The First Tycoon: The Epic Life of Cornelius Vanderbilt (106 page)

Vanderbilt had serious problems that year. While he was at Saratoga, Frank's brother Robert L. Crawford was indicted for attempted murder. On the night of May 24, the police had banged on the door of 10 Washington Place, demanding access to Vanderbilt's stables. His coachman, James Ames, described by the
New York Times
as a “powerful, stalwart negro,” had reportedly taken (or dragged, according to the
Times)
a drunk seamstress named Carrie Love into his bedroom in the stables. Vanderbilt himself let the police in, and a wild brawl ensued between Ames and the officers, who finally knocked out Ames and dragged him off. Bizarrely Frank's brother Robert appeared at the police station. Crawford, who was on a visit from Alabama, acted as if Ames were the slave of a Southern planter before the war. “You dare not lock up Commodore Vanderbilt's coachman,” he bellowed. The police finally tossed Crawford into the street, where he lurked until a detective emerged. Crawford produced a revolver and shouted his intention of killing the man. In a confused scuffle, he shot and severely wounded the detective. The initial press reports of the incident may have been exaggerated, since a jury swiftly acquitted Ames. Still, Crawford faced a long fight for exoneration and an eventual lawsuit by his victim.
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When the Commodore returned from Saratoga, he suffered a terrible loss. In October, an epizootic struck New York's forty thousand horses, afflicting them with disease. The
New York Herald
remarked on “the singular spectacle… of a great city almost at a standstill; of thousands of persons, male and female, young and old, unable to reach their homes after a day of toil except on foot.” Omnibuses, streetcars, carts, and drays sat in the streets, or “were dragged slowly around by horses more dead than alive.” On November 15, thinking the worst had passed, Vanderbilt drove out behind Mountain Boy. Soon afterward the steed fell sick. Worcester came around to the Commodore's stables not much later, and Vanderbilt told him his finest horse was dead. He would rather have given a thousand shares of New York Central, he said sadly, than have that horse die. When Worcester later recounted this remark, William—knowing how much his father valued both money and the Central—could only say, “Whew!”
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The Commodore was in a grim frame of mind, then, when his name began to appear in the newspapers in the ensuing week. Horace Clark and Augustus Schell carried out a corner in Chicago & Northwestern Railroad stock, in alliance with none other than Jay Gould. As with the Union Pacific earlier in the year, the newspapers assumed that Vanderbilt was the mastermind of any operation involving Clark and Schell, and proclaimed a new alliance between Gould and the Commodore. In fact, Vanderbilt had no interest in acquiring the Northwestern, and he would never take part in its management. The linking of his name with the Union Pacific had been bad enough, but to be identified with Gould snapped his temper. On November 26, he dictated a “card” for the newspapers.
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SIR: The recent corner in “Northwestern” has caused some considerable excitement in Wall street, and has called forth much comment from the press. My name has been associated with that of Mr. Jay Gould and others in connection with the speculation, and gross injustice has been done me thereby.

I beg leave, therefore, to say, once and for all, that I have not had, either directly or indirectly, the slightest connection with or interest in the matter. I have had but one business transaction with Mr. Gould in my life. In July 1868, I sold him a lot of stock, for which he paid me, and the privilege of a call for a further lot, which he also settled. Since then I have had nothing to do with him in any way whatever; nor do I mean ever to have, unless it be to defend myself. I have, besides, always advised all my friends to have nothing to do with him in any business transaction. I came to this conclusion after taking particular notice of his countenance. The almost constant parade, therefore, of my name in association with his seems very much like an attempt to mislead the public, to my injury, and, after the publication of this, ignorance or misinformation can no longer be urged as an excuse for continuing this course.

As for Wall Street speculators, I know nothing about them. I do not even see the street three times a year, and no person there has any authority to use my name, or to include me in any speculative operation whatever.

C. VANDERBILT
No. 25 West Fourth Street, Nov. 26, 1872
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The card shows the emotion and haste in which it was written. The claim that he had had only one “business transaction” with Gould was true only if the definition of a transaction was limited to stock trades, and excluded their relations as railroad presidents. Even then, Vanderbilt neglected the technicality he had insisted on in 1868, that his sale of stock at the end of the Erie War be to Drew and no one else. On the other hand, his denial of any role in speculation rings true; as Worcester would later report, since 1870 Vanderbilt had limited himself to strategic purchases of stock for investment or to control other companies.
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As for his personal opinion of Gould—well, a lot of businessmen didn't like the look of him, let alone trust him.

When asked about the card by a reporter, Vanderbilt said, “The constant association of my name with that of Mr. Gould has injured me greatly.” It made investors reluctant to buy the securities of his railroads, he claimed. He had seen one telegram from England that read, “What is the meaning of Vanderbilt's name being mixed up with Jay Gould's in this affair?” When pressed about Gould, he added:

No man could have such a countenance as his, and still be honest.… I tell you, sir, God Almighty has stamped every man's character upon his face. I read Mr. Gould like an open book the first time I saw him. I did not like to express too strongly an opinion this morning, but if you wish to have it now I will give it to you. You have my authority for stating that I consider Mr. Jay Gould a damned villain. You can't put it too strongly.

