The First Tycoon

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The First Tycoon Page 10

by T. J. Stiles


  On April 19, Vanderbilt commanded it on its initial run to New Brunswick, where an enthusiastic crowd swarmed the dock to meet him. He piloted the Thistle to its moorings under the echoing boom of a small cannon, fired by a local merchant and two others to welcome the flagship of the new era of free competition. Then the cannon exploded, blasting off the fingers of two men and scorching the face of the third.1

  In later years, many observers would ponder the gargantuan figure that Cornelius Vanderbilt had become and wonder if the unchecked marketplace had not blown up in everyone's face. In the immediate aftermath of Gibbons v. Ogden, however, no one doubted that the world had become a better place. The Livingston monopoly could not stop steamboats from entering New York waters from other states, the Supreme Court ruled; to the public, this was a blow for freedom.

  Chief Justice Marshall's decision provided one of those rare turning points in history that is recognized as one at the time. Newspapers across the country greeted the ruling with lengthy coverage. “The interest excited by the decision,” wrote the Washington Republican, “has induced us to… gratify our readers.” Niles' Register reprinted the decision in full, filling almost eight pages.

  “It is the fashion to praise the Chief Justice's opinion,” John Randolph of Virginia observed. Indeed, it proved to be almost universally popular, perhaps the most popular of his long career. The Evening Post captured the mood when it called the decision “one of the most powerful efforts of the human mind that has ever been displayed from the bench of any court.” It represented “a forecast, in relation to the destinies of our great confederacy.” John Marshall foresaw a destiny of commerce, free and abundant, and the people wholeheartedly agreed.2

  “Chief Justice John Marshall's great disquisition on the commerce clause,” writes legal scholar Leonard W. Levy, “is the most influential in our history.” In constitutional terms, it completed his great nationalist project, the establishment of federal supremacy. It struck down the New York steamboat monopoly as an affront to Congress's exclusive jurisdiction over interstate commerce, refuting the claim that the states shared power in that area. In practical terms, it threw the high court's weight behind the gathering momentum of competitive individualism—of laissez-faire—in American law and culture. “Marshall's nationalism,” writes R. Kent Newmeyer, “aimed to create not a nation-state but a national market, an arena in which goods and credit moved without hindrance across state lines.” Though the decision said nothing about the legality of government-granted monopolies as such, it added to a growing sense among many that they ran against the natural law of economics and the principle of equality And Marshall fully recognized the need to expand transportation to develop (and unify) the sprawling republic. (After the Court adjourned at the end of March, he ruefully decided to return home by taking his first trip in a steamboat.)3

  A century after Gibbons v. Ogden, legal historian Charles Warren hailed the decision as “the emancipation proclamation of American commerce.” Marshall's admiring biographer, Albert Beveridge, claimed that it “has done more to knit the American people into an indivisible Nation than any other force in our history, excepting only war.” More recent legal scholars have stepped back from such extravagant praise, noting the ways in which this sweeping decision was soon hemmed in.4 And yet, there is much truth in these earlier assessments, especially when the case is set in a context larger than constitutional law. Marshall captured and codified a new mood in the country, after nearly fifty years of independence. Commerce, interstate commerce in particular, was the stuff of daily life as never before. The chief justice proclaimed that, yes, the United States was a common market; no matter how the states would later eat away at the edges of his ruling, he gave voice to what most Americans now believed—that freedom of movement and trade across state lines was a basic right.

  Gibbons v. Ogden came at an extraordinary moment. Within a year, the most important work of public engineering of the era, the Erie Canal, would be complete from Albany to Lake Erie. The unleashing of steamboats in New York waters and the opening of the canal that connected the nation's interior to the Atlantic coast would integrate markets and open the way for new economic growth. They would also guarantee New York City's dominant position in the American economy, and make way for Vanderbilt's rise.5

  The results could be seen almost at once. The Thistle was only the first of many new vessels to be launched after the death of the monopoly. The steamboats registered at the New York Custom House jumped from one or two per year to twenty-two. Even more churned in from neighboring states. In November 1824, Niles' Register reported, the number of paddle-wheelers in New York had increased from six to forty-three. New York went from stumbling block to keystone in the American economy6

