Cornelius Vanderbilt

• 1. Introduction

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  Cornelius Vanderbilt died on the 4th of January 1877 at his residence, No. 10 Washington Place. He was 82. For about eight months he had been confined to his rooms. The immediate cause of death was exhaustion, brought on by a long struggle with a complication of chronic disorders. Yet the man known as the Commodore left an estimated fortune of $105 million. It was by far the largest estate in the world at that time. Where did a sum like that come from? Which rivals did he beat, and which of them did he later befriend? And why did some of his own children take his will to court?

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• 2. A Dutch Name

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  In 1650, a Dutch farmer named Jan Aertson left the village of De Bilt, in Utrecht, and crossed the Atlantic to New Amsterdam as an indentured servant. He was Cornelius Vanderbilt's great-great-great-grandfather. His surname meant "Aert's son." Over time the Dutch words van der, meaning "of the," were attached to his village name, producing "van der Bilt." That was eventually squeezed into the single word Vanderbilt.

  Cornelius was born on Staten Island, New York, on the 27th of May 1794, to Cornelius van Derbilt and Phebe Hand. As a boy he worked on his father's ferry in New York Harbor. He quit school at the age of 11. At 16 he decided to run a ferry of his own. Accounts of how he got started disagree.

  One version says he borrowed money from his mother to buy a periauger, a shallow two-masted sailing vessel, and named it the Swiftsure. The first account of his life, published in 1853, says the boat belonged to his father and that the son kept half the profit. Either way, he ferried freight and passengers between Staten Island and Manhattan. His energy amused the other captains nearby, and they began calling him "The Commodore" as a joke. The name stuck for the rest of his life.

  Many Vanderbilt relatives joined the Episcopal Church, but Cornelius stayed a member of the Moravian Church until he died. Along with other family members, he helped build a Moravian parish church in his city.

  On the 19th of December 1813, at 19, he married his first cousin, Sophia Johnson. The couple moved into a boarding house on Broad Street in Manhattan. They had 13 children, beginning with Phebe in 1814 and ending with a second son named George in 1839. The first George, born in 1832, had died in 1836.

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• 3. The Monopoly Case

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  On the 24th of November 1817, a ferry entrepreneur named Thomas Gibbons asked Vanderbilt to captain his steamboat between New Jersey and New York. Vanderbilt kept his own ventures going, including trade in food and merchandise and a schooner called the Charlotte, bought from his brother-in-law John De Forest. But he also became Gibbons's business manager.

  Gibbons was fighting a steamboat monopoly in New York waters. The New York State Legislature had granted it to the politically influential Robert Livingston and to Robert Fulton, who had designed the steamboat. Both men were dead by the time Vanderbilt arrived, and Livingston's heirs held the monopoly. They had licensed Aaron Ogden to run a ferry between New York and New Jersey.

  Gibbons had a personal quarrel with Ogden and hoped to drive him into bankruptcy. He undercut Ogden's prices, and he took a lawsuit, Gibbons v. Ogden, to the United States Supreme Court to overturn the monopoly itself.

  Working for Gibbons taught Vanderbilt how to run a large and complicated business. He moved his family to New Brunswick, New Jersey, a stop on Gibbons's line between New York and Philadelphia. There Sophia ran a very profitable inn, and she used the income to feed, clothe and educate their children. Vanderbilt also proved a quick study in legal matters. He represented Gibbons in meetings with lawyers, and he traveled to Washington, D.C., to hire Daniel Webster to argue the case.

  Vanderbilt had even brought his own case against the monopoly. It was next on the Supreme Court's docket, and the justices never heard it. On the 2nd of March 1824, the Court ruled in Gibbons's favor and held that states had no power to interfere with interstate commerce. The ruling is still considered a landmark, and the protection of competitive interstate commerce is regarded as the basis for much of the prosperity the United States has generated.

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• 4. Steamboat Wars

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  Thomas Gibbons died in 1826, and Vanderbilt then worked for Gibbons's son William until 1829. After that he worked entirely for himself. Step by step, he opened lines between New York and the surrounding region. He first took over Gibbons's ferry to New Jersey and then moved into western Long Island Sound.

