A Gilded Edge Tycoon-The Commodore

‘Gilded Edge’, a novel carrying this revealing title, written by Mark Twain in 1873, portrays quintessentially the lives of greedy industrialists and corrupt politicians. The real-life Gilded Age was presided over by entrepreneurs known as “captains of industry” or “robber barons”.
They grew extremely rich through the monopolies they created in the steel, petroleum, transportation and banking industries. John D. Rockefeller, Andrew Carnegie, Leland Stanford, J.P. Morgan and Cornelius Vanderbilt are some names that represent the ambition, drive, spirit and guile that characterized this ilk.

But if there were one example that outshone everyone else for the sheer audacity and imagination, it was Cornelius Vanderbilt that strode the business world like a colossus and impacted a whole generation of a country in such substantial ways, that it would be impossible not to remember him if one were to recount the history of those times. Usually referred to as Commodore, the first of the robber barons and at one time the richest man in the world, Cornelius Vanderbilt was both an institution and a legend.

On his death on this day, the 4th of January of 1877, he left $100 million-equivalent to $2.5 billion to his son, William who carrying the legacy of his father became the richest man in the world.

Born on Staten Island, New York in 1794 to a Dutch immigrant farmer of less than modest means, Cornelius who attended school sparingly began by helping his father ferry produce between Staten Island and Manhattan. By the time he was a teenager, he bought his own boat with a $100 loan. At 23, began his own steam boat operations aided by providence as his employer died and the one- man enterprise fell to his ambitious maneuverings.

There was no looking back from then. By the mid 1840s, he was running more than 100 steamboats and by 1855 he began a very successful transatlantic steamship business.

He was fiercely aggressive and ruthless. ‘There is no friendship in trade’, he is reported to have remarked. Everyone who came in contact with him seems to have come to the same conclusion. In the 2009 Pulitzer Prize winning biography,’The First Tycoon: The Epic Life of Cornelius Vanderbilt, its author T.J. Stilz writes about him thus, “a tough guy, getting into scraps with other men, beating the hell out of them and knocking them unconscious.”

Earning the nickname “Commodore” (for unknown reasons), Vanderbilt created the largest shipping empire in the world. His unusually gifted intuition to sense business possibilities, made him invest in the 1860s in railways as the Civil War was looming. By the end of the war, he had created one of the most extensive rail networks. He forced small operators out of business, built his own lines and his rail companies were carrying seven million passengers a year. A legacy of his daring enterprise was the majestic Grand Central Depot of Manhattan, a precursor of today’s Grand Central Station (1913), a landmark and a tribute to a business genius.

By the end of the war Vanderbilt had become the richest man in America with a net worth of over $65 million {nearly $75 billion today). When he died in 1877, his fortune was valued at $100 million (equal to nearly $2.5 billion today). That was said to be more than the US Treasury held at that time.

“Any fool can make a fortune; it takes a man of brains to hold onto it.” Commodore is reported to have said this to his eldest son Billy who inherited most of his fortune. Billy did more than that. With strong business acumen, partly by way of his inherited genes, he doubled his inheritance to nearly $200 million, making him the richest man in the world by 1883.

The most interesting account of the man was, however, given by one of his descendants in 1989. In his book, “Fortune’s Children: The Fall of the House of Vanderbilt”, descendant Arthur T. Vanderbilt II says: “Despite the Commodore’s great success as a businessman and investor, the man was notoriously harsh and rarely trusted his family with his business and money.

“His eight married daughters were ignored since they no longer bore the family name, but, of course, that was just one factor that barred his daughters from taking over the business.

“One time, after a daughter sold her house and asked him to invest the money for her, the Commodore doubled it and then refused to return her money. ‘Women are not fit to have money anyway,’ he said.”

The wealth so assiduously built by the Commodore and his son Billy, was with equal passion and energy spent by the generations that followed. Arthur T. Vanderbilt II confesses ‘to his absolute amazement’ in his book that when he was researching his book, he realized just how much money had been earned in two generations of the family – and how quickly much of it was spent by the next two generations.

The succeeding generations focused on building grand mansions including three massive townhouses called the “Triple Palaces.” on Fifth Avenue in New York City, luxurious “summer cottages” in Newport, Rhode Island; the palatial Biltmore House in Asheville, North Carolina; and The Breakers. These were indeed grand and opulent. The Breakers, built by the Commodore’s grandson Cornelius, as a “summer home” in Newport, for example is a 70-room mansion completed in 1895. And Biltmore, also finished in 1895, is a 30,000-acre estate with a 250-room French Renaissance castle. It all took six years to build at a cost of nearly $6 million (about $1.6 billion today). Now a tourist attraction, it is the largest privately owned home in the United States and is still run by Vanderbilt descendants. Fortunately, most of these mansions have become National Heritages, and have inevitably immortalized the Vanderbilt name.

Commodore died in 1877. Within less than 100 years, in 1973, 120 members of the family came together for a reunion. There was not a single millionaire among them.