What went to New York did not stay in New York; like tourists from Topeka, those greenback reserves toured Wall Street and then went home again. In the fall, the harvest and shipping of foodstuffs to the seacoast-known as "the moving of the crops"-required a countermovement of currency to the countryside to accommodate the accompanying flurry of transactions. Country banks drew down their accounts in reserve cities; those banks drew down accounts in New York; and New York banks called in their loans to brokers. Stock trading slowed; prices tended to stall or fall. For this reason, Wall Street panics almost always occurred late in the year.
Economists call this problem "currency inelasticity," because the fixed quantity of high-powered money made it difficult to ease these seasonal fluctuations. Starting in the twentieth century, the Federal Reserve Bank would fine-tune the money supply on a daily basis, but in the nineteenth century there was no agency charged with such close supervision of the financial system. In fact, Treasury Secretary Hugh McCulloch determinedly made things worse. Believing that greenbacks were inflationary and literally an abomination-a violation of God's plan to make gold and silver the only money-he gradually withdrew greenbacks from circulation to enable the Treasury to redeem them in gold on demand. While orthodox policy by 1867 standards, it created deflationary pressure that was felt most strongly on Wall Street.
A man as cunning as Drew could see the vulnerabilities of this system, and he did not hesitate to deliberately manipulate it for personal gain. In early l868, the New York Evening Post New York Evening Post estimated the banks that belonged to the city's clearinghouse (including all the important ones) possessed a total greenback reserve of only $12 million, just 5 percent of their deposits and circulating notes. It was disturbingly easy for a few wealthy individuals to siphon much of that $12 million out of the system and cripple its ability to provide credit. This was done through a maneuver known as the "lockup." A man (better yet, a group of men) with a large amount on deposit would draw certified checks against this sum. The bank was now obliged to keep those funds out of use until the checks were presented for payment. Then the perpetrator would take the checks to other banks and use them as collateral for loans, which he would take in the form of actual greenbacks; these he would lock up in a safe. Now he had removed from circulation far more money than was in his original account-and it was high-powered money. Banks, short of greenbacks, would call in loans to brokers, who would curtail trading on margin on Wall Street, causing stock prices to fall. A self-reinforcing credit crunch could ensue, as falling share values caused further reductions in loans against stock. The lock-up was a sawed-off shotgun of a financial weapon-devastating, imprecise, and likely to injure innocent bystanders. estimated the banks that belonged to the city's clearinghouse (including all the important ones) possessed a total greenback reserve of only $12 million, just 5 percent of their deposits and circulating notes. It was disturbingly easy for a few wealthy individuals to siphon much of that $12 million out of the system and cripple its ability to provide credit. This was done through a maneuver known as the "lockup." A man (better yet, a group of men) with a large amount on deposit would draw certified checks against this sum. The bank was now obliged to keep those funds out of use until the checks were presented for payment. Then the perpetrator would take the checks to other banks and use them as collateral for loans, which he would take in the form of actual greenbacks; these he would lock up in a safe. Now he had removed from circulation far more money than was in his original account-and it was high-powered money. Banks, short of greenbacks, would call in loans to brokers, who would curtail trading on margin on Wall Street, causing stock prices to fall. A self-reinforcing credit crunch could ensue, as falling share values caused further reductions in loans against stock. The lock-up was a sawed-off shotgun of a financial weapon-devastating, imprecise, and likely to injure innocent bystanders.39 Vanderbilt accused Drew of carrying out a lock-up during his bear campaign of 1866, when he laid Erie low with his secret 58,000 shares. The chance that he might do it again posed a grave threat to Vanderbilt's campaign to conquer the Central.40 The Commodore could afford to buy Central stock for cash, but he needed the support of a wide array of friends and allies who bought on margin and needed an easy money market to finance their purchases. More than that, Vanderbilt needed the perception that his rise to power was good for stockholders. If Drew sent the market tumbling, it would weaken the Commodore's reputation, one of his most valuable assets. And Vanderbilt faced one more worry: it was autumn. The moving of the crops was under way, and money was already tight. He had to forestall Drew's bear operations. The Commodore could afford to buy Central stock for cash, but he needed the support of a wide array of friends and allies who bought on margin and needed an easy money market to finance their purchases. More than that, Vanderbilt needed the perception that his rise to power was good for stockholders. If Drew sent the market tumbling, it would weaken the Commodore's reputation, one of his most valuable assets. And Vanderbilt faced one more worry: it was autumn. The moving of the crops was under way, and money was already tight. He had to forestall Drew's bear operations.
The explanation satisfied Gould, who went his silent way after the exchange of bond for proxy. With Vanderbilt's votes in hand, the Eldridge party looked certain to win the annual election on October 8, 1867. Drew knew he was beaten. On October 6, he called on Vanderbilt at home to beg for mercy. What Drew said is unknown, but the tight-lipped former cattle drover must have been at his most eloquent that night. Perhaps he cited their decades of friendship, the millions they had made together. Perhaps he reminded Vanderbilt of their bull campaign in Erie in 1854. They could do it again; and a rising market would help Vanderbilt conclude his operations in the Central.41 Whatever he said, it worked. Whatever he said, it worked.
Vanderbilt dispatched Richard Schell to fetch Eldridge and Gould and bring them to his house that evening. The Commodore explained that he had changed his mind-he wanted Drew to remain. "Some rather plain talk ensued," Gould dryly recalled. Finally they all settled on a deal. On October 8, Eldridge, Gould, and Work went onto the new Erie board along with a little-known broker named James Fisk Jr.; Drew was not elected. But one of the new directors promptly resigned, and the board named Drew to his place. Friendship had triumphed, with the help of a little trade.42 For Vanderbilt, everything seemed to work exactly as Drew promised in the days that followed. "These manipulators of Erie talk of putting the stock much higher," the New York Herald New York Herald commented skeptically. The paper found Central's rising price to be still more remarkable-"ridiculous," to use the exact quote. "It is said that a certain would-be railway monopolist aspires to control it, and that he and his friends hold a large amount of the stock; but it is against the public interests that any one person should constitute himself a railway king." Drew led a pool to drive up the price of Erie, managing money contributed by Work, Richard Schell, Banker, and Steward. With the market rising, the Commodore duly conquered the New York Central in December. He little realized what treachery was in store for him. commented skeptically. The paper found Central's rising price to be still more remarkable-"ridiculous," to use the exact quote. "It is said that a certain would-be railway monopolist aspires to control it, and that he and his friends hold a large amount of the stock; but it is against the public interests that any one person should constitute himself a railway king." Drew led a pool to drive up the price of Erie, managing money contributed by Work, Richard Schell, Banker, and Steward. With the market rising, the Commodore duly conquered the New York Central in December. He little realized what treachery was in store for him.43 With Drew seemingly well in hand, Vanderbilt focused on reforming the management of the Central. "If I take possession of a railroad today," he explained a year later, "I send my men over it to examine it in every particular and all over. They report to me its condition, and then it is my business to see that it is kept up, equal in every respect to what it is then." This was a precise description of what he did upon taking command of the Central. On February 1, 1868, he dispatched Banker on an inspection tour with orders to examine the machine shops, ticket offices, and books kept by every office-"in fact look to every department of the company's property along its whole line." He wanted to save every shilling. As he told the treasurer, "Mr. Worcester, do everything just as you would do it if it was your own business. Vary from this only so far as the peculiar demands incidental to a corporation demand."44 Vanderbilt's reforms ranged from the petty to the profound. As on his other lines, he attacked the "monstrous" practice of handing out enormous quantities of free passes, restricting to himself and his vice president, Torrance, the privilege of granting them. He fired underperforming staff and eliminated patronage positions (including one held by Erastus Corning Jr.), in what one man called a "wholesale slaughter." He had William better coordinate traffic and running arrangements of the Harlem and the Hudson River. He halted the practice of using the company's money to buy stock in connecting lines. He also revoked an agreement, made when Keep and Fargo had run the board, to pay American Express $50,000 a year-a rather remarkable contract, since ordinarily express companies paid rent to railroads, not the other way around. He also fought to recover a grain elevator in Buffalo that Keep had leased to Fargo.45 Vanderbilt's most famous reform was the most superficial: he forbade brass ornamentation on all locomotives, to save the time spent polishing them. This one step attracted lengthy comment in newspapers and railroad journals. Clearly it sent a powerful signal that economy would be Vanderbilt's defining principle.46 These changes aroused bitter complaints. Impervious to them all, Vanderbilt continued to squeeze savings out of the Central. But he was never vindictive. Instead, he sought peace with the railroad's strategic partners. After all of the struggles over the previous four years, he wanted peace. According to John M. Davidson, Vanderbilt declared that "he did not wish to persecute, but rather, to forget, and heal old sores."47 AS 1868 BEGAN, VANDERBILT CONTINUED to participate in the bull campaign in the Erie, though it was the Central that really mattered to him. The brokers most closely identified with him were "the most steady buyers of NY Ctrl-they are buying for the Commodore's friends, who are all steadfast believers in the stock, even at these prices, for a long pull," one Wall Street denizen wrote on January 7. "Vanderbilt advises his to participate in the bull campaign in the Erie, though it was the Central that really mattered to him. The brokers most closely identified with him were "the most steady buyers of NY Ctrl-they are buying for the Commodore's friends, who are all steadfast believers in the stock, even at these prices, for a long pull," one Wall Street denizen wrote on January 7. "Vanderbilt advises his horse companions horse companions to buy Central," Davidson wrote to Corning on January 14. "Told the noted driver [Dan] Mace yesterday to buy 500 shares, that he would make $25,000 in a short time." Erie tagged along, ascending to 76, its highest price since the previous summer. to buy Central," Davidson wrote to Corning on January 14. "Told the noted driver [Dan] Mace yesterday to buy 500 shares, that he would make $25,000 in a short time." Erie tagged along, ascending to 76, its highest price since the previous summer.48 Then, on January 22, it began to show "hesitation," according to the Then, on January 22, it began to show "hesitation," according to the New York Herald New York Herald. Something was amiss. Erie began to fall. Drew unexpectedly declared the pool operation complete and divided the profits.
Schell believed that Drew had cheated them. "There has been quite a quarrel going on for several days between Mr. Drew & Richd Schell," one financier wrote. Even as Drew had bought for the pool, for his own account he had "sold all his stock of Erie in the market, and gone largely short-in amount of nine millions of dollars.... Schell blows in a fearful manner-public & & private private-puffed up with his good fortune lately. He says that Erie will sell at par par before next May, & threatens Mr. Drew with all kinds of prosecution & exposure." Schell informed Gould that the legal complaint against Drew-shelved as part of the peace accord-would be filed at last, unless Drew took 5,500 shares of Erie off his hands at 75 or (perhaps intending to expose the famously pious Drew as a hypocrite) paid $20,000 to the poor of New York. Drew declined. before next May, & threatens Mr. Drew with all kinds of prosecution & exposure." Schell informed Gould that the legal complaint against Drew-shelved as part of the peace accord-would be filed at last, unless Drew took 5,500 shares of Erie off his hands at 75 or (perhaps intending to expose the famously pious Drew as a hypocrite) paid $20,000 to the poor of New York. Drew declined.49 Vanderbilt's involvement in this pool is far from certain. The Commodore later claimed to have been a reluctant participant in the Erie campaign, and one insider reported, "Vanderbilt refuses to have any interest in Erie." After all, it was one thing to prevent Drew from ruining the money market; it was quite another to commit money into his hands. "There was a lot of people in the street that called themselves my friends, came up to me and pressed me very hard to go in with them," Vanderbilt later explained. "Damn your pools!" he said he replied. "It is altogether out of my line." Work and Richard Schell were in fact much more than Vanderbilt's puppets in this drama. They had pushed him to help them, not the other way around. Finally the Commodore had relented. "I had some loose money," he said. "If you want me to help you along with your Erie I will help you along," he recalled saying to them. "And they got me engaged in it, and I bought a pretty large amount of Erie."50 But then Drew cheated, and whether he cheated Vanderbilt directly or his friends mattered little to the outraged Commodore. More than that, Vanderbilt's strategic concerns may have motivated him to move against his treacherous old friend. The new Erie board negotiated to lay a third rail on the Michigan Southern's track, to allow the Erie's broad-gauge rolling stock to pass over its standard-gauge line to Chicago; and Michigan Southern already discriminated against the Central in favor of the Erie. It seems that honor and economics both impelled Vanderbilt to proceed with the long-threatened lawsuit.51 On February 15, Work filed the complaint against Drew and his fellow Erie directors in New York's Supreme Court. (Despite the name, the Supreme Court was a trial, not appellate, court.) As mentioned earlier, it asked the court to halt Drew's trading in Erie stock and force the return of his secret 58,000 shares (which he had used to cheat the pool). On February 15, Work filed the complaint against Drew and his fellow Erie directors in New York's Supreme Court. (Despite the name, the Supreme Court was a trial, not appellate, court.) As mentioned earlier, it asked the court to halt Drew's trading in Erie stock and force the return of his secret 58,000 shares (which he had used to cheat the pool).52 Rapallo, as Work's attorney, filed the motion with the least respected, least honest, most notorious jurist in New York, Judge George G. Barnard. "Barnard," historian Allan Nevins wrote, "was an insolent, overbearing man of handsome face and figure who had for a time hypocritically posed as a reformer." He was not. Nor was he very, or even minimally, learned. "The court-room of Judge Barnard has been a place of amusement, where lawyers and others go to hear something 'good,'" the New York Tribune New York Tribune later wrote. "Every day his indecent sarcasms and vulgar jests keep his court-room crowded with laughing spectators." An ally of William Tweed, he had a reputation for being, as one newspaper wrote, "a most merchantable judge." later wrote. "Every day his indecent sarcasms and vulgar jests keep his court-room crowded with laughing spectators." An ally of William Tweed, he had a reputation for being, as one newspaper wrote, "a most merchantable judge."53 Barnard issued an injunction against Drew that barred him from the stock market. Two days later, Rapallo appeared before him again, acting in the name of New York's attorney general, to ask that Drew be removed from the Erie board. Barnard delivered a temporary order to that effect.54 With Drew thoroughly enjoined, Vanderbilt charged into the Erie china shop, determined to corner his old friend and punish him for his treachery. He gave orders to his brokers to buy all the Erie they could get. With Drew thoroughly enjoined, Vanderbilt charged into the Erie china shop, determined to corner his old friend and punish him for his treachery. He gave orders to his brokers to buy all the Erie they could get.
Contemporaries and historians alike have concluded that the Commodore had "marked the Erie for his own," as Charles F. Adams Jr. famously wrote, in pursuit of "absolute control over the railroad system." Biographer Wheaton J. Lane claimed that Vanderbilt aimed at "ending competition between [the New York Central] and the Erie," by buying up the latter line.55 Wasn't his course toward monopoly obvious, as he moved from Harlem to Hudson River to New York Central? The Erie was the closest and most troublesome of the trunk lines; it seemed a natural target. Wasn't his course toward monopoly obvious, as he moved from Harlem to Hudson River to New York Central? The Erie was the closest and most troublesome of the trunk lines; it seemed a natural target.
The Commodore himself thought otherwise. "I never had any intention of taking possession of or having anything to do with the Erie road-I mean in the management of it," he later told a committee of the state assembly. "I never had the slightest desire; damn it! Never had time to. It is too big a thing!"56 Vanderbilt's words demand attention, for, flawed as he was, he was never a liar. And there is good reason to believe him. For one thing, he never launched a war of aggression in all his years as a railroad leader; always he practiced diplomacy first, fighting only as a last resort. For another, Vanderbilt was still mired in the process of taking over the Central, one of the largest and most important railroads in the United States; getting a grip on its levers of power proved to be a time-consuming task. Even a partial list of his work in February alone is imposing. On the 1st, he dispatched Banker on the inspection tour mentioned above; on the 6th, he wrote to President Andrew Johnson, complaining about the customs collector at the Niagara Suspension Bridge; on the 21st, he presided over a conference of the trunk lines to coordinate rates. All the while he fought resistance to his reforms by staff at all levels. "All the Assistant Supt. are doing their best to break the road down... because none of them like Mr. Torrance or the Commodore," one official wrote. "The way the road is now managed is most ridiculous in the extreme.... It is perfect confusion from one end to the other."57 Soon afterward, a strike broke out in the Albany machine shops because Torrance had reduced the men's hours and wages, then restored the hours but not the wages. Vanderbilt himself had to intervene to settle it. Soon afterward, a strike broke out in the Albany machine shops because Torrance had reduced the men's hours and wages, then restored the hours but not the wages. Vanderbilt himself had to intervene to settle it.58 Seizing the Erie, in the midst of this enormous internal struggle, would have been too big a thing indeed. The surprising truth is that Vanderbilt fought one of the greatest business conflicts in American history purely out of a desire for revenge. Seizing the Erie, in the midst of this enormous internal struggle, would have been too big a thing indeed. The surprising truth is that Vanderbilt fought one of the greatest business conflicts in American history purely out of a desire for revenge.
Drew's fellow Erie directors, unfortunately, could not see into the Commodore's heart. Their eyes were fixed instead on the stock certificates piling up in his safe, which made them fear that they would lose control of their railroad. Gould, Fisk, and Eldridge had come into the Erie in order to drive out Drew, but Vanderbilt's vengeance ironically forced them to rally around him and make his cause their own.
To defeat the attempted corner, they engaged in a stock-watering operation of unprecedented size and speed. In essence, they would drown Vanderbilt in new shares, created under cover of the law that permitted the conversion of bonds into stock. First, they approved an issue of $5 million in convertible bonds and sold them to Drew's broker. They also entrusted the "speculative director" with ten thousand new shares converted from the securities of a recently leased railroad, the Buffalo, Bradford & Erie. Then they established a fund of $500,000 in cash to pay for legal expenses-or what have you. On March 5, Erie attorney David Dudley Field approached a close friend of Barnard's and offered him $5,000 to convince the judge to modify his injunction; the friend declined, so Field placed the cash elsewhere. With these preparations made, Drew sold Erie short to Vanderbilt in massive quantities. He also took elaborate steps to have front men deliver the new shares in order to hide his hand from the courts.59 The trap was set. The trap was set.
THE COMMODORE HAD NO CORONATION as railroad king-but New York's aristocrats acknowledged early on that he had founded a dynasty. On February 18, William's eldest girl, Louisa, married Elliott F. Shephard at the Episcopalian Church of the Incarnation, on Madison Avenue and Thirty-fifth Street. The chapel was jammed "by the fashionable denizens of Murray Hill, Fifth Avenue, and Madison Avenue," one newspaper reported. "The streets in the vicinity were lined with carriages for a quarter of a mile." Afterward the reception was held at William's new house on Fifth Avenue. "For four hours the elite of the town flowed in and out, and it was altogether a splendid affair. The new home of Mr. Vanderbilt is the most elegant in its interior of any house in town." New York's ballrooms would not be barred to William's princeling children. as railroad king-but New York's aristocrats acknowledged early on that he had founded a dynasty. On February 18, William's eldest girl, Louisa, married Elliott F. Shephard at the Episcopalian Church of the Incarnation, on Madison Avenue and Thirty-fifth Street. The chapel was jammed "by the fashionable denizens of Murray Hill, Fifth Avenue, and Madison Avenue," one newspaper reported. "The streets in the vicinity were lined with carriages for a quarter of a mile." Afterward the reception was held at William's new house on Fifth Avenue. "For four hours the elite of the town flowed in and out, and it was altogether a splendid affair. The new home of Mr. Vanderbilt is the most elegant in its interior of any house in town." New York's ballrooms would not be barred to William's princeling children.60 Sadly, no one would confuse Ellen Vanderbilt with a princess. The respectable daughter of a prosperous New England merchant, she had married the son of one of the wealthiest men in the world, only to be thrown into poverty and disgrace. Yet she stood loyally by Corneil. Only Greeley shared her faith in her husband-in part because of his affection for her. "I but interest myself in the Commodore's good will to his son and namesake, but I know he cannot in any case leave you destitute, for he knows how nobly you have deserved his highest appreciation," he wrote her on March 8. "Even should he leave your husband nothing, he will leave a good income to you, and in that faith I rest content.... I know that he [the Commodore] has been sorely tried, and I can only hope that he will live to realize and put faith in his son's devotion."61 Ellen needed more than sympathy. The couple had emerged out of Corneil's bankruptcy penniless. In order to "commence housekeeping once more," she told Greeley, she needed money, though "I am really ashamed" to ask for more.62 Within the walls of 10 Washington Place, the fate of Corneil and Ellen remained a matter of dispute between Cornelius and Sophia. The Commodore simply didn't trust his son. He demanded that Corneil swear that he never again would borrow money; even then, he refused to help. "Father Vanderbilt is waiting to see us started, & in course of the summer he will be vastly more liberal than at present," Ellen wrote. "But he says we must get started first, & it certainly is strange he does not consider our extra wants & make some appreciation requisite. But he does not." The Commodore kept a close watch on his son's financial doings, as Ellen complained to Greeley. "I feel that you are in fact the only person on whom we can rely to keep our affairs from the world, & this is just the reason we ask you, as others would at present undoubtedly assist us, but father Vanderbilt would probably hear of it a day or two afterwards."
"Mother Vanderbilt," on the other hand, "aids us all in her power. She sent me last week a large quantity of linen, & other things, & says she shall continue to assist us as far as she is able. I think she has no patience with the Commodore for what she calls 'his stubborn inconsistency'!"63 The divide between the two parents over their troubled son had continued-though, tellingly, it was no operatic feud. Sophia did not rage at her husband, just lost "patience." The divide between the two parents over their troubled son had continued-though, tellingly, it was no operatic feud. Sophia did not rage at her husband, just lost "patience."
