The Scarlet Sisters (7 page)

In one of his few mistakes, Vanderbilt underestimated Drew, who was known to “laugh at injunctions.” Wall Street had already deemed him the King of Watered Stock for a legendary scheme he’d concocted years earlier as a cattle drover to bilk gullible New York merchants. When he rounded up cattle, he commanded his hands to “Give ’em lots of salt.” The thirsty beasts were then given no water until just before they were weighed, and then gulped so much water that their weight, and the sales price, went up. Hence the derivation of the term “watered stock.” Now while Vanderbilt was hoarding Erie stock, Drew and his young protégés Fisk and Gould decided to ignore this newest court order. They repaired
to a printing press in the basement of the Manhattan Erie Building. Turning blank paper into crisp new Erie convertible bonds, Fisk cracked, “If this printing press don’t break down, I’ll be damned if I don’t give the old hog [Vanderbilt] all he wants of Erie.”

It didn’t break down, and Drew immediately converted the bonds, still wet with ink, into shares in Erie, which he knew would most certainly be declared illegal by Vanderbilt’s judge, since the move squarely violated his injunction against Drew’s issuing any new shares. But that problem could wait. Immediately, Fisk and Gould ordered their brokers at the New York Stock Exchange to start selling the oceans of new shares. As soon as Wall Street traders recognized that these several thousand new stock certificates were, in fact, new (easily recognizable as coming straight from the printer), the price dropped “like lead.” Vanderbilt had already spent millions to buy Erie shares. He suddenly found their value shrinking rapidly, and stood no closer to controlling the company. If he showed an ounce of weakness at that moment, the bottom would drop out of Erie, creating a panic that could threaten even his vast fortune. The collapse of Erie “would be ruin for him and hundreds of others.” So he bought, and bought, and bought, singlehandedly bringing the Erie price back up.

Meanwhile, Drew, Fisk, and Gould, recognizing that Vanderbilt’s New York judges stood ready to declare their newly created stock invalid, quickly raced to sell it for cash. They literally stuffed millions in carpetbags and hightailed it to the Hudson River. Some $7 million of their cash had been fleeced from Vanderbilt in his frenzied buying to stave off a major panic. Vanderbilt was stuck with a hundred thousand shares worth far less than what he paid for them. His raid to catch the culprits was a failure.

The furious Vanderbilt got his “injunction” judge to issue arrest warrants against the entire Erie board of directors, but it was too late. His enemies had fled across the Hudson to safety in New Jersey, beyond the reach of New York judges. With great bonhomie, Fisk entertained reporters who had dashed to New Jersey’s Taylor Hotel (nicknamed Fort Taylor) to drink his whiskey and laugh at his jokes. Fisk was more expansive than ever, having collected his
mistress, Josie Mansfield, known as the best-kept “kept” woman, from her Manhattan mansion—safe from Vanderbilt’s contempt citation.

The Claflin sisters, newly arrived in New York, heard all about the Erie War. The conflict had received more coverage than the battle for President Andrew Johnson’s impeachment and crystallized in the minds of most Americans the corrupt and heartless financial games proliferating in post–Civil War Wall Street. Soon the ambitious sisters had their minds set on meeting the famously rich Vanderbilt. His belief in Spiritualism was no secret, perfect for two clairvoyants who saw “visions.” At this point he was in need of help, spiritual or otherwise, because he faced an inconceivable obstacle. As the Erie crisis unfolded, banks refused to lend to the Commodore, now low on cash. “We can’t lend on Erie,” a Vanderbilt aide was told; “there is an illegal issue of stock, and Erie isn’t worth anything.” The aide demanded, “What will you lend on?” The banker said, “[New York] Central—that’s good.” Vanderbilt’s assistant knew that most bankers had broker’s loans, which used stock as security. So he snapped to the bank officer, “If you don’t lend the Commodore half a million on Erie at 50, and do it at once, he will put Central at 50 tomorrow and break half the houses on the Street!”

