The First Tycoon

by T. J. Stiles

  88 NYH, June 8, 1870; CT, June 7, 8, 11, 1870; NYT, June 7, 8, 1870; RRG, May 14, June 11, 1870; Klein, 96.

  89 NYTr, June 14, 1870, in CT, June 16, 1870; NYT, March 16, 1870; Klein, 92.

  90 NYTr, June 29, 1870; CT, July 2, 4, 6, 1870; RRG, July 2, 1870; see also HC, June 13, 1870; NYH, June 19, 1870. These newspaper reports make clear that the Erie initiated the cut to $1 per car, often ascribed to the Central by historians.

  91 NYT, July 1, 15, 1870; New York Commercial, in CT, August 2, 1870.

  92 The press reports of this encounter named Richard, not Augustus, Schell, but I think this was a mistake. Richard played no part in the Central's management, but the Schell at this meeting pressed for a compromise. NYS in CT, August 13, 23, 1870; Albion, August 20, 1870; NYT, August 23, October 29, 1870; NYS, November 28, 1872.

  93 RRG, July 2, November 19, 26, December 3, 17, 24, 1870; Circular, July 25, 1870; The Stockholder, in RRG, September 17, 1870; HC, November 26, 1870, July 19, 1871; Directors' Minutes, July 6, 1871, Dunkirk, Warren & Pittsburgh Railroad Company, reel 58, box 242, Directors' Minutes, May 3, 1871, LS&MS, reel 65, box 243, NYCRR; Edward Chase Kirkland, Men, Cities, and Transportation: A Study in New England History, 1820–1900, vol. 1 (Cambridge, Mass.: Harvard University Press, 1948), 372–5.

  94 NYT, October 13, 1870; The Telegrapher, in RRG, October 29, 1870. CV would imply (though not explicitly state) that he had no stake in Western Union, in NYT, January 21, 1873. Norvin Green, then a vice president of Western Union, later testified before Congress, “In 1869 Commodore Vanderbilt and his friends came in. Horace Clark… and Mr. Schell and a number of leading men came into the company and organized an executive committee, suspended dividends, and introduced some new features.” See SR 577, 48th Cong., 1st sess., vol. 1, 2238. Historians have generally taken this as proof of CVs leading role. See, for example, Julius Grodinsky, Jay Gould: His Business Career, 1867–1892 (Philadelphia: University of Pennsylvania Press, 1957), 150. However, Green seems to have been speaking casually; he misdated this event by a year (among other factual errors he made in his testimony), and may have been making the offhand connection between CV and HFC that most observers made at the time. I am not fully convinced that CV did in fact invest in Western Union at this time. See also SR 1262, 48th Cong., 2nd sess., vol. 1, 948–9.

  95 CT, May 5, 6, 1870; RRG, May 7, June 4, 1870; NYTr, in RRG, May 21, 1870; NYT, May 25, 27, 1870; RT, June 18, 1870.

  96 NYT, November 23, 24, 1870.

  97 CT, August 29, 1870. CVs defenders often wrote that he engaged in secret charity disdaining public approbation; see a letter to the editor, NYS, September 24, 1870.

  98 Edward M. Deems and Francis M. Deems, Autobiography of Charles Force Deems and Memoir by his Sons (New York: Fleming H. Reveli, 1897), 194, 196, 205; NYTr, October 24, 1878; NYT, September 2, 1870, August 3, 1874.

  99 NYTr, January 15, 1877; Deems, 206–7.

  100 Deems, 207–8.

  101 Deems, 208–14; Charles F. Deems to Mrs. Vanderbilt, August 6, 1870, Mrs. F. A. Vanderbilt Papers, Burton Historical Collection, Detroit Public Library; HC, August 5, 1870; NYT, September 2, 1870.

  102 CV was quoted by Edwin D. Worcester, NYTr, February 13, 1879.

  103 NYS, December 15, 1877.

  104 CT, September 3, 1871; NYT, October 15, November 2, 1871, August 3, 1874; NYT, January 5, 1877.

  105 NYT, March 20, 23, 1870; NYS, December 20, 1877; Ellen W. Vanderbilt to HG, October 18, 1871 [?], reel 3, HGP.

  106 Cornelius J. Vanderbilt to George Terry, May 12, 1871, fold. 24, and Cornelius J. Vanderbilt to George Terry, n.d., fold. 26, box 59, ser. 13, Colt Family Papers, Special Collections, University Libraries, University of Rhode Island.

