The First Tycoon: The Epic Life of Cornelius Vanderbilt

by T. J. Stiles

  Even corrupt Mayor Hall had a point: Vanderbilt did devote his energy to constructing works of immense benefit to the public, building transportation infrastructure that would serve the city of New York for centuries. The St. John's Park freight depot was one example. Two historians of New York write, “The new terminal revolutionized the Lower West Side. An enormous complex of grain depots, stockyards, and stables arose along the waterfront.” Like a “gigantic magnet,” the confluence of rail and sea access at St. John's Park attracted “wholesalers, express companies, packing-box firms, and dry-goods commission merchants” from their old locations near the East River. More than two hundred new warehouses went up in the district in the late 1860s and early 1870s, leaving a mark that would last into the twenty-first century. And this was far from the only piece of Manhattan on which Vanderbilt would stamp his name. On November 15, the Harlem Railroad broke ground on Forty-second Street for what would be the largest railroad station in North America. They called it the Grand Central Depot.69

  THE COMMODORE'S CRITICS would cluck their tongues once more on January 22, 1870. That day the New York Herald announced a sensation: Victoria Woodhull and Tennie C. Claflin had set themselves up as brokers and bankers on Wall Street. In doing so, the two sisters defied social expectations. “Were I to notice what is said by what they call ‘society’ I could never leave my apartments except in fantastic walking dress or in ballroom costume,” Claflin told a Herald reporter, “but I despise what squeamy, crying girls or powdered counter-jumping dandies say of me. I think a woman is just as capable of making a living as a man.” She added, “I know as much of the world as men who are older. Besides, we have a strong back [i.e., backer].”

  The reporter noticed a picture of Vanderbilt on the wall. “I have been told that Commodore Vanderbilt is working in the interest of your firm. It is stated that you frequently call at his office in Fourth street about business.” Tennie replied, “I know the Commodore and frequently call to see him on business, but I am not prepared to state anything as to whether he is working with us.”70

  On February 4, the women formally opened Woodhull, Claflin & Co. at 44 Broad Street. Thousands of Wall Street men came calling, including Richard Schell, William R. Travers, Daniel Drew, and even the esteemed Jay Cooke, who admitted he was frankly curious. Edward H. Van Schaick visited several times, with a fresh haircut, hat, or coat on each occasion. They all found the women self-assured and forceful to a degree that surprised and unsettled them. Claflin said, “If I had engaged a little fancy store upon Broadway and sold ribbons and thread, it would have been perfectly proper.… No one would have remarked it. But because I have brains sufficient to carry on a banking house people are astonished.”71

  The reporters, brokers, and operators all asked, Who was the Co. in Woodhull, Claflin & Co.? A broker remarked that there was “something back of the movement.” Claflin sharply responded: “Yes, there is something back of it. Commodore Vanderbilt is back of it.” The sisters spoke his name more frequently with each passing day. On January 26, Wood-hull had thanked journalist Whitelaw Reid for a favorable editorial. It “was entirely satisfactory to our best friend, the Commodore, who first called our attention to it as we were dining with him,” she wrote. (Claflin sent Reid a note rife with sexual innuendo soon after.) “A rather free use has been made of the name of the veteran Commodore Vanderbilt as the aider and abettor, if not the full partner, of the firm,” the Herald noted on February 9.72

  Vanderbilt routinely alerted the press when his name was mistakenly attached to any operation. In this case, he kept silent—at first. As one broker asked, “What does Vanderbilt mean?”73 The answer remains mysterious. One hint comes from the memoirs of Alva Vanderbilt Belmont, who married William K. Vanderbilt in 1875, and vividly recalled her first meeting with her husband's grandfather. “His manner was most overbearing, and the family more or less stood in great awe of him,” she wrote. “I had never known what it was to be awed by anybody, and I think that for that reason he had a great deal of respect for me, and we became quite friendly”74 He did not tolerate fools and had little respect for weak personalities. But a woman who stood her ground—in an age that idealized feminine frailty—impressed him. It was strength where he expected none. Woodhull and Claflin were nothing if not strong.

