by T. J. Stiles
But there was another New York that arose in the 1850s—the New York of tenements and day-to-day earnings, of pushcarts and workshops and strikes and police batons. In 1857, Harper's looked back fifty years and remarked, “What was then a decent and orderly town of moderate size has been converted into a huge semi-barbarous metropolis—one half as luxurious and artistic as Paris, the other half as savage as Cairo or Constantinople.” This polarization angered and depressed Herman Melville, who criticized it in Pierre, “Bartleby, the Scrivener: A Story of Wall Street,” and the self-explanatory “Poor Man's Pudding and Rich Man's Crumbs.” In the aftermath of the Panic of 1857, as many as 100,000 went jobless in New York and Brooklyn; in November of that year, thousands demonstrated at Tompkins Square, the city hall, and the Merchants' Exchange, sometimes in the face of hundreds of police and troops. In the winter of 1857–8, at least 41,000 went homeless in Manhattan.81
As majority shareholder of a shipyard, machine works, and a fleet of steamers, Vanderbilt played a direct role in shaping this second city. He earned his reputation for keeping costs low in part by paying his workers as little as possible. In August 1858, for example, he cut the monthly wages of his firemen and coal passers from $25 to $20 and $20 to $17, respectively. (Even at the higher wage, a fireman on the Vanderbilt earned in an entire year only 3 percent of what the Commodore spent on a team of horses.) When they went on strike, Vanderbilt called on the police to bring in nonunion men. In successive battles on the slips, the police beat back the strikers.82
Vanderbilt never acknowledged that conditions had changed since he had lifted himself up—that it was more difficult to attain self-sufficiency, let alone wealth, in this emerging new world. He expected everyone to make his own way, including Billy. As recently as 1856, Vanderbilt had derided his son as a “sucker.” He knew that Billy had borrowed heavily to develop his farm, taking $5,000 from Daniel Allen alone. Jacob Van Pelt recalled how, when he had praised Billy's “splendid farm,” the Commodore had reacted angrily. “Yes,” he replied, “but he can't make a living off it. He has it mortgaged to a damned——. He ought to come to me. I've got plenty of money to put out on mortgages.”83 But the dutiful son built up his farm successfully. He supplied great quantities of hay to the city's draft animals, and made independent investments. In 1860, for example, he became a director of the nearly complete Staten Island Railroad, and took over as its treasurer. He had emerged as a leader of Richmond County.84
Whether Vanderbilt's other sons would succeed remained an unanswered question. George was still at West Point. During the summer, he went on military maneuvers. “The boys are taught to sleep under the canopy of heaven, to dispense with all the luxuries and comforts of civilization, and to accustom themselves to the privations of actual warfare,” wrote Harper's Weekly on September 3, 1859. “The strictness of West Point discipline has long been proverbial; during ‘the encampment’ it is severe indeed.” In his leisure hours, he would have attended the frequent “hops” or dances organized by such cadets as Adelbert Ames, Wesley Merritt, and Horace Porter. But demerits or low grades hurt George's standing; as he neared graduation, he was ranked next to last in his class.85
Vanderbilt remained immensely fond of the clan Corneil had married into. In early 1860, the Commodore wrote to Corneil's father-in-law, Oliver Williams, promising to visit “your sweet home.” In some of the most telling lines he would ever write, he added, “Your famally is the only one on earth that I ever say a word to on paper. I much dislike to write & never do out side of business matters.”86
ON THE NIGHT OF OCTOBER 16, 1859, John Brown led eighteen men into the federal armory at Harper's Ferry, Virginia. A veteran of the fighting against border ruffians in Kansas, he now hoped to spark an uprising by slaves in the South. Instead, Colonel Robert E. Lee and Lieutenant J. E. B. Stuart arrived on the scene with a force of U.S. Marines, who stormed the arsenal on October 18, captured Brown and sixteen of his men, and killed two in the process. The abolitionist stood trial and died on the gallows on December 2. “His name may be a word of power for the next half-century,” George Templeton Strong wrote in his diary. The Wall Street lawyer had no sympathy for the antislavery movement, but “Old Brown's demeanor” moved him. “His simplicity and consistency, the absence of fuss, parade, and bravado, the strength and clearness of his letters, all indicate a depth of conviction that one does not expect in an Abolitionist,” he wrote. “Slavery has received no such blow in my time as his strangulation.”87
John Brown's raid confirmed the worst suspicions among “fire-eaters” in the South. When the newly elected House of Representatives tried to choose a speaker in December, Southern Democrats and Know-Nothings blocked the Republican plurality from naming John Sherman, the moderate brother of William T. Sherman. But they could not elect their own man because Horace Clark and a handful of other anti-Lecompton Democrats stood in their way—though Clark refused to vote for Sherman. “Common report attributes the conduct of [Clark] more to the influence of his father-in-law, Mr. Vanderbilt, than any other,” the Chicago Tribune reported. “Mr. V's mail steamship interests are too valuable to be sacrificed by a single vote for Speaker.”88
