In this podcast, Motley Fool personal finance expert Robert Brokamp talks with Michael Meyer, author of Benjamin Franklin's Last Bet: The Favorite Founder's Divisive Death, Enduring Afterlife, and Blueprint for American Prosperity about topics including:

  • Franklin's mistakes in estate planning.
  • The power of small, anonymous donations.
  • Other fun facts about America's first celebrity.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

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Michael Meyer: Franklin is probably the first person to found a university and then cut it completely out of his will. He founded the Philadelphia Academy, which went on to become the University of Pennsylvania. He had hoped it would be a working-class school. He wanted practical education. When he came back from Paris after the Revolutionary War, he discovered it had become a real finishing school for the gentry of Philadelphia. Oh my gosh, they were teaching Latin and Greek. They weren't teaching accounting or public speaking. 

Chris Hill: I'm Chris Hill, and that's Michael Meyer, a professor of English at the University of Pittsburgh and author of the new book, Benjamin Franklin's Last Bet: The Favorite Founder's Divisive Death, Enduring Afterlife, and Blueprint for American Prosperity. Robert Brokamp talked with Meyer about the founding father's mistakes and successes in estate planning, how Franklin popularized microfinance and open-source technology, and the power of small, anonymous donations.

Robert Brokamp: Ben Franklin was a lot of things, founding father, politician, postmaster, author, inventor, kite flyer. He also became relatively wealthy. Where did most of his wealth come from? He certainly wasn't born into it, and unlike some founding fathers, he didn't marry into it.

Michael Meyer: That's right. I thought his wealth would have come from his many inventions, but in fact, it didn't. Franklin today is often cited as a founder of the open-source movement because although there weren't patents while he was alive, he could've had exclusive commercial licenses on his many inventions. But instead, he said, "Just as I've benefited from the technology of others, I want others to benefit from my technology as well." Franklin was a bit of an inveterate borrower, as we're going to see as we talk about his last will and testament, whose ideas largely came from somebody else, just like many of his famous sayings originated with someone else.

But to go back to your question here, he was a very good business person. He married well, and we'll talk about his wife, Deborah, in a little bit as well because he did benefit from the property her parents owned when he started his printing shop, but it was really his press from which he derived most of his money. Not only did he benefit from, as deputy postmaster, he could enjoy free postage, so he could send Poor Richard's Almanack and his Pennsylvania Gazette up and down the Eastern Seaboard. But as he retired at age 42 to devote himself to a life of philanthropy, as he called it, and science, he also started franchising printing shops up and down the seaboard as well, and so he benefited from that. That's how he accrued a lot of his money.

Robert Brokamp: The title of your book says that he had a divisive death. What was divisive about his demise?

Michael Meyer: Half of the country didn't seem to mourn him that much. Our own Congress when they met in New York City a few days after his death were really divided on how they should show their respects to this person. Thomas Jefferson, who was then secretary of state, had asked President Washington to wear a Badge of Mourning, black armband and Washington said, "Franklin didn't die in office, and he didn't die on the battlefield. So I don't want to set that precedent." The House of Representatives decided to wear those Badges of Mourning. The Senate, under the aegis of John Adams, and the vice president and Franklin's nemesis, said they wouldn't be doing that. I was surprised to find, too, and the beginning of the book talks about this that there was no state funeral for Benjamin Franklin. That still does flabbergast me, and his official eulogy wasn't read till nearly a year had passed since his 1790 death.

Robert Brokamp: Interesting. A lot of your book is about his estate plan. Of course, when you talk about estate plans, you start with families. What was Franklin's family like?

Michael Meyer: It was also quite fractured. I think that just like his family, his reputation in America had fissured along lines of was he too close to France because he had spent nine years during the Revolutionary War raising men, materiel, and money for the Rebel cause. His own family was fractured through that war as well. For the Franklins, it was a civil war, I should say, at the same time. His firstborn son, William, who was illegitimate, had been raised to be his heir apparent. You mentioned Franklin, the kite flyer. It was probably William, actually, who held the string in that paddock of the Northern Liberties in Philadelphia, when Franklin touched his knuckle to the string and felt that charge of electricity in his famous experiment. He and William had fallen out.

