The First Tycoon

by T. J. Stiles

  9 Beckert, 136–7, 148; James A. Ward, J. Edgar Thomson: Master of the Pennsylvania (Westport, Conn.: Greenwood Press, 1980), 93–6; Chandler, Visible Hand, 90–4, 105.

  10 Executive Committee Minutes, February 16, 1865, HR, oversize vol. 249, NYCRR; NYSAD 19, 90th sess., 1867.

  11 MM, January 1865.

  12 NYT, December 9, 1864.

  13 Strong, 3:409, 565.

  14 Henry Clews, Fifty Years in Wall Street (New York: Irving Publishing, 1908), 3–7, 110. For an example of how this mistaken notion that CV hated trains has taken hold in popular thinking, see John Steele Gordon, An Empire of Wealth: The Epic History of American Economic Power (New York: HarperCollins, 2005), 212.

  15 Cochran, 178–9; John V. L. Pruyn Journal, April 28–30, 1864, box 2, John V. L. Pruyn Papers, NYSL (to be referred to hereafter as “Pruyn Journal”).

  16 NYT, August 28, 1866; CT, August 30, 1866; Pruyn Journal, November 10, 1864; Directors' Minutes, August 29, 1866, NYC, vol. 4, box 34, NYCRR; Cochran, 178–9; Hungerford, 193–4. For examples of EC's need for transcriptions of Richmond's letters, see fold. 5, box 38, ECP.

  17 Stiles, 141–2. For insight into the trunk line diplomacy that would ensue in 1865, see Dean Richmond to J. Edgar Thomson, June 22, 1865, J. Edgar Thomson to Dean Richmond, September 15, 1865, J. Edgar Thomson to Samuel J. Tilden, August 13, 1865, fold. 3, box 6, Samuel J. Tilden Papers, NYPL.

  18 Another factor in their relationship was the railroads' co-ownership of the Albany bridge, which required a further infusion of $400,000 for completion; Pruyn Journal, November 10, 1864, December 12, 1866; NYSAD 19, 90th sess., 1867; Directors' Minutes, February 7, 1865, HR, oversize vol. 248, NYCRR. For more evidence of JHB's role as CV's messenger at this time, see CV to Edwin D. Morgan, February 7, 1865, CV to Edwin D. Morgan, June 4, 1866, fold. 2, box 13, Edwin D. Morgan Papers, NYSL.

  19 NYSAD 19, 90th sess., 1867.

  20 Ibid. The fast steamboats of the People's Line remained reasonably competitive in terms of speed with the HR passenger trains, which averaged twenty-five to thirty miles per hour, including stops; see HR Annual Reports, oversize vol. 241, NYCRR.

  21 NYSAD 19, 90th sess., 1867.

  22 Ibid.; Chauncey M. Depew, My Memories of Eighty Years (New York: Charles Scribner's Sons, 1922), 37.

  23 NYSAD 19, 90th sess., 186.

  24 NYT, February 10, 1865.

  25 McPherson, 838–40, 845–6.

  26 Strong, 3:573–5.

  27 McPherson, 847–9; Philip H. Sheridan, Personal Memoirs of P. H Sheridan, vol. 2 (New York: C. L. Webster, 1888), 195–7; John B. Gordon, Reminiscences of the Civil War (New York: Charles Scribner's Sons, 1904), 441.

  28 Pruyn Journal, April 15, 18, 1865; McPherson, 853.

  29 McPherson, 854.

  30 McPherson, 853. As McPherson also notes, 484–9, disease was far more deadly to soldiers than enemy weaponry. On the social response to the war, see David W. Blight, Race and Reunion: The Civil War in American Memory (Cambridge, Mass.: Harvard University Press, 2001); and Drew Gilpin Faust, This Republic of Suffering: Death and the American Civil War (New York: Alfred A. Knopf, 2008).

  31 Strong, 4:25; NYTr, September 25, 1878; Faust, 180–5; Anne Braude, Radical Spirits: Spiritualism and Women's Rights in Nineteenth-Century America (Boston: Beacon Press, 1989), 2–6.

