The First Tycoon

by T. J. Stiles

  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

  “I thought at that meeting there was no possible chance to do anything with Mr. Keep,” the Commodore recalled. “When we left I said to Mr. Corning, ‘Get into my wagon and I will carry you up to the Fifth Avenue Hotel.’” He still respected Corning; Keep, on the other hand, he derided as “a shyster,” and was heard to say “that he should never be recognized by gentlemen.” Corning climbed up next to Vanderbilt, who held the reins and whipped his horses through the crowded New York streets. Vanderbilt said, “Mr. Corning, I am very sorry we cannot get along together in this matter.”

  “I am too,” Corning replied. “If it was left to you and me we could fix it up in a little while.”

  “I believe we could,” the Commodore said. The brief conversation told him all he needed to know. It was not left to Corning to fix it up. Clearly he had no power in the matter. Vanderbilt dropped his friend off at the hotel, certain that war was inevitable.100

  On January 7, William received a notice from Worcester, the Central's treasurer, who said he was not authorized to pay the Hudson River's terminal charges. The Central also began to play with the accounts of the Albany bridge company, keeping for itself a certain amount of stock that should have been divided with the Hudson River.101 William showed the note to his father. “This thing is getting very serious,” the Commodore said. “Go to Albany.… Fix up some kind of arrangement with these people. I don't want to be compelled to split with them. Go to Albany.”

  William and Schell took the train to Albany the next morning, and arrived at half past one in the afternoon. They immediately went into a conference with the Central directors. William told them that he only wanted to do what was right. “Your father said that the other day,” Keep replied, “but I have about made up my mind he does not know what is right and what is wrong.”

  The insult stunned Schell. He watched the reaction on William's face, under the great pyramids of whiskers that extended out and drooped from his cheeks. William “controlled himself,” Schell recalled, and said “that he wished to avoid any personal difficulty, and he had come as a representative of the road to see if the matters in difference could not be fairly adjusted.” Under this calm surface, William seethed. He thought to himself that if his father “was inclined at all to break his business connections with the NY. Central R.R. he had cause enough now.”

  William made one last proposal: to refer the dispute to arbitration. He said his father wished “to do nothing in the world that any man who walked the streets should not say was exactly right.” At that, Azariah Boody leaped up and shouted, “There was no man in the world who could say that. Mr. Vanderbilt has not made a fair proposition.” Keep coldly added, “We can settle our own business.”

  Vanderbilt equipped the Vanderbilt with a ram to destroy the Confederate ship Virginia and brought it to Hampton Roads, Virginia, where it bottled up the ironclad. He refitted it as a cruiser to search for the Confederate raider Alabama (note the cannons visible through gun-ports in this image) and sold it to the navy for one dollar. Library of Congress

  Cornelius Vanderbilt as he appeared on a magazine cover in 1865. This image captures him just after he sold his last steamships and devoted himself to his growing railroad empire. Library of Congress

  Confederate captain Raphael Semmes of the Alabama targeted Vanderbilt's Panama line, hoping to punish the Commodore for donating the Vanderbilt to the Union navy. On December 7, 1862, A. G. Jones, the captain of the Vanderbilt steamer Ariel, suspiciously watched the approach of the Alabama under a false U.S. flag. Naval Historical Center

  Captain Jones attempted to escape the Alabama, but the Ariel was one of the slowest ships in the Vanderbilt fleet. But Semmes had been searching for the Champion, headed north with a cargo of gold; the Ariel was steaming south from New York, and had none. Semmes let it go after a few days. Naval Historical Center

  In 1863, Vanderbilt took control of the struggling New York & Harlem Railroad, which had one key strength: it was the only steam railway to enter the center of Manhattan. Its trains ran down the surface of Fourth (later Park) Avenue to this station on Twenty-sixth Street, where they connected with the Harlem's horse-drawn streetcar line. New York Central System Historical Society

  In keeping with steamboat and steamship tradition, locomotives were named in honor of leading officials of their companies. The Commodore Vanderbilt of the Hudson River Railroad was typical of those operated by Vanderbilt's lines. Library of Congress

  After taking control of the Harlem, Vanderbilt bought its principal competitor, the Hudson River Railroad, which ran from Albany along the river to this freight depot at Chambers Street. The horse-drawn carts illustrate one of the railroad's strengths: it ran down the West Side, close to the piers that served the city's abundant shipping trade. New York Central System Historical Society

  Horace F. Clark, one of Vanderbilt's sons-in-law, emerged in the 1850s as a trusted lieutenant. A prominent Democratic politician, he sat on the boards of Vanderbilt's railroads and became president of the Lake Shore & Michigan Southern, which Vanderbilt controlled. In that position he struck out on his own, and forged an alliance with Jay Gould. Library of Congress

  Augustus Schell was Horace Clark's close friend and political ally, and served as grand sachem of Tammany Hall after Boss Tweed's downfall. He also sat on the boards of Vanderbilt's railroads. Library of Congress

