Chapter Fourteen

THE ORIGINS OF EMPIRE

Few men in wartime New York were better known than Cornelius Vanderbilt—or so often misjudged. Thousands recognized him as he drove his fast horses through the streets each day, sitting erect on a light racing wagon with reins in hand, long white sideburns flowing down his cheeks, keen eyes squinting ahead. The fastidious Commodore always dressed in black and wore a white cravat typical of a passing generation, now affected largely by clergymen. One afternoon he left his office on Bowling Green and caught a stage headed north on Broadway. In front of him sat two young men dressed in the street finery favored by New York thugs. “I looked them over rather sharply, as I am accustomed to do,” Vanderbilt recounted to a friend. One of the pair turned and looked back; he did not recognize the dignified old man in the white cravat, but assumed that he was a minister of the gospel. “I suppose you think I'm going to hell?” the rough asked. “No,” Vanderbilt replied. He told the youth (as he later related) that “he seemed pretty badly off just then, but he appeared to have good stuff in him, and I guessed he'd come out all right.” The stranger turned to his friend and exclaimed, “Universalist, by God!”¹

Individuals far better informed than this one came to wrong conclusions about the clerical-looking Commodore (who spent very few of his many days in any kind of church, Universalist or otherwise). They still do. Even in retrospect, it is difficult to appreciate the true dimensions of his wealth and the power it gave him. The American economy grew rapidly but unevenly. New York towered over the rest of the developing nation as would be impossible in later centuries; wealth concentrated there, and financial markets matured there, far faster than anywhere else. It was the preeminent American port, the preeminent banking center, the home of the preeminent stock exchange. Securities held in New York could be liquidated or hypothecated rapidly. Vanderbilt was not only far richer than most rich men, he also occupied a strategic location in which he could use his fortune as a lever to move even greater masses of wealth and personally affect the economy nationwide.²

Vanderbilt himself struggled to describe his role as his financial capacities grew. “I… am connected with shipping,” he vaguely told a Senate committee on December 30, 1862. Then he felt obliged to add, “I run steamship lines.” Then he qualified again, observing, “Some would call me a merchant.” In some ways, this old-fashioned and highly general term remains the best description. Shipper? Financier? Industrialist? Railroad director? He was all these things. He guided the Atlantic & Pacific Steamship Company, and managed its strategic relations with Pacific Mail. His engine works and shipyard produced pistons, boilers, and steamers. He purchased half a million dollars in Connecticut state bonds. He served on the boards of the Harlem, Erie, New Jersey Central, and Hartford & New Haven railroads.³

The very diversity of his activities makes it difficult to understand his true significance, for it is often impossible to know where he placed the lever of his fortune. He made an art out of hiding his hand, having risen with the original generation of New York and New England's smart men, the wily pioneers of free-for-all commerce who knew how to speak and say nothing. He would make this connection himself in dodging an inquiry from a New York State Assembly committee. “Let me answer your question by asking another,” he would say, “as the Yankee does.”⁴

In 1863, much of the mystery would disappear. That year he embarked on a new course, the last in his long business career. The results would cast a shadow over millions of people, if not the entire nation; indeed, Vanderbilt's historical importance would become apparent to all, rising above his furtive methods like a mountain peak above the clouds. In step with an increasingly specialized economy, he would concentrate his resources in a single industry, the most important of the nineteenth century: the railroads. So great would be his impact that a leading business journal could eulogize him, without fear of contradiction, as “the most striking figure in the American railroad world.”⁵

Vanderbilt was striking enough already, with his vast wealth and control over major steamship lines, but his transformation from Commodore to railroad king would give him a significance that was cultural as much as economic. He would lead a revolution in American life, one that was terribly obvious to his contemporaries but perhaps less so to later generations. The lingering image of post-Civil War railroads is one of construction—think, for example, of the Chinese and Irish work crews who laid the transcontinental lines through mountains and wilderness—and it is an image with a solid basis in fact. After a wartime pause in new building, U.S. railroad mileage would more than double, from about thirty thousand in 1860 to seventy thousand by 1873, as the loose net of tracks that overlaid the American map became a fine mesh. But Vanderbilt would play little role in this process. Though he would build critical (and lasting) new infrastructure, he would lay few new lines and take no interest in the West, where construction through virgin land was most pronounced.

Vanderbilt, rather, would pioneer the rise of the truly gigantic business corporation. This process would leave an imprint on American society every bit as deep as the expansion of the physical railroad network itself. His role in this revolution would prove more startling in his own day than the mere fact of his riches. As the Railroad Gazette would write of him in 1877,

His early career as a railroad manager [i.e., starting in 1863] was distinguished by a series of bold, startling, revolutionary measures which attracted universal attention and had an effect reaching far beyond the lines and companies with which he dealt directly. The Vanderbilt era was the first great era of consolidations. That it was created by Vanderbilt would be too much to say; but he was the first great actor in it, and apparently hastened its coming.⁶

Consolidations. The word seems quaint, an old-fashioned version of the eye-glazing phrase “mergers and acquisitions,” yet it was fraught with portentous meaning in the 1860s. Vanderbilt's consolidation of one railroad company into another into another into an empire would mark a profound change in the nature of the corporation itself. As late as the Civil War, a strong sense lingered that corporations were public bodies, chartered to channel private capital toward public ends—specific, limited ends. Early business corporations even operated under time constraints. The Richmond Turnpike Company had expired on schedule, and even the New York & Harlem Railroad had had to renew its charter in 1859 before it lapsed. Most corporations had come into existence during the life-spans—indeed, the active careers—of their stockholders and managers, who did not necessarily imagine that their companies would outlast their own involvement in them. The Pacific Mail directors had tried to sell out to the Commodore in order to pay off the stockholders and shut down permanently.

Starting in 1863, Vanderbilt would progressively destroy the last vestiges of this long-held conception. Drawing on his extensive experience with the corporate form, he would strip it of its remaining public character as he finished the long process of converting it into a vehicle for private gain alone. His consolidations would submerge older railroad companies into a behemoth to serve the requirements of efficiency and profitability; in so doing, he also would drown the original public purpose of these companies' charters, to serve specific localities over well-defined routes. Often these consolidations would prove highly beneficial for the public—though only incidentally because it was good business. And his takeovers would heighten the growing distinction between corporations and their flesh-and-blood shareholders and managers. He would separate companies from the individuals originally associated with them, transforming them into impersonal and permanent, or very long-lived, institutions.⁷

Historian Alfred D. Chandler Jr. famously referred to the rise of the large business enterprise—a rise led by the railroad corporation—as a “managerial revolution” in American business. The demands of a geographically sprawling railroad with thousands of employees necessitated the creation of a bureaucracy of salaried, professional managers; these managers imposed a “visible hand” on economic decisions that remade the smaller, simpler market economy of old. By creating one of the largest railroad companies the world had ever seen, Vanderbilt would directly shape this business transformation. But the sheer size of his enterprises would give him a larger cultural significance. He operated on an unprecedented scale, amassing some of the first interstate corporations in American history, which gave him a chokehold over the nation's arteries of commerce. The gigantic entities he helped pioneer would overshadow forever after the old landscape of individuals and small partnerships. They would also infuse American life with an institutional, bureaucratic business culture—what scholar Alan Trachtenberg calls the “incorporation of America.”⁸

Vanderbilt would emerge as the first great icon of this revolution. This self-taught native of the eighteenth century would masterfully play the instruments of the corporation to gather unparalleled power in his own hands and contribute to a stark polarization of American society. Yet his ascendancy can hardly be dismissed as a curse. He would also create vast new wealth and forge one of the most efficient, lowest-cost transportation routes in the world, speeding American economic growth and opening new opportunities for investors and consumers. His contemporaries would have good reason to mark his rise as the start of a new era—and to give his name to it.

How did he do it? Why did he do it? Observers typically have accepted the simplistic formula that he suddenly realized that railroads, not steamships, were the technology of the future.⁹ In truth, what he started in 1863 emerged naturally from his earlier career. He had been embroiled in railroads since the 1830s, served as the Stonington's president in the 1840s, and his involvement in the industry had increased in the 1850s. But too often writers have credited him with deep-laid plans of conquest, a systematic scheme to build an iron Rome.¹⁰ There is another interpretation that better fits the unknowability of the future before it becomes the past, an interpretation more complimentary, perhaps, of the Commodore's abilities. Though he was an excellent planner, he was still more accomplished as an improviser, a master of the unpredictable rough-and-tumble of business combat. He possessed a keen eye for strategic opportunities in his opponents' tactical errors, for turning successful skirmishes into full-blown campaigns. When he first started, he had little inkling of what he eventually would accomplish.¹¹

The irony of this, the most successful phase of Vanderbilt's career, is that he would resist each of the battles that brought him to new heights of wealth. He would consistently pursue diplomacy with connecting railways, accepting war only as a last resort. Contented with his realm, he would conquer a neighbor in order to eliminate its harassment of his domain. New conflicts with new neighbors would follow, leading to further conquests, until he gained a vast, consolidated kingdom—much as the Caesars pressed their boundaries forward to pacify the barbarian tribes that always lay beyond.

These epic wars of conquest began humbly, with what might be called a hobby. In 1863, he cocked an eye at the most bedraggled railroad in New York: the Harlem, the benighted line that he twice had rescued from bankruptcy. His initial interest in the company need not have concerned the public at all, except that it led him into a conflict with one of the great perils that plagued American democracy in the 1860s, that of government corruption. The elected officials of New York flapped around what they assumed to be the mere corpse of a company, each looking to tear off a piece for himself. Vanderbilt would not let them. The origins of his empire, then, lay not in his godlike foresight, but in his determination to punish the greed of a few foolish men.

ON FEBRUARY 16, 1863, Cornelius Vanderbilt wrote to former governor Edwin D. Morgan to decline a request to stand as an incorporator of a hospital for invalid soldiers. “I feel it a duty I owe myself to keep my name aloof from any association with public acts granted by legislative bodies,” he wrote, “inasmuch as whenever my name has appeared before such bodies, without any regard to the justice of the object, it has been looked upon as a speculation, and with an eye of jealousy.” Vanderbilt's concern for his personal honor is striking, and his wish to reduce his visibility even more so. “At this late day,” he added, “I am desirous of keeping myself aloof from any public transaction of any kind or nature.”¹²

This sentiment typified the Commodore's attitude toward both charitable bodies and his public image; and perhaps it reflected his desire to avoid any connection with the disreputable state legislature. But this attempt to distance himself from speculation would prove highly ironic. Even as he dictated this letter, the current of events carried him into an operation that would launch his career as a railroad tycoon through the greatest speculation to date.¹³ It would center on the New York & Harlem Railroad.

