The First Tycoon

by T. J. Stiles

  For Gibbons, it had become an affair of honor. On July 25, 1816, he stormed over to Ogden's house, horsewhip in hand. He pounded on the door as Ogden ran out the back and scrambled over a fence. Gibbons tacked up a challenge that read, “Sir—I understand that you have interfered in a dispute between Mrs. Gibbons and myself.… My friend Gen. Dayton will arrange with you the time and place of our meeting.” He later testified in court that “if he had found him at home he meant to have whipped him within an inch of his life in his own house, for he knew he was a coward.”

  Ogden, who had no intention of exchanging shots at dawn, had Gibbons arrested for trespass and for dueling. Gibbons decided to get revenge another way, one that stood to increase his own wealth even further: he would drive Ogden out of the steamboat business by running his own paddlewheeler between Elizabethtown and New York. And that—against all logic of politics, social position, and personal conviction—pitted him directly against the New York steamboat monopoly.

  In taking on Ogden as an ally, the Livingstons had unwittingly acquired their deadliest enemy yet.18

  WHEN THE STORM HIT on the morning of February 3, 1818, Vanderbilt stood in the rocking hull of the Dread, which he ran on a strict schedule between Staten Island and New York's Whitehall Slip. Scanning the skies from within the grip of Manhattan's piers, he could see what little time he had to secure his boat. The winds began to howl through the bare masts of the ships that nursed along South Street, driving hail, then rain, then snow down New York's narrow ways.

  Then the little steam ferry York* came drifting past the Battery, just off Manhattan's southern tip. The boat had no business there; as Vanderbilt knew, it made its 10:30 run from Paulus Hook (later the site of Jersey City) to the foot of Courtlandt Street, over on the North River waterfront. What he did not know was that it carried a full load of thirty passengers and three wagons, each with a two-horse team; that the storm had smashed the boat like the butt of a rifle, halting its progress across the Hudson; and that the pilot had decided to seek the shelter of Whitehall Slip. On rounding the Battery, it had met a ruthless ebb tide pouring out of the East River, which ripped the York out of control. Waves crashed over the rails, sending tons of freezing seawater knee-high across the deck.

  As Vanderbilt stood in the Dread, a single glance would have revealed hundreds of masts in the harbor—of boats, barks, and brigs, all anchored or moored against the gale. With the storm rising to its height, none dared to go to the aid of the York. Undeterred, he cast off and hoisted sail. Running before the wind, he bore down on the spinning York, bringing the Dread alongside amid the snow and hail. The two vessels drifted together in the worst of the storm; one by one, twelve passengers clambered over the gunwales into the Dread before Vanderbilt had to cut loose. He later tied up safely at Whitehall. Now out of reach, the York drifted on with the rest of the passengers, all the way to the Narrows, until it finally landed six hours later.19

  After the rescue, Vanderbilt returned immediately to work, repairing his ravaged boat, preparing to resume his scheduled runs. If anything, his moment of glory only underscored the distance between himself and the merchants, who read about his exploit in the Evening Post.

  It is often thought that youth is the time of grand horizons, of great dreams and bold plans. In fact, the reverse is often true: how little the young have experienced, how little they know of what might be. Vanderbilt daily glimpsed the emporium of New York, but he saw it strictly from sea level. He may have begun to buy and sell his own small cargoes of fish and fabrics, but he was removed from the countinghouse kingdom on the far side of South Street—the merchants who endorsed bills of exchange with glasses of sherry in hand, the auctions of federal bonds and British imports. His was a gunwale-to-gunwale existence of weather in the face and physical strain. He encountered the Anglo-Dutch elite only when they called on his sailor's skill and knowledge—as they did again just three weeks after the storm.

  Late on the night of February 23, the British ship Neptune ran aground at Sandy Hook. Twenty-two days out of Jamaica, the merchantman carried $404,000 in gold and silver, of which $339,000 belonged to the New York branch of the recently refounded Bank of the United States. That precious metal formed the very foundation of the most important branch of the nation's central bank; every note, every record of deposit, every check it issued was considered a promise to pay in specie. Though no lives were at risk, the loss of the cargo might have a devastating effect, sparking a panic. None of the bay's boatmen had been able to salvage it, as waves battered the helpless vessel. So on February 26, Vanderbilt piloted the Dread down to Sandy Hook to see the stranded ship for himself. Two boats were luffing uselessly around its inert hull. Vanderbilt neatly steered his craft alongside and began to haul the specie across the gunwales. Later he met the federal revenue cutter Active and transferred the cargo. A possible financial catastrophe had been averted.20

  By the time of this second rescue, Vanderbilt had already begun his foray into the world of wealthy men. When the Mouse was laid up for winter refitting, Vanderbilt had returned to his sailboats. But he seemed to sense that there was more to be made of his relationship with Gibbons; so when Gibbons asked him to check on the work being done to the Mouse, he agreed.

