Cornelius Vanderbilt on Industry Transition

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.

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.

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.

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.

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.