The First Tycoon: The Epic Life of Cornelius Vanderbilt (64 page)

The carriage was the great recreational institution of New York's rich. Any afternoon would see expensive affairs pulled by fancy horses, carrying William B. Astor, Hamilton Fish, Watts Sherman, or even Daniel Drew through “the pleasant drives of the Central Park,” as the
Herald
remarked on December 5, 1859. Vanderbilt, of course, was one of the “fast men” who held his own reins and hungered for speed. For decades, harness racing had been the plebeian alternative to the aristocratic sport of Thoroughbreds; but Vanderbilt led a rising elite, lacking any social pedigree, that championed trotters in both formal races at dedicated tracks and informal contests on the road. To garner respectability for the sport, he helped organize the Elm Park Pleasure Ground Association, a club “of many of the best people in the city,” to race on or near Bloomingdale Road above Ninetieth Street. Four hundred men belonged, with a combined investment of nearly $
i
million in horseflesh.

The Commodore's great rival was Robert Bonner, editor of the
Ledger
. He rarely beat the skillful Bonner—but it was Vanderbilt who drew the admiration of onlookers. “What fine looking man is that,” the
Herald
rhetorically asked,

with a segar in his mouth, who is passing all those roadsters on the right? He dashes past everybody but Bonner. His bays must be well trained; he handles the ribbons as though he was used to it. That gentleman with a white cravat on, you mean? Yes, sir. That is Commodore Cornelius Vanderbilt, who has four of the best horses that appear on the road, every one of them exceedingly fast. He never gives up to anyone but Bonner; is always in good spirits, and takes great comfort in his $10,000 worth of horse flesh; is one of the coolest drivers on the road.
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August Belmont and William Aspinwall created a stir in 1859 by opening the first private art galleries New York had ever seen—large, specially designed spaces for paintings by Europe's old masters, including Velázquez and van Dyck. By contrast, Vanderbilt's only notable work of art was a bust of himself.
⁸⁰

But there was another New York that arose in the 1850s—the New York of tenements and day-to-day earnings, of pushcarts and workshops and strikes and police batons. In 1857,
Harper's
looked back fifty years and remarked, “What was then a decent and orderly town of moderate size has been converted into a huge semi-barbarous metropolis—one half as luxurious and artistic as Paris, the other half as savage as Cairo or Constantinople.” This polarization angered and depressed Herman Melville, who criticized it in
Pierre
, “Bartleby, the Scrivener: A Story of Wall Street,” and the self-explanatory “Poor Man's Pudding and Rich Man's Crumbs.” In the aftermath of the Panic of 1857, as many as 100,000 went jobless in New York and Brooklyn; in November of that year, thousands demonstrated at Tompkins Square, the city hall, and the Merchants' Exchange, sometimes in the face of hundreds of police and troops. In the winter of 1857–8, at least 41,000 went homeless in Manhattan.
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As majority shareholder of a shipyard, machine works, and a fleet of steamers, Vanderbilt played a direct role in shaping this second city. He earned his reputation for keeping costs low in part by paying his workers as little as possible. In August 1858, for example, he cut the monthly wages of his firemen and coal passers from $25 to $20 and $20 to $17, respectively. (Even at the higher wage, a fireman on the
Vanderbilt
earned in an entire year only 3 percent of what the Commodore spent on a team of horses.) When they went on strike, Vanderbilt called on the police to bring in nonunion men. In successive battles on the slips, the police beat back the strikers.
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Vanderbilt never acknowledged that conditions had changed since he had lifted himself up—that it was more difficult to attain self-sufficiency, let alone wealth, in this emerging new world. He expected everyone to make his own way, including Billy. As recently as 1856, Vanderbilt had derided his son as a “sucker.” He knew that Billy had borrowed heavily to develop his farm, taking $5,000 from Daniel Allen alone. Jacob Van Pelt recalled how, when he had praised Billy's “splendid farm,” the Commodore had reacted angrily. “Yes,” he replied, “but he can't make a living off it. He has it mortgaged to a damned——. He ought to come to me. I've got plenty of money to put out on mortgages.”
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But the dutiful son built up his farm successfully. He supplied great quantities of hay to the city's draft animals, and made independent investments. In 1860, for example, he became a director of the nearly complete Staten Island Railroad, and took over as its treasurer. He had emerged as a leader of Richmond County.
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Whether Vanderbilt's other sons would succeed remained an unanswered question. George was still at West Point. During the summer, he went on military maneuvers. “The boys are taught to sleep under the canopy of heaven, to dispense with all the luxuries and comforts of civilization, and to accustom themselves to the privations of actual warfare,” wrote
Harper's Weekly
on September 3, 1859. “The strictness of West Point discipline has long been proverbial; during ‘the encampment’ it is severe indeed.” In his leisure hours, he would have attended the frequent “hops” or dances organized by such cadets as Adelbert Ames, Wesley Merritt, and Horace Porter. But demerits or low grades hurt George's standing; as he neared graduation, he was ranked next to last in his class.
⁸⁵

