The First Tycoon: The Epic Life of Cornelius Vanderbilt (10 page)

Vanderbilt agreed, but only up to a point. He would take command of the
Mouse
, then the
Bellona
when it was launched, but no more. He looked over the rooms at Rising Sun Landing and begged off, explaining, “I would prefer living in N. York.” He had his own ferry to run, after all, and a schooner to ready for the spring coastal trade.
²¹

Gibbons put him in charge of the refurbished
Mouse
for several weeks before they settled on an employment contract, the only one Vanderbilt would ever sign.

Memorandum of agreement made this 26 June 1818 between Thomas Gibbons and Cornelius Vanderbilt,—The said Cornelius Vanderbilt agrees to serve as master and commander of the Mouse, and when the Bellona shall run of the Bellona Steamboat until the present season is over, or until the ice shall block up the boat at the rate of Sixty Dollars a month and the privillege of half of the bar—Gibbons finding the bar furniture and Vanderbilt preserving the furniture and making the whole good at the end of the season. Vanderbilt will do all the duties required of him as commander, to run to and from Elizabeth Town at the landings of the said Thomas Gibbons.
Th. Gibbons
Cornelius Vanderbilt

It was a typically hard bargain for the stony Gibbons—though the bar would swell Vanderbilt's earnings. As one historian has put it, America was an “alcoholic republic;” early steamboats were motorized taverns, dispensing wine, whiskey, and brandy in enormous quantities. Once the
Bellona
was launched, Vanderbilt could expect anywhere from $60 to $110 a month from the bar alone.
²²
More important was Vanderbilt's limitation of his commitment to the “present season” as he continued to pursue an independent course. He carried on with his ferry, of course, and even laid plans for a new schooner, the
Thorn.
²³

Gibbons was focused on crushing Aaron Ogden. Vanderbilt listened to endless outbursts at “this fallen Shylock,” as Gibbons called him. “He will if he can ruin me,” he claimed, in a fit of projection. “Indeed he would ruin the whole world to enrich himself and family.” Unfortunately, his enemy now sheltered inside the fortress of the New York steamboat monopoly. Ogden and the Livingstons, Gibbons wrote to John Randolph, “have no merit; they have no claim to useful invention. They are mere locusts and blood suckers in this part of the union. We cannot get to New York without their consent and at their price.”
²⁴

In his employer's presence, Vanderbilt caught his first insider's glimpse of how business affairs were of one flesh with the law and politics. Despite Gibbons's physical infirmities and extravagant self-absorption, he possessed a legal mind of Damascus steel—sharp, hard, and penetrating. In the glare of his own self-righteousness, he readily saw the vast repercussions of his vendetta. To bankrupt Ogden, a ruthless business war was necessary, but insufficient; he had to convince the courts to overturn the Livingston monopoly itself. “The present is not a question of pounds shillings & pence,” he later wrote; “it is the great question of sovereign rights—the right of navigating your own waters, under the laws and constitution of the U. States.” At stake was the notion that the United States should be a common market, that the individual states should have no power to erect barriers to trade at their borders. The outcome of such a case could hardly be clear; indeed, if it did reach the Supreme Court, it would be the first in the Constitution's three-decade history concerning the commerce clause.
²⁵

In their frequent conversations, Vanderbilt learned of Gibbons's careful preparations for the legal battle to come. Aaron Burr had assured Gibbons that “any judge of the Court of the U.S.” would find the steamboat grant “unconstitutional… highly absurd & tyrannical.” Gibbons intended to obtain federal licenses under the Coasting Act of 1793, violate the monopoly to trigger a legal response from Ogden, then move the case to federal court. There he would argue that the commerce clause gave Congress sole authority over interstate commerce.
²⁶

Ogden, of course, merely held a license; behind him loomed the rich and powerful Livingston family. They were certain to fight back, for their monopoly was tremendously lucrative. In 1818, for example, the gross receipts of their North River Steam Boat Company reached $153,694, leaving a profit of $61,861 and dividends of $49,000. These sums were astronomical for the economy of the day. (In 1812, Fulton had described an income of $34,000 as “such immense profits.”)

