Cornelius Vanderbilt

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Cornelius Vanderbilt

Born May 27, 1794
Staten Island, New York, U.S.
Died January 4, 1877 (aged 82)
New York, New York, U.S.
Occupation Entrepreneur
Net worth ▲$167.4 billion, according to Wealthy historical figures 2008, based on information from Forbes - February 2008.

Cornelius Vanderbilt (May 27, 1794 – January 4, 1877), also known by the sobriquets The Commodore[1][2] or Commodore Vanderbilt,[3] was an American entrepreneur who built his wealth in shipping and railroads and was the patriarch of the Vanderbilt family.

Cornelius Vanderbilt and Phebe Hand had a family of modest means in Port Richmond on Staten Island.

His great-great-great-grandfather, Jan Aertson, was a Dutch farmer from the village of De Bilt in Utrecht, the Netherlands, who immigrated to New York as an indentured servant in 1650. The Dutch van der ("of the") was eventually added to Aertson's village name to create "van der bilt", which was eventually condensed to Vanderbilt. Most of Vanderbilt's ancestry was English, with his last ancestor of Dutch origin being Jacob Vanderbilt, his grandfather. Cornelius Vanderbilt engaged in the steamship and then railroad industries. His company name was the Accessory Transit Company.[4]

On December 19, 1813, Cornelius Vanderbilt married his cousin and neighbor, Sophia Johnson (1795-1868), daughter of his aunt Elizabeth Hand Johnson. He and his wife had 13 children, 1 died in childhood.

Vanderbilt University in Nashville, Tennessee, is named for Cornelius, and the university's mascot is the commodore.

Contents

[edit] Ferry empire

“ If I had learned education, I would not have had time to learn anything else. ”

As a young boy, Cornelius Vanderbilt worked on ferries in and around New York, quitting school at age 11. By age 16 he was operating his own business—after having borrowed money from his mother—ferrying freight and passengers between Staten Island and Manhattan. During the War of 1812, he received a government contract to supply the forts around New York City. He operated sailing schooners, which is where he gained his nickname of "Commodore."

In 1818, he turned his attention to steamships. The New York legislature had granted Robert Fulton and Robert Livingston a thirty-year legal monopoly on steamboat traffic. Working for Thomas Gibbons, Vanderbilt undercut the prices charged by Fulton and Livingston for service between New Brunswick, New Jersey, and Manhattan—an important link in trade between New York and Philadelphia. During this period, his wife, Sophia Vanderbilt, operated a very profitable inn and tavern near the New Jersey mooring, adding significantly to the early family fortune.

Vanderbilt avoided capture by those who sought to arrest him and impound the ship. Livingston and Fulton offered Vanderbilt a lucrative job piloting their steamboat, but Vanderbilt rejected the offer. He said "I don't care half so much about making money as I do about making my point, and coming out ahead." For Vanderbilt, the point was the superiority of free competition over the government-granted monopoly.[5] Livingston and Fulton sued; the case went before the United States Supreme Court and ultimately broke the Fulton-Livingston monopoly on trade.

In 1829, Vanderbilt struck out on his own to provide steam service on the Hudson River between Manhattan and Albany, New York. By the 1840s, he had 100 steamships plying the Hudson and was reputed to have the most employees of any business in the United States.

During the 1849 California Gold Rush, he offered a shortcut via Nicaragua to California—shaving 600 miles (960 km) at half the price of the Isthmus of Panama shortcut.

In the 1850s Vanderbilt competed without direct government subsidy against the subsidized Collins Line and Cunard Line in the trans-Atlantic steamship market. See Entrepreneurs and American Economic Growth for an heroic view of this contest.

[edit] Railroad empire

Cornelius Vanderbilt versus James Fisk ("Diamond Jim") in the famous rivalry with the Erie Railroad
Cornelius Vanderbilt versus James Fisk ("Diamond Jim") in the famous rivalry with the Erie Railroad

[edit] Early rail interest

You have undertaken to cheat me. I won't sue you, for the law is too slow. I will ruin you.
-Cornelius Vanderbilt, 1853 (in a letter to former business associates Morgan & Garrison, the partnership of Charles Morgan and C.K. Garrison)

Vanderbilt's involvement with early railroad development led him to being involved in one of America's earliest rail accidents. On November 11, 1833, he was a passenger on a Camden & Amboy train that derailed in the meadows near Hightstown, New Jersey, when a coach car axle broke because of a hot journal box. He spent a month recovering from injuries that included two cracked ribs and a punctured lung. Uninjured in this accident was former U.S. President John Quincy Adams, riding in the car ahead of the one that derailed. Adams's son was killed in the accident.

In 1844, Vanderbilt was elected as a director of the Long Island Rail Road, which at the time provided a route between Boston and New York City via a steamboat transfer.[3] In 1857, he became a director of the New York and Harlem Railroad.[4]

[edit] New York Central Railroad

In the early 1860s, Vanderbilt started withdrawing capital from steamships and investing in railroads. He acquired the New York and Harlem Railroad in 1862-63, the Hudson River Railroad in 1864, and the New York Central Railroad in 1867. In 1869, they were merged into New York Central and Hudson River Railroad.