  The railroad bridge across the Hudson River at Albany was seen as a major feat of engineering when it was opened in 1866. It allowed a direct connection between Vanderbilt's lines and the New York Central Railroad. Library of Congress

  Henry Keep became a major figure on Wall Street in partnership with financier LeGrand Lockwood. In December 1866, Keep led a takeover of the New York Central, then provoked Vanderbilt by revoking a hard-won agreement with the Hudson River Railroad. Vanderbilt closed the Albany bridge to train traffic in retaliation, cutting the Central's link to New York. Keep capitulated. Library of Congress

  Erastus Corning was one of New York State's leading businessmen and politicians. A resident of Albany, he rose to wealth as owner of an iron mill and president of the New York Central. Though Vanderbilt sometimes clashed with Corning, he liked and respected him. Library of Congress

  Jay Gould shared a birthday with Vanderbilt, making Gould exactly forty-two years younger. He proved to be Vanderbilt's most determined enemy. In 1867, Gould asked Vanderbilt for his help in throwing Daniel Drew off the board of the Erie Railway; in the end, Gould sided with Drew to defeat Vanderbilt's attempt to corner Erie stock. Library of Congress

  James Fisk Jr. emerged as Jay Gould's closest ally on the Erie board. Often understimated because of
his outrageous behavior, he proved to be Gould's capable partner after the latter took the Erie presidency in 1868. A rival for the affections of a mistress shot Fisk dead in a hotel lobby in 1871. Library of Congress

  As vice president and later president of the Pennsylvania Railroad, Thomas A. Scott made a striking contrast with Vanderbilt. Scott was a professional executive who rose through the ranks of management. He pioneered the use of shell corporations and holding companies, and was Andrew Carnegie's mentor. Library of Congress

  Vanderbilt negotiated the purchase by the Hudson River Railroad of St. John's Park, the model for Gramercy Park, located where the exit of the Holland Tunnel is now. The railroad built the St. John's Park Freight Depot, pictured here, on that site. This image depicts the unveiling on November 10, 1869, of a statue of Vanderbilt centered in a bronze relief that depicted his career. New York Central System Historical Society

  The St. John's Park Freight Depot statue was designed by Ernst Plassman and paid for by a fund organized by Albert De Groot, a former employee who had grown rich with Vanderbilt's assistance. Twelve feet tall, it (and the reliefs on either side) cost a reputed $500,000. In the early twentieth century it was moved to the front of Grand Central Terminal, where it remains today. New York Central System Historical Society

  As the richest man in America, Vanderbilt was often caricatured by the press, which cast a cynical eye on the wealthy. This cartoon mocks Vanderbilt by making an unflattering comparison between him and James Fisk, in their “watering” the stock of their railroads—increasing the number of shares, considered a grave misdeed in 1869. Library of Congress

  Vanderbilt's consolidation of the New York Central and the Hudson River railroads pioneered the giant corporation in American history. This 1870 cartoon shows Vanderbilt racing his newly merged company against Fisk of the Erie. Library of Congress

  In 1869, the Harlem Railroad began to build the continent's largest railroad station, the Grand Central Depot. The station was located on the north side of Forty-second Street, well above the built-up portion of New York, because of legal prohibitions on the use of steam locomotives below that point. Vanderbilt personally paid for much of the construction. This photograph shows the arched supports for the vast train shed, or “car house.” New York Central System Historical Society

  This engraving of Grand Central, completed in 1871, views it from the south, as most New Yorkers saw it. The depot anchored the rapid development of this district, and turned Forty-second Street into a major crosstown artery. Note the entrance on the far right for horse-drawn streetcars that rolled up Fourth Avenue from downtown. The depot was later rebuilt as Grand Central Station, and finally replaced by Grand Central Terminal on the same location. New York Central System Historical Society

  The northern entrance of the Grand Central car house, shown here, opened onto Fourth Avenue. Because of complaints about the trains running on the surface of Fourth Avenue, Vanderbilt agreed to sink the tracks in an open cut. The cut was later covered over, and Fourth blossomed into Park Avenue. New York Central System Historical Society

  This view shows the interior of Grand Central's car house, beneath the enormous arched glass roof. Note the horse-drawn streetcars on the far right, which entered the station through a southern entrance. New York Central System Historical Society

  An express train for Chicago departs Grand Central. During the 1870s, the New York Central and the Pennsylvania competed to run the fastest train between New York and Chicago. The Pennsylvania, with a more direct route, usually won. But the Central possessed a nearly level route, by far the most economical. New York Central System Historical Society

  Four giant railroads, called the trunk lines, dominated traffic between the West and the Atlantic seaboard. Vanderbilt and his son William made the New York Central & Hudson River into the most profitable. A key strength, advertised here, was the unprecedented four-track line they built between Albany and Buffalo, at a time when many railroads had only one set of tracks. The four-track plan was Vanderbilt's brainchild. Library of Congress