  Then, too, there was his contrarian streak. If he relished his wife's outspoken loyalty to the Confederacy, he found far more controversial views in Woodhull and Claflin. They championed the cause of gender equality at a time when the twenty-two-year-old women's movement had won new prominence, as Elizabeth Cady Stanton, Susan B. Anthony, and others turned the debate over Reconstruction toward the question of women's rights. Woodhull and Claflin skillfully used the publicity of their Wall Street firm to promote the cause, and propel themselves into its leadership. More and more in the coming months, they would weave together various radical strands in American intellectual life, including Spiritualism, women's rights, workers' rights, and (most controversial of all) free love, that catchall phrase for any unconventional sexuality In May 1870, the sisters began to publish Woodhull ifClaflin's Weekly, which gave space to the ideas of such figures as Stephen Pearl Andrews, who would go on to join Karl Marx's International Workingmen's Association.75

  Woodhull and Claflin hinted at other motivations that the Commodore might have had for supporting them. “At times I know and feel that I am under a spirit influence that I do not understand; and when in that condition I do see visions of future events,” Claflin told a reporter later in 1870. “If you doubt it go and ask Commodore Vanderbilt!… Victoria and I both see visions.” Years later, in the great trial over Vanderbilt's will, Susan A. King would testify that Claflin introduced her to the Commodore in 1870. He urged her to follow their advice to buy New York Central stock, for it would go up 22 percent in three months. “He said that Mrs. Woodhull was a spiritual medium, and while in a clairvoyant state, had told him so.” Marie Antoinette Pollard would testify that she also called on him in 1870 to ask advice about the stock market. He replied, “Why don't you do as I do, and consult the spirits?”76

  Claflin's sexual allure, it was said, was the most powerful motivation of all. A story would be put out that Vanderbilt was seen throwing his arm around Claflin; that he vainly boasted to her that women bought New York Central stock because his picture was on it; that he promised her a fortune in his will. It would be said that she asked Vanderbilt if he had not promised to marry her before he married Frank, and that he replied, “Certainly, but the family prevented it and otherwise arranged it.” Joseph Treat, an acolyte of Woodhull and Claflin who turned against them, later wrote that he had heard from a friend of another sister of Claflin's that she had asked Vanderbilt how many sexual partners he had had, “and he said a thousand, to which she responded… that then she was only half as big a whore as he.” Claflin, Treat wrote, suffered from a sexual disease, implying that Vanderbilt might have contracted it as well.77

  This is scandalous stuff—irresistible to many writers over the years, who would abandon all skepticism to embrace or even inflate it with conjecture and outright invention. In reality, solid evidence of Vanderbilt's relationship with the sisters is lacking. The tales of Vanderbilt promising money to Claflin, boasting about his stock-certificate portrait, and having been forced to marry Frank, all came at the trial over his will, from the mouth of a lawyer who was paid to prove that Vanderbilt was not in his right mind.78 The stories did not even come from a witness. They were merely declarations of what the counsel hoped to prove, and no such testimony was actually made. Even if Vanderbilt did say these things, they come across mostly as sexually charged banter with a woman who cultivated sensuality. The idea that he was forced to marry Frank at all, let alone by a family that had barely met her, flies in the face of direct documentation.

  As for Treat's explosive account, it is hearsay of hearsay of hearsay, originating with Claflin herself, the most untrustworthy source of all. In 1871, she would proclaim her
clairvoyant power in court—in order to soften an admission that she was a confidence artist. “To support this family I had to humbug people sometimes,” she would say. Indeed, both Claflin and Woodhull proved to be accomplished liars who filled their interviews with the press with complete fabrications. Claflin claimed that she had studied law with her father. Woodhull said that they had made a fortune in real estate, and had operated quietly on Wall Street for years. They found themselves caught out in their lies in March, when creditors in Chicago, Claflin's most recent home, sued her for numerous unpaid debts. That led the New York Sun to report, “Commodore Vanderbilt, whom Miss Tennie claims to be her financial backer, denies all knowledge of her or her partner, Mrs. Woodhull.”79