“It is not so big a road,” Vanderbilt remarked six years later. “It is a small thing, with a little capital of only about $6,000,000” ($5,772,800, actually). A small thing! Only in comparison to other railways could a business worth several million in the 1860s be considered “not so big.”¹⁴ And only in comparison to the Commodore's fortune, of course. But Wall Street agreed with his judgment, on the grounds of Harlem's potential as well as its size. New York State's two largest railroads dwarfed it, the Erie having a capital stock of just under $20 million at par, the New York Central just over $24 million. Its business suffered grave weaknesses, for it carried almost no through freight from the West, apart from some cattle, due to steep grades north of Manhattan. Even though Vanderbilt had helped reduce its floating debt, it still had trouble meeting expenses. “Of all the active railway shares dealt in at the board, the Harlems probably possess the least intrinsic value,” wrote the New York Herald on March 25, 1863. “The net earnings last year—which was an extraordinarily good one for all roads—were $473,401,” about equal to the interest on its $6.7 million in bonds. “No one believes that the road can, for ten years to come, pay anything” in dividends.¹⁵

The Harlem was a peculiar line in many ways, in part because it had been chartered in 1831, when railroads were still regarded as an unproven experiment. For example, the par value of each share was set at $50, half the standard $100 for an American corporation (though the press still reported changes in its price as 1 “percent” for each dollar, as with other stocks). It was a hybrid road, both a horse-drawn streetcar line and a steam-locomotive railway. Trains ran down the Harlem 130 miles from Chatham Four Corners or came in from New England over the New York & New Haven Railroad, crossed the Harlem River on a bridge, and rolled down Fourth Avenue to Forty-second Street. They entered a tunnel dug under Murray Hill (and covered over with parks, all at the expense of the railroad), rolled out ten blocks south, and continued into the Harlem depot at Twenty-sixth Street, a structure with crenellated walls that rather resembled a castle. There the trains interchanged passengers with the horse-drawn streetcars, which went as far down as the city hall via the Bowery. For years the company had fought city ordinances, passed at the urging of wealthy Murray Hill residents, to stop the locomotives north of the tunnel. Fearing an uptown creep of this sentiment, on April 16, 1859, the Harlem had secured from the state legislature the right to use steam engines as far south as Forty-second Street (though it was forced to haul its cars between the depot and Forty-second Street with horses).¹⁶

This undersize hermaphrodite road attracted the Commodore's renewed attention amid the Civil War boom in railway shares on Wall Street. “In 1862 he was known to be buying a large amount of the stock,” recalled William Fowler. According to rumor, Vanderbilt foresaw a great day in Harlem. “The idea that he was buying it for investment seemed intensely funny to the brokers,” Fowler wrote. Vanderbilt's purchases had no effect on the negative view of the railroad among financial men, even though he drove the share price from a few dollars a share to over 50. Most brokers said “the certificates were only good for wrapping paper.”¹⁷

Wall Street was at all times a waterfall of rumors, few of them accurate. In this case, the tales muttered over fillet of sole at Delmonico's proved to be true: Vanderbilt was, in fact, buying because he believed in the Harlem's prospects. “I recollect… hearing him say that this railroad property, if properly managed,” Horace Clark later remarked, “will be as good property as there was in the state.”¹⁸

What did he see in it that no one else did? From the very beginning of Vanderbilt's career, he had focused on transportation routes that had decisive strategic advantages over competitors. The Stonington railroad, for example, ran from a convenient port inside Point Judith over a direct line to Boston with easy grades that he made into the fastest and cheapest to operate at the time of his presidency. Likewise, the Nicaragua route to California had possessed a permanent superiority in coal consumption over Panama, thanks to shorter steamship voyages. The Harlem's fixed strength was its penetration of the center of New York, down Fourth Avenue and through its streetcar line. This was something that no other railroad possessed—not even the only other steam railway to enter Manhattan, the Hudson River, which was restricted to the far west side. The Harlem provided the only portal for direct rail traffic with industrial New England, a rich trade that Vanderbilt knew well from his directorship of the Hartford & New Haven. And, as with the Stonington, he moved in after the company's debts had been starkly reduced. Once in control, he could reduce the Harlem's operating costs (a science he practiced most effectively), and then he thought it would prove very profitable.¹⁹

But there was something more personal driving Vanderbilt's interest in the Harlem. Perhaps the most important element in his character—even more than his economic calculation—was pride. We know he prized his reputation (as shown by his letter to Governor Morgan, among many other examples) and cherished his status as a man of honor. Most of all, he took pride in his abilities. Competitive to the core, he had spent his life outdoing other men, whether sailing New York Bay or navigating the Nicaraguan rapids; fighting with his fists or waging rate wars; racing his steamboats or running his four-footed trotters; designing steamships or planning sprawling enterprises. Now he would show the world that he could revive the most necrotic of companies. “Here is a man,” the Commodore would remark in 1867, “who has taken a road when its stock was not worth ten dollars a share, and had not been for years. He has had a little pride; he said he would bring up that road, and make the stock valuable.”²⁰

Of course, Vanderbilt's pride mattered little to anyone else. He had been an important Harlem stockholder for almost a decade, and his slowly increasing stake changed nothing for the public (except those few who also owned stock and saw the value rise). But his purchases led him into a confrontation with one of the great evils that worried civic-minded New Yorkers: the corruption of their government.²¹

During the Civil War, Americans began to fear that rampant corruption threatened democracy itself. The head of the New York Custom House alone could scoop in as much as four times the salary of the president (which, at $25,000, was many times larger than that of railroad presidents or other extremely well-paid men). As the federal budget grew, the scope of graft seemed to swell as well. Profiteering off military contracts seemed to run rampant, particularly under Lincoln's first secretary of war, Simon Cameron, who did without competitive bidding. Manufacturers delivered cheap, flimsy shoes and uniforms made of recycled wool, or “shoddy,” that soon fell apart. Conflicts of interest abounded as businessmen filled new government posts; for example, Thomas A. Scott, the superintendent of the Pennsylvania Railroad, served as assistant secretary of war with jurisdiction over military transportation.²²

Crooked dealing within the federal government seemed almost tame compared to its rapacity in New York. George Templeton Strong, like many, complained of “our disgraceful, profligate legislature.” Harper's Weekly reported late in 1863, “Last winter, it became evident to all discerning observers that a combination of adventurers had bought up a majority of both branches of the Legislature.” And city government looked worse. At war's end, the Union League Committee on Municipal Reform would admit a “longing for a temporary dictator who would sweep these bad men from our municipal halls and cleanse this Augean stable of its accumulated corruption.”²³

As Vanderbilt steadily purchased Harlem stock, the company fell afoul of a past master of bribery, one of the Commodore's oldest enemies, George Law. New York's merchant community smelled sulfur wherever he went. “It is impossible for outsiders to estimate his worth, & it is doubtful if he can do it himself,” R. G. Dun & Co. reported in 1859. The next year it added, “He is reported to be sharp & over-reaching in his transactions & dealt with accordingly.” He had spread his money freely in the fallow fields of Washington during his years in the U.S. Mail Steamship Company and the Panama Railroad. Now he devoted himself to transportation in Manhattan, with a stake in various ferries and the Eighth Avenue Railroad, a horse-drawn streetcar line, so his bribes flowed upstream to Albany²⁴

Sometime around March 1863, Law reportedly began to twitch and tweak the state legislature into granting him a charter for a streetcar railroad down Broadway. “Reportedly” is as conclusive as any account can be; though the press blamed him for pushing this bill, direct evidence of his involvement is hard to find.²⁵ But no doubt exists over the furious reaction that erupted in late April when Manhattanites learned that the most famous avenue in America might be bound with iron rails. As the bill advanced toward passage, a long list of New York's patriarchs—among them William B. Astor, Moses Taylor, Peter Lorillard, and Royal Phelps—signed a petition to the new governor, Horatio Seymour, to protest “bestowing a franchise of immense value upon individuals, many of whom are unknown.… Its effect will be to injure immensely if not almost destroy the most beautiful thoroughfare on this continent.” The New York Herald declared that New Yorkers were “wonderfully unanimous” in “disgust and anger at the shameless corruption of the Albany scheme.”²⁶

One might well wonder why the state should intervene in a purely municipal matter. The answer is that the Broadway bill, and the corruption that surrounded it, reflected a long-standing struggle for power between city and state, and within the Democratic Party. In 1857, in an effort to weaken then-mayor Fernando Wood, the Republican legislature had passed a series of measures to strip New York of authority over its own affairs. This had strengthened Wood's Democratic opponents more than the city's Republicans, as one of his leading rivals, William Tweed, gained an independent power base in the enhanced New York County Board of Supervisors. By 1863, the city's Democratic Party had divided into three fiercely alienated factions: Tammany Hall, Wood's Mozart Hall, and a splinter group led by former U.S. attorney John McKeon. Even Tammany itself was split between Tweed's crowd and the wealthy circle around Horace Clark, Augustus Schell, and August Belmont.²⁷

The “George Law” bill threatened to further erode the city's power over its own streets, and deny it any revenue from a potentially lucrative franchise. City hall, torn by its internal feuding, looked unlikely to come up with an effective response. But there was one force that could unite the bitterest enemies in New York: money.

Someone conceived a plan to have the city preempt the Law company, by granting the Harlem the right to run a streetcar line down Broadway. If the city fathers must have a Broadway railroad, they thought, they should at least keep control of it—and its proceeds. According to Harper's Weekly, the aldermen and councilmen demanded that, in return for this gift, the Harlem pay roughly $100,000 in bribes. (“We don't pretend to know exactly,” Harper's wrote.) What's more, rumors began to fly about unusual purchases—and purchasers—of Harlem stock. “Men with strongly Celtic faces were seen on Wall Street,” recounted Fowler, with the unblushing anti-Irish prejudice of the day, “sixth-warders by the cut of their jib, and said to belong to the Ancient and Honorable Board of Aldermen.”