William was a Loyalist during the war. He was actually in prison for many years, and Washington would not parole him even to be there for the death of William's wife. William ends up living in London on a dead-end street near Trafalgar Square, and Franklin makes sure that William receives nothing of his estate, and even lists him first in the will that he gets all the land that he attempted to deprive me of, which was nothing. There was William, and then there was his daughter, Sally, who he loved a great deal but also never let her journey with him to London and to Paris the way he allowed William to go, and we'll talk about that. Sally comes back and has her revenge with her bequest. Then there's two grandsons. There's Temple, who's William's illegitimate son. Illegitimacy definitely ran in the Franklin family, who is a bit of a cad and a layabout, and he had fallen out of favor. He'd ingratiated himself.

He was Franklin's private secretary when he was in Paris, but Adams and Jefferson didn't see much in him and didn't see a real future for Temple. Then there's Sally's young son, Benny, who was primary school age when he went with his grandfather to Paris. Benny is the person that Franklin pins most of his hopes, and he's the one that he says, "You know what? I made a big mistake. I did not train Temple and Sally and William in my trade. But to Benny, I'm going to train him to become a printer." For all his of accomplishments, he begins the will, "I, Benjamin Franklin, printer." He's really staking that I'm a trades person, I'm a skilled labor, and I'm different than the other founders, and I don't want my family to follow their paths and rather follow mine.

Robert Brokamp: Part of it was basically putting some conditions in his last will and testament. He didn't just give stuff away. There were some conditions on what people either had to do or what they could do with what they inherited.

Michael Meyer: That's right. I think Franklin was aware that his will would be published. He was the first American celebrity. He was certainly the most famous American to die when he did at that point in 1790. To each of these bequests, he gives his kids, there's a condition attached to them. To Sally, for example, this is an era of laws of coverture where a married woman is no more free than a dependent child. In her bequest, he says, "Clearly, this is meant for you and yourself alone. This is no disrespect for your husband, Richard, but I want you to have an income independent of a man." He also gives Sally the most precious item in his estate, which is a portrait of King Louis XVI ringed by diamonds. He tells Sally that, "Whatever you do, don't take these diamonds off and fashion them into jewelry because that's wasteful." Now, what he thought a mother of seven was going to do with a portrait of the French king, especially one that was about to be beheaded, I don't know what he thought she would do it that.

But Sally sort of went around in a sneaky way, I like what she did, she started about a year after Franklin dies. You see in the Philadelphia newspaper notices that the Franklin house is for rent. Then you start following the betrayal, and it showed that Sally was selling off individual diamonds from the portrait so she could finance her first trip abroad. She goes to London for a period of over two years, including her portrait painted for the first time. It's the only image we know of her. To his layabout no-good grandson Temple, he says, "I'm giving you all my papers in hopes that you'll collate them into an edited edition, and you'll make a name for yourself, and you'll have your own career free of patronage. I don't want you badgering politicians for your posts." There is a revolution. Napoleon comes to power.

A lot happens in those years, but it takes Temple nearly 30 years for those papers to be edited, and collated, and put out. I think people is about Temple right on. Then Benny, his grandson, gives him his printing press. He says, "I'm giving you what to me, emotionally, is the most important of all my items, which is my trade, and I expect you to go forth and use it." It's actually Benny that moves into Franklin's former newspaper shop and takes over his former newspaper and becomes a real muckraker. You noted that he was calling out President Washington for owning slaves, for example. You're supposed to be the disciple of liberty and look at your behavior. His detractors started calling him "Lightning Rod Junior." In fact, I was shocked to learn that the first American prosecuted under the Alien and Sedition Acts was Benjamin Franklin's grandson, Benny, for the print of his diatribes against the Federalists and President Washington.

Robert Brokamp: One aspect of his will highlighted his complicated relationship to slavery. Tell us little bit about that.

Michael Meyer: Franklin both benefited from and opposed slavery for much of his life. Early on as a printer, he would print notices for runaway enslaved people, for auctions of enslaved people in Philadelphia. At the same time, he published the first abolitionist tracts against slavery in Philadelphia, actually, in the entire colonies. He and his family themselves owned up to seven human beings. Franklin called them servants, which was typical of urban Americans at that time. Again, this was news to me because growing up in Minnesota, I'm a Northern American. It was always slavery is something that happened elsewhere, that happened in the South. You realize, no, enslaved people were held throughout the big cities on the Eastern Coast. Franklin, later in his life, has a major about-face. He befriends a lot of leading abolitionists, including Granville Sharp, when he was working in London and then in Paris, too, because France had abolished slavery before any other country, or was about to I should say, at that time.