Certainly the Commodore did not wish to alienate the Democratic administration. At the moment, though, both Clark and Vanderbilt were deeply enmeshed in an even more complicated negotiation. William Aspinwall—the merchant prince, the founder of the Pacific Mail and Panama Railroad companies, the man who had given his name to a city in Panama—had decided to give up. He had opened secret talks with Vanderbilt, and on November 25 he presented the Pacific Mail board with the results: a tentative agreement to shut down the North Atlantic Steamship Company, sell to Vanderbilt Pacific Mail's seven ships on the Pacific for $2 million, distribute the proceeds to the stockholders, and terminate the corporation. Despite some dissent, the board empowered Aspinwall to conclude the negotiations. Vanderbilt prevailed on Clark to remain in New York to finalize the talks alongside Marshall Roberts, despite Clark's eagerness to go to Washington.
At nine in the evening on November 29, Clark sent a one-line note to Vanderbilt: “I am quite satisfied that the proposed arrangement is wholly impracticable.” The problem was that Clark and Roberts insisted on a guarantee that the directors of Pacific Mail would not go on to compete against Vanderbilt's company as individual proprietors, newly enriched with the Commodore's money. They insisted that Aspinwall give his personal word of honor that there would be no competition—which he “peremptorily declines to give,” Clark and Roberts wrote on November 30. Aspinwall replied that this demand was a “new feature,” that he could not possibly speak for the stockholders as individuals. “It is a great pity,” Vanderbilt concluded.89
This argument reveals the culture of American business in a moment of transition. On the eve of 1860, after decades of experience with—indeed, mastery of—the abstractions of the new economy, Vanderbilt and his ring still saw little distinction between the corporation and its stockholders. Theirs was not an elaborately worked-out philosophical position; rather, it was the product of a long tradition of controlling competition with formal and informal agreements—as well as raw self-interest. Yet it demonstrates how even the most sophisticated businessmen held to a tangible understanding of the world of commerce. The financial columnist for the New York Herald found it astonishing that Aspinwall and his fellow directors refused the demands of Vanderbilt's representatives. “Without such a guarantee, in fact, Mr. Vanderbilt would have made the worst of bargains,” the newspaper observed. “In ordinary cases, it is the vendor who guarantees his purchaser against competition; in this case the vendor was the Pacific Mail Company, which was going into liquidation and out of existence on the consummation of the bargain; the guarantee, therefore, was naturally sought from the individual directors, from whom alone opposition was to be expected.”90
In January 1860, Joseph Scott, the guardian of the machine works and steamboats at Punta Arenas, walked into Vanderbilt's office on Bowling
Green. “I had always expected there would be a line there [in Nicaragua], and that probably he would run it, and if I could sell the things then, I could receive enough to pay my services,” he later testified. But the line never reopened, and the property fell into ruin. “I went to Mr. Vanderbilt for a settlement,” Scott reported, “to see if he would take the things off my hands.” Instead, he went to work for Vanderbilt as agent of the Atlantic & Pacific Steamship Company in Aspinwall, Panama.91
Pacific Mail felt the pain of continued competition. It lost a reported $100,000 in the last quarter of 1859 alone, and its prospects looked grim. In January, Vanderbilt's iron-hulled Champion arrived in San Francisco, and greatly impressed the city's cynical residents. “As far as we can ascertain by full inquiry the Commodore shows no symptoms of yielding,” the New York Tribune remarked. The newspaper was correct. When Samuel L. M. Barlow, a key figure in Pacific Mail, suggested the possibility of a compromise to Horace Clark, Clark offered no encouragement. “The Commodore was here [in Washington] yesterday and I endeavoured to sound him [out] on the subject. He is more indifferent than I hoped to find him,” Clark wrote on January 16. “Let me suggest to you that you go right straight to him and talk to him yourself.”92
Clark's letter was a warning of Vanderbilt's determination, but also an invitation to further talks. Once again, Aspinwall and Barlow began to meet secretly with the Commodore. They soon arrived at a new agreement, one that obviated the need for guarantees of any kind. They would divide the business in half, Pacific Mail retreating to its eponymous ocean and Vanderbilt's Atlantic & Pacific Steamship Company restricting itself to the Atlantic. (This was the same basic agreement they had made in 1856, before Walker had disrupted everything.) Vanderbilt was to bring his new Champion back around Cape Horn, receive $50,000 to pay for the voyage, and sell the other, much older ships based in San Francisco to Pacific Mail for five thousand shares of stock and $250,000 in cash, to be paid in ten monthly installments. He would not be allowed to trade the shares for two years. (Vanderbilt owned the ships, so he took this payment himself.) The North Atlantic Steamship Company would be shut down. The two parties would split fares and postal payments according to mileage (giving Vanderbilt 30 percent). The plan would establish a new, more stable monopoly93