  In 1831 he took over his brother Jacob's line to Peekskill, on the lower Hudson River. That same year a steamboat run by Daniel Drew challenged him, and Drew forced Vanderbilt to buy him out. Vanderbilt was impressed. He made Drew a secret partner for the next thirty years, so that neither man would have a reason to compete with the other.

  On the 8th of November 1833, Vanderbilt was nearly killed in the Hightstown rail accident on the Camden and Amboy Railroad in New Jersey. John Quincy Adams was also on the train.

  In 1834 he went up against the Hudson River Steamboat Association, a monopoly on the run between New York City and Albany. He named his rival service "The People's Line" and borrowed the populist language associated with the Democratic president Andrew Jackson. By the end of the year the monopoly paid him a large sum to stop competing, and he shifted his boats to Long Island Sound.

  The 1830s saw textile mills built in large numbers across New England. Some of the first American railroads ran from Boston to Long Island Sound, where they met steamboats bound for New York. By the end of the decade Vanderbilt dominated the steamboat trade on the Sound, and he began taking over management of the connecting railroads.

  In the 1840s he targeted the most attractive of them, the New York, Providence and Boston Railroad, popularly known as the Stonington. He cut fares on competing lines, which drove the Stonington's stock price down. In 1847 he became its president, the first of the many railroads he would head.

  His other holdings grew too. He bought large amounts of real estate in Manhattan and on Staten Island, and he took over the Staten Island Ferry in 1838. Commodore was then the highest rank in the United States Navy, and it was a common nickname for important steamboat entrepreneurs. By the end of the 1840s, the title belonged to him alone.

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• 5. Gold Rush And War

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  When the California gold rush began in 1849, Vanderbilt left regional steamboat lines for ocean-going steamships. Many migrants to California, and almost all the gold coming back east, traveled by steamship to Panama. There mule trains and canoes carried them across the isthmus, until the Panama Railroad was built for a faster crossing.

  Vanderbilt proposed a canal across Nicaragua, which lay closer to the United States. Lake Nicaragua and the San Juan River already covered most of the distance. He could not attract enough investment to build the canal. Instead he started a steamship line to Nicaragua and founded the Accessory Transit Company. It carried passengers by steamboat on the lake and river, with a 12-mile carriage road between the Pacific port of San Juan del Sur and Virgin Bay.

  In 1852, a dispute with Joseph L. White, a partner in the company, led to a business battle. Vanderbilt forced the company to buy his ships at an inflated price. In early 1853 he took his family on a grand tour of Europe aboard his steamship yacht, the North Star. While he was away, White conspired with Charles Morgan, Vanderbilt's former ally, to cheat him of money the company owed him. When Vanderbilt returned, he built a rival steamship line to California and cut prices until Morgan and White paid him off.

  He then turned to the Atlantic, running ships against the heavily subsidized Collins Line, headed by Edward K. Collins. Vanderbilt eventually drove that line out of existence. During the 1850s he also bought control of a major shipyard and of the Allaire Iron Works, a leading manufacturer of marine steam engines, in Manhattan.

  In November 1855, Vanderbilt began buying control of Accessory Transit once again. That year the American military adventurer William Walker led an expedition to Nicaragua and briefly took over the government. Walker's close friend Edmund Randolph coerced Cornelius K. Garrison, the company's San Francisco agent, into opposing Vanderbilt. Randolph persuaded Walker to annul the company's charter and hand the transit rights and steamboats to him, and Randolph sold them to Garrison. Garrison brought in Morgan in New York.

  Vanderbilt had taken control of the company just before these moves were announced. The United States and English governments refused to help him recover its rights and property. So he negotiated with Costa Rica, which, like the other Central American republics, had declared war on Walker. A man Vanderbilt sent there led a raid that captured the steamboats on the San Juan River. That cut Walker off from reinforcements from insurgent groups in the United States. Walker was forced to give up, and a United States Navy officer drove him out of the country.

  The new Nicaraguan government would not let Vanderbilt restart his transit business. He started a line by way of Panama instead, and he eventually built a monopoly on the California steamship business.

  When the Civil War began in 1861, Vanderbilt tried to donate his largest steamship, the Vanderbilt, to the Union Navy. Secretary of the Navy Gideon Welles refused. He thought its operation and maintenance too costly for a war he expected to be short. Vanderbilt had little choice but to lease it to the War Department at prices set by ship brokers.

