Fifty years in Wall Street
Government during our great National struggle, or according to another
account, he lent her, and the Government kept her. The Commodore at one
time had a fleet of sixty ships.
The Commodore became convinced that the growing prospects of railroads
pointed to greater facilities for transportation in the future, and also
a more profitable investment than those watery regions which had
hitherto appeared to be his natural element. He promptly resolved to
turn his back on the domain of Neptune, and to devote his great energies
to enterprises on land. He saw there was comparatively little room for
development in water traffic, while in the railroad business the field
was practically unlimited.
He then commenced to buy up Harlem Railroad stock, so as to obtain
control of that road, and in the operation got up the celebrated Harlem
“corner.” Application had been made to the Legislature for some
advantages in connection with the road, which were refused for reasons
best known to leading members of that body. In the meantime Harlem stock
had been knocked down to a very low figure. The Commodore remained in
ambush, and was secretly purchasing it. He then went to the Legislature
to get his bill passed. Most of the members of the Legislature thought
they had got the “deadwood” on the Commodore, and enlisted a large
number of their friends in the enterprise. They attempted “to work the
Commodore for all he was worth,” and for a time appeared anxious to pass
the measure required. On the strength of this anticipated action on the
part of the Legislature the stock advanced, when the members sold
“short” and failed to legislate. The stock naturally went down, and
Vanderbilt bought it up. The collapse anticipated by the Legislature did
not take place, and, instead of that, the Commodore got a “corner” in
the stock, and the members of the Legislature were the parties mulcted.
They had, therefore, all to go to the Commodore’s office, and settle up
with him on his own terms, and he made arrangements to get his measure
in favor of the road through the Legislature as part of the bargain.
This transaction is more fully described in another chapter.
His next great enterprise was in connection with the New York Central.
Having successfully euchred the legislators in the matter of Harlem, he
was encouraged to play a still higher game. As soon as he obtained
control of this property, it seemed as if it had been touched by a magic
wand, or that famous stone of Midas, contact with which turned
everything into gold. Prior to this event the road had been dragged
along under the management of Dean Richmond, Samuel Sloan and Henry
Keep, without any signs of prosperity; but when Vanderbilt took hold of
it there was a sudden change to visible progress and prosperity. It
never looked behind afterwards, and both enterprises have enjoyed signal
and increasing success ever since, thus illustrating the marvellous
capacity of the Commodore for the organization and management of large
enterprises. The hydraulic operations of the Commodore with the stock of
this property would alone furnish material for a very interesting
chapter. Sending it up on one occasion at a bound, between Saturday and
Monday, 20 per cent., was a new move in manipulation which caused some
of the boldest operators on the Stock Exchange to stand aghast. He kept
working the stock up and down, in some such way as Mr. S. V. White now
keeps toying with Lackawanna, until he “milked” the street sometimes
very dry. He kept the tempting prize of a coming dividend glittering
before the eyes of the dazzled imaginations of his friends who were
dealing in the stock, but the “milking” process was so ably managed
that, when the famous 80 per cent. dividend was actually declared, they
had become so poor that they were unable to carry any of the stock, so
as to avail themselves of the profits. There was but one man that I know
of who reaped any benefit from it, and that was an old friend of the
Commodore, who still lives, and who had met with signal reverses in some
of the Erie deals at the time Mr. Gould so ably managed that concern.
This man had been wiped out in Erie, and his depressed condition awoke a
sympathetic cord momentarily in the heart of the Commodore. He gave his
friend the tip the day before the dividend was declared, and he found
another friend who bought enough of stock to realize $700,000, which was
divided between them. This is the solitary exception within my knowledge
where the Commodore failed to bag the entire game without “saying turkey
once” to any person connected with the deal.
The life of the Commodore affords singular scope for reflection on the
immense possibility of a great business capacity to amass a huge fortune
in a few years, especially in this country. The Commodore and his son
William H., in a little more than half a century, accumulated the
largest private fortune in the world, excepting the aggregate wealth of
all the Rothschilds combined, which has been the result of the most
expert financiering in all the capitals of Europe through several
generations, with all the resources of the greatest monarchs on the
earth to back their various enterprises. With all these advantages in
favor of the Rothschilds, the Vanderbilt fortune amounts to two-thirds
of the sum total of theirs. The result is certainly astounding when
submitted to a test of the highest standard of comparison that can be
found anywhere on this globe. But, wonderful as the success of the
Commodore was in its rapid gradations, from the possession of a rowboat
on our bay to that of a fleet of sixty-six steamboats that brought
mercantile argosies from all parts of the world, and in later years his
great railroad acquisitions, yet the success of his son is more
marvellous still.
In seventy years the Commodore arose from nothing financially to be the
proud possessor of $90,000,000. Wm. H. obtained $75,000,000 of that and
nearly trebled it in a tenth part of the time. He made three times as
much in seven years as his father made in seventy, or he made as much on
an average every two and one-half years as his father had done during
the three score and ten of his active business and speculative career.
