IN SOME WAYS, DONALD Trump’s presidency hinged on the stubbornness of a prince in Germany, where Trump’s grandfather Friedrich was born March 14, 1868.
His village of Kallstadt, a hamlet in Bavaria’s wine region, was known as pig-stomach paradise after a signature dish. Kallstadt sat close to the Rhine River, which was used to ferry goods across Europe before railroads and highways existed. Because of its prime location, its fortunes changed along with invading empires: Romans, Christian crusaders, the French, Austrians, and then Bavarians.
The German Empire swallowed the town when Friedrich was two, which meant once again that an old world was giving way. In this new world, every boy owed the army three years of military service. The alternative was jail.
The alternative was jail.
Friedrich was one of six children. Thin and dark-eyed with a large forehead, he was too sickly to help much in the family vineyard, where the work was arduous and endless, sometimes requiring even Friedrich to work late into the night painting grape leaves with copper sulfate to fight off insects.
When he was eight, his father died from emphysema, a lung disease made worse by inhaling pesticides. The illness impoverished the family, and Friedrich’s mother, Katherina, who had young children to care for, scraped along by baking bread for the neighborhood. At fourteen, Friedrich went to Frankenthal to learn a trade. He worked seven days a week as a barber’s apprentice. Once he’d mastered the work, he returned home. But the town only had a thousand heads—not enough to make a good living. What’s more, Friedrich was now sixteen and he would soon owe his country military service, a debt that could kill him.
The service requirement made it difficult for Kallstadt to keep its citizens. German law also ordered that families pass down their land in equal parcels to their children. While this decree sounded equitable, it meant that children of minor landowners were stuck with parcels too small to eke out a living. There were better opportunities elsewhere, including America, where the new Homestead Act gave 160 acres to people who paid a small filing fee and put in five years’ labor on the land.
The town’s survival depended on its population, so Kallstadt tried to prevent departures. People bent on escape often pretended they had plans for short excursions. They’d bid their farewells and then retrieve hidden suitcases stuffed with indispensable things.
One dark October night in 1885, after the last pick of the grape harvest, Friedrich left his mother a good-bye note and a bit of money, and then traveled 345 miles north to Bremen, where he embarked on a ten-day journey to New York City aboard the SS Eider.
The 430-foot German ocean liner had room for more than 1,200 passengers. People who could afford it occupied small cabins, a privilege that also meant easier passage through immigration once they arrived.
Friedrich rode steerage with 504 others, crammed like sausages in a tin.
Friedrich rode steerage with 504 others, crammed like sausages in a tin. There were no baths aboard the ship, and not enough food. Passengers cooked what they brought with them on deck when they could. The Eider stank so much New Yorkers could smell it coming.
The railroad tycoon Cornelius Vanderbilt, whose fortune would be worth around $212 billion today and who lived in a place so ostentatious an architectural critic called it one of the “thingiest edifices” in the city, complained bitterly about the smell, which could penetrate all the wealth and thinginess in the world.
Friedrich’s sister Katherine, who’d left Kallstadt two years earlier, awaited him in New York. First, though, he had to make it through customs. Agents recorded his entry: “Friedr Trumpf, 16, M, none, Germany, Kallstadt.”
Kallstadt had more than a thousand years of history. New York City had been colonized and fought over, burned, and rebuilt until it was finally established as part of the United States. It had been under construction ever since. Katherine had arrived the year the New York and Brooklyn Bridge opened, the first-ever built with steel cables arranged like the rays of a sun. Overhead lines in the city carried electricity, telegraphs, and even voices, and an elevated train steamed over the city for a dime a ride (half that during rush hour). All around, the streets and alleys teemed with people, horse-drawn carriages, and carts; some parts of the city were the most densely crowded in the world.
Friedrich lined up work at a barbershop. He lived with Katherine and her husband in a crowded tenement amid other Germans in Manhattan’s Lower East Side. It was a slum: cobbled streets thick with horse manure and polluted air, and nowhere near enough outhouses. Poverty and homelessness abounded. While there might have been only a few city blocks between the ostentatiously rich and the struggling poor, the distance felt like another ocean.
