It is the 25th of June 1999. In Long Island Medical Centre, one of New York’s wealthiest real estate magnates passes away, at the age of 93. Within hours his children are reviewing the details of his will and the enormous property portfolio that will be divided up between them. However, in the weeks that follow, arguments erupt, as the children of the Magnate’s eldest son, have been written out of the will. A year later, the two grandchildren, asserting that their grandfather’s will was changed under undue influence, take their aunt and two uncles, Maryanne Trump, Robert Trump and Donald Trump to court.
So begins the dispute over the late man’s estate and the latest saga in the Trump dynasty and business Empire which he founded. The man’s name? Fred Trump – Father of Donald Trump. The man known to history as Fred Trump was born on the 11th of October 1905 in the Bronx in New York City. His full baptismal name was Frederick Christ Trump.
A later story that he was born in New Jersey is not accurate.
His father was Frederick Trump, a German from the Bavaria region of southern Germany. His father, Fred’s grandfather, had died from emphysema when he was a child and Frederick had gone to work from a very young age to support his family. This was a time when German unification had recently occurred in 1871 and the country was both experiencing new economic growth through the Second Industrial Revolution and also large-scale immigration as population pressure grew in many parts of Europe. Frederick Trump joined the exodus to the Americas in 1885 when he was just 16 years old.
His immigration record on arrival at New York City gives his surname as ‘Trumpf’ with an f at the end. Frederick initially lived and worked in Manhattan.
Then, in 1891, he moved out west, settling in Seattle in the new state of Washington for a few years before moving to the town of Monte Cristo. He ran restaurants and other establishments and made a lot of money over the course of the 1890s as the Klondike Gold Rush brought a swell of gold prospectors to the Yukon region north of Washington State in Canada, a part of the Pacific coast that had previously been very thinly inhabited. Many of those who joined the Klondike Gold Rush came north from California through Washington State and onwards to Canada, meaning hospitality services of the kind that Trump was providing were in high demand.
By the end of the decade he had moved to British Columbia, closer to the Yukon River which was the centre of the gold rush.
Frederick engaged in some gold prospecting, but the surest way to make money in a gold rush is to provide hospitality and to sell pickaxes, pans and shovels. Trump made most of his money in these years from these latter activities. It was the beginning of the Trump family’s wealth. With it, Frederick returned to Germany in 1901 and quickly married.
His new bride and he considered living in Germany, though in the end, after officials in Bavaria determined that he had migrated to the US back in 1885 in order to avoid compulsory military service in Germany and started to create legal difficulties for Frederick, they decided to head to New York again. It was there that Fred was born in 1905. The woman Frederick had married in 1902 was Elizabeth Christ. She was eleven years younger than her husband and part of the reason for their indecision about migrating permanently to America after their wedding was her reluctance to leave her family behind in Germany.
Yet with the Bavarian government looking to strip her husband of his German citizenship over the military service issue, they had little choice except to make for New York.
Their first child, a daughter named Elizabeth after her mother, was born there in April 1904. Fred was their second child and a third, a boy named John, followed in 1907. Fred’s childhood was not a typical one for a child of a European migrant to New York at the turn of the twentieth century. Where most immigrant families lived in tenements in neighbourhoods like the Lower East Side and barely made ends meet, the Trumps were comparatively well off. Around the time John was born in 1907 the family moved to a new housing development in the South Bronx where each family had their own bathrooms and iceboxes.
The complex had a nice view over the Bronx and building staff that conveyed fuel for the fire up to the apartments.
It was middle class wealth by the standards of early twentieth-century New York. Fred’s father worked for a time as a barber after returning to the city, a trade he had apprenticed in back in Germany as a child. He didn’t stick with it for long. Instead he began using his savings made out west during the gold rush to acquire property in the borough of Queens across the East River from Manhattan.
It was a shrewd move. Queens was very thinly populated in comparative terms by the start of the twentieth century. The completion of the Queensboro Bridge in 1909 started to reverse that situation, leading to a huge influx of New Yorkers in the 1910s. By then the Trumps were living there and Frederick was a small-time landlord. Here he and his brother and sister grew up speaking German and playing in a neighbourhood that was changing rapidly.
There is an element of myth surrounding Fred’s early years. He later claimed he was working from when he was eight or nine years old, but it’s unclear if this is true or not. What is certain is that the outbreak of the First World War in 1914, and in particular US entry into it in 1917, made their lives slightly more difficult, as anti-German sentiment grew in New York. The Trumps kept a low profile during the war years. Fred’s father hoped that it would end soon and he could go back to expanding his small real estate empire in Queens, which had grown to include a number of properties, as well as land in the borough that he intended to erect new buildings on.
He would never see the end of the war. Although it would later erroneously become known as the Spanish Flu in the mistaken belief that it started in Spain, the pandemic which struck the world in the final months of the First World War actually seems to have originated in the Midwest of the United States, as the earliest documented case was in a military hospital in Kansas in March 1918.
By April it was spreading around the US and then parts of Western Europe. Frederick Trump was seemingly one of its earlier victims in May 1918. There are contradictory reports about his illness and it can’t be confirmed that it was the Spanish Flu that killed him, yet the circumstantial evidence is pretty compelling.