  Then the Confederate ironclad Virginia, popularly called the Merrimack in the North, wrought havoc on the Union blockading squadron at Hampton Roads, Virginia. Secretary of War Edwin Stanton and President Abraham Lincoln called on Vanderbilt for help. This time his donation was accepted. He equipped the ship with a ram and staffed it with handpicked officers. It helped bottle up the Virginia. Vanderbilt then converted it into a cruiser to hunt the Confederate commerce raider Alabama, captained by Raphael Semmes. He was awarded a Congressional Gold Medal for the gift, and he also paid to outfit a major expedition to New Orleans.

  The war cost him personally as well. George Washington Vanderbilt II, his youngest and favorite son and his heir apparent, was a graduate of the United States Military Academy. He fell ill and died without ever seeing combat.

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• 6. Railroad Empire

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  In 1863, Vanderbilt took control of the New York and Harlem Railroad in a famous stockmarket corner and was elected its president. He had served on its board during the 1850s, along with the boards of the Erie Railway, the Central Railroad of New Jersey and the Hartford and New Haven. He later explained that he wanted to prove he could take a railroad generally considered worthless and make it valuable.

  The Harlem had one key advantage. It was the only steam railroad to enter the center of Manhattan. It ran down 4th Avenue, later renamed Park Avenue, to a station on 26th Street, where it connected with a horse-drawn streetcar line. Going north, it reached Chatham Four Corners, New York, where it met railroads running east and west.

  Vanderbilt brought his eldest son, Billy, in as vice-president of the Harlem. Billy had suffered a nervous breakdown early in life, and his father had sent him to a farm on Staten Island. But Billy proved a good businessman and eventually headed the Staten Island Railway. The Commodore had once scorned him, and he was impressed. He promoted Billy to operational manager of all his railroad lines. In 1864 he sold his last ships to concentrate on the railroads.

  Once in charge of the Harlem, Vanderbilt ran into conflicts with connecting lines. Each ended in a battle that he won. He bought control of the Hudson River Railroad in 1864, the New York Central Railroad in 1867, and the Lake Shore and Michigan Southern Railway in 1869. He later bought the Canada Southern as well. In 1870 he merged two of his key lines into the New York Central and Hudson River Railroad, one of the first giant corporations in United States history.

  In 1869, he directed the Harlem to begin building the Grand Central Depot on 42nd Street in Manhattan. It opened in 1871 as the terminus of his lines in New York. He sank the tracks on 4th Avenue into a cut that later became a tunnel, which allowed the street above to become Park Avenue. Grand Central Terminal replaced the depot in 1913.

  In 1868, Vanderbilt quarreled with his old secret partner Daniel Drew, who had become treasurer of the Erie Railway. Seeking revenge, he tried to corner Erie stock, which set off the so-called Erie War. It put him in direct conflict with Jay Gould and the financier James Fisk Jr., who had just joined Drew on the Erie board. They defeated the corner by issuing "watered stock" in defiance of a state law limiting how many shares a company could issue. Gould then bribed the legislature to make the new stock legal. Vanderbilt used a lawsuit to recover his losses, but he and Gould became public enemies.

  Gould never beat Vanderbilt in any other important business matter, though he often embarrassed him. Vanderbilt, uncharacteristically, lashed out at Gould in public. With his other foes he behaved differently. After their fights ended, he befriended them, Drew and Cornelius Garrison among them.

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• 7. Marriage And Philanthropy

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  Sophia died in 1868, and Vanderbilt traveled to Canada afterward. On the 21st of August 1869, in London, Ontario, he married a cousin from Mobile, Alabama. Her name was Frank Armstrong Crawford, which was unusual for a woman.

  His second wife persuaded him to give $1 million to Bishop Holland Nimmons McTyeire, the husband of her cousin Amelia Townsend. At that point it was the largest charitable gift in American history. The money founded Vanderbilt University in Nashville, Tennessee, named in his honor. He also paid $50,000 for a church for his second wife's congregation, the Church of the Strangers. He gave to churches around New York as well, including a gift to the Moravian Church on Staten Island for a cemetery, the Moravian Cemetery. He chose to be buried there.