Friedrich, Katherine, and Katherine’s husband kept on the move, always hoping for something better. Friedrich shaved faces and trimmed hair feverishly, setting aside money and keeping an eye open for opportunity. One came in 1889, when a catastrophic fire leveled twenty-nine blocks of Seattle’s business district. Rebuilding sixty wharves and 465 new buildings on top of the bones of the old would be an ordeal: seventy million bricks and ten million dollars.
Friedrich wasn’t yet thinking of construction. Rather, he was thinking about all the money in the pockets of construction workers.
By the end of 1891, he’d gone to Seattle, likely by train, about as far from New York City as a man could get. The journey probably took weeks, and Friedrich, now going by Fred, hopped various lines from New York to Philadelphia, on to Chicago and then St. Paul, before the last and longest leg to Seattle. With $600 he’d saved from barbering, he bought a restaurant near the waterfront and changed its name from the Poodle Dog to the Dairy Restaurant, after a popular restaurant back in New York.
Fred lived near the Dairy in an upper-floor room in a two-year-old gambling den called the Pacific House. Saloons and dance halls and sex workers masquerading as seamstresses abounded. Seattle’s population was booming in the midst of hurried construction. A man could pile away a heap of money by serving the people at the center of the action.
A man could pile away a heap of money by serving the people at the center of the action.
In addition to making money, Fred made himself at home in Seattle, and by 1892 he became a naturalized US citizen. He’d also cast his first vote.
Hungry for even more opportunity, risk, and money, on February 10, 1893, he sold the Dairy and shortly thereafter moved east to a town called Monte Cristo, where prospectors hoped to mine a fortune in silver and gold.
Just as working the fields wasn’t for Fred, neither was mining. Real estate was another story. For $200, he bought forty acres east of Seattle. And because he didn’t have enough money to buy land near the train station to build a hotel, he fudged things.
He bought lumber and built a boarding house and restaurant on land another man already had claimed under mining laws. For a while, it worked. He dodged rent collection efforts from the rightful owner, and even got into politics, winning in a landslide election for justice of the peace in 1896.
He dodged rent collection efforts from the rightful owner, and even got into politics …
But the mines proved to be more bust than boom, so in 1897 he returned to Seattle, opened another restaurant not far from his first, and made such a killing he was able to pay off his mortgage in a month and have enough money left over to go into business in the Yukon, where a gold rush had begun in 1897.
In July that year, he and two partners spent $15 on a claim in the Klondike region of the Yukon in Canada (which would later become part of the state of Alaska). They sold half of it the next day for $400. They staked another in September. By December, they’d split it and sold both halves for $2,150 total.
By 1898, Fred had enough money to get to the Yukon himself as a restaurateur. His journey there was rough, and he opened a restaurant in a tent beside the trail—even selling meals made from the remains of horses who’d dropped dead from exhaustion.
By May, Fred and a partner arrived in Bennett, British Columbia, where they set up the New Arctic Restaurant and Hotel, which was a two-story affair that served single men extravagant dishes—including fresh fruit, duck, goose, salmon, moose, goat, sheep, rabbit, and a type of grouse called a ptarmigan. They also sold liquor and female companionship; this was why a letter written to the Yukon Sun about the place told “respectable women” to sleep elsewhere lest they hear things “repugnant to their feelings.”
Before long, Fred set up a new restaurant called the White Horse that cranked out three thousand meals a day. But his business partner was a drinker, and that plus a crackdown on liquor, gambling, and prostitution soured Fred’s interest in the business. He sold the business to his partner, and having a newly minted fortune, he returned home to Kallstadt in 1901, where his mother still lived. He was a rich man now and old enough for the danger of compulsory military service to have passed, and he was at last financially ready for a new adventure: marriage.
He knew who he wanted. Miss Elizabeth Christ had been one of his neighbors—just a child when he left, but now a grown woman, blond and curvaceous. Even though his mother thought Elizabeth was low class, Fred proposed to her, promising her father the couple would return to Kallstadt if America wasn’t to her liking. When he came back the next year, he wed Elizabeth in August and swept her away to New York City. He briefly resumed the barber trade but was soon back in the hotel and restaurant business.
The young couple lived in a German neighborhood in the Bronx, sharing a language, food, and traditions with their neighbors. Despite that, after a baby girl arrived in April 1904, Elizabeth’s homesickness grew so acute that Fred took her back to Kallstadt in June.
