The Studebaker Fortune: From $68 to the Largest Estate in the City's Record

The Studebaker Fortune: From $68 to the Largest Estate in the City's Record

The fortune: The Studebaker money began at the smallest documented scale in this section: $68 of capital and two forges, February 1852 (Erskine's company history, 1918). John M. Studebaker came home from the California gold country in April 1858 with $8,000 he had earned making wheelbarrows at $10 each, and bought out his brother Henry's interest — Howard's county history prices the buyout at $5,200 — entering a firm whose total assets Erskine values at $10,000 in that year. The Civil War wagon trade did the rest. When the brothers incorporated the Studebaker Brothers Manufacturing Company on 26 March 1868, Erskine prints the underlying figures from the company's own books: net tangible assets of $223,269.06 at 1 January 1868, sales of about $350,000 a year, and a capitalization of $75,000 paid in one-third each — $25,000 apiece — by Clement, John M., and Peter E. Studebaker, who took salaries of $2,000 a year as its officers.

Its scale: The company figures measure the fortune's engine, and Erskine publishes them in full: common stock raised by stock dividends to $1,000,000 in 1875 and $3,600,000 in 1896, $1,500,000 of 6% preferred issued for cash in 1906, and a closing balance sheet at 31 December 1910 of total assets $24,318,323.72 and net worth $11,714,863.12, with dividends over the forty-three years of $6,758,088.16. The new Studebaker Corporation of 14 February 1911 — which absorbed the E-M-F company — was authorized at $15,000,000 of 7% preferred and $30,000,000 of common, its financing handled by Goldman, Sachs & Co. and Lehman Brothers of New York (Erskine). Of the personal fortunes, the death record is uneven. For Clement Studebaker (d. 1901), president for thirty-three years, no estate or probate figure appears in the sources consulted, and none is stated here; the fortune shows instead in what he built — Tippecanoe Place, completed in 1889 at a construction cost of $250,000 with $100,000 of furnishings, by the house's published history. For John M. Studebaker (d. 16 March 1917), the last of the five brothers, the figure survives entire, because the federal government disputed it: the Indianapolis News of 24 June 1919 reported the estate-tax litigation over his executors' return — Frederick S. Fish, his son-in-law, among the executors — in which the executors stated a net estate of $5,916,916.56, on which they had tendered $505,969.64 in tax, while the government's reporting officers proposed to assess the tax on a net estate of $7,130,211.72, the difference lying in lifetime gifts of stock, real estate, and cash the government held taxable. Both figures are carried here; the record of the dispute does not reconcile them, and it remains the largest personal estate figure in South Bend's published record.

A contemporary listing: The New-York Tribune's 1892 list, American Millionaires — its survey of all persons in the United States "reputed to be worth a million or more," some four thousand names — counted, by the Crawfordsville Daily Journal's summary of 18 May 1892, thirty-seven millionaires in Indiana, of whom three were in South Bend. The summary does not name them, and the list itself has not been read page by page for this section; that the three were Studebakers is a natural inference — in 1892 Clement, John M., and Peter were the city's industrialists of that scale — but an inference is all it is, and it is printed as one.

Sources:

1. Albert Russel Erskine, History of the Studebaker Corporation (1918) — the $68 capital, the $8,000 in gold, the 1858 assets of $10,000, the 1868 net tangible assets of $223,269.06 and $75,000 capitalization, the stock increases, the 1910 balance sheet, the 1911 corporation and its Goldman Sachs / Lehman Brothers financing.
2. Howard, A History of St. Joseph County, Vol. I (1907) — the $5,200 buyout of Henry Studebaker's interest.
3. Indianapolis News, 24 June 1919 — the John M. Studebaker estate-tax dispute: net estate $5,916,916.56 per the executors, $7,130,211.72 per the government officers.
4. Tippecanoe Place / Discover Indiana house history — the $250,000 construction and $100,000 furnishings, 1889.
5. Crawfordsville Daily Journal, 18 May 1892, summarizing the New-York Tribune's American Millionaires (1892) — Indiana's thirty-seven listed millionaires, three of them in South Bend, unnamed in the summary.