The First Tycoon: The Epic Life of Cornelius Vanderbilt (7 page)

IN 1814, THE UNITED STATES
stood on the brink of losing the war. On April 6, Napoleon abdicated the imperial throne of France, allowing Britain to reinforce its armies in North America. Of particular concern for New York was a possible thrust down the Hudson from Canada, an attack that would avoid the heavy fortifications on the harbor. On July 15, Brigadier General Joseph Swift began construction of a line across upper Manhattan and the western end of Long Island. On August 26, terrified New Yorkers snatched up copies of a special edition of the
Evening Post
, announcing that Washington had been captured and sacked by a British force. “Your capital is taken!” the press declared. “In six days the same enemy may be at the Hook!… Arise from your slumbers!” Thousands of residents took up shovels to dig trenches as 23,000 militiamen reported for duty
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Military disaster meant economic windfall for the strapping twenty-year-old Vanderbilt. One of the canonical stories of his early life describes a moment of great excitement among the harbor's boatmen, as the military headquarters offered a contract to carry supplies to the forts and construction sites. Vanderbilt, at his father's urging, put in a bid at a price that he considered fair, but was far from the lowest. He was startled when he learned he had won. “Don't you know why we have given the contract to you?” the officer reportedly asked. “It is because we want this business
done
, and we know you'll do it.” No evidence has ever surfaced to support the tale, but, if true, it hints at the moment when a subtle transition began, when he started to acquire a reputation in this slippery, low-caste society.
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That year Vanderbilt took his wife from their rented house in Staten Island to the city of New York, settling into rooms at 93 Broad Street. Their new home spoke eloquently of the young man's social standing: it was an artisans' boardinghouse, where there also lived a carpenter and a gunsmith, along with their wives and children. Broad Street boasted some countinghouses, but it was also home to grocers, drapers, and cabinetmakers, along with other boatmen—craftsmen and shopkeepers all.
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How alarming it must have been for Sophia to move from a country village on a broad green island to this crowded street. Cornelius expected her to raise their infant girl in a house shared with three other families, emptying the chamberpots in a backyard privy, dodging horses and wagons and grunting pigs on muddy streets to fetch water or bring home food from crowded open-air markets. Her transition calls to mind the observations of Frances Trollope, mother of novelist Anthony Trollope, who visited America a decade later. “The women are doggedly steadfast in their will,” she wrote, describing a crowd jostling for seats in a boat, “and till matters are settled, look like hedgehogs, with every quill raised, and firmly set, as if to forbid the approach of any one who might wish to rub them down. In circumstances where an English woman would look proud, and a French woman
nonchalante
, an American lady looks grim; even the youngest and the prettiest can set their lips, and knit their brows, and look as hard and unsocial as their grandmothers.”
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Lovely and industrious Sophia may have been; now she had to learn to be hard as well.

She and her husband occupied a distinctly subordinate rank in a society shaped by eighteenth-century notions of social status. The craftsmen they lived with on Broad Street—the carpenters, coopers, and cabinetmakers, the gunsmiths, grocers, and fellow boatmen—were “middling sorts” who made a living with strength and skill. Such fellows affected “a sort of rough independence, which appeared to me manly,” one genteel New Yorker wrote. “They… filled their parts in society with reputation and respectability.” But even artisans who owned shops and employed assistants were men of labor. “The culture of rank,” notes historian Stuart Blumin, “degraded those independent businessmen who worked with their hands.”

