Cornelius Vanderbilt on Crisis Response

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.

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.

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'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.