The Age of the Moguls

Stewart Holbrook

• Publisher: Routledge
• Year: 2017
• eBook ISBN: 9781351486156
• Topic: History
• Subtopic: Social History
• Index: History

Vanderbilt, Carnegie, Rockefeller, Ford, Drew, Fisk, Harriman, Du Pont, Morgan, Mellon, Insull, Gould, Frick, Schwab, Swift, Guggenheim, Hearst- these are only a few of the foundation giants that have changed the face of America. They gave living reality to that great golden legend-The American Dream. Most were self-made in the Horatio Alger tradition. Those whose beginnings were blessed with wealth parlayed their inheritances many times through the same methods as their rags-to-riches compatriots: shrewdness, ruthlessness, determination, or a combination of all three.

The Age of the Moguls is not overly concerned with the comparative business ethics of these men of money. The best of them made "deals," purchased immunity, and did other things which in 1860, 1880, or even 1900, were considered no more than "smart" by their fellow Americans, but which today would give pause to the most conscientiously dishonest promoter. Holbrook does not pass judgments on matters that have baffled moralists, economists, and historians. He is less concerned with how these men achieved their fortune as much as how they disbursed the funds.

Stewart Holbrook has written a brilliant and wholly captivating study of the days when America's great fortunes were built; when futures were unlimited; when tycoons trampled across the land. Few writers today could range backwards and forwards in American history through the last century and a half, and could take their readers to a dozen different sections of the country, or combine the lives of over fifty famous men in such a way as to produce a continuous and exciting narrative of sponsored growth. Leslie Lenkowsky's new introduction adds dimension to this classic study.

PART ONE

THE ERA OF BRASS KNUCKLES

Chapter 1 Noon

CORNELIUS VANDERBILT, commonly called the Commodore, was last seen taking the air in April 1876. He was then eighty-two years old. Yet confining him to his mansion at 10 Washington Place in New York City required the stoutest efforts of a regiment of physicians and the pleadings of his young and second wife, Frank, of whom he was most fond.

It is improbable that the astonishingly vital old man would have paid them any heed had he not read, in the Tribune of April 11, of the death of A. T, Stewart, the department store magnate, and reflected, too, that William B. Astor was already five months in the grave. Things of that sort, happening to contemporaries, tend to leave a man open to reason.

The Commodore was richer than Astor, richer than Stewart. He was the richest man in the United States. In New York he was much admired, not for his charities, which were few, but for his bluff manner, his dash and energy, and his public comments, which were forceful, often humorous, and wondrously illiterate.

The Commodore’s hulking figure, likened by some to that of Silenus, was familiar to all New York. It was encased, no matter the weather or the occasion, in a fur-lined overcoat and a plug hat. Many thought he looked like an English archbishop, with his bright blue eyes and pink countenance fringed with whiskers from his ears down to the parochial snow-white choker, perhaps the last high stock in the city, which he retained when flightier men gave way and changed to the vulgarly stylish product of Troy and the new four-in-hand cravats.

Though conservative and almost antique in his dress, there was nothing shy about Commodore Vanderbilt. His handsome features appeared on every bond certificate of the New York Central and the Lake Shore & Michigan Southern railroads; and on both sides of the great head lamp of the Commodore Vanderbilt, fastest locomotive engine of the New York Central. The whole massive figure, fur-lined coat and all, stood in bronze before the St. Johns Park freight terminal. Esthetes might sneer. Sneers did not affect the Vanderbilt lines, which continued to pay investors eight per cent, often more.

For many years New Yorkers had been made familiar with the Commodore’s habits. He was an early riser. It was his custom to glance at the morning papers, then to break his fast with the yolks of three eggs, a lamb chop, toast, and a cup of tea into which he invariably put twelve lumps of sugar. He then drove in a topless buggy to his office in Bowling Green. There in an hour or so, aided by one clerk, he transacted business, gave a few hints to his son William, then drove home for a good solid midday dinner. When he drank, which was not often, he liked a tumbler full of straight gin.

Afternoon usually found him driving in Central Park or racing horses along the Harlem Lane speedway with Robert Bonner, the New York Ledger publisher. Friends seldom went driving twice with the Commodore, for he was a fiend on the road. Occasionally he was seen in Wall Street, and often at the Manhattan Club, where he liked to play whist. Evenings of late years, however, he was at home, and here to please his youthful wife he had been trying hard to forego the pungent waterfront language he had picked up in his ferryboat days. It was a difficult thing to do. The Rev. Charles F. Deems found him one day in tears and was so astonished at the spectacle he barely managed to ask what was the matter. “Oh, goddamnit!” the old man replied. “I’ve been a-swearing again, and I’m sorry.”