He brought a considerable fortune with him: the equivalent of over a half million 2018 dollars. He hoped to reestablish himself as a Bavarian with this impressive pile of cash, but authorities bristled at his return. On Christmas Eve, they announced an investigation into the matter. Their conclusion: His draft-dodging would cost him his German citizenship.
Desperate to stay, Fred wrote to the German monarch:
Most Serene, Most Powerful Prince Regent! Most Gracious Regent and Lord!
I was born in Kallstadt on March 14, 1869. My parents were honest, plain, pious vineyard workers. They strictly held me to everything good—to diligence and piety, to regular attendance in school and church, to absolute obedience toward the high authority.
After my confirmation, in 1882, I apprenticed to become a barber. I emigrated in 1885, in my sixteenth year. In America I carried on my business with diligence, discretion, and prudence. God’s blessing was with me, and I became rich. I obtained American citizenship in 1892. In 1902 I met my current wife. Sadly, she could not tolerate the climate in New York, and I went with my dear family back to Kallstadt.
The town was glad to have received a capable and productive citizen. My old mother was happy to see her son, her dear daughter-in-law, and her granddaughter around her; she knows now that I will take care of her in her old age.
But we were confronted all at once, as if by a lightning strike from fair skies, with the news that the High Royal State Ministry had decided that we must leave our residence in the Kingdom of Bavaria. We were paralyzed with fright; our happy family life was tarnished. My wife has been overcome by anxiety, and my lovely child has become sick.
Why should we be deported? This is very, very hard for a family. What will our fellow citizens think if honest subjects are faced with such a decree—not to mention the great material losses it would incur. I would like to become a Bavarian citizen again.
In this urgent situation I have no other recourse than to turn to our adored, noble, wise, and just sovereign lord, our exalted ruler His Royal Highness, highest of all, who has already dried so many tears, who has ruled so beneficially and justly and wisely and softly and is warmly and deeply loved, with the most humble request that the highest of all will himself in mercy deign to allow the applicant to stay in the most gracious Kingdom of Bavaria.
Your most humble and obedient,
Friedrich Trump
His letter failed.
A few months after their return to New York, they had a baby boy and named him Frederick Christ Trump, after his father. By 1907, the Trumps had another baby. As he reestablished himself in America, Fred opened a barbershop in Manhattan, at 60 Wall Street, not far from where his grandson would someday own a skyscraper. The next year, Fred bought real estate in Queens, which, within two years, would become the family home as well as a rental property.
Ever the entrepreneur, he also managed a hotel and acquired land as he could. The family soon moved to a quieter spot than their first home, which was on the trolley line, and the children—there were three—attended school at the nearby Public School 97. There, they spoke English, although they preferred German at home.
Ever the entrepreneur, he also managed a hotel and acquired land as he could.
World War I started in 1914, making it harder for the Trumps and other German immigrants to feel welcome. The bias against German immigrants was so strong that German names were erased from schools, foods, and maps. Violence erupted, too; people questioned the loyalty of German Americans, tarring and feathering some, and hanging one.
In the midst of this, Fred became ill with Spanish flu while walking down Jamaica Avenue with little Fred, who was twelve. Big Fred died the next day. He was only forty-nine, but he left his family with stocks, cash, and more important, a small real estate empire: their two-story home in Queens, along with five vacant lots.
Elizabeth grieved her husband, but she had three children to raise. They would carry on her husband’s legacy. Elizabeth, the daughter, would keep books. John, the diligent student, would be the architect. And young Fred, most like his father, would build, just as soon as he’d graduated from high school.
Not long after his father’s death, Fred built a garage for a neighbor. He studied everything relating to building he could think of: carpentry, masonry, electrical work, plumbing, and blueprint reading. Later, he took a construction job that paid $11 a week, kept up the construction classes, and before he was twenty-one, he’d started building houses—paying for the supplies needed to build them by selling a house under construction and using profits to fund the next as he finished the first.
Because Fred was so young, his mother incorporated the business as E. Trump & Son. People loved what Fred Trump built. He included details that made the houses distinct, and he had a salesman’s instinct for paying close attention to his customers’ desires.
