The First Tycoon: The Epic Life of Cornelius Vanderbilt (113 page)

How does $100 million or so translate into twenty-first-century dollars? These pages have not provided modern equivalent figures, in the conviction that historical dollar amounts cannot honestly be converted. They are irreducible facts that can be understood only in their contemporary context. The economy was not simply a balloon that inflated over time; in the nineteenth century it was lumpy, with partially integrated markets, uneven currency supplies in different regions, periods of rapid growth and dramatic increases in economic complexity, and long periods of deflation. At some point in the twentieth century, even the smallest, most remote communities in America would find themselves woven seamlessly into the national—even the international—financial system. This integration of all economic life into a single web, dominated by the Federal Reserve Bank, would prove to be the culmination of much of Vanderbilt's life of entrepreneurship and institution building. But it had not yet come into existence during his own time. Rural areas in the South and West frequently lacked access to banking; they were the areas most heavily dependent on cash, yet they were plagued with raw cash shortages. In 1876, the last full year of Vanderbilt's life, the comptroller of the currency reported that the combined total of all greenbacks, national banknotes, fractional currency, and gold and silver coin in circulation amounted to $900,676,194—just $19.77 for each of the estimated 45,550,000 citizens. Even this figure is deceptively large, for national banknotes were concentrated in bank-rich regions, particularly the Northeast.
⁸

On the other hand, these figures do provide some context for the scale of Vanderbilt's fortune. If he had been able to liquidate his $100 million estate to American purchasers at full market value (an impossible task, of course), he would have received about $1out of every $9 in existence. If demand deposits at banks are included in the calculation, he still would have taken possession of $1 out of every $20. By contrast,
Forbes
magazine calculated in September 2008 that William Henry Gates III—better known as Bill Gates—was the richest man in the world, with a net worth of $57 billion. If Gates had liquidated his entire estate (to American buyers) at full market value at that time, he would have taken $1 out of every $138 circulating in the American economy
^*
Even this comparison understates the disparity between the scale of Vanderbilt's wealth and that of any individual in the early twenty-first century, let alone his own time. The calculation for 2008 uses the Federal Reserve's M2 figure, the most literal equivalent to the 1876 comptroller's report; the money supply in the far more complex modern economy is generally thought to include a far broader range of financial instruments, a tally referred to as M
₃
.
⁹

Vanderbilt cultivated William and William's sons as his heirs, instructing them to preserve the empire and perpetuate the dynasty For an impious man, it was his greatest grasp at immortality, greater even than the creation of his university. But fathers rarely imprint themselves on their sons. No sooner had the trial over the Commodore's will ended in 1879 than William agreed to sell 250,000 shares of New York Central & Hudson River to a syndicate organized by banker J. P. Morgan. Morgan's consortium bought them at 120, for a total payout of $30 million. This was not a majority stake, and William and his sons retained a large percentage of the hundreds of thousands of remaining shares; but the family now worked closely with Morgan, who served as maestro of a banking syndicate that established interlocking directorates in the major railroads to tamp down the competition that had driven so many lines into bankruptcy. Morgan, together with William's sons, particularly Cornelius II, established a Board of Control that brought to fruition the great project started by the Commodore. Charles F. Adams Jr. would write in 1888, “The most perfect organization is that now known as the Vanderbilt system.”
¹⁰

William ostensibly sold out because a bill was pending in the legislature to bar any family from having majority control of the Central. Chauncey Depew, who knew Albany better than anyone, counseled in favor of the sale. But there is reason to think that William was simply worn out. He lacked his father's year-after-year resilience in the face of hostility Where the Commodore had been calmest in the heat of battle, unleashing his temper largely at home, William seems to have been a kind father but a poor corporate diplomat. Even his ally Morgan wrote that he “irritated and harassed” other businessmen, and pursued “legal quibbles which would be disgraceful to any Bowery lawyer.” Rather than slowly limit his role in business without giving it up, as his aging father had done, he retired to a life of luxury. He constructed twin mansions on Fifth Avenue between Fifty-first and Fifty-second streets, and filled them with fine art.
¹¹

