The First Tycoon: The Epic Life of Cornelius Vanderbilt (50 page)

In this case, Vanderbilt would not get ahead of the other boys. He and White neutralized each other. Pacific Mail, U.S. Mail, and the Panama Railroad (a formidable lobbying bloc in their own right) would remain the official carriers for the Post Office. Stymied in politics, Vanderbilt carried on the business war, the one he knew best. His and Mills's ships continued to connect via Panama, rather than Mexico, but the Commodore's prowess at cutting costs would allow him to slash fares until he had cut open the very arteries of the Accessory Transit Company.

AS THE BUSINESSMEN BATTLED
, the fixer left Washington to continue his work. In February 1854, Joseph White returned to Nicaragua to cope with the government's anger over Accessory Transit's failure to pay the required 10 percent of its profits. White, of course, preferred intrigue and corruption to simply paying the debt, as he freely admitted to Secretary of State Marcy “I am fatigued with listening to the extortionate demands of this Govt. & bribing it into silence,” White wrote from Nicaragua. “This process of securing the observance of chartered rights is too annoying and expensive.”
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Whatever Marcy thought of White personally, he supported the company. As Nicaragua surpassed Panama in popularity as a route to California, keeping the transit open became a strategic imperative for the United States, which would admit no fine points of morality
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In the course of 1854, the company's profits suffered under the competition of Vanderbilt's Independent Line, as the Commodore slashed fares—by half, then to one-third of what Accessory Transit charged.
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At Virgin Bay on Lake Nicaragua, an Accessory Transit launch shuttling passengers to a steamboat overturned, drowning twenty-one.
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In July, a murder carried out by one of the Accessory Transit riverboat captains brought to a head years of conflict with the people of Greytown. Together with Solon Borland, the belligerent U.S. minister to Nicaragua, White convinced Marcy to send the USS
Cyane
to destroy the town. White himself wrote instructions for the ship's captain, telling him not to “show any mercy to the town or people.… It is of the last importance that the people of the town should be taught to fear us. Punishment will teach them.” On July 13, the
Cyane
bombarded Greytown for several hours; then a landing party burned the remaining buildings to the ground. Not for the last time, Americans had completely destroyed a Nicaraguan city
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VANDERBILT FACED SWINDLERS
of every description, in every direction. In June 1854, he sued William C. Moon for fraud. He had accepted a $3,000 promissory note from Moon, who claimed to represent a well-known mercantile house. Vanderbilt endorsed it over to August Belmont, who discovered the hoax. The Commodore promptly paid Belmont, though he is unlikely to have gotten his money back from Moon. In this case, the crime is less interesting than what it says about Vanderbilt's prolific small-scale lending. In 1854, he took numerous promissory notes for amounts ranging from $1,000 to $5,000. Years later, Lambert Wardell would claim that Vanderbilt had no time for small deals, observing, “An intimate friend of his once said that ‘The Commodore was the biggest man in a big thing and the littlest man in a little thing that he ever knew’” In 1854, that judgment was only half true, as Vanderbilt sought to invest every penny. He reportedly admitted all callers at his private office, and accommodated requests for minor loans rather freely (though he charged market rates of interest).
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But swindlers continued to haunt him; indeed, they would plague him in 1854 as at no other point in his life. The most heartbreaking, though not the worst, was his son Corneil. In March, Corneil's epilepsy struck him hard. “He is in feeble health,” a friend wrote, “and visits Washington for pleasure & for the benefit of his health.” The idea of anyone visiting the swampy city of Washington to improve his health would have struck most Americans as a bit strange. Stranger still were the identities of the friend who wrote this letter and the man who received it: John P. Hale, former senator from New Hampshire, and Charles Sumner, senator from Massachusetts, both leading opponents of slavery.

At the moment, Hale and Sumner were embroiled in a struggle against the Kansas-Nebraska bill, which threatened to overturn the Missouri Compromise's ban on slavery in the lands north and west of Missouri. It was a titanic battle, yet Hale found time to intervene for the “son of the celebrated Mr. Vanderbilt.” He told Sumner, “If you can show him any attention, you will confer a favor on yours [truly].”

