The First Tycoon: The Epic Life of Cornelius Vanderbilt

by T. J. Stiles

  On April 12, Vanderbilt responded with a curiously ambivalent letter. “The earlier period of my life was devoted to unremitting toil, while my later years are severely burdened by the multiplied cares which my varied pursuits have engendered,” he wrote. “I have never found the time to indulge one single dream of ambition; and I have already attained to that period of life when more simple realities take the place of the hopes and the anticipations of youth.” Along with this apparent refusal to stand as a candidate, he announced some positions on public affairs. He declined to partake of the anti-immigrant fervor, for example, speaking in defense of “the large class of industrial emigration now flowing in upon our shores.” And he recommended his personal approach to enterprise for the nation as a whole. “I am well satisfied that all the results that have attended the labors of my life are attributable to the simple rule which I early adopted, to mind my own business.… Nor can I suggest one more appropriate for the regulation and conduct of the foreign policy of the American people.”36

  The attempt to draft Vanderbilt, and his response, say a great deal about the man and his relationship to his times, albeit indirectly. The appeal to him was nonpartisan, which reflected the collapse of the old party system, of course, but also Vanderbilt's own lack of party affiliation. As noted earlier, the only evidence of serious political activity on his part is an apocryphal account of his parading for Henry Clay in 1844; before and after, he expressed no interest in public affairs unless they intersected with his own. Lambert Wardell later summarized, “He paid no attention to politics and was not a party man.”37 His lack of partisanship showed in the positions that he did take. Like a Whig, he looked askance at U.S. intervention abroad, and embraced corporations and the entire invisible architecture of modern commerce; like a Democrat, he championed immigration and free competition.

  All of this was a bit remarkable in 1855. Politics saturated American life even more thoroughly than twenty years earlier, when Alexis de Tocqueville toured the republic and commented on the partisan passions of the people. To disengage from politics was, in some ways, to disengage from the substance of social intercourse.38 So, too, was Vanderbilt's lack of ambition rather noteworthy. In New York, the tradition of political leadership by the mercantile elite lingered from the eighteenth century. True, it had become attenuated in recent decades, as professional politicians came to dominate the ballot, but men such as Hamilton Fish and various Livingstons still walked the halls of power; banker August Belmont occupied the center of the national Democratic Party organization; and wealthy merchants organized mass meetings and citizens' committees that declaimed on every aspect of public affairs. Vanderbilt, on the other hand, represented a new species of wealthy Americans. After his precedent, it would not seem strange that Andrew Carnegie or John D. Rockefeller should shun public office, choosing to quietly exert their influence behind closed doors.

  Despite enthusiasm in the newspapers for the “steamboat candidates,” neither went anywhere. Law being Law, he tried to corrupt delegates to the Know-Nothing convention. “A well-known agent of his attempted to bribe John H. Lyon of Jersey City with a certified check for $200,” reported a New Jersey newspaper. “This fact was made known by Mr. Lyon, and thence [contributed to] Mr. Law's defeat.” As for Vanderbilt, he never seriously considered running. It was a curious diversion in a year when business, not politics, drove his Washington agenda.39

  The first order of business was his Atlantic line, scheduled to start on May 21. In April, he announced that he would slash fares to Europe from $130 to $110 for first cabin tickets, and from $75 to $60 for second cabin. “The magnificent steamship Ariel, lately built as a consort to the North Star, in Vanderbilt's direct New York and Havre line, will sail on her first voyage on Saturday noon next,” the New York Herald announced on May 17. The newspaper lavishly praised the vessel, focusing in particular on the luxury of the grand saloon. “The wainscotting is of satin rose and other highly polished wood. The deck is superbly carpeted, and the walls are ornamented with beautiful mirrors; and easy chairs, ottomans, and lounges of the most luxurious description are profusely scattered about.” Unlike the North Star, the Ariel had only one engine, a feature calculated to reduce fuel costs. And yet it proved fast enough, crossing the Atlantic on its first voyage in only twelve days.40

  “Both the Ariel and North Star are fine steamships of great speed,” the London Times observed on August 1. “Their voyages across the Atlantic have recently been performed with admirable regularity.” It reported that “the well-known” Vanderbilt had arranged for the ships to stop at Southampton. “What is the most interesting feature of the business is, that Commodore Vanderbilt is running his ships entirely unassisted by any Government grant or subvention whatever.”

