Without departing from the main issue of my subject, however, I may say that the position which Mr. Tilden was enabled to assume as counsellor to our committee made it possible for him to rise from the, not to say dignified, although money-making, attitude of railroad wrecker to that of Governor of the Empire State of the Union, thus paving the way for him to become almost a successful candidate for the highest position in the gift of the Great Republic.
Such a sudden transition from comparative obscurity was enough to turn any ordinary head.
Seeing the unexpected course that both our local and national history have taken, it is impossible to say what might have been the course of this man’s destiny, and the fate of this new Daniel come to judgment in canal ring masters, had it not been that his friend Havemeyer discovered him at an opportune moment, and rescued him from manifest oblivion in the nick of time.
It must be said, on behalf of Mr. Tilden, however, that he improved the occasion with the discernment of genius, and in the fullest degree, and to the highest extent, thoroughly justified Havemeyer’s choice.
The soundness of that proverbial philosophy which holds that lightning never strikes twice in the same place seems to have been fully appreciated by Mr. Havemeyer, although this was a little ahead of the time that John Tyndall and other scientists of the modern school of discovery had demonstrated some of the recent wonders of electricity.
Tilden struck while the iron was hot, and though he failed to reach the highest pinnacle of his soaring ambition, he demonstrated the wonderful possibilities which lie in the path of obscure men who are blest with friends who look out for their welfare, and who have the precaution to turn the wheel of fortune in the right direction.
Whether it was the result of fate, genius, or wise direction, or a combination of all these attributes, I don’t pretend to decide, but I have noted the simple facts from my own observation and experience, associated with the rise and financial progress of the Hon. Samuel J. Tilden, leaving others deeper in scientific and philosophic matters to supply the details and hidden mysteries of the causes of his marvellous prosperity.
The Committee of Seventy, when entering upon its labors, passed a resolution authorizing the appointment of a subcommittee by the chair to select and retain three lawyers to represent it in the matters of litigation that might arise in connection with the investigation. Mr. Havemeyer, being a member of the sub-committee, through his influence Samuel J. Tilden was one of the three appointed.
To give the reader an idea of the power and prestige of the Committee of Seventy at that time it is only necessary to state that it was instrumental in making Mr. Abraham Lawrence one of the Judges of the Supreme Court, and Mr. W. H. Peckham, the third counsel, could have obtained almost any judgeship he had desired, with perfect facility.
These cases are on official record, and are living examples to show that I am not exaggerating. Judge Lawrence still adorns the bench, with an excellent record behind him, and Mr. Peckham has been a prominent figure in many of the most important suits that have become historic in the State and City of New York.
Mr. Tilden saw the power which this committee, used as an instrument of recommendation, wielded, and he set his astute mind to avail himself of the reformatory advantages which it afforded. The committee was a reform body, and he saw his opportunity, as one of its counsel, to become a reformer also. He builded almost better than he knew, if I may be permitted to quote Scripture in this case, and he did not build on a sandy foundation either. He planted himself on the solid rock of reform principles, independent of politics or previous condition. It must be said, to his credit, that he used the material at his disposal with great tact and good judgment, and made an excellent reformer.
Whatever may have been said about him by political opponents, the late Sage of Greystone must be judged in this sinful world by the positions to which he honorably attained. He became a prominent and most estimable citizen of our great Republic, and had it not been for his age, and certain physical infirmities, the existence of which was a matter of dispute, he would have made a very good President, judging from his record as a Governor.
I have not intended to say anything especially disparaging or ill-natured about Mr. Tilden through any hostile feeling towards him, of which I never had any. My intention has been simply to show how easily a man can rise if he has the ability required to take passage on the tide of prosperity exactly at its flow, the magic point of embarkation which William Shakespeare has suggested.
So what I have stated about Mr. Tilden is in the main rather to his credit than otherwise.
For a man who attained such an elevated position of success by his own industry and brain power I have the highest respect and the deepest sympathy, knowing myself a good deal about the toil attendant upon climbing above the heads of the great majority of the “masses” with a strong contingent of the envious “classes” always using their best efforts to pull a man down who attempts to aspire above a certain level. In fact, Mr. Tilden not only deserved success and respect, but he commanded them. Such a man should always be accorded most graciously his well-earned deserts.
I can, therefore, conscientiously subscribe myself one of the great admirers of his successful career on the whole, bearing always in mind that human nature is not perfect, and that there are few, if any, who have not had some murky clouds cast over their fair fame.
