CORNELIUS VANDERBILT:

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CORNELIUS VANDERBILT THE FIRST TYCOON
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Author, T. J. Stiles

• For Flash Audio from The Miller Center at the
  University of Virginia
• http//www.tjstiles.com/_b_media_center__b__18191.
  htm

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New York Harbor, 19th Century
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STEAMSHIP ERA TO 1840s
VANDERBILT HAD A VERY LARGE NUMBER OF SHIPS
CARRYING FREIGHT AND PASSENGERS THROUGHOUT THE
NORTHEAST, AND COULD PERHAPS CLAIM TO BE THE
LARGEST SINGLE EMPLOYER IN AMERICA. HE SAW THE
HUGE MIGRATION TO CALIFORNIA IN THE 1849
GOLD-RUSH AS A TREMENDOUS OPPORTUNITY, AND FORMED
THE ACCESSORY TRANSIT COMPANY TO CARRY FREIGHT
AND PASSENGERS TO THE GOLDFIELDS VIA NICARAGUA.
SHIPS FROM THE EAST COAST OF THE U.S. LANDED ON
THE GULF COAST OF NICARAGUA, TRANSFERRED THEIR
PASSENGERS TO A RAILROAD RUNNING TO THE SHORE OF
LAKE NICARAGUA. FROM THERE A COMBINATION OF STEAM
PACKETS AND STAGECOACHES CARRIED THEM OVER LAKE,
RIVER, AND LAND TO THE PACIFIC COAST. THERE THEY
AGAIN BOARDED STEAMSHIPS FOR THE LAST LEG OF
THEIR JOURNEY TO CALIFORNIA
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The Erie Canal was constructed between 1817 and
1825 at a cost of 7 million, and the Erie Canal
ran 363 miles along the Hudson River between
Albany and Buffalo, New York. The Erie Canal
was the first great engineering project in U.S.
History. As New York City lies on the Atlantic
Ocean at the mouth of the Hudson, the Erie Canal
essentially connected Lake Erie and the rest of
the Great Lakes with the Atlantic world. It thus
linked the port city and commercial center of New
York with the growing interior of the North
American continent. The canal made it possible
to ship wheat and meat - products from the
interior - to the urban centers of the East. The
Great Lakes and the Atlantic were thus became
inextricably linked.
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NEW YORK MONOPOLY
A New York state law gave two individuals (Robert
Fulton and Chancellor Robert Livingston) the
exclusive right to operate steamboats on waters
within state jurisdiction. Laws like this one
were duplicated elsewhere which led to friction
as some states would require foreign
(out-of-state) boats to pay substantial fees for
navigation privileges. In this case a steamboat
owner who did business between New York and New
Jersey challenged the monopoly that New York had
granted, which forced him to obtain a special
operating permit from the state to navigate on
its waters.
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• ROBERT FULTON

• Chancellor
• Robert Livingston

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Ogden v. Gibbons
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Ogden vs. Gibbons (1824) One of the most
important decisions of the Marshall era at the
U.S. Supreme Court. It ended the Fulton and
Livingston monopoly on the steamboat trade in New
York, and declared that the federal government
had final authority over interstate commerce.
The decision freed commercial ventures from
local tariffs and monopolies that could have
Balkanized trade among the states, and thus
facilitated the flow of goods between the
interior and coastal ports.
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Vanderbilt also challengesthe Fulton-Livingston
Monopoly

• Vanderbilt appealed his own case against the
  monopoly to the Supreme Court, which was next on
  the docket after Gibbons v. Ogden. The Court
  never heard Vanderbilt's case, because on March
  2, 1824, it ruled in Gibbons's favor, saying that
  states had no power to interfere with interstate
  commerce.

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When the California gold rush began in 1849,
Vanderbilt switched from regional steamboat lines
to ocean-going steamships. Many of the migrants
to California, and almost all of the gold
returning to the East Coast, went by steamship to
Panama, where mule trains and canoes provided
transportation across the isthmus. The Panama
Railroad was soon built to provide a faster
crossing. Vanderbilt proposed a canal across
Nicaragua which was closer to the United States
and was spanned most of the way across by Lake
Nicaragua and the San Juan River. In the end, he
could not attract enough investment to build the
canal, but he did start a steamship line to
Nicaragua, and founded the Accessary Transit
Company to carry passengers across Nicaragua by
steamboat on the lake and river,
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WILLIAM WALKER FILIBUSTERS
THE TERM FILIBUSTER WAS FIRST USED IN 1851. IT
WAS DERIVED FROM THE SPANISH WORD, FILIBUSTERO,
MEANING PIRATE OR FREEBOOTER.
THIS TERM WAS APPLIED AT THE TIME TO AMERICAN
ADVENTURERS, MOSTLY FROM SOUTHERN STATES, WHO
SOUGHT TO OVERTHROW THE GOVERNMENTS OF CENTRAL
AMERICAN STATES, AND THEN IT REFERRED TO THE
USERS OF THE LEGISLATIVE FILIBUSTER, SEEN AS A
TACTIC FOR PIRATING OR HIJACKING DEBATE.
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Vanderbilts Railroad Era
At age 70, encouraged by his son William to get
into railroading, Vanderbilt decided hed try to
build a railroad empire. The most significant
railway acquisitions started with the purchase of
stock in the New York and Harlem Railroad of
which he later became director. By the end of
1867, he had acquired the Hudson River Railroad
and the New York Central Railroad.
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THE NEW YORK CENTRAL R.R. THE WATER LEVEL
ROUTE
The New York Central was known as the "Water
Level Route", as its mainline to New York City
followed the Hudson River, the Erie Canal, and
the Lake Erie shoreline.
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James Fisk and the Erie War

• With Daniel Drews backing, the brokerage firm of
  Fisk Belden was formed in New York City, in
  1866.
• Fisk joined with Drew and Jay Gould to wage the
  Erie War, a scheme to use the Erie Railroad to
  pry huge amounts of money from Vanderbilt.

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Between 1866-1868 Daniel Drew conspired along
with James Fisk and Jay Gould to issue fraudulent
Erie Railroad stock, thus "watering down" the
stock, of which Cornelius Vanderbilt bought a
large quantity. Vanderbilt lost more than 7
million in his attempt to gain control, although
Gould later returned most of the money.
Vanderbilt conceded control of the railroad to
the trio. They were involved with the corrupt
Tammany Hall party machine, and made Boss Tweed a
director of the Erie Railroad. Tweed (who later
died in prison for embezzlement or fraud), in
return arranged favourable New York legislation
for them. But in 1870, Fisk and Gould betrayed
Drew, again manipulating the Erie Railroad stock
price and causing him to lose 1.5 million. The
Panic of 1873 cost him still more, and by 1876,
Drew filed for bankruptcy, with debts exceeding a
million dollars and no viable assets. He died in
1879, dependent on his son for support. Gould
eventually gained the advantage in the conflict,
but he had to relinquish control in 1872-73,
following his loss of 1 million worth of Erie
Railroad stock to the British con-man Lord
Gordon-Gordon. Public opinion was also hostile to
him because of his involvement in the 1869
gold-rigging scandal.
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