The First Tycoon: The Epic Life of Cornelius Vanderbilt (40 page)

Vanderbilt and Childs rode a rough nine miles from Rivas to the Pacific, through steep hills, trees, and brush, a route described by one reporter as “dangerous and even impassable during the rainy season.” Fortunately, the fifty-six-year-old Commodore was an excellent horseman. He and the engineers marked out the best path for the road, down to the virtually uninhabited little horseshoe harbor of San Juan del Sur, “one of the prettyest bays I ever saw,” as Allen described it. “I must say that with a moderate outlay of money it can be made as safe a harbor as is to be found anywhere.” Creating a harbor on the lake, on the other hand, would be more costly, as the western shore was exposed to swells that beat upon the beach from the southeast. The engineers selected Virgin Bay for the primary landing, but they would have to build a breaker and pier.
¹³

Vanderbilt visited Granada once more. In that city, as elsewhere in Nicaragua, he saw that the people “hate Englishmen with an inveterate hatred, and hold Americanos Del Norte in high esteem,” in Allen's words. “Americans are welcomed in Nicaragua,” a reporter wrote. “At balls and public festivals the flag of the United States is seen wreathed together with that of the country.” At the end of the month, Vanderbilt descended the San Juan to Greytown amid pouring rain. Before leaving the harbor, he spoke to a reporter for the
New York Herald
. “He stated that the practicability of this route is no longer problematical,” the journalist wrote. “By the first of May next, Mr. V. is sanguine that a speedy and expeditious transit will be opened between this port and the Pacific; the motto is go-ahead.”
¹⁴

As Vanderbilt and his entourage returned to New York (by way of New Orleans) in the
Prometheus
, they again encountered ferocious seas, and Allen came away impressed with how the vessel rode them. “The
Prometheus
is without doubt the finest sea steamer ever afloat,” he told his diary, “and in all respects and as for speed her equal is yet to be built. Anything that may start with the idea of catching her, in order to make the thing certain, must start at least two hours ahead.”
¹⁵

The
Prometheus
convinced Vanderbilt of his own genius. It differed from other steamships in many respects, the most important being the engines. When oceangoing steam vessels were first built, engineers decided that the machinery should be as low in the hull as possible, to avoid exposure to the elements and give the ship a low center of gravity. They came up with the “side-lever engine,” which had elaborate gearing from the piston to the paddlewheels to keep the entire works belowdecks. The problem, Vanderbilt concluded, was that the multiple arms of the side lever made the engine inefficient, causing it to consume additional coal. Furthermore, side-lever engines had very narrow tolerances, and could not accommodate a ship's natural tendency to “hog,” or bend lengthwise, at sea. That mandated a strongly reinforced engine compartment that made a ship heavier and more expensive. Refuting conventional wisdom, Vanderbilt went back to the walking-beam engine used in steamboats. The exposed arm that rocked up and down above the deck allowed for simpler gearing, which meant greater fuel efficiency, a lighter and cheaper engine, and a lighter and cheaper hull. He calculated that exposure and a higher center of gravity would not prove much of a problem. The
Prometheus
proved him right.
¹⁶

“A most extraordinary passage,” the
New York Herald
announced upon the
Prometheus
's return to New York on February 22, 1851. Vanderbilt published a long letter describing the ship's remarkable speed and fuel efficiency. It ran 5,590 miles in just over nineteen days, consuming 450 tons of coal—a third less than any steamer of its size. “I consider the
Prometheus
, in her combination of qualities, far superior to anything afloat,” he said. “I will venture a large wager that there is no ship afloat, and none that can be built within twelve months, having any other plan of engines of the same size in proportion to the capacity of the ship, that can make a winter passage in the same time, with the same quantity of fuel.” The bet he proposed was $100,000.
¹⁷