  On the day the Neptune ran aground, Vanderbilt hurried over to the shipyards of Corlears Hook, the southeastern bulge of Manhattan island, and marched into the sprawling steam-engine works of James P. Allaire. A friendship quickly grew up between these two men, who both valued tough-minded competence, and Allaire willingly tutored Vanderbilt in this new world of steam. Few knew more about it. Allaire had worked on Fulton's first boats, then leased the inventor's engine works after his death and moved the machinery to these yards on Cherry Street. Allaire had built the Mouse himself, in fact, to test a paddle design. He walked Vanderbilt through the yard, pointing out the replacement parts for the boiler, the new toilet (or “necessary”), and the boring mill where the piston cylinder would be prepared.

  Vanderbilt moved on to the shipyard of Lawrence & Sneden. There, beneath a swarming crew of caulkers and carpenters, glistened an entirely new hull ordered by Gibbons, for a vessel provisionally called the Violin. This sleek steamboat-in-creation stretched twice as long as the Mouse and would soon be fitted with Allaire's newest machinery. “I have saw the Violine,” Vanderbilt reported, in his characteristically direct style, “and think she will be a fine Boat.” It soon received a new and lasting name: the Bellona, after the Roman goddess of war. It would prove a fitting title indeed.

  When Vanderbilt next sailed up the narrow Kill Van Kull to Gibbons's Rising Sun Landing, where a crew of workmen hammered together a pier and buildings to serve the Mouse and the Bellona, Gibbons greeted him with a demanding air. Obese and diabetic from a life of rapacious eating and drinking, Gibbons constantly grumbled about “the agonies of my frail body” that often left him housebound in Elizabethtown. Gibbons needed someone to help run his new steamboat enterprise; his first preference, his son William, spent much of his time overseeing the family's plantations. Gibbons observed that Vanderbilt stood in marked contrast to the “worthless fellows” who ran so many of the harbor's boats; his manner and conduct earned as much trust as Gibbons was grudgingly willing to give. He asked Vanderbilt to become his permanent captain, and move to Rising Sun Landing—directly under his hard eye.

  Vanderbilt agreed, but only up to a point. He would take command of the Mouse, then the Bellona when it was launched, but no more. He looked over the rooms at Rising Sun Landing and begged off, explaining, “I would prefer living in N. York.” He had his own ferry to run, after all, and a schooner to ready for the spring coastal trade.21

  Gibbons put him in charge of the refurbished Mouse for several weeks before they settled on an employment contract, the only one Vanderbilt would ever sign.

  Memorandum of agreement made this 26 June 1818 between Thomas Gibbons and Cornelius Vanderbilt,—The said Cornelius Vanderbilt agrees to serve as master and commander
of the Mouse, and when the Bellona shall run of the Bellona Steamboat until the present season is over, or until the ice shall block up the boat at the rate of Sixty Dollars a month and the privillege of half of the bar—Gibbons finding the bar furniture and Vanderbilt preserving the furniture and making the whole good at the end of the season. Vanderbilt will do all the duties required of him as commander, to run to and from Elizabeth Town at the landings of the said Thomas Gibbons.

  Th. Gibbons

  Cornelius Vanderbilt

  It was a typically hard bargain for the stony Gibbons—though the bar would swell Vanderbilt's earnings. As one historian has put it, America was an “alcoholic republic;” early steamboats were motorized taverns, dispensing wine, whiskey, and brandy in enormous quantities. Once the Bellona was launched, Vanderbilt could expect anywhere from $60 to $110 a month from the bar alone.22 More important was Vanderbilt's limitation of his commitment to the “present season” as he continued to pursue an independent course. He carried on with his ferry, of course, and even laid plans for a new schooner, the Thorn.23

