Cornelius Vanderbilt

http://en.wikipedia.org/wiki/Cornelius_Vanderbilt

Cornelius Vanderbilt (May 27, 1794 – January 4, 1877), also known by the sobriquet Commodore,[1] was an American entrepreneur. He built his wealth in shipping and railroads and was the patriarch of the Vanderbilt family and one of the richest Americans in history (adjusted wealth: $205 billion).

Ancestry

Cornelius Vanderbilt's great-great-grandfather, Jan Aertson or Aertzoon, was a Dutch farmer from the village of De Bilt in Utrecht, Netherlands, who immigrated to New York as an indentured servant in 1650. The Dutch van der ("of the"/"from") was eventually added to Aertson's village name to create "van der Bilt" ("from De Bilt"), which was eventually condensed to Vanderbilt.[2]

Early years

Born in Staten Island, New York, Vanderbilt 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,he also ferryed lots of alegal things.

On December 19, 1813, Vanderbilt married his first cousin, Sophia Johnson (1795–1868), 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]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.[4]

When Vanderbilt entered his new position, Gibbons was fighting against a monopoly on steamboats in New York waters, granted by the New York 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.[5]

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.[6]

Steamboat entrepreneur

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.[7]

On November 8, 1833, Vanderbilt was nearly killed in a mugging in New Jersey. he got mugged by the former president John Quincy Adams.[8]

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.[9]

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.[10]

During these years, Vanderbilt also operated many other businesses. he also was a mean drug dealer, and a male hooker. 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.[11]

Oceangoing steamship lines

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.[12]

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.[13] 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.[14]

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.[15]

American Civil War

When the American 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.[16]

Railroad empire

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 New Jersey Central, the New Haven and Hartford, 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 horse-drawn 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.[17]

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.[18]

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.

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.[19]

Grand Central Depot

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.[19]

Rivalry with Jay Gould

In 1868, Vanderbilt fell into a dispute with Daniel Drew, now 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. But Gould bribed the legislature to legalize the new stock. Vanderbilt used the leverage of a lawsuit to get his losses back, but he and Gould became public enemies.

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.

Legacy

Following his wife's death in 1868, Vanderbilt went to Canada where, on August 21, 1869, he married a cousin from Mobile, Alabama, named Frank Armstrong Crawford.[20] 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 8½ acres (34,000 m2) for a cemetery in which he was later buried.

At the time of his death, aged 82, Cornelius Vanderbilt's 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 to Cornelius Vanderbilt II, and $2 million apiece 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 dollars, if his total wealth as a share of the nation's 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.[21][22] Another calculation, from 1998, puts him in third place, after Andrew Carnegie.[23]

Vanderbilt's life story has inspired works of fiction, including the ambitious character of Nat Taggart in Ayn Rand's Atlas Shrugged (1957).[24] His family (see below) has done much the same.

Descendants

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 had 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.

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.Phoebe 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 Almira (Vanderbilt) Thorn (1823–1896)

6.Sophia Johnson (Vanderbilt) Torrance (1825–1912)

7.Maria Louisa (Vanderbilt) Clark Niven (1827–1896)

8.Frances Lavinia Vanderbilt (1828–1868)

9.Cornelius Jeremiah Vanderbilt (1830–1882)

10.George Washington Vanderbilt (1832–1836)

11.Mary Alicia (Vanderbilt) LaBau Berger (1834–1902)

12.Catherine Juliette (Vanderbilt) Barker LaFitte (1836–1881)

13.George Washington Vanderbilt (1839–1864)

Railroads controlled by Vanderbilt

New York and Harlem Railroad (1863–) Hudson River Railroad (1864–)

New York Central Railroad (1868–)

Canada Southern Railway (1873–)[25]

Lake Shore and Michigan Southern Railway (1873?–)

Michigan Central Railroad (1877–)[26]

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

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Born May 27, 1794 Staten Island, New York, U.S. Died January 4, 1877 (aged 82) New York, New York, U.S. Occupation Entrepreneur Spouse Sophia Johnson (1795–1868) (his first cousin) Frank Armstrong Crawford (1839–1885) m. 1869 Children Phebe Jane (Vanderbilt) Cross Ethelinda (Vanderbilt) Allen Eliza (Vanderbilt) Osgood William Henry Vanderbilt Emily Almira (Vanderbilt) Thorn Sophia Johnson (Vanderbilt) Torrance Maria Louisa (Vanderbilt) Clark Niven Frances Lavinia Vanderbilt Cornelius Jeremiah Vanderbilt George Washington Vanderbilt 1832–1836 Mary Alicia (Vanderbilt) LaBau Berger Catherine Juliette (Vanderbilt) Barker LaFitte George Washington Vanderbilt Parents Cornelius Vanderbilt Phebe Hand