His children followed suit, constructing their own Fifth Avenue palaces. In March 1883, William K. and Alva Smith Vanderbilt threw a costume ball that stood as one of the great extravagances of the Gilded Age. “I wish the Vanderbilts didn't retard culture so very thoroughly,” Edith Wharton wrote to a friend. “They are entrenched in a sort of
thermopylae
of bad taste, from which apparently no force on earth can dislodge them.” William H. Vanderbilt's mansion was eventually demolished (as was 10 Washington Place), though some of those built by William's children still remain, from the Breakers at Newport to the Biltmore in Asheville, North Carolina—monuments to an outrageous self-indulgence that the Commodore would have scorned, made possible by an enormous disparity in wealth that the Commodore pioneered.
¹²

The story of the subsequent generations has no place here. Suffice it to say, as Louis Auchincloss does, “With the death of Cornelius II in 1899 at the age of only fifty-six, the Vanderbilt dynasty at the New York Central really came to an end.” The family would play a role in the mighty corporation until its eventual merger with the Pennsylvania and the state takeover that soon followed, but “the sense of a family leader was gone.”
¹³
The fortune was built on America's first great industry, but also the first industry to mature and fade, as the Commodore's descendants spent their money and enjoyed themselves. Descendants live on, but the family has drifted out of the main currents of history.

The Commodore himself remains. His statue still stands at the city gate, gazing down Park Avenue South from the front of Grand Central Terminal. In 1929, the railroad moved it from the top of the St. John's Park Freight Depot, which was slated for destruction, to its current location. The original Grand Central Depot had been rebuilt, then destroyed, and replaced in 1913 by the railroad palace that remains in use to this day. Trains rumble out of it, through the Park Avenue tunnel that dates to the Fourth Avenue Improvement, along the curving track around the Harlem River that Vanderbilt originally built as the Spuyten Duyvil Railroad.
¹⁴
It is fitting that he should stand guard over the infrastructure he created, more grand and more central than it was even in his own time, so vitally important to the city that rose to greatness under his influence. His corporation has disappeared; his plans for a dynasty ultimately failed; but, as the directors of his railroads observed, “The work will go on, though the master workman is gone.”

*
The
New York Times
, July 15, 2007, named Vanderbilt the second-wealthiest man in American history, relative to the size of the economy. Statistics for the nineteenth-century economy as a whole, however, are unreliable.

Acknowledgments

Shortly after 2:30 p.m. on October 15, 2003, I hurried my teenage niece and nephew into the Whitehall Terminal of the Staten Island Ferry. They had come to visit me in New York, where I had lived since 1986, and I thought we could do no better on their first day in town than to take the ferry. We just missed the 2:30 sailing, and had to wait half an hour to board the
Andrew J. Barberi
. Twenty minutes after we boarded, the
Barberi
smashed into a service pier on Staten Island. Now I had to shoo my niece and nephew out of the way of a mob of panicking commuters who were racing back from the bow. We were on the upper deck, and saw no carnage; it was not until we returned to Manhattan that we realized it had been a catastrophe, one that eventually cost the lives of eleven passengers. It was the deadliest transit accident in New York in more than a century.

From the moment of impact, I knew we had been caught in a historic event. As my nephew and I handed out life jackets—and as I scanned the deck to see if the
Barberi
was listing, and in danger of sinking—I thought to myself,
I've studied ferry disasters; now I'm in one
. We returned to Whitehall on the last ferry to run that day, where we gave our accounts to a crowd of reporters. It was peculiar to find myself delivering the sort of information I was consuming to write this book.

I had been at work on it for more than a year already, and was struck by the coincidence that I was writing a biography of the man who founded the Staten Island Ferry.
^*
The 150 or so years between my subject and me matter far more, however. It is a gulf that requires immense effort to span, even in the imagination. Matters conscious and unconscious—grand political issues, meanings of words, social expectations, even the smell of the air—all must be reconstructed, but never can be completely. It is a literary and historical endeavor that cannot be carried out alone.

