by T. J. Stiles
Size—geographical as well as financial—brought challenges faced by no other type of enterprise. The Hudson River Railroad, for example, was far smaller than any of the four trunk lines, yet it stretched 144 miles in length, with sixty-seven locomotives, twenty-nine baggage cars, 130 passenger cars, and 671 freight cars, not to mention twelve engine shops and numerous depots and stations; in 1864, it carried more than 2 million passengers and 600,000 tons of freight. The technical demands of managing such businesses were unprecedented. The best-trained minds in the United States grappled with the problem, developing new systems of organization, control, and accounting.5
The Commodore was surprisingly well prepared to serve as a chief executive in this emerging new world. He previously had served as president of the Stonington, of course, and had sat on the boards of a number of railroads since the 1840s. Perhaps more important was his experience in running far-flung steamship lines, involving multiple ports, transit operations in Central America, and a base on the far side of the continent. Not surprisingly, from his earliest days in railroads he demonstrated a comprehensive grasp of how to delegate authority “Are you a practical railroad manager?” a state assemblyman would ask him in early 1867. “No sir, I don't manage anything,” he would reply. “We have our superintendents, etc., who attend to those matters. All those matters of detail are done by our officers.”6
What Vanderbilt did was set general policies, as well as the overall tone of management. Any corporation has an internal culture shaped by the demands, directives, and expections that rain down from above. The Commodore created an atmosphere of efficiency, frugality and diligence, as well as swift retribution for dishonesty or sloth. As Lambert Wardell observed, “He thought every man could stand watching.” Even though he disclaimed any interest in practical management, he tellingly remarked, “Now and then I get hold of a point that I have to look to. Smooth matters they never say anything to me about.” Every employee knew he was watching.7
As the winter of 1864–65 set in, the end of the Civil War came into view—still a bloody distance away, but visible at last. Grant besieged Lee at Petersburg, and Sheridan had burned out the Shenandoah Valley. Railroads, which had grown little during the conflict, looked forward to peace with plans to lay new track, refurbish infrastructure, and generally reinvest their wartime profits. Lines short and long would soon burst out across the trans-Mississippi West, as seen in the famous example of the transcontinental Union Pacific. The Hudson River Railroad released its pent-up energies into the completion of a double track to the Albany bridge, an enormous span that it was building in conjunction with the New York Central and Western railroads.8
The railroads' massive demand for capital for new construction, even for ordinary maintenance and operations, drove another, subtler revolution. The financial world had long been ruled by generalized merchant capitalists such as Vanderbilt himself, but the railroads' appetite for money far outstripped the capacity of individuals to meet it. Financial institutions—investment banks—now aggregated and channeled the capital of American and foreign investors. The wartime nationalization of the U.S. financial structure, with the introduction of greenbacks and the national bank system, contributed to this development. The frenzy on Wall Street, so notable in Vanderbilt's Harlem corners, centered almost entirely in railroads, which provided by far the largest number of securities actively traded on the exchanges. This, too, played a role in the institutionalization of the economy. The identification of corporations with individuals, already waning when the war began, virtually disappeared in the 1860s, heightening the abstraction of the economic world. On the Pennsylvania Railroad, this process had gone one step further. This trunk line was managed by a professional staff rather than leading stockholders, with an engineer as president (J. Edgar Thomson) and a powerful vice president (Thomas A. Scott) who had risen through the ranks.9
Vanderbilt understood these financial changes; in part, that is why he relied so heavily on a vice president of the Bank of New York, James Banker. But he also represented a glaring exception to these trends. The Harlem was increasingly seen as his personal property, as the Hudson River would be before many months passed. He wielded financial might that surpassed that of the largest banks. The Hudson River estimated the cost of completing its second track to Albany at $900,000; Vanderbilt personally provided at least two-thirds of it, purchasing $600,000 in bonds at 105. This was Vanderbilt summarized in one transaction: maker and exemplar of his times, yet always standing apart, unique in his wealth and power.10
“The influence of one earnest, energetic life upon the world is scarcely appreciated,” Merchant's Magazine declared in January 1865, in a frontpage profile of the Commodore. His name was “inseparably connected with our commercial history.… Perhaps there are two or three men wealthier than he in New York city—but no more; and all of his vast wealth is the product of his own labor.” The theme that ran through the article was the intersection of the broad current of history and the individuality of this man. The journal observed, just as Courtlandt Palmer had back in 1841, that the Commodore valued his reputation for honor, and rewarded “frankness and honesty of speech.” His courtesy toward men worthy of respect was matched by mercilessness toward those who were not. “Deceit and underhand dealing,” the magazine added, “he has ever quickly detected and thoroughly hated.”11
ON DECEMBER 8, 1864, VANDERBILT AND HIS WIFE attended the wedding of their granddaughter, Sophia Cross, to Rev. J. B. Morse, at the home of the bride's parents, Phebe and James M. Cross.12 As the saying goes, their granddaughter had her entire life in front of her, yet she would never witness changes as sweeping as those the Commodore had both experienced and helped to bring about. The biggest had been the advent of change itself—change as a nearly constant state in American society.