Cornelius and Sophia lived only steps away from lower Broadway, where luxurious private houses were “occupied by the principal merchants and gentry of New York,” as John Lambert observed. Lambert's travelogue frequently referred to this class, noting that their “style of living in New York is fashionable and splendid.” They looked down on “the inferior orders” with contempt. In 1811, a memoirist wrote of how he and his friends had aspired “to be merchants, as to be mechanics was too humiliating.”
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Vanderbilt could have remained on Staten Island, enjoying the fresh sea air at a fraction of the cost of living. But he and his fellow middling sorts were looking to rise. With the oceangoing ships of the “principal merchants” locked up in port, with wartime shortages rampant, craftsmen became entrepreneurs, breaking down longstanding methods to increase productivity. Vanderbilt's move to New York was itself an entrepreneurial act. It was in the city that information moved most quickly, through word of mouth or the many newspapers that published prices of important goods, news of ship arrivals and departures, and prices of stocks and commodities. It was in the city where the exchanges were located, where auctions of goods were held, where informal, curbside trades of bonds and shares went on each day. It was in the city where one acquired a reputation—and reputation was the axle of this informal, personal economy.

Vanderbilt could hardly avoid noticing that, despite the innovations and energy of his fellow artisans, most of New York's wealthiest citizens were general merchants. Even banks and securities markets largely remained merchant clubs. When the federal government needed to sell millions of dollars' worth of bonds to fund the war, for example, it turned to two ship-owning, international merchants, Stephen Girard of Philadelphia and John Jacob Astor of New York, who brokered the sale and took bonds for themselves. Vanderbilt would never forget that the richest men traded in cargoes.
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But for all of his success during the war years, his wealth could only grow so much as long as British ships-of-the-line shadowed Sandy Hook, the president embargoed trade, and the citizens of New York dug trenches that everyone hoped would never be needed.

SNOW FELL ON THE EVENING
of February 11, 1815. The New York waterfront sat silent, the thousands who depended on the port lingering at home, many of them desperate. Chunks of ice descended the North River into the bay—ordinarily a problem for schooners and square-riggers, now a concern only for the few boatmen at work. Shortly before eight o'clock, a small craft steered up to Manhattan's slips. It was a swift pilot boat, one of those that used to race to meet incoming merchantmen from Europe and the Caribbean. As its hull scraped the dock, two men leaped out and raced across South Street to the offices of the city's newspapers. They burst in and gasped,
“There is peace.”

The pilot boat had met the British sloop-of-war
Favourite
, carrying an American and a British diplomat coming to announce the seven-week-old Treaty of Ghent. Within an hour the city burst into celebration. In every house residents put candles and lamps in the windows. Trinity Church rang its bells, over and over, as the batteries on the harbor fired off cannons. Men and women packed the freezing streets in impromptu torchlight parades, cheering “Huzza!” and “A Peace!” until midnight.
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The next morning, crews began to scour the docks to prepare ships to sail again. They shoveled out salt that had been thrown into bottoms to preserve timbers, removed the tar barrels (nicknamed “Mr. Madison's night caps”) thrown over mastheads, and prepared new sails and lines. On March 1 the first ship cleared the harbor—the
Diamond
, bound for Havana.

The incoming ships may have mattered more. British merchants, themselves suffering from the years of war, selected New York as their favored port for dumping their large inventories of manufactured goods. In 1811, New York had run behind Massachusetts in imports, and only slightly ahead of Pennsylvania; in the year ending September 30, 1815, it took in more than both combined. The resurgence of trade lifted New York's imports from $2.4 million in 1811 to $14.6 million in 1815.

It was merely the first act in a startling revival of the long-closed port over the next few years. On October 24, 1817, came the formation of the first transatlantic packet line (a regularly scheduled service, as opposed to the old custom of ships sailing when they were full), a major contribution to New York's growing dominance over other American ports. Also in 1817, the state passed new legislation that fostered auctions and made the city the most favorable place for merchants from across the republic to buy foreign goods, helping to seal New York's lead as the nation's import center. It began to emerge as the premier distribution hub for the entire country, and as a financial center as well, as money clattered in and credit poured out.
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The result was a revolution in New York's trade, not only with the interior, but with the Atlantic seaboard. Its long-suppressed coasting trade burst out again as merchants made contact with isolated communities. Much of the nation was, in essence, a new market—a vast, untamed economic frontier.

