A dynasty in and of the world

Here's a little side project. It spans 1790-present, so I'm not sure where to put it...

A dynasty for the ages – The Burgess Family of New York

For a dynasty that has seen over two centuries of political, economic, and social prominence, the criticism levied against the Burgess family has proven remarkably constant. The most popular and enduring, perhaps, is the image of the Burgesses as anachronistic members of the landed gentry, sitting in feudal splendour at Blackwood surrounded by millions of acres of farmland filled with scores of tenants. While the Burgesses were never proper feudalists—a privilege belonging only to the Dutch patroons of the Hudson Valley---for the most part, this portrayal is remarkably close to the truth.

The Burgesses’ landholdings have stayed constant at just above 400,000 acres since the late 19th century, but continue to exert significant influence in the ten counties where they received title to nearly 3 million acres at the end of the 18th century. They have owned and managed v every sort of company and enterprise man has conceived—flour mills, canals, railroads, still mills, car companies, arms manufacturing, shipping, resorts, even an airline—and held almost every office possible in the United States—a Vice President, two Governors, three Senators, six Congressmen (and one Congresswoman), Secretaries of State, War, Treasury, and Agriculture—with only the Presidency eluding them.

While most members of the Burgess Family today chose to keep a low profile (only two members are active in politics as of 2012), the vast number heirs of and comparatively low profile conceal the sheer size of their interests—estimated at over $26 billion in 2012, which is held by some 25 households in varying amounts, mainly through shares of the several private holding companies under the control of the family as well as direct inheritance. Despite this, the senior line of the family—the direct patrilineal descendants of Rupert Burgess—holds the lion’s share of both influence and wealth within the family, a fact that has led to no shortage of strife and familial intrigue. Yet the Burgesses endure, helped by the fact that their trusts are arranged to prevent shareholding outside of the family—meaning as several descendants inherit smaller and smaller shares until they are compelled to cash out and resell to a more senior member, keeping the wealth cycling within the family, and not diluted amongst the twelve thousand descendants of Rupert Burgess; combined with an adamant refusal to sell off money-losing enterprises.

The result is a powerful few branches do much of the moving and shaking within the families businesses. Nearly all of the shareholders, even to this day, would be by definition members of the landed gentry, as they could live off the dividends based off of their agricultural interests alone. Practically, this is what most of them do: supervising the lands, investing the income of the 2,100 or so tenant farmers that rent land from them, developing subdivisions, managing the dozens of commercial and industrial interests that the family still controls: hotels, importers, transportation companies. The majority of Western New York’s grain passes through—and is thus purchased by—a Burgess Farm Company (BFC) elevator or mill. The famed Bread & Circus chain of upscale, organic groceries is a subsidiary of the Burgess Trust Group (BTG), as is the famed Burgess House Hotel facing New York’s Central Park. They have lent their name to a college, a county, and several ships of the US Navy.

For all their fame, the Burgesses are not known for flaunting their wealth. Perhaps it is because the nature of it is so un-American, being essentially acquired by poorly-taxed inheritance alone off of the backs of tenant farmers in aristocratic glory. Whereas the gentry of Britain saw their influence and lands dwindle in the 20th century, and the great families of America faded into time, the Burgesses have managed to endure, and, today, are wealthier and stronger than ever.

____________________________________________________________

Burgess joins Republicans angry over lack of Sandy aid
CBS News
1/2/2013

Rebecca+Hall+60th+Berlin+Film+Festival+Please+uB-DcXaVYW0l.jpg

Congresswoman Helen Burgess (R-NY)

WASHINGTON - Another prominent Republican joined the choir of politicians disparaging their own party due to Congressional inaction over passing a relief package for Hurricane Sandy victims.

Republican Congresswoman Helen Burgess, of New York's 27th congressional district, criticized speaker John Boehner and House leadership on an appearance on NBC Nightly News yesterday.

