At fifty-four, Vanderbilt could look back on a career of breathtaking leaps of imagination. Steamboats and railroads, fare wars, market-division agreements, and corporations: all were virtually unknown in America when he mastered them. He understood the emerging invisible world far better than those who condescended to him. And this knowledge was about to serve him better than he could have dreamed. He was about to imagine a work of global significance-to create a channel of commerce that would help make the United States a truly continental nation. In the process, a most perplexing collision of public and private interests would embroil him in great-power diplomacy, international finance, and a bitter war between a half-dozen sovereign nations. And it was all because of a frenzy that now began three thousand miles from 10 Washington Place.
IN APRIL 1848, in the northeastern corner of the great peninsula that extended like a thumb to enclose San Francisco Bay, some two hundred buildings could be counted in the village of Yerba Buena. They included some 145 houses, a dozen stores, and perhaps thirty-five shanties. Clustered in a sandy basin beneath steep hills and ridges, the town formed a convenient port close to the Golden Gate, with the promise of steady growth as Americans trickled into California. To assist that growth, the leading citizens had decided to change Yerba Buena's name to that of the bay-San Francisco. Already the population had risen from around two hundred in 1846 to as much as a thousand.
By the end of May, they were gone. Sand blew through deserted streets. Ships sailed through the Gate, rounded the northeastern corner of the peninsula, and dropped anchor in front of those two hundred empty buildings; then their crews scurried overboard, never to return. Over the previous few weeks, visitors from the upper country had brought rumors of gold near Sutter's settlement of New Helvetia; then men who had panned and dug for gold themselves had brought the yellow evidence to town. "The inhabitants began gradually, in bands and singly, to desert their previous occupations, and betake themselves to the American River," wrote a resident. "Soon all business and work, except the most urgent, was forced to be stopped.... About the end of May we left San Francisco almost a desert place."16 The craze soon struck Monterey. "As the spring and summer of 1848 advanced," William T. Sherman recalled, "the reports came faster and faster from the gold-mines at Sutter's saw-mill. Stories reached us of fabulous discoveries, and spread throughout the land. Everybody was talking of 'Gold! gold!!' until it assumed the character of a fever. Some of our soldiers began to desert; citizens were fitting out trains of wagons and pack-mules to go to the mines."17 Nothing could have been more predictable than the rush to the "diggings," as they were called. Gold was not simply worth worth money-it money-it was was money. Anyone could take refined gold (and refining was a relatively simple process) to the United States Mint and have it poured into coin. The earth was spitting up cash. Who wouldn't have gone? money. Anyone could take refined gold (and refining was a relatively simple process) to the United States Mint and have it poured into coin. The earth was spitting up cash. Who wouldn't have gone?
In late June, Lieutenant Sherman convinced Colonel Mason that they must visit the diggings in order to report on the find. With four soldiers, Mason's black servant, "and a good outfit of horses and pack-mules," they journeyed up to the mines. "I recall the scene as perfectly today as though it were yesterday," Sherman wrote decades later. "In the midst of a broken country, all parched and dried by the hot sun of July, sparsely wooded with live-oaks and straggling pines, lay the valley of the American River, with its bold mountain stream coming out of the snowy mountains to the east." Along a gravel floodplain adjacent to the river, "men were digging, and filling buckets with the finer earth and gravel," which they poured into roughly made sifters. Sherman estimated that about four men worked each sifter, and each man earned an average of an ounce of gold-$16-per day, though they often pulled in twice as much. "The sun blazed down on the heads of the miners with tropical heat, the water was bitter cold, and all hands were either standing in the water or had their clothes wet all the time; yet there were no complaints of rheumatism or cold."
When Mason and Sherman returned to Monterey, they learned that the Mexican War had ended, and California would remain American territory. The troops began to desert by the company, riding to the mountains to take raw money out of the water and the dirt. "Nearly all business ceased," Sherman wrote, "except that connected with gold."18 It soon became clear just how much business could be connected with gold. Well before the end of the year, men began trickling back to San Francisco to start businesses to serve the thousands who poured off ships that sailed in growing numbers through the Golden Gate. California was one of the most remote parts of the new American empire-as much as six months' voyage from the Atlantic coast around Cape Horn-yet already its residents could see that something enormous had started there, something that would have repercussions far beyond the mountains and the bay.
IN MARCH 1847, Merchant's Magazine Merchant's Magazine had published a survey of the commercial potential of the recently conquered territory of Upper California. "The Indians," the writer added, "have always said there were mines, but refused to give their locality" had published a survey of the commercial potential of the recently conquered territory of Upper California. "The Indians," the writer added, "have always said there were mines, but refused to give their locality"19 Cornelius Vanderbilt, like most New York businessmen, paid little attention to reports of secret Indian gold. He had other concerns. In 1848, he took over the presidency of the Elizabethport Ferry Company, now paying a 20 percent dividend (that is, $20 per share).*1 That same year, Oroondates Mauran died. On March 1, Vanderbilt bought Mauran's shares of their joint enterprises from his estate, buying full control of the Staten Island Ferry for $80,000, along with various parcels of real estate. That same year, Oroondates Mauran died. On March 1, Vanderbilt bought Mauran's shares of their joint enterprises from his estate, buying full control of the Staten Island Ferry for $80,000, along with various parcels of real estate.20 Before the end of the year, Vanderbilt developed his own health problems. He began to suffer heart palpitations. His heart started beating faster and faster, until "it was impossible to count its pulsations," Dr. Linsly recalled. "At first these attacks lasted a few hours only. They increased at last to twenty-four hours' duration, and in 1848 Dr. Edward Johnson and I were with him sometimes all night and he was a great sufferer." Given the state of medical knowledge, Linsly and Johnson likely made things worse. George Templeton Strong for one seriously considered homeopathy as an alternative to conventional medicine, "with emetics and cathartics and blistering and bleeding and all the horrors, the anticipation of which makes the doctor's entry give me such a sinking of spirit."21 Vanderbilt survived his beating heart, blistered skin, and bleeding veins, only to learn that something strange was going on in the world. Rumors circulated of gold in California-real gold, not a figment of Indian legends. The rumors quickly found their way to the stock exchange, where brokers sucked in all commercial information, good or bad. With his ear to the Street, or at least to Nelson Robinson's lips, Vanderbilt would have heard the stories early on. On December 5, 1848, President Polk formally announced the discovery in his annual written message to Congress. "The accounts of the abundance of gold in that country are of such an extraordinary character as would scarcely command belief," he reported, "were they not corroborated by the authentic reports of officers in the public service." Horace Greeley proclaimed in the New York Tribune New York Tribune, "We are on the brink of the Age of Gold."22 Many wealthy New Yorkers feared an age of inflation. "This California business worries me sadly," Strong wrote on January 25, 1849. "Suppose... the circulating medium of the world should suddenly be increased by a third or a quarter? Where should I be then? Of course, without any loss whatever, one-third or one-fourth poorer." On January 22, the venerable merchant James G. King voiced the same concerns to Baring Brothers, the esteemed London bankers. "The news from California... cannot fail to have much effect here upon prices, inducing speculation, &c.," he wrote from New York. "Meanwhile, there is quite an emigration from this country to that region, although the journey is long and perilous."
As King observed, greed, rather than fear, seized most Americans. One by one, Strong counted friends who organized partnerships of a dozen or more men to buy supplies, outfit a ship, and sail around Cape Horn for the Golden Gate. "The frenzy continues to increase every day," he observed on January 29. "It seems as if the Atlantic Coast was to be depopulated, such swarms of people are leaving it for the new El Dorado. It is the most remarkable emigration on record in the history of man since the days of the Crusades." In the twelve months following President Polk's announcement, no less than 762 vessels departed North American ports for California; by April 19, 1849, 226 would sail from New York alone, carrying nearly twenty thousand people.23 The calculation in Vanderbilt's set was much too cold for either fear or frenzy. Clearly this extraordinary development offered new opportunities. Daniel Allen seems to have concocted the group's first gold-rush scheme. On February 2, he convened a meeting of twenty-one men, including himself, to organize the California Navigation Company of New York. Vanderbilt attended, as did nearly his entire circle, including Drew, Jacob Vanderbilt, shipbuilder Jeremiah Simonson, steam-engine manufacturer Theodosius F. Secor, Staten Islander Daniel Van Duzer, Allen's brother William, and Vanderbilt's son Billy. They paid in a total capital of $21,630, divided into twenty-one shares. With this sum they purchased a schooner, the James L. Day James L. Day, and built a seventy-foot steamboat named Sacramento Sacramento. The completed steamer was cut into three pieces and placed on the schooner; they planned to have it reassembled in San Francisco, in order to steam between that port and the Sacramento River landings that served the diggings.
It was an ingenious plan, though it followed the model of many small emigration companies. For example, the agreement obliged each of the shareholders to serve as a crewman on the schooner and steamboat or provide a substitute. Vanderbilt had no intention of going, but he thought the expedition offered a suitable start in life for his disappointing son, Cornelius Jeremiah, now eighteen years old. On March 4, 1849, Corneil (as he was called) shipped out under the billowing canvas of the James L. Day the James L. Day as it sailed out of New York Harbor, on a voyage that would change him forever. as it sailed out of New York Harbor, on a voyage that would change him forever.24 Did Vanderbilt stand on the dock and wave good-bye to his son? He gave little sign to his associates of sentimentality and his daughter Mary would recall his "ill-treatment" of Corneil at this time.25 Yet the day would come when he would quietly confess his concern, even his compassion, for the boy. Yet the day would come when he would quietly confess his concern, even his compassion, for the boy.
In business, his mind was occupied by larger matters than his single share in the California Navigation Company. At each stage of his career, he had seized control of the most important channel of transportation in the young country's growing economy. Now tens of thousands proved desperate to travel to San Francisco, an enormous journey that commanded equally enormous fares. If he were to enter this market, he faced fierce competition from both familiar and unfamiliar rivals.
Two men-two utterly contradictory men-stood in his way, thanks to a confluence of forces so unusual as to verge on the bizarre. Long before anyone had heard of Sutter's mill, George Law, the canal contractor, and William H. Aspinwall, a merchant at the pinnacle of New York society had joined with the federal government and a pair of political fixers to establish steamship lines to the Pacific coast. Purely by coincidence, they put their first ships in place just as the gold rush began.
The project originated, in a sense, with a slogan: "Fifty-four forty or fight," battle cry of expansionist James K. Polk in the presidential election of 1844. He came into office determined to annex Oregon, a task he completed in 1846. The next question was how to establish mail service to this distant territory, separated from the organized states by thousands of miles of wilderness. A glance at the map suggested the sea, with a land crossing at the narrowest point in Central America, across the Isthmus of Panama.
But who would pay for such a line? Who would operate it? This was the golden age of laissez-faire Democrats who believed in competitive private enterprise rather than government rewards for a favored few. In 1846, for example, President Polk vetoed a bill to improve harbors and river navigation, calling it an inappropriate and extravagant use of federal money. Unfortunately, businessmen saw no profit in sailing thousands of miles to carry a handful of letters for a few thousand settlers; maintaining a strong link to the Pacific was a matter of national, not private, interest. But there was no public institution capable of carrying out the massive operation. With the extremely important exception of the Post Office, the federal government boasted only a few hundred civilian employees, and played a less active role in the economy than many states. Jacksonian Democrats faced a conflict between their laissez-faire dogma and their territorial expansionism. Expansionism won. Polk's Democratic administration embraced Whig notions as Washington embarked on a scheme to subsidize private enterprise on an unprecedented scale.26 Congress and the State Department prepared the way. In 1846, the South American republic of New Granada (later called Colombia) agreed to a treaty that guaranteed Americans free and safe passage across its province of Panama. Congress passed legislation that offered public funds for private carriers to establish a line to the Pacific coast. In 1847, it directed that the contract for the Atlantic passage (between New York, New Orleans, Havana, and the Panamanian port of Chagres) be given to "Colonel" Albert G. Sloo; the contract for the Pacific (from Panama to points in California and Oregon) went to Arnold Harris.27 These were curious choices. Harris was a resident of Nashville and Sloo of Cincinnati-cities not generally thought of as ocean ports. Rather, the two men represented a new creature in American life, at least at the federal level: they were "dummies." In some cases, dummies served as front men for other parties; more often, they were political connivers who used their contacts to obtain government privileges which they had no means-or intention-of using themselves, but promptly sold to real entrepreneurs. On August 17, Sloo essentially sold his contract to a group headed by George Law (including Marshall O. Roberts, Prosper M. Wet-more, Robert C. Wetmore, and Edwin Croswell). The federal government would pay these gentlemen $290,000 a year in return for two steamship voyages per month to Chagres. From there the mail would be carried by canoe and mule over the isthmus to the city of Panama, where it would be taken by steamships constructed by William H. Aspinwall, the merchant who bought the Pacific contract from Harris on November 19, 1847, three days after he had received it. Aspinwall would be paid $14,510 per voyage, or $348,250 per year, for his services. In some respects, these deals validated the Jacksonian critique of government largesse, offering a foreshadowing of the corruption that would creep into government in the aftermath of the Mexican War.28 Law's role in this contract-flipping subsidy speculation did not exactly shock political insiders. With his large, blunt head, his thick, wavy hair piled above overhanging brows, hard eyes, and a long, heavy nose, he resembled nothing so much as a prizefighter-and he spoke like one, too. "I ain't a-going to give you the money today," he snapped on one occasion, with regard to a disputed bill. "I have nothing to do with that 'ere account. It belongs to the company to pay." The Mercantile Agency, that mouthpiece of establishment opinion, later observed, "He is reported to be sharp & over-reaching in his transactions & dealt with accordingly.... Knows how to take care of his money but [has] little regard for the feelings or interests of others."29 Law, of course, had defeated Vanderbilt in the famed steamboat race of 1847; but it was conniving rather than racing that defined his career. As a contractor on the Croton aqueduct and other projects, Law had learned the craft of lobbying-or simply bribing-public officeholders. He also knew how to arrange deals. With such talents, he easily gathered more highly esteemed businessmen-notably Marshall Roberts and the Wetmores-to form the United States Mail Steamship Company to build and run the five steamships demanded by his contract with the federal government.30 Aspinwall's role, on the other hand, surprised many. Born in 1807 into a family of prominent New York merchants, he rose to become senior partner of the esteemed firm of Howland & Aspinwall. Unlike Law or Vanderbilt, he received countless callers each New Year's Day at his richly appointed house. "Made a very satisfactory call there," recorded the snooty Strong on January 1, 1846. "His arrangements, by the by, house and furniture both, are really magnificent." Aspinwall was, Strong later wrote, "a merchant prince and one of our first citizens."31 Aspinwall's overseas mercantile business revealed possibilities that his Manhattan-bound peers did not see. In 1847, with the federal subsidy in hand, he created the Pacific Mail Steamship Company to operate his half of the mail route. His corporation outpaced Law's U.S. Mail, building larger ships faster, and positioned its first vessels on the Pacific just as the torrent to California began to gush. When the scope of the rush became clear, Aspinwall helped organize the Panama Railroad to span the isthmus. Ticket buyers besieged the office of Pacific Mail as it continued to bank its huge federal subsidy. It is worth noting that, despite the romantic image of the gold-rush wagon train and dust-covered stagecoach, the steamship lines provided the primary means of travel and commerce between California and the East. They immediately became a very big business, one that would continue for two decades.32 To seize that business for himself, Cornelius Vanderbilt conceived perhaps the boldest plan of his entire career. It would require the help of his old associates, his family, the mercantile establishment, and still others. It would require his own political fixer-not as a dummy, but as an insider who could negotiate as an equal with officeholders at home and abroad. He planned to divert that golden torrent from Panama to a channel of his own making: a canal across the republic of Nicaragua.
Vanderbilt never revealed where his idea originated. Others had proposed much the same plan before. Louis Napoleon Bonaparte (Emperor Napoleon I's nephew) had championed a canal a few years earlier, though escape from imprisonment, the tumult of a revolution, and winning election to the French presidency had left him otherwise occupied. In the waning days of the Mexican War, even before gold had been discovered in California, American newspapers and magazines had frequently reported on a possible canal and transit route across Nicaragua.33 As was often pointed out, there seemed to be an obvious route, following natural waterways: up the San Juan River, which ran some 120 miles from the Atlantic up to Lake Nicaragua; across the lake's 110-mile width; then down a short twelve-mile land excavation to the Pacific, or a channel northwest through Lake Managua. As was often pointed out, there seemed to be an obvious route, following natural waterways: up the San Juan River, which ran some 120 miles from the Atlantic up to Lake Nicaragua; across the lake's 110-mile width; then down a short twelve-mile land excavation to the Pacific, or a channel northwest through Lake Managua.34 But perhaps something deeper than maps and magazine articles drove his thinking. Vanderbilt had yet to hit upon a grand work he believed he was meant to build; no line of steamboats, not even the Stonington Railroad, loomed large enough. But an interoceanic canal-that would be a monument to enshrine his name in glory forever.
VANDERBILT'S SON CORNEIL first saw the Golden Gate from sea. The name (which predated the gold rush) appeared obvious to anyone sailing the rugged coast to where it suddenly broke open to reveal the great bay-"the glory of the western world," as one man called it. Sailing through the Gate, the thin and sickly eighteen-year-old passed between mountains that rose straight up from the water, "the little stream tumbling from the rocks among the green wood," in the words of a traveler, "and the wild game standing out from the cliffs or frolicking among the brush, and the seal barking in the water." first saw the Golden Gate from sea. The name (which predated the gold rush) appeared obvious to anyone sailing the rugged coast to where it suddenly broke open to reveal the great bay-"the glory of the western world," as one man called it. Sailing through the Gate, the thin and sickly eighteen-year-old passed between mountains that rose straight up from the water, "the little stream tumbling from the rocks among the green wood," in the words of a traveler, "and the wild game standing out from the cliffs or frolicking among the brush, and the seal barking in the water."35 It was a fittingly grand entrance to the greatest treasure trove in history. It was a fittingly grand entrance to the greatest treasure trove in history.
For five months, Corneil had blistered his hands as a crewman on the James L. Day James L. Day, sailing down tropical coasts, crashing through the titanic storms of Cape Horn, sailing up the Chilean shore. Two of the twenty-one aboard had died. Finally, on August 5, 1849, Captain John Van Pelt gave the order to drop anchor at San Francisco. Where once had been a sleepy village, Corneil now saw bedlam. Workmen milled about the shore, leveling the countless sand hills, dumping the dust and dirt into the bay, pounding in pilings and planking down piers. Tents pimpled the flats all about the town, tents of all descriptions-canvas, blankets, and branches stripped from trees. Some served as homes and some as shops, with bags of coffee, barrels of foodstuffs, and stacks of bricks and lumber on display. Men, mules, horses, and carts lumbered up and down ungraded dirt streets, fighting through clouds of dust-or, after heavy rains, through quicksand that sucked horses down to their ears, along with the drays they pulled.
