The First Tycoon: The Epic Life of Cornelius Vanderbilt (5 page)

The Stock was soon joined by shares in two banks: the new, federally chartered Bank of the United States (the second part of Hamilton's financial plan), and the older Bank of New York, which acquired a state charter and issued shares that year. Investors in New York began to meet six times a week for formal stock auctions at the Merchants' Coffee House on Wall Street; between sessions, they clustered outside under a buttonwood tree to trade informally. In 1792, they formalized the stock market with the Buttonwood Agreement, setting fixed commissions for brokers (or “stockjobbers”) and establishing the Tontine Coffee House at the corner of Wall and Water streets as a physical exchange (though the informal “curb market” continued to thrive).
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These new institutions laid a foundation that was absolutely essential for the future. But their immediate scope and impact should not be exaggerated. The stock market remained small for many years, because there was little stock to trade. In 1792, the New York stock exchange publicly quoted the price of just five securities, including three federal bonds; by 1815, the number had grown to only twenty-three. The vast majority of businesses remained partnerships or personal proprietorships. As a business historian notes, a corporation was “considered appropriate only when the enterprise was intended to perform a public service,” such as the construction of a bridge or turnpike. A special act of the state legislature was required for every corporate charter. Few corporations had widely traded shares, and many were small, with a handful of investors, serving essentially as a new form for the traditional partnership.
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Every place, of course, is the scene of continuity But not every place is equally a fulcrum of change. New York's geographical advantages—its deep-water port at the end of a long river into the interior of the country—had attracted first imperial planners and then private merchants. Its density of merchants in turn gave rise to innovations in finance and business methods. A self-feeding cycle began to emerge, a multiplication of people and commerce, and needs and solutions, that was already starting to magnify New York's significance for the country as a whole.

Of all the accidents that would make the little boy Cornele into the man he would become, perhaps the most important was the location of his birthplace. From his waterside farmhouse hard by the Narrows, the future flowed in only one direction—toward the steeples and masts that marked the city across the bay.

A THIN LINE SEPARATES
destiny from coincidence. A child's passion may begin a lifelong obsession; or a momentary interest, no more vehement than any other, may be remembered as an omen, thanks to the exaggeration of hindsight. For Cornele, the defining moment was a race. He was only six, he later recalled, when he rode a horse through the surf against another ridden by a neighbor's child slave. It would seem absurd if his rival had not returned decades later to publicly confirm the story. But what matters is that Cornele's earliest memory, the beginning of his self-image, was of competition—and victory.

A taste for competition may have been the natural result of growing up in a household filled with children. Certainly he never lacked confidence. With long limbs, a head of sandy hair, full lips, and a strong chin, he boasted a pair of penetrating eyes set between a high forehead and a long, sharp nose like the prow of a ship. A strong swimmer, he quickly grew tall and athletic, capable of immense labors and endurance.
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Farm life has always tended to erode the line between childhood and adulthood. Cornele lived a life of work and responsibility, hoeing and milking, piling and shoveling. There was church, too—Moravian services, the legacy of a conversion generations before that had taken the Vanderbilt family out of the Dutch Reformed tradition. But the sermons and hymns left no mark on him. He went to school briefly—for a mere three months, by one account—and would recall it as an agonizing process of rote memorization, drill, and punishment. Though he learned to read well enough, he manifested a lasting contempt for the conventions of written English. The handwritten letters that survive from his early twenties—the ink that flowed from a split nib, freshly dipped in an inkwell, now faded on brown, crumbling paper—show an alarming level of innovation in spelling. “See” became “sea” or even “se”—all in the same letter. To “know” was to “no.” And he wrote “wrote” as “roat.” His casual written diction stood in sharp contrast to the formality of the letters of contemporaries, even of those who also had little education.

