Great Fortunes from Railroads

w enrolled among the conspicuous multimillionaires, were still in the embryonic stages when Vanderbilt towered aloft in a class by himself with a fortune of $105,000,000. In these times of enormous i

illionaires or semi- billionaires, it cannot be expected

IONS IN FIF

ed millionaires rolled in one. Compared with his wealth the great fortunes of ten or fifteen years before dwindled into bagatelles. During the Civil War a fortune of $15,000,000 had been looked upon as monumental. Even the huge Astor fortune, so long far outranking

r as they are with the ease with which John D. Rockefeller and other multimillionaires have long swept in almost fabulous annual revenues. With his yearly income of fully $80,000,000 or $85,000,000 [Footnote: The "New York Commercial," an ultra- conservative financial and c

ical not less than now. Wealth was the real power. None knew or boasted of this more than old Vanderbilt when, with advancing age, he became more arrogant and choleric and less and less inclined to smooth down the storms he provoked by his contemptuous flings at the great pliable public. When th

* *

nd political, it is not difficult to esti

ived in the highest market not more than $1,040 a year. The usual weekly pay ran from $12 to $20 a week; the average pay of unskilled laborers was $350 a year. More than 7,500,000 persons ploughed and hoed and harvested the farms of the country; compa

ote of grim poverty and the guarantees of good living; which dictated the services, honorable or often dishonorable, of men, women and children; which bought brains not less than souls, and which put their sordid seal on even the most sacred qualities. Now by these t

cely be worth remembrance were it not that he was the founder of a

E OF $70

men, at $20,000,000. [Footnote: "Who Owns the United States?"-The Forum Magazine, November, 1889.] Adding the fortunes of the various other members of the Vanderbilt family, the Vanderbilts then possessed about $300,000,000. Since that time the population and resources of the United States have vastly increased; wealth in the hold of a few has become more intensely centralize

ly is one of the dynasties of inordinately rich families ruling the United States industrially and politically. Singly it has mastery over many of the railroad and public utility systems and industrial corporations of the United States. In combination with other powerful men or families of wealth, it shares the dictatorshi

OLD PRESENT

tear it into shapeless ribbons Yet under the institution of law, as it exists, these pieces of paper are endowed with a terrible power of life and death that even enthroned kings do not poss

tified with both power and proofs of possession. Those bonds and stocks are the tangible titles to tangible property; whoso holds them is vested with the ownership of the necessities of tens of millions of subjected people. Great stretches of railroad traverse the country; here are coal mi

castle and station a garrison to hold it. They that then disputed the king's title could challenge, if they chose

hange has it been; the owners of the resources of nations can disport themselves thousands of miles away from the scene of their ownership; they need never bestir themselves to provide measures for the retention of their property. Government, with its array of officials, prisons, armies and navies, undertakes all of

REE TAXE

eatly at variance with the palpable facts, will survive to bring dismay in the near future to the very classes who would have the people believe it so. Instead of now being the superior of the corporation the Government has long since definitely surrendered to private corporations a tremendous

That single taxation is of itself confiscatory enough, as is seen in the $912,000,000 of profits gathered in by the Standard Oil Company since its inception. The trust tax is in the form of its selling price to the public. But the rail

the railroads. How enormous the revenues of the railroads are may be seen in the fact that in the ten years from 1898 to 1908 the dividends declared by thirty-five of the leading railroads in the United States reached the sum of about $1,800,000,000. This railroad taxation is a grinding, oppressive one, from which there is no appeal. If the Government taxes too heavily the peop

SE UNRESTR

ctions of classic conquerors become dwarfed beside it. If this levying entailed only the seizing of money, that cold, unbreathing, lifeless substance, then human emotion might not start in horror at the

life and death; and time never was since the railroads were

intercourse, the men who control it have the power to stand as an inflexible barrier between individuals, groups of individuals, nations and international peoples. The very agencies which should under a rational form of civilization be devoted to promoting the interests of mankind, are used as their capricious self-interest incline them by the few who have been allowed to obtain control of them. What if helpless people are sw

d do not hesitate if sufficient profits be involved. One man sitting in a palace in New York can give an order declaring a secret discriminative tariff against the products of a

improved its outwards forms in these passing centuries. Clanking chains are no longer necessary to keep slaves in subjection. Far more effective than chains and balls and iron collars are the ownership of the means whereb

MIGHTY PO

es are most of them, sunk in a surfeit of gorgeous living and riotous pleasure. Weak, without distinction of mind or heart, they have the money to hire brains to plan, plot, scheme, advocate, supervise and work for them. Suddenly deprived of their stocks and bonds they would find themselves adrift in the sheerest helpless

after a fit of indigestion or a night of demoralizing revelry, it may flit to an extreme of parsimonious retaliation. As the will fluctuates, so must be the fate of the hundred thousand workers. If the will decides that the pay of the men must go down, curtailed it is, irrespective of their protests that