And everywhere Corneil saw men-almost only men-all eager to head for the mines or make money from those who were going. At the time the James L. Day James L. Day sailed through the Gate, one resident counted some two hundred ships in the bay, from virtually every nation with a port on the Pacific. Russians and Australians, Peruvian Indians and Indian Brahmins, Japanese, Mexicans, and Maori, all passed up and down on urgent business. The town was "crowded with human beings from every corner of the universe and of every tongue-all excited and busy, plotting, speaking, working, buying and selling town lots, and beach and water lots, shiploads of every kind of assorted merchandise, the ships themselves, if they could." sailed through the Gate, one resident counted some two hundred ships in the bay, from virtually every nation with a port on the Pacific. Russians and Australians, Peruvian Indians and Indian Brahmins, Japanese, Mexicans, and Maori, all passed up and down on urgent business. The town was "crowded with human beings from every corner of the universe and of every tongue-all excited and busy, plotting, speaking, working, buying and selling town lots, and beach and water lots, shiploads of every kind of assorted merchandise, the ships themselves, if they could."36 No sooner had the Day Day pulled into port and the crew begun to unload the disassembled hull of the steamboat than Corneil deserted. Three others abandoned ship with him. He slipped into a town populated largely by young men awash in money with no authorities to inhibit their impulses. Making his way past the tents and shanties into the city's center, he discovered the finest buildings in San Francisco: "Gambling saloons, glittering like fairy palaces," as a citizen wrote a few years later, "studding nearly all sides of the plaza, and every street in its neighborhood.... Monte, faro, roulette, rondo, rouge et noir and vingt-[et-]un, were the games chiefly played. In the larger saloons, beautiful and well-dressed women dealt out the cards or turned the roulette wheel, while lascivious pictures hung on the walls. A band of music and numberless blazing lamps gave animation and a feeling of joyous rapture to the scene." All night the gambling went on, with runaway sailors and runaway slaves elbowing between wealthy merchants and ministers of the gospel, all drinking, eating, smoking, gaming. pulled into port and the crew begun to unload the disassembled hull of the steamboat than Corneil deserted. Three others abandoned ship with him. He slipped into a town populated largely by young men awash in money with no authorities to inhibit their impulses. Making his way past the tents and shanties into the city's center, he discovered the finest buildings in San Francisco: "Gambling saloons, glittering like fairy palaces," as a citizen wrote a few years later, "studding nearly all sides of the plaza, and every street in its neighborhood.... Monte, faro, roulette, rondo, rouge et noir and vingt-[et-]un, were the games chiefly played. In the larger saloons, beautiful and well-dressed women dealt out the cards or turned the roulette wheel, while lascivious pictures hung on the walls. A band of music and numberless blazing lamps gave animation and a feeling of joyous rapture to the scene." All night the gambling went on, with runaway sailors and runaway slaves elbowing between wealthy merchants and ministers of the gospel, all drinking, eating, smoking, gaming.
Gold was everywhere, in solid lumps or bags of dust, thrown about carelessly, measured indifferently, won and lost at the tables with stunning rapidity (as much as $20,000 riding on a hand, it was said). And with the money and the revelry came violence-a flashing knife over a contemptuous word, the crack of a revolver over an attempted theft, a flurry of fistfights and formal duels. "And everybody made money," "And everybody made money," wrote our San Franciscan, wrote our San Franciscan, "and was suddenly growing rich." "and was suddenly growing rich."
It is difficult to know how all this affected young Corneil, because we know so little of his childhood-just a fleeting image of a furtive second son, overshadowed by his overbearing father, occasionally seized by epileptic fits. But he landed in this most impressive place at an early and impressionable age. By every indication, the San Francisco of 1849 stamped him with its image-a city of gamblers and speculators, confidence men and killers. Cornelius J. Vanderbilt stood in the saloons that remained open all night, swam through cigar smoke and shouted over blaring music, smiled at female card dealers and calmed belligerent miners, learning to talk, learning to charm.
The fever of the place infected even Captain Van Pelt of the James L. Day James L. Day. He and his crew reassembled the steamboat Sacramento Sacramento and started to run it up the eponymous river on September 14; meanwhile his second-in-command, James S. Nash, took command of the schooner and entered the carrying trade on the bay. And they made money, and suddenly grew rich. Within two months, the and started to run it up the eponymous river on September 14; meanwhile his second-in-command, James S. Nash, took command of the schooner and entered the carrying trade on the bay. And they made money, and suddenly grew rich. Within two months, the Sacramento Sacramento earned a profit of $40,000, and the earned a profit of $40,000, and the James L. Day James L. Day another $10,000. Unfortunately for Vanderbilt and the other owners, Captain Van Pelt allied himself with a San Franciscan, James H. Fisk of Turner, Fisk & Co., who saw no reason to remit such earnings all the way across the continent. Fisk and Van Pelt decided to auction off the two boats, even though they had no authority to do so. They named a time just before the departure of a Pacific Mail steamship from San Francisco, an hour when the city's merchants were frantically busy with correspondence and consignments of gold for the Atlantic coast. Then Fisk held the auction fifteen minutes ahead of schedule. With no other bidders, he bought the boats himself at ridiculously low prices. He soon sold them, winning a very large profit. another $10,000. Unfortunately for Vanderbilt and the other owners, Captain Van Pelt allied himself with a San Franciscan, James H. Fisk of Turner, Fisk & Co., who saw no reason to remit such earnings all the way across the continent. Fisk and Van Pelt decided to auction off the two boats, even though they had no authority to do so. They named a time just before the departure of a Pacific Mail steamship from San Francisco, an hour when the city's merchants were frantically busy with correspondence and consignments of gold for the Atlantic coast. Then Fisk held the auction fifteen minutes ahead of schedule. With no other bidders, he bought the boats himself at ridiculously low prices. He soon sold them, winning a very large profit.
Corneil, on the other hand, did not do so well. Not long after abandoning ship, he ran out of money, most likely at the tables, and issued a draft on his father-a draft his father refused to honor.37 But it was the excitement rather than the bad debt that endured in his memory. It is impossible to contemplate the Corneil of later years without imagining that he carried with him those heady days of utter abandonment and strained to his utmost to recapture them. "Happy the man who can tell of those things which he saw and perhaps himself did, at San Francisco at that time," wrote our witness. San Francisco would haunt Corneil to the end. But it was the excitement rather than the bad debt that endured in his memory. It is impossible to contemplate the Corneil of later years without imagining that he carried with him those heady days of utter abandonment and strained to his utmost to recapture them. "Happy the man who can tell of those things which he saw and perhaps himself did, at San Francisco at that time," wrote our witness. San Francisco would haunt Corneil to the end.
THEY CALLED HIM "INDIANA WHITE," though the records of the House of Representatives name him Joseph L. White. Curiously, his contemporaries never described his physical appearance; he seems to have cut an eminently forgettable figure. It was his voice they remarked on, his gift for rhetorical explosions and diamond-cutting logic. In 1840 he emerged from an obscure youth in upstate New York, where he had studied law, to become a powerful speaker in Indiana for presidential candidate William Henry Harrison. White was "the most fascinating orator that ever mounted a stump in the state," in the words of one newspaper. "Probably since stump speaking was invented no effort was ever received with such unqualified and extravagant delight, not merely by the 'roughs,' who could appreciate its 'hits,' but by cultivated men, who could penetrate its arguments." He won election to the House that year as a Whig. In Washington he withered, much to everyone's surprise. He possessed "a genius," the same writer observed, "that only lacked the balance of character to be one of the most powerful men in the nation." Perhaps, in his only term in Congress, his unbalance began to reveal itself. though the records of the House of Representatives name him Joseph L. White. Curiously, his contemporaries never described his physical appearance; he seems to have cut an eminently forgettable figure. It was his voice they remarked on, his gift for rhetorical explosions and diamond-cutting logic. In 1840 he emerged from an obscure youth in upstate New York, where he had studied law, to become a powerful speaker in Indiana for presidential candidate William Henry Harrison. White was "the most fascinating orator that ever mounted a stump in the state," in the words of one newspaper. "Probably since stump speaking was invented no effort was ever received with such unqualified and extravagant delight, not merely by the 'roughs,' who could appreciate its 'hits,' but by cultivated men, who could penetrate its arguments." He won election to the House that year as a Whig. In Washington he withered, much to everyone's surprise. He possessed "a genius," the same writer observed, "that only lacked the balance of character to be one of the most powerful men in the nation." Perhaps, in his only term in Congress, his unbalance began to reveal itself.
Still, White was smart, in every sense that word carried in 1843, when he moved to New York and started to practice law. "He was one of the most social and genial men I have ever met, and a most engaging and eloquent conversationalist," remarked one New Yorker. "His apropos speeches, his witty and good-humored repartees, were inimitable." He emerges from these accounts as a highly confident man of sharp wit, a sophisticated and well-connected charmer, a master of both courtroom histrionics and backroom negotiations. As a former politician, he also had ties to the new Whig administration of Zachary Taylor, elected president in 1848. He was, in short, a fixer.38 How and when Vanderbilt first approached White remains uncertain, though two dates suggest the moment when they joined in the Nicaragua canal project. On March 24, 1849, Vanderbilt resigned the presidency of the Elizabethport Ferry Company, as if to concentrate his efforts on something else. On March 29, White sent a letter from a hotel in Washington, D.C., to the new secretary of state, former Delaware senator John M. Clayton. "I have come from New York New York expressly to see you expressly to see you on business of importance on business of importance, & which admits of no delay," he wrote. "Will you oblige me by writing a note, informing me at what hour to day or tomorrow I can see you privately.... privately.... I have come on behalf of I have come on behalf of seven seven New York gentlemen & on their errand. I know something of your engagements, & would not press for an interview under New York gentlemen & on their errand. I know something of your engagements, & would not press for an interview under ordinary circumstances ordinary circumstances."39 Clearly White was an emphatic emphatic man, impressed with his own importance. In this case, though, he understood his audience. Back in 1835, Senator Clayton had sponsored a bill to encourage Americans to dig a canal across Nicaragua. Now he came into office as secretary of state with U.S. territory on the Pacific, massive quantities of gold coming out of California, and tens of thousands of Americans migrating there. The canal idea had grown dramatically more important for American foreign policy. Clayton listened with great interest as White told him that Vanderbilt had organized the American Atlantic & Pacific Ship Canal Company, and had dispatched David White (Joseph's brother) to Nicaragua to negotiate with the government there. man, impressed with his own importance. In this case, though, he understood his audience. Back in 1835, Senator Clayton had sponsored a bill to encourage Americans to dig a canal across Nicaragua. Now he came into office as secretary of state with U.S. territory on the Pacific, massive quantities of gold coming out of California, and tens of thousands of Americans migrating there. The canal idea had grown dramatically more important for American foreign policy. Clayton listened with great interest as White told him that Vanderbilt had organized the American Atlantic & Pacific Ship Canal Company, and had dispatched David White (Joseph's brother) to Nicaragua to negotiate with the government there.
Not many days later, Clayton appointed Ephraim G. Squier the charge d'affaires to Guatemala (the chief diplomatic post in Central America). "Considering the motive which influenced you to make this appointment so speedily," so speedily," Joseph White wrote to Clayton on April 3, "those with whom I am associated & myself... express their & my very sincere acknowledgments to you; and I beg you to examine this Joseph White wrote to Clayton on April 3, "those with whom I am associated & myself... express their & my very sincere acknowledgments to you; and I beg you to examine this written assurance, that under no possible combination of circumstances will I fail to reciprocate this great favor in any mode which you may designate written assurance, that under no possible combination of circumstances will I fail to reciprocate this great favor in any mode which you may designate."
This curious letter reveals White as not only emphatic, but insinuating as well-not to mention vain. He assumed Squier's appointment had been a favor, to be repaid on demand. It was an assumption that came naturally to the scheming brain of a political fixer. Clayton, by contrast, was a very high-minded man, focused not on rewarding friends but on public policy. Ignorant of this, White blustered on, listing orders that should be given to Squier to assist in the canal intrigues-"instruct him to avoid my brother to avoid my brother (now in Nicaragua) in securing the grant"-and assuring Clayton that the company's tolls would discriminate against the British in favor of American ships. (now in Nicaragua) in securing the grant"-and assuring Clayton that the company's tolls would discriminate against the British in favor of American ships.
If he thought this would prove appealing, he was mistaken. Clayton believed that any canal must be neutral, or it would lead to "more bloody and expensive wars than the struggle for Gibraltar had caused to England and Spain." Yet he seems to have tolerated White's insinuations in order to accomplish the larger goal. As he wrote in his instructions to Squier, "A passage across the isthmus may be indispensable to maintain the relations between the United States and their new territories on the Pacific; and a canal from ocean to ocean might, and probably would, empty much of the treasures of the Pacific into the lap of this country." Clayton thought that the canal was essential to the national interest, but he also knew that Congress would never fund its construction. He needed Vanderbilt and his backers as much as they needed him.40 Joseph White happened to reveal to Clayton the names of those backers, who have previously escaped historical notice. The original organizers of the canal company included Cornelius Vanderbilt, of course, along with White and his brother David, merchants Nathaniel H. Wolfe and Edmund H. Miller, and three Wall Street firms: Livingston, Wells & Co.; Hoyt & Hunt; and Bowden, Groesbeck & Bridgham. The last-named firm suggests the disguised involvement of Daniel Drew, for David Groesbeck was one of Drew's personal brokers and close allies.41 They were not the only American businessmen seeking the rights to a crossing in Nicaragua. No sooner had Squier arrived there than he learned that another firm claimed to have signed an agreement with the government that granted them monopoly rights for a canal or railroad across the isthmus.42 Vanderbilt's canal project had scarcely begun, and already it was mired in the political jungles of Central America. Vanderbilt's canal project had scarcely begun, and already it was mired in the political jungles of Central America.
ON AUGUST 26, DAVID WHITE signed a contract with the Nicaraguan government. It gave the exclusive right to build a canal to Vanderbilt's American Atlantic & Pacific Ship Canal Company in return for $10,000 a year, 20 percent of the annual profits, and a stake in the business. "It will also be observed that the grant is not only for a canal, but for a rail or carriage road," Ephraim Squier wrote to Clayton, "a provision which will enable the company to open a route at once across this isthmus, more rapid, easier, cheaper, safer, and more pleasant, than that by Panama. In distance, this route will save 300 miles on the Atlantic and upwards of 800 on the Pacific." signed a contract with the Nicaraguan government. It gave the exclusive right to build a canal to Vanderbilt's American Atlantic & Pacific Ship Canal Company in return for $10,000 a year, 20 percent of the annual profits, and a stake in the business. "It will also be observed that the grant is not only for a canal, but for a rail or carriage road," Ephraim Squier wrote to Clayton, "a provision which will enable the company to open a route at once across this isthmus, more rapid, easier, cheaper, safer, and more pleasant, than that by Panama. In distance, this route will save 300 miles on the Atlantic and upwards of 800 on the Pacific."43 For Vanderbilt, the transit route promised to make his Nicaragua adventure profitable during the prolonged canal construction by allowing him to carry passengers across the isthmus. But he may not have realized how lucky he was to get any contract at all. White negotiated it during a rare moment of peace and unity in a country whose divisions would plague Vanderbilt in ways he scarcely imagined in 1849.
The Spanish built cities in Nicaragua a century before Squanto taught the Pilgrims to plant corn, but they left an inheritance of perpetual civil war. When Spain's empire collapsed in 1821, Nicaragua briefly fell under Mexican rule; then it joined the United Provinces of Central America from 1823 to 1838, when it finally assumed full sovereignty. Independence, unfortunately, brought little sense of national cohesion. Unlike virtually every other former Spanish province, it lacked a single metropolitan center. Two cities-Leon and Granada-fought for dominance. As in other Latin American nations, two parties, generically known as the Liberals and the Conservatives,*2 dominated politics, but here they were identified with the two cities: the Liberals made a bastion of Leon, while the Conservatives were entrenched in Granada. The cities' patricians waged war without end, fighting less out of ideology than geographical rivalry, commanding armies of unmotivated Indians and mestizos who were dragooned out of the sparse population of only 275,000 or so. In 1849 alone, no less than three men declared themselves the supreme director, as the Nicaraguan chief executive was called. "Nothing exists but our misfortune," declared a government report. "One man fights another, one family opposes another, one town attacks another, all with such a variety of different interests that we will never be able to form a state." dominated politics, but here they were identified with the two cities: the Liberals made a bastion of Leon, while the Conservatives were entrenched in Granada. The cities' patricians waged war without end, fighting less out of ideology than geographical rivalry, commanding armies of unmotivated Indians and mestizos who were dragooned out of the sparse population of only 275,000 or so. In 1849 alone, no less than three men declared themselves the supreme director, as the Nicaraguan chief executive was called. "Nothing exists but our misfortune," declared a government report. "One man fights another, one family opposes another, one town attacks another, all with such a variety of different interests that we will never be able to form a state."44 Fortunately for Vanderbilt, a popular uprising united Nicaragua's warring elite in 1849. They joined forces to suppress the rebellion, and executed its bandit leader a month before they signed the canal contract (superseding the agreement with the rival company, which had been negotiated before the settlement of the civil war). The unity government embraced Vanderbilt's proposal; for centuries, Nicaraguans had dreamed of a canal that would bring the riches of the world through their borders. "Where is... the patriot, the wise man," asked one Nicaraguan newspaper, "who does not want to see this productive project carried out?" Enthusiasm for the North Americans swept the country, as Squier arranged a treaty that promised U.S. protection to Nicaragua.45 The enthusiasm was mutual. "Certain American citizens, whose judgment, energy, and pecuniary responsibility need no better voucher than the designation of 'Cornelius Vanderbilt and others'... have chosen that [canal route] which follows the river St. Juan and crosses the Nicaragua lake," rejoiced the United States Magazine and Democratic Review United States Magazine and Democratic Review, an influential Democratic Party journal. "But," it added, "suddenly there arises a lion in the path-that is to say, a sort of lion."
Yes, a lion. Vanderbilt had slipped through the shoals of Nicaragua's civil wars through sheer good luck, only to confront the opposition of America's most persistent European rival: Great Britain. As soon as he secured his contract with Nicaragua, the British consul in New York published a warning, forbidding him to begin work on the canal.46 What had begun as a simple business venture was fast becoming the epicenter of dangerous tensions between Washington and London. If ever Vanderbilt needed the services of Joseph White, it would be now. The Anglo-American conflict over Nicaragua would require intensive diplomacy at the highest levels, and more than once it would threaten to descend into war. What had begun as a simple business venture was fast becoming the epicenter of dangerous tensions between Washington and London. If ever Vanderbilt needed the services of Joseph White, it would be now. The Anglo-American conflict over Nicaragua would require intensive diplomacy at the highest levels, and more than once it would threaten to descend into war.