In those early days of his career, he was arrested at a Ku Klux Klan riot. A thousand hooded Ku Klux Klansmen marched through the Jamaica neighborhood of Queens on Memorial Day 1927. They brawled with about one hundred police officers. Fred was detained for “refusing to disperse from a parade when ordered to do so,” though he wasn’t charged with a crime.
Meanwhile, he kept cranking out houses, while his brother John worked for General Electric and studied architecture in college. The brothers clashed. John saw an aesthetic proposition, and he wanted to get each house perfect before selling. Fred saw a business, which demanded he move quickly and sell houses that weren’t yet finished. Fred’s drive steamrolled his brother right out of the business. And, free of his brother, he started building bigger and better houses modeled after English manors.
Things were looking up until suddenly they weren’t. When Fred was twenty-four, the stock market crashed. With it went the housing market. But, as his father had learned before him, Fred knew people always needed to eat. He opened a grocery store in Queens, but not the old-fashioned kind where a store clerk gathered items. Fred’s motto was catchy: “Serve yourself and save!” The concept was a hit, even if his heart wasn’t in it.
Five years passed. When a corrupt mortgage-service company crashed, Fred saw an opportunity to get in on the $2 million remaining. He whipped up some F. C. Trump Construction Corporation stationery, made no mention of the fact that he was in the grocery business, and claimed years of experience servicing mortgages. It was true enough, he figured. And it would be good money. Mortgage servicers earn a percentage of the loan in exchange for processing payments and figuring out how much interest, tax, and insurance borrowers owe. They also make money on late fees and foreclosures.
Two other builders were in the running for the business, including another guy from Queens who, like Fred, had more enthusiasm than experience. During negotiations, where they were outmatched by a competitor with more money and better connections, the two outsiders teamed up and concocted a plan. Despite a last-minute bid by a Manhattan-based competitor, Trump and his ally won.
The money he’d make managing mortgage payments meant he could finally build houses again. The timing was right, because he would soon marry a tall, pretty, brown-haired Scottish immigrant he’d met at a party. He fell in love at first sight with Mary Anne MacLeod, a domestic worker, resolving that night to marry her. He made good on his word in January of 1936. They honeymooned in Atlantic City, New Jersey—but only for a weekend, because he had work to do. The real estate business was catching fire, thanks to interventions by the United States government to alleviate the Great Depression.
During this bleak time, one out of every four workers was unemployed. Many had worked in construction. What’s more, 10 percent of homeowners had defaulted on their mortgages. The industry was a mess, but houses and lots could be scooped up on the cheap. The government funded programs to put builders to work, which would ideally boost the economy.
And the government, through the Federal Housing Administration, began to insure private banks that lent money for housing. This meant it was less risky for banks to make the loans. The government also put together a team of people to address things like land planning, effective home design, and real estate appraisal.
Fred Trump now had connections and he worked them, even joining an organization of movers and shakers called the Madison Club. Thanks to the FHA, he could turn his big plans into big loans. His ability to build no longer depended on how much money he had in the bank.
Now he could go after large plots of land. He had his eye on a swath of underdeveloped land in East Flatbush, and his partner researched the owners and bought the plots, sometimes at auctions when their owners had failed to pay taxes. Fred devised plans for 450 houses and got $750,000 in mortgage insurance from the FHA.
This he took to a bank for cash, and then he went to work. He knew every inch of the building process and managed his workers himself. He had an instinct for what his middle-class customers wanted: affordable, solidly built homes with porches and garages.
By August 1936, the Trumps not only had a baby on the way, but Fred and his business partner had also completed the first forty-eight homes in his 450-home community. The New York Times covered the milestone celebration, which featured local and national dignitaries.
In 1938, the Brooklyn Eagle called him the “Henry Ford of the home-building industry.” He loved this and the attention he got by devising novel ways to advertise his wares. He dropped balloons with coupons and offered prizes for babies born in his houses. He fed newspapers tidbits to fill their empty columns. He even had women in bikinis hand out bricks for people to throw at old landmarks he was replacing with new buildings. His Trump homes, as they became known, were a hit.
He built his biggest project yet during World War II for defense workers: a seven-hundred-home behemoth covering fifty-five acres. In the midst of the war, he cleverly worked around shortages as he built more housing for defense workers in Norfolk, Virginia. He discovered he liked to build apartments, because he could keep them and make even more on rent.