  32 NYTr, October 16, 24, 1878; NYS, November 14, 1877.

  33 Directors' Minutes, June 6, 1865, HR, oversize vol. 248, NYCRR.

  34 Directors' Minutes, June 12, 13, 1865, HR, oversize vol. 248, Executive Committee Minutes, December 8, 1865, May 5, 1866, HR, oversize vol. 249, NYCRR; RT, August 19, 1865. See also Directors' Minutes, December 6, 1864, HR, oversize vol. 247, NYCRR, and HW, August 12, 1865.

  35 Directors' Minutes, April 26, 1865, Michigan Southern and Northern Indiana Railroad Company, reel 67, box 243, NYCRR; Medbery 176–7; Fowler, 176, 256–60. CV reportedly held $7 million in Erie bonds; CT, January 10, 1865.

  36 Pruyn Journal, June 19, 20, 21, 1865.

  37 NYH, August 23, 1865; Hungerford, 196; NYSAD 19, 90th sess., 1867.

  38 Lib to Cornele, n.d., Family Record, WFP.

  39 CV to Oliver E. Williams, September 2, 1865, WFP.

  40 PS, October 26, 1865; NYS, December 19, 1877. Harlem Lane later became St. Nicholas Avenue; NYT, October 2, 1872.

  41 NYH, November 21, 1865; Atlantic Monthly, May 1868. Apart from a horse named Commodore Vanderbilt, there was no sign that CV attended these events.

  42 NYTr, February 6, 1879; John Y Simon, ed., The Papers of Ulysses S. Grant, vol. 16 (Carbondale: Southern Illinois University, 1988), 79–80. WHV had already met Grant, having escorted him in a Harlem Railroad train to Albany in July, and was an admirer of the general; NYT, July 6, 1865.

  43 Round Table, November 25, 1865; NYT, September 7, 1871; Francis Gerry Fairfield, The Clubs of New York (New York: Henry L. Hinton, 1873), 138–43; HW, July 11, 1868.

  44 Fairfield, 138–43; LW Dictation. CV resigned from the New York Yacht Club on February 13, 1850; Book of Minutes, box 1: July 30, 1844, to March 18, 1891, New York Yacht Club Library and Archives.

  45 NYTr, February 26, December 5, 1867; New York Observer and Chronicle, November 23, 1865; Depew, 14–5.

  46 NYH, December 14, 1866. In January 1867, Henry Keep would testify, “We suppose that Mr. Vanderbilt has managed the NY. Central for the last two years, through men in his interest.” See NYSAD 19, 90th sess., 1867. Keep was wrong, but the quote demonstrates how Banker was perceived.

  47 NYS, December 22, 1877.

  48 NYS, December 19, 27, 1877, March 13, 1878, NYTr, March 6, 1878.

  49 CJV to HG, February 26, n.d., reel 3, HGP This letter, though dated without a year, was written from Litchfield, Conn.; as will be seen, CJV went into the asylum in Litchfield in December 1865, showing that this letter must have been written in 1866.

  50 NYS, December 27, 1877; NYW, December 22, 1877.

  51 NYS, December 27, 1877; CJV to HG, February 26, n.d., reel 3, HGP.

  52 NYS, December 27, 1877; Henry S. Thatcher and George Buckland v. CJV, April 2, 1867, LJ-1867-V-192, Supreme Court Law Judgments, NYCC.

  53 NYS, December 19, 1877.

  54 CJV to HG, February 26, n.d., reel 3, HGP.

  55 HW, March 17, 1866; SA, July 6, 1867.

  56 NYT, January 25, 1866; Commercial and Financial Chronicle, January 27, 1866.

  57 Smith, 119; RGD, NYC 374:1.

  58 NYT, March 19, 1866; NYSAD 19, 90th sess., 1867.

  59 RT, August 3, 1867.

  60 NYSAD 19, 90th sess., 1867.

  61 Strong, 4:77; McKay, 218–9; Beckert, 173; Burrows & Wallace, 986–8.

  62 Directors' Minutes, June 25, 1866, HRR, reel 27, box 242, NYCRR. At the annual election on May 15, CV personally voted 60,647 of the 75,560 shares represented. Tobin voted 31,500, and WHV 10,600.

