In the tapestry of American history, some threads shine brighter, weaving tales of ambition, innovation, and an unyielding spirit. Cornelius Vanderbilt, the “Commodore,” is one such thread. From humble beginnings, he rose to become an architect of the modern American economy, a testament to sheer perseverance against incredible odds.
His story isn’t just about building railroads and fortunes; it’s about a man driven by a profound conviction – a faith in his own word, his duty to transform, and the surprising principles that guided his ruthless rise. It reminds us that often, the greatest American successes are forged not just from ambition, but from a persistent belief in what’s possible, even when others see only despair.
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Speaker 1: And we continue with our American stories. And up next, a bit of economic history, and a bit
Speaker 2: of business history.
Speaker 1: In his Pulitzer Prize-winning biography, The First Tycoon: The Epic Life of Cornelius Vanderbilt,
Speaker 2: author T.J.
Speaker 1: Stiles tells the dramatic story of Cornelius “Commodore” Vanderbilt’s humble birth during the presidency of George Washington to his death as one of the richest men in American history. The Commodore helped to launch the transportation revolution, repel the Gold Rush, reshape Manhattan, and invent the modern corporation. This combative American icon, through his genius and force of will, did more than perhaps any other single individual to
Speaker 2: create the modern American economy. Here’s T.J.
Speaker 1: Stiles with the story of Cornelius Vanderbilt.
Speaker 3: Vanderbilt has often been depicted as this purely amoral creature who was willing to do anything, basically. And he’s often been conflated and confused with a lot of his rivals. For example, in the famous Erie War of 1868, the most famous of the Gilded Age Wall Street battles, in which he fought with Daniel Drew and Jay Gould and Jim Fisk over the control of the Erie Railway. There was a lot of corruption of government officials, and when I started writing the book, I assumed that Vanderbilt was bribing away with the best of them. And it turns out I could not find any evidence or even any accusations at the time that Vanderbilt was bribing people, and I thought that was kind of interesting. Because he was ruthless. He took extraordinary steps to defeat his enemies, and I think for much of his career, at least until he got into the railway years, he saw his enterprises as much as military campaign against his enemies as he did machinery and enterprise and businesses, which makes his life a lot of fun to read about, but raises questions about whether he did have a code. And surprisingly, he really did have a code of conduct. Now, his opponents didn’t always agree, but he really polished his reputation as a man of his word. And I found letters from people he dealt with in which they would say, “Well, let’s have a written agreement.” He said, “No, you know that my word is as good as my bond.” And often when he had disputes, he almost always suggested that they go to arbitration. You know, each side picks an arbitrator, and then those two arbitrators pick a third. And when his opponents agreed, he almost always won, which tells you something. He would push his opponents as hard as possible, but once he made a deal, he stuck to it. Another thing that’s interesting about Vanderbilt, and again, I’m saying this not, you know, trying to raise him up as a great hero, no, looking at him on his own terms. But the evidence is that he was not only honest, but he also believed in his duty to his stockholders. And as he became a corporate official, he really believed that he had a duty, as he put it, to run a corporation as if it was his own personal, private property. So what he did was invest heavily in the stock. And in the 19th century, stock was expected to pay dividends. They didn’t look for growth in share value. They looked for steady dividends. That’s what investors looked for then. So he took no salary, and the only remuneration he took was dividends in his stock. A lot of corporate officials engaged in side dealing, and Andrew Carnegie’s mentors at the Pennsylvania Railroad are much more like the executives we have now corporations. They were not major shareholders. They were professional managers hired by these largely anonymous shareholders who run the company. Very smart men, Thomas A. Scott, J. Edgar Thomson. They ran the Pennsylvania Railroad; they ran it very well. But they also pioneered shell corporations and dummy companies through which they funneled the company’s business, and they controlled those companies and skimmed money as that came in and out of the Pennsylvania. Vanderbilt never engaged in that sort of business. He thought it was abhorrent. So, surprisingly, for a man who was utterly ruthless, and yet, within the context of business, he had a strict code of ethics, and
Speaker 2: he lived by it.