Ever since the War of Independence, a significant proportion of Americans had nursed a resentment of Britain as the monarchical antithesis of republican ideals. More to the point, tensions between the two nations had flared over their influence in Latin America after the collapse of the Spanish empire. Despite the promulgation of the Monroe Doctrine in 1823, Britain had largely filled the vacuum left by Spain in Central America. Leapfrogging from the colonies of Jamaica and British Honduras (later Belize), English merchants had come to dominate the region's trade. In 1841, the British had extended their sway by proclaiming a protectorate over the "kingdom" of the Miskito (corrupted to "Mosquito" by the British) Indians on Nicaragua's sparsely populated Atlantic coast. The Nicaraguans regarded it as an insult to their sovereignty-an insult the British had compounded in 1848, when they had occupied San Juan del Norte and renamed it Greytown to block any canal or transit route. In the United States, where the burning of Washington in the War of 1812 remained a living memory, the sight of the Royal Navy guarding the mouth of the San Juan River looked like an act of war. "Better by far to lose California and Oregon," the United States Magazine and Democratic Review United States Magazine and Democratic Review wrote, than "Britain or any other great power should... stand in the way between us and our own." wrote, than "Britain or any other great power should... stand in the way between us and our own."47 Not all Americans breathed fire and steel. Secretary of State Clayton, for one, wanted an accommodation. The canal was a strategic imperative, he wrote to Abbott Lawrence, the United States minister to Great Britain. "Without some such ship navigation, it may be difficult, at some future period, to maintain our government over California and Oregon." He instructed Lawrence to offer a neutral canal, open to all on equal terms.48 Clayton's initiative was complicated by a common problem in nineteenth-century global diplomacy: the independence of local agents, who operated for weeks or months without instructions from their capitals. The seizure of San Juan del Norte (to be called Greytown hereafter) was the work of the intrusive Frederick Chatfield, Britain's man in Central America since 1834, who worried that Nicaragua would be "overrun by American adventurers." He recommended that the entire country be put under "a protectorate... favorable to British interests."49 Lord Palmerston, the foreign secretary, took a dim view of the often-belligerent United States and generally supported Chatfield. But the rest of the British government feared the consequences of being too belligerent over too little of consequence. Prime Minister Lord John Russell declared that the Mosquito protectorate was "not worth a barrel of gunpowder on either side." Lord Palmerston, the foreign secretary, took a dim view of the often-belligerent United States and generally supported Chatfield. But the rest of the British government feared the consequences of being too belligerent over too little of consequence. Prime Minister Lord John Russell declared that the Mosquito protectorate was "not worth a barrel of gunpowder on either side."50 London responded to Clayton's overtures by sending a new minister, Sir Henry Lytton Bulwer, who presented his credentials in Washington at the end of November 1849. Palmerston had given him the mission of making a comprehensive settlement. He was to agree to an American-built canal in Nicaragua, but without ceding the Mosquito protectorate. The sly and polished Bulwer would prove more than equal to the task.
Joseph White checked into the Thomas Irving House in Washington just as Bulwer arrived in the capital. With the future of the canal company resting on these negotiations, he called on the new British minister. Bulwer, by definition, was a man of the world; he realized that he could take advantage of White's vanity and taste for intrigue. "In America nothing is done with the Govt.," Bulwer wrote. "One must influence the people who influence the Govt." He subtly cultivated White, in part by letting White cultivate him him. Knowing the huge cost of building a canal, Bulwer dangled the bait of British capitalists, hinting that they wanted to buy a large stake once a treaty had been signed. White abruptly abandoned his anglophobic rhetoric of the year before. Why, he and his associates had been surprised that Nicaragua should give the United States special advantages over Britain. The canal contract would be amended at once!51 As 1850 began, Clayton and Bulwer threw themselves into crafting a politically viable agreement. The American public would not accept a permanent British presence on the Mosquito Coast, and with the South in an uproar over California's request to be admitted to the Union as a free state, President Taylor could not afford to look weak. But imperial pride would not allow the British to recede. "Sir H. L. Bulwer & I am again at variance," Clayton wrote on February 10. "The Nicaragua question... may may be settled-but will not be be settled-but will not be unless unless he agrees to abandon the Mosquito claim. I have many forebodings about this matter-yet I shall try hard to settle it." he agrees to abandon the Mosquito claim. I have many forebodings about this matter-yet I shall try hard to settle it."52 THE FATE OF THE CANAL depended on this intricate international statecraft, but Vanderbilt had little choice but to go ahead as he awaited the outcome. He threw himelf into the task of turning the American Atlantic & Pacific Ship Canal Company into a functioning corporation. For the moment, that required him to start up the transit business, the carrying of passengers across Nicaragua by steamboats on the San Juan River and Lake Nicaragua and a short carriage road to the Pacific. It was an integral aspect of the canal project (engineers and supplies had to be moved into the interior), but it also promised immediate profits once it was linked with a steamship line on both oceans. The demand for steamer berths from New York to San Francisco remained so high that the Pacific Mail and U.S. Mail Steamship companies began to compete against each other on both sides of Panama. Other lines were entering the fray as well. depended on this intricate international statecraft, but Vanderbilt had little choice but to go ahead as he awaited the outcome. He threw himelf into the task of turning the American Atlantic & Pacific Ship Canal Company into a functioning corporation. For the moment, that required him to start up the transit business, the carrying of passengers across Nicaragua by steamboats on the San Juan River and Lake Nicaragua and a short carriage road to the Pacific. It was an integral aspect of the canal project (engineers and supplies had to be moved into the interior), but it also promised immediate profits once it was linked with a steamship line on both oceans. The demand for steamer berths from New York to San Francisco remained so high that the Pacific Mail and U.S. Mail Steamship companies began to compete against each other on both sides of Panama. Other lines were entering the fray as well.53 On May 14, 1849, Vanderbilt had resigned the presidency of the Stonington Railroad, a step that reveals how central Nicaragua had become to his career.54 That year, as cholera swept New York, he attended to both the corporate and physical vessels of the canal company. He divided into 192 the shares held by the eight partners, for ease of trading. Then he went to the shipyard of his nephew Jeremiah Simonson, near Corlears Hook on the East River. That year, as cholera swept New York, he attended to both the corporate and physical vessels of the canal company. He divided into 192 the shares held by the eight partners, for ease of trading. Then he went to the shipyard of his nephew Jeremiah Simonson, near Corlears Hook on the East River.
Simonson had inherited the firm Bishop & Simonson, which now faced bankruptcy. According to rumors in the shipbuilding trade, its chief problem was the spendthrift ways of Vanderbilt's "prodigal" nephew. "He lives in first rate style," the Mercantile Agency observed, "keeps a fast horse and spends his money freely with his associates." When he asked for credit, lenders turned to Vanderbilt to cosign the notes. With Simonson's failure looming, Vanderbilt decided to purchase the shipyard, though he would leave it in the care of his nephew, who, for all his faults, knew how to build boats. Vanderbilt also sketched plans for an oceangoing steam ship. At some 1,200 tons, it would be one of the largest and fastest of its kind in the world. He would call it Prometheus Prometheus.55 His next step would be a firsthand inspection of the canal and transit route. At three o'clock in the afternoon on December 13, 1849, he boarded the steamship Crescent City Crescent City at Pier No. 2 on Manhattan's North River waterfront, accompanied by his brother Jacob and David White. It was a brisk winter day, yet thousands of spectators crowded onto the docks, even clambered aboard schooners and brigs moored in the slips. They came to witness the "singular sight," as the at Pier No. 2 on Manhattan's North River waterfront, accompanied by his brother Jacob and David White. It was a brisk winter day, yet thousands of spectators crowded onto the docks, even clambered aboard schooners and brigs moored in the slips. They came to witness the "singular sight," as the New York Herald New York Herald called it, of four steamships departing at the same time. Three of these enormous vessels-the called it, of four steamships departing at the same time. Three of these enormous vessels-the Crescent City Crescent City, the Ohio Ohio, and the Cherokee Cherokee-were headed for Chagres, Panama, carrying hundreds of California-bound passengers. The Vanderbilts and White had to fight a crowd on the gangway and the deck that loomed high above the pier, and push through "a large number of female friends of the passengers," as the Herald Herald observed, "promenading the decks, viewing the cabins, sitting around the stoves, or taking a last fond farewell, with a merry, ringing laugh, or with streaming eyes, according to the disposition of each." observed, "promenading the decks, viewing the cabins, sitting around the stoves, or taking a last fond farewell, with a merry, ringing laugh, or with streaming eyes, according to the disposition of each."56 Many women remained aboard as passengers when the crew let slip the hawsers that held the Crescent City Crescent City to the pier. "Going to California has ceased to be regarded as the formidable undertaking it once was," the reporter noted. On shore, fewer watchers waved hats and cheered as the multistory paddlewheels churned against the Hudson, smoke surging out of the great stacks that rose amidships between supplementary masts and rigging. To a businessman such as Vanderbilt, all this was telling. The very ordinariness of the event, the abundance of female passengers, and the fact that three steamships could be packed full of California passengers on the same day confirmed the size and endurance of the gold rush. It would not end soon. to the pier. "Going to California has ceased to be regarded as the formidable undertaking it once was," the reporter noted. On shore, fewer watchers waved hats and cheered as the multistory paddlewheels churned against the Hudson, smoke surging out of the great stacks that rose amidships between supplementary masts and rigging. To a businessman such as Vanderbilt, all this was telling. The very ordinariness of the event, the abundance of female passengers, and the fact that three steamships could be packed full of California passengers on the same day confirmed the size and endurance of the gold rush. It would not end soon.
Those steamships also revealed the fact that New York was the primary point of departure for voyages to San Francisco. Though far up the Atlantic coast from Panama, it was the most important city in the United States, easily reached by rail or steamboat from elsewhere in the Northeast. As one historian notes, New York had a "unique position as the national city-system's hub." Travelers to California came from across the settled states to New York to make their departure.57 It was inevitable that Vanderbilt should go to survey the route for himself. In nineteenth-century terms, he was a "practical" businessman who attended to technical details to organize and direct the operation. As the Crescent City Crescent City sailed south, he would observe weather, currents, and other aspects that could add or subtract days from each voyage. But he had a specific task at hand: to fetch the newly purchased sailed south, he would observe weather, currents, and other aspects that could add or subtract days from each voyage. But he had a specific task at hand: to fetch the newly purchased Orus Orus, a river steamer now in Panama, tow it to Greytown, and pilot it up the San Juan River. More intriguing than his task was his choice of company. Along with his brother and David White, he rode with the man who owned the Crescent City Crescent City, one Charles Morgan.
At fifty-four, Morgan was a year younger than Vanderbilt, though with his thinning hair, wrinkled jowl, and bulbous nose that hung like a ripe pear between two large, cautious eyes, he made a decidedly poor contrast with his tall, athletic guest. In 1809, at the age of fourteen, Morgan had moved to New York from Long Island and had gone to work as a clerk. Ten years later, he had accumulated enough money to buy a share in a sailing ship; he eventually bought stakes in eighteen packet ships on ten lines, as well as some fifteen merchant vessels that plied European and Caribbean ports. He had moved into coastal steamers through James P. Allaire, Vanderbilt's own tutor in steamboats, and established a line on the Gulf of Mexico upon the annexation of Texas. He purchased Theodosius F. Secor's machine works in New York, built his own steamships, and now competed in the California traffic, making him a potential rival.58 But Morgan's position also made him a potential ally and investor. Indeed, his biographer believes he was one of the original partners in the canal company-unlikely, but possible, since he could have disguised his share. In the small world of New York's steamboat entrepreneurs, he and Vanderbilt surely knew each other well. Unfortunately for their planned visit to Nicaragua, four days out of New York the cross rail supporting the engine of the Crescent City Crescent City snapped. Powerless, the ship drifted on the ocean swells until a brig, the snapped. Powerless, the ship drifted on the ocean swells until a brig, the Roscoe Roscoe, happened by. The Roscoe Roscoe took on board Morgan and the Vanderbilt party and carried them to Havana. On December 30, Morgan took a sailing ship to New Orleans, and the Vanderbilt brothers boarded the took on board Morgan and the Vanderbilt party and carried them to Havana. On December 30, Morgan took a sailing ship to New Orleans, and the Vanderbilt brothers boarded the Ohio Ohio to return to New York, abandoning their journey to Nicaragua. White took passage to Chagres to fetch the to return to New York, abandoning their journey to Nicaragua. White took passage to Chagres to fetch the Orus. Orus.59 If Vanderbilt failed at one task, he succeeded in another. In his search for investors in the canal, he appears to have aroused Morgan's interest. Certainly the two respected each other as businessmen. Morgan shared Vanderbilt's instinctive understanding of when to take a risk, as well as his discipline and caution. (Like Daniel Drew, Morgan was highly reticent about his business, and committed little to paper that would survive his lifetime.)60 The would-be rival was becoming a friend. If only Vanderbilt knew how costly that friend's ultimate betrayal would prove to be. The would-be rival was becoming a friend. If only Vanderbilt knew how costly that friend's ultimate betrayal would prove to be.
EVEN AS JOSEPH L. WHITE told lies to Sir Henry Lytton Bulwer, Vanderbilt searched out the truth for Governor Hamilton Fish. On his return to New York from Havana, he had traveled to Albany on mysterious business-though most of what he did was mysterious, for secrecy was one of the highest business virtues. But secrecy was quite a different thing from falsehood. Vanderbilt continued to cultivate his reputation as a man of his word, even if his words were few. This aspect of his character helps explain why New York's social elite continued to work with him, even seek him out, though they would never invite him to their houses for dinner. Austere and offensive Vanderbilt may have been-benevolent and polished he was not-but Fish knew that he was honest. And so, when the Commodore entered Fish's office on that mysterious errand, the governor brought up another, rather delicate, matter. told lies to Sir Henry Lytton Bulwer, Vanderbilt searched out the truth for Governor Hamilton Fish. On his return to New York from Havana, he had traveled to Albany on mysterious business-though most of what he did was mysterious, for secrecy was one of the highest business virtues. But secrecy was quite a different thing from falsehood. Vanderbilt continued to cultivate his reputation as a man of his word, even if his words were few. This aspect of his character helps explain why New York's social elite continued to work with him, even seek him out, though they would never invite him to their houses for dinner. Austere and offensive Vanderbilt may have been-benevolent and polished he was not-but Fish knew that he was honest. And so, when the Commodore entered Fish's office on that mysterious errand, the governor brought up another, rather delicate, matter.
Fish boasted a head of thick, dark hair, along with an elaborate swell of cheek whiskers and a wide, heavy-lipped mouth that made him look rather like a grouper. He also laid claim to leadership of one of the first families of New York. His father had been a Federalist and a close friend of Alexander Hamilton, his namesake; he himself had served in the U.S. House of Representatives as a Whig, and had won the gubernatorial election in 1848. His problem now was that someone had told him that Addison G. Jerome, a prominent Wall Street figure, had spoken ill of him. The reported insult forced Fish to rethink some of his business or political plans. But was the story true?
Vanderbilt promised to look into it. "Upon investigation of the conduct of Mr. Jerome," he wrote, "I have come to the conclusion that your mind has been abused. I am satisfied that every charge made against him relative to his conduct towards you is false." false." The rumor's substance remains unknown, but Vanderbilt was unforgiving toward such intrigues. "It is extremely hard," he added, "that an upright, honourable man should be put down by the base fabrications of foul and designing men." The rumor's substance remains unknown, but Vanderbilt was unforgiving toward such intrigues. "It is extremely hard," he added, "that an upright, honourable man should be put down by the base fabrications of foul and designing men."61 He already may have grown uncomfortable with the highly designing Joseph White. On February 21, Vanderbilt stayed away from a formal dinner given by the canal company in honor of Eduardo Carcache, the Nicaraguan minister to the United States. White made the keynote toast; glib as ever, he boasted of his intimacy with Bulwer and insinuatingly alluded to matters of state that he could not discuss "without violating confidences." It was the sort of self-important performance that Vanderbilt despised.62 As events swept forward in 1850, White's personality began to create problems for Vanderbilt's company. True, the year began well enough: on February 24, under headlines that announced Daniel Webster's intent to forge a compromise to settle the disputes between North and South, the New York Herald New York Herald declared that Bulwer and Clayton had reached a settlement, to be ratified later as the Clayton-Bulwer Treaty It guaranteed the neutrality of the canal and barred Greytown's authorities from interfering with the company, though the British officials and fleet remained. The next good news came on March 9, when Nicaragua incorporated the American Atlantic & Pacific Ship Canal Company. But then some of White's letters fell into the hands of Nicaragua's leaders. declared that Bulwer and Clayton had reached a settlement, to be ratified later as the Clayton-Bulwer Treaty It guaranteed the neutrality of the canal and barred Greytown's authorities from interfering with the company, though the British officials and fleet remained. The next good news came on March 9, when Nicaragua incorporated the American Atlantic & Pacific Ship Canal Company. But then some of White's letters fell into the hands of Nicaragua's leaders.63 "The letters from Mr. Joseph L. White," Squier wrote to Clayton from Nicaragua, "were past all precedent egotistical, and calculated to leave the impression that the individual above named was charged with the entire entire business of arranging affairs with Sir Henry Bulwer.... 'I stipulated this,' and 'I did that' are the burthen of every sentence. Mr. White," he added, "is unquestionably what the Yankees term a 'smart' man, but a most inveterate, indiscriminating, and indiscreet talker.... The General-in-Chief of the State, and other leading men, have openly expressed to me their disgust." business of arranging affairs with Sir Henry Bulwer.... 'I stipulated this,' and 'I did that' are the burthen of every sentence. Mr. White," he added, "is unquestionably what the Yankees term a 'smart' man, but a most inveterate, indiscriminating, and indiscreet talker.... The General-in-Chief of the State, and other leading men, have openly expressed to me their disgust."64 It was only a hint of the trouble White would cause. It was only a hint of the trouble White would cause.
Still, the treaty had been completed, allowing the canal to go forward. If White was, in Squier's judgment, "fitted for little beyond talking," at least his talk had accomplished what Vanderbilt had required of him. As the company's counsel, his verbal dexterity soon would be needed for one more essential task: to open the bank accounts of those British investors who Bulwer had promised were eager to invest.
In the meantime, Vanderbilt moved the work of the company forward. He called a meeting of the board on April 24, and directed the incorporating partners to pay the first installment on the stock they had taken, to pay for the Orus Orus and the riverboats now under construction. When the first new boat, the and the riverboats now under construction. When the first new boat, the Director Director, was completed on July 1, he had it sent down to Nicaragua with a corps of engineers who would survey the canal route. He hired Orville Childs, the former chief engineer of New York State, to lead this team. Newspaper editors began to puff up the project, listing its advantages in distance, speed of crossing, and climate over the Panama route.65 Vanderbilt kept his hand in numerous other enterprises, of course, from the real estate he owned on Coenties Slip and Warren Street, to the Staten Island Ferry, to his post as a director of the Hartford & New Haven Railroad, now paying 10 percent annual dividends (with an extra 5 percent in the fall). But he let go of his last link to the Stonington, resigning the seat on the board he had held after stepping down as president.66 Another event occurred that year that had far more obvious repercussions. On Independence Day, President Taylor fell ill after a ceremony in extremely hot weather at the Washington Monument. Less than a week later, he was dead. A victorious general in Mexico, the popular Taylor had been an implacable nationalist who had refused to bend to pressure from his native South during the still-unresolved California admission crisis. "He was a good and upright man, such as is uncommon in high office," George Templeton Strong wrote in his diary, "[and] everybody North and South had a vague sort of implicit confidence in him, which would have enabled him to guide us through our present complications." He left the White House to Millard Fillmore, an unknown quantity in the midst of the ongoing crisis.67 At the end of September, the Prometheus Prometheus slid down the rails at Simon-son's (that is, Vanderbilt's) shipyard, splashing into the East River. It was Vanderbilt's first oceangoing steamship, and perhaps his finest vessel to date. "V has superintended her construction himself," the slid down the rails at Simon-son's (that is, Vanderbilt's) shipyard, splashing into the East River. It was Vanderbilt's first oceangoing steamship, and perhaps his finest vessel to date. "V has superintended her construction himself," the New York Tribune New York Tribune wrote on October 1, "and the builder has made her a first-class vessel." Measured at more than 1,200 tons and 230 feet, with clean lines and enormous sidewheels, it promised to be the swiftest ship in the California trade. wrote on October 1, "and the builder has made her a first-class vessel." Measured at more than 1,200 tons and 230 feet, with clean lines and enormous sidewheels, it promised to be the swiftest ship in the California trade.68 Everything seemed to be in place. Nicaragua had signed the contracts and issued the corporate charter; the United States and Great Britain had come to terms; riverboats were on the scene or on their way; and now Vanderbilt had launched the first ship for the Nicaragua transit line. Only one thing was lacking: money. And there was only one place where it would be found. No sooner had the hull of the Prometheus Prometheus been towed to the Allaire machine works for the installation of its boilers and pistons than Vanderbilt and Joseph White boarded a different steamship, bound for London. been towed to the Allaire machine works for the installation of its boilers and pistons than Vanderbilt and Joseph White boarded a different steamship, bound for London.