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Cornelius Vanderbilt

Born: 27 May 1794

Staten Island, [county], New York, USA

Died: 4 Jan 1877

New York City, New York, New York, USA

Spouse 1

Sophia Johnson

Born: 7 May 1795 in Staten Island, Richmond, New York, USA

Died: 1868 in Staten Island, Richmond, New York, USA

Marriage: 19 Nov 1813 in Staten Island, Richmond, New York, USA View Info

Children Sex Birth

Francis Vanderbilt M

Catherine Johnson Vanderbilt F

George W Vanderbilt M

Phebe Jane Vanderbilt F 7 Nov 1814 in Staten Island, Richmond, New York, USA

Ethelinda Vanderbilt F 1817 in Staten Island, Richmond, New York, USA

William Henry Vanderbilt M 8 May 1821 in New Brunswick, Middlesex, New Jersey, USA

Emily Almira Vanderbilt F 1823 in New Brunswick, Middlesex, New Jersey, USA

Sophia Johnson Vanderbilt F 9 Mar 1825 in New Brunswick, Middlesex, New Jersey, USA

Maria Louisa Vanderbilt F 1827 in New Brunswick, Middlesex, New Jersey, USA

Eliza Vanderbilt F 1828 in Staten Island, Richmond, New York, USA

Cornelius Jeremiah Vanderbilt M 29 Dec 1830 in New Brunswick, Middlesex, New Jersey, USA

Mary Alicia Vanderbilt F 1834 in Staten Island, Richmond, New York, USA

Catherine Juliette Vanderbilt F 23 Aug 1836 in New Brunswick, Middlesex, New Jersey, USA

Spouse 2

Frank Armstrong Crawford

Born: 13 Jan 1839 in Mobile, [county], Alabama, USA

Died: 4 May 1885 in Staten Island, Richmond, New York, USA

Marriage: 21 Aug 1869 in Tecumseh Hotel, London, Ontario, Canada

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Cornelius Vanderbilt

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Cornelius VanderbiltCornelius Vanderbilt I (May 27, 1794 – January 4, 1877), also known by the sobriquets ( A sobriquet is a nickname or a fancy name, usually a familiar name given by others as distinct from a pseudonym assumed as a disguise, but a nickname which is familiar enough such that it can be used in place of a real name without the need of explanation.) The Commodore [1] [2] or Commodore Vanderbilt [3], was an American entrepreneur who built his wealth in shipping and railroads and was the patriarch of the Vanderbilt family.

Vanderbilt was the fourth of nine children of Cornelius Vanderbilt and Phebe Hand, a family of modest means in Port Richmond on Staten Island in New York City.

His great-great-great-grandfather, Jan Aertson, was a Dutch farmer from the village of De Bilt in Utrecht, the Netherlands, who immigrated 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", which was eventually condensed to Vanderbilt. Most of Vanderbilt's ancestry was English, with his last ancestor of Dutch origin being Jacob Vanderbilt, his grandfather. Cornelius Vanderbilt's business was railroads. His company name was the Accessory Transit Company.([4]).

On December 19, 1813, Cornelius Vanderbilt married his cousin and neighbor, Sophia Johnson (1795-1868), daughter of his aunt Elizabeth Hand Johnson. He and his wife had 13 children, 12 of whom survived childhood.

Vanderbilt University in Nashville, Tennessee, is named for Cornelius, and the university's mascot is the commodore.

[edit] Ferry empire

As a young boy, Cornelius Vanderbilt worked on ferries in New York City, quitting school at age 11. By age 16 he was operating his own business, ferrying freight and passengers between Staten Island and Manhattan.

If I had learned education, I would not have had time to learn anything else.

Cornelius Vanderbilt

During the War of 1812, he received a government contract to supply the forts around New York City. He operated sailing schooners, which is where he gained his nickname of "Commodore."