  Aaron Ogden—hero of the Revolution, former New Jersey governor, former United States senator, hated by no one but Thomas Gibbons—went bankrupt. Gibbons had the great satisfaction of seeing his old foe descend into the indignity of debtors' prison. He went free thanks to the aged but still-influential Aaron Burr, who lobbied the New York legislature to enact a law to spare all Revolutionary veterans from imprisonment for debt. Ogden moved to Jersey City in 1829, received an appointment as collector of customs there, and died on April 19, 1839. A man who merely played by the rules of the day, he paid for the sins of the entire system, and was sacrificed for its transformation.

  The Livingston clan was stunned by the Supreme Court's decision. “I had no idea of the court's going to the extent it has,” mused a troubled Edward P. Livingston. “It seems to have adopted opinions which I had thought settled long ago.” He and his brother Robert L. felt insulated, however; their North River Steam Boat Company operated entirely within New York State boundaries, where the monopoly still prevailed. The defeat really belonged to their uncle, John R. Livingston, whose rights covered the waters shared with neighboring states. But the ill-tempered John was determined to make his nephews suffer just as he did. Bitterly admitting failure in his battle against Vanderbilt, he took the Olive Branch off the line to New Brunswick and sent it to Albany to compete against his own family. In the resulting court case, the now more democratic state courts overturned the monopoly entirely. John R. Livingston, one of the oldest survivors of the culture of deference, had destroyed its last remnants. Like the rest of the old patricians, the Livingstons had become merely rich men in an economic war of all against all.7

  For the man who sat in the office of the Thistle as it floated at its New Brunswick dock, counting out shillings and scratching entries in ledgers, the courtroom victory posed an entirely different conundrum. As the commander of Gibbons's forces, Vanderbilt had fought loyally under his chief in a great campaign. But his service had been a whetstone to sharpen his ambition. Now, with Ogden crushed, the Livingstons dispersed, and the monopoly in ashes, what was there to keep him in his master's pay? If even the aging chief justice had caught the rising spirit of the times—a rough, combative individualism—what would restrain the mariner-businessman who best embodied it? In Gibbons's dark, suspicious heart, he knew it was only a matter of time before his iron-willed captain fought his battles for himself.

  WORKMEN BUSTLED AROUND BELLONA HALL, hammering together an extension on the building, laying a new terrace, making improvements to the stables. Vanderbilt urged them to finish by the end of May, when traffic between New York and Philadelphia would pick up dramatically8 His mind raced with ideas for the months ahead, searching for any competitive advantage for the Union Line. The Supreme Court had eliminated Ogden and the Livingstons as competitors, but in so doing had unleashed anarchy upon a business long restrained by law and custom. Already a new rival had appeared: the Citizen's Line, which ran the steamboat Aetna (or “Etney” as Vanderbilt typically chewed up the name). The war of all against all had begun.

  As if to underscore the uncertainties of the age, the Aetna erupted in a massive boiler explosion on the waters of New York Harbor on May 16, 1824. The spectacular accident created a new anx
iety—“the lurking fear that we might burst the boilers,” as one passenger called it. Though Americans were still entranced with the technology of steam, the Aetna disaster planted a seed of that most modern awareness: that progress marches with tragedy, that new capacities breed new horrors. At the time, the press merely focused on the choice of machinery, angrily denouncing the Aetna's owners for using a high-pressure engine. “Let no such boats be trusted,” the Evening Post fumed. Vanderbilt swiftly took advantage by notifying the newspaper that all of the boats on the Union Line “are propelled by the low pressure Steam Engines.”9

  Time would show that the difference between high- and low-pressure engines barely mattered when opposing captains strained their boilers beyond their limits. It was not merely the technology but the new culture of economic conflict that made the steam engine so dangerous to the public. Yet competitive zeal was what powered Vanderbilt in those weeks after Gibbons v. Ogden; rivalry seemed to make his mind ever more nimble, ever quicker, in these rapidly changing times.