IF ANYONE DOUBTED that progress could serve to obscure the world, a carriage ride through London might have been proof enough. Here were all the wonders of civilization, from the cupolas of St. Paul's Cathedral to the crowded docks, where laborers swarmed over ships to unload goods from around the globe. Unfortunately, those wonders often were invisible, thanks to innumerable hearths of burning coal. When White and Vanderbilt rode in a coach through the crooked lanes of the great metropolis in October 1850, they, like characters in Charles Dickens's that progress could serve to obscure the world, a carriage ride through London might have been proof enough. Here were all the wonders of civilization, from the cupolas of St. Paul's Cathedral to the crowded docks, where laborers swarmed over ships to unload goods from around the globe. Unfortunately, those wonders often were invisible, thanks to innumerable hearths of burning coal. When White and Vanderbilt rode in a coach through the crooked lanes of the great metropolis in October 1850, they, like characters in Charles Dickens's Bleak House Bleak House, might well have asked "whether there was a great fire anywhere? For the streets were so full of dense brown smoke that scarcely anything was to be seen."
For Vanderbilt, on a personal level, the impact and implications of this transatlantic journey remain as obscure as London itself. We can only guess. For one thing, the sheer size of the imperial capital must have been a revelation. Millions milled through "the dirtiest and darkest streets that ever were seen in the world" (in Dickens's words), down lanes lined with ancient monuments and architectural marvels unknown in the United States. This transatlantic voyage was Vanderbilt's first; for him, as for so many other Americans who crossed the ocean, to discover London was to discover the world.
His very presence on this mission speaks of a particular, perhaps growing, confidence. Three more years would pass before the Mercantile Agency pronounced him "boorish" and "offensive," suggesting that he retained the crude manners of a Staten Island mariner. Yet no longer would he let White serve as sole interlocutor for the canal company. He conferred with Lord Palmerston himself during this visit-though it is unknown whether Vanderbilt kept his ever-present cigar clamped between his teeth, or spoke in curses and double negatives, as had been his wont.69 Vanderbilt and White journeyed from their hotel through the streets of the City the heart of the metropolis and the financial capital of the globe, to a building around the corner from the Bank of England, at 8 Bishopsgate Street: the grand offices of Baring Brothers & Co. The firm was perhaps the foremost merchant bank in the world, rivaling the combined wealth of the international Rothschild clan. After ninety years in business, Baring Brothers carried such weight in world affairs that a common saying counted the company as one of the great powers of Europe, alongside Britain, France, and Russia.
Vanderbilt and White were ushered in and conducted past "a hollow square," as one historian described the central office, wherein worked a "corps of bookkeepers, clerks, copyists, and accountants, almost all perched on high stools facing the grillwork topping the high, continuous desk." They passed from this chamber into a conference room, perhaps, or into the office of Thomas Baring or one of the other managing partners.70 In those private quarters, Vanderbilt and White explained the Nicaraguan grant, the treaty, and Bulwer's promise that English capitalists would invest. They offered Baring Brothers an equal stake in the canal company-a 50 percent share. In those private quarters, Vanderbilt and White explained the Nicaraguan grant, the treaty, and Bulwer's promise that English capitalists would invest. They offered Baring Brothers an equal stake in the canal company-a 50 percent share.
In this office, as at Rothschild & Sons, as with Sir J. H. Pelly, as elsewhere, Vanderbilt and White met with raised eyebrows. A Baring Brothers partner wrote that the hastiness of the proposal surprised them: "There appeared no information that could be used as to the profitability of making a canal or of the cost of constructing it."
The Americans went back to their hotel as the various merchant bankers they had approached put together a joint position on the canal, which they communicated in a letter on October 14. "If, after organisation, surveys, & estimates, it shall appear that a canal can be made at a cost that would offer a fair return for the capital needed," they declared, "we will endeavor to get English capital to join in completing it." As one of the financiers summarized their response, "The matter is not ripe for the present."71 The next day, the Baring partners read with surprise a gross distortion of their position in the financial columns of the London Times Times. "The junction of the Atlantic and Pacific may almost be regarded as a work commenced," the story began. White's hyperbole and insinuations echoed throughout the piece. "It is the grandest physical work the world can witness.... A promise was given to Sir Henry Bulwer that an equal participation in the enterprise should be offered to this country on reasonable terms. To fulfil that pledge two commissioners from the company, Messrs. White and Vanderbilt, arrived in London... and after a short period of negotiation a satisfactory arrangement was completed this afternoon." It was a planted story-White's own London fog.72 "C. Vanderbilt & Joseph L. White of New York have been here in regard to the Nicaragua Ship Canal," Baring Brothers wrote to Thomas W. Ward, the firm's agent in Boston. "We see in the of New York have been here in regard to the Nicaragua Ship Canal," Baring Brothers wrote to Thomas W. Ward, the firm's agent in Boston. "We see in the Times Times and and [London] Globe [London] Globe that they would make more of [what was agreed] than [was] said here.... We don't think anyone knows at present whether the canal is practicable or not, therefore these newspaper puffs are all absurd." that they would make more of [what was agreed] than [was] said here.... We don't think anyone knows at present whether the canal is practicable or not, therefore these newspaper puffs are all absurd."73 Who were these Americans, with their grand plans, empty estimates, and deceitful boasts to the newspapers? The English financiers were hardly ignorant of the United States; the Rothschilds, for example, employed as their agent August Belmont, who since his arrival in New York in 1837 had inserted himself into the center of that city's politics and society. Days before Vanderbilt's visit, Baring Brothers and two other London houses each had agreed to purchase $25,000 in stock in the Panama Railroad, because the project was backed by William H. Aspinwall, whom they knew and respected as an aristocratic merchant. They perceived that Vanderbilt and his associates had connections to the U.S. government, but they knew little else about them. On October 15, one of the Baring partners penned a letter to James G. King of New York. "I should be glad if you can give us any information respecting the partners forming the Pacific Canal co.," he wrote, "and about support it is likely to meet with on your side."74 James King had been born in Manhattan only three years before Vanderbilt, yet he belonged to a completely different world. His father was Rufus King, one of the first two U.S. senators from New York and a friend of Alexander Hamilton's. James graduated from Harvard and served as a congressman, president of the Erie Railroad, and president of the New York Chamber of Commerce. He occupied the very peak of New York society and often might be found as a dinner guest in homes, as Philip Hone observed, known for "excellent taste" and "the utmost good breeding."75 King did not know Cornelius Vanderbilt. "To your enquiry respecting the partners connected with the Pacific Canal Co., we can give you only general information," he wrote to Baring Brothers on October 29, 1850. "Some of them, we hear of as large owners of steamboats employed in our neighboring routes, the success of which we have no means of estimating-large means, certainly, and so employed. And with the public, they have more credit for sagacity and enterprize, than for caution."
Sagacity and enterprize, not caution: this distinction offers fascinating insight into the differences between the business milieus of the merchant banker and the steamboat entrepreneur in 1850. The competitive spirit that moved Vanderbilt to strain every resource in battle against an opponent remained suspect in King's eyes. Most of all, though, King's assessment spoke to the social gap that still yawned between Vanderbilt and the mercantile elite. "Altogether," he concluded, "they do not possess, so far as we can judge, the confidence or cooperation of our prudent people. And they must join with them names better known and more widely confided in before they are able to command support here. And that, with other motives of more abundant capital abroad, is probably the reason of the plan being presented in London-before it was here." this distinction offers fascinating insight into the differences between the business milieus of the merchant banker and the steamboat entrepreneur in 1850. The competitive spirit that moved Vanderbilt to strain every resource in battle against an opponent remained suspect in King's eyes. Most of all, though, King's assessment spoke to the social gap that still yawned between Vanderbilt and the mercantile elite. "Altogether," he concluded, "they do not possess, so far as we can judge, the confidence or cooperation of our prudent people. And they must join with them names better known and more widely confided in before they are able to command support here. And that, with other motives of more abundant capital abroad, is probably the reason of the plan being presented in London-before it was here."76 Vanderbilt and White boarded the steamship Pacific Pacific for the return voyage home. They carried with them nothing to show for their efforts but White's puffery in the for the return voyage home. They carried with them nothing to show for their efforts but White's puffery in the Times Times. They docked on October 31; two weeks later, the real story of their reception in London leaked out in the press. The canal company was a mere "speculation," the New York Herald New York Herald wrote. "No stock had been taken-no stock books opened-not one cent of capital subscribed or paid in." For Vanderbilt, the scathing wrote. "No stock had been taken-no stock books opened-not one cent of capital subscribed or paid in." For Vanderbilt, the scathing Herald Herald story marked a low point in his long career. The scheming White had become the image of the canal company; Vanderbilt was lumped in with him, and cast as a political dummy hoping to flip the canal rights. "The whole affair was an experiment," the story marked a low point in his long career. The scheming White had become the image of the canal company; Vanderbilt was lumped in with him, and cast as a political dummy hoping to flip the canal rights. "The whole affair was an experiment," the Herald Herald concluded, "in which a few lawyers in Wall Street were the principal movers, their original purpose being to obtain a charter, and afterwards dispose of it at any good price." concluded, "in which a few lawyers in Wall Street were the principal movers, their original purpose being to obtain a charter, and afterwards dispose of it at any good price."77 What remained now for Vanderbilt was to make real what his critics thought was a vaporous fraud.
*1 Since stock usually had a par value of $100, per-share dividends were described in percentages. Since stock usually had a par value of $100, per-share dividends were described in percentages.*2 In Nicaragua these parties were also called the Democrats and the Legitimists, respectively. In Nicaragua these parties were also called the Democrats and the Legitimists, respectively.
Chapter Eight.
STAR OF THE WEST.
The air of crisis seemed to turn Americans' minds toward death. All through 1850, the South had made increasingly loud noises about seceding from the Union. The issue was whether slavery would be allowed in the vast swath of territory conquered from Mexico. Southerners saw attempts to block the spread of the "peculiar institution" as an assault on their labor and property system, as an unfair discrimination against their section. Most Northerners saw any extension of slavery as unfair competition with free labor, and the relatively few but vocal abolitionists denounced the institution itself. The crisis persisted throughout 1850, as Henry Clay and Daniel Webster, the Senate's aging statesmen, labored over a compromise. The price of failure, many believed, would be the nation's extinction.
The dead literally haunted New York that summer, as the famous teenage sisters Margaret and Kate Fox came down from Rochester to perform seances. The pair appeared to have the gift of speaking to spirits of the deceased, who would answer with a rapping noise that a less credulous public might have recognized as the cracking of toes. "I've attended twice," George Templeton Strong informed his diary. "I'm mystified." The girls proved a sensation. The spirits they conjured answered questions with remarkable accuracy-though Strong complained about "the trifling and undignified demeanor of these ghosts."1 The People's Line on the Hudson died that year, in a way. For complicated legal and business reasons, Daniel Drew sent it to the cross. Just before the new year, Drew attended the auction of its steamboats at the Merchants' Exchange and purchased the best ones in his own name, in order to resurrect his monopoly. He attended to his own immortality as an avid member of the Mulberry Street Methodist church, one of only two churches in the city "built with no design of renting the seats [to rich congregants], though several have adopted the plan since their erection," as a religious journal wrote.2 When Vanderbilt returned from London, he found that the crisis had lifted. The four bills comprising the Compromise of 1850 had passed through Congress. They admitted California as a free state, settled a boundary dispute between Texas and New Mexico, paid a large sum to Texas, and organized Utah and New Mexico as territories open to slavery. The deal also enacted a new fugitive slave law, requiring federal marshals to assist in recapturing escaped slaves. It restored calm to politics, but gave new energy to abolitionists. Still, they remained a small minority, loathed by many merchants in New York, a city made rich by Southern cotton.3 "Now, however, there is no quarter of the world to which attention is more actively directed than Central America," declared a newspaper on November 2, 1850. For all the talk of disunion, Americans had continued to flock to and from San Francisco as gold emerged from the mountains in vast quantities. Most of the migrants-and all of the gold-traveled by steamship, crossing the isthmus at Panama. Miners, merchants, and bankers longed for a faster route. "The Nicaragua route must command the entire traffic to California, the moment it shall be rendered practicable, even by a mixture of water and land conveyance," the press asserted.4 Vanderbilt threw himself into making that route practicable. He prepared the Prometheus Prometheus for its first voyage, and ordered his lawyers to prepare a petition to Congress, offering to carry the California mail for $180,000 a year, a mere fraction of what the government currently paid. In a formal proposal, delivered in December, he offered to build six first-class steamships for its first voyage, and ordered his lawyers to prepare a petition to Congress, offering to carry the California mail for $180,000 a year, a mere fraction of what the government currently paid. In a formal proposal, delivered in December, he offered to build six first-class steamships "at his own proper cost" "at his own proper cost" to transport the mail via Nicaragua, "which transit route will be opened... probably within six months." Joseph White played no part in this appeal, for an important reason: the steamship line Vanderbilt now organized was entirely separate from the canal company. Years later, his assistant Lambert Wardell vividly recalled how important it was to Vanderbilt that he personally owned the to transport the mail via Nicaragua, "which transit route will be opened... probably within six months." Joseph White played no part in this appeal, for an important reason: the steamship line Vanderbilt now organized was entirely separate from the canal company. Years later, his assistant Lambert Wardell vividly recalled how important it was to Vanderbilt that he personally owned the Prometheus Prometheus. "She was the only [steamship] owned entirely by one man, up to that time at least. When she started out there was not a cent owing on her, he remarking that he wanted her to 'go out on her own bottom.'"5 As with the ship, so with the man: Vanderbilt himself would finally go to Nicaragua. It would be the first of three remarkable voyages to that distant republic, a land virtually unknown to his fellow countrymen. There were practical reasons to go, of course; as a master of the transportation business, he could best judge for himself the technical considerations of a canal or transit line. That was why he had set out to go there once before. But there was something Homeric in this uneducated man's conception of himself. Like Achilles, he would lead the charge himself; like Odysseus, he would face ocean storms, river rapids, tropical fevers, and the crocodiles and sharks of Nicaragua's waters. These trips would further open his eyes to the world and enhance his heroic reputation.
At ten o'clock in the morning on December 26, Vanderbilt stood on the deck of the Prometheus Prometheus as it churned through New York Harbor on its maiden voyage. Packed with passengers and freight, it would stop at Greytown and then Chagres, where most passengers would debark, since the canal company was not yet carrying travelers across Nicaragua. The as it churned through New York Harbor on its maiden voyage. Packed with passengers and freight, it would stop at Greytown and then Chagres, where most passengers would debark, since the canal company was not yet carrying travelers across Nicaragua. The Prometheus Prometheus cut a fine figure of a ship as it steamed for the Narrows, with its distinctive vertical bow rising three decks in height, twin smokestacks, and enormous sidewheels-though it had to cut power in minutes to clear a rope caught in a paddlewheel. But this time Vanderbilt would not be stopped. cut a fine figure of a ship as it steamed for the Narrows, with its distinctive vertical bow rising three decks in height, twin smokestacks, and enormous sidewheels-though it had to cut power in minutes to clear a rope caught in a paddlewheel. But this time Vanderbilt would not be stopped.6 The Prometheus Prometheus proved itself. "Ship performing admirably," wrote Joseph N. Allen in his diary, "riding the seas like a duck and though very rough not a drop or spray even on deck." The forty-seven-year-old Allen was a merchant in New York and one of Vanderbilt's closest friends; he had agreed to help the Commodore establish the transit business in Nicaragua. proved itself. "Ship performing admirably," wrote Joseph N. Allen in his diary, "riding the seas like a duck and though very rough not a drop or spray even on deck." The forty-seven-year-old Allen was a merchant in New York and one of Vanderbilt's closest friends; he had agreed to help the Commodore establish the transit business in Nicaragua.7 He noted that some of the "rich" passengers grew "very much excited" when the ship hit heavy cross seas, causing its 230-foot hull to plunge and roll. Three days out of port, a crewman fell to the deck from the mainmast (like all steamships in this era, the He noted that some of the "rich" passengers grew "very much excited" when the ship hit heavy cross seas, causing its 230-foot hull to plunge and roll. Three days out of port, a crewman fell to the deck from the mainmast (like all steamships in this era, the Prometheus Prometheus had supplementary sails), dying on impact, leading to what Allen called "the solemn scene of a burial at sea." The ship made a New Year's Day call on Havana, and arrived at Greytown on January 4, 1851. had supplementary sails), dying on impact, leading to what Allen called "the solemn scene of a burial at sea." The ship made a New Year's Day call on Havana, and arrived at Greytown on January 4, 1851.
Greytown nestled on the inside of a harbor formed by the outlet of the San Juan River into the Atlantic. A sandy spit of land, Punta Arenas, enclosed the bay, in which porpoises frolicked among dugout canoes, called bungos, and canal-company steamboats. (Vanderbilt chose Punta Arenas as the location for machinery works, warehouses, and an office.) The town consisted of some sixty thatched huts, pushed nearly into the water by the great tropical forest that pressed up to the Atlantic shore. "There were no clearings, no lines of road stretching back into the country," wrote Ephraim Squier; "nothing but dense, dark solitudes, where the tapir and the wild boar roamed unmolested; where the painted macaw and the noisy parrot, flying from one giant cebia to another, alone disturbed the silence; and where the many-hued and numerous serpents of the tropics coiled among the branches of strange trees, loaded with flowers and fragrant with precious gums." Going ashore, Vanderbilt found a shanty port populated by three hundred Americans, Miskito Indians, mestizos, and "the English authorities," as Squier wrote disapprovingly, "consisting chiefly of negroes from Jamaica.... All mingle together with the utmost freedom, and in total disregard of those conventionalities which are founded on caste."8 At eleven in the morning on January 8, Vanderbilt and his party (including engineer Orville Childs) boarded the steamboat Orus Orus and chuffed into the San Juan River. A heavy tropical rain fell as the paddles beat against the increasingly swift current, carrying them between high, vertical banks and dense, dark forest, past islands in the broad river. Now came the moment of greatest danger. On January 11, they spent an hour and forty minutes battling the torrent of water crashing through the Machuca rapids. Vanderbilt shoved the pilot aside and took the helm, an engineer recalled, "tied down the safety valve [and] put on all steam." With the boiler pressure building dangerously, the paddles whirling at furious speed, the boat shot through, Allen wrote, after "a tremendously hard struggle and grating... on the rocks." and chuffed into the San Juan River. A heavy tropical rain fell as the paddles beat against the increasingly swift current, carrying them between high, vertical banks and dense, dark forest, past islands in the broad river. Now came the moment of greatest danger. On January 11, they spent an hour and forty minutes battling the torrent of water crashing through the Machuca rapids. Vanderbilt shoved the pilot aside and took the helm, an engineer recalled, "tied down the safety valve [and] put on all steam." With the boiler pressure building dangerously, the paddles whirling at furious speed, the boat shot through, Allen wrote, after "a tremendously hard struggle and grating... on the rocks."9 The next day they reached the ruins of Castillo Vejo, the ancient Spanish fortress that Horatio Nelson had stormed as a young man. On January 13, the Orus Orus spent two hours fighting the raging Toro rapids, twice getting stuck on the boulders in the stream. Once again it appeared that the boat would be wrecked, deep in the Nicaraguan rain forest. This time Vanderbilt ordered ropes to be tied to trees on either bank, and had the boat painfully winched up over a hundred feet of water-swept rocks. spent two hours fighting the raging Toro rapids, twice getting stuck on the boulders in the stream. Once again it appeared that the boat would be wrecked, deep in the Nicaraguan rain forest. This time Vanderbilt ordered ropes to be tied to trees on either bank, and had the boat painfully winched up over a hundred feet of water-swept rocks. Harper's Weekly Harper's Weekly later reported that one of the party, "a tough old sea-captain, declared he would not go through such work again for all Central America." Finally, on January 14, they landed at the village of San Carlos, where the San Juan River poured out of Lake Nicaragua. later reported that one of the party, "a tough old sea-captain, declared he would not go through such work again for all Central America." Finally, on January 14, they landed at the village of San Carlos, where the San Juan River poured out of Lake Nicaragua.