In 1818, he turned his attention to steamships. The New York legislature had granted Robert Fulton and Robert Livingston a thirty-year legal monopoly on steamboat traffic. Working for Thomas Gibbons, Vanderbilt undercut the prices charged by Fulton and Livingston for service between New Brunswick, New Jersey, and Manhattan—an important link in trade between New York and Philadelphia.

He avoided capture by those who sought to arrest him and impound the ship. Livingston and Fulton offered Vanderbilt a lucrative job piloting their steamboat, but Vanderbilt rejected the offer. He said "I don't care half so much about making money as I do about making my point, and coming out ahead." For Vanderbilt, the point was the superiority of free competition and the evil of government-granted monopoly.[1] Livingston and Fulton sued; the case went before the United States Supreme Court and ultimately broke the Fulton-Livingston monopoly on trade.

In 1829, Vanderbilt struck out on his own to provide steam service on the Hudson River between Manhattan and Albany, New York. By the 1840s, he had 100 steamships plying the Hudson and was reputed to have the most employees of any business in the United States.

During the 1849 California Gold Rush, he offered a shortcut via Nicaragua to California—shaving 600 miles (960 km) at half the price of the Isthmus of Panama shortcut.

[edit] Rail empire

Cornelius Vanderbilt versus James Fisk ("Diamond Jim") in the famous rivalry with the Erie Railroad

[edit] Early rail interest

You have undertaken to cheat me. I won't sue you, for the law is too slow. I will ruin you.

Cornelius Vanderbilt, 1853 - in a letter to former business associates Morgan & Garrison, the partnership of Charles Morgan and C.K. Garrison.

Vanderbilt's involvement with early railroad development led him into being involved in one of America's earliest rail accidents. On November 11, 1833, he was a passenger on a Camden & Amboy train that derailed in the meadows near Hightstown, New Jersey when a coach car axle broke because of a hot journal box. He spent a month recovering from injuries that included two cracked ribs and a punctured lung. Uninjured in this accident was former U.S. President John Quincy Adams, riding in the car ahead of the one that derailed. Sadly Quincy's son was killed in the accident. [5]

In 1844, Vanderbilt was elected as a director of the Long Island Rail Road, which at the time provided a route between Boston and New York City via a steamboat transfer ([6]). In 1857, he became a director of the New York and Harlem Railroad ([7]).

[edit] New York Central Railroad

In the early 1860s, Vanderbilt started withdrawing capital from steamships and investing in railroads. He acquired the New York and Harlem Railroad in 1862-63, the Hudson River Railroad in 1864, and the New York Central Railroad in 1867. In 1869, they were merged into 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.

[edit] Grand Central Depot

Main article: Grand Central Terminal

In October 1871, Vanderbilt struck up a partnership with the New York and New Haven Railroad to join with the railroads he owned to consolidate operations at one terminal at East 42nd Street called Grand Central Depot, which was the original Grand Central Terminal, where his statue reigns today. The glass roof of the depot collapsed during a blizzard on the same day Vanderbilt died in 1877. The station was not replaced until 1903-13.

[edit] Rivalry with Jay Gould

By 1873, he had extended the lines to Chicago, Illinois. Around this time Vanderbilt tried to gain control of the Erie Railroad, which brought him into direct conflict with Jay Gould, who was then in control of the Erie. Gould won the battle for control of the railroad by "watering down" its stock, which Vanderbilt bought in large amounts. Vanderbilt lost more than $7 million in his attempt to gain control, although Gould later returned most of the money. Vanderbilt was very accustomed to getting what he wanted, but it seems that he met his match in Jay Gould. Vanderbilt would later say of his loss "never kick a skunk". In fact this was not the last time that Gould would serve to challenge a Vanderbilt. Years after his father's death, William Vanderbilt gained control of the Western Union Telegraph company. Jay Gould then started the American Telegraph Company and nearly forced Western Union out of business. William Vanderbilt then had no choice but to buy out Gould, who made a large profit from the sale.

[edit] Vanderbilt legacy

Following his wife's death, Vanderbilt went to Canada where, on August 21, 1869, he married a cousin, a Ms. Crawford, from Mobile, Alabama. Ms. Crawford's great-grandfather, was a brother to Phebe Hand Vanderbilt (the Commodore's mother) and to Elizabeth Hand Johnson (the Commodore's former mother-in-law and maternal aunt). Ms. Crawford herself was 43 years younger than her husband-to-be, Vanderbilt. It was her nephew who convinced Cornelius Vanderbilt to commit funding for what would become Vanderbilt University.