An otherwise healthy man in his late forties took ill in late May and died on the 30th of the month after a severe respiratory condition. The family were not left destitute.
Elizabeth Trump, with the aid of her children, continued to develop the properties in Queens after the war and they kept the real estate business alive. Meanwhile, young Fred continued his education and in 1923 he graduated with a diploma from Richmond Hill High School. It was the end of his formal education.
While his father’s legacy had provided the family with a financial leg up after he died, an inflationary cycle began after the First World War ended, one which lasted into the early 1920s and which diluted the wealth Frederick had left behind. Thus, young Fred and his siblings were aware of the need to make the best of the money and properties they had inherited. As the 1920s went on it became clear that it was Fred who would direct the family’s fledgling property business, as John continued into higher education and eventually became an engineer and inventor. While the Trumps already had a small property portfolio, Fred acquired a job as a construction worker immediately after leaving school in 1923, learning elements of the industry from the ground up.
He worked as a labourer and then a carpenter, while also studying elements of engineering and the technical elements of building.
All of this was a conduit towards developing the family business with him at the helm. To this end he worked part time on building homes on the plots that his father had bought years earlier. By 1925 he had constructed three small yet functional homes in Queens. His mother continued to run the business officially for a time, as Fred was unable to manage property inherited from his deceased father until he turned 21. Hence, in the mid-1920s the company operated as Elizabeth Trump & Son.
She signed the checks. Fred ran the day to day. Finding liquidity for his operation was difficult.
The skyscraper building boom was underway in Manhattan and small-scale builders operating in Queens, especially ones who were barely 20 years old, were not exactly the greatest draw for bankers looking to loan out capital. Therefore, Fred had to turnover one house and sell it before using the profits to complete a second.
Over time this accumulated and soon he was working on two or three homes at one time and using the proceeds from them to finance five or six further projects afterwards. By 1926 he had completed work on 19 different houses and in the years that followed entire blocks of residences around Queens appeared that bore Fred Trump’s imprint. These were solid houses built for upwardly mobile young couples that aimed to be middle-class Americans.
They weren’t fancy, but they were functional and Fred clearly took pride in his work at this time. By the end of the 1920s he was doing very well.
Fred was setting out to try and maintain and build up his family’s business during a time when the United States was changing rapidly. His father had migrated across the Atlantic from Europe as one of tens of millions of people who did so between the 1820s and the early 1920s, driven by overpopulation at home in Europe and the perception of abundant possibilities in the New World. Many went to places like Canada, California and booming South American cities such as Buenos Aires, Montevideo and Sao Paulo. However, the foremost destination was the US. New York City was the entry-point into America for millions of Irish, Italian, German, Jewish, Polish, Czech, Hungarian and Scandinavian immigrants.
They had lived in huge tenements complexes in places like the Lower East Side of Manhattan and had built America through hard work and with much suffering, often eking out hard lives in an effort to ensure a better future for their children. America had boomed in the process, rapidly industrialising and expanding over the course of the nineteenth century. This earlier process was now ending in the aftermath of the First World War and a new phase of American life was commencing. There was the realisation that mass immigration from Europe had run its course and in 1924 the Immigration Act was passed to severely curtail freedom of movement into the United States. At the same time, the American economy was moving into a more mature phase of development and the middle class began to expand significantly.
That process would be slowed by the Great Depression of the 1930s, but in the long run there was now a new need for middle class housing. In time Fred Trump would oversee the building of a substantial amount of it in New York City. One element of Fred Trump’s life at this time has aroused considerable controversy. In a June 1927 edition of The New York Times it was reported that Fred Trump had just been arrested in the course of a police crackdown on a Ku Klux Klan rally in Queens. Trump, who often moved between houses that he was working on during these years, was described as living at Devonshire Road in the Jamaica neighbourhood of Queens.
The cause of his arrest was a clash between what the Times described as a thousand members of the Ku Klux Klan, several hundred fascist Blackshirts and the police.
The Blackshirts in question were Italian migrants, many of whom had formed Blackshirt units in emulation of the Italian Blackshirts back in the mother country who had claimed power under Benito Mussolini back in 1922. In addition to their targeting of African Americans, The Ku Klux Klan in the early twentieth century also aimed expressed animosity towards Roman Catholic migrant communities like the Italians and Irish, millions of whom had arrived into America. The counter protests descended into violence and the police ended up clashing with the Klansmen. There really isn’t any certainty as to whether or not Fred Trump was arrested for being a Klansman taking part in the march and violence, or if he was simply in the wrong place at the wrong time in Queens, the borough where he lived and worked.
What we do know is that Trump was not prosecuted after his initial arrest and there is also no other evidence of Fred Trump being a member of the Ku Klux Klan, however we do know that we was present at this particular rally. For Fred Trump his brief arrest in the summer of 1927 was not the greatest adversity he faced in his twenties. Instead the most trying episode in his life as a young man came just over two years later when the Wall Street Crash of October 1929 ushered in the Great Depression.
This was the worst economic crisis of the twentieth century and building activity ground to halt for years after it in America and other countries. An indication of exactly how damaged the property market in New York was is seen in the case of the Empire State Building.
