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Cornelius Vanderbilt was born at Port Richmond, Staten Island, New York, the son of a ferryman and farmer. During the 1830s, Vanderbilt's line became the dominant steamship presence on the Hudson River, due largely to low pricing and comfortable accommodations. The bulk of his $100 million fortune was left to his son, William.
The Misunderstood Robber Baron: On Cornelius Vanderbilt
November 11, 2009
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Cornelius Vanderbilt died in January 1877. Six months later, the greatest social insurrection of the nineteenth century paralyzed the operations of Vanderbilt’s New York Central Railroad (by then overseen by his son William) along with the other three trunk lines connecting the East Coast to Chicago and points farther west. The Great Railroad Strike, as it came to be known, was an upheaval of extraordinary violence sparked by an astonishing act of collusion and callousness: a 10 percent wage cut announced the previous year–amid the century’s worst depression–and endorsed in concert by the four trunk lines. Armed confrontations between state militias and infuriated railroad workers and their legions of sympathizers broke out in cities and towns across the country. A general strike paralyzed St. Louis. On a single day in Pittsburgh, crowds burned thirty-nine railroad buildings and 1,300 railroad cars and engines as well as a huge grain elevator armed with Gatling guns, the National Guard killed twenty that night and more the next day. Thomas Scott, who ran the Pennsylvania Railroad, concluded, “Nothing but the insanity of passion, played upon by designing and mischievous leaders, can explain the destruction of vast quantities of railroad equipment.” Nothing, that is, except the desperate circumstances of the railroad workers–who for paltry wages risked being killed or maimed in industrial accidents–and their families.
The three weeks of mayhem ended with widespread applause for the forces of law and order. Armories were erected in major cities to quell the anxieties of the middle classes, who since the incendiary days of the Paris Commune had lived in chronic fear of a bloody class confrontation erupting in America. In this tense climate, many came to revere the new lords of industry. A few years after his death, Vanderbilt was lionized by his first biographer: without “the Commodore”–a sobriquet by which Vanderbilt was widely known at the time–there’d be “no railroads or steamships or telegraphs no cities, no leisure class, no schools, no colleges, literature, art in short no civilization.” Millions shared in this idolatry.
A minority were irate and excoriated the titans of finance and industry as “robber barons” and worse. E.L. Godkin, founder of The Nation, launched a volley of invective at the new plutocracy: “kings of the street” like Vanderbilt displayed “unmitigated and immitigable selfishness” as appalling as their “audacity, push, unscrupulousness and brazen disregard of others’ rights.” Henry Adams, writing about the Credit Mobilier debacle after the Civil War, in which railroad operators connived with government officials to loot the public treasury, concluded that “the moral law has expired–like the Constitution.” This less sanguine view grew more popular in the twentieth century, especially during and after the Great Depression, a catastrophe millions of Americans blamed on a second generation of “robber barons.” Historical scholarship reflected that assessment. Biographies of Mellon, Carnegie and Rockefeller were often laced with moral censure, warning that “tories of industry” were a threat to democracy and that parasitism, aristocratic pretension and tyranny have always trailed in the wake of concentrated wealth, whether accumulated dynastically or more impersonally by the faceless corporation. This scholarship, and the cultural persuasion of which it was an expression, drew on a deeply rooted sensibility–partly religious, partly egalitarian and democratic–that stretched back to William Jennings Bryan, Andrew Jackson and Tom Paine.
The censure of big business continued through the 1960s and beyond, but it has gradually been eclipsed by the cultural and intellectual reclamation of Gilded Age tycoonery. During the past two decades, revisionist biographies and collective portraits of Mellon, Carnegie, Rockefeller, Harriman, J.P. Morgan and others have effectively rehabilitated the reputation of the robber baron. Even the railroad tycoon and speculator Jay Gould, known to his contemporaries as “the Mephistopheles of Wall Street,” has been rescued from cultural purgatory. The quotient of negative moral and political judgment in these studies has declined or disappeared entirely. The emphasis now falls on the commercial brilliance of these men, their implacable will to succeed, their pioneering roles in strengthening the country’s industrial and financial resources, and their mastery of the increasingly complex technological, financial and organizational innovations that have defined the modern economy.
Together this literature might be said to constitute a new genre: the misunderstood robber baron. The genre does not slight the harsh circumstances and nasty tactics that may have facilitated a robber baron’s rise to dominance: a no-holds-barred competitive ferociousness, a casual attitude about sticking to the letter of the law, an imperiousness that distanced him from the plight of those less fortunate, a ruthless drive to bankrupt competitors, the suborning of elected officials. But instead of criticizing these traits and tactics, the genre naturalizes them. If these men did things that today might strike us as unscrupulous, so too did their contemporaries, all members of a society motivated by the single-minded individualism characteristic of a robust free-market economy. Looked at from afar, what we are persuaded to see through the examination of these lives is the incubation of the modern world of industrial and financial capitalism and its ineluctable evolutionary mechanics, not always pretty but at the end of the day a blessing that endowed the country with wealth and power. This sunny picture mirrors today’s ownership society, with its free-market audaciousness and its reverence of businessmen in general, especially those committed to “lean and mean” competitiveness and financial empire-building. Arguably, the genre of the misunderstood robber baron is itself an expression of the shift in the zeitgeist, just as that earlier literature of moral condemnation shared in a more universal set of reservations about the reign of big business.
A telling undercurrent runs through many of these biographies. They seem haunted by the first wave of robber baron biographies and feel the need to exorcise their heavy admixture of judgmental criticism. They often do so by adopting a standpoint of Olympian disinterest. With a certain cool condescension they dismiss the spirit of anticapitalism as near-sighted or doctrinaire and fatally out of touch with the inexorable logic of economic development. They imply that earlier critics–everyone from Henry Adams, Henry George and Henry Demarest Lloyd in the nineteenth century to Charles Beard and other historians of the Progressive era and continuing on in the work of Matthew Josephson, Ferdinand Lundberg and the New Left historians of the s–were captives of a grand illusion: that feasible alternatives to capitalism existed, a menu of possibilities ranging from the cooperative commonwealth to socialism. Historians of the misunderstood robber baron are free of that illusion indeed, their freedom carries with it the conviction that for all its obvious failings the free-market system prevails because it works, and it works because it is in harmony with some deeper economic truth as lawful as a chemical reaction.