If tension was muted between Mother and Father Vanderbilt, it was still tension. Sophia aided the bankrupt couple secretly, lest she arouse her husband's wrath. One did not defy his will lightly; already his power and forcefulness had become proverbial in American culture. On February 17, for example, a religious periodical sought to express the glory of Jesus Christ by equating the Son of God with Vanderbilt-"and none can get a pass on his railroad without respect and loyalty for the Bible." In the New York Times New York Times that same day, Albert DeGroot proposed a fund to build a life-size statue of the Commodore atop the mighty freight depot currently under construction in St. John's Park. "The public spirit, energy, and indomitable nerve of the great steamboat and railway king merits some such recognition," he wrote. Vanderbilt's admirers began to contribute as his detractors muttered that yes, he certainly had nerve. that same day, Albert DeGroot proposed a fund to build a life-size statue of the Commodore atop the mighty freight depot currently under construction in St. John's Park. "The public spirit, energy, and indomitable nerve of the great steamboat and railway king merits some such recognition," he wrote. Vanderbilt's admirers began to contribute as his detractors muttered that yes, he certainly had nerve.64 A FEW MORE STEPS, and the steel jaws would snap shut. With the secret new stock certificates rolling off the presses, the Erie directors prepared for war with Vanderbilt by withdrawing from the trunk line compact, which freed them to slash rates in competition with the Central. Drew secured a delay of his hearing before Barnard, and hurriedly distributed the fresh shares to his front men. On March 5, in the final piece of preparation, the Erie lawyers appeared in remote Broome County, New York, before Judge Ransom Balcom, who agreed to suspend Work from the Erie board and to bar him-and the New York State attorney general-from pursuing their lawsuits. The attorneys took advantage of a quirk in New York's judicial structure that gave every one of the thirty-three Supreme Court judges jurisdiction over the entire state, a flaw that fed rampant corruption in the legal system. "The New York community is not apparently unaccustomed to seeing one justice of its Supreme Court enjoining another," the American Law Review American Law Review commented, "on the ground that his respected associate has entered into a conspiracy to use his judicial power in a stock-jobbing operation." commented, "on the ground that his respected associate has entered into a conspiracy to use his judicial power in a stock-jobbing operation."65 A bewildering blizzard of lawsuits and injunctions began to snow paper across the desks of judges and lawyers across the state, giving Drew the legal cover to deliver giant blocks of new shares into Vanderbilt's hands. The courts and markets erupted in chaos: the price of Erie staggered, Richard Schell and the Erie lawyers obtained fresh injunctions, the New York Stock Exchange declared the new shares invalid, and the New York State Senate created a committee to investigate the imbroglio.
On March 10, with losses mounting, Vanderbilt suffered perhaps the most dangerous blow of all: Drew and the Erie board conducted a lockup. "The Erie Company is understood to have drawn nearly the whole of the balance from its bankers in this city... including some of the proceeds of the recent sale of ten millions of convertible bonds," the New York Herald New York Herald reported. The reported. The Times Times estimated that $5 million or $6 million in cash-formerly Vanderbilt's-had been withdrawn from the financial system (the Erie directors claimed $8 million), which forced bankers to call in loans, driving up interest rates and shaking down stock prices across the board. estimated that $5 million or $6 million in cash-formerly Vanderbilt's-had been withdrawn from the financial system (the Erie directors claimed $8 million), which forced bankers to call in loans, driving up interest rates and shaking down stock prices across the board.
But Vanderbilt continued to buy, grimly determined to corner Drew. According to rumor, his entire fortune teetered on the brink as he fought to put up margins on millions of dollars' worth of questionable Erie stock (questionable, because the Erie board had not secured the approval of the shareholders to issue convertible bonds, as required by law). Supposedly he pressured banks to lend to him on the threat of selling off his Central stock and causing a general panic. If only half of the gossip was half true, he was in a desperate spot.66 The farcical Judge Barnard decided that the farce must end. Despite the injunctions against his injunctions, he issued contempt citations for the entire Erie board. David Dudley Field, the railroad's esteemed chief attorney, advised that the distinguished directors go on the lam. "Anticipating a sudden visit by the officers of the law, a regular stampede took place Thursday morning [March 12] among the officials," the New York Herald New York Herald reported, "each one lugging off an account book, desk, drawer, or as much of the red tape documents as could be grasped in the hurry of the moment." Carrying millions in greenbacks, bonds, and stocks, the officers of one of the largest corporations in the United States scampered aboard the ferry to Jersey City, where they crowded into Taylor's Hotel, a brick building with yellow doors hard by the ferry dock. "The proprietor was called for; a brief conference ensued, and the company passed to an upper room of the hotel, strict orders being given as to the admission of visitors." reported, "each one lugging off an account book, desk, drawer, or as much of the red tape documents as could be grasped in the hurry of the moment." Carrying millions in greenbacks, bonds, and stocks, the officers of one of the largest corporations in the United States scampered aboard the ferry to Jersey City, where they crowded into Taylor's Hotel, a brick building with yellow doors hard by the ferry dock. "The proprietor was called for; a brief conference ensued, and the company passed to an upper room of the hotel, strict orders being given as to the admission of visitors."67 Gould and Fisk remained behind. On the evening of March 15, the officers tracked them to Delmonico's, where they were enjoying a luxurious meal. They dashed into the street, boarded a carriage, and rattled to the Canal Street dock. They secured an open boat and, with two hired hands, rowed into a dense fog that had settled on the Hudson. As they meandered the wide river, bellowing into the darkness, they heard a paddlewheeler bearing down on them. They clutched at the guardrails as their boat was swamped, and were hauled aboard. Soon after they joined their colleagues at Taylor's Hotel.
The desperate flight to New Jersey left the public agog. What had been merely a private (if outlandish) fight over a disreputable stock became a symbol of all that seemed wrong in post-Civil War America: public corruption, grasping monopolists, outsize corporations, and an utter disregard for morality As Charles F. Adams Jr. would write, "The American people cannot afford to glance at this thing in the columns of the daily press, and then dismiss it from memory. It involves too many questions; it touches too nearly the national life."68 Harper's Weekly Harper's Weekly wrote: wrote: The wealth and importance of the contesting roads; the prominence of the two men who control them and who direct this war; the singularity, not to say the illegality, of the judicial proceedings in the case; the amount of money involved in the quarrel; the numbers of brokers, bankers, and speculators engaged, pecuniarily, in it; the vigor and boldness of the effort to take possession of the Erie road; the not less bold maneuvre of a change of base to New Jersey soil-in short, all the circumstances of the rivalry make it one of the "stories of the street."69 Who was worse? Vanderbilt, who seemed to seek a monopoly of New York's railroads, or Drew and company, who defied both the law and business ethics with their stock watering and flight? Few saw any reason to choose between two sides of the same evil.
Crowds formed around the brick walls of "Fort Taylor," as the newspapers dubbed the hotel, amid rumors of a planned assault by hoodlums hired by Vanderbilt. A reporter for the New York Herald New York Herald went in and found ten men seated for dinner in a special room-Drew, Eldridge, Gould, Fisk, and other directors and brokers. "Everyone appeared in good humor, and each seemed to relish a good joke which had just been told about Mr. Fisk, who was represented in one of the papers as armed to the teeth," the reporter wrote. "A good burlesque, on my soul; very good indeed, ha, ha," responded Fisk, who was described as "a gentleman with luxuriant tufts of hair and Dundreary mustache who sat at a corner of the table draining a glass." went in and found ten men seated for dinner in a special room-Drew, Eldridge, Gould, Fisk, and other directors and brokers. "Everyone appeared in good humor, and each seemed to relish a good joke which had just been told about Mr. Fisk, who was represented in one of the papers as armed to the teeth," the reporter wrote. "A good burlesque, on my soul; very good indeed, ha, ha," responded Fisk, who was described as "a gentleman with luxuriant tufts of hair and Dundreary mustache who sat at a corner of the table draining a glass."70 Fisk emerged as the public face of exiled Erie. Part clown, part generalissimo-"with shining buttons and studs and rings, and an immense shirt bosom, and a porcine carcass," as William Lloyd Garrison later described him-he was a gifted and often hilarious orator who declaimed freely to any reporter in his vicinity.71 A former peddler and the son of a peddler, he once had rattled down the back roads of New England atop a wagon full of trinkets. He had joined a merchant house in Boston, helped Drew find a buyer for the Stonington steamboats, and made his way onto Wall Street, where he started a disreputable brokerage house, Fisk & Belden, with partner William Belden. A former peddler and the son of a peddler, he once had rattled down the back roads of New England atop a wagon full of trinkets. He had joined a merchant house in Boston, helped Drew find a buyer for the Stonington steamboats, and made his way onto Wall Street, where he started a disreputable brokerage house, Fisk & Belden, with partner William Belden.
But Fisk was also shrewd. He seized on the image of Vanderbilt as a monarchical monopolist to win sympathy for their conjuring of stock and run from justice. He attributed to the Commodore alone the decade-old effort by the trunk lines to coordinate rates, and claimed that the result had diverted shipments of foodstuffs to Philadelphia and Baltimore instead of New York. "This struggle, then," he pronounced, "was in the interest of the poorer classes especially. Vanderbilt opposes the laying of the broad gauge track* [sic] on the Erie Railroad, which would secure such an abundance of provisions in the New York market from the West as to considerably reduce the current prices." When asked how long the directors would remain in New Jersey, he grandly declared, "We must throw personal comforts in the balance. Six weeks, six months, or six years are all equal to us in this sense. Just see and judge for yourself." It was bravado, yes, but he knew the importance of impressing the enemy with a sense of their determination. By contrast, Vanderbilt remained out of sight, turning away reporters. [sic] on the Erie Railroad, which would secure such an abundance of provisions in the New York market from the West as to considerably reduce the current prices." When asked how long the directors would remain in New Jersey, he grandly declared, "We must throw personal comforts in the balance. Six weeks, six months, or six years are all equal to us in this sense. Just see and judge for yourself." It was bravado, yes, but he knew the importance of impressing the enemy with a sense of their determination. By contrast, Vanderbilt remained out of sight, turning away reporters.72 The legal comedy continued. Barnard appointed Vanderbilt's son-in-law-and Barnard's good friend-George A. Osgood as receiver for the proceeds of the enjoined stock. Then Osgood was enjoined by an Erie-friendly judge. At one point Osgood sprinted up his stoop and darted inside to avoid the service of papers, which were hurled at him and bounced off the door. New Jersey passed a law to make the Erie a corporation of the Garden State, offering the fugitives a home across the Hudson.
For all the laughter these events produced, the real battle now shifted to Albany. Vanderbilt's attorneys argued that Erie's convertible bonds were illegal, because the Erie's directors had not secured the required approval of two-thirds of the stockholders. A state senate committee began to consider a bill to legalize the enormous increase in stock, in the name of preventing a monopoly under Vanderbilt.73 Senator Abner C. Mattoon belonged to that committee. He had heard rumors that each side would spend up to a million dollars in the notoriously corrupt legislature to secure or kill the Erie bill. In the interests of justice-justice to himself-he visited Drew in New Jersey. Knowing the Erie directors' concern for the poor, Mattoon began to muse aloud about what little income legislators received. "We cannot go there and live upon what we get," he reflected sadly. Drew recalled, "The inference I drew was that he would take money if it was offered to him." Soon afterward Mattoon visited the other Erie directors in Taylor's Hotel. He told them that Vanderbilt's allies and attorneys were lobbying vigorously; soon Mattoon's committee would approve a report condemning one side or the other, most likely Erie. Mattoon, ever helpful, urged the exiled directors to send one of their number to Albany-preferably well funded.74 The assignment fell to Jay Gould. If Fisk was the ideal spokesman at the besieged Fort Taylor, the discreet and cunning Gould made the perfect bribe-giver. "On March 30," writes biographer Maury Klein, "he left Jersey City with a suitcase full of greenbacks and a ready reserve of checkbooks. For three days he wooed legislators with a liberal supply of food, drink, and greenbacks." Now that Gould was in New York State, he was prey to Barnard's contempt citation. But his hearing was delayed, and Gould convinced the court officer who arrested him to serve as his bodyguard. "You may go with me," he said. "I will still be in your custody"75 The allegations of corruption remain impossible to verify in detail. A committee of the state senate later found solid evidence that a great deal of money had been paid in bribes by the Erie board-but it could not pin down who received received the bribes. This is not surprising. Corruption had plagued government for decades, and a well-developed system had emerged to mask the dispersal of graft. Lobbyists who specialized in corruption were known as "strikers;" they acted as self-serving middlemen in transactions between legislators and wealthy men and corporations. the bribes. This is not surprising. Corruption had plagued government for decades, and a well-developed system had emerged to mask the dispersal of graft. Lobbyists who specialized in corruption were known as "strikers;" they acted as self-serving middlemen in transactions between legislators and wealthy men and corporations.
And yet, not all of what happened in Albany can be blamed on graft. Both sides of the dispute made serious arguments. The titanic watering of Erie stock struck many as illegal, not to mention immoral; and Vanderbilt's seeming attempt at monopolizing New York's trunk lines appalled others. William Cassidy a Democratic newspaper editor, found himself confused as to the correct line to take in his editorials. "I have denounced the illegality of the overissue & the attempt to whitewash it; I will stand by that portion; but perhaps tis unwise to go further," he wrote to Samuel J. Tilden. "Our political capital is as important to us, as Vanderbilt's money to him." For honest legislators, the conundrum proved just as vexing. There is no way of knowing who voted out of conscience or calculation.76 Except, perhaps, for Senator Mattoon. On April 1, he gave the decisive vote in committee for a report that denounced the Erie board, declared Drew's conduct to be "disgraceful," and found that Eldridge, Gould, and Fisk were in collusion with him "in these corrupt proceedings." Gould later said that Mattoon's vote "astounded" him. He should have known better; to all appearances, it was a negotiating tactic. On April 18, after Gould had changed Mattoon's mind with crisp, green arguments, he reversed himself and voted with the senate majority in favor of the Erie bill. Vanderbilt's lobbyists abruptly withdrew from Albany. On April 20, the assembly passed the bill-which it had previously defeated-by 101 to 5, and the governor soon signed it. More than a legalization of the fresh Erie stock, the new law forbade any director of Vanderbilt's railroads from becoming a director of Erie. The Commodore had lost.77 Or had he? Vanderbilt appears to have pulled his forces back from the front line in Albany because he had begun to outflank the enemy in Manhattan. On April 6, Cassidy reported, "Last Sunday Drew was at Vanderbilt's house; & yesterday the interview may have been renewed." Drew was able to visit his old friend because of a provision of New York law that gave a Sunday reprieve from arrest in civil cases. Drew later admitted, "I called on the Commodore two or three times. He always told me that I acted very foolish in going to Jersey City; I ought to have never left my home in the City." Drew sadly agreed with him. As Gould later observed, "He had got sick of New Jersey." Drew and Vanderbilt began to talk about a compromise.78 Drew conducted these talks without the knowledge of Eldridge, Gould, or Fisk, though they suspected that he was up to something. On Sunday, April 19, Drew offered to return Vanderbilt's money in return for the shares, saying something about wanting to take over the Erie himself. Fisk found out about the plan and immediately attached Drew's personal funds, which put a stop to the subterfuge. So Drew turned to Eldridge and convinced him to settle with the Commodore to end their exile. Soon the equally Jersey-weary Eldridge joined Drew on his secret visits to Vanderbilt.79 For the public, the Erie War ended suddenly and mysteriously. Even before the end of April, the Erie directors fearlessly returned to New York. Barnard spared them arrest, and the New York attorney general agreed to vacate the motion to suspend Drew from the board. But these doves of peace proved just as mysterious to two key Erie directors, Gould and Fisk. In Jersey City the pair had forged a tight friendship, emerging as the most cunning and resilient opponents of Vanderbilt on the board. Recognizing this, Drew and Eldridge kept them in the dark as they negotiated terms.80 Frustrated, the two young men took a carriage early one June morning to 10 Washington Place and banged on the door. The servant showed them into the reception room, notified the Commodore, then sent them upstairs to the second-floor parlor. "Presently Mr. Vanderbilt sent for me to come into a little back room," Fisk testified. Gould waited in the parlor as Fisk went in. It seems that the flamboyant former peddler had made an impression on the Commodore-or perhaps Vanderbilt wished to see him separately as a negotiating tactic. Fisk found him sitting on his bed, putting on his shoes. "I remember those shoes on account of the buckles," Fisk later testified. "You see there were four buckles on that shoe, and I know it passed through my mind that if such men wore that kind of shoes I must get me a pair."81 Vanderbilt looked Fisk over sharply. "I had a very bad opinion of Mr. Fisk since I first knew him," he said later. "I thought he was a reckless man, and would do anything he undertook to accomplish a purpose."82 But he was accustomed to dealing with enemies, even reckless ones. According to Fisk, Vanderbilt said that "several of the directors were trying to trade with him, and he would like to know who was the best man to trade with." Fisk proudly replied that Vanderbilt should trade with him, "if the trade was a good one." The Commodore ruefully said that he might be right. "Old man Drew was no better than a batter pudding, Eldridge was completely demoralized, and there was no head or tail to our concern," Fisk reported him saying. Fisk agreed. But he was accustomed to dealing with enemies, even reckless ones. According to Fisk, Vanderbilt said that "several of the directors were trying to trade with him, and he would like to know who was the best man to trade with." Fisk proudly replied that Vanderbilt should trade with him, "if the trade was a good one." The Commodore ruefully said that he might be right. "Old man Drew was no better than a batter pudding, Eldridge was completely demoralized, and there was no head or tail to our concern," Fisk reported him saying. Fisk agreed.
Vanderbilt wanted to unload his 100,000 Erie shares, and demanded compensation for his losses. Eldridge had made a peace proposal that he had accepted, he said; according to Fisk, Vanderbilt argued that Gould and Fisk should "take hold of it. If we would advocate the settlement and pay his losses we should be landed in the haven where we were all desirious of being, where there was peace and harmony." Fisk said their talk grew momentarily heated.
He said I must take the position of things as I found it. He would keep his bloodhounds on us and pursue us until we took his stock off his hands; he would be d--d if he would keep it. I told him I would be d--d if we would take it off his hands, and that we would sell him stock as long as he would stand up and take it. Upon this he mellowed down and said that we must get together and arrange this matter. I told him that we would not submit to a robbery of the road.... Well, he said, these suits would not be withdrawn until he was settled with.83 Soon after this interview, Gould and Fisk confronted Eldridge, who told them it was all over. "He was tired and worn out and had been driven away from home and wanted to get out of his troubles," Fisk recalled. "At last he had got the Commodore to settle on a price, and Schell and Work had fixed on their price, and if we would come in tomorrow we should be free and clear of all suits."
The two young men went to see Vanderbilt at his home one more time. The Commodore looked them over with respect. According to Gould, he told them that "Drew had no backbone, and if we had not come in he would have had it all his own way.... When we rose to come away he said to us, 'Boys, you are young, and if you carry out this settlement there will be peace and harmony between the two roads.'" Carry it out they did, but peace and harmony would prove elusive.84 The grand settlement was complex, and many of its details would elude contemporaries and historians alike. Of Vanderbilt's 100,000 Erie shares, he sold fifty thousand back at 80, for a total of $4 million. Except he did not actually sell it to the railroad. It was important to Vanderbilt that he technically sold the stock to Drew. As he said to Drew when they made the deal, "I must have an understanding about the matter. I will not sell the Erie Railroad anything; I will have nothing to do with it." Drew replied that he was buying the stock for himself. "I said that," Vanderbilt later explained, "because I had made up my mind the Erie Railroad had got under so many difficulties that I would have nothing to do with them."
If Vanderbilt did not sell his stock to the Erie, the Erie certainly bought it. After Drew made the original agreement, Eldridge arranged for the Erie to take the fifty thousand shares at 70, paying $3.5 million that went into Vanderbilt's hands (Drew himself paid the Commodore the remaining $500,000). The Erie also paid Vanderbilt $1 million for a sixty-day call on his remaining fifty thousand shares at 70 (that is, the Erie purchased the right to buy from Vanderbilt that quantity of stock at that price within two months). In addition to compensating Vanderbilt for his losses, this was a payment to keep the stock off the market, to give the company time to stabilize its finances. The Erie also compensated Frank Work and Richard Schell for their losses with a payment of $429,000, and paid Rapallo for his legal work with 250 Erie shares at 70. And, among other acts, the Erie also bought $5 million of Boston, Hartford & Erie bonds at 80 (accomplishing Eldridge's mission), released Drew from any claims, and settled his long-standing loan to the company. In July, Drew resigned as director and treasurer. In August, Vanderbilt carried out the final part of the agreement, buying $1,250,000 in Boston, Hartford & Erie bonds at 80. Eldridge resigned the presidency, leaving the Erie to Gould and Fisk.85 The Erie War proved to be the most serious defeat of Vanderbilt's railroad career. His corner had been thwarted, his attempt at revenge had failed, and his losses had been heavy-perhaps as much as $1 million, though they remain impossible to calculate. But it was not the defeat that the public imagined. Observers in Wall Street and the press saw him as a voracious monopolist, so they assumed that he had wanted the Erie itself, something he explicitly denied. Indeed, what is most striking is not the failure of his corner, but how he rallied on the brink of disaster and forced his enemies to restore much of what he had lost. Unfortunately, he could never recover his lost prestige. More serious than the hundreds of thousands that slipped from his fingers was the humiliation he had suffered at the hands of the upstart Fisk and Gould.
But even his costliest battles served as a reminder of his vindictiveness and his power. On May 19, R. G. Dun & Co. estimated his wealth at $50 million. He was "peculiar & eccentric in [character]," the agency reported, "a strong friend, a mostly bitter enemy." Drew, his oldest friend of all, would have agreed.86 ON MARCH 30, AS THE ERIE WAR approached its height, the United States Senate convened as a court of impeachment for President Andrew Johnson. Most of the charges revolved around his violation of the Tenure of Office Act, a constitutionally questionable law that limited his ability to fire executive-branch officials without congressional approval. He had deliberately flouted the law by sacking Secretary of War Edwin Stanton, Commodore Vanderbilt's old friend. approached its height, the United States Senate convened as a court of impeachment for President Andrew Johnson. Most of the charges revolved around his violation of the Tenure of Office Act, a constitutionally questionable law that limited his ability to fire executive-branch officials without congressional approval. He had deliberately flouted the law by sacking Secretary of War Edwin Stanton, Commodore Vanderbilt's old friend.
