The First Tycoon: The Epic Life of Cornelius Vanderbilt (90 page)

His honesty attracted great admiration, for this was an era when even the best corporate officials routinely engaged in self-dealing, as they had since the first appearance of railroads in the 1830s. In the Pennsylvania—called by Azariah Boody “the most perfect road in this country”—the highly professional president and vice president, J. Edgar Thomson and Thomas A. Scott, demanded kickbacks in the form of stock from outside contractors, such as sleeping-car and express companies. In the Central, Corning and other directors had ordered the company to purchase iron, goods, and services from their own firms. “The pecularity of Mr. Vanderbilt's railroad management,”
Putnam's Monthly Magazine
wrote, “is that, instead of seeking to make money out of the road in contracts and side speculations, he invests largely in the stock, and then endeavors to make the road pay the stockholders.” The only compensation he accepted as president of his roads was in dividends on his own shares. “I manage it [a railroad corporation] just as I would manage my individual property. That is my notion, and the way I think a railroad ought to be managed,” he told the assembly committee in February. When he did manipulate share prices, he only drove them up.
¹⁶

But he was sharp. In March 1866, the
American Phrenological Journal
saw “Firmness” and “Self-Esteem” in the high crown of his skull. “His will, self-reliance, and ambition to achieve success are
immense.”
When he demonstrated those traits in the blockade of the Central, the non-phrenological press decided that they might not be so healthy for the public. “Mr. Vanderbilt is a bold, outspoken man, and, backed by immense private wealth, can afford to say and do things which ordinary and prudent railway people and even very respectable stockjobbers would hesitate to commit themselves,” the
Times
wrote on February 7, 1867. “As the Colossus of Roads, he thinks as little of defying public opinion as when he used to snap his fingers at the world of California travel when he was dictator of steamship competition.” The
Round Table
wrote of the blockade, “Mr. Cornelius Vanderbilt proceeded to show to what sublimity of insolence the chieftains of the railway banditti have attained.… Railway wars, according to the Vanderbilt view, are to be waged against the passengers.”
¹⁷

The enormous impact of this one man's decision to blockade the Central—even if it was short-lived—made him the personification of the unprecedented size and power of railroads. The Jacksonian fear of aristocracy and distrust of corporations reemerged in new form as the railroads became the only large-scale mode of transportation. Even before the blockade, the
Times
had singled out Vanderbilt for abuse in a scathing editorial, “The Tyranny of Corporations,” that was about these larger changes. “There is no nation on earth where they are so utterly under the control and at the mercy of gigantic corporations and monopolies as in the United States,” it claimed.

The tendency of power—of the modern aristocracy of capital—is toward disregard of individuals and individual convenience and comfort. We already begin to feel the first grindings of the approaching tyranny of capitalists or corporations.… Every public means of transit is in the hands of the tyrants of modern society—the capitalists.… Even the State Legislatures can barely hold their own against these powerful monopolies. They can bribe and bully and cajole, so as to squelch any bill directed against them.

In this essay, one can hear the writer straining to construct a new political matrix to account for conditions that antebellum Americans had only begun to glimpse in the 1850s. These words were heartfelt, but did not reflect a coherent critique of corporate power in a democratic society. The
Times
admitted, “It is no part of our present purpose to suggest a remedy. Indeed, we must frankly confess we see none.”
¹⁸

Inconclusive as this outcry may have been, it appeared in one publication after another, often in the context of an attack on Vanderbilt. On December 15, 1866,
Harper's Weekly
published an essay titled “King Corporation,” arguing, “Some method must be devised of emancipating the country from the tyranny of these vast corporations.” The
Cleveland Leader
wrote on January 21, 1867, “The tendency of great railroad corporations has been to become monopolies of the most unblushing and reckless character.”
¹⁹