  107 NYH, August 3, 1871; NYT, August 3, 18, September 3, 16, 1871.

  108 NYW, June 30, 1871, in RRG, July 8, 1871; RT, August 12, 1871; HW, February 3, 1872; Burrows & Wallace, 944.

  109 Directors' Minutes, May 16, 1871, Lease Agreement, November 17, 1872, HRR, reel 27, box 242, NYCRR; NYSSD 41, February 28, 1872. The taking of land for the depot, under the state authorization of 1869, resulted in extended, tedious legal complications; RT, July 23, 1870.

  110 NYT, November 17, 1871; Burrows & Wallace, 929–31, 943–5.

  111 NYH, July 28, 1871; Second Annual Report of the President and Directors of the Lake Shore & Michigan Southern Railway Company, to the Stockholders for the Fiscal Year Ending December 31, 1871 (Cleveland: Fairbanks, Benedict & Co, 1872), Baker Library, Harvard Business School.

  112 NYH, October 20, 1871; RRG, October 28, 1871; Second Annual Report of the… Lake Shore.

  113 CT, May 6, 1871; NYT, April 25, 1871; BM, March 1872.

  114 NYT, September 7, 1871; Seymour J. Mandelbaum, Boss Tweed's New York (New York: John Wiley & Sons, 1965), 76–86; Burrows & Wallace, 1008–11. The Samuel J. Tilden Papers in the New York Public Library collections show frequent correspondence with AS.

  115 NYT, September 7, December 30, 1871; CT, August 7, 1872. As a sign of just how close AS and HFC were, HFC served as the equivalent of best man in AS's Quaker wedding in 1873; CT, March 27, 1873.

  Eighteen Dynasty

  1 NYH, January 13, 1872; NYT, October 17, 19, November 16, 17, 18, 22, 1871, December 12, 1871. For a count of the number of trains that ran on Fourth Avenue, see WHV's testimony, NYSSD 41, February 28, 1872. For earlier complaints about the noise and danger of the trains on Fourth Avenue, see Jonas P. Sevy to Corporation Counsel, July 27, 1868, Jonas P. Sevy to Corporation Counsel, July 27, 1868, box 1216, Mayor John T. Hoffman Correspondence, Mayors' Papers, NYMA.

  2 NYH, January 13, 1872.

  3 NYT, January 27, 1872.

  4 Adam Smith, The Wealth of Nations (New York: Modern Library, 2000), book 1, chap. 10, part 1, 148; Alfred D. Chandler Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass.: Harvard University Press, 1979), 137.

  5 John D. Rockefeller Sr. to Laura S. Rockefeller, December 15, 1871, fold. 270, box 36, Record Group 1.2, Rockefeller Archives Center, Sleepy Hollow, N.Y.; Ron Chernow, Titan: The Life of John D. Rockefeller, Sr. (New York: Random House, 1998), 133–8; Edward Harold Mott, Between the Ocean and the Lakes: The Story of Erie (New York: Ticker Publishing, 1908), 467–70; Rolland Harper Maybee, Railroad Competition and the Oil Trade, 1855–1873 (Mount Pleasant, Mich.: Extension Press, 1940), 244–6, 253, 263–4, 280, 282, 285–305.

  6 John D. Rockefeller Sr. to Laura S. Rockefeller, December 15, 1871, fold. 270, box 36, Record Group 1.2, Rockefeller Archives Center, Sleepy Hollow, N.Y; NYT, August 22, 28, 1879; WHV to J. H. Devereaux, July 2, 1872, and John D. Rockefeller to J. H. Devereux, December 7, 1872, fold. 19, box 1, New York Central Railroad Collection, Albany Institute for History and Art, Albany, N.Y; H. E. Sargent to JFJ, May 16, 1874, JFJP; JMD to EC, June 3, 1868, fold. 8, box 39, ECP; Chernow, 110–7. Rolland Harper Maybee, Railroad Competition and the Oil Trade, 1855–1873 (Mount Pleasant, Mich.: Extension Press, 1940), is an excellent study of the economics of oil traffic for railroads, and the advantages of the SIC.