Speaker 3: Another thing about him is that he was driven by pride, and I think what drove him into railroads. When he was 70 years old, well past life expectancy, past when he expected to live, he turned to railroads. He didn’t think, “I’m going to become the great railroad tycoon.”
Speaker 2: No.
Speaker 3: He started off with the New York and Harlem Railroad, which at the time was considered the most necrotic company in America. It was a railroad that was considered barely worth the iron and the rails. And he said, “You know what? I can take this railroad and I can make it profitable.” And he said repeatedly, “It was a point of pride for me to take a company where the stock wasn’t worth ten dollars a share and to raise it up and make it into a healthy, profitable company.” And that pride drove him. It’s why he was such a competitor personally with his racing horses, and he was a card player, fierce competitor at everything he did. And that personal pride was really something that drove him all the way through. And that, of course, also made him such a ferocious competitor with his enemies, too. During much of his life, he was considered notably unbenevolent, and I don’t completely dismiss that idea. Certainly, he was no Andrew Carnegie. He didn’t engage in some of the truly great philanthropy that later tycoons did, there’s no doubt about that. On the other hand, there’s two things you remember about Vanderbilt. One is that he hated people who were boastful and talked about themselves. And there are a lot of reports that are impossible to verify. They claim that he engaged in a lot of charity, but he just refused to put his name out there, and he would certainly — I do know that, for example, young relatives, nephews and grandsons, you know, their letters to presidents and whatnot, where he’d say, “You know, I normally don’t do this, but I really hope that you can help him out, and I would like you to find a position for this guy.” You know, he engaged in helping people out much more than the public record would indicate. I think the other thing is that he was a man who was deeply patriotic, and a lot of the benevolence that he did take part in. But he, for example, during the Civil War, donated his largest steamship, worth almost a million dollars, of the Union Navy and personally outfitted it and then re-outfitted it for the Union. He took part in helping to prepare major expeditions without any pay. He engaged in these activities because he was deeply patriotic. He named his three sons after his heroes: George Washington Vanderbilt, William Henry Harrison Vanderbilt, and Cornelius Vanderbilt. Like I said, he was a proud man. But then after the Civil War, he really took on the idea of helping to reconcile North and South. And so he put up his name as one of the bondsmen for Jefferson Davis to get him out of prison. He specifically wanted to help found a university in the South, deliberately to counterbalance his gift of the Union Navy, and those two gifts largely balanced each other. He actually gave slightly more money to found Vanderbilt University. So it’s true, he will not go down in history as one of the great charitable givers. But the record, I think, needs to be balanced a little bit, and also specifically to be seen as his personal vision of trying to reconcile the two sides of the country. Rather than being, you know, “I’m going to found libraries.” He thought, “Let’s try to bring the divided country together again.” And again, he had a real knack. One of the secrets of his success was an unerring sense for where the main channel of commerce was in the country. Late in life, Chicago and New York. During this period, the 1830s and ’40s, between New York and Boston, and he ran his steamboats on Long Island Sound and ran in connection with the railroads, which there wasn’t enough capital to build a railroad all the way to New York, so they ran short lines down to the seaport towns on Long Island Sound. Well, one of the interesting things is that Vanderbilt always had a large cash reserve. When these panics hit, he always managed to see trouble coming soon enough so that he wasn’t overexposed in terms of being overly leveraged. Another thing is that by constantly engaging in fair wars with his opponents, he kept prices on his steamboats very low, and that, I think, had a surprising effect. In the 19th century, before the Civil War, paper money was issued by private banks, and the banks would collect a reserve of gold and silver, which was, you know, gold or silver coin was worth its weight in that precious metal. He could melt it down and sell it for the same amount, and they would issue loans by issuing paper money. Well, most paper banknotes were only issued for larger denominations, a dollar or larger, usually five dollars or larger. Vanderbilt’s fares are usually a dollar or less, often so. He had gold and silver coin which would never lost its value. So ironically, on a lot of his routes, the low fares actually ended up giving him a large cash reserve.
Speaker 2: And you’re listening to T.J.