There was only one problem: the Panama Railroad did not want a settlement with Vanderbilt. It profited enormously by carrying passengers for both sides, and it had enjoyed a record business during the fare war. A number of the railroad's directors sat on the Pacific Mail board, and they were certain to resist the agreement. So Aspinwall played a trick. He invited those directors to take a junket with him to Panama. He boarded the steamship in New York with his trunks, along with his guests; then, moments before the ship sailed, he announced that pressing business would keep him at home. When the directors returned from Panama, they discovered to their irritation that the treaty with Vanderbilt had been signed and ratified in their absence.94
As the 1860s began, Vanderbilt attained wealth and influence never before imagined for a private American citizen—“almost kingly power,” as the Chicago Tribune said. He controlled American steamship traffic on the Atlantic Ocean, and stood as the largest shareholder in Pacific Mail.95 (In 1860, Daniel Allen took a seat on the company's board of directors to represent his father-in-law's interests.) Vanderbilt arranged a lasting rise in fares (though not to their previous heights), and along the way prevented his friend Roberts from starting a rival line without paying him a penny. When the California postal contract expired after Congress adjourned without making arrangements for a new one, Vanderbilt refused to carry any more mail. This edict threatened to add weeks to communication between the two coasts by forcing the mail to be carried overland. The Commodore relented only after President Buchanan begged him to reconsider and promised to ask Congress to pay him retroactively. Vanderbilt expanded his role in New York's railroads as well. Already a director of Harlem, he helped Drew restructure the bankrupt Erie's debt (for a very large fee), and joined him on the Erie's board of directors.96
One by one, Vanderbilt's enemies lost, surrendered, or met with a violent death. Law had given up; Collins had failed; Morgan, Garrison, Aspinwall, and even Joseph Scott had accepted his terms. Others were less wise, or less fortunate. On August 14, 1859, an uprising in Costa Rica overthrew President Mora. He was executed on September 30, 1860. Even the irrepressible William Walker reached the end of his piratical career. The British captured him on his latest filibustering expedition, and handed him over to the Hondurans, the nearest Central American authorities. They unceremoniously shot him to death on September 12, 1860.97
And then there was Joseph White, who had plagued Vanderbilt from the beginning of the gold rush. In January 1861 White returned to Nicaragua, this time to buy exclusive rights to harvest rubber. As he swung in a hammock on the porch of a hotel, he began to talk with another American, Jonathan Gavitt. “It appears that this conversation was not of a very pleasant character, as Mr. Gavitt had been several months in Nicaragua on business of a similar nature to that of Mr. White's, and the former thought the latter was trespassing on his ground,” the New York Times reported. Gavitt sent his servant to retrieve his revolver, then shot White in the leg. After seven days in tremendous pain, White died.98
ON NOVEMBER 4, 1859, VANDERBILT sued Henry J. Raymond, editor of the New York Times, for libel. The article in question—a patently false report that Vanderbilt had supported Walker's last expedition—was hardly the issue. After all, journalists of the day relied heavily on rumor and innuendo; newspaper reporting was inaccurate on a regular basis. The point, Vanderbilt argued in his legal complaint, was “that the said article in the Times is the result either of personal ill-will toward him or interest averse to his, which leads to the said newspaper being impelled to assail and if possible injure him.” Personal ill will indeed. Raymond responded with insults the very next day. “We are at some little loss to understand the meaning of this sudden floundering of the Commodore—this explosion of blubber at the prick of a newspaper paragraph,” he wrote. “We don't know whether it indicates that he is growing old and touchy, or that he is becoming ambitious of notoriety.”99
But this attack was also a matter of politics. During the late 1850s, even into 1860, the New York Times waged a crusade against Vanderbilt. On February 9, 1859, Raymond published perhaps his most memorable assault, “Your Money or Your Line,” berating Vanderbilt for forcing Pacific Mail to pay his monthly subsidy under the threat of his renewed competition. In this piece, Raymond crafted a lasting metaphor in American culture: the robber baron.