  This was indeed international news. It may be that Vanderbilt conducted his campaign out of personal pique against the man who had snubbed him, yet his fast, well-run, unsubsidized line kept him at the center of the political debate. As the London Times concluded, “His ships have, therefore, to sail at every disadvantage against the heavily subsidized mail steamers of the various British and American lines. The Commodore appears to be convinced that good management and great speed of transit will enable his vessels to hold their own and to make a fair profit.” Or, perhaps, he simply had to run his ships long enough, even at a loss, to undermine congressional support for Collins's subsidy.

  As Vanderbilt pounded the Collins Line with his swift, luxurious ships and low fares, he prepared for a second assault: a ship nearly twice the size of the North Star, a steamship larger than any ever built. Construction began in the Simonson yard about the time the Ariel made its first voyage. It would prove to be the pinnacle of Vanderbilt's shipbuilding career.41

  Collins began to see his company fall apart under the strain. He doggedly kept his fares up, only to see passengers flock to the Vanderbilt line. Pressing his ships' advantage in speed, he ordered his captains to run them so fast that their engines needed costly, time-consuming repairs on each return to New York. Soon a second transatlantic line, the Ocean Steam Navigation Company—a line that had run to Bremen for a decade—began to struggle under Vanderbilt's pressure.42 Eventually all would come down to a test of will between Collins, with his bookkeeping tricks and political connections, and the fierce but savvy Commodore.

  VANDERBILT'S SECOND ORDER of business for 1855 would be the Accessory Transit Company. It was rather like the business version of his son Corneil, a child with a kind of genius and a kind of curse, its great promise addled by an addiction to deceit, a child he was unable to simply shunt aside.

  It was a ripe and vulnerable target. The company had continued to do “an exceedingly favorable business,” according to the New York Tribune, but it faced seemingly grave difficulties: its unsettled debt to Nicaragua, its ongoing payments to Vanderbilt, its loss of the Yankee Blade, and, perhaps most important, competition with the Panama route. In February, workers completed the Panama Railroad, and trains began to run from Aspinwall on the Atlantic to the city of Panama on the Pacific. Passengers flocked to the Pacific Mail and U.S. Mail Steamship companies as the isthmus crossing dropped from a matter of days to only hours. And yet, these obstacles were all surmountable. Over the previous two years, Accessory Transit had improved its operations, and even now remained competitive in terms of speed between New York and San Francisco. The initial surge of business to Panama slacked off as passengers began to return to the Nicaragua route. And shorter steamship voyages meant that operating expenses still remained significantly lower for the Transit Company. It was under these circumstances—short-term trouble but long-term possibilities—that Vanderbilt made his return.43

  He had never left, really, having retained shares in the company all along. In early November, he went to the company offices, where Charles Morgan presided over the annual stockholders' meeting. There were “many other anxious faces” among the shareholders, one man reported. Of particular concern to them was Morgan's practice,
as New York agent, of letting the company's ships sit “idle for the need of trifling repairs,” while Morgan put his own Sierra Nevada on the line, taking 60 percent of the earnings for himself. “Cornelius Vanderbilt said he had performed similar service for the Transit Company for 40 percent,” the witness wrote. “Mr. Morgan apologized for the extra 20 percent, under a plea of a higher price for coal.” The meeting broke up in suspicion over Morgan's conduct.44

  Discontent within the company and worries without presented an obvious opportunity On November 21, the day when newspapers published Accessory Transit's annual report, detailing its difficulties, certain brokers began to bid for large amounts of its stock. Within a few days, the mysterious “new party” behind the purchases bought 25,000 shares, nearly a third of the 78,000 shares in existence. Word went out on Wall Street of a secret plan, the New York Tribune reported, “to buy a majority of the whole, so as to control the company”45