  Vanderbilt helped lift harness racing to social prominence in the 1850s, with his expensive horses and match races on the roads of rural upper Manhattan. The rising generation of Wall Street men chased the Commodore on Bloomingdale Road or Harlem Lane, shown here. Even after Vanderbilt (center-left foreground, with top hat and white cravat) turned eighty, he raced his expensive trotters on an almost daily basis. Library of Congress

  Vanderbilt spent $14,000 on Mountain Boy, his finest horse and most prized possession, shown at right, racing its most famous rival, Lady Thorn. Mountain Boy began to dominate American harness racing in 1867 and became a national celebrity. The horse died in the epizootic of 1872, a loss that deeply affected Vanderbilt. Library of Congress

  Starting in the 1830s, Vanderbilt went to the fashionable resort of Saratoga Springs every summer. This photograph shows him (seated at right, with crossed legs and top hat) on the veranda of the Congress Hall hotel in the early 1870s. He took part in Saratoga's highly social environment, playing whist and attending races. New York Public Library

  Vanderbilt, shown here at about the age of eighty, impressed observers with his erect posture, physical energy, and youthful appearance. He acquired dignity with age, even winning praise for his courtly manners and fastidious dress. Library of Congress

  Tennessee Claflin became Vanderbilt's magnetic healer, spiritualist medium, and possibly mistress. In 1870, she and her sister Victoria Woodhull claimed to have established the first female-run brokerage house on Wall Street with Vanderbilt's backing. There is no evidence that they conducted any trades or had Vanderbilt's support. Library of Congress

  Victoria Woodhull used the fame of her purported brokerage house to take a leading role in the women's movement. Shown here addressing a committee of Congress (with her sister on her left), she declared herself a candidate for president in 1872. The sisters also launched Woodhull & Claflin's Weekly, devoted to spiritualism and radical causes. Though some have assumed that Vanderbilt supported the periodical, he did not. Library of Congress

  Founder of the New York Tribune, Horace Greeley played a unique role in American public life. He befriended Vanderbilt's gambling-addicted son Corneil, and lent him tens of thousands of dollars. Greeley convinced Vanderbilt to serve as bondsman for the release of Jefferson Davis in 1867, which started him on the path toward his endowment of Vanderbilt University. Library of Congress

  Vanderbilt's second wife, Frank Crawford Vanderbilt, was also his cousin. A native of Mobile, Alabama, Frank was a thirty-year-old divorcée when she gained the Commodore's acquaintance in 1868. A year later, they made a trip to Canada for a private wedding—after she signed a prenuptial agreement. A dignified woman with an aristocratic air, she brought her often-difficult husband fully into elite society. Albany Institute of History and Art

  Vanderbilt's daughter Ethelinda married Daniel B. Allen, who served as a manager of his father-in-law's businesses for three decades. The Allens lived on Staten Island, not far from William H. Vanderbilt's farm. A permanent rift opened between the Commodore and the Allens in 1873 when Vanderbilt refused to save their son when his brokerage house failed. Albany Institute of History and Art

  Vanderbilt's daughter Sophia married Canadian merchant Daniel Torrance, who ran his father-in-law's transatlantic line and served as vice president of the New York Central Railroad. Described by one nephew as “impulsive,” Sophia criticized Frank behind her back. On his deathbed, Vanderbilt insisted that Sophia apologize and shake hands with Frank. Albany Institute of History and Art

  Mary, another Vanderbilt daughter, married Nicholas B. La Bau, a lawyer and politician. Mary led the resistance to Vanderbilt's will, in which he left most of his estate to William. “Now don't be stubborn and give trouble,” Vanderbilt told her on his deathbed. “I have left you all enough to live like ladies.” Unsatisfied with $500,000 worth of bonds, she challenged the will, leading to a long court battle. Albany
Institute of History and Art

  When Seymour Guy painted Going to the Opera in 1873, William and his wife Maria had already begun to establish their large family in patrician society, as shown here by the fine art that William purchased on repeated trips to Europe. The Commodore cultivated William's oldest sons, Cornelius II and William K. Biltmore Estate

  The Panic of 1873 posed the greatest crisis of Vanderbilt's career. His son-in-law Horace F. Clark had dangerously increased the debt of the Lake Shore & Michigan Southern Railroad, and had embroiled both it and a major bank, the Union Trust Company, in his personal stock speculations. The Union Trust had to close its doors in the face of a run (shown here) during the Panic. Library of Congress

  Vanderbilt turned eighty in 1874. This engraving—made from a photograph taken for Frank Leslie's Illustrated Monthly in early 1876—shows him at rest in his house at 10 Washington Place. He holds a young descendant, likely a great-grandchild, demonstrating a warmth that outsiders rarely saw. New York Central System Historical Society