Speaker 1: Stiles tell the story of Cornelius Vanderbilt. And my goodness, to live the years he lived, to get into the railroad industry at that late an age. I had no idea that he was that old when he started, and well, what turned out to be one of the most important investments of his entire life, and when he would come to dominate. When we come back, more of the story of Cornelius Vanderbilt here on Our American Stories. And we continue with our American Stories and with author T.J. Stiles, author of the book The First Tycoon: The Epic Life of Cornelius Vanderbilt. Let’s pick up where we last left off.
Speaker 3: Vanderbilt is incredibly effective at doing things like getting cheaper fuel. He designed his steamships himself. He was one of the great maritime architects of the paddlewheel era, and the steamboats he started to put on Long Island Sound were written up in technical journals as masterpieces of naval engineering. His first great Long Island Sound steamboat used half the fuel of its rival steamboats, and fuel was by far the largest expense. So these sorts of things, his ability to cut costs, were phenomenal. And one thing that I touched on in the book, and I won’t go into great detail, his attacks on especially early corporations and on companies that had monopolies, legal or otherwise, played right into a big political conflict in the 19th century in which an economy in which there weren’t large businesses, the economy is relatively flat. Laissez-faire was a radical philosophy, and corporations were seen as grants of special favors to men who are already rich, giving them limited liability and other special privileges. And so Vanderbilt’s business enterprises during the 1830s and ’40s were actually raised him up as a kind of Jacksonian populist hero. Here’s this guy who’s an individual going after these rich corporations that have special privileges granted by the government. And he made public pronouncements saying, “You know, I’m the anti-monopoly guy.” He called his lines “the People’s Line.” You know, his headline said, “No monopoly, you know, power to the people,” or the equivalent. And in his early career, he was a radical, he was a populist. Now, his laissez-faire philosophy stayed the same as he became the great railroad tycoon, and he’s the master of these giant corporations, and the political landscape rotated 180 degrees. So he’s saying the same things he’d said in the 1830s when he got into the 1870s. And meanwhile, the first government regulation advocates are out there, and the populists all of a sudden are favoring government intervention. So it’s very interesting when we look at today’s political landscape, and I think a lot of liberals don’t understand how people earning $30,000 a year or the family of five can be pro-free market and anti-government regulation. But when you look at the currents of American history, a lot of these currents are very deep, they go back very far, and these things come up in Vanderbilt’s life again and again.
Speaker 2: He actually
Speaker 3: was notoriously unreligious, and he was raised in the Moravian Church. Some Vanderbilt ancestors switched from Dutch Reform to Moravian, and he was capable of, you know, personal charity, and he would occasionally express things in religious terms, but I don’t know if he ever went to a church except for a wedding or a funeral. And this is a period in American history when spiritualism was huge and it was a mainstream belief. You have to remember, the Civil War killed the better part of a million Americans. Every family had lost loved ones. And spiritualism, you know, having séances contacting the dead, had gotten its start before the Civil War, but in the decade after the Civil War became a huge phenomenon. And Vanderbilt, who outlived so many contemporaries, friends, family, rivals, he started going to séances during the Civil War. And I don’t believe that he made any business decisions based on séances. And one of, I think, a telling story of a witness testified to being in a séance with him in which he asked to speak to the ghost of Jim Fisk, one of his rivals. So the medium, you know, contacts, I don’t believe in spiritualism. I don’t think they actually contacted Jim Fisk. Jim Fisk comes up. “Oh, Jim Fisk is here.” And so Vanderbilt asked him a question about a stock in the stock market, and Jim Fisk, of course, medium doesn’t know anything. So Jim Fisk gives a nonsense answer, and so Vanderbilt doesn’t say, “Oh, that’s interesting.” He says, “What are you talking about? Are you crazy?” And he starts to argue with the ghost, and then Vanderbilt says, “Yeah, well, we’ll see who’s right, you or me.” And then he says, sort of a joke with Fisk, he says, “So, how do you like it on the other side?” He said, “Well, you’ll find out soon enough. You’re near the end of your line.” And they have this hilarious exchange, Vanderbilt arguing and joking with the ghost of Jim Fisk. But it shows that I don’t think he made any decisions based on these. I think he found them comforting. I don’t think that it was his guide. But late in life, his wife, his second wife, was very religious. She was a Methodist, and he did give money to found Vanderbilt University, which was specifically a religious university, and he did give money to buy a church for the Church of the Strangers, which was a church for Southerners in New York City. But interestingly, when he made those gifts, he didn’t ask the bishop who was the first head of Vanderbilt
Speaker 2: of business history.
