The Other Half of History Post

The Men Who Built America: Great Stories, Too

Much Poetic License
Posted on October 21st, 2012 in Daily Blog, TV Shows with 6 Comments Printer Friendly

The History Channel aired the first episode of its The Men Who Built America
series last week, and I tuned in eagerly to watch it.
The series will profile the careers of railroad magnate Cornelius Vanderbilt, oil
man John D. Rockefeller, steel maker Andrew Carnegie, investment banker JP
Morgan, and car maker Henry Ford. The opening episode focuses on
Vanderbilt and Rockefeller.
As my regular readers know, Im a huge fan of entrepreneurs who have gone
from rags to riches in this country. Ive read dozens of books about this era in
American history, including biographies of most of the primary and secondary
characters in this series. If rock stars have their groupies, Andrew Carnegie
and John D. Rockefeller have me.
After watching the first episode of this program, I can offer only a qualified
endorsement.
On the positive side, the History Channel does a pretty good job of sketching
out the development of Americas leading ninteenth century businesses and
businessmen for a mass audience. Viewers who know little or nothing about
these stories can get a fairly accurate introduction to the names and major
milestones.
Also on the plus side, the treatment History gives these stories is generally
free of the taint of left wing Political Correctness. While the program does
portray the movers and shakers of that era as flawed individuals (which all of
them were), it stays away from the Robber Baron caricature so common in
college textbooks and other media portrayals. Interviews with modern day
businessmen like Jack Welch and Donald Trump give a more appreciative
view of the early American business leaders that youd be likely to hear in a
typical college classroom.
On the negative side, the makers of this series, or at least of the first episode,
take far too many liberties with the stories. My overall impression is that the
makers of this episode where more concerned with telling a dramatic story
than they were with historical accuracy.

The first bit of carelessness comes in the opening minutes of the episode. To
introduce the post-Civil War era, the show starts out with a dramatization of the
death of President Lincoln. The narrator solemnly observes that Lincoln was
the final of the six hundred thousand deaths of Americas bloodiest conflict.
Aside from the bad grammer, the statement is untrue, as any Civil War buff
can attest. The battle of Columbus was fought the day after the Presidents
death, and the Battle of Palmito Ranch a month later.
(President Lincoln was shot ten days after General Lees famous surrender at
Appomattox Courthouse, but, contrary to popular belief, the Civil war didnt end
when Lee surrendered.)
The episode then moves rapidly from politics to business, introducing the
viewer to the career of Cornelius Vanderbilt up to that time. Unlike more PC
versions of history, the program mentions that Vanderbilt grew up poor and
built his shipping and railroad business from scratch.
Then the program goes into a highly dramatized and very imperfect account of
how Erie Railroad executives Jim Fisk and Jay Gould fleeced Vanderbilt with a
stock watering scheme early in 1868. The narrator describes Fisk and Gould
as being mere middle managers at the Erie before their successful scheme
against Vanderbilt. In actual fact both of them were on the board of Directors of
the Erie, and both were well known to Vanderbilt.
The History Channel then tells the viewer that Vanderbilt rebounded from this
loss by entering into the oil-shipping business via a personal meeting with
Rockefeller, who is portrayed as a struggling businessman threatened with
bankruptcy before his fortuitous meeting with Vanderbilt.
In truth Rockefellers company was in no danger of bankruptcy when these
1868 negotiations took place, and Vanderbilt had little to do with them.
Rockefeller, whose business was growing more profitable by the day, met with
executives of the Lake Shore railroad, a subsidiary of Vanderbilts New York
Central, a couple months after the Fisk-Gould stock watering scam.
Rockefeller did agree in these meetings to ship sixty carloads of oil a day, just
as the History narrator describes, but thats about the only detail of the meeting
that wasnt stretched or changed for dramatic effect.
Another detail about Rockefellers business that the program gets wrong is
why he chose Cleveland for his center of operations. The program claims that
there were oil fields all around Cleveland in every direction, even showing a
bogus map that purports to show where these wells were located. In actual
fact all the oil fields in the world in 1868 were located in northwestern

Pennsylvania, near a town called Titusville, about a hundred and fifty miles
southeast of Cleveland.
Another issue over-dramatized by the network is Rockefellers entry into the
pipeline business. The show claims that the oil man came up with the idea
himself, while staring at some pipes in one of his refineries. In actual fact the
oil drillers near Titusville built their own pipelines before Rockefeller ever even
considered the idea, and so did Thomas Scott of the Pennsylvania Railroad.
The program then introduces Andrew Carnegie to the viewer by claiming that
he, as Scotts protege, was present in meetings between Scott and Rockefeller
in the late 1860s and even into the early 1870s. This is a fabrication obviously
intended to tie Carnegie into the story so viewers will be familiar with him when
he is profiled in the soon-to-be-aired second episode.
While it is true that Carnegie got his start in business working for Scott, he had
ceased to do so several years before Scott got involved in the negotiations
with Rockefeller portrayed in the TV show. Carnegie resigned from the
Pennsylvania Railroad in 1865, right after the war ended. By that time his other
business interests were far more lucrative to him than the work he did for
Scott. (He only stayed with the railroad as long as he did because he
considered it a valuable way to assist the Union war effort.)
Heres one last minor criticism of the program. According to the narrator,
Rockefellers oil business had already made him the richest man in the world
in the mid 1870s, the period being portrayed as the episode comes to a close.
Not true. While Rockefellers nineteenth century lamp oil business made him
quite wealthy, he was nowhere near being the richest man in the world at that
time.
He would not achieve that status until years after his retirement, when Henry
Fords gasoline-burning automobiles created a demand for petroleum that
drove the value of Rockefellers Standard Oil shares up to unprecedented
levels.
All in all, this History Channel series is probably worth watching for anyone
who wants to get a historical overview of late nineteenth and early twentieth
century business, even though the producers have taken a few creative
liberties to make for a more dramatic flow. And if a few viewers are inspired to
learn more about the men being profiled, so much the better.
Al Fuller

Click here to read Als review of the second episode.

Click here to read Als review of the third episode.
And click here to read his review of the fourth.
Back to Top

6 Responses
1.

Aimee Duran says:

June 10, 2013

This is a very interesting text. The series just aired in History Channel
Latin America. It has had great response but I did wonder how
accurate they were. It is too bad that several historical facts were
changed but I guess it should be considered as a TV version of an
historical novel.
Thanks for this information, I will start looking into REAL events related
to those characters.
2.

Paul Jacobs says:

November 15, 2012

Another serious misrepresentation in this episode was the clear

inference that Rockefeller was the primary cause for the Crash of
1873. There is no evidence whatsoever that Rockefellers fight with the
railroads had any impact on the financial collapse. I question whether it
is worthwhile for people to get their history from a series that has so
many misstatements of fact.
3.

Gary Gordon says:

October 28, 2012

Unlike more PC versions of history, the program mentions that

Vanderbilt grew up poor and built his shipping and railroad business
from scratch.
I actually took issue with that statement. Poor is relative. My
understanding was his family was working class. His father owned a
boat from which he derived his income. The show mentions that
Vanderbilt got a loan for his first boat. This is true, but they neglected

to mention the loan came from his mother who ran a side business
lending people money. (according to the Stiles biography, at least).
4.

Tony says:

October 23, 2012

Thanks for the article. Fun series to watch. Too bad its half Hollywood.
Carnegie never built the Eads Bridge, he sold his shares in Keystone
Bridge in 1871. Eads was completed in 1874. He didnt have anything
to do with the elephant, haha! Thats just one example. Maybe History
Channel should do a series on the historical point in time when
everything on t.v. became complete BS.
5.

John Crebassa says:

October 22, 2012

Good article. I always look forward to them but I havent heard from
you for a while.

The Other Half of History Post

The Men Who Built America
Episode Two: Twice as Phony
Posted on October 25th, 2012 in Daily Blog, TV Shows with
19 Comments Printer Friendly

The History Channel aired the second episode of its

Men Who Built America series on Tuesday, and
there was very little history in it.
In my review of the first episode I said the makers
were more concerned with telling a dramatic story
than they were with historical accuracy. The second
episode is far worse in this regard. Its basically just
fiction in a period setting.
The episode starts with Andrew Carnegie standing
over the grave of Thomas Scott, the recently
deceased president of the Pennsylvania Railroad.
The Narrator informs us that John D Rockefeller had
crushed the railroad, and Scott, by his ruthless
business practices. Scott had been Carnegies
mentor (that bit is actually true), and the loss is an
enormous blow to Carnegie because of the close
personal relationship they had.
Scott, we are told, died a broken man, defeated and
humiliated at the hands of John D Rockefeller.
Carnegie vows to get revenge against Rockefeller.
The rest of the two hour episode pretty much sticks
with the narrative that Carnegie is obsessed with
defeating Rockefeller.
None of this is true.
When Scott died in 1881 his Pennsylvania Railroad
was one of the two largest railroads in the nation,
partly because of all the business theyd gotten from
John D Rockefellers Standard Oil Company. Scott
had had some financial troubles, but he was certainly
not a broken man.

And the financial hardships Thomas Scott was

suffering at that time had very little to do with
Rockefeller. Scott had over-extended himself
investing in a southern railroad in the early 1870s,
and then tried, unsuccessfully, to get Carnegie to bail
him out financially. The relationship between
Carnegie and Scott was always frosty after that. By
the time Scott died he and Carnegie had long since
ceased to be close personal friends.
Its true that Standard Oil was always haranguing the
Pennsylvania, and the other railroads, for lower
freight rates; but so was Carnegie Steel. That was
the nature of business, then as now.
After this phony tale of Carnegie having a vendetta
against Rockefeller, the program goes into a highly
fictitious account of the building of the first railroad
bridge across the Mississippi River.
In the TV version Carnegies Keystone Bridge Works
hired James Buchanan Eads to design the bridge,
but Eads couldnt figure out how to make an iron
structure strong enough to withstand the distances it
had to span, and the currents of the river. Carnegie
has an epiphany while standing outside a
blacksmiths shop, and tells Eads that he must use
steel rather than iron. The bridge project consumes
Carnegies money, time, and passion; until he is on
the verge of bankruptcy. When his vendors refuse to
ship him any more materials, and threaten to sue
him, he has to stop construction on the bridge until
he can beg some additional financing from the
government.
Nothing like that ever happened.
In actual fact Carnegies company was not the prime
contractor for the bridge project, it was only a subcontractor. It was Eads who insisted on steel for
various parts of the bridge, while Carnegie argued
fiercely that iron should be good enough. Carnegies

part of the job was profitable from start to finish; he

even made some extra money helping the
government sell bonds to finance the project!
The fictional story of the bridge is followed up with
more stories about the vendetta Carnegie
supposedly nursed against Rockefeller. Its a shame
that History didnt offer a more accurate account,
because the relationship the two men actually had
was pretty interesting.
The only major business deal the two of them ever
made in the real world involved some iron-bearing
lands in the Mesabi Mountain range of Minnesota,
which Rockefeller ended up leasing to Carnegie on
terms very favorable to Carnegie. The Mesabi Range
deal ended up having repercussions all around the
nation. Among other things it drove Thomas Edison
from riches back to rags for a while by driving down
the price of iron ore. No mention of the Mesabi
Range deal was made in the History program, and
thats a pity, because the story would have been far
more interesting than the fiction the network chose to
broadcast.
The last forty-five minutes or so of the program is an
outrageously phony account of the violence that
broke out at Carnegies Homestead Steel Mill during
a labor strike in 1892.
In the TV version the mill manager brings in a private
army of Pinkerton Agency mercenaries to kill off the
striking workers and force the survivors to go back to
work for slave wages. The striking workers are
standing their ground, unarmed, in the mill; standing
on principle. Historian David Nasaw is interviewed,
and as he phrases it, the workers were virtuously
trying to defend their mill. The leader of the
Pinkerton men addresses the strikers and threatens
to mow you all down, then quickly orders his men
to do just that. The unarmed workers run around in

confusion while the mercenaries shoot them dead

one by one.
(From various political comments David Nasaw
made during the program I guessed that he was
either a professor at, or a graduate of, Columbia
University. During a commercial break I googled his
name and learned that I was right.)
To increase the shock value, the script writer even
shows one smooth-cheeked young Pinkerton
employee who is unable to make himself shoot at the
helpless strikers. The Pinkerton leader struts up to
him and orders him at pistol-point to start killing
strikers. The poor lad struggles between fear and
conscience, and finally shoots and kills a wounded
worker, forever soiling his tender young soul.
All of this is complete hogwash. Nothing remotely
like this ever happened during the Homestead Strike.
Joseph Wall gives all the details of the Homestead
strike in his exhaustively researched and abundantly
footnoted (and very readable) 1,047 page Carnegie
biography. The workers were not in the shuttered
steel mill when the Pinkerton men arrived. The
management team, fearing vandalism and arson,
had been able to keep the workers out of the mill by
putting up a fence and standing guard around the
clock. They sent for Pinkerton guards to protect the
mill, and to protect the safety of any strike-breakers
who might eventually be hired.
The Pinkertons arrived in a barge, and the strikers
were waiting for them, having been alerted by scouts
who were patroling the river in a steamboat. By the
time the Pinkerton barge landed, the strikers were
arrayed on the hills above the river, armed with rifles,
dynamite, and even a cannon. The strikers opened
fire when first Pinkerton man set foot on the
gangplank to leave the boat. The guards hunkered
down inside the barge and returned fire through the
windows.

