents? His most recent tax return reported about $8 million in interest and dividend income. If he’s earning 3 percent on his investments, that means he’s worth a cool quarter billion.
So where would that rank? He’d be behind only President Washington, but unlike Washington and most wealthy presidents, Romney didn’t inherit his wealth. He earned it.
George Washington was not only “first in the hearts of his countrymen,” but he was also the richest president in our nation’s history.
How do we measure Washington’s wealth? Measuring across centuries has its challenges. One approach is to estimate the value of his property when he was alive and adjust for inflation. Another is to look at his wealth as a percentage of GDP. A third is to compare his income to the national budget. Each approach leads to huge numbers.
For the first 100 years of our nation, wealth was measured mostly by land and slaves. Washington inherited 10 slaves from his father at age 11. He eventually owned more than 8,000 acres of prime farmland near what is now Washington, DC and more than 300 slaves. His wife, Martha, was also very wealthy both from her dowry and inheritance from her first husband, one of the wealthiest men in Virginia. She inherited one-third of his 17,000 acres of land and 300 slaves as well as $129,650 in Colonial Virginia currency estimated by historians at Washington and Lee University to be worth $6 million in 1986.
At his death, Washington’s land, slaves, house, horses and personal belongings were worth about $525,000, which has been estimated to be worth $525 million today.
In 1996, a study to calculate the 100 richest people ever in the United States ranked Washington 59th, the only president on the list. His net worth was estimated to be 1/777, or 0.13 percent, of GDP. By that measure, John D. Rockefeller was the wealthiest American ever. His wealth equaled 1.5 percent of GDP. Bill Gates, worth about $60 billion, or about 0.4 percent of GDP, would be in the top 10.
Washington’s salary as president was 2 percent of the U.S. budget in 1789, which would amount to $60 billion today. To be fair, the budget was different 225 years ago, when there was no income tax and most federal government spending was defense. Even so, 2 percent of today’s defense budget would be $2 billion per year.
For his time, Washington was incredibly wealthy, but he didn’t have air conditioning or toilets. He got strep throat riding his horse in the snow and died two days later. Today, a common antibiotic would have had him back on his horse within days.
Like Washington, Thomas Jefferson also inherited thousands of acres of land and dozens of slaves from his father. Jefferson eventually accumulated 5,000 acres of land near Charlottesville, Va., and owned hundreds of slaves. His net worth, in today’s dollars, reached an estimated $200 million. But land isn’t cash, and Jefferson had trouble maintaining his real estate late in his life; like eight presidents, he was arguably bankrupt at the time of his death.
The third wealthiest president, Theodore Roosevelt, was a “trust fund” baby. Like so many lottery winners, he made some stupid investments and lost much of it. Even so, he still had his 235-acre estate, Sagamore Hill, located on some of the most valuable real estate on Long Island where land is worth approximately $1 million an acre.
John F. Kennedy
No. 4, a tough call, is probably John Kennedy, another trust fund baby. The Kennedy fortune was estimated to be worth at least $1 billion. The estate of his father, Joe Kennedy, was estimated to be worth $500 million when he died in 1969. Among his investments was the Chicago Merchandise Mart, purchased in 1945 for $12.5 million and sold in 1998 for $625 million. JFK’s $75 million share of that one investment— worth about $100 million today — was divided between Caroline and John Jr. In addition, the Kennedy family owned other valuable properties in Florida and Massachusetts.
Though JFK never had to file federal disclosure reports, his brother, Ted Kennedy, did, and they provide some guidance here. In 2008, Ted Kennedy reported a net worth between $50 and $150 million after parting with millions in his divorce. Caroline Kennedy is reportedly worth $400 million, mostly from inheritances from her parents and brother, so JFK was very wealthy.