Plans for the building were developed throughout 1929. It was publicly announced in August and the site was cleared to make way for construction to begin in September, even as the stock market was entering the crisis that would peak in late October. Despite the crash the project was continued with and the building was erected in 1930 and 1931 to become the tallest building in New York and the world. It remained broadly abandoned for years thereafter. Such was the scale of the economic crisis that the vast majority of the building was unoccupied down to the late 1930s.
Unsurprisingly, Fred Trump’s construction business couldn’t perform in such an environment. He couldn’t obtain credit and market demand was on the floor. Trump did have enough money to diversify though and he moved into the groceries sector, building one of the first modern supermarkets in Queens, one in which customers collected what they wanted from the shelves themselves rather than having a clerk gather everything from shelves behind a large counter.
This is normal today but was a novelty in the 1930s. His heart clearly wasn’t in this new business, yet it was enough for him to survive through the leaner years of the Great Depression in the early 1930s.
Two things changed Fred Trump’s fortunes in 1934 and set the wider Trump family on the road to immense riches. Firstly, in November 1932 Franklin Delano Roosevelt had won the US Presidential Election.
He entered office early in 1933 and began implementing the New Deal, a programme of political, economic and social reforms that was designed to try and pull the United States out of the Great Depression. The core element of it was a huge building programme to provide jobs for unemployed Americans and to develop the infrastructure of the country in the shape of roads, bridges, schools and homes. A core part of it was the passage in 1934 of the National Housing Act.
The Federal Housing Administration was created to oversee house construction through this and funding mechanisms were put in place by the government to pay for new mortgages and prevent foreclosures on older ones. Fred Trump was soon taking advantage of these New Deal mechanisms to begin building modest houses on a huge scale. By 1936 he had hundreds of workers employed and would soon be dealing in hundreds of housing units and apartments. The other event in 1934 which facilitated this rapid emergence as a leading construction magnate was his acquisition of the mortgage book of the J. Lehrenkrauss Corporation of Brooklyn that went bankrupt in January of that year.
Trump acquired numerous properties as part of this arrangement at a highly reduced price.
This acquisition in 1934, combined with the simultaneous beginning of the New Deal programmes around housing construction and mortgage financing, ensured that Fred Trump prospered in the second half of the 1930s. By the dawn of the 1940s he was on his way to becoming one of New York’s leading property magnates. His rise occurred on the back of big government and federal funding. Fred became a family man during this period too.
Around the time that he was beginning to re-transition back into construction after acquiring the mortgage book of Lehrenkrauss and as the provisions of the National Housing Act commenced in 1934, he had met Mary Anne Macleod at a party. She was an immigrant who had first arrived at New York from her native Scotland in 1930 as the effects of the Great Depression began to bite. Mary didn’t have much to her name and lost her job as a nanny as a result of the economic crisis. She briefly returned home to Scotland and then came back to America, where, after a short courtship, she married Fred on the 11th of January 1936.
Fifteen months later she gave birth to their first child, Maryanne.
Four more children would follow, a boy named Fred after his father, in 1938, Elizabeth after her grandmother in 1942, Donald, who was named after two different ancestors on Mary’s side of the family, in 1946, and finally Robert in 1948. The family made their home in Jamaica in Queens, upsizing on several occasions over the next few decades.
Fred was a strict, authoritarian parent. He physically disciplined the children and received reports from Mary about how they had conducted themselves during the day while he was away at work. Precise table manners and other rules were adhered to.
In later years he had a surveillance system installed around the house. The Trump household was not laidback. Fred was also a teetotaller who never drank alcohol, having come of age during the Prohibition era of the 1920s. He was also quite religious, a Lutheran Protestant, while Mary was a Presbyterian, the Scottish branch of Calvinism. Later he was a fan of the Southern Baptist evangelist, Billy Graham, one of the most prominent Christian preachers in twentieth-century America.
Fred Trump was, in short, a dour and conservative character whose focus was on his work, making money and raising a family that he kept strict control over.
By the late 1930s Fred Trump’s business was booming on the back of large government subsidies and a favourable environment for modest home construction brought about by Roosevelt’s New Deal. A newspaper profile at the time referred to him as the Henry Ford of the affordable New York housing market. By then he was building hundreds of housing units and had expanded out of his core market in Queens into Brooklyn, where he was born. As the 1940s dawned he had built thousands of housing units.
The skies were darkening though. Europe was at war after the Nazis had invaded Poland in September 1939, provoking a response from Britain and France. Roosevelt was anxious to enter the fray against fascism, but there was no appetite for war in America until the Japanese attack on Pearl Harbor on the 7th of December 1941 pulled the United States into the Second World War overnight.
On the surface, this was all very bad for Fred Trump. With the economy now being overhauled overnight to gear everything towards war manufacturing, the traditional construction sector, especially home building, was disrupted.