On April 21, this farce turned into slapstick when a deputy sheriff appeared at a meeting of the aldermen, bearing an injunction on behalf of Broadway's stage and omnibus lines. “He was ordered to retire,” the New York Herald reported, “but not seeming inclined to go, the President directed the Sergeant-at-Arms to remove him.” Once the deputy had been wrestled out and the door locked, the honorable gentlemen voted to give the Harlem the Broadway streetcar franchise. Two days later the railroad's workmen began to lay tracks. Meanwhile the “George Law” company went to work on another section of Broadway, in anticipation of victory in the well-greased legislature.²⁸

Even with General Grant attacking Vicksburg from the rear, with General Joseph Hooker in motion against Robert E. Lee, the people of New York could talk of little else but the battle of Broadway. “The coup d'etat of the Common Council” was “the great theme of conversation in the city yesterday,” the Herald reported on April 24. “The deepest interest was expressed by all classes, and a high state of excitement prevailed in Wall Street, about the City Hall, and around the newspaper bulletins.” Finally a fresh injunction halted both sides. Strong wrote that the “only visible sign” of the Harlem's Broadway line “is a strip of lacerated pavement between 13th and 14th Streets, and a few sleepers and rails lying out in the rain.” Then Governor Seymour vetoed the George Law bill. The city—and the Harlem Railroad—had won.²⁹

Where was the Commodore? True to his word, “at this late date” he chose to keep “aloof from any public transaction,” particularly the mass corruption of New York City and State. Though he held a seat on the Harlem board, he did not bother to attend meetings with any regularity until the beginning of May (though Horace Clark helped fight the George Law bill in Albany). The first overt sign of Vanderbilt's intentions came on May 13. With the Harlem's annual election five days away, he asked Erastus Corning, president of the New York Central Railroad, to serve as a director on the new board.³⁰ (Corning declined.) On May 18, Vanderbilt swept the election, winning directorships for himself and his circle, including Clark, Daniel Drew, Augustus Schell, and a vice president of the Bank of New York named (appropriately enough) James H. Banker. The next day the board unanimously elected the Commodore president.³¹

The final phase of the Commodore's career now commenced. If the Harlem was “not so big a road,” it was a beginning. And the measures he enacted upon assuming power set the pattern for what he would do with every railroad that later fell into his hands. “Mr. Vanderbilt replied that he would accept the office of President of the Co. upon the condition that he receive no compensation for his services,” the secretary recorded, “& that the Board appoint a vice president who shall discharge the executive duties of the office.” It was a declaration of a sweeping new policy of reform: he would save the company every penny—including the president's $6,000 salary—but he would not be an operational manager. Rather, he would be a railroad leader, a distinction critical to understanding his role.

The board ratified his terms, of course, and elected William E. Morris vice president. Other reforms appeared in swift succession. The same day the board created an executive and finance committee, a tighter, more efficient group to act on behalf of the full board. It consisted entirely of Vanderbilt's assistants and allies: Clark, Schell, Banker, A. B. Baylis, and John Steward. The committee promptly restructured the company's debt by issuing $6 million in new consolidated mortgage bonds “for the liquidation, adjustment, & settlement of all debts & liabilities of the company.” In a stark departure from past expediency, the bonds were not to be sold for less than par. It was a bold decision given the railroad's miserable reputation.³²

By emerging from the shadows to publicly take charge of the Harlem, the Commodore staked his prized reputation on his ability to revive the ailing railroad. His failure to save the Accessory Transit Company had cut deeply into his muscular pride; he would never let the same thing happen again. But this personal project immediately came under attack. The two tales of Harlem—the comedy of public corruption and the heroic saga of its rescue—now converged.

Just as Vanderbilt assumed the presidency of the railroad, the Harlem came under attack by New York's corrupt officials. Those officials were not its original enemies, the state legislators, but its erstwhile allies, the city councilmen. The elected elders of Gotham had bought as many shares of Harlem as their good credit would allow before giving the railroad the Broadway franchise. As soon as Governor Seymour vetoed the George Law bill, the price of Harlem soared to 105—nearly twice the market price of 58 recorded when this affair began. “In comparison with the thousands thus made in a day or two,” Harper's declared, “street-cleaning schemes, by which a few hundreds were filched, or the sale of votes at $100 a piece, seemed petty and contemptible.” But their grand profit in this most inside of inside trading led them, en masse, to a grave miscalculation: “If they could create, could they not also destroy?”³³

“The City Hall junta, like many other men, are smart in their own sphere, but children out of it,” Harper's continued. “In a sweetly innocent way, they ‘sold Harlem short’ all the way from 85—to which point the Commodore let it drop—to 72.” Their plan was simple: to sell Harlem short, revoke the Broadway franchise, then buy in at a profit after the price tumbled. They would use their official powers to destroy the share value of one of the city's largest companies and most important transit lines. The result would devastate the railroad's shaky credit as the price of its securities collapsed.

For Vanderbilt, the potential losses may have been less important than the attack on his pet project, the intended showcase of his abilities as a businessman. It was said that friends of the aldermen and councilmen informed Vanderbilt of the impending revocation of the Broadway grant. “Rumor states,” the New York Herald wrote, “that the President of the Company, Commodore Vanderbilt, warned the members of the Council of the folly of their trick, and predicted that they would lose more than they would make by it.”³⁴

On June 25, the battle of Harlem began. The price began the day at 83 ¼, but orders to sell poured out of city hall. At four o'clock, the board of councilmen voted to repeal the Broadway grant, and Harlem fell rapidly to 72½ at the Open Board. But the Commodore had laid a trap. He intended to corner the market—to buy every share offered by the brokers working for aldermen and councilmen, even if they surpassed the total in existence. When the short-sellers went into the market to buy shares in order to deliver them to Vanderbilt's brokers, they would find none—and still less mercy.

The corner was hardly a new maneuver on Wall Street (Vanderbilt may have carried one out in late 1852), but the Commodore proposed to conduct this one on a far larger scale than ever before. The dangers were immense. He had to buy on credit, for he had to buy quickly. Anything short of complete victory would prove disastrous; he had to control all the shares or he would be unable to extort money from the short-sellers. But Vanderbilt, as Lambert Wardell later explained, “was a bold, fearless man, very much a speculator, understanding all risks and willing to take them.”³⁵

On the morning of June 26, news of a Confederate invasion of Pennsylvania filled the pages of the newspapers. On Wall Street, nervous traders expected Harlem's rapid retreat after the repeal and the losses of the night before. “Instead of declining, however, it advanced, rather to the astonishment of the shorts,” reported the Herald. “It rose today to 97, a difference rarely witnessed in a single day and a more severe punishment than the bears have suffered for some time.” Vanderbilt's credit stretched as his brokers bought and bought, fighting the bears who sold in a desperate attempt to break down the price. Some of the short-sellers panicked and borrowed stock to deliver (rather than buy in at a loss); they paid interest of as high as 2 percent per day for its use. Still Harlem rose, to 101½ on June 27, then 106 on June 28. “The bear campaign in Harlem proves the most disastrous on record,” the Herald observed.

As Harlem marched upward, the bears realized that they were borrowing stock, through third-party brokers, from Vanderbilt. He had slyly lent out his own stock for delivery to himself, to both fool and squeeze his opponents. Those opponents were cornered; they could not fulfill their contracts by delivering the stock they had promised. Each day that the situation persisted, they paid interest. “It is understood that the short sellers have acknowledged their defeat, and endeavored to make terms with their triumphant antagonists without success,” the Herald wrote.³⁶

The “triumphant antagonists,” of course, were Commodore Vanderbilt and a tight clique of friends and advisers who wisely followed his directions. He had directed his campaign from his office at 5 Bowling Green without ever going near Wall Street, ruthlessly gambling his fortune on complete victory. It was a chilling display of nerve. According to Harper's Weekly, the councilmen called to beg for mercy, and the Commodore graciously replied that “he knew not who had sold the stock he had bought. If the gentlemen present were the sellers, he feared they had parted with valuable property at a low price. For his part he didn't see that he had had, or was likely to have, any dealings with them; and wished them a very good morning.”

For New York's famously corrupt councilmen, Vanderbilt's vengeance proved a grand humiliation. He had caught them in their game of twisting public power to private ends, and drove them to the brink of bankruptcy. They “slunk back to Wall Street” and found that Harlem had risen $2 per share. Even more devastating, Harper's added, was that “the public had come to understand the game.… No member of the City Hall party could show himself in public without exciting a roar of laughter.”³⁷ Finally Vanderbilt granted a (stiff) price to let them out of their contracts. On June 29, the humbled Common Council restored the Broadway grant. Vanderbilt let the price down after he had squeezed the most he deemed prudent out of his foes. “It may seem anomalous to outsiders that Harlem should rise 30 percent on the repeal of the grant and fall on the repeal of the repeal,” the Herald wrote on July 1. “But people who sold the stock short understand the reason.”

Two days later the Union army at Gettysburg held the line against Pickett's charge. The battered Army of Northern Virginia retreated, leaving the battlefield to the Army of the Potomac. “A memorable day” Strong wrote on July 5, “even if its glorious news prove but half true.… This may have been one of the great decisive battles of history.” So too on Wall Street, if the reporting was only half true. Vanderbilt enriched himself by forcing greedy men to pay for selling him what was his all along.³⁸

The Harlem corner proved significant in many ways. For one, Vanderbilt's punishment of the famously corrupt city government resonated with disgruntled New Yorkers, especially the elite who resented the rise of the Irish to office. For another, the sheer volume of money in play attracted unprecedented attention to Wall Street. Some were charmed by the romance of this financial warfare; others were alarmed that the public highways should be gambled in financial markets that few Americans fully understood. Perhaps most important, the corner greatly increased Vanderbilt's stake in the Harlem Railroad. In a typical corner, the victorious bulls would try to unload the stock they had acquired; in this case, Vanderbilt held on to many of the additional shares he had bought, lifting his official holdings from less than one-tenth to almost one-third. He had pursued the corner to avenge himself, but it may have led him to make an even more serious commitment to the railroad. It transformed the Harlem into the foundation of his railroad kingdom.³⁹

In July, the annual wave of heat and humidity and dirt and stench rolled over New York. It was time for Vanderbilt to move on, as he did every summer, to Saratoga. His victory secure, he could remove himself two hundred miles to the Springs. Everywhere people declared that Gettysburg had effectively ended the rebellion. “My cheerful and agreeable but deluded friends,” Strong wrote in his diary, “there must be battle by the score before that outbreak from the depths of original sin is ‘ended.’”⁴⁰

MANY MYSTERIES SURROUND the Harlem corner. How much stock did Vanderbilt really keep in the end? How much did he make? Who were his collaborators? Perhaps most important, who were his enemies? The councilmen and aldermen? In the last case, this was petty individual graft. The famously corrupt Tweed Ring did not yet exist. Nor was it a Tammany Hall operation. Contrary to historical myth, Tammany had never been an all-powerful machine, especially not now, when it comprised only one wing of the Democratic Party⁴¹