The thing that probably saved the Pinkerton guards

from mass slaughter was the lack of military
expertise among the strikers. The strikers blew up
their cannon through a loading error, and failed to
get any of their dynamite bombs to detonate on the
barge. The shooting stopped when the Pinkertons
raised a white flag and agreed to disarm and leave
Pittsburgh.
Next weeks episode will be about JP Morgan. It will
be interesting to see what kind of stories the History
producers make up about him.
Al Fuller
Click here to read Als review of the third episode.
Click here to read Als review of the Fourth.
Back to Top

19 Responses
1.

Al Fuller says:

March 23, 2013

@ Cory:
A short but good introduction to the history of
this era is The Tycoons by Charles R.
Morris. Its only 318 pages but its a good
thumbnail sketch of the careers of Carnegie,
Rockefeller, Morgan, and Jay Gould.
Al
2.

Cory says:

March 23, 2013

It has become harder and harder to find

reading material referencing poignant
chapters of history without the helping hand
of political correctness rewriting the pages.
After watching the aforementioned episode

of The Men Who Built America, the labor

infused rhetoric awoke enough skepticism to
seek out alternative sources which,
thankfully, leave pantomime where it
belongs: The theater. With that, are there
sources other than the one mentioned which
you would recommend in an effort to rebuild
my own personal academics?
3.

Al Fuller says:

March 18, 2013

Sometimes Im shocked by the comments

people leave on my website. Spencer D
seems to have made a choice between blind
faith in my website and blind faith in the
History Channel, opting for the History
Channel. I find that frightening.
Ted W responded with the very sensible
observation that blind faith in any one source
is always a bad idea.
Kudos to you, Ted W. Skepticism is always a
students best friend, and I would argue that
this is more important in the study of history
than anywhere else. An accurate
understanding of history is our best
protection against all sorts of evils, and
history is probably the one field of study
where bad information is most common.
In addition to all the usual sources of error,
history is more subject to political bias than
other subjects, and political bias is not the
only problem. In the case of the Men Who
Built America series I suspect that much of
the phony information came from nothing
more than someones desire to write a
dramatic story for a TV audience.

As for the question of my not citing all my

sources, that is simply a time issue. I dont
make my living from this website; I write it as
a labor of love, and it takes up a fair amount
of my time as it is. The history textbook
reviews that youll find in the Columns
section of this site are pretty thoroughly
footnoted, but I dont usually footnote these
weekly blog posts.
I do, however, provide source information
whenever someone leaves a comment
asking for it. If someone cares enough about
his/her question to ask a question in the
comments field I always make the time to
respond with detailed information.
Al Fuller
4.

Ted W says:

March 18, 2013

The point is you should not blindly accept

historical information from any one source,
especially the History Channel, without first
verifying through several sources.
5.

Spencer D says:

March 17, 2013

Who would trust this random blogger over

the history channel. This man doesnt even
cite his sources.
6.

Ted W says:

March 17, 2013

Thank you for your insightful analysis. While

watching this series many events depicted

just did not ring true but I thought, well, the

History Channel would not make things up.
Wow was I wrong. Serves me right for
believing anything in modern media without
verifying it from several sources.
7.

T-Man says:

March 10, 2013

Hey, whoever made this thing picked the

wrong guy to narrate it. I mean, this dude
has a certain guttural, constipated urgency in
his tone of voice. And even worse, he overpronounces words in a manner that sounds
very unnatural. People dont talk that way,
with extra emphasis on Ts and Ds and Ps
and so forth. Sounds rather sputtery, with
lots of popping sounds and snake-like
hissing when he pronounces Ss as well.
Very distracting and annoying. Completely
ruined the series for me.
8.

Bill T says:

March 9, 2013

It MATTERS when it is the History Channel.

I tend to have somewhat of a critical mind
but may have been too trusting of the History
Channel. I am not saying that much of what
they do is not accurate. Possibly. In this
case, if it is fictionalized dramatization drawn
from history, say so repeatedly during the
broadcast. It they want to do a SHOW fine,
but make sure to distinguish between that
and a true DOCUMENTARY.
9.

jerry carlson says:

February 3, 2013

I am not an expert in this areajust a guy

entering retirement who luvs the history
channelI expect this channel to have
higher standardsat least thats what I get
from the history channel
10. J. Q. Public says:

November 13, 2012

I think the most obvious part was the fact

that the revisionist fiction was nothing more
than a chance for the nouveau riche to flash
their over-achieving faces an add to their hit
resume.
The biggest question is who died and left the
British Council in charge of American
history?
11. Mike S says:

November 10, 2012

*their versionsorry!
12. Mike S says:

November 10, 2012

When I saw there version of the Homestead

Strike I was mortified! History Channel is to
history as Fox News is to politics.
13. NYCBR says:

November 7, 2012

Re: John Q. Methinks you may be one of

the writers of the series. Otherwise I have no
explanation for you getting in a twist

because someone decided to hold the

HISTORY CHANNEL accountable for the
fact it is selling nonsense as history.
And, just to make an observation: According
to you this blogger should get a life, yet you
are taking the time to criticize him. Hmm.
What do you suppose that says about you
and how you spend your time?
To: The Other Half of History Unlike John
Q, Ive found your analysis well worth both
your time and mine. My history was rusty,
but good enough to realize something
smelled rotten. Your blog serves as a nice
compendium to the show. Its amusing to
see how much theyve made up. (And, so far
when Ive checked you you were correct.)
Well, it would be amusing if it werent so
infuriating!
14. Candy says:

November 2, 2012

Thanks so much. Ive harped on their

versions of history through many series. It
does my heart good to see anyone value the
truth and lessons of history.
15. Jay says:

October 30, 2012

I will be the next modern day tycoon

16. Al Fuller says:

October 29, 2012

Many thanks to alert reader Proton for

catching a typo. Ive since corrected it.

Al
17. PROTON says:

October 28, 2012

On the Homestead labor strike, did you

mean 1892?
18. Nick G says:

October 28, 2012

Thank you for this analysis!

19. John Q says:

October 28, 2012

U have too much time on ur hands. U have

an entire website where u whine about a
show on tv. Its tv, and its a SHOW, not a
DOCUMENTARY. How many movies have u
seen that were based on a true story that
didnt stretch and embelish the truth for sake
of the movie. BASED, is the key word. Put
away the tissue and get a life.

The Other Half of History Post

The Men Who Built America
Episode III Less than Accurate
Posted on November 2nd, 2012 in Daily Blog, TV Shows with
1 Comment Printer Friendly

The History Channel aired the third installment of its

The Men Who Built America series Tuesday, and,
like the first two, this episode was less than accurate.
In my review of the first episode I describe the many
creative liberties the producers took in their efforts to
jazz up the stories for a television audience. The
second part of this four part series was even more
inaccurate, just fiction in a period setting.
The third part is not as completely un-historical as
the second, but there are several places where
accuracy is sacrificed for the sake of drama.
Whats more, the third episode even contradicts the
second. The History Channel aired a rerun of the
second part immediately before the third part on
Tuesday night. In the closing minutes of the second
episode the narrator tells us that Andrew Carnegie
prolonged his annual summer hiatus in Scotland
after the Homestead Strike turned violent, because
he didnt want to face the political backlash in the
US. After the opening credits of the third episode the
same narrator comes back on and tells us that
Carnegie cut short his stay in Scotland and came
home ahead of schedule to deal with the backlash!
Next the narrator claims that JP Morgan was an
expert at turning around broken companies, and
that Carnegie Steel was such a company. This is a
complete fabrication. Carnegie steel was as
profitable as ever after breaking up the Homestead
Strike, and when the nation plunged into depression
the following year, Carnegie and his company were
so financially strong that they were able to buy up
the assets of failing competitors. The company

generated such strong revenues, year in and year

out, that it could fund its own expansion without
resorting to bank loans.
At any rate Morgan had no way of taking over
Carnegie Steel. Nine years later he did put together
a group of investors who lured Carnegie into
retirement by offering him a mountain of money for
his company, which they then merged with other
steel companies; but the History Channel portrayal of
Carnegie Steel as a failing company that needed to
be saved by turnaround artist JP Morgan is pure
fiction.
Speaking of bankers, JP Morgan, the main
protagonist of this episode, is completely mischaraterized. The TV version of Morgan is a rich
investor who likes to buy and run businesses, whose
management skills allow him to take over failing
companies and make them profitable. He is, we are
told, someone who builds industries from the ground
up. The truth is very different.
JP Morgan was an investment banker. What he did,
and did very well, was help his clients find promising
places to invest their money. He didnt spend his
own money to gain sole control of Thomas Edisons
business as shown in the program. He spotted
Edison as a good place to invest money and quickly
described the opportunity to the wealthy men who
trusted him to find such investments. Its true that he
put some of his own funds into the Edison project,
but it is far from true to say that he bought the
company to run it as his own little fiefdom.
The show is just about as inaccurate when it shows
the Edison Electric deal putting JP Morgan at
loggerheads with his father Junius Morgan. In the TV
version of the story, JP was unable to fully invest in
Edison until his Junius died in April of 1890, leaving
JP in control of the company. There is only a small
grain of truth in this. Its true that the elder Morgan

had early misgivings about the Edison project, but by

1882 his son had convinced him that the project was
worthy of their clients money. Until Junius death
eight years later both Morgans, and their clients,
invested heavily in the electrical industry.
Like the first two episodes, Part Three is full of
inaccuracies in all sorts of minor plot details. We are
told, for example, that in 1882 Morgans house
became the first private residence in the world with
electric light. In reality Edisons house was the first,
three years before that. The story of Edisons first
demonstration, at his house, is fascinating, funny,
and historically important, but the producers of the
series saw fit to leave this story out.
This episode also weaves a yarn about John D
Rockefeller becoming obsessed with combating the
electric light, fearing that it threatened his lamp oil
business. The narrator even claims that Rockefeller
financed a massive advertising campaign to make
people afraid of electricity. This is totally bogus.
I rate Ron Chernows biography of Rockefeller as the
best-written biography Ive ever read (and Ive read
tons of em), and Chernows references to the
electric light as a threat to Standard Oils lamp oil
business make no mention at all of Rockefeller trying
to resist the movement. In actual fact Standards
business continued to grow year by year as the
company positioned itself to supply every new
petroleum market that emerged: lamp oil, lubricants,
paint and varnish, and eventually gasoline and other
engine fuels.
Perhaps this fabrication about Rockefeller panicking
in the face of the electric light was put in place to set
up the drama of the forth episode, where they will
probably tell us that Henry Fords automobiles came
along just in time to save Standard Oil from
bankruptcy. If they say that, it will be another
fabrication.