Ruthless in business, Cornelius Vanderbilt was said by some to have made few friends in his lifetime but many enemies. In his will, he disowned all his sons except for William, who was as ruthless in business as his father and the only one Cornelius believed capable of maintaining the business empire.

At the time of his death, aged 82, Cornelius Vanderbilt's fortune was estimated at more than US$100 million. He willed US$95 million to son William but "only" US$500,000 to each of his eight daughters. His wife received US$500,000 in cash, their modest New York City home, and 2,000 shares of common stock in New York Central Railroad.

Vanderbilt gave little of his vast fortune to charitable works, leaving the US$1 million he had promised for Vanderbilt University and $50,000 to the Church of the Strangers in New York City. He lived modestly, leaving his descendants to build the Vanderbilt houses that characterize America's Gilded Age.

Vanderbilt is also heavily associated with the standardization of gauges and the use of steel in rails.

[edit] Descendants

Main article: Vanderbilt family

Cornelius Vanderbilt was buried in the family vault in the Moravian Cemetery at New Dorp on Staten Island. Three of his daughters and son, Cornelius Jeremiah Vanderbilt, contested the will on the grounds that their father had insane delusions and was of unsound mind. The unsuccessful court battle lasted more than a year, and Cornelius Jeremiah Vanderbilt committed suicide in 1882.

Children of Cornelius Vanderbilt & Sophia Johnson:

Phebe Jane (Vanderbilt) Cross (1814-1878)

Ethelinda (Vanderbilt) Allen (1817-1889)

Eliza (Vanderbilt) Osgood (1819-1890)

William Henry Vanderbilt (1821-1885)

Emily Almira (Vanderbilt) Thorn (1823-1896)

Sophia Johnson (Vanderbilt) Torrance (1825-1912)

Maria Louisa (Vanderbilt) Clark Niven (1827-1896)

Frances Lavinia Vanderbilt (1828-1868)

Cornelius Jeremiah Vanderbilt (1830-1882)

Mary Alicia (Vanderbilt) LaBau Berger (1834-1902)

Catherine Juliette (Vanderbilt) Barker LaFitte (1836-1881)

George Washington Vanderbilt (1839-1864)

[edit] See also

Railroads controlled by Vanderbilt

New York and Harlem Railroad (1863-)

Hudson River Railroad (1864-)

New York Central Railroad (1867-)

Canada Southern Railway (1873-) [8]

Lake Shore and Michigan Southern Railway (1873?-)

Michigan Central Railroad (1877-) [9]

New York, Chicago and St. Louis Railroad (Nickel Plate Road) (1882-)

West Shore Railroad (1885-)

Rome, Watertown and Ogdensburg Railroad

Mohawk and Malone Railroad

Fall Brook Railway

Beech Creek Railroad

Dunkirk, Allegheny Valley and Pittsburgh Railroad

Cleveland, Cincinnati, Chicago and St. Louis Railway

Lake Erie and Western Railroad

Pittsburgh and Lake Erie Railroad

[edit] References

Burton W. Folsom, Jr., The Myth of the Robber Barons, Young America.

Robert Sobel The Big Board: A History of the New York Stock Market (1965) reprinted Beard Books (May 2000) ISBN 1-893122-66-2

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Cornelius Vanderbilt of the New York Central gains control of the rail line between New York and Chicago by leasing the Lake Shore & Michigan Southern, formerly headed by his son-in-law Horace F. Clark (see 1869; Clark, 1872), but Clark dies at New York June 19 at age 57 after heading the Union Pacific for less than a year and Jay Gould acquires his first Union Pacific shares (see Vanderbilt, 1877).

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Cornelius Vanderbilt (May 27, 1794 – January 4, 1877), also known by the sobriquet Commodore,[1] was an American entrepreneur who built his wealth in shipping and railroads and was the patriarch of the Vanderbilt family.

