The First Tycoon: The Epic Life of Cornelius Vanderbilt

by T. J. Stiles

  Scott and Vanderbilt forged divergent paths toward the future of the large enterprise in the American economy. Scott, along with Thomson, crafted the seemingly more sophisticated model, erecting holding companies to lease or purchase connecting lines far beyond the borders of Pennsylvania. Under his guidance, the Pennsylvania created a massive self-contained system that sprawled from the Mississippi River to the Atlantic seaboard, from the Great Lakes to the Gulf Coast. But the Commodore moved more cautiously. He pursued cooperation with his connections, and refrained from interfering in his son-in-law Clark's management of the Lake Shore. If Vanderbilt's decentralized strategy seems less advanced, it reflected his ever-astute calculations. He did not wish to alienate important partners, such as the Michigan Central. And he did not want to burden himself or the Central with financially unstable properties. As Scott aggressively acquired line after line, he found it more and more difficult to make them all pay; by contrast, Vanderbilt insulated the Central from the weaknesses of its connections—even from the Lake Shore, which he largely owned.9

  Scott possessed great powers of mind, but he suffered from overconfidence. More and more, he began to overreach. Acting on his own account, he joined with his protégé Carnegie in 1871 to seize the Union Pacific in a complex operation, taking over as president. Already overworked, he gave little attention to his new duties. Carnegie quickly sold their shares at a profit, and the stockholders concluded to overthrow their absentee chief. In 1872, Scott began to promote the Texas & Pacific, a planned transcontinental road that increasingly weighed him down with debt and worry10

  As for the SIC, it soon collapsed under the weight of public outrage once the terms of its contracts were revealed. At a closed meeting on March 25 with angry refiners, officers of the participating railroads (including Scott and William H. Vanderbilt) abandoned it. The railroad men refused even to let Rockefeller into the room. But Rockefeller would go on with his conquest of the oil industry, and would press the railroads for further privileges and rebates, much to William's annoyance. And the Commodore would continue to look for cooperation with his competitors.

  In the ensuing year, observers might wonder how he could harmonize the warring railroads when he could not even control his own house.11

  EVERYBODY DIES—just not always in the right order. By all logic, Cornelius Vanderbilt should have gone before any of his many familiars who died in 1872. He turned seventy-eight that year, decades past life expectancy. He had survived fistfights, boiler explosions, a train wreck, heart trouble, Nicaraguan rapids, exposure to tropical diseases, Atlantic storms, and wagon smashes. Yet he endured as those younger than himself passed away. On February 24, LeGrand Lockwood fell dead at fifty-two, still in debt to the Lake Shore. Before that, on January 6, the “porcine carcass” of the thirty-eight-year-old Jim Fisk tumbled down the steps of the Grand Central Hotel, shot by Edward S. Stokes, and died soon after. “I cannot sufficiently give expression to the extent I suffer over the catastrophe,” Jay Gould told the New York Herald. It was, perhaps, more than a coincidence that Gould lost control of the Erie Railway in just two months to an assault led by financier James McHenry. (Two years later, McHenry would recall that he offered control of the Erie to Commodore Vanderbilt, who declined, suggesting Peter H. Watson instead.) Lock-wood and Fisk probably drew little of Vanderbilt's sympathy. In December, he would coldly testify at Stokes's trial, “I had a very bad opinion of Mr. Fisk since I first knew him.”12

  But death took friends and family as well as foes. On March 25, Ellen Vanderbilt died of pneumonia in West Hartford.13 The loss of this self-sacrificing young woman struck Vanderbilt to the core. He received the news as he sat in his office at 25 West Fourth Street, talking with J. C. Smith, a railroad contractor. When he first had learned of his son's engagement to Ellen, he told Smith, he had gone to Hartford to meet her. He had taken her out in a carriage and recounted Corneil's many misdeeds. She had replied, “Commodore, isn't some of it your fault? Have you always treated him as you should?” At that, Vanderbilt related, he had looked around and said, “What a beautiful city”—because “he knew the thing was up.”