Another reason for the bogus claims of a Rockefeller

attack on the electrical industry may be to build up
this fictitious rivalry between Rockefeller and
Morgan. In actual fact the two men were more than
capable of cooperating when it suited them.
The coverage History gives to Morgans 1895 rescue
of the US government makes it sound like Morgan
personally came up with the money to bail out the
feds. The truth, again, is that Morgan was an
investment banker. The deal he brokered to lend the
government enough money to meet its immediate
needs was funded by several wealthy clients, one of
the largest of them being Rockefellers Standard Oil
Company. This is addressed in detail in Jean
Strouses biography of Morgan, among others.
The saddest thing about this series is not all the
fiction masquerading as history, its the all the great
true stories that have been left out. The producers
have resorted to inventing all these bogus stories to
make for a better drama, when the real story of this
era is far more dramatic and interesting than all of
this History Channel fiction.
In 1885, to cite just one of a million great stories
History didnt mention, Morgan brokered a deal
between William Vanderbilts New York Central
Railroad and Carnegies erstwhile employer, the
Pennsylvania, to deny both Carnegie and
Rockefeller access to rail traffic at non-monopoly
prices. The meeting took place on Morgans aptlynamed yacht, the Corsair. The story of that meeting
and its aftermath, told accurately, would be more
than enough to fill a fascinating and amusing two
hour television program.
During the second hour of Episode Three the
creative liberties continue. Nicola Tesla is portrayed
as having invented his polyphase motor and
transformer in Edisons Menlo Park lab, while
working as Edisons apprentice. In actual fact Tesla

worked in the Menlo Park lab briefly, but he was

never Edisons apprentice, and he was long gone
before he came up with those world-changing
inventions.
The more I watch this series the more I wish
someone would tell the stories accurately. It could be
great television.
Al Fuller

The Other Half of History Post

The Men Who Built America
Episode IV Still Phony
Posted on November 14th, 2012 in Daily Blog, TV Shows with
16 Comments Printer Friendly

This is the fourth in a series of reviews of the History

Channels four-part series The Men Who Built
America.
Click here to read Al Fullers review of the first
episode.
Click here to read Als review of the second episode.
Click Here to read Als review of the third episode.
***********
The History Channel aired the fourth and final
episode of its The Men Who Built America series
Sunday night, and like the first three installments,
this one is terribly inaccurate. Its a crying shame that
the series contained so little real history; there are no
end of fascinating and true stories about the great
nineteenth century entrepreneurs, and an accurate
version of this series would be good TV.
Part Four starts out with the long, detailed, and
completely fictitious story of a meeting between
Morgan, Carnegie, and Rockefeller, in which the
three moguls conspire to put a hand-picked puppet
(William McKinley) in the White House in the 1896
Presidential election.
A teaser at the end of the third episode promised
that the fourth episode would tell how the three titans
conspired to do this: They devise a plan so bold that
no one has ever attempted it beforeTo be
successful, they cant work alone. For the first time,
Americas most powerful men will have to put their
rivalries aside, and start working together. The goal,

as Morgan states it, is that We need to buy the

President.
When Part Four starts we see the three
businessmen sitting in a library watching film of a
William Jennings Bryan campaign speech on a home
movie projector. In the footage Bryan, campaigning
for President, threatens to break up the monopolistic
trusts controlled by wealthy businessmen, and calls
out Carnegie and Rockefeller by name. The History
Channel narrator tells us that Bryan wants not only to
break up the business interests of the three, but that
Bryan wont rest until theyre behind bars. They
discuss options for an opponent to Bryan and come
up with McKinley.
This meeting never took place. Nothing like it ever
took place; the whole story is a fabrication.
Ive read any number of books about this era in
American business, including biographies by the
yard, and no fewer than eight college freshman level
American history textbooks, and none of them
mention anything like this. Surely if the meeting had
taken place some author would have made mention
of it.
Whats more, there are partisan issues involved;
Bryan was a Democrat and McKinley was a
Republican. Its safe to assume if three corrupt rich
guys had stolen a Presidential election from the
Democrats, as it happens in this TV show, some
historian with pro-Democrat sympathies would have
mentioned it in a book or article somewhere along
the line!
The truth is that JP Morgan and Andrew Carnegie
dont seem to have played any very significant role in
supporting McKinleys campaign. William McKinleys
name doesnt even show up in the index of Jean
Strouses 700-plus page biography of Morgan, nor in

the index of Joseph Walls excellent thousand-plus

page biography of Carnegie.
According to Ron Chernows biography of
Rockefeller, the Standard Oil company did donate
$250,000 to McKinleys 1896 campaign, and
Rockefeller personally donated an additional $2,500.
The only other mentions of McKinley in Chernows
book are a few brief references to things that
happened after McKinley was already President.
And even if the meeting had taken place, it certainly
wouldnt have been the first time that the three men
were able to put their rivalries aside, and start
working together. Carnegie had had a close working
relationship with JP Morgan (and Morgans father
Junius Morgan) long before 1896. In the 1860s,
before he went into the steel business, Carnegie,
who was always an outstanding salesman, made
good money selling bonds for large public works.
The Morgans and the investors they represented
were large customers who worked closely with
Carnegie during that era. The Morgans later helped
Carnegie find promising investments for some of his
own money.
Morgan frequently helped Rockefeller find places to
invest his personal funds as well. And, as I pointed
out in my review of the third episode, Morgan turned
to Rockefeller and his Standard Oil Company in
1895 when he was trying to raise capital to protect
the US Federal Government from bankruptcy and
default.
The claim that runs all through this TV series, that
the three men always hated and tried to destroy
each other, is just as bogus as the claim that they
met in 1896 to cook up a plot to buy the President.
After the November 1896 elections, according to the
narrative, Rockefeller is the first to break ranks with
the other two, when he learns of a massive deposit

of iron ore in Northern Minnesota, (in the Mesabi

Mountain Range) and launches into the iron mining
business. After a few years of developing and
marketing this resource Rockefeller forces Carnegie,
the steel producer, to the bargaining table.
Other than the timing, the History account of the
Mesabi Range deal is fairly accurate. Rockefeller
actually started investing in the Mesabi properties
three years before the 96 election, not after it as
shown on the show, and he and Carnegie concluded
their deal just a few weeks after McKinley was
elected. But its true that Carnegie was slow to
appreciate the Mesabi ore as a resource, because
the powdery consistency of the ore made it a bad
match for steel mills using 1893 technologies.
Rockefeller showed more insight than Carnegie on
that issue, in life as in the TV show. And its true that,
when steel mills started to be upgraded to allow use
of the Mesabi ore, Carnegie was concerned about
rumors that Rockefeller might build a steel mill of his
own, and become a competitor.
The terms of the deal the two men eventually struck,
as shown on the program, agree pretty well with the
terms described in Ron Chernows biography of
Rockefeller.
If youre looking for actual history on the History
Channel, the Mesabi Range story is about the
closest thing youll find in this series.
Next the program shows how JP Morgan enlisted
Carnegie Steel executive Charles Schwab to help
talk Carnegie into selling his the company to Morgan.
There are a number of over-simplifications in the
History version of the story, and one statement that
is glaringly false. In the initial meeting between
Morgan and Carnegie Steel executive Charles
Schwab, Morgan says that profits at Carnegie Steel
have doubled every year for the last five years (i.e.
the years between 1896 and this 1901 meeting.)

TV viewers who are good at math will quickly figure

out that this would represent a thirty-two fold
increase in profits in just five years, for a company
that was already well-established and profitable. This
is an absolutely absurd claim. Its hard to understand
why the makers of this program would be so
shameless about making up facts like this out of thin
air. It adds nothing to the story, and it made me
laugh out loud when I heard it.
Morgan, of course, is shown buying the company
with his own money, for his own use; just as in the
third episode Morgan was shown using his own
money to buy Edison General Electric and later to
bail out the US Government. That too is false, but it
is perhaps an excusable over-simplification.
Morgan could not have bought Carnegie Steel alone,
any more than he could have saved the US
government alone. Morgan was an investment
banker. He brokered deals between wealthy
businessmen. What he, competing steel makers, and
various cash investors offered Carnegie and the
other Carnegie Steel stockholders was a merger
deal consisting of shares of stock in the new
company, sweetened with gold-backed bonds for the
Carnegie side. Carnegie wanted the liquidity the
bonds offered because he intended to give virtually
all the money to worthy charities.
The total value of the deal was four-hundred-eightymillion dollars, just as the History narrator said.
According to biographer Joseph Wall, this sum
represented a price/earnings ratio of about twelve;
the previous years profits, in other words, had been
around forty million dollars. (A healthy increase over
1896 profits, but nowhere near a thirty-two fold
increase!)
There is far more that could be said about
Carnegies retirement and the creation of United
States Steel, and it would have made for interesting

and entertaining TV. I cant help but think that if the

first half of this broadcast hadnt been wasted on a
fictitious account of the 1896 Presidential election
there might have been more time available to give
the United States Steel deal the coverage it
deserves.
Its too bad, for example, that History wasnt able to
say anything about the role John Bet a Million
Gates played in the foundation of the new
conglomerate. Gates wire company was one of
those that merged with Carnegies to form United
States Steel, and he was present at that first meeting
between Morgan and Schwab, where he helped plot
the merger. When Morgan denied him an executive
position in the new company, Gates started nursing
a grudge that would have somewhat comical results
six years later. This was a real-life grudge between
two high rollers that wouldnt have to be fabricated
like the grudges History invented for this TV series.
From Carnegies retirement the program veers into a
very careless treatment of the early days of the Ford
Motor Company. I have in my library a childrens
book titled Henry Ford: Young Man with Ideas, by
Hazel Aird and Catherine Ruddiman. Its about a
hundred pages, double-spaced with very large type,
and written at about a fifth grade reading level; and
its far more informative than the History segment on
Ford.
In the television version Ford is shown coming hatin-hand to the Association of Licensed Automobile
Manufacturers (ALAM), and begging them to let him
start a car company. He describes exactly the kind of
car he proposes to sell, right down to how much it
will weigh and how much he will charge for it. It uses
a four cylinder engine, he tells them.
ALAM denies him the permission he craves, so to
gain stature he challenges established car maker
Alexander Winton to a race.

Ford, were told, has spent years developing his car

for the common man. He builds his first model at the
age of thirty-two, and calls it the quadricycle, but
vehicle is expensive to produce, and prone to
breaking down. Fords second attempt, the Model A,
is much more suited to the needs of modern
America, but he cant begin selling it without
permission from ALAM.
The truth is very different.
The quadricycle was not a model that Ford
intended to mass produce for the common man. It
was a homemade go-cart that he built in his spare
time while employed as the chief engineer at Detroit
Edison in 1896, seven years before the ALAM group
even existed. There was no question of it being
expensive to produce; he built it out of scrap metal
and old bicycle parts.
The quadricycle is important only because it was
Fords first experiment in building a motor vehicle.
Ive seen it up close; its on display in the Henry Ford
Museum in Dearborn, Michigan. It certainly was not
something he ever intended to mass produce.
Fords storied race with Alexander Winton actually
took place in 1901, two years before ALAM was
founded. In the History version of the story his
performance in the race allows him to raise the
$28,000 he needed to found the Ford Motor
Company. In the real world Ford followed up his
victory over Winton by founding a company that
eventually morphed into Cadillac Motors after the
other owners forced Ford out. He didnt found the
Ford Motor Company (which was indeed founded
with exactly $28,000 in seed money) until 1903, the
same year ALAM was founded. That same year he
started producing and selling the Model A, which
used a two cylinder, not a four cylinder, engine.

As for ALAMs lawsuit against Ford, its little more

than a footnote to history. The group couldnt stop
him from going into business, all they could do is
waste some of his time in a lawsuit that he eventually
won.
As with this whole series, the most disappointing
thing about the Henry Ford segment is all the great
stuff they left out. Theres no mention of the
schoolteacher who lent her brother $100 for a share
of Ford Motor Company stock, and ended up making
a four-hundred-thousand percent profit. Theres no
mention of the fact that Cadillac Motors went into
business building a car that Henry Ford had
designed. Theres not one word about the absolutely
fascinating relationship between Ford and his idol
and role model, Thomas Edison.
As I watched the final episode I found myself thinking
for the hundredth time that an accurate account of
the lives of these men would make better and more
entertaining television than this hyper-dramatic
fiction the network has been peddling.
Im half tempted to launch into a series of blog posts
on the actual history of this era. Perhaps Ill wait to
see if readers leave any comments expressing
interest.
Click hear to read the first post in Als series An
Accurate Account of the Men Who Built America.
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16 Responses
1.

JD says:

July 29, 2013

Great! Thanks a lot for the

recommendations, I hope theres a spanish
version of The Tycoons, but Ill buy it
anyway, it looks interesting. bye!

2.

Al Fuller says:

July 23, 2013

Thanks for the kind words JD!

If you want video you can buy DVDs of old
episodes of the A&E Biography Series on
Amazon
from Amazon. (I have the A&E bios of Ford
and Carnegie on old-fashioned VHS tape,
and theyre pretty good.)
If you really want to learn more about these
people, and dont have a lot of time to
spend, I strongly recommend that you read
The Tycoons, by Charles Morris. Its a quick
read, only about three hundred pages, and
its both accurate and interesting. It it covers
all the highlights of Carnegie, Rockefeller,
and Morgans biographies, and touches on
Vanderbilts career as well. It also makes
nineteenth century economics easy for a
novice to understand.
3.