“When I was a boy,” George Templeton Strong reflected in early 1865, “the aristocracy lived around the Battery, on Bowling Green.” So it had been since New York was named New Amsterdam, two centuries earlier. Young Cornelius and Sophia Vanderbilt had lived on Broad and Stone streets, in buildings and circumstances that might have been recognizable to Pieter Stuyvesant himself. Then, in the 1820s, the transformation of New York began, as immigrants swarmed in from Germany, Ireland, and the American countryside. The elite relocated, and kept on relocating every decade or so. In 1864, Strong declined to serve as president of Columbia College, since it would require him to move from Murray Hill (the current center of fashion) “to a frontier settlement… on Forty-ninth Street.” He little realized how quickly the city's center of gravity would shift to that very area.13
Each generation flatters itself with the thought that it is the vanguard of the new, sweeping away the stodgy ways of the past. Henry Clews imagined that he and his peers had introduced real cunning to the stock exchange in 1857—unaware that they could never surpass Nelson Robinson's skill at sharp dealing. The brokers who arrived on Wall Street during the Civil War told themselves that the aged Vanderbilt snorted at trains as “these steam contrivances that you tell us will run on dry land,” until he finally bought the Harlem.14 Much of it was nonsense, of course; but once upon a time the old had indeed been new for Vanderbilt and such contemporaries as Erastus Corning and Dean Richmond. These elder statesmen had grown up with the country, with the securities markets and corporations and mechanized transportation and rapid growth that were beginning to define the United States. Small wonder the venerable Commodore remained so quick to grasp possibilities, to accommodate change. Yet the world that they had created trapped them in an intractable conflict that defied even their most well-meaning attempts at compromise.