Vanderbilt remained immensely fond of the clan Corneil had married into. In early 1860, the Commodore wrote to Corneil's father-in-law, Oliver Williams, promising to visit “your sweet home.” In some of the most telling lines he would ever write, he added, “Your famally is the only one on earth that I ever say a word to on paper. I much dislike to write & never do out side of business matters.”
⁸⁶

ON THE NIGHT OF OCTOBER 16, 1859
, John Brown led eighteen men into the federal armory at Harper's Ferry, Virginia. A veteran of the fighting against border ruffians in Kansas, he now hoped to spark an uprising by slaves in the South. Instead, Colonel Robert E. Lee and Lieutenant J. E. B. Stuart arrived on the scene with a force of U.S. Marines, who stormed the arsenal on October 18, captured Brown and sixteen of his men, and killed two in the process. The abolitionist stood trial and died on the gallows on December 2. “His name may be a word of power for the next half-century,” George Templeton Strong wrote in his diary. The Wall Street lawyer had no sympathy for the antislavery movement, but “Old Brown's demeanor” moved him. “His simplicity and consistency, the absence of fuss, parade, and bravado, the strength and clearness of his letters, all indicate a depth of conviction that one does not expect in an Abolitionist,” he wrote. “Slavery has received no such blow in my time as his strangulation.”
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John Brown's raid confirmed the worst suspicions among “fire-eaters” in the South. When the newly elected House of Representatives tried to choose a speaker in December, Southern Democrats and Know-Nothings blocked the Republican plurality from naming John Sherman, the moderate brother of William T. Sherman. But they could not elect their own man because Horace Clark and a handful of other anti-Lecompton Democrats stood in their way—though Clark refused to vote for Sherman. “Common report attributes the conduct of [Clark] more to the influence of his father-in-law, Mr. Vanderbilt, than any other,” the
Chicago Tribune
reported. “Mr. V's mail steamship interests are too valuable to be sacrificed by a single vote for Speaker.”
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Certainly the Commodore did not wish to alienate the Democratic administration. At the moment, though, both Clark and Vanderbilt were deeply enmeshed in an even more complicated negotiation. William Aspinwall—the merchant prince, the founder of the Pacific Mail and Panama Railroad companies, the man who had given his name to a city in Panama—had decided to give up. He had opened secret talks with Vanderbilt, and on November 25 he presented the Pacific Mail board with the results: a tentative agreement to shut down the North Atlantic Steamship Company, sell to Vanderbilt Pacific Mail's seven ships on the Pacific for $2 million, distribute the proceeds to the stockholders, and terminate the corporation. Despite some dissent, the board empowered Aspinwall to conclude the negotiations. Vanderbilt prevailed on Clark to remain in New York to finalize the talks alongside Marshall Roberts, despite Clark's eagerness to go to Washington.