Although on strict moral principles we should never do evil that good may come, yet the manner in which Tilden disposed of the greater portion of his fortune will, even in the eyes of straight-laced moralists, go far to cover a multitude of sins in the acquisition of his wealth. There are probably few, if any, churches in the land that would have refused a portion of the bequest, no matter how familiar their members or their clergy might have been with Mr. Tilden’s railroad methods.
In this imperfect sketch of the turning point of prosperity in Mr. Tilden’s career, I have desired to show how little it requires to change the entire current of a man’s apparent destiny. A man who attains such eminent success has his Creator to thank for endowing him in the first instance with the capacity to take advantage of the chances thrown in his way, and his own smartness for turning them to the best account.
I have taken Mr. Tilden up and devoted to his extraordinary career a few pages, from personal reminiscences, in this book, owing to the fact that he was identified with a number of railroads in the way which I have indicated above. His position in this respect naturally classifies him with some of our most prominent Wall Street speculators, investors and operators, and he thus naturally falls within the scope of the main subject of this book.
Mr. Tilden, in his will, ordered that if the will should be contested by any of the beneficiaries each and all of the contesting parties should be disinherited.
In spite of this prohibition, George H. and Samuel J. Tilden, sons of Henry A. Tilden, and nephews of the testator, contested the validity of the instrument, not on the ground of incapacity or undue influence, but upon construction.
Henry L. Clinton and Aaron Vanderpoel were the lawyers for the contestants.
It is curious that the will of a man so deeply learned in the law as Mr. Tilden was, should be questioned as to whether it was a legal document or not. But such was the ground of the contest. The point was this: The residuary clause empowers the trustees to apply to the Legislature for an act to incorporate a body to be called the Tilden Trust. This body, when incorporated, was to become the legatee. This method of procedure, according to the opinion of learned counsel in the law, bequeathed to the trustee under the will the power to name the public legatee of the testator. It seems that a testator has no power to do this, according to the recent decisions of the Courts of last resort in this country, which, it would seem, Mr. Tilden had not read. Nobody but the testator himself has power to name the legatee. It appears he had the decision of the English Court in his mind, which allows of this method of bequeathing property. Following is the residuary clause in full, bearing upon this point: “I request my said executors and trustees to obtain, as speedily as possible, from the Legislature an act of incorporation of an institution to be known as the Tilden Trust, with capacity to establish and maintain a free library and reading-room in the city of New York, and to promote such scientific and educational objects as my said executors and trustees may more particularly designate. Such corporation shall have not less than five trustees, with power to fill vacancies in their number, and in case said institution shall be incorporated in a form and manner satisfactory to my said executors and trustees during the lifetime of the survivor of the two lives in being, upon which the trust of my general estate herein created is limited, to wit, the lives of Ruby S. Tilden and Susie Whittlesey, I hereby authorize my said executors and trustees to organize the said corporation, designate the first trustees thereof, and to convey to or apply to the use of the same the rest, residue and remainder of all my real and personal estate not specifically disposed of by this instrument, or so much thereof as they may deem expedient, but subject, nevertheless, to the special trusts herein directed to be constituted for particular persons, and to the obligations to make and keep good the said special trusts, provided that the said corporation shall be authorized by law to assume such obligation. But in case such institution shall not be so incorporated during the lifetime of the survivors of the said Ruby S. Tilden and Susie Whittlesey, or if for any cause or reason my said executors shall deem it expedient to convey said rest, residue and remainder, or any part thereof, or to apply the same, or any part thereof, to the said institution, I authorize my said executors and trustees to apply the rest, residue and remainder of my properly, real and personal, after making good the said special trusts herein directed to be constituted, or such portion thereof as they may not deem it expedient to apply to its use to such charitable, educational and scientific purposes, as in the judgment of my said executors and trustees will render the said rest, residue and remainder of my property most widely and substantially beneficial to the interests of mankind.”
[Illustration:
_C Van Derbilt_ ]
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CHAPTER XXXIV.
COMMODORE VANDERBILT. —HOW HIS MAMMOTH FORTUNE WAS ACCUMULATED.
FERRYMAN.—STEAMBOAT OWNER.—RUNS A GREAT COMMERCIAL FLEET.—THE FIRST AND GREATEST OF RAILROAD KINGS.—THE HARLEM “CORNER.”—REORGANIZATION OF N. Y. CENTRAL.—HOW HE MILKED HIS CO-SPECULATORS.—HIS FORTUNE.—ITS VAST INCREASE BY WM. H.
