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by
T.J. Stiles
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June 4 - August 18, 2024
By 1859, he operated almost entirely through corporations; he proved himself an expert at using the stock market to concentrate capital or avenge himself on his enemies, and emerged as a master of corporate structure. He saw the corporation as just another type of business organization. For many old Whigs and Democrats, on the other hand, the corporation remained a political animal.
in pursuing his private interests wherever they took him, he felt no obligation to act in the public interest; when competition had served its purpose, he freely sold out or constructed new monopolies.
Vanderbilt, for all its incoherence, spoke to a budding sense that this increasing concentration of wealth and power in the hands of one man posed a challenge to democratic, egalitarian society. Unions could not restrain Vanderbilt from slashing wages and firing strikers; no federal or state laws prohibited his inside trading on Wall Street; few taxes touched his wealth; no regulatory agencies examined his vast affairs or rendered them transparent.
Still true today
Discipline and obedience, he wrote, ultimately depend upon “the subordinate’s recognition that those placed in authority over him are possessed of a higher degree of experience, military prowess, or—not to beat around the bush—moral development.
But a superior who lacks real ability—or character—draws only scorn.
Beyond all analysis of Vanderbilt’s historical role, it is worth remembering that men willingly followed this difficult, profane titan, even at the risk of their own lives. It was not because he was generous or kind, but because he was a man of genuine prowess. No one, they knew, understood steamships better; no one, they knew, was more willing to face personal danger; no one, they knew, was truer to his word. Vanderbilt was many things, not all of them admirable, but he was never a phony. Hated, revered, resented, he always commanded respect, even from his enemies.
Wide Awakes,
Woke today
The fire-eaters demanded the right to carry slaves into any federal territory;
The limited government inherited by Lincoln’s administration lacked the financing, the manpower, even the organizational capacity to undertake a major war.
The revolutionary nature of all this can scarcely be overestimated. On one hand, it suddenly overturned long-standing traditions concerning the role of the national government in the economy.
Washington chartered hundreds of banks, dictated how they would structure and place their reserves, and even issued a national paper currency for the first time since the ratification of the Constitution. In addition, Congress enacted a federal income tax in 1861, also for the first time, extending the touch of the central government to individuals
It was not a party platform but a war for national survival that drove this process, and radically redefined what Americans accepted as legitimate federal activity.
The idea of “fiat money” (as economists call irredeemable legal tender) offended economists and businessmen, who believed that it would spark disastrous inflation. Old Jacksonians saw it as a dangerous step that opened the economy to political corruption and manipulation.
an emerging industrial bourgeoisie was not so much a new class, perhaps, as the triumph of a new outlook among the wealthy, one that had long existed but now came to the fore. It was an ease with the abstract economy, the intangible commerce of stocks and bonds and clearinghouse transactions, the impersonal corporations that began to supplant old family firms.
“We ought to find patriotism enough in our country to do something for it without everybody making money out of the funds of the government.”
Cynicism, of course, always seems to be the most sophisticated position to take; yet it is also the laziest (along with hero-worship, its direct opposite).
the board created an executive and finance committee, a tighter, more efficient group to act on behalf of the full board.
“The City Hall junta, like many other men, are smart in their own sphere, but children out of it,”
He intended to corner the market
When the income tax assessors drew up their lists that year, they found that the top 1 percent, a group of 1,600 families, earned 61 percent of the taxable income of Manhattan’s more than 800,000 souls.
Half a percent of the population controlled 61% of the Annual income.
Wartime inflation punished the city’s poor. Retail prices had risen 43 percent since 1860, and rents had climbed as much as 20 percent, but wages had increased only 12 percent.
Sound familiar?
Black Joke men sparked a citywide inferno known as the Draft Riots.
the incident demonstrated that Civil War-era corruption was far more complicated than the historical cliché of the rich buying off lawmakers; in this case, as in the previous Harlem corner, the officeholders abused their power to profit from the deliberate destruction of the value of a major corporation. Time would show that extortion by legislators and their hangers-on was as serious a problem as bribery by the wealthy.
three-card-monte
What Vanderbilt did was set general policies, as well as the overall tone of management. Any corporation has an internal culture shaped by the demands, directives, and expections that rain down from above. The Commodore created an atmosphere of efficiency, frugality and diligence, as well as swift retribution for dishonesty or sloth.