Speaker 1: In his Pulitzer Prize-winning biography, The First Tycoon: The Epic Life of Cornelius Vanderbilt,
Speaker 2: author T.J.
Speaker 1: Stiles tells the dramatic story of Cornelius “Commodore” Vanderbilt’s humble birth during the presidency of George Washington to his death as one of the richest men in American history. The Commodore helped to launch the transportation revolution, repel the Gold Rush, reshape Manhattan, and invent the modern corporation. This combative American icon, through his genius and force of will, did more than perhaps any other single individual to
Speaker 2: create the modern American economy. Here’s T.J.
Speaker 1: Stiles with the story of Cornelius Vanderbilt.
Speaker 3: Vanderbilt has often been depicted as this purely amoral creature who was willing to do anything, basically. And he’s often been conflated and confused with a lot of his rivals. For example, in the famous Erie War of 1868, the most famous of the Gilded Age Wall Street battles, in which he fought with Daniel Drew and Jay Gould and Jim Fisk over the control of the Erie Railway. There was a lot of corruption of government officials, and when I started writing the book, I assumed that Vanderbilt was bribing away with the best of them. And it turns out I could not find any evidence or even any accusations at the time that Vanderbilt was bribing people, and I thought that was kind of interesting. Because he was ruthless. He took extraordinary steps to defeat his enemies, and I think for much of his career, at least until he got into the railway years, he saw his enterprises as much as military campaign against his enemies as he did machinery and enterprise and businesses, which makes his life a lot of fun to read about, but raises questions about whether he did have a code. And surprisingly, he really did have a code of conduct. Now, his opponents didn’t always agree, but he really polished his reputation as a man of his word. And I found letters from people he dealt with in which they would say, “Well, let’s have a written agreement.” He said, “No, you know that my word is as good as my bond.” And often when he had disputes, he almost always suggested that they go to arbitration. You know, each side picks an arbitrator, and then those two arbitrators pick a third. And when his opponents agreed, he almost always won, which tells you something. He would push his opponents as hard as possible, but once he made a deal, he stuck to it. Another thing that’s interesting about Vanderbilt, and again, I’m saying this not, you know, trying to raise him up as a great hero, no, looking at him on his own terms. But the evidence is that he was not only honest, but he also believed in his duty to his stockholders. And as he became a corporate official, he really believed that he had a duty, as he put it, to run a corporation as if it was his own personal, private property. So what he did was invest heavily in the stock. And in the 19th century, stock was expected to pay dividends. They didn’t look for growth in share value. They looked for steady dividends. That’s what investors looked for then. So he took no salary, and the only remuneration he took was dividends in his stock. A lot of corporate officials engaged in side dealing, and Andrew Carnegie’s mentors at the Pennsylvania Railroad are much more like the executives we have now corporations. They were not major shareholders. They were professional managers hired by these largely anonymous shareholders who run the company. Very smart men, Thomas A. Scott, J. Edgar Thomson. They ran the Pennsylvania Railroad; they ran it very well. But they also pioneered shell corporations and dummy companies through which they funneled the company’s business, and they controlled those companies and skimmed money as that came in and out of the Pennsylvania. Vanderbilt never engaged in that sort of business. He thought it was abhorrent. So, surprisingly, for a man who was utterly ruthless, and yet, within the context of business, he had a strict code of ethics, and
Speaker 2: he lived by it.
Speaker 3: Another thing about him is that he was driven by pride, and I think what drove him into railroads. When he was 70 years old, well past life expectancy, past when he expected to live, he turned to railroads. He didn’t think, “I’m going to become the great railroad tycoon.”
Speaker 2: No.