This same intense pride pulsed through his drive to win the California mail contract. He dispatched Daniel Allen to Washington with letters for Postmaster General N. K. Hall and Secretary of the Navy William A. Graham, saying that he could carry the mail via Nicaragua in twenty-five days, faster than any other route. “I am willing to pledge my reputation,” he declared, “and it is well known to those who know me (and among those is the present Secretary of State), that I will make no such pledge unless certain of its fulfillment.” That new secretary of state was Daniel Webster, whom Vanderbilt had known since he first traveled to Washington in 1821. Henry Clay himself presented Vanderbilt's bid to the Senate. “I dare say it is well known to every Senator, as it is to almost every person in the United States, that Mr. Vanderbilt has been one of the most successful and enterprising persons engaged in that description of navigation,” Clay said. “All this is offered by this liberal, enterprising, and distinguished gentleman, without asking for one dollar of present appropriation.”
¹⁸

Vanderbilt seems to have bounced back fully from the humiliation of the London trip. With a little prodding on his part, politicians and the press hailed his reputation. On March 6, the
New York Herald
, the same paper that had derided the canal as a mere “speculation,” effusively praised the Nicaragua route—and Vanderbilt himself.

Commodore Vanderbilt's character for energy and go-aheadativeness is well known in this community, and apart from other considerations, the fact that he is connected with this enterprise is a guarantee to the public that both of these great projects—the construction of an ocean ship canal, and that of a transit route—will be finished at the earliest moment practicable. He is a man whose resolution is indomitable, and before whose determination obstacles, no matter how great, disappear as the morning dew before a July sun.
¹⁹

It was not the first time Vanderbilt was titled “Commodore,” but afterward his name rarely appeared in print without this honorary rank. He was becoming a cultural icon.

Despite the support of Webster and Clay, Vanderbilt failed to convince Congress to alter the existing mail contracts. Against George Law's skill at lobbying and William H. Aspinwall's aristocratic connections, he could make no headway—particularly after the U.S. Mail and Pacific Mail Steamship companies agreed in January to cease competing with each other, the first retreating to the Atlantic and the latter to the Pacific.
²⁰
But Vanderbilt had delivered a clear warning that he was going to fight for the California trade, with English capital or not. And when he fought, he usually won.

ONE DAY IN THE FUTURE
there would be a name for it: vertical integration. Late in the nineteenth century, John D. Rockefeller and Andrew Carnegie would emerge as leading exponents of this form of organization, in which a single owner takes control of businesses at every step of the manufacturing process, from mining raw materials to production of finished goods. A vertically integrated company captured profits (or reduced costs) at every point. Perhaps more important, in an age when few industries existed it helped ensure supply that otherwise might be diverted to a competitor.
²¹
Ship owner Charles Morgan understood the principle as early as the spring of 1851, when he bought control of a leading engine manufacturer in Manhattan, T. F. Secor & Co., and renamed it the Morgan Iron Works.

Ironically, Morgan's move quickened Vanderbilt's own steps toward a vertical integration of his budding steamship business. Already he had taken direct control of the Simonson shipyard, which constructed hulls; now he joined with the men whom Morgan had bought out, T. F. Secor and John Braisted, along with Daniel Drew, to purchase New York's other large steam-engine plant, the Allaire Works. “The works are immense,” remarked the Mercantile Agency, “one of the most extensive in this city.” Located at 466 Cherry Street on the East River near Corlears Hook, the Allaire Works would now be run by a corporation, commanded (not surprisingly) by Vanderbilt's sons-in-law: Daniel Allen as president, and James Cross as treasurer. The purchase hinted at the size of both Vanderbilt's means and his ambition.
²²

By the time the Mercantile Agency took note of all this, Vanderbilt's preparations for opening the Nicaragua route were advancing rapidly. Already the
Prometheus
carried California passengers—to Panama for now, until the transit route was ready. The steamboat
Director
plied Lake Nicaragua, carrying enterprising migrants who found their own way overland and down the San Juan River. The boat grossed $32,000 for the canal company in January alone. (The canal company owned the boats and infrastructure within Nicaragua, though not the oceangoing steamships.) The
Orus
had smashed onto the rocks of the Machuca rapids, but Vanderbilt sent down two specially constructed, shallow-draft, iron-hulled steam boats, the
J. M. Clayton
and the
Sir H. L. Bulwer

Meanwhile, he pushed ahead with his efforts to put steamships on both sides of the isthmus. He had two under construction in New York, the 1,000-ton
Daniel Webster
and the 1,800-ton
Northern Light;
both would receive Vanderbilt's customary walking-beam engines from the Allaire Works, and would run on the Atlantic, along with the
Prometheus
. For the Pacific, he fittingly bought the 900-ton
Pacific
(while it was en route to San Francisco) and the 600-ton
Independence
. It was still not enough tonnage.