  7 CT, April 3, 1872; NYSAD 38, 103rd sess., 1880, 40–1; H W, July 12, 1873; RRG, June 13, 1874; Maybee, 101–10, 165–72, 182–8, 286; James A. Ward, J. Edgar Thomson: Master of the Pennsylvania (Westport, Conn.: Greenwood Press, 1980), 95–6, 140–51; Scott Reynolds Nelson, Iron Confederacies: Southern Railways, Klan Violence, and Reconstruction (Chapel Hill: University of North Carolina Press, 1999), 71–94; Chandler, Visible Hand, 151–6. On Scott's role as mentor to Carnegie, see David Nasaw, Andrew Carnegie (New York: Penguin, 2006), 55–85.

  8 Nasaw, 59–60, 61–3, 105–112; Nelson, 138–62; Maybee, 101, 114, 133–8, 286. Nasaw writes, 122, that Scott “followed the standard financing practices of the time and established improvement companies,” whereas Scott had pioneered the form. Ward, 150, notes that Scott, for example, organized the Pennsylvania Company, a subsidiary corporation that owned or leased the Pennsylvania's western connections.

  9 Chandler, Visible Ha
nd, 145–87. Chandler astutely discusses these divergent patterns of system building, but fails to appreciate the defensive advantages of CVs decision not to integrate his lines. As noted, CV not only insulated his companies from each other's ailments, but also shielded himself from political outrage at his expanding reach.

  10 Maury Klein, Union Pacific: Birth of a Railroad, 1862–1893 (Garden City, N.Y: Dou-bleday 1987), 286–7; Nasaw, 122–4. Citations of “Klein” below refer to Jay Gould.

  11 NYT, March 22, 26, 1872; Chernow, 141–2.

  12 NYH, January 7, 9, 1872; HW, January 20, 1872; NYT, May 2, 1874; New York Observer and Chronicle, February 29, 1872; BM, March 1872; CT, January 1, 1873; Klein, 121–5. The phrase “porcine carcass” is from William L. Garrison to Wife, May 24, 1871, William Lloyd Garrison Papers, Rare Books and Manuscripts Department, Boston Public Library.

  13 CT, April 1, 1872; NYTr, June 15, 1878; Family Record, WFP.

  14 Both Smith and Corey testified to their conversations during the will trial; NYTr, June 15, 1878.

  15 Cornelius J. Vanderbilt to George Terry, April 12, 20, May 14, 1871, fold. 24, box 59, ser. 13, Colt Family Papers, Special Collections, University Libraries, University of Rhode Island. In making these generalizations, I am drawing on a reading of the full contents of folds. 23–26, box 59, ser. 13, in this collection.

  16 NYS, December 19, 22, 1877; NYT, December 29, 1877; NYTr, February 27, 1878; CT, January 13, 1873; CJV to HG, June 25, 1872, reel 3, HGP.

  17 Chauncey M. Depew, My Memories of Eighty Years (New York: Charles Scribner's Sons, 1922), 91–2; Foner, 501–10; NYT, April 16, 1872.

  18 NYT, March 15, 1872; CT, April 5, 1872; NYH, April 18, 20, 22, 1873.

  19 NYT, April 11, 16, 19, 20, 23, 1872; NYH, April 23, 24, May 3, 1872.

  20 CV to Samuel J. Tilden, May 20, 1872, Samuel J. Tilden to CV, June 14, 1872, fold. 8, box 7, Samuel J. Tilden Papers, NYPL.

  21 Grenville M. Dodge, Philadelphia, to U. S. Grant, June 6, 1872, in John Y. Simon, ed. The Papers of Ulysses S. Grant, vol. 23 (Carbondale: Southern Illinois University, 2000), 163.

  22 Klein, Union Pacific, 287–90.

  23 WHV to Edwin D. Morgan, April 17, June 14, 1872, fold. 3, box 13, Edwin D. Morgan Papers, NYSL; NYT, March 21, 1871. It was generally believed that CV had bought control of Western Union by 1872; see Gardiner G. Hubbard, “In the Matter of the Postal Telegraph Bill,” April 22, 1872, Baker Library, Harvard Business School.

  24 NYT, June 26, 1872, April 17, 1873, March 12, 1898; CT, April 17, 1873; NYH, April 17, 1873; Paul H. Bergeron, ed., The Papers of Andrew Johnson, vol. 14 (Knoxville: University of Tennessee Press, 1997), 278–9n.

  25 NYH, February 24, March 7, 1872; NYTr, October 3, 1873.

  26 NYH, March 7, 1872; RRG, June 28, 1873; HsR 78, 42nd Cong., 3rd sess., vol. 2. See also RRG, March 16, 1872.

  27 NYH, April 23, 1872; BG, May 31, 1872, January 29, 1873; NYT, April 11, 16, May 9, September 7, 1872, November 1, 1873; RT, October 12, 1872; CT, December 12, 1872; New York Evangelist, July 8, 1875; Executive & Finance Committee Minutes, May 2, 1873, HRR, reel 26, box 242, NYCRR.