JD says:

July 22, 2013

Hi Al, Im writing you from Argentina, here

The History Channel started to air The Men
Who Built America in eight episodes a
month ago and after watching four of them, I
started to doubt a lot if it was historically
accurate, and looking on the internet for
someone who could explain that. Im glad I
found your blog (although I wish they didnt
ruin the series, they didnt have to, the real
history is interesting too) you did a great job.
I just wanted to thank you, I really appreciate
this.
Ive seen that you recommended some bios,

do you know if there is any other

series/documentary of this men? I dont
know if I should keep watching The Historys
version but at least I have your reviews now.
Thank you and sorry for the bad grammar!

4.

Al Fuller says:

May 11, 2013

@ Bob:
Thanks for your kind words of
encouragement Bob. Its always gratifying to
hear that the time and effort I put into this
website is of value to someone.
A source I would recommend for your son is
a childrens book titled Henry Ford: Young
Man with Ideas by Aird and Ruddiman.
Im not aware of any source for exactly what
Ford may have had in his personal bank
account in 1903, but the Ford Motor
Company was down to $223.65, with bills
coming due for more than that, when the
company finally sold its first car. Ford
certainly didnt have any personal money to
speak of; hed spent everything he had trying
to get a car company off the ground over the
years leading up to that moment.
(My source for that figure is not the
childrens book; its a book called Young
Henry Ford by Sidney Olson.)
Youre certainly right that Americans of the
past were far more strong-minded that the
average person of today. Thats one of the
reasons I continue to work on this blog. I
hope to inspire at least a few modern-day
Americans to hope and self-confidence by

writing about the tenacity and toughness of

our forefathers.
One last thought. If your son wants to write a
college level paper about someone like Ford
in a few years, tell him to feel free to contact
me for recommendations on source
materials. Id be glad to help.
Regards,
Al
5.

Bob says:

May 10, 2013

Al, Nice work! Ive bookmarked your blog

site. I appreciate the books you mentioned to
Erin and will pick one to start since I am
weaker on history than I should be. Agree
that Morgan is not particularly interesting in
relation to the others since he had an
aristocratic start (kind of like The History
Channels captain of industry Donald
Trump).
I came to your site based upon todays WSJ
excerpt of the new Henry Ford book. I seem
to recall that Ford was down to his last $100
or something when he started FMC. If that
was one of the others, or if you have an
accurate description of Fords finances at the
time, please advise. I am particularly
interested currently because my 2nd-grader
is doing a report on HF for school.
As an entrepreneur myself who has failed
once took me ten years to recover
financially and succeeded once, I am
fascinated by brave entrepreneurs of all
types and at all levels of success. Most
Americans have little understanding of the
types of people America used to have before

we became a complacent bunch of sloths

who complain and await hand-outs from
others. Two quotes I like, one that would
serve employees well and one serves
entrepreneurs (and me of late) well:
1. If you dont like your job, quit (and go start
your own company). If you dont quit, shut
up.
2. Fail early and cheaply.
Keep up the good history work and thanks!
6.

Sam says:

March 10, 2013

The other fascinating story about Carnegie

that his biographers dont seem to mention is
Carnegies role in starting Napoleon Hill off
on Hills discovery of what it takes to be
successful culminating in one of the bestselling books of all time, Think and Grow
Rich.
7.

Al Fuller says:

November 30, 2012

@ Matt:
I tend to agree with you when you suggest
that the inaccuracies in this TV series were
agenda-driven; particularly in regard to the
totally fictitious portrayals of the Homestead
Strike and the 1896 Presidential election.
And youre right when you say the
government can collect money literally a
gunpoint. (PJ ORourke covers that issue in
a humorous-but-accurate way in one of his
books.) GE and Walmart can only use the
legal system to make you pay for a product

you bought voluntarily. the IRS, on the other

hand, can simply force you to hand over
your money.
Thanks for commenting, and I hope youll
enjoy my series of posts on the business
moguls of the 19th century.
Al
8.

Matt says:

November 30, 2012

I liked the series for the cool tough guy

image that they tried to portray. The theme
song is on my iPod. Throughout the series
though I shifted, winced, smirked, puffed,
moaned, then guffawed. I finally wrung my
hands when at the end the point of the whole
series became clear. monopolies bad,
regulation good!. Thats when the libertarian
in me just took over and said DEAR GOD!.
Inaccurate, yes clearly, but agenda driven,
that was the more subtle tone. Dont know
how Mark Cuban would lend himself to this,
maybe he didnt know the full story. When
will History do a series on the evils of the
U.S. Government monopoly? You know the
ones that send the bill to your house with the
promise of guns to the face if you dont pay?
Isnt that called extortion? Im still waiting on
my bill from Standard Oil, or GE, or Walmart
for that matter, with the promise of violence
for non compliance.
9.

Al Fuller says:

November 25, 2012

In answer to Richs question:

Roosevelts selection for VP at the 1900

convention had nothing to do with the three
business moguls. It was purely a matter of
power politics within the New York State
Republican Party.
Heres how the choice is described in the the
book Americas Promise, a relatively
unbiased freshman history textbook:
The great surprise at the convention came
when party bosses, led by New Yorks Tom
Platt, selected Theodore Roosevelt to run as
McKinleys vice president. Fearing that
Governor Roosevelt might gain control of the
New York party, the bosses kicked him
upstairs. Neither McKinley nor Senator Mark
Hanna favored Roosevelt, but the party
bosses were too strong to be circumvented.
10. Rich says:

November 24, 2012

What about the indication that the Titans

got Teddy Roosevelt named as Vice
President to get him out of their way? Was
that accurate?
11. Al Fuller says:

November 24, 2012

To Erin, who asks for reading

recommendations:
I consider Titan, Ron Chernows biography
of Rockefeller, to be about the best-written
biography Ive ever read, and Ive read tons
of biographies. Its about seven hundred
pages.

Andrew Carnegies autobiography is a great

read; it gives a good insight into Carnegies
thinking. But its obviously not the book to
read if you are looking for a purely objective
account. Joseph Walls bio of Carnegie is
very well researched and well written. It
might be a bit too long for some readers at
just over a thousand pages.
Ive read Edward Renehans bios of
Cornelius Vanderbilt and Jay Gould, and
liked the Gould book better. Both are fairly
short; about three hundred pages each. Ive
spotted a number of errors in his Vanderbilt
bio, and it doesnt really tell the reader very
much about how Vanderbilt did what he did.
Renehan talks a little about Vanderbilts
work ethic and his commitment, but doesnt
really dig into the nuts and bolts of what it
takes to go from childhood poverty to
tremendous success.
Getting back to Joseph Walls bio of
Carnegie, Wall does an excellent job of
making the reader understand what it takes
to go from thirteen year old sweatshop
worker, dressed in rags, to wealthy business
owner. Thats what makes his book so much
better than Renehans book on Vanderbilt.
Jean Strouses bio of JP Morgan was well
done, but I didnt enjoy it all that much
because I dont happen to admire Morgan
the way I admire self-made men like
Carnegie. Morgan was born rich and always
acted like an aristocrat; Carnegies life was a
how-to video for anyone who wants to
overcome childhood poverty and succeed in
business. Strouses book is about seven
hundred pages.

If you want a quick introduction to this era I

suggest a book called The Tycoons, by
Charles Morris. The sub-title is How Andrew
Carnegie, John D. Rockefeller, Jay Gould,
and JP Morgan invented the American
Supereconomy. Its pretty well done and
gives an overview of the interactions of
these men in only 318 pages.
I cant recommend a good biography of
Henry Ford, although a quick check of
Amazon.com shows me that a couple of new
ones have been written since the last time I
checked. I havent read those.
Ive read Fords My Life and Work and
enjoyed it but, again, you shouldnt expect
much objectivity in an autobiography. Ive
also read books on specific aspects of
Fords career, but nothing Id recommend to
the casual reader. If you decide to read one
of the new Ford biographies Id be interested
to hear what you think of it.
Al Fuller
12. JDH says:

November 24, 2012

The History Channel is less about history

and more about entertainment. Its not
surprising it would produce a hyped,
nonsensical series starring some very
dubious captains of business, including
Casion owners, Donald Trump, and the
CNBC guy who had no idea of the crash of
2009 until after it happened.
13. Erin says:

November 24, 2012

My husband has enjoyed watching this

series, but I warned him about possible
fabrication. It isnt really possible to learn
history from tv, after all! I would appreciate
recommendations of biographies on these
men and this time period!
14. Frank says:

November 24, 2012

The unidentified McKinley campaign aide I

believe was Henry Cabot Lodge. If so,
Lodge basically acted as a middle man for
J.P. Morgan as the Rockefeller political
machine operating out of Ohio. The main
contact for the Rockefeller camp was William
McKinleys campaign manager Mark Hanna.
15. Eric says:

November 16, 2012

I have been watching this series interested

in the connections of the men but after
watching the final episode last night (dvr) I
couldnt believe the ridiculous liberal spin I
was hearing. Even though the first 3
episodes were loose at best on the facts,
none went so far as to quote 2012
presidential talking points of the Democratic
Party. Shame on history channel for
becoming a liberal media outlet.

Cornelius Vanderbilt [1794-1877]

Industrial/Commercial Leader

Upon his death in 1877, at age 82, Cornelius Vanderbilt, also known as Commodore
Vanderbilt, was the wealthiest man in the United States and probably the greatest of the
nineteenth century railroad barons. Earlier in his business career he probably was the
greatest shipping tycoon in the United States. His estate was worth 100 million dollars, a
sum unheard of in those days. He left the bulk of his estate to his son William Henry
Vanderbilt, because he was the only child who had been actively involved in the business
that produced the Vanderbilt fortune. William Henry also had been instrumental in building
and expanding the railroad business since he joined his father in the management of the
organization upon becoming an adult.
Cornelius was born in Port Richmond, Staten Island, New York on May 27, 1794. His
parents were poor and his father earned his living by providing low level transportation
services. As was usual for the common people in those days, Cornelius went to work at age
11, and was employed by his father. We know little of his parents but his ancestors came
from the town of De Bilt, in the province of Utrecht in the Netherlands. His great great
great grandfather was Jan Aertsen who came to New Netherland as an indentured worker in
1650, at the time of the early Dutch settlements including New Amsterdam. Cornelius
married his first cousin, Sophia Johnson [1795-1868] on December 19, 1813 when he was
only 19 and she was only 18 years old. They had their first child, Phebe Jane Vanderbilt
[1814-1878] the following year in 1814. Eleven more surviving children followed until the
last one, George Washington Vanderbilt [1839-1864], was born twenty five years later.
Between the years 1805 and 1810 Cornelius worked for his father and for the ferry services
serving Staten Island. In 1810 when he was sixteen years old he convinced his parents to
lend him $100 so he could buy a sailboat to start his own ferry and freight business. They
provided him with the money but with the understanding that he would share the profits
from the business with his parents. He used the money to start a passenger and freight
service between Staten Island and New York City. There was a lot of competition in the
ferry service business, but Vanderbilt competed on the basis of lower fares, asking as little
as 18 cents per trip. He was quite successful and apparently was able to repay the $100 loan
to his parents within one year. According to local lore, he was even able to earn a $1,000
for his parents during the first year of operations as part of their share in the profits.