On February 9, the
Round Table
published the lambasting of Vanderbilt quoted previously—but, unlike the
Times
or
Harper's
, it offered a solution: “Congress, under its power to regulate interstate commerce, is the only source whence effectual remedy can come.” Of course: this was the obvious method, if Americans truly wished to regulate railroads. Generally speaking, the railroad (with the telegraph) was the first kind of company to straddle state lines, and it nearly monopolized interstate commerce. But neither the government nor the public was ready for federal regulation. Despite the expansion of federal power during the war, Washington still lacked a nonpartisan, professional civil service that could undertake such a vast and complex task as overseeing the railroads. Nor did the political will for it exist yet. But it was coming.
²⁰

None of this particularly mattered to the New York Central stockholders. The Vanderbilt they saw was the economical, energetic, far-seeing executive who promised to energize a leaderless trunk line. By the second week in November the Commodore had guaranteeed his success in the December election. To persuade the public—and his enemies—that he had widespread support, he and a party of socially prominent stockholders published a rather contrived exchange of letters. John Jacob Astor Jr., Edward Cunard, John Steward, and others in control of more than $13 million in stock formally asked Vanderbilt to lead the Central and enact “a thorough reformation in the management of its affairs.” He accepted.

In reprinting the correspondence, the
New York Herald
offered a pragmatic commentary. “That the result aimed at will be beneficial to the stockholders of all the roads mentioned cannot be doubted,” its financial writer said, “and although there is a look of monopoly about it, the practical effect may be unobjectionable to the public.”
²¹
For the stockholders, this was all that mattered. If Vanderbilt truly was becoming society's new tyrant, at least he made the trains run on time—and profitably.

But there was another trunk line in New York, one in which Daniel Drew reigned as treasurer. In taking the Central, Vanderbilt would come to the conclusion that he must drive Drew off the Erie board. It would be the costliest mistake he ever made.

THE YEAR 1867 WAS ONE OF
momentous business for one Cornelius Vanderbilt—and of momentous personal developments for three Cornelius Vanderbilts: the Commodore; his benighted son; and his grandson, the oldest of William's four male children. “Handsome, serious, high-minded, industrious, efficient, and thorough,” Louis Auchincloss describes the grandson—Cornelius Vanderbilt Jr., as he was now known. He “got on well with his grandfather—no easy task.” The well-educated scion of Staten Island had started out at the Shoe and Leather Bank in New York. After a certain period, the Commodore saw that he received a position at the banking and brokerage house of Kissam Brothers, and then he brought him in to work for the Harlem Railroad.
²²

The Commodore took a special interest in his namesake. Since young Cornelius was the presumed heir of the patriarch's presumed heir, this was natural enough, but the young man's name may have been a crucial factor. The aged founder of the family treasured those two words, Cornelius Vanderbilt. Throughout his life he had christened boats, ships, and children after himself until finally he ceased to produce them. The details of his beliefs about the power of words lie beyond detection, but it is significant that “name” is a synonym for reputation. He prized his “character,” to use an old term, for honor, honesty, strength, and sagacity. The son who bore his name lacked all of those traits, to his bitter disappointment; but now he had a chance to reach down two generations, to build his dynasty by molding the character of another, better Cornelius.

On February 4, 1867, Cornelius Vanderbilt Jr. married Miss Alice Gwynne at the Episcopal Church of the Incarnation on Madison Avenue. The new Mrs. Vanderbilt came from a respectable family. She shared her husband's seriousness, his deep sense of responsibility to the family he was destined to lead. “One of Alice's nieces described her to me as ‘pompous,’” Auchincloss writes, “but an old gentleman who had known her well insisted that, on the contrary, she had been… ‘very definite and straightforward, with no airs at all.’ Yet both descriptions might have been true, as they both might have been true of Queen Victoria. Alice's supposed pomposity might have consisted only in her concept of the role she deemed it her duty to fulfill.” With the Commodore still very much in control of the clan, and William waiting to take his place, the young couple would have ample time to learn both the social and business roles laid out for them. And the Commodore soon accelerated his grandson's education. Three months after the marriage, he made Cornelius Jr. the treasurer of the Harlem Railroad, an enterprise that had a special place in the Commodore's heart.
²³

