HIT BY DEPRESSION

Taranaki Daily News, 1 February 1933, Page 10

HIT BY DEPRESSION

ROCKEFELLER’S LOSSES STILL WORTH MILLIONS. GREAT VALUE OF SECURITIES. The Rockefeller fortune, held by John D. Rockefeller and - his son, John D. Rockefeller junr., has been severely affected by the depression and may now rate as one. of the minor large fortunes of this country instead of the greatest in the world, in the opinion of John T. Flynn, economist and biographer of the elder Rockefeller. From a total of £100,000,000 to £200,000,000, which Mr. Flynn estimates to have been the fortune in 1929 after the elder Rockefeller had made gigantic gifts to his chosen philanthropies, it probably has shrunk now to around £30,000,000.

At its peak, after Mr. Rockefeller had multiplied by wise investments the £40,000,000 fortune with which he retired from active business in 1896, and before he had embarked on his career as a great philanthropist, the fortune was about £200,000,000, in Mr. Flynn’s opinion.

In his biography of the elder- Rockefeller, entitled “God’s Gold,? Mr. Flynn mentioned briefly his belief that the Rockefeller fortune must have suffered heavy losses in the depression, and he amplified it in an interview with the New York Times. FORTUNE IN SECURITIES. “The Rockefeller fortune is in securities,” he said, “and of course every one knows what has happened to securities since the crash of 1929.” Mr. Flynn based his estimate of what had happened to the Rockefeller fortune on’• the list of stocks and bonds which Mr. Rockefeller turned over to the Rockefeller Foundation, his major philanthropy, and which was published in the foundation’s report for 1930. “These escurities had a total book value. of £22,000,000,” Mr. Flynn pointed out. “There values as given in the report were their cost, and they were never valued at the . values of 1929 before the crash, when of course they were far higher. Sixty per cent, of the investment was in stocks and the rest in bonds.

“Now it is a fair assumption that the securities which Mr. Rockefeller turned over to the Rockefeller Foundation represent a cross-section, of his holdings. What happened to the Rockefeller Foundation holdings must have happened, on a large scale, to the remaining holdings of the Rockefeller fortune. . “It has not been possible to figure the gains and losses on all the securities, because not all of. them are quoted on the market. We have the records, however, of twenty-six of the forty-eight ;stocks he gave the Rockefeller Foundation. These twenty-six stocks in the foundation’s portfolio had a book value of £20,000,000. At tire height of the boom they had risen to more than £50,000,000. . “As the market went down, however, these, twenty-six stocks descended in total value to £11,000,000. The rise in the market this summer . has brought them to a total,value now of something over £17,000,000. • SOME HOLDINGS. . ■ . The securities in the Rockefeller Foundation portfolio are of the “gilt-edge” variety. They include such items as 21,944 shares of Atchison, Topeka, and Santa Fe common stock, listed by the foundation as having a book value of £400,000. This stock shrank to a total market value of £BO,OOO at the lowest point this year, and afterward rose to £250,000, as computed by Mr. Flynn. Another large item is 45,271 shares of International . Harvester preferred, valued at £1,040,000 on the foundation’s books. This shrank to £470,000 this year, and then climbed back to £BOO,OOO. Many stocks, of course, suffered heavier losses than a few given as instances. Turning to the application of these figures to the Rockefeller personal fortune, Mr. Flynn commented on the fact that after Mr. Rockefeller’s retirement in 1896 with a fortune of £40,000,000 at the most, he made .money from his investments faster than he could give it away in the greatest programme of philanthropy the world had ever seen. He and his son- gave away a total of £115,000,000 by 1928. “Using the Rockefeller ; Foundation portfolio as a cross section,” said Mr. Flynn, “it is a fair inference that the Rockefeller fortune has been cut to, .at mpst, one-third of its size, even taking into consideration the current rise in security prices. And when the market was at its 1 lowest, the Rockefeller fortune must have shrunk to a fifth its former size.” .

How much of the fortune now belongs to the elder Rockefeller and how much to his son was not known to outsiders, Mr. Flynn said, but he said the last publication of income tax figures, in which the younger Rockefeller paid a far greater tax than his father, indicated that the elder had transferred a large part of his holdings to his son. • Mr. Flynn’s estimates of the depreciation in the Rockefeller fortune were called to the attention of Mr. Ivy L. Lee, spokesman for the Rockefeller family and their interests. He said it was the kind of matter on which his office never commented.