  Vanderbilt, of course, was behind the “movement,” as it was called; but he had something larger in mind besides simply taking back the Accessory Transit Company. For some time, he had plotted the future of the California passenger business with Marshall Roberts of U.S. Mail and William Aspinwall of Pacific Mail. Nothing could have said more about Vanderbilt's rising status, for these men—both leaders of New York's social establishment—wished to place their fortunes in his hands.46

  The three men crafted a multifaceted plan for both immediate profit and long-term dominance. First, after they acquired control of Accessory Transit they intended to have the company buy back forty thousand of their shares for several dollars more for each than they had paid. Second, Vanderbilt was to bring his ferocious cost-cutting skill to bear, to enable the company to pay a consistent dividend. Third, Accessory Transit would buy out the U.S. Mail Steamship Company, and then abandon the Pacific to Pacific Mail, which would become sole carrier for both Nicaragua and Panama. Accessory Transit ships would provide the Atlantic connection for both routes. Fourth, Accessory Transit would assume the Atlantic mail contract from the soon-to-be-dissolved U.S. Mail; as an incentive for Congress, Vanderbilt would carry the mail weekly instead of bimonthly, and for $90,000 less per year.

  It was a remarkable turnabout. Not nine months after Vanderbilt publicly proclaimed his belief in “unfettered trade and unrestrained competition,” he conspired to erect a monopoly over California's steamship lines. To all appearances, he saw no inconsistency in this curious juxtaposition, despite the fact that this new monopoly would be supported by government funds (if they succeeded in transferring the mail contract). Perhaps he felt himself justified, for unlike his intended partners he had arrived at this point—at the threshold of total market control—through his prowess in competition, and he would maintain it in the future only if he remained ready to fight against any challengers. In any case, he never engaged in competition purely for its own sake, but always as a means of achieving a satisfactory, and profitable, equilibrium.47

  One thing is certain: he had grown accustomed to holding his fate in his own hands, whether whipping a team of fast horses through a crowded street or seizing the corridor between the Atlantic and Pacific coasts. Little did he realize that he recaptured Accessory Transit at the very moment when its fate—and the fate of Nicaragua itself—was falling into the hands of an international criminal.

  ON THE AFTERNOON OF NOVEMBER 8, a company of soldiers drew up in formation on the grand plaza of Granada, Nicaragua. They stood at attention as a distinguished figure approached: General Ponciano Corral, a popular patrician of the city a veteran of the republic's many civil wars, and the Conservative military commander. He strode beside a priest to the center of the plaza, sat down in a chair, and looked out over the city's tiled roofs and its massive cathedral, the volcano Mombacho in the distance. Then the soldiers raised their rifles and shot him dead.48

  The man who ordered Corral's execution was William Walker. Vanderbilt would never meet Walker, but he would prove to be the most dangerous enemy of the Commodore's life so far. Walker was a small man, just five feet six inches tall, with a slender frame, thin mouth, thinning hair, and a freckled complexion. He had intense gray eyes that often drew notice. Commodore Hiram Paulding, one of the U.S. Navy's senior officers, remarked, “He listens to everything in a quiet way, says but little, speaks in a mild and subdued tone, and has rather the appearance and manner of a clerical gentleman than that of a warlike leader. He is said to be remarkable for his abstinence… and that wine and the society of ladies have no charm for him.”49

  Walker had landed in Nicaragua six months earlier, leading fifty-six rifle-carrying Californians hired to fight for León's Liberals in the most recent flare-up of civil war. In the United States, though, he was known not as a mercenary, but as a filibuster. “Filibustering” had entered the American vocabulary around 1850 as a name for armed invasions of foreign territory by private American citizens—generally with the hope of annexing those lands to the United States. The term had likely been imported from Spanish (filibustero), which had borrowed in turn from the Dutch word for freebooter. By any name, it dated back to the earliest days of the republic. In 1837, for example, the first steamboat constructed by Vanderbilt, the Caroline, went over Niagara Falls amid skirmishing between Canadian militia and American invaders. The current wave grew out of the fight for independence by American settlers in Texas and the Mexican War. Filled with that expansionist enthusiasm captured by the name “Manifest Destiny,” small groups plotted expeditions into Latin America. In 1850 and again in 1851, scores of Americans made disastrous landings in Cuba. Walker himself had led an invasion of Mexico with a handful of men in 1853—a failure, but one that made him famous.50