Historian Mark Wahlgren Summers convincingly refutes the long-held idea that the Civil War gave rise to “exceptional rascality.” It was not corruption that was new, he writes, but the corruption issue—a fever for reform that would grow with the coming of peace. As we've seen, graft arrived on the American scene long before 1861; as Summers notes, the “argot of corruption,” with such terms as “borers,” “strikers,” and “dummies,” first emerged in the antebellum years. The source might be traced back to the Jacksonian revolution in politics, with the rise of professional politicians who treated elections and officeholding as a business. Some were simply greedy, but even the most public-spirited needed money to fund campaigns, partisan newspapers, and party rallies. As Tweed ascended to power in the months ahead, he would not pioneer graft, but rationalize it to serve the purpose of governing the decentralized, anarchic city. In that sense, the Common Council's bear raid on Harlem represented a transitional moment in New York's rich history of corruption—a frenzy of profiteering before the rise of the more systematic (but equally greedy) Tweed.⁴²

A more personal mystery surrounds Daniel Drew. The banker Henry Clews would later write in his influential memoir (Twenty-eight Years in Wall Street, updated later as Fifty Years in Wall Street) that “Drew was one of the great bears in this deal with the aldermen.” Clews and other Wall Street men of the 1860s depicted Drew as Vanderbilt's natural rival—the bear who fought the bull, a skulking fiend who undercut stock prices and refused to fulfill his contracts when he lost money⁴³ Unfortunately, Clews was a wildly unreliable rumormonger with a taste for the most colorful version of any story; his oft-quoted tales are mostly worthless as historical evidence. More than that, this dark picture of Drew was projected through the lens of events yet to occur. In 1860, by contrast, R. G. Dun & Co. had made a more nuanced report: “His stock firm stands high at the Board. Drew is pretty well liked & not very grasping in his disposition, but takes care that he gets his own. Altho he is [responsible], his contracts would be better interpreted in writing.”⁴⁴ He was a bit slippery, then, but not dishonorable—quite popular, in fact, and well respected. True, he had a taste for short-selling (his inside trading in Erie stock had come to light as early as 1857), but that did not make him Vanderbilt's enemy. No evidence exists to indicate a departure from their long years of close cooperation in business operations and speculation, let alone their friendship. “Uncle Daniel” was far more likely to have joined the Harlem corner.⁴⁵

A final enigma surrounds Vanderbilt's intentions, now that he controlled the Harlem. He had turned sixty-nine on May 27, an age generally associated with retirement—or death—rather than beginnings. He himself had written of “this late day” in his life. Yet he showed every sign of embracing his new role as chief executive despite his insistence on a vice president to run daily affairs. Over the ensuing months he would correspond with everyone from the Harlem's chief engineer to Edwin D. Stan-ton about everything from machine shops to individual locomotives.⁴⁶ His long-term plans, on the other hand, remain shrouded. More than likely, he had little notion of the epic wars to come.

THE HARLEM CORNER was perhaps the most spectacular sign of the vast quantities of wealth now being handled by the men of Wall Street. Vanderbilt kept his profits secret, but they surely ran into the hundreds of thousands of dollars. It was a harvest that reflected an increasingly stark polarization of society. 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. Were dividends (which were taxed at the source) included, that percentage would prove far larger. Department-store magnate Alexander T. Stewart earned $1,843,637 in 1863; when one of his clerks was promoted that year, he received a salary of only $500, and many clerks received as little as $300. 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. The resentment felt in such slums as Corlears Hook and Five Points began to boil.⁴⁷

On Saturday, July 11, a typically suffocating New York summer day, the lottery for the draft began, as mandated by the Conscription Act, passed by a Congress desperate for men to fight the increasingly costly war. At the corner of Third Avenue and Forty-seventh Street, “an area of vacant lots and isolated buildings,” as two historians of the city write, “the provost marshal read off names drawn from a large barrel.” Some of the 1,236 men drafted belonged to Black Joke Engine Company No. 33. Largely Irish and working-class, the firemen had always enjoyed an exemption from the state militia; being called up for federal service enraged them. On Monday, when the lottery was scheduled to resume, the Black Joke men sparked a citywide inferno known as the Draft Riots. Mobs stormed buildings and battled police; arsonists started fires from river to river, from Fiftieth Street to the Battery. The violence took a savagely racist turn. Rioters attacked black-owned homes and businesses, lynched black men and women, and ransacked the Colored Orphan Asylum on Fifth Avenue and Forty-second Street, shouting “Burn the niggers' nest!” Troops rushed back from Gettysburg; they charged barricades and battled lines of armed and organized civilians. By Thursday night, six thousand soldiers patrolled the smoldering city. On Friday, the omnibuses rolled once again.

A man could avoid the draft by paying a $300 fee, a provision that inflamed class tensions—indeed, that drove much of the riot's fury. “There goes a $300 man!” the rioters bellowed when they spotted (and attacked) a prosperous-looking fellow on the streets. “Down with the rich men!” they cried, as they looted fine houses on Gramercy Park.⁴⁸ But the Commodore did not feel their wrath, nor did he have any feeling for it.

The city's response was typically divided. The Republican mayor Opdyke had appealed for troops. Democrats came up with a more sympathetic and expedient solution. With Tweed's guidance, the county board of supervisors created a committee to pay for exemptions and substitutes for the poor. Governor Seymour, a Democrat, also convinced Lincoln to reduce New York's quota.

Somewhere amid this crisis moved Horace Clark and Augustus Schell. Along with August Belmont, they led the “silk-stocking sachems” of Tammany Hall, a faction of wealthy Democrats who eyed Tweed warily as his influence grew in the wake of the riot. The time would come when Clark and Schell moved openly against Tweed, whom they considered a dangerous demagogue; but for the moment, they devoted themselves to the service of the Commodore as he worked to reform the Harlem Railroad. They would rebel against him one day as well, with disastrous consequences for all.⁴⁹

ON AUGUST 20, 1863, a small, slender, reserved young man with a great black sack of a beard composed a letter on the stationery of the Rutland & Washington Railroad, addressed to Erastus Corning, president of the New York Central. “I was informed to day,” he wrote, “that a party in intent with the Hudson River [Railroad] clique had been made up for the purpose of purchasing controll [sic] of the NY. Central.” An “informant” in the office of the ring's leader, Leonard W. Jerome, had overheard a conversation among its members, “[and] I thought it proper to advise you.”⁵⁰

Curiously, the writer of the letter shared a birthday with Cornelius Vanderbilt, though he was born in 1836, making him only twenty-seven. A former surveyor and local historian from the heart of the Catskill Mountains, he had set up as a leather merchant in Manhattan, where he was not very popular. Recently he had purchased a large quantity of the securities of the little Rutland & Washington at a steep discount and had gone into railroading, albeit on a very small scale. His name was Jay Gould.⁵¹

Less than five years later, Gould would emerge as the most dangerous enemy of Vanderbilt's long life, but the plot that Gould now uncovered would bring them onto the same side. For Vanderbilt—only weeks into his presidency of the Harlem Railroad—Jerome's scheme posed a test: How would he conduct himself on the treacherous battlefield of New York's railways? The answer would prove surprising, given his reputation, but it would be characteristic of his career as a railroad executive. More than that, his handling of this plot spoke to the strategic geography of the nation's railways, a reality that would define the rest of his life.

If one word could describe the railroad system, it would be fragmented. By 1860, a total of 30,626 miles of track draped the American landscape; hundreds of companies made up that network, which had as many as seven different gauges (widths between tracks), from 4 feet 8½ inches (standard in New England, New York, and Pennsylvania) to 6 feet (used on the Erie Railway and some thirteen smaller lines). This confusion dated back to the origins of the system in the 1830s and ′40s. Rather like the old turnpike companies, railroad corporations had been created by the merchants of various cities and towns to funnel trade toward themselves. Local communities fiercely resisted the integration of the network for fear that business would roll right past them; they wanted breaks between railroads, despite the inefficiencies imposed on long-distance commerce. The original charter of the Erie actually prohibited it from linking to railroads that led into neighboring states. By the start of the Civil War, such legal restrictions largely had been eliminated, but the profusion of incompatible gauges and the fragmentation into scores of companies persisted, with consequent costs from “breaking bulk” (loading freight from one car into another) and outbreaks of hostilities between connecting lines.⁵²

In the 1850s, four giant railroads rose to dominance over these mismatched pieces. As early as 1854 they were dubbed the “trunk lines”—defined as the primary routes between the eastern seaboard and the West, reaching from the main Atlantic ports to the heads of river and lake navigation across the Appalachians. They were the Baltimore & Ohio, the Pennsylvania (often called the Pennsylvania Central), the Erie, and the New York Central.^*1 The latter two were New York lines, though the Erie now terminated in Jersey City The New York Central had emerged in 1853 from the consolidation of ten railways that paralleled the Erie Canal from Buffalo to Albany; it and the Erie were far larger, in capitalization and length, than any other line in the state.⁵³

It was the New York Central that overshadowed the smaller lines run by Gould and Vanderbilt. The Erie ran through barren mountains, but the Central connected a chain of agricultural and manufacturing centers from Buffalo to Rochester to Syracuse to Albany. From its terminus in the latter city it had a choice of three paths into Manhattan: Daniel Drew's People's Line steamboats, the Hudson River Railroad, or (through a short link) the Harlem. The Central's long-standing policy was to pit the three against each other to keep down costs. It routinely gave most of its New York-bound freight to the steamboats, except when ice closed the river during the winter; then it delivered to the Hudson River line. Very little ever went over the Harlem.⁵⁴

Vanderbilt sorely wanted the long-distance passengers and through freight that came from the West via the Central, no matter how little revenue he received. Unlike a steamboat and steamship line, a railroad suffered from high fixed costs. It was an immovable piece of infrastructure. Whether trains ran or not, the tracks, bridges, buildings, locomotives, and cars had to be maintained; conductors, engineers, firemen, and laborers had to be paid. At least two-thirds of a railroad's expenses remained constant no matter how much or how little traffic it carried. If the Commodore could get additional business, even at losing rates, it would improve the Harlem's outlook.⁵⁵

To gain access to that rich flow of freight from the West, Vanderbilt decided to pursue diplomacy with the Central. He made this choice as a matter of policy, but he liked and respected the Central's president, Erastus Corning, whom he hailed as “a man of business and a gentleman.” Corning, who was only a few months younger than the Commodore, also had risen to wealth through his wits. At thirteen, he had moved from Connecticut to upstate New York and set up as a merchant in Albany. Though he had served as the Central's president from its creation, he remained alert to his own interests, and ordered the railroad to buy its ironware from a foundry he owned. Corning was also a political power broker—a former congressman and leader of the state's Democratic Party (along with the Central's vice president, Dean Richmond of Buffalo). Corning had thin gray hair, a prominent lower lip, and large, dark, deep-set eyes. Clark and Schell knew him well; indeed, Vanderbilt took Clark with him when he opened talks with Corning in late summer. On September 16, Vanderbilt called on Corning again, and dispatched to him James Banker, who was emerging as a favorite subordinate.⁵⁶

Unfortunately for Vanderbilt, Corning believed the Harlem offered the Central few advantages. But then came Leonard Jerome's plot to oust Corning from the Central's presidency, offering the Commodore an unexpected opportunity for leverage.