In April 1864, an exhausted Corning had resigned the presidency of the New York Central, passing the office on to his vice president, Dean Richmond.15 A burly man, more than six feet in height, the sixty-year-old Richmond exuded power. He combed a layer of dark hair across his large, round pate, and peered at his (smaller) fellow directors through heavy-lidded eyes s
et between arching eyebrows and above a fat, mushroom nose and the permanently pursed lower lip so common to jowly faces. He had the look of a man who never moved quickly, for anyone. He, too, had risen from a poor childhood, having moved from Vermont to Syracuse to Buffalo, from clerk to salt manufacturer to commission merchant, before entering the business of railroads. A man of volatile temper, he had little education, with handwriting so abominable that even Corning regularly ordered a clerk to transcribe his letters. He had worked closely with Corning in Democratic Party politics as well as business. The two were recognized as heirs to Martin Van Buren's Albany Regency—though Richmond, unlike Corning, refused to stand for elected office, exerting influence instead as chairman of the Democratic State Central Committee.16
Politics remained uppermost on Richmond's agenda—not electoral but railroad politics. The lucrative business provided by the federal government had muted competition among the trunk lines, but peace threatened to break out. On December 15 and 16, the Union army under General George H. Thomas annihilated the rebel Army of Tennessee at Nashville. At the end of the same month, Sherman completed his March to the Sea. “I beg to present you, as a Christmas gift,” he wired to Lincoln, “the city of Savannah.” And on January 15, 1865, a division led by General Adelbert Ames stormed into Fort Fisher, North Carolina; its capture effectively closed Wilmington, the last rebel seaport. Richmond worried that victory in the South would mean war in the North between the trunk lines.17
As Richmond embarked on his presidency in these troubling times, he spent many of his dinner hours with James Banker, the special representative of Commodore Vanderbilt. Though the Harlem and the Hudson River were minor powers on the railroad landscape, they occupied a strategic position. They provided the Central with a direct rail link to New York, and Richmond had no choice but to pay heed to Vanderbilt (who was, in any case, a major Central stockholder, with some four thousand shares). Still, Richmond saw no reason to cease the practice of shifting the Central's passengers and freight to the People's Line steamboats from spring through fall, when the Hudson was clear of ice and navigable all the way to Albany18
That infuriated John M. Tobin, the Hudson River Railroad president. “It was unjust to insist that the Hudson R.R.R. should form part of its [the Central's] trunk line during three months of the year and be excluded from the advantages of that traffic during nine months of the year,” Horace Clark later explained. “There never has been a man connected with the Hudson River Railroad Company who has not protested against and felt the wrong that such a state of things brought about.”19 This was the issue that brought Vanderbilt's and Richmond's railroads into conflict—the result of the fragmentation of the railroad network, which forced long-distance traffic to pass through the hands of successive companies, each with its own needs and agendas.
The problem came down to a central feature of railroad economics: the difference between through traffic from “competitive points” and purely local traffic from stations where a railway had a monopoly. For freight shipped to New York, the Central could charge higher local rates in Syracuse or Rochester, where it faced no competition, than it could in Buffalo or Chicago, where rival trunk lines fought for the business (especially exports, which theoretically could be shipped from Philadelphia or Baltimore as easily as New York). The Central set the rates for this through freight, and prorated its revenue with the Hudson River on a mileage basis. Daniel Drew's People's Line, on the other hand, operated more cheaply than the Hudson River Railroad, so it accepted less than a pro-rata percentage. Why wouldn't the Central give its business to the steamboats? As Clark admitted, “Before the [Albany] bridge was built, and bulk had to be broken, it might as well be broken and the freight go by river, as the other way.” For the Hudson River, however, this state of affairs brought “all the disadvantages of consolidation without any of its advantages.”20
Tobin wanted compensation—to receive the higher local rates on through freight during the winter.21 For Richmond, this was a frightening prospect. It would cripple the Central's ability to compete with the other trunk lines during the season of ice and snow. He anxiously asked Clark to arrange a meeting with Vanderbilt.
“Commodore Vanderbilt had a great admiration for Dean Richmond,” attorney Chauncey Depew later remarked. “The Commodore disliked boasters and braggarts intensely. Those who wished to gain his favor made the mistake, as a rule, of boasting about what they had done, and were generally met with the remark: ‘That amounts to nothing.’” As Depew's juxtaposition of these observations implies, the Central's president was much like Vanderbilt himself: authentic, honest, and direct. Vanderbilt agreed to intervene on his behalf. “After a severe struggle, Mr. Tobin's policy was overruled,” Clark recalled, “and an agreement was made for that winter through Mr. Richmond and through Mr. Vanderbilt. That winter… the N.Y Central R.R. Co. should fix rates such as they might see fit to fix, in accordance with their policy in competition with the other great trunk lines, and the Hudson R.R.R. Co. should carry them out.”22
Vanderbilt had other interests that impelled him to cooperate with Richmond—particularly the Athens railroad. He had helped Drew create it as a weapon against the Hudson River Railroad; now he needed Richmond's help to prevent it from being turned against himself. Nevertheless, he demanded a price for overriding Tobin: once the ice cleared from the river, the Central would make a permanent arrangement to either give the Hudson River a larger share of freight or pay it compensation.23
Time and again, Vanderbilt showed himself to be patient and diplomatic in his dealings with Corning and Richmond, as he sacrificed short-term profits in return for long-term stability. But the structural conflict between these lines would only get worse.