The war of 1812 provided new opportunities for growth. The forts around New York City
expanded and Vanderbilt obtained a government contract to supply them. Between 1814
and 1818 he expanded with additional schooners for freight and passenger services in Long
Island Sound and in the coastal trade from New England to Charleston, South Carolina.
In 1818 he sold all his sailing vessels and became a steamboat captain and partner with
Thomas Gibbons who operated a ferry service between New Brunswick, New Jersey and
New York City. The Vanderbilt-Gibbons partnership charged only a quarter of the
competitive fares. It soon became the dominant ferry service on the busy Philadelphia-New
York City route. During the 1818-1829 time period the partnership made a fortune.
In 1829 Vanderbilt decided to go on his own and began passenger and freight service on the
New York City-Peekskill Hudson River route. Again he competed on the basis of price and
quickly eliminated the competition. He then expanded his service to Albany, New York. He
also opened passenger and freight service to the Long Island Sound, Providence and
Connecticut areas. By the 1840s Vanderbilt had a fleet of 100 steamships and he had
become the biggest employer in the United States. At that point he not only competed on
the basis of price but also on the basis of comfort, size, speed, luxury and elegance in the
steamship passenger transportation industry.
During the California gold rush in 1849, Vanderbilt began steamship service to San
Francisco by way of Nicaraqua. His competitors used the Panama route which was longer.
Vanderbilt was able to cut two days off the length of the trip to San Francisco, and it was
600 miles shorter. This part of his transportation business netted him over one million
dollars per year. As a result he became the principal transportation service provider on the
East Coast to San Francisco route.
In the 1850s he did two possibly foolish things. In 1853 he decided to take his first vacation
ever. He had a steam yacht built and made a triumphant tour of Europe. While on his trip he
had left the management of the business to contract managers. They tried to fraudulently
take over the business while he was away in Europe. Although they were not successful, his
temporary absence from his business proved to be costly, but he quickly recovered.
Another not so successful business attempt was trying to compete against the British
Cunard Steamship Line, a line subsidized by the British government, on the North Atlantic
passenger service route. This also proved to be a failure. So the old fox discovered that not
all his ventures were automatically successful.
In the 1860s he became aware that the big growth in the future for the transportation
industry was not by way of water but by way of rail. So he became interested in railroad
transportation, which was then still in its infancy. But instead of building new railroads, he
took the easier route of buying existing railroads. He acquired the Long Island Railroad
followed by the New York and Harlem Railroad and the Hudson River Railroad. In 1867 he
also acquired the Central Railroad and merged it with the other railroads he already owned.
As he had done with his shipping ventures, he focused on improving service and on
upgrading capital equipment while maintaining low fares. He eventually merged all his
initial acquisitions into what became known as the New York Central Railroad. It is
estimated that he made $ 25 million in the first five years from his railroad ventures.

The eventual main heir to his empire, his son William Henry Vanderbilt, influenced his
father to expand rail service into the direction of Chicago. To do so they acquired the
Lakeshore and Michigan Railway, the Michigan Southern, the Canadian Southern and the
Michigan Central Railroad, creating for that time the largest American system of railway
transportation.
In 1868 Cornelius lost his wife Sophia. This was a great loss to him. She had provided him
with ten still living children and apparently was a good business woman herself, supporting
and advising him in many of his business decisions. One of the things that is not widely
known is the fact that Cornelius was a meticulous planner and analyst. Before he entered
into any deal or venture he would meticulously analyze it and have it evaluated by others
before making a decision. Many people attribute his success to luck. In reality Cornelius
was a super smart and astute business man and hands-on manager of his many businesses.
Although he may have made some mistakes along the way, he was always able to either cut
his losses or extract himself from the occasional debacle. And undoubtedly, he often
involved his wife Sophia in many if not most of his business decisions.
A year after the death of his wife Sophia, Vanderbilt now 73 years old, married a distant
cousin named Frances Armstrong Crawford, and known as Frank. She was 34 years his
junior. The marriage was probably a good one because it gave him a new outlook on life. It
is doubtful if his children approved of it. After all, his new wife was younger than seven of
his twelve children. It appears that the marriage to a younger woman gave him an imagined
extension to his life.
Allthough Vanderbilt had not engaged in philanthropy at all until that point in his life,
through his new wife's influence, he perpetuated his name through a gift of one million
dollars to Nashville's Central University. One million dollars may not sound like a lot of
money, but in the 1870's it was. Using a conversion ratio of 260, based on the gross
domestic product per capita then and now, the one million dollars was essentially equal to
$260 million in today's terms. The Nashville Central University would become, and to this
day still is, the prestigious Vanderbilt University in Nashville, Tennessee.
During the last years of his life, his son William H. Vanderbilt became the senior manager
of the business, and continued the path his father had set. Cornelius passed away in 1877 at
the age of 83. He had left the bulk of his estate to his son William H. Vanderbilt and only
gave modest amounts of half a million dollars to each of his other nine surviving children.
Needless to say his will was contested but the suit was thrown out. He also donated
$50,000 to the Church of the Strangers in New York City. Following his death the offspring
did not suffer. Even half a million dollars, equal to 130 million dollars today, was also a
substantial amount in 1877. The value of the Vanderbilt estate in today's terms would have
been about $26 billion.
Cornelius and Sophia Vanderbilt had 12 children, but only 11 survived to adulthood.
1. Phebe Jane Vanderbilt Cross [1814-1878]
2. Ethelinda Vanderbilt Allen [1817-1889]
3. Eliza Vanderbilt Osgood [1819-1890]

4. William Henry Vanderbilt [1821-1885]

5. Emily A. Vanderbilt Thorn [1823-1896]
6. Maria L. Vanderbilt Clark Niven [1827-1896]
7. Francis L. Vanderbilt [1828-1868]
8. Cornelius J. Vanderbilt [1830-1882]
9. Maria A. Vanderbilt La Beau Berger [1834-1902]
10. Catherine J. Vanderbilt Barker La Fitte [1836-1881]
11. George W. Vanderbilt [1839-1864]

Cornelius Vanderbilt Biography

Cornelius Vanderbilt, the Commodore: the first of the robber barons. The Civil
War broke his heart, but made his second fortune.

Cornelius was born in 1794 on Staten Island among the harbours that would make his first
fortune. Aged 11, he started work with his father, a poor illiterate seaman, but by 16, hes
bought his first small ferry boat with a $100 loan. Even at this early age few could best him,
in business, or on the street.
He was a tough guy. Getting into scraps with other men, beating the hell out of them
and knocking them unconscious.
TJ Stiles, Vanderbilt Biographer

At 19, he marries his first cousin who will bear him 13 children. A cutthroat entrepreneur,
he moves from sailboat to steamships, always undercutting, and then overcoming the
competition.
FIRST FORTUNE
His single island-hopping ferry expands to an ocean going fleet and he becomes
synonymous with shipping earning the nickname Commodore. Defeating many
monopolies along the way, he creates the largest shipping empire in the world. But before
the Civil War, he sells nearly everything to invest in the new railways believing theyll
unite America.
By wars end, hes the richest man in America with a net worth of over $65 million
equivalent to nearly $75 billion today. But the war costs him his favourite son and heir

apparent and he dives into a drink fuelled depression. He relies on his less able son,
William and makes him operations director of the Hudson Railroad.
By 1866, hes 72, and 30 years past the average age expectancy. His railroad rivals think
hes weak and ready to fall. But he owns the only rail bridge into New York City, and it is
both the gateway to countrys largest and busiest port and, in his hands, a weapon.
SECOND FORTUNE
He orders his son to close Albany Bridge effectively blockading the millions of dollars of
cargo of other rival railroads. Before their stocks become worthless, the rival rail road
presidents try to sell their shares. When Wall Street realises, theres a massive sell off. And
when the price falls, Vanderbilt buys up. In just days, he creates the largest single railroad
company in America.
Chicago is Americas fastest growing city and the Erie Line, the rail road connecting it to
New York, the most profitable: And Vanderbilt doesnt own it. So in 1867, Vanderbilt tries
to buy up its shares demanding majority control by the end of the week, a move now
known as a hostile takeover.
But middle managers, Jay Gould and Jim Fisk see a chance to cash in on the Commodore.
They print over 100,000 new shares in a basement, diluting Vanderbilts ownership. This
now illegal manoeuvre costs the equivalent of a billion dollars in todays money.
But by 1871, his supremacys undisputed. Marking his conquest, he opens the Grand
Central Depot, the biggest train station in the country. It covers 22 acres. He also gives the
largest charitable donation in American history with a $1m gift to a university that still
bears his name.
And Vanderbilt realises the rail network has been overbuilt and future profits will come
from transporting new cargo, not from building new lines. He believes the demand for the
kerosene that lights the lamps of the newly industrialising America will be explosive.
ENTER ROCKEFELLER
Vanderbilt homes in on Eastern Ohio, the Middle East of its day, and begins negotiations
with a struggling oil man, John D Rockefeller. Vanderbilt wants the exclusive contract to
transport his kerosene so his freights always full.
Initially, the deal suits Vanderbilt. But Rockefellers rise is meteoric enough to make
Vanderbilt ally himself with railroad rivals. He hopes to control the Ohio oilman who seeks
lower and lower rates for transportation.
Then, in 1877, in the depths of the economic depression, and holding the largest fortune in
the US, Vanderbilt dies, aged 82. He leaves his $100m empire to his son William. And he
leaves a template for the other robber barons to follow.

Cornelius Vanderbilt
born: 27 May 1794
died: 4 January 1877

Entrepreneurs and American Economic Growth

Cornelius (Commodore) Vanderbilt
I.

Youth and Early Career

A. Political Entrepreneurs vs. Market Entrepreneurs (Folsom, p.1)
1. Political Entrepreneur One who tries to succeed through "federal aid,
pools, vote buying, stock speculation"
2. Market Entrepreneur One who tries to succeed by creating and
marketing a superior product at a low cost.
B. Cornelius Vanderbilt was a classic Market Entrepreneur (using Folsoms
terminology) and an Agent of Creative Destruction a true Schumpeteran
Entrepreneur. He was a key figure in breaking the steamboat monopoly granted to
Robert Fulton and Robert Livingston in the waters around New York City; in the
transatlantic steamship business; in the east coast to west coast steamship
business; and the builder of the New York Central system which, in effect,
replaced the Erie Canal. When he died he was the richest man in America ($105m)
and he left a high quality quadrupled track railroad that played a key role in the
development of the Midwestern United States.
C. Vanderbilt: Youth. He was born 27 May 1794 on Staten Island, New York. His
father was a farmer who would sail his produce to the New York market across the
harbor.
1. Entered business at the age of 16 in 1810. He was paid $100.00 by his
Mother to clear and plant an 8-acre field. He used the $100 to buy a small
two-masted (sailing) flat-bottomed vessel (a periauger) and used to carry
freight and passengers between Manhattan and Staten Island. (He had a
minor accident just after he bought it and it almost sank. This was his only
accident as an owner of boats as an owner, he never fell victim to fire,
explosion, or shipwreck.)
2. He was called "Cornele, the boatman" and he catered primarily to
commuters because he quickly built a reputation for reliability and
fearlessness. He would undertake any job -- even in stormy weather -- and
he consistently charged lower rates than his competitors.
3. During the War of 1812 Vanderbilts reputation for reliability resulted in
his being awarded an Army contract to supply six posts around New York

Bay in addition to his regular business. He also made additional money by

bringing food down to New York City from the farms along the Hudson.
(The British blockaded NYC during the War.) His profits allowed him to buy
an interest in two other boats.
4. After the War in 1815, Vanderbilt goes into the coastal trade carrying
oysters, watermelons, whale oil, shad, and many other items, between
Chesapeake Bay and New York. In his spare time, he sold beer, cider, and
provisions to ships anchored in the harbor. By 1818 (age 24) he had saved
$9,000 and owned interests in several other boats.
5. Summary: His business style established very early in life: 1) hard working;
2) fiercely competitive, willing to cut prices to get business; 3) reliable
(repeat customers!); 4) frugal.

II.

Vanderbilt: Steamboat Period

A. In 1807 Robert Fulton piloted his steamboat Clermont up the Hudson river from
New York to Albany against the current at the blazing speed of 4 miles per hour.
Fulton a classic example of a political entrepreneur -- and Robert R. Livingston
were subsequently granted a monopoly on all steamboat traffic in New York for 30
years.
B. In 1817 Vanderbilts Staten Island NYC was invaded by steamboats and his
income began to fall. Vanderbilt responded by selling his sailing vessels and went
to work for Thomas Gibbons who owned a small steamboat. Once he learned how
to operate the steamboat, he persuaded Gibbons to build a steamboat that he
himself designed -- the Bellona. Vanderbilt began ferrying passengers from New
Jersey to Manhattan in violation of the monopoly. He charged $1 which was
below cost -- rather than the monopoly price of $4, but made up his losses by
raising the price of food and drink in the steamboats bar. At one point, he went
60 straight days evading New York City police trying to arrest him for violating the
monopoly.