Whatever their Weltanschauung, many of these studies are first-rate histories, and The First Tycoon, a new biography of Cornelius Vanderbilt by T.J. Stiles, is no exception. Vanderbilt’s rise from small-time ferry boat operator on Staten Island to the dominant figure in the nation’s maritime (steamboat) and land (railroad) transportation system is a fascinating story, and Stiles tells it well. His writing is lively and colorful. He is a meticulous and exhaustive researcher with an instinct for the telling anecdote. Drawing on the observations of local merchants, visitors from abroad and the aperçus of Herman Melville, Stiles artfully evokes the hurly-burly of early nineteenth-century New York City: the malodors of its wharves the logjam of sailing ships and steamboats crowding its harbor the frenzy of commercial wheeling and dealing in the serpentine streets of Lower Manhattan, which soon established the city as the headquarters of the nation’s commercial maritime economy. Vanderbilt made his fortune in this mercantile jungle, and Stiles does a superb job of portraying how it shaped his character–hardening its armature, sharpening his guile. And though “the First Tycoon” was often a clumsy and reluctant writer who didn’t leave behind much of a paper trail, Stiles has some convincing insights into Vanderbilt’s inner life.
Stiles’s account of the California gold rush of 1849 teems with vivid descriptions of prospectors, con men, gamblers and deal-makers, and captures the meteoric emergence of San Francisco, with its uninhibited night life and the extraordinary cultural diversity that drew fortune-seekers from all over the world. The discovery of gold at Sutter’s Mill presented the opportunity for Vanderbilt to transform his Atlantic Coast steamboat business into a transoceanic one, transporting passengers west to the gold fields and, more important, carrying gold back east to New York’s banks. The gold rush also entangled the Commodore in endless intrigues to construct a land route (railroad/canal/steamboat) across Nicaragua connecting the two oceans, so as to speed up and lower the cost of transit to and from the gold coast. Stiles is especially good, although a bit long-winded, at describing the dangerous yet tragicomic players involved in these machinations, among them the Southern filibusters, freelance military adventurers and political self-promoters who aimed to overthrow local Central American governments and annex places like Nicaragua to the South, feeding Dixie’s insatiable appetite for new slave territories.
Stiles’s talents are by no means limited to his descriptive powers. His analysis of the political economy of the antebellum North is often compelling. He calls Vanderbilt a “shopkeeper of the sea,” a wonderful metaphor that conveys the distinctly mercantile character of the American economy in the decades leading up to the Civil War. It was an economy that rested on trade, not manufacturing, and the Commodore mastered it because he managed to control much of its motorized transport: first the steamboat coastal and then transatlantic trade, and later the land commerce carried by steam-driven railroads. Vanderbilt made his fortune and acquired power in this earlier, commercial phase of American development, not during the subsequent industrialization that made his fellow robber barons so rich and famous.
When Vanderbilt became a steamboat operator in 1817, the mercantile economy was controlled by an elite circle of Anglo-Dutch bankers and merchants dominant since the pre-Revolutionary era. Its members enjoyed a privileged position, in particular an entitlement to exclusive corporate charters issued by state and local governments to carry on various businesses: steamboat lines, turnpikes, railroads, canals and other facets of infrastructure vital to a trading society. The democracy for which the Jacksonian era is so well-known was marked by the desire to open up this state-supported, insular mercantile economy to every man. Antebellum America boiled with entrepreneurial energies go-getters roamed the land eager to take advantage of the flood of business opportunities that accompanied the country’s territorial expansion. Aspiring men on the make denounced established ones, especially those enjoying the favors of the government, as monopolists and aristocrats. They sought a truly free market economy, universal incorporation laws and the end of state-sanctioned monopolies. It was a war against one form of capitalism on behalf of another.
Stiles makes a persuasive case that Vanderbilt was an important figure in the struggle to unseat an older, patrician form of capitalism. Although he was apolitical, neither a Whig nor a Democrat, and involved himself in politics only when it suited his immediate business objectives, Vanderbilt was in many ways the perfect Jacksonian. Again and again he challenged the state-sanctioned franchises run by politically connected grandees in New York and New England. He established rival steamboat lines, using his detailed knowledge of ship construction and the vagaries of the sea to drive established franchises into bankruptcy. He sank others in court. And he was hardly bashful when it came to deploying democratic rhetoric to discredit his top-drawer enemies while concealing his predatory aims.
The patrician old guard fancied itself a disinterested elite equipped with the breeding, knowledge and independence to act in the public interest but in fact, as market society extended its reach the old guard behaved like ordinary businessmen, anxious to retain their special commercial advantages. As Stiles cogently observes, “New York’s old patrician families had carried on into this more competitive, egalitarian era, carrying their wealth and prejudices with them. Their elitism blended with the Whig faith in an entrepreneurial but orderly economy.”
Vanderbilt, on the other hand, might have preached the democratic virtues of the free market, but he was perfectly prepared to impose his own monopoly control when the chance presented itself, or to accept ransom money from his competitors so that they might continue to operate their monopolies. Stiles dubs Vanderbilt the “selfish revolutionary” and the “millionaire radical” because he grasped that laissez-faire ideology could perform double duty as a defense of and an attack on wealth. In August 1834 Vanderbilt published a piece of democratic demagoguery aimed at his patrician rivals in the New York Evening Post, a paper committed to radical Jacksonian anti-monopoly politics. His plea was written on behalf of one of his steamboat enterprises, pointedly named the People’s Line, running between New York and Albany: “Thus fellow citizens has this aristocratic monopoly, secure as they think themselves in wealth and power, wantonly attacked an individual whose constant endeavor has been to avoid a contest with them…the question now is, will the public countenance the combined companies in an act of overbearing oppression, or will they patronize and encourage one who is determined to resist aggression and injustice…. The North River is the great highway of the people, and does not belong exclusively to the Monopolists.”
All this verbiage capitalized on the huckstering riffs of the era’s Mammon-worshiping land promoters, town developers and canal and railroad stock jobbers. It’s an irresistible blend of the highfalutin democratic egalitarianism and unblinkered covetousness satirized by Charles Dickens in Martin Chuzzlewit. Whether Vanderbilt really believed himself a warrior against monopoly or simply rented the rhetoric by the column inch is very hard to say. What’s clear is that he championed capitalism by decrying it. Most important, Stiles notes a deeper irony of the era: that the corporation, which originated as a creature of the state, subject at least in theory to its rules and regulations, would become instead in the decades to follow the master of the state, free of public constraints or any obligation to serve the public interest, thanks to the anti-monopoly social and political upheaval inspired by people like Cornelius Vanderbilt and Andrew Jackson.
For all its virtues, The First Tycoon devotes scant attention to the way this broader cultural atmosphere nourished the Napoleonic mythos that came to envelop businessmen like Vanderbilt. The Commodore’s modest social origins and rise to powerful heights mimicked those of Napoleon, a man from nowhere who became emperor. That’s one version of the American Dream and its promise of limitless opportunity and endless self-invention. It is the reason so many revered Vanderbilt. Great Fortunes, and How They Were Made, a classic celebration of self-made American heroes published in 1871, described Vanderbilt’s “mind of crystal, the heart of adamant, the hand of steel, and the will of iron.” In a more distanced and dispassionate way, Stiles endorses this romantic portrait of the Commodore. Aware that he was hated and resented by many, especially by his defeated business rivals, Stiles nevertheless touts Vanderbilt’s reputation as a great man, a rough-hewn economic genius, a primordial tycoon and architect of the modern world.
