The Consolidator

by Samuel McCracken
The First Tycoon: The Epic Life of Cornelius Vanderbilt
By T.J. Stiles
Knopf, 736 pages, $37.50
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The inevitable transcontinental railroad, completed in 1869, would soon render the Central American routes obsolete, and Vanderbilt turned to the North Atlantic, where he more than held his own against subsidized shipping rivals, including Cunard. After conquering on water and dabbling in railroads, the Commodore found his fi nal métier on land.

In connecting New York and Chicago, he built little track himself, but had a remarkable eye for track laid by others. He was the Great Consolidator. Our existing rail system, comprising six giant corporations, is simply the logical result of the Commodore’s strategy of consolidation, signally embodied in his 1867 purchase of the New York Central. Even now, Amtrak takes people from New York to Chicago largely by the Vanderbilt route.

In this 1870 Currier & Ives lithograph, Vanderbilt races his newly merged railroads against the Erie for dominance between New York and Chicago. At the Eries throttle, Jim Fisk. / Illustration: Library of Congress

Stiles argues persuasively that Vanderbilt found the business model in clay and left it in the marble now surrounding us. He transformed the nature of corporations and of the stock market. Through consolidation, he created the fi rst giant corporation. Stiles correctly notes that this achievement transcended the narrower purposes of the railroad itself.

The Commodore also left a more personal legacy: 13 children. The youngest son, next to last in his class at West Point, went to France to recover his health and died there at the start of the Civil War. The middle son, Cornelius Jeremiah (“Corneil” to the family), an alcoholic gambler and Central Casting wastrel, fi nally ended the comedy by his own hand. William, the eldest son, for many years impressed his father as a “numskull,” but Billy became the Commodore’s deputy and successor, in 15 years doubling the fortune his father left him. In a legendary 1877 trial, Corneil and some of the sisters unsuccessfully contested the will. The current value of the stake in the trial is not easy to calculate, but when the Commodore died, he controlled 1 in 20 of every dollar in circulation. On a good day, Bill Gates controls 1 in 138.

The Vanderbilts are no longer super-rich. Although Billy was worth $200 million when he died and lived almost modestly (for the richest man in the world), his children were spenders, not earners. To see the fortune the Commodore built, you must visit their palaces in Newport and North Carolina.

The Commodore’s true legacy is even more immense: the economic structure about us. “The imagined devices of commerce gradually abstracted the tangible into mere tokens, and then less than tokens,” writes Stiles. “Money transformed from gold coin to gold-backed banknotes to legal-tender slips of paper and ledger entries of bank accounts . . . Like a ghost, the business enterprise departed the body of the individual proprietor and became a being in itself, a corporation with its own identity, its own character, its own personhood.” No philosopher of business (he was too busy making an economy to be an economist), Vanderbilt leads to this day by example.

Stiles takes his epigraph from Salman Rushdie: “To understand just one life, you have to swallow the world.” Stiles has swallowed — and, more important, digested — the world through which Cornelius Vanderbilt for eight decades so astonishingly strode. This is biography on the epic scale.

Stiles's book won the Pulitzer Prize for biography in Spring 2010.

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