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American Moguls: Cornelius Vanderbilt

Mark Wyatt McGinnis

Cornelius Vanderbilt, acrylic on paper, 2022, Mark W McGinnis

Cornelius Vanderbilt

1794-1877

What do I care about the law? Hain’t I got the power?

Cornelius was born on Staten Island to a blunt, straightforward father who owned a small ferry business and a mother who frugally and carefully ran the household. At 11, Cornelius quit school and joined his father in the family business. When 16, he co-owned a small, two-masted boat with his father. He was so enthusiastic and hardworking that the older captains on the dock sarcastically called him “The Commodore,” a nickname that stuck with him for life. The docks were his education. Throughout his life, his grammar-less speech was heavily laced with profanity, and his handwriting was nearly illegible.

In 1813, at 19, he married his first cousin, Sophia Johnson. She would bear him 13 children in the next 25 years. Vanderbilt was a life-long misogynist, a harsh husband, a distant and ridiculing father, and a frequent user of prostitutes.

By 23, he owned a number of ferries and caught the attention of ferry entrepreneur Thomas Gibson. Gibson offered Vanderbilt a job, and seeing an opportunity, Cornelius took it. With Gibson, he received the next phase of his education. He learned how to fight monopolies, use the courts, undercut the competition, and, most importantly, run a large, complicated business.

After Gibson died, Vanderbilt began buying steamships and then steamship lines. By 1840 he had 100 ships. He jumped on President Andrew Jackson’s populism bandwagon and called his steamship line “The Peoples Line.” He was a multimillionaire in his 40’s. Vanderbilt was a meticulous planner and analyst who had a genius for building companies and then had his competitors buy him out for enormous amounts of money. Vanderbilt kept all his bookkeeping in his head as he trusted no one.

He built a large brick home in Manhattan but kept to a very frugal lifestyle, with threadbare rugs and modest furniture. He was shunned by New York society for his poor beginnings, disdain for luxury, and his crude and vulgar persona. He didn’t care. It seems his only extravagances were racehorses and prostitutes.

The California gold rush began in 1849, and there was a huge demand from people wanting to get to the American West Coast. Vanderbilt went into the oceangoing steamboat business. Instead of a Panama crossing to the Pacific, he used a Nicaragua route. The steamboats would use the San Juan River to Lake Nicaragua and then a nineteen-mile stagecoach ride to the Pacific, where another ship awaited them. The laborers working on the route were driven to breaking point in tropical heat, plagued by diseases, and working 14-16 hour days. When Vanderbilt was there, he worked the same hours. He made enormous money with the passage, including $900,000 a year from the U.S. government to transport the mail. Later he let another company take over the lucrative mail route, and they paid him $56,000 a month to do so. Vanderbilt had a very large steam-powered yacht and sailed it to Europe to show off his wealth and American technology. The tour was a great success. When he returned, he found that two of his close associates had conspired against him during his absence. He wrote them a letter that said:

“Gentlemen: You have undertaken to cheat me. I will not sue you, for the law takes too long. I will ruin you.” And he did.

An American adventurer, William Walker, led a military expedition that took over Nicaragua in 1856. He threatened Vanderbilt’s lucrative business. Vanderbilt sent secret agents to Costa Rica to encourage them to war against Walker. El Salvador and Honduras joined Costa Rica and defeated Walker, who was later executed by firing squad.

Profits from Vanderbilt’s vast steamboat empire were severely diminished by the Civil War. To the great acclaim of the public, he donated a massive steamship to the Union Navy that was fitted with an enormous battering ram. At the same time, he was renting ships to the government for $800 to $900 a day. It was said that some of the ships were in such bad shape and rotten that their masts could not hold a nail. He was given the Congressional Gold Medal at the end of the war.

Vanderbilt began buying railroads connected to his steamships but soon realized that the railroad was the future of transportation for freight and people. He bought up small unprofitable lines and made them profitable, eventually joining his small companies, including the larger New York Central and Hudson River Railroad. He continued to add lines until it came to adding the Erie Railroad, where he met a rare defeat that came to be called “The Erie Railroad War of 1868.” His adversaries were three other famous “robber barons,” Daniel Drew, Jay Gould, and James Frisk. In a convoluted fight to win enough stocks to control the railroad, his opponents did some illegal maneuvers that they had made legal by bribing state legislators and judges. It is said Vanderbilt lost between 5 to 7 million dollars. His adversaries scampered off with suitcases crammed with 6 million in cash, surrounded by armed guards. In a rare public show of emotion, Vanderbilt told a reporter regarding Gould, “Never kick a skunk.”

An aspect of the 19th-century railroads not frequently discussed is the conditions of the workers. On some lines, 1 in 20 workers was killed or disabled; with brakemen, the ratio was 1 in 7. There was no consideration given to worker safety as it might cut into profits for the shareholders. The pay was so paltry that in 1877 wage decreases led to the Great Railroad Strike and spread through the country. One hundred thousand railroad workers rose in sometimes violent demonstrations, sometimes burning railroad property. State national guards and militia were called up, sometimes brutally putting the protests down.

Vanderbilt’s long-suffering wife, Sophia, died in 1868. He quickly married another cousin, 45 years his junior. Before this time, Vanderbilt had no interest in philanthropy, but his very young wife seemed to loosen his purse strings a bit. His most significant legacy was one million dollars to found Vanderbilt University in Tennessee, an interesting choice considering his disdain for education. Vanderbilt went through years of ill health before his death. Speculations on when he would die became an ongoing fascination for the public, and reporters were permanent fixtures under his windows. It is said one day, not long before his dying, he got out of bed, opened a window, and shouted down, “I’m not dying!”

Vanderbilt did die in 1877 at the age of 82. The cause of the death seemed basically old age, possibly complicated by syphilis. His vast fortune was approximately 105 million dollars upon his death, about 2.8 billion today. Of this amount, he gave 95 million to his son, William. To his nine daughters, he gave $500,000 each. The daughters challenged the will because of the old man’s mental state. Since the late 1860s, Vanderbilt was involved in Spiritualism, communicating with the spirits of the dead through mediums. This practice was widespread in the late 19th and early 20th century with believers such as Arthur Conan Doyle, Queen Victoria, and Thomas Edison. The sisters claimed that their brother, William, had been bringing a medium, in his pay, to the old man. The medium would conjure up a spirit that told Vanderbilt to leave his money to William. The sisters lost the case, but William, in his largess, gave them each an additional $200,000.

As were all the 19th-century robber barons, Vanderbilt was idolized by many common people. They were mesmerized by enormous wealth with swooning envy. The newspapers amplified this by trying to follow the barons’ every move and making something up when there was a lull. There were dissenters, and one of the most outspoken was Mark Twain. He expressed himself to Vanderbilt as follows:

“You seem to be the idol of only a crawling swarm of small souls, who love to glorify your most flagrant unworthiness in print or praise of your vast possessions worshippingly; or sing of your unimportant private habits and sayings and doings, as if your millions gave them dignity.”

The adoration somewhat died down in the 20th with scholarship on the many abuses of the barons and their negative impact on the country’s development. But in the 1960s, this trend was reversed, and a whitewashing of the 19th-century robber barons’ reputations began. This coincided with the obscene concentration of wealth among the elite in the last decades of the century. In the 21st century, the hoarding of wealth reaching an absurd level once again. Three multibillionaires in the United States own more than the bottom 50% of the population— 80 million people. 45% of new wealth in the country goes to the top 1%, the new robber barons.

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