  He was first placed in the family vault at the cemetery in New Dorp on Staten Island. Later he was reburied in a tomb built in the same cemetery by his son Billy.

  His will left 95% of the estate to Billy and to four grandsons through him. Billy's eldest son, Cornelius Vanderbilt II, received $5 million. His three younger sons, William Kissam Vanderbilt, Frederick William Vanderbilt and George Washington Vanderbilt II, received $2 million each. The Commodore's wife received $500,000, their New York City home and 2,000 shares of New York Central common stock. His daughters received sums ranging from $250,000 to $500,000 each. Cornelius Jeremiah Vanderbilt, whom his father regarded as a wastrel, received only the income from a $200,000 trust fund.

  Those bequests made the daughters and Cornelius Jeremiah very wealthy by the standards of 1877, and they were not subject to inheritance tax. But they were far smaller than what Billy received, and even smaller than what their young nephews got. Cornelius Jeremiah, known as Corneel, along with Ethelinda and Mary, took the will to court. They argued that their father was not in his right mind in old age and that Billy had influence over him.

  The testimony also involved a spiritualist in the Commodore's circle, a Mr. Stoddard. Eyewitnesses alleged that Billy had paid him to stage a trance in the Commodore's presence. In that session a "spirit" appeared in the form of Billy's late mother, Sophia. It supposedly said Billy was the most trustworthy heir and that the Commodore's other children hated him and were waiting for him to die.

  Billy did not want further public humiliation of the family name. He settled with his siblings. Corneel received an extra $200,000 in cash and a $400,000 trust fund, and Mary and Ethelinda received the same. The court battle had lasted more than a year, and Billy paid his siblings' legal fees. Corneel died in 1882 without children, which left every later Vanderbilt multimillionaire descended from Billy.

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• 8. Legacy

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  T. J. Stiles, a biographer of Vanderbilt, credits him with contributing to "a transformation of the very geography of the United States." Stiles says he embraced new technologies and new forms of business organization, and that he helped create the corporate economy that would define the country into the 21st century. Critics see a darker side. For his monopolies on shipping and the railroads, helped along by political manipulation, he is described either as a "captain of industry" or as a "robber baron."

  The Commodore himself lived in relative modesty given his nearly unlimited means, splurging mainly on race horses. His descendants built the mansions that characterize the Gilded Age. The most famous is the Biltmore Estate in the mountains of Asheville, North Carolina. George Washington Vanderbilt II, the Commodore's youngest grandson through Billy, built it as his main residence with part of his inheritance. The house has 250 rooms and nearly 179,000 square feet of floor space, and it remains the largest privately owned home in the United States, though it is open to the public.

  The estate originally sat on 125,000 acres. George's final wishes led to the sale of 86,000 of them to the government at $5 an acre, a heavily reduced price and what he had paid for the land. That land became the core of the Pisgah National Forest. His widow, Edith Stuyvesant Vanderbilt Gerry, sold off still more land to pay for the estate's upkeep. Today it covers 8,000 acres.

  In The Wealthy 100, Michael Klepper and Robert Gunther take Vanderbilt's wealth as a share of the nation's gross domestic product in 1877 and apply that proportion to 2007. The result is $143 billion in 2007 dollars. That would make him the second-wealthiest person in United States history, behind John Davison Rockefeller, the Standard Oil co-founder. A different calculation from 1998 places him third, after Andrew Carnegie.

  In 1999, Vanderbilt was inducted into the North America Railway Hall of Fame, in the "Railway Workers & Builders: North America" category. Statues of him stand in two places. Giuseppe Moretti designed the one at Vanderbilt University, installed in 1897 near Kirkland Hall. The bronze statue at the south side of Grand Central Terminal was sculpted by Ernst Plassmann. It first stood at the Hudson River Railroad depot at St. John's Park and was moved to Grand Central in 1929, where it faces the Park Avenue viaduct.

  His family line reaches into modern public life. His great-great-granddaughter Gloria Vanderbilt was a renowned fashion designer, and her youngest son is the television news anchor Anderson Cooper. Through Billy's daughter Emily Thorn Vanderbilt, another descendant is the actor Timothy Olyphant. In 2012, the History Channel dramatized the Commodore's career in its miniseries The Men Who Built America.

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