Furthermore, the family’s German heritage was once again an issue as fears emerged of German families in America that might act as a Nazi fifth column within the country. Trump responded to the latter problem by claiming that his parents had actually been Swedish. The other issue was solved for him by the government in a way which turbo-charged his growing wealth and property empire. The Federal Housing Administration repurposed some of its funding to finance the building of apartments for staff and personnel of the American military and defence department. Overnight Fred Trump moved into building apartments for the military, primarily in the city of Norfolk in Virginia, the headquarters of the US Navy and what has become the largest naval base anywhere in the world today.
There was an added bonus. The government allowed the builder of these housing units and apartments to maintain ownership after the war.
Hence, the Trump property empire grew enormously owing to federal wartime funding. Trump built around 1,500 apartments in Norfolk alone during the war. Trump did give back to a society that did an awful lot to build him up.
The period in which he was born back at the very start of the twentieth century was the age of the so-called ‘robber barons’, figures like John D. Rockefeller and Andrew Carnegie who became obscenely wealthy off the industrialisation and expansion of the United States in the nineteenth century.
However, as rich as these men became, they also felt a duty to reinvest their wealth into bettering American society, fostering aid programmes and promoting a huge array of cultural, educational and health institutions. Carnegie Hall, Vanderbilt University and the Morgan Library and Museum are some of the great institutions of American life to this day. Fred Trump made his own contributions.
In the health sphere, he and Mary made large donations to the Jamaica Hospital Medical Center in Queens, a place where some of their children were born, including Donald. They also contributed towards the work of institutions like United Cerebral Palsy. Fred donated a large building complex in New Jersey to the organisation for their use. Arguably the most notable element of Fred’s philanthropy was his contribution to Jewish causes.
This began during the Second World War and continued afterwards through his purchasing of Israel Bonds to support the emerging state of Israel in the Middle East.
He also supported numerous Jewish American politicians in New York, including Ed Koch, mayor of the city between 1978 and 1989. Koch was a moderate Democrat, though Trump himself was not strongly affiliated with either of the major political parties. The Second World War came to an end in stages between May and September 1945, first with the defeat of the Nazis in Europe and then the Empire of Japan in the Far East. When it ended, the federal government terminated the lucrative financing it had been offering to builders like Fred Trump to erect large scale military housing. Fred consequently ordered building to cease on a large new project that was underway in Norfolk in Virginia.
It wasn’t the end of Uncle Sam bolstering his business though. The government of President Harry Truman now simply reallocated the financing in question towards building affordable homes for the veterans who would be coming home after defeating fascism. This was badly needed, as the wartime emergency had seen large-scale investment in places like Norfolk, Virginia, but few people wanted to live next to an enormous US Navy base in peacetime. Fred Trump would once again be at the trough when it came to acquiring this lucrative financing. He refocused his attentions on New York after years spent travelling extensively between Queens and Norfolk in Virginia.
Trump returned to projects at Benonshurst and Brighton Beach in Brooklyn, where he had owned sites since before the war. He now began developing the same kind of modest apartments and housing that were his stock in trade and availing of federal support to do so. This was arduous work. Trump was known to work seven days a week during these years and there were many problems after the war. The country’s supply routes had to be completely reconfigured as the world returned to peace.
It could often be a major headache trying to source enough of things like bathtubs, radiators and copper.
He had to raise the price of the units he was selling by several thousand dollars as a result. Buyers didn’t mind though. When he completed work on another development, Bath Beach, early in 1947, prospective buyers turned up in large numbers to see the model homes. This work continued for Fred for years thereafter.
The Great Depression had been brought to an end by the New Deal in the 1930s, and then definitively so by the boost to the economy created by the war, yet the ethos of the New Deal continued well into the 1940s and 1950s. Fred Trump was a great beneficiary. For instance, he received millions of dollars in backing for some of his projects in the post-war period from the Federal Housing Administration that had been set up back in 1934.
This had now expanded to Trump acquiring funding to build huge blocks of houses and apartments as well as stores and amenities surrounding them as planned neighbourhoods were baked into post-war housing construction. The scale of this was undeniable.
As an authoritative account of the Trump family over several generations has stated, quote, “Without the Federal Housing Administration Fred Trump would have been running a supermarket,” a reference to the store he had been operating back in the early 1930s before the New Deal was commenced by Roosevelt and Fred Trump knew it.
He was very careful to cultivate his ties to the Federal Housing Administration and dined regularly at a restaurant owned by Thomas Grace, the director of the FHA in New York between 1935 and 1952. By the late 1950s, Trump was immensely wealthy as a result. It’s difficult to put a figure on this, as so much of his wealth was tied up in property, the value of which could fluctuate. In any event, Trump had no intention of selling the thousands and thousands of housing units he owned in Queens, Brooklyn and Norfolk, Virginia.
These brought in millions of dollars as a rental income each year. All he had to do was sit on this property empire and his wealth would continue to increase. Fred Trump’s success was not a fluke or dumb luck. Nor can it be attributed to the simple impact of being born to a father who had enjoyed a considerable degree of business success himself, especially so since Frederick Trump had died when Fred was very young, leaving the family’s economic future in a precarious state. This background helped him, yet he didn’t go from being born into a relatively comfortable family to becoming one of the world’s richest real estate magnates without his own initiative and ideas.