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

Born in Staten Island, New York, Vanderbilt began working on his father's ferry in New York harbor as a boy, quitting school no later than age 11. By age 16 he was operating his own boat—after having borrowed money from his mother to purchase it—ferrying freight and passengers between Staten Island and Manhattan. On December 19, 1813, Cornelius Vanderbilt married his cousin and neighbor, Sophia Johnson (1795-1868), daughter of his aunt Elizabeth Hand Johnson. They moved into a boarding house on Broad Street in Manhattan. He and his wife eventually had 12 children, one of whom died in childhood.[3]

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.[4]

When Vanderbilt entered his new position, Gibbons was fighting against a monopoly on steamboats in New York waters, granted by the New York 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 legal case to the United States Supreme Court to overturn the monopoly.[5]

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

After Thomas Gibbons died in 1826, Vanderbilt worked for his son, William Gibbons, 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's 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.[7]

On November 8, 1833, Vanderbilt was nearly killed in a wreck on the Camden and Amboy Railroad in New Jersey. Also on the train was former president John Quincy Adams.[8]

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.[9]

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.[10]

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

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.[12]

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. During the 1850s, he also bought control of a major shipyard and the Allaire steam engine works in Manhattan.[13]

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's, 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.[14]

When the American 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 it 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

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 New Jersey Central, the New Haven and Hartford, 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 horse-drawn 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.[16]

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

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

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

In 1868, Vanderbilt fell into a dispute with Daniel Drew, now 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. But Gould bribed the legislature to legalize the new stock. Vanderbilt used the leverage of a lawsuit to get his losses back, but he and Gould became public enemies.

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.

Following his wife's death in 1868, Vanderbilt went to Canada where, on August 21, 1869, he married a cousin from Mobile, Alabama, named Frank Armstrong Crawford.[19] Crawford was 43 years younger than her husband. Her 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 8½ acres (34,000 m²) for a cemetery in which he was later buried.

At the time of his death, aged 82, Cornelius Vanderbilt's 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 to Cornelius Vanderbilt II, and $2 million apiece 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, who 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 dollars, if his total wealth as a share of the nation's GDP in 1877 were taken and applied in that same proportion in 2007, making him the third-wealthiest person in American history after Rockefeller and Carnegie.[20]

Vanderbilt's life story has inspired works of fiction, including the ambitious character of Nat Taggart in Ayn Rand's Atlas Shrugged (1957)

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http://en.wikipedia.org/wiki/Cornelius_Vanderbilt

Cornelius Vanderbilt (May 27, 1794 – January 4, 1877), also known by the sobriquet Commodore,[1] was an American entrepreneur. He built his wealth in shipping and railroads and was the patriarch of the Vanderbilt family and one of the richest Americans in history.

Ancestry

Cornelius Vanderbilt's great-great-grandfather, Jan Aertson or Aertzoon, was a Dutch farmer from the village of De Bilt in Utrecht, Netherlands, who immigrated to New York as an indentured servant in 1650. The Dutch van der ("of the"/"from") was eventually added to Aertson's village name to create "van der Bilt" ("from De Bilt"), which was eventually condensed to Vanderbilt.[2]

Early years

Born in Staten Island, New York, Vanderbilt 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,he also ferryed lots of alegal things.

On December 19, 1813, Vanderbilt married his first cousin, Sophia Johnson (1795–1868), 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]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.[4]

When Vanderbilt entered his new position, Gibbons was fighting against a monopoly on steamboats in New York waters, granted by the New York 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.[5]

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.[6]

Steamboat entrepreneur

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.[7]

On November 8, 1833, Vanderbilt was nearly killed in a mugging in New Jersey. he got mugged by the former president John Quincy Adams.[8]

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.[9]

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.[10]

During these years, Vanderbilt also operated many other businesses. he also was a mean drug dealer, and a male hooker. 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.[11]

Oceangoing steamship lines

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.[12]

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.[13] 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.[14]

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.[15]

American Civil War

When the American 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.[16]

Railroad empire

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 New Jersey Central, the New Haven and Hartford, 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 horse-drawn 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.[17]

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.[18]

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.

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.[19]

Grand Central Depot

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.[19]

Rivalry with Jay Gould

In 1868, Vanderbilt fell into a dispute with Daniel Drew, now 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. But Gould bribed the legislature to legalize the new stock. Vanderbilt used the leverage of a lawsuit to get his losses back, but he and Gould became public enemies.

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.

Legacy

Following his wife's death in 1868, Vanderbilt went to Canada where, on August 21, 1869, he married a cousin from Mobile, Alabama, named Frank Armstrong Crawford.[20] 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 8½ acres (34,000 m2) for a cemetery in which he was later buried.