"The intransigence over this bill is just sickening," she said. "You have people holding this up over-what- peanuts, a roof for the Smithsonian, some aid to fisheries to Alaska. It's ridiculous. We need help now. Actually, we needed help two months ago."

Burgess emphasized that Upstate New York suffered significant damage from the storm as well, saying, "we often focus the camera on the Jersey Shore or Long Island, when Upstate New York was affected as well. Thousands of trees were downed, power was knocked out, and we need to recover."

But she also noted that all affected regions needed aid.

"I do realize there are people, parts of the region that have suffered more than we have, and that's why we need to make passing this bill a top priority."

"And I have just not seen that from the Speaker. He outright refused to meet with us. There's a total lack of leadership from him and his office." When pressed on whether Boehner should step down, she said that "I would find it very hard to vote for him for Speaker again."

Burgess joins New Jersey Governor Chris Christie and fellow New York Congressman Peter King in her scathing criticism of fellow House Republicans on delayed aid.

Burgess, 31, was elected in a special election in 2011 to succeed Scott Lee after he resigned following a sex scandal; she was reelected in a landslide in November. She is currently the youngest member of the House of Representatives.
 
Dawn of a Dynasty - The Burgess Purchase

250px-George_Romney_-_A_Man_Called_Mr._Cross_-_Google_Art_Project.jpg


Rupert Burgess in 1785.

Rupert Burgess (born 1751), was a British businessman who had immigrated to the newly born United States in 1783, shortly after the end of the War of Independence. He had made a small fortune in building and operating grist mills in Massachusetts, and rapidly. However, Burgess desired to control the grain supply as well, perhaps a foreshadowing of the tendencies towards vertical integration exhibited by the family firms in the 20th century; however it would have been impossible for Burgess to come into ownership of the state’s farms.

In 1790, however, an opportunity presented itself. Two years before, the speculators Oliver Phelps and Nathaniel Gorham had purchased the title to over six million acres of Western New York from the Commonwealth of Massachusetts. Legal disputes and a failure to find willing settlers meant that Phelps and Gorham were forced to default in 1790 and forfeit the title to land west of the Genesee River to Massachusetts. The state then resold those lands to the financier Robert Morris, who in turn in 1792 sold the lands to the Dutch Holland Land Company.

East of the Genesee, Phelps and Gorham had managed to sell only 500,000 out of 2,750,000 acres, and there too they had been forced to default on their payments. Thus Burgess entered the picture. Unlike the other buyers, who intended to resell the land at a profit to settlers, Burgess anticipated retaining ownership over his purchase and forming a vast agricultural demesne, growing, milling, and selling every foodstuff conceivable. “I anticipate that this Venture shall be the greatest Agricultural scheme ever undertook by a man in this Country…the estates of the Lords of England put together shall not be as productive as this One shall be.”

Burgess began development of the land that same year, initially clearing some 50,000 acres for primarily wheat and cattle production in 1791. One major impediment was finding labour to farm this vast tract; settlers were not especially allured by the prospect of tenancy, nor was Burgess even particularly willing to divide up his holdings helter-skelter amongst tenants with goals for the land that differed from his and with designs on purchasing it outright. The labour shortage proved stifling, only 17,000 acres were cleared in 1792 and fewer than 5,000 in 1793.

300px-PhelpsGorhamMap_Milliken.gif

A 1794 map of the Burgess Estate, divided into survey townships.

The scheme would have proved insolvent by no later than 1795, if not for the petition of a corps of destitute veterans to farm the land for a share of the produce. The solution was metayage, a system little different from the sharecropping of the latter half of the 18th century, where farmers would cultivate the land for a share of the produce. The system allowed the tenants a steady source of income variable upon their efforts; it gave Burgess full control over the allocation and production the crops. Additionally, it was anticipated that the tenants would sell their share of the crops to the processing facilities that Burgess would produce—grist mills, tanneries, abbatoirs—thus capturing the profits derived from those goods.