Fred’s success was based around a simple logic. America was becoming richer and richer in the twentieth century. Its economic might had been built on the back of the labour of millions of poor immigrants who arrived from Europe between the 1840s and the 1910s, as well as millions of former slaves freed after the American Civil War. As the country prospered, and as Roosevelt’s New Deal enjoyed such success in the 1930s, the middle class began to expand. The new, upwardly mobile families wanted better housing than the tenements which so many had lived in across New York until the end of the First World War.
Moreover, with Manhattan property sky-rocketing, there was a drive to move the poorer immigrant families out of districts like the Lower East Side and across the Hudson River to places like Queens and Brooklyn. Fred Trump capitalised on these wider socio-economic developments by building cheap, but comparatively comfortable apartment blocks in these parts of New York City. That was the key to his success. It was nothing flashy. But that is typically how great wealth is built in America.
Henry Ford transformed mass transport by building one car, the Ford Model T, and doing it over and over again for nearly 20 years at an affordable price.
A simple, but good idea, done effectively and consistently over a long time is how riches are created. Fred Trump was the Henry Ford of post-war affordable housing in New York City. He found a winning formula and repeated it over and over again. The analogy with Henry Ford is relevant in more ways than one, for both Ford and Trump were also quite controversial figures.
Henry Ford was a notorious Anti-Semite who used his publishing company to produce articles, booklets and pamphlets throughout the interwar period with titles like “The International Jews: The World’s Problem”. Fred Trump was a controversial figure himself, although when he started in the 1920s and 1930s he was anxious to be seen as a decent real estate man and landlord, this was because so much of his work at that time was in neighbourhoods where he knew people such as in Queens, however by the 1940s and 1950s things were different. By some accounts Trump had garnered a reputation for being a difficult landlord who tried to maximise profits. Woody Guthrie, a folk singer of the era who was later a major influence on Bob Dylan, lived in Trump’s Beach Haven complex of apartments at Gravesend in Brooklyn in the early 1950s and wrote a couple of songs which referenced his landlord, notably one entitled “Old Man Trump”. One of the issues Guthrie raised was that of racial segregation within Trump’s complexes.
Admittedly, a lot of this was not Trump’s doing.
Racial discrimination was rife in America in the middle of the twentieth century and the New Deal housing programmes have been criticised for fostering racial segregation through a practice known as redlining. This fact aside, it has been argued by some, that Fred Trump’s policies towards his African American tenants over many years tended to be discriminatory. By the mid-1950s the core of Fred Trump’s business empire was already in place. He had benefited enormously from the financial incentives which the government first put in place to encouraging home construction as part of the New Deal in the mid-1930s and which were then continued through wartime building contracts and post-war construction to provide veterans with affordable homes.
The fact that the government had broadly paid for Fred to build complexes like the huge array of apartments at Norfolk in Virginia next to the naval base and then allowed him to retain ownership of these properties after the war set him up to make huge profits for decades to come. As such, much of his wealth generation in the 1960s, 1970s and 1980s was simply in the form of rent from thousands and thousands of apartments and homes that he owned and leased out.
Still, he did enter into some new projects later in life. A notable one, which did not work out as planned, was the attempted re-development of Steeplechase Park in Coney Island in Brooklyn. It was one of three amusement parks that had been built on Coney Island around the turn of the century.
By the mid-1960s they were dilapidated and no longer profitable. Steeplechase closed in 1964. Trump acquired it and planned to build a series of large, 30-storey apartment blocks with thousands of apartments. The project was entered into with much fanfare as Fred held an open event in which parts of the old park were demolished. The project never came to fruition though.
Trump ran into a series of zoning and planning problems with the local municipality over his plans and ended up leasing back out parts of the property to a man named Norman Kaufmann who re-opened some of the remaining amusements. Trump eventually sold the property to the government for four million dollars after buying it for 2.3 million dollars. Between this, the rent he acquired in the meantime and more than a million dollars he won after suing the city government, Fred made several million on the Steeplechase project without ever actually building anything.
According to accounts, by the late 1960s Fred was preparing to put in place plans for handing over his business, known by then as the Trump Organization, to his children and also for passing on a huge fortune without incurring onerous inheritance taxes.
The average life expectancy in the United States was around 70 years in 1970. Fred Trump turned 65 that year. He would ultimately live well beyond the average life expectancy, but his increasing years prompted him to plan ahead. In an era where business in New York was still resoundingly dominated by men, it was assumed that one or more of his sons would take over the family business one day.
In any event, Maryanne was already well on her way to becoming a qualified lawyer in the 1960s and would eventually rise to become a federal judge, while Elizabeth, Fred’s younger daughter, would not play a major role in the family business, instead going to work as an assistant at Chase Manhattan bank.
Fred’s son and namesake, known as Freddy within the family, was the eldest son, and might have been expected to play a leading role in the business in the same way that Fred himself had done back in the 1920s after his father’s death.
This was initially how things were playing out and Freddy was a vice-president of the company in the mid-1960s. However, in the period that followed the relationship between father and son deteriorated and Freddy left to pursue his ambition to become an airline pilot. According to Freddy’s daughter, Mary, the fractious family dynamic contributed towards Freddy’s descent into alcoholism in the period that followed. With Freddy extricating himself from the family business, Fred now began preparing his second eldest son, Donald, to take over.