Now, in early May of 1876, clever mongers of stocks, hearing that the Commodore was confined to his home with some ailment or other, confided to Wall Street reporters that the old gentleman was actually dying and that his agents were unloading his stocks.

The young men of the press hastened to 10 Washington Place. Young Mrs. Vanderbilt admitted them to the parlor and explained that her husband’s disorder had almost entirely disappeared, that the rumors of mortal illness had no truth. Just then the whole mansion seemed to vibrate as a roaring avalanche of profanity came rolling down the stair well. It was the old man himself. He had crept from his couch to listen, and now he spoke. “I am not dying,” he bellowed. The reporters then heard him say something to the effect that even if he were dying, he would arise from his death’s bed to knock all hell out of them wretches who start rumors and provide a big job for the undertakers. The boys went back to their papers to write that the Commodore still lived.

But he was declining, and when another report of his passing came out of Wall Street, the New York papers set up a deathwatch at 10 Washington Place. The Commodore was furious when he heard reporters discussing his health in front of his own home. His wife protested to them. The reporters then chipped in to engage a room almost across the street from the Vanderbilt home. There they played cards and had beer and sandwiches brought in, detailing one of their number to watch comings and goings at No. 10.

But the Commodore was not to be hurried in his going. Spring turned to summer. Autumn arrived. Christmas found the reporters still in their vidette. Meanwhile, two of the Commodore’s physicians died, and the Rev. Henry Ward Beecher remarked unkindly in public that the press noted the rises and falls of Mr. Vanderbilt’s temperature as though they were a part of the daily weather report.

The family, the retainers, and the physicians were having their hands full. When one of the surviving doctors recommended champagne to the patient, the old man seemed to figure a moment, then replied: “I guess sody water will do.” One did not become wealthy drinking champagne.

Yet, when he overheard his wife remark, in reply to one of the doctors who suggested more woolen blankets on the patient’s bed, that they were “very expensive,” the Commodore exploded. “Goddamn the expense!” he said. “Buy a bale of ‘em.”

He was constantly demanding “more of them cookies” which, for some reason or other, were given him in short ration. Once, when he had asked for more cookies and was instead given a bowl of soup, he took one mouthful, then heaved soup, spoon, bowl and all clear across the room. “Who in damnation salted that soup?” he cried.

On occasion, and without notice to his conventional physicians in attendance, he would call in “Dr.” William Bennett, who said he was an electric healer. One time Bennett found the Commodore howling like a wild beast, wondering aloud “why God was persecuting him so,” but he “responded immediately” to magnetization and the electric healer “left him sleeping placidly.”

Meantime, and despite family protests, the Commodore enjoyed what he said was Art, and sat for hours gazing at a shocking painting, Aurora, the gift of his pretty if somewhat scandalous friend Tennessee Claflin, who was herself a sort of magnetic healer and spiritualist. The Commodore had set her and her sister Victoria Woodhull up as stockbrokers and helped them to found a weekly paper that discussed everything, even sex. It seems unlikely that the hardheaded old man was ever a thorough convert to spiritualism, but he played at it, possibly on the theory that one can never be certain about such matters. He also had saltcellars placed under the legs of his bed as “health conductors.”

But his health did not improve, and his devoutly Christian wife, knowing the lateness of the hour and horrified at the Commodore’s pagan superstitions, labored hard to make him see the true light. She had a small organ moved to his bedroom, and there she played while the sons and daughters, together with their children, gathered to sing old hymns. These and the soothing Dr. Deems, Baptist pastor added to the menage by Mrs. Vanderbilt, gradually weaned the old man from the deplorable errors of his thinking.

Early on the morning of January 4—it was now 1877—the old gentleman suddenly sat bolt upright in bed. “Frank!” he called to his wife. “Frank! Sing me my hymns!” Frank broke out with “Come All Ye Sinners, Poor and Needy,” while Dr. Deems intoned the Lord’s Prayer. At 10:51 A.M. the Commodore died.