  At the end of May, he spent his thirtieth birthday consumed by the threat of a new and more dangerous foe, “the elegant Steam Boat Legislator,” as the Evening Post hailed it. “The Legislator has a large and airy centre dining cabin,” the paper reported, “finished off with mahogany and curled maple; a ladies' cabin richly and beautifully furnished; beside a large and convenient forward cabin containing a bar for refreshments, &c. and is in reality a splendid floating Hotel.”

  Vanderbilt informed Gibbons that the Legislator belonged to a corporation based in New Brunswick; the shares were selling below par, he noted, and soon they might be able to buy enough to take control. (The par value was the official price which the original incorporators were technically obligated to pay.) It was a remarkable piece of creative thinking. In 1824, the corporation was a mysterious abstraction to most Americans, but Vanderbilt already grasped its nature and the market in stocks.10 Indeed, the proposal offered an early hint of methods that would later define his career.

  But it went nowhere. Instead, he and Gibbons met the Legislator with a fare war that drove the cost of the forty-mile journey from New York to New Brunswick down to a shilling. “But within a few days past the fare has been still farther reduced,” commented the New York Daily Advertiser on June 4, “and they now carry for nothing; in some instances a good dinner has been given to all who would accept it.” Vanderbilt—always alert to his personal interests—touted his inn in Union Line advertisements. “The elegant hotel, Bellona Hall, is connected with these boats,” he boasted, “where travellers can be well accommodated, and horses kept at low rates.”

  The Legislator, meanwhile, suffered from its crew's inexperience. Several days after it began to run, schoolteacher Sam Griscom boarded it in New York. “We were getting along very fast, and were in hopes of getting to New Brunswick nearly as soon as the other Boat,” he wrote in his diary; “then thro want of skill the pilot ran the boat on a bar in Raritan Bay.… The captain was very much mortified. I believe that neither he nor his pilot was acquainted with this passage; to add to his mortification, a steam boat passed us, which would carry the tidings of our disaster to N. York”11

  As a teacher, Griscom had no reason to fret about a few minutes' difference in the journey to Philadelphia, but he was caught up in the craze for competition. “The sport arising from ‘boat racing,’” the Evening Post observed, captured the public imagination, as each vessel attracted dedicated adherents. English actress Anne Royall witnessed a race from aboard the Legislator; referring to the boat as “our heroine,” she recounted the chase with breathless excitement. “Although she seized upon the middle of the channel, her rival drew up alongside somewhat boldly, and sometimes had the presumption to run ahead,” she wrote, with a fan's attention to technical detail, “which her ability to sail in shoal water enabled her to do.” Here was everything exciting about the age, captured in a moment: the power of the new machines, the ease and rapidity of travel, the thrill of the daily duel. And the benefits of this competition were clear to see: the passage between Philadelphia and New York shrank to less than ten hours, and fares had never been cheaper.12

  To Vanderbilt's consternation, the Legislator's captain, Lawrence Fisher, rapidly got better, and soon began to beat the Thistle with alarming frequency. On September 3, Vanderbilt won the race to New York; as the Thistle churned up to the pier that was used by both vessels, he ordered his deckhands to tie up in the middle, leaving no room for the enraged Fisher. Harbormaster John Minugh ran out on the dock and ordered Vanderbilt “to haul ahead in order to accommodate the… Legislator.” With characteristic contempt for empty authority, Vanderbilt “refused so to do,” Minugh reported. Vanderbilt continued to block out Fisher whenever he could, snorting at the threat of a $250 fine. The battle was all that mattered.13

  Shortly before six o'clock on the morning of June 2, 1825, Vanderbilt and Fisher ordered their engineers to build up steam for the morning race to New Brunswick. Men and women bound for New Jersey and Philadelphia lined up on the dock, boarding the boats at their berths. Vanderbilt glowered at his rival as Fisher strutted on his deck with pride. “He had beaten the Thistle yesterday,” a passenger remembered Fisher saying, “and [he] intended to go ahead of her still farther today.” The Legislator's engineer was new, but he understood his mission well. “She must beat the Thistle,” he told his assistant (one of many black men who worked the harbor's ferries), who accordingly held down the safety valve to build up extra pressure. The two captains ordered their deckhands to cast off the lines.