The real issues driving the extraordinary trial were Johnson's personality and the nature of Reconstruction itself. Devotedly Jacksonian and virulently racist, Johnson wanted to quickly restore all-white governments in the South. Rising violence against freed slaves drove Republicans on Capitol Hill toward a far more expansive and direct federal role in reconstructing the South. Johnson had thwarted them at every step, giving rise to anger at his belligerence and sheer incompetence. Before the end of May, the Senate acquitted Johnson on all counts, after failing to meet the required two-thirds majority for a conviction by one vote. But congressional Reconstruction went forward. The South was divided into military districts and put under the administration of army officers until new, more racially just, state constitutions could be put into effect. In the old Confederacy, black voters, jurors, and officeholders appeared for the first time.87 In all this, Congress ventured into entirely unmapped terrain, not simply with respect to racial justice, but in terms of its own powers. The war and continuing crisis in the South created a ferment on Capitol Hill, opening up new possibilities. What else could the federal government do? What should should it do? The Republicans had been united in fighting the Civil War, and one of the strongest arguments in favor of Radical measures to aid freed slaves was that they had been the only consistently loyal population in the South during the conflict. But in other areas the party remained deeply divided, and sometimes confused. On April 27, in the midst of the impeachment trial, the House of Representatives ordered the Committee on Roads and Canals to investigate whether Congress had the power to regulate railroads. On June 9, the committee reported that it do? The Republicans had been united in fighting the Civil War, and one of the strongest arguments in favor of Radical measures to aid freed slaves was that they had been the only consistently loyal population in the South during the conflict. But in other areas the party remained deeply divided, and sometimes confused. On April 27, in the midst of the impeachment trial, the House of Representatives ordered the Committee on Roads and Canals to investigate whether Congress had the power to regulate railroads. On June 9, the committee reported that Gibbons v. Ogden Gibbons v. Ogden had clearly established federal power over interstate commerce, but the committee was not sure exactly what to do with railroads. "The question of the constitutional power of Congress to regulate the rates of fare and charges for freight is one of very great importance and of difficult solution," it hedged. The committee advised no action, though it voiced a serious fear. "The great railroad corporations do possess the power and the will to absorb the lesser competing lines.... These vast consolidated corporations have the power to crush out all competition and to fix upon such rates of fare and charges for the transportation of freight as they please to impose." But congressional interference was still too radical even for the Radicals. had clearly established federal power over interstate commerce, but the committee was not sure exactly what to do with railroads. "The question of the constitutional power of Congress to regulate the rates of fare and charges for freight is one of very great importance and of difficult solution," it hedged. The committee advised no action, though it voiced a serious fear. "The great railroad corporations do possess the power and the will to absorb the lesser competing lines.... These vast consolidated corporations have the power to crush out all competition and to fix upon such rates of fare and charges for the transportation of freight as they please to impose." But congressional interference was still too radical even for the Radicals.88 "We hope the question will not be allowed to drop into forgetfulness," the Nation Nation responded. "The railroad corporations are already of immense power." In light of the negotiations to end the Erie War, the responded. "The railroad corporations are already of immense power." In light of the negotiations to end the Erie War, the Nation Nation thought that Vanderbilt and Drew might make an alliance "which puts for many important purposes the whole State of New York into their hands. It is plain that we need a different order of things from what we had when the Constitution was adopted, when railroads were unthought of." thought that Vanderbilt and Drew might make an alliance "which puts for many important purposes the whole State of New York into their hands. It is plain that we need a different order of things from what we had when the Constitution was adopted, when railroads were unthought of."89 The Erie War proved to be a catalyst for rising anxieties over the place of the railroad corporation in a democratic society. In economic culture, railroads ran headlong against the deep Jacksonian belief that free competition was an essential component of democracy itself-that monopoly threatened free government. Their dual nature as both public works and private businesses presented a paradox: What was more important, to protect shareholders in their property rights, or to prevent a monopoly? Good management and returns on investment, or competition? When the Erie War brought this conundrum to a head, even business journals found themselves torn. The Round Table Round Table said, "It is very hard to understand why, if Mr. Vanderbilt does own a majority of the stock of the Erie Railway, he should not be allowed to manage it." On the other side, the said, "It is very hard to understand why, if Mr. Vanderbilt does own a majority of the stock of the Erie Railway, he should not be allowed to manage it." On the other side, the Merchant's Magazine Merchant's Magazine wrote, "While allowing that Erie would be sure of a more efficient head under his supervision than under its present and late control, yet it would be a matter of regret" if Vanderbilt added it to his empire. The wrote, "While allowing that Erie would be sure of a more efficient head under his supervision than under its present and late control, yet it would be a matter of regret" if Vanderbilt added it to his empire. The New York Times New York Times awkwardly dodged the monopoly question when defending him: "It may be right that the amalgamation... of the Erie with the Central and other Vanderbilt lines should be prohibited... [but] nothing can justify or even extenuate the conduct of the [Erie] directors in creating ten millions of stock for speculative purposes, or in otherwise abusing their power." awkwardly dodged the monopoly question when defending him: "It may be right that the amalgamation... of the Erie with the Central and other Vanderbilt lines should be prohibited... [but] nothing can justify or even extenuate the conduct of the [Erie] directors in creating ten millions of stock for speculative purposes, or in otherwise abusing their power."90 The Times Times editorial introduces the second current of anxiety surrounding railroads: the corruption of government. The tales of bribery that flowed out of Albany reinforced stereotypes of public officials on the take, acting as if they were retainers of wealthy corporations, not representatives of the people. After Jay Gould took over as president of the Erie, he allied the railroad explicitly with the Tweed ring, naming "Boss" Tweed himself to the board, along with his close associate Peter Sweeney. editorial introduces the second current of anxiety surrounding railroads: the corruption of government. The tales of bribery that flowed out of Albany reinforced stereotypes of public officials on the take, acting as if they were retainers of wealthy corporations, not representatives of the people. After Jay Gould took over as president of the Erie, he allied the railroad explicitly with the Tweed ring, naming "Boss" Tweed himself to the board, along with his close associate Peter Sweeney.
The culmination of the Erie War, culturally speaking, would come in July 1869, with the publication in the North American Review North American Review of one of the most influential essays in American history: "A Chapter of Erie," by Charles F. Adams Jr. of one of the most influential essays in American history: "A Chapter of Erie," by Charles F. Adams Jr.91 (It would be reprinted in a collection, (It would be reprinted in a collection, Chapters of Chapters of Erie Erie, that included articles by Adams's brother Henry.) Ironic, incisive, and impressively researched, it combined a detailed account of the Erie War with an exploration of its broader meaning. "Freebooters have only transferred their operations to the land," he wrote. "It is no longer the practice of Governments and Ministries to buy legislators; but individuals and corporations of late not unfrequently have found them commodities for sale in the market. So with judicial venality."
Adams cogently expressed the anxiety that resulted from the combination of the corporation-that abstract entity feared since Jackson's day-with the size and wealth of the railroads. "Already our great corporations are fast emancipating themselves from the state, or rather subjecting the state to their own control," he wrote. It was the Commodore's mastery of this process that made him such a terrifying figure.
In this dangerous path of centralization Vanderbilt has taken the latest step in advance. He has combined the natural power of the individual with the factitious power of the corporation. The famous "L'etat, c'est moi" of Louis XIV represents Vanderbilt's position in regard to his railroads. Unconsciously he has introduced Caesarism into corporate life. He has, however, but pointed out the way which others will tread.... Vanderbilt is but the precursor of a class of men who will wield within the state a power created by it, but too great for its control. He is the founder of a dynasty.
Such power-concentrated in one man's hands through control of corporations-was only possible because of the centrality of the railroads to modern life. "As trade now dominates the world, and the railways dominate trade, his object has been to make himself the virtual master of all by making himself absolute lord of the railways."92 Adams's words captured a very real dilemma. American institutions and values stemmed from a largely rural, agricultural past in which businesses were limited in size and personal in nature. Corporations had arisen as a means of financing large public works without inflating the size and cost of government-yet they were also private property. This uncomfortable meeting of public and private aroused dark memories, particularly when focused on the person of Vanderbilt. "The country is not without experience of the dangers of intrusting so much power to an individual," one man wrote to the Journal of Commerce Journal of Commerce. "Nicholas Biddle and the United States Bank furnish a warning too well remembered by us who passed through the fearful ordeal caused by his abuse of power, to look with composure on the power possessed by this railroad king."93 Of course, Jackson could control Biddle by vetoing the Bank of the United States charter and withdrawing federal deposits. In 1868 there was no such recourse with Vanderbilt. Small wonder that Adams compared him to Louis XIV. Of course, Jackson could control Biddle by vetoing the Bank of the United States charter and withdrawing federal deposits. In 1868 there was no such recourse with Vanderbilt. Small wonder that Adams compared him to Louis XIV.
And yet, this discussion points to a widely shared alertness to encroachments on democracy. It reflected a deep suspicion, even cynicism, about private power and public corruption. Adams and his contemporaries-and historians who followed them-were quick to believe the worst, whereas the truth was complicated and difficult to find. Even the transparently corrupt Tweed ring was a mechanism for controlling a huge, decentralized city through payoffs. "The term 'boss' applied to William Marcy Tweed or to John Kelly, his successor, is a measure of the mystery which surrounded their activities, not of their political omnipotence," writes historian Seymour J. Mandelbaum.
Journalists often claimed that railroads "bought" or "owned" state governments, but corrupt officeholders squeezed corporations as much as they obeyed them. Starting as early as the 1840s, politics had become a breeding ground for manipulators and lobbyists-those "strikers"-who abused the power of the state for the purpose of extortion. Horace Clark, for example, testified about the use of "pro-rata" bills in the state legislature to shake down railroads. Such a law would have set a single per-mile rate and prohibited discounts on through freight from competitive points; in theory, it would destroy a trunk line's ability to compete. "I think it is a fact that the introduction of those bills... has been done with a view to extract money from railroad companies," Clark said. "It is a very serious question for the railway managers to know what to do; and they do pay money, not to the members of the Legislature, for I don't believe that this money which is paid by a great corporation reaches members or is designed to, but goes to others who are preying upon the hopes and fears of men." The strikers knew that railroads would think it safer to give them money than to ignore them. Such payments, Clark claimed, "are not bribes but ransoms." Railroads feared government graft just as the public did, and suffered for it.94 Contemporaries and historians alike have carelessly lumped Vanderbilt together with Gould, Fisk, and the Erie board in their accusations of bribery. In fact, the state senate's investigation found little evidence of corruption by Vanderbilt and his agents, by contrast with the abundant proof that the Erie had poured out cash to judges and legislators. Indeed, Vanderbilt's lobbyists in Albany testified that he forbade them from buying votes (at least, not explicitly).95 On close inspection, even the Commodore's relationship with the preposterous Judge Barnard proves to be more than a matter of graft. Little doubt exists as to Barnard's corruption, but there is no evidence that he simply took cash from Vanderbilt and did as he was told. Indeed, being a Tweed ally made him a foe of Horace Clark and Augustus Schell, who had started the Manhattan Club as a rival to the Tweed ring. On close inspection, even the Commodore's relationship with the preposterous Judge Barnard proves to be more than a matter of graft. Little doubt exists as to Barnard's corruption, but there is no evidence that he simply took cash from Vanderbilt and did as he was told. Indeed, being a Tweed ally made him a foe of Horace Clark and Augustus Schell, who had started the Manhattan Club as a rival to the Tweed ring.96 Even Vanderbilt's bitterest enemies never accused him of bribing Barnard; rather, they pointed out that the judge was a close friend of the Commodore's son-in-law and broker, George A. Osgood, and speculated in Erie. John M. Davidson socialized with Barnard and quoted his opinions about stocks, but his letters show that Barnard often talked down New York Central shares and took positions hostile to the Commodore. Temperamental and self-important, Barnard had his own agenda, if a dishonest one. In the Erie litigation, it simply coincided with Vanderbilt's. Even Vanderbilt's bitterest enemies never accused him of bribing Barnard; rather, they pointed out that the judge was a close friend of the Commodore's son-in-law and broker, George A. Osgood, and speculated in Erie. John M. Davidson socialized with Barnard and quoted his opinions about stocks, but his letters show that Barnard often talked down New York Central shares and took positions hostile to the Commodore. Temperamental and self-important, Barnard had his own agenda, if a dishonest one. In the Erie litigation, it simply coincided with Vanderbilt's.
These fine (but critical) details escaped opinion makers and newspaper-headline writers, let alone the public itself. "Exaggeration, misapprehension, and well-grounded allegations mingled together, and created a sense of crisis," writes Mark Summers, a historian of nineteeth-century corruption. This cynicism obstructed attempts to cure the underlying complaints. Regulation was the obvious method of keeping corporations answerable to democracy, and not the other way around-but why trust public officials to regulate if they were all on the take? The absence of a nonpartisan, professional civil service-still decades away-meant there was no easy answer. The power of the railroads gave rise to demands for a stronger government to control them, yet this same power aroused fears that they would simply corrupt a strong government, and grow still more powerful. As Adams wrote elsewhere, "Imagine the Erie and Tammany rings rolled into one and turned loose upon the field of politics."97 Perversely, one lasting result of "A Chapter of Erie" was the doubt it cast on any solution to the problems it illuminated. And so the railroads grew still larger, and Vanderbilt more powerful. Perversely, one lasting result of "A Chapter of Erie" was the doubt it cast on any solution to the problems it illuminated. And so the railroads grew still larger, and Vanderbilt more powerful.
THE VANDERBILT FAMILY SEEMED to be falling apart. In 1868, after the Commodore battled back from the brink of disaster in the Erie War, he found himself helpless to save his own loved ones. The first to go was the most vulnerable: Frances Lavinia, the invalid. Vanderbilt and Sophia buried their daughter in the family vault on Staten Island in the first week of June. The to be falling apart. In 1868, after the Commodore battled back from the brink of disaster in the Erie War, he found himself helpless to save his own loved ones. The first to go was the most vulnerable: Frances Lavinia, the invalid. Vanderbilt and Sophia buried their daughter in the family vault on Staten Island in the first week of June. The Hartford Courant Hartford Courant took the occasion to report that the old man intended to "bequeath the great bulk of his property, now estimated at sixty millions of dollars, to his son William.... The Commodore has shown much interest in his relatives, particularly young men, and has put many of them... on the high road to wealth." took the occasion to report that the old man intended to "bequeath the great bulk of his property, now estimated at sixty millions of dollars, to his son William.... The Commodore has shown much interest in his relatives, particularly young men, and has put many of them... on the high road to wealth."98 With the family gathered in grief at 10 Washington Place, Corneil pulled his mother away from the others, "& held a long & important consultation," according to Ellen. "They both concluded it was best for him not to write his father again or in any way ask a favor at his hands." Sophia advised him to go on living quietly until January; if the Commodore did not assist him then, Corneil should take "a political position, or enter into some safe & respectable business," Ellen reported. In so many words, Sophia tried one last time to convince him to abandon his dreams of making a big score, of duplicating his father's success in one lucky strike.
"On coming home," Ellen wrote, "he seemed deeply impressed with his conversation with his mother & of his own accord assured me that he should not under any circumstances again trouble his father in any manner during the present year." She suffered for her husband's penance as much as his crimes. The couple no longer had a house or carriage, and lived in relative poverty Even worse, Corneil sometimes turned against her in his frequent fits of self-hatred. When a close friend discussed Corneil's debts with her, he flared in anger at "this expose [sic] of my matters to a woman.... a woman.... You certainly must know that I will stand no lecturing from any female." Ellen, he wrote, "has got nothing to do with my business, and... I am not in the least responsible to her." Yet still she defended him. "I fear you have a wrong impression in regard to his troubling his father," she told Greeley "I know that for at least six months past he has neither personally nor by his letter asked his father a single favor, except that of recognition & this he immediately responded to satisfactorily. Cornelius has carefully avoided alluding to increase of allowance." Then she added a caveat, one that said everything about his habits and associates: "Whatever his friend may have solicited on his behalf is of course another matter." You certainly must know that I will stand no lecturing from any female." Ellen, he wrote, "has got nothing to do with my business, and... I am not in the least responsible to her." Yet still she defended him. "I fear you have a wrong impression in regard to his troubling his father," she told Greeley "I know that for at least six months past he has neither personally nor by his letter asked his father a single favor, except that of recognition & this he immediately responded to satisfactorily. Cornelius has carefully avoided alluding to increase of allowance." Then she added a caveat, one that said everything about his habits and associates: "Whatever his friend may have solicited on his behalf is of course another matter."99 As ever, Vanderbilt declined to assist his son, convinced that it would be wasted until he reformed himself. Yet, as the Courant Courant observed, he made extraordinary efforts for other young relatives. On June 27, he beseeched President Johnson to restore his grandson, Vanderbilt Allen, to the commission that the young officer had abandoned. The Commodore observed that he was departing from his "uniform practice" of never requesting public office for his friends, but, he wrote, "He is a promising young man and I am anxious to save his pride.... After the war was over feeling that the country could spare his services- observed, he made extraordinary efforts for other young relatives. On June 27, he beseeched President Johnson to restore his grandson, Vanderbilt Allen, to the commission that the young officer had abandoned. The Commodore observed that he was departing from his "uniform practice" of never requesting public office for his friends, but, he wrote, "He is a promising young man and I am anxious to save his pride.... After the war was over feeling that the country could spare his services-boy like-[he] foolishly resigned his place to make a trip to Europe in July 1865. I want to get him reinstated." To Vanderbilt's disappointment, young Allen wanted to go into business. At least he took care of himself; the same could not be said for Jeremiah Simonson, the spendthrift nephew and master of the shipyard in Green-point. Vanderbilt sued him for $22,596.71 and won.100 In the third week of July, the Commodore traveled to Saratoga Springs as usual. He checked into the Union Hotel, a favorite of Daniel Drew. Sophia was not feeling well; in hopes of regaining her health, she went to Lebanon Springs, on the Massachusetts border southeast of Albany. There she was advised to return at once to New York, for her health was too frail. Rather than go to 10 Washington Place, where she would be alone with the servants, she stayed with her daughter Maria Louisa and son-in-law Horace Clark at their home in Murray Hill.
On August 6, a little more than two weeks after Vanderbilt went to Saratoga, he received a telegram that Sophia had collapsed with a stroke. Immediately he boarded a special train for Troy, and telegraphed an order to the Hudson River Railroad to ready a locomotive and car for him there, and to clear the track south. He found his car waiting for him, hitched to the D. T. Vail D. T. Vail, driven by engineer S. F. Gregory Jr. The Vail Vail roared down the rails at fifty miles an hour. "Gregory says that is the fastest he ever rode," the roared down the rails at fifty miles an hour. "Gregory says that is the fastest he ever rode," the Troy Times Troy Times reported, "and quite as fast as he thinks it safe to run." reported, "and quite as fast as he thinks it safe to run."101 Sophia remained bedridden at the Clark house, and showed encouraging signs of recovery. Her husband, who had brought her so much, who had put her through so much, remained with her. He was there at one thirty in the morning on August 17, when she suffered a second stroke and died. As Greeley wrote in the New York Tribune New York Tribune, "She had lived nearly 74 years without incurring a reproach or provoking enmity."102 On August 19, Vanderbilt sat surrounded by family and flowers as mourners came to 10 Washington Place to pay their respects. They filed past a sleek rosewood casket, viewing Sophia's body through a lid that was glass from the bust upward. The pallbearers included Cornelius's closest cohorts, Marshall O. Roberts, Charles O'Conor, John Harper, Augustus Schell, and John Steward, and the couple's wider circle of friends-Alexander T. Stewart, William H. Bradford, and A. S. Halsted. The guests included Daniel Drew, Edwin D. Morgan (now a U.S. senator), and others of note. A short funeral service was held at ten thirty in the morning, after which the Commodore escorted his deceased wife down to Whitehall Slip and across the harbor to the family tomb.103 He returned to an empty house. Not literally empty, of course: the income tax assessor finally got a peek inside that year, and found an abundance of taxable possessions, including two fine watches, 468 ounces of silver dinnerware, and three carriages in the stables in the rear (in addition to $69,230 in taxable income, which did not include stock dividends).104 Then, too, there was the staff of Irish-born servants. Not emotionally empty either: the walls, floors, and cabinets abounded with mementos of their nearly fifty-five years together: paintings of each other, the gifts from their golden wedding anniversary. Each item served as a reminder of his loss. Then, too, there was the staff of Irish-born servants. Not emotionally empty either: the walls, floors, and cabinets abounded with mementos of their nearly fifty-five years together: paintings of each other, the gifts from their golden wedding anniversary. Each item served as a reminder of his loss.
The image of Vanderbilt as a man of force burns brightly in the historical eye, making it difficult to penetrate the glare to perceive a subtler vision behind it. He often comes across as having been abusive and domineering to his wife. The truth was more nuanced. Daniel Allen, for example, thought that Vanderbilt's notorious dispatch of Sophia to an asylum in 1846 was justified, that she required treatment. Ellen's letters never hinted at anger between her in-laws-and Corneil would have tried any parents' patience. Cornelius and Sophia grew rich together, traveled together, had children together, buried children together, attended the weddings of grandchildren together. They were a couple.
Perhaps the truth is not so nuanced after all: despite his shortcomings as a husband, Vanderbilt loved his wife. And her death left him alone. Of all the forms of stress that afflict human beings, one of the worst is loneliness, especially after the loss of a spouse. His unmarried sister Phebe recognized the emotional vacuum, and stepped in to supervise the maids, keep up the house, and keep up her brother.105 He needed his sister in this hour; and through her, he glimpsed a future beyond his isolation and grief. He needed his sister in this hour; and through her, he glimpsed a future beyond his isolation and grief.
* The Erie already had a broad gauge. Presumably Fisk misspoke or was misquoted, and meant a third rail on the Michigan Southern. The Erie already had a broad gauge. Presumably Fisk misspoke or was misquoted, and meant a third rail on the Michigan Southern.
Chapter Seventeen.
CONSOLIDATIONS.
