The First Tycoon: The Epic Life of Cornelius Vanderbilt (146 page)

Sixteen
Among Friends

1
For a reference to CV as “the Railroad King of New York,” see
CT
, December 16, 1867. For references to “railroad kings” in a general sense, see
Albany Evening Journal
, January 21, 1867.

2
See, for example, CFA, “A Chapter of Erie,”
NAR
, July 1869; Alfred D. Chandler Jr.,
The Visible Hand: The Managerial Revolution in American Business
(Cambridge, Mass.: Harvard University Press, 1977), 149.

3
Keep delegated to EC authority to manage relations with CV—for example, to equalize sleeping-car income with the HR, “and make such other arrangements” as might be in the interests of the company; Directors' Minutes, February 15, 1867, NYC, vol. 5, box 34, NYCRR.

4
WHV to JFJ, April 30, 1867, box 3, JFJP-2.

5
NYT
, June 29, August 7, 1867;
RT
, July 13, 1867; Directors' Minutes, July 25, August 22, 1867, NYC, vol. 5, box 34, NYCRR; Erastus Corning Jr. to EC, July 27, 1867, fold. 2, box 89, ECP.

6
Flag of Our Union
, June 22, 1867.

7
Testimony of HFC, NYSAD 142, 92nd sess., 1869;
NYT
, April 4, 1867; Proceedings of the Stockholders' Meeting, March 30, 1867, Directors' Minutes, HR, oversize vol. 248, NYCRR.

8
CFA, “The Railroad System,” in CFA and Henry Adams,
Chapters of Erie and Other Essays
(New York: Henry Holt, 1871), 403.

9
Recent historical and popular literature does a poor job of explaining why stock watering was considered such an abuse in the nineteenth century. (Of course, I simply may not have read widely enough.) For example, John Steele Gordon,
The Scarlet Woman of Wall Street: Jay Gould, Jim Fisk, Cornelius Vanderbilt, the Erie Railway Wars, and the Birth of Wall Street
(New York: Weidenfeld & Nicholson, 1988), 87, writes that it was seen as “cheating the stockholders by diluting their equity,” which misses the real complaint, and does not touch the underlying thinking that made it such a politically sensitive subject. See CFA, “The Railroad System,” 398–413. For an enlightening discussion between CVs executives and state legislators on the problem of “fictitious capital,” see NYSAD 142, 92nd sess., 1869. Stock watering was a focus of the famous Hepburn Committee, NYSAD 38, 103rd sess., 1880. For a contemporary attack on the “great evil” of “fictitious capital,” see
BM
, August 1869. See also Montgomery Rollins, “Convertible Bonds and Stocks,”
Annals of the American Academy of Political and Social Science
35, no. 3 (May 1910): 97–110. Fowler, 24–5, is especially good at expressing the wonder his contemporaries felt for the abstraction of corporate finance.

10
HC
, March 18, 1867;
NYT
, April 4, 1867.

11
Spuyten Duyvil & Port Morris Railroad Company Minutes Book, vol. 1, box 39, NYCRR;
NYT
, April 21, 1870. When Daniel Drew had operated the Upper Bull's Head Tavern on Third Avenue, it had been the primary north-south route to the city; see
Walter Blair v. Daniel Drew
, March 10, 1831, Court of Common Pleas, file 1831–87, and
Fitz G. Halleck v. Daniel Drew
, March 15, 1820, Court of Common Pleas, file 1820–479, NYCC.

12
RT
, July 13, 1867;
NYT
, May 20, August 29, September 11, 1867; Directors' Minutes, December 11, 1867, NYC, vol. 5, box 34, NYCRR. On the Great Western's third rail (it had been built to a gauge of 5′6”) and the creation of a through line on the North Shore, see Directors' Minutes, November 8, 1866, NYC, vol. 5, box 34, NYCRR;
CT
, January 9, 1867.

13
Nathaniel Thayer to EC, November 26, 1867, fold. 8, box 39, JMD to EC, December 7, 1867, fold. 2, box 90, ECP; Directors' Minutes, December 11, 1867, NYC, vol. 5, box 34, NYCRR. On Joy, see Alfred D. Chandler Jr. and Stephen Salsbury, “The Railroads: Innovators in Modern Business Administration,” in Bruce Mazlish,
The Railroad and the Space Program: An Exploration in Historical Analogy
(Cambridge, Mass.: MIT Press, 1965), 152; Julius Grodinsky,
Transcontinental Railway Strategy, 1869–1893: A Study of Businesmen
(Philadelphia: University of Pennsylvania Press, 1962), 5–6.

14
WHV to JFJ, January 29, 1868, JFJP See also WHV to JFJ, May 14, 1868; Memorandum of Agreement, December 17, 1868; and H. E. Sargent to JFJ, May 16, 1874; all in JFJP; Notice of NYC&HR, October 1, 1874, Document Summary, box 5, JFJP-2. WHV used back channels to reassure Joy as well, speaking to Samuel Sloan of the Vanderbilts' desire to treat the North Shore lines fairly; Samuel Sloan to JFJ, August 30, 1867, JFJP.