Vanderbilt got his credit. Friends had deserted him, but he had stemmed the Erie decline. The battle then went from the courts to the New York state legislature in Albany, where Gould quickly set up shop in Parlor 57 of the Delavan House hotel with a trunk stuffed with thousand-dollar bills. Soon legislators were crowding the suite, where Gould dispensed whiskey and his thousand-dollar gratuities. Since Judge Barnard clung to the view that their stock deal was illegal, the Erie crowd decided that a law must be passed to overturn Vanderbilt’s judges and make the stock legal. Boss Tweed, then a senator as well as New York’s “King of Corruption,” set up his own suite in the Delavan, according to many reports, to aid Vanderbilt on the side of killing the bill. The Erie bill was “a godsend to the hungry legislators and lobbymen” who roamed from one suite to the other looking for the best deal. When Vanderbilt suddenly announced he
wasn’t going to fight the bill anymore, the bribe-ravenous legislators angrily voted in favor of Gould and Fisk—whose bribes included an estimated half a million in stockholders’ money. The legislators, known far and wide for easy corruptibility, nonetheless puffed themselves up as gatekeepers of democratic fair play, roaring that they had voted for the Erie contingent because they could not bear to see a Vanderbilt railroad monopoly.

The crowing Gould and Fisk did not know that Vanderbilt had pulled a decisive ace out of his sleeve. It involved a double cross by Drew, who was only too eager to oblige. In secret meetings, the old battlers agreed on terms necessary to lift Barnard’s judicial ruling so that the Fort Taylor gang could return to Manhattan without paying stiff fines or going to jail. In return, Vanderbilt got his money back. Fisk and Gould protested Drew’s betrayal, to no avail. The deal struck with Drew included nearly half a million in payment to Vanderbilt for the $7 million in worthless stock he had bought. He soon was back in the game as vigorous as ever. The deal also included a generous golden parachute for Drew. And Fisk and Gould, the newest fiscal celebrities, were left in control of the declining railroad, whose offices they would soon, in 1869, move uptown to Pike’s Opera House, their base of many notorious Wall Street operations.

In 1868, at the age of seventy-four, the Commodore remained strikingly handsome, as erect as when he was a young six-foot-tall ferry skipper who could brawl his way to a win on the waterfront. He was known for racing his trotters in Central Park at such a breakneck pace that others got out of his way. His prominent nose gave him the look of a Roman senator, it was remarked, and his blue eyes, with their shrewd squint, bored holes in those who dared cross him. He wore black, and his well-groomed white sideburns reached his stiff white collar with its immaculate white cravat tied snugly at the throat. This old-fashioned attire gave him the appearance of a minister, which of course was a far cry from what the cunning, combative tycoon was. He could not spell; he swore atrociously, mangled his grammar, and used spittoons. But he was impossibly rich. His scrawl
on a piece of butcher’s paper was good enough for any banker. He also earned a reputation for honesty: “flawed as he was, he was never a liar.”

Although he was powerful enough in his youth to beat a belligerent prizefighter to the ground with his fists, “he never launched a war of aggression in all his years as a railroad leader,” wrote biographer J. T. Stiles, while still acknowledging Vanderbilt’s ruthlessness. One of his most successful methods was price cutting: lowering the cost to passengers, buying up or driving competitors out of business, then jacking the prices up again. With adversaries, he tried diplomacy first but never backed down when a competitor tried to muscle in on what the Commodore considered his—and by the time the sisters met him, this constituted nearly everything in trains and ships.

The Commodore also frustrated anyone who wanted to find out what he was doing by keeping his business deals in his head, not on paper.

Vanderbilt liked fast horses and his share of fast women, and had seen the world from the lowest level to the highest peak. Nothing much surprised him, but he stunned skeptics with his fascination for Spiritualism and mediums.

For all his tough exterior, the Commodore endured private mourning when those few he loved died. He was often cruelly dismissive of his thirteen children, belittling William, the eldest, whom he would eventually choose to succeed him, but he was heartbroken when his youngest and favorite son, George, who had served without distinction in the Civil War, died in 1863 of consumption. Vanderbilt regularly consulted a medium, who would provide answers to questions he wrote to his deceased parents, brother, and wife. Whether the medium told anything that dovetailed with the Commodore’s questions is unknown. The Commodore also purchased prescriptions from a Spiritualist healer.

In 1868, the sisters knocked on Vanderbilt’s door, calling cards in hand. (Unlike those who had moved uptown, Vanderbilt had clung to the Greenwich Village mansion he had built on Washington Place in 1845, with his stable of fine trotters out back.) When Victoria and Tennie arrived that day, Vanderbilt was definitely ready to embrace their brand
of Spiritualism—and twenty-two-year-old Tennie’s bewitching charms. He was vulnerable that fall, after his Erie defeat and the loss of his wife, Sophie, the long-suffering mother of thirteen, who had died in August. Vanderbilt was a teenager when they married, and although they had not been close for years, her death reminded him of his own advancing age.

Victoria and Tennie almost certainly had caught wind of Vanderbilt’s Spiritualist interest; he was a perfect catch for them. Victoria held out hope that she could please Vanderbilt’s obsessive desire to communicate with his long-dead mother.