The Director Director-the riverboat that Vanderbilt had sent down in July 1850 and that had steamed up to the lake on January 1-was nowhere to be seen. The Commodore told Allen to wait for its return at San Carlos, in the care of the town's governor, Patricio Rivas; then he set out for Granada in the Orus Orus with Childs and the other engineers. Allen remained behind with mixed feelings. On one hand, he studied Spanish with "a very pretty and very obliging daughter" of Rivas; on the other, he slept on an animal-hide cot, with rats skittering along the rafters, various lizards and "enormous spiders" scurrying across the walls, and hogs rooting outside. with Childs and the other engineers. Allen remained behind with mixed feelings. On one hand, he studied Spanish with "a very pretty and very obliging daughter" of Rivas; on the other, he slept on an animal-hide cot, with rats skittering along the rafters, various lizards and "enormous spiders" scurrying across the walls, and hogs rooting outside.10 Vanderbilt and party, meanwhile, crossed Lake Nicaragua. Home of a rare species of freshwater shark, this enormous expanse could switch in an instant from calm to violent, throwing the shallow-draft steamboat into swells far more alarming than the ocean storms encountered by the Prometheus Prometheus. The boat chuffed past the island of Ometepe, with its twin volcano cones covered in greenery, nosing thousands of feet into the clouds. On the approach to Granada's landing, the waterfront could be seen teeming with poor Nicaraguans, splashing and bathing, "without regard to sex or age, all mixed up indiscriminately," as Allen wrote after he caught up with Vanderbilt, "a sight to make a northerner open his eyes."11 To reach Granada, the group made their way past wandering, pecking chickens and outlying cane-and-mud huts with thatched roofs. Then they entered the streets of the city proper, lined with tile-roofed adobe houses decorated with window balconies, ornamental archways, and heavy wooden doors that guarded elegant courtyards. They finally reached the plaza, with its decaying cathedral. Even for the increasingly worldly Vanderbilt, it was all strange, far more alien than London. On Sunday, January 19, for example, a religious festival erupted. "Such a din," Allen complained. "The streets were thronged with people.... In those occupied by the lower classes thousands of flags and streamers are fluttering in the wind.... As the morning advanced the people assembled in the neighborhood of the plaza and attired themselves in a variety of ways, among others by assuming masks and uncouth costumes."12 Vanderbilt and Childs consulted with the Nicaraguan authorities, surveyed the canal route (through neighboring Lake Managua, up to the Gulf of Fonseca), then headed south to scout the transit route. The transit road would cut through roughly twelve miles of land from the western edge of Lake Nicaragua to the Pacific coast. The Commodore led his men sixty miles south toward Rivas, through a still more alien landscape. They passed scattered haciendas (mostly cattle ranches), seeing monkeys, armadillos, and fences made by lines of cactus and prickly-leafed aloe plants. In the immediate vicinity of Rivas, where some ten thousand people lived about three miles inland from the lake, innumerable fruit trees gave the area the feel of "an immense and beautiful garden," as one observer thought.
Vanderbilt and Childs rode a rough nine miles from Rivas to the Pacific, through steep hills, trees, and brush, a route described by one reporter as "dangerous and even impassable during the rainy season." Fortunately, the fifty-six-year-old Commodore was an excellent horseman. He and the engineers marked out the best path for the road, down to the virtually uninhabited little horseshoe harbor of San Juan del Sur, "one of the prettyest bays I ever saw," as Allen described it. "I must say that with a moderate outlay of money it can be made as safe a harbor as is to be found anywhere." Creating a harbor on the lake, on the other hand, would be more costly, as the western shore was exposed to swells that beat upon the beach from the southeast. The engineers selected Virgin Bay for the primary landing, but they would have to build a breaker and pier.13 Vanderbilt visited Granada once more. In that city, as elsewhere in Nicaragua, he saw that the people "hate Englishmen with an inveterate hatred, and hold Americanos Del Norte in high esteem," in Allen's words. "Americans are welcomed in Nicaragua," a reporter wrote. "At balls and public festivals the flag of the United States is seen wreathed together with that of the country." At the end of the month, Vanderbilt descended the San Juan to Greytown amid pouring rain. Before leaving the harbor, he spoke to a reporter for the New York Herald New York Herald. "He stated that the practicability of this route is no longer problematical," the journalist wrote. "By the first of May next, Mr. V. is sanguine that a speedy and expeditious transit will be opened between this port and the Pacific; the motto is go-ahead."14 As Vanderbilt and his entourage returned to New York (by way of New Orleans) in the Prometheus Prometheus, they again encountered ferocious seas, and Allen came away impressed with how the vessel rode them. "The Prometheus Prometheus is without doubt the finest sea steamer ever afloat," he told his diary, "and in all respects and as for speed her equal is yet to be built. Anything that may start with the idea of catching her, in order to make the thing certain, must start at least two hours ahead." is without doubt the finest sea steamer ever afloat," he told his diary, "and in all respects and as for speed her equal is yet to be built. Anything that may start with the idea of catching her, in order to make the thing certain, must start at least two hours ahead."15 The Prometheus Prometheus convinced Vanderbilt of his own genius. It differed from other steamships in many respects, the most important being the engines. When oceangoing steam vessels were first built, engineers decided that the machinery should be as low in the hull as possible, to avoid exposure to the elements and give the ship a low center of gravity. They came up with the "side-lever engine," which had elaborate gearing from the piston to the paddlewheels to keep the entire works belowdecks. The problem, Vanderbilt concluded, was that the multiple arms of the side lever made the engine inefficient, causing it to consume additional coal. Furthermore, side-lever engines had very narrow tolerances, and could not accommodate a ship's natural tendency to "hog," or bend lengthwise, at sea. That mandated a strongly reinforced engine compartment that made a ship heavier and more expensive. Refuting conventional wisdom, Vanderbilt went back to the walking-beam engine used in steamboats. The exposed arm that rocked up and down above the deck allowed for simpler gearing, which meant greater fuel efficiency, a lighter and cheaper engine, and a lighter and cheaper hull. He calculated that exposure and a higher center of gravity would not prove much of a problem. The convinced Vanderbilt of his own genius. It differed from other steamships in many respects, the most important being the engines. When oceangoing steam vessels were first built, engineers decided that the machinery should be as low in the hull as possible, to avoid exposure to the elements and give the ship a low center of gravity. They came up with the "side-lever engine," which had elaborate gearing from the piston to the paddlewheels to keep the entire works belowdecks. The problem, Vanderbilt concluded, was that the multiple arms of the side lever made the engine inefficient, causing it to consume additional coal. Furthermore, side-lever engines had very narrow tolerances, and could not accommodate a ship's natural tendency to "hog," or bend lengthwise, at sea. That mandated a strongly reinforced engine compartment that made a ship heavier and more expensive. Refuting conventional wisdom, Vanderbilt went back to the walking-beam engine used in steamboats. The exposed arm that rocked up and down above the deck allowed for simpler gearing, which meant greater fuel efficiency, a lighter and cheaper engine, and a lighter and cheaper hull. He calculated that exposure and a higher center of gravity would not prove much of a problem. The Prometheus Prometheus proved him right. proved him right.16 "A most extraordinary passage," the New York Herald New York Herald announced upon the announced upon the Prometheus Prometheus's return to New York on February 22, 1851. Vanderbilt published a long letter describing the ship's remarkable speed and fuel efficiency. It ran 5,590 miles in just over nineteen days, consuming 450 tons of coal-a third less than any steamer of its size. "I consider the Prometheus Prometheus, in her combination of qualities, far superior to anything afloat," he said. "I will venture a large wager that there is no ship afloat, and none that can be built within twelve months, having any other plan of engines of the same size in proportion to the capacity of the ship, that can make a winter passage in the same time, with the same quantity of fuel." The bet he proposed was $100,000.17 This same intense pride pulsed through his drive to win the California mail contract. He dispatched Daniel Allen to Washington with letters for Postmaster General N. K. Hall and Secretary of the Navy William A. Graham, saying that he could carry the mail via Nicaragua in twenty-five days, faster than any other route. "I am willing to pledge my reputation," he declared, "and it is well known to those who know me (and among those is the present Secretary of State), that I will make no such pledge unless certain of its fulfillment." That new secretary of state was Daniel Webster, whom Vanderbilt had known since he first traveled to Washington in 1821. Henry Clay himself presented Vanderbilt's bid to the Senate. "I dare say it is well known to every Senator, as it is to almost every person in the United States, that Mr. Vanderbilt has been one of the most successful and enterprising persons engaged in that description of navigation," Clay said. "All this is offered by this liberal, enterprising, and distinguished gentleman, without asking for one dollar of present appropriation."18 Vanderbilt seems to have bounced back fully from the humiliation of the London trip. With a little prodding on his part, politicians and the press hailed his reputation. On March 6, the New York Herald New York Herald, the same paper that had derided the canal as a mere "speculation," effusively praised the Nicaragua route-and Vanderbilt himself.
Commodore Vanderbilt's character for energy and go-aheadativeness is well known in this community, and apart from other considerations, the fact that he is connected with this enterprise is a guarantee to the public that both of these great projects-the construction of an ocean ship canal, and that of a transit route-will be finished at the earliest moment practicable. He is a man whose resolution is indomitable, and before whose determination obstacles, no matter how great, disappear as the morning dew before a July sun.19 It was not the first time Vanderbilt was titled "Commodore," but afterward his name rarely appeared in print without this honorary rank. He was becoming a cultural icon.
Despite the support of Webster and Clay, Vanderbilt failed to convince Congress to alter the existing mail contracts. Against George Law's skill at lobbying and William H. Aspinwall's aristocratic connections, he could make no headway-particularly after the U.S. Mail and Pacific Mail Steamship companies agreed in January to cease competing with each other, the first retreating to the Atlantic and the latter to the Pacific.20 But Vanderbilt had delivered a clear warning that he was going to fight for the California trade, with English capital or not. And when he fought, he usually won. But Vanderbilt had delivered a clear warning that he was going to fight for the California trade, with English capital or not. And when he fought, he usually won.
ONE DAY IN THE FUTURE there would be a name for it: vertical integration. Late in the nineteenth century, John D. Rockefeller and Andrew Carnegie would emerge as leading exponents of this form of organization, in which a single owner takes control of businesses at every step of the manufacturing process, from mining raw materials to production of finished goods. A vertically integrated company captured profits (or reduced costs) at every point. Perhaps more important, in an age when few industries existed it helped ensure supply that otherwise might be diverted to a competitor. there would be a name for it: vertical integration. Late in the nineteenth century, John D. Rockefeller and Andrew Carnegie would emerge as leading exponents of this form of organization, in which a single owner takes control of businesses at every step of the manufacturing process, from mining raw materials to production of finished goods. A vertically integrated company captured profits (or reduced costs) at every point. Perhaps more important, in an age when few industries existed it helped ensure supply that otherwise might be diverted to a competitor.21 Ship owner Charles Morgan understood the principle as early as the spring of 1851, when he bought control of a leading engine manufacturer in Manhattan, T. F. Secor & Co., and renamed it the Morgan Iron Works. Ship owner Charles Morgan understood the principle as early as the spring of 1851, when he bought control of a leading engine manufacturer in Manhattan, T. F. Secor & Co., and renamed it the Morgan Iron Works.
Ironically, Morgan's move quickened Vanderbilt's own steps toward a vertical integration of his budding steamship business. Already he had taken direct control of the Simonson shipyard, which constructed hulls; now he joined with the men whom Morgan had bought out, T. F. Secor and John Braisted, along with Daniel Drew, to purchase New York's other large steam-engine plant, the Allaire Works. "The works are immense," remarked the Mercantile Agency, "one of the most extensive in this city." Located at 466 Cherry Street on the East River near Corlears Hook, the Allaire Works would now be run by a corporation, commanded (not surprisingly) by Vanderbilt's sons-in-law: Daniel Allen as president, and James Cross as treasurer. The purchase hinted at the size of both Vanderbilt's means and his ambition.22 By the time the Mercantile Agency took note of all this, Vanderbilt's preparations for opening the Nicaragua route were advancing rapidly. Already the Prometheus Prometheus carried California passengers-to Panama for now, until the transit route was ready. The steamboat carried California passengers-to Panama for now, until the transit route was ready. The steamboat Director Director plied Lake Nicaragua, carrying enterprising migrants who found their own way overland and down the San Juan River. The boat grossed $32,000 for the canal company in January alone. (The canal company owned the boats and infrastructure within Nicaragua, though not the oceangoing steamships.) The plied Lake Nicaragua, carrying enterprising migrants who found their own way overland and down the San Juan River. The boat grossed $32,000 for the canal company in January alone. (The canal company owned the boats and infrastructure within Nicaragua, though not the oceangoing steamships.) The Orus Orus had smashed onto the rocks of the Machuca rapids, but Vanderbilt sent down two specially constructed, shallow-draft, iron-hulled steam boats, the had smashed onto the rocks of the Machuca rapids, but Vanderbilt sent down two specially constructed, shallow-draft, iron-hulled steam boats, the J. M. Clayton J. M. Clayton and the and the Sir H. L. Bulwer Sir H. L. Bulwer Meanwhile, he pushed ahead with his efforts to put steamships on both sides of the isthmus. He had two under construction in New York, the 1,000-ton Daniel Webster Daniel Webster and the 1,800-ton and the 1,800-ton Northern Light; Northern Light; both would receive Vanderbilt's customary walking-beam engines from the Allaire Works, and would run on the Atlantic, along with the both would receive Vanderbilt's customary walking-beam engines from the Allaire Works, and would run on the Atlantic, along with the Prometheus Prometheus. For the Pacific, he fittingly bought the 900-ton Pacific Pacific (while it was en route to San Francisco) and the 600-ton (while it was en route to San Francisco) and the 600-ton Independence Independence. It was still not enough tonnage.
On June 17, passengers on the big new North America North America, which already had its steam up for a voyage from New York to Galway Ireland, were startled to learn that the ship would sail to California instead. Vanderbilt and Daniel Drew had bought it from P. T. Barnum. Barnum recalled the Commodore's amusement when they first met. "Why, I expected to see a monster-part lion, part elephant, and a mixture of rhinoceros and tiger," Vanderbilt exclaimed. "Is it possible that you are the showman who has made so much noise in the world?" Like more than one businessman in the 1850s, Barnum had dangled his feet in the ocean and found the waters too cold.23 "We are happy to have it in our power to announce the opening of the new route to the Pacific," the New York Evening Post New York Evening Post declared at the end of June. "Cornelius Vanderbilt is the principal proprietor of this line, which is sufficient guaranty [sic] for the superior speed and equipment of the vessels." Passengers thronged to the upstairs office at 9 Bowling Green, next to the offices of other lines on "steamship row," to buy tickets. "The Vanderbilt line was then the rage," recalled passenger William Rabe. declared at the end of June. "Cornelius Vanderbilt is the principal proprietor of this line, which is sufficient guaranty [sic] for the superior speed and equipment of the vessels." Passengers thronged to the upstairs office at 9 Bowling Green, next to the offices of other lines on "steamship row," to buy tickets. "The Vanderbilt line was then the rage," recalled passenger William Rabe.
On July 14, Rabe boarded the Prometheus Prometheus at Pier No. 2 on the Hudson River for the inaugural voyage of the Nicaragua transit route. "On board I found... Mr. Vanderbilt himself," Rabe wrote a few weeks later. Rabe pressed the Commodore about whether the Nicaragua transit truly was in working order; otherwise Rabe and some of the other passengers might go on to Chagres and cross Panama. "Mr. Vanderbilt said that we would get through before any other passengers who had started about the same time for California, and insisted upon our going." at Pier No. 2 on the Hudson River for the inaugural voyage of the Nicaragua transit route. "On board I found... Mr. Vanderbilt himself," Rabe wrote a few weeks later. Rabe pressed the Commodore about whether the Nicaragua transit truly was in working order; otherwise Rabe and some of the other passengers might go on to Chagres and cross Panama. "Mr. Vanderbilt said that we would get through before any other passengers who had started about the same time for California, and insisted upon our going."24 Unknown to Rabe and the other passengers, Vanderbilt accompanied them because he had a mission to perform. He embarked on this journey to Nicaragua to meet a political threat, one that endangered his entire canal-and-transit enterprise. Due to the nature of the problem, he brought Joseph White, the company counsel and fixer. Before they returned to New York, Vanderbilt would have reason to wonder if White himself was not a greater danger than any problem in Nicaragua.
Government and nature seemed to conspire against Vanderbilt and his inaugural passengers at every step. After ten days at sea, the Prometheus Prometheus anchored at Greytown, where they boarded the anchored at Greytown, where they boarded the Bulwer Bulwer, one of the iron-hulled riverboats. The first sign of trouble was a demand from the town's officials that the boat obtain their permission to ascend the San Juan River, in clear violation of the Clayton-Bulwer Treaty. White haughtily replied that "the only way to prevent us was to blow us out of the water." On they went-only to run aground. Most of the passengers leaped into the river "to drag her over, trying to lift her up, or pull her along," in Rabe's words. Humiliatingly it took a boatload of sailors from the Bermuda Bermuda, a British warship, to lift the steamer over the bar.
The next day, the tightly packed little paddlewheeler steamed to the Machuca rapids, where the passengers stared at the ominous wreck of the Orus Orus, rusting on the rocks. As the pilot scraped the hull of the Bulwer Bulwer helplessly into the rapids, it seemed likely that the boat would follow the helplessly into the rapids, it seemed likely that the boat would follow the Orus Orus's example. Once again, Vanderbilt took the wheel. At fifty-seven, he already could be considered somewhat elderly by the standards of the day. Yet he radiated power, both physical strength and force of personality. And so, deep in the wilds of Nicaragua, on a treacherous jungle river, Vanderbilt poured on the steam and piloted his first passengers into the rapids. "Back we were swept," wrote another traveler. "At it again; the boat's nose was brought out of the current, and all our steam applied. 'Now she moves,' cried one. Now she nears the rocks; puff, puff-up, up-not a word-all silent-how we gazed silently at the shrubbery fringing the water's edge, marking our headway. At length we passed the peril, and gave three hearty cheers, shot through one set of rapids, then ran aground on the next."
