Fifty years in Wall Street
DETAIL.—HIS PRUDENT ACTION IN THE GREAT STRIKE OF 1877, AND ITS GOOD
RESULTS.—SETTLED ALL MISUNDERSTANDINGS BY PEACE AND
ARBITRATION.—MAKES PRINCELY PRESENTS TO HIS SISTERS.—THE SINGULAR
GRATITUDE OF A BROTHER-IN-LAW.—HOW HE COMPROMISES BY A GIFT OF A
MILLION WITH YOUNG CORNEEL.—GLADSTONE’S IDEA OF THE VANDERBILT
FORTUNE.—INTERVIEW OF CHAUNCEY M. DEPEW WITH THE G. O. M. ON THE
SUBJECT.—THE GREAT VANDERBILT MANSION AND THE CELEBRATED BALL.—THE
IMMENSE PICTURE GALLERY.—MR. VANDERBILT VISITS SOME OF THE FAMOUS
ARTISTS.—HIS LOVE OF FAST HORSES.—A PATRON OF PUBLIC
INSTITUTIONS.—HIS GIFT TO THE WAITER STUDENTS.—WHILE SENSITIVE TO
PUBLIC OPINION, HAS NO FEAR OF THREATS OR BLACKMAILERS.-“THE PUBLIC
BE DAMNED.”—EXPLANATION OF THE RASH EXPRESSION.—THE PURCHASE OF
“NICKEL PLATE.”—HIS DECLINING HEALTH AND LAST DAYS.—HIS WILL AND
WISE METHOD OF DISTRIBUTING 200 MILLIONS.—EFFECTS OF THIS COLOSSAL
FORTUNE ON PUBLIC SENTIMENT.
In treating of the family in the order of descent, I shall now make a
brief survey of the life of William H. Vanderbilt, especially in its
relation to Wall Street affairs and the management of his great railroad
system, the two being closely connected. William H. Vanderbilt was not
much of a speculator in the Wall Street sense of the term. He was more
of an investor than a speculator, and his investments had always a
healthy effect upon the market. Unlike Woerishoffer and others of that
ilk, he built up instead of pulling down values, but was at the same
time careful to avoid the error of inflation. He paid due deference to
public opinion also, in striving to allay its alarm in regard to the
dangerous overgrowth of monopolies. A grand illustration of this was
seen in the sale of the large block of New York Central. His first
experience in railroad matters was in connection with the Staten Island
Railroad, thirteen miles in length. The road had been mismanaged and was
deeply in debt, and became bankrupt. As he and his father had
considerable interest in the road William H. was appointed receiver. It
seems this was done secretly at the suggestion of the Commodore, who
wanted to discover by this experiment if his son had any capacity for
railroad management. The receivership of the Staten Island road was
crowned with signal success. In two years the entire indebtedness of the
road was paid, and the stock, which had been worthless, rose to 175.
William H. Vanderbilt was then elected President of the road. It was at
this time, it is said, that the Commodore began to correct his judgment
regarding the “executive ability of William H.,” and the latter relaxed
no effort to please his exacting father in everything, taking all his
abuse without complaint or anger. After the Commodore secured control of
the Harlem road, which was his first great railroad venture, he made
William H. Vice-President. As a co-worker with his father the latter
further demonstrated his capacity for railroad management, and Harlem
stock, which had been down to nearly nothing, in a few years became one
of the most valuable railroad properties in the country. So, it is a
fact, although not generally known, that William H. Vanderbilt had
proved himself to be a competent railroad manager before his eminent
father had fairly begun that line of business. It was almost entirely
owing to his individual exertions and sound judgment that, in a few
years, the Harlem road was double-tracked, and such other improvements
made as sent the stock from 8 or 9 to above par. The Commodore was so
highly pleased and agreeably surprised with his son’s management of the
Harlem road that he made him Vice-President of the Hudson River Railroad
also, and at a later date associated him in the same capacity with the
management of the important consolidation of New York Central & Hudson
River. The great executive power of William H. was manifested in every
successive movement which his father directed, and unparalleled
prosperity was the result in every instance. After William H. was fully
installed in the Vice-Presidency of the consolidated system of the
Vanderbilt railroads he became an indefatigable worker, taxing his
physical and mental powers to their utmost capacity, and it was
doubtless this habit of hard work, persisted in for many years, that
resulted in so sudden and comparatively premature death for a member of
a family famous for its longevity throughout several generations. He
insisted on making himself familiar with the smallest details of every
department, and examined everything personally. He carefully scrutinized
every bill, check and voucher connected with the financial department of
the immense railroad system, and inspected every engine belonging to the
numerous trains of the roads. In addition to this general supervision of
everything that pertained to the railroads, he was in the habit of going
over a large amount of correspondence which the majority of other men
not possessing the hundredth part of his wealth hand over to their
clerks, and he answered a great number of letters with his own hand
which financiers of comparatively moderate means are in the habit of
dictating to their stenographers. When his father died, at the age of
82, in January, 1887, William H. Vanderbilt, then 56 years of age, found
himself the happy possessor of a fortune variously estimated at from 75
to 90 million dollars. The remainder of the Commodore’s bequests
amounted to 15 millions.