The endorsement forms the very spine of The First Tycoon. The titles of the book’s three parts–“Captain,” “Commodore” and “King”–convey the image of a triumphant warrior. The titles, in fact, reprise the appellations by which Vanderbilt came to be widely known but once adopted as organizing themes for a biography, they develop a life of their own. Stiles never seriously questions the extravagant language used by contemporaries to describe Vanderbilt, such as the encomium issued by the directors of his railroad empire upon the Commodore’s death. The “splendor” of his “marvelous personal triumphs” lent them “the tinge of romance…. Beginning in a humble position…he rose by his genius, his indomitable energy and his clear forecast…. It was to his lasting honor that his uniform policy was to protect, develop, and improve the interests with which he was connected, instead of seeking a selfish and dishonorable profit.” Stiles’s own prose is not without grandiose flourishes. His images and metaphors grow overripe as he describes Vanderbilt casting “a shadow over millions of people” and rising “like a mountain peak above the clouds.” Throughout he deploys the vocabulary of the Napoleonic empire-builder, the dramaturgy of combat and daredevil heroism. He admires the Commodore’s “iron nerve” during the Panic of 1873, how he was in “full command as others nearly broke down in fear,” and talks about how alone among the railroad titans Vanderbilt remained “unbent and unbroken.”
Taking this approach raises the stakes, pressuring Stiles to make more of less, to puff up the pedestrian, lending it a grandeur it doesn’t warrant. One result is that the book bogs down at the midway point as Stiles slogs through one business deal after another in a numbing effort to demonstrate Vanderbilt’s superior acumen. Thousands upon thousands of words are invested in describing the intricacies of the Commodore’s Nicaragua venture, requiring some heroic efforts on the reader’s part to follow what’s going on. At the same time, Stiles strains to connect Vanderbilt’s homelier commercial machinations to matters of much greater national import–the sectional conflict over slavery, the collapse of the Whig Party–but these contrived attempts to lend his everyday life greater historical weight almost always fall flat.
Gilding the image of the First Tycoon has worse consequences. Vanderbilt quite consciously constructed a family dynasty, one mainly based on his railroad holdings. Stiles knows that, but, determined to paint a picture of Vanderbilt as the architect of modernity and the modern corporation in particular, he ends up conflating dynastic capitalism with its corporate successor. Vanderbilt’s New York Central did not initially exercise the rationalizing, bureaucratic management already installed on other major railroads, and even after the Commodore assumed command he practiced the kind of personal and familial control he’d favored his whole life. If he did engage in major reorganization of the road along corporate lines, turning it into a complex, impersonal hierarchy run by a cadre of managerial and technical professionals, Stiles provides the reader very little evidence of it. Besides, the modern corporation behaves quite differently, both in the marketplace and the political arena, from its dynastic predecessor. Here’s what a dynasty sounds like: “The law, as I view it, goes too slow for me when I have remedy in my own hands…. Let the other parties go to the law if they want, but by God I think I know what the law is I have had enough of it.” Vanderbilt’s words are not those of a faceless corporate suit sensitive to his company’s intricate interactions with government bureaucrats and the courts, someone whose loyalty to and tenure at any specific corporation is a contingent one and hardly informed by the patriarchal ambitions of family lineage. Dynastic capitalism rests on an identity of interest and outlook between its owners and managers, since they are more or less the same people the modern corporation severs that link. Stiles seems willfully blind to the distinction, so intent is he on proving Vanderbilt’s surpassing historical stature.
That’s because, for Stiles, associating Vanderbilt with modernity is axiomatically a good thing. He admires the tycoon’s pathbreaking, visionary ventures into the new world of corporate stocks and bonds and other forms of hypothecated paper values subject to the unpredictable fluctuations of the marketplace. There’s no denying that the rise of financial capitalism was a revolutionary transformation, a radical rupture with a traditional economic outlook whose measure of value remained tied to tangible manifestations of real, physical property, gold currency and the like. The new way of doing things allowed for the mobilization of liquid capital resources and their investment in all sorts of productive enterprises. Vanderbilt became a major player in this mysterious parallel economy. He faced off against rival speculators for control of various railroads, most notoriously the Erie, known far and wide as the “scarlet woman of Wall Street” because of the way it was looted and relooted by stock manipulators like Daniel Drew, Jay Gould and the Commodore. For Stiles that is the end of the story: Vanderbilt as pioneer of modern finance.
But these financial mechanisms also spawned a paper economy of fictitious value that might grossly over- or underestimate the actual value of the tangible assets they were supposed to represent, creating the conditions for periodic booms, busts and panics. Stiles dismisses the reservations of Vanderbilt’s contemporaries about this strange new world as old-fashioned, parochial and near-sighted. He takes for granted that the notion of real value is a delusion, that the market is the sole and ultimate arbiter of what anything is worth. That is the modern view. But those old-time, unenlightened anxieties about “fictitious value” don’t sound so retrograde in light of our recent financial meltdown and its impact on the “real economy,” nor did they in the Commodore’s day during the panics and depressions of 1837, 1857 and 1873 (the most devastating one of all).
East Coast Brahmins like Henry and Charles Francis Adams, Oliver Wendell Holmes and E.L. Godkin were among the many critics of Vanderbilt and the ascendancy of the giant corporation. They, along with legions of less well-known opponents of the Commodore within the nascent labor movement and among distressed and angry farmers and middling businessmen, originated the robber-baron stigma that shadowed Vanderbilt and his fellow tycoons well into the twentieth century. Even the New York Times acknowledged the existence of a “modern aristocracy of capital” and described the new breed of corporate capitalists as “the tyrants of modern society.” Stiles treats this language as incoherent but without explaining why. To be sure, there is a profound historical difference between the aristocrat and the capitalist. But the political significance of the analogy made by the Times and others was clear enough.
Stiles thinks the Adamses, Godkin and other patrician critics of the First Tycoon were cynics. After all, they loathed trade unions, lamented that Anglo-Protestant America was being mongrelized by immigrants, feared and deplored mass democratic politics, considered Populists to be hayseeds and were appalled as much by the vulgarity of the new tycoonery as they were by its inordinate power. Stiles says these unsavory views discredit the Brahmins’ withering critique of the robber barons’ greed, corruption and exploitation. But the charge is a cheap shot and also reflects a kind of intellectual snobbery. After all, the Brahmins’ criticisms were echoed in the indictments against the robber barons leveled by the Knights of Labor, farmer-labor and greenback political parties and anti-monopoly leagues, men and women untainted by the reactionary views of their social superiors. But these anonymous or less well-known political actors don’t turn up in The First Tycoon. They are as invisible to Stiles as they were noxious to Godkin.