  An enormous roar split the air. In the center of the Legislator, the superheated boiler exploded, disintegrating into a shock wave of scalding steam and metal fragments that shattered decks, windows, wheels, bulkheads, and bodies. In horror, Vanderbilt and his passengers watched splinters of the rival vessel shower the water and the dock amid the screams of the wounded. Four died in the blast: two black men (one a slave), one white man, and a boy who worked as a waiter. The new American ethic, to win at all costs, was proving costly14

  THE TIME HAD COME to say farewell to the age of the Founders. The Jubilee—the fiftieth anniversary of independence—approached, and the ever forward-moving Americans chose to look backward. “It is a moment that American history has forgotten,” writes Andrew Burstein, “a moment when two critical generations reaffirmed their connection.” It was a moment of tribute to the last few survivors of that founding generation, in a world that had changed radically since 1776, and changed still more with each passing day.

  The long good-bye began two years early, with the arrival of Marquis de Lafayette, the French nobleman who had thrown himself into the cause of American independence. At the invitation of President Monroe, he sailed to the United States in 1824, making landfall on Staten Island on Sunday, August 15. The Nautilus steamed out to greet him, and he spent his first night in Vice President Tompkins's mansion. The next day Lafayette sailed to Manhattan, where the entire city turned out to welcome him. “It is impossible to describe the majesty of this procession,” wrote one of his companions. “The water was covered with vessels of all descriptions, elegantly decorated.… At length we could perceive the crowds which everywhere covered the shore.” The mayor of New York led squads of troops and public officials in making a formal salute. Lafayette, once the symbol of youthful rebellion, had become the aged emblem of the venerable past to a nation that was joyously sentimental about the Revolution.15

  Even calculating Cornelius found himself swept up in the enthusiasm over the hero's visit. On September 24, the mariner joined a delegation of New Brunswick's dignitaries that awaited Lafayette's arrival at the bridge into town, along with a crowd of some eight thousand citizens. At length the old soldier appeared, and a battery of artillery fired a sixty-nine-gun salute. Vanderbilt presented a fine carriage pulled by four white horses, and personally drove Lafayette on a parade through the streets.16

  Curious, this regard for the past: in so many other ways,
Vanderbilt disdained the delicacy of cultured men, the sentiment that caramelized in the diaries and letters of the literate. “I love you? dearest—Ay, do I love you—and when I love you not, chaos is come again,” Attorney General William Wirt wrote to his wife, in a typical note of the era. Vanderbilt would sooner start writing in Russian than write such things. He was the most commercial creature of a society that was throwing away the traditional social bonds—a self-made man, where the Founders themselves mostly had been old patricians. And yet, his patriotism was sincere, his veneration authentic. His heroes can be identified by the names he gave to his sons: William Henry (after General William Henry Harrison, hero of the War of 1812), George Washington—and Cornelius.17

  As Vanderbilt rose, Thomas Gibbons declined. The old Tory who had helped unlock the “radicalism of the American Revolution,” in Gordon Wood's phrase—the dueling aristocrat who had overthrown aristocratic privilege—faded in the twilight of his generation. His sense of purpose seemed to evaporate in the heat of victory, and the flood of letters that poured from his pen dwindled. His chronic ailments overcame him, and he moved to the elegant patrician enclave of St. John's Park in New York. Vanderbilt largely ran Gibbons's steamboat enterprise, tracking income and expenses on large spreadsheets, boat by boat, month by month. Tension rippled through their relationship as days, even weeks passed between the captain's visits to his employer. “I used to do some things without his knowledge,” Vanderbilt later testified, “and he used to bear me out in them, though sometimes he said he would not do so.”18

  And yet, despite their equally headstrong personalities, the seemingly inevitable conflict between the two never came to pass, thanks in large part to Vanderbilt's admiration for Gibbons. His regard for this impossible old man seemed to run together with his reverence for the Founders, mingling his esteem for the men who had made the nation with that for the former Tory who had helped reshape it.

 

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