Jerome, the younger brother of Wall Street giant Addison G. Jerome, exemplified the flowering of wealth on wartime Wall Street and the resulting flourish of conspicuous consumption. Strong derided as “a sign of the times” Jerome's “grand eighty-thousand-dollar stable, with the private theatre for a second story.” Social observer Matthew Hale Smith observed that Jerome became “the leader of fashions.”^*2 According to William Fowler, Jerome was “a tall man, fashionably but somewhat carelessly attired, having a slight stoop, a clear olive complexion, a tigerish moustache, and a cerulean eye.”⁵⁷

Jerome's belligerence, like Vanderbilt's diplomacy, was a response to the fragmentation of the railroad system. He had come onto the Hudson River board only recently, and he and his fellow directors resented the Central's custom of delivering its freight to Drew's steamboats. To solve this conflict, he organized “a large combination… to control NY Central RR affairs at the next election” in December, as banker Watts Sherman warned Corning, with the aim of “forcing the immense eastward traffic over the road of the [Hudson River],” according to Gould. The game began on October 20 when the Hudson River directors voted to loan Jerome $400,000 for his operation.⁵⁸

Vanderbilt had personal ties to both Corning and the Jerome brothers, but he calculated his strategic interests clearly and coldly. A takeover of the great trunk line by his rival, the Hudson River Railroad, would permanently deny the Harlem any through freight and passengers from the West. Furthermore, if Vanderbilt helped Corning he would put the Central's president in his debt. On November 11, Vanderbilt scratched a note to Corning in his own hand, a significant fact for a man who loathed writing. “Is their any feair of their success,” he asked, referring to Jerome and his allies. “I feal a little anxious, if I can be of any servis say so.” He wrote that he just had purchased a thousand shares, and had had a total of 5,250 transferred under his name. He offered to obtain “proxys” for many more. “If J. H. Banker ask you for information you can giv it to him he is true & will not deceive us this is certain,” he concluded—revealing how heavily he relied on the honey-smooth vice president of the Bank of New York. (As Watts Sherman told Corning, Banker was well known as Vanderbilt's personal agent. “He holds a position here of great influence in many quarters & is class in all respects.”)⁵⁹

On Vanderbilt's orders, Banker ferreted out information about Jerome's plot at brokers' offices and gentlemen's clubs. “They are making great exertions,” he wrote to Corning. “I believe they have gone to the extent of sending to Geo. Peabody & Co. to influence foreign proxies,” referring to the American banking house in London where many shares of key railroads, including the New York Central, were held by British investors. The fight for proxies (the right to the votes of those shares) often was more important than stock purchases, especially in a big corporation in which it was prohibitively expensive to buy majority control.⁶⁰ And the fight was fierce. The New York Herald wrote on November 19, “The excitement has now reached a pretty high point, and hard words are resorted to on both sides, instead of argument.”⁶¹

“I sea by the New York Times of this morning that the opposition has used my name” on their ticket of proposed directors, Vanderbilt wrote to Corning on November 20. The letter that followed constitutes a piece of found poetry, a free verse of the Commodore's approach to Wall Street's shadow warfare.

this is without athority

They do not understand how

I feal in this matter

I keep them in the dark

I in close you the two proxies

I tell Mr Banker to keep

you posted with what is

doing here & get all proxy

possible—let them say what

they will I want you to

understand I will have

nothing to do with them

in any form—over

I want you to feal that

you air at liberty to

use me in this matter

in any honorable way you

may think adviseable⁶²

Shrewdly, Vanderbilt declined Banker's suggestion that he stand for election to the board on Corning's ticket, for he wished to avoid alienating Jerome. Indeed, one week before the election, he met with Jerome in private to propose a compromise. “I don't believe it is worthwhile to say anything more about what we talked about last night,” Jerome wrote to him the next morning. “I appreciate your views and feelings in the matter and in the main think you are perfectly correct. But you see I have been acting with other parties.… I guess we had better let the thing take its course.”⁶³

Was that a tone of resignation? Certainly the Commodore now acted as if he were certain of Corning's victory—and of the material benefits to flow from it. On December 2, for example, he convened a special meeting of the Harlem's stockholders. They approved the sale of the unissued $2,139,950 in stock authorized by the corporation's charter to double-track and extend the line to Albany. The stated reason was to accommodate “anticipated connections with other railroads.”⁶⁴

It was a dangerous game, especially now that Vanderbilt had revealed his position—dangerous because Jerome not only had taken power in the Hudson River, but also in Pacific Mail, the partner of the Commodore's steamship line. But Vanderbilt was as sure of his strength now, at sixty-nine, as he had ever been. On December 7, with the Central election two days away, he went down to his stables and ordered a fast team harnessed to his racing wagon. He drove up Broadway to where it became Bloomingdale Road, and looked for a “brush.” He found one. He and a challenger rattled their rigs alongside each other at top speed, Vanderbilt whipping his horses ahead as he tried to edge out his rival. Then the Commodore's powers failed him, and the wagons cracked into each other. “His carriage was broken,” the Chicago Tribune reported, “and the Commodore thrown over the dashboard to the ground”—more specifically, “head foremost and violently to the ground,” according to the New York Times. “He was picked up insensible, but soon recovered consciousness, and was conveyed to a house nearby, where he received every attention.”⁶⁵

The Commodore overcame his injuries, but he could not go to Albany as he had intended. Corning and his party triumphed regardless. “No election of this kind has ever produced such an extended & warm excitement,” longtime Central director John V. L. Pruyn noted in his journal. “The result has been most gratifying.” Banker dined at Corning's house on December 11 as his patron's representative.⁶⁶

In the first crisis of Vanderbilt's new career as a railroad president, he had displayed masterful statecraft, adroitly turning a battle between two far stronger companies to his advantage. As soon as he was able to go to his office, he addressed a letter to Corning. “In consequence of the severe fall I had I have been prevented from visiting you,” he wrote. He then specified how the Central could repay him. “It would suit the Harlem Road to have your agents… make their tickets in such a form that the holder should be entitled to pass either, at his option, over the Harlem or Hudson River Rail Road. I can see no good reason why this should not be.” Even more important, he insisted that his man Banker should have a seat on the Central's board. Corning obliged by forcing the resignation of one of his directors.⁶⁷

Hardly had Vanderbilt secured Corning's hold on power than he attempted to collect the debt. But time would show how difficult that would be. The structural conflicts stemming from the fragmentation of the railroad landscape—the same problem that gave rise to this particular battle—would continue to grow. As the Commodore would learn, they had only one solution.

AT SEVEN O'CLOCK ON SATURDAY EVENING, December 19, 1863, a visitor who stepped out of a carriage in front of 10 Washington Place naturally might have paused in the cold winter air and looked up to the windows of the second floor. Scores of well-dressed people would be seen through the glass as band music drifted down from that nearly twenty-year-old mansion, twice the width of a regular brownstone. If a visitor proceeded up the stoop to the entrance, where one of the Irish servants would open the door, into the great hall where one's coat would be taken, then up the stairs and to the right, through the small library and into a large sitting room, twenty by twenty-five feet, the reason for all the revelry could be seen.⁶⁸

There, surrounded by the Commodore's milling siblings and children and grandchildren and nieces and nephews, was a table filled with gifts in celebration of Cornelius and Sophia Johnson Vanderbilt's fiftieth wedding anniversary. “There was a profusion of bracelets, porte-mounnales [sic], gold plate, exquisitely carved chess-men, superbly bound Bibles, brooches, and feminine ornaments of every kind,” wrote Mrs. Ann S. Stephens, a popular “authoress” and friend of the wealthy pair, who described the event for the New York Tribune. At the center perched the Commodore's gift to his wife, a miniature steamship crafted of gold, specially ordered from Europe. “It is twenty inches long and five wide, with exquisitely wrought revolving towers,” Stephens wrote, “which filled the room with fairy music whenever the delicate machinery was set in motion.” After a formal review of the ship, the bride presented the golden groom with “a collection of gold-headed canes [and] driving-whips, mounted in some costly manner.” Then the party descended to the main-floor parlors, where Stephens observed two striking sculptures: the marble bust of Vanderbilt, carved by Hiram Powers in Italy in 1853, and in the opposite corner of the room—in line with the stone Commodore's stare—a statue of the son of William Tell.⁶⁹

The family swarmed around Vanderbilt—dressed “in quiet black… unpretending and gentlemanly as he is everywhere”—and his wife, who wore “a head-dress of Brussels point, wreathed with gold-tinted roses and marabout feathers,” perched on her “thick and scarcely silvered curls,” as Stephens wrote. Sons-in-law all appeared: Nicholas La Bau, who had often served as Vanderbilt's attorney; George Osgood, a rising stockbroker who handled some of Vanderbilt's trades; Daniel Torrance and James Cross, who had helped to manage Vanderbilt's steamship lines; Horace Clark, growing ever more important as a lieutenant in all capacities; and Daniel Allen, the longest-serving of Vanderbilt's daughters' husbands. R. G. Dun & Co. would deem Allen “a high minded man of 1st rate [business] qualifications,” an accurate assessment of the man who had learned how to run a shipping line in Vanderbilt's office, only to stand up to him when Allen believed he had violated the Accessory Transit Company's charter. Now, after nearly thirty years in business together, they began to sever their ties. On November 27, Allen and Cornelius Garrison had incorporated the Atlantic Mail Steamship Company, with an authorized capital of $4 million. Within a year, the new corporation would buy out the old Atlantic & Pacific Steamship Company, along with Vanderbilt's remaining stake in shipping. The Commodore was leaving the ocean behind.⁷⁰

Despite the profusion and importance of sons-in-law, Vanderbilt's sons by blood—the Vanderbilt princes, as it were—stepped forward to take command of the celebration. The teeming family assembled in one of the parlors, in front of a grand floral display, and the murmur of conversation died away. “Here and there,” Stephens wrote, “half-hidden by flowing robes of gossamer, tulle, brocade, or velvet, a little fairy child would peep into the front ranks to learn why all the stillness had come on so suddenly.” Then the ceremony formally began with a speech by Cornelius Jeremiah.⁷¹

Corneil, the victim of disease and the degenerate gambler, had been the subject of concern and scorn poured out in unpredictable measure by his father. Once he collapsed in a severe seizure during a visit by his father. “While he was lying there,” recalled Corneil's servant, Margaret Massy who went to work in his Hartford house around 1862, “the Commodore came in, and, pointing his cane at the ship Vanderbilt, a picture in the room, said, ‘I would have given that ship to have cured Cornelius if it were possible.’” In the moneymaking frenzy that came with the war, Corneil had fallen back into his gambling habit. “Many times,” Jacob J. Van Pelt recalled, the Commodore “spoke very disrespectfully about him. He said he would lie and steal. He said, ‘I wouldn't let him go into my office if there was anything there he could lay his hands on.’” This mix of compassion and disdain—what Sophia called her husband's “stubborn inconsistency” toward his namesake—made Corneil self-conscious as he stood before the gathering. But his mother had always been his defender.⁷² And so, before his judge and his protector, Corneil began to speak.