After the death of his father the executive powers of Wm. H. Vanderbilt,
in the management of the vast railroad interests bequeathed to him, were
called into active play. The great strike of 1877 among the railroad
employes threatened to paralyze business all over the country, and came
pretty near causing a social revolution. In this emergency a cool head
and prudent judgment were valuable attributes to a railroad manager. Mr.
Vanderbilt proved that he possessed both in more than an ordinary
degree. Just prior to encountering the knotty problem of the strike he
had been highly instrumental in bringing about suspension of hostilities
in the freight war, and the course which he advised led to an
arrangement that produced harmony among the trunk lines for a
considerable period. As a consequence of the rate war the railroad
companies were obliged to cut down the wages of their employes, and this
was the chief element in causing the strike. There were 12,000 men in
the employ of the New York Central and Harlem. Their wages had been
reduced ten per cent. and they had threatened to annihilate the Grand
Central Depot. Instead of making application to have the militia called
out, as had been done in Pennsylvania, Mr. Vanderbilt—although a man
possessed of far more than ordinary courage—with keen foresight proposed
a kindly compromise with his employes. He telegraphed from Saratoga to
his head officials an order to distribute $100,000 among his striking
employes and promising them a restoration of the ten per cent. reduction
as soon as business improved to a point justifying such an advance. This
prompt and prudent action had the desired effect, and the consequence
was that while there was a small insurrection in Pittsburgh, and bloody
war to the knife, at great cost to Allegheny County, calmness reigned in
the prominent railroad circles of New York, and the taxpayers escaped
the burden that might otherwise have been put upon their shoulders, and
the demoralizing effects of violence and bloodshed were prevented. Over
11,500 of the 12,000 men returned to work, thus showing their gratitude
to Mr. Vanderbilt and faith in his promise, which was afterwards duly
fulfilled. The policy of Wm. H., in the management of his great railroad
system, unlike that of his father, was entirely pacific in its
character. He was disposed to settle all misunderstandings by reason and
arbitration, and had no inclination for fighting and conquest, after the
manner of the Commodore. Although a very close calculator in business
matters, a habit to which he adhered even to the precision of striking
out superfluous items which should not have been charged in his lunch
bill, Mr. Vanderbilt was in many respects generous to a fault. He
compromised the suit with his brother, “Young Corneel,” allowing him the
interest on $1,000,000, whereas his father had only left him the
interest on $200,000, with a forfeiture clause in the event of “Corneel”
contesting the will. Wm. H. also made a present of $500,000 in United
States bonds to each of his sisters, out of his own private fortune. A
good story is related in connection with the distribution of this
handsome gift. Mr. Vanderbilt, it is said, went around one evening in
his carriage, taking the bonds with him and dispensing them to the
fortunate recipients from his own hands. One of his brothers-in-law
having observed by the evening papers that the bond market had declined
a point or two on that day, said, “William, these bonds fall $150 short
of the $500,000, according to the closing prices of this day’s market.”
“All right,” replied Mr. Vanderbilt, with assumed gravity, “I will give
you a check for the balance,” and he wrote and signed it on the spot. It
is related that another brother-in-law followed him to the door, and
said, “If there is to be anything more in this line I hope we shall not
be forgotten.” It is said that these remarkable instances of
ingratitude, instead of irritating him, as they would have in the case
of an ordinary individual, only served to arouse his risible faculties
and that he regarded the exhibitions of human weakness as a good joke.
One of the greatest works of Mr. Vanderbilt’s life was the building of
the beautiful palace on Fifth avenue, between Fifty-first and
Fifty-second streets, which he adorned extensively with paintings
selected from the great masterpieces of the most renowned artists of the
world.
One reason assigned for his disinclination to speculate was that he
regarded the property left by his father in the light of a sacred trust,
and while he considered it a filial duty to look after its increase and
accumulation, he was careful not to do anything that might risk its
dissipation.
Mr. Chauncey Depew, who succeeded to the presidency of the New York
Central & Hudson River Railroad Company, was upon one occasion, while
visiting in London, a guest at a dinner given to the Hon. Wm. E.
Gladstone, then Premier of England, and was honored by a seat on the
left of Mr. Gladstone, with whom he discussed the differences between
American and English railroad and financial management. In the course of
conversation Mr. Gladstone said, “I understand you have a man in your
country who is worth £20,000,000 or $100,000,000, and it is all in
property which he can convert at will into cash. The Government ought to
seize his property and take it away from him, as it is too dangerous a
power for any one man to have. Supposing he should convert his property
into money and lock it up, it would make a panic in America which would
extend to this country and every other part of the world, and be a great
injury to a large number of innocent people.” Mr. Depew admitted that
the gentleman referred to—who was Mr. Vanderbilt—had fully the amount of
money named and more, and in his usual suave and conclusive way,
replied, “But you have, Mr. Gladstone, a man in England who has equally
as large a fortune.”
Mr. Gladstone said, “I suppose you mean the Duke of Westminster. The
Duke of Westminster’s property is not as large as that. I know all about
his property and have kept pace with it for many years past. The Duke’s
property is worth about £10,000,000 or $50,000,000, but it is not in
securities which can be turned into ready cash and thereby absorb the