He was employed by the Trump Organization from 1968 onwards right around the time he received a well-known reprieve from having to serve in the US military in Vietnam owing to a diagnosis of having bone spurs in the heels of his feet. After several years of laying the groundwork, in 1971 Fred promoted Donald to become the new president of the Trump Organization. This does not mean that Fred turned over the business entirely to his son.
There was a gradual transition and Fred remained in control of large parts of his property empire down to his death. Instead Donald became the acting manager of the company.
His father’s advice to him over these years has been widely discussed. It is said that Fred tried to instil an attitude in Donald that he needed to be a ruthless figure, a, quote, “killer.” As well as this, it is asserted that he also imparted to him ideas about trying to put his rivals on the back foot. For instance, Fred had worked for years in offices in which he held meetings where people were made to sit on uneven chairs facing the window where sunlight came in. It was a setting which placed the person Fred was doing business with in a position that seemed weak on a wobbly chair squinting against the sun.
More troublingly for some, several studies have suggested that Donald inherited his father’s attitudes towards their tenants and management of their large apartment and housing complexes.
By the early 1970s the Trump Organization’s policies in this area were leading to a series of legal disputes between it and the Department of Justice over alleged racial discrimination in their letting practices. There were also growing problems in the company’s older complexes. In the mid-1970s, for instance, a large group of tenants living in the old wartime complexes in Virginia sued the Trumps over dilapidated conditions and rodent problems. These issues led to Fred being briefly arrested again in 1976.
Fred instilled many of his beliefs about how to conduct business and manage the Trump Organization into Donald, or at least he tried to. In other ways Donald always went his own way. Fred Trump was a New York property magnate who had avoided becoming involved in flashy projects and had deliberately shirked the limelight. His son and heir was different. This was most clearly seen in the way in which he steered the company towards involvement in the Manhattan property market in the late 1970s.
Manhattan was a fundamentally different market to other parts of New York.
Where Fred had made his fortune developing large apartment complexes in Queens and Brooklyn with modest construction costs and middle-class customers, in Manhattan property prices were vastly higher and much of the market was about skyscrapers. Fred had deliberately avoided it. Some have noted that Donald was unlike his father and sought out attention wanting to become someone that New York society talked about, he decided to break into the Manhattan market as his father gave him greater control over the company in the late 1970s. To that end, at the end of the 1970s he acquired a site at the intersection of Fifth Avenue and 56th Street and began work on what would become Trump Tower in 1979.
When it was completed in 1983, the residential apartments of the 58-storey building sold out rapidly.
This was partly because New York and the western world in general were entering into a period of pronounced economic growth and revitalization in the early 1980s after years of stagnation in the 1970s, and also partly because of the level of publicity Donald had generated for the project. Fred looked on at the success of Trump Tower and must have been pleased. As Donald was preparing to break into the Manhattan real estate market, affairs within the wider Trump family were becoming a serious cause for concern. Freddy’s alcoholism had deteriorated further in the course of the 1970s, worsened by the perception that he had been marginalised within the family by Donald’s ascent.
His attempts to become a pilot with Trans World Airlines had been scuppered by his drinking.
He then returned to working with the family business. This brought its own humiliation. At the same time that Donald was preparing to acquire land on Fifth Avenue to build Trump Tower, Freddy worked as a handy man and day-to-day operative running some of the company’s properties. His marriage to Linda Clapp collapsed and he began drinking more heavily.
All of this eventually culminated in his death from an alcohol-induced heart attack in 1981 at just 42 years of age. He left behind two children, Fred Trump III and Mary Trump. Their place in the family inheritance would become a major issue later on. Meanwhile, Donald Trump later suggested that his lifelong rejection of alcohol was in part because of his father’s teetotalism and partly because of the impact that it had on his older brother. Freddy’s children have argued that their father’s alcohol abuse was to some degree the result of how he was marginalised and derided within the Trump family and it could also be argued that Donald Trump’s public statements to his own children, most notably Barron, telling them never to drink or smoke, could largely be because of his brother’s problems.
Trump Tower was a major success after it opened in 1983.
Fred now bought into his son’s abilities and he began loosening the purse strings for Donald to expand further. It’s difficult to disentangle this for the simple reason that Donald was now the president and figurehead of the Trump Organization, even though Fred retained control over a huge proportion of the property empire he had built up since the 1930s. Clearly there was millions of dollars being loaned to Donald by Fred. At the same time Donald was borrowing huge amounts of money to expand at a breakneck speed in Manhattan.
This was an era of an economic boom and rejuvenation in New York, as efforts were made to regenerate large parts of the city that had become rundown crime hotspots in the 1960s and 1970s. Trump became the figurehead of consortiums that bought up large numbers of hotels and commercial property buildings and began re-developing them. Hundreds of millions of dollars were obtained to do so.
The problem was that like any economic boom in modern history, eventually prices started to reach the point where they were no longer value for money and the individuals purchasing the properties were exposing themselves to potentially ruinous losses if the market crashed. This is more or less what eventually happened.