If any person having the necessary amount of temerity had ever ventured
to make such a prediction as this in the presence of the old Commodore,
what a natural burn idiot he would have been regarded by that grand old
man. If the spirits of the departed ever visited the glimpses of the
moon in these days, what a profound sense of humiliation that of old
Vanderbilt must feel, as it makes its nightly rounds through those
spacious marble corridors in Fifth avenue, or, perched on the dome of
the Grand Central Depot, it contemplates the mighty development and
expansion of its earthly designs, now extended far beyond the limits of
what its highest ambition had dared to foreshadow.
Some people may argue that it required greater ability to acquire these
first $90,000,000 than the present sum total of the wealth of the
Vanderbilts. Those who argue thus, however, have no precedent to suggest
their position. An instance of such prosperity on so large a scale in so
short a time has never occurred in the history of financiering. The
accumulations in all the wealthy families that I know of have been
comparatively slow, and the history of the family of European
millionaires shows a similar principle of gradation, except, indeed,
that the gradation in the majority of instances has gone backwards. Very
few wealthy men, with the exception of the Rothschilds, the Astors and a
few others, have had any children capable of increasing their wealth,
except where it was almost impossible to do otherwise under the law of
primogeniture. In this country, therefore, where the law of distribution
has full scope, Wm. H. Vanderbilt, who had to that time been regarded as
a man of very moderate capacity, proved himself to be the ablest
financier of which there is any record either in ancient or modern
history.
Jay Gould, with all the resources of science at his disposal, and all
the talent that money could command, with newspapers, politicians,
lawyers, judges, and courts at his will, with as good a start,
financially dating from 1878, as Wm. H. Vanderbilt had, has been left
far behind in the race for wealth, and for the highest prize ever gained
by one man in any nation. It has been truly said that a fool can make
money, but it takes a wise man to keep it. Wm. H. Vanderbilt’s financial
wisdom, as well as his ability, was signally displayed in keeping this
great fortune intact, besides adding fully three times as much more to
it; and it proves that his father made no mistake in selecting him to
hand his name and fortune down to posterity. This immense pile of
“filthy lucre,” however, in spite of all the credit that is justly due
to its late manager, has had one serious drawback from a public
standpoint. In fact, the very announcement of this mammoth fortune in
the newspapers, at the time of Mr. Wm. H. Vanderbilt’s death, had a most
demoralizing effect upon a large number of the wealthy portion of the
community, who began to feel that they were nonentities in comparison.
In making this statement I absolve the Vanderbilt family from any blame.
Every man in this great Republic has the privilege of walking in the
footsteps of the two great Vanderbilts if he only has the ability; but
it would not be wisdom for a large number of men to attempt it. They
would be pretty certain to “get left.”
The story of the distribution of the Vanderbilt wealth, however, has
brought discontent to many a home where happiness reigned before. It
could hardly be otherwise, constituted as human nature is, and
especially human nature in our highly strung commercial society, where
the spirit of ambition is always strenuously aiming at higher flights.
People who heretofore had considered themselves rich, and socially
important, with a million or so to draw upon, felt that they were mere
ciphers in the scale of wealth; they seemed to themselves to be
financially blighted, and miserably poor in contrast with the colossal
magnitude of the Vanderbilt possessions as exhibited in the Surrogate’s
Court. The plain, cold, prosy figures brought out there read like a
romance, or the story of Sinbad the Sailor and the Valley of Diamonds.
But it was all stern reality. This is why the feelings which suffer from
this contrast are so deeply pathetic. It is a reality, and a stern
reality, that can hardly be imitated or duplicated by any other two men
in this generation. The thing is possible, but just about as probable as
it was for every private soldier of Napoleon the Great, who each had a
Marshal’s baton in his knapsack, to become a Marshal. “Every
blacksmith,” says the Rev. Robert Collyer, “might become a preacher, but
it would be a great public calamity if it should happen to that extent.”
The bare outlines of the Vanderbilt wills, which have made such a deep
impression on the community at large, will be found in another part of
this book. I think they will afford very interesting reading for
generations yet unborn.
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CHAPTER XXXV.
WILLIAM H. VANDERBILT.
A BUILDER INSTEAD OF A DESTROYER OF PUBLIC VALUES.—HIS RESPECT FOR
PUBLIC OPINION ON THE SUBJECT OF MONOPOLIES.—HIS FIRST EXPERIENCE IN
RAILROAD MANAGEMENT.—HOW HE IMPROVED THE HARLEM RAILROAD
PROPERTY.—HIS GREAT EXECUTIVE POWER MANIFESTED IN EVERY STAGE OF
ADVANCE UNTIL HE BECOMES PRESIDENT OF THE VANDERBILT CONSOLIDATED
SYSTEM.—AN INDEFATIGABLE WORKER.—HIS HABIT OF SCRUTINIZING EVERY