Andrew Jackson, the people’s president, is No. 5 with a net worth of about $120 million. An orphan and the first president to come from humble beginnings, Jackson married wealth and earned more. He joined the Continental Army at age 13. After the war, he studied law in Salisbury and moved to Tennessee, where he married a divorcee whose father was wealthy and politically connected. Jackson became a gentleman, general in the U.S. Army and a politician. After the War of 1812, Jackson “negotiated” the resettlement westward of various Indian tribes. Jackson made a fortune in the ensuing land grab. It raised ethical eyebrows, but the political climate of the times was far different than today.
Jackson’s wealth included his 1,000 acre homestead in Nashville, Tenn., The Hermitage, a cotton farm operated by slaves. He owned over 500 slaves in his lifetime, including 150 at his death.
The next five
Rounding out the top 10 wealthiest presidents are James Madison and Lyndon Johnson at about $100 million, Herbert Hoover at $75 million, Franklin Roosevelt at $60 million and John Tyler at $50 million.
Like those of their generation, Madison’s and Tyler’s wealth was in land and slaves. Roosevelt, like his cousin, Teddy, inherited his wealth. Lyndon Johnson was a poor boy, but while in Congress, he and his wife, Lady Bird, purchased a small radio station in Austin, Texas. With a series of favorable rulings by the Federal Communications Commission, that radio station grew into a large regional broadcasting company that included radio, television and cable.
An orphan before age 10, Herbert Hoover was passed around between relatives. He teased that he was the first student at the newly established Stanford University, where he studied geology, leading to a career, and a fortune, in mining engineering. In today’s dollars, Hoover’s salary at one point reached $2.5 million. At approximately age 40, Hoover left the business world and dedicated his life to public service, refusing any salary to avoid the appearance that he was seeking public office for money. As secretary of Commerce and president, the law required Hoover to accept his salary, so he gave it away, some to his political appointees who he thought were underpaid and the rest to charity. (Kennedy was the only other president to donate his salary.)
That’s the top 10. If Mitt Romney wins the Presidency, John Tyler would be bumped off.
Bill Clinton left the White House millions in debt because of accumulated legal fees. Since leaving the presidency, however, he has accumulated a net worth estimated to be approaching $80 million. Hillary Clinton’s most recent public reports as Secretary of State put her net worth at $30-$35 million. Together, their net worth would put them in the top five, and their wealth is growing.
Moving the Clintons into the top 10 would bump Franklin Roosevelt off the list.
Era of poor presidents
As the national debate over slavery heated up, the wealth of presidents declined. For almost the next 100 years, from 1857 until 1952, the 10 poorest presidents served. Other than the Roosevelts and Hoover, only one president, Grover Cleveland, accumulated any real wealth, about $25 million, from inheritance, law practice and an estate he purchased near Princeton.
Harry Truman almost went bankrupt as a haberdasher, a clothing salesman. Instead of declaring bankruptcy, he spent the rest of his life repaying those debts. When Truman returned home to Independence, Mo., after his presidency, he was 69 and unemployed. His only income was $112 per month from his U.S. Army Reserve pension. He had saved 20-25 percent of his presidential salary, about $150,000, over eight years. When federal retirement benefits were expanded during his term, he excluded the president.
Truman foreswore all attempts to “cash in” when he left the presidency and turned down several offers to serve on corporate boards believing it would demean the office of the presidency. When Congress learned that Truman was paying for his own stamps and licking them without any administrative assistance, it passed the Former Presidents Act, providing an annual pension and giving it to him retroactively. President Hoover, who didn’t need the pension, accepted it to avoid embarrassing Truman.
In 1966, I bought a VW minivan and camped across the United States with a few friends. We stopped at President Truman’s home in Independence. A big black car was parked on the street with about 10 people standing beside his white picket fence. We learned that Vice President Hubert Humphrey was visiting President Truman. When he came out, Vice President Humphrey chatted with us. President Truman stood on the porch about 40 feet away and waved to us as if it were any other day. Other than Humphrey’s driver, there was no security detail. It was a different day.
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David Post is a co-owner of the Salisbury Pharmacy, an adjunct professor at Georgetown University and writes frequently on economic issues for the Salisbury Post.