Cornelius Vanderbilt liked to memorialize himself. One enduring monument–and vital piece of railroad centralization that substantially improved the New York Central’s economic efficiency–was the original Grand Central Terminal, completed in 1871. Stiles piles up in front of the reader a mountain of statistics about the extraordinary volume and diversity of materials used to build the station. It’s impressive. But there is another set of numbers Stiles shows no interest in compiling or analyzing. During this formative phase of industrialization, 35,000 workers died each year in industrial accidents. In 1910 one-quarter of all workers in the iron and steel industries were injured once a year, partly because of management’s failure to install safety devices or to shorten the hours of work. Between 1890 and 1917, 158,000 mechanics and laborers were killed in railroad repair shops and roundhouses. In 1888-89 alone, of the 704,000 railroad employees, 20,000 were injured and nearly 2,000 killed. On the Illinois Central between 1874 and 1884, one out of every twenty trainmen died or was disabled among brakemen, railroaders who did the most dangerous work, the ratio was one in seven (and among railroad switchmen the number was almost as alarming). Part of the reason for this horrendous record of disfigurement and death was management’s relentless drive to increase the workload: brakemen, for example, were required to brake four or five cars rather than the two or three that had been the custom earlier. Yet the air brake, invented by George Westinghouse, had been available since 1869. It was expensive to install, however, and the railroad tycoons did nothing until its installation was required by federal legislation in 1893. The accident rate then declined promptly and precipitously by 60 percent.
Stiles insists that Vanderbilt deserves to be treated as a pioneer of modern industrial capitalism. If that’s so, and certainly there’s a case to be made, then what is more fundamental than understanding his relationship to wage labor, upon which the whole system rests? Thousands of workers, not Vanderbilt alone, made the road what it was. Did they end up dead and disabled in numbers comparable to, less than or more than their co-workers on other lines? Was the Commodore particularly solicitous about their welfare? Did he install the air brake? If not, why not? Did he share the bellicose view of people like Tom Scott of the Pennsylvania Railroad or was he, given his lowly social origins, more sympathetic, conciliatory perhaps? What was it like to work for one of the Commodore’s great enterprises? The First Tycoon has little to say about any of this, and its silence helps sustain the romance of the misunderstood robber baron.
Not that everyone was silent. Stiles cites an open letter of 1869 from Mark Twain to Vanderbilt in which Twain indicts the tycoon’s rapaciousness and greed. But what really bothers Twain (and Stiles emphasizes this) is the idolatry that Vanderbilt’s fortune inspired among ordinary people: “You seem to be the idol of only a crawling swarm of small souls, who love to glorify your most flagrant unworthiness in print or praise your vast possessions worshippingly or sing of your unimportant private habits and sayings and doings, as if your millions gave them dignity.” Anyone living during the last quarter century must be acutely aware that the inclination to genuflect before great wealth has once again become a national pastime. It began back in the days of the First Tycoon. It is another, perhaps less savory contribution of the Commodore’s, or at least of his fellow robber barons. But while Stiles is eager to interrogate critics of that idolatry–Twain’s views are fairly presented but then derogated as the work of a “cynic”–he stays mum about the origins, meaning and consequences of the cult itself. Such silence is inherent in the genre of the misunderstood robber baron. It takes for granted what Twain and others worried about indeed, it asks us to follow its example and prostrate ourselves before the captains, commodores and kings of great wealth.
25 Resources for High School Students
“After all, the chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world.”
– President Calvin Coolidge, 1925
In Pioneer’s ongoing series of blogs here , here , here , and here on curricular resources for parents, families, and teachers during COVID-19, this one focuses on:
Celebrating American Free-Market Capitalism.
“The secret of success is to do the common thing uncommonly well,” wrote the American industrialist and founder of the Standard Oil Company, John D. Rockefeller, Jr. It is vitally important for the financial well-being of our country, as well as the productive happiness of our children, for them to learn about, emulate, and appreciate the great business geniuses that have made the United States the largest and most successful economy in the world over the last two centuries. From the Colonial Era to the Age of Globalization, strivers, risk-takers, entrepreneurs, immigrants, and business tycoons alike have all helped make America the envy of the world. As it was for previous generations (prior to the last 30 years), we need to restore to K-12 schooling – especially in high schools – a thoughtful study and recognition of how the “Captains of Industry” have propelled the country’s historic economic progress. To support this effort, we’re offering a variety of resources to help parents, teachers, and high school students:
Overrated For a hundred years the armor-plate scandal of the 1890s has been offered up as a definitive example of corporate greed. In fact it’s a better example of government incompetence.
Battleships were becoming the measure of naval might at the end of the nineteenth century. As the United States began to emerge as a Great Power and started to build a significant navy, it needed a domestic source of armor plate. But the steelmakers, notably Andrew Carnegie, were reluctant to build the necessary mills. Armorplate mills couldn’t be used for other types of steel, and there was only one possible customer: the Navy. Worse, Navy bureaucrats, ignorant of the difficult realities of steel production, established specifications that were impossible to meet.
Through appeals to his patriotism, Carnegie was prevailed upon, against his better business judgment, to build a mill. But when the mill evaded the specifications, simply in order to produce good armor plate, disgruntled labor leaders informed the Navy. Without taking evidence from the company, or even informing it of the investigation, the board of inquiry fined Carnegie 15 percent of the value of the contract in question. Carnegie had no option but to pay. And, stuck with an armor-plate mill that had no other customer, he was forced to continue dealing with the Navy.
It was a scandal all right, but not one of business ethics.
Underrated By the mid-1860s, thanks to the Civil War, Wall Street had grown to be the second-largest financial market in the world. But it was utterly unregulated. The federal government had no responsibility at the time for such matters, and New York’s state and city governments were a cesspool of political corruption in which nearly every legislator and judge was for sale to the highest bidder. Moreover, there was no stock exchange large enough to enforce what rules there were. For a few years it was pure capitalism, red in tooth and claw.
In 1867 Cornelius Vanderbilt, hoping to bring a measure of order and economic rationality to New York railroading, decided to buy control of the notoriously corrupt Erie Railroad, the Scarlet Woman of Wall Street. As Vanderbilt bought more and more Erie stock in the market, however, Daniel Drew, Jim Fisk, and Jay Gould, who controlled the line, printed more and more stock to sell him. When Vanderbilt found out what was going on, he had arrest warrants issued, and Drew, Fisk, and Gould fled to New Jersey with six million dollars—in cash—of the Commodore’s money.
An orgy of bribery of elected officials ensued, as both sides tried to get the legislature and the courts to do their bidding. Finally, Vanderbilt settled for getting his money back and left the Erie to its unhappy fate. (It would go bankrupt a total of four times before finally disappearing in the 1970s.)
But while the public was vastly entertained by the Erie Wars — which commanded more press coverage than the impeachment proceedings against Andrew Johnson—New York’s business and legal communities were horrified. They saw New York’s position as the country’s leading business center threatened, and they pushed through reforms. The New York Stock Exchange soon merged with its largest rival and became powerful enough to institute and enforce such rules as open registries of stock issues and advance notice of new issues, while lawyers formed the New York Bar Association to reform the judiciary and enforce a code of ethics on lawyers.
