The First Tycoon

by T. J. Stiles

  What's more, the engagement with Gibbons set him back a step in his plans to build his fortune. A thriving ferryman, he aspired to more, as he used his boats to embark on the only obvious voyage to wealth in the new republic, setting up as a general merchant. Even as he stepped aboard the Mouse and inspected its copper boiler, he kept his periauger plying between Staten Island and Whitehall Slip with passengers and produce, and his schooner nosing along coastal waters with cargoes of fish and woolens.1

  And yet, he clearly saw the advantages of the connection he had made. Having formed partnerships with his father and his brother-in-law, he recognized that few men in the entire nation commanded greater resources than Thomas Gibbons. Even more important, Vanderbilt and his contemporaries understood that the steam engine (or, to put it more broadly, motorized transportation) was the most dramatic technological breakthrough since the advent of the printing press at the dawn of the Renaissance. To move on water at will, against wind, tide, and current, was to transform a fundamental fact of life; to say that it marked a revolution is to give an overused word its proper weight. A practical education in steam would be worth a few days of taking orders.

  What he did not reckon on was how well he would get on with Gibbons. “I always thought Thomas Gibbons a very strong-minded man, the strongest I ever knew,” he said later. “I don't believe any human being could control him; he was a man that could not be led.”2 He could just as easily have been describing himself. And there, ironically, in this meeting of iron wills, lay the seed of an alliance that would force the freedom of commerce within America's borders and tear down one of the last bastions of the eighteenth-century world—a culture of deference, privilege, and rank already groaning under the pressure of the times. And it all started with the most aristocratic of rituals: a challenge to a duel.

  “DUELLING IS AN ABOMINABLE CUSTOM introduced by the depravity of man,” Thomas Gibbons scratched out on a piece of paper, pausing now and then to dip the nib of his quill into an inkwell. “And good men sometimes are dragged into it by the wicked, thoughtless part of the community.” It was the evening of September 15, 1786; Gibbons was composing a letter to his eldest son, a letter that he believed might be his last. The next morning, he planned to engage in the “abominable custom” with characteristic righteous wrath. As he counseled his son, “Should your character be wantonly sported with, with deliberate caution arm yourself.”

  The next day, he and his opponent faced each other with pistols in hand, bellowing their firm intention to kill each other—until their seconds arranged a compromise. Gibbons had been entirely earnest; the essence of the art of the duel, he knew, was a sincere willingness to stake everything on the outcome. Killing the foe was entirely secondary; the point, rather, was to bravely expose oneself to deadly gunfire, thereby proving to the world a quality that lies hidden in a man's heart: his honor. In his own case, however, he may have confused honor with ruthlessness, for no trick or ploy was beneath him when he had a goal in mind.

  Gibbons came into the world in 1757 as heir to an army of slaves, and a large rice plantation in Georgia, and he never forgot it. In adulthood he opened a thriving law practice in Savannah, and eventually bought more plantations. He accumulated and consumed until he himself had swelled to almost three hundred pounds. Cunning and commanding, he had, his daughter dryly noted, “a particular and singular mode of doing… business.” In other words, he was almost pathologically contentious.3

  In the Revolution, he alone in a family of patriots stood by the king. Imprisoned for treason, he called the sheriff a “damned scoundrel” and accused him of asking for a bribe. Remarkably, he was able to have his conviction overturned after the war, managed General “Mad Anthony” Wayne's campaign for Congress, then fought a duel with the losing candidate, who had accurately denounced him as a man “whose soul is faction… who never could be easy under government.” The two faced off in 1791; they blazed away at each other three times before they settled their quarrel. Gibbons went on to serve as the Federalist mayor of Savannah off and on until 1801.4

  That year he established “bachelor quarters,” as he called them, in Elizabethtown, New Jersey. Perhaps he was driven out of the South by tense relations with the wife he left behind (he soon impregnated a young maid in his new home). In any case, it was a financially astute move. New York was just beginning its climb to a predominant role in the South's overseas trade. Living in the North, Gibbons served as his own middleman, and he had ample opportunities for reinvesting his profits in real estate, rapidly multiplying banks, and turnpike corporations that constructed solid new toll roads across New Jersey5 He also discovered a culture surprisingly familiar to him.