  Gibbons was focused on crushing Aaron Ogden. Vanderbilt listened to endless outbursts at “this fallen Shylock,” as Gibbons called him. “He will if he can ruin me,” he claimed, in a fit of projection. “Indeed he would ruin the whole world to enrich himself and family.” Unfortunately, his enemy now sheltered inside the fortress of the New York steamboat monopoly. Ogden and the Livingstons, Gibbons wrote to John Randolph, “have no merit; they have no claim to useful invention. They are mere locusts and blood suckers in this part of the union. We cannot get to New York without their consent and at their price.”24

  In his employer's presence, Vanderbilt caught his first insider's glimpse of how business affairs were of one flesh with the law and politics. Despite Gibbons's physical infirmities and extravagant self-absorption, he possessed a legal mind of Damascus steel—sharp, hard, and penetrating. In the glare of his own self-righteousness, he readily saw the vast repercussions of his vendetta. To bankrupt Ogden, a ruthless business war was necessary, but insufficient; he had to convince the courts to overturn the Livingston monopoly itself. “The present is not a question of pounds shillings & pence,” he later wrote; “it is the great question of sovereign rights—the right of navigating your own waters, under the laws and constitution of the U. States.” At stake was the notion that the United States should be a common market, that the individual states should have no power to erect barriers to trade at their borders. The outcome of such a case could hardly be clear; indeed, if it did reach the Supreme Court, it would be the first in the Constitution's three-decade history concerning the commerce clause.25

  In their frequent conversations, Vanderbilt learned of Gibbons's careful preparations for the legal battle to come. Aaron Burr had assured Gibbons that “any judge of the Court of the U.S.” would find the steamboat grant “unconstitutional… highly absurd & tyrannical.” Gibbons intended to obtain federal licenses under the Coasting Act of 1793, violate the monopoly to trigger a legal response from Ogden, then move the case to federal court. There he would argue that the commerce clause gave Congress sole authority over interstate commerce.26

  Ogden, of course, merely held a license; behind him loomed the rich and powerful Livingston family. They were certain to fight back, for their monopoly was tremendously lucrative. In 1818, for example, the gross receipts of their North River Steam Boat Company reached $153,694, leaving a profit of $61,861 and dividends of $49,000. These sums were astronomical for the economy of the day. (In 1812, Fulton had described an income of $34,000 as “such immense profits.”)

  But the Livingstons were a divided clan. The chancellor had left to his heirs, Robert L. and Edward P. Livingston, the North River Steam Boat Company and its line to Albany. In 1808, however, he had sold to his brother John R. Livingston the rights to the waters between New York City and New Jersey, Staten Island, and Long Island. Intensely belligerent, eternally suspicious, and underhanded, John was aggravated by gout in both feet, and he aggravated his monopoly partners in turn. One of his many slippery maneuvers had led Fulton to erupt, “Never shall he edge himself into any other enterprise which I can control.”27

  On December 5, 1817, Gibbons had approached John R. Livingston to test his reaction to the news that he was building the Bellona to compete with Ogden's new ninety-five-foot Atalanta. Livingston had never liked Ogden; he had agreed to grant him a license only because of intense family pressure. So he slyly replied that he would not stop Gibbons from waging his vendetta.28

  So far, so good: Gibbons had made every preparation for the legal fight to come. But the courtroom struggle would only be half the war. He still needed to win the business battle. After all, the ultimate goal was not to take away Ogden's license, but to send him to debtor's prison through direct competition. And that was Vanderbilt's job.

  IN THE PARLOR OF THOMAS GIBBONS, Vanderbilt found a portal into the world of New York's wealthy patricians. Surprisingly, he found a second one through his own family. His introduction came through his brother-in-law, John De Forest, who now commanded the Nautilus, a steamboat that ran between New York and Staten Island. The craft belonged to the Richmond Turnpike Company, a corporation that was itself the property of Daniel D. Tompkins. Tompkins, a former governor of New York who had married into an aristocratic family, pursued expensive plans to develop his estate of Tompkinsville, Staten Island, even as he served as vice president of the United States. Thanks to De Forest, Vanderbilt became a regular guest at Tompkins's imposing marble mansion. There he learned that Tompkins, like all of patrician New York, was terrified by Gibbons's vendetta against Ogden.