Indeed, Cornele wrote so phonetically that it is possible to reconstruct his pattern of speech. Some of his quirks are not surprising. A man who has returned home, for example, “is got home;” if he was forbidden, he was “forbid;” if he ought to have been, he “aught a bean.” Cornele's conversations featured now unusual or long-lost pronunciations (such as “ginerally” for “generally”), including the frequent use of a long “a”: “air” for
are
, and “wair”
for were
. He also said “git”
for get
, “sence” for
since
, and he did not
remember
, but would “recollect.” And, like many others around New York Bay, he would add “a” before a verb ending in -ing, as in “Mr. Jones is agoing to Albany”
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When he was eleven, his older brother Jacob died. The event, scarcely mentioned in later years by Cornele or his chroniclers, surely shook this young boy's life. Already the family had lost a child—Phebe, born next after Cornele, had died very young—but Jacob died as a teenager, at an age when he no doubt served as his father's closest assistant in his operations and ambitions. Even apart from the emotional trauma of the loss of a brother, the event turned Cornele from a middle child into the oldest son. Small wonder that he left the schoolroom so young.
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Few traces remain of Cornele's childhood, such as it was. What is known is a mirage, a hazy image floating above the real childhood. It consists of stories repeated by the man the boy became, solidified into a portrait with frequent retelling, colored by admirers. The haziness, the distance, and the repetition not only cast doubts on the accuracy of the image, they raise questions about what it really means.

The mirage tells us that, as early as 1805, during the presidency of Thomas Jefferson, the eleven-year-old boy began to work alongside his father in the periauger. Taking the place of his dead brother, he learned to man the tiller, to raise and set the sails, to tack into the wind. He grew comfortable with the vessel heeling steeply in a stiff breeze, the masts dipping toward the waves, or crashing through a rising storm. One morning, the story goes, the boy awoke to a day he had been looking forward to. His father had promised him a reward for a particularly exhausting chore of hoeing a potato field: Cornele could take his friend Owen in the periauger to New York and spend the day. Cornele gathered Owen and ran down to the shore, where his father stood beside a stack of hay he had contracted to deliver to the city “Now, Cornele, there's the periauger for you,” Vanderbilt recalled his father saying. “I've pitched on more than half the hay, you and Owen can just pitch on the rest, and take it up and unload it at the wharf as usual, and you can play on the way.” He tossed his son a few pennies, and left him to do the work. “A boy can get fun out of most anything,” Vanderbilt later grumbled, “and we got some fun out of that; but I remember we were just as tired that night as if we had been working.”

But what does the story mean? That the eleven-year-old was trustworthy enough to make a delivery across several miles of open water to what was now the biggest city in the country? That he resented his father's total control over his life? Probably something in both these explanations sealed the tale's place in Cornele's memory. But, observed across the chasm of two centuries, the story seems to demonstrate how the nearness of New York overshadowed this family, filling their lives with commerce, turning even a boy's play into a chance for profit. It is a story that could not be told about the more distant reaches of rural America.

The mirage expands. The next year, it tells us, Cornele's father took a contract to retrieve the cargo from a ship that had run ashore at Sandy Hook, the great sandbar that extends from New Jersey outside of Staten Island. Cornelius marshaled some laborers, three wagons, and a few row-boats to do the work. He put his son in charge of the wagons as they shuttled the cargo from the beached ship across the sandbar to the boats on the other side. Cornelius departed with the scows, leaving Cornele to lead the wagons and teamsters on the long drive to the ferry at South Amboy By the time the boy and his men arrived, he had spent all his money on food and feed—but the ferryman demanded $6 for the crossing. Thinking quickly, Cornele went to a tavern and asked to borrow the money from the proprietor, offering to leave one of his horses and promising to redeem it with cash within twenty-four hours. The innkeeper agreed. They crossed, and the boy soon returned to give the innkeeper his money back.

The story would later be told as an example of Cornele's resourcefulness, but (if true) it too contains signposts that point to larger matters. For one thing, his family had so immersed him in business that, at the age of twelve, he already understood the principle of borrowing on collateral security. And the entire enterprise of salvaging a wreck further highlights the way the port of New York defined their lives.