  Three years after Gibbons's arrival, in that ritual he knew so well, Vice President Aaron Burr shot Alexander Hamilton dead in nearby Weehawken, in the culmination of Burr and Hamilton's long and bitter political rivalry. The duel led to a quixotic turn in Burr's life, sending it on a winding path that led to a trial for treason and an eventual return to a prestigious law practice in New York. It also showed that dueling (which first appeared in America among military officers in the Revolution) was far from the specifically Southern institution that it would eventually become. In the early years of the republic, politicians issued challenges to each other with alarming frequency. They did so in part because the first parties of the early republic were, to a great extent, factions of notables; political disputes quickly became matters of personal honor.6 But the importance placed on honor reveals something deeper: the persistence of an eighteenth-century culture of deference, dominated by an American aristocracy.

  The word “aristocracy” tends to be used rather loosely. In the modern world, it is calculated by multiplying wealth by snobbery. During the early republic, on the other hand, it reflected the division of society into distinct ranks. Until the Revolution, wrote historian Bernard Bailyn, Americans had assumed “that a healthy society was a hierarchical society in which it was natural for some to be rich and some poor, some honored and some obscure, some powerful and some weak.” Perhaps most important, “it was believed that superiority was unitary, that the attributes of the favored—wealth, wisdom, power—had a natural affinity to each other, and hence that political leadership would naturally rest in the hands of social leaders.” In New York in particular, these natural leaders came from a closed set of families, distinguished by an inherited prestige. A full century before Gibbons moved north, the aristocrats of his day had already emerged—the Livingstons, Van Rensselaers, Schuylers, Beekmans, Jays, Bayards, Morrises, and others—in a self-perpetuating circle of intermarried clans.7

  The patricians owed much of their status to their particular kind of wealth. New York's aristocrats were classic landed gentry, owners of vast manorial estates along the Hudson River that were populated by tenant farmers (a rarity in land-abundant America). Philip Schuyler, for example, held some six thousand acres, while the Van Rensselaers reigned over an enormous “patroonship” established by the Dutch in the seventeenth century. Their relationships with their inferiors were defined by vertical chains of deference and dependence. “As late as 1828,” writes historian Martin Bruegel, an English observer was amazed by the “immense influence” of these manorial lords over their tenants and neighbors. And landed wealth was proprietary wealth, the kind that originally defined a “gentleman.” The gentry did not work for their income, and so had the leisure to educate and improve themselves. Strikingly, they neatly adapted to, and even championed, the Revolution: they saw themselves as a refined, disinterested ruling class for a virtuous, classical republic.

  Property requirements for suffrage under New York's constitution of 1777 hardened the culture of rank into law. Two distinct levels of wealth were required to vote: one for the state assembly, and a second and higher level for the state senators and governor—establishing a “three-tiered scaffolding of society” as Bruegel writes. In 1790, four of ten adult white men could not cast a ballot of any kind; in some places
, only one out of four could vote for the assembly, and one out of five for governor.8

  It was in this environment that the duel flourished. In the aristocratic culture of deference, little distinction was made between the person and his position. A leader could only function if he maintained his personal authority; upholding his “character” (as reputation was called), by the duel if necessary, was essential to all aspects of his life. So too in an economy with limited currency and few formal institutions, where transactions were highly personal and usually sealed by an exchange of promissory notes. A lofty character allowed one's notes to “pass current,” to be circulated in the marketplace at little or no discount. The patricians literally could not afford to be defamed, to allow insults to their authority to go unchallenged.