The most conspicuous man connected with Wall Street in my early days of speculation was “Commodore” Vanderbilt. Without going minutely into the early exploits of the man, it will be sufficient, for the purposes of this narrative, that I trace his start in life in connection with a row-boat of which he was Captain, plying between Staten Island, Governor’s Island, and New York, in which he himself did the rowing. This enterprise, in course of time, grew into one with boats propelled by steam, instead of manual labor. During his progress as ferryman he became proprietor of a hotel at New Brunswick, New Jersey. This side issue did not prove very lucrative, perhaps, because the Commodore, with all his versatile ability, did not possess the special talents required to keep a hotel. The hotel still exists, and is situated near the railroad station, and is now, as it was then, merely a railroad tavern. The first vivid recollection of the Commodore in Wall Street “dickering” was in connection with the Nicaragua Transit Company, the capital of which was over $4,000,000. He became President of the Company, and soon afterward the head and front of the whole enterprise. The Directors and stockholders, and in fact every one else connected with the Company, were soon crushed into nonentities. When their complete subjection was obtained, the Commodore loomed up into gigantic dimensions, and, as he expanded, the Nicaragua Company became small by degrees and beautifully less in inverse proportion. Eventually the greatly depressed stockholders, like the worm when trodden under foot, turned and showed resentment. The case came into Court and was the subject of ordinary investigation, but I never heard of the Company recovering anything. I presume their claims were relegated to the profit and loss account in perpetuity.
After this, the Commodore started a line of steamers in opposition to the fleet of Pacific Mail, and kept his boats running until he was bought off. About this time an event happened which has preserved for posterity a good story, highly characteristic of the Commodore. His son-in-law, James M. Cross, had conceived the idea of embarking in the wholesale leather business in the “Swamp.” He had been talked into it by an experienced man who was to be his partner. A store was secured, and everything put under way for the start, with the exception of the capital, which Mr. Cross had agreed to contribute against the experience of his partner. The amount was to be $50,000. Mr. Cross, knowing that the Commodore had at this time become rich and prosperous, felt satisfied that it was only necessary to make application to his enterprising father-in-law for the amount required. Thereupon, with the confidence begotten of implicit trust, he approached the Commodore for this temporary accommodation, giving him a full description of the nature of the business. After listening attentively to the statement of his esteemed son-in-law, the Commodore said in reply: “Now, James, if I let you have this $50,000 to put in the leather business, how much do you think you will be able to make for your share out of the profits?” Mr. Cross thought the best position to take with a rigid business man like his father-in-law was to be prudently conservative in his expectations, and to keep all his Colonel Seller prospects in the background. After a few moments reflection he replied: “I believe I am almost certain to make $5,000 a year.” The Commodore promptly responded: “James, as I can do better than that myself in handling $50,000, I will give you $5,000 a year hereafter, and you may consider yourself in my employ at that salary.” There was no way for James to wriggle out of it, and he accepted the situation with apparent good grace, whatever his internal emotions may have been at the time. The Commodore forthwith dispatched Mr. Cross to San Francisco to manage his steamboat business there. He soon discovered, however, that James was hardly aggressive enough for the go-ahead fellows on the gold coast, and he was recalled. After looking around some time for a man possessing the necessary requirements to be placed in successful competition with the adventurous spirits of the Pacific Slope, his search was rewarded by an introduction to Commodore C. K. Garrison, then in command of a Mississippi steamboat. Garrison had established his reputation for being the best euchre player on the river, and for much besides which that term implies. He was brave and fearless—in fact, in some respects, a Jim Bludso of real life, with the self-sacrificing qualities of that hero largely discounted, or perhaps entirely left out. It required men of mettle in those days to run a steamboat on the Father of Waters, when the greater portion of the passengers belonged to the gambling fraternity, and were all experts with the bowie knife and the ready revolver.
The Commodore had an interview with Garrison, which resulted in an engagement, and he was sent to San Francisco as the Commodore’s agent. It was soon found that he was the man for the Wild West, and he was not slow to appreciate his own value and importance to the increasing fortunes of his employer. He struck very often for higher wages, and was always able to command his price. He rose, from one advance to another, until his salary at that day had reached the marvellous figure of $60,000 a year. Numerous stories of Garrison’s fabulous prosperity on the Pacific Coast reached this city and the ears of the Commodore, and his fame began to penetrate farther than the name of the latter had ever been heard. These accounts had their effect on a mind so naturally envious as that of the Commodore. He began to realize the humiliating fact that, instead of Garrison being in his employ, the former captain of the Mississippi steamboat had him in tow, and was everywhere regarded as the Boss, while Vanderbilt was simply supposed to be his Eastern agent. This brought matters to the point where patience ceased to be a virtue, and the connection was severed. Soon after this the Commodore sold out to the Pacific Mail Company, which again became a monopoly, and as the fight had been a losing one to him, he was obliged to find other waters for his boats.