In time, all things came to the Commodore. Wealth, like mass, exerts a gravitational pull, attracting power, social recognition, and more wealth. With each fresh accumulation, its pull grows stronger. Vanderbilt was the biggest man in the biggest thing in America, the railroads, and so he drew to himself the leading figures in politics, society, and the economy. "Cornelius Vanderbilt is a man of power, unquestionably," the Chicago Tribune Chicago Tribune wrote. "Many fear, but few love him.... He is the railway king of America, and the great power of Wall Street.... He is so accurate a judge of men, so clear-sighted, so fertile of resource, so skilful an organizer of combinations, and the wielder of such an immense capital, that failure is next to impossible.... He is a foe even Wall Street stands in awe of." wrote. "Many fear, but few love him.... He is the railway king of America, and the great power of Wall Street.... He is so accurate a judge of men, so clear-sighted, so fertile of resource, so skilful an organizer of combinations, and the wielder of such an immense capital, that failure is next to impossible.... He is a foe even Wall Street stands in awe of."1 On April 18, 1868, in the midst of the Erie War, Vanderbilt beckoned to a thirty-year-old businessman from Ohio, a pious, long-faced oil refiner with a pinched mouth named John D. Rockefeller. Together with Henry Flagler, he had recently formed the Standard and Excelsior Oil Works in Cleveland. That put him at the forefront of one of the most important developments in the American economy. "Nothing in the history of this country," Scientific American Scientific American had declared in 1865, "if we except the furor that followed the opening of the gold fields of California, has caused so much excitement in business circles as the rapid development of the petroleum oil interests." had declared in 1865, "if we except the furor that followed the opening of the gold fields of California, has caused so much excitement in business circles as the rapid development of the petroleum oil interests."2 The industry had fulfilled that excitement in the years that followed, as oil gushed out of wells in northwestern Pennsylvania to be refined into kerosene for the world's lamps. By 1868, petroleum products were a leading export, much of it shipped from New York. The industry had fulfilled that excitement in the years that followed, as oil gushed out of wells in northwestern Pennsylvania to be refined into kerosene for the world's lamps. By 1868, petroleum products were a leading export, much of it shipped from New York.
Perhaps no other example better demonstrates the symbiotic relationship between railroads and industry. In part, the demands of the railroads themselves invigorated production. They consumed huge amounts of pig iron and coal, for instance; production of those commodities more than doubled in the decade after the Civil War. When Andrew Carnegie left the Pennsylvania Railroad in 1865, he invested in an iron mill, a bridge-building concern, a sleeping-car company, and other businesses that fed his former employer's voracious appetites-and helped turn Pittsburgh into a smoke-shrouded manufacturing center.3 In addition, the railroads' craving for freight led them to radically cut rates, which encouraged new industries by lowering shipping costs. When petroleum took off in the 1860s, new lines sprang into existence to serve remote wellheads; trains clacked into the mushrooming drilling towns bearing iron, lumber, foodstuffs, and other supplies, and chuffed out hauling barrels of oil. Cleveland boomed with more than fifty refineries that clustered outside of town amid a forest of wooden tanks, pouring a waste product called gasoline into the Cuyahoga River, which caught fire regularly. The city began as a Lake Erie port, but now refiners could choose from the Pennsylvania, Erie, or Lake Shore railways to move their product for export. In addition, the railroads' craving for freight led them to radically cut rates, which encouraged new industries by lowering shipping costs. When petroleum took off in the 1860s, new lines sprang into existence to serve remote wellheads; trains clacked into the mushrooming drilling towns bearing iron, lumber, foodstuffs, and other supplies, and chuffed out hauling barrels of oil. Cleveland boomed with more than fifty refineries that clustered outside of town amid a forest of wooden tanks, pouring a waste product called gasoline into the Cuyahoga River, which caught fire regularly. The city began as a Lake Erie port, but now refiners could choose from the Pennsylvania, Erie, or Lake Shore railways to move their product for export.
When Vanderbilt took over the New York Central, he immediately inquired into its relations with the smaller lines being built into the oil region. That investigation naturally brought Rockefeller to his attention. Rockefeller and Flagler were to oil what the Commodore was to the rails: the great consolidators. They fought aggressively to bring their burgeoning industry under their own control; in so doing, they also worked to elevate Cleveland over Pittsburgh as a refining center (which they accomplished in 1869). That suited Vanderbilt's interests. Pittsburgh was the special preserve of the Pennsylvania, which currently carried the bulk of the oil traffic, but the Central connected to Cleveland through the standard-gauge Lake Shore Railway4 Young Rockefeller often attended to his company's interests in New York at an office on Pearl Street, where he received the Commodore's request for a meeting at noon on April 18. He refused to go. "We sent our card by the messenger," Rockefeller wrote to his wife in Cleveland, "that Van might know where to find our office." The response showed Rockefeller's confidence; with so many routes to port, he knew the strength of his bargaining position. But the Commodore's gravity was too powerful to escape. In the afternoon, Rockefeller stopped by the St. Nicholas Hotel and saw his card in the hand of Amasa Stone Jr., a New York Central director from Cleveland. Stone explained that the Commodore had assigned him to secure the oil traffic. "We talked business business to Amasa & guess he thinks we are rather prompt young men," Rockefeller wrote. At Stone's urging, he met with Vanderbilt that evening in the Manhattan Club, where they began a long, frustrating, but fruitful relationship. to Amasa & guess he thinks we are rather prompt young men," Rockefeller wrote. At Stone's urging, he met with Vanderbilt that evening in the Manhattan Club, where they began a long, frustrating, but fruitful relationship.
The power of attraction worked both ways. Vanderbilt could be solicitous as well as commanding; Rockefeller himself wrote, "He is anxious to get our business, and said thought he could meet us on the terms."5 Within the railroad industry, too, business logic demanded that the Commodore build close relationships with lines to the west. Previously freight from Chicago, Detroit, or Cleveland went by boat over the Great Lakes to Buffalo; now trains hauled most of it. The connecting lines needed to cooperate to coordinate schedules, set rates, divide costs, and allow freight to move without breaking bulk if at all possible. As early as May, William wrote to James F. Joy, chief executive of the Michigan Central and a broad network known as "the Joy roads," and asked him to meet with the Commodore. William assured Joy, "There is not the least disposition to make exactions.... You will find the right spirit here." On December 17, after months of negotiations, the Vanderbilts secured a comprehensive agreement for through traffic from the major western cities-Chicago, St. Louis, and Cincinnati-to New York and Boston. The signators met in the Commodore's office on West Fourth Street; they included Joy, for the North Shore lines (Michigan Central and Great Western of Canada), Chester W. Chapin for the Western (soon to be known as the Boston & Albany), and executives of the South Shore lines, as well as Vanderbilt himself. Diplomacy, cooperation, and consolidation were emerging as themes of his reign. Within the railroad industry, too, business logic demanded that the Commodore build close relationships with lines to the west. Previously freight from Chicago, Detroit, or Cleveland went by boat over the Great Lakes to Buffalo; now trains hauled most of it. The connecting lines needed to cooperate to coordinate schedules, set rates, divide costs, and allow freight to move without breaking bulk if at all possible. As early as May, William wrote to James F. Joy, chief executive of the Michigan Central and a broad network known as "the Joy roads," and asked him to meet with the Commodore. William assured Joy, "There is not the least disposition to make exactions.... You will find the right spirit here." On December 17, after months of negotiations, the Vanderbilts secured a comprehensive agreement for through traffic from the major western cities-Chicago, St. Louis, and Cincinnati-to New York and Boston. The signators met in the Commodore's office on West Fourth Street; they included Joy, for the North Shore lines (Michigan Central and Great Western of Canada), Chester W. Chapin for the Western (soon to be known as the Boston & Albany), and executives of the South Shore lines, as well as Vanderbilt himself. Diplomacy, cooperation, and consolidation were emerging as themes of his reign.6 As in business, so too in his personal life. When his sister Phebe stepped into his household after Sophia's death, she brought company. They were two visitors-reportedly his cousins-from Mobile, Alabama: a widow named Martha Crawford and her daughter, the twenty-nine-year-old Frank.7 William H. Vanderbilt remembered meeting them on a Sunday evening in 1868 at Phebe's house, where they stayed as guests. The curiously named Frank was especially close to her mother; years before, Frank had married a John Elliott in Mobile, but refused to move out of her mother's house, and a divorce soon followed. Martha Crawford had brought her daughter north during Alabama's brutal summer to improve her health. William H. Vanderbilt remembered meeting them on a Sunday evening in 1868 at Phebe's house, where they stayed as guests. The curiously named Frank was especially close to her mother; years before, Frank had married a John Elliott in Mobile, but refused to move out of her mother's house, and a divorce soon followed. Martha Crawford had brought her daughter north during Alabama's brutal summer to improve her health.
Vanderbilt found himself intrigued by Frank's Southernness, and much else. The child of a once-aristocratic family, she boasted the musical accomplishments expected of her social status, with a fine voice and skill at the piano. One observer described her as "quite a good-looking, though by no means beautiful, woman." Rather, Vanderbilt admired her immense dignity ("queenly," by one account) and her body (as much as could be seen under the dirigible dresses of the era).8 He missed her when she and her mother went home in October. On the 24th, he received a letter from her, and put everything else aside to dictate a reply: He missed her when she and her mother went home in October. On the 24th, he received a letter from her, and put everything else aside to dictate a reply: I am happy to hear that you and your dear mother arrived at home all straight, after so long a visit amongst-as it were-almost entire strangers to you previous to your leaving home. I hope you may continue to improve all the time-you in particular, until you will turn the scale when 125 pounds is on the opposite balance. This is weight enough for your beautiful figure. Please... accept of the kind wishes of Miss Phebe, Mrs. Osgood, Mrs. Dustan and family, William & all the rest as well as the subscriber.9 The haste of the letter, of course, spoke to his romantic interest-as did the way he turned the topic of her health into praise for her figure. She gave this grieving old man hope for the future.
What he intended to do in the future remained a mystery to those around him. Vanderbilt had more than one surprise in store for his family, and the world.
VANDERBILT RATHER LIKED his enemies. For decades, he had deftly switched from enmity to friendship, embracing Drew, Morgan, Garrison, Corning, and others once their wars ended. He never took business disputes personally. He made an exception for Jay Gould and Jim Fisk. He had admitted to them directly that they were the ones who had ensured his personal humiliation in the Erie War. Even worse, they broke the gentlemen's code of business combat. His other foes kept silent about secret business battles, but Fisk and Gould freely told the press every grimy detail, which infuriated the Commodore. He regarded Fisk as reckless, and didn't like the looks of Gould. "God Almighty has stamped every man's character upon his face. I read Mr. Gould like an open book the first time I saw him," Vanderbilt later said. "No man could have such a countenance as his, and still be honest." his enemies. For decades, he had deftly switched from enmity to friendship, embracing Drew, Morgan, Garrison, Corning, and others once their wars ended. He never took business disputes personally. He made an exception for Jay Gould and Jim Fisk. He had admitted to them directly that they were the ones who had ensured his personal humiliation in the Erie War. Even worse, they broke the gentlemen's code of business combat. His other foes kept silent about secret business battles, but Fisk and Gould freely told the press every grimy detail, which infuriated the Commodore. He regarded Fisk as reckless, and didn't like the looks of Gould. "God Almighty has stamped every man's character upon his face. I read Mr. Gould like an open book the first time I saw him," Vanderbilt later said. "No man could have such a countenance as his, and still be honest."10 On November 15, 1868, Gould called on Vanderbilt. The younger man had taken office as the Erie's president, and it had strained his considerable capabilities to keep the troubled railroad afloat. The company had borrowed heavily against its own stock to pay off Vanderbilt; knowing this, Vanderbilt had sold his remaining fifty thousand shares in small batches on seller's option (retaining the right to decide when to deliver the stock). Then he delivered the entire lot on a single day, staggering the share price and nearly forcing the Erie into bankruptcy. Gould narrowly steered the Erie through this flood, but he now viewed Vanderbilt with deep suspicion.11 Gould asked the Commodore if he had anything to do with a lawsuit that would be filed the next morning by August Belmont, who represented foreign investors, demanding that the Erie be placed in receivership. Vanderbilt dismissed the notion. It was obvious he had nothing to do with it, he said; if he had a stake in the lawsuit, he would have sent the attorney Charles O'Conor into court.12 Unfortunately for Vanderbilt, O'Conor had more than one client. The next morning, he showed up at the courthouse as Belmont's counsel. Taking this as confirmation of Vanderbilt's role in the lawsuit, Gould and Fisk crafted a plan to undo the grand settlement of the Erie War. On December 5, Fisk rode a carriage through a howling storm to 10 Washington Place, and produced a carpetbag stuffed with fifty thousand Erie shares. Take them back, he demanded, and return the money paid for them-along with the $1 million "bonus" paid for the sixty-day call on the other fifty thousand shares. Vanderbilt threw him out. Gould then filed a lawsuit with the same demands.13 Vanderbilt had faced worse insults than those made in Gould's affidavits and Fisk's flamboyant orations, but these two men irritated him as no one ever had. On December 6, he sent a carefully worded letter to the New York Times New York Times, declaring all the assertions in the lawsuit to be false. "I have no dealings with the Erie Railway Company, nor have I ever sold that Company any stock or received from them any bonus," he wrote. Even the best historians have treated this as nonsense; Maury Klein, for example, calls it "a lame denial." In fact, it was literally accurate. Vanderbilt had insisted during the settlement that his sale of stock technically be to Drew, who contributed $500,000 to the purchase price; and Erie had paid $1 million not as a bonus, but for the sixty-day call. (Gould was not a party to the settlement talks, so his allegations may have been sincere.) But Vanderbilt walked a twisted path in trying to defend his honor without revealing the full story, and it led to a dead end. Fisk showed the press the two checks that comprised the $1 million payment, which seemed to prove his case. Rather than argue and fully expose the secret deal, Vanderbilt fell silent.14 Gould likely saw no direct profit in his lawsuit. Rather, it gave him leverage in future negotiations, and put stress on his enemy. The real fighting consisted of a rate war that had flared up in October, when Gould introduced what the press called "starvation prices." He also announced a planned line to the Niagara Suspension Bridge (to gain access to the North Shore route) and, most important, he opened secret talks with the South Shore lines for a connection to Chicago.15 In the end, the latter intrigue would prove to be the most consequential aspect of these hostilities, for it would force Vanderbilt into yet another war of conquest. In the meantime, the public spat announced to the world that he had survived the Erie War merely to acquire a new set of enemies-the most cunning and dangerous of his career.
BESET BY EXTERNAL FOES, Vanderbilt surely felt pressure to adopt a conservative domestic policy at the end of his first year as president of the New York Central. He did not. Instead he took two bold steps that startled contemporaries, and helped lay the foundation for the modern corporate economy.
The first revolved around the seemingly dry question of capitalization. Rumors had long circulated that he would issue new shares to existing stockholders. As early as January 9, John M. Davidson had told Corning, "I think certain sure think certain sure, a stock dividend will be made on Central." But months had passed without one. In early December, brokers barely blinked at whispers that John Morrissey, Vanderbilt's prizefighting friend, was madly buying Central.16 On Friday, December 18, Central treasurer Edwin D. Worcester handed Vanderbilt a report. Its contents surprised him. He consulted his trusted son-in-law Horace Clark and began to track down directors for an immediate meeting. On Saturday evening, they assembled at Clark's house. The Commodore announced that Worcester had finished a six-month review of the line's construction accounts, which showed a remarkable increase in property over the previous several years. To represent it, Vanderbilt proposed an 80 percent stock dividend. For each one hundred shares held, a stockholder would receive scrip representing eighty new shares. (Stock was customarily bought or sold in blocks of one hundred shares.) Once converted into stock, the scrip would add $20 million at par value to the Central's existing $25 million stock capitalization. Vanderbilt recused himself from the vote, but his proposal passed without opposition.
Why issue scrip, and not actual stock? As Clark later explained, they were trying to distinguish themselves from the Erie by acting lawfully. The Central treated the scrip as if it were identical to stock, but the board would await explicit authorization from the legislature before converting it into shares. The scrip served another purpose as well: Judge Barnard recently had enjoined the board from issuing new stock; the use of this instrument dodged the order but performed the same function.17 The news drove the financial community into a frenzy. Not only did the Central prepare the way for nearly doubling its stock, from $25 million to $45 million, it also declared a semiannual dividend of 4 percent on both shares and scrip (amounting to $1.8 million). On Monday morning, Central shot up from 133 to 165. But not everyone in Vanderbilt's circle was pleased. He had given no prior warning to the board, except to Clark and Chester W. Chapin, who had designed and printed the scrip in advance. Many of his closest friends and one of his sons-in-law (most likely Osgood) complained about the secrecy. Vanderbilt replied, "You shan't speculate on us." He believed that some of his own directors had gone short on the stock; as he later explained, "I would not trust many of them." The surprise stock dividend caught them out, and delivered a sharp lesson in trying to profit off Vanderbilt's company18 The sheer size of the issue aroused intense emotion, even among leading railroad men. James F. Joy and John M. Forbes considered it a "rascally abuse of stock dividends."19 But why should a simple financial transaction, conducted between the railroad and its existing shareholders, arouse such outrage? The answer is that stock watering occupied the center of the national debate over the emerging new economy. But why should a simple financial transaction, conducted between the railroad and its existing shareholders, arouse such outrage? The answer is that stock watering occupied the center of the national debate over the emerging new economy.
In part, the argument was pragmatic. The New York Sun New York Sun wrote, "If the road can really earn dividends on $45,000,000, it is all right to water the stock." But the wrote, "If the road can really earn dividends on $45,000,000, it is all right to water the stock." But the Chicago Tribune Chicago Tribune countered, "Its practical effect is to swindle honest people who hold the stock as an investment.... The stock has been watered to the point where no dividends can be made." countered, "Its practical effect is to swindle honest people who hold the stock as an investment.... The stock has been watered to the point where no dividends can be made."20 The Central immediately declared a dividend, though, which seemed to refute that complaint. Furthermore, Vanderbilt apportioned the new shares evenly among the shareholders. By contrast, the Erie during its eponymous war had thrown convertible bonds on the market; when these were converted into stock, they diluted the stake of existing shareholders by reducing the relative proportion of their holdings. And yet, the Commodore suffered equally severe criticism. The Central immediately declared a dividend, though, which seemed to refute that complaint. Furthermore, Vanderbilt apportioned the new shares evenly among the shareholders. By contrast, the Erie during its eponymous war had thrown convertible bonds on the market; when these were converted into stock, they diluted the stake of existing shareholders by reducing the relative proportion of their holdings. And yet, the Commodore suffered equally severe criticism.
For critics, the issue was not fairness, but the very nature of the corporate economy as envisioned on January 1, 1869-the date when the North American Review North American Review published "Railroad Inflation," by Charles F. Adams Jr. Though written prior to the December 19 meeting at Clark's house, this essay made an argument against stock watering that reveals the persistence of a tangible understanding of the economic universe and a continuing resistance to abstractions. published "Railroad Inflation," by Charles F. Adams Jr. Though written prior to the December 19 meeting at Clark's house, this essay made an argument against stock watering that reveals the persistence of a tangible understanding of the economic universe and a continuing resistance to abstractions.
To Adams, if a thing wasn't a thing, it was nothing. Wealth consisted only of physical objects-goods, not services. "Transportation cannot add to wealth," he wrote. For all the merchandise the railroad system carried, "it never makes one ton two." Therefore, railroad revenue "constitutes a tax on consumption"-essential, perhaps, but to be jealously watched.
Adams saw railroad dividends as a necessary evil. Like virtually everyone else, he did not not consider them the simple division of profits among stockholders. Rather, they were "interest on capital," a due return on the amount originally invested in construction. Americans discussed the par value of a railroad share as if it were money deposited in a savings account, an account from which all interest must be drawn, and never allowed to compound. Even the market value of the railroad's physical assets-its "book value," or what it would bring if its property were sold-did not enter into it; only the cost of construction mattered. And on this capital an interest of about 6 to 10 percent was politically acceptable-indeed, expected by investors and the broader public alike. consider them the simple division of profits among stockholders. Rather, they were "interest on capital," a due return on the amount originally invested in construction. Americans discussed the par value of a railroad share as if it were money deposited in a savings account, an account from which all interest must be drawn, and never allowed to compound. Even the market value of the railroad's physical assets-its "book value," or what it would bring if its property were sold-did not enter into it; only the cost of construction mattered. And on this capital an interest of about 6 to 10 percent was politically acceptable-indeed, expected by investors and the broader public alike.
In this light, any increase of stock was a fraud unless it directly reflected money expended on new construction, and any dividend paid on those fraudulent shares was theft, fake interest paid on "fictitious capital." It was widely believed that stock watering caused railroad companies to raise their rates to pay the expected dividends on the excess stock, bleeding the public for the benefit of those who were in on this paper-certificate magic trick. Many railroad men feared that stock watering would call into question the validity of all corporate shares. Henry V. Poor, the leading chronicler of the industry, wrote, "Such enormous additions to the capital of companies, without any increase of facilities... threaten more than anything else to destroy the value of railway property as well as to prove most oppressive to the public."21 Did Vanderbilt argue against this logic? Did he make a case that share price should reflect earnings or growth or other factors, rather than initial construction costs? Did he declare that dividends should represent a division of profits-that competition determined his rates, not his need to pay dividends on "fictitious capital"? No, he emphatically did not. He did did believe that the Central was worth far more than its existing par value; but he justified his actions by releasing a letter from major stockholders (ranging from Frank Work to John Jacob Astor II) that pleaded with him to increase the stock in order to represent prior real estate purchases and construction, made with money that should have been paid out as dividends. Whether Vanderbilt created the letter himself as political cover is irrelevant; the point is, he defended himself in terms that matched those of his critics. Indeed, Worcester testified that, at Vanderbilt's request, he had indeed conducted a six-month investigation of such prior expenditures. The Commodore pronounced himself "astonished" at how large a figure Worcester found. His insistence on the justice of all this would lead him into a bitter fight with the U.S. Treasury, in which his sincerity would become all too apparent. believe that the Central was worth far more than its existing par value; but he justified his actions by releasing a letter from major stockholders (ranging from Frank Work to John Jacob Astor II) that pleaded with him to increase the stock in order to represent prior real estate purchases and construction, made with money that should have been paid out as dividends. Whether Vanderbilt created the letter himself as political cover is irrelevant; the point is, he defended himself in terms that matched those of his critics. Indeed, Worcester testified that, at Vanderbilt's request, he had indeed conducted a six-month investigation of such prior expenditures. The Commodore pronounced himself "astonished" at how large a figure Worcester found. His insistence on the justice of all this would lead him into a bitter fight with the U.S. Treasury, in which his sincerity would become all too apparent.22 The future is made by those in the present. The acts that Vanderbilt performed out of the orthodox logic of his times undermined that very logic. A day was coming when the economic mind would relinquish the physical basis of stock price, the insistence on par value. A day was coming when the price of a share would be released to flap into the air, its height determined strictly by the market-the uplifts and downdrafts created by millions of buyers and sellers. A day was coming when dividends simply would mean the division of profits. Vanderbilt prepared the way for this time, and in practice he operated on many of its principles, though only on a subconscious level. He did not "concoct" a justification of the stock dividend, as one writer claims; he believed it. But sometimes actions really are more potent than words.23 The second dramatic step that the Commodore took as president of the Central needed more time to mature, but its significance would be far more apparent to the public and historians alike. It would give his name to an era-the era of consolidations.
