The First Tycoon: The Epic Life of Cornelius Vanderbilt (Pulitzer Prize Winner)

by T.J. Stiles

Vanderbilt had first amassed wealth as a competitor in the steamboat business, cutting fares against established lines until he forced his rivals to pay him to go away. The practice led the New York Times, a quarter of a century before his death, to introduce a new metaphor into the American vernacular by comparing him to the medieval robber barons who took a toll from all passing traffic on the Rhine.

Rockefeller, Carnegie, Gould, Morgan—all were just beginning their careers when Vanderbilt was at his height. They respected and followed his example, though they would be hard-pressed to match it.

purity of the Revolution for the golden calf of wealth. “You seem to be the idol of… a crawling swarm of small souls,” Mark Twain wrote in an open letter to Vanderbilt, “who… sing of your unimportant private habits and sayings and doings, as if your millions gave them dignity”4

Over the course of his sixty-six-year career he stood on the forefront of change, a modernizer from beginning to end. He vastly improved and expanded the nation's transportation infrastructure, contributing to a transformation of the very geography of the United States. He embraced new technologies and new forms of business organization, and used them to compete so successfully that he forced his rivals to follow his example or give up.

A CHILD, IT IS SAID, CHANGES EVERYTHING.

The first of his family had arrived in America in 1650, when Jan Aertsen Van Der Bilt settled in the Dutch colony of New Netherlands.

In 1790, only 11.3 percent of English families owned slaves, compared to 27.9 percent of the Dutch—and one out of every three families in northern Staten Island.

Despite some pointed political debate, no heads rolled when John Adams assumed the office in 1797.

peaceful transfer of power is a big deal. perhaps it eads to more economic stability.

A momentary disarrangement of the world—the war between France and its enemies—had allowed American merchants to step in as shippers to all nations.

foreign trade had been at least four times greater than domestic during the colonial era, as each port gathered in crops and raw material from its immediate hinterland and shipped them abroad.

New York remained in the moment of its dawn.

In 1790, it remained the second city in population in the United States, with only 33,131 to Philadelphia's 54,388. New York nearly doubled by 1800 to 60,515,

As the United States began to mint its own coins, Congress made the new American dollar equal to the Spanish in silver content, for an easier transition.

Hamilton's role in the Bank of New York was nothing compared to what he accomplished as secretary of the treasury in Washington's first term, when the federal capital was temporarily located in Manhattan. In 1790, he presented a plan to have the federal government assume the states' Revolutionary War debts, paying for them with interest-bearing federal bonds, backed by a tariff and an excise tax on whiskey. Despite fierce resistance by Thomas Jefferson and James Madison, Congress enacted the program. The new federal bonds—known as

“the Stock”—essentially created the securities market in New York, and by extension in America.

In February 1812, President Madison reimposed the ban on imports from Britain. On

June 18, Congress declared war.

many fortunes started by supplying wartime goods like dupont (gun powder) Rothchield (bought the right bonds). Onassis (oil delivery)

Military disaster meant economic windfall

for the strapping twenty-year-old Vanderbilt.

“Don't you know why we have given the contract to you?” the officer reportedly asked. “It is because we want this business done, and we know you'll do it.” No evidence has ever surfaced to support the tale,

because later in life he coud charge more for services if this was true....history of a business is PR.

their large inventories of manufactured goods. In 1811, New York had run behind Massachusetts in imports, and only slightly ahead of Pennsylvania; in the year ending September 30, 1815, it took in more than both combined. The resurgence of trade lifted New York's imports from $2.4 million in 1811 to $14.6 million in 1815.

of the long-closed port over the next few years. On October 24, 1817, came the formation of the first transatlantic packet line (a regularly scheduled service, as opposed to the old custom of ships sailing when they were full), a major contribution to New York's growing dominance over other American ports.

In 1816, a Senate committee found that it was as expensive to move a ton of goods thirty miles overland as it was to bring the same ton across the Atlantic from Europe.

When George Washington died on December 14, 1799, for example, the news took seven days to travel the 240 miles from northern Virginia to New York.

It is often thought that youth is the time of grand horizons, of great dreams and bold plans. In fact, the reverse is often true: how little the

young have experienced, how little they know of what might be.

*

By 1824, more and more Americans demanded a market open to any who dared to venture in, an economy as democratic as the political arena increasingly was.

capitlism and democracy together.