As a result, Wall Street, if hardly a good place for fools, became a dependable capital market, able to fuel the vast expansion of American industry that by the end of the century had given the country the world’s largest economy. The Erie Wars were the first great American business scandal, and they gave us what every subsequent business scandal has given us: genuine reform.
Money brought "nothing but anxiety" for Billy Vanderbilt
When his father passed in 1877, his eldest son William "Billy" Vanderbilt inherited the bulk of his estate, including the 87-percent stake in New York Central, according to Forbes. While Billy was able to prove his business sense to his father, it would be a mistake to assume that the two men had similar characters. As told by Arthur T. Vanderbilt II, the father and son duo couldn't have been more different. Where the Commodore was abrasive and money-hungry, Billy was more inclined to compromise and saw money as a source of anxiety.
Ownership of New York Central came with publicity and conflicts that Billy hated. By 1879, he was ready to sell some of his shares so that he would no longer be considered the sole owner. With the $35 million he made from the sale, he invested in government bonds, a comparatively safe move uncharacteristic of a tycoon.
While Billy wasn't as ambitious as his father, he was obsessed with preserving his wealth and would nitpick over expenses. It is perhaps with smart budgeting and a strong business acumen that Billy was able to double his inheritance to nearly $200 million, making him the richest man in the world by 1883. For him, though, the money was a terrible burden. When he died in 1885, rather than entrusting the fortune to the most business-savvy descendant, he divided it between his two eldest sons so they could share the "heavy responsibility."
1. George Peabody has been named the father of modern philanthropy as well as the ultimate rags-to-riches success story
Massachusetts&rsquo own George Peabody is widely-cited as the father of modern philanthropy. That is, he has been credited with inspiring countless wealthy individuals to give some &ndash or indeed, all &ndash of their fortunes away to worthy causes. Peabody is also regularly cited as the ultimate American success story. Indeed, his is the ultimate rags-to-riches story, and he was able to die a happy, honorable man.
Peabody was born into poverty in the small town of South Parish in 1795. He left school at 11 and then went to work as an apprentice in the local general store. Here, he learned skills and habits that would stay with him for the rest of his life: hard work, diligence, and the importance of being responsible, honest and honorable. Staying in retail, he went on to manage a store in Georgetown and then, at the age of 20, he had risen to become a partner in a wholesale dry goods business.
For around 20 years, Peabody worked in Baltimore, establishing himself as a leading international merchant and financier. His work regularly took him to Europe and then, in 1837, he made the decision to make a life in London. It was in the British capital that he went into banking, setting up the house of George Peabody and Company. In later years, he would take on a certain J.P. Morgan as a partner.
It was only as he neared retirement that Peabody realized he didn&rsquot want to die rich. So, he started giving away millions of dollars. Through gifts and legacies, he helped fund a number of educational projects, both in Britain and the United States. Then, when his nephew went to Yale, he decided to establish the Peabody Museum of Natural History at the prestigious university. This was soon followed by the Peabody Museum of Archaeology and Ethnology at Harvard.
When Peabody died in November of 1869, he was granted the honor of being interred in Westminster Abbey for a short while (a right usually reserved for kings and queens). His body was finally brought back to his hometown &ndash which had been renamed Peabody in honor of its most famous, and most generous son.
You Can Visit All of These Incredible Vanderbilt Family Homes
Gloria Vanderbilt's family is one of the most storied&mdashand wealthiest&mdashin America.
When style icon and heiress Gloria Vanderbilt died at age 95, the outpouring of grief included innumerable homages to the woman herself&mdashincluding a moving tribute by her son, CNN's Anderson Cooper&mdashand also to her storied family. The Vanderbilts were one of the wealthiest families in American history, and Gloria's status as great-great-granddaughter to Commodore Cornelius Vanderbilt, the 19th-century industrialist and railroad magnate (there's a reason why New York's famous Grand Central Terminal is located on Vanderbilt Avenue!) earned her a life of incredible privilege. Many of the Vanderbilt family's sumptuous homes are not just still standing but open to the public. Here are a few of the most famous, all worth a visit for their great beauty, and their deep history.
This imposing Beaux Arts&ndashstyle mansion, the estate of Frederick W. Vanderbilt from 1895 to 1938, is a true example of a Gilded Age country house. It has been designated a National Historic Site and sits on 200 acres preserved by the National Park Service.
An opulent bedroom inside the Vanderbilt Mansion, which is located in Hyde Park, New York, an idyllic Hudson Valley area that is also famous for its connection to the Roosevelts. Hyde Park is also the home of Franklin Delano Roosevelt's presidential library, home, and burial place.
The grandest of Newport's famous "cottages," The Breakers was the summer home of Cornelius Vanderbilt II, built in 1893 in the Italian Renaissance style. In addition to the usual house tour, check out "Beneath the Breakers," which explores the underground tunnels, boiler room, and basement to give a fascinating view of how emerging technologies like electricity changed daily life during the Gilded Age.
The 70-room mansion, now a National Historic Landmark, is the most popular tourist attraction in the state of Rhode Island with approximately 300,000 visitors per year. It was named for the waves that continuously crash onto the cliffs below and is visible on the city's famous Cliff Walk.
Another Vanderbilt "cottage" in Newport, Marble House was the summer home of Cornelius's brother, William Kissam Vanderbilt, who gifted it to his wife, Alva, for her 39th birthday in 1892.
Now also a National Historic Landmark, Marble House was designed by Richard Morris Hunt and modeled after the Petit Trianon at Versailles. Alva, a grand socialite, fancied it a "temple of the arts."
The fairy-tale-like Biltmore House was the summer home of another of Cornelius's brothers, George Vanderbilt, and his wife, Edith. George began building it in 1889 after visiting the area with his mother and falling in love with the Blue Ridge Mountain landscape, visible in the distance.
The 250-room French Renaissance chateau includes a 90-foot-long Tapestry Gallery. It also boasts 35 bedrooms, 43 bathrooms, and 65 fireplaces, not to mention impressive gardens designed by Frederick Law Olmstead. The property also houses luxury lodgings, a winery, and more.
Overlooking Northport Bay and the Long Island Sound, this Gold Coast mansion was the estate of William K. Vanderbilt II until his death in 1944. The Spanish Revival home, dubbed Eagle's Nest, is said to have been built by the New York City architecture firm of Warren & Wetmore&mdashthe same firm that designed and built Grand Central Terminal for William's great-grandfather Cornelius.
Truly a pool with a view. Tours of the mansion are available, and the property also features an extensive science museum&mdashWilliam was a natural-history enthusiast&mdashas well as a planetarium and observatory.