But the Livingstons were a divided clan. The chancellor had left to his heirs, Robert L. and Edward P. Livingston, the North River Steam Boat Company and its line to Albany. In 1808, however, he had sold to his brother John R. Livingston the rights to the waters between New York City and New Jersey, Staten Island, and Long Island. Intensely belligerent, eternally suspicious, and underhanded, John was aggravated by gout in both feet, and he aggravated his monopoly partners in turn. One of his many slippery maneuvers had led Fulton to erupt, “Never shall he edge himself into any other enterprise which I can control.”
²⁷

On December 5, 1817, Gibbons had approached John R. Livingston to test his reaction to the news that he was building the
Bellona
to compete with Ogden's new ninety-five-foot
Atalanta
. Livingston had never liked Ogden; he had agreed to grant him a license only because of intense family pressure. So he slyly replied that he would not stop Gibbons from waging his vendetta.
²⁸

So far, so good: Gibbons had made every preparation for the legal fight to come. But the courtroom struggle would only be half the war. He still needed to win the business battle. After all, the ultimate goal was not to take away Ogden's license, but to send him to debtor's prison through direct competition. And that was Vanderbilt's job.

IN THE PARLOR OF THOMAS GIBBONS
, Vanderbilt found a portal into the world of New York's wealthy patricians. Surprisingly, he found a second one through his own family. His introduction came through his brother-in-law, John De Forest, who now commanded the
Nautilus
, a steamboat that ran between New York and Staten Island. The craft belonged to the Richmond Turnpike Company, a corporation that was itself the property of Daniel D. Tompkins. Tompkins, a former governor of New York who had married into an aristocratic family, pursued expensive plans to develop his estate of Tompkinsville, Staten Island, even as he served as vice president of the United States. Thanks to De Forest, Vanderbilt became a regular guest at Tompkins's imposing marble mansion. There he learned that Tompkins, like all of patrician New York, was terrified by Gibbons's vendetta against Ogden.

An air of desperation hovered over Tompkins, who swayed under the weight of alcoholism and heavy debts. He owed a great deal of money to Gibbons, and ran the
Nautilus
under an expensive license from the Livingstons; he stood to lose heavily if the monopoly was overturned. Indeed, Gibbons's assault on the steamboat monopoly was also an attack on aristocratic privilege, as represented in Tompkins's own Richmond Turnpike Company. Whenever Vanderbilt stopped at the Tompkinsville dock and knocked on the doors of the mansion, the vice president urged him to press Gibbons to compromise, to make peace “with honor & propriety.”
²⁹

What a universe was captured in that phrase—one that Tompkins's young guest could never grasp. For all of the vice president's Jeffersonian political affiliations, he picked his way through this changing society with an eighteenth-century mental map, written in the ink of deference and rank, drafted with mercantilist principles that placed the orderly direction of the economy in elite hands. To New York's patricians, Gibbons's insistence on competition was scandalous. Shortly after Vanderbilt took command of the
Bellona
, the aristocrat Rachel Stevens wrote in alarm, “Gibbons runs an elegant Steamboat for half price… purposely to ruin Ogden, and as he has a very long purse, I expect he will do it. Ogden has lowered his price and now Gibbons says he will go for nothing. Did you ever hear of such malice in this enlightened age?”
Malice
may seem a curious term for the offering of better service at lower rates, but it was malice indeed. Perversely, it was an obsession with honor that drove Gibbons to a kind of competitive capitalism that respected profits, not persons.
³⁰

In Vanderbilt's world, crowds were thicker, elbows sharper, confrontations cold and raw. He had grown up in a market-centered household outside the shadow of aristocrats; his was the individualistic society still emerging in America, guided not by honor but by calculation. He was angered but not scandalized when Ogden's men tore down signs to Rising Sun Landing, when the captains of Ogden's periaugers blocked the
Mouse's
dock—to “plague” Gibbons, as one declared.