After spending a night trying to run the mighty Castillo rapids, again using ropes, chain, and a winch to haul the boat over, Vanderbilt had to give up. The passengers piled into Nicaraguan bungos and were paddled up to San Carlos, where they boarded the Director Director. "To my astonishment I found the lake a boisterous expanse of water, running as high as the angry Atlantic," Rabe wrote. Hungry, sopping wet, and seasick, the passengers finally arrived on the western shore, where they were ferried to land in canoes or carried on the shoulders of Nicaraguan porters. The passengers went on to California, some happy, some convinced that the transit was not really ready. Vanderbilt mounted a horse and galloped off to Granada, together with White, to complete his mission.25 Rumor had it that the Nicaraguan government, disturbed at the lack of progress on the canal, planned to revoke the company's charter. Vanderbilt knew that the canal would take far longer than originally envisioned, while the transit business offered immediate profits. To protect the latter from delays to the former, he wanted to separate the two enterprises by chartering a transit company26 But on his arrival in Granada, he learned that Nicaragua had once again descended into civil war. The unity government of 1849 had collapsed. The Liberals had risen in revolt; two hostile governments now faced each other, a Conservative one in Granada and a Liberal rival in Leon. It was a moment that called for great prudence. But on his arrival in Granada, he learned that Nicaragua had once again descended into civil war. The unity government of 1849 had collapsed. The Liberals had risen in revolt; two hostile governments now faced each other, a Conservative one in Granada and a Liberal rival in Leon. It was a moment that called for great prudence.27 No one ever accused Joseph L. White of excessive prudence, or perhaps any prudence at all. Believing the Conservatives to be the friendliest government, he "promised to send men and arms to their support, assuring them at the same time that all resident foreigners were on their side," a reporter wrote. He said he could help wrest control of Greytown from the British. He also paid out $20,000 in bribes.28 On August 14, the Conservative government agreed to charter the Accessory Transit Company, transferring to it the canal company's crucial monopoly on steamboats in exchange for 10 percent of its profits and $10,000 per year. On August 14, the Conservative government agreed to charter the Accessory Transit Company, transferring to it the canal company's crucial monopoly on steamboats in exchange for 10 percent of its profits and $10,000 per year.
All this alarmed the Liberals. On August 25, John Bozman Kerr, the (notably bigoted) chief U.S. diplomat in Nicaragua, sent a warning to Secretary of State Daniel Webster from Leon. "Mr. White seems very naturally to have regarded these people as mere children, who could be led or driven any way he might be disposed," he wrote; "but I fear he may have carried his contempt for their intellect somewhat too far." One cynical journalist expressed ironic admiration: by dangling the false promise of a canal, the company had won a monopoly on the transit-"in my humble opinion, the most clever speculation which ever came into a Yankee's head."29 Too clever, perhaps. On August 22, the rival Liberal government in Leon addressed an angry letter to White and Vanderbilt. By choosing sides, the Liberals declared, "you have lost the neutrality of a foreigner." The Accessory Transit Company was created under a curse. White had been true to his nature, and so put the enterprise on the path to destruction from the start.30 For the time being, White's gamble seemed to pay off. The Conservatives remained safely entrenched in Granada, where they were well placed to protect the transit route. Rumor had it that the Prometheus Prometheus carried a shipment of two thousand muskets to them in the fall of 1851. And Vanderbilt's new company flourished. Workers blasted rocks from the San Juan's rapids, and a steam sawmill arrived for construction of a plank road to San Juan del Sur. The creation of Accessory Transit as a separate corporation gave it access to the power of the stock market to gather capital through sales of bonds, issues of new stock, or calls for additional payments from the shareholders. The Commodore's sidewheelers now sailed the Atlantic and Pacific oceans, packed with passengers attracted from the Panama route by lower fares. Vanderbilt earned vast sums from his ships, and as agent of Accessory Transit he kept 20 percent of each $35 ticket for the Nicaragua crossing. carried a shipment of two thousand muskets to them in the fall of 1851. And Vanderbilt's new company flourished. Workers blasted rocks from the San Juan's rapids, and a steam sawmill arrived for construction of a plank road to San Juan del Sur. The creation of Accessory Transit as a separate corporation gave it access to the power of the stock market to gather capital through sales of bonds, issues of new stock, or calls for additional payments from the shareholders. The Commodore's sidewheelers now sailed the Atlantic and Pacific oceans, packed with passengers attracted from the Panama route by lower fares. Vanderbilt earned vast sums from his ships, and as agent of Accessory Transit he kept 20 percent of each $35 ticket for the Nicaragua crossing.31 The success of Vanderbilt's Nicaragua venture had national consequences. Simply put, he helped transform a rush for gold into the lasting establishment of American civilization on the Pacific. By steeply reducing fares and offering faster service, Vanderbilt sped up the flow of migrants to the West and gold to the East, where it had a significant impact on the economy. And he did it not only without a federal subsidy, but in competition with the subsidized line.
Thanks in large part to reduced transportation costs, San Francisco matured from a dust-blown, mud-lined tent camp with gambling saloons into a brick-walled, warehouse-filled commercial center with gambling saloons. Numerous devastating fires in the city's first few years destroyed the shanties and rough wooden buildings thrown up by the first settlers; by necessity sturdy masonry structures went up along the orderly streets that stretched from the bay up the steep hills. "The characteristics of a Spanish or Mexican town had nearly all disappeared," wrote one resident. "Superb carriages now thronged the street, and handsome omnibuses regularly plied between the Plaza and the Mission.... The old stores, where so recently all things 'from a needle to an anchor' could be obtained, were nearly extinct; and separate classes of retail shops and wholesale warehouses were now the order of business. Gold dust as a currency had long given place to coin." It was still a fast town, but it also became a place of aristocratic display. "A striking change was observable everywhere and in everything. The houses were growing magnificent, and their tenants fashionable."32 The pulse of commerce between the Atlantic and Pacific coasts beat twice a month, a pace set by steamship departures. Every two weeks, "steamer day" sent San Francisco into a frenzy, as bankers prepared shipments of gold to New York houses, merchants called in debts to make payment to eastern suppliers, and everyone prepared letters and packages to mail to the "states."33 When steamers were expected, all eyes watched the tower atop Telegraph Hill, where signalmen would announce the approach of a paddlewheeler by running out oversize wooden semaphore flags-two long black boards, hanging down on either side of a tall pole. The signal's centrality to life in the city was seen during a performance by a visiting theater company. At a climactic point in the play, an actor flung out his arms, the sleeves of his black robe hanging down, and asked, "What does this mean?" A wag in the audience shouted, "Sidewheel steamer!" The knowing audience erupted in howls of laughter. When steamers were expected, all eyes watched the tower atop Telegraph Hill, where signalmen would announce the approach of a paddlewheeler by running out oversize wooden semaphore flags-two long black boards, hanging down on either side of a tall pole. The signal's centrality to life in the city was seen during a performance by a visiting theater company. At a climactic point in the play, an actor flung out his arms, the sleeves of his black robe hanging down, and asked, "What does this mean?" A wag in the audience shouted, "Sidewheel steamer!" The knowing audience erupted in howls of laughter.34 As the owner of one of the two primary steamship lines, Vanderbilt emerged as a powerful presence in San Francisco, where he never had and never would set foot. Railroad and newspaper promoters there besieged him with requests for investment. "If you knew of the hundreds of applications that we have daily for the same thing," he replied to one, "you would at once see that it would be ruinous to grant them."35 Rather than send money to California, Vanderbilt needed it close to home. His Nicaragua line posed a serious threat to the established interests on the Panama route, and those enemies had decided to strike back.
THE GHOST OF VICE PRESIDENT Daniel D. Tompkins bedeviled Cornelius Vanderbilt. When Tompkins had sought state assistance to develop Staten Island during the War of 1812, the New York legislature had chartered the Richmond Turnpike Company. Under the company's aegis, Tompkins started the first steam ferry to the island, which became known simply as the Staten Island Ferry. When Vanderbilt took over the ferry in 1838 it was still technically the Richmond Turnpike Company, the creature of eighteenth-century mercantilist philosophy. As such, it differed from later corporations in one important respect. This artificial person existed for a fixed term of years, after which its charter would expire. Just before it perished on April 1, 1844, its chief officers-Vanderbilt and Oroondates Mauran-assigned its leases and real-estate titles to two private citizens, Cornelius Vanderbilt and Oroondates Mauran. When Mauran died in 1848, Vanderbilt, as we've seen, purchased his stake, and was immediately forced to defend his title to the corporation's lands. New York's attorney general argued that the dead company's property reverted to the state. Vanderbilt battled back in court, where he repulsed the state's assault year after year. The ferry was worth defending, and it could pay for a few lawyers: the Daniel D. Tompkins bedeviled Cornelius Vanderbilt. When Tompkins had sought state assistance to develop Staten Island during the War of 1812, the New York legislature had chartered the Richmond Turnpike Company. Under the company's aegis, Tompkins started the first steam ferry to the island, which became known simply as the Staten Island Ferry. When Vanderbilt took over the ferry in 1838 it was still technically the Richmond Turnpike Company, the creature of eighteenth-century mercantilist philosophy. As such, it differed from later corporations in one important respect. This artificial person existed for a fixed term of years, after which its charter would expire. Just before it perished on April 1, 1844, its chief officers-Vanderbilt and Oroondates Mauran-assigned its leases and real-estate titles to two private citizens, Cornelius Vanderbilt and Oroondates Mauran. When Mauran died in 1848, Vanderbilt, as we've seen, purchased his stake, and was immediately forced to defend his title to the corporation's lands. New York's attorney general argued that the dead company's property reverted to the state. Vanderbilt battled back in court, where he repulsed the state's assault year after year. The ferry was worth defending, and it could pay for a few lawyers: the New York Times New York Times estimated its annual profits at $50,000. estimated its annual profits at $50,000.36 George Law never showed much interest in Staten Island. From his office in the Dry Dock Bank, he turned his eye toward Albany and Washington, where he bribed and bargained his way into government contracts, or to Panama, where his U.S. Mail Steamship Company connected to Pacific Mail, and where he had invested hundreds of thousands of dollars in the stocks and bonds of the Panama Railroad. By mid-1851, he had taken a number of steps to restore the original steamship monopoly. He had reached an agreement with Pacific Mail to divide the oceans (as noted earlier); he had purchased Charles Morgan's rival steamships, the Empire City Empire City and the and the Crescent City Crescent City, along with Morgan's agreement to abandon future competition; and he had driven off or intimidated most of the lesser steamship owners who dared oppose him.37 And then Vanderbilt opened the Nicaragua route. And then Vanderbilt opened the Nicaragua route.
As coarse and conniving as Law was, he lived under the same informal code of the transportation business that Vanderbilt had defined in court twenty years earlier. It was a code honored in the breach as often as the observance, but it was recognized nonetheless. If a man had a steamboat line, he was entitled to enjoy it in peace. If a competitor moved against him, then the competitor's other lines were fair game for a counterattack. They called it "self-defense." And so, with Vanderbilt cutting into profits on one of the most lucrative lines of transportation in American history Law struck back on the route Vanderbilt had plied since childhood.38 Shortly before the Commodore went aboard the Prometheus Prometheus to inaugurate the Nicaragua line, he gave orders for the construction of a ferry house on Staten Island, on a lot he had acquired through the late Richmond Turnpike Company. A crew went to work on the structure, only to discover that Henry M. Western claimed the property as his own, and had leased it to the New-York & Staten Island Steam Ferry Company. to inaugurate the Nicaragua line, he gave orders for the construction of a ferry house on Staten Island, on a lot he had acquired through the late Richmond Turnpike Company. A crew went to work on the structure, only to discover that Henry M. Western claimed the property as his own, and had leased it to the New-York & Staten Island Steam Ferry Company.
The moving force behind the new ferry company was Law, who had joined with Western and other Staten Islanders who were eager to break Vanderbilt's monopoly. With the Commodore away, his men worked warily alongside Law's employees, who built a dock for the new ferry on the same lot. Law's men started to openly harass Vanderbilt's, throwing obstacles in their way and nailing up boards. One of Vanderbilt's subordinates went to court for an injunction, which briefly stopped the intimidation. But Law's workers still snarled threats, and violence hung in the air.
On the afternoon of July 26, as Vanderbilt piloted a steamboat through the far-off jungle, a mob of three hundred workers, armed with axes and crowbars, marched down the road toward the new building, led by Henry Western. "Tear it down," he bellowed. "It is on my land and I will be responsible." The mob rushed forward, swinging axes and shouting, "Down with the building!" Vanderbilt's foreman tried to stop them, telling them not to "cut" the structure. "They replied," the foreman later testified, "that if deponent did not get out of the way they would cut him too." They razed the building to the ground, then ran a wooden footbridge over the foundation to the dock, where the boats of the new ferry began to land on July 27. Law's men posted a guard, but Vanderbilt's men reportedly retaliated by cutting down the pier's pilings.39 Elsewhere Law took a more subtle approach to countering his opponent. He worried that Vanderbilt's boast might prove true, that the Nicaragua route might consistently carry passengers between New York and San Francisco in twenty-five days, roughly a week less than the average on the Panama route. On July 21, Law told the postmaster general that most of his ships would sail directly between New York and Panama to save time; a separate postal steamer would tag along behind, making the multiple stops mandated by contract. Yet passengers traveling by way of Nicaragua still arrived from California eight days ahead of those on the Panama route. So Law and his partners resorted to a whispering campaign, spreading accounts of the poisonous climate and long delays encountered on Vanderbilt's line. Even the London Times Times took note of "the constant attempts to depreciate its success and underrate its convenience." took note of "the constant attempts to depreciate its success and underrate its convenience."40 The Nicaragua transit did did suffer problems. After all, it ran through hundreds of miles of rapids-filled river and storm-tossed lake. Only small, shallow-draft boats could run the river, a guarantee of overcrowding. Droughts and heavy rains both made for delays. The route ran through a wilderness without amenities; it would take time before hotels and restaurants could be built. Steamships arrived early or late. Cholera and tropical diseases plagued travelers in this era of dim medical knowledge. Passengers often complained, bitterly and publicly. But all this was true of the Panama route as well. suffer problems. After all, it ran through hundreds of miles of rapids-filled river and storm-tossed lake. Only small, shallow-draft boats could run the river, a guarantee of overcrowding. Droughts and heavy rains both made for delays. The route ran through a wilderness without amenities; it would take time before hotels and restaurants could be built. Steamships arrived early or late. Cholera and tropical diseases plagued travelers in this era of dim medical knowledge. Passengers often complained, bitterly and publicly. But all this was true of the Panama route as well.41 Vanderbilt returned to New York to find that Daniel Allen already had filed a lawsuit against Law and his company for the attack on Staten Island. The Commodore prepared for a long war to keep his monopoly on the ferry. To fight the aspersions cast on the Nicaragua route, he served as his own publicist, writing letters to the press to tout his accomplishments. He constructed a new steamboat for Lake Nicaragua, named Central America Central America. "When the expedition that has thus far marked the progress of this little vessel is taken into consideration I think it will somewhat astonish the world," he wrote. "I had her built in 27 days.... Let some one try to beat it."42 On October 22, 1851, Vanderbilt embarked on his final voyage to Nicaragua. His three trips neatly adumbrated the enormous effort he had put into his California line, for they were in turn geographical, political, and commercial-or, perhaps, maritime-in nature. First he had gone to scout the canal and transit route, next to create the corporate body of Accessory Transit, and last to crush his competitors. Unlike Law or William H. Aspinwall, the Commodore was a technical master of steam navigation, and it was to trumpet his prowess that he personally took the Central America Central America to Nicaragua. The 375-ton steamboat trailed in the wake of the new to Nicaragua. The 375-ton steamboat trailed in the wake of the new Daniel Webster Daniel Webster, sister ship to the Prometheus Prometheus, sailing on its maiden voyage. It was another day of four simultaneous steamship departures; a huge crowd pushed onto the slips, and some of the onlookers even climbed wood piles and heaps of coal to get a look. "No sooner were the vessels observed to be moving from their berths," the New York Tribune New York Tribune reported, "than parting cheers began to be exchanged between the people on board and those on shore, which were heartily renewed and continued till the increasing distance... rendered them inaudible." reported, "than parting cheers began to be exchanged between the people on board and those on shore, which were heartily renewed and continued till the increasing distance... rendered them inaudible."43 Decades later, Vanderbilt's clerk, Lambert Wardell, would describe the Commodore as a man who couldn't be bothered with details. Clearly that was not true in 1851. The millionaire checked and double-checked the two stout hawsers that ran out over the stern to the Central America Central America, as the Daniel Webster Daniel Webster paddled through the Atlantic swell. Towing the boat onto the ocean was highly risky, as he had often been told before leaving New York. "All the 'knowing ones,'" Vanderbilt wrote, "and particularly those of the greatest experience of the seafaring part of the community, pronounced it to be impossible." The critics gave the paddled through the Atlantic swell. Towing the boat onto the ocean was highly risky, as he had often been told before leaving New York. "All the 'knowing ones,'" Vanderbilt wrote, "and particularly those of the greatest experience of the seafaring part of the community, pronounced it to be impossible." The critics gave the Central America Central America six hours before it swamped. six hours before it swamped.
That evening, the water grew restless, then rough. After nightfall, the sea lashed out violently. Vanderbilt made his way across the tossing deck to the stern and learned that one of the hawsers had snapped. "This would have been the last of the tow had I not been here," he declared. As always, the moment of crisis-of physical danger-showed the Commodore at his finest. He ordered the Daniel Webster Daniel Webster to slacken its speed and personally directed the crew as they attached a new cable in the darkness, amid crashing waves and a soaking spray. The to slacken its speed and personally directed the crew as they attached a new cable in the darkness, amid crashing waves and a soaking spray. The Webster Webster went ahead again, and the new line held. The crisis had passed. went ahead again, and the new line held. The crisis had passed.44 On November 2, Vanderbilt arrived at Greytown and piloted the Central America Central America into the San Juan River. Now came the second moment of danger. "She is a large vessel to get up through this river, drawing about four feet of water," he wrote to a friend in New York, "when you know I never pretended, nor do I now, to navigate it with a greater draught of 20 to 22 inches, which is the draught of the small iron steamers now navigating it." After a hard struggle, he made it through on November 19, and the into the San Juan River. Now came the second moment of danger. "She is a large vessel to get up through this river, drawing about four feet of water," he wrote to a friend in New York, "when you know I never pretended, nor do I now, to navigate it with a greater draught of 20 to 22 inches, which is the draught of the small iron steamers now navigating it." After a hard struggle, he made it through on November 19, and the Central America Central America began to carry five hundred passengers at a time across the rough waters of Lake Nicaragua. "The steamer will now always be in readiness on the Lake," he wrote to the began to carry five hundred passengers at a time across the rough waters of Lake Nicaragua. "The steamer will now always be in readiness on the Lake," he wrote to the New York Tribune New York Tribune, "which will hereafter remedy the former delays of the line."45 His mission accomplished, Vanderbilt descended the now-familiar river to Greytown. With the increasing traffic across the isthmus, Americans hoping to profit from the migration had swelled the village. They met with frustration. Few passengers stopped in town; most transferred directly between the steamships and the riverboats. Accessory Transit set up its facilities across the harbor, at Punta Arenas. Exasperated municipal officials began to pester steamship and riverboat captains to pay port fees, only to be ignored-in part because the officials were black Jamaicans and the captains white Americans, and in part because the British had stipulated, as Sir Henry Lytton Bulwer had informed Daniel Webster, "All vessels or goods connected with the Nicaraguan Canal Company going up the River San Juan should be admitted free of duty."46 On November 21, a well-satisfied Vanderbilt stepped aboard the Prometheus Prometheus from one of the Accessory Transit Company's riverboats tied alongside. With him came some five hundred passengers traveling from California, who flocked through the ship, dropping bags in their cabins or claiming berths in steerage. At two in the afternoon, as Captain Henry Churchill was about to give orders for departure, a boat rowed over from Greytown and disgorged the port collector, Robert Coates. As on four previous occasions, Coates demanded port fees. This infuriated Vanderbilt; he had been assured by Lord Palmerston himself in London that his ships would be free from municipal interference. "I cannot nor will not recognize any authority here," he snapped, "and I will not pay unless I am made by force." The crew bundled Coates and his entourage off the from one of the Accessory Transit Company's riverboats tied alongside. With him came some five hundred passengers traveling from California, who flocked through the ship, dropping bags in their cabins or claiming berths in steerage. At two in the afternoon, as Captain Henry Churchill was about to give orders for departure, a boat rowed over from Greytown and disgorged the port collector, Robert Coates. As on four previous occasions, Coates demanded port fees. This infuriated Vanderbilt; he had been assured by Lord Palmerston himself in London that his ships would be free from municipal interference. "I cannot nor will not recognize any authority here," he snapped, "and I will not pay unless I am made by force." The crew bundled Coates and his entourage off the Prometheus Prometheus. Unnoticed by Vanderbilt, Coates notified the British consul, who dispatched a messenger to the British warship Express Express, anchored offshore.47 "I hove up my anchor and dropped down the harbor with the current, having alongside one of the river steamers, receiving from her the baggage of the passengers," Captain Churchill reported later that day. "The English brig-of-war, lying a short distance from us, immediately got under weigh, made sail for us, and when within a quarter of a mile from us fired a round-shot over the forecastle, not clearing the wheelhouse over ten feet."