The Vanderbilt family built much more than just homes for themselves! New York City's iconic Grand Central Terminal (pictured) is a direct result of the original family scion's railroad-tycoon brilliance. The Commodore also dabbled in philanthropy, turning a small college in Tennessee into the venerable Vanderbilt University in 1873 with a $1 million endowment. And the world-renowned Whitney Museum of American Art was founded by sculptor and patron of the arts Gertrude Vanderbilt Whitney&mdashnone other than Gloria's aunt.
Cornelius Vanderbilt: Pioneer American Industrialist - History
Objective: Students will be able to define robber baron and captain of industry and evaluate which title best suits the industrialists of the Gilded Age.
1.) Search the web to find out what is meant by the terms "robber barons" and "captains of industry" during the Gilded Age. Write down definitions for both terms based on your research on the worksheet provided below.
2.) Go to the following website to read about two industrialists who were considered robber barons. Read "The Robber Barons" and then click "move to next article" to read the "Panic of 1873." Once you have read these, answer question 1 on the worksheet.
3.) Chose one of the industrialist below to research. Fill out the Robber Baron or Captain of Industry worksheet based on your research.
- It shall be the rule for the workman to be Partner with Capital, the man of affairs giving his business experience, the working man in the mill his mechanical skill, to the company, both owners of the shares and so far equally interested in the success of their joint efforts.
I have been insane on the subject of moneymaking all my life.
Cornelius Vanderbilt Biography: "The Commodore"
Even today, more than 140 years since his passing, Cornelius Vanderbilt's name continues to evoke power, prestige, and fame. He remains the most revered railroad executive of all time although his direct involvement did not begin until age 70!
For most of his life, this self-taught Staten Islander, with almost no formal education, made millions in the marine/ferry trade.
Table Of Contents
Vanderbilt was born decades prior to the steam engine's widespread use. However, following its development, he was quick to harness its advantages in amassing a fortune which eventually earned him the title of Commodore.
He was a celebrity and legend in his own time, becoming one of the richest individuals in America thanks to his relentless competitiveness.
Vanderbilt fervently believed in laissez-faire economics, using it to great advantage in crushing his rivals. After a lifetime on the sea, he shifted all focus to railroads in 1863.
While Vanderbilt could be rightfully argued as a profiteer with little interest in the public good he was nevertheless fair in business dealings. By the time of his death in 1877 he had laid the foundation for what would become the modern New York Central System.
Background And Early Life
The early life and childhood of Cornelius Vanderbilt is not particularly noteworthy. While it will be discussed here in brief this article will predominantly focus on the Commodore's railroad career.
If interested in a complete biography of Vanderbilt please consider a copy of T.J. Stiles' "The First Tycoon: The Epic Life Of Cornelius Vanderbilt."
It is the quintessential book on his life. Cornelius Vanderbilt was born on May 27, 1794, the fourth child of Phebe Hand andornelius Van Der Bilt (original spelling).
His parents were Dutch although their family's history can be traced back to immigrants who settled the colony of "New Netherlands" in 1650.
By trade, father Cornelius was a farmer and, living so close to New York (then a city of only 33,000), would sell his produce in the city. Ferrying his goods to market required water transport. In Van Der Bilt's case he piloted a two-masted vessel known as a periauger.
This little boat was a Dutch invention specifically meant to carry people and/or goods across the bay. Cornelius never became rich in this trade although it did supplement farming.
Because of their limited means, he and his wife were quite frugal and always saved what disposable income they had. Phebe even lent her silver, earning a profit through the accrued interest.
Industry And Facts
This background set the stage for young Cornelius's future endeavors. As a child he put in long hours on his father's farm and from this impressionable age learned the value of hard work. His father was often overbearing in pursuit of the family farm.
For this reason the lad never had a great interest in formal schooling and quit at the age of 11 to focus exclusively on farming. Vanderbilt's lack of education would prove costly as he climbed the corporate ladder. He never learned to write proper English and instead spelled words phonetically.
This handicap plagued Vanderbilt throughout his life it was not only embarrassing but also caused his shunning by the social elite for many years. Over the years he partially tackled the issue but always hated putting pen to paper.
By the age of 12, he had grasped the ferry business quite well coupled with his mother's teachings of savings, borrowing, and collateral he was primed to enter the business world.
This came at the age of 16 when he put a periauger to work, which was technically the property of his parents. After saving enough money he acquired his very own boat by 1813 and his career on the water officially began (that same year, on December 19, he married first cousin, Sophia Johnson).A New York Central publicity photo featuring the railroad's flagship service, the "20th Century Limited," at Cold Spring, New York in June, 1947.
During the War of 1812, Vanderbilt secured a government contract for the movement of military supplies to forts and other projects under construction around New York Harbor.
While the story's validity cannot be confirmed it is said he was awarded this undertaking due to his growing reputation as a competent and able ferryman who offered fair prices.
Vanderbilt's attention to cost, frugality, customers, and his tenacious competitiveness earned him increasingly more money. His aggression continually drove rivals out of business. In some cases they bought him off simply to eliminate the headache.
His usual tactic involved slashing prices so low the opposition would capitulate. He usually lost money himself in the short term but nearly always achieved victory in the long term.
Vanderbilt continually accrued hard capital through either direct cash savings, real estate, or interest earned on loans. As his financial security grew it aided future conquests.
On November 24, 1817, at the age of 23, he took command of the steamboat Mouse, a vessel owned by the wealthy Thomas Gibbons, then one of the nation's most successful merchants.New York Central E7A #4002 pulls into Chicago's Englewood Union Station on April 21, 1965. Roger Puta photo.
Steam, of course, was the future in transportation as one no longer needed the winds or currents to power vessels. During his time overseeing Gibbons' fleet he honed his skills as both a seaman and businessman.
On May 16, 1826 Vanderbilt's long-time mentor passed away and the estate passed on to his son. Vanderbilt never cared much for William Gibbons who he saw as weak, a trait the Commodore loathed.
In early 1828 the rising seafarer launched his very own steamboat, the Citizen a 106-foot, 145-ton sidewheeler. As his means grew, Vanderbilt became a force within the maritime industry.
He acquired evermore steamships and was equally adept at designing his own boats with a constant eye towards cost and speed. A personal clerk who he hired in 1837, Lambert Wardell, once remarked, "He never had a debt and never bought anything on credit. He was economical almost to extremes."
Vanderbilt was believed to be worth a half-million dollars by 1834 and six years later set foot in his new mansion on Staten Island. (Interestingly, he would live in this home for only 13 years. In 1846 he moved into a new home at 10 Washington Place in Manhattan. This would remain his residence until his death.)
Earning The Title Of "Commodore"
Until the late 1840's, Vanderbilt had largely concentrated solely on freight and passenger traffic (both ferry and maritime) between New York-Boston, and Long Island Sound in particular.
That changed with the California Gold Rush of 1849. He also became involved with railroads at this time and as his prestige grew so, too, did his celebrity.