C. In the 1824 Gibbons vs. Ogden Supreme Court decision, the Fulton-Livingston
monopoly was declared illegal as it violated the U.S. Constitutions commerce
clause only the U.S. government could regulate interstate commerce.
Vanderbilts employer, Gibbons, won a suit filed against him by Aaron Ogden a
New Jersey steamboat operator who had purchased a license from the monopoly
and who had brought suit against Gibbons for his violations (Daniel Webster was
Gibbons attorney).
D. The collapse of the monopoly resulted in: 1) immediate drop in prices for freight
and passengers; 2) new entrants into the business; 3) introduction of new
technology specifically, tubular boilers and the use of anthracite coal (plentiful in
nearby Pennsylvania) for fuel rather than wood. {Aside: In a North & Thomas
sense, the structure of incentives was dramatically shifted with private property
rights ensured, investors were now willing to try new technology in the hopes of
gaining a competitive edge. See Schmokler paper in Topic 6.} Gibbons and
Vanderbilt who were used to running lower rates and trying innovative services,
quickly adopted the new technologies and earned large profits.
E. In 1829 (age 35) Vanderbilt had saved $30,000 and went into the steamboat
business for himself beginning with the New York to Philadelphia run. Passengers
were taken from New York City to New Jersey by steamboat, then across N.J. by
stagecoach to Trenton, then down the Delaware river by steamboat. He
immediately cut rates, which threatened a rate war with the established
steamboat lines. Believing that he still was working for Gibbons (who had sold out
and retired), the existing carriers got together and paid him handsomely to leave
the market.
F. In 1830 Vanderbilt entered the Hudson River market competing against the
Hudson River Steamboat Association. He cut fares from $3 to $1 and then to $0!
He made up part of his losses by increasing the price of food aboard his two boats.
The Steamboat Association threw in the towel and bought him out. For $100,000
and an annual payment of $5,000 for ten years, Vanderbilt agreed to withdraw
from the Hudson River market. He then turned to the Long Island Sound market
and coastal trade and soon dominated both.
G. By the mid 1840s Commodore Vanderbilt operated a fleet over 100 steamboats,
employed more men than any other business in the country, and was worth
several million dollars.
H. Summary: In addition to those qualities exhibited in his early business career -- 1)
hard working; 2) fiercely competitive, willing to cut prices to get business; 3)
reliable (repeat customers!); 4) frugal this stage shows Vanderbilts skill as a
business strategist. His methods may not pass muster in todays legal
environment, but wherever he competed regardless of whether he was paid to
leave the market or not prices were lower in his wake.

III.

Vanderbilt: Steamship Line via Nicaragua to California

A. The discovery of gold in California in 1848 set off a stampede of adventurers
heading for California from the East Coast. Initially the California bound
adventurers went by Clipper Ship around Cape Horn. The Clippers were built for
speed long, narrow amidships, with very tall masts and large sails. They could
make the journey from NYC in 90 days compared to an average of 159 days for a
conventional sailing vessel. However, they were designed for speed and not for
cargo so passage was very expensive.
B. Consequently, New York steamship operators organized a route via Panama using
steamships two weeks to Panama, a weeks portage across the Isthmus to the
Pacific, and then two more weeks aboard a second steamship to San Francisco (35
days).
C. Vanderbilt, who studied maps of Central American for many hours thought he had
a better solution Nicaragua. The San Juan River runs along the border with Costa
Rica for 119 miles and then empties into Lake Nicaragua. One Hundred miles long
and 50 miles wide, the western shore of Lake Nicaragua is only 12 miles from the
Pacific Ocean. Why not shorten the route to California by using Lake Nicaragua
and the San Juan River?
D. In 1851 he formed the Accessory Transit Company and paid the Nicaraguan
government $10,000 for a charter to cross the country. Vanderbilt personally
piloted a small steamboat up the San Juan River to test the route (which many
locals said couldnt be done). He had the river cleared of obstacles, placed a
steamboat on Lake Nicaragua, and built a road from the west shore of the lake to
San Juan del Sur a port he constructed on the Pacific coast.
E. Vanderbilts route was 600 miles and 2 days shorter to California and cheaper he
immediately slashed the prevailing fare of $600 to $400. His two competitors were
subsidized by the U.S. government to the tune of $500,000 to carry the mail to

California. Vanderbilt not only cut fares, he offered to carry the mail for free!
Eventually the fare dropped to $150 and Vanderbilt still made money.
F. After some political machinations involving some crooked subordinates and the
American adventurer William Walker, Vanderbilt lost control of his Accessory
Transit Company, switched his steamships to the Panama route, regained his
Nicaraguan interests, and, finally, was paid by his subsidized rivals a fee of
$672,000 (of the $900,000 subsidy) a year not to operate a steamship line on the
California route.
IV.

Vanderbilt: Steamship Line Across the Atlantic

A. In 1855 Commodore Vanderbilt entered the steamship business on the Atlantic.
Their respective governments heavily subsidized Cunard, a British line, and Collins,
an American line. After failing to obtain a subsidy himself, Vanderbilt enters the
business.
B. As was his practice, Vanderbilt cut fares for both passengers and mail. He focussed
on 2nd and 3rd class passenger to get a volume business. He did not insure his ships
because he only used well built vessels with first class crews. Even so, he barely
broke even.
C. Consequently, Vanderbilt spent $600,000 building the Vanderbilt which was the
largest vessel ever to float on the Atlantic ocean to that time. It was 335 feet long
with a beam of 46 feet and weighed 4,500 tons. It was built of the best materials
and used an advanced power plant so that it was very fast and set the speed
record at 9 days 1 hour from Sandy Hook to the Isle of Wight.
D. By 1858 Congress revoked the subsidy to the Collins line (which quickly went
bankrupt). Vanderbilts only competition became an unsubsidized British Line
the William Inman Line.
E. Folsom (p.11) argues that the subsidies had the effect of delaying innovation. In
particular, the use of iron hulled ships with screw propellers. Cunard and Collins
used wooden ships with paddle wheels. It is no accident that the winners
Vanderbilt and Inman used iron-hulled ships. {Aside: Once again, North &
Thomass fundamental argument about poorly defined property rights.}

V.

The Railroad Period: 1863 1877

A. From 1862 1864 Vanderbilt sold or leased most of his vessels to the Union
government at a good profit. Vanderbilts fortune rose to around $40,000,000 by
1863.
B. New York & Harlem Vanderbilt became a director of the RR in 1857 after an
initial small investment and did not take an active part in the affairs of the RR. The
Harlem was the only RR to enter Manhattan from the North and East. It crossed
the Harlem River at 135th Street and then went south through Manhattan along
Fourth (later Park) Avenue to 26th Street where it connected to its horse car lines.
It was built on the east side of the Hudson and inland because the original builders
figured that they could never compete with the steamboat traffic along the
Hudson itself!

Daniel Drew
1. First Stock Corner: Dec. 1862 Harlem
directors applied for permission to lay
rails down Broadway south of Union
Square to the Battery. (This would have
been a horse car line.) The line was
approved by the City government in
April 1863. Daniel Drew, a director of
the NY&H then conspired with City
officials to withdraw their approval in a
scheme to sell the NY&H stock short.
Vanderbilt learned of the scheme and
began to purchase all the stock that
came on the market and all the short
sales. By August 1863 the stock hit
$179 and Vanderbilt and his group
controlled it all the entire stock
capitalization of the company,
$4,217,100. The politicians then
reversed their reversal and reapproved the extension of Harlem
down Broadway.

2. Second Stock Corner: Because of legal entanglements the NY&H needed a

bill passed by the NY State Legislature to given the NY&H corporation the
authority to do the construction. The Bill was introduced early in 1864.
Once again Daniel Drew and others hatched a short selling scheme on the
NY&H stock. They conspired with state legislators to defeat the bill to
drive down the price of the stock. And, once again, Vanderbilt and his

group who were short of cash pooled their resources and began
buying up the NY&H stock. By the end of April, 1864 the stock hit $235
and Vanderbilt and his group had bought the equivalent of the entire
capitalization and some 27,000 shares besides. Scores of legislators were
financially ruined.

C. Hudson River Railroad: Built despite the opposition of both the Harlem RR and the
steamboat interests, the HRRR was constructed on the east bank of the Hudson
river and reached east Albany in 1851. The main passenger depot was located at
Tenth Avenue and 30th Street on the West Side of Manhattan.
1. By the summer of 1863 Vanderbilt owned a substantial block of stock in
the Hudson but was still primarily interested in the Harlem. This changed
when a group of traders began selling the Hudson short. Vanderbilt then
participated in a scheme (which he suggested) to convince the "shorts"
that the supporters of the Hudson were lacking in cash. Supporters sold
large blocks of stock to the "shorts" for cash with an option to buy back
the stock within 30 days at a slightly higher price. Instead of holding the
stock, the "shorts" immediately sold it. The "Supporters" then quietly
bought the stock the "shorts" sold along with all other shares on the
market. By July, 1863, the stock of the Hudson was cornered and the
"shorts" took a bath.
2. Vanderbilt and his allies took control of the board of directors of the
Hudson in 1864 and Vanderbilt became President of the railroad in 1865.
3. In 1866 Vanderbilt built a wooden truss bridge 2000 feet long over the
Hudson River at Albany. Both the Hudson and Harlem RRs now came all

the way into Albany using the station of the New York Central.

4. During the summer months the New York Central would transfer all lot of
its freight to steamboats for the trip to New York City rather than shipping
the freight over the Hudson. However, Vanderbilt began buying NYC stock
in 1863-64 and was able to influence the election of Erastus Corning as
President in 1864. From 1864-66 Vanderbilt and the New York Central
cooperated. In December 1866 interests hostile to Vanderbilt gained
control of the NYC and the cooperative relationship ended. On 14 January
1867 Vanderbilt retaliated by announcing that the terminus of the Hudson
River RR would henceforth be East Albany. East bound freight piled up in
Albany because the river was frozen over. East bound Passengers had to
walk across the ice to catch the train down to New York.
5. The NYC quickly capitulated because it was under great competitive
pressure from the other Trunk Line Railroads -- especially the Erie and the
Pennsylvania.

D. The New York Central System: On 12 November 1867 the major stockholders of
the NYC offered Vanderbilt control of the railroad. On 11 December 1867
Vanderbilt was elected President of the railroad and picked his own board of
directors.
1. By 1869 Vanderbilt merged the New York Central and Hudson River
railroads and doubled the capitalization of the combined lines to some
$90,000,000. His philosophy was to adjust the capitalization his critics
called it "stock watering" based upon the anticipated earnings. NYC
stock paid a consistent 8% dividend under the Commodore.
2. In contrast to many other railroads of the era, the NYC was truly managed
by its stockholders. Vanderbilt steadily increased his share of the stock.
3. In 1868 Vanderbilt faced two problems. First, he became convinced that
he had to extend his system all the way to Chicago to be competitive with
the other major lines the PA, Erie, and B&O who were also casting
about for connections. Second, he wanted to gain control of the Erie
(technically, the New York & Erie) to end the competition for New York
City Freight.
4. Vanderbilts efforts to gain control of the Erie led to the infamous "Erie
War" in which the Commodore was outwitted by his old rival Daniel Drew
and Drews two young collaborators, Jim Fisk and Jay Gould. Vanderbilt
bought up larger and larger amounts of Erie stock in order to gain majority
control but Drew, Fisk, and Gould simply kept issuing more stock and
dumping it onto the market. Eventually Drew and Vanderbilt made a deal
that allowed Vanderbilt to extricate himself with "only" about $1.5 million
in losses and Fisk and Gould ended up controlling an almost completely
bankrupted Erie railroad.

5. Vanderbilt was much more successful in gaining control of the lines he

needed to Chicago the Lake Shore, and the Michigan Southern and
Northern Indiana railroads. By the summer of 1869 he controlled a
consolidated railroad system from New York City to Chicago.
6. Vanderbilt made major improvements throughout his consolidated
system. In 1868 he built a new and much larger freight yard on the West
Side of Manhattan. In 1871 the first Grand Central Terminal was opened
at 42nd Street. Throughout the period he steadily upgraded the right-ofways, the track, and the rolling stock of his railroads. Installing steel rails
on the most heavily traveled routes. Finally, in 1874, in what many
thought a foolish and "impractical" action, but turned out to be a visionary
action, Vanderbilt quadrupled tracked (2 lines for passenger, 2 lines for
freight) the New York Central from Albany to Buffalo. This vastly improved
the productivity of the core of his railroad system and made the system
enormously profitable.
E. Summary: The Railroad phase of Vanderbilts career exhibits the same qualities of
his early career and his steamboat period -- 1) hard working; 2) fiercely
competitive, willing to cut prices to get business; 3) reliable (repeat customers!);
4) frugal; 5) skilled business strategist and something more -- 6) the ability to
master the details of a new business (which shows exceptional insight) and to act
boldly when necessary. (The first Harlem corner was his first foray into the stock
market.) Also, the sheer size of the NYC showed other skills: 7) He picked skilled
managers to run his railroad properties. On the debit side, Vanderbilt was not an
"Empire Builder" as James J. Hill was (the areas his railroads ran through were
largely settled). He built very little new railroad mileage and the "vision" of a great
system linking New York with Chicago occurred very late in his career.