Speaker 3: He started off with the New York and Harlem Railroad, which at the time was considered the most necrotic company in America. It was a railroad that was considered barely worth the iron and the rails. And he said, “You know what? I can take this railroad and I can make it profitable.” And he said repeatedly, “It was a point of pride for me to take a company where the stock wasn’t worth ten dollars a share and to raise it up and make it into a healthy, profitable company.” And that pride drove him. It’s why he was such a competitor personally with his racing horses, and he was a card player, fierce competitor at everything he did. And that personal pride was really something that drove him all the way through. And that, of course, also made him such a ferocious competitor with his enemies, too. During much of his life, he was considered notably unbenevolent, and I don’t completely dismiss that idea. Certainly, he was no Andrew Carnegie. He didn’t engage in some of the truly great philanthropy that later tycoons did, there’s no doubt about that. On the other hand, there’s two things you remember about Vanderbilt. One is that he hated people who were boastful and talked about themselves. And there are a lot of reports that are impossible to verify. They claim that he engaged in a lot of charity, but he just refused to put his name out there, and he would certainly — I do know that, for example, young relatives, nephews and grandsons, you know, their letters to presidents and whatnot, where he’d say, “You know, I normally don’t do this, but I really hope that you can help him out, and I would like you to find a position for this guy.” You know, he engaged in helping people out much more than the public record would indicate. I think the other thing is that he was a man who was deeply patriotic, and a lot of the benevolence that he did take part in. But he, for example, during the Civil War, donated his largest steamship, worth almost a million dollars, of the Union Navy and personally outfitted it and then re-outfitted it for the Union. He took part in helping to prepare major expeditions without any pay. He engaged in these activities because he was deeply patriotic. He named his three sons after his heroes: George Washington Vanderbilt, William Henry Harrison Vanderbilt, and Cornelius Vanderbilt. Like I said, he was a proud man. But then after the Civil War, he really took on the idea of helping to reconcile North and South. And so he put up his name as one of the bondsmen for Jefferson Davis to get him out of prison. He specifically wanted to help found a university in the South, deliberately to counterbalance his gift of the Union Navy, and those two gifts largely balanced each other. He actually gave slightly more money to found Vanderbilt University. So it’s true, he will not go down in history as one of the great charitable givers. But the record, I think, needs to be balanced a little bit, and also specifically to be seen as his personal vision of trying to reconcile the two sides of the country. Rather than being, you know, “I’m going to found libraries.” He thought, “Let’s try to bring the divided country together again.” And again, he had a real knack. One of the secrets of his success was an unerring sense for where the main channel of commerce was in the country. Late in life, Chicago and New York. During this period, the 1830s and ’40s, between New York and Boston, and he ran his steamboats on Long Island Sound and ran in connection with the railroads, which there wasn’t enough capital to build a railroad all the way to New York, so they ran short lines down to the seaport towns on Long Island Sound. Well, one of the interesting things is that Vanderbilt always had a large cash reserve. When these panics hit, he always managed to see trouble coming soon enough so that he wasn’t overexposed in terms of being overly leveraged. Another thing is that by constantly engaging in fair wars with his opponents, he kept prices on his steamboats very low, and that, I think, had a surprising effect. In the 19th century, before the Civil War, paper money was issued by private banks, and the banks would collect a reserve of gold and silver, which was, you know, gold or silver coin was worth its weight in that precious metal. He could melt it down and sell it for the same amount, and they would issue loans by issuing paper money. Well, most paper banknotes were only issued for larger denominations, a dollar or larger, usually five dollars or larger. Vanderbilt’s fares are usually a dollar or less, often so. He had gold and silver coin which would never lost its value. So ironically, on a lot of his routes, the low fares actually ended up giving him a large cash reserve.
Speaker 2: And you’re listening to T.J.
Speaker 1: Stiles tell the story of Cornelius Vanderbilt. And my goodness, to live the years he lived, to get into the railroad industry at that late an age. I had no idea that he was that old when he started, and well, what turned out to be one of the most important investments of his entire life, and when he would come to dominate. When we come back, more of the story of Cornelius Vanderbilt here on Our American Stories. And we continue with our American Stories and with author T.J. Stiles, author of the book The First Tycoon: The Epic Life of Cornelius Vanderbilt. Let’s pick up where we last left off.