  What a rare burst of reflection, even self-criticism, the death of this young woman induced. It speaks to both the tenderness he felt for his daughter-in-law and the conflicting emotions that his tortured and torturing son aroused in him. On an evening soon after Ellen's death, Vanderbilt told Rev. Syndey A. Corey how he had approached her father, Oliver Williams, before the wedding and pestered him about her possessions. Williams naturally (and indignantly) had asked the reason for such questions. The Commodore had replied, “If your girl has silver and jewelry, and silk and satins, and fine shawls, and my son marries her, he will steal them away from her, pawn them, and gamble away the proceeds.” Williams had said that Vanderbilt was giving his son a bad reputation. “I feel that it is due to your daughter,” Vanderbilt had said. “It can't be as painful to you to hear as it is for me to say it.”14

  Corneil had been loosely moored at best since the death of his mother. The loss of his devoted wife set him almost literally adrift. He took up with George Terry, an unmarried hotel keeper whom Corneil considered “my dearest friend.” The intensity of their relationship raises the question of precisely how intimate they were. Corneil once addressed a letter to “my darling George.” On another occasion, he wrote, “Oh! George I cannot give you up. You must not desert me now, but must be brave & patient, and give me encouragement and hope for the future.” In the full context of Corneil's prolific and effusive correspondence, however, such declarations turn out to be less than definitive evidence that their relationship was physical or romantic. It was an era when platonic male friends commonly wrote of their “affection” or “love” for one another—and Corneil was particularly affectionate when he was asking Terry for money. Ellen had known Terry well, and had struggled together with him to save Corneil from his gambling addiction.15

  But Terry and Corneil's relationship was certainly intimate. Both men later testified that, after Ellen's death, they became “almost constant companions, sleeping and eating and reading together almost all the time.” In the spring, they departed for the West on a journey that would eventually take them to Japan. On June 25, Corneil wrote to Horace Greeley from Denver. “Having constantly employed myself roaming about the Colorado Country, I find myself much improved in health & my nerves more quiet and composed,” he wrote. “I have just received quite an affectionate letter from the Commodore. He appears to take a deep interest in me just at present & begs me to do everything to regain my health. I have never known him quite so affectionate.”16

  This stubborn inconsistency by the Commodore was all too comprehensible. Ever a man who did not suffer fools, Vanderbilt felt impatience and scorn for Corneil's weaknesses; yet he unquestionably loved his son, and never quite gave up hope for him. Better parents than he have suffered contradictory emotions over their children.

  It was, perhaps, for his son's sake that he assigned Chauncey M. Depew, the Harlem's attorney, to assist Corneil's patron that year. In one of history's ironies, Greeley ran for president as the nominee of the Liberal Republican Party a breakaway formation of Republicans led by the “best men” who criticized Vanderbilt so fiercely. Depew, like so many who knew Vanderbilt well, recalled that he “took no interest in politics,” but had great fondness for Greeley. “Mr. Greeley has been to see me and is very anxious for you to assist him,” he told Depew. “If you can aid him in any way I wish you would.” Depew obeyed. He helped organize the party in New York and ran for lieutenant governor. It was another point of divergence between the Commodore and William, who very publicly supported Grant in his bid for reelection.17

  Vanderbilt's detachment from politics may have been a matter of personal taste, or it may have been a deliberate policy. His interests were constantly in play whenever the state legislature met in Albany, and every positive outcome (from Vanderbilt's perspective) was blamed on the Commodore's corruption. In the spri
ng yet another pro-rata bill appeared, threatening to bar the Central from competitive pricing on through freight (condemned as “discrimination” by those who had to pay local rates). The bill went down to defeat because many believed, probably correctly that it would divert commerce away from New York and into other seaports. Yet accusations of bribery by Vanderbilt as the cause of its demise proliferated.18 Newspapers made the same charges regarding passage of the act that authorized the sinking of the Fourth Avenue tracks (a project known as the “Fourth Avenue Improvement”), because it required the city to pay half the cost. In fact, a serious theory stood behind this provision: the municipality would receive increased property taxes as real estate values rose, and the city as a whole would benefit from the new infrastructure.19