By the time World War II ended, Fred was a millionaire.
After the war, with three children born and a fourth on the way, Fred was eager to build houses for all those returning servicemen. Supplies were limited.
At Coney Island, Fred Trump hands over an ax to begin the demolition of Steeplechase Park, where he plans to build a high-rise development. (Charles Frattini/NY Daily News Archive via Getty Images)
Fred’s fourth child, Donald John, arrived amid this frustrating time. But new rules at the FHA created new opportunities, and as usual, Fred quickly spotted potential profit. He shifted into building giant apartment complexes, starting with a thirty-two-building development called Shore Haven, which was big enough it needed its own shopping center. The Brooklyn Eagle nicknamed it Trump City.
A similar development called Beach Haven came next, and as Fred worked the projects, he also worked the room at political clubs, and even behind the scenes with mobsters. Like his father, he did what it took to make money.
He also knew how to sell things. Fred understood women drove the housing decisions, and he catered to them with roses,
lectures on childcare, and children’s orchestra concerts, among other things. What’s more, he understood the value of media. News coverage burnished his image, and this image kept people wanting to live in his apartments. Trump wasn’t just a name. It was a brand.
Things were looking great for him, professionally and socially—until the US government accused him of taking advantage of the same housing program that had made him into a household name. The Section 608 program, which enabled him to build thousands of housing units for veterans, worked like this:
Fred estimated how much his projects would cost and how long they’d take to build. The FHA provided mortgage insurance and calculated future rents based on these estimates. This Fred took to the bank for funding. If Fred finished ahead of time and under budget, the extra money he got through the bank loans was technically his to keep.
Because he determined the budget and the timeline, this wasn’t hard to do.
Sure, Fred could have lowered the veterans’ rents or returned the overages. But the law didn’t require it, and he was a businessman, so he kept these windfalls. A related tax issue arose when such windfalls were counted as capital gains instead of income. Had they been considered income, Fred would have owed significantly more to the IRS.
The Brooklyn Eagle, which had reported so many Fred Trump success stories, ran one that said: “Federal Investigators Checking the Housing Loan Scandals Have Accused Fred C. Trump, Jamaica, [Long Island,] Builder of Pocketing $4,047,900 Windfall on the Beach Haven Apartments in Brooklyn.”
During a US Senate hearing in July 1954, Trump was criticized for “unethical behavior.” Fred called the accusation “very wrong, and it hurts me. The only thing I am happy about is that it is not true.”
“… The only thing I am happy about is that it is not true.”
President Eisenhower was so mad about it he called Trump and other developers “sons of bitches.”
Fred disputed the charge that he’d pocketed more than $4 million. The money wasn’t in his pocket. It was in the bank. What’s more, he still owed $16 million on the mortgage.
The pocket logic did not impress New York senator Herbert Lehman. “Well, Mr. Trump, without going into the merits or the justification for your having this so-called windfall of $4 million, isn’t it a fact that that $4 million, while not paid out to you in the form of a windfall, is in the treasury of the company and could be paid out, at any time? So it is not so very inaccurate as to the amount of the windfall.”
Trump replied, “I first have to take it out before I pocket it, Senator; isn’t that right? I am happy we haven’t taken it out.”
The reply was technically correct, but it also missed the point of the question. Of course that $4 million was Trump’s—and his children’s. And they were benefiting. Fred had set up a complicated corporate ownership structure, a trust fund that paid tens of thousands every year to his offspring.
In the end, Fred and other builders managed to convince people that the laws were to blame. He’d built homes. He’d created value. This was free enterprise. Free enterprise that meant the veterans who fought in World War II paid higher rents than they otherwise needed to.
This riled some of his tenants. And it wasn’t the only tenant complaint. Some thought he was racist.
The folk singer Woody Guthrie moved into a Trump apartment in December 1950 and came to write an angry song about Trump stirring up hatred “in the bloodpot of human hearts” at one of his developments.
Guthrie wasn’t the only one noticing biased rental practices. Fred Trump would eventually be sued by the Justice Department for housing practices that violated the Fair Housing Act of 1968.
But it wouldn’t just be Fred in the crosshairs of the federal government. His son Donald, in elementary school when Guthrie wrote his song, would stand accused of racism along with his father.