Franklin has a massive about-face. When he comes back to Philadelphia after the Revolutionary War is finished, and he's there for the Constitutional Convention, it's Franklin who is ready to propose an amendment banning the slave trade. His fellow abolitionist in Philadelphia said, no, it's not time for that. It's too contentious right now. Instead, after the Constitution was ratified, Franklin presented the first-ever petition to ban the slave trade into the Senate and House of Representatives. The House of Representatives actually considered it, they put it to committee. The Senate shut it down. Another reason his death was quite divisive with people that here you have someone who talked about compromise during the Constitutional Convention, and here he is now, appealing against the very compact that he had helped to ratify.

Franklin died as the president of the Pennsylvania Society for the Abolition of Slavery. It was probably an honorific title. In the book, I make it very clear, I can't say he took the actions that other governors and other abolitionists did in the United States at that time. But he did make sure, after the other people he had held had either died or run away without being formally freed by him, in his will, his son-in-law, Sally's husband, owed him a great deal of money, and he said that debt is forgiven if upon my death you release, what he called "your servant," and then did. In the book, I said that Franklin finally freed his first slave, but it wasn't a human being who he had owned.

Robert Brokamp: Let's move on to Franklin's "last bet," as you call it, involving bequests to Boston and Philadelphia. Tell us about those.

Michael Meyer: Franklin is probably the first person to found a university and then cut it completely out of his will. He founded the Philadelphia Academy, which went on to become the University of Pennsylvania. He had hoped it would be a working-class school. He wanted practical education, and when he came back from Paris after the Revolutionary War, he discovered it had become a real finishing school for the gentry of Philadelphia. They were teaching Latin and Greek. They weren't teaching accounting or public speaking. He was really upset about this. I should say I know the Constitutional Convention had lawyers that carried the day, and he felt different than your George Washingtons, and your James Madisons, and your Thomas Jeffersons who had huge plantations and profited off of slavery. He had made the turn at that point. Franklin said, "What's really important for our republic to survive is that working-class people have to have a voice in it.

How are we going to ensure there's more people like me and less people like John Adams, the lawyer, and George Washington, and Thomas Jefferson, and James Madison, etc.?" He remembers there was a French admirer of Franklin who wrote a satirical essay and had sent it to him. It was all about the power of compound interest. In this essay, instead of Poor Richard, it was about a man named Fortunate Richard. Fortunate Richard is told by his grandfather, just put a little bit of money in an account and watch it accrue with compound interest, and after 100 years, you can give it away to charity. Then keep some of it back and give it away again, 200 years, 300 years. So in this essay, the man decides he's going to create training schools for women, so women can join the workforce, he's going to create a European bank so European countries won't go to war, he's going to create libraries, etc. Franklin, when he comes back to Philadelphia, remembers this essay and he thinks, you know what? I'm going to borrow that idea and change my will, and he actually puts in his will.

He says, "To my family, I'm giving a large portion of my estate to an idea that you may find distasteful because the money is not going to you, but to me it's very important." In this codicil, he added 10 months before he died. He takes £2,000. The British dollar was not yet official currency. But he takes his money, and he puts it into pots. One goes to the city of Boston, £1,000. One goes to the city of Philadelphia, £1,000. Boston, his hometown where he was born; Philadelphia the town to which he ran away and broke his own indentured servitude and found his fortune. He says, what this money is going to do, he essentially creates microfinance because what this money is going to do is it be lent in small amounts to apprentices who want to open their own businesses. They're going to repay it in 10 years at 5% annually, below market rate at the time. With that money, the principal, the seeding fund as he called it, the principal will accrue, and we can lend more money to more craftspeople. So he really wanted to fund the next generation of carpenters, and printers, and saddlers, and glaziers, and masons, and so forth, with the hopes that they would then turn to public service and have a voice in the American republic.

Robert Brokamp: You pointed out in your book that that didn't quite work out. You cited a survey. It said about half of Americans considered themselves working class, but only 2% of Congress has had that type of background, but talking about those, what happened over the next 200 years, which is really the story of the book. It is a fascinating story because it's really the history of the American economy, the history of finance in America, the history of how our labor market changes. Definitely, read the book, but I would love for you to highlight one good thing each city did with the money and maybe one mistake that each made.

