Essay Sample: The Main Drivers of Fred Trump's Early Business Success

The Underpinnings of Fred Trump’s Real Estate Business’ Early Success

As an international real estate empire, The Trump Organization makes over half a billion dollars a year, profiting from residential, commercial, and vacation properties in the US and across the globe. Although Donald Trump is often cited as the company’s success driver, his father, Fred Trump, and his grandmother, Elizabeth Crist Trump, founded the business in 1927 and secured its early position in the real estate market. Fred Trump employed innovative advertising methods and construction know-how to increase profits, but he was also accused of profiteering and other underhanded business practices that secured his success.

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Although Fred Trump participated in the construction of the first homes built by the E.Trump & Son (now known as The Trump Organization), he could only start a business thanks to the estate left by his late father, Frederick Trump. During the Gold Rush, Frederick amassed a small fortune by running a bar and brothel for miners. After her husband's death from the Spanish Flu, Elizabeth Trump invested the money into the development of family homes in Queens, and her son soon took over the reins of the family business.

Fred Trump’s first significant business success resulted from the construction and subsequent sale of the Trump Market in Queens. It was a new supermarket modeled on King Kullen, which purchased Trump Market within six months of its opening. Fred Trump invested his profits into purchasing J. Lehrenkrauss Corporation’s subsidiary and selling its foreclosed properties with a significant profit.

These early successes helped Fred Trump receive Federal Housing Administration (FHA) loans under the National Housing Act of 1934. The construction company employed hundreds of workers building single-family houses. Fred Trump employed unique advertising methods to raise awareness and sell his properties. For example, he used the prices ending in nines to create an appearance of lower rates. He also hired a boat to advertise the new properties using balloons to disperse discounts among potential buyers. Thanks to speedy construction and aggressive marketing, Trump completed over 2,000 homes in Brooklyn by 1942, earning himself a comparison with Henry Ford.

Throughout the early years of World War II, Trump used the FHA funds to build barracks and temporary housing for American soldiers and defense workers across Pennsylvania and Virginia. In a few years, Fred Trump built over 1,200 houses. Moreover, Congress amended the National Housing Act to include mortgage insurance, making Trump the owner of the properties his company constructed. Trump’s company continued receiving funds from the FHA after the war to subsidize the construction of multi-story housing for middle-income families, shopping centers, and other commercial buildings.

Despite Trump’s real estate empire's rapid growth in the first half of the 20th century, it was often the subject of investigations and legal action. For example, The Trump Organization was accused of racial profiling and other discriminatory practices that applied to tenants, as well as construction workers. Moreover, the Senate committee investigated Trump’s business practices in 1954 and 1966 on accusations of profiteering using federal loans. Finally, Fred Trump was suspected of transferring the bulk of his net worth to his children, avoiding significant gift taxes.

In conclusion, Fred Trump was a successful real estate businessman who expanded a small family-owned construction company into a multi-million corporation with a worldwide asset portfolio. Although he took advantage of his inheritance and federal funding, Trump built innumerable houses, apartment buildings, and commercial real estate for low and middle-income families and wartime workers. His innovative marketing methods drove the company’s success, but he was also accused of discriminatory practices and profiteering, as well as tax evasion, which tarnished the business’ reputation.