4. His parents lived on Staten Island; his father conveyed passengers in a boat to and from New York-an industrious, dull man who did his plodding part and allowed his wif

UNDER'

. He was grasping and enterprising, coarse and domineering. Of the real details of his early life little is known except what has been written by laudatory writers. We are informed that as he gradually made and saved money he built his own schooners, and went in for the coasting trade. The invention and success of the steamboat, it is further related, co

tivities and methods in his early career are obtainable from the court records. In 1827 he was fined two penalties of $50 for refusing to move a steamboat called "The Thistle," commanded by him, from a wharf on the North River in order to give berth to "The Legislature," a competing steambo

An appeal was taken by Vanderbilt, and Judge Nelson, in the Supreme Court, in October, 1841, affirmed that judgment.-Vanderbilt vs. Eagle Iron Works, Wendell's Reports, Cases in the Supreme Court of the State of New York, xxv: 665-668.] He was severe with the men who worked for him, compelling them to work long hours for little pay. He showed a singular ability in undermining competitors. They could not pay low wages but what he could pay lower; as rapidly as they set about reducing passenger and freight rates he would anticipate them.

OUT COMP

he great landlords and other capitalists bribed the aldermen to lease or give them valuable city property. Many scandals resulted, culminating in the great scandal of 1853, when the Grand Jury, on February 26, handed up a presentment showing in detail how certain aldermen had received bribes for disposal of the city's water rights, pier privileges and other property, and how enormous

n all of the usual biographies of rich men, discredits itself and is overthrown by the actual facts. The times in which Vanderbilt lived and thrived were not calculated to inspire the masses of people with respect for the trader

ipled as he. Nearly all of these men, and scores of competitors in his own sphere-dominant capitalists in their day-have become well-nigh lost in the records of time; their descendants are in the slough of poverty, genteel or otherwise. Those times were marked by the intensest commerc

by this process. Almost all conventional writers, it is true, set forth that it was the accepted process of the day, implying that it was a condition acquiesced in by the employer and worker. This is one of the lies

hours a day at $1.50 a day for many years. The actual purchasing power of this wage kept declining as the cost of rent and other necessaries of life advanced. This was notably so after the great gold discoveries in California, when prices of all commodities rose abnorma

A COMMERCI

build up profitable lines of steamboats, and he then proceeded to carry out methods which inevitably had one of two terminations: either his competitor had to buy him off at an exorbitant price, or he was left in undisputed possession. His principal biographer, Croffut, whose effusion is one long chant of praise, treats these methods as evidences of great shrewdness, and goes on: "His foibl

in every extant biographical work and note, Vanderbilt was the f

sty was his sterling virtue, and whose splendid ability in opening up and extending the country's resources was rewarded with a great fortune and the thanks of his generation. This is utterly false. He who has the slightest kn

writers who cannot be accused of wealth worship or deliberate misstatement have all, without exception, borrowed their narratives of Vanderbilt's career from the fiction of his literary, newspaper and oratorical incense burners. And so it is that everywhere the conviction prevails that whatever fraudulent methods Vanderbilt employed in his later career, he was essentially an honest, straightforward man who was c

AND THEF

ilt's original millions were the proc

e and sell goods under false pretenses; to adulterate prepared foods and drugs; to demand the very highest prices for products upon which the very life of the people depended, and at a time wh

s, or fought one another, no matter how rapaciously, in accordance with understood procedure. But when any business man ventured to overstep these limitations, as Vanderbilt did, and levy a species of commercial blackmail to the extent of millions of dollars, then he was sternly denounced as an

ORE CORNELIUS VANDERB

bilt F

ransportation of mail. This subsidy, however, was not the only payment received by the steamship owners. In addition they were allowed what were called "postages"-the full returns from the amount of postage on the letters carried. Ocean postage at that time was enormous and burdensome, and was especially onerous upon a class of persons least

PTION OF

th your Whig party and your Democratic party for the last thirteen years, and I have never seen any head of a Department strong enough to resist these influences. ... Thirteen years' experience has taught me that wherever you allow the Postoffice or Navy Department to do anything which is for the benefit of contractors you may consider the thing as done. I could point to

what became of these millions in loot? Part went in profits to the owners, and another part was used as private capital by them to build more and newer ships constantly. Practically none of Vanderbilt's ships cost him a cent; the Government

years. Together with the "postages," these amounts made a total mail subsidy for that one line alone during the latter years of the contract of about a million dollars a year. The act of Congress did not, however, specify that the contract was to run for ten years. The postal officials, by what Senator Too

ILT'S H

stal system was already burdened with a deficit of $5,000,000. While the appropriation bill was being solemnly discussed with patriotic excla