ON MARCH 3, 1869, a committee of the New York State Assembly settled into chairs in a private parlor on the third floor of the Fifth Avenue Hotel in Manhattan. They gathered to hear testimony regarding the New York Central's stock dividend. But the proceedings seemed peculiar to Hudson C. Tanner, the stenographer. "Everything was on the dead quiet," he wrote. No one was allowed in except the witnesses. They heard from Edwin Worcester, then Horace Clark. During Clark's testimony, the Commodore strode in, "wearing his traditional white choker, and appearing as innocent as a little, white lamb," Tanner snidely recorded. "All the members of the Committee were introduced to him, instead of his being introduced to the members of the Committee. That was, of course, due entirely to the respect which the Committee had for an old steamboat captain."
"Mr. Clark said it as he should say it," Vanderbilt told the committee when his turn to speak came. "I can do no better than he has done on that subject, only he talks a little too much! That is all the trouble. That is a general fault with lawyers." Obviously comfortable in front of his inquisitors-if not in outright command-he defended the $20 million scrip issue at length, engaged in banter with Clark, turned aside to question Worcester, and digressed into the tale of how he and Daniel Drew had saved the Harlem in 1857-all testimony that the committee politely struck from the published record, along with his occasional "damn."24 The committee duly reported a bill to the assembly to authorize the conversion of the scrip into stock. At the same time, a bill advanced to allow Vanderbilt to consolidate the Central with the Hudson River, to create a unified railroad from St. John's Park in Manhattan to the shores of Lake Erie. This second act would prove even more momentous than the enormous scrip dividend, for it would create a corporation on an unprecedented scale. Long envisioned as a practical matter (Dean Richmond had proposed the same thing years earlier), it promised to end the most troublesome fragmentation of the railroad system in New York, introduce greater efficiency, and reduce costs to shippers and consumers. More broadly, it represented the abandonment of the older, local purposes which had first brought railways into existence, as a truly national network emerged. No longer semipublic bodies, railroads now functioned entirely as business enterprises, operated for maximum profit, bought and sold in the market, managed as business logic would dictate. That logic led inexorably to consolidation. The day of the giant corporation had arrived.
On May 20, Governor Hoffman signed both bills into law. In one day Vanderbilt nearly doubled the capitalization of his largest company and opened the door to increase it another 50 percent by annexing the Hudson River. It would take the rest of the year before the consolidation would be complete, but the most difficult step-the political step-had been taken. And Hoffman signed another bill that would help Vanderbilt to make his mark in history: an act authorizing the Harlem Railroad to build, at Forty-second Street and Fourth Avenue, a grand, central depot.25 Vanderbilt immediately convened boards of directors and meetings of stockholders to approve the scrip dividend and the consolidation. He cast votes in his own name on 23,600 Central shares (one-tenth of the total voted). His son William voted seventeen thousand; his grandson Cornelius Vanderbilt Jr. seventeen thousand; and his grandson William K. Vanderbilt another ten thousand. Already the Commodore was laying the foundation for his dynasty, settling a large portion of his still-growing estate on the heirs of his heir.26 Indeed, his family in general prospered. Another favorite grandson, Vanderbilt Allen, went into the railroad supply business at this time, forming the partnership Haven & Allen. Even Corneil partially righted himself that spring. On March 5, Horace Greeley approached the incoming administration of President Ulysses S. Grant to request a job for Corneil in the Internal Revenue Bureau. Corneil himself went to Washington to press his case (borrowing money from Greeley of course). On May 1, he began work as superintendent of the bureau's Bonded Warehouse in New York under the collector, Joshua F. Bailey, with a salary of $175 a month. Indeed, his family in general prospered. Another favorite grandson, Vanderbilt Allen, went into the railroad supply business at this time, forming the partnership Haven & Allen. Even Corneil partially righted himself that spring. On March 5, Horace Greeley approached the incoming administration of President Ulysses S. Grant to request a job for Corneil in the Internal Revenue Bureau. Corneil himself went to Washington to press his case (borrowing money from Greeley of course). On May 1, he began work as superintendent of the bureau's Bonded Warehouse in New York under the collector, Joshua F. Bailey, with a salary of $175 a month.27 Everything seemed to go Vanderbilt's way. On February 1, the Harlem achieved such prosperity that he ceased to subsidize it with noncompetition payments from the Hudson River. In April, he closed a very old wound: the last reminder of Joseph L. White. Strong informed his diary "'Settlement' of the ancient suit of Nicaragua Transit Co. stockholders against that nefarious old Cornelius Vanderbilt, much talked of." The lawyers who had nursed the case for a dozen years absorbed most of the more than $400,000 that Vanderbilt agreed to pay; much of the rest went to speculators who had bought stockholders' claims for a penny on the dollar.28 His social life, too, took pleasurable turns. On May 25, he and his brother Jacob attended the opening day of the spring races at the Prospect Park Fairground in Brooklyn. They drove together through the gate, between carts piled with oranges, oysters, and other treats for sale, and made their way to the clubhouse, "its verandahs crowded with the beauty and fashion of the city and from one of which the Fourteenth Regiment Band discoursed sweet music," the Brooklyn Eagle Brooklyn Eagle reported. Jake remained close to Cornelius; he often brought his trotters across from Staten Island on the ferry to race on Harlem Lane or Bloomingdale Road against his brother, snorting at the brokers who tried to curry favor with the Commodore by letting him win. reported. Jake remained close to Cornelius; he often brought his trotters across from Staten Island on the ferry to race on Harlem Lane or Bloomingdale Road against his brother, snorting at the brokers who tried to curry favor with the Commodore by letting him win.29 Vanderbilt had hardly forgotten about Frank Crawford. No evidence speaks to when she came north again from Alabama; most likely it was not until the summer heat made Mobile unbearable. In the meantime, he acquainted himself with two most unusual sisters, Victoria Woodhull and Tennessee Claflin.30 In late 1868, the pair appeared at 17 Great Jones Street, not far from Vanderbilt's home, and began to advertise themselves as "magnetic physicians and clairvoyants," according to the In late 1868, the pair appeared at 17 Great Jones Street, not far from Vanderbilt's home, and began to advertise themselves as "magnetic physicians and clairvoyants," according to the New York Times New York Times. "They charged $25 in advance for their services, advertised largely and guaranteed wonderful cures." They attracted many clients, and for good reason. Emetics, bleeding, blistering, and mercury remained in the conventional doctor's arsenal; when fired at patients, they felt it. The role of unconventional healer, like that of spiritualist medium (or "clairvoyant"), remained one of the few professional roles largely reserved for women. Since femininity was seen as passive, women were thought to better serve as vessels for voices from the beyond, or invisible magnetic rays that passed through their hands into the patient.31 Victoria, at thirty-one, was a few years older than Tennessee (or Tennie C, as she preferred to be called). Both boasted striking features, with large eyes, dark hair, and full lips, though Tennie's face was softer, rounder, less angular. Victoria's marital status remained vague. At fifteen she had married Dr. Calvin Woodhull, whom she divorced, and had remarried a Union army veteran named James Harvey Blood (whom she later may have divorced and married again). Tennie, voluptuous and single, exuded sexuality On one occasion, the Herald Herald interrupted an account of a trial to observe "that Tenny C. displayed in the most aggravating way A WONDROUS SHIRT FRONT." In an age of strict social standards, her sensuality was an explosive weapon that she wielded as she chose, flirting with influential men in letters and conversation. interrupted an account of a trial to observe "that Tenny C. displayed in the most aggravating way A WONDROUS SHIRT FRONT." In an age of strict social standards, her sensuality was an explosive weapon that she wielded as she chose, flirting with influential men in letters and conversation.32 Vanderbilt liked and trusted his primary doctor, Jared Linsly but he didn't always like his treatments. Though he generally enjoyed abundant good health-he ate sparingly, drank little, and remained fit, alert, and active-he was an old man. He had been severely injured over the years in railroad and driving accidents, and felt the aches and pains that come with one's eighth decade. His daughter Mary La Bau obtained a "prescription" for him from a spiritualist healer named Tafts. Vanderbilt showed it to Linsly. "I think he was a believer in the efficacy of the medicine, and thought that the person [Tafts] could do him good," Linsly said. "He was relieved in his sufferings by being rubbed; that was as far as I supposed that he believed in magnetism."33 How and when Vanderbilt met Woodhull and Claflin remains unclear. Even less certain is his knowledge of their mysterious past. It does seem, though, that he felt particularly relieved when Tennie rubbed him. Soon the names of Woodhull and Claflin would be very publicly intertwined with that of Vanderbilt.34 ON FEBRUARY 24, 1869, the New York Herald New York Herald reported that Vanderbilt had developed a "plan for a consolidation of all the railways connecting the Central with Chicago, thus... making but one corporation between New York City and the metropolis of the West." This project was to be carried out in the year ahead. reported that Vanderbilt had developed a "plan for a consolidation of all the railways connecting the Central with Chicago, thus... making but one corporation between New York City and the metropolis of the West." This project was to be carried out in the year ahead.35 The Herald's Herald's account struck many as obvious. The Commodore's seizure of the Harlem, the Hudson River, and the New York Central-and his announced plans for amalgamating the latter two lines-made it seem as if he would buy up and consolidate every connecting line between St. John's Park and Chicago. And reaching Chicago made all the difference. With a population soaring toward 300,000, this metropolis teemed with stinking stockyards, slaughterhouses, and factories. All this put it on the leading edge of changes in the economy. "Although Chicago lagged far behind Philadelphia and New York, the nation's leading manufacturing centers, in investment and output," notes historian Eric Foner, "a larger proportion of its labor force worked for firms with fifty or more employees." It was big in the biggest new thing: bigness. account struck many as obvious. The Commodore's seizure of the Harlem, the Hudson River, and the New York Central-and his announced plans for amalgamating the latter two lines-made it seem as if he would buy up and consolidate every connecting line between St. John's Park and Chicago. And reaching Chicago made all the difference. With a population soaring toward 300,000, this metropolis teemed with stinking stockyards, slaughterhouses, and factories. All this put it on the leading edge of changes in the economy. "Although Chicago lagged far behind Philadelphia and New York, the nation's leading manufacturing centers, in investment and output," notes historian Eric Foner, "a larger proportion of its labor force worked for firms with fifty or more employees." It was big in the biggest new thing: bigness.
Chicago had emerged as the commercial hub of the West. The wartime closing of the Mississippi had crimped the trade of its primary rival, St. Louis, which lacked a bridge across the great river. But Chicago captured the commerce of the region through a spider's web of rails that spread out from Cook County Between 1860 and 1873, more than ten thousand miles of track were laid in the upper Mississippi states, putting 98.5 percent of all land in Illinois within fifteen miles of a railroad. Farmers in all but the most remote tracts of Minnesota, Wisconsin, Iowa, Missouri, Nebraska, and Kansas gained access to railheads, integrating them into national and international markets. The agricultural products of this region-the nation's primary export-moved to Chicago first on their way east for consumption or shipment overseas. To the trunk lines, nothing was more important than an untroubled connection to the Windy City.36 And yet, it is a mistake to assume that Vanderbilt thought it necessary to own the lines that connected the Central to Chicago if he were to capture their traffic. Admittedly there were great advantages to having a continuous line under one management: lower overhead, for example, and greater efficiency in routing trains and handling freight. Still, the inefficiencies could be limited under agreements such as those signed by Vanderbilt and Joy in December 1868. Indeed, throughout Vanderbilt's reign much of the Central's freight would come over Joy's Michigan Central (via the Great Western of Canada), which was largely owned by New England investors and maintained consistently healthy relations with the Commodore.
More important, the New York Central had joined with its connecting railroads to establish cooperative fast-freight lines. In proportion to mileage, member companies contributed cars, which were painted a uniform color. Each fast-freight line had its own management that solicited freight, issued waybills, and fixed rates, but its profits were distributed to the participating railroads. Often overlooked by historians, fast-freight lines reduced the costs of through freight, even across separate railroads, by eliminating the need to break bulk (that is, transfer freight from one car to another) and increasing managerial efficiency. Finally, the Central offered the best access to the nation's most important port (and to Boston). It was at least as necessary to western railroads as they were to it. In a world without enemies, Vanderbilt would have felt no need to buy control of his connections.37 But then there was Jay Gould. As Alfred D. Chandler Jr. wrote, "No man had a greater impact on the strategy of American railroads." An ambitious and farsighted chief executive, he embarked on an aggressive effort to break the isolation of the Erie-with its unusual six-foot gauge-by seizing connecting lines. He would fail in the end, but his campaign forced his competitors, including Vanderbilt, to begin the process of constructing interregional railroad systems of mammoth proportions.38 Gould began by leasing the broad-gauge Atlantic & Great Western, which added hundreds of miles to the Erie's network. Next he purchased stock and proxies to get control of the Pittsburgh, Fort Wayne & Chicago (the "Fort Wayne")-which happened to be the Pennsylvania Railroad's primary connection to Chicago. This move jarred the Pennsylvania's president and vice president, J. Edgar Thomson and Thomas A. Scott, out of their complacency. Scott quickly secured a classification act from the Pennsylvania legislature that rigged elections to the Fort Wayne board. (As an indication of how thoroughly Scott dominated the state government, the bill was signed by the governor thirty-four minutes after it was introduced.) On June 21, the Pennsylvania leased the Fort Wayne to forestall any further trouble.39 Gould turned to the fragmented South Shore lines, in which no one party exerted dominance. This route had entered a turbulent period of rapid consolidation, offering him the perfect opportunity to align it with the Erie. In March, the Cleveland & Toledo merged with the Lake Shore Railway; in May, that line merged with the Michigan Southern & Northern Indiana, forming the Lake Shore & Michigan Southern Railway Company; in August, that line merged with the Buffalo & Erie (itself the product of an earlier consolidation). That made the Lake Shore (as it will now be called) a continuous line from Chicago to Buffalo, with branches to Detroit, Grand Rapids, and the oil regions of Pennsylvania.40 On May 31, Horace Clark and James Banker boarded a train to Cleveland for the Lake Shore & Michigan Southern's first stockholders' meeting. They had in their care the Commodore's interest in the new company-an interest, they soon learned, that faced strong opposition from LeGrand Lockwood. A banker, broker, and onetime treasurer of the New York Stock and Exchange Board, Lockwood wielded immense power in Wall Street. Short and rather fat, he had come to New York from Norwalk, Connecticut, at the age of eighteen, married a New York belle, and rapidly rose to riches-prominently displayed in a mansion he built in Norwalk for a reputed $750,000. With the half a million or more he earned each year, he traveled to Europe to purchase fine art and won acceptance in the most aristocratic parlors. He was also a close ally of Henry Keep and had suffered in Vanderbilt's blockade of the Central in January 1867.41 Fighting erupted in the first Lake Shore directors' meeting on June 2. In a series of close votes, Lockwood defeated Clark's attempt to control the election of the president. Finally they compromised on the neutral E. B. Phillips, with Lockwood as treasurer; Clark and Banker went on the executive committee. An uneasy peace settled over the divided board.42 In late June, Vanderbilt inspected the line for himself, a clear sign of his special concern with the Lake Shore. Accompanied by Phillips, he traveled the route to Chicago in a special train, in his first recorded visit to the city. "We understand the Commodore was well satisfied with the trip," the Cleveland Herald Cleveland Herald reported on June 22. In early July, he went to Saratoga as usual, staying at the rebuilt Congress Hall along with former president Millard Fillmore, Thurlow Weed, and former New York mayor George Opdyke. On July 12, he unexpectedly returned to Cleveland to consult with major Lake Shore stockholders. These movements left observers mystified. "I hardly know what to say about Central," one man wrote to Erastus Corning. "It is now my belief that the Commodore will in some way secure the Central of the reported on June 22. In early July, he went to Saratoga as usual, staying at the rebuilt Congress Hall along with former president Millard Fillmore, Thurlow Weed, and former New York mayor George Opdyke. On July 12, he unexpectedly returned to Cleveland to consult with major Lake Shore stockholders. These movements left observers mystified. "I hardly know what to say about Central," one man wrote to Erastus Corning. "It is now my belief that the Commodore will in some way secure the Central of the main line main line to the to the Pacific." Pacific."
Some of those closest to Vanderbilt had a more pessimistic view. In August, a story circulated that one of his daughters was seen teaching her own daughter to mend stockings; when asked why she would trouble herself with such a menial occupation, she replied, "There was no telling what a woman might be called upon to do in this country, or what fate awaited her, and she believed in instructing them [her daughters] in useful arts as a preparation for any reverse that might overtake them."43 Perhaps she knew that Gould and Lockwood were scheming to freeze Vanderbilt out of the Lake Shore. Over the summer, the two negotiated an alliance, with the aid of Fisk's skills as an entertainer. "The Erie clique," according to the New York Herald New York Herald, "wined and dined the Michigan Southern party at the lower Delmonico's, and brought every argument to bear in favor of a union of the two lines." Gould and Lockwood settled on a plan, which they finalized on August 16 at a secret meeting in West Point. They agreed to a "running arrangement" to divert Lake Shore traffic to the Erie; even more important, they would lay a third rail on the Erie to open it to the Lake Shore's standard-gauge trains, funded by $5 million in Erie bonds, on which the Lake Shore would pay the interest. In return, Gould agreed to abandon his plans to build a broad-gauge line to Chicago. At a Lake Shore board meeting on August 19, the agreement steamed through with Lockwood's support over Clark's fruitless objection. Vanderbilt's only gain was the election of ally Amasa Stone Jr. to a vacant directorship.
At first, the consolidation of the South Shore lines had looked like the end of Vanderbilt's troubles. Instead, that critical route seemed to slip out of his hands before he could even grasp it. "The absorption of the line by the Erie will be the eventual result," the Herald Herald wrote. "But the Commodore is fertile in resources." wrote. "But the Commodore is fertile in resources."44 ON AUGUST 20, VANDERBILT SUDDENLY disappeared from Saratoga. He had been a fixture there, as usual, spending almost all of his time with Morrissey until he vanished. He turned up later that day in Canada, when a locomotive pulling his private car chuffed into London, Ontario. The Commodore debarked and hurried into the Tecumseh Hotel, followed by a small party. He did not even stop to sign the register, but left that matter to Augustus Schell. He refused all calls and inquiries from the press. In his rooms, Schell produced a legal document, which Vanderbilt signed. Then a young woman signed as well. Her name was Frank Armstrong Crawford, and the document was a prenuptial agreement. She relinquished all claim on the Commodore's estate; when he died, she would receive $500,000 in first-mortgage bonds of the New York & Harlem Railroad. Except in comparison to Vanderbilt's estate, it was a vast sum for 1869; but comparisons to Vanderbilt's estate would be inevitable. disappeared from Saratoga. He had been a fixture there, as usual, spending almost all of his time with Morrissey until he vanished. He turned up later that day in Canada, when a locomotive pulling his private car chuffed into London, Ontario. The Commodore debarked and hurried into the Tecumseh Hotel, followed by a small party. He did not even stop to sign the register, but left that matter to Augustus Schell. He refused all calls and inquiries from the press. In his rooms, Schell produced a legal document, which Vanderbilt signed. Then a young woman signed as well. Her name was Frank Armstrong Crawford, and the document was a prenuptial agreement. She relinquished all claim on the Commodore's estate; when he died, she would receive $500,000 in first-mortgage bonds of the New York & Harlem Railroad. Except in comparison to Vanderbilt's estate, it was a vast sum for 1869; but comparisons to Vanderbilt's estate would be inevitable.45 At seven o'clock the next morning, a Saturday, Vanderbilt dressed in a plain black suit, the only sign of his wealth being the brilliant diamond studs in his shirt. The Canadians found him impressive. "He is a noble-looking gentleman, erect in figure, active in movement, intelligent in expression, and almost courtly in bearing," wrote a local reporter. "He is so well preserved, even amid all the cares and responsibilities of his position, that he looks to be not more than 61 or 62 years old." Vanderbilt entered a private parlor, where he saw Frank in a simple traveling dress, "wearing always a singularly happy expression of face."