  63 NYSAD 19, 90th sess., 1867.

  64 NYH, January 20, 1869; SED 46, 39th Cong., 1st sess., vol. 2.

  65 HW, January 6, September 15, 1866; Nation, June 5, 1866.

  66 NYH, May 30, June 1, 1866; NYT, May 29, 30, June 4, 1866; American Law Review, October 1868; Frank Work v. Daniel Drew, John E. Eldridge, Alexander Drew, Homer Ramsdell, J. C. Bancroft Davis, Henry Thompson, Dudley Gregory, Frederick A. Lane, George Gravel, James Fisk Jr, Jay Gould, and William Skidmore, July 24, 1868, file PL-1868-W-25, Supreme Court Pleadings, NYCC; CFA “A Chapter of Erie,” NAR, July 1869. On the law that created the additional shares, see RT, May 7, 1864.

  67 CT, January 10, 1865.

  68 JMD to EC, June 1, 1866, fold. 5, box 88, ECP; NYSAD 19, 90th sess., 1867.

  69 Buffalo Freight Convention, May 2, 1866, Proceedings of the Railway Meeting Held at the St. Nicholas Hotel, New York, May 22d and 23d, 1866, called by the Vice President of the Erie Railway Company, in pursuance of a resolution passed at Buffalo, May 2d, 1866, Erie Railway Company Collection, Baker Library, Harvard Business School; Chandler, Visible Hand, 123. Chandler, it should be noted, wrote generally
of the cartels the railroads repeatedly formed over this period.

  70 NYSAD 19, 90th sess., 1867.

  71 This conversation is taken from HFC's testimony, NYSAD 19, 90th sess., 1867.

  72 Testimony of HFC, NYSAD 19, 90th sess., 1867. After taking over as president of the Central in 1864, Richmond had pushed to include more Republicans in the Central board, to improve the chances of convincing the Republican-dominated legislature to increase the legal limit on passenger fares. That bill failed. Pruyn protested the move as tending to bring politics into the railroad's management; Pruyn Journal, November 10, 1864.

  73 HFC and CV testimony, NYSAD 19, 90th sess., 1867. On the proposed consolidation or lease, see also NYTr, July 26, 1866; NYH, December 14, 1866.

  74 NYSAD 19, 90th sess., 1867. On the proposed consolidation or lease, see also NYTr, July 26, 1866; NYH, December 14, 1866.

  75 CT, October 14, 1866; RT, July 13, August 3, 1867.

  76 NYSAD 19, 90th sess., 1867.

  77 NYTr, August 11, 1866.

  78 NYH, July 1, 1865, May 30, 1866.

  79 BE, July 17, 1866; CT, October 24, 1867.

  80 Fowler, 242–3.

  81 NYH, December 14, 1866; HW, January 11, 1868; JMD to EC, June 18, 1866, fold. 5, JMD to EC, June 19, 1866, fold. 3, box 88, ECP; Stiles, 249–51. See also NYH, July 15, 1865; Pruyn Journal, December 12, 1866.

  82 EP, July 31, in CT, August 3, 1869; Fowler, 255–6; HW, January 11, 1868. For more background on Keep's campaigns, see Edmund Clarence Stedman, ed., The New York Stock Exchange (New York: Stock Exchange Historical Company, 1905), 190–4.

  83 G. C. Davidson to EC, July 1866?, fold. 3, box 88, ECP.

  84 NYT, December 19, 1866, would note that Keep returned from England “with his coat-pockets full of London proxies.”

  85 NYSAD 19, 90th sess., 1867.

  86 NYT, August 28, 1866; NYTr, in CT, August 30, 1866; Directors' Minutes, August 29, 1866, NYC, vol. 4, box 34, NYCRR.

  87 BE, November 19, 1866; Directors' Minutes, September 27, 1866, NYC, vol. 4, box 34, and Executive Committee Minutes, September 22, 1866, HR, oversize vol. 249, NYCRR; CT, October 14, 1866; NYSAD 19, 90th sess., 1867.

  88 See the testimony of the parties cited in NYSAD 19, 90th sess., 1867. The information and quotes that follow are taken from the same source, until otherwise noted.

  89 All of the foregoing is from NYSAD 19, 90th sess., 1867.

  90 NYT, December 19, 1866.

  91 Testimony of CV, NYSAD 19, 90th sess., 1867.

  92 “Dinner to the President of the United States, in Honor of His Visit to the City of New York, August 29, 1866, at Delmonico's, Fifth Avenue and Fourteenth Street,” fold. 4, box 6, Samuel J. Tilden Papers, NYPL; Foner, 264–5. For an attack on the capitalists (including “the Vanderbilts”) for their tribute to Johnson, see NYT, September 7, 1866.