Each generation flatters itself with the thought that it is the vanguard of the new, sweeping away the stodgy ways of the past.
instead of seeking to make money out of the road in contracts and side speculations, he invests largely in the stock, and then endeavors to make the road pay the stockholders.”
“I manage it [a railroad corporation] just as I would manage my individual property. That is my notion, and the way I think a railroad ought to be managed,”
he never launched a war of aggression in all his years as a railroad leader; always he practiced diplomacy first, fighting only as a last resort.
The surprising truth is that Vanderbilt fought one of the greatest business conflicts in American history purely out of a desire for revenge.
Of all the forms of stress that afflict human beings, one of the worst is loneliness, especially after the loss of a spouse.
Wealth, like mass, exerts a gravitational pull, attracting power, social recognition, and more wealth. With each fresh accumulation, its pull grows stronger.
VANDERBILT RATHER LIKED his enemies. For decades, he had deftly switched from enmity to friendship, embracing Drew, Morgan, Garrison, Corning, and others once their wars ended. He never took business disputes personally.
His other foes kept silent about secret business battles, but Fisk and Gould freely told the press every grimy detail, which infuriated the Commodore.
he defended himself in terms that matched those of his critics.
In striking down Lake Shore he inadvertently contributed to Black Friday, one of the greatest panics in American financial history.
To avenge himself upon Lockwood, and to bring the Lake Shore Railway into the Central’s orbit, he had gambled with the economic health of the national economy.
Twain saw a culture grown vulgar, selfish, materialistic, and corrupt, and he didn’t like it. Like many of the Civil War generation, he viewed his times with a cynical eye and, underneath his ironic tone, a poignant sense that America had lost its virtue.
He did not attack Vanderbilt’s fortune in its own right; rather, he went after the way it warped the rest of society—for it was corruption, not riches, that offended him.
Charles F. Adams Jr. proclaimed, “Universal suffrage can only mean in plain English the government of ignorance and vice.”
a remarkable prototype of that rough-hewn American character which asks no greater original capital than is afforded by that independence of thought… that irresistible resolution in executing great projects, which can carve the way of every humbly born American boy to national eminence.”
Democracy must have its discontents, or it would not be democracy.
The key to his survival would be the nature of his pride. It never became complacency, and, great as he was, he paid heed to the world around him.
As Scott aggressively acquired line after line, he found it more and more difficult to make them all pay; by contrast, Vanderbilt insulated the Central from the weaknesses of its connections—even from the Lake Shore, which he largely owned.
People who live too much on credit generally get brought up with a round turn in the long run. The Wall street averages ruin many a man there, and is like faro.
The Panic of 1873 started one of the longest depressions in American history—sixty-five straight months of economic contraction. In the next year, half of America’s iron mills would close; by 1876, more than half of the railroads would go bankrupt. Unemployment, hunger, and homeless-ness blighted the nation. “In the winter of 1873–74, cities from Boston to Chicago witnessed massive demonstrations demanding that authorities ease the economic crisis,” Eric Foner writes.
The expanding, increasingly efficient railroad network had created a truly national market. The fates of farmers, workers, merchants, and industrialists across the landscape were tied together as never before. New York had cast its financial net across the country, which meant that credit flowed to remote regions far more easily than before—but also that financial panics affected the entire nation.
“At one time $6,000,000 of Mr. Vanderbilt’s own private fortune in Harlem and New York Central stock was pledged for debts of the Lake Shore road. True, the road was one which could and did repay him; but his wealth was the only thing which enabled him to save it from going to protest.”
He epitomized the Jacksonian ideal of every man being free to compete and rise on his merits, and that ideal remains a bright thread in the fabric of American thought. Yet his unprecedented wealth—and with it, unprecedented power—signaled that inequalities were exploding in size with the new corporate economy.
While Being a self made man, CV also reached a stratospheric height that distorted his connection to family. He subordinated his family, some of them resented it, others prospered
and respected, and so it was with Vanderbilt. His fellow businessmen appreciated his forthrightness, capability, honesty, dignity, sense of honor, and force of personality.