  The Revolution marked a decisive turn against the culture of deference. By the time Gibbons settled in New Jersey—the year Thomas Jefferson took office as president, after campaigning against patrician rule—assertiveness as well as deference was visible in the lower layers of society, swelled chests as well as bowed heads. Rochefoucauld-Liancourt noted the progress of this transformation in two telling observations in the 1790s: “They deceive themselves very much who think that pure republican manners prevail in America,” he wrote, pointing out how the citizens painstakingly differentiated between the ranks of society “In balls, concerts, and public amusements, these classes do not mix; and yet,” he added in amazement, “every one calls himself, and is called by others, a gentleman.”9

  It is the image of a society in the midst of tectonic change. An older, stratified idea of the world was being torn up by political radicalism erupting out of the Revolution, and by a new social dynamism linked to the surging economy. Once-deferential artisans wanted to serve in public office themselves. Average Americans were less and less willing to passively follow the old elite, as they had for so long.10

  Thomas Gibbons, by contrast, settled comfortably into that old order—or, at least, as comfortably as a cantankerous tyrant could—as he passed his promissory notes among New York's elite, and formed business partnerships with his neighbors Aaron Ogden and Jonathan Dayton, the Federalist senators for New Jersey. He could hardly have been a less likely champion of Jeffersonian ideals. Ironically, a chain of events had already been set in motion that would turn his famously hard head into a battering ram against the citadel of aristocracy. That chain of events—and that citadel—were the work of the most patrician of patricians, Chancellor Robert R. Livingston.

  No one better exemplified the culture of deference than Chancellor Livingston. Peering out of serious eyes set between the arching eyebrows and long nose of his bloodline, he looked every ounce the aristocrat. As leader of one of the richest and most prestigious families of Hudson Valley gentry, he presided over a vast manor, serving as patron to hundreds of tenant farmers who came to him, hats clutched to their chests, to ask for favors or pay their rent. In keeping with his family's tradition of leadership, he played a prominent part in the Revolution, serving alongside Jefferson on the committee that drafted the Declaration of Independence, and he later became New York's first chancellor (a chief judge in the state court system). Livingston allied with Jefferson and his Republicans, proving that, under the state's restrictive constitution, the aristocrats and their values crossed party lines, despite the Federalists' reputation as the party of the elite. In 1802, the New York Evening Post referred to the Livingstons as a “house of republican nobility” and quoted a junior member of the clan as saying, “To be born with their family name is a fortune to any man.”

  Unlike the stuffy, fictional aristocrats of Jane Austen's novels, Livingston and his fellow patricians felt no disdain for trade. They maintained countinghouses in the city invested in urban real estate, and had careers as lawyers and merchants. They embraced Hamilton's financial program, with its stocks, financial markets, and banks. Schuyler, Hamilton's father-in-law, sought to rationalize his tenants' leases for greater profits, and the patricians led the drive to build a canal to Lake Erie. Livingston organized a state agricultural society and promoted merino sheep and gypsum fertilizer. To quote George Washington, they were decidedly a “monied gentry.”11

  Those very activities, however, separated the commercial vision of aristocrats such as Livingston from the emerging ideals of rank-and-file Jeffersonians. He believed in economic development, but in an ordered manner, directed from above. After the Revolution, the seeds of a different notion began to sprout—of an individualistic, competitive economy where one could go as far as his ability and energy could take him. “Adam Smith's invisible hand,” writes historian Joyce Appleby “was warmly clasped by the Republicans.” They criticized the patricians for using their political power to grant themselves special privileges. Corporate charters usually went to the well-connected. Many early banks extended credit only to a closed network of relatives and cronies. Government intervention in the economy largely consisted of special rewards to officeholders and favored men.12

  The aristocrats saw no conflict of interest in using public office to enrich themselves. As society's natural leaders, they reasoned, they should be entrusted with economic stewardship as well. This outlook, this merging of the private and public roles of the elite, was the essence of mercantilism, in which the state empowered private parties to carry out activities thought to serve the public interest.13 The standard reward for such an undertaking was a monopoly—just what Chancellor Livingston sought when he offered to meet a most pressing public need, the need for steamboats.