In his solitary steamboat, he sailed off to fight the economic war.29

how did he finance the first boat.?

steamboats, and ships that clogged the slips. “New York was changing with disruptive speed,” writes historian Allan Horlick. “It was becoming strange where it had been familiar, and mysterious where it had been predictable.” At mid-century Joseph Scoville looked back to his youth and recalled a time when an average New Yorker “of no very extended acquaintance” could point out all the leading merchants, even direct a visitor to their homes.31 That memory faded rapidly as new faces arrived daily to rent apartments, find work, or start businesses.

In 1790, Manhattan's population had barely topped 33,000; in 1820, it reached 123,700; by 1830, it would pass 202,500.

Erie Canal in 1925

They were coming not so much from the impoverished districts of Europe (not yet, at least) as the fields and towns of the United States itself, especially New England and rural New York State.

Semi-subsistence farming disappeared; country folk left home as never before, looking for opportunities or simply some kind of cash income.

In 1826, the New York Evening Post announced—in the same issue that marked Thomas Gibbons's death—the first shipment of Michigan pork through the Erie Canal. With such humble items new eras are made.34

*

NOTHING ENTIRELY DISAPPEARS in history.

Frances Trollope

look up in Wikipedia. she's mentiond in The Wedding Of The Waters a lot

Pride is often the door to humiliation.

Close encounters with death have a reputation for transforming lives, for starting dramatic new departures. Vanderbilt's near extinction concentrated his existing qualities—his decisiveness, his will to dominate, his ability to rapidly assess a chaotic situation.

So began the Bank War, the result not merely of Jackson's obsessions, but the cultural crisis of the times. It broke out because two great waves now crashed into one another: the individualistic, anti-aristocratic, competitive

impulse fostered by the Revolution, and the instinct to organize, amalgamate, develop, and bring order to the chaos of the marketplace.

This idea rested on the notion that the amount of property was constant (rather than growing in a growing economy), and that only physical things—land, goods, animals—could

be property, never shares in corporations. Stock and paper money had no value of their own, Jacksonians believed; they were a conjuration that transferred wealth from real producers to stockjobbers who made nothing (except potentially money). Such a fundamentalist mind-set deeply frustrated the president's opponents, especially the Yankee businessmen who were learning to use the sophisticated devices of commerce.

The brilliance of this appeal could be heard in its echo of the Evening Post's radical brand of Jacksonianism, as advocated by editor William Leggett. Two days before, Leggett had attacked corporations for “combining larger amounts of capital than unincorporated individuals can bring into competition.”

It's not fair that businesses can be more powerful than individual people.

But the political debate over monopolies and corporations went to the heart of his existence, leaving a deep impression that he believed his rhetoric: he was the people's rebel, a challenger of the mighty.

This how he starts, but I expect he'll change his tune when he becomes very powerful himself.

In 1830, those rich men organized corporations to construct railroads radiating out of Boston. If ever corporations were necessary, it was now, for railways were far more costly and far more complex than textile mills (almost all of which were owned by individual proprietors or partnerships).

Though they were public works in the broadest sense—increasingly important as the common carriers of commerce—they were also private property, owned by individuals who pursued their own interests.

On June 1, the Lexington embarked on its maiden voyage

The Airbus A380 of it's day. This w time where small numbers of people could design break throughs. I wish there was more discussion on where the engine came from.

in her speed, in which we suppose it is safe to say, she surpasses any boat in the world, and has in fact reached a degree which was supposed two years ago impossible.” The Journal voiced a broad consensus that Vanderbilt had achieved one of the great technical triumphs of the day.

but passengers were the most lucrative part of the trade—and passengers demanded speed, speed the Lexington had like no other boat. He slashed the fare, once as high as $10, to $3, and timed his arrivals in Providence to allow his customers time to walk from his dock and buy tickets for the Boston train.

Speed equals more trips and less per unit charge?

The docks and decks of paddlewheelers began to turn up in stories, novels, and anecdotes.

Culture reflects business developments

On August 27, 1835, he sold off the Water Witch and the Cinderella, along with his lucrative Elizabethtown ferry, to a group of six men for the hefty sum of $74,000—enough to build a fast and luxurious steamboat on the model of the Lexington, which he would christen Cleopatra.

Investing, moving, not sitting still.