  Were solid evidence to surface that Vanderbilt and Claflin had an affair between the death of Sophia and his marriage to Frank, it would not be a particularly startling discovery*1 But the significance of their connection should not be exaggerated. There is no sign that Vanderbilt gave any support to the radical Woodhull & Claflin's Weekly, even though many writers have assumed that was the case. Rather, the sisters annoyed the business community with their efforts to bring in money for it. R. G. Dun & Co. would report in March 1871 that they “have obtained a quantity of [subscriptions] to their paper by dint of intrusive persistency, which has been as notorious as disagreeable. They have been accused of black mailing in their publication, which is believed by well posted parties.” As to their “brokerage” house, it was a failure from the beginning—“no standing whatever,” as R. G. Dun & Co. would put it. Vanderbilt denied being their partner in court, and the evidence supports him.80

  But it does seem clear that Vanderbilt sought the sisters' visions. Dr. William Bodenhamer, a leading physician who would attend the Commodore on his deathbed, later testified that Vanderbilt confessed his belief in “clairvoyance.” A deep accumulation of evidence suggests that he started to attend séances as early as 1864. In 1870, the high point of Spiritualism in American history, this was not unusual. Bodenhamer—who also testified to Vanderbilt's exceptionally clear mind, even when in intense pain—observed of his faith, “Many most intelligent and intellectual men in our country believe the same.” It is doubtful that the Commodore made decisions based on the sisters' supposed revelations. Marie Antoinette Pollard, for example, was not a good witness: she was a felon, having shot a druggist in Baltimore, and couldn't identify Lambert Wardell, Vanderbilt's eternal gatekeeper. Even if she accurately quoted Vanderbilt (“Why don't you do as I do, and consult the spirits?”), she took it as an attempt to put her off. “He was so gruff that I left,” she said. Whenever Woodhull or Claflin were put on the spot in court, they would admit that they went to Vanderbilt for money and advice, not the other way around.81

  The most likely explanation for his role in the sisters' scandalous, flamboyant adventures is simpler. It came from their mother—another unreliable witness, but with a believable story. He turned to them for magnetic healing, or rubbing, of his various aches and pains. He felt better, and perhaps took part in séances with them. He might have slept with Claflin, but ceased to before his second marriage. Impressed with the sisters' intelligence, allure, and forthrightness, he put their money into the stock market, and made a small fortune for them. Woodhull's husband, James H. Blood, who served as their writer, accountant, and impresario, suggested that they open a brokerage house with their new stake—perhaps only as a publicity stunt. Vanderbilt agreed to carry their stocks (as Woodhull later testified in court), though he would not spare them losses, and did not endorse or join their firm. He felt uncomfortable with their notoriety, and never gave them permission to use his name; but, fond of them still, he did not run very fast in the other direction.82

  This scenario was eccentric enough, if not so satisfyingly outrageous as the myth. In the vast scope of Vanderbilt's affairs, from his extensive social circle to his various railroads to his new wife, Woodhull and Claflin were a minor diversion. But their notoriety and his discomfort, would grow.

  THE GREATEST ACCOMPLISHMENT of Vanderbilt's railroad reign culminated with surprisingly little fanfare. On January 27, 1870, he took part in the first stockholders' meeting of the New York Central & Hudson River Railroad. It was one of the largest corporations in American history—and his own special creation. He took office as president, of course, and made William his vice president. (Daniel Torrance had been the Central's vice president until consolidation.) To “equalize values,” they set the stock of the company at $90 million (at the par value of $100 per share), an increase of 85 percent for the Hudson River and 27 percent for the Central, amounting to over $44 million in new shares. This figure astounded the public. As Charles F. Adams Jr. pointedly (and predictably) observed, twenty years earlier no corporation in the country had had a capitalization of more than $10 million. The new Central's semiannual 4 percent dividend on April 15 amounted to $3.6 million, “the very largest single dividend ever paid in this country by any one great corporation or state,” the New York Times wrote.83