The New York Herald reported on March 6, 1851, "Commodore Vanderbilt's character for energy and go-aheadativeness is well known in this community.
He is a man whose resolution is indomitable, and before whose determination obstacles, no matter how great, disappear as the morning dew before a July sun."
The result of the Gold Rush brought thousands of settlers into California, especially into the then-small community of San Francisco.
As an increasing number of Europeans flocked westward, predominantly via steamboat around Cape Horn, California achieved statehood on September 9, 1850 with travel needs so strong, many companies stepped forward to fill the demand as millions of dollars was poured into waterborne transportation.
On April 19, 1849, 226 steamships alone would depart New York for California, carrying some 20,000 travelers. In addition to people, the federal government was interested in shipping mail to and from the west coast. The most practical way was the ocean and South America's Cape Horn.
Recognizing this immense monetary opportunity, Vanderbilt and a few associates believed a canal across Nicaragua was not only practical but could also shave days off the journey.
It was an arduous albeit predominately natural passage, one which would utilize the San Juan River and Lake Nicaragua between the Pacific Ocean and Caribbean Sea.
The only man-made section was a 12-mile component along the western fringe. The project was incorporated as the American Atlantic & Pacific Ship Canal Company and following considerable delays, dealings, and political bickering (particularly involving England) Vanderbilt's steamship Prometheus made its way to Greytown, Nicaragua on a trail run from New York.
After arriving at its destination, the goods and passengers were offloaded onto smaller vessels to complete the inland journey. Vanderbilt, himself, was on this trip and became convinced of its merits once he had returned to New York.
On July 14, 1851 the Prometheus again departed New York Harbor, this time on theਊmerican Atlantic & Pacific Ship Canal Company's inaugural run. It proved a short-lived venture as the corporation's charter was transferred to another Vanderbilt-controlled entity on August 14th that year, the Accessory Transit Company.An A-B-A set of New York Central covered wagons led by F7A #1707 is stopped at St. Thomas, Ontario on subsidiary Canadian Southern (CASO) with a westbound freight as the train waits for the electrified London and Port Stanley Railway during September of 1957. Much of this double-tracked route, a very important corridor under the Central, has since been abandoned. David Sweetland photo.
Unfortunately, his interest in the Nicaraguan venture was always a tumultuous affair, largely due to a meddling associate, one Joseph L. White.
The operation nevertheless proved quite successful and by the 1850's his nickname as theommodore, typically reserved for the highest ranking title of a naval officer, was well-established.
He later tapped the transatlantic steamship market (late 1854), a venture which also proved successful. For his many achievements at home and abroad, Vanderbilt's coveted U.S. mail contract always alluded him. Over the next decade he continued to focus on his various maritime dealings.
With a great sense of patriotism he even played a key role during the Civil War. More than once Vanderbilt was offered top positions within President Abraham Lincoln's staff. However, always fiercely against the politic arena he declined each time.
His primary contribution to the war effort involved lending his maritime expertise and gifting the United States his most prized steamship, the five-decked Vanderbilt.
This enormous boat was placed into service on May 5, 1857 where it competed in the transatlantic arena. It was not only large but also fast, able to reduce the New York-Liverpool run from eighteen days to nine. At first, the Navy rejected his offer. However, when the Confederacy unveiled the ironclad CSS Virginia on March 8, 1862 everything changed.
- The CSS Virginia was always referred to as the Merrimacky Union forces as the warship was rebuilt from the salvaged USS Merrimack. -With nearly impenetrable armor the vessel was capable of single-handedly crushing the Union fleet which consisted of traditional wooden-hauled designs.
During that day it sank the USS Cumberlandਊnd USS Congress while severely damaging the USS Minnesota. On March 9th, it was met by the United States' own new ironclad, the USS Monitor. The two battled to a stalemate within the James River at Hampton Roads, Virginia.
As an added protection against the Rebels' new creation, President Lincoln and the War Department acquired the Vanderbilt. While it would never engage the CSS Virginiairectly the titanic sidewheeler nevertheless kept her from wreaking further havoc.
On May 10, 1862 Union forces captured Norfolk, denying the Virginia port facilities. With nowhere to refit and reequip itself, Confederate forces scuttled the ship on May 11th to avoid its capture.
The Vanderbilt would later earn acclaim chasing another infamous Confederate warship, the CSS Alabama. This sloop-of-war earned recognition as one of the war's most successful raiders. Once again, the Vanderbilt never engaged the Alabamaਊlthough she did prevent the vessel from creating further trouble along the U.S. coast.
Theਊlabama was eventually sunk by the USS Kearsargeਊt the Battle of Cherbourg outside the port of Cherbourg, France on June 19, 1864. For the service to his country, Vanderbilt was awarded a special gold medal following a resolution passed by Congress on January 28, 1864.
A New Era, The Railroads
While the Commodore's direct involvement with railroads did not begin until age 70, he had nevertheless maintained a long history in the industry. It began on November 8, 1833 when he traveled to nearby South Amboy, New Jersey to inspect the recently completed Camden & Amboy Railroad.
At the time the new technology was little more than a novelty although that would soon change. In a decision that nearly killed him, Vanderbilt rode the new contraption that day.
The train derailed en route and despite the traumatic event he held no serious grudge against the iron horse. In fact, Vanderbilt remained keenly interested in the newfangled device.
On November 10, 1837 the New York, Providence & Boston Railroad (NYP&B) opened its first 50 miles southwestward from Providence, Rhode Island. Better known as the "Stonington Railroad" (a future component of the modern New York, New Haven & Hartford) Vanderbilt also rode this line and became convinced of its potential.
He stated it was the fastest way to Boston (from New York) and later, during the summer of 1845, purchased considerable shares in the NYP&B. The following year he also acquired substantial stakes in the Hartford & New Haven Railroad (the precursor to the modern New Haven).
By 1847, he had ascended to the presidency of the Stonington. While the system was well-managed under his direction, the Commodore's interest in railroads remained subdued as he pursued the Nicaragua canal project. This led to his resignation from the Stonington on May 14, 1849.
It was in 1854 that he first became involved with the railroad he would later control, the New York & Harlem Railroad (NY&H). It was the city's first such system, incorporated on April 25, 1831.
Only after Vanderbilt's involvement (On May 18, 1863 he won a directorship and the following day was elected president.), who recognized the railroad's potential, did it thrive.
Prior to this the NY&H had been a poorly managed, unprofitable operation. In 1864 he took control of the nearby Hudson River Railroad, which maintained a roughly parallel route between Albany and New York City.An A-B-A set of New York Central E7's hustle the eastbound "20th Century Limited" along the Hudson River north of New York City in July of 1947. Storm King Mountain can be seen in the background to the left. Ed Nowak photo.
Interestingly, as Mr. Stiles notes, Vanderbilt's business tactics changed as his railroad involvement deepened. Perhaps, in part, due to his advancing age he often chose diplomacy over open hostility.