On June 17, passengers on the big new
North America
, which already had its steam up for a voyage from New York to Galway Ireland, were startled to learn that the ship would sail to California instead. Vanderbilt and Daniel Drew had bought it from P. T. Barnum. Barnum recalled the Commodore's amusement when they first met. “Why, I expected to see a monster—part lion, part elephant, and a mixture of rhinoceros and tiger,” Vanderbilt exclaimed. “Is it possible that you are the showman who has made so much noise in the world?” Like more than one businessman in the 1850s, Barnum had dangled his feet in the ocean and found the waters too cold.
²³

“We are happy to have it in our power to announce the opening of the new route to the Pacific,” the
New York Evening Post
declared at the end of June. “Cornelius Vanderbilt is the principal proprietor of this line, which is sufficient guaranty [sic] for the superior speed and equipment of the vessels.” Passengers thronged to the upstairs office at 9 Bowling Green, next to the offices of other lines on “steamship row,” to buy tickets. “The Vanderbilt line was then the rage,” recalled passenger William Rabe.

On July 14, Rabe boarded the
Prometheus
at Pier No. 2 on the Hudson River for the inaugural voyage of the Nicaragua transit route. “On board I found… Mr. Vanderbilt himself,” Rabe wrote a few weeks later. Rabe pressed the Commodore about whether the Nicaragua transit truly was in working order; otherwise Rabe and some of the other passengers might go on to Chagres and cross Panama. “Mr. Vanderbilt said that we would get through before any other passengers who had started about the same time for California, and insisted upon our going.”
²⁴

Unknown to Rabe and the other passengers, Vanderbilt accompanied them because he had a mission to perform. He embarked on this journey to Nicaragua to meet a political threat, one that endangered his entire canal-and-transit enterprise. Due to the nature of the problem, he brought Joseph White, the company counsel and fixer. Before they returned to New York, Vanderbilt would have reason to wonder if White himself was not a greater danger than any problem in Nicaragua.

Government and nature seemed to conspire against Vanderbilt and his inaugural passengers at every step. After ten days at sea, the
Prometheus
anchored at Greytown, where they boarded the
Bulwer
, one of the iron-hulled riverboats. The first sign of trouble was a demand from the town's officials that the boat obtain their permission to ascend the San Juan River, in clear violation of the Clayton-Bulwer Treaty. White haughtily replied that “the only way to prevent us was to blow us out of the water.” On they went—only to run aground. Most of the passengers leaped into the river “to drag her over, trying to lift her up, or pull her along,” in Rabe's words. Humiliatingly it took a boatload of sailors from the
Bermuda
, a British warship, to lift the steamer over the bar.

The next day, the tightly packed little paddlewheeler steamed to the Machuca rapids, where the passengers stared at the ominous wreck of the
Orus
, rusting on the rocks. As the pilot scraped the hull of the
Bulwer
helplessly into the rapids, it seemed likely that the boat would follow the
Orus
's example. Once again, Vanderbilt took the wheel. At fifty-seven, he already could be considered somewhat elderly by the standards of the day. Yet he radiated power, both physical strength and force of personality. And so, deep in the wilds of Nicaragua, on a treacherous jungle river, Vanderbilt poured on the steam and piloted his first passengers into the rapids. “Back we were swept,” wrote another traveler. “At it again; the boat's nose was brought out of the current, and all our steam applied. ‘Now she moves,’ cried one. Now she nears the rocks; puff, puff—up, up—not a word—all silent—how we gazed silently at the shrubbery fringing the water's edge, marking our headway. At length we passed the peril, and gave three hearty cheers, shot through one set of rapids, then ran aground on the next.”