A Methodist minister presided over the brief marriage ceremony. The handful of witnesses included Frank's mother, Martha, and brother Robert and his wife; Schell; James Tillinghast (superintendent of the New York Central); and only two others: Thomas Bragg, former Confederate attorney general, and his brother Braxton Bragg, one of the Confederate army's most senior generals. Frank had introduced Vanderbilt to the latter. Intelligent, impatient, and ridden with ulcers, Bragg had won a reputation during the Civil War for shooting privates until they obeyed his commands. A true believer in the rebel cause (he had peppered his orders with denunciations of "the Abolition tyrant"), he had shown some talent as a strategist, but his domineering personality had driven his subordinate generals into open revolt. Vanderbilt liked him. Perhaps he admired Bragg's technical competence as an engineer, or his full-bearded face, with his large, dark eyes under heavy brows. What he probably liked most about the general was the fact that so few others liked him, especially in the North. The Commodore mused openly about bringing Bragg into his railroads.46 The wedding over-and the American press and fashionable gossips safely avoided-Mr. and Mrs. Vanderbilt dashed back to their private railroad car for the journey east, accompanied by Schell, Tillinghast, and Frank's black maid, Nellie. The Bragg brothers and the Crawfords returned to the South separately. "I was completely overcome after leaving you all & poor Nellie tried to cheer me, but immediately burst into tears herself," Frank wrote to her "Ma" two days later. "I could not be sad long with such devoted attention as the Com showed me." The luxuries of the life of the Commodore-always "Com" to Frank-astonished her. "About 2 o'cl'k, the table was spread in our car, with the purest white cloths & silverware, & a delightful little dinner was brought in from the refreshment car-broiled chicken & chops, & everything so clean & nice" so clean & nice" she wrote. "Mr. Schell & Tillinghast were so kind & attentive, & I begin to feel Schell belongs in part to me." she wrote. "Mr. Schell & Tillinghast were so kind & attentive, & I begin to feel Schell belongs in part to me."
They spent that night at a hotel in Syracuse-the Vanderbilt, of course-hiding in ostentatiously appointed rooms from the crowds outside. "The Commodore was very lively indeed, and quite graceful and courteous in his attentions to his wife," the local press observed. Frank agreed. "Com. is so good," she wrote to her mother. "Says he loves me too much, it amounts to worship worship. He is up & down-can't stay away long."47 The next day they went to Saratoga Springs. At the hotel, the women in Vanderbilt's wide circle of friends swarmed around the rather overwhelmed Frank. "Mrs. Decker rushed in & such kissing & hugging us both," she wrote, "Mrs. Work, Harker, &c. I feel really gratified at the cordial warm reception given me." Most gratifying of all was the welcome from the Vanderbilt family. William and Maria, along with some of William's siblings, came straight in "and kissed me so cordially. They are glad their father married." One of them told her that the family "all thought favorably about the marriage." The musical Nicholas B. La Bau, a "nice little fellow," congratulated her as well-but his wife, the Commodore's daughter Mary, did not. This devoted spiritualist comes across in the scant written record as prickly and defensive. She later remarked that she first met Frank and her mother a full year after the wedding. Other daughters proved equally cold. Emily Thorn recalled meeting Frank after the couple returned to the city but could not recollect how much later, as she "did not feel interested enough to remember."48 Frank, unlike Vanderbilt, was uncomfortable at being the center of public attention. She did not want to leave their flower-stuffed rooms ("almost stifling with the perfume of tuberoses & heliotrope"). She knew she was a spectacle, and her clothes "old timey" and unfashionable. But the women insisted. "They all made made me go down to dinner & tea & such staring & pulling on glasses & taking different & good views was most trying to stand," Frank wrote to her mother. Vanderbilt took her out for spins around the track in their double-top buggy, behind a fast new horse named Myron Perry. They drove out one day to the races to watch Mountain Boy defeat Lady Thorn, strolling onto the stand through curious onlookers. Vanderbilt's brother Jake strode up to them and exclaimed, "I must kiss the bride," much to Frank's embarrassment. "I was that day closely scrutinized by me go down to dinner & tea & such staring & pulling on glasses & taking different & good views was most trying to stand," Frank wrote to her mother. Vanderbilt took her out for spins around the track in their double-top buggy, behind a fast new horse named Myron Perry. They drove out one day to the races to watch Mountain Boy defeat Lady Thorn, strolling onto the stand through curious onlookers. Vanderbilt's brother Jake strode up to them and exclaimed, "I must kiss the bride," much to Frank's embarrassment. "I was that day closely scrutinized by thousands thousands of people. Mrs. Work says she could not help gazing too, seeing everybody else doing so, tho' she had seen me so often." of people. Mrs. Work says she could not help gazing too, seeing everybody else doing so, tho' she had seen me so often."
Frank's letters to her mother reveal many reasons why the Commodore fell in love with her. She was modest, scoffing at praise for her beauty by a toadying innkeeper. She admitted to being out of keeping with fashion, but she was also attentive to it. She exhibited grace, sociability, and a sense of fun (she thrilled to their fast drives and Mountain Boy's victory). She demonstrated a keen but unpretentious intelligence; as she was finishing one letter, William strode into the room, and the Commodore proudly insisted that Frank read her correspondence aloud to him. He even loved her masculine name, which she herself loathed.
But Frank also resonated with a contrarian aspect of Vanderbilt's personality. She was an unrepentant Confederate. "Com. is proud of my being a rebel," she wrote. "Takes pains to tell it." At one point the seventy-two-year-old Alexander T. Stewart (Vanderbilt's primary rival for the title of richest man in America) sat down with Frank and argued with her about the virtues of General (now President) Grant. She debated "pleasantly of course-but I meant what I said." She found Stewart to be kind and talkative, as she did General Gordon Granger. Granger had led the Union forces that captured Mobile during the war. When he called on the newly-weds, he warmly remarked that he remembered when he had first met Frank. It seems that he had shown particular courtesy to the Crawfords during the occupation, and it proved to be a source of lasting gratitude from the Commodore.49 Vanderbilt's pride in his rebel wife speaks to his peculiar relationship with fashionable New York society He had now grown so wealthy, so powerful, that the social aristocrats could hardly shut him out. As one observer wrote in 1870, "Even Vanderbilt & others & others are not ignored by gentlemen." Displaying a courtly bearing that belied his historical reputation as a vulgarian, he now dined with the Astors and mingled with the leaders of fashion at Saratoga, the Manhattan Club, or Jerome Park. Though he had always taken pride in being a man of honor, he may indeed have grown into the dignity generated by his tens of millions; where credit reporters had once derided him, they would soon record that he was considered "honorable & high toned." At the same time, he indulged in a proud independence of character as he levitated above the social strictures of the elite (later fictionalized by Edith Wharton, then a seven-year-old girl known as Pussy Jones). Amid Reconstruction's turmoil, he flouted gossips with his divorced Southern bride. are not ignored by gentlemen." Displaying a courtly bearing that belied his historical reputation as a vulgarian, he now dined with the Astors and mingled with the leaders of fashion at Saratoga, the Manhattan Club, or Jerome Park. Though he had always taken pride in being a man of honor, he may indeed have grown into the dignity generated by his tens of millions; where credit reporters had once derided him, they would soon record that he was considered "honorable & high toned." At the same time, he indulged in a proud independence of character as he levitated above the social strictures of the elite (later fictionalized by Edith Wharton, then a seven-year-old girl known as Pussy Jones). Amid Reconstruction's turmoil, he flouted gossips with his divorced Southern bride.50 But Frank's Southernness had another important attraction for Vanderbilt. He remained as patriotic now as when he had given his million-dollar steamship to the Union navy. That patriotism extended to the entire country after Appomattox. He demonstrated a growing interest in healing the wounds of the war. His friends and associates reinforced this impulse. Horace Greeley Horace Clark, Augustus Schell, and Charles O'Conor all resisted what they saw as a harsh peace imposed on the South. Of course, when they thought about the South, they meant the white South; as elite members of wealthy New York society they identified with the former planters who had gone bankrupt when the slaves went free. Regardless, Vanderbilt's desire to bring North and South together was sincere. It would be the ultimate consolidation.
ON SEPTEMBER 2, VANDERBILT RETURNED to face the crisis. Over the summer, LeGrand Lockwood, confident in his understanding with Gould, had purchased on credit $1.25 million worth of new Lake Shore stock, issued as part of the consolidation. Vanderbilt had bided his time. He had had personal matters to attend to, but the perfect time for his revenge would be the autumn, when the moving of the crops would squeeze the money market. Now he quietly issued contracts for sale of his own Lake Shore stock, along with the thousand shares held by the New York Central. Starting on Monday, September 13, cash began to grow scarce in New York. Vanderbilt struck. to face the crisis. Over the summer, LeGrand Lockwood, confident in his understanding with Gould, had purchased on credit $1.25 million worth of new Lake Shore stock, issued as part of the consolidation. Vanderbilt had bided his time. He had had personal matters to attend to, but the perfect time for his revenge would be the autumn, when the moving of the crops would squeeze the money market. Now he quietly issued contracts for sale of his own Lake Shore stock, along with the thousand shares held by the New York Central. Starting on Monday, September 13, cash began to grow scarce in New York. Vanderbilt struck.
"The whole course and tendency of prices have been reversed with magic-like power," the New York Herald New York Herald reported on Saturday, September 19. It explained the next day, "The veteran Commodore indignantly tossed all his Lake Shore stock on the market and brought about a break in the stock which threatened the credit of his enemies and certainly entailed great losses upon them." Vanderbilt delivered all his stock on three successive days, collapsing Lake Shore from 107 to 75. This erased its value as collateral for the heavily leveraged Lockwood, leaving him "thoroughly frightened," as the reported on Saturday, September 19. It explained the next day, "The veteran Commodore indignantly tossed all his Lake Shore stock on the market and brought about a break in the stock which threatened the credit of his enemies and certainly entailed great losses upon them." Vanderbilt delivered all his stock on three successive days, collapsing Lake Shore from 107 to 75. This erased its value as collateral for the heavily leveraged Lockwood, leaving him "thoroughly frightened," as the Herald Herald wrote. He begged for mercy. Vanderbilt gave none. Lockwood & Co., long one of the Wall Street's great houses, declared bankruptcy on October 1. "The veteran Commodore," the wrote. He begged for mercy. Vanderbilt gave none. Lockwood & Co., long one of the Wall Street's great houses, declared bankruptcy on October 1. "The veteran Commodore," the Herald Herald noted, was "an unrelenting enemy" noted, was "an unrelenting enemy"51 The waters in which he drowned Lockwood proved nearly fatal to himself. In striking down Lake Shore he inadvertently contributed to Black Friday, one of the greatest panics in American financial history. The immediate catalyst for the disaster lay in a breathtaking financial scheme crafted by Jay Gould. Well aware that the Gold Room served as a currency exchange, Gould wanted to drive down the price of greenbacks to make American exports cheaper overseas. The result would be a bounty for the railroads as more crops were shipped to the seaports in the fall. He brought Fisk into the plan, and the two of them lobbied President Grant to limit sales of government gold from customs duties collected in New York. The plot promised personal profit as well, provided Gould could properly time the sale of the massive amounts of gold he purchased in August and September.52 Gould and Fisk's attempt to corner the gold market played out in a field beyond Vanderbilt's immediate affairs, as they colluded with the president's brother-in-law, bribed the federal subtreasurer in New York, and even opened a gold account for First Lady Julia Grant. Their campaign did not go unopposed. Brokers who were bears in gold fought back mightily. Then Vanderbilt hammered the weak money market with his attack on Lake Shore stock. Gould and Fisk even accused the Commodore of carrying out a lock-up to make credit tight.53 Fisk responded by flamboyantly bidding the gold premium up to heights not seen since the Civil War. The financial frenzy seemed to threaten the economy's stability, and rumors of Grant's involvement did not go unnoticed in the White House. Finally Grant decided to intervene. He ordered Treasury Secretary George Boutwell to sell a few million in gold. The signal this action sent mattered as much as the enormous quantity of greenbacks it sucked out of the market. Fisk responded by flamboyantly bidding the gold premium up to heights not seen since the Civil War. The financial frenzy seemed to threaten the economy's stability, and rumors of Grant's involvement did not go unnoticed in the White House. Finally Grant decided to intervene. He ordered Treasury Secretary George Boutwell to sell a few million in gold. The signal this action sent mattered as much as the enormous quantity of greenbacks it sucked out of the market.
On September 24, the price of gold collapsed amid the worst panic since 1857. The radical rise and plunge in prices trapped many brokers; no less than fourteen Wall Street houses failed (not including those that were strictly gold dealers). In Fisk's oft-quoted phrase, "It was each man drag out his own corpse"-literally in the case of a broker who shot himself to death. The problem for Vanderbilt was that the crashing market destroyed credit generally carrying down stock prices across the board.54 On Friday evening he rushed home from a Central board meeting in Albany where he had presided over the signing of the final consolidation agreement with the Hudson River Railroad. In the face of this crisis-a crisis he had helped make-he had to fight to protect his grip on his emerging giant, what soon would be called the New York Central & Hudson River Railroad. Most likely he lacked a clear majority of the stock without the support of friends and allies, including Augustus Schell and John Morrissey At his urging, they had purchased large quantities; as the price fell, one of them was called "as terrified as a man can be." In a rare move, Vanderbilt put up a reported $2.5 million to meet their margin calls. Still more remarkably, he went in person to Wall Street to soothe the markets and sustain the price of Central.55 "I knew it, I knew it," an old broker said on the floor of the stock exchange, "the old rat (Vanderbilt) never forgets his friends." The Commodore very visibly set himself up at the Bank of New York at the corner of Wall and William streets, where his lieutenant James Banker provided him with "comfortable offices, upholstered as a Fifth Avenue drawing room," according to the New York Sun New York Sun. From his nicely cushioned throne he issued orders to buy, and buy, and buy. A reporter asked Vanderbilt what he was up to; he replied, "Well, now really, sonny, I really cannot tell you anything. I don't care about forming opinions. All we want is to protect ourselves All we want is to protect ourselves."
The Commodore was being disingenuous. His presence on Wall Street had one purpose only, and that was to form opinions. Behind the scenes his situation grew desperate, as William revealed by paying a visit to Judge Barnard, who was considering various injunctions in the Erie's lawsuit against the Commodore. William pleaded with him to aid the Central. Barnard refused, saying "that his father and his gang had treated him badly," according to Barnard's friend, John M. Davidson. (It did not help the Vanderbilts' case that Barnard had sold all of his Central stock before the panic, and had no stake in the matter.) William replied that "his father was strong enough to take care of himself," Davidson wrote. "The Judge said all right all right, but he differed with him. Vanderbilt has struggled to save Central from falling."56 The Commodore, ever cool amid others' panic, projected pure strength. He strolled through the exchange to make his presence felt. "Central's coming up, Commodore," a young broker shouted. "Top o' the heap still, my boy," he replied. Soon the reason for his confidence leaked out: he had taken a large short-term loan from Baring Brothers in London, putting up as collateral an equal amount, at par, of New York Central stock. He bought back his Lake Shore shares (at radically reduced prices, of course), along with Lockwood's stake. And he very visibly purchased Central. He failed to keep the price above 200, where it had been before Black Friday, but he arrested its fall at 175, and brought it back to 184 in short order. On October 2, the New York World New York World commented on his impact: commented on his impact: The best men on the street all assert that had it not been for the Commodore coming to the rescue and sustaining his stocks, the panic on Tuesday and Wednesday of this week would have been a hundred fold greater than it was, and that nearly the whole street would have been ruined, and several of the banks have been obliged to succumb by the great decline that would have taken place in securities; that this decline would not have stopped with stocks, but have extended to government, State, and city stocks [i.e., bonds], and been universal and disastrous. To the prevention of this disaster, the brokers generally give the credit to Commodore Vanderbilt.57 In the drama of Black Friday-a morality play of Gould's greed, government corruption, and new economic intricacies that easily fell prey to manipulation-Vanderbilt appeared in the role of a hero: the man who saved the stock market, who prevented a panic from igniting a depression. Closer inspection reveals that a blood-chilling ruthlessness infused all his actions. To avenge himself upon Lockwood, and to bring the Lake Shore Railway into the Central's orbit, he had gambled with the economic health of the national economy. Well aware of the frailty of the financial market in the autumn (and of Gould and Fisk's gold-cornering scheme), he had pumped in still more pressure, taking the risk that Wall Street's boiler would explode. Along the way, he also endangered the fortunes of his friends and his own grip on his flagship corporation. He gambled all this on his confidence in his ability to singlehandedly sustain the market. The only thing more remarkable than his recklessness was his success. After contributing to one of history's great panics, he took his revenge, captured the Lake Shore, and rescued Wall Street.
To the American public, Black Friday suddenly illuminated, like a flash of lightning on a midnight floodplain, the way in which the new corporate and financial reality inundated the national landscape. The bankers and brokers of New York were no longer an oddity-an isolated batch of men who seemingly produced nothing but merely juggled bewilderingly abstract securities. Now, because of the railroads, corporations began to overshadow farmers, artisans, and merchants. Now, because of the increasing financial integration of the country, the fears and hopes of a few hundred men on Wall Street could shake the nation. More than any other man, the Commodore frightened or excited those few hundred, driving them as he willed. With the wave of one hand he created tens of millions in new wealth; with a wave of the other, he crushed his enemies; with cold-eyed calculation, he gambled with the lives of millions. The American people were fortunate that he gambled so well, but they had no say in how he placed his bets. Black Friday posed a great question: What was the place of a railroad king in a democracy of equals?
AFTER SURVIVING THE PRESENT, there remained the future-specifically, the future of the Lake Shore. Vanderbilt swept his enemies out and his lieutenants in: Lockwood resigned as treasurer and was replaced by James Banker, and another Lockwood ally resigned from the board to make room for Augustus Schell.58 Clearly it was now Vanderbilt's property. But what would he do with it? Clearly it was now Vanderbilt's property. But what would he do with it?
Lockwood's defeat prompted widespread speculation about a grand consolidation of the Lake Shore with the still-merging New York Central & Hudson River. Such a move would have been in keeping with the changing times. For example, the Pennsylvania Railroad responded to Gould's threats by creating a self-contained system extending from Philadelphia to New York, Chicago, St. Louis, and throughout the South. Its lease of the Fort Wayne was only the first step in the development of a highly sophisticated, centrally controlled network of subsidiaries and holding companies. Within five years, the Pennsylvania's managers would gain control of $400 million in assets and nearly six thousand miles of track-8 percent of the national total.59 But the Commodore balked at such an ambitious step as consolidating the Lake Shore into the Central. First, it is not clear that Vanderbilt had purchased an outright majority of Lake Shore stock. (It was hardly necessary to control the board.) Second, he and his lieutenants remained immersed in the immense task of merging the Central and the Hudson River. Third, the Lake Shore's finances were nowhere near as robust as those of Vanderbilt's other lines; to coalesce them before reforms could be enacted would scuff the gilt edges off Central stock.
Most important, Vanderbilt handled the Lake Shore gingerly because of his keen ear for politics, both the electoral variety and the realpolitik of railroad diplomacy. He fully grasped the public's worries over the rise of giant railroad corporations. A fresh consolidation would have been a vast undertaking, financially, legally, and especially politically, requiring legislation from each of the six states through which the line would run. And since he had no desire (and perhaps insufficient means) to buy all all the lines that fed the Central traffic, he had to appease the executives of connecting lines; he could not afford to discriminate against them. To understand him as a railroad leader, it must always be remembered that he was first and foremost a diplomat. the lines that fed the Central traffic, he had to appease the executives of connecting lines; he could not afford to discriminate against them. To understand him as a railroad leader, it must always be remembered that he was first and foremost a diplomat.
Out of deference to both political and business sensitivities, he refused to treat the Lake Shore as a subsidiary of the Central. For example, he did not give it preference over the North Shore lines, which he did not control. Five years later, the Michigan Central's superintendent would applaud "the neutrality which he he [the Commodore] has always professed and which up to this twine has been [the Commodore] has always professed and which up to this twine has been pretty well pretty well observed." Vanderbilt's battle with Lockwood, like all his railroad wars, had been one of self-defense (in this case, to block Gould), not an exercise in imperial conquest. observed." Vanderbilt's battle with Lockwood, like all his railroad wars, had been one of self-defense (in this case, to block Gould), not an exercise in imperial conquest.60 The Commodore delegated command of the Lake Shore to Banker, Schell, and especially Horace Clark, who would take over as president at the next stockholders' meeting. They were more than puppets; they had agendas of their own, and Vanderbilt gave them latitude. "We have got some high-toned, honorable men in our board of directors, a set of men who are capable of thinking for themselves," he had said about Clark, Banker, and Schell in 1867. "And they might think very differently from me, and I would not blame them for expressing their opinions." As long as they managed the line wisely, cooperated in carrying through freight, and kept his enemies at bay, he would leave them to manage the railroad as they saw fit.
He should have remembered his own words about keeping an eye on your friends.61 "HOW I DO PITY YOU, Commodore Vanderbilt!" Mark Twain wrote. "You seem to be the idol of only a crawling swarm of small souls, who love to glorify your most flagrant unworthinesses in print; or praise your vast possessions worshippingly; or sing of your unimportant private habits and sayings and doings, as if your millions gave them dignity."
Twain's essay, "Open Letter to Com. Vanderbilt," appeared in March 1869 in Packard's Monthly Packard's Monthly, a new periodical devoted to fighting "the evils of the day"62 Twain clearly saw Vanderbilt as evil. He ascribed to him a willingness to run down and kill pedestrians in his carriage. ("No matter, I'll pay for them.") He pictured him as a creature of pure greed. ("You... rob yourself of restful sleep and peace of mind, because you need money so badly. I always feel for a man who is so poverty ridden as you.") He accused him of lacking all charity. Twain clearly saw Vanderbilt as evil. He ascribed to him a willingness to run down and kill pedestrians in his carriage. ("No matter, I'll pay for them.") He pictured him as a creature of pure greed. ("You... rob yourself of restful sleep and peace of mind, because you need money so badly. I always feel for a man who is so poverty ridden as you.") He accused him of lacking all charity. ("Do ("Do go, now, and do something that isn't shameful.") Lest his point be missed, he added, "You observe that I don't say anything about your soul, Vanderbilt. It is because I have evidence that you haven't any." go, now, and do something that isn't shameful.") Lest his point be missed, he added, "You observe that I don't say anything about your soul, Vanderbilt. It is because I have evidence that you haven't any."
And yet, what really irritated Twain was not the Commodore himself so much as the adoration of his ultra wealth. He complained of the praise for Vanderbilt that appeared in editorials, the tales that ran in the columns of miscellaneous chitchat. "No, sir; other men think and talk as brilliantly as you do, but they don't do it in the glare of seventy millions," he wrote, "so pray do not be deceived by the laudation you receive; more of it belongs to your millions than to you."