Like those old German barons who, from their eyries along the Rhine, swooped down upon the commerce of the noble river and wrung tribute from every passenger that floated by, Mr. Cornelius Vanderbilt, with all the steamers of the Accessory Transit held in his leash, has insisted that the Pacific Company should pay him toll, taken of all America that had business with California and the South Sea, and the Pacific Company have submitted to his demand.… He has… devoted himself to the study of the steam navigation of his country—not with the object of extending its development, but for the purpose of making every prosperous enterprise of the kind in turn his tributary or his victim.
Though Raymond never used the exact phrase “robber baron,” it entered the American lexicon as a term for an industrialist who wields his power unscrupulously, to the harm of others. Yet it is essential to note how the metaphor originated. Raymond criticized Vanderbilt for preying upon monopolists. He attacked him for, as he wrote elsewhere, “driving too sharp a competition.”100 In “Your Money or Your Line,” Raymond derided “competition for competition's sake; competition which crowds out legitimate enterprises… or imposes tribute upon them.” On July 13, 1860, he called on “our mercantile community to look the curse of competition fully in the face.”
To later generations of Americans, Raymond's critique would make no sense. Vanderbilt was a robber baron because he was excessive
ly competitive? Vanderbilt's enterprises were not “legitimate,” even though they were more successful than those that supposedly were? Was competition supposed to have no winners or losers? And wasn't it Pacific Mail that was the monopolistic force that restrained trade by buying off competitors (a policy that made it immensely profitable)?
Raymond's arguments reflected a deep and persistent strain of Whig philosophy. The editor himself was a “reliably orthodox” Whig, and his newspaper was founded by “Whig bankers,” as two historians write.101When he tried to express his loathing for Vanderbilt, he drew on a political vocabulary, a political mind-set, now decades old, crafted in a younger America with limited capital and few large enterprises. The Whigs had strongly believed in economic development, and had championed legal devices such as corporations to assist wealthy men in concentrating capital for useful purposes. Pacific Mail, which originated in a federal plan to guarantee mail service to the Pacific coast, offered a perfect example of their ideals; more than that, the elite status of its incorporators appealed to social prejudices that lingered among old New York Whigs. Raymond even depicted corporations as fragile creations. In “Your Money or Your Line,” he made the argument that “no joint-stock company… can ever be a match for a single man” who possessed a large sum of money. Raymond gave voice to a certain strand of Whig thinking that had always condemned the destructive tendency of free competition, casting it as piracy that annihilated capital.
“The idea of depicting Vanderbilt as a corsair because he establishes rival lines to successful steamboat companies is not consistent with experience or common sense,” argued Harper's Weekly, in a direct counterblast to the Times's famous editorial. “It is because competition is free—because it is encouraged in every branch of trade and enterprise—that this country has become rich and prosperous.”102 On March 5, 1859, Harpers published an adulatory profile of the Commodore in which it continued this argument. “It has been much the fashion to regard these contests as attempts on his part to levy black-mail on successful enterprises.… He must be judged by the results; and the results, in every case, of the establishment of opposition lines by Vanderbilt has been the permanent reduction of fares.” It added, in a much-quoted line, “This great boon—cheap travel—the community owes mainly to Cornelius Vanderbilt.”