  93 Foner, 243–51.

  94 Foner, 235; HW, September 15, 1866. Given that this is a biography, and not a study of economic ideology, I am restricted to a schematic discussion. Given the enormous changes of this era, both political parties lost much of the cohesion in their economic views, leading to complexities to which I cannot do justice here.

  95 NYT, October 7, 1866; Strong, 4:108–9; NYT, October 13, 1866; Directors' Minutes, May 13, 1859, NYC, vol. 2, box 33, NYCRR.

  96 Boston Journal, in BE, November 19, 1866; NYH, September 10, 1873; AtlC, October 21, 1875. I am mixing in these later reports in the belief that they are consistent with the contemporary reporting in the Journal story, reprinted in BE.

  97 HG to EC, June 8, 1866, fold. 3, box 88, ECP; CV to Edwin D. Morgan, December 28, 1866, fold. 2, box 13, Edwin D. Morgan Papers, NYSL; NYH, October 3, 1869; HW, November 23, 1867.

  98 NYT, December 12, 19, 1866; NYH, December 14, 1866; Directors' Minutes, December 12, 1866, NYC, vol. 5, box 34, NYCRR.

  99 Directors' Minutes, December 20, 1866, NYC, vol. 5, box 34, NYCRR; testimony of Robert L. Banks, Henry Keep, WHV, NYSAD 19, 90th sess., 1867.

  100 The conversation is from CVs testimony, NYSAD 19, 90th sess., 1867. For CVs remarks on Corning and Keep, see JMD to EC, February 1, 1867, fold. 3, box 89, ECP.

  101 Testimony of WHV and HFC, NYSAD 19, 90th sess., 1867.

  102 Testimony of WHV, CV and AS, NYSAD 19, 90th sess., 1867.

  103 Testimony of AS and CV NYSAD 19, 90th sess., 1867.

  104 Directors' Minutes, January 14, 1867, HR, oversize vol. 248, Directors' Minutes, January 14, 1867, HRR, reel 26, box 242, NYCRR; testimony of WHV NYSAD 19, 90th sess., 1867. See also NYH, January 15, 1867.

  105 Testimony of CV NYSAD 19, 90th sess., 1867; Albany Evening Journal, January 18, 1867; NYT, January 19, 1867; NYH, January 18, 19, 20, 1867. For the impact of the blockade on the Central's business, see also the testimony of Harlow W. Chittenden, NYSAD 19, 90th sess., 1867. The Central attempted to send through freight by a roundabout route, using the Housatonic Railroad, but experienced great difficulties arranging it.

  106 BE, January 21, 1867; NYH, January 17, 19, 1867.

  107 Testimony of CV NYSAD 19, 90th sess., 1867.

  108 NYT, January 23, 1867; NYT, January 23, 1867.

  109 Henry Keep to EC, January 17, 1867, fold. 3, box 89, ECP; Directors' Minutes, January 17, 1867, HR, oversize vol. 248, NYCRR; testimony of H. Henry Baxter, NYSAD 19, 90th sess., 1867.

  110 Testimony of WHV NYSAD 19, 90th sess., 1867.

  111 Testimony of Henry Keep, NYSAD 19, 90th sess., 1867; JMD to EC, January 24, 1867, fold. 3, box 89, ECP. See also NYT, January 25, 1867.

  112 JMD to EC, January 25, 1867, fold. 3, box 89, ECP.

  Sixteen Among Friends

  1 For a reference to CV as “the Railroad King of New York,” see CT, December 16, 1867. For references to “railroad kings” in a general sense, see Albany Evening Journal, January 21, 1867.

  2 See, for example, CFA, “A Chapter of Erie,” NAR, July 1869; Alfred D. Chandler Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass.: Harvard University Press, 1977), 149.

  3 Keep delegated to EC authority to manage relations with CV—for example, to equalize sleeping-car income with the HR, “and make such other arrangements” as might be in the interests of the company; Directors' Minutes, February 15, 1867, NYC, vol. 5, box 34, NYCRR.

  4 WHV to JFJ, April 30, 1867, box 3, JFJP-2.

  5 NYT, June 29, August 7, 1867; RT, July 13, 1867; Directors' Minutes, July 25, August 22, 1867, NYC, vol. 5, box 34, NYCRR; Erastus Corning Jr. to EC, July 27, 1867, fold. 2, box 89, ECP.