By 1800 250,000 acres were under cultivation, and an extra 100,000 used for grazing. The Burgess Estate, as it had become known as, was the nation’s largest producer of leather and wool, and produced more wheat, corn, and oats than any other single farm in the country. Rupert Burgess had become one of the wealthiest men in the United States—and his family’s fortune was just beginning.
 
The butterflies! Think of the butterflies!

In all seriousness, this looks good and I'm subscribed.

If I were to pay attention to those, then I'd have to re-write history entirely, and that would take up all my time... that's not what I'm trying to do here.
 
A Line of Their Own – The Burgesses and the Erie Railroad

The opening of the Erie Canal was initially seen as a great opportunity for the Burgess estate, guaranteeing easier passage of goods down from Upstate to the Hudson, New York, and beyond. Indeed, the high cost of transportation had limited the further growth of Burgess’s farms, with only the already large quantities of produce keeping the enterprise afloat. The aged Rupert Burgess made the journey to Albany in 1815 (the furthest he had traveled in three years) to petition governor DeWitt Clinton to build a canal. He was not alone in pushing for a canal; The Holland Land Company saw the canal as a way to increase values, while a one-time buyer of Burgess’s flour, Jesse Hawley, had written extensively on the subject whilst in debtor’s prison.

In 1817, their efforts paid off and the State Assembly authorized the then-astronomical sum of $7 million for the construction of the canal. Rupert Burgess would die in 1822, before the Canal was completed, but his son, Lesley Burgess, was present at the 1825 opening of the canal. Production on the estate seemed set to explode, which it did: wheat production quadrupled from 500,000 bushels of wheat per annum in 1820 to two million in 1835, 800,000 bushels of corn to three million, and 150,000 bushels of oats to 400,000, all on half a million acres of land.

Aq_1823.gif

The Erie Canal, in Rochester, which was intended to save the Burgess estate, would instead imperil it

But all was not well with this story. Lesley Burgess was less disinclined than his father to rent his lands outright to his tenants and leave them be in exchange for rent, in order to facilitate the rapid expansion of farming of the estate. This was particularly true for those tenants who had been farming the land for over three decades by this point. The control of their produce, in turn, was lost. A major fault in Rupert Burgess’s plan thus emerged. Burgess’s tenants found themselves more willing to sell their grain at competitive prices to mills in Rochester than at an undervalued price at a Burgess mill. Where they had once had no other option than to give in to the artificially valued price, the “Flour City”, as Rochester had become known, provided an alternative. While the Burgesses saw moderate success with their own mills in Rochester, it was not enough. Profits for the Burgesses fell once more.

The problem was exacerbated by the increasing wealth of the tenants, many of whom sought to buy the lands they rented. This increasing tenant prosperity, combined with anti-rent sentiment in the Hudson Valley, and eventual state pressure, would spark the precipitous sell-off of five-sixths of the Burgess estate. While the magnitude of this chain of events was not realized in the 1830s, already hundreds of thousands of acres were being sold to their renters to fund the construction of new mills to keep up with market prices. An alternative to Rochester had to be found, or otherwise the Burgess Estate would find itself staring down the hole of insolvency.

DeWitt Clinton, when building the Erie Canal, had promised the peoples of the Southern Tier their own transportation route. In 1832, the construction of the New York & Erie Railroad (NY&E) from Dunkirk on Lake Erie to Piermont on the Hudson was authorized by the state. Ground was broken on the NY&E in 1835, but a fire in New York caused most of its backers to lose their fortunes. It was at this point that Lesley Burgess stepped in. Burgess decided to invest the vast sum of $2 million dollars—a considerable portion of the cost of the railway’s construction, and an even more considerable portion of his wealth—into the railroad, and additionally gifted tens of thousands of acres to the railroad for tracks, stations, and other purposes. Construction resumed in 1838. After several more false starts, challenges, and bankruptcy, the railway opened with great fanfare in 1851.