And he may have heard of them, for when they arrived in Manhattan the sisters had once again widely advertised themselves as “magnetic physicians and clairvoyants” and “charged $25 in advance” for their wondrous cures. Tennessee had made it known that she saw “visions.” She pointedly told a reporter “if you doubt it, go and ask Commodore Vanderbilt.” Stories made the rounds that Vanderbilt gained stock market tips from the sisters, through their supernatural talents. One woman vowed that Vanderbilt urged her to follow the sisters’ advice to buy New York Central stock. Another woman—considered somewhat unreliable, seeing as how she had shot a druggist—stated that Vanderbilt had advised her, “Why don’t you do as I do, and consult the spirits?”

Unlike upright citizens who prized demure, quiet women, Vanderbilt loved the sisters’ intelligence and boldness. Tennie’s magnetic healing, plus her cheery, upbeat presence, helped his aches and pains, earned through years of railroad and horse racing accidents. The Commodore also suffered from an enlarged prostate and complications from a ruptured lung. Tennie frequented his office and, according to the earliest of biographies, it was said that he would jiggle her up and down as she sat on his lap and call her his “little sparrow,” while she pulled his whiskers and dotingly called him “old boy.” The presumption that they were lovers has lasted for a century and a half. Though the rumor has never been proven definitively, the circumstances and the logic of the situation speak plainly. Tennie would not have blanched at Vanderbilt’s swearing, his whist playing, his occasional gin, or his frequent
cigars. He would have loved her youth and her freewheeling ability to tell a good story. Although it certainly was never discussed, the two shared the honor of being indicted for manslaughter—she for the Ottawa cancer cure, he for a Staten Island Ferry bridge collapse that killed more than a dozen, although the charge against Vanderbilt was quashed.

Vanderbilt probably sought Tennie in the boudoir between his first wife’s death the summer before and his surprise remarriage in August 1869. The oft-repeated “fact” that he asked Tennie to marry him was merely raised later, in 1878, during a sensational fight over his will, by a lawyer trying to prove that Vanderbilt was senile. Disgruntled siblings “proposed to show” that Vanderbilt was of unsound mind during his time with the sisters. The judge ruled this information immaterial, but could not resist a cheap shot at Tennie, to courtroom laughter: “I don’t see that the conversation is any evidence of unsoundness of mind. It might be a matter of taste.”

A medium once allegedly told Vanderbilt, after two raps on a table, “This is for you, Commodore. It is from your wife.” The Commodore reportedly growled, “Business before pleasure; I want a communication from Jim Fisk” (the joke being that Fisk, shot dead in 1872, was someone with whom Vanderbilt could do business even from the grave).

In 1869, however, Fisk was still very much alive. In the months following the Erie War, the sisters credit their good fortune to Vanderbilt’s warning them that Gould and Fisk were scheming again. During the Civil War, Fisk had been a Capitol Hill fixture, wining, dining, and bribing whomever he needed to influence government contracts for his product: blankets of an inferior grade of material called shoddy, the origin of the adjective to describe anything substandard. He then cheerfully traded with the enemy, smuggling cotton through the blockades. By war’s end, he was a very rich man. He had just turned thirty on April Fool’s Day 1865.

Recklessly playing the stock market, he lost it all but swore to return. And by 1869—while the sisters kept a low profile, learning all they could about Wall Street machinations from Vanderbilt, preparing to startle the world with their brokerage move—Fisk was back with a vengeance.
“Manhattan’s upper crust” was stricken to find that such a “buffoon,” with Boss Tweed by his side, could trample on them and become a “frightening financial and political power.” Fisk sailed on, his mustache waxed to rapier sharpness, his red-blond hair marcelled in waves. His diamond-studded vests preceded the rest of him; Fisk seemed to use his girth as his calling card as he swaggered forth.

In 1869, Gould and Fisk tried to corner the New York Gold Exchange’s gold market and created the financial panic known as Black Friday. The sisters, by now players in the market, had a lot at risk. The gold-cornering scandal was one of the most famous of many that rocked the Grant presidency. In their attempt to conquer the gold market, Fisk and Gould recruited Grant’s brother-in-law, Abel Corbin, to help them socialize with Grant. Over cigars and brandy, Gould argued against the government sale of gold even though the use of Civil War government greenbacks had waned. Grant resisted, but an assistant treasurer of the United States, Daniel Butterfield, agreed to tip off Gould and Fisk when the government intended to sell gold.