Cornelius Vanderbilt
From Wikipedia, the free encyclopedia
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For other people named Cornelius Vanderbilt, see Cornelius Vanderbilt (disambiguation).

Cornelius Vanderbilt

May 27, 1794

Born

Staten Island, New York, U.S.

January 4, 1877 (aged 82)

Died

New York City

Occupation Entrepreneur

Net worth

US$105 million at the time of his death

(approximately 1/87th of US GNP)[1]

Sophia Johnson (17951868)

Frank Armstrong Crawford Vanderbilt (1839

Spouse(s)

1885) m. 1869

Phebe Jane Cross

Ethelinda Allen

Eliza Osgood

William Henry Vanderbilt

Emily Almira Thorn

Sophia Johnson Torrance

Children

Maria Louisa Clark Niven

Frances Lavinia Vanderbilt

Cornelius Jeremiah Vanderbilt

George Washington Vanderbilt 18321836

Mary Alicia LaBau Berger

Catherine Juliette Barker LaFitte

George Washington Vanderbilt

Parents

Cornelius Vanderbilt
Phebe Hand

Signature

Cornelius Vanderbilt (May 27, 1794 January 4, 1877), also known by the sobriquet
Commodore,[2] was an American industrialist and philanthropist who built his wealth in
shipping and railroads. He was also the patriarch of the Vanderbilt family and one of the
richest Americans in history. He provided the initial gift to found Vanderbilt University,
which is named in his honor.

Contents
[hide]

1 Ancestry
2 Early years
3 Steamboat entrepreneur
4 Oceangoing steamship lines
5 American Civil War
6 Railroad empire
o 6.1 New York and Harlem Railroad
o 6.2 New York Central and Hudson River Railroad
o 6.3 Grand Central Depot
o 6.4 Rivalry with Jay Gould and James Fisk

7 Death and legacy

8 Descendants
9 Railroads controlled by Vanderbilt
10 See also
11 References
12 Further reading
13 External links

Ancestry
Cornelius Vanderbilt's great-great-grandfather, Jan Aertson or Aertszoon, was a Dutch
farmer from the village of De Bilt in Utrecht, Netherlands, who emigrated to New York as
an indentured servant in 1650. The Dutch van der ("of the") was eventually added to
Aertson's village name to create "van der Bilt" ("of De Bilt"), which was eventually
condensed to Vanderbilt.

Early years
Vanderbilt was born in Staten Island, New York and began working on his father's ferry in
New York Harbor as a boy, quitting school at the age of 11. At the age of 16 Vanderbilt
decided to start his own ferry service. According to one version of events, he borrowed
$100 from his mother to purchase a periauger (a shallow draft, two masted sailing vessel).
However, according to the version of the first published account of his life, published in the
magazine Scientific American in 1853, the periauger belonged to his father and he received
half the profit. He began his business by ferrying freight and passengers between Staten
Island and Manhattan.
On December 19, 1813, Vanderbilt married his first cousin, Sophia Johnson (17951868),
daughter of his aunt Elizabeth Hand Johnson. They moved into a boarding house on Broad
Street in Manhattan. He and his wife eventually had 13 children, one of whom died in
childhood.[3]:9-27 In addition to running his ferry, Vanderbilt bought his brother-in-law John
De Forest's schooner Charlotte, and traded in food and merchandise, in partnership with his
father and others. But on November 24, 1817, a ferry entrepreneur named Thomas Gibbons
asked Vanderbilt to captain his steamboat between New Jersey and New York. Though
Vanderbilt kept his own businesses running, he became Gibbons's business manager.[3]:3135
When Vanderbilt entered his new position, Gibbons was fighting against a monopoly on
steamboats in New York waters, granted by the New York State Legislature to the
politically influential patrician, Robert Livingston, and steamboat designer Robert Fulton.
Though both Livingston and Fulton had died by the time Vanderbilt went to work for
Gibbons, the monopoly continued in the hands of Livingston's heirs, who had granted a
license to Aaron Ogden to run a ferry between New York and New Jersey. Gibbons
launched his steamboat venture because of a personal dispute with Ogden, whom he hoped
to bankrupt. To accomplish this, he undercut prices, and also brought a landmark legal case
Gibbons v. Ogden to the United States Supreme Court to overturn the monopoly.[3]:3748

Working for Gibbons, Vanderbilt learned to operate a large and complicated business. He
moved to New Brunswick, New Jersey, a stop on Gibbons's line between New York and
Philadelphia, where his wife Sophia operated a very profitable inn, using the proceeds to
feed, clothe, and educate the children. Vanderbilt also proved a quick study in legal matters,
representing Gibbons in meetings with lawyers. He also went to Washington, D.C., to hire
Daniel Webster to argue the case before the Supreme Court. Vanderbilt appealed his own
case against the monopoly to the Supreme Court, which was next on the docket after
Gibbons v. Ogden. The Court never heard Vanderbilt's case, because on March 2, 1824, it
ruled in Gibbons's favor, saying that states had no power to interfere with interstate
commerce. The case is still considered a landmark ruling, and is considered the basis for
much of the prosperity the United States later enjoyed.[3]:4767

Steamboat entrepreneur

C. Vanderbilt, Hudson River steamer owned by Cornelius Vanderbilt (oil on canvas by James and
John Bard).

After Thomas Gibbons died in 1826, Vanderbilt worked for Gibbons' son William until
1829. Though he had always run his own businesses on the side, he now worked entirely
for himself. Step by step, he started lines between New York and the surrounding region.
First he took over Gibbons' ferry to New Jersey, then switched to western Long Island
Sound. In 1831, he took over his brother Jacob's line to Peekskill, New York, on the lower
Hudson River. That year he faced opposition by a steamboat operated by Daniel Drew, who
forced Vanderbilt to buy him out. Impressed, Vanderbilt became a secret partner with Drew
for the next thirty years, so that the two men would have an incentive to avoid competing
with each other.[3]:72, 8487
On November 8, 1833, Vanderbilt was nearly killed in the Hightstown rail accident on the
Camden and Amboy Railroad in New Jersey. Also on the train was former president John
Quincy Adams.[3]:9091
In 1834, Vanderbilt competed on the Hudson River against a steamboat monopoly between
New York and Albany. Using the name "The People's Line," he used the populist language
associated with Democratic president Andrew Jackson to get popular support for his
business. At the end of the year, the monopoly paid him a large amount to stop competing,
and he switched his operations to Long Island Sound.[3]:99104

During the 1830s, textile mills were built in large numbers in New England as the United
States experienced an industrial revolution. Some of the first railroads in the United States
were built from Boston to Long Island Sound, to connect with steamboats that ran to New
York. By the end of the decade, Vanderbilt dominated the steamboat business on the
Sound, and began to take over the management of the connecting railroads. In the 1840s, he
launched a campaign to take over the most attractive of these lines, the New York,
Providence and Boston Railroad, popularly known as the Stonington. By cutting fares on
competing lines, Vanderbilt drove down the Stonington stock price, and took over the
presidency of the company in 1847, the first of the many railroads he would head.[3]:119146
During these years, Vanderbilt also operated many other businesses. He bought large
amounts of real estate in Manhattan and Staten Island, and took over the Staten Island Ferry
in 1838. It was in the 1830s when he was first referred to as "commodore," then the highest
rank in the United States Navy. A common nickname for important steamboat
entrepreneurs, it stuck to Vanderbilt alone by the end of the 1840s.[3]:124127

Oceangoing steamship lines

Vanderbilt in later life

When the California gold rush began in 1849, Vanderbilt switched from regional steamboat
lines to ocean-going steamships. Many of the migrants to California, and almost all of the
gold returning to the East Coast, went by steamship to Panama, where mule trains and
canoes provided transportation across the isthmus. (The Panama Railroad was soon built to
provide a faster crossing.) Vanderbilt proposed a canal across Nicaragua, which was closer
to the United States and was spanned most of the way across by Lake Nicaragua and the
San Juan River. In the end, he could not attract enough investment to build the canal, but he
did start a steamship line to Nicaragua, and founded the Accessory Transit Company to
carry passengers across Nicaragua by steamboat on the lake and river, with a 12-mile

carriage road between the Pacific port of San Juan del Sur and Virgin Bay on Lake
Nicaragua.[3]:174205
In 1852, a dispute with Joseph L. White, a partner in the Accessory Transit Company, led
to a battle in which Vanderbilt forced the company to buy his ships for an inflated price. In
early 1853, he took his family on a grand tour of Europe in his steamship yacht, the North
Star. While he was away, White conspired with Charles Morgan, Vanderbilt's erstwhile
ally, to betray him, and deny him money he was owed by the Accessory Transit Company.
When Vanderbilt returned from Europe, he retaliated with a rival line to California, cutting
prices until he forced Morgan and White to pay him off. He then turned to transatlantic
steamship lines, running in opposition to the heavily subsidized Collins Line, headed by
Edward K. Collins. Vanderbilt eventually drove the Collins Line into extinction.[4] During
the 1850s, he also bought control of a major shipyard and the Allaire Iron Works, a leading
manufacturer of marine steam engines, in Manhattan.[3]:217264
In November 1855, Vanderbilt began to buy control of Accessory Transit once again. That
same year, the military adventurer, William Walker, took control of Nicaragua. Edmund
Randolph, a close friend of Walker, coerced the Accessory Transit's San Francisco agent,
Cornelius K. Garrison, into opposing Vanderbilt. Randolph convinced Walker to annul the
charter of the Accessory Transit Company, and give the transit rights and company
steamboats to him; Randolph then sold them to Garrison. Garrison brought Charles Morgan
in New York into the plan. Vanderbilt took control of the company just before these
developments were announced. When he tried to convince the U.S. and British
governments to help restore the company to its rights and property, they refused. So he
negotiated with Costa Rica, which (along with the other Central American republics) had
declared war on Walker. Vanderbilt sent a man to Costa Rica who led a raid that captured
the steamboats on the San Juan River, cutting Walker off from his reinforcements from the
United States. Walker was forced to give up, and was conducted out of the country by a
U.S. Navy officer. But the new Nicaraguan government refused to allow Vanderbilt to
restart the transit business, so he started a line by way of Panama, eventually constructing a
monopoly on the California steamship business.[3]:268327

American Civil War

When the Civil War began in 1861, Vanderbilt attempted to donate his largest steamship,
the Vanderbilt, to the Union Navy. Secretary of the Navy Gideon Welles refused it,
thinking its operation and maintenance too expensive for what he expected to be a short
war. Vanderbilt had little choice but to lease it to the War Department, at prices set by ship
brokers. When the Confederate ironclad Virginia (popularly known in the North as the
Merrimack) wrought havoc with the Union blockading squadron at Hampton Roads,
Virginia, Secretary of War Edwin Stanton and President Abraham Lincoln called on
Vanderbilt for help. This time he succeeded in donating the Vanderbilt to the Union navy,
equipping it with a ram and staffing it with handpicked officers. It helped bottle up the
Virginia, after which Vanderbilt converted it into a cruiser to hunt for the Confederate
commerce raider Alabama, captained by Raphael Semmes. Vanderbilt also outfitted a
major expedition to New Orleans. But he suffered a personal loss when his youngest and

favorite son and heir apparent, George Washington Vanderbilt, a graduate of the United
States Military Academy, fell ill and died without ever seeing combat.[3]:341

Railroad empire

Cornelius Vanderbilt versus Jim Fisk in a famous rivalry with the Erie Railroad
New York and Harlem Railroad

Though Vanderbilt had relinquished his presidency of the Stonington Railroad during the
California gold rush, he took an interest in several railroads during the 1850s, serving on
the boards of directors of the Erie Railway, the Central Railroad of New Jersey, the
Hartford and New Haven, and the New York and Harlem (popularly known as the Harlem).
In 1863, Vanderbilt took control of the Harlem in a famous stockmarket corner, and was
elected its president. He later explained that he wanted to show that he could take this
railroad, which was generally considered worthless, and make it valuable. It had a key
advantage: it was the only steam railroad to enter the center of Manhattan, running down
4th Avenue (later Park Avenue) to a station on 26th Street, where it connected with a horsedrawn streetcar line. From Manhattan it ran up to Chatham Four Corners, New York, where
it had a connection to the railroads running east and west.[3]:365386
Vanderbilt brought his son William Henry Vanderbilt in as vice-president of the Harlem.
William had had a nervous breakdown early in life, and his father had sent him to a farm on
Staten Island. But he proved himself a good businessman, and eventually became the head
of the Staten Island Railway. Though the Commodore had once scorned him, he was
impressed by William's success, and eventually made him operational manager of all his
railroad lines. In 1864, the Commodore sold his last ships, concentrating on railroads.[3]:387
390

New York Central and Hudson River Railroad

Looking out the north end of the Murray Hill Tunnel towards the station in 1880; note the labels
for the New York, Harlem and New York, and New Haven Railroads; the New York Central and
Hudson River was off to the left. The two larger portals on the right allowed some horse-drawn
trains to continue further downtown.