Although it is less well-known than the Wall Street Crash and the Great Depression that had so up-ended Fred’s burgeoning property career sixty years earlier, the economic boom of the 1980s came to a halt on Black Monday, the 19th of October 1987, when the stock markets incurred very substantial losses. The wider stock market recovered reasonably quickly. An exception was Manhattan property prices, which it was now appreciated had become overvalued. This left Donald and his business associates holding a large amount of bad loans. He claimed at the time that he had cashed out his stocks a month before the crash, some have asserted that even if this was true it doesn’t allow for the more important issue of his property loans.
The question of exactly how much money Donald had either borrowed from his father or indirectly acquired from him through the Trump Organization during these years has been widely debated in recent times. Donald himself has maintained that he got started simply with a, quote, “small” loan of one million dollars from his father however this one million dollar claim seems to relate to trusts of one million dollars which Fred set up for each of his children in 1976. Soon Fred’s largesse towards Donald far exceeded this. In 1978, Donald’s first project in Manhattan, right before he began work on Trump Tower, commenced. This was a full re-development of the Commodore Hotel next to the iconic Grand Central train station on Park Avenue in Midtown Manhattan.
To undertake it Donald acquired a loan of 70 million dollars, half of which was obtained with Fred acting as guarantor.
The money came from a bank, but it may as well have come from Fred. If Donald had reneged on the loan, Fred would have owed the bank 35 million dollars. The Commodore re-opened as the Grand Hyatt Hotel in 1980 and the loan was repaid. The same cannot be said of money his father loaned him in the 1980s.
A legal document from 1985 indicated that Donald owed Fred 14 million dollars at that time. That figure only escalated as Donald’s business affairs really began to run into trouble in the late 1980s and early 1990s as he became involved in the casino business. Like anyone involved in the Manhattan property market in the 1980s, Donald had suffered from the downturn at the end of the decade, so too had Fred as a result but there was a lot of breathing room. In 1982, when Forbes had published its inaugural list of the 400 Richest Americans, Fred had featured on the list at number 286 with an estimated fortune of 200 million dollars, though it has been argued it was substantially more than this.
Things became much, much more difficult in the years that followed.
Donald continued to invest in hotels that pushed him further into debt. Most notably he had entered the Atlantic City casino and hotel industry, buying up several casinos here from the mid-1980s onwards. He invested hundreds of millions of dollars in these ventures, money that was obtained through vast loans in the expectation that there would be a never-ending continuation of the boom that occurred between 1981 and 1987. Instead, after a sputtering recovery following the crash of 1987, the western world entered a recession in the early 1990s. Casinos do not do well in recessions and Donald’s questionable decision to purchase multiple casinos in Atlantic City meant he was now effectively in competition with himself.
By 1990 he was falling behind on his interest payments. Fred stepped in at this point. He sent one of his lawyers, Howard Snyder, to the Trump Castle casino and had him buy 670 grey chips, each of which was worth 5 thousand dollars, amounting to 3.35 million dollars in total.
Then Snyder left the casino.
A similar move the following day added 150 thousand dollars to bring the total sum to 3.5 million dollars. This effectively meant Fred had given Donald three and a half million dollars to meet his loan payments without ever having to pay tax on the gift to his son. As far as the legality of this went Fred had simply had his lawyer buy him hundreds of chips from the casino. He could cash them in and get his money back at any time if he wished, so it was not a taxable gift, even though he obviously never intended on getting the money back.
The Casino Control Commission was not as convinced and fined Donald 65 thousand dollars. As Donald’s financial situation was declining in this drastic way in the early 1990s, Fred’s health was deteriorating in tandem.
It must be remembered that he was in his mid-eighties by the time his lawyer was spending millions of dollars on casino chips for him. He was suffering from a range of age-related ailments. Then, in October 1991, he was diagnosed with a mild form of dementia, though it would get worse over time.
For instance, when Donald married his second wife, Marla Maples, at the Plaza Hotel in New York on the 20th of December 1993, Fred acted as his best man. However, he had to be reminded why he was there. Still, at this juncture he was lucid enough to know that Donald had effectively entered bankruptcy proceedings in 1991 and that he would eventually foreclose on the Plaza Hotel and his three Atlantic City casinos, the Taj Mahal, the Trump Plaza and the Trump Castle. Other family members have noted that in the years that followed this, Fred would often forget who they were. His final years were spent in this downward spiral.
Eventually Fred was hospitalized in 1999 in Long Island and died from pneumonia on the 25th of June 1999 at 93 years of age.
His funeral was held in Manhattan and he was buried in a family plot at Middle Village in the borough of Queens where he had lived and worked for most of his life, despite the family’s recent move to the other side of the Hudson River. Fred Trump’s death was not the end of his story. For years there had been internal wrangling within the family over his wealth and property empire. Although Fred had planned that Donald would take over the family business and run it, he never intended that he would inherit everything.
Instead he had made provisions in his will for each of his children to acquire a large slice of his estate and for extended members of the family, notably Freddy’s two children, Fred III and Mary, to also be given a proportion of the inheritance. There were accusations from several family members that Donald tried to intervene to change this arrangement as early as 1990 in such a way that would see him become the majority benefactor.
