Pugilistic Tycoon: Vanderbilt Jabs His Way To The Top
STEVE INSKEEP, host:
We're learning about some American lives in this final week of the year, a few of the people who got us where we are. And this morning, we're going to look at a man who shaped this country's economy. Cornelius Vanderbilt owned shipping lines and railroads in the 1800s. His statue still looms over the entrance of New York's Grand Central terminal. Biographer T.J. Stiles brought that statue to life.
Mr. T.J. STILES (Author): He was six feet tall at a time when the average American man was 5'7" or 5'8". He was combative, living in a level of society that was intensely competitive and confrontational. Rumor and legend has it that he was involved in numerous fist fights, and I actually found court records that showed that he engaged in fist fights and won into his 50s.
INSKEEP: T.J. Stiles is the author of "The First Tycoon," which won the National Book Award for Non-fiction this year. Cornelius Vanderbilt controlled around five percent of the U.S. economy. That's far more than any individual today. He did that even though he didn't have much education. Cornelius Vanderbilt did not write well, or all that often.
Mr. STILES: His letters are not numerous. He abominated papers, according to his long-time clerk. But those that survive show that he wrote completely phonetically. He would write in this pattern of speech that I didn't find even in other letters from uneducated individuals. I am a-going. Things are a-working. It's really interesting. His lack of education actually allows us to gain access to the way he spoke.
Mr. STILES: But as he aged, even though he never learned to spell properly, his letters became more formal. As he rose in status, he actually sought to become gentlemanly. We see through his letters that he began to inhabit the social world that his wealth had lifted him to.
INSKEEP: Well, what did he use to begin to vault himself forward in business and in the world?
Mr. STILES: Well, one of the fascinating things about Vanderbilt is that his career speaks to some of the great themes in American history, and one of them is the expansion of the American economy. Because he was in transportation -transportation was the first big business in America, and as the country geographically shifted, as the economy changed, he shifted his operations to follow the main channel of commerce.
INSKEEP: You know, I was delighted as a resident of the East Coast - of the Northeast Corridor, as it's called, who's frequently traveled from New York to Philadelphia to Washington up to Boston by train or by car or by plane - to realize that Vanderbilt based his early fortune on early versions of that Northeast Corridor traffic.
Mr. STILES: Absolutely. That Northeast Corridor was the main artery of commerce for most of American history until the Civil War. And Vanderbilt followed with his steamboat operations. And he got involved, because the early railroads connected with steamboats, he became involved in railroads very early on. And that's interesting, not only because he was one of the pioneers in what is still one of the main corridors of commuting today, but because getting involved in the early railroads taught him about corporations. And the emergence of the corporation is one of the major themes of 19th century American history. It's one of the things that created modern America.
INSKEEP: You described businesses were growing too large for any one person to finance or control and a corporation was a method by which somebody like Cornelius Vanderbilt could take his money and a lot of other people's money and spend it his way.
Mr. STILES: That's right. The corporation is both an enormously powerful instrument for productivity and the creation of wealth, but it also comes with lots of conflicts of interest. And one of the things about Vanderbilt that's very interesting is that he was a very honest manager of the corporations he ran, and it was considered a wonderfully rare thing. You see the press talking about how amazing it is to have a corporate chieftain who's not stealing from his shareholders.
INSKEEP: What was Vanderbilt's attitude toward competition when he was running a steamboat line or a rail line and he had a competitor coming up against him or he was thinking of competing against somebody?
Mr. STILES: Well, Vanderbilt made his mark as one of the great competitors. For example, he would go after the big players who were dominating markets. But when he moved into railroads, the railroad industry was different from shipping. If you're competing against someone and you find that you're losing, you can always move your ship someplace else. But railroads are there to stay. So the man who built his reputation as the great competitor ended his life by helping to forge cartels. He became one of the great anti-competitive forces in the American economy.
INSKEEP: You seem to suggest throughout his career, even in shipping, he was perfectly comfortable with monopoly and with no competition, as long as it was his monopoly.
Mr. STILES: But it's interesting because he was perfectly happy to make deals to end competitive wars, either by taking a payment to leave a market, or by paying someone else to leave a market.
INSKEEP: He would compete and then essentially demand what some people felt was a blackmail payment to stop competing against a rival line.
Mr. STILES: And that actually led to the first use of the robber baron metaphor. He saw himself as willing and able to fight and win under all circumstances. Whenever he had a monopoly, it was because he had won it through a fair fight.
INSKEEP: Is it too harsh to suggest that Cornelius Vanderbilt's main principle was that he was going to do whatever served his interest in the moment?
Mr. STILES: No, I don't think that's too harsh at all. One of the most fascinating moments when we see that is in 1867, to settle a dispute with the New York Central Railroad, he decided to cut off all rail traffic into Manhattan, the largest city in the country.
INSKEEP: This must have been the equivalent of if you threw a roadblock on Interstate 80 going west out of Manhattan today or something, just cut off traffic.
Mr. STILES: Well, it would be more like also stopping all airline traffic, also stopping all shipping. Railroads were everything at the time, and it was deep winter. The rivers and the bay were closed by winter storms and ice. So he essentially put a blockade on Manhattan, cutting off the nation's largest city from the rest of the country.
Fortunately, the dispute was resolved quickly and Vanderbilt won. His enemies caved in. But it naturally posed a question for Americans, which is how do we control and make sure that these large corporations, which we so depend upon, how do we make sure that they in pursing their private interest, they don't violate the public interest?
And when this question was presented to Vanderbilt at a hearing by the New York State legislature, he said, well, if you can pass a law that gets men to pursue their interests more effectively, then it's all well and good, but I don't think you can do it. He didn't even recognize the idea of a public interest in answering that question. He had the idea taken to the nth degree that society is best served by everyone pursing their interests as vigorously as possible. And he pursued his personal interests more vigorously than anyone, and he thought that was a great thing for the country.
INSKEEP: T.J. Stiles is author of the "The First Tycoon." Thanks very much.
Mr. STILES: Thank you very much.
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INSKEEP: We're learning about American lives in this final week of the year, a few of the people who got us where we are today. Tomorrow, we will hear about the American life of the boxer Sugar Ray Robinson.
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