Corneil, who once had limited himself to drawing drafts on his unsuspecting father or skipping out on his bill at the haberdashery, had discovered a new method of acquiring gambling money: he charmed and flattered powerful men, playing on his father's fame to elicit loans. “Corneil was eccentric, and was possessed by some astonishing peculiarities that made him a genius in his way,” said Henry Clews, a gossipy banker who knew Corneil in later years. That genius lay in “his ability to catch the ear of prominent men, who would listen attentively to his tale of woe, and some of them were so thoroughly under the spell of his persuasive powers that they would fork out the required amount without hesitation, to relieve his pressing necessities.”
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As if this were not strange enough, Corneil managed to get himself arrested for forgery. His father, it seems, bailed him out of jail, then took him for a carriage ride.
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What Vanderbilt said to his son is unknown, but clearly he was unhappy with Corneil's increasingly disturbing behavior—the behavior of an addict. And he had a plan to address it. Before he could put it into operation, however, he suddenly fell ill.

One day in late May, Dr. Linsly received an urgent message to come to 10 Washington Place. He rushed to Vanderbilt's bedside. Listening closely to his patient's heart, he heard the same rapid yet feeble beating that had afflicted the Commodore in 1848. It was “a severe attack,” Linsly recalled. “He had had this trouble with his heart for eighteen days. He could not lie down, and the infiltration of water into his legs gave him dropsy.” It was a “singular heart trouble,” Linsly said. “There is no name for it.” Nonplussed, he once again advised Vanderbilt that he would likely die, and should put his affairs in order.

“
SERIOUS ILLNESS OF COMMODORE VANDERBILT
,” the
Times
announced on May 31. “We regret to hear that Cornelus Vanderbilt, Esq., lies dangerously ill at his residence in Washington Place.” The children, including Corneil, took up vigil in the house, shrouded by a near certainty of their father's demise. As in 1836, Vanderbilt called for an attorney and dictated a will. “He told me he had given the bulk of his property to his two sons, William H. and George,” Linsly reported. “He also told me he had left the house in Washington Place to Mrs. Vanderbilt, and, my impression is, with $10,000 added.” Like an ancient dynast, the Commodore meant to keep his estate intact, and pass it on to his sons—the sons for whom he still had some respect, that is. Curiously, he drafted no special provisions for the sons-in-law who played such a large role in his businesses, not even for Horace Clark, who had just settled 128 lawsuits stemming from the
North America
disaster for just $61 each. For the daughters who fretted beside his deathbed, and for Corneil, the Commodore planned to leave comparatively little.
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On the very day the
Times
announced Vanderbilt's illness, he began to improve. The
New York Evening Post
reported “the favorable change today in the symptoms of the disease.” His heart began to beat strongly and evenly, and the “dropsy” disappeared. By June 30, he had fully recovered. On Sunday, July 2, he had Corneil arrested. “Dear Sir,” Corneil wrote to his lawyer, at four o'clock that afternoon, “I have this moment been arrested by two officers, on the charge of insanity, and am now on my way to the Asylum. Do what you can to release me at once.”

Four days later, a judge ordered Corneil's release from the Blooming-dale Asylum, after its presiding physician testified that “he was perfectly sane.”
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The physician was correct. Corneil's problem was not insanity; it was addiction to gambling. The Commodore's heavy-handed intervention in Corneil's self-destructive course failed because the era lacked the language, let alone the science, for addressing the disease.

When Corneil went free, he found his brother Billy and lawyer Charles A. Rapallo waiting for him. Billy told him, Corneil later reported, “that the doctor had sworn to this commitment to keep me out of the State prison [for forgery], and I told him I had rather be considered a damned rascal than a lunatic.… After that I had no conversation with William H. for two years.”
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Corneil blamed his brother, but his father almost certainly gave the order. The incident speaks to Vanderbilt's exasperation with Corneil. George inherited his athleticism; Billy showed signs of his shrewdness and intelligence; but Corneil was a schemer, a talker, and a weakling, all things that aroused the Commodore's contempt. Characteristically Vanderbilt tried to solve the conundrum with a decisive act; but family cannot be managed like a business. Like so many fathers, he would have to just muddle through.