For the Burgesses, the railway served a very practical purpose—direct grain and produce away from Rochester. The location of the Erie Railroad depot in Hornell was convenient for the construction of several mills, and competition was prevented by the fact that the surrounding lands were either part of the Burgess estate outright or owned by the railroad, which, being amenable to the Burgesses (as, of course, a significant percentage of their stock was owned by them), was highly unlikely to allow rival mills to be built on their land. The relative proximity of the Hornell depot to the Burgess estate and its touted speed provided a successful alternative to the Burgess tenants, and shipments to Rochester declined rapidly, and the Burgesses again controlled the lion’s share of their tenants’ grain.

But for the railroad itself, the good times were not to last long. It ran into difficulties not soon after opening and was lent money by the Burgesses. It was also lent some two million dollars by a financier, Daniel Drew. It could not pay, therefore in 1859 it entered receivership and was taken over by Drew. During the next decade he used the Erie railroad simply as a means to manipulate the price of its stocks on the Stock Exchange. In this way he fleeced a large number of investors tricked into speculation out of millions of dollars. Leslie Burgess was more than willing to let this occur provided the trains still ran, but his son and heir, T. Chauncey, was less willing to see the railway run into the ground; additionally, he presupposed, he could run it profitably himself. He secretly began to buy stock, and by 1866 he had obtained enough to get control. Drew and his directors were ejected, Burgess superseding them with his own.

T. Chauncey Burgess, who would later become Governor of New York, was astute a politician as he was a businessman, and began to assemble a far larger network than he had acquired. With the cooperation of his cousin, Bartholomew Livingston, who was head of the board of directors, and Hugh J. Jewett, a former Congressman who became the company’s president, the Erie expanded westward, to Chicago. The idiosyncratic broad-gauge (designed to keep other trains off of the Erie’s trackage) was replaced with standard gauge.

Jewett was succeeded as president in 1899 by Fredrick D. Underwood, who continued the modernization of the Erie. His projects included double-tracking the remainder of the main line and building several freight bypasses with lower grades, making the line east of Meadville, Pennsylvania largely a water-level route. In 1907, the Erie electrified passenger operations on its branch between Rochester and Mt. Morris, New York. In 1918 the Erie purchased the New York, Susquehanna and Western Railway, whose stock it had been buying since 1898.

The Erie generally compared poorly to the other two major Chicago-New York railways, the New York Central and the Pennsylvania. It was primarily a freight railroad as opposed to a passenger one; with its circuitous route and leisurely timekeeping, the Erie Railroad held perhaps the least advantageous position in the heated competition for passenger traffic between New York and Chicago. The Erie Limited paled in comparison to the Broadway Limited or the 20th Century Limited, and even the Burgesses were often said to be seen traveling upon those rather than their own trains. . But that was not its primary concern, that being, again, freight, and connecting small towns to the world, which was a task the Erie served well for decades.

The Erie, however, was not immune to the changes afoot in the second half of the 20th century. In 1960, to cut costs, the Erie merged with the Delaware, Lackawanna and Western Railroad, forming the Erie Lackawanna Railroad. But that did not save it. Helpless in the face of subsidized airlines, automobiles, and coaches, the E&L consistently made losses. Overregulated, it found itself both unable to neither raise fares nor significantly cut its expenses. Hurricane Agnes in 1972 cost the E&L $2 million in damage, and it was left with no choice but to declare bankruptcy. Four years later, it would forfeit itself to the federally-backed Conrail system. Thus ended the Erie Railroad.

NEWPORTCENTER.jpg

The Newport development of the 1980s and 90s helped the Burgesses recoup the Erie's late-life financial losses

But its saga was not yet complete. The Erie still owned several physical assets to be disposed of. Most of these were acquired by the Burgesses, and indeed a large portion of them had once belonged to them. The majority of these were developed by the Burgess Land Company; perhaps the most prominent of these is Newport in Jersey City, a 10,000 unit development built from the former Erie rail yard that drove the city’s renewal in the 1990s.
 
Top