Stunned, Vanderbilt and the passengers watched as smoke again billowed from the warship's gunports, and a moment later heard the cannon's boom and the dull whir of a second ball rocketing over the stern, "so near that the force of the ball was distinctly felt by several passengers," Churchill wrote. When he sent a boat over to ask the reason for the shots, "the captain stated that it was to protect the authorities of Greytown in their demands, and if we did not immediately anchor he would fire a bombshell into us, and ordered his guns loaded with grape and canister shot."
Some of the passengers, filled with fury at the bully Britain, demanded that they risk it. But Vanderbilt told the captain to steam back into the harbor and anchor, as the Royal Navy had ordered. (To pile on insult to American pride, the British sent over a detachment to see that the Prometheus Prometheus's boiler fires were extinguished.) Then the Commodore went ashore to pay $123 to the triumphant Greytown authorities.48 No sooner had the Prometheus Prometheus returned to the United States than news of the affair prompted a national wave of indignation. Americans had a clear sense of inferiority toward Britain that, together with a belligerent pride in the superiority of their republican institutions, primed them for outrage. And it returned to the United States than news of the affair prompted a national wave of indignation. Americans had a clear sense of inferiority toward Britain that, together with a belligerent pride in the superiority of their republican institutions, primed them for outrage. And it was was an outrage. A British warship had shot at an unarmed American passenger ship, had threatened to destroy it and kill hundreds of civilians. The order to fire came from the British consul, James Green, in violation of treaty and explicit assurances from London. an outrage. A British warship had shot at an unarmed American passenger ship, had threatened to destroy it and kill hundreds of civilians. The order to fire came from the British consul, James Green, in violation of treaty and explicit assurances from London.
Joseph White carried an official protest from the American Atlantic & Pacific Ship Canal Company to Washington (oddly, as the canal company was not involved). The United States government demanded an explanation from London, and dispatched the USS Saranac Saranac to Greytown. Newspapers across the country voiced anger, even a willingness to go to war with the British Empire. "The outrage upon the to Greytown. Newspapers across the country voiced anger, even a willingness to go to war with the British Empire. "The outrage upon the Prometheus Prometheus demands the most ample apology and reparation," proclaimed the demands the most ample apology and reparation," proclaimed the New York Herald New York Herald, "or it demands the application of the Jacksonian doctrine of retaliation and reprisals."49 As luck would have it, the British cabinet was in a state of turmoil. On December 21, Lord Russell dismissed Palmerston from the Foreign Office; his replacement, Lord Granville, eventually wrote to Washington, "Her Majesty's Government have no hesitation in offering an ample apology for that which they consider to have been an infraction of Treaty engagements." The onus fell on the Greytown consul, James Green, but the ultimate victim may have been Frederick Chatfield, the British viceroy in Central America who had charted an aggressively anti-American course. London recalled him, even though he had not taken direct part in the affair. The real result of the near bombardment of Cornelius Vanderbilt, then, was a more stable diplomatic environment.50 In his war with George Law, he had gained another advantage. In his war with George Law, he had gained another advantage.
IF THERE WAS ONE RELIGIOUS RITE that Vanderbilt believed in, it was marriage. Weddings brought him sons-in-law-and sons-in-law made trustworthy assistants, which were hard to find in the treacherous business world at mid-century. Vanderbilt's own sons sorely disappointed him, but his daughters gave him a steady succession of replacements in the form of their husbands. In the end, he would rely on no son-in-law, not even Daniel Allen, more than Horace F. Clark. that Vanderbilt believed in, it was marriage. Weddings brought him sons-in-law-and sons-in-law made trustworthy assistants, which were hard to find in the treacherous business world at mid-century. Vanderbilt's own sons sorely disappointed him, but his daughters gave him a steady succession of replacements in the form of their husbands. In the end, he would rely on no son-in-law, not even Daniel Allen, more than Horace F. Clark.
Clark exuded ambition from every pore-ambition in politics, ambition in business, ambition in society. Born in 1815 to a respected clergyman in Southbury Connecticut, he graduated from Williams College and began to practice law in New York in 1837. In 1848 he joined the firm of Charles A. Rapallo, the Commodore's attorney. Round-faced and wide-eyed, Clark pursued high-profile cases-demanding, for example, that famous writer Nathaniel P. Willis hand over letters written to Willis by a client's wife. Clark threw himself into Democratic Party politics alongside such luminaries as August Belmont. Above all, he tried to climb in social standing. George Templeton Strong derided him in 1851 as "that snob of snobs"-not in the sense of one who condescends, as the word would later mean, but one who sucks up insufferably. A dictionary of that era defined "snob" as "a person who looks up to his or her social betters and tries to copy or associate with them." So when Clark married Maria Louise Vanderbilt on April 13, 1848, on a Thursday evening several months before the California gold rush changed the world, it was undoubtedly a wedding in keeping with the customs of New York's social elite, even if that elite shunned the event itself.51 Years after the wedding, a story would circulate about Clark's request for the Commodore's permission to marry Louise (as she was called). Vanderbilt assumed the lawyer was after his wealth, and curtly refused. "The impetuous Horace, with more emphasis than elegance, told him to take his money and be d--d, he would have the girl anyhow," a newspaper later wrote. "Whereupon the Commodore, always an admirer of pluck and perseverance, quickly relented and consented to the union." The story sounds suspiciously like something that a self-admiring man like Clark might tell of himself. He was too smart a Yankee not to see, and take advantage of, his new connection; and Vanderbilt was smart enough to see how useful Clark could be to him. The new son-in-law boasted strengths in precisely the areas where Vanderbilt felt most vulnerable-those requiring great learning, such as the law, public speaking, and politics, areas in which his business increasingly carried him.52 If the Commodore felt a growing appreciation for his new son-in-law, he seethed at the son who bore his own name. When Cornelius Jeremiah came to the wedding in his father's house at 10 Washington Place, the father boiled over. In the midst of the reception, this finely calibrated social event, he lashed out at his son with his fists. "The Commodore tried to do something to Cornelius," son-in-law James Cross recalled, and Corneil "fled from the house." The specific cause is unclear. The incident occurred before Vanderbilt sent Corneil to California, but perhaps the boy already showed some of the character flaws that later became so pronounced.
Corneil returned from California in 1849 with something broken inside of him. It was the gear that connects labor with reward, diligence with satisfaction. Perhaps it had never worked properly in the first place, but the land of excitement and easy money had ruined it for good. Back on the Atlantic coast, he drew another draft on his father, which his father also refused to pay. He then agreed to seek treatment in an asylum. It did not help. He began to disappear into card and roulette-wheel saloons, only to emerge penniless. He developed a taste for fine clothes-a black silk tie, white watered silk vest, black frock coat, and kid gloves-but he neglected to pay for them, causing his creditors to pester the Commodore with the bills (unsuccessfully). Vanderbilt had given his own name to this boy, only to see him become everything he despised: sickly, weak, spendthrift, dishonest, dishonorable.53 William H. Vanderbilt-or Billy, as the Commodore still called him-had said nothing about his father's outburst at the wedding. He knew better than to try to fight such abuse, which he himself still received during his father's regular visits to Staten Island. Billy continued to complain to Daniel Allen about "the old man." Vanderbilt had exiled Billy to a farm, yet harshly rebuffed his requests to borrow money to improve the place. "He would say of his father that he was mean," Allen later recalled, "that he couldn't get anything out of him and couldn't get along without money." As a prosperous businessman as well as a brother-in-law, Allen was always willing to help, loaning a few hundred dollars here and there, which Billy repaid promptly. Very likely it was Allen who brought Billy into his first joint business venture with his father, the ill-fated California Navigation Company (under which they had shipped the disassembled steamboat to San Francisco at the start of the gold rush).54 Gradually-and almost unnoticed by the Commodore-the supposedly meek, soft son turned his farm into a profitable operation. "He was a hard master to work for," one field hand told W. A. Croffut, the nineteenth-century biographer. Knowing that new workers tried to make a good impression on their first day, Billy "would count the number of rows of corn they had hoed, and then require them to do the same amount of work every day"55 Billy's stature rose steadily, lifted by his own success. On December 5, 1851, virtually the entire population of Staten Island poured down to the water's edge to see "the greatest living man," in the words of the New York Herald: New York Herald: Louis Kossuth, the Hungarian revolutionary who had nearly won his nation's independence from the Austrian Empire. Billy stood in front of the crowd as part of Richmond County's official welcoming committee; the other members included Daniel Allen and George A. Osgood, another of the Commodore's sons-in-law. Louis Kossuth, the Hungarian revolutionary who had nearly won his nation's independence from the Austrian Empire. Billy stood in front of the crowd as part of Richmond County's official welcoming committee; the other members included Daniel Allen and George A. Osgood, another of the Commodore's sons-in-law.
The next day, Kossuth took the Vanderbilt Vanderbilt across the harbor to Manhattan. There the Commodore must have had trouble getting to his place of business at 9 Bowling Green, for an immense mob jammed into every crevice and climbed every ledge and pole to see the Hungarian hero. across the harbor to Manhattan. There the Commodore must have had trouble getting to his place of business at 9 Bowling Green, for an immense mob jammed into every crevice and climbed every ledge and pole to see the Hungarian hero.56 When Vanderbilt did reach his door and climbed the steps to the second floor, he strode past Allen's desk on his way to his own office in the rear. Allen would present the affairs of the steamship business, discuss decisions tentatively made, and show him handbills and documents. The Commodore would shift the cigar around in his mouth, put on his reading glasses, and give his approval or curtly say otherwise. When Vanderbilt did reach his door and climbed the steps to the second floor, he strode past Allen's desk on his way to his own office in the rear. Allen would present the affairs of the steamship business, discuss decisions tentatively made, and show him handbills and documents. The Commodore would shift the cigar around in his mouth, put on his reading glasses, and give his approval or curtly say otherwise.
In late 1851 and early 1852, there was much for him to review. "That was a time of great emigration," recalled James Cross. "There was a great demand for passages." With the Nicaragua steamships sailing from Pier No. 2, just around the corner, ticket buyers packed into the office. Daniel Drew regularly stopped by to chat, discussing their joint ownership of the North America North America and Wall Street matters. And Vanderbilt often unrolled plans of various steamers, pondering which to buy to expand his fleet, especially on the Pacific, where he needed more tonnage. In the process, he built a partnership with Robert and George Schuyler, Alexander Hamilton's illustrious nephews, who helped settle a dispute between Vanderbilt and shipbuilder William H. Brown over the six-hundred-ton steamer and Wall Street matters. And Vanderbilt often unrolled plans of various steamers, pondering which to buy to expand his fleet, especially on the Pacific, where he needed more tonnage. In the process, he built a partnership with Robert and George Schuyler, Alexander Hamilton's illustrious nephews, who helped settle a dispute between Vanderbilt and shipbuilder William H. Brown over the six-hundred-ton steamer Independence Independence. "We came in and re-imbursed Mr. Vanderbilt his advances" for the ship, Robert testified, "and let the ship remain in the line, and took our chance for the earnings." That brief statement shows how thoroughly the aristocratic Schuylers trusted Vanderbilt. As always, though, Vanderbilt trusted his own family most. On January 21, he sent his son-in-law Cross to California to act as his new agent in San Francisco and Jacob Vanderbilt to Nicaragua to supervise the Accessory Transit Company's affairs.57 As master of one of the two primary channels of commerce and travel between San Francisco and New York, the Commodore emerged as a national figure with a public stature worthy of his informal title. But Washington continued to fund his rivals, a circumstance that offended both his quasi-Jacksonian outlook and his personal interests. In January 1852 he offered to carry the mail via Nicaragua for $250,000 per year, compared to the current annual payments of $638,000 to the Pacific Mail and U.S. Mail Steamship companies and $100,000 to the still-incomplete Panama Railroad.
Though Congress declined his offer, he redoubled his competition. He purchased the Samuel S. Lewis Samuel S. Lewis in February and the in February and the Brother Jonathan Brother Jonathan in March, as well as the in March, as well as the Pioneer Pioneer and the and the Monumental City Monumental City. He ordered eighteen omnibuses for the carriage road from San Juan del Sur to Virgin Bay. He launched an 1,800-ton steamship, the Northern Light Northern Light, from the Simon-son yard, and began construction on another steamship. As if in tribute to the great turn in his career, it was named Star of the West Star of the West. Bankers, merchants, and travelers all gained as he cut fares, added facilities, and put new hulls in the water.58 No one studied Vanderbilt's march more closely than George Law. In February, in seeming imitation of the Commodore's celebrated journeys to Nicaragua, Law sailed to Panama to inspect the progress of the railroad he had invested in so heavily. He inaugurated the Atlantic terminus of the line at Navy Bay, where he christened the new city of Aspinwall. He returned to New York in May and was welcomed with a public dinner at the Astor House hotel, hosted by Charles Morgan, Isaac Newton, Daniel E. Sickles, and an obscure Democratic Party functionary named William M. Tweed.59 Law took Vanderbilt's competition personally. One of Law's partners was Colonel Sloo, the original steamship "dummy;" alarmed at the "ruinous competition with the Nicaragua Company," Sloo accused Law of refusing an offer to set fares jointly with Accessory Transit "in consequence of an old grudge between Law and C. Vanderbilt." Law was full of grudgery but he also faced a deeper problem: Nicaragua's greater proximity to the United States gave Vanderbilt a permanent advantage over the Panama lines. A faster passage was one result, of course, attracting both passengers and specie shippers (who lost money with every day gold remained in transit, and who paid a lucrative commission on consignments). But the biggest benefit was the savings Vanderbilt reaped in operational costs. "The route by the Isthmus of Nicaragua is decidedly the most economical route," declared John A. Buckman, a veteran of the California steamship business. Because of the shorter trip, a ship needed fewer provisions and, in particular, less coal, the biggest operating expense. On the Pacific alone, a Nicaragua voyage saved at least $5,000 over one to Panama. Even if the rival lines agreed to charge the same fare, Vanderbilt would earn a larger profit.60 Law had the advantage of a federal subsidy, of course; he also counted on the Panama Railroad, when complete, to make the Panama route just as fast. At the moment, he had to cope with a small distraction: in March, the New York Times New York Times reported that the New York attorney general, under highly suspicious circumstances, had lobbied the board that was awarding contracts to widen the Erie Canal to set aside $1 million for Law. Small wonder Law left the country for Panama. reported that the New York attorney general, under highly suspicious circumstances, had lobbied the board that was awarding contracts to widen the Erie Canal to set aside $1 million for Law. Small wonder Law left the country for Panama.61 Vanderbilt soon had his own problems. On March 27, he learned that the North America North America had run aground on the coast of Mexico, and was a total loss. "The owners"-meaning Vanderbilt and Drew-"might as well have thrown $400,000 into the sea as to lose her," remarked James Cross. The ship was also uninsured, as was Vanderbilt's custom. Still worse, it was the biggest ship on the Pacific side, with six hundred berths-though it usually packed in nine hundred passengers. In San Francisco, Cross frantically worked to charter and dispatch steamships to carry customers stuck in Nicaragua, but many remained stranded for weeks. Some eventually gave up and returned to New York. had run aground on the coast of Mexico, and was a total loss. "The owners"-meaning Vanderbilt and Drew-"might as well have thrown $400,000 into the sea as to lose her," remarked James Cross. The ship was also uninsured, as was Vanderbilt's custom. Still worse, it was the biggest ship on the Pacific side, with six hundred berths-though it usually packed in nine hundred passengers. In San Francisco, Cross frantically worked to charter and dispatch steamships to carry customers stuck in Nicaragua, but many remained stranded for weeks. Some eventually gave up and returned to New York.
One of the latter was Sidney Briggs. He went to 9 Bowling Green and introduced himself to Vanderbilt. "I asked him if he proposed to do anything" to provide compensation, Briggs recalled. "He said he proposed to do what was right.... I told him there was no other way but for us to return. He said he supposed not." Then Briggs asked why, after after Vanderbilt had learned that he had lost his biggest Pacific steamship-when he knew Nicaragua was clogged with stranded travelers-he had let the Vanderbilt had learned that he had lost his biggest Pacific steamship-when he knew Nicaragua was clogged with stranded travelers-he had let the Northern Light Northern Light sail from New York, full of passengers. "His reply was that some of the tickets for the sail from New York, full of passengers. "His reply was that some of the tickets for the Northern Light were Northern Light were then in the hands of the passengers, that if he had kept back a part, it would have frightened the whole, and it was better for him to let us come back and settle with us and pay us our damages than to let the then in the hands of the passengers, that if he had kept back a part, it would have frightened the whole, and it was better for him to let us come back and settle with us and pay us our damages than to let the Northern Light Northern Light go out empty." go out empty."
Vanderbilt had added up the numbers, and calculated that it would be more profitable to strand dozens, perhaps hundreds, of passengers in a tropical country, exposed to diseases for which they had no resistance, in a region chronically short of shelter and amenities, than to hold his ship. Of all the things the Commodore would be accused of in his long career, it would never be said that he had gone soft.62 Claims for damages soon flowed in. To defend himself, Vanderbilt turned to his son-in-law Horace Clark. Clark faced a grueling task, but he was wise enough to see that it was an apprenticeship, or even a test. Vanderbilt would give him bigger assignments in the future-greater, perhaps, than anything Clark now imagined.
