In 1794, the year Cornelius Vanderbilt was born, George Washington was president, and farmers in the new American republic were in revolt: Roads were so bad people were accustomed to making raw corn into easy-to-transport whiskey, and now the Feds wanted to tax it!
In 1877, the year Vanderbilt died, Ulysses S. Grant was president, railroads had crossed the continent a decade before, and Vanderbilt's own New York Central system dominated the high-profit lines between Grand Central Depot — which he built — and Chicago. Interstate commerce was a reality. People, farm goods and, increasingly, manufacturers went everywhere. The railroads dominated America's economy, the telegraph made communication nearly instant (Vanderbilt owned most of Western Union), and only the Feds could balance the power of the cartels.
What T.J. Stiles calls the age of deference gave way to the age of untrammeled competition, the grandees to the go-getters. Whether Vanderbilt was the beneficiary of those changes or their driving force is too tangled a skein to straighten out, even today.
Certainly he was the right man in the right place at the right time, and the meticulous Stiles seems to be the right man to tell us about it. One might argue that his book, however gracefully written, is simply too detailed for the average reader — notes and bibliography alone consume nearly 150 pages — but his subject is huge: the growth of the American economic system, driven by technology and roughneck competition.
The son of a Staten Island farmer and boatman, Vanderbilt grew up on the water, running cargoes from the rural outposts that surrounded Manhattan — first for his father, then for himself, because "general merchant" seemed to him the way to wealth, even in his teens.
It would quickly become apparent that the carrying, rather than the cargoes, was the real source of profit, and he became in succession a ferry master, a dominant figure in the coastal trade. Soon, with the advent of steam power, he became a pioneer in what current jargon calls intermodal transportation, running steamers across Long Island Sound to the railheads in Rhode Island or Connecticut.
His path from prosperity to unimaginable riches seems obvious in retrospect. But only Vanderbilt seems to have known where it lay and how to take it. New York's other richest man, with a fortune estimated at less than half of Vanderbilt's, was a department store magnate, not a railroader.
Vanderbilt was the apostle of free competition, burying but also befriending his business enemies — it was nothing personal. So it is ironic that, as Stiles documents, his free-market practices led inevitably to what today we would call price fixing, insider trading and restraint of trade. Yet he was not, in Stiles' view, the coldly rapacious villain, a sort of Genghis Khan of capitalism, that we think of when we think of Vanderbilt.
Indeed, he was a diplomat first, notes Stiles. Like the British Empire, which grew by accident, Vanderbilt waged war to achieve his business ends only when sweet reason failed. Because then it was personal: The Commodore, as he came to be known — even his second wife called him "the Com'' — disliked subterfuge and hated to be crossed.
In an age when hard money was giving way to soft (the 1870s depression began with an attempt by Jay Gould and Jim Fisk to corner the U.S. supply of gold), and individuals to corporations, he did it all with his own money. What would he have thought about junk bonds, derivatives and all the other ghostly and quasi-fraudulent instruments that have brought the current economy low?
Here's what he told a reporter in 1873:
"Respectable banking houses in New York, so called, make themselves agent for sale of the bonds of the railroads in question, and give a kind of moral guarantee of their genuineness," which allows them to flood the market. "When I have some money," he continued, "I buy railroad stock or something else, but I don't buy on credit. I pay for what I get. People who live too much on credit generally get brought up with a round turn in the long run. The Wall Street averages ruin many a man there, and is like faro."
Stiles does his best to give us the inner Vanderbilt as well as the man of business, but he's tacking against the wind here, since the Commodore was not a man much given to introspection. He loved his family, but his love was complicated by his brutal sense of reality. Stiles punctuates his book with scenes from the lawsuit brought by one of his daughters over his will; it is disappointing to learn that the case was settled and the judge never had to rule on the Commodore's dispositions.
He was a tall, strong and vigorous man, prone to physical violence in his youth and to racing horses in the streets in old age. And he was apparently a man of strong passions as well. He may have told Tennessee Claflin — faith healer, con artist and seductress — that he had had a thousand women; but if he financed a love nest or two, Stiles doesn't mention it.
David L. Beck is a St. Petersburg writer and editor.