Speaker 3: Vanderbilt is incredibly effective at doing things like getting cheaper fuel. He designed his steamships himself. He was one of the great maritime architects of the paddlewheel era, and the steamboats he started to put on Long Island Sound were written up in technical journals as masterpieces of naval engineering. His first great Long Island Sound steamboat used half the fuel of its rival steamboats, and fuel was by far the largest expense. So these sorts of things, his ability to cut costs, were phenomenal. And one thing that I touched on in the book, and I won’t go into great detail, his attacks on especially early corporations and on companies that had monopolies, legal or otherwise, played right into a big political conflict in the 19th century in which an economy in which there weren’t large businesses, the economy is relatively flat. Laissez-faire was a radical philosophy, and corporations were seen as grants of special favors to men who are already rich, giving them limited liability and other special privileges. And so Vanderbilt’s business enterprises during the 1830s and ’40s were actually raised him up as a kind of Jacksonian populist hero. Here’s this guy who’s an individual going after these rich corporations that have special privileges granted by the government. And he made public pronouncements saying, “You know, I’m the anti-monopoly guy.” He called his lines “the People’s Line.” You know, his headline said, “No monopoly, you know, power to the people,” or the equivalent. And in his early career, he was a radical, he was a populist. Now, his laissez-faire philosophy stayed the same as he became the great railroad tycoon, and he’s the master of these giant corporations, and the political landscape rotated 180 degrees. So he’s saying the same things he’d said in the 1830s when he got into the 1870s. And meanwhile, the first government regulation advocates are out there, and the populists all of a sudden are favoring government intervention. So it’s very interesting when we look at today’s political landscape, and I think a lot of liberals don’t understand how people earning $30,000 a year or the family of five can be pro-free market and anti-government regulation. But when you look at the currents of American history, a lot of these currents are very deep, they go back very far, and these things come up in Vanderbilt’s life again and again.
Speaker 2: He actually
Speaker 3: was notoriously unreligious, and he was raised in the Moravian Church. Some Vanderbilt ancestors switched from Dutch Reform to Moravian, and he was capable of, you know, personal charity, and he would occasionally express things in religious terms, but I don’t know if he ever went to a church except for a wedding or a funeral. And this is a period in American history when spiritualism was huge and it was a mainstream belief. You have to remember, the Civil War killed the better part of a million Americans. Every family had lost loved ones. And spiritualism, you know, having séances contacting the dead, had gotten its start before the Civil War, but in the decade after the Civil War became a huge phenomenon. And Vanderbilt, who outlived so many contemporaries, friends, family, rivals, he started going to séances during the Civil War. And I don’t believe that he made any business decisions based on séances. And one of, I think, a telling story of a witness testified to being in a séance with him in which he asked to speak to the ghost of Jim Fisk, one of his rivals. So the medium, you know, contacts, I don’t believe in spiritualism. I don’t think they actually contacted Jim Fisk. Jim Fisk comes up. “Oh, Jim Fisk is here.” And so Vanderbilt asked him a question about a stock in the stock market, and Jim Fisk, of course, medium doesn’t know anything. So Jim Fisk gives a nonsense answer, and so Vanderbilt doesn’t say, “Oh, that’s interesting.” He says, “What are you talking about? Are you crazy?” And he starts to argue with the ghost, and then Vanderbilt says, “Yeah, well, we’ll see who’s right, you or me.” And then he says, sort of a joke with Fisk, he says, “So, how do you like it on the other side?” He said, “Well, you’ll find out soon enough. You’re near the end of your line.” And they have this hilarious exchange, Vanderbilt arguing and joking with the ghost of Jim Fisk. But it shows that I don’t think he made any decisions based on these. I think he found them comforting. I don’t think that it was his guide. But late in life, his wife, his second wife, was very religious. She was a Methodist, and he did give money to found Vanderbilt University, which was specifically a religious university, and he did give money to buy a church for the Church of the Strangers, which was a church for Southerners in New York City. But interestingly, when he made those gifts, he didn’t ask the bishop who was the first head of Vanderbilt
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