At nine in the evening on November 29, Clark sent a one-line note to Vanderbilt: “I am quite satisfied that the proposed arrangement is wholly impracticable.” The problem was that Clark and Roberts insisted on a guarantee that the directors of Pacific Mail would not go on to compete against Vanderbilt's company as individual proprietors, newly enriched with the Commodore's money. They insisted that Aspinwall give his personal word of honor that there would be no competition—which he “peremptorily declines to give,” Clark and Roberts wrote on November 30. Aspinwall replied that this demand was a “new feature,” that he could not possibly speak for the stockholders as individuals. “It is a great pity,” Vanderbilt concluded.
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This argument reveals the culture of American business in a moment of transition. On the eve of 1860, after decades of experience with—indeed, mastery of—the abstractions of the new economy, Vanderbilt and his ring still saw little distinction between the corporation and its stockholders. Theirs was not an elaborately worked-out philosophical position; rather, it was the product of a long tradition of controlling competition with formal and informal agreements—as well as raw self-interest. Yet it demonstrates how even the most sophisticated businessmen held to a tangible understanding of the world of commerce. The financial columnist for the
New York Herald
found it astonishing that Aspinwall and his fellow directors refused the demands of Vanderbilt's representatives. “Without such a guarantee, in fact, Mr. Vanderbilt would have made the worst of bargains,” the newspaper observed. “In ordinary cases, it is the vendor who guarantees his purchaser against competition; in this case the vendor was the Pacific Mail Company, which was going into liquidation and out of existence on the consummation of the bargain; the guarantee, therefore, was naturally sought from the individual directors, from whom alone opposition was to be expected.”
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In January 1860, Joseph Scott, the guardian of the machine works and steamboats at Punta Arenas, walked into Vanderbilt's office on Bowling Green. “I had always expected there would be a line there [in Nicaragua], and that probably he would run it, and if I could sell the things then, I could receive enough to pay my services,” he later testified. But the line never reopened, and the property fell into ruin. “I went to Mr. Vanderbilt for a settlement,” Scott reported, “to see if he would take the things off my hands.” Instead, he went to work for Vanderbilt as agent of the Atlantic & Pacific Steamship Company in Aspinwall, Panama.
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Pacific Mail felt the pain of continued competition. It lost a reported $100,000 in the last quarter of 1859 alone, and its prospects looked grim. In January, Vanderbilt's iron-hulled
Champion
arrived in San Francisco, and greatly impressed the city's cynical residents. “As far as we can ascertain by full inquiry the Commodore shows no symptoms of yielding,” the
New York Tribune
remarked. The newspaper was correct. When Samuel L. M. Barlow, a key figure in Pacific Mail, suggested the possibility of a compromise to Horace Clark, Clark offered no encouragement. “The Commodore was here [in Washington] yesterday and I endeavoured to sound him [out] on the subject. He is more indifferent than I hoped to find him,” Clark wrote on January 16. “Let me suggest to you that
you
go right straight to him and talk to
him
yourself.”
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Clark's letter was a warning of Vanderbilt's determination, but also an invitation to further talks. Once again, Aspinwall and Barlow began to meet secretly with the Commodore. They soon arrived at a new agreement, one that obviated the need for guarantees of any kind. They would divide the business in half, Pacific Mail retreating to its eponymous ocean and Vanderbilt's Atlantic & Pacific Steamship Company restricting itself to the Atlantic. (This was the same basic agreement they had made in 1856, before Walker had disrupted everything.) Vanderbilt was to bring his new
Champion
back around Cape Horn, receive $50,000 to pay for the voyage, and sell the other, much older ships based in San Francisco to Pacific Mail for five thousand shares of stock and $250,000 in cash, to be paid in ten monthly installments. He would not be allowed to trade the shares for two years. (Vanderbilt owned the ships, so he took this payment himself.) The North Atlantic Steamship Company would be shut down. The two parties would split fares and postal payments according to mileage (giving Vanderbilt 30 percent). The plan would establish a new, more stable monopoly
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