By noon, says the biographer of the Vanderbilts, the flags of the Manhattan and the Union clubs were at half-mast. The engravers at Harper’s Weekly were busy making a cover portrait of the late great man. The closing hours of Wall Street trading showed the Commodore’s stocks to have made slight gains. This would have pleased him most of all. Death, nothing, could shake the value of the Vanderbilt lines. It was, as an observer remarked, evidence of the Commodore’s genius. Even though “$50,000 of absolute water” had been poured for each mile of his railroad system, this so-called watered stock took account of “the boundless values which adhered to his property through its completion as a supreme monopoly over common highways of trade.” That was the great thing. Vanderbilt had “discovered and taken the then new way of imperialism and monopoly.”

In clubs and in Wall Street offices, old New Yorkers related stories of the late Commodore’s humor; and Henry Clews, the stock market chatterbox, recalled that when one of Vanderbilt’s numerous sons-in-law needed $50,000 to enter a tanning venture and went to the Commodore to borrow it, the old gentleman asked how much he expected to make from the investment, “About five thousand dollars a year,” replied the young man. “Boy,” said the Commodore, “I can do better than that with $50,000. Tell you what Γ11 do. I will pay you $5,000 a year hereafter, and you may consider yourself in my employ at that salary.” Others recalled the Commodore’s great virility and spoke of the difficulty of getting pretty housemaids, or even just housemaids, to remain long in the Vanderbilt menage.

Now that the first great mogul of American capital and industry was dead, he must be laid away. After a brief service at his home, followed by a sermon at the Church of the Strangers, the body was taken to Staten Island, home of Van Derbilts since early in the eighteenth century. Here the horses “toiled with difficulty through the falling snow,” and the Commodore was at last interred in the Moravian cemetery at New Dorp. By the graveside stood a score of the family and many old friends, and even a few business enemies, including Peter Cooper, Thurlow Weed, Frank Leslie, Samuel Ward, and old Daniel Drew, a scarecrow knee-deep in snow, threadbare as usual, leaning on the umbrella he used for a cane.

It was a giant they buried. Said the New York Herald: “The impression made upon the community by both Stewart and Astor was a faint one compared to the deep mark of Vanderbilt.” From the cover of Harpefs Weekly peered the old man, and inside one read that he was “. . . unfalteringly faithful to his engagements . . . and though not much of a churchman was never skeptical.” Then it came to something of genuine importance. The deceased, said Harper’s Weekly, was “the owner of 28 steamboats, no one of which was lost by fire, explosion or wreck while in his employ.” In that era of steamboat disasters, a more arresting statement could hardly have been made, unless it was one in the Herald saying of Vanderbilt that “the rights and welfare of the smallest stockholder [in his railroads] were as well guarded as his own.”

That his own welfare had been well guarded was soon apparent when it became known that the Commodore’s estate ran to $105,000,000 before taxes, and almost as much after taxes, for in that day government was a ghoul of modest wants.

What nobody remarked, simply because nobody could know, was that Commodore Vanderbilt had died at high bright noon-noon, that is, for his own class of men, the aggressive and spectacularly successful leaders of commerce and industry, the great moguls of capital. Never again, after 1877, were the moguls to be wholly free, as they had been before, to work their financial wonders without protest from labor, criticism from the public, and harassment by government.

Great fortunes, larger than Vanderbilt’s, were to be made after 1877, but not with impunity. A new era had set in. The giants and near giants who followed the Commodore, including his own able son, were never to know a moment when they were not under fire.

Out of the last sk months of the year of the Commodore’s death came the first effective labor unions the country had seen. Along with the unions came the first serious efforts of government to make it increasingly more difficult for one man to accumulate and leave an estate of $105,000,000.

Accompanying these harassments, and perhaps their actual source, was a radical change in public temper and a new viewpoint: Through the smoke of the tremendous violence of 1877 the capitalist was seen clearly to be an ogre, the natural enemy of man, of the Republic, and of God.

Chapter 2 PRIMITIVES

THE astonishing fortune left by Commodore Vanderbilt was in large part the result of his activities during and right after the Civil War. In this span of less than two decades his wealth had increased one hundred times over. It could not have happened in the United States until then. The period of Vanderbilt’s vast accumulations was the first rich growing season for American multimillionaires.

In 1855 Vanderbilt had been listed as merely one of nineteen New Yorkers whose wealth was estimated at more than one million dollars. Nor was he high on the list, which was topped by the twenty millions of William B. Astor, second of the line, whose father had done well enough in the fur trade.

The bulk of the Astor fortune had come chiefly from increased values of New York City and adjacent real estate. John Jacob Astor, the poor immigrant from Germany, got his liking for land from a crafty deal he began working on as early as 1809, when a browsing lawyer told him that 51,012 acres of Putnam County, New York, did not legally belong to the more than seven hundred families who had bought these farms from the state of New York and had been living upon them since just after the end of the Revolutionary War.