Twain saw a culture grown vulgar, selfish, materialistic, and corrupt, and he didn't like it. Like many of the Civil War generation, he viewed his times with a cynical eye and, underneath his ironic tone, a poignant sense that America had lost its virtue. (One of his most hilarious pieces of writing was an ironic attack on young Benjamin Franklin for having been so maliciously self-improving, "so that all other boys might have to do [the same] or else have Benjamin Franklin thrown up to them.") He did not attack Vanderbilt's fortune in its own right; rather, he went after the way it warped the rest of society-for it was corruption, not riches, that offended him. It is worth remembering that the novel he wrote with Charles Dudley Warner-the book that gave its name to this era, The Gilded Age The Gilded Age-is not a satire of the wealthy, nor even of the extravagant lifestyles now associated with the title. The book's hero actually rises to fortune through expertise and hard work. Rather, Twain and Warner's villains are scurrilous adventurers who try to bilk the federal government with a pork-barrel project championed by a flagrantly corrupt senator.
At the opposite end of the social scale from Twain stood Henry and Charles Francis Adams Jr., yet they shared the same concerns. In their writings, they voiced an abiding belief in the scientific laws that governed economics, and argued that corruption in corporations and government prevented those laws from working properly63 Indeed, the key to understanding their critique is that it was infused with an almost Calvinist conviction that humanity is fallen. In "A Chapter of Erie," Charles wrote with alarm about the increasing size of giant railroad corporations, but his real complaint was not with corporations themselves, but the moral failings of the businessmen who misused them. "No acute moral sensibility has... for some years troubled either Wall Street or the country at large," he wrote. The natural laws of economics had been corrupted by "the legerdemain of paper financiering," he argued, as if corporations were not products of the human imagination, but of natural processes, as much as mountain ranges or spoon-billed sandpipers. They wished to remove the original sin, to rest economic values on the natural, the solid, the inanimate. With regard to currency, this meant an end to legal tender. Instead of the volume of high-powered money being set by Congress, they argued, it should be based on the supply of gold. With regard to the values of stocks, they wished to base them on construction costs, not the whims of stock-watering rascals such as Vanderbilt or Gould. Indeed, the key to understanding their critique is that it was infused with an almost Calvinist conviction that humanity is fallen. In "A Chapter of Erie," Charles wrote with alarm about the increasing size of giant railroad corporations, but his real complaint was not with corporations themselves, but the moral failings of the businessmen who misused them. "No acute moral sensibility has... for some years troubled either Wall Street or the country at large," he wrote. The natural laws of economics had been corrupted by "the legerdemain of paper financiering," he argued, as if corporations were not products of the human imagination, but of natural processes, as much as mountain ranges or spoon-billed sandpipers. They wished to remove the original sin, to rest economic values on the natural, the solid, the inanimate. With regard to currency, this meant an end to legal tender. Instead of the volume of high-powered money being set by Congress, they argued, it should be based on the supply of gold. With regard to the values of stocks, they wished to base them on construction costs, not the whims of stock-watering rascals such as Vanderbilt or Gould.
To the Adams brothers, the Commodore and his ilk were most dangerous when they spread their corruption into politics, as in Gould's alliance with Tweed. (Henry titled his own satirical novel Democracy Democracy, not Capitalism) Capitalism) In "A Chapter of Erie," Charles wrote, "As the Erie ring represents the combination of the corporation and the hired proletariat of a great city, as Vanderbilt embodies the autocratic power of Caesarism introduced into corporate life... it, perhaps, only remains for the coming man to... put Caesarism at once in control of the corporation and of the proletariat." In "A Chapter of Erie," Charles wrote, "As the Erie ring represents the combination of the corporation and the hired proletariat of a great city, as Vanderbilt embodies the autocratic power of Caesarism introduced into corporate life... it, perhaps, only remains for the coming man to... put Caesarism at once in control of the corporation and of the proletariat."64 The phrase "the hired proletariat" speaks to the social prejudices that pervaded the Adams brothers' set, the liberal reformers-or the "best men," as they called themselves. Liberals such as E. L. Godkin (editor of the Nation) Nation), Charles Eliot Norton (editor of the North American Review) North American Review), economist David A. Wells, historian Francis Parkman, and others scorned the poor and uneducated "dangerous classes" as vulnerable to Tweed and other manipulators. As Warner wrote, "All men are created unequal." The liberals recoiled from Reconstruction. Believing the worst tales about corruption in Southern state governments, they questioned black suffrage. They weren't sure all white men should vote. As Charles F. Adams Jr. proclaimed, "Universal suffrage can only mean in plain English the government of ignorance and vice."
In the same breath, they blasted the tycoons-Vanderbilt foremost among them-for one underlying, ultimate sin: they were uncultured. The Education of Henry Adams The Education of Henry Adams dismisses Vanderbilt and Gould by saying they "lacked social charm." But charm mattered, the Adamses thought; the tycoons' ignorance and lack of culture served as the fountainhead of their selfish defiance of natural economic laws. Twain later befriended one of the richest and most ruthless of all industrialists, Andrew Carnegie, in large part because Carnegie aspired to intellectual cultivation and literary accomplishment, and thus distinguished himself from his peers. The "best men" saw the corrupt poor and the corrupt robber barons (a term used in June 1868 by Edward Howland, and by Charles F. Adams Jr. in a private 1869 letter) as the twin causes of society's troubles. "An ignorant proletariat and a half-taught plutocracy," Parkman later wrote, had "risen like spirits of darkness on our social and political horizon." dismisses Vanderbilt and Gould by saying they "lacked social charm." But charm mattered, the Adamses thought; the tycoons' ignorance and lack of culture served as the fountainhead of their selfish defiance of natural economic laws. Twain later befriended one of the richest and most ruthless of all industrialists, Andrew Carnegie, in large part because Carnegie aspired to intellectual cultivation and literary accomplishment, and thus distinguished himself from his peers. The "best men" saw the corrupt poor and the corrupt robber barons (a term used in June 1868 by Edward Howland, and by Charles F. Adams Jr. in a private 1869 letter) as the twin causes of society's troubles. "An ignorant proletariat and a half-taught plutocracy," Parkman later wrote, had "risen like spirits of darkness on our social and political horizon."65 The worst fears of the liberal reformers seemed to come true on November 10, 1869, when half-taught Caesar and the ignorant plebeians met in a ceremony that rather resembled a coronation. New York's newspapers had given notice of the event, and the public came by the thousands-men and women, jostling and squeezing, stepping over curbs and clods of horse manure, pressing down the narrow streets of lower Manhattan toward the Hudson River. On Hudson Street they collided with a cordon of 250 policemen. Beyond the constables, a rope line divided the crowd from the invited ticket holders arrayed in front of an extended dais, beneath the long, low arches and massive brick walls of the new Hudson River Railroad freight depot. As a military band drummed and blared, the eyes of the crowd went to a detachment of twenty-five sailors who held a large canvas cover that flapped across the peak of the building's facade.
On the dais sat the leading men of the city from Mayor A. Oakey Hall to Horace Greeley and August Belmont, along with two admirals, the U.S. district attorney, a bishop, Daniel Drew, and even Jim Fisk and Jay Gould. President Grant was expected, but sent his regrets. Vanderbilt occupied the center, smiling between the white shocks of his abundant sideburns, still a dominating presence at seventy-five.
The onlookers fell silent for a bishop's invocation. Then the sailors let go the cover and unveiled a twelve-foot bronze statue of the Commodore, which stood within the brackets of an enormous bronze relief depicting the icons of Vanderbilt's long career: sailboats, steamships, and trains. "At the same moment," the New York Tribune New York Tribune reported, a navy vessel "ran up the Commodore's pennant to the flagstaff; the band struck up a lively tune, and the crowd cheered with enthusiasm." Mayor Hall delivered a lengthy tribute. Vanderbilt was the richest man on the continent, Hall observed, but he did not fritter his wealth; he employed it "in public projects of startling conception that have kept employed almost armies of men." Vanderbilt, the mayor proclaimed, "is a remarkable prototype of that rough-hewn American character which asks no greater original capital than is afforded by that independence of thought... that irresistible resolution in executing great projects, which can carve the way of every humbly born American boy to national eminence." He was the equivalent of Benjamin Franklin, Andrew Jackson, and Abraham Lincoln. William Rose Wallace-the poet who wrote "The Hand That Rocks the Cradle Is the Hand That Rules the World"-then read an original, if abysmal, verse, beginning, "Mighty Monument to Conquest-so the Great Republic cries / Power orbed on her vast forehead, earnestness burning in her eyes." reported, a navy vessel "ran up the Commodore's pennant to the flagstaff; the band struck up a lively tune, and the crowd cheered with enthusiasm." Mayor Hall delivered a lengthy tribute. Vanderbilt was the richest man on the continent, Hall observed, but he did not fritter his wealth; he employed it "in public projects of startling conception that have kept employed almost armies of men." Vanderbilt, the mayor proclaimed, "is a remarkable prototype of that rough-hewn American character which asks no greater original capital than is afforded by that independence of thought... that irresistible resolution in executing great projects, which can carve the way of every humbly born American boy to national eminence." He was the equivalent of Benjamin Franklin, Andrew Jackson, and Abraham Lincoln. William Rose Wallace-the poet who wrote "The Hand That Rocks the Cradle Is the Hand That Rules the World"-then read an original, if abysmal, verse, beginning, "Mighty Monument to Conquest-so the Great Republic cries / Power orbed on her vast forehead, earnestness burning in her eyes."66 High praise indeed. Unfortunately, Mayor Hall was on his way to two indictments for corruption, ensuing public disgrace, and self-imposed exile abroad. "But there is something essentially laughable," E. L. Godkin noted in the Nation Nation, "in the spectacle of a man's putting out his own cash to pay for civic honors to himself." He found it reminiscent of the decaying days of the Roman republic, in particular the story of how a group of citizens approached a nobleman with the news that the Senate had voted to erect a statue of him. The nobleman gravely replied that honor alone was enough-in fact, it was too much, so he would put up his own monument.67 Democracy must have its discontents, or it would not be democracy. Indeed, the liberal reformers formed only one channel of dissent against Vanderbilt and the corporate power he represented. The other would be a populist current that lifted up government regulation to counter the railroad monarchy. It would take longer to emerge, in large part because of the liberals' influence in intellectual circles and with the leadership of both political parties. The cynicism and social disdain of Godkin, Twain, and the Adams brothers created confusion, then and now, over the problems facing American society in 1869. Their attacks on corruption went beyond the Tweed ring, to the point of undermining black-elected governments in the South and giving credence to white supremacy. Their economic theories led them to lambast business practices that eventually would become standard. Most important, their distrust of popular government discredited regulatory measures that offered the only means of placing political limits on the power of large corporations.
They were right about many things, of course: political corruption was a real problem; the spoils system needed to be replaced by a professional, nonpartisan civil service; insider trading and other abuses wracked corporations; and no one could accuse Vanderbilt of being well educated. But prejudice cannot replace investigation. Vanderbilt, for example, did not pay for his monument, as Godkin believed. It was the brainchild of Albert De Groot, who once had worked on Vanderbilt's steamboats, enjoyed his patronage, and felt he "owed a debt of gratitude." He had planned the statue and relief, designed by Ernst Plassmann, and raised $500,000 from Vanderbilt's wealthy friends. De Groot claimed that the Commodore knew nothing about it until it was well under way68 Even corrupt Mayor Hall had a point: Vanderbilt did devote his energy to constructing works of immense benefit to the public, building transportation infrastructure that would serve the city of New York for centuries. The St. John's Park freight depot was one example. Two historians of New York write, "The new terminal revolutionized the Lower West Side. An enormous complex of grain depots, stockyards, and stables arose along the waterfront." Like a "gigantic magnet," the confluence of rail and sea access at St. John's Park attracted "wholesalers, express companies, packing-box firms, and dry-goods commission merchants" from their old locations near the East River. More than two hundred new warehouses went up in the district in the late 1860s and early 1870s, leaving a mark that would last into the twenty-first century. And this was far from the only piece of Manhattan on which Vanderbilt would stamp his name. On November 15, the Harlem Railroad broke ground on Forty-second Street for what would be the largest railroad station in North America. They called it the Grand Central Depot.69 THE COMMODORE'S CRITICS would cluck their tongues once more on January 22, 1870. That day the would cluck their tongues once more on January 22, 1870. That day the New York Herald New York Herald announced a sensation: Victoria Woodhull and Tennie C. Claflin had set themselves up as brokers and bankers on Wall Street. In doing so, the two sisters defied social expectations. "Were I to notice what is said by what they call 'society' I could never leave my apartments except in fantastic walking dress or in ballroom costume," Claflin told a announced a sensation: Victoria Woodhull and Tennie C. Claflin had set themselves up as brokers and bankers on Wall Street. In doing so, the two sisters defied social expectations. "Were I to notice what is said by what they call 'society' I could never leave my apartments except in fantastic walking dress or in ballroom costume," Claflin told a Herald Herald reporter, "but I despise what squeamy, crying girls or powdered counter-jumping dandies say of me. I think a woman is just as capable of making a living as a man." She added, "I know as much of the world as men who are older. Besides, we have a strong back [i.e., backer]." reporter, "but I despise what squeamy, crying girls or powdered counter-jumping dandies say of me. I think a woman is just as capable of making a living as a man." She added, "I know as much of the world as men who are older. Besides, we have a strong back [i.e., backer]."
The reporter noticed a picture of Vanderbilt on the wall. "I have been told that Commodore Vanderbilt is working in the interest of your firm. It is stated that you frequently call at his office in Fourth street about business." Tennie replied, "I know the Commodore and frequently call to see him on business, but I am not prepared to state anything as to whether he is working with us."70 On February 4, the women formally opened Woodhull, Claflin & Co. at 44 Broad Street. Thousands of Wall Street men came calling, including Richard Schell, William R. Travers, Daniel Drew, and even the esteemed Jay Cooke, who admitted he was frankly curious. Edward H. Van Schaick visited several times, with a fresh haircut, hat, or coat on each occasion. They all found the women self-assured and forceful to a degree that surprised and unsettled them. Claflin said, "If I had engaged a little fancy store upon Broadway and sold ribbons and thread, it would have been perfectly proper.... No one would have remarked it. But because I have brains sufficient to carry on a banking house people are astonished."71 The reporters, brokers, and operators all asked, Who was the Co. in Woodhull, Claflin & Co.? A broker remarked that there was "something back of the movement." Claflin sharply responded: "Yes, there is something back of it. Commodore Vanderbilt is back of it." The sisters spoke his name more frequently with each passing day. On January 26, Wood-hull had thanked journalist Whitelaw Reid for a favorable editorial. It "was entirely satisfactory to our best friend, the Commodore, who first called our attention to it as we were dining with him," she wrote. (Claflin sent Reid a note rife with sexual innuendo soon after.) "A rather free use has been made of the name of the veteran Commodore Vanderbilt as the aider and abettor, if not the full partner, of the firm," the Herald Herald noted on February 9. noted on February 9.72 Vanderbilt routinely alerted the press when his name was mistakenly attached to any operation. In this case, he kept silent-at first. As one broker asked, "What does Vanderbilt mean?"73 The answer remains mysterious. One hint comes from the memoirs of Alva Vanderbilt Belmont, who married William K. Vanderbilt in 1875, and vividly recalled her first meeting with her husband's grandfather. "His manner was most overbearing, and the family more or less stood in great awe of him," she wrote. "I had never known what it was to be awed by anybody, and I think that for that reason he had a great deal of respect for me, and we became quite friendly" The answer remains mysterious. One hint comes from the memoirs of Alva Vanderbilt Belmont, who married William K. Vanderbilt in 1875, and vividly recalled her first meeting with her husband's grandfather. "His manner was most overbearing, and the family more or less stood in great awe of him," she wrote. "I had never known what it was to be awed by anybody, and I think that for that reason he had a great deal of respect for me, and we became quite friendly"74 He did not tolerate fools and had little respect for weak personalities. But a woman who stood her ground-in an age that idealized feminine frailty-impressed him. It was strength where he expected none. Woodhull and Claflin were nothing if not strong. He did not tolerate fools and had little respect for weak personalities. But a woman who stood her ground-in an age that idealized feminine frailty-impressed him. It was strength where he expected none. Woodhull and Claflin were nothing if not strong.
Then, too, there was his contrarian streak. If he relished his wife's outspoken loyalty to the Confederacy, he found far more controversial views in Woodhull and Claflin. They championed the cause of gender equality at a time when the twenty-two-year-old women's movement had won new prominence, as Elizabeth Cady Stanton, Susan B. Anthony, and others turned the debate over Reconstruction toward the question of women's rights. Woodhull and Claflin skillfully used the publicity of their Wall Street firm to promote the cause, and propel themselves into its leadership. More and more in the coming months, they would weave together various radical strands in American intellectual life, including Spiritualism, women's rights, workers' rights, and (most controversial of all) free love, that catchall phrase for any unconventional sexuality In May 1870, the sisters began to publish Woodhull Woodhull if ifClaflin's Weekly, which gave space to the ideas of such figures as Stephen Pearl Andrews, who would go on to join Karl Marx's International Workingmen's Association.75 Woodhull and Claflin hinted at other motivations that the Commodore might have had for supporting them. "At times I know and feel that I am under a spirit influence that I do not understand; and when in that condition I do see visions of future events," Claflin told a reporter later in 1870. "If you doubt it go and ask Commodore Vanderbilt!... Victoria and I both see visions." Years later, in the great trial over Vanderbilt's will, Susan A. King would testify that Claflin introduced her to the Commodore in 1870. He urged her to follow their advice to buy New York Central stock, for it would go up 22 percent in three months. "He said that Mrs. Woodhull was a spiritual medium, and while in a clairvoyant state, had told him so." Marie Antoinette Pollard would testify that she also called on him in 1870 to ask advice about the stock market. He replied, "Why don't you do as I do, and consult the spirits?"76 Claflin's sexual allure, it was said, was the most powerful motivation of all. A story would be put out that Vanderbilt was seen throwing his arm around Claflin; that he vainly boasted to her that women bought New York Central stock because his picture was on it; that he promised her a fortune in his will. It would be said that she asked Vanderbilt if he had not promised to marry her before he married Frank, and that he replied, "Certainly, but the family prevented it and otherwise arranged it." Joseph Treat, an acolyte of Woodhull and Claflin who turned against them, later wrote that he had heard from a friend of another sister of Claflin's that she had asked Vanderbilt how many sexual partners he had had, "and he said a thousand, to which she responded... that then she was only half as big a whore as he." Claflin, Treat wrote, suffered from a sexual disease, implying that Vanderbilt might have contracted it as well.77 This is scandalous stuff-irresistible to many writers over the years, who would abandon all skepticism to embrace or even inflate it with conjecture and outright invention. In reality, solid evidence of Vanderbilt's relationship with the sisters is lacking. The tales of Vanderbilt promising money to Claflin, boasting about his stock-certificate portrait, and having been forced to marry Frank, all came at the trial over his will, from the mouth of a lawyer who was paid to prove that Vanderbilt was not in his right mind.78 The stories did not even come from a witness. They were merely declarations of what the counsel hoped to prove, and no such testimony was actually made. Even if Vanderbilt did say these things, they come across mostly as sexually charged banter with a woman who cultivated sensuality. The idea that he was forced to marry Frank at all, let alone by a family that had barely met her, flies in the face of direct documentation. The stories did not even come from a witness. They were merely declarations of what the counsel hoped to prove, and no such testimony was actually made. Even if Vanderbilt did say these things, they come across mostly as sexually charged banter with a woman who cultivated sensuality. The idea that he was forced to marry Frank at all, let alone by a family that had barely met her, flies in the face of direct documentation.
As for Treat's explosive account, it is hearsay of hearsay of hearsay, originating with Claflin herself, the most untrustworthy source of all. In 1871, she would proclaim her clairvoyant power in court-in order to soften an admission that she was a confidence artist. "To support this family I had to humbug people sometimes," she would say. Indeed, both Claflin and Woodhull proved to be accomplished liars who filled their interviews with the press with complete fabrications. Claflin claimed that she had studied law with her father. Woodhull said that they had made a fortune in real estate, and had operated quietly on Wall Street for years. They found themselves caught out in their lies in March, when creditors in Chicago, Claflin's most recent home, sued her for numerous unpaid debts. That led the New York Sun New York Sun to report, "Commodore Vanderbilt, whom Miss Tennie claims to be her financial backer, denies all knowledge of her or her partner, Mrs. Woodhull." to report, "Commodore Vanderbilt, whom Miss Tennie claims to be her financial backer, denies all knowledge of her or her partner, Mrs. Woodhull."79 Were solid evidence to surface that Vanderbilt and Claflin had an affair between the death of Sophia and his marriage to Frank, it would not be a particularly startling discovery*1 But the significance of their connection should not be exaggerated. There is no sign that Vanderbilt gave any support to the radical But the significance of their connection should not be exaggerated. There is no sign that Vanderbilt gave any support to the radical Woodhull & Claflin's Weekly Woodhull & Claflin's Weekly, even though many writers have assumed that was the case. Rather, the sisters annoyed the business community with their efforts to bring in money for it. R. G. Dun & Co. would report in March 1871 that they "have obtained a quantity of [subscriptions] to their paper by dint of intrusive persistency, which has been as notorious as disagreeable. They have been accused of black mailing in their publication, which is believed by well posted parties." As to their "brokerage" house, it was a failure from the beginning-"no standing whatever," as R. G. Dun & Co. would put it. Vanderbilt denied being their partner in court, and the evidence supports him.80 But it does does seem clear that Vanderbilt sought the sisters' visions. Dr. William Bodenhamer, a leading physician who would attend the Commodore on his deathbed, later testified that Vanderbilt confessed his belief in "clairvoyance." A deep accumulation of evidence suggests that he started to attend seances as early as 1864. In 1870, the high point of Spiritualism in American history, this was not unusual. Bodenhamer-who also testified to Vanderbilt's exceptionally clear mind, even when in intense pain-observed of his faith, "Many most intelligent and intellectual men in our country believe the same." It is doubtful that the Commodore made decisions based on the sisters' supposed revelations. Marie Antoinette Pollard, for example, was not a good witness: she was a felon, having shot a druggist in Baltimore, and couldn't identify Lambert Wardell, Vanderbilt's eternal gatekeeper. Even if she accurately quoted Vanderbilt ("Why don't you do as I do, and consult the spirits?"), she took it as an attempt to put her off. "He was so gruff that I left," she said. Whenever Woodhull or Claflin were put on the spot in court, they would admit that they went to Vanderbilt for money and advice, not the other way around. seem clear that Vanderbilt sought the sisters' visions. Dr. William Bodenhamer, a leading physician who would attend the Commodore on his deathbed, later testified that Vanderbilt confessed his belief in "clairvoyance." A deep accumulation of evidence suggests that he started to attend seances as early as 1864. In 1870, the high point of Spiritualism in American history, this was not unusual. Bodenhamer-who also testified to Vanderbilt's exceptionally clear mind, even when in intense pain-observed of his faith, "Many most intelligent and intellectual men in our country believe the same." It is doubtful that the Commodore made decisions based on the sisters' supposed revelations. Marie Antoinette Pollard, for example, was not a good witness: she was a felon, having shot a druggist in Baltimore, and couldn't identify Lambert Wardell, Vanderbilt's eternal gatekeeper. Even if she accurately quoted Vanderbilt ("Why don't you do as I do, and consult the spirits?"), she took it as an attempt to put her off. "He was so gruff that I left," she said. Whenever Woodhull or Claflin were put on the spot in court, they would admit that they went to Vanderbilt for money and advice, not the other way around.81 The most likely explanation for his role in the sisters' scandalous, flamboyant adventures is simpler. It came from their mother-another unreliable witness, but with a believable story. He turned to them for magnetic healing, or rubbing, of his various aches and pains. He felt better, and perhaps took part in seances with them. He might have slept with Claflin, but ceased to before his second marriage. Impressed with the sisters' intelligence, allure, and forthrightness, he put their money into the stock market, and made a small fortune for them. Woodhull's husband, James H. Blood, who served as their writer, accountant, and impresario, suggested that they open a brokerage house with their new stake-perhaps only as a publicity stunt. Vanderbilt agreed to carry their stocks (as Woodhull later testified in court), though he would not spare them losses, and did not endorse or join their firm. He felt uncomfortable with their notoriety, and never gave them permission to use his name; but, fond of them still, he did not run very fast in the other direction.82 This scenario was eccentric enough, if not so satisfyingly outrageous as the myth. In the vast scope of Vanderbilt's affairs, from his extensive social circle to his various railroads to his new wife, Woodhull and Claflin were a minor diversion. But their notoriety and his discomfort, would grow.