  The Empire State had never seen anything like Vanderbilt's new empire. From St. John's Park to the shores of Lake Erie, its tracks stretched 740 miles in length, with branches fingering out another three hundred miles. It operated 132 baggage cars, four hundred locomotives, 445 passenger cars, and 9,026 freight cars. In 1870, the consolidating railroads carried some 7,045,000 passengers and 4,122,000 tons of freight. Though the number of employees remains uncertain, the payroll figures were vast: nearly $752,000 paid to engineers and firemen; $600,000 to porters, watchmen, flagmen, and switch tenders; $512,000 to conductors, baggagemen, and brakemen; and $185,000 for “general superintendence.” These statistics speak to its vast economic displacement, which was rather that of a giant in a bathtub. No other enterprise in New York came close to these figures—not even its rival trunk line, the Erie, which was only three-quarters its size. The Central ran through all of the state's largest cities, with the exception of Brooklyn; in each, it was the single largest economic force, with its enormous payroll, voracious needs, and near monopoly on intercity transportation. Few businesses in the country, apart from a very few other railroads, boasted a capitalization as large as one-tenth that of the New York Central & Hudson River; and few if any factories represented investment equal to what it spent on fuel alone each year ($1,869,000).84

  The New York Central & Hudson River (to be called simply the New York Central, or the Central, hereafter) was not an isolated phenomenon. The Pennsylvania Railroad in particular was building a vast integrated system from the Mississippi to the Atlantic. But it marked a decisive turn in economic history. By consolidating two companies of great size and financial health, it created a single behemoth on an unprecedented scale. This new entity, the giant corporation, would spread into manufacturing, as seen first in Standard Oil and later in other industries, beginning with a great wave of mergers from 1895 to 1904; eventually it would dominate every other sector of the economy as well. It would introduce economies of scale, lower prices, multiply productivity—and either crush out smaller businesses or set the terms of their existence. And it introduced bureaucratic management into American business. On the Central, Vanderbilt and son set about a program of rationalization that standardized procedures and introduced a departmental system of organization.85

  The giant corporation would bring Americans of all stripes into its orbit with remarkable speed. A professional and managerial middle class began to emerge as the educated and skilled went to work as engineers, lawyers, technical experts, clerks, and middle managers for large companies. The ranks of permanent wage workers swelled, both within railroads and in the industries that fed their needs or expanded with the new markets they opened up. Labor prospered during the postwar boom, enjoying a 40 percent growth in average real income from 1865 through late 1873. Indeed, the rise of the large corporation had its counterpart in the expanding, increasingly militant union movement. Significantly, William H. Vanderbilt signed the first contract with the B
rotherhood of Locomotive Engineers in the New York Central's history.

  None of these changes were absolute, of course. Small producers, self-employed artisans, and other survivors of the old economy coexisted with the enterprises and unions of the new industrial, corporate economy. The outlook of social philosophers, labor organizers, economists, and businessmen alike remained rooted in the past. But the creation of the New York Central & Hudson River stands as a historical landmark, showing us where the era of big business—the Vanderbilt era—well and truly began.86

  There is a double irony to all this. Vanderbilt had first marched onto the economic battlefield like a Viking warrior, storming the ramparts of corporations under the banner of the individual competitor. Now his flag fluttered from the greatest corporate fortress to date—one with a monopoly on rail transportation into Manhattan. He had put aside the sword in favor of statecraft. All he wanted was to be left alone to manage his realm. It was a task that demanded constant attention, even from a leader who tried to remain above matters of detail. As big as the Central was, Vanderbilt personally sustained it during the consolidation process, paying hundreds of thousands of dollars out of his own accounts to smooth its cash flow The Harlem, too, announced it would issue twenty thousand shares to pay for the Grand Central Depot. Vanderbilt would buy them. Meanwhile William scheduled new trains to compete directly with the Hudson River steamboats, and began to re-lay tracks with steel rails (more expensive but far more durable than those of iron). Work began on a new double-track bridge at Albany. And Horace Clark joined in his father-in-law's diplomatic initiatives. On May 4, Clark took over the presidency of the Lake Shore, with Augustus Schell as vice president and Banker as treasurer; in short order they arranged with connecting roads for a passenger through line from Cincinnati, Louisville, and St. Louis, over the Central to New York.87