At the time of his death, aged 82, Cornelius Vanderbilt's 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 to Cornelius Vanderbilt II, and $2 million apiece 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 dollars, if his total wealth as a share of the nation's 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.[21][22] Another calculation, from 1998, puts him in third place, after Andrew Carnegie.[23]

Vanderbilt's life story has inspired works of fiction, including the ambitious character of Nat Taggart in Ayn Rand's Atlas Shrugged (1957).[24] His family (see below) has done much the same.

Descendants

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 had 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.

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.Phoebe 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 Almira (Vanderbilt) Thorn (1823–1896)

6.Sophia Johnson (Vanderbilt) Torrance (1825–1912)

7.Maria Louisa (Vanderbilt) Clark Niven (1827–1896)

8.Frances Lavinia Vanderbilt (1828–1868)

9.Cornelius Jeremiah Vanderbilt (1830–1882)

10.George Washington Vanderbilt (1832–1836)

11.Mary Alicia (Vanderbilt) LaBau Berger (1834–1902)

12.Catherine Juliette (Vanderbilt) Barker LaFitte (1836–1881)

13.George Washington Vanderbilt (1839–1864)

Railroads controlled by Vanderbilt

New York and Harlem Railroad (1863–)

Hudson River Railroad (1864–)

New York Central Railroad (1868–)

Canada Southern Railway (1873–)[25]

Lake Shore and Michigan Southern Railway (1873?–)

Michigan Central Railroad (1877–)[26]

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

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The Commodore.

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Cornelius Vanderbilt (May 27, 1794 – January 4, 1877), also known informally as "Commodore Vanderbilt", was an American business magnate and philanthropist who built his wealth in railroads and shipping. Born poor and having but a mediocre education, he used perseverance, intelligence and luck to work into leadership positions in the inland water trade, and invest in the rapidly growing railroad industry. He is best known for building the New York Central Railroad.

As one of the richest Americans in history and wealthiest figures overall, Vanderbilt was the patriarch of a wealthy, influential family. He provided the initial gift to found Vanderbilt University in Nashville, Tennessee. According to historian H. Roger Grant:

Contemporaries, too, often hated or feared Vanderbilt or at least considered him an unmannered brute. While Vanderbilt could be a rascal, combative and cunning, he was much more a builder than a wrecker. ... being honorable, shrewd, and hard-working.

Ancestry Cornelius Vanderbilt's great-great-grandfather, Jan Aertson or Aertszoon ("Aert's son"), 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"). This was eventually condensed to Vanderbilt.

Early years Cornelius Vanderbilt was born in Staten Island, New York on May 27, 1794 to Cornelius van Derbilt and Phebe Hand. He 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), which he christened the Swiftsure.[6] However, according to the first account of his life, published in 1853, the periauger belonged to his father and the younger Vanderbilt received half the profit. He began his business by ferrying freight and passengers between Staten Island and Manhattan. Such was his energy and eagerness in his trade that other captains nearby took to calling him The Commodore in jest - a nickname that stuck with him all his life.

While many Vanderbilt family members had joined the Episcopal Church, Cornelius Vanderbilt remained a member of the Moravian Church to his death. In fact, he, along with other members of the Vanderbilt family, helped erect a local Moravian parish church in his city.

On December 19, 1813, at age 19 Vanderbilt married his first cousin, Sophia Johnson (1795–1868), daughter of Nathaniel Johnson and Elizabeth Hand. They moved into a boarding house on Broad Street in Manhattan. They had 13 children together:

Phebe Jane Vanderbilt (1814–1878) Ethelinda Vanderbilt (1817–1889) Eliza Vanderbilt (1819–1890) William Henry "Billy" Vanderbilt (1821–1885) Emily Almira Vanderbilt (1823–1896) Sophia Johnson Vanderbilt (1825–1912) Maria Louisa Vanderbilt (1827–1896) Frances Lavinia Vanderbilt (1828–1868) Cornelius Jeremiah Vanderbilt (1830–1882) George Washington Vanderbilt I (1832–1836) Mary Alicia Vanderbilt (1834–1902) Catherine Juliette Vanderbilt (1836–1881) George Washington Vanderbilt II (1839–1864)[12]: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. Although Vanderbilt kept his own businesses running, he became Gibbons's business manager.