  Even before Americans learned of James Watt's work with the steam engine in England in the 1760s, they had dreamed of bolting it to the hull of a boat to speed themselves across the vast stretches of water that linked their scattered communities. Experiments abounded: paddlewheels, early propellers, even a water jet and mechanical oars.14 Chancellor Livingston dreamed and experimented as ambitiously as anyone. In 1798, he convinced his friends in the legislature to give him a monopoly on steamboats in New York State waters. Unfortunately he failed to produce a working design of his own, and his monopoly remained unused.

  In 1801 he arrived in Paris as Jefferson's minister to France, where he met an émigré American artist and inventor named Robert Fulton. As Livingston helped to negotiate the Louisiana Purchase, he financed Fulton's prototype steamboat, which ran on the Seine in 1803. They returned to New York, where Fulton tinkered with his designs. Finally, on August 17, 1807, the sixty-year-old Livingston invited New York's dignitaries aboard Fulton's final effort, a clanking, 150-foot-long vessel prosaically named Steam Boat. Crowds lined the shore to watch the amazing spectacle: a boat moving by mechanical power. It churned up the Hudson at five miles per hour to Livingston's manor, Clermont, where Livingston declared that his cousin Harriet and Fulton were to be married. The steamboat—and Fulton—had arrived.

  Fulton created a line between New York and Albany while Livingston maneuvered an extension of the monopoly through the legislature—“a veritable model of state munificence,” as legal scholar Maurice G. Baxter writes—that gave him the right to seize steamboats that entered New York waters from other states.15 But Livingston had overreached. With so many inventors and investors interested in the steamboat, the monopoly only served to limit its widespread adoption. The new technology was simply too important for the monopoly to remain unchallenged.

  In 1813, Chancellor Livingston died. That same year, Gibbons's neighbor and business partner Aaron Ogden took office as governor of New Jersey, and promptly launched an attack on the steamboat grant, both as chief executive of the state, fighting New York's claims to the waters shared with New Jersey, and as a private steamboat entrepreneur. In a bitter battle Fulton successfully defended his monopoly, though at the cost of his own life, after he fell ill from exposure when crossing the frozen Hudson on his return from a lobbying trip to New Jersey. The monopoly lived on in the hands of Livingston's heirs, who came to terms with Ogden. On May 5, 1815, a little over two months after Fu
lton's death, the Livingstons gave Ogden a license to run his own steamboat between Elizabethtown and New York. Ogden had begun as the monopoly's most potent challenger; he had ended as its ally16

  Enter the irascible Thomas Gibbons. On the surface, he and Ogden had everything in common: they were of the same party profession, and patrician status. In temperament, however, they were virtually destined to clash. Gibbons was arrogant and explosive; Ogden, wily and sanctimonious. And both were men of infinite calculation. With all the force of a Greek tragedy, their respective traits drew them into an epic conflict, one that would decide the fate of the Livingston steamboat monopoly.

  At the height of Ogden's battle against the Livingstons, he and Gibbons fell into a dispute over the renewal of a lease for his steamboat pier, which he rented from Gibbons, who characteristically made things difficult. Ogden tried to apply pressure by involving himself in Gibbons's ongoing dispute with his wife, daughter, and son-in-law over Gibbons's will, suggesting strategies to the disinherited family members. This only enraged the easily enraged Gibbons. To make matters worse, Ogden acquired a past-due promissory note that Gibbons had made out to a third party; Ogden deposited it with his banker in New York, who had Gibbons arrested for nonpayment on May 30, 1816 (on Ogden's steamboat, no less). Gibbons bailed himself out and stomped home, steeped in a hatred that soon took on a life of its own. “As we reside within half a mile of each other,” he wrote to Ogden, “and your never intimating to me, nor any of my friends, any claims or cause of action you had against me, I pronounce your conduct rascally.”17