Unit 6: people who made a fortune

Text 1: Read and translate the text

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 no 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, Jr., 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 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 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 bythem, 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 be­nevolences through 1950. Sweet are the uses of philanthropy."

 

Vocabulary

men of wealth — богатые люди

dawn — рассвет

influence — влияние

to ascertain — устанавливать, выяснять

to resort — прибегать, обращаться (к кому-либо)

estimate — оценка

poll — подсчет голосов, число голосов

income tax — подоходный налог

government — правительство

archives — архивы

with precision — с точностью

assets — капитал

oil — нефть

under the term of the will — по условию завещания

trust — доверие

prediction — предсказание

fictitious — фиктивный, вымышленный

owing to — благодаря

philanthropic foundations — филантропические организации, фонды

to allot — раздавать, предназначать

enrichment — обогащение, увеличение

to amount — составить, равняться

exclusively — исключительно

estate — имущество; поместье, имение

heir — наследник

value — ценность, цена

to underestimate — недооценивать

to bequeath — завещать; передавать потомству

to evaluate — оценивать

the Treasury — государственное казначейство, министерство финансов, казна

officials — чиновники, служащие

to object — возражать

estate tax — налог на имущество

inheritance tax — налог на наследство

in effect — в сущности, в действительности

impose — облагать; налагать; обязывать

burden — ноша, бремя

bill — счет

benevolence — благотворительность

 

Exercise 1: Give the Russian equivalents to the following words and phrases.

Influence; estimate; income tax; government; allot; with precision; the Treasury; heir; estate; value; under the term of the will; philanthropic; foun­dations; underestimate; inheritance tax; impose; bill.

 

Exercise 2: Translate a newspaper article about rich people owning great fortunes. Think if you can name some men of wealth from our country.

Богатые люди существовали всегда и везде. Они владеют огромными состояниями и, что самое главное, - влиянием.

Очень трудно установить размер их богатства, и поэтому исследователи часто прибегают к подсчету голосов экспертов по подоходному налогу или правительственным архивам. Это позволяет оценить капитал миллионеров с точностью.

Для увеличения своего капитала и прибыли многие миллионеры вкладывают деньги в нефтяные компании. Другие покупают поместья, вкладывая в недвижимость (real estate). Ценность этих имений со временем возрастает, а налог на недвижимость небольшой.

Владельцы и основатели, так называемых, «старых состояний» завещают свои деньги наследникам. Обычно они недооценивают свое состояние, чтобы платить небольшой налог на наследство. По условию завещания наследники могут пользоваться прибылью, но не самим капиталом.

Богатые люди раздают большие суммы филантропическим организациям. Эти суммы не облагаются налогом.

 

Text 2: From the previous text you have learned about such men of wealth as Rockefeller and Henry Ford. Now read how Henry Ford earned such a fortune and say what the secret of his success is, in your opinion.

 

Henry Ford: