Cornelius Vanderbilt

Cornelius Vanderbilt, born on Staten Island, New York, on May 27, 1794, and nicknamed the Commodore, was the American business magnate who assembled one of history's great fortunes, first in shipping and then in railroads. He began working with his father's boat business, fought his way into leadership of inland and coastal shipping, and then redirected his energy and capital into the rapidly growing railroad industry, which was transforming the geography of the United States. He was the patriarch of the wealthy and influential Vanderbilt family, stood among the richest Americans of any era, and provided the initial gift that founded Vanderbilt University in Nashville, Tennessee. Because his dominance of shipping and railroads was facilitated in part by political manipulation, historians have argued ever since over whether he belongs among the captains of industry or the robber barons, two labels that have competed for his reputation since his own lifetime.

Gibbons v. Ogden, decided in 1824, held that Congress's power to regulate interstate commerce encompasses navigation, and the ruling is credited with underwriting the growth of the antebellum economy and the creation of national markets. Daniel Webster argued for Gibbons that federal power over interstate commerce was exclusive; Ogden's counsel answered that the states held concurrent authority. Chief Justice Marshall's opinion defined commerce as more than mere traffic, embracing the trade of commodities and navigation, and read the phrase among the several states to mean commerce intermingled with the states rather than stopping at boundary lines. A license granted under the federal Coasting Act of 1793 therefore took precedence over New York's monopoly grant. The Court produced one of the longest sets of opinions in its history to that point. The precedent became the basis for congressional regulation of railroads, freeways, and broadcasting, the legal architecture of the continental market that Vanderbilt's boats and rails would go on to fill.

The New York and Harlem Railroad, incorporated on April 25, 1831, was one of the first American railroads and the world's first street railway. Its founders laid track on the east side of Manhattan Island, convinced a line on the Hudson side could never compete with steamboats, and the first section, along the Bowery from Prince Street to 14th Street, opened in November 1832. Horses drew the early cars; steam engines arrived in 1837 but were confined to stretches outside the settled city. Reaching Chatham in 1852, the road gave New York a rail connection toward Albany, Boston, and Vermont. In 1854 the city's Common Council barred steam power below 42nd Street, an ordinance the company resisted through injunctions until the courts cleared enforcement in 1858. Vanderbilt acquired the property in the eighteen-sixties and consolidated it with the Hudson River Railroad, and in October 1871 Grand Central Depot became the terminus for intercity trains from the north.

The Accessory Transit Company ran the cheapest route from the East Coast to California: steamer from New York to Grey Town in Mosquitia, up the Rio San Juan to Lake Nicaragua, across the lake to Rivas, stagecoach over the narrow isthmus to San Juan del Sur, and a final steamer to San Francisco. Against an overland crossing that took many weeks, the line was soon carrying two thousand passengers a month at a fare of three hundred dollars each, later reduced to one hundred and fifty. The wealth generated by the route attracted predators, and in 1854 the United States Navy bombarded San Juan del Norte after town authorities demanded the company vacate its premises. Vanderbilt's original contract with the Nicaraguan government also granted him exclusive rights to build a Nicaragua canal until 1861, rights that political instability and the country's frequent volcanic eruptions eventually rendered moot as Panama became the more attractive canal site.

Public money raised through taxation, together with land contributed by public officials and private developers, had built the Erie Railway, and by the middle of the 1850s the road was mismanaged and deeply in debt. Daniel Drew, a cattle drover turned Wall Street banker and broker, first loaned the railroad two million dollars and then acquired control over it, amassing a fortune by skillfully manipulating Erie shares on the New York Stock Exchange. Vanderbilt, assembling a railroad empire, saw financial and strategic opportunity in the property and in 1866 set out to corner the market on Erie, silently scooping up the stock. Having succeeded in the accumulation, he then permitted Drew to remain on the board of directors in his former capacity as treasurer, a gesture of apparent reconciliation with his old adversary that set up one of the most spectacular betrayals in the history of American finance.

Grand Central Terminal's site has held three successive stations serving essentially the same function, and the first was Vanderbilt's. The Harlem Railroad had run at street level along Fourth Avenue, with the New Haven line operating over its tracks under a trackage agreement, when Vanderbilt, who had acquired the New York Central in 1867 together with the Hudson River Railroad and fused the pair two years afterward, proposed uniting three separate railroads at a single central station, replacing the separate adjacent depots whose jumbled baggage transfers created chaos for passengers. He commissioned the architect John B. Snook to design Grand Central Depot on 42nd Street, and work started on September 1, 1869, finishing in October 1871. The Second Empire-style depot was considered the country's first station to measure up to those of Europe. Later expansions in 1895 and 1900 could not keep pace with traffic, and the building was replaced by the present terminal in 1913.

Before the Civil War the Methodist Episcopal Church South had contemplated a regional university for training ministers, and after lobbying by Nashville bishop Holland Nimmons McTyeire, church leaders voted in 1872 to found the Central University of the Methodist Episcopal Church, South, in Nashville, a project delayed by lack of funds and the ravaged state of the Reconstruction South. The following year McTyeire, in New York for medical treatment, stayed at Vanderbilt's residence; Vanderbilt's second wife was a cousin of McTyeire's wife, both women from Mobile. The Commodore, then the wealthiest man in the United States, had been planning a university on Staten Island, but McTyeire persuaded him to endow Central University with five hundred thousand dollars to help strengthen the ties between all sections of the common country. Vanderbilt doubled the gift to a million, never asked that the school carry his name, and the trustees rechristened it in his honor in the spring of 1873. Landon Garland became the first chancellor as the university enrolled its first students in the fall of 1875.

The Vanderbilt family rose to define the Gilded Age, its success beginning with the shipping and railroad empires of Cornelius Vanderbilt and expanding into other areas of industry and philanthropy. Cornelius was the richest American until his death in 1877; his son William Henry inherited the fortune and held the same standing until his own death in 1885, the last moment the family name topped the nation's wealth. The dynasty's prominence lasted until the mid-twentieth century, after which the ten great mansions of Fifth Avenue came down and most of the family's other houses passed into other hands or became museums, a decline often called the Fall of the House of Vanderbilt. The founder's rise was improbable: born fourth among nine children of a modest Staten Island family, he left school at eleven and built a shipping and railroad empire that made him one of the wealthiest men in the world. Contemporary descendants include the journalist Anderson Cooper, the actor Timothy Olyphant, and the present Duke of Marlborough.

Vanderbilt was in his seventy-ninth year when he decided, in the spring of 1873, to make the gift that founded Vanderbilt University. The one million dollars he gave to endow and build the institution was, the university's own history records, his only major philanthropy. Bishop Holland N. McTyeire of Nashville, husband of Amelia Townsend, a cousin of Vanderbilt's young second wife Frank Crawford, came to New York for medical treatment early in 1873 and spent his recovery in the Vanderbilt mansion, where he won the couple's support for building a university in the South that would strengthen the bonds between all sections of the country. McTyeire chose the campus site, supervised construction of the first buildings, and personally planted many of the trees that make the campus a national arboretum. The university opened with one Main Building, an astronomical observatory, and professors' houses, enrolling 307 students in the fall of 1875.

Between 1866 and 1868, Drew conspired with James Fisk and Jay Gould, whom he brought onto the Erie board, to issue spurious shares, watering down the stock, of which an unsuspecting Vanderbilt bought a large quantity, losing more than seven million dollars in his attempt to gain control. Gould later returned most of the money under threat of litigation, but Vanderbilt conceded the railroad to the trio. They were entangled with the corrupt Tammany Hall machine and made Boss Tweed a director of the railroad, and he arranged favorable state legislation in Albany legalizing the newly issued shares. The historian Gustavus Myers recorded that Vanderbilt's agents poured out money to buy legislative votes against the legalization bill while members impassively took cash from both sides: Gould appeared in Albany with a satchel holding half a million dollars in greenbacks, and one senator kept seventy-five thousand from Vanderbilt and a hundred thousand from Gould, and voted with Gould.

Vanderbilt's lineage traces to Jan Aertson, a Dutch farmer from the village of De Bilt near Utrecht who reached New Amsterdam around 1650 as an indentured servant; over generations the family name fused his village with the Dutch van der to become Vanderbilt. Cornelius was born on Staten Island to Cornelius van Derbilt and Phebe Hand, quit school at eleven, and worked on his father's ferry in New York Harbor. At sixteen he resolved to start a ferry service of his own. In the standard account he borrowed one hundred dollars from his mother to buy a shallow-draft, two-masted periauger he christened the Swiftsure, carrying freight and passengers between Staten Island and Manhattan; the first published account of his life, from 1853, held instead that the boat belonged to his father and that the son took half the profits. Either way, the teen's ferocity in the trade led neighboring captains to mock him as the Commodore.

Family tradition preserves the young Vanderbilt's boldest gesture of defiance, from a line that began with Jan Aertszoon, a Dutch farmer who reached New Netherland as an indentured servant in 1650. Competing with Robert Fulton's company for dominance of New York's waterways, and blocked by the monopoly Fulton's heirs held over trade in and out of New York Harbor, Vanderbilt based himself across the river in New Jersey and flouted the law outright, sailing his boats in and out of the harbor beneath a banner reading New Jersey Must Be Free. He engaged Daniel Webster to argue his position before the United States Supreme Court, and won, helping establish an early precedent for the country's first laws of interstate commerce. The episode fixed the pattern of his entire career: where monopoly closed a market, he treated the closure itself as the opening, converting a legal barrier into a marketing banner and a courtroom fight into a competitive asset.

In 1855 the American filibuster William Walker installed himself as president of Nicaragua, seizing the transit company's assets in the country; he was driven out in 1857 by forces backed by Vanderbilt. Having regained control of the company, Vanderbilt then made the move his critics never forgot: he opened negotiations with Pacific Mail and the United States Mail Steamship Company, the pair that ran the routes across Panama, offering to stop running the Nicaragua line in return for a monthly stipend of forty thousand dollars. The companies accepted, essentially paying him never to compete, and a year later raised the payment to fifty-six thousand when he threatened to reopen the transit. The Accessory Transit line never ran again. For a modest retainer, Vanderbilt had converted a wrecked asset into an annuity, a pure demonstration of the leverage that credible competition held over incumbents who valued their position above everything else.

Vanderbilt stipulated that McTyeire serve as chairman of the Board of Trust for life. For its first forty years the institution remained under the auspices of the Methodist Episcopal Church, South, a lineage modern historians have documented unsparingly: McTyeire was born into a slave-owning family and wrote an essay defending slavery, chancellor Landon Garland owned as many as sixty enslaved people before the war, and Vanderbilt's own second wife was a Confederate sympathizer during the conflict. Tension between the board and the church over trustee selection and the place of non-Methodist faculty culminated in 1910, when the board refused to seat three Methodist bishops. After litigation, the Tennessee Supreme Court held in 1914 that the true founder of the university was the Commodore himself, not the Methodist Church, and the General Conference voted 151 to 140 to sever its ties with the institution that carried his name.

On November 24, 1817, the ferry proprietor Thomas Gibbons recruited Vanderbilt to take command of a steamboat running between New York and New Jersey. Vanderbilt kept his own ventures alive but in practice became Gibbons's business manager. Gibbons was then waging war on the steamboat monopoly that the New York State Legislature had handed to the patrician Robert Livingston and the steamboat inventor Robert Fulton, a privilege Livingston's heirs inherited and licensed to Aaron Ogden for a ferry linking New York and New Jersey. Gibbons had started his rival operation out of a personal quarrel with Ogden, whom he meant to drive into bankruptcy, cutting fares while carrying a landmark legal challenge to the United States Supreme Court. Piloting Gibbons's boats put the young captain in daily defiance of a state-protected monopoly, an apprenticeship in aggressive competition under legal fire that shaped everything he later did as an operator and placed him at the center of the struggle that opened American interstate commerce.

The Erie War's losers were sorted brutally. Fisk and Gould betrayed Drew himself, manipulating Erie's price and costing him a million and a half dollars; the Panic of 1873 cost him more, and by 1876 he was bankrupt with debts exceeding a million dollars and no viable assets, dying in 1879 reliant on his son. That same September of 1869, Gould and Fisk touched off the Black Friday gold panic, and public opinion turned permanently hostile to Gould. Fisk was murdered in 1872. Gould had to relinquish Erie control in 1872 and 1873 after losing a million dollars of stock to the confidence man Lord Gordon-Gordon. The Erie Railway Company, after all the swindles and continuing mismanagement, declared bankruptcy in 1878 and was reconstituted as the New York, Lake Erie and Western Railway. Vanderbilt, who never got his railroad, remained what he had been throughout: the richest man in America.

The years with Gibbons taught Vanderbilt to run a large and complicated business. He moved his family to New Brunswick, New Jersey, a stop on Gibbons's New York to Philadelphia line, where his wife Sophia ran a profitable inn whose proceeds fed, clothed, and educated the couple's thirteen children. A quick legal study, he represented Gibbons in meetings with lawyers and traveled to Washington to engage Daniel Webster for the Supreme Court argument. Vanderbilt's own appeal against the monopoly sat next on the Court's docket, but it never came up: on March 2, 1824, the Court ruled for Gibbons, holding that states had no power to interfere with interstate commerce. Gibbons v. Ogden remains a landmark, and the protection of competitive interstate commerce it established is considered the basis for much of the prosperity the United States subsequently generated. Vanderbilt had bet a decade of his career on the right side of the argument.

When Gibbons died in 1826, Vanderbilt worked for the son William until 1829, then struck out entirely on his own, assembling lines step by step around New York. He took over Gibbons's Jersey ferry, shifted to western Long Island Sound, and in 1831 assumed his brother Jacob's route to Peekskill on the lower Hudson. There he met the steamboat operator Daniel Drew in open competition, and Drew fought hard enough that Vanderbilt bought him out; impressed, he then made Drew a secret partner for the next thirty years so the two men would have an incentive never to compete with each other. In November 1833 a Camden and Amboy Railroad train derailed at Hightstown with Vanderbilt aboard, nearly killing him; the former president John Quincy Adams rode the same train and survived the jolt. The episode marked his first serious brush with the iron rail, the industry he would one day rule.

In 1834 Vanderbilt attacked the Hudson River Steamboat Association, the steamboat monopoly between New York City and Albany, sailing under the name the People's Line and borrowing the populist language of Andrew Jackson's Democracy to rally public support. By year's end the monopoly paid him a large sum to stop competing, and he switched operations to Long Island Sound. As New England's textile mills multiplied, the first railroads ran from Boston down to the Sound to connect with his steamboats, and by the end of the decade he dominated Sound shipping and began absorbing the connecting railroads themselves. In the 1840s he targeted the most attractive of them, the New York, Providence and Boston Railroad, known as the Stonington: cutting fares on competing lines, he depressed its share price and took its presidency in 1847, the first of the many railroads he would head. Commodore, once a common tag for steamboat entrepreneurs, now meant Vanderbilt alone.

When the California gold rush began in 1849, Vanderbilt abandoned regional steamboating for ocean-going steamships. Most migrants, and nearly all the returning gold, moved by steamship to Panama, crossed the isthmus by mule train and canoe, and sailed on; a Panama Railroad soon speeded the crossing. Vanderbilt judged Nicaragua superior, closer to the United States and nearly spanned by Lake Nicaragua and the San Juan River, and proposed a canal across it. He could not attract enough investment to dig, so he settled for the next best thing: a steamship line to Nicaragua plus the Accessory Transit Company, which carried passengers across the country by steamboat on the lake and river, linked to the Pacific port of San Juan del Sur by a twelve-mile carriage road from Virgin Bay. The route cut both miles and days from the journey, and the Commodore had built the fastest artery of the gold rush economy.

Friction inside the Accessory Transit Company broke into open war in 1852, when Vanderbilt clashed with Joseph L. White, one of its partners, and forced the firm to buy his ships at an inflated price. Early in 1853 he embarked with his family on a European cruise aboard the North Star, the steamship yacht he had built. In his absence White and Charles Morgan, until then Vanderbilt's ally, plotted against him and withheld money the company owed. It was a serious miscalculation. Returning, Vanderbilt retaliated by organizing a rival steamship line to California and slashing prices until Morgan and White paid him off. The episode displayed his signature pattern in disputes: rather than absorb a loss or litigate endlessly, he would rebuild the competitive weapon that had made his counterpart money, and then rent it back to them at a price of his own choosing.

In November 1855 Vanderbilt began buying back control of Accessory Transit just as the American military adventurer William Walker seized Nicaragua's government. Walker's ally Edmund Randolph coerced the company's San Francisco agent, Cornelius K. Garrison, into opposing Vanderbilt, and Walker annulled the transit charter, handing the rights and steamboats to Randolph, who sold them to Garrison; Charles Morgan was brought into the scheme in New York. Vanderbilt appealed in vain to Washington and London, then opened talks with Costa Rica, already at war against the filibuster alongside the region's other republics. He sent an agent whose raiding party seized the steamboats on the San Juan River and severed Walker's pipeline of reinforcements arriving from insurgent sympathizers in the United States. Walker collapsed and was expelled. When the new Nicaraguan government still refused to restore the transit, Vanderbilt simply opened a line by way of Panama, and eventually developed a monopoly over the California steamship business itself.

When the Civil War began in 1861, Vanderbilt offered his largest steamship, the Vanderbilt, as a gift to the Union Navy; Secretary Gideon Welles refused it, expecting a short war and judging the ship too expensive to operate. Vanderbilt leased her to the War Department instead. After the Confederate ironclad Virginia shattered the Union blockading squadron at Hampton Roads, the conflict drew appeals for help from President Abraham Lincoln and War Secretary Edwin Stanton, and this time he completed the donation, re-equipping the vessel with a ram and handpicked officers. She helped bottle up the Virginia, then was converted into a cruiser to hunt the Confederate commerce raider Alabama under Raphael Semmes. Congress awarded him a Congressional Gold Medal, and he paid to outfit a major expedition against New Orleans. His youngest and favorite son, George Washington Vanderbilt II, a West Point graduate and heir apparent, fell ill and died without ever seeing combat.

Though he had stepped down from the Stonington presidency during the gold rush, Vanderbilt spent the 1850s on several railroad boards, among them the Harlem, the Hartford and New Haven, the Central of New Jersey, and the Erie. In 1863 he took control of the Harlem in a famous stock-market corner and was elected its president, later explaining that he wanted to prove he could take a railroad widely considered worthless and make it valuable. The Harlem held a singular asset: it was the only steam railroad entering the center of Manhattan, running down Fourth Avenue to a 26th Street station, with a connection at Chatham Four Corners to the lines running east and west. He installed his eldest son Billy, once scorned and sent to a Staten Island farm after a youthful breakdown, as vice president, and in 1864 sold his last ships to concentrate on railroads.

Once the Harlem was his, conflicts with connecting lines flared, and Vanderbilt won every battle: control of the Hudson River Railroad in 1864, the New York Central in 1867, the Lake Shore and Michigan Southern in 1869, and later the Canada Southern. In 1870 he merged his two key lines under the banner of the New York Central and Hudson River Railroad, an enterprise so vast that it stood among the biggest corporations the United States had yet seen. In 1869 he directed the Harlem to begin Grand Central Depot on 42nd Street, completed in 1871 as his lines' New York terminus; he sank the Fourth Avenue tracks in a cut that later became a tunnel, and Fourth Avenue became Park Avenue. The consolidation thesis was ruthless and simple: a single system reaching from Manhattan toward Chicago, professionally run, paying steady dividends, and it became the template for American big business.

Following Sophia's death in 1868, Vanderbilt traveled to Canada, and on August 21, 1869, in London, Ontario, married Frank Armstrong Crawford, a cousin from Mobile, Alabama, more than four decades his junior. His second wife encouraged the act that softened his historical reputation: a one-million-dollar gift to Bishop Holland Nimmons McTyeire to found Vanderbilt University in Nashville, at that date the largest charitable gift in American history. He also gave fifty thousand dollars to her congregation, the Church of the Strangers, and land for the Moravian cemetery on Staten Island where he chose to be buried. He died at 10 Washington Place on January 4, 1877, aged eighty-two, after roughly eight months confined to his rooms, with exhaustion from chronic disorders cited as the immediate cause. His estate, estimated at one hundred and five million dollars, was the largest in the world at the time.

Vanderbilt's will left ninety-five percent of the estate to his son William and four grandsons, while his surviving son Cornelius Jeremiah and nine daughters received comparatively little, in some cases less than their own nephews. Three of the disappointed heirs sued, claiming their father had been of unsound mind and under William's influence and that of a corrupt spiritualist, alleging staged seances in which a spirit in the form of their dead mother endorsed William as the trustworthy heir. Rather than endure further public airing, William settled, adding two hundred thousand dollars in cash and a four-hundred-thousand-dollar trust for each challenger. Biographer T. J. Stiles credits the Commodore with vastly expanding the nation's transportation infrastructure, embracing new technologies and new forms of corporate organization, and helping create the corporate economy that defined the United States into the twenty-first century. Rankings of all-time American wealth place him second only to Rockefeller as a share of the economy.

History.com's profile emphasizes how unpolished the rising magnate remained. A descendant of Dutch settlers who arrived in the mid-1600s, Vanderbilt was born on May 27, 1794, to Staten Island farmers, and his father supplemented farm income by ferrying produce and merchandise to Manhattan in his periauger. As a teenager Cornelius moved cargo around the harbor in his own periauger, then acquired a fleet of small boats and learned the fundamentals of ship design. In 1817 he signed on as ferry captain for Thomas Gibbons's commercial steamboat service, mastering the steamship business before going independent in the late 1820s and becoming one of the country's largest operators through fierce fare wars, with rivals sometimes paying him hefty sums simply not to compete. In the 1840s he built a large brick home at 10 Washington Place in what is now Greenwich Village. The city's elite remained unmoved, considering him rough and uncultured.

ThoughtCo's retelling captures the Erie War's theatrical absurdity. Wall Street after the Civil War was largely unregulated, and manipulators moved stocks at will. The Erie, opened in 1851 as a rolling counterpart of the Erie Canal, was chronically unprofitable and controlled by Daniel Drew, a former cattle drover who had walked herds from upstate New York to Manhattan, deeply religious, prone to lapsing into prayer, and benefactor of the New Jersey seminary that became Drew University. Vanderbilt, who had known Drew for decades and held what observers could not explain as an abiding respect for him, began working with him in late 1867 to buy up the majority of Erie shares. When Drew, Gould, and Fisk turned to issuing watered stock against him, Vanderbilt kept buying. In March 1868 the trio fled across the Hudson and barricaded themselves in a Jersey hotel guarded by hired thugs, Drew sitting silently in prayer, Gould morose, and Fisk parading before reporters with outrageous quotes, until Albany payoffs and a buyback settlement ended the farce.

Vanderbilt died at eighty-two in his Manhattan home on January 4, 1877, and lies buried in the Moravian Cemetery on Staten Island, leaving the bulk of a fortune estimated above one hundred million dollars to his son William. Unlike the Gilded Age titans who followed him, Andrew Carnegie with his libraries and John D. Rockefeller with his foundations, he owned no grand homes and gave away little of his wealth; the only substantial philanthropic donation of his life came in 1873, near its end, when he gave one million dollars to build and endow Vanderbilt University in Nashville. The mansion era belonged to his descendants: the Breakers in Newport and the 250-room Biltmore in Asheville were built by later Vanderbilts, and Biltmore remains the largest privately owned home in the United States. In a nod to its founder's nickname, the university's athletic teams are called the Commodores.

After the Erie War the struggle for upstate lines turned physical. Gould and Fisk sought control of the Albany and Susquehanna, a strategically located railroad running through upstate New York toward Boston, originally controlled by Joseph Ramsey, and the fight became one of the most hard-fought corporate takeovers in New York State history. As the raiders accumulated shares, Ramsey's side issued thousands of new ones and at one point hid the company's books in Albany Rural Cemetery. A Tammany-allied judge, George G. Barnard, issued an order for Gould and Fisk; an Albany judge favorable to Ramsey countermanded it, backed by young John Pierpont Morgan, who held a large mortgage on the railroad and, in the almanac's account, threw Gould-Fisk men down a flight of stairs at a corporate meeting. Fisk stormed the Albany offices with thugs, seized the rail station at Binghamton, and took a train toward Albany until railroad men met him with weapons in a tunnel near Harpursville and the militia was called out. Ramsey's side prevailed.

Samuel McCracken's review of The First Tycoon opens by cataloguing the four things everyone knows about Cornelius Vanderbilt, and finds each of them wrong. He did not found the New York Central Railroad; others founded it, and he made it great. His nickname was not a sardonic joke about a one-man Staten Island ferry but the press's salute to a shipping magnate, commodore then being the highest rank in the United States Navy. The public be damned, the most famous quotation attached to the name, was left to his son William to pronounce, not the Commodore. And the potato-chip origin myth, in which the crusty tycoon sends back fried potatoes as not thin or salty enough, collapses on the fact that the chip reached the Saratoga Springs restaurant ahead of him. The biography behind these corrections, by T. J. Stiles, won the Pulitzer Prize for biography in the spring of 2010.

On February 9, 1859, Henry J. Raymond, editor of the New York Times, published the editorial that launched a phrase. Raymond, no friend of Vanderbilt, assailed him for accepting a large monthly payment from Pacific Mail in exchange for staying out of the California sea lanes, comparing him to the old German barons who swooped from their Rhine castles to wring tribute from every passing merchant. Though Raymond never used the exact words, it was the first known use of the robber baron metaphor in American journalism. The strange part, as Stiles observes, is what Raymond meant: Vanderbilt was a robber baron because he preyed upon monopolists. Pacific Mail held total control of the California sea lanes and bought Vanderbilt off to preserve its monopoly, and Raymond attacked him for pursuing competition for its own sake, for crowding out what the editor considered legitimate enterprises. The modern meaning, titanic monopolists crushing rivals and corrupting government, is nearly the opposite.

Vanderbilt's career began in an economy still ruled by patricians. In 1798 the New York legislature handed Chancellor Robert R. Livingston and Robert Fulton a monopoly on steam navigation, and Livingston passed it down as a hereditary right, the logic of what historians call the culture of deference, in which the state turned to its leading families to direct orderly economic development. New York's 1777 constitution had entrenched the hierarchy with three tiers of citizenship and escalating property requirements for voting. Thomas Gibbons attacked the monopoly out of a personal vendetta against Aaron Ogden, punishing him commercially, one aristocratic observer marveling at such malice in an enlightened age, while carrying the case to the Supreme Court. Chief Justice Marshall's 1824 ruling that states could not erect barriers to interstate commerce ended the monopoly; Ogden went to debtor's prison, Gibbons died in 1826, and Vanderbilt emerged as a proprietor in his own right. Competition itself was a new thing on the American scene, and the old elite read it as pure destruction.

Across sixty-six years, the review observes, Vanderbilt committed himself to a single business: transportation. His water empire took in New York Harbor, the Hudson, Long Island Sound, the route to San Francisco through Central America, and the North Atlantic; he straddled sea and land once he joined Boston and New York with linked steamboat and rail services, and not until around seventy did he give up the water entirely, selling his fleet to fund his new empire on rails. In linking New York with Chicago he laid almost no track of his own, yet few could match his eye for track other men had laid, which is why the reviewer crowns him the Great Consolidator. The country's existing rail system of six giant corporations is, in the reviewer's judgment, the direct descendant of the Commodore's consolidating strategy, nowhere more visible than in his 1867 purchase of the New York Central. Amtrak still runs passengers from New York to Chicago largely along the route he assembled.

Wherever Vanderbilt operated, he was feared as the most effective competitor alive, one who either destroyed his enemies or extracted a ransom for leaving a market. A businessman of the era, weighing whether to face him, confessed to a partner that he would rather have Vanderbilt with him than against him. The political culture split on what to make of such men. Conservative Whigs condemned bare-knuckle competition, wanting rapid development guided and assisted by government, and Raymond wrote his 1859 attack as an old Whig, praising Pacific Mail as a virtuous, privately owned instrument of a federal plan for communications with California, subsidized for carrying the mail. Jacksonian Democrats took the opposite view: aggressive self-interest in the marketplace was a matter of individual liberty, and government involvement in the economy merely granted special privileges to favored men, manufacturing the artificial aristocracy that was democracy's antithesis. In the era of universal white manhood suffrage, competitive individualism carried the argument, and Vanderbilt was its most successful practitioner.

When the gold rush began, Vanderbilt abruptly abandoned the regional transportation market around New York and entered ocean-going steamships, even though Washington subsidized his rivals, Pacific Mail and the US Mail Steamship Company, its partner. He built steamships for both the Atlantic and the Pacific, connected by his transit route across Nicaragua, north of the established Panama crossing, and inaugurated the line in 1851 with lower fares and a faster passage, swiftly earning a fortune. When war closed the Nicaragua route in 1856, the subsidized incumbents paid him a large monthly fee to keep him from competing by way of Panama. The California lines, Stiles argues, gave Americans their first glimpse of big business: routes stretching thousands of miles, with stations in distant countries, whose fights rippled across hundreds of thousands of travelers, and whose demands fed industries like the shipyard and steam-engine works Vanderbilt bought. Of the great steamship organizers of the 1850s, George Law, William H. Aspinwall, and Marshall O. Roberts, only Vanderbilt is remembered today.

In 1863, amid the Civil War, Vanderbilt began selling his steamship interests to buy railroad stock, and younger brokers on Wall Street mocked him, doubting the aging Commodore grasped the nation's most dynamic industry. In truth he had known railroads almost since American railroading began: his steamboats had connected with New England's earliest railways, he had seized the Stonington's presidency in 1847, and through the 1850s he had helped save the endangered Erie Railway and the Harlem by lending money and restructuring their debt. He became the era's greatest railroad tycoon almost by accident: at sixty-nine he wished to show he could turn a nearly bankrupt railroad into a thriving company. The fragmented web of local lines pulled him onward. He took the Hudson River Railroad in 1864, seized the New York Central in January 1867 by stopping trains over the Hudson River at Albany and briefly severing New York City from the country, and in 1869 gained the Lake Shore and Michigan Southern through a short-selling campaign that bankrupted his rival LeGrand Lockwood.

His one failed campaign was the 1868 attempt to corner the stock of the Erie Railway, launched to punish Daniel Drew for betraying him on the stock market. As Vanderbilt bought, Drew, the Erie's treasurer allied with Jay Gould and James Fisk, sold short, and the board flooded Wall Street with fresh certificates of dubious legality. The notoriously corrupt judge George Barnard issued arrest warrants; the Erie directors packed up the corporate files and funds and fled to New Jersey; Gould visited Albany with a suitcase of greenbacks, and the suddenly enriched legislators legalized the new shares. Barnard kept the warrants alive, forcing a compromise in which the company restored Vanderbilt's losses and he asked the judge to let the directors return. Stiles draws out the nuance: for all the graft surrounding Vanderbilt's career, no evidence convincingly shows that he corrupted government officials, since corruption also flowed as extortion by officeholders. The Erie War personalized the rising institutional economy, making dehumanization human.

As the newspapers' Railroad King, Vanderbilt took a series of dramatic steps that reshaped the industry, consolidating smaller lines into some of the first giant corporations in United States history, companies capitalized at levels that dwarfed entire industries of the time. With William Henry, his son, serving as his operational chief, he reorganized the companies and brought professional managers into them, introducing new efficiency into the nation's transportation system by lowering costs and building key new infrastructure. Even through the depression that set in after the Panic of 1873, the New York Central and Hudson River Railroad kept paying investors steady, healthy dividends. After his death in 1877 the Railroad Gazette observed that his early career as a railroad manager had been distinguished by a series of bold, startlingly revolutionary measures whose effect reached far beyond the lines he dealt with directly, and pronounced the Vanderbilt era the first great era of consolidations.

A July 2007 New York Times study, adjusting for inflation, placed Vanderbilt behind only John D. Rockefeller among the wealthiest individuals in American history, and when he died in 1877 he left an estate of roughly one hundred million dollars. His biographer T. J. Stiles cautions that such comparisons are notoriously inexact and proposes a starker metric: total net worth as a share of money in circulation. In 1877 the United States circulated about nine hundred million dollars, meaning Vanderbilt held about one-ninth of the nation's currency. Measured the same way against the Federal Reserve's M2 money supply, Bill Gates's fifty-seven billion dollars represented roughly one one-hundred-thirty-eighth. By the share-of-currency standard the Commodore towers over every modern fortune. He earned it in the nineteenth century's transportation revolution: born into a world of sail and horse-drawn freight, he died in one of coal, steam, and iron rails.

Vanderbilt's career centered on New York City and ran impossibly long: he remained in charge of his companies until 1876, at eighty-two. It began on the Hudson River, where he operated a passenger ferry, and he made his first serious money in the War of 1812, commanding a small vessel that helped break the British naval blockade of New York. He invested in the passenger railways of the 1830s, kept building steamships, and became a major player in the race to move hundreds of thousands of people from the Atlantic to the Pacific during the California gold rush. He involved himself deeply in the failed effort to dig a canal across Nicaragua in the 1850s and fought the American filibuster William Walker, who nearly seized Nicaragua as a private fiefdom. A consummately practical man, he read the pace of technological change better than anyone, and in 1864 sold his last steamship interests for railroads.

Stiles credits Vanderbilt's personal intervention in 1869 with saving the United States from a major financial crisis. When a group of speculators attempted to corner the nation's gold supply, the Commodore freed up sufficient capital to keep the panic from escalating into a depression, and was hailed as a hero, the savior of Wall Street. His enterprises demonstrably benefited the nation: historians Edwin Burrows and Mike Wallace calculate that roughly two hundred businesses relocated to cluster around the freight terminal he built on Manhattan's Lower West Side, drawn there like a gigantic magnet. The only thing more remarkable than his recklessness, Stiles observes, was his success. Vanderbilt seized the foundering New York and Harlem Railroad and restored it to profit, bought out railroad after railroad as an early master of modern corporate tactics, and by his death controlled many of the most important railroads in North America.

Vanderbilt was a great capitalist but not a great philanthropist. He left most of his fortune to his children and under five percent of it to charity, though the two to three million dollars he did dedicate to giving exceeded that of anyone else in his generation. Around 1873 a Catholic priest returned ten dollars he had found belonging to the New York Central; Vanderbilt had the money booked to the railroad's accounts and sat silently until the priest left, remarking afterward that there was considerable good in religion after all. In 1863 he declined to contribute to a hospital for wounded soldiers, writing that he owed it to himself to keep his name aloof from public acts granted in association with legislative bodies. In 1869 Mark Twain publicly demanded that he do something that was not shameful; the New York Herald answered that his numerous, liberal charities bore the reticence of his business character.

The clearest statement of what the university gift meant came from Charles F. Deems, a Southern Methodist minister who testified at the 1878 trial over the will. Vanderbilt, Deems recalled, had said the idea dated to the Rebellion: he had spent a million dollars sending a warship against the South to show where he stood, and now wanted to give a million after the war as proof that Northerners stood ready to extend the olive branch. The two gifts bracketed the conflict, the steamship donation for the Union Navy and the endowment for a Southern university, as matched bookends of sectional reconciliation. His son William added two hundred thousand dollars, and the school opened with a six-hundred-thousand-dollar endowment, exceptionally privileged among universities of its era. The philanthropic line then faded with the family: at a 1973 university reunion of one hundred twenty Vanderbilt descendants, not one was a millionaire.

Vanderbilt's transatlantic campaign against the Collins Line was a war over subsidies. Edward K. Collins ran the celebrated American steamers that carried more passengers than Cunard and as much express freight, but the ships lost money: pushed at top speed to meet the requirements of the mail subsidy contract, they burned enormous quantities of coal and needed constant repair. In January 1852 Collins petitioned Congress to raise his subsidy from $385,000 to $858,000 a year, and dramatized the request by bringing the Baltic to Washington on the Potomac, mooring her off Alexandria for President Fillmore and the Cabinet to admire. The spectacle worked, but opponents wrote a cancellation clause into the new contract, and after the loss of the Arctic in September 1854, with the line's fortunes sinking, Collins's enemies invoked it, cutting the payments back to the original $385,000. The episode exposed the fragility of a business model built on political patronage rather than operating economics.

Into Collins's crisis came Vanderbilt's signature weapon, the underbid. He submitted an offer to carry the ocean mails from New York to Southampton for $390,000, less than half of what Collins believed he required, deploying the same technique he had used to freeze out competition on the New York to Isthmus service. Collins, his subsidy gutted and his flagship Adriatic perpetually delayed, never recovered; when he died on January 22, 1878, it was in a modest house at 133rd Street, his passing almost unnoticed, a few old shipmasters at the funeral, harbor flags lowered, no stone on his grave, and his widow and stepsons quarreling over a pitifully small estate. The contrast with his old rival was total: the death watch at the Commodore's mansion in 1877 had been world news. The subsidized pioneer was forgotten; the unsubsidized competitor became the richest American of his century.

Harlem stock, with a par value of fifty dollars, traded as low as nine during the Civil War before the Commodore's arrival on the board lent it standing. In December 1862 the directors applied under their 1832 charter to lay rails down Broadway from Union Square to the Battery, and the stock jumped. Smart brokers snickered at the news that Vanderbilt was buying for investment and unloaded their shares on him at rising prices, until the franchise was granted in April 1863 and the stock leapt again. The speculator George Law pushed a rival bill through the legislature awarding himself the Broadway franchise in defiance of the city's ordinances; Governor Seymour, advised by Samuel Tilden and lobbied by William Astor and Pierre Lorillard, vetoed it. At the annual election Vanderbilt, revealed as holder of 8,801 shares, was elected president, stipulating that he take no salary while the vice president ran operations. The cornered interests had yet to learn what that election meant.

Daniel Drew saw Harlem's elevated price as the setup for a raid: he schemed with city politicians, Boss Tweed said to be chief among them, to have the Common Council abrogate the Broadway franchise and crash the stock after those in the secret had sold short. Through June 1863 the plotters pounded the quotation from 100 to 80; on June 25 the Council repealed the franchise and an injunction halted track-laying, breaking the price to 73. Vanderbilt's response was one of his standing rules of practice: I bide my time. His cash-rich coterie bought by the thousands of shares, 97 one day and 106 the next, while the shorts who had sold fifty thousand shares scrambled to borrow stock. On June 30 the trapped councilmen reinstated the franchise, hoping for mercy and mistaking their man; the clique kept buying into August, when the last battered shorts, Drew and a few aldermen among them, covered near 179. In September he let the price coast down to 115, emerging not overloaded but in control.

The courts ruled that the Broadway extension required a new franchise from Albany, and in early 1864 Harlem's bill was killed in a Senate committee, Drew again conspiring with legislators, this time alongside New York Central officials who wanted Harlem cheap as their own entrance to the city. The stock collapsed from 145 to 101. Vanderbilt summoned his old Staten Island friend Tobin with a proposal to teach the legislators never to go back on their word, and ran the corner a second time with a war chest of roughly five million dollars assembled from Tobin and Leonard Jerome. The bears kept selling as the stock climbed past 150 and 235; the group ultimately held the equivalent of the entire capital stock plus twenty-seven thousand shares the shorts could never deliver. Told that squeezing them to a thousand might break every house on the Street, Vanderbilt settled for less; in late June the last contracts settled at 285, with losses above a million dollars and bankruptcies to match. His verdict on the affair: they had busted the whole legislature.

The summer of 1864 marked the turning point in the Harlem's fortunes, from rags toward riches, and in those of William Henry Vanderbilt, who at forty-four entered the board and was elected vice president, having moved his wife and their eight children off the Staten Island farm and into his first house in town. No more than a superintendent at first, attending to details of operation, William slowly grew in power until his father relied on him as he once had on Horace Clark, and concluded that the son was worth a dozen Clarks. For the fourteen years until the Commodore's death, William had more to do with building the New York Central system than later generations credited. The corner also revolutionized the board itself: Drew retired from the directorate that year, and the election swept in eight new directors out of thirteen, a complete overturn that revealed the Vanderbilt interest in command. The pattern for the empire was set: control the stock, install the family, run the road.

Vanderbilt never let a railroad run down once he owned it. Holding two New York to Albany lines, he preferred the direct, level Hudson River route but rebuilt the Harlem too, ordering new rolling stock and rails and planning to double-track the line throughout. On the Hudson River Railroad the dividend rate rose to seven percent in 1864 and eight percent the following year; 1865 earnings approached four and a half million dollars while the road operated at just 62.5 percent of income. Six-sevenths of the mileage was double-tracked with seventy-pound iron rail, and newly introduced steel began going down by the thousands of tons; the Tribune noted five ties laid where four had gone before, and longer chairs at the rail-ends to reduce jolting and wear. Seventy-five road locomotives were converted from wood to coal burning, and the stock was regarded as gilt-edged, trading at 150 or more. Efficiency, in his hands, was not a slogan but a dividend.

Vanderbilt's breaking point with the New York Central came in the winter of 1866 and 1867. A snowstorm ending December 28 tied eastern New York rail traffic into the worst knot it had ever known: eight trains stalled at West Albany, passengers plodding through the drifts, some unfed since leaving Syracuse the previous morning. The river froze, and the Central grudgingly fed the Hudson River Railroad some business. On January 14, 1867, Vanderbilt struck with a newspaper notice: since the Central had terminated their arrangements, the Hudson River road would henceforth sell tickets and check baggage only over its own line, ending all through traffic at East Albany. Passengers and shippers cried out; editors wrote with white-hot pens of the mad rivalries of railroad kings trampling a helpless public; the legislature ordered an investigation and bills to prevent such blockades. The Central, whose East to West business was its lifeblood, tried detours over uncooperative New England roads while its traffic strangled.

Before the investigating committee, William Vanderbilt testified that the Hudson road kept eighty-two engines and equipment enough for two thousand tons of freight a day, yet the Central expected that capacity to stand idle through the nine months of open navigation. The Commodore conceded nothing: he had always served the public because it was his interest to do so, and as for the courts, the law went too slow for him when he held the remedy in his own hands. Historians treat this testimony as the source of the apocryphal sneer about law and power that no witness ever actually heard him utter. On the hearing's third day a telegram signed W. H. V. announced that satisfactory arrangements had been made and the trains would connect as usual that night. In November, stockholders led by Edward Cunard and John Jacob Astor Jr., representing thirteen million dollars of stock, begged him by letter to take their proxies, and at the December election his eighteen-million-dollar ballot decided control of the New York Central.