THE GREATEST ACCOMPLISHMENT of Vanderbilt's railroad reign culminated with surprisingly little fanfare. On January 27, 1870, he took part in the first stockholders' meeting of the New York Central & Hudson River Railroad. It was one of the largest corporations in American history-and his own special creation. He took office as president, of course, and made William his vice president. (Daniel Torrance had been the Central's vice president until consolidation.) To "equalize values," they set the stock of the company at $90 million (at the par value of $100 per share), an increase of 85 percent for the Hudson River and 27 percent for the Central, amounting to over $44 million in new shares. This figure astounded the public. As Charles F. Adams Jr. pointedly (and predictably) observed, twenty years earlier no corporation in the country had had a capitalization of more than $10 million. The new Central's semiannual 4 percent dividend on April 15 amounted to $3.6 million, "the very largest single dividend ever paid in this country by any one great corporation or state," the of Vanderbilt's railroad reign culminated with surprisingly little fanfare. On January 27, 1870, he took part in the first stockholders' meeting of the New York Central & Hudson River Railroad. It was one of the largest corporations in American history-and his own special creation. He took office as president, of course, and made William his vice president. (Daniel Torrance had been the Central's vice president until consolidation.) To "equalize values," they set the stock of the company at $90 million (at the par value of $100 per share), an increase of 85 percent for the Hudson River and 27 percent for the Central, amounting to over $44 million in new shares. This figure astounded the public. As Charles F. Adams Jr. pointedly (and predictably) observed, twenty years earlier no corporation in the country had had a capitalization of more than $10 million. The new Central's semiannual 4 percent dividend on April 15 amounted to $3.6 million, "the very largest single dividend ever paid in this country by any one great corporation or state," the New York Times New York Times wrote. wrote.83 The Empire State had never seen anything like Vanderbilt's new empire. From St. John's Park to the shores of Lake Erie, its tracks stretched 740 miles in length, with branches fingering out another three hundred miles. It operated 132 baggage cars, four hundred locomotives, 445 passenger cars, and 9,026 freight cars. In 1870, the consolidating railroads carried some 7,045,000 passengers and 4,122,000 tons of freight. Though the number of employees remains uncertain, the payroll figures were vast: nearly $752,000 paid to engineers and firemen; $600,000 to porters, watchmen, flagmen, and switch tenders; $512,000 to conductors, baggagemen, and brakemen; and $185,000 for "general superintendence." These statistics speak to its vast economic displacement, which was rather that of a giant in a bathtub. No other enterprise in New York came close to these figures-not even its rival trunk line, the Erie, which was only three-quarters its size. The Central ran through all of the state's largest cities, with the exception of Brooklyn; in each, it was the single largest economic force, with its enormous payroll, voracious needs, and near monopoly on intercity transportation. Few businesses in the country, apart from a very few other railroads, boasted a capitalization as large as one-tenth that of the New York Central & Hudson River; and few if any factories represented investment equal to what it spent on fuel alone each year ($1,869,000).84 The New York Central & Hudson River (to be called simply the New York Central, or the Central, hereafter) was not an isolated phenomenon. The Pennsylvania Railroad in particular was building a vast integrated system from the Mississippi to the Atlantic. But it marked a decisive turn in economic history. By consolidating two companies of great size and financial health, it created a single behemoth on an unprecedented scale. This new entity, the giant corporation, would spread into manufacturing, as seen first in Standard Oil and later in other industries, beginning with a great wave of mergers from 1895 to 1904; eventually it would dominate every other sector of the economy as well. It would introduce economies of scale, lower prices, multiply productivity-and either crush out smaller businesses or set the terms of their existence. And it introduced bureaucratic management into American business. On the Central, Vanderbilt and son set about a program of rationalization that standardized procedures and introduced a departmental system of organization.85 The giant corporation would bring Americans of all stripes into its orbit with remarkable speed. A professional and managerial middle class began to emerge as the educated and skilled went to work as engineers, lawyers, technical experts, clerks, and middle managers for large companies. The ranks of permanent wage workers swelled, both within railroads and in the industries that fed their needs or expanded with the new markets they opened up. Labor prospered during the postwar boom, enjoying a 40 percent growth in average real income from 1865 through late 1873. Indeed, the rise of the large corporation had its counterpart in the expanding, increasingly militant union movement. Significantly, William H. Vanderbilt signed the first contract with the Brotherhood of Locomotive Engineers in the New York Central's history.
None of these changes were absolute, of course. Small producers, self-employed artisans, and other survivors of the old economy coexisted with the enterprises and unions of the new industrial, corporate economy. The outlook of social philosophers, labor organizers, economists, and businessmen alike remained rooted in the past. But the creation of the New York Central & Hudson River stands as a historical landmark, showing us where the era of big business-the Vanderbilt era-well and truly began.86 There is a double irony to all this. Vanderbilt had first marched onto the economic battlefield like a Viking warrior, storming the ramparts of corporations under the banner of the individual competitor. Now his flag fluttered from the greatest corporate fortress to date-one with a monopoly on rail transportation into Manhattan. He had put aside the sword in favor of statecraft. All he wanted was to be left alone to manage his realm. It was a task that demanded constant attention, even from a leader who tried to remain above matters of detail. As big as the Central was, Vanderbilt personally sustained it during the consolidation process, paying hundreds of thousands of dollars out of his own accounts to smooth its cash flow The Harlem, too, announced it would issue twenty thousand shares to pay for the Grand Central Depot. Vanderbilt would buy them. Meanwhile William scheduled new trains to compete directly with the Hudson River steamboats, and began to re-lay tracks with steel rails (more expensive but far more durable than those of iron). Work began on a new double-track bridge at Albany. And Horace Clark joined in his father-in-law's diplomatic initiatives. On May 4, Clark took over the presidency of the Lake Shore, with Augustus Schell as vice president and Banker as treasurer; in short order they arranged with connecting roads for a passenger through line from Cincinnati, Louisville, and St. Louis, over the Central to New York.87 The second irony was that Vanderbilt would not be allowed to live in peace. Instead, his enemies forced him to fight once more. Those enemies were Jay Gould and Jim Fisk. In the end, their rivalry with Vanderbilt would loom above his larger but more sedate accomplishments, transforming the long-lived Commodore into one side of a matched set in American memory. But Vanderbilt himself bears some of the blame for history's overemphasis on his feud with Gould and Fisk. They angered him, embittered him, as no other enemies ever had or ever would. One coldly unpredictable and lethally resourceful, the other predictably flamboyant and surprisingly shrewd, they refused to abide by the rules of combat that were so important to the Commodore. Again and again, they provoked him into publicly overreacting despite the Erie's limited capacity for competition with the mighty Central.
In early 1870, Gould and Fisk reopened always-festering hostilities by undercutting the rates set by the most recent trunk line rate agreement. In May, Gould personally went to Chicago to cultivate livestock shippers, traditionally loyal customers of the Central. These were the ordinary skirmishes of railroad competition, but Vanderbilt took everything that Gould and Fisk did personally. On June 1, he declared that he would retaliate. Within a week, William slashed passenger fares by 25 percent (cutting the price of a ticket from Chicago to New York from $24.95 to $20); ceased the practice of checking passengers through to the Erie from the Great Western of Canada (the Central provided the only link); and slashed livestock rates from Chicago to New York from $125 a car to $100, and then $50, in response to Gould's grab for that traffic. Clark showed a common front, declaring that the Lake Shore would cease to cooperate with the Erie, leaving Gould dependent on the Fort Wayne, the Pennsylvania's subsidiary, for a connection to Chicago. Railroad Gazette Railroad Gazette wrote, "It will be a strange sight to see the Erie and the Pennsylvania working together." wrote, "It will be a strange sight to see the Erie and the Pennsylvania working together."88 On June 13, a reporter called at 10 Washington Place for an interview about the "railroad war." Vanderbilt relished the opportunity to pour scorn on Gould and Fisk. "We don't pay any attention to them; it would be beneath us to have a row with them," he said. "You see, my son, there are some disreputable fellows around this town who have got hold of a railroad somehow or another, and are trying to run it.... To make it a little respectable they talked about a 'war' they'd hatched up with the Central, so as to make folks think that it amounted to something; but there's nothing in it, nothing in it." The reporter said that Gould and Fisk accused him of controlling the Lake Shore to their detriment. He replied, "I don't know anything about it. The Lake Shore Line folks are all honest, and I run the Central, but the Erie fellows are squealing about it, ain't they? They can't do anything, nobody'll trust them, the Central has all the traffic, and they have got none."
The reporter went off to see Gould and Fisk at Pike's Opera House, a grand structure decorated with cut glass, carved woodwork, and ceiling frescoes that Fisk had purchased for use as the Erie headquarters. Fisk indulged in his own bluster. "He talks about us, and here we've had our doors besieged for the last three days by his relatives, trying to effect a settlement of the affair amicably." When pressed on the fact that the Central paid dividends and the Erie did not, he snapped, "That's so; we can't, until he sends back the $5,000,000 he took out of the Erie treasury when he left." Fisk's jab served as a reminder that Vanderbilt did, indeed, have a personal motive for the rate war, as the Erie's lawsuit against him continued to drag its slow way through Barnard's courtroom. But the two upstarts were already laying a trap for their wily opponent.89 About the time of this interview, Gould and Fisk secretly purchased some six thousand head of livestock in the West. Then, in late June, they announced that they were cutting the Erie's livestock rates to $1 per car. The move forced the Central to follow suit, as they knew it would. Shortly afterward, Gould and Fisk boasted to the press that they had shipped their livestock over the Central at these absurd rates, reaping a rich profit at the Commodore's expense. The Central instantly raised rates to $40 per car. It was one more example of why they irritated Vanderbilt so: they did not simply fight, they sought to humiliate him. And they succeeded.90 In July, Vanderbilt took Frank to Saratoga. They checked into the Congress Hall, along with William, the Schell brothers, and some of his other captains. "Mrs. Vanderbilt is admired more for her hauteur hauteur and modest dignity than for any dazzling beauty" the and modest dignity than for any dazzling beauty" the New York Commercial New York Commercial reported from the Springs. As for the Commodore, he was "as hale, hearty, and spry as ever," affectionate with Frank, relaxed and talkative with friends. Abstemious as always, he ate little and watered down his brandy reported from the Springs. As for the Commodore, he was "as hale, hearty, and spry as ever," affectionate with Frank, relaxed and talkative with friends. Abstemious as always, he ate little and watered down his brandy91 He was in good spirits at seven in the morning on August 10 when he went down to the Congress Spring for a draught of mineral water, along with William and Augustus Schell. There he happened across Jay Gould, seemingly by chance. They sat together on a bench, "but a few feet distant from the statue of Cupid," noted a reporter, who thought that Gould and the Commodore actually seemed warm with each other. Before they stood again, they had agreed on the basic outlines of a comprehensive settlement-one that William had discussed with Gould the previous evening. The Erie would withdraw its lawsuit against the Commodore, and both lines would work with the Pennsylvania to create a comprehensive rate agreement, "the same as though a single individual owned all three roads," as William wrote in a memorandum.92 The seemingly personal spat that had been going on between the Commodore and Gould and Fisk had national repercussions, forcing yet another realignment of the emerging interregional railway systems. The rate cutting between the Erie and the Central inevitably forced the Pennsylvania to slash prices as well, starting a conflict that would only be settled at a grand trunk line conference in New York in November. Indeed, this rate war demonstrated that the Central's greatest competition for traffic between Chicago and New York was with the Pennsylvania rather than the Erie. During the fight, the Central and the Pennsylvania both ran fast trains to Chicago, the first getting through in thirty hours, the latter in twenty-seven. They were a gimmick, but one that pointed to the relative advantages of each line. The Pennsylvania had a superbly constructed railroad, as well as a more direct route west, saving from forty-nine to sixty-one miles over the Central, depending on the connection to New York. The problem was, it did not have such a connection of its own. To reach New York Harbor, it relied on the United Companies of New Jersey-the old Camden & Amboy, still the state's railroad monopoly-which refused to cut prices, forcing the Pennsylvania to absorb rate-war losses. The Pennsylvania also suffered from heavy grades as its tracks climbed up and over the Appalachians. The Central, on the other hand, had an almost level route the entire way to Chicago, whether by the Lake Shore or North Shore lines. If not quite as short, it allowed locomotives to use less fuel and haul more cars, creating huge savings.
By launching a rate war in 1870, Gould prompted a scramble for control of track that lasted long after peace returned. The Pennsylvania entered into negotiations to lease the United Companies, which it succeeded in doing in 1871. The Central tried to block the Erie from building its own connection to the Niagara Suspension Bridge, until the courts forced it to relent. The New York & New Haven (soon to consolidate with the Hartford & New Haven, which would make Vanderbilt a major stockholder) leased the New England Shore Line, blocking the Erie's access to Boston. In December, the Central and the Lake Shore also made an exclusive contract to receive all the traffic of the Dunkirk, Warren & Pittsburgh, a new railroad being extended into Pennsylvania's oil region. Gould had thought to undermine his more robust rivals; instead he drove them to widen their already vast grip on the rail traffic between the West and the seaports.93 Even with these great affairs-and expenses-weighing on him, Vanderbilt may have found the strength to pick up one of the most massive companies outside of the railroad industry: Western Union, the giant telegraph monopoly. On October 12, 1870, five men closely identified with the Commodore moved onto its board of directors: Horace Clark, Augustus Schell, James Banker, Daniel Torrance, and John Steward. Western Union was a classic target for a Vanderbilt takeover: it possessed immense strengths, but needed reform. "With a magnificent income and a constantly increasing business, they found it impossible to pay regular dividends, and the value of the stock had declined to about one third its par value," an industry journal wrote. "The management of the company [will be] placed in the hands of new men.... It is intended to dispense with some of the sinecures... which have hitherto proved so lucrative to their holders." As was the case in all of the Commodore's takeovers, Clark and associates organized an executive committee and took radical steps to put Western Union's finances in order. And yet, their presence on the board hardly proved that Vanderbilt took a personal stake in the company, at least at this time. Wall Street was ever murky94 For all of the Commodore's power-his cunning, his nerve, his strategic vision-some things remained beyond his control. The federal government had decided to tax the scrip dividend issued by the Central in 1868 at the standard 5 percent, for a total of $1,150,000. Vanderbilt claimed that the dividend represented earnings made before the income tax had been created, and should be exempt. In May he had sent Clark, Schell, and William to Washington to argue his case, to no avail.95 On November 21 he went in person, taking Clark and Schell with him. The next day, he struck one observer in the Internal Revenue office as the "brightest and quickest" of the three. As Clark stated their case, Vanderbilt "did not hestitate to thunder out his opinion whenever he could get a word in edgeways, in a manner that would indicate he was used to driving everything before him." On November 21 he went in person, taking Clark and Schell with him. The next day, he struck one observer in the Internal Revenue office as the "brightest and quickest" of the three. As Clark stated their case, Vanderbilt "did not hestitate to thunder out his opinion whenever he could get a word in edgeways, in a manner that would indicate he was used to driving everything before him."
As they got up to go, Vanderbilt said, "I am not very good at this kind of business. The last time I was here, it was on business. I said I could do better." He referred to his gift of the Vanderbilt Vanderbilt to the navy. Even now, he took pride in the vessel. "Why, they never gave me my vessel back," he explained. Yes, he had made a gift of it, but the navy had abandoned it. "The finest ship ever built is now rotting at the wharves in San Francisco." He felt mistreated, and now felt a personal stake in the dividend-tax question above and beyond the money. "We'll make war if I don't get justice," he declared. The curious term "justice" speaks to his state of mind. This man of honor was accustomed to enforcing his idea of fairness on the world. to the navy. Even now, he took pride in the vessel. "Why, they never gave me my vessel back," he explained. Yes, he had made a gift of it, but the navy had abandoned it. "The finest ship ever built is now rotting at the wharves in San Francisco." He felt mistreated, and now felt a personal stake in the dividend-tax question above and beyond the money. "We'll make war if I don't get justice," he declared. The curious term "justice" speaks to his state of mind. This man of honor was accustomed to enforcing his idea of fairness on the world.96 "THIS IS VANDERBILT, probably the most powerful individuality in America," a reporter for the Chicago Tribune Chicago Tribune wrote in August 1870. "I saw him at Saratoga, sitting on the porch of the Congress Hall-a very tall, straight, graceful, and noticeable old man... surrounded by parasites-all of them coarser-looking men." The writer reflected that Vanderbilt was a fine name for a tycoon, especially one so dignified, so careful and honest with his corporate interests. "He is a member of society a man of administration and not a thief.... On the other hand, what has this richest American done for any other motive than immediate gain?" wrote in August 1870. "I saw him at Saratoga, sitting on the porch of the Congress Hall-a very tall, straight, graceful, and noticeable old man... surrounded by parasites-all of them coarser-looking men." The writer reflected that Vanderbilt was a fine name for a tycoon, especially one so dignified, so careful and honest with his corporate interests. "He is a member of society a man of administration and not a thief.... On the other hand, what has this richest American done for any other motive than immediate gain?"97 At that moment, a fifty-year-old Methodist minister named Charles F. Deems was answering the question. Four years earlier, he had come from the South to New York, where he felt "the weight of Andersonville around his neck," his son wrote, in reference to the infamous Confederate prison camp. (That is to say, he felt ostracized because of Northerners' anger over Andersonville, rather than suffering guilt over its horrors.) He decided to establish a sanctuary for Southerners in Manhattan. On July 22, 1866, he began to rent the New York University chapel for weekly services. He called his flock the Church of the Strangers. One Sunday two new women attended, and became regular congregants: Frank Crawford Vanderbilt and her mother, who had moved into 10 Washington Place. In their chats with him, they strongly implied that he should call at the Vanderbilt home.98 In the year since the Commodore's second marriage, he had gradually curtailed his evenings at the Manhattan Club. Now and then he would have a party of friends over to his house to play whist or, more frequently now, euchre (a card game played by four people, teamed in pairs). His companions included Joseph Harker, Chester W. Chapin, and Cornelius Garrison, whom Vanderbilt had grown to like a great deal. But the aging Commodore came to prefer quiet evenings at home with his wife and his mother-in-law. He welcomed Deems, whom he had met briefly before the war, and the minister became a regular dinner guest.99 "The Commodore paid me special attention," Deems recalled. Over dinner or in the parlor afterward, often with Daniel Drew as a guest, Vanderbilt questioned Deems closely "about my preaching, my past history, and my expectations of the future." When the subject of "clerical beggars" came up-a sore point for Vanderbilt-Deems loftily pronounced to Frank that he delivered his sermons just a block from the Commodore's house, but he would never ask a dollar from him. Vanderbilt shot him "one of those steely looks of his which were very piercing and very subduing." Deems realized that he had sounded rather like a beggar as well, so he continued in a lighthearted tone, "For, if he has lived to attain his present age and has not got the sense to see what I need and the grace to send it to me, he will die without the sight!" They all laughed, and the subject lapsed.100 "I regarded him as an unscrupulous gatherer of money," Deems recalled. "The few interviews I had had with him after his marriage had modified my opinions of the man. I discovered fine points of which I had had no suspicion. But I was still a little afraid of him." One Saturday evening in July 1870, before Vanderbilt went to Saratoga, he called Deems up to a little office he kept next to his bedroom. He had heard that the minister was negotiating for the purchase of the Mercer Street Presbyterian Church for $50,000. "Doctor, I'll give you that church."
Deems flared indignantly. "There is not any man in America rich enough to have me for a chaplain."
"Doctor, I don't know what you mean. Lord knows I've got as little use for a chaplain as any other man you ever saw. I want to give you this church, and give it to you only. Now will you take it?"