When Vanderbilt entered his new position, Gibbons was fighting against a steamboat monopoly in New York waters, which had been granted by the New York State Legislature to the politically influential patrician Robert Livingston and Robert Fulton, who had designed the steamboat. Though both Livingston and Fulton had died by the time Vanderbilt started working for Gibbons, the monopoly was held by Livingston's heirs. They 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 drive into bankruptcy. 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.

Working for Gibbons, Vanderbilt learned to operate a large and complicated business. He moved with his family to New Brunswick, New Jersey, a stop on Gibbons' line between New York and Philadelphia. There his wife Sophia operated a very profitable inn, using the proceeds to feed, clothe and educate their 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' favor, saying that states had no power to interfere with interstate commerce. The case is still considered a landmark ruling. The protection of competitive interstate commerce is considered the basis for much of the prosperity which the United States has generated.

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.

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.

In 1834, Vanderbilt competed on the Hudson River against a steamboat monopoly between New York City 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.

During the 1830s, textile mills were built in large numbers in New England as the United States developed its manufacturing base. They processed cotton from the Deep South, so were directly tied to the slave societies. 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 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. It was the first of the many railroads he would head.

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, by the end of the 1840s, only Vanderbilt was referred to by this nickname.

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.

In 1852, a dispute with Joseph L. White, a partner in the Accessory Transit Company, led to a business 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 by developing a rival steamship 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.[13] During the 1850s, Vanderbilt also bought control of a major shipyard and the Allaire Iron Works, a leading manufacturer of marine steam engines, in Manhattan.

In November 1855, Vanderbilt began to buy control of Accessory Transit once again. That same year, the American military adventurer, William Walker, led an expedition to Nicaragua and briefly took control of the government. 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 sold these 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 English 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 insurgent groups in 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 developing a monopoly on the California steamship business.

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. For donating the Vanderbilt, he was awarded a Congressional Gold Medal. Vanderbilt also paid to outfit a major expedition to New Orleans. He suffered a grievous loss when George Washington Vanderbilt I, his youngest and favorite son, and heir apparent, a graduate of the United States Military Academy, fell ill and died without ever seeing combat.

Railroad empire 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 horse-drawn 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.

Vanderbilt brought his eldest son Billy in as vice-president of the Harlem. Billy 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 Billy, he was impressed by his son's success. Eventually he promoted him to operational manager of all his railroad lines. In 1864, the Commodore sold his last ships, in order to concentrate on the railroads.

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. 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 United States history.

Grand Central Terminal below the MetLife Building in New York City, New York in 2012. In 1869, Vanderbilt 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.

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 financier 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. But Gould bribed the legislature to legalize the new stock. Vanderbilt used the leverage of a lawsuit to recover his losses, but he and Gould became public enemies.

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 Following his wife Sophia's death in 1868, Vanderbilt went to Canada. On August 21, 1869, in London, Ontario, he married a cousin from Mobile, Alabama with the unusual name for a woman of Frank Armstrong Crawford (1839—1885). Frank was 45 years younger than her husband. Her cousin's husband, Holland Nimmons 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. In addition, he donated to churches around New York, including a gift to the Moravian Church on Staten Island of 8½ acres for a cemetery (the Moravian Cemetery). He chose to be buried there.

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. At the time of his death, aged 82, Vanderbilt had a fortune estimated at $100 million. In his will, he left 95% of his $100 million estate to his son William (Billy) and to William's four sons ($5 million to Cornelius, and $2 million apiece to William, Frederick, and George). The Commodore said that he believed William was the only heir capable of maintaining the business empire.

Legacy Commodore Vanderbilt willed amounts ranging from $250,000 to $500,000 to each of his daughters. His wife received $500,000, their New York City home, and 2,000 shares of common stock in the 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. His descendants were the ones who built the Vanderbilt houses that characterize America's Gilded Age. (Although his daughters and Cornelius received bequests much smaller than those of their brothers, these 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 United States history, after Standard Oil co-founder John Davison Rockefeller (1839–1937). Another calculation, from 1998, puts him in third place, after Andrew Carnegie.

In 1999, Cornelius Vanderbilt was inducted into the North America Railway Hall of Fame, recognizing his significant contributions to the railroad industry. He was inducted in the "Railway Workers & Builders: North America" category.