  In retrospect, filibustering can seem like a curious footnote to the antebellum era, a case of quixotic eccentrics racing down one of history's blind alleys. In reality, it was a significant element in the United States' slide toward civil war. Militants in the South embraced the movement in hopes of enlarging the territory open to slavery; the filibusters' focus on Cuba, for example, was due in part to the island's proximity to Florida and the fact that large-scale slavery already existed there. Perhaps most important, filibustering reflected the explosion of freelance violence as civil society and respect for political norms disintegrated in the fight over slavery's growth in the 1850s.

  But filibustering was a complicated phenomenon, mingling nationalist expansionism with naked racism with a crusading belief in spreading Protestantism and free institutions to benighted Latin America. As one U.S. diplomat in the region wrote to Secretary of State William Marcy “Catholicism and Military rule have charms for them, which my pen is inadequate to describe, while any other more rational form of religion or government appears to them, heresy and anarchy.” After Walker landed in Nicaragua, Paulding wrote to his wife, “Central America will soon be brought into harmonious action by the introduction of our own beautiful system of government.”51

  Walker himself had no lofty goals in mind. Entranced with the power of his own star, he believed himself destined to become Central America's own Napoléon. Nicaragua, with its transit route, was simply a convenient place to begin his conquests.52

  He did have his beliefs—chiefly in his own genius. Born in Nashville, he received a classical education, and later wrote a memoir in which he referred to himself in the third person, in imitation of Julius Caesar's Commentaries. Caesar he was not. He fought four pistol duels in his life, missing his antagonist every time. In Nicaragua he threw his men into headlong attacks against fortified enemy troops, suffering horrific casualties. But he was lucky. The Liberals' chief executive and army commander both died soon after Walker's arrival; by default, he emerged as León's senior military leader.

  After some of his usual, costly blundering, he won the war with his only inspired maneuver: he commandeered an Accessory Transit steamboat at Virgin Bay on Lake Nicaragua, landed at Granada, and captured the city from the rear. He then took hostage the families of leading
Conservatives, forcing General Corral to surrender. Walker dictated a peace treaty that established a provisional unity government nominally led by Patricio Rivas, former governor of San Carlos, a weak figure whom Walker easily dominated. Walker named himself commander of the army and Corral minister of war. Within days, Walker accused Corral of treason, had him tried by a court-martial of filibuster officers, then had him shot, thereby consolidating his own power.53

  With his political position secured, Walker turned to the problem of the transit. If he were to survive as Nicaragua's strongman, he would need a steady supply of reinforcements from the United States; his fellow countrymen were his most reliable troops, but they died in large number in his frontal assaults. Walker was intensely aware of this dependence. As he later wrote, “Internal order as well as freedom from foreign invasion depended… entirely on the rapid arrival of some hundreds of Americans.” Fortunately for him, his success created a wave of enthusiasm; thousands of young Americans proved eager to join his army—if they could get to Nicaragua. Walker, then, was as dependent on the Accessory Transit Company as he was on his American recruits.

  But how to get Accessory Transit to respond to his dictates? His initial correspondence with the company was discouraging. Joseph White dismissed his demands, and Cornelius Garrison, the company's agent in San Francisco, did not reply at all. Frustrated, Walker turned to an aide, a one-handed confidence man named Parker H. French. Walker instructed Rivas to appoint French as Nicaragua's minister to the United States, then sent French to New York with orders to buy guns from George Law and bring Accessory Transit to terms. But Walker continued to mull over his relationship with the company.54