“Kindred and friends,” he said, “the joyful yet solemn anniversary to which we have so long and anxiously looked forward, has at length brought us together. Let us be thankful that it finds so many links in our family circle still bright and unbroken.” After this auspicious beginning, Corneil's address took an awkward and painfully solipsistic turn. “For myself, having tested in a larger measure, perhaps, than others, the unwearying patience and unfailing love of those around whom we are gathered tonight,” he continued, “I feel sure that they will yet remain with us for many years, if only that I may be enabled to prove, by devotion and watchful care, through the long bright autumn of their days, that their long-suffering goodness was exercised in behalf of one who is neither insensible nor ungrateful.” A ripple of cringing around the room can be imagined at this wordy display of self-absorption and self-loathing.

As if to break the crust of discomfort, La Bau brought in a six-foot “tree” of ivy wrapped around a trellis that spelled out the names of Vanderbilt's children in tiny flowers. “The Bible tells us that to everything there is a season,” he said. “I insist that it is not time in which to cast away stones, because, alas for poor humanity we all dwell in glass houses.” This was an appropriate occasion for such reflections. “Could you, sir, fifty years ago, have predicted that steam would have been encased in a steel jacket, placed on wheels, and sent off, puffing fire and smoke, through this land, upon iron roads?” La Bau asked. “And could you, madam, have predicted that men of this day, thousands of miles apart, would converse by lightning?”

The Commodore declined to speak, as always. Rather, he and Sophia thanked their offspring through their oldest son, William. Billy, as Vanderbilt still called him, had earned his father's almost begrudging affection during the North Star excursion and its aftermath, in large part by winning his respect. “He was slow and clumsy in his movements,” the New York Sun later remarked. “His face was red and rough-skinnned and he had very small, dull eyes, so that he had the appearance, not justified by the facts, of a slow-witted man.” Unjustified indeed. The former treasurer of the Staten Island Railroad became the bankrupt line's receiver, revived its fortunes during the wartime boom, and now served as its president. This dull-looking farmer had emerged as a leading man of Richmond County and stood now as his parents' mouthpiece.⁷³

At ten o'clock, after Billy spoke, the band played a march to accompany the family into the dining room, in a procession led by the Commodore and Sophia. They ate; La Bau sang; the grandchildren sang; the 7th Regiment Band marched up outside and serenaded the famous couple; and near midnight the band indoors played “Home, Sweet Home,” as arms slid into coats and coachmen drove up carriages. It was a glorious evening for the Vanderbilts and their children—except for the two who did not attend. One was Frances Lavinia. She was described as an “invalid,” a term so general and all-encompassing that it could have included anything from mental retardation to multiple sclerosis, though clearly her ailment had left her unable to care for herself since her birth in 1828. She lurked somewhere out of view, a vivid yet completely obscured fact in Vanderbilt's life.⁷⁴

The other missing child was George. On September 19, the regular army had promoted him to captain of the 10th Infantry Regiment, but it appeared increasingly likely that it would be a purely honorary appointment. Soon after the horses pulling the last carriage had clopped away from the front of 10 Washington Place on the night of the golden anniversary, Billy resigned the presidency of the Staten Island Railroad to go to his brother in Nice. Whether he was prompted by news of his brother's decline is unclear. Whether he was prompted by news of his brother's death is unclear as well. George died on December 31, 1863. About the end of January, Billy returned to New York with his corpse.⁷⁵

At half past ten in the morning on Thursday, February 4, not quite two months after the golden gathering, the family again assembled at 10 Washington Place, along with army comrades and friends of the deceased. By one report, George was engaged to a Miss Hawley, on whom the Commodore bestowed a house in upper Manhattan; most likely she attended as well. The funeral procession trailed in black behind teams of horses down to the Staten Island Ferry, rolled onto a boat that steamed across the bay, and drove up the drive from Vanderbilt's Landing to the cemetery, where the statue of Grief presided over the family tomb. “How wavering are the scenes of earth,” wrote Rev. Samuel Kissam, Billy's father-in-law, “our kindred pleasures, too.”

Now, now that circle we behold

In sorrow deep and wide,

Weeping o'er son and brother cold,

Long, long their joy and pride—

Embalmed, and ready for the tomb.

Vanderbilt buried his youngest son. Now he looked to his oldest. William would speak for him not merely on ceremonial occasions, but with the full authority of the Commodore's tens of millions of dollars in his voice. At the next Harlem election in May, Vanderbilt made William vice president of the company. He brought him all the way into Manhattan, in fact, giving him a gift of a house on Thirty-eighth Street, on the west side of Fifth Avenue, two blocks south of the massive stone walls of the Egyptian-style reservoir between Forty-second and Fortieth streets. As dutifully as when William had left East Broadway for the farm twenty years before, he moved his family back to New York, into a house much like its new owner, substantial but unostentatious. “The interior was richly and not showily furnished,” the New York Sun wrote, “and the drawing room was surpassed in elegance of decoration and furnishing by hundreds in the city.”⁷⁶

As for Corneil, he seems to have left George's funeral with a determination to plummet as swiftly as he could.

ON JANUARY 28, 1864, the Congress of the United States passed a resolution thanking Cornelius Vanderbilt for his “unique manifestation of a fervid and large-souled patriotism,” the gift of the steamship Vanderbilt to his country. It further resolved that President Lincoln be requested to “cause a gold medal to be struck, which shall fitly embody an attestation of the nation's gratitude.” Congress may have waited nearly two years before extending its thanks, but its timing was appropriate: it celebrated the finest act in the long career of perhaps the single most important figure in the history of American steam navigation, at the very moment he left the sea behind.⁷⁷

On the rivers, bays, and oceans, he had acted like a Viking prince, taking his fleet wherever trade or plunder seemed most promising, freely abandoning markets for a price. Railroads, on the other hand, were fixed properties, geographical entities by their very nature—often compared to nation-states by contemporaries and historians. The Commodore understood this intimately, having been involved in the industry for three decades. Though famous as a warrior, he demonstrated statecraft in the New York Central election, offering no hint of aggressive intent.

Diplomacy, unfortunately, did not seem to work on the management of the Hudson River Railroad. “When I first went into the Harlem road, I did not want to have anything to do with the Hudson River,” Vanderbilt said later. “I took the Harlem when it was down to nothing, and I got it up along by degrees; but I found that there was a continual clashing with the Hudson River. I said this is wrong; these roads should not clash.” For one thing, competition between the parallel lines kept fares dangerously low⁷⁸ For another, their friction could be felt in relations with their mutual partner, the New York Central. Even after the Hudson River's directors failed to oust Corning, they demanded preference in through traffic. It was a conflict made nearly inevitable by the fragmentation of the railroad net into multiple companies. “In a hundred miles,” the Railway Timesobserved, “we have two or three corporations with their conflicting interests, conflicting time tables, and different organizations, likely at any moment to be at war with each other as interest or personal feelings may dictate.”⁷⁹

Now began the second phase of the founding of Vanderbilt's empire: his campaign against the Hudson River Railroad. He began with an attempt to undermine it by changing the physical railway net itself—by outflanking the enemy in a double envelopment. First, on January 27, the Harlem board authorized him to sell (to himself, if he wished) the additional $2,139,950 in stock approved by the stockholders for the purpose of double-tracking the line to Chatham Four Corners. Second, he threatened to build down the western shore of the Hudson River, filing for incorporation of a line from Albany to the vicinity of New York City And he accepted Daniel Drew's proposal to build a short railroad from a point on the Central's line at Schenectady to Athens, a town on the Hudson River south of Albany where the People's Line steamboats would face fewer weeks of ice each winter. Officially known as the Saratoga & Hudson River Railroad (more commonly as the Athens road), it received a charter on April 15. Vanderbilt took a quarter of the $1.5 million in stock and went on the board with such well-known Wall Street figures as Henry Keep and Azariah Boody with Drew as the president. The two lines would be weapons against the Hudson River Railroad, threatening to strip it of what little freight it received from the Central.⁸⁰

The Commodore also had a spy among the enemy: John M. Tobin, whom Vanderbilt had hired years before as a fare collector on the Staten Island Ferry. Matthew Hale Smith reported a popular story that, when Tobin first went to work for the ferry, Vanderbilt strictly instructed him to allow no one to ride for free; the first time Tobin saw the Commodore come aboard, he demanded the fare, saying, “No dead-heads on this line” (using the common slang for those who rode boats and trains for free). “Tobin became the delight of the Commodore,” Smith wrote. Tobin later had gone into the liquor business in Manhattan in the 1850s, and was considered to be “of gd [character] & [habits], hard-working & [industrious], careful & reliable,” according to R. G. Dun & Co.

The thin, wiry Tobin turned to stock speculation during the war, and became a flamboyant broker at the Open Board. “He was known to be somehow mysteriously connected with Vanderbilt,” William Fowler recalled. “His style of operating, too, was so bold and so dashing and even reckless… that it quite captivated ‘the boys,’ and they were all agog when Tobin got on his pins and commenced bidding.”⁸¹ Tobin's connection to Vanderbilt remains just as mysterious now as it was then, but a connection they clearly had; so when Tobin had taken a seat on the Hudson River board on June 8, 1863, Vanderbilt had gained either a puppet or an ally inside the rival corporation.⁸²

One of the canonical stories of Vanderbilt's life, enshrined in myth by the banker-memoirist Henry Clews, is that he had masterminded a famous corner in Hudson River stock almost simultaneously with the Harlem corner of 1863.⁸³ There is no evidence for this tale, and it makes little sense. The leader of the Hudson River corner was Leonard Jerome, whom Vanderbilt simultaneously battled in the New York Central election. In December, the Commodore prepared to double-track the Harlem to Albany; why would he plan to pour money into a line with heavy grades if he was buying control of a parallel route, one better equipped and cheaper to operate?