  28 CV to JHB, February 10, 1872, CV-NYHS. See also CV to JHB, March 1, 3, 1873, May 22, n.d., same collection.

  29 CT, July 6, 1873.

  30 NYT, July 4, 1872; CT, August 4, 1872; New York World in CT, August 21, 1872; NYTr, February 13, 1879; Ethelinda Vanderbilt Allen to Frank Armstrong Crawford Vanderbilt, July 20, 1872, CV-NYHS. Chivalric tournaments were especially popular with Southerners; see T. J. Stiles, Jesse James: Last Rebel of the Civil War (New York: Alfred A. Knopf, 2002), 224.

  31 AtlC, May 26, July 17, 1872; CT, May 27, 1872, April 26, 1873; BG, May 27, 1872; NYT, May 31, June 7, 1872. CV later made Crawford an agent and director of the NYC&HR.

  32 NYT, October 29, 1872; NYH, October 30, 1872; CT, November 17, 1872; SA, November 30, 1872; NYTr, February 13, 1879; James P. McClure, “The Epizootic of 1872: Horses and Disease in a City in Motion,” NYH 79, no. 1 (January 1998): 5–22; Burrows & Wallace, 948.

  33 NYT, November 21, 1872; NYH, November 23, 1872; CT, November 23, 25, 27, 1872; New York Commercial Advertiser, in CT, December 1, 1872; Commercial and Financial Chronicle, November 30, 1872; RRG, November 30, 1872; Klein, 129–32.

  34 NYH, November 27, 1872.

  35 NYT, January 5, 1877.

  36 NYS, November 27, 1872.

  37 NYS, November 28, 1872.

  38 RRG, November 30, 1872.

  39 NYT, April 10, 1872; NYH, November 30, 1872; CT, March 4, 1873; SEP, April 4, 1873.

  40 Mrs. Frank A. Vanderbilt to Chancellor Garland, n.d., Mrs. F. A. Vanderbilt Papers, Burton Historical Collection, Detroit Public Library; New York Sun in AtlC, May 5, 1876; NYTr, November 21, 1878; CV to H. N. McTyeire, March 17, 1873, Resolutions of Board Accepting the Gift of Commodore Vanderbilt to Central University, March 26, 1873, CV to G. C. Kelly, March 31, 1873, H. N. McTyeire to CV, May 21, 1873, CV to H. N. McTyeire, May 26, 1873, Correspondence of Cornelius and William H. Vanderbilt, NYPL. CVs correspondence with McTyeire verifies that McTyeire came to New York to be treated by Bodenhamer; see H. N. McTyeire to CV, July 31, 1873, Correspondence of Cornelius and William H. Vanderbilt, NYPL.

  41 NYTr, October 24, 1878.

  42 Mrs. Frank A. Vanderbilt to Chancellor Garland, n.d., Mrs. F. A. Vanderbilt Papers, Burton Historical Collection, Detroit Public Library; New York Sun in AtlC, May 5, 1876; NYTr, November 21, 1878; CV to H. N. McTyeire, March 17, 1873, Resolutions of Board Accepting the Gift of Commodore Vanderbilt to Central University, March 26, 1873, CV to G. C. Kelly, March 31, 1873, H. N. McTyeire to CV May 21, 1873, CV to H. N. McTyeire, May 26, 1873, Correspondence of Cornelius and William H. Vanderbilt, NYPL. CVs correspondence with McTyeire shows that he took a close personal interest in the progress and the financing of the university. In the letter of May 26, for example, he gave instructions to McTyeire on how to date the drafts on him so that they would be properly paid.

  43 RRG, November 2, 1872; Executive Committee Minutes, January 11, 1873, NYC&HR, vol. 1, box 93, NYCRR. The minutes of this meeting show CV in full command, as he presented negotiations he had conducted for the lease of a grain elevator in Buffalo.

  44 NYS in CT, January 14, 1873; RRG, February 8, August 9, 1873; HED 46, part 2, 44th Cong., 2nd sess., vol. 13.

  45 NYS in CT, January 14, 1873.

  46 Board of Directors' Minutes, April 1, 2, 1873, NYC&HR, vol. 2, box 93, Lease Agreement, April 1, 1873, HRR, reel 27, box 242, NYCRR. On a prior reorganization of the New York Central & Hudson River, see RRG, December 30, 1871.

