The First Tycoon: The Epic Life of Cornelius Vanderbilt (83 page)

Richmond's plan to lease the Hudson River and Harlem railroads died with him. In London, Keep received letters from his partners, warning “that there was great danger that the roads would be consolidated,” as he recalled. With his encouragement, the pool secured an injunction that prohibited any lease. But Richmond's demise created a power vacuum on the Central's board that Vanderbilt exploited.
⁸⁷

On October 18, William traveled to Albany to see the Central board “on matters of general business,” as he later said, and fell into a discussion over how the two sides could settle their problems. William wanted the Hudson River to have the Central's freight business all year round; the Central directors wanted to use the People's Line and set through rates as before. “It was urged that I should name a price—so much money” as compensation, William said. He had not been charged with the task of settling this great question; considering his father's temper—and need for control—he might well have begged off. But he did not. “I will take it upon myself to do it for $100,000 for a year,” William replied. As he recalled, “Two or three gentlemen jumped up from the table and said we will do that.”
⁸⁸

William's offer was an act of confidence in his authority as his father's agent, and he was soon punished for it. “There has never been any one act in my life that has so much met the disapprobation of Cornelius Vanderbilt as that act,” William recounted. “He said the privileges I had granted was worth a half million of dollars a year to the Central R.R. Co.” Considering the Commodore's past “disapprobation,” this was saying a great deal. But Vanderbilt also accepted his son's power to act in this matter. Indeed, this negotiation reveals the maturation of their relationship.

“The $100,000 was a mere bagatelle,” Vanderbilt remarked. “I did not care anything about it.” The specific amount paid “should not be a subject of any difference between the two companies if we can only have some understanding among ourselves hereafter.” But perhaps he went too far in making his point: he clearly wanted the maximum compensation possible for allowing the Central to treat the Hudson River Railroad as an extension of itself. Vanderbilt's company had numerous costs that he wished to shift, from the use of its engines and cars over the Central's tracks to the steep terminal expenses in Manhattan.

Eager to appease the Commodore, the rudderless Central board named a committee to balance the companies' accounts. The committee consisted of James Banker. He took the Central's treasurer, Edwin D. Worcester, to the Hudson River office on Thirtieth Street to see Vanderbilt. At the meeting, Worcester expected the Hudson River to pay the $97,000 it owed the Central for westbound freight. But the Commodore believed that the Central owed the Hudson River money, so he insisted on arbitrary deductions until the $97,000 debt disappeared. “I objected,” Worcester recalled, “to which Mr. Vanderbilt said it did not make any difference at what rate they were put in.”

“I said, ‘Damn the thing, I don't care anything about it,’” Vanderbilt recalled. “That is the way I did, and that is the way I generally do.” The whole thing was, he frankly admitted, “a kind of ‘jumped’ settlement.” He and the Central directors had fixed a payment, so they fiddled with the accounts until the books absorbed the agreed-upon amounts. However, none of this was what the Vanderbilts wanted. “We would a great deal rather do the business, than to get the money and not do the business,” William said. But at least the $100,000 and the other “jumped” amounts offered some compensation, and established the principle that they could not be taken for granted.
⁸⁹

But soon the Central would have a new president, one who would throw this hard-won compromise into chaos and replace respect with disdain. In November, Keep returned from Europe “with his coat-pockets full of London proxies,” the
New York Times
reported.
⁹⁰
He promptly called on Vanderbilt. Keep informed him that he and his allies would take control of the board in December, and he planned to assume the presidency. He had no intention of paying $100,000 to the Hudson River for nothing, as he saw it, and would only prorate passenger fares and freight charges.

“You may break if you please, but I will not do your work,” Vanderbilt warned.

“We can live without the Hudson River Railroad,” Keep replied. “We do not want the Hudson River Railroad.”

After the struggles of the previous two years, Vanderbilt scorned this arrogance. “Mr. Keep, I do not care one rush who is elected President of the N.Y. Central road. There is one thing I do know, there is no party of men in the world who can manage its affairs more prejudicially to our interests than the last board of directors.”
⁹¹

Vanderbilt was wrong. Things were going to get much worse.

AS THIS BUSINESS INTRIGUE
played out after the death of Dean Richmond, Vanderbilt spent an evening on politics. On August 29, he attended a dinner for President Andrew Johnson at Delmonico's on Fourteenth Street, thrown by the great capitalists of New York. Among those invited were Charles Morgan, Cornelius Garrison, August Belmont, and Peter Cooper, as well as Vanderbilt's circle of subordinates and sons-in-law—James Banker, Horace Clark, Augustus Schell, Daniel Allen, Frank Work, and Richard Schell—and William Vanderbilt.
⁹²

The dinner was billed not as a political event, but as an appropriate gesture to honor the president. In truth, politics suffused the evening. Johnson visited New York as part of his “swing around the circle,” a speaking campaign designed to undermine congressional Republicans. He had broken with them in the spring in a fierce fight over the status of emancipated slaves and the nature of Reconstruction. Johnson, a longtime Democrat and a Southerner himself, had vetoed first an extension of the Freedmen's Bureau, and next a civil rights bill, which extended citizenship and some basic rights (but not the vote) to the freed people. Johnson argued that the latter bill would somehow discriminate against whites. In the face of rising violence across the South against blacks, however, his veto strengthened the radicals, who marshaled moderates to override it and pass the landmark Civil Rights Act of 1866. Johnson now launched an unprecedented effort to defeat the Republicans in the midterm elections.
⁹³