Cornelius Jeremiah resented his nephew's public appropriation of the designation “Cornelius Vanderbilt Jr.” But self-loathing often manifests itself as bitterness toward others, just as helplessness can result in hatred of those who offer help. Corneil plunged to new depths after his discharge from the Litchfield asylum, writing bad checks and issuing fraudulent promissory notes. He often left Hartford to prowl his favorite gambling haunts in New York. In 1867, he stayed at the United States Hotel on Fulton Street, and befriended one of the proprietors, George N. Terry. The two men soon became very close friends.
²⁴

Corneil needed friends. For one thing, he was arrested on civil process for his unpaid checks. And, with more than $50,000 in debts (including $13,905 owed to Horace Greeley), he made plans to file for bankruptcy on October 1. As he explained in yet another pathetic letter to Greeley, he had pawned two gold watches, more than $2,000 worth of silver dinner-ware, “a very costly bracelet & splendid set
of coral
belonging to my wife. She let me have them with her usual desire to please, and hardly dared to refuse my crazed, rascally demands.… God forgive me for taking advantage of such an ennobling disposition.” To paraphrase the Book of James, repentance without works is dead; Corneil's was, as a doorknob.
²⁵

Just how dead could be seen in a letter he wrote to Nathaniel P. Banks, the Union general whom Corneil had besieged for money and favors in New Orleans. “I write to inform you that owing to the very weak condition of my mind for the last few years, I have become involved in a series of financial difficulties from which I can only obtain relief through bankruptcy,” he told Banks, implying that he was a victim, preyed upon by others. “I take pleasure in stating that my general reconstruction has become an accepted fact by my relatives and friends.… My family will soon have an opportunity to display their magnanimity when matters of my personal honor are involved.”
²⁶
The words seem so bitter and so sarcastic, and were so false.

His anger at himself and all others now overwhelmed the oily solicitousness that usually flowed from his pen. After his bankruptcy proceedings, he wrote to William, “Your course toward me through the last four years has been unkind.… You perfectly ignored me in my dark and trying days and withheld from me every particle of your aid and encouragement.” This was not true. Though William undoubtedly arched a censorious eyebrow at his younger brother's wastrel ways, he had supported his effort to reform himself in Litchfield. But Corneil was an addict. Typically, what had sparked his self-righteous outrage was William's refusal to give him money. “You promised me upon your honor that you would give me $150,” Corneil wrote. “It appears that you are even now working underhandedly to injure me with my father at the very moment that I am gaining his confidence and respect.”
²⁷

A decade later, Corneil's accusations would foster an image of William as a manipulator who schemed to influence his father behind the scenes. He was not. The Commodore came to his own harsh conclusions about his younger son without William's help, and Corneil had little hope of ever regaining his confidence and respect.

Curiously, Corneil's patron Greeley formed an intersection between the two episodes that most strongly marked the Commodore's own personal life in 1867. In recent months, the famous editor seems to have struck up a friendship with Vanderbilt. This was in spite of Corneil's debt, not because of it. Vanderbilt refused to pay it, and Greeley refused to ask.
²⁸
Rather, Greeley needed help for something else, a mission that would become increasingly important to the Commodore, until it became his most cherished project: to heal the divide between North and South. The first step, Greeley thought, was to free Jefferson Davis.

Soon after Lee's surrender, the federal authorities had arrested Davis. They incarcerated him at Fortress Monroe, Virginia, month after month, year after year, without charges, without any sign that they might prosecute him. As early as June 1865, Davis's wife had written to Greeley to ask for help in at least bringing about a trial. Greeley sought advice, investigated Davis's connection to mistreatment of Union prisoners of war, and finally agreed to assist her. He secured the cooperation of leading Republicans, including Thaddeus Stevens and abolitionist Gerrit Smith, as well as such noted New York Democrats as Charles O'Conor, Augustus Schell, and Horace Clark. Greeley's editorials and lobbying piled pressure on President Johnson's administration. O'Conor, meanwhile, applied to the Supreme Court for a writ of habeus corpus, and Chief Justice Salmon P. Chase issued one on May 8, 1867. On May 13, army officers delivered Jefferson Davis to civil authorities. “The attorneys of the Government having announced that they were not prepared to prosecute at this term of the court, a motion was made to release the prisoner on bail,”
Harper's Weekly
reported.