Cornelius Vanderbilt on Innovation

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.

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.

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.