  An air of desperation hovered over Tompkins, who swayed under the weight of alcoholism and heavy debts. He owed a great deal of money to Gibbons, and ran the Nautilus under an expensive license from the Livingstons; he stood to lose heavily if the monopoly was overturned. Indeed, Gibbons's assault on the steamboat monopoly was also an attack on aristocratic privilege, as represented in Tompkins's own Richmond Turnpike Company. Whenever Vanderbilt stopped at the Tompkinsville dock and knocked on the doors of the mansion, the vice president urged him to press Gibbons to compromise, to make peace “with honor & propriety.”29

  What a universe was captured in that phrase—one that Tompkins's young guest could never grasp. For all of the vice president's Jeffersonian political affiliations, he picked his way through this changing society with an eighteenth-century mental map, written in the ink of deference and rank, drafted with mercantilist principles that placed the orderly direction of the economy in elite hands. To New York's patricians, Gibbons's insistence on competition was scandalous. Shortly after Vanderbilt took command of the Bellona, the aristocrat Rachel Stevens wrote in alarm, “Gibbons runs an elegant Steamboat for half price… purposely to ruin Ogden, and as he has a very long purse, I expect he will do it. Ogden has lowered his price and now Gibbons says he will go for nothing. Did you ever hear of such malice in this enlightened age?” Malice may seem a curious term for the offering of better service at lower rates, but it was malice indeed. Perversely, it was an obsession with honor that drove Gibbons to a kind of competitive capitalism that respected profits, not persons.30

  In Vanderbilt's world, crowds were thicker, elbows sharper, confrontations cold and raw. He had grown up in a market-centered household outside the shadow of aristocrats; his was the individualistic society still emerging in America, guided not by honor but by calculation. He was angered but not scandalized when Ogden's men tore down signs to Rising Sun Landing, when the captains of Ogden's periaugers blocked the Mouse's dock—to “plague” Gibbons, as one declared.

  The twenty-four-year-old Vanderbilt took command of the 116-ton Bellona in October 1818. He brought it through the broad bay and narrow creek of Kill Van Kull less than a dozen times before he was met on the New York docks by a process server. Ogden had been content merely to harass the Mouse, but the large and powerful Bellona prompted him to seek an injunction fro
m New York's Chancery Court, charging Gibbons with violating the monopoly. For Gibbons, it was all according to plan, and he began work on an appeal.

  The vendetta played out in parallel battles of high and low. In September 1818, Gibbons stood trial for trespass, stemming from his attempt to challenge Ogden to a duel. (The charge for dueling was dismissed, as there had been none.) “The celebrity and high standing of the parties,” the Newark Centinel reported, “excited considerable interest in the public mind.” Each day, “a great number of respectable ladies” attended the trial, which ended with a $5,000 fine for Gibbons. It was far less decorous down on the waterfront, where the rival steamboat crews stooped to stealing fuel from each other's woodpiles. When Gibbons's own process server approached the engineer of the Atalanta, Ogden's man started punching and kicking, shouting, “Damned rascal, infernal villain, damned son of a bitch.”31

  Vanderbilt resorted to his own brazen and bewildering maneuvers to keep the Bellona running to Manhattan in the face of the court order. On June 4, 1819, as he chatted with De Forest and Tompkins at the vice president's mansion, he received another injunction barring the Bellona from New York. Nevertheless he went, was arrested, and was bundled off to Albany to see Chancellor James Kent, a man decidedly sympathetic to the monopoly. There Vanderbilt explained his insolence: Tompkins had hired the boat on the day he was taken into custody. The chancellor had no choice but to release him. Sometimes Vanderbilt simply ran the Bellona to the city, deftly avoiding the authorities who tried to impound it. When Ogden presented evidence of these violations, Gibbons blithely told the court that he had “misunderstood” its orders.32

  With Vanderbilt managing the tactics of the struggle, Gibbons gave thought to strategy. His ferry service, he realized, was lucrative because it was a link in the most important commercial corridor in the burgeoning economy—the route between New York and Philadelphia, the young republic's financial centers and largest cities. Each year, more and more people passed between them, carrying information, capital, credit, and new business relationships. Gibbons constructed a consolidated line in early 1819 by forming a partnership with the Stevens brothers (aristocratic nephews of Chancellor Livingston, no less), who had a steamboat on the Delaware River, and with a group of stagecoach owners who provided transit by turnpike across the thirty-mile neck of New Jersey. The Bellona connected with the stages at New Brunswick, the farthest navigable point on the Raritan River. They called it the Union Line.33