Another reason was a result of railroading's very nature unlike steamships, where one could simply chart a course between two points, railroads operated on fixed infrastructure. Since no singular company then owned a through route between major cities, companies were forced to work together.
The Children Of Cornelius And Sophia Vanderbilt
Phebe Jane Vanderbilt (1814–1878)
Ethelinda Vanderbilt (1817–1889)
Eliza Vanderbilt (1819–1890)
William Henry "Billy" Vanderbilt (1821–1885)
Emily Almira Vanderbilt (1823–1896)
Sophia Johnson Vanderbilt (1825–1912)
Maria Louisa Vanderbilt (1827–1896)
Frances Lavinia Vanderbilt (1828–1868)
Cornelius Jeremiah Vanderbilt (1830–1882)
George Washington Vanderbilt I (1832–1836)
Mary Alicia Vanderbilt (1834–1902)
Catherine Juliette Vanderbilt (1836–1881)
George Washington Vanderbilt II (1839–1864)
Corporate America of the 19th century was a cutthroat affair with speculators and Wall Street magnates constantly undercutting one another in an attempt to line their own pockets. This was especially true with railroads, the largest businesses in the country.
Unfortunately, with little government oversight, executives like Jay Gould, Daniel Drew, and Collis Huntington often put profits ahead of public service.
Even Vanderbilt could be rightfully accused of this although his empire was not the result of direct conquests. Time and again he added systems as a defensive measures.
After becoming involved in the Harlem, he acquired the competing Hudson River Railroad (via stock control) to protect the NY&H. A plot by Leonard Jerome in 1864 to takeover the original New York Central Railroad (NYC) would have essentially made the NY&H redundant.
Jerome also controlled the Hudson River and his addition of the NYC would have provided him a direct route from New York City to Buffalo via Albany.
Following Vanderbilt's Hudson River conquest he stated: "I said this is wrong, these roads should not clash. Then step-by-step I went into the Hudson River."
Typical of Vanderbilt he was concise and to the point although the actual process of acquiring the system was a chess game, one in which he had become a master. As his railroad portfolios grew, Vanderbilt left the ocean for good in 1864.New York Central's eastbound "Missourian" (St. Louis - New York) skirts the Mohawk River between Utica and Albany, New York during July of 1952.
Interestingly, his railroading career was predominantly from a leadership level. Vanderbilt was rarely involved in the day-to-day, operational management of his properties instead, he delegated these responsibilities to subordinates. He did, however, regularly take inspection trips.
According to Mr. Stiles' book, "Vanderbilt. set general policies, as well as the overall tone of management. The Commodore created an atmosphere of efficiency, frugality, and diligence, as well as swift retribution for dishonesty or sloth." The Commodore's greatest single acquisition was the original New York Central Railroad.
For years, the NYC was controlled by Erastus Corning, a man who, after some time, became an ally of Vanderbilt's. In April, 1864 Corning retired and was replaced by vice president Dean Richmond, another competent railroader who Vanderbilt respected.
During his tenure they enjoyed friendly, mutual traffic interchanges. Alas, he passed away unexpectedly in late 1866 and was subsequently replaced by Henry Keep on December 12, 1866.
Keep had no interest in working with the Commodoreਊnd became extremely hostile to Vanderbilt's railroads.
So much so the NYC refused to handle westbound shipments of the Harlem and Hudson River. After many failed attempts at appeasement, Vanderbilt retaliated by refusing to send eastbound NYC shipments beyond the Albany gateway after January 18, 1867.
As the largest American city, New York was a vital market and Vanderbilt controlled the only direct entry. His move scared Keep so badly the man yielded and immediately settled for terms on January 19th. In the aftermath, Keep and his associates sold large blocks of their NYC shares, which Vanderbilt acquired.
Less than a year later he was named New York Central's president (December 11, 1867). Now under control of all lines between New York and Buffalo, the Commodoreਏormed the New York Central & Hudson River Railroad in 1869 the HRRR and NYC were merged into the new operation while the Harlem was leased.
As Brian Solomon and Mike Schafer note in their book, "New York Central Railroad," another important addition was the Lake Shore & Michigan Southern Railway.
This very large Midwestern had a history tracing as far back as the 1830s and grew through a combination of takeovers and mergers. ਊt its peak the LS&MS connected Buffalo with Chicago via Toledo, Cleveland, and Elkhart.
It also reached Detroit, southern parts of Michigan, and Oil City, Pennsylvania. Vanderbilt assumed the presidency of this road on July 2, 1873 after learning the previous management had nearly bankrupted the railroad. Thanks to his leadership, within a year the company had paid off its debts.
Vanderbilt's last major acquisition occurred on January 1, 1876 when he added the Canada Southern Railway through stock control. Better known by its initials, "CASO," it offered a shorter route through southern Ontario between Buffalo and Detroit. It remained an integral part of the New York Central throughout the 20th century.
After the Commodore'sth the New York Central continued to expand reaching Boston Pittsburgh (through the Pittsburgh & Lake Erie) Wheeling (West Virginia) the coalfields of southern West Virginia (via the Toledo & Ohio Central) Columbus Cincinnati Cleveland St. Louis over the Big Four Route (Cincinnati, Cleveland, Chicago & St. Louis Railway) Detroit (via the Michigan Central) and even Montreal, Quebec.
In addition, the Indiana Harbor Belt provided the NYC terminal and switching services throughout Chicago. In 1868 Vanderbilt sparked the "Erie War" with Jim (James) Fisk, Jay Gould, and Daniel Drew when he attempted to gain control of the Erie Railroad.An A-B-A set of New York Central "C-Liners" (CFA/B-16-4's) help showcase the railroad's "Pacemaker" high-speed freight service, circa 1952. Ed Nowak photo.
During this time the Erie was one of the largest American railroads. The fight was a battle of wills between Gould and Vanderbilt.
As the Commodore gained increasingly more shares, Gould and his associates issued evermore stock to inflate the Erie's stock value (also known as "watered stock") and prevent Vanderbilt from acquiring majority control.
Gould would eventually win the tilt by bribing the New York state legislature, which authorized the stock as legal. Over the years Cornelius Vanderbilt had disputes with many in the business world such as Drew, Fisk, and others.
His quarrels were almost never personal and he became friends with most later on in life Gould and Jim Fisk, though, proved an exception.
Net Worth And Estate
The Commodore passed away on January 4, 1877 at the age of 82 having amassed a fortune of nearly $100 million, which would be worth more than $233 billion in today's dollars making him one of the richest Americans in history.
In his will Vanderbilt left $95 million directly to his son, William, with his eight daughters receiving between $250,000 and $500,000 each.
Unlike James Hill, and a number of the other famed railroad tycoons, Vanderbilt was not noteworthy for philanthropy. He did, however, endow $1 million for the establishment of Central University in Nashville, Tennessee. This higher institution of learning became today's prestigious Vanderbilt University.
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