This very land, the lawyer told Astor, had been originally the estate of Roger Morris, a Tory, and had been confiscated by New York. New York had no legal right to do so, for Morris held the land on a life lease only; and, said the lawyer, no state could confiscate a life lease. Either the state’s officers had not known this basic law, or they had disregarded it as pettifoggery.

John Jacob Astor acted promptly. After satisfying himself on the point, namely that one third of Putnam County legally belonged to the heirs of Roger Morris, all of whom lived in England, he set out to buy off the heirs. This he accomplished for approximately a hundred thousand dollars. Then he notified the seven hundred farmers they were trespassers. The poor, dumbfounded farmers appealed to the state. The state at first refused to recognize Astor’s title. Astor refused to recognize the state’s. After a long battle in the courts, the state compromised in 1827 and granted Astor $500,000.

Astor did not mind the abuse heaped upon him by the public. He continued his real estate ventures. His favorites were heavily mortgaged farms on Manhattan Island, such as the Eden farm, a portion of which is now Times Square. Astor got it for less than a song. During the panic of 1837, he foreclosed on some sixty farms or parcels of land on Manhattan. Though he was by then the richest man in America, he did not become a spender. He liked beer, tobacco, and draughts; and his biggest outlay was perhaps the pensioning of an old friend, whose duties were to converse in German and, as Hone the diarist remarked, “to be Astor’s train bearer and prime minister.’’ This surely was modest enough compared to one of his descendants who bought his way into the British peerage and died Viscount Astor of Hever Castle.

In summing up the career of the first John Jacob Astor, the New York Herald said that at least half of his fortune should have been left to the people of New York City because the value of his property had been “augmented by their aggregate intelligence, enterprise and commerce.” As for Astor himself, he had exhibited at best only “the ingenious powers of a self-invented money-making machine.”

Perhaps the same could have been said of several other large fortunes of the fifties and the forties. Stephen Whitney, large landowner, ranked next to Astor in wealth in 1855. After him come James Lenox, a man of property, then assorted Rhinelanders, Schermerhorns, and Goelets. The Goelets started as ironmongers, the Schermerhorns as ship chandlers, the Rhinelanders as bakers. But their new affluence had come from real estate. The Goelets, for instance, had for sale or rent a great deal of the land along Fifth Avenue from Union Square to Forty-seventh Street.

Shipping had brought four million dollars to William Aspinwall by 1855. The Belfast emigrant, Alexander T. Stewart, whose death had given pause to old Commodore Vanderbilt, had made his pile as New York City’s first merchant prince, mostly in retail and wholesale dry goods. Just below the nineteen millionaires of 1855 stood no less a public character than Phineas T. Barnum. From the exhibition of midgets, mermaids, two-headed calves and such, he had accumulated $800,000, and was probably better known than any of the nineteen top money-making machines.

More typical of the new captains of industry like Vanderbilt was Peter Cooper, who had made his million from the manufacture of glue and isinglass; and George Law, son of an Irish immigrant, whose million had come from New York City’s first horsecar lines.

In Philadelphia, probably the first fortune in 1855 was that of the Drexels, father and sons, and its founder was the most unusual of the new millionaires. He was Francis Martin Drexel, born in the Austrian Tyrol, who had come to the United States in 1817 as a portrait painter. For the next decade he followed his profession, and got as far afield as South America. Here he also trafficked in currency. Returning to Philadelphia, he opened a note-shaving business that was successful from the first. During the early years of the California gold rush the Drexels made a great deal of money as bankers.

New England’s early fortunes had come from the sea, neither as fish nor yet as sperm oil, but from trade with foreign parts. By 1855, however, the brothers Brown of Rhode Island had long since proved that Americans, as well as the English, might become wealthy by manufacturing cotton. By then, too, members of the remarkable Lawrence family of Massachusetts were promoting railroads from the profits of their own textile mills.

Possibly the first New England millionaire had made his stake as early as 1830. He was Israel...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• Introduction to the Transaction Edition
• Foreword
• PART ONE THE ERA OF BRASS KNUCKLES
• PART TWO RISE OF THE COLOSSI
• PART THREE THE ERA OF FRENZIED FINANCE
• PART FOUR NEW GIANTS APPEAR
• PART FIVE DYNASTIC SUCCESSION
• PART SIX WHAT THEY DID WITH IT
• ACKNOWLEDGMENTS AND BIBLIOGRAPHY
• INDEX