The twenty-four-year-old Vanderbilt took command of the 116-ton
Bellona
in October 1818. He brought it through the broad bay and narrow creek of Kill Van Kull less than a dozen times before he was met on the New York docks by a process server. Ogden had been content merely to harass the
Mouse
, but the large and powerful
Bellona
prompted him to seek an injunction from New York's Chancery Court, charging Gibbons with violating the monopoly. For Gibbons, it was all according to plan, and he began work on an appeal.

The vendetta played out in parallel battles of high and low. In September 1818, Gibbons stood trial for trespass, stemming from his attempt to challenge Ogden to a duel. (The charge for dueling was dismissed, as there had been none.) “The celebrity and high standing of the parties,” the
Newark Centinel
reported, “excited considerable interest in the public mind.” Each day, “a great number of respectable ladies” attended the trial, which ended with a $5,000 fine for Gibbons. It was far less decorous down on the waterfront, where the rival steamboat crews stooped to stealing fuel from each other's woodpiles. When Gibbons's own process server approached the engineer of the
Atalanta
, Ogden's man started punching and kicking, shouting, “Damned rascal, infernal villain, damned son of a bitch.”
³¹

Vanderbilt resorted to his own brazen and bewildering maneuvers to keep the
Bellona
running to Manhattan in the face of the court order. On June 4, 1819, as he chatted with De Forest and Tompkins at the vice president's mansion, he received another injunction barring the
Bellona
from New York. Nevertheless he went, was arrested, and was bundled off to Albany to see Chancellor James Kent, a man decidedly sympathetic to the monopoly. There Vanderbilt explained his insolence: Tompkins had hired the boat on the day he was taken into custody. The chancellor had no choice but to release him. Sometimes Vanderbilt simply ran the
Bellona
to the city, deftly avoiding the authorities who tried to impound it. When Ogden presented evidence of these violations, Gibbons blithely told the court that he had “misunderstood” its orders.
³²

With Vanderbilt managing the tactics of the struggle, Gibbons gave thought to strategy. His ferry service, he realized, was lucrative because it was a link in the most important commercial corridor in the burgeoning economy—the route between New York and Philadelphia, the young republic's financial centers and largest cities. Each year, more and more people passed between them, carrying information, capital, credit, and new business relationships. Gibbons constructed a consolidated line in early 1819 by forming a partnership with the Stevens brothers (aristocratic nephews of Chancellor Livingston, no less), who had a steamboat on the Delaware River, and with a group of stagecoach owners who provided transit by turnpike across the thirty-mile neck of New Jersey. The
Bellona
connected with the stages at New Brunswick, the farthest navigable point on the Raritan River. They called it the Union Line.
³³

There was already a steamboat that sailed between New York and New Brunswick. Perversely named
Olive Branch
, it belonged to John R. Livingston. He had eyed Gibbons's war against Ogden with unease that simmered into anger as Gibbons looked increasingly likely to succeed. Now that Gibbons competed directly against his own boat, his shallow patience boiled away, and he swept down on the
Bellona
with an injunction on April 24, 1819.
³⁴

Vanderbilt kept the business running, passing passengers through to New York by connecting with the
Nautilus
in New Jersey waters or simply by dodging process servers in Manhattan. Meanwhile Gibbons proceeded with his appeal to the Supreme Court of what was now called
Gibbons v. Ogden
. On December 13, 1819, he wrote to Daniel Webster, former congressman and future secretary of state. Webster already had a formidable reputation for his national vision, his championing of enterprise, his arguments before the high court—and his godlike vanity. A case that could tear down state barriers to national commerce, Gibbons thought, would suit Webster perfectly.
³⁵

THE ICE FROZE
the
Elizabeth
in port. In February 1820, it sealed shut New York's North River piers and prevented the tall-masted vessel from departing. No one could free it. On board, Dr. J. M. Scott McKnight tended to the shivering passengers: some fifty black men and women, all skilled artisans bound for Africa to prepare settlements for rescued slaves. Technically a federal expedition against the transatlantic slave trade, it was a thinly disguised project of the American Colonization Society which planned to ship freed slaves to Africa.