The best explanation of his real actions, and calculations, would come from the Commodore himself on February 5, 1867, in testimony before a legislative committee. As quoted before, he would state that he had been frustrated and irritated by the railroads' conflicts. “I said this is wrong; these roads should not clash,” he would say. “Then, step by step, I went into the Hudson River.” Having weakened it with his outflanking moves, he slowly purchased its stock, quietly maneuvering for control.⁸⁴

IN 1864, AS VANDERBILT stepped-by-step into the Hudson River, he continued to direct the Harlem's affairs—none of which were more pressing than the Broadway streetcar line. Despite the municipal grant (and the Harlem's plan to buy the Broadway stagecoach companies), no progress had been made. In October 1863, a judge had ruled that the city had no power to issue its grant. The Harlem would have to go to Albany⁸⁵

In early March, the railroad asked the state legislature for a bill to validate its rights to a railway in Broadway. Horace Clark led the lobbying effort, taking with him his fellow director, Daniel Drew. The committee seemed agreeable, and Senator John B. Dutcher, the Harlem's champion, prepared a report in favor of the bill. Harlem stock rose to 145. Then a vote was called. To Dutcher's (and Clark's and Vanderbilt's) surprise, the committee issued a negative report. Harlem plunged to 107.

Legislators on either side of the issue muttered charges of corruption against their foes. On March 25, Dutcher raised the issue openly on the Senate floor. “He… denied that those who were here urging this bill had been speculating in the stock, but the speculating in stock was on the other foot,” the New York Herald reported. “Those who had been trying to kill this bill had been in Wall Street, to his knowledge, betting great odds that the report would be unfavorable, and had also been selling the stock short.”

So they were. In fact, the inside trading on the committee report marked only the start of a massive attack by “a legislative clique” (as the Herald called the conspirators) on the stock value of the New York & Harlem Railroad Company. Following the example of the city councilmen the year before, they plotted to use their lawmaking power to make money by shorting Harlem. The corrupt legislators likely had an inside partner. Pervasive reports circulated in the press that Drew was selling Harlem short.⁸⁶

Drew's betrayal of Vanderbilt marked a chilling turn in their relationship. Despite Drew's later reputation for treachery, there is no evidence that he ever double-crossed the Commodore over their decades of partnership and friendship. Indeed, they were so close that Drew named his own son after William H. Vanderbilt.⁸⁷ So why now? Perhaps most perplexing, why did the famously shrewd Drew believe that he could drive down the price of the very stock that Vanderbilt had recently cornered?

One motive is obvious: if he succeeded, there would be a great deal of money in it. But more telling is the fact that, for the first time in more than thirty years, the two men's strategic interests were diverging. As long as Vanderbilt controlled the Harlem alone, he and Drew had a common enemy—a common rival for the New York Central's through freight—in the Hudson River Railroad. But Vanderbilt's creep toward control of the Hudson River presaged a conflict with Drew's steamboat line.

As to why Drew thought he could succeed, there are four likely answers. First, he probably believed, like most of Wall Street, that the Harlem had no hope for prosperity without the Broadway line, and he knew that the legislature held the last hope for such a franchise. Second, the amount of Harlem stock had just increased, which would tend to depress the price. Third, the legislature was considering another bill to allow the Harlem to convert $3 million of its bonds into still more shares; this would cut its debt in half, but further add to the circulating stock.

Finally, in a reflection of the growing complexity of the financial markets, Drew had cunningly refined his method of operations. In addition to selling shares that he did not own, he sold calls on shares that he did not own. A call was a contract that gave the buyer the right to call on the seller and buy a certain stock at a certain price within a limited period of time. If Drew sold seven-day calls for Harlem at 125, but the price fell below that figure for the duration of the call, then the holder of the call was certain to forgo his right to demand the stock. Who would insist on buying stock for more than the prevailing price? Drew, then, could make money without having to provide anything. More important, short-sellers used calls as margins to protect themselves from an upturn in the market. (Should the price rise unexpectedly, they could limit their losses by buying in at a preset call price.) Drew's huge distribution of calls, in addition to his own short sales, added momentum to the downward movement in Harlem.⁸⁸

Vanderbilt responded to Drew's campaign in characteristic fashion: he began to buy. With Tobin as his partner and agent, he took every offer of Harlem stock. Every day, Fowler recalled, Tobin could be seen at the Open Board or on the curb, “bidding for and buying thousands of shares, his face pale with excitement and his opalescent eyes blazing like a basilisk's. He grabbed at the stock with fury, for he had suffered by the decline.” The market felt the weight of the Commodore's liquid millions pressing down on short-sellers, who were burdened also by the thousands risked by Clark, the Schells, and Tobin himself. By March 29, Harlem had stabilized at 126½. In a few days it climbed over 141, and it kept rising.⁸⁹

The Commodore may have felt even richer than usual in the first week of April, when he was approached by members of the United States Sanitary Commission, a private charity devoted to the medical care of soldiers that had grown into an enormously important auxiliary to the Union army. The organization was about to hold a fund-raising fair in Union Square, and its leaders wanted a donation from the Commodore. Vanderbilt declined to make a pledge. Ever attuned to the marketplace, he said he would donate as much as any other man. The delegation later returned with a check for $100,000 from Alexander T. Stewart. “He found himself cornered,” the press reported. “However, he was as good as his word. He covered Stewart's check with a check of his own for a like amount.”

On April 4, the fair commenced with a military parade before perhaps half a million onlookers. Leonard W. Jerome contributed in his own way hosting plays at his private theater. “Tickets are in great demand at five dollars, the whole transaction being highly distinguished, aristocratic, and exclusive,” Strong recorded. “House was full and everybody in the fullest tog, men in white chokers and women in ball costume.”⁹⁰

On Wall Street, all went well. A great upward tide lifted all shares. In the general financial frenzy of that year, brokers decided to open an evening exchange in a room at the Fifth Avenue Hotel, to keep on trading after dark. But Harlem led all others. Drew and his followers in the stock exchanges fought to drive down the price—the legislators prepared to obliterate the Broadway bill—all to no avail. “The Harlem corner goes up vigorously,” the financial correspondent for the New York Times wrote on April 15. Already Vanderbilt made money from frightened bears. “Heavy differences are said to have been paid to the leading Bull in the stock to close contracts,” the Times added.⁹¹

The next day, disaster struck, at the hands of Treasury Secretary Chase.

Over the preceding months, congressmen and cabinet secretaries had grown increasingly angry at the gold market, seeing it as a den of treason. Speculators whistled “Dixie” as they sold greenbacks short before major battles, gambling that the Union would be defeated and legal-tender paper currency would lose value against gold. Chase pushed a bill in Congress that, with a spectacular lack of realism, would ban the trade in gold. Then he took direct action. On April 16, in an attempt to drive down the gold premium and undercut speculation, he went into the market and sold a large amount of federal specie; he took the greenbacks thus received and withdrew them from circulation. This moralistic act was a sharply deflationary blow, one that hit Wall Street hard. “The stock market was struck with a panic to-day,” the New York Herald reported. Even as Chase “locked up” millions in currency, another $15 million was absorbed by a new loan by the banks to the federal government. The sudden drain on cash reserves caused prices to collapse across the board in what the Evening Post called “one of the severest panics recorded since 1857 on the annals of the Stock Exchange.” Drew's hour, it seems, had come round at last; he had sold calls at 140, and now Harlem slouched to 133. The slide drove Vanderbilt to the brink, forcing him to put up more and more cash as margins for his millions of dollars' worth of purchases.⁹²

But Harlem rose again. Indeed, it rose relentlessly. On April 21, it reached 210. Five days later, it climbed to 235. Despite the immense strain on his resources—and the increasingly severe consequences should he fail—Vanderbilt kept up the pressure, buying still more. Short-sellers desperately waited out the terms of their contracts, hoping to buy in at a lower price before they ran out of time. They could not. Vanderbilt leaped every precipice (including a vicious attack on his management published in the Herald) in a splendid display of nerve, the most important virtue in a stock market battle. He carelessly attended the opening of the races at the Fashion Course while Tobin and his other brokers gambled his millions against the combined power of Daniel Drew, the New York State Legislature, and the desperate bears of Wall Street. On May 11, Harlem rose to 256. On May 14, it ascended to 275. Finally, it peaked at 285. One after another, the short-sellers crawled to the Commodore's myrmidons to buy their way out of their unfulfillable contracts. The legislators' attempted abuse of power cost them dearly⁹³

Drew, according to the press, refused to settle. He faced staggering losses on the tens of thousands of calls and whatever short sales he had made, so he announced that he would “squat”—litigate his contracts, rather than pay. The news shocked Wall Street. Should losers in transactions resort to the courts, the markets would break down in short order. If Drew carried out his threat, he likely would be shunned; few brokers, not even his longtime partner David Groesbeck, would do business with a man who did not fulfill his agreements. Once barred from the exchange, Drew never would recover his losses in the future. So Vanderbilt remained cool in the face of this intransigence, and icy cold to the mercurial Drew's pleas for mercy. In the course of further negotiations, Drew finally agreed to pay his old partner perhaps $1 million, roughly half of what the Commodore is believed to have gained in this second corner.⁹⁴

The tens of millions thrown about in this abstract battle on Wall Street captivated—and repulsed—the public. For one thing, 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. Such graft only reinforced Vanderbilt's long-standing laissez-faire beliefs.