Since his advent with a common row boat on the waters of our own handsome bay, thence through the gradations of ferry boats and steamboats, nothing but unremitting success had attended his ventures, until his unequal struggle in competition with Pacific Mail. He appeared to have met his Trafalgar when he encountered that fleet. His dissociation with Garrison seemed for a time to forebode disaster. He gathered himself up temporarily again, but never took to the waters so kindly afterwards. He began to feel that his financial destiny was verging towards a firmer foundation. His last boat was the famous steamship Vanderbilt, which was recognized at the time as one of the finest ships to be found on any sea. He made a present of her to the Government during our great National struggle, or according to another account, he lent her, and the Government kept her. The Commodore at one time had a fleet of sixty ships.
The Commodore became convinced that the growing prospects of railroads pointed to greater facilities for transportation in the future, and also a more profitable investment than those watery regions which had hitherto appeared to be his natural element. He promptly resolved to turn his back on the domain of Neptune, and to devote his great energies to enterprises on land. He saw there was comparatively little room for development in water traffic, while in the railroad business the field was practically unlimited.
He then commenced to buy up Harlem Railroad stock, so as to obtain control of that road, and in the operation got up the celebrated Harlem “corner.” Application had been made to the Legislature for some advantages in connection with the road, which were refused for reasons best known to leading members of that body. In the meantime Harlem stock had been knocked down to a very low figure. The Commodore remained in ambush, and was secretly purchasing it. He then went to the Legislature to get his bill passed. Most of the members of the Legislature thought they had got the “deadwood” on the Commodore, and enlisted a large number of their friends in the enterprise. They attempted “to work the Commodore for all he was worth,” and for a time appeared anxious to pass the measure required. On the strength of this anticipated action on the part of the Legislature the stock advanced, when the members sold “short” and failed to legislate. The stock naturally went down, and Vanderbilt bought it up. The collapse anticipated by the Legislature did not take place, and, instead of that, the Commodore got a “corner” in the stock, and the members of the Legislature were the parties mulcted. They had, therefore, all to go to the Commodore’s office, and settle up with him on his own terms, and he made arrangements to get his measure in favor of the road through the Legislature as part of the bargain. This transaction is more fully described in another chapter.
His next great enterprise was in connection with the New York Central. Having successfully euchred the legislators in the matter of Harlem, he was encouraged to play a still higher game. As soon as he obtained control of this property, it seemed as if it had been touched by a magic wand, or that famous stone of Midas, contact with which turned everything into gold. Prior to this event the road had been dragged along under the management of Dean Richmond, Samuel Sloan and Henry Keep, without any signs of prosperity; but when Vanderbilt took hold of it there was a sudden change to visible progress and prosperity. It never looked behind afterwards, and both enterprises have enjoyed signal and increasing success ever since, thus illustrating the marvellous capacity of the Commodore for the organization and management of large enterprises. The hydraulic operations of the Commodore with the stock of this property would alone furnish material for a very interesting chapter. Sending it up on one occasion at a bound, between Saturday and Monday, 20 per cent., was a new move in manipulation which caused some of the boldest operators on the Stock Exchange to stand aghast. He kept working the stock up and down, in some such way as Mr. S. V. White now keeps toying with Lackawanna, until he “milked” the street sometimes very dry. He kept the tempting prize of a coming dividend glittering before the eyes of the dazzled imaginations of his friends who were dealing in the stock, but the “milking” process was so ably managed that, when the famous 80 per cent. dividend was actually declared, they had become so poor that they were unable to carry any of the stock, so as to avail themselves of the profits. There was but one man that I know of who reaped any benefit from it, and that was an old friend of the Commodore, who still lives, and who had met with signal reverses in some of the Erie deals at the time Mr. Gould so ably managed that concern. This man had been wiped out in Erie, and his depressed condition awoke a sympathetic cord momentarily in the heart of the Commodore. He gave his friend the tip the day before the dividend was declared, and he found another friend who bought enough of stock to realize $700,000, which was divided between them. This is the solitary exception within my knowledge where the Commodore failed to bag the entire game without “saying turkey once” to any person connected with the deal.
The life of the Commodore affords singular scope for reflection on the immense possibility of a great business capacity to amass a huge fortune in a few years, especially in this country. The Commodore and his son William H., in a little more than half a century, accumulated the largest private fortune in the world, excepting the aggregate wealth of all the Rothschilds combined, which has been the result of the most expert financiering in all the capitals of Europe through several generations, with all the resources of the greatest monarchs on the earth to back their various enterprises. With all these advantages in favor of the Rothschilds, the Vanderbilt fortune amounts to two-thirds of the sum total of theirs. The result is certainly astounding when submitted to a test of the highest standard of comparison that can be found anywhere on this globe. But, wonderful as the success of the Commodore was in its rapid gradations, from the possession of a rowboat on our bay to that of a fleet of sixty-six steamboats that brought mercantile argosies from all parts of the world, and in later years his great railroad acquisitions, yet the success of his son is more marvellous still.
