The Breakers: How a $220 Million Mansion Ruined America's Richest Family

In 1895, Cornelius Vanderbilt II spent $7 million building this house, equivalent to more than $220 million in today’s money.

The Breakers in Newport, Rhode Island, USA, is an Italian Renaissance-style palazzo with 70 rooms filled with exquisite European artworks, a 50-foot-high ceiling, a dining room for 34 guests, a Music Room, a library, a billiards room, a morning room, 27 fireplaces, and a grand staircase that is a work of art in itself. The exterior of The Breakers is just as impressive, with its manicured gardens, terraces, and oceanfront views.

As you can see, the house has everything one can dream of and more, but things designed to impress can also be an enormous financial burden. After Cornelius Vanderbilt II’s death, this massive and luxurious mansion drove his descendants to bankruptcy.

The Breakers required many servants and workers—housekeepers, gardeners, maids, stable hands—all of whom had to be paid. In addition, when it was first built, there was no federal income tax. After the Sixteenth Amendment was ratified in 1913, the great fortunes of the Gilded Age were exposed for the first time to government taxation, and the Vanderbilts were no exception.

Cornelius' daughter, Countess Gladys Vanderbilt Széchenyi, inherited not only The Breakers but also $12.5 million, about $340 million in today’s money; she was definitely a wealthy woman, but her fortune wasn’t enough to pay all those bills.

In 1948, running low on funds and desperate to find a solution that would keep The Breakers in the family, Gladys Vanderbilt arranged to lease the house for one dollar a year to the Preservation Society of Newport County, which began offering tours to the public. She moved out of the grand rooms on the first and second floors and decamped with her family into third-floor rooms. They installed a small gate on the grand staircase to stop any curious visitors from sneaking onto the floor and converted a servant's room into a kitchen.

The deal with the Preservation Society helped the Countess by lowering taxes on the property, but Gladys Vanderbilt was still responsible for paying them and for covering the cost of most major repairs. She managed to hold on to the house until she died in 1965, but her children couldn't afford to keep it for long. Two generations after it was built, it passed out of family hands. In 1972, Gladys Vanderbilt’s children sold the house to the Preservation Society for $365,000, or about $2.3 million in today’s money, which was $218 million less than their grandfather paid to build it.