Paradoxically, by punishing corrupt state legislators so thoroughly Vanderbilt made it appear that the balance of power in society was shifting away from democratic government and toward wealthy individuals and corporations. “Think of the one-man power that could accomplish this wonderful feat and prevail against a whole Legislature,” Henry Clews admiringly wrote in his memoirs. “Think of this, and then you will have some conception of the astute mind that the Commodore possessed, without education to assist it, in the contest against this remarkable combination of well-trained mental forces. There can hardly be a doubt that the Commodore was a genius, probably without equal in the financial world.”⁹⁵

The second Harlem corner marked the culmination of his move from steamships to railroads, for it forced him to concentrate his resources in this titanic battle. With victory in hand, he consolidated his power in the Harlem by driving Drew out of the board at the election on May 17 and giving his seat to Senator Dutcher. Out of 105,873 shares represented, the Commodore voted 29,607, though he likely hid the rest of his stock under the names of Horace Clark, Augustus Schell, James Banker, John Tobin (who voted 31,900 shares alone), and others. The next day, Vanderbilt hired his son William as the Harlem's vice president to manage the road's operations.⁹⁶

One month later, Vanderbilt made a second move to solidify his holdings, by displacing the Hudson River Railroad board in a disputed election. Out went Samuel Sloan, Moses H. Grinnell, Addison G. Jerome, and other giants. In came Vanderbilt's captains: Clark, Schell, Banker, and allies Oliver Charlick and Joseph Harker. John Tobin survived from the old board, of course, as did Leonard W. Jerome, who (according to rumor) had cooperated with Vanderbilt in the second Harlem corner. The new board elected Tobin president and created a standing executive committee—a common device, but typical of Vanderbilt's desire to centralize power—consisting of Clark, Schell, Banker, Jerome, and Charlick, in addition to Tobin. On July 6, the committee voted to end the competition between the Hudson River and Harlem trains.⁹⁷

Also in July, the Commodore sold his last sidewheelers to Atlantic Mail, which now supplanted the old Atlantic & Pacific Steamship Company. The step severed his business ties to his son-in-law Daniel Allen, who was a leading figure in Atlantic Mail alongside Cornelius Garrison. Curiously, Allen provided the only Vanderbilt to win glory in the war: his son Vanderbilt Allen, a West Point cadet appointed first lieutenant on June 13, 1864. The young officer soon found a place on General Philip H. Sheridan's staff.⁹⁸

The second Harlem corner typified Vanderbilt's battles on Wall Street in the 1860s. It was a defensive campaign rather than a merely speculative maneuver, designed to avenge himself upon men who had betrayed him. But it proved to be far more than a personal affair. By the summer of 1864, the Commodore had definitively left the floating world behind to concentrate on railroads. In short order he had gained control of the only two steam railways that entered Manhattan and linked it to the world, and had ended their costly rivalry. This first year set the pattern for his long railroad career: diplomacy, defensive battle, acquisition, reform, consolidation. In pursuit of “a small thing,” the bedraggled Harlem, he had begun to build an empire.

“YOU MIGHT AS WELL HIT A BRICK WALL as hit that man on the head,” Yankee Sullivan declared in 1853. He spoke through the dripping blood of a badly battered face, and he spoke about John Morrissey his burly foe in a fight for a $1,000 stake, after the brick-wall fellow had beaten him into submission in fifty-seven minutes. The triumphant Morrissey—a fellow Irishman by birth—was somewhere between twenty and thirty years of age at the time, yet already he had acquired a fearsome reputation. As a teenager he had led an Irish gang on the streets of Troy against nativist thugs, before setting up in the slums of New York as a prizefighter, Democratic Party enforcer, and saloon owner. Notably lucky with his games of chance, he expanded beyond Five Points. His gambling house on Fifth Avenue was considered one of the city's finest.⁹⁹

Sullivan returned to San Francisco after his defeat, on a path toward ultimate suicide; the victor, on the other hand, went to Saratoga. Morrissey, the broken-nose prince of Paradise Square, aspired to fashion, and so he flowed with fashion's current to the Springs every summer. There his presence was unmistakeable, “in his white flannel suit, huge diamond rings, and pin containing brilliants of the first water,” as Matthew Hale Smith described him. He was a man “of immense size; tall of stature, a powerful-looking fellow, walking quietly about the streets, or lounging at the hotels, but seldom speaking.” During the Civil War he opened the Club House, a brick saloon on Saratoga's Matilda Street; as on Fifth Avenue, his place attained a reputation as the most elegant casino in town. But he remained a creature of the street, no matter how high he rose above it. In 1864, for instance, a crowd of con men from Manhattan—three-card-monte artists—stepped off the train at Saratoga. Morrissey sauntered up to them in his white flannel suit and quietly told them to leave town. They did.¹⁰⁰

Morrissey himself had a taste for gambling, though he would never be seen at a roulette wheel; he understood that apparatus too well to risk his money there. Rather, he played the stock market. Rumor had it that he had joined with his Irish Democratic cohorts on the Common Council to short Harlem in 1863, forgetting the old rule that the house always wins. But he recovered his wits soon after. As the Chicago Tribune had observed, “no skull in the world” could absorb as much “pounding” as his and come back fighting. Poorer but wiser, he determined to join the house. For example, when the Commodore built a racetrack less than a mile outside of Saratoga, along with a group of Wall Street men (including his son-in-law George Osgood and William R. Travers) and a school of New York Central remoras (Erastus Corning Jr. and John M. Davidson, a partner of Erastus Corning Sr.), Morrissey agreed to serve as the track's manager.

He steadily gained Vanderbilt's friendship in the course of the Commodore's summer residence in Saratoga, during his days at the track and evenings playing hands of whist in the rooms at the Congress Hall or the United States Hotel. And when Vanderbilt returned to the Springs in August 1864 on a train carrying his fastest horse, Post Boy (valued at $22,000), and four other expensive trotters, the knowing ones whispered that at least one of them was a gift from Morrissey. Vanderbilt's reward to the fighter, they said, had been a “point” or tip on the second Harlem corner.¹⁰¹

For Vanderbilt's son Corneil, all the world comprised the house, yet he still bet against it. His gambling addiction continued to grow worse. He filched a gold cup from Horace Clark's house in Murray Hill before descending Broadway to bet and lose the money it brought him. Penniless again, he went into a pawnshop with a pair of gold sleeve buttons. They came from his dead brother George's dress uniform, and had been given to Corneil as a keepsake. When William learned they had been hocked, he redeemed them himself—and he never trusted Corneil with them again.¹⁰²

Corneil responded by gambling on a far larger scale, on the gaming table of the war itself. As early as February 1864, he charmed his way into the confidence of Horace Greeley editor of the New York Tribune, with that gift for manipulation that so confounded his closemouthed father. He borrowed money from Greeley, which he did not repay. He issued drafts that descended upon the famous editor unexpectedly¹⁰³ Then Corneil brashly declared that he had a scheme to set things right. A frequent traveler to New Orleans before the war, he returned in 1864 to trade cotton across Confederate lines. There he befriended and beguiled General Nathaniel P. Banks, whom Corneil pronounced “a glorious fellow.”

“Matters with me are progressing very favorably,” Corneil wrote to Greeley from New Orleans on September 7, “and through the friendship of Gen. Banks & [Edward R. S.] Canby & the especial favoritism shown myself & friend in connection with a certain cotton transaction I shall soon realize a very handsome profit. I do hope & feel that I shall shortly relieve myself of the heavy incubus hanging over me by reason of my former misdeeds.” It is a classic trait of the addict, of course, to admit his crimes and declare his intention to set them right just before a fresh round of lying and cheating. Corneil continued:

I have been obliged to make use of some ready capital, & knowing of no earthly means to obtain it here I have drawn upon you for $1,700. I do beg that you will honor it, as a refusal to do so would of course involve me in dishonor & ruin. I shall leave here by the steamer of the 18th and shall bring home with me several thousands of greenbacks. I will call on you at once.… I beg Mr. Greeley that you will not desert me, just as my success is coming around.

Greeley never saw how transparently dishonest this was; he had been manipulated completely. But Corneil knew that not everyone would prove so gullible. He warned Greeley, “On no account give any information to Father or family in relation to the past & present.”¹⁰⁴

Greeley did his best to help. Corneil needed a permit to buy and sell cotton in occupied territory, so Greeley asked for one directly from Lincoln. “His father, the Commodore, is the largest individual holder of our Public Securities (to the extent of $4,000,000), has given outright more than any other man to invigorate the prosecution of the War, and his good will is still an element of our National strength,” he wrote. “I know little of the business in question; but I feel confident that any favor shown to Mr. V. will redound to the advantage of the Union cause.” For this reason, “as well as that of my personal regard for him,” he begged that Corneil's application be approved.¹⁰⁵ Lincoln, however, did not act on the request, so Greeley began to badger William P. Fessenden, the new secretary of the treasury.

On October 8, the New York Herald reported a rumor that the Commodore stood behind the persistent lobbying on behalf of his son, which led him to write an angry letter that the paper published two days later. “I am at a loss to conceive how a report of this nature should have obtained currency,” Vanderbilt declared. “I have remained perfectly passive [in terms of recommending appointments], feeling that the present condition of the country requires of its citizens other and more patriotic endeavors than those of self-interest and personal aggrandizement.” Greeley sent the clipping to the Treasury Department as yet another reason to make Corneil a cotton-trading agent!¹⁰⁶

Stymied, Greeley wrote to Lincoln on November 23 to recommend that Fessenden be replaced as treasury secretary by the Commodore. He listed five reasons why Vanderbilt deserved the position, beginning with “i. He is the ablest and most successful financier now living, and has the largest private fortune in America.” He stressed Vanderbilt's knowledge, his reputation at home and abroad, and concluded, “He is utterly and notoriously unconnected with any clique, faction, or feud among the Unionists of our State or of any other.” It was all true, but Greeley admitted that he was not intimate with the Commodore, “whom I scarcely know by sight.”¹⁰⁷

The Commodore would have been appalled at Greeley's lobbying on his behalf. He never begged for public office; and when he wanted a corporate position, he simply took it. On September 6, he forced the resignation of two members of the Hudson River board (one of them William R. Travers, his partner in the Saratoga racetrack). He took one of the directorships for himself, and gave the other to Dean Richmond, the new president of the New York Central. At a board meeting in October, Vanderbilt ordered that the Hudson River's tracks be opened to the Harlem's trains between a junction at Castleton (now Castleton-on-Hudson) and Albany¹⁰⁸

So went the tale of dynastic struggles and railway statecraft. With his younger son conniving for petty favors, the Commodore brought the older into his new principality. He eliminated one rival, the Hudson River, by taking it over through quiet purchases and persuasion; with regard to the powerful New York Central, he clearly hoped that diplomacy would suffice. With a little decency on both sides, a few negotiations conducted with honor and propriety, he might manage that fraught relationship successfully for perhaps the first time in the history of those companies. All he sought, it appears, was to give Tobin and his son William a chance to reform their respective charges.¹⁰⁹ But Vanderbilt would closely watch his old friend Drew; after his unprecedented betrayal in the second Harlem corner, there was no telling what he might do next.

Unfortunately for Vanderbilt, betrayal, not friendship, would govern the future. What he had begun with diplomacy, he would bring to an end in a stunning act of revenge.

*1 A “trunk line” would later be defined as an integrated line, under one management, from the seaboard to Chicago or St. Louis. This book will use the contemporary meaning of the term, as explained here.

*2 Leonard Jerome was to become the grandfather of Winston Churchill.