After the long stagnation of embargo and war, the air on South Street vibrated with opportunity, with the concussion of hogsheads on ship decks and the snap of canvas filling with wind. A race began to be the first to reach new customers and find new suppliers. In this frenzied atmosphere, Vanderbilt's actions spoke both to his unending hunger for wealth and his close reading of the world around him. For one thing, he was bold: just twenty years old when peace arrived, he now reached far beyond the familiar New York Harbor to distant ports and landings along the Atlantic coast. For another, he was shrewd, as he looked for partners with expertise and financial resources greater than his own. His brother-in-law and fellow Staten Islander John De Forest joined with him first. A highly regarded mariner, De Forest was the master of a fast schooner, the
Charlotte
(named for Cornelius's sister and De Forest's wife), which he had run to Virginia and beyond before the war. In 1815, Vanderbilt purchased a share in the ship. The partners used it to haul goods from New York to Charleston and other Southern ports, where they filled the hold with fish and produce for the return voyage. Before long, Vanderbilt bought full ownership of the schooner. Slowly and steadily, he was making himself into a general merchant. Nothing better illustrated his careful study of the riches that poured into New York.

He also took on his father as a partner. Cornelius the elder put up some of the money for large new periaugers, big enough for open water. So too did James Day of Norwich, Connecticut, a shipwright who constructed or rebuilt Vanderbilt's vessels, all two-masted boats ranging from twenty-two to thirty-two tons
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and costing around $750 each (at a time when a succesful artisan in New York earned about $3,200 a year). Though patterned after the harbor-bound boats of New York Bay Vanderbilt had them built for longer voyages, and registered them for the coastal trade with the New York Custom House. The first was the twenty-seven-ton
Dread
, registered on January 24, 1816. It measured forty-nine feet by fourteen and a half, with little more than a four-foot draft.

In his small fleet of the small and fleet, Vanderbilt swept down on coastal and riverside communities around New York, seeking out new customers and cargoes. Soon after the war ended, he raced ahead of a cluster of rival schooners to the Virginia oyster grounds to fill his hull with New York's favorite food. He began to sail the
Dread
around Cape May and up the Delaware River, where he bought shad by the slippery thousands, then sailed up New Jersey's Raritan River, where he learned to hire horsemen to spread the word that he had fish to sell. In New York Harbor, he paid boatmen to sail out to meet incoming ships to peddle food or liquor, while he haggled on South Street over the
Charlotte's
cargo of fish, produce, and goods.
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As he struggled into the lowest tier of merchants, he conducted his business with an elbows-out aggressiveness. On October 2, 1816, he had one Daniel Morgan arrested for failing to pay De Forest and himself for a cargo, claiming $200 for goods delivered. The Mayor's Court, located in the city hall, ruled in Vanderbilt's favor, but decided that he had overstated the bill by $100. A few days later his lawyer John Wallis argued in the same court that merchants Phineas Carman and Cornelius P. Wyckoff owed Vanderbilt and his father the substantial sum of $900 for “divers quantities of fish and goods, wares, and merchandize before that time sold and delivered.” Three merchant referees examined the books. In April 1817, they reported that the true debt was only $189.
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Americans had long been comfortable with the commercial marketplace, but for centuries many had lived in rural isolation or labored under British commercial restrictions. Now they encountered a new world, with the promise of new, better,
more
—as well as changes that no one could predict. The war had planted the seeds of manufacturing across the North, as workshops were established to produce things no longer available from Europe. New commercial institutions and mercantile houses opened for business. In 1815 alone, the number of American banks rose from 208 to 246, and the value of their circulating notes from $46 million to $68 million. That year marked the start of Vanderbilt's rise as well, as he both rode and added to this rising tide. As a decidedly minor, boat-owning merchant, he could not share in the lucrative transoceanic trade. His very limitations, then, forced him to seek out opportunities on the domestic frontier—to tie together distant marketplaces and introduce trade in places that had been wilderness when it came to commerce.
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