The first tycoon Cornelius Vanderbilt was a key figure in the 1800s who helped propel the United States as a prominent force in the 21st-century economy. Perhaps the significance of his contribution is best depicted through the grandeur and magnificence of the Grand Central Terminal in New York City – an edifice Vanderbilt himself built in 1871. His nickname was “The Commodore” – a title he earned as a sharp and astute young trader. He first tried his hand in water transportation business at the age of 16. By the age of 23, Vanderbilt began easing into the steamboat business as an apprentice for Thomas Gibbons. In addition, Vanderbilt helped usher in an era of rapid economic growth known as the “Gilded Age” at 70 years old.
Bold Business looks back in history and shines the spotlight on the colorful life and journey of the first tycoon Vanderbilt.
Laying the Foundations of an Empire: The Early Years of the First Tycoon
Vanderbilt was born on May 27, 1794 to parents Cornelius Vanderbilt and Phebe Hand. Born and raised amidst the busy harbor of Staten Island, New York, Vanderbilt was introduced to the transportation trade at an early age. He began working on his father’s ferry boat at eleven-years old. By 16, Vanderbilt decided to start his own ferry service. With his vigor and energy, captains of other boats within the area nicknamed him as the Commodore. Recognizing another trading opportunity, the young Vanderbilt, partnered with his father, bought a schooner and engaged in food and merchandise business.
In 1817, a steamboat entrepreneur by the name of Thomas Gibbons took Vanderbilt under his wing. While running his own business on the side, Vanderbilt was offered a post to be Gibbons’ business manager. The position will prove to be of critical significance down the road. At the time when Vanderbilt joined the company, Gibbons was going through a legal battle fighting a steamboat monopoly. Working with Gibbons, Vanderbilt was given a chance to understand the underpinnings and complexities of running a larger business.
The Journey from Steamboats to Railroads
Gibbons passed away in 1826, but Vanderbilt continued to work for the Gibbons through 1829. He took over the Gibbons’ ferry business in 1831. Since then, Vanderbilt was unstoppable. He upended competitions left and right, dismantled monopolies, and grown his reach by taking over connecting railroads. By the end of the 1830s, Vanderbilt has dominated the steamboat business.
In 1849, the year when the frenzy of California Gold Rush began, Vanderbilt saw another opportunity. From inland water and regional steamboat, he ventured to ocean-going steamships. Vanderbilt founded the Accessory Transit Company while transporting migrants to the west coast and carrying gold back to the east via the Lake Nicaragua. Of course, business is never easy. Disputes with partners and rivalries with competitors erupted which compelled Vanderbilt to change course. Vanderbilt founded another company when his own company kicked him out. He opened a new route by way of Panama. Like water, nothing could stop Vanderbilt from finding a new way.
While Vanderbilt was growing his steamship business, he took an interest in the railroad business. He also served as one of the board of directors of various railway lines including the Erie Railway, the Central Railroad of New Jersey, the Hartford and New Haven, and the New York and Harlem. Moreover, working with his eldest son, William (“Billy”), Vanderbilt bolstered his railroad business. In 1864, at the age of 70, the elder Vanderbilt sold his ships and focused on the railroad business.
The Bold Leadership of Cornelius Vanderbilt
- A Bold Leader of composure and focus.
The media often depicted him as an unrefined and ruthless businessman. In fact, the title Robber Baron was a commentary on Vanderbilt and his business practices. In the early 1860s, Vanderbilt fought overpriced monopolies and companies heavily-subsidized by taxpayers’ money. Determined to create an open market, Vanderbilt’s strategy was to offer better services at a fraction of the price. Unfazed by criticisms, the tycoon pressed on with eyes focused on the goal.
- A Bold Leader recognizes opportunities from afar.
Opportunities often come disguised as challenges, and he has confirmed this reality many times in his life. One notable instance was the acquisition of the New York and Harlem Railroad in 1864. The railroad we famously know as “The Harlem” was almost worthless when Vanderbilt took over the track. But the entrepreneur knew the Harlem had potential. It was the only railroad that cut through the center of Manhattan. Five years later, Vanderbilt put the Harlem together with the Hudson River Railroad to form the New York Central and Hudson River Railroad. This merging of two railroads was a precursor to the much larger New York Central Railroad.
- A Bold Leader who wished to unite a divided nation.
After the Civil War in 1865, Vanderbilt took on the idea of helping to reconcile a divided nation. At the start of the American Civil War, Vanderbilt donated his largest steamship “the Vanderbilt”, to the Union Navy (North). After the war, the damage to the Confederate South was severe. To help restore national unity and rebuild the South, Vanderbilt provided a substantial gift to construct the Vanderbilt University. He also vouched for Jefferson Davis – the only President of the Confederate States of America – as a bondsman to get him out of prison.
The Legacy of Cornelius Vanderbilt
Having lived long enough, Vanderbilt has passed through numerous labyrinths and has left indelible impressions. Though admiration was never part of his intention, the distinction was a result of his efforts to give the public options and the best possible service. He once declared, “I have always served the public to the best of my ability. Why? Because, like every other man, it is to my interest to do so.”
At the South facade of Grand Central Terminal, an 8.5-foot tall bronze statue of Vanderbilt stands as a reminder. He was a tycoon, a philanthropist, and an industrialist. His contributions to the field of commerce and transportation have been significant. Without a doubt, the life of Cornelius Vanderbilt is tightly woven into the fabric of American history.