The First Tycoon: The Epic Life of Cornelius Vanderbilt (37 page)

The enthusiasm was mutual. “Certain American citizens, whose judgment, energy, and pecuniary responsibility need no better voucher than the designation of ‘Cornelius Vanderbilt and others’… have chosen that [canal route] which follows the river St. Juan and crosses the Nicaragua lake,” rejoiced the
United States Magazine and Democratic Review
, an influential Democratic Party journal. “But,” it added, “suddenly there arises a lion in the path—that is to say, a sort of lion.”

Yes, a lion. Vanderbilt had slipped through the shoals of Nicaragua's civil wars through sheer good luck, only to confront the opposition of America's most persistent European rival: Great Britain. As soon as he secured his contract with Nicaragua, the British consul in New York published a warning, forbidding him to begin work on the canal.
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What had begun as a simple business venture was fast becoming the epicenter of dangerous tensions between Washington and London. If ever Vanderbilt needed the services of Joseph White, it would be now. The Anglo-American conflict over Nicaragua would require intensive diplomacy at the highest levels, and more than once it would threaten to descend into war.

Ever since the War of Independence, a significant proportion of Americans had nursed a resentment of Britain as the monarchical antithesis of republican ideals. More to the point, tensions between the two nations had flared over their influence in Latin America after the collapse of the Spanish empire. Despite the promulgation of the Monroe Doctrine in 1823, Britain had largely filled the vacuum left by Spain in Central America. Leapfrogging from the colonies of Jamaica and British Honduras (later Belize), English merchants had come to dominate the region's trade. In 1841, the British had extended their sway by proclaiming a protectorate over the “kingdom” of the Miskito (corrupted to “Mosquito” by the British) Indians on Nicaragua's sparsely populated Atlantic coast. The Nicaraguans regarded it as an insult to their sovereignty—an insult the British had compounded in 1848, when they had occupied San Juan del Norte and renamed it Greytown to block any canal or transit route. In the United States, where the burning of Washington in the War of 1812 remained a living memory, the sight of the Royal Navy guarding the mouth of the San Juan River looked like an act of war. “Better by far to lose California and Oregon,” the
United States Magazine and Democratic Review
wrote, than “Britain or any other great power should… stand in the way between us and our own.”
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Not all Americans breathed fire and steel. Secretary of State Clayton, for one, wanted an accommodation. The canal was a strategic imperative, he wrote to Abbott Lawrence, the United States minister to Great Britain. “Without some such ship navigation, it may be difficult, at some future period, to maintain our government over California and Oregon.” He instructed Lawrence to offer a neutral canal, open to all on equal terms.
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Clayton's initiative was complicated by a common problem in nineteenth-century global diplomacy: the independence of local agents, who operated for weeks or months without instructions from their capitals. The seizure of San Juan del Norte (to be called Greytown hereafter) was the work of the intrusive Frederick Chatfield, Britain's man in Central America since 1834, who worried that Nicaragua would be “overrun by American adventurers.” He recommended that the entire country be put under “a protectorate… favorable to British interests.”
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Lord Palmerston, the foreign secretary, took a dim view of the often-belligerent United States and generally supported Chatfield. But the rest of the British government feared the consequences of being too belligerent over too little of consequence. Prime Minister Lord John Russell declared that the Mosquito protectorate was “not worth a barrel of gunpowder on either side.”
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London responded to Clayton's overtures by sending a new minister, Sir Henry Lytton Bulwer, who presented his credentials in Washington at the end of November 1849. Palmerston had given him the mission of making a comprehensive settlement. He was to agree to an American-built canal in Nicaragua, but without ceding the Mosquito protectorate. The sly and polished Bulwer would prove more than equal to the task.

Joseph White checked into the Thomas Irving House in Washington just as Bulwer arrived in the capital. With the future of the canal company resting on these negotiations, he called on the new British minister. Bulwer, by definition, was a man of the world; he realized that he could take advantage of White's vanity and taste for intrigue. “In America nothing is done with the Govt.,” Bulwer wrote. “One must influence the people who influence the Govt.” He subtly cultivated White, in part by letting White cultivate
him
. Knowing the huge cost of building a canal, Bulwer dangled the bait of British capitalists, hinting that they wanted to buy a large stake once a treaty had been signed. White abruptly abandoned his anglophobic rhetoric of the year before. Why, he and his associates had been surprised that Nicaragua should give the United States special advantages over Britain. The canal contract would be amended at once!
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As 1850 began, Clayton and Bulwer threw themselves into crafting a politically viable agreement. The American public would not accept a permanent British presence on the Mosquito Coast, and with the South in an uproar over California's request to be admitted to the Union as a free state, President Taylor could not afford to look weak. But imperial pride would not allow the British to recede. “Sir H. L. Bulwer & I am again at variance,” Clayton wrote on February 10. “The Nicaragua question…
may
be settled—but will not be
unless
he agrees to abandon the Mosquito claim. I have many forebodings about this matter—yet I shall try hard to settle it.”
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THE FATE OF THE CANAL
depended on this intricate international statecraft, but Vanderbilt had little choice but to go ahead as he awaited the outcome. He threw himelf into the task of turning the American Atlantic & Pacific Ship Canal Company into a functioning corporation. For the moment, that required him to start up the transit business, the carrying of passengers across Nicaragua by steamboats on the San Juan River and Lake Nicaragua and a short carriage road to the Pacific. It was an integral aspect of the canal project (engineers and supplies had to be moved into the interior), but it also promised immediate profits once it was linked with a steamship line on both oceans. The demand for steamer berths from New York to San Francisco remained so high that the Pacific Mail and U.S. Mail Steamship companies began to compete against each other on both sides of Panama. Other lines were entering the fray as well.
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On May 14, 1849, Vanderbilt had resigned the presidency of the Stonington Railroad, a step that reveals how central Nicaragua had become to his career.
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That year, as cholera swept New York, he attended to both the corporate and physical vessels of the canal company. He divided into 192 the shares held by the eight partners, for ease of trading. Then he went to the shipyard of his nephew Jeremiah Simonson, near Corlears Hook on the East River.