Havre and Bremen; Collins' to Liverpool. There were indications that for years a secret understanding had been in force between Collins and Vanderbilt by which they divided the mail subsidy funds. Ostensibly, however, in order to give no sign of collusion, they went through the public appearance of war

uments why the Collins line should be heavily subsidized, and why Collins should be permitted to change his European port to Southampton. V

st conflict. I do not know but that these parties have colluded now. I have not the least doubt that all these people understand one another. I am struggling against collusion. If they have colluded, why should Vanderbilt run to Southampton for the postage when Collins can get three hundred and eighty-seven thousand dollars for running to the same place? Why may not Collins, then, sell his ships, sit

otherwise called the Harris and the Sloo lines. He declared that Vanderbilt, threatening them with both competition and a public agitation such as would uncover the fraud, had forced them to pay him gigantic sums in return for his silence and inactivity. Respo

about $900,000 a year (since 1847); and Vanderbilt, by his superior skill and energy, compelled them for a long time, to disgorge $40,000 a month, and now $56,000 a month. ... They pay lobbymen, they pay agencies, they go to law, because everybo

before Judge Ingersol

York City, on May 16,

cts came out both in

deci

ulently (so the decision read) took out $700,000 of stock, and also fraudulently appropriated large sums of money belonging to the trust fund. This was the same Law who, in 1851 (probably with a part of this plunder) bribed the New York Board of Aldermen, with money, to give him franchises for the Second and Ninth Avenue surface railway lines. Roberts appropriated $600,000 of the United States Ma

steerage passage from California to New York was $35. After he had sold the company the steamship "North Star" for $400,000, and ha

d papers.] The result of this system is that here comes a man-as old Vanderbilt seems to be-I never saw him, but his operations have excited my admiration-and he runs right at them and says disgorge this plunder. He is the kingfish that is robbing these smal

to be fit for ships of war in case of necessity, and that these steamers were to be accepted by the Navy Department before they could

llins line was set u

mittee on Ways and Means of the other House, and I remember that the men at the head of our bureau of yards and docks said that they were not worth a sixpence for war purposes; that a single broadside would blow them to pie

makes contracts, declare who they shall be with, and how much they shall pay for them, they can never escape

ry year that many of the most opulent merchants could not claim the equal of it after a lifetime of feverish trade. It was purely as a means of blackmailing coercion that he started a steamship line to California to compete

sentative Davis, of Mississippi, made the same charge

d States Mail Steamship Company, carrying the mail between New York and Aspinwall, an additional sum of $10,000 per month, making $40,000 per month to Vanderbilt since May, 1856, which they contin

vasions and equivocations. [Footnote: The Congressional Globe, part iii, 1857-58:3029. The Washington correspondent of the New York "Tim

IL CHAR

tended warfare among them had served its purpose; all got what they sought in subsidy funds. While the bill allowed the Postmaster- Ge

er Government departments were so numerously made, that the House of Representatives on March 5, 1860, decided, as a matter of policy, to appoint an investigatng committee. This committee, called the "Covode

he earnings of the line were very large, but the greater part of the money was wrongfully appropriated to Vanderbilt for blackmail, and to others on various pretexts." [Footnote: House Reports, Thirty-sixth Congress, First Session 1859-60 v:785-86 and 829. "Hence it was held," explained Fisher, in speaking of his fellow trustees, "that he [Vanderbilt] was interested in preventing competition, and the terror of his name and capital would be effectual upon others who might be disposed to establish steamship lines" (p. 786).] William H. Davidge, president of the Pacific Mail Steam

overnment recoup them, to a considerable extent, for the amount

y succeeded. An act was passed directing the Court of Claims to investigate and determine the merits of the claim.] It is quite useless [Footnote: The Court of Claims threw the case out of court. Judge Drake, in delivering the opinion of the court, said that the act was to be so construed "as to prevent the entrapping of the Government by fixing upon it liability where the intention of the legislature [Congress] was only to authorize an investigation of the question of liability" (Marshall O. Roberts et al., Trustees, vs. the United States

proportion it is impossible to ascertain.] The mail subsidies were the real foundation of his fortune. Many newspaper editorials and articles of the time mention this fact. Only a few of the important underlying facts of the character of his methods when he was in the steamboat and steamship business can be gleaned from the records. But these few give a clear enough insight. With a part of the p

TS STE

s an unpropitious time for American mercantile vessel

d frequently than any other man of his generation. Like the Astors, he was cynical, distrustful, secretive and parsimonious. He kept his plans entirely to himself. In his business dealings he was never known to have shown the slightest mercy; he demanded the last cent due. His close-fistedness was such a passion that for many years he refused to su

erts that in 1861 he was worth $20,000,000; other writers say that his wealth did not exceed $10,000,000. He knew nothing of railroads, not even the firs