15
RGD, NYC 374:1;
Buffalo Express
, in
CT
, December 16, 1867;
NYT
, October 15, 1866; testimony of CV, NYSAD 19, 90th sess., 1867. For high praise for his Harlem management, from a very skeptical source, see the
Nation
, March 26, 1868. See also praise from the
RT
, September 30, 1865, for CVs emphasis on safety.

16
Testimony of Azariah Boody and CV, NYSAD 19, 90th sess., 1867;
Putnam's Monthly Magazine
, February 1868. For a splendid illustration of corruption in the Pennsylvania, see David Nasaw,
Andrew Carnegie
(New York: Penguin, 2006), 59–63.

17
American Phrenological Journal
, March 1866;
NYT
, February 7, 1867;
Round Table
, February 9, 1867.

18
NYT
, November 10, 1866.

19
HW
, December 15, 1866;
Cleveland Leader
, January 21, 1867.

20
Round Table
, February 9, 1867.

21
NYH
, November 14, 1867.

22
Louis Auchincloss,
The Vanderbilt Era: Profiles of a Gilded Age
(New York: Charles Scribner's Sons, 1989), 37;
The Way Bill
, March 1887.

23
Auchincloss, 38;
CT
, February 3, 1867; Directors' Minutes, May 23, 1867, HRR, reel 26, box 242, NYCRR.

24
NYS
, December 22, 1877, February 27, 1878;
NYW
, December 20, 1877;
NYTr
, February 27, 1868, February 6, 1879;
Henry S. Thatcher and George Buckland v. CJV
, April 2, 1867, file LJ.-1867-V-192,
George R. Pecker v. CJV
, April 2, 1867, file L. J-1867-V-100, Supreme Court Law Judgments, NYCC.

25
New York Ledger
in
CT
, November 19, 1867; CJV to HG, September 28 n.d., reel 3, HGP.

26
CJV to Nathaniel P. Banks, October 27, 1867, cont. 40, Nathaniel P. Banks Papers, LOC.

27
Letter quoted in
NYS
, December 27, 1877.

28
SEP
, April 4, 1873.

29
NYT
, April 27, 1867;
New York Observer and Chronicle
, May 16, 1867;
NYH
, May 22, 1867;
H W
, June 1, 1867;
NYTr
, January 24, 1876.

30
NYT
, October 1, 8, 1867.

31
CT
, October 18, 24, 1867;
NYT
, October 19, 22, 1867.

32
New York Ledger
, in
CT
, November 19, 1867.

33
For the original complaint, see
Frank Work v. Daniel Drew, John E. Eldridge, Alexander Drew, Homer Ramsdell, J. C Bancroft Davis, Henry Thompson, Dudley Gregory, Frederick A. Lane, George Gravel, James Fisk Jr., Jay Gould, and William Skidmore
, July 24, 1868, file PL-1868-W-25, Supreme Court Pleadings, NYCC. The account given here of the complaint and CVs interaction with Jay Gould, to follow, comes from an overlooked deposition later filed by Gould;
CT
, March 30, 1868. For an influential source that calls Work CVs nephew, see CFA, “A Chapter of Erie,”
NAR
, July 1869. Work himself made no claim to any relation to CV; see his testimony in the will trial,
NYS
, March 7, 1878. On Samuel Barton's role in the HR, see Directors' Minutes, June 10, 1867, HR, oversize vol. 248, NYCRR. For his partnership with Work, see a notice in
NYT
, February 19, 1866. For evidence that CV specially favored Barton, see CV to Samuel L. M. Barlow, March 6, 1860, BW Box 36 (14), Samuel L. M. Barlow Collection, HL.

34
CT
, March 30, 1868. According to Gould's lieutenant and bodyguard, G. P. Morosini, Gould joined the Eldridge clique through contact with lawyer Frederick A. Lane and broker James Fisk Jr.; G. P. Morosini, “Jay Gould and the Erie Railway,” NYHS.

35
Klein, 77; Edward Harold Mott,
Between the Ocean and the Lakes: The Story of Erie
(New York: Ticker Publishing, 1908), 141.

36
NYT
, December 14, 1865, June 10, 1867;
PS
, August 13, 1868; Edward Chase Kirk-land,
Men, Cities, and Transportation: A Study in New England History, 1820–1900
, vol. 2 (Cambridge, Mass.: Harvard University Press, 1948), 34–40. Kirkland notes that Adams stressed the need for the Boston, Hartford & Erie in his article on Boston for the
NAR
.

37
CT
, March 30, 1868.

38
The discussion of the financial system that follows is largely based on the same sources cited in the discussion of the introduction of the greenback in Chapter Thirteen. See in particular Richard Franklin Bensel,
Yankee Leviathan: The Origins of Central State Authority in America, 1865–1877
(New York: Cambridge University Press, 1990), 239–80, esp. 264–77; Richard Sylla, “Federal Policy, Banking Market Structure, and Capital Mobilization in the United States, 1863–1913,”
JEH
29, no. 4 (December 1969): 657–86; Esther Rogoff Taus,
Central Banking Functions of the United States Treasury, 1789–1941
(New York: Columbia University Press, 1943), 65–9; and also George A. Selgin and Lawrence H. White, “Monetary Reform and the Redemption of National Bank Notes, 1863–1913,”
BHR
68, no. 2 (summer 1994): 205–43.