On the day that Vanderbilt had his son arrested, he confronted a far more dangerous, and far less likely, swindler: Robert Schuyler. Vanderbilt's relationship with him reached back at least as far as 1838, when Schuyler had served as president of the New York & Boston Transportation Company, the steamboat monopoly on Long Island Sound. But the twisted tale that unfolded over Independence Day of 1854 may have begun even earlier.

The nephew of Alexander Hamilton, Schuyler was “no nameless money-making speculator,” George Templeton Strong wrote in his diary “but… one of our ‘first’ people in descent and social position and supposed wealth.” And yet, according to one Wall Street source, he led a double life. As an unmarried man, he resided at a hotel downtown, and maintained an office with his brother on Wall Street. Yet he also had a small house in the upper reaches of Manhattan, where he kept a mistress. “Here he lived a part of his time, and reared a family, though the mother of his children was not his wife,” the Wall Street insider wrote fifteen years later. Why he did not marry the woman is unclear—perhaps she was not considered a suitable match for the illustrious Schuyler scion. “The landlord, the butcher, the grocer, and the milkman transacted all their business with the lady. Bills were promptly paid, and no questions asked. The little girls became young ladies. They went to the best boarding-schools in the land.”

His eldest daughter indirectly ended the masquerade. A minister of the gospel asked for her hand, insisted on meeting her family, and was stunned to discover that his prospective father-in-law was the rich and famous Robert Schuyler—and that his fiancée was an illegitimate child. At the minister's insistence, Schuyler agreed to marry the mother of his children, despite the likely scandal. To Schuyler's surprise, the elite of New York embraced his new family. “An uptown fashionable mansion was purchased, and fitted up in style. Crowds filled the spacious parlor, for there was just piquancy enough in the case to make it attractive. Splendid coaches of the fashionable filled the street; a dashing company crowded the pavement, and rushed up the steps to enjoy the sights.”
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No other sources mention this tale; perhaps it was too delicate a subject for the newspapers, or perhaps it was just a rumor, an echo in the ruins of Schuyler's cataclysmic downfall. Tellingly, it suggested a personality steeped in subterfuge, an accomplished liar who saw deception as something other than his last resort. As Vanderbilt soon discovered, this described Robert Schuyler with tragic precision.

On the morning of Saturday, July I, New York's merchant community expected runners to spread through the streets of downtown New York from “the eminent house of Robert and George L. Schuyler,” as the
Evening Post
called it, carrying payment for promissory notes and other debts now due. But instead of money, a message went forth that the firm could not meet its engagements; and Robert, the senior partner, had fallen terribly ill and could not leave his bed to manage his affairs.

Wall Street had known great failures before, but this one deeply troubled the city's businessmen. The Schuylers occupied the center of the emerging corporate economy. George served as president of the New York & Harlem Railroad, Robert of the Illinois Central, the New York & New Haven, and others. Even worse, the money market was already approaching a crisis. The capitalists of New York and New England had overextended themselves in lending to expanding railroads in the West, while the supply of credit from London had dried up because of heavy borrowing by the British and French governments to finance the Crimean War against Russia.
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When word went out of the Schuylers' failure, Cornelius Vanderbilt drove to Robert's mansion on Twenty-second Street. Schuyler owed him $600,000, of course, but Vanderbilt also feared a general panic in the wake of the bankruptcy. Sitting at Schuyler's bedside, the Commodore held out a check for $150,000, enough to see him through the next week or so. After a few arrangements, he said, he could provide still more help, as much as $3 million. Furthermore, he would go into Wall Street and start a bull campaign to drive the stock of the New Haven and Harlem railroads up to par, which would inflate the value of Schuyler's stock portfolio and allow him to settle with his creditors. All this and more he would do, the
Evening Post
reported, “if Mr. Robert Schuyler would only assure him that ‘all was right.’ To this Mr. Robert Schuyler made no other reply than shaking his head. No such assurance could be given.”
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