Simonson had inherited the firm Bishop & Simonson, which now faced bankruptcy. According to rumors in the shipbuilding trade, its chief problem was the spendthrift ways of Vanderbilt's “prodigal” nephew. “He lives in first rate style,” the Mercantile Agency observed, “keeps a fast horse and spends his money freely with his associates.” When he asked for credit, lenders turned to Vanderbilt to cosign the notes. With Simonson's failure looming, Vanderbilt decided to purchase the shipyard, though he would leave it in the care of his nephew, who, for all his faults, knew how to build boats. Vanderbilt also sketched plans for an oceangoing steam ship. At some 1,200 tons, it would be one of the largest and fastest of its kind in the world. He would call it
Prometheus
.
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His next step would be a firsthand inspection of the canal and transit route. At three o'clock in the afternoon on December 13, 1849, he boarded the steamship
Crescent City
at Pier No. 2 on Manhattan's North River waterfront, accompanied by his brother Jacob and David White. It was a brisk winter day, yet thousands of spectators crowded onto the docks, even clambered aboard schooners and brigs moored in the slips. They came to witness the “singular sight,” as the
New York Herald
called it, of four steamships departing at the same time. Three of these enormous vessels—the
Crescent City
, the
Ohio
, and the
Cherokee
—were headed for Chagres, Panama, carrying hundreds of California-bound passengers. The Vanderbilts and White had to fight a crowd on the gangway and the deck that loomed high above the pier, and push through “a large number of female friends of the passengers,” as the
Herald
observed, “promenading the decks, viewing the cabins, sitting around the stoves, or taking a last fond farewell, with a merry, ringing laugh, or with streaming eyes, according to the disposition of each.”
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Many women remained aboard as passengers when the crew let slip the hawsers that held the
Crescent City
to the pier. “Going to California has ceased to be regarded as the formidable undertaking it once was,” the reporter noted. On shore, fewer watchers waved hats and cheered as the multistory paddlewheels churned against the Hudson, smoke surging out of the great stacks that rose amidships between supplementary masts and rigging. To a businessman such as Vanderbilt, all this was telling. The very ordinariness of the event, the abundance of female passengers, and the fact that three steamships could be packed full of California passengers on the same day confirmed the size and endurance of the gold rush. It would not end soon.

Those steamships also revealed the fact that New York was the primary point of departure for voyages to San Francisco. Though far up the Atlantic coast from Panama, it was the most important city in the United States, easily reached by rail or steamboat from elsewhere in the Northeast. As one historian notes, New York had a “unique position as the national city-system's hub.” Travelers to California came from across the settled states to New York to make their departure.
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It was inevitable that Vanderbilt should go to survey the route for himself. In nineteenth-century terms, he was a “practical” businessman who attended to technical details to organize and direct the operation. As the
Crescent City
sailed south, he would observe weather, currents, and other aspects that could add or subtract days from each voyage. But he had a specific task at hand: to fetch the newly purchased
Orus
, a river steamer now in Panama, tow it to Greytown, and pilot it up the San Juan River. More intriguing than his task was his choice of company. Along with his brother and David White, he rode with the man who owned the
Crescent City
, one Charles Morgan.

At fifty-four, Morgan was a year younger than Vanderbilt, though with his thinning hair, wrinkled jowl, and bulbous nose that hung like a ripe pear between two large, cautious eyes, he made a decidedly poor contrast with his tall, athletic guest. In 1809, at the age of fourteen, Morgan had moved to New York from Long Island and had gone to work as a clerk. Ten years later, he had accumulated enough money to buy a share in a sailing ship; he eventually bought stakes in eighteen packet ships on ten lines, as well as some fifteen merchant vessels that plied European and Caribbean ports. He had moved into coastal steamers through James P. Allaire, Vanderbilt's own tutor in steamboats, and established a line on the Gulf of Mexico upon the annexation of Texas. He purchased Theodosius F. Secor's machine works in New York, built his own steamships, and now competed in the California traffic, making him a potential rival.
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But Morgan's position also made him a potential ally and investor. Indeed, his biographer believes he was one of the original partners in the canal company—unlikely, but possible, since he could have disguised his share. In the small world of New York's steamboat entrepreneurs, he and Vanderbilt surely knew each other well. Unfortunately for their planned visit to Nicaragua, four days out of New York the cross rail supporting the engine of the
Crescent City
snapped. Powerless, the ship drifted on the ocean swells until a brig, the
Roscoe
, happened by. The
Roscoe
took on board Morgan and the Vanderbilt party and carried them to Havana. On December 30, Morgan took a sailing ship to New Orleans, and the Vanderbilt brothers boarded the
Ohio
to return to New York, abandoning their journey to Nicaragua. White took passage to Chagres to fetch the
Orus.
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