ON THE AFTERNOON OF February 6, 1865, a Wednesday, Vanderbilt climbed into his wagon outside his office on Bowling Green. He whipped his team of horses up Broadway until he reached Fulton Street, a block below City Hall Park. There he bowled over a woman named Caroline Walter; her fright and the ensuing confusion can only be imagined. An Officer Dodge arrested the Commodore and took him to the glowering, neo-Egyptian Tombs, the police court and city jail. Mrs. Walter did not appear to make a complaint, so the judge released Vanderbilt. The victim had not been seriously injured, and perhaps she thought it best to let the powerful man go about his business.24
One week prior to his brief imprisonment, the House of Representatives had voted to abolish slavery, by sending the Thirteenth Amendment to the states for ratification. It was both a revolutionary act and a practical recognition that the war had destroyed slavery as a functioning institution. In both senses, it demonstrated how thoroughly America's most costly conflict remade the nation.
But the war itself approached an end. In fighting that began on March 24, the Confederate position at Petersburg crumbled. On April 2, Grant launched a decisive attack that sent Lee's army fleeing to the west. The next day, Lincoln (who had been visiting the Army of the Potomac) entered the fallen Confederate capital.25
When the news reached Wall Street, the rector of Trinity Church began to ring the bell, over and over, joining a symphony of church bells that chimed all over New York. Crowds crowded the pavement. “All the cheers I ever listened to were tame in comparison,” Strong wrote. The massed men—for they were all men on Wall Street—sang “John Brown's Body” and “The Star-Spangled Banner,” and waved their hats in ecstasy now that the long nightmare had ended, and ended in victory. “I walked about on the outskirts of the crowd,” Strong added, “shaking hands with everybody, congratulating and being congratulated by scores of men I hardly know even by sight. Men embraced and hugged each other, kissed each other, retreated into doorways to dry their eyes and came out again to flourish their hats and hurrah. There will be many sore throats in New York tomorrow.”26
The war was not over yet. On April 7, Grant's troops caught Lee's army at Appomattox Courthouse, where a truce was called. Sheridan rode to meet Confederate general John B. Gordon, and complained
that a South Carolina unit was firing on General Wesley Merritt's men. He asked Gordon to dispatch orders to cease fire. “He answered, ‘I have no staff-officer to send,’” Sheridan wrote in his memoirs.
Whereupon I said that I would let him have one of mine, and calling for Lieutenant Vanderbilt Allen, I directed him to carry General Gordon's orders to General Geary, commanding a small brigade of South Carolina cavalry, to discontinue firing. Allen dashed off with the message and soon delivered it, but was made a prisoner, Geary saying, “I do not care for white flags; South Carolinians never surrender.” By this time Merritt's patience being exhausted, he ordered an attack, and this in short order put an end to General Geary's “last ditch” absurdity, and extricated Allen from his predicament.
The Commodore's grandson was one of the last prisoners of the Civil War, and, ironically, carried one of the last Confederate orders. On April 9, Lee surrendered.27
“We have the astounding intelligence of the assassination of President Lincoln & the attempt to assassinate Mr. Seward,” New York Central director John V. L. Pruyn wrote in his diary on April 15. “The whole community has been stirred to its deepest depths by these events. Their results cannot be predicted.… Every face bears evidence of emotion. It is a terrible, a fearful tragedy.” At the moment of victory, the great emancipator had been shot dead by John Wilkes Booth—on Good Friday, no less. Three days later, Pruyn observed in Albany, “All buildings in the city almost without exception, are hanging emblems of mourning for the death of President Lincoln. Accounts from every part of the country show this to be the case everywhere. The grief seems to be universal & profound.”28