Looking out the north end of the Murray Hill Tunnel towards the station in 1880; note the labels for the New York, Harlem and New York, and New Haven Railroads; the New York Central and Hudson River was off to the left. The two larger portals on the right allowed some horse-drawn trains to continue further downtown.
Looking out the north end of the Murray Hill Tunnel towards the station in 1880; note the labels for the New York, Harlem and New York, and New Haven Railroads; the New York Central and Hudson River was off to the left. The two larger portals on the right allowed some horse-drawn trains to continue further downtown.

[edit] Grand Central Depot

Main article: Grand Central Terminal

In October 1871, Vanderbilt struck up a partnership with the New York and New Haven Railroad to join with the railroads he owned to consolidate operations at one terminal at East 42nd Street called Grand Central Depot, which was the original Grand Central Terminal, where his statue reigns today. The glass roof of the depot collapsed during a blizzard on the same day Vanderbilt died in 1877. The station was not replaced until 1903-13.

[edit] Rivalry with Jay Gould

By 1873, he had extended the lines to Chicago, Illinois. Around this time Vanderbilt tried to gain control of the Erie Railroad, which brought him into direct conflict with Jay Gould, who was then in control of the Erie. Gould won the battle for control of the railroad by "watering down" its stock, which Vanderbilt bought in large amounts. Vanderbilt lost more than $7 million in his attempt to gain control, although Gould later returned most of the money.

Vanderbilt was very accustomed to getting what he wanted, but it seems that he met his match in Jay Gould. Vanderbilt would later say of his loss "never kick a skunk". In fact this was not the last time that Gould would serve to challenge a Vanderbilt. Years after his father's death, William Vanderbilt gained control of the Western Union Telegraph company. Jay Gould then started the American Telegraph Company and nearly forced Western Union out of business. William Vanderbilt then had no choice but to buy out Gould, who made a large profit from the sale.

[edit] Vanderbilt legacy

Following his wife's death, Vanderbilt went to Canada where, on August 21, 1869, he married a distant cousin from Mobile, Alabama named Frank Armstrong Crawford. Crawford's great-grandfather, was a brother to Phebe Hand Vanderbilt (the Commodore's mother) and to Elizabeth Hand Johnson (the Commodore's former mother-in-law and maternal aunt). Crawford herself was 43 years younger than her husband-to-be. Her cousin, Holland McTyeire, convinced Cornelius Vanderbilt to commit funding for what would become Vanderbilt University.

Ruthless in business, Cornelius Vanderbilt was said by some to have made few friends in his lifetime but many enemies. In his will, he disowned all his sons except for William, who was as ruthless in business as his father and the only one Cornelius believed capable of maintaining the business empire.

At the time of his death, aged 82, Cornelius Vanderbilt's fortune was estimated at more than US$100 million. He willed US$95 million to son William but "only" US$500,000 to each of his eight daughters. His wife received US$500,000 in cash, their modest New York City home, and 2,000 shares of common stock in New York Central Railroad.

Vanderbilt gave little of his vast fortune to charitable works, leaving the $1 million (the equivalent of $19 million today[citation needed]) he had promised for Vanderbilt University and $50,000 to the Church of the Strangers in New York City. He lived modestly, leaving his descendants to build the Vanderbilt houses that characterize America's Gilded Age.

According to "The Wealthy 100" by Michael Klepper and Robert Gunther, Vanderbilt would be worth $143 billion in 2007 dollars, if you take his total wealth as a share of the nation's GDP in 1877 and apply that same proportion in 2007, making him the second-wealthiest person in American history after Rockefeller.[6]

Vanderbilt is also heavily associated with the standardization of gauges and the use of steel in rails.

[edit] Descendants

Main article: Vanderbilt family

Cornelius Vanderbilt was buried in the family vault in the Moravian Cemetery at New Dorp on Staten Island. Three of his daughters and son, Cornelius Jeremiah Vanderbilt, contested the will on the grounds that their father had insane delusions and was of unsound mind. The unsuccessful court battle lasted more than a year, and Cornelius Jeremiah Vanderbilt committed suicide in 1882.

Children of Cornelius Vanderbilt and Sophia Johnson:

  1. Phebe Jane (Vanderbilt) Cross (1814-1878)
  2. Ethelinda (Vanderbilt) Allen (1817-1889)
  3. Eliza (Vanderbilt) Osgood (1819-1890)
  4. William Henry Vanderbilt (1821-1885)
  5. Emily Almira (Vanderbilt) Thorn (1823-1896)
  6. Sophia Johnson (Vanderbilt) Torrance (1825-1912)
  7. Maria Louisa (Vanderbilt) Clark Niven (1827-1896)
  8. Frances Lavinia Vanderbilt (1828-1868)
  9. Cornelius Jeremiah Vanderbilt (1830-1882)
  10. Mary Alicia (Vanderbilt) LaBau Berger (1834-1902)
  11. Catherine Juliette (Vanderbilt) Barker LaFitte (1836-1881)
  12. George Washington Vanderbilt (1839-1864)

[edit] Railroads controlled by Vanderbilt

[edit] See also

[edit] Works cited

  1. ^ [1]
  2. ^ Business Biography
  3. ^ [2]
  4. ^ RootsWeb's WorldConnect Project: Blaine's Mega Tree
  5. ^ Hull, Gary. The Abolition of Antitrust, Transaction Publishers, 2005, p. 77
  6. ^ Jackson, Tom. "The Wealthiest Americans Ever", The New York Times, 2007-07-15. Retrieved on 2007-07-15. 

[edit] References

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