Michael Meyer: I'm glad you mentioned the 200-year part, I forgot to say that, that he is so ambitious, that it's not just lending money to tradespeople for 10 years. It's going to last for 200 years. That's how ambitious he is. He's like ensuring that he's going to keep his name in the headlines. This is at a time when the demise of America certainly seemed more certain than its success. This is two years before the New York Stock Exchange opens. This is two years before the dollar is made official currency. So, Franklin, there's a lot of wishful thinking involved here. Further to that point to get to what the cities did well, he also expected that kindly people in each city would manage this loan fund for free. They would have oversight over it and make sure that people are getting their money. In the book, it's set up as a race because Philadelphia and Boston did keep an eye on each other and how much money each one was accruing, and how many loans each city was making.

These are very different cities anyway. Philadelphia is diverse. It's a working port. It's the center of finance at that time, and publishing, and business. Boston is very homogeneous and known more for its academies and for its churches. To go back to your question, which is excellent, Philadelphia, I think the best thing they did is they kept the money in play. They tried to honor Franklin's wishes, and they kept making these loans even through the War of 1812, and the capital moving to D.C., and the opening of the Erie Canal, and the Industrial Revolution where apprentices and tradespeople were falling by the wayside, and on. Boston, on the other hand, a city that in the book every [UNCLEAR] is busy inventing the mutual fund, is busy inventing the investment bank, they decide, you know what, it's not working out.

Franklin's idea isn't going to allow any money to be left over for future generations to use, and so we're going to actually take it away from working craft tradespeople, and we're going to put it in an investment bank and get a guaranteed return. So this is very different. People always asked me like, who do you think did a better job of managing the money? It depends. Again, was the idea to start as many small businesses as possible, or was the idea to let them money accrue as largely as possible so the citizens of Boston and Philadelphia, at the end of 200 years, could cash it out and build something to benefit the people of those cities?

Robert Brokamp: Any mistakes you'd like to highlight that each city made?

Michael Meyer: There's always bad investments. It's funny. Current Philadelphians, when they read this book, including city officials will say, we're just as corrupt. Our city administration is just as dysfunctional as it was in Franklin's time. Philadelphia, the mistake they made is they grouped Franklin's loans, or this bequest, in with the dozens, if not hundreds of other bequests that people had left, money to be left for widows, for winter soup, or fuel, or whatnot, yellow fever victims for their recuperation. Still, it's a public record. You can still look at the annual report of these funds that have been on the books. There's well over 100 of them. They didn't manage it carefully. They didn't have a dedicated person. It was a city treasurer that was overseeing it, and that city treasurer made some very bad investments when they did try to emulate Boston's model. They didn't realize that some of the things in which we're investing, were basically controlled by Philadelphia's equivalent of Tammany Hall. They were machine-backed pyramid schemes in many ways, and so the money took a step backwards.

Boston, I think their great failure was their lack of imagination. There was one person that managed the fund for nearly six decades. He tucked it safely into an investment bank, and it was only when a second person, I think he's one of the heroes of the book, takes over its management and says you know what, what Franklin called tradespeople or apprentices, nowadays we could consider medical students in Boston. They're apprenticing. They'll open their own businesses and hang a shingle. There's a series of court cases that happened, which I think are really interesting to read because it's people reimagining the funders' wishes, which is something that states have to deal with all the time. Buyer beware of what you put in your will and your instructions because future generations might say, "We can interpret that differently, and here's what we can do with it." But in the end, I think the biggest mistake and the best thing each city did was they tried to adhere to Franklin's wishes, but his wishes were not crystal clear what the end game should be. Were you going for the now, or were you going for the 200-year payout?

Robert Brokamp: So when talking about Franklin's last will and testament, unfortunately, the majority of Americans don't even have a will, let alone a comprehensive estate plan. So what lessons can the typical American take away from Franklin's last will and testament, and maybe did it change at all how you thought about your own legacy?