As the reporter walked down the stoop into the rain, the Commodore shouted after him, “He is undoubtedly a damned villain, and you can say I said so.”
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Vanderbilt's remarks apparently stung Gould, who proved equally petty. “The poor old Commodore is in his dotage,” he told a reporter. “There is a class of rising financiers whom the old man hates.… While he in his second childhood is uptown amusing himself with his horses, and listening to the flatteries of sporting men, these young business men are rising into financial power which will far exceed the old Commodore's even in his palmiest days.” Gould was wrong, of course. He would never achieve Vanderbilt's power, or even his absolute, unadjusted net worth.
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But this feud drew attention away from what truly made this moment so hurtful, and damaging, for the Commodore. Vanderbilt directed at Gould all the anger and frustration he felt at Clark and Schell's betrayal. The pair went so far as to bail Gould out of jail after he was arrested in a lawsuit at the height of the Northwestern corner. As
Railroad Gazette
observed, Gould “rarely worked with these men or men of their class, and… was thought to be hardly acceptable in their company”
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Vanderbilt, that student of human nature in the business environment, must have known that this was a very bad sign. Such open defiance of his feelings suggested that Clark, in particular, had begun to think of himself as a great railroad manager and financier in his own right, as he took over the Union Pacific and cornered the Northwestern. As Vanderbilt knew all too well, first pride, then the fall.

ONE BY ONE, VANDERBILT'S
old friends passed on. Erastus Corning had died in April 1872. Horace Greeley's wife died at the end of October, swiftly followed by Greeley's defeat in the presidential election and his own demise on November 29. It was publicly disclosed that Corneil owed nearly $46,000 to the editor, on promissory notes that were listed by the auditors of the estate under “items of doubtful value.”
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More and more, Vanderbilt's legacy lingered in his mind as he rolled inexorably toward the same fate. The topic came up when he received a call from a Southern Methodist bishop named Holland N. McTyeire, who was married to a cousin of Frank's. The bishop had traveled to New York for treatment by Dr. William Bodenhamer. The Commodore liked him, and insisted that he stay at 10 Washington Place. McTyeire became a frequent guest. As Frank later wrote, Vanderbilt had high regard for his “noble Christian character & great executive ability”—the latter more important to him than the former, perhaps. Vanderbilt listened closely when McTyeire discussed how the Southern Methodists had received a charter for the Central University to be erected somewhere in Dixie, where the destruction of the Civil War remained all too visible.

McTyeire returned to New York in March 1873, and called at Vanderbilt's home as usual. The Commodore took him aside and said that he would give $500,000 to endow the university. “It was a grateful surprise,” McTyeire later remarked; wisely, he had never asked for any money, let alone such a vast sum as $500,000 represented in 1873. As the Commodore explained, it was his lifelong nationalism, his patriotism, that moved him. “It was a duty” Vanderbilt later quoted himself as saying, “that the North owed to the South, to give some substantial token of reconciliation which would be a benefit, and he wanted to do his individual share by founding an institution.”
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Charles F. Deems testified under oath to hearing similar statements by the Commodore about his motives. Vanderbilt, he said, voiced a fear that “the greatness of his success would give an argument against education and its usefulness; that it had been secretly a life-long regret to him that he was not educated.” But a desire to heal the divided nation was most important. “When the Commodore finally announced his purpose to make the gift, he said that he had this in mind during the Rebellion,” Deems reported. “He spent a million of money in sending a vessel against the Southerners to show his views then, and he wanted to give the money after the war was over to show them that the men of the North were ready to extend the olive branch.”
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Characteristically, Vanderbilt entrusted his gift to McTyeire as an individual. In a letter dated March 17, he placed several conditions on his gift: he specified that the university should be located in Nashville (as a major Southern city), and that the bishop should be the president, with the power to veto resolutions by the university board. McTyeire agreed, and the board swiftly accepted. Indeed, the Southern Methodists immediately decided to change the name from Central to Vanderbilt University
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Vanderbilt had another project already under way to establish his legacy: the construction of two additional tracks on the Central between Albany and Buffalo (where its main feeders, the Lake Shore and the North Shore lines, converged). At the time, most railroads had only single-track lines, so even a complete double track was considered a great thing. The Lake Shore was considered an excellent road, yet it had only one track for part of its length. To construct a
quadruple
track over the distance of some three hundred miles loomed in the public mind as a monumental undertaking. Work began in 1872 through the simple device of extending sidings at various points along the line until they met. By the end of the year, seventy-five miles had been completed. To move the work along faster (and to consolidate existing debt), the New York Central board voted on January 11, 1873, to issue $30 million in bonds, plus another £2 million to be sold in London.
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“I had this design in mind when I went on the road three [sic] years ago,” he told a reporter. “I got our best people together, and submitted a proposition to them. Suppose all the passenger trains were taken off, and the road given up entirely to freight? How much percent on the current expenses could we save in the transportation of freight?” The Central's freight haulage had risen dramatically since the Civil War. Freight receipts had climbed by 72 percent, despite the fact that freight
rates
had fallen by an average of 8 percent per year. In 1872, 203,351 freight cars passed over the line; in 1873, it would carry east 255 carloads in a single day, the largest total of any railroad to date. Passenger traffic, on the other hand, remained flat. “We have to run freight trains so rapidly to get them out of the way of the passenger trains that we frequently have to run thirty miles an hour,” the Commodore explained. “But it uses up the rolling stock, knocking the cars to pieces without really carrying the freight any faster.” Ten percent was the lowest estimate he received of the savings to be derived from running freight trains on separate tracks; Vanderbilt thought 15 percent.
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“Suppose, now, we should save 15 percent on $15,000,000 freight transportation. That would be $2,250,000,” he lectured. “Now, suppose the new tracks cost $15,000,000, on which we should pay 7 percent, which would be $1,050,000. Now, if our business remained just as it is, the new tracks would give us a saving of $1,200,000 a year.” It is significant that he made his calculations based on the railroad's current business. At the start of 1873, after years of rapid growth, such railroad executives as Scott and Clark banked on continued expansion; the older and wiser Vanderbilt did not. “I hope to seem them laid. I am getting pretty old, but I never had better health than now”
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