In seventy years the Commodore arose from nothing financially to be the proud possessor of $90,000,000. Wm. H. obtained $75,000,000 of that and nearly trebled it in a tenth part of the time. He made three times as much in seven years as his father made in seventy, or he made as much on an average every two and one-half years as his father had done during the three score and ten of his active business and speculative career. If any person having the necessary amount of temerity had ever ventured to make such a prediction as this in the presence of the old Commodore, what a natural burn idiot he would have been regarded by that grand old man. If the spirits of the departed ever visited the glimpses of the moon in these days, what a profound sense of humiliation that of old Vanderbilt must feel, as it makes its nightly rounds through those spacious marble corridors in Fifth avenue, or, perched on the dome of the Grand Central Depot, it contemplates the mighty development and expansion of its earthly designs, now extended far beyond the limits of what its highest ambition had dared to foreshadow.
Some people may argue that it required greater ability to acquire these first $90,000,000 than the present sum total of the wealth of the Vanderbilts. Those who argue thus, however, have no precedent to suggest their position. An instance of such prosperity on so large a scale in so short a time has never occurred in the history of financiering. The accumulations in all the wealthy families that I know of have been comparatively slow, and the history of the family of European millionaires shows a similar principle of gradation, except, indeed, that the gradation in the majority of instances has gone backwards. Very few wealthy men, with the exception of the Rothschilds, the Astors and a few others, have had any children capable of increasing their wealth, except where it was almost impossible to do otherwise under the law of primogeniture. In this country, therefore, where the law of distribution has full scope, Wm. H. Vanderbilt, who had to that time been regarded as a man of very moderate capacity, proved himself to be the ablest financier of which there is any record either in ancient or modern history.
Jay Gould, with all the resources of science at his disposal, and all the talent that money could command, with newspapers, politicians, lawyers, judges, and courts at his will, with as good a start, financially dating from 1878, as Wm. H. Vanderbilt had, has been left far behind in the race for wealth, and for the highest prize ever gained by one man in any nation. It has been truly said that a fool can make money, but it takes a wise man to keep it. Wm. H. Vanderbilt’s financial wisdom, as well as his ability, was signally displayed in keeping this great fortune intact, besides adding fully three times as much more to it; and it proves that his father made no mistake in selecting him to hand his name and fortune down to posterity. This immense pile of “filthy lucre,” however, in spite of all the credit that is justly due to its late manager, has had one serious drawback from a public standpoint. In fact, the very announcement of this mammoth fortune in the newspapers, at the time of Mr. Wm. H. Vanderbilt’s death, had a most demoralizing effect upon a large number of the wealthy portion of the community, who began to feel that they were nonentities in comparison. In making this statement I absolve the Vanderbilt family from any blame. Every man in this great Republic has the privilege of walking in the footsteps of the two great Vanderbilts if he only has the ability; but it would not be wisdom for a large number of men to attempt it. They would be pretty certain to “get left.”
The story of the distribution of the Vanderbilt wealth, however, has brought discontent to many a home where happiness reigned before. It could hardly be otherwise, constituted as human nature is, and especially human nature in our highly strung commercial society, where the spirit of ambition is always strenuously aiming at higher flights. People who heretofore had considered themselves rich, and socially important, with a million or so to draw upon, felt that they were mere ciphers in the scale of wealth; they seemed to themselves to be financially blighted, and miserably poor in contrast with the colossal magnitude of the Vanderbilt possessions as exhibited in the Surrogate’s Court. The plain, cold, prosy figures brought out there read like a romance, or the story of Sinbad the Sailor and the Valley of Diamonds. But it was all stern reality. This is why the feelings which suffer from this contrast are so deeply pathetic. It is a reality, and a stern reality, that can hardly be imitated or duplicated by any other two men in this generation. The thing is possible, but just about as probable as it was for every private soldier of Napoleon the Great, who each had a Marshal’s baton in his knapsack, to become a Marshal. “Every blacksmith,” says the Rev. Robert Collyer, “might become a preacher, but it would be a great public calamity if it should happen to that extent.” The bare outlines of the Vanderbilt wills, which have made such a deep impression on the community at large, will be found in another part of this book. I think they will afford very interesting reading for generations yet unborn.