TRAGEDY, TREACHERY, AND ACCIDENT most often strike at home. On July 5, 1852, that lesson came on a crowded dock at Vanderbilt's Landing, the terminal of the Staten Island Ferry, just a short distance from the Commodore's old mansion. At four o'clock on that Monday afternoon, the most often strike at home. On July 5, 1852, that lesson came on a crowded dock at Vanderbilt's Landing, the terminal of the Staten Island Ferry, just a short distance from the Commodore's old mansion. At four o'clock on that Monday afternoon, the Hunchback Hunchback chuffed in, and a crowd of passengers on the pier pushed forward onto a hinged bridge at the end, held in place by heavy chains. The bridge was designed to allow the boat to dock no matter what the state of the tide; it was chuffed in, and a crowd of passengers on the pier pushed forward onto a hinged bridge at the end, held in place by heavy chains. The bridge was designed to allow the boat to dock no matter what the state of the tide; it was not not designed for the weight now pressing upon it. When the arriving passengers surged off the boat, the chains snapped, sending dozens of men, women, and children into the water below, smacking on top of each other, pushing the first to fall down under the surface. In the end, seventeen bodies would be recovered, most of them women, most of them German immigrants returning to the city from a jaunt to breezy Staten Island. A grand jury convened; in mid-August, it indicted Cornelius Vanderbilt for manslaughter. He would need Horace Clark's services more than ever. designed for the weight now pressing upon it. When the arriving passengers surged off the boat, the chains snapped, sending dozens of men, women, and children into the water below, smacking on top of each other, pushing the first to fall down under the surface. In the end, seventeen bodies would be recovered, most of them women, most of them German immigrants returning to the city from a jaunt to breezy Staten Island. A grand jury convened; in mid-August, it indicted Cornelius Vanderbilt for manslaughter. He would need Horace Clark's services more than ever.63 One week before the indictment was handed down, Joseph White and Orville Childs stepped off the Atlantic steamship Africa Africa onto one of New York's piers, having returned from a second attempt to convince British bankers to provide capital for the canal. Back in March, Childs had presented his full report to the directors of the canal company, making an eminently reasonable (if unreasonably precise) construction estimate of $13,243,099.47. This had caused the price of the 192 canal shares (or "rights") to shoot up on the stock exchange, from $1,800 to $3,250 to $3,600. Childs then had accompanied White and H. L. Routh to London to present the report to Rothschild, Baring Brothers, and the other British investment banks. The delegation returned with joyful news. At a meeting of the canal-company board, held on August 19, White announced that British capitalists had agreed to invest half of the amount needed to build the canal. Canal rights soared to $4,000 each. onto one of New York's piers, having returned from a second attempt to convince British bankers to provide capital for the canal. Back in March, Childs had presented his full report to the directors of the canal company, making an eminently reasonable (if unreasonably precise) construction estimate of $13,243,099.47. This had caused the price of the 192 canal shares (or "rights") to shoot up on the stock exchange, from $1,800 to $3,250 to $3,600. Childs then had accompanied White and H. L. Routh to London to present the report to Rothschild, Baring Brothers, and the other British investment banks. The delegation returned with joyful news. At a meeting of the canal-company board, held on August 19, White announced that British capitalists had agreed to invest half of the amount needed to build the canal. Canal rights soared to $4,000 each.64 Then, mysteriously, the price suddenly collapsed. Someone was dumping the rights, in sufficient quantities to drop the price to $750. The press found it "striking," and baffling.65 Who would be selling when construction of the canal now seemed assured? Close behind came a second surprise: a collapse in the stock of the Accessory Transit Company. "A transfer of 1,500 shares, it is stated, was made today by one of the strongest parties connected with the Company," the Who would be selling when construction of the canal now seemed assured? Close behind came a second surprise: a collapse in the stock of the Accessory Transit Company. "A transfer of 1,500 shares, it is stated, was made today by one of the strongest parties connected with the Company," the New York Tribune New York Tribune reported. (This was a very large percentage of the 38,700 Transit shares in existence.) "The street appears to be entirely in the dark as to the reason for the late decline in this stock." reported. (This was a very large percentage of the 38,700 Transit shares in existence.) "The street appears to be entirely in the dark as to the reason for the late decline in this stock."66 A war was playing out behind the scenes through the offers and bids of brokers at the Merchants' Exchange-a war between Vanderbilt and White. After White's return from London, the long-simmering tension between the two men had finally boiled over. It appears that White had betrayed Vanderbilt by withholding the real result of his mission to London. The great bankers of London had not not agreed to put up half the money for the canal. On July 23, Joshua Bates, an American partner of Baring Brothers, had written a long letter to Thomas Baring that destroyed any chance of British investment in the project. "The proposed size of the canal strikes me as totally inadequate to the largest class of ships," Bates argued. "To make this increased depth would more than double the cost." At that price, the project would never pay for itself. The great Nicaragua canal project was dead. Back in New York, White had lied about his failure, loudly and long enough to dump his soon-to-be-worthless canal rights. It appears one of those who was burned by this brazen play was Vanderbilt. agreed to put up half the money for the canal. On July 23, Joshua Bates, an American partner of Baring Brothers, had written a long letter to Thomas Baring that destroyed any chance of British investment in the project. "The proposed size of the canal strikes me as totally inadequate to the largest class of ships," Bates argued. "To make this increased depth would more than double the cost." At that price, the project would never pay for itself. The great Nicaragua canal project was dead. Back in New York, White had lied about his failure, loudly and long enough to dump his soon-to-be-worthless canal rights. It appears one of those who was burned by this brazen play was Vanderbilt.67 "An exceedingly bitter personal hostility existed between White and Vanderbilt, so much so that they were not on speaking terms at that time," Daniel Allen testified three years later.68 Vanderbilt could do nothing to revive the now-lifeless canal rights, but he could go after White in his last stronghold: the Accessory Transit Company. For much of the previous year, White had been intriguing within the company, stealing influence from the Commodore. "Mr. Cornelius Vanderbilt," the Vanderbilt could do nothing to revive the now-lifeless canal rights, but he could go after White in his last stronghold: the Accessory Transit Company. For much of the previous year, White had been intriguing within the company, stealing influence from the Commodore. "Mr. Cornelius Vanderbilt," the New York Times New York Times reported on August 27, "has not had, for some months, as much control of the affairs of the Company as he had desired, nor as much as his ownership of the line of California steamers, from which the Transit Company derive their main profits, would seem to entitle him." As vain as he was treacherous, White was heard to boast, "I am the Nicaragua Transit company!" reported on August 27, "has not had, for some months, as much control of the affairs of the Company as he had desired, nor as much as his ownership of the line of California steamers, from which the Transit Company derive their main profits, would seem to entitle him." As vain as he was treacherous, White was heard to boast, "I am the Nicaragua Transit company!"69 The corporate form had aided Vanderbilt in amassing capital and negotiating with sovereign governments to open the Nicaragua line; now it served him in a more personal way, as he used it as a weapon for revenge. As soon as he learned of White's deception, he launched a full-scale assault on the price of Accessory Transit shares-the bulwark of White's wealth-to impoverish his foe. "Vanderbilt advised [me] to divest... this stock," recalled Franklin Osgood, "and declared the stock worthless, as long as White remained in the company, for he was using the company to his own benefit." But in trying to drive the price down, Vanderbilt confronted a serious problem: the Accessory Transit Company was extremely profitable. The Commodore himself had talked up the stock in early 1852, when it had declared its first dividend. Since then, its competitive position had only grown stronger. Within Nicaragua, the friendly Conservative government had tightened its control, capturing Leon early in the year.
But Vanderbilt owned the all-important ships. He announced that his vessels would stop at Panama first before continuing on to Nicaragua. "The effect, of course, is to damage the Transit interest," the New York Times New York Times wrote. Instantly Nicaragua became the slowest route. Accessory Transit plunged from 40 to 24. wrote. Instantly Nicaragua became the slowest route. Accessory Transit plunged from 40 to 24.* Vanderbilt suffered losses, but revenge mattered more. "Vanderbilt declared that he would rather sink his ships at the dock than that White should make money," Osgood reported. Vanderbilt suffered losses, but revenge mattered more. "Vanderbilt declared that he would rather sink his ships at the dock than that White should make money," Osgood reported.70 "Commodore Vanderbilt resigned the Presidency of the Transit Co., and with it the Directorship, which his colleagues promptly accepted," the Times Times reported on September 14. "The fight on the Stock, therefore, is not likely to end at present. The immediate relatives of Commodore V. have been selling and talking it down for some weeks past. It is said that he has never been beaten in a Stock or Steamboat contest of this sort." In all likelihood, his lead broker remained Nelson Robinson. Robinson recently had dissolved Drew, Robinson & Co. and moved into a luxurious home on fashionable Union Place, but he remained Vanderbilt's friend and a master of the game. reported on September 14. "The fight on the Stock, therefore, is not likely to end at present. The immediate relatives of Commodore V. have been selling and talking it down for some weeks past. It is said that he has never been beaten in a Stock or Steamboat contest of this sort." In all likelihood, his lead broker remained Nelson Robinson. Robinson recently had dissolved Drew, Robinson & Co. and moved into a luxurious home on fashionable Union Place, but he remained Vanderbilt's friend and a master of the game.
Then a strange thing happened. Four days later, on September 18, the Times Times reported that the "Vanderbilt" party were now reported that the "Vanderbilt" party were now buying buying Transit stock, and that White and his friends were selling. "It is a frisky game of late," the financial writer commented. Transit stock, and that White and his friends were selling. "It is a frisky game of late," the financial writer commented.71 On closer inspection, the turnaround appears less mysterious than brilliant. Vanderbilt used his "bear" campaign to pry shares out of the hands of White and his friends, and gain control of the company. How could selling lead to owning more? Most stocks, especially those in a "fancy" company like Accessory Transit (a volatile one that attracted speculators, who bought and sold rapidly), were bought "on margin." A broker would lend the purchase money to his client, who merely put up a margin-an amount sufficient to protect the broker against loss if the price fell. Such stocks were, to use the technical term, "hypothecated." When prices fell, the broker could either ask for a bigger margin from the client or sell the stock immediately to avoid a loss. The faster the price dropped, the more likely brokers were to dump hypothecated stocks, because they had less time to get more money from their clients. That drove the price down further, and eventually shook loose all the stock held on margin.
This was the secret behind Vanderbilt's bear attack on the Transit Company. Even before the end of August, the New York Tribune New York Tribune observed that the stock "has sunk so low that the margins on a large amount of hypothecated stock have been used up and this stock has also come upon the market." By September 18, the price fell far enough that Robinson stopped selling and began to buy, on his own behalf as well as that of Vanderbilt, his family, and a new ally, Charles Morgan. observed that the stock "has sunk so low that the margins on a large amount of hypothecated stock have been used up and this stock has also come upon the market." By September 18, the price fell far enough that Robinson stopped selling and began to buy, on his own behalf as well as that of Vanderbilt, his family, and a new ally, Charles Morgan.
But White was not going away. He could not be pried from the shares that he owned outright, those he had been given as one of the original incorporators of the company. So, as the battle raged, Vanderbilt dispatched Franklin Osgood (a large Transit shareholder) to offer terms to the man whom he could not bear to speak to himself. It was useless. "White declared," Osgood said, "that... Vanderbilt was a great scoundrel, and would cheat and rob any person he had any dealings with."72 For the vain and self-destructive White, it was another sign of that imbalance of character that had driven him from Congress. Even as he insulted the Commodore, a man with far greater resources and even more guile, he provoked the one force that he could not afford to alienate: the government of Nicaragua. The lack of progress on the canal had left even the Conservatives of Granada disgruntled. They had grown more upset when they learned that Accessory Transit had declared a dividend even though it had not paid the 10 percent of its profits that were owed under its charter. To investigate, the Nicaraguan government appointed two commissioners, who arrived in New York in August to inspect the books; after a long delay, they received a thin and highly suspect ledger that showed no profits. For all their frustration, the commissioners modestly concluded that Accessory Transit owed $30,000. White's astounding response was to deny their diplomatic powers. He claimed that Nicaragua had lost the "attributes of a sovereign state" when it joined the Central American confederation decades earlier-asserting, in essence, that the company existed, but Nicaragua did not. The Nicaraguans seized the lake steamboat Central America Central America to enforce payment of the $30,000, "but she was subsequently released in consequence of the threatening attitude taken by our minister," the to enforce payment of the $30,000, "but she was subsequently released in consequence of the threatening attitude taken by our minister," the New York Tribune New York Tribune reported. reported.73 Vanderbilt, meanwhile, learned that the Pioneer Pioneer had been wrecked on the Pacific. had been wrecked on the Pacific.74 If anything, the loss made him more determined to bring his war with White to a satisfactory conclusion. He asked his son-in-law Allen to take over the negotiations. What Vanderbilt wanted was to sell his steamships to the Accessory Transit Company for $1.1 million. Allen refused. Considered "a high minded man" by his colleagues in business, he believed that the company's charter prohibited it from owning steamships. Vanderbilt dismissed the argument. He wanted his deal. With Osgood stymied, he thought only Allen (who had worked closely with White in the past) could achieve a settlement, so he pressured him until Allen finally agreed to open new talks. If anything, the loss made him more determined to bring his war with White to a satisfactory conclusion. He asked his son-in-law Allen to take over the negotiations. What Vanderbilt wanted was to sell his steamships to the Accessory Transit Company for $1.1 million. Allen refused. Considered "a high minded man" by his colleagues in business, he believed that the company's charter prohibited it from owning steamships. Vanderbilt dismissed the argument. He wanted his deal. With Osgood stymied, he thought only Allen (who had worked closely with White in the past) could achieve a settlement, so he pressured him until Allen finally agreed to open new talks.75 For several weeks, the stock market battle had fallen silent, with the Transit Company stock lying exhausted below 30. Just before Christmas, Vanderbilt and his friends began to buy heavily. Aroused by the large purchases, the bears came out of their caves. The bears-brokers who believed the Transit stock would fall again-began to sell it "short;" that is, they made contracts to sell shares that they didn't own. They would either borrow the shares in order to deliver, then repay the lenders with shares they bought later at a lower price, or-more commonly in this era-make contracts for sale that gave them weeks or even months to deliver, hoping to buy the shares in the interim at a lower price. Instead of buy low, sell high, the short strategy was sell high, buy low. The Commodore's heavy purchases in "sick Transit" (as brokers called the stock) offered the bears a seemingly perfect opportunity. Unaware of the progress of the talks, they believed the price was doomed to sink.76 On Christmas Eve, Allen concluded the negotiations. Vanderbilt now formally made the offer that had already been agreed to, in a letter to the board of the Accessory Transit Company. "I will sell to your company the steamships Northern Light, Star of the West, Prometheus, Daniel Webster, Brother Jonathan, Pacific Northern Light, Star of the West, Prometheus, Daniel Webster, Brother Jonathan, Pacific, and S.S. Lewis S.S. Lewis, together with their furniture," he wrote, "for the sum of $1,350,000; payable $1,200,000 in cash, and $150,000 in the bonds of your company, payable in one year from the date of the bills of sale. All the coal bulks, and all other fixtures, your Company to take at cost, paying for them from the first earnings of the vessels." Three days later, the board accepted the terms. The directors decided to issue forty thousand new shares of stock to pay for the ships-to be sold to the directors themselves at 30. Vanderbilt would be the agent, managing the ships from his New York office, with a 20 percent commission on each transit ticket for the Nicaragua crossing. He would also take a 2.5 percent commission of the entire gross receipts.77 The deal sent Accessory Transit stock skyrocketing. "The shorts have fairly been caught," the New York Herald New York Herald proclaimed, "and the probability is they will suffer some before they see the end of the present movement." The bears had to buy stock for as much as 40 to deliver the shares they had sold for less than 30. Even worse, it appears that Vanderbilt and his friends may have "cornered" the market by buying up the available supply (the new stock had yet to be issued). When caught without shares to deliver, the bears had to pay the buyers heavily to get out of their contracts. Thus Vanderbilt made money by buying shares that didn't even exist. proclaimed, "and the probability is they will suffer some before they see the end of the present movement." The bears had to buy stock for as much as 40 to deliver the shares they had sold for less than 30. Even worse, it appears that Vanderbilt and his friends may have "cornered" the market by buying up the available supply (the new stock had yet to be issued). When caught without shares to deliver, the bears had to pay the buyers heavily to get out of their contracts. Thus Vanderbilt made money by buying shares that didn't even exist.78 In the end, the Commodore got all that he wanted. He had waged his wars on multiple fronts, under difficult conditions, against wily opponents, and won them all. He had battled the U.S. Mail and Pacific Mail Steamship companies, and made a great deal of money doing it. "The nett [sic] profits of his line of boats for the past season are figured up to $1,150,000," the New York Times New York Times reported at the end of 1852. (Profits for the entire year, when added to those for 1851, must have been far more than that amount.) Then he had sold his ships on his terms, and at his price-indeed, for more than his initial price. His stock market campaigns had added enormously to his fortune. And he and his allies seized control of the Accessory Transit Company from the detested White (though that remained to be formalized). reported at the end of 1852. (Profits for the entire year, when added to those for 1851, must have been far more than that amount.) Then he had sold his ships on his terms, and at his price-indeed, for more than his initial price. His stock market campaigns had added enormously to his fortune. And he and his allies seized control of the Accessory Transit Company from the detested White (though that remained to be formalized).79 For the public the picture was far more ambivalent. On one hand, Vanderbilt wrought much good for his fellow citizens. Even though his canal scheme failed, he had created a new path of commerce and travel to California, one of great practical and strategic value to the United States. Falling costs and increasing speeds helped lift San Francisco from a trading outpost to a thriving metropolis-firmly rooting the republic on the Pacific-and improved the flow of gold to New York, pumping money into the national economy. Vanderbilt seemed to vindicate Jacksonian philosophy as he successfully competed against a government-subsidized line. He also revealed the beneficial role of the stock market by mobilizing capital to develop this critical new route. On the other hand, his battle against White demonstrated all too clearly the sometimes unhappy consequences of mixing private and public interests in a large enterprise. Travelers, merchants, and specie shippers fell victim to his vindictiveness as he disrupted the Nicaragua line to destroy its stock price; small investors fell victim to his bear campaign against White.
In pursuing his own interests, Vanderbilt acted as he always had, both creating wealth and punishing his enemies. But, as his businesses achieved a truly national scale, those who benefited and suffered from his decisions multiplied into the hundreds of thousands, and, eventually, millions. Like the marketplace itself, Vanderbilt was a paradox-both a creator and a destroyer.
From his own perspective, he was simply the victor. All in all, it was a remarkable new year that Vanderbilt celebrated in 1853. Small wonder that he decided to celebrate as no American had ever celebrated before.
* The stock prices will be given without dollar symbols throughout the text. The stock prices will be given without dollar symbols throughout the text.
Chapter Nine.
NORTH STAR.
"There is no friendship in trade." Lambert Wardell often heard the Commodore make the remark as he pitched letters into the office fire, "bundled his bonds and stocks in packages," or advised his sons-in-law. It was one of the few things he ever said. "He talked very little," Wardell recalled. Indeed, his wariness with words marked him in the public eye. "Vanderbilt, as is well known, is remarkable for terseness of expression, a compacted force of argument, and Spartan simplicity, rarely to be equalled," commented one newspaper. Standing six feet tall from the soles of his feet to his bristling grey hair, weighing a powerful two hundred pounds, he could be mistaken for a man of appetites; he was not (except, perhaps, for sex). Sparing with words, sparing with money, sparing even with food, "he was economical almost to extremes," Wardell reflected, as if Vanderbilt suspected that his own mouth might betray him, just as he suspected everyone around him. "He thought every man could stand watching," the clerk added, "and never placed confidence in anyone."1 As fancy carriages passed by 10 Washington Place on January 1, 1853, carrying the fashionable on their way to New Year's Day calls, Vanderbilt contemplated an end to his life of frugality and suspicion. A few months earlier, he had said to Franklin Osgood "that he was getting old, and had better close business."2 And yet, even when brooding on his own mortality he cast a jaded eye over those closest to him. And yet, even when brooding on his own mortality he cast a jaded eye over those closest to him.
One day, in his office at 9 Bowling Green, he brought up the subject of his will with Daniel Allen. "Daniel," he exclaimed, "when I die, there'll be hell to pay!"
"Oh, no," Allen replied. "Commodore, I guess not."