  47 CV to JHB, March 1, 3, 1873, CV-NYHS; Executive Committee Minutes, March 3, 1873, NYC&HR, vol. 1, box 93, Directors' Minutes, March 3, 1873, LS&MS, reel 65, box 243, NYCRR; NYT, March 10, 1873.

  48 NYT, January 20, 21, February 7, 1873; HC, July 4, 1873.

  49 NYH, April 17, 1873.

  50 J. S. Morgan to Carnegie, quoted in Nasaw, 144; J. P. Morgan to Junius Spencer Morgan, April 16, 1873, J. P. Morgan Letterpress Books, vol. 1, Department of Literary and Historical Manuscripts, Morgan Library.

  51 NYH, April 17, 18, 1873; NYT, April 17, 1873; CV to Samuel L. M. Barlow, March 6, 1860, BW box 36 (14), Samuel L. M. Barlow Collection, HL.

  52 RGD, NYC 343:316 NYW, November 14, 1877.

  53 NYT, June 20, 21, 22, 23, 1873; HW, July 12, 1873.

  54 NYTr, February 13, 1879.

  55 Directors' Minutes, June 30, July 2, October 10, 1873, LS&MS, reel 65, box 243, NYCRR; CT, July 17, 18, 1873; NYH, July 17, 1873; BG, July 17, 1873.

  56 NYW in Railway World, April 17, 1875; CT, July 17, 1873; Cleveland Leader in CT, July 24, 1873; Fourth Annual Report. On Amasa Stone, see Magazine of Western History, December 1885.

  57 New York World in Railway World, April 17, 1875; NYTr, September 22, 23, 1873; Fourth Annual Report; Testimony Taken Before the Special Committee of the Assembly… in the Matter of the Erie Railway Investigation (1873), Erie Railway Company Collection, Baker Library, Harvard Business Sch
ool, 716.

  58 CT, October 25, 1873; NYTr, October 25, 1873.

  59 NYT, July 1, 1873; AtlC, August 5, September 21, 1873; HW, October 11, 1873; RGD, NYC 374:1, 10; H. N. McTyeire to CV, July 31, 1873, Correspondence of Cornelius and William H. Vanderbilt, NYPL.

  60 NYH, September 19, 1873.

  61 NYH, September 19, 21, 1873; NYTr, September 19, 1873; HW, November 1, 1873. The pre-panic market capitalization figures are based on average stock prices in the weeks preceding the collapse.

  62 Entries for September 18, 19, 22–27, 1873, John V. L. Pruyn Journal, box 2, John V. L. Pruyn Papers, NYSL.

  63 NYH, September 21, 22, 23, 1873; NYTr, September 22, October 3, 1873; entries for September 22–27, 1873, October 4, 9, 1873, Pruyn Journal.

  64 NYH, September 22, 1873; CT, September 23, 1873; Joseph Dorfman, The Economic Mind in American Civilization, vol. 3, 1865–1918 (New York: Viking, 1949), 15; Esther Rogoff Taus, Central Banking Functions of the United States Treasury, 1789–1941 (New York: Columbia University Press, 1943), 68–71.

  65 Strong, 4:498; Foner, 512–4; Jean Strouse, Morgan: American Financier (New York: Random House, 1999), 150–7.

  66 Burrows & Wallace, 991, 1022–34.

  67 Nasaw, 151–5; Strouse, 150–7; James A. Ward, J. Edgar Thomson: Master of the Pennsylvania (Westport, Conn.: Greenwood Press, 1980), 202–15.

  68 NYH, October 15, 1873; NYTr, October 24, 1873; NYT, October 29, 1873; CT, April 11, 1874, November 14, 1882; Chauncey M. Depew, My Memories of Eighty Years (New York: Charles Scribner's Sons, 1922), 353.

  69 Entry for October 9, 24, 1873, Pruyn Journal; NYT, October 28, 1873. Lest there be any confusion about which Vanderbilt negotiated with the trustees, Pruyn's journal specifies that CV proposed the final settlement, confirming press accounts.

  70 NYT, October 28, 1873; Executive Committee Minutes, December 17, 1873, Directors' Minutes, April 18, 1874, LS&MS, reel 65, box 243, NYCRR; Depew, 354.