  6 Flag of Our Union, June 22, 1867.

  7 Testimony of HFC, NYSAD 142, 92nd sess., 1869; NYT, April 4, 1867; Proceedings of the Stockholders' Meeting, March 30, 1867, Directors' Minutes, HR, oversize vol. 248, NYCRR.

  8 CFA, “The Railroad System,” in CFA and Henry Adams, Chapters of Erie and Other Essays (New York: Henry Holt, 1871), 403.

  9 Recent historical and popular literature does a poor job of explaining why stock watering was considered such an abuse in the nineteenth century. (Of course, I simply may not have read widely enough.) For example, John Steele Gordon, The Scarlet Woman of Wall Street: Jay Gould, Jim Fisk, Cornelius Vanderbilt, the Erie Railway Wars, and the Birth of Wall Street (New York: Weidenfeld & Nicholson, 1988), 87, writes that it was seen as “cheating the stockholders by diluting their equity,” which misses the real complaint, and does not touch the underlying thinking that made it such a politically sensitive subject. See CFA, “The Railroad System,” 398–413. For an enlightening discussion between CVs executives and state legislators on the problem of “fictitious capital,” see NYSAD 142, 92nd sess., 1869. Stock watering was a focus of the famous Hepburn Committee, NYSAD 38, 103rd sess., 1880. For a contemporary attack on the “great evil” of “fictitious capital,” see BM, August 1869. See also Montgomery Rollins, “Convertible Bonds and Stocks,” Annals of the American Academy of Political and Social Science 35, no. 3 (May 1910): 97–110. Fowler, 24–5, is especially good at expressing the wonder h
is contemporaries felt for the abstraction of corporate finance.

  10 HC, March 18, 1867; NYT, April 4, 1867.

  11 Spuyten Duyvil & Port Morris Railroad Company Minutes Book, vol. 1, box 39, NYCRR; NYT, April 21, 1870. When Daniel Drew had operated the Upper Bull's Head Tavern on Third Avenue, it had been the primary north-south route to the city; see Walter Blair v. Daniel Drew, March 10, 1831, Court of Common Pleas, file 1831–87, and Fitz G. Halleck v. Daniel Drew, March 15, 1820, Court of Common Pleas, file 1820–479, NYCC.

  12 RT, July 13, 1867; NYT, May 20, August 29, September 11, 1867; Directors' Minutes, December 11, 1867, NYC, vol. 5, box 34, NYCRR. On the Great Western's third rail (it had been built to a gauge of 5′6”) and the creation of a through line on the North Shore, see Directors' Minutes, November 8, 1866, NYC, vol. 5, box 34, NYCRR; CT, January 9, 1867.

  13 Nathaniel Thayer to EC, November 26, 1867, fold. 8, box 39, JMD to EC, December 7, 1867, fold. 2, box 90, ECP; Directors' Minutes, December 11, 1867, NYC, vol. 5, box 34, NYCRR. On Joy, see Alfred D. Chandler Jr. and Stephen Salsbury, “The Railroads: Innovators in Modern Business Administration,” in Bruce Mazlish, The Railroad and the Space Program: An Exploration in Historical Analogy (Cambridge, Mass.: MIT Press, 1965), 152; Julius Grodinsky, Transcontinental Railway Strategy, 1869–1893: A Study of Businesmen (Philadelphia: University of Pennsylvania Press, 1962), 5–6.

  14 WHV to JFJ, January 29, 1868, JFJP See also WHV to JFJ, May 14, 1868; Memorandum of Agreement, December 17, 1868; and H. E. Sargent to JFJ, May 16, 1874; all in JFJP; Notice of NYC&HR, October 1, 1874, Document Summary, box 5, JFJP-2. WHV used back channels to reassure Joy as well, speaking to Samuel Sloan of the Vanderbilts' desire to treat the North Shore lines fairly; Samuel Sloan to JFJ, August 30, 1867, JFJP.

  15 RGD, NYC 374:1; Buffalo Express, in CT, December 16, 1867; NYT, October 15, 1866; testimony of CV, NYSAD 19, 90th sess., 1867. For high praise for his Harlem management, from a very skeptical source, see the Nation, March 26, 1868. See also praise from the RT, September 30, 1865, for CVs emphasis on safety.