Statue at the modern Grand Central Terminal

Once in charge of the Harlem, Vanderbilt encountered conflicts with connecting lines. In
each case, the strife ended in a battle that Vanderbilt won. He bought control of the Hudson
River Railroad in 1864, the New York Central Railroad in 1867, and the Lake Shore and
Michigan Southern Railway in 1869. He later bought the Canada Southern as well. In 1870,
he consolidated two of his key lines into the New York Central and Hudson River Railroad,
one of the first giant corporations in American history.[3]:391442, 474520

Grand Central Depot

Main article: Grand Central Terminal

In 1869, he directed the Harlem to begin construction of the Grand Central Depot on 42nd
Street in Manhattan. It was finished in 1871, and served as his lines' terminus in New York.
He sank the tracks on 4th Avenue in a cut that later became a tunnel, and 4th Avenue
became Park Avenue. The depot was replaced by Grand Central Terminal in 1913.[3]:391-442
Rivalry with Jay Gould and James Fisk

In 1868, Vanderbilt fell into a dispute with Daniel Drew, who had become treasurer of the
Erie Railway. To get revenge, he tried to corner Erie stock, which led to the so-called Erie
War. This brought him into direct conflict with Jay Gould and James Fisk, Jr., who had just
joined Drew on the Erie board. They defeated the corner by issuing "watered stock" in
defiance of state law, which restricted the number of shares a company could issue.[5]:207-232
But Gould bribed the legislature to legalize the new stock.[5]:262-4 Vanderbilt used the
leverage of a lawsuit to get his losses back, but he and Gould became public enemies.[6]
Gould never got the better of Vanderbilt in any other important business matter, but he
often embarrassed Vanderbilt, who uncharacteristically lashed out at Gould in public. By
contrast, Vanderbilt befriended his other foes after their fights ended, including Drew and
Cornelius Garrison.

Death and legacy

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Following his wife's death in 1868, Vanderbilt went to Canada where, on August 21, 1869,
in London, Ontario,[7] he married a cousin from Mobile, Alabama, named Frank Armstrong
Crawford.[8] Crawford was 43 years younger than her husband. Crawford's cousin's
husband, Holland McTyeire, convinced Vanderbilt to endow what would become
Vanderbilt University, named in his honor. Vanderbilt gave $1 million, the largest
charitable gift in American history to that date. He also bought a church for $50,000 for his
second wife's congregation, the Church of the Strangers. He also donated to churches
around New York, including a gift to the Moravian Church on Staten Island of 8 acres
(34,000 m2) for a cemetery in which he was later buried.
Cornelius Vanderbilt died on January 4, 1877, at his residence, No. 10 Washington Place,
after having been confined to his rooms for about eight months. The immediate cause of his
death was exhaustion, brought on by long suffering from a complication of chronic
disorders.[9] At the time of his death, aged 82, his fortune was estimated at $100 million. In
his will, he left 95% of his $100 million estate to his son William and to William's four

sons ($5,000,000 (approx. $99,000,000 in 2008 USD) to Cornelius Vanderbilt II, and $2
million apiece (approx. $39,600,000 in 2008 USD) to William Kissam Vanderbilt,
Frederick Vanderbilt, and George Washington Vanderbilt II). The Commodore stated that
he believed William Henry was the only heir capable of maintaining the business empire.
He willed amounts ranging from $250,000 (approximate $4,950,000 in 2008 USD) to
$500,000 ($9,920,000 in 2008 USD) to each of his eight daughters. His wife received
US$500,000, their New York City home, and 2,000 shares of common stock in New York
Central Railroad. To his younger surviving son, Cornelius Jeremiah Vanderbilt, whom he
regarded as a wastrel, he left the income from a $200,000 trust fund. The Commodore had
lived in relative modesty considering his nearly unlimited means, splurging only on race
horses, leaving his descendants to build the Vanderbilt houses that characterize America's
Gilded Age. (It is worth noting that though trivial in comparison to the $90 million+
inherited by William Henry Vanderbilt and his sons, the bequests to his other children
made them very wealthy by the standards of 1877 and were not subject to inheritance tax.)
According to "The Wealthy 100" by Michael Klepper and Robert Gunther, Vanderbilt
would be worth $143 billion in 2007 United States dollars, if his total wealth as a share of
the nation's gross domestic product (GDP) in 1877 (the year of his death) were taken and
applied in that same proportion in 2007. This would make him the second-wealthiest
person in American history, after John D. Rockefeller.[10][11] Another calculation, from
1998, puts him in third place, after Andrew Carnegie.[12]
In 1999, Cornelius Vanderbilt was inducted into the North America Railway Hall of Fame,
recognizing him for his significant contributions to the railroad industry. He was inducted
in the "Railway Workers & Builders: North America" category.[13]

Descendants
Main article: Vanderbilt family

Dr. Jared Linsly testifying as to the mental and physical condition of Cornelius Vanderbilt, during
court proceedings surrounding the challenge to his will. 1877 illustration from Harper's Weekly.

Cornelius Vanderbilt was buried in the family vault in the Moravian Cemetery at New Dorp
on Staten Island. He was later reburied in a tomb in the same cemetery constructed by his
son William. Three of his daughters and son, Cornelius Jeremiah Vanderbilt, contested the
will on the grounds that their father was of unsound mind and under the influence of his son
William Henry and of spiritualists he consulted on a regular basis. The court battle lasted
more than a year and was ultimately won outright by William Henry Vanderbilt, who then
increased the bequests to his siblings and paid their legal fees. One of the current-surviving
descendants is his great-great granddaughter blue jeans designer Gloria Vanderbilt. Gloria's
son is television anchor Anderson Cooper. Through his granddaughter Emily Thorn
Vanderbilt, Cornelius Vanderbilt is the great-great-great-great grandfather of actor Timothy
Olyphant.
Cornelius Jeremiah Vanderbilt, an epileptic, committed suicide in 1882. George
Washington Vanderbilt also died without issue, during the Civil War. All of the Vanderbilt
multimillionaires descend through oldest son William Henry.
Children of Cornelius Vanderbilt and Sophia Johnson
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.

Phoebe Jane (Vanderbilt) Cross (18141878)

Ethelinda (Vanderbilt) Allen (18171889)
Eliza (Vanderbilt) Osgood (18191890)
William Henry Vanderbilt (18211885)
Emily Almira (Vanderbilt) Thorn (18231896)
Sophia Johnson (Vanderbilt) Torrance (18251912)
Maria Louisa (Vanderbilt) Clark Niven (18271896)
Frances Lavinia Vanderbilt (18281868)
Cornelius Jeremiah Vanderbilt (18301882)
George Washington Vanderbilt (18321836)
Mary Alicia (Vanderbilt) LaBau Berger (18341902)
Catherine Juliette (Vanderbilt) Barker LaFitte (18361881)
George Washington Vanderbilt (18391864)

Railroads controlled by Vanderbilt

New York and Harlem Railroad (1863)

Hudson River Railroad (1864)
New York Central Railroad (1868)
Canada Southern Railway (1873)[14]
Lake Shore and Michigan Southern Railway (1873?)
Michigan Central Railroad (1877)[15]
New York, Chicago and St. Louis Railroad (Nickel Plate Road, 1882)
West Shore Railroad (1885)
Rome, Watertown and Ogdensburg Railroad
Dunkirk, Allegheny Valley and Pittsburgh Railroad
Cleveland, Cincinnati, Chicago and St. Louis Railway
Lake Erie and Western Railroad
Pittsburgh and Lake Erie Railroad

See also

Tennessee Celeste Claflin, mistress of Cornelius Vanderbilt in later life

List of wealthiest historical figures
List of railroad executives

References
1. Jump up ^ Klepper, Michael; Gunther, Michael (1996). The Wealthy 100: From Benjamin
Franklin to Bill GatesA Ranking of the Richest Americans, Past and Present. Secaucus,
New Jersey: Carol Publishing Group. p. xi. ISBN 978-0-8065-1800-8. OCLC 33818143
2. Jump up ^ "Commodore Vanderbilt's Life". New York Times. January 5, 1877.
3. ^ Jump up to: a b c d e f g h i j k l m n o p q Stiles, T.J. (2009). The First Tycoon: The Epic Life of
Cornelius Vanderbilt. New York: Knopf. ISBN 978-0-375-41542-5.

4. Jump up ^ Schweikart, Larry, and Lynne Pierson Doti. 2010. "American entrepreneur: the
fascinating stories of the people who defined business in the United States." New York:
American Management Association. pp. 4345.
5. ^ Jump up to: a b White, Bouck (1910). The Book of Daniel Drew. New York: Doubleday,
Page & Co.
6. Jump up ^ McAlpine, Robert W. (1872). The Life and Times of Col. James Fisk, Jr.. New
York: New York Book Co. pp. 79147.
7. Jump up ^ , http://www.vanderbilt.edu/magazines/vanderbiltmagazine/archives/VMagsm06/features/strangeGift.pdf
8. Jump up ^ Knight, Lucian Lamar (1908). Reminiscences of famous Georgians: embracing
episodes and incidents in the lives of the great men of the state, Volume 2. New York:
Franklin-Turner. p. 123.
9. Jump up ^ "Cornelius Vanderbilt.; A Long And Useful Life Ended. The Renowned
Commodore Dies After Eight Months' Illness His Remarkable Career As A Man Of The
World His Wealth Estimated At $100,000,000 Particulars Of His Illness And Death". The
New York Times. January 5, 1877.
10. Jump up ^ Jackson, Tom; Evanchik, et al., Monica (2007-07-15). "The Wealthiest
Americans Ever". The New York Times. Retrieved 2007-07-15.
11. Jump up ^ Fortune Magazine's "richest Americans". Fortune estimated his wealth at death
at $105,000,000, or 1/87 of the nation's GDP.
12. Jump up ^ Michael Klepper, Robert Gunter, Jeanette Baik, Linda Barth, and Christine
Gibson, "The American Heritage 40; A ranking of the forty wealthiest Americans of all time
(Surprise: Only three of them are alive today)". American Heritage, Volume 49, Issue 6
(October 1998).
13. Jump up ^ North America Railway Hall of Fame: C. Vanderbilt Inductee Page
14. Jump up ^ Van Winkle, Louis (2001). "Gross Ile, MI depot." Michigan Passenger Stations.
15. Jump up ^ Berry, Dale. "Railroad History Story: Jackson's Evolution as a Rail Center."
Michigan's Internet Railroad History Museum. Accessed 2012-04-16.

Further reading

Folsom, Burton W. (1991). The Myth of the Robber Barons. Herndon, VA: Young America's
Foundation. ISBN 978-0-9630203-1-4.
Josephson, Matthew (1934). The Robber Barons: The Great American Capitalists, 18611901. New York: Harcourt Brace Jovanovich. ISBN 0-15-676790-2.
Schlichting, Kurt C. (2001). Grand Central Terminal: Railroads, Engineering, and
Architecture in New York City. Johns Hopkins University Press. ISBN 978-0-8018-6510-7.
Sobel, Robert (2000) [First published 1965]. The Big Board: A History of the New York Stock
Market. Washington: Beard Books. ISBN 978-1-893122-66-6.
Stiles, T.J. (2009). The First Tycoon: The Epic Life of Cornelius Vanderbilt (1st ed.). New
York: Alfred A. Knopf. ISBN 978-0-375-41542-5.

External links

Wikimedia Commons has media related to: Cornelius Vanderbilt

"Vanderbilt, Cornelius". Appletons' Cyclopdia of American Biography. 1889