This book was the product of endless assistance: from archivists who ultimately hold the secrets, in disassembled pieces; from the scholars who created the historiographical context and interpretive framework; from my editor and fellow writers who offered their insights; from institutions that gave financial and research support; and from family and friends, who offered not only emotional and material aid, but have shaped my personal understanding of humanity, the ultimate resource for any biographer.

First I must thank my wife, Jessica Stiles, who has supported and inspired me. Our meeting, long engagement, move to California, wedding, honeymoon, move to San Francisco, and birth of our first child all fall entirely within the brackets of my work on this book. I'm not sure she knew what she was in for. Her love, creativity, sensitivity, hard work, and fine talent as a writer have made it possible for me to complete this book, and I am grateful.

I must also thank the rest of my family, who have supported me unstintingly I am grateful to my parents, Dr. Clifford and Carol Stiles, who always encouraged my interests, and even endured my decision to forgo an academic career after I had devoted years to graduate school. They have always been there for me. I must thank my sister Colleen Stiles for her creative assistance, and her son and daughter, Keegan and Kevyn Stokes, who survived the
Andrew J. Barberi
with me in 2003.

I include my wife's clans in my definition of family, and they offered abundant help before and after our move to California. I should single out my brothers-in-law Patrick and Kevin McKenna and sister-in-law Elizabeth McKenna, their parents, Susan and Michael McKenna, and my wife's grandparents, Jack and Ruth Kahoun. I owe a special debt to my grand-mother-in-law, Elizabeth Frank, and her family, who let Jessica and me live for a year in the Frank home of the past sixty years, a house designed by Frank Lloyd Wright, where I wrote Part Two of this book. Friends and relatives of friends helped as well, especially Christina Wertz and Jeffrey Lerner, Kiki and Alex Beam, Woody Gilmartin, and Philip and Kathleen Brady. To all, thank you.

In acknowledging professional colleagues, I should begin with my editor, Jonathan Segal of Alfred A. Knopf, Inc. It is a great comfort to know that he won't publish a manuscript from me unless it's the best that I can make it. He sent this one back to me more than once for more work, and he was right to do so. I have profound respect for his literary judgment, not to mention gratitude for all he has done for me, and I'm honored to be on his list of authors. My agent, Jill Grinberg, brings an equal level of dedication to her work. She has remained a steadfast believer in my ability—or, at least, my potential—and has labored skillfully and hard to advance my career. I also have to thank Kirsten Wolf, another member of Jill Grinberg Literary Management, who has done so much to help me in the final year of work on this book.

There are a number of writers and historians who have given me their thoughts about this manuscript as it has progressed. David Hochfelder forwarded very useful details from the Western Union letterbooks. James McPherson, Richard Maxwell Brown, and Brenda Maddox supported my efforts to obtain a fellowship to support my work on this book (discussed below), and they have my deep gratitude. The late George Plimpton supported my application as well. We became acquainted with each other through my previous book, in which Plimpton's great-grandfather Adelbert Ames plays an important role, and I consider myself fortunate to have known him, however narrowly and briefly. My heartfelt thanks are due to Edward Countryman, Andrew Burstein, and Robert E. May, who commented on parts of various drafts. I must single out Joyce Appleby Maury Klein, and Richard R. John for special thanks for looking over the entire manuscript. Each of them offered factual corrections, perceptive comments on my writing, and insightful criticism of my interpretations. To have distinguished historians labor through an uncut, unedited manuscript is a much-appreciated gift. I have benefited enormously from all the comments I have received; all failings of this book, however, are mine alone.

I believe very strongly in conducting my research myself. Unfortunately, I was forced to hire researchers for work at the Detroit Public Library and the University of Michigan, Ann Arbor. I must thank Ruth McMahon and Kristina Eden, respectively, for their fine work on my behalf there. They provided me with abundant material, though any oversight is my responsibility alone. I must also thank Frank Mauran of Providence, Rhode Island, who made available information from the ledger book of his ancestor, Oroondates Mauran. I wish to thank in particular Cristine Gonzalez, who assisted me as part of her Hertog Research Fellowship at Columbia University's School of the Arts. I never gave her much responsibility, I'm afraid, though she and her husband, Landon Hall, tracked down sources at the New-York Historical Society and photocopied them for me, and found valuable leads that I followed up. I was especially grateful for their labors after I arrived on the far side of the continent, copies in hand. I am indebted to the School of the Arts for the honor of working with a Hertog Fellow, especially one so talented.