There was another aspect of this tale that surely made an impression on the boy: the ferryman's ability to demand his own price. As an islander, Cornele could not help but feel that power in his bones. Living across the water from Manhattan and the mainland, he developed a sensitivity to the spaces between, to the significance of the crossing, to the strategic importance of the vessel that conveys from shore to shore. This knowledge, formed early in his mind, would serve him all of his life.
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But he was still a boy. Though it is reasonable to believe that he knew the marketplace better than the typical child, it is just as reasonable to believe that he reveled in his physicality—that he was moved by a “pride in action for action's sake” that a later friend attributed to his youth. That trait drew him to New York's waterfront, with all its furious activity: the strutting captains and mates; the insolent pilots, idling as they waited to take vessels back out to the ocean; and the packs of free-living sailors—many of them black—pushing into saloons or staggering drunkenly under the bowsprits that thrust like rafters over South Street. These were men whose lives were all action.
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Cornele learned this scene well as he entered his teenage years, for he took on more and more responsibility for his father's periauger. As he sailed past fat merchantmen or sleek navy frigates, as he talked with ships' officers along South Street, he began to dream of possibilities beyond those on Staten Island.

At the end of 1807, the possibilities grew smaller. The city's frenzied trade abruptly halted when Congress passed the Embargo Act, at President Jefferson's urging, in a vain attempt to force Britain to lift restrictions on American ships and cease the impressment of American sailors amid its long war with France. The act prohibited the nation's vessels from sailing for foreign ports. “Not a box, bale, cask, barrel, or package was to be seen upon the wharfs,” John Lambert observed. “The few solitary merchants, clerks, porters, and labourers that were to be seen were walking about with their hands in their pockets.”
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In March 1809, when Congress finally repealed the act, joy swept New York, and ships were again readied for distant ports.

After James Madison assumed the presidency in 1809, Congress continued to tinker with the idea of using trade to influence Britain and France—especially Britain, so detested by Madison and most Republicans. The Royal Navy, meanwhile, swept down on American ships with rising ferocity, seizing vessels and sailors under the notorious Orders in Council, which required neutral vessels to abide by Britain's blockade of Napoleon's empire. A crew could make enormous profits by running a ship to continental European ports, but at a tremendous risk that grew almost by the day.

In that tense and warlike world, young Cornele made a momentous decision. Early in 1810, after bringing passengers and goods to the city, he strode down South Street to see a captain he knew. The captain's ship was a fast-sailing merchantman, about to make the dangerous run to France with a cargo of silks—a luxury that would sell for a high price in the blockaded ports of Napoleon's Europe. Cornele was just fifteen, but he was tall and strong and an able sailor; when he applied for a place, the captain agreed to take him on as a member of the crew, with a regular share of the fortune they would gain. The act marked an abrupt end to Cornele's already tenuous childhood. Once he stepped onto that ship, he would depart the gritty marketplace and enter into a life of action for action's sake. He sailed the boat home that night, determined to tell his parents that he would be leaving Staten Island for good.
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“IT IS AS IF WE ALL CARRY
in our makeup the effects of accidents that have befallen our ancestors,” writes V. S. Naipaul, “as if we are in many ways programmed before we are born, our lives half outlined for us.”
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For a farm-born fifteen-year-old in 1810, it was nearly impossible to shrug off the weight of time. Cornele had acted forcefully when he signed on to that blockade runner, yet he still faced a formidable obstacle: his mother. She “found out,” he later said, “and begged him so earnestly not to go.”

There were dangers enough to startle her, from storms and disease to the threat of impressment into the British navy. More to the point, Phebe and her husband relied heavily on their oldest son as she continued to bear children. Cornele, who would become legendary for his ruthlessness, listened to his mother's pleading and was moved. He reluctantly told his father, he later recalled, “If he could get him honorably released from his engagement he would remain.” The senior Cornelius promptly went to see the captain and settled the matter. It was a fortunate decision. Cornele later learned that the British captured the ship in the English Channel on that very voyage.
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