Michael Meyer: It did. I think the big lesson is, again, he expected people to manage this endowment, this bequest for free, and that was a mistake. Nowadays, we have professional financial planners and estate managers. So if you have a large amount of money, I would absolutely say be as specific as you can about who's your executor and who's the estate manager. The other thing that Franklin did is, I think he put too many restrictions on how his money was going to be used. I should say that Carnegie, and Rockefeller, and the Fords, and these different foundations that came up a hundred years after his death were very aware of this. The tax code was eventually changed in our country, so you could say the reason your philanthropy exists is to benefit humankind. That's a viable reason these days. It was the Guggenheim Foundation that first attempted to make that change. Franklin had all sorts of restrictions on who could use his money, who could benefit from his money. You had to be at least 25 years old.

You had to at least be married because he was 25 when he went into a common-law union with his wife, Deborah. You had to be a man in the beginning. He didn't put any restrictions on race, or religion, or origin, which was unique for his time. But it took years of court cases chipping away, including cases brought by Franklin's descendants. Many of them women saying, we need to expand what his money can be used for here to include women, and it did. I think, for myself, the lesson is something that Franklin wrote about in his memoir, which is that those with the least usually give the most, percentage-wise, and that he preferred to be anonymous in his philanthropy because, he said, if you slap your name on something, it doesn't encourage other people to give money to it because it's just for your benefit.

We could have the Franklin University, and the Franklin Library, and the Franklin Fire Brigade, and so forth, but we don't. He didn't want his name on those things. So one thing I've thought about with my own legacy going forward as someone who doesn't have a lot of money is that Franklin also knew that a little can go a long way and that those $5 donations and those $10 donations and those $100 donations from many people are sometimes more useful to an organization or an idea than a $1 million one-off that gets spent and then you go, who's checking up on it? It's made me think a lot about parceling out money in small doses in perhaps in ways that can be released at 50-year intervals or 75-year intervals. But again, this takes a lot of planning. It would need a manager or an heir who's willing to take this on.

Robert Brokamp: Let's close by asking you to mention a few things about Ben Franklin that maybe you think most people don't know about. I'll actually go first by mentioning some things I learned from your book. First of all, I didn't know that Franklin was such a strong swimmer and that he used to swim for miles with a suitcase of books on his back so he'd be able to survive a shipwreck, and that he also invented swimfins and was posthumously inducted into International Swimming Hall of Fame, which I think is hilarious. Franklin is known as the father of the Foreign Service and, between 1757 and 1785, he only spent three years on American soil. The rest of that time was in England and France. Like you said, he co-founded the nation's first hospital, still in operation today because he believed that every American should have quality healthcare, regardless of income. Those are my few things. What would you say are some things that most people probably don't know about Ben Franklin?

Michael Meyer: He was very insecure. I think when I was working on this book and reading his letters, all of which are available online, we have a wonderful archive at Library of Congress called Founders Online, at the National Archives, excuse me. You can access these and you can search by keyword. I was shocked at how insecure he was because he was self-taught. He only had two years of formal schooling as quite a young person. Schooling was free at that time if you were a male. But he couldn't afford the textbooks. I was just struck by, throughout his life, he's always looking for a pat on the back from father, from his older brother, from Deborah, from his sister, Jane. "Do you see what I did?" You really feel his pain when he writes to his older brother James, for example, and he doesn't get a response, or at least one that survives. I was also surprised that the kite experiment, he wrote about that as if someone else had done it. He wrote about it months later.

It was a friend in England, Joseph Priestley, the man who is credited with the discovery of oxygen or at least with fizzy water that we drink today. Priestley popularized it widely in the British press. When Franklin wrote about it in the Americas, he said, it's very easy. Anyone could do it. I thought, but I'm going to tell you, no one had, that gets really remarkable to me. Those are the things I think about his personal thing. The last thing, because I'm a writing teacher here at the University of Pittsburgh, he taught himself to write the same way I urge my students to learn to write, which is he pulls down great books from the shelf and copies them. He gets this feeling in his hand about what that writer is doing. Then he closes the book, and he tries to remember what the writer wrote, and then he tries to write it himself. He often finds that he's improving the text. In that way, he's finding his own voice. He's making different choices, and that impresses me a great deal. He's very moderate in that way.

Robert Brokamp: He obviously loved books. He helped found libraries, and when he passed away, he had more than 4,000 books in his estate. Michael Meyer, this has been a fascinating discussion. Thanks so much for joining us.

Michael Meyer: Thanks for having me.

Chris Hill: As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Chris Hill. Thanks for listening. We'll see you tomorrow.