Fred refused to allow this at the time and it is notable that in 1991 he made two of his other children, Maryanne and Robert, co-executors of his will. Thus, when Fred died eight years later the will was still broadly along the lines which he had intended. This was important.
For all that developments within the Trump Organization in the 1980s and 1990s had compromised elements of the company’s future, huge amounts of property that Fred had built over the decades still remained vested solely in his ownership until his death. He didn’t leave behind a huge amount of liquid cash assets, yet there were tens of millions of dollars of property assets on paper. Studies of the family wealth suggest that these were actually worth hundreds of millions of dollars and there are allegations that the estate had been drastically undervalued in the 1980s and 1990s to avoid paying substantial inheritance tax when they were passed on to Fred’s children.
Hence, the properties in question were passed to the next generation and then often sold a few years later at anywhere between 10 and 20 times what they had been previously listed as being worth. This financing provided a crucial lifeline to Donald to dig himself out of the financial troubles he had been experiencing during the 1990s.
As well as this a dispute also arose around the alleged codicil to Fred’s will that had been added to curtail the portion of the estate that would pass to Freddy’s children, Fred III and Mary Trump, who alone amongst Fred’s grandchildren were direct inheritors of a portion of the estate. This controversial addition to the will resulted in a legal dispute over whether Fred could have added the codicil and whether or not he was of sound enough mind to be responsible for his actions if he did, given his advanced age and dementia. A very divisive lawsuit followed.
In the end, a partial settlement was reached. However, both Fred III and Mary Trump insist they were essentially disinherited by Donald who they claim exploited their grandfather’s poor cognitive state towards the end of his life.
Fred Trump was, by temperament, a conservative and unflashy individual who avoided the limelight. He was obviously very well-known within New York business circles and many people in the city and elsewhere in places like Norfolk in Virginia would have known that he was their landlord, albeit while having virtually zero direct contact with him. Beyond this he was an obscure figure, unknown to the wider world. Some have argued that this was probably exactly how he wanted it. Staying out of the news was a good way to avoid pesky financial officials peering too closely into his business affairs.
What this meant is that the world has only really become interested in Fred Trump in relatively recent times. This was already occurring to an extent in the later stages of his life.
As Donald broke into the Manhattan market with Trump Tower and then constructed casinos in Atlantic City, the press often questioned where he had come from and what financial backing he had to begin with. This interest in Fred as the man who bankrolled Donald and started his career has only intensified over time, particularly so since Donald became president for the first time in 2017. It has been fuelled by memoirs by members of the Trump family, notably two of Fred’s grandchildren who were broadly removed from the family inheritance at the time of Fred’s death.
Newspapers and other media outlets have also generated a lot of new information about Fred’s life and career in recent times. The story of Fred being arrested during a Ku Klux Klan rally in the summer of 1927, for instance, only surfaced in 2016 during the US Presidential Election of that year, as fresh scrutiny was cast on Donald’s family background.
Hence, Fred Trump’s career has garnered more and more attention as the years have gone by since his death. While the Trump family is primarily known today for Donald Trump, the 45th and 47th President of the United States, Fred Trump was the man who built the dynasty. We would probably have never heard of Donald Trump had it not been for his father, in much the same way that John F.
Kennedy was only ever in a position to become President in 1961 because of his father Joseph’s enormously successful business career. Fred had a leg up as well. His father, Frederick Trump, immigrated in his youth to the United States from southern Germany and made a good lot of money out west in Seattle, British Columbia and Yukon during the era of the Klondike Gold Rush at the end of the 1890s. He then employed the money he had made at that time as seed capital to enter the construction business back in New York. The family was doing well during an era of rapid development in Queens in the 1910s when Frederick’s sudden death from the Spanish Flu in 1918 left Fred, his mother and siblings facing an uncertain future.
Fred rose to the challenge. He learned the construction sector from the ground up in the mid-1920s, flipping houses after building them himself. The Wall Street Crash and the Great Depression temporarily halted his ambitions, but thereafter he prospered through a combination of his own hard work and also an enormous amount of government aid through the New Deal and wartime contracts to build military housing. This state support continued after the war. Shrewd management and some fairly controversial practices saw him become one of the most successful property magnates in the history of New York City, a billionaire in modern terms.
However, the last twenty years of his life were filled with growing anxiety as he promoted one of his younger sons, Donald, as his successor. Where Fred had built his vast wealth and property empire through unflashy and reliable projects, Donald was determined to make a name for himself by breaking into the Manhattan property market and then the casino sector in Atlantic City.
Indeed, although the business acumen of Donald Trump is disputed, there is no denying that for a time Fred Trump was a hugely capable and successful real estate developer and like so many other American family dynasties in the 20th Century such as the Kennedys and the Bushes, Fred Trump was the founder and patriarch of the Trump Empire and without him none of his offspring would hold the positions of high office they do today. What do you think of Fred Trump? Was he a major influence on the political and socio-economic outlook of his son Donald or were they fundamentally different individuals in their views?
Please let us know in the comment section, and in the meantime, thank you very much for watching..
Read More: BRANDY B.NPC COMPETITOR BACK ROUTINE