  As Vanderbilt had written to Governor E. D. Morgan years before, he wished to avoid entangling his name with anything political, knowing what abuse would ensue. Yet he frequently mingled with political figures who were an integral part of New York's legal and business environment. One of them was Democratic lawyer Samuel J. Tilden, who had played a leading part in Tweed's downfall and would be elected governor in 1874. “I should like to have a little conversation with you,” the Commodore wrote to him on May 20, 1872. “If you will do me the favor to stop at my office at your convenience—or at my house in the evening of any day that may suit you.” The topic was the lease agreement that the Central and New York & New Haven would sign for the use of Grand Central, but the tone of the letter was light and familiar. He concluded, “I am sure the ladies would be pleased to see the light of your countenance once more” (italics in original), revealing that Tilden was a frequent guest at 10 Washington Place. (Tilden reviewed the lease, and sent his corrections to Vanderbilt personally)20

  On June 3, Vanderbilt stopped by the Murray Hill home of Horace Clark and encountered Grenville M. Dodge, the former Union general, congressman, and railroad engineer. The Commodore brought up the Central's ongoing dispute with the Internal Revenue Bureau over the tax on the scrip dividend of 1868, discussing it in detail. “He thinks the goverment [sic] has treated him badly” Dodge wrote to President Grant. “He feels the matter keenly.” More interesting was Vanderbilt's attitude toward Grant. Dodge called Vanderbilt

  a warm friend of yours.… Says if he should go to you about it at this time it would be misconstrued and he prefers to pay—that he should not do anythg [sic] that could hurt you in the campaign.… My only reason for saying a word is the kindly feeling exhibited towards you by Vanderbilt and Clark and the very evident anxiety of former in the case—and his evident disappointment and surprise at the presnt [sic] action of Government.

  This warm regard for Grant and Greeley alike reflected Vanderbilt's striking lack of partisanship—his attention to people, not ideology.21

  Dodge mentioned one other telling aspect of this meeting: he met the Commodore at Clark's house by accident. Dodge had come to discuss with Clark an affair of their own—Clark's rise to the presidency of the Union Pacific, in which Dodge was a leading figure. It marked the full emergence of a starkly independent course for Clark—one that would push Vanderbilt to the brink of disaster.22

  VANDERBILT'S FAMILY FLOURISHED financially under the arms of the patriarch, and as his offspring and sons-in-law gained strength, they struck out on their own. In 1871, Daniel Torrance had assumed the presidency of the Ohio & Mississippi as a personal project. William involved himself in the management of the Western Union Telegraph Company—perhaps in his father's interest, perhaps in his own.23 In June 1872, grandson Vanderbilt Allen returned from Egypt. He had gone there (in defiance of the Commodore's wishes) to enroll in the army of the Khedive, the Turkish ruler of that principate. He came back to New York as a Commander of the Order of the Mejidie, a recognition of his valor on the Nile, and soon formed a new Wall Street firm with his cousin Samuel Barton. Vanderbilt agreed to give Barton & Allen some of his business, provided they operated strictly on commission, and did not carry stocks or otherwise expose themselves to financial reverses. They agreed.24

  Then they reneged. Instead, they followed the call of Augustus Schell, James Banker, and Horace Clark. In 1872, this trio abandoned all caution as they forged ahead with stock market speculations and railroad acquisitions on their own behalf. In February, they launched a bull campaign in Union Pacific stock. On March 6, Clark assumed the railroad's presidency, and brought Banker and Schell onto the board. Aha! the press collectively exclaimed—the rise of Clark shows that the Commodore now has control of the transcontinental railroad, and will divert its traffic onto the Central.25 But no evidence points to Vanderbilt's involvement in the Union Pacific, as some contemporaries observed. “His friends assert that he is not engaged in the many plans set on foot by his ambitious son-in-law,” remarked the New York Herald on March 7. Clark, Schell, and Banker all loaned money to the Union Pacific, but Vanderbilt did not—an important sign, considering how deeply he enmeshed his personal finances with the railroads he controlled. Railroad Gazette pointed out that control of the transcontinental line—a deeply troubled company, far from the classic target of a Vanderbilt takeover—would bring very little benefit to the Commodore's railroads. “The traffic, not large at best, must be pretty well divided before it reaches Chicago even, and a connection a hundred miles long in a State east of Chicago might easily give a more profitable traffic to the Lake Shore or the New York Central than the entire thousand miles of the Union Pacific.”26