Seemingly numberless archivists have assisted me generously and capably. I apologize for listing so many only by institution. My thanks go out to the staffs of the following, in no particular order: the California Historical Society; the Bancroft Library, University of California, Berkeley; the Huntington Library; the Newberry Library; the Manuscript Division of the Library of Congress; the National Archives in Washington, D.C., College Park, Maryland, and New York, New York; the Milton R. Perkins Library, Duke University; Department of Special Collections, University Libraries, Wichita State University; Special Collections, Jean and Alexander Heard Library, Vanderbilt University; the American Antiquarian Society; the Watkinson Library, Trinity College, Hartford, Connecticut; the Baker Library, Harvard Business School; Carl A. Kroch Library, Cornell University; the Special Collections Research Center, Morris Library, Southern Illinois University, Carbondale, Ill.; Special Collections, University Libraries, University of Rhode Island; the Albany Institute of History and Art; the New York State Library; the Rockefeller Center Archives; the New York Municipal Archives; the New-York Historical Society; and the various libraries of Columbia University.

I must single out a few archivists who went above and beyond to help me as I spent weeks or months in their collections. Rebecca Rego Barry, late of Special Collections at Drew University enthusiastically assisted me as I took the New Jersey Transit train to Madison, N.J., for so many snowy weeks in the winter of 2002–03. Joseph Van Nostrand and Bruce Abrams stand guard over the historical treasure trove of the Old Records Division of the New York County Clerk's Office, assisted by David Brantley Robert Soenarie, Eileen McAleavey, and Annette Joseph. I would like to think we became friends as well as colleagues over the course of many months, as they guided me through the priceless collection of papers in their keeping. Bruce Adams skillfully indexed this book.

I must conclude by singling out one institution in particular, which combined every form of assistance possible—financial, editorial, literary, historical, archival, emotional, even architectural. It is the New York Public Library (NYPL). I not only conducted years of research in the main research library on Fifth Avenue and Forty-second Street, I wrote much of the book there, in the Allen Room and the Center for Scholars and Writers (see below). It is one of America's great cultural institutions, and it is well served by its highly professional staff. I do a disservice to many by naming only a few, but I would like to single out, for their generous personal assistance, Wayne Furman of the Office of Special Collections (and thoughtful keeper of the Allen Room); Maira Liriano, Assistant Chief Librarian and Kate Cordes Librarian of the Milstein Division of United States History, Local History, and Genealogy; Alice C. Hudson, Chief of the Lionel Pincus and Princess Firyal Map Division; William Stingone, Charles J. Liebman Curator of Manuscripts in the Manuscripts and Archives Division; Kristin McDonough, Director of the Science, Industry, and Business Library; and David Ferriero, the Andrew W. Mellon Director and Chief Public Executive of the Research Libraries.

I wish to extend my special thanks to the NYPL's Dorothy and Lewis B. Cullman Center for Scholars and Writers. I could not have completed this book without the financial assistance of a fellowship at the center, 2004–05. For this award, I am grateful also to the Gilder Lehrman Institute of American History, which gave me the honor of being the first Gilder Lehrman Fellow in American History at the center. The center's staff, especially Pamela Leo and Adriana Nova, were exceptionally helpful. I am deeply indebted to Jean Strouse, the John and Sue Ann Weinberg Director of the center. A superb biographer, she both fostered a productive and collegial environment and offered specific advice on the early chapters of my manuscript. Finally, I thank my classmates of 2004–05. I hope they excuse me for singling out just a few whose insights, advice, or assistance I found particularly helpful: Hermione Lee, Jennifer Egan, Nathan Englander, Colum McCann, and Lisandro Perez. I admire them—and the other fellows of that year—for their character as much as their intellectual and artistic gifts.

T. J. S.

*
The service Cornelius Vanderbilt started just before the Civil War to run in conjunction with the Staten Island Railroad, and later sold to the railway, is the lineal ancestor of today's ferry.