Vanderbilt most likely did not care much about the politics involved. He should have, though, because the dinner was a sign of how the political world was rotating beneath his feet. He still believed in the Jacksonian principles that he had embraced in the 1830s, in his battles on the Hudson and Long Island Sound: free competition, laissez-faire, limited government. In his youth, these beliefs were found on the radical side of the political spectrum. But the Civil War and its aftermath had put in motion a process that broke down this matrix. The federal government had taken on power to a previously unthinkable degree to defeat the rebellion. Then, in the turmoil and confusion of the postwar South, Congress found itself forced to intervene at the local level—the individual level—in ways that fell far outside the American political tradition. Before the war, the federal government had not reached down very far (except in the territories); it had delivered the mail, inspected steam engines, and helped to capture runaway slaves, but not much else. Now it taxed individuals, extended aid to freed people, defined citizenship, specified rights, prescribed penalties for violating those rights, and soon would impose direct military administration of most of the South. In this crisis, Americans awoke to the power of the central government.

The way was opening for a new political paradigm, in which those on the radical side would embrace government action to defend equality. At the moment, though, the older schools of politics remained alive. Most Republicans, in keeping with antebellum “free labor” ideology championed “the small-scale competitive capitalism” (to use historian Eric Foner's words) that still defined life in the North. They saw the individual as the primary actor in an economy of farms, workshops, and small mercantile houses. But their philosophy could not account for changes sweeping the nation. For example, the union movement—bolstered by rising numbers of wage workers in big companies such as railroads—staged a convention in Baltimore that left orthodox thinkers scratching their heads. “The tendency of the assembly… is to the recognition and indeed creation of a special class known as working men,”
Harper's Weekly
wrote. “Is such a tendency in this country wise, or is it even practicable?”
⁹⁴
It was inevitable. The unionists looked to government for help, calling for legal limits on the working day. It would not be long before farmers followed their example. Vanderbilt's laissez-faire principles were becoming conservative without changing at all.

Personal and business matters kept him busy through the fall. On October 6, Sophia and grandson William K. Vanderbilt set sail for Europe. On October 8, the Commodore convinced Trinity Church to sell St. John's Park to the Hudson River Railroad. Once an elegant quadrangle of townhouses surrounding a gated park, dominated by St. John's Chapel at one end, it had been the model for Gramercy Park and the final home of Thomas Gibbons. It had fallen into decay, however, and offered a large, open space in lower Manhattan, close to the docks. As early as 1859, the railroad's management had eyed it as a location for a freight depot. Vanderbilt agreed to pay $1 million on behalf of the company—$400,000 going to the church, the rest to the lot owners.
⁹⁵

Vanderbilt attended to his affairs in an office at 25 West Fourth Street, near Greene Street, adjacent to his stables in the rear of his Washington Place lot. After so many years on Bowling Green, he finally had relinquished his desk there. “He comes in about nine o'clock,” the
Boston Journal
wrote. “A digest of letters and papers is laid before him on a prepared sheet. Running his eye over the list, he dots down yes and no, and gives some brief direction to each.” Always puffing on a cigar, he moved around his office in a light linen coat and carpet slippers. Wardell kept a desk in the outer chamber, the walls covered with railroad maps and photographs of Vanderbilt's steamships and railway depots. The Commodore's room was in the back. “Through his rear window could be continually heard the chafing of his thoroughbreds, eager for the five o'clock drive which the indefatigable old gentleman gives them every afternoon,” a reporter for the
New York Herald
observed. After finishing whatever Wardell had prepared for his review, the
Journal
added, “he then goes out with some confidential friend to attend to what he calls business, which consists of going out to his stables and minutely examining his horses. After this he holds a levee [reception] in his office, and rides up to the Harlem and Hudson railroad.”
⁹⁶

Famous for his expensive horses and his frugality in all other areas, Vanderbilt proved more generous than his reputation would suggest. In June, he had agreed to serve as a trustee of Horace Greeley's pet charity, the American Institute; in December, he served as a reference for the artist who had designed his congressional gold medal. But he cared little about whether he was seen as a public benefactor. “He does not go much to churches, and no one ever sees his name on a subscription paper, or ever will,” the
Herald
later noted. “In his charities, which are numerous and liberal, he exhibits the reticence which marks his conduct as a man of business. He despises cant and humbug and pretentious show.”
⁹⁷
It was hard to imagine Vanderbilt ostentatiously putting his name on an institution of higher learning, as Daniel Drew did with a seminary
^*

ON DECEMBER 12, 1866
, the New York Central Railroad held its annual election in Albany. For weeks, rumors had flown about the fight for control. The winner was Keep, elected to the presidency by a new board largely consisting of his allies: Fargo, Corning, Azariah Boody H. Henry Baxter, John H. Chedell, LeGrand Lockwood, and others. “The new regime may properly be called anti-Vanderbilt. All the Vanderbilt men in the old direction were thrown overboard,” the
New York Herald
wrote. It was, the
New York Times
declared, a “revolution.”
⁹⁸

On December 20, the new Central board revoked the agreement to pay $100,000 to the Hudson River Railroad. “We supposed they had got quite enough in their hands and we would not give them more,” Keep later said. The Commodore recognized the crisis for what it was: the final battle in the long struggle between the two railroads. On December 29, he took William, Clark, Augustus Schell, and Charlick into a meeting with Keep, Corning, Baxter, and Boody, who had returned to New York from Albany. Again and again, William asked the same question: “Gentlemen, you have taken it upon yourselves to repudiate this contract, and to break up the connection under which the companies are running. We ask if you have anything to substitute in the place of it.” Keep offered only to prorate the charges for whatever freight or passengers the Central deigned to provide. They talked fruitlessly for five hours.
⁹⁹