  Vanderbilt, though, did engage in enterprises outside of his core railroad empire. In 1872, amid a general clamor for rapid transit through Manhattan, he proposed an underground railroad to run from city hall to Grand Central. He secured a charter for the New York City Rapid Transit Company, ordered a survey, prepared estimates of the cost, and finally concluded that it would not be profitable. Before letting the matter drop, he tried to sell the company to the Harlem Railroad. He recused himself from the vote, and the board declined. New York would have to wait for its subway27

  His role in this project had been entirely open, casting more doubt on any secret part in so big an affair as the Union Pacific. But Clark benefited from rumors that Vanderbilt was a member of the “Vanderbilt party” as the press called Clark, Schell, and Banker. The trio likely took advantage of their inside knowledge of Vanderbilt's moves on the stock market, for the Commodore often sent Banker handwritten instructions regarding his securities. On February 10, 1872, he wrote, “Wardell will hand you 1,000,000 of dollars worth of [New York Central] scrip. I wish you would have it exchanged in to stock in one certificate of 10,000 shairs in your name & sign it & give it [to] Wardell for me. I will tell you when I sea you the purpose. Let this be confidential.”28

  Vanderbilt increasingly expressed concern, perhaps even distress, as Clark struck out on his own. A banker later reported a discussion with Vanderbilt in 1872, in which he mentioned that he needed to see Clark. “Horace isn't up yet—he never gets up till about noon. But, if you want to see him very much, we'll go to his house and get the boy out of bed,” Vanderbilt said. They drove to Murray Hill and, sure enough, Clark had worked late into the night and was still in bed. He hurried downstairs and began to consume an enormous breakfast as the callers watched. Vanderbilt said brusquely, “Horace, you eat too much. You keep bad hours, too. You can't stand it, my boy, strong and healthy as you are. If you don't stop this thing it will certainly kill you. I'd have been dead fifty years ago if I'd lived like you.”29

  When summer arrived, William set sail for Europe with his family, but Clark and Augustus Schell followed Vanderbilt to Saratoga, where the Commodore was seen each day on the Congress Hall veranda. “He wears light colored breeches, and a black coat, and a standing collar,” a reporter observed. “He is tall and straight, and white whiskered.” Vanderbilt drove Frank out to watch a medieval tournament, a recent fad. His daughter Ethelinda Allen wrote a warm letter from Newport to Frank, asking about “father's programme for the future.” Would it be a trip to Niagara Falls, �
��or is he too comfortable to move?” Her question points to how deeply he rooted himself in Saratoga. Each evening he played cards for $5 to $25 a hand. One morning he came down from his room chuckling. He had gone to bed late, he explained to Edwin D. Worcester, and had seen the light on in Clark's room; going in, he found Clark, Schell, and two others playing cards. “What are you playing for?” he asked. “For fun,” Clark answered. “The idea,” Vanderbilt laughed, “of four grown-up men playing cards together at that time of night for fun!”30

  Vanderbilt had serious problems that year. While he was at Saratoga, Frank's brother Robert L. Crawford was indicted for attempted murder. On the night of May 24, the police had banged on the door of 10 Washington Place, demanding access to Vanderbilt's stables. His coachman, James Ames, described by the New York Times as a “powerful, stalwart negro,” had reportedly taken (or dragged, according to the Times) a drunk seamstress named Carrie Love into his bedroom in the stables. Vanderbilt himself let the police in, and a wild brawl ensued between Ames and the officers, who finally knocked out Ames and dragged him off. Bizarrely Frank's brother Robert appeared at the police station. Crawford, who was on a visit from Alabama, acted as if Ames were the slave of a Southern planter before the war. “You dare not lock up Commodore Vanderbilt's coachman,” he bellowed. The police finally tossed Crawford into the street, where he lurked until a detective emerged. Crawford produced a revolver and shouted his intention of killing the man. In a confused scuffle, he shot and severely wounded the detective. The initial press reports of the incident may have been exaggerated, since a jury swiftly acquitted Ames. Still, Crawford faced a long fight for exoneration and an eventual lawsuit by his victim.31