Table of
Contents

The Vanderbilts, a family of Dutch farmers, emigrated to America sometime before 1685. They settled in New York, the colony originally known as New Netherland. Not much is known about the early history of the Vanderbilts in America. They did not stand out in New York society until the fourth generation, when in 1810, 16-year-old Cornelius Vanderbilt (1794-1877) began to accumulate what would become the largest family fortune America had ever known.

With $100 borrowed from his parents, Cornelius Vanderbilt purchased a periauger (a flat-bottomed sailing barge) and began a ferry service between Staten Island and Manhattan. He repaid the hundred dollars one year later. By then he had earned a profit of $1,000. Eventually, his ferry service became known as the Staten Island Ferry, which is still in operation today. Young Cornelius then signed on as an apprentice on a variety of ships--sailing ships, steamships, and transatlantic cargo carriers--so he could learn all aspects of the seagoing industry. By the age of 50, he had reached millionaire status and had become known by the nickname "Commodore." According to one of his descendants, Vanderbilt's "toughness and use of profanity" earned him the nickname. He did not have many friends, and he treated his enemies harshly. For example, when he believed a former business associate cheated him, he reportedly claimed, "I won't sue you, for the law is too slow. I will ruin you."¹ He then proceeded to do just that.

At the age of 70, Vanderbilt sold his shipping empire and started buying up small, sometimes money-losing, railroads and turning them into profitable ventures. Among other railroad lines, Vanderbilt owned the New York Central, which grew into the nation's biggest business by the 1870s. The hub of this network, which he expanded throughout the Northeast and to Chicago, was Grand Central Station in Manhattan. At the time of his death in 1877, the Commodore was worth $105 million, a larger sum than in the United States Treasury at the time. Wanting to leave his fortune intact, Commodore Vanderbilt left the bulk of his money to the oldest of his 13 children, William Henry. Although William Henry Vanderbilt (1821- 1885) lived only eight years after his father's death, he managed to double the family fortune to $210 million, the equivalent in today's currency of more than $3 billion. He was the richest man in the world at the time of his death. Such a huge fortune could be amassed during this period, in part, because income tax and government regulation of business and industry did not yet exist.

William Henry divided his fortune among his four sons and four daughters, but not in equal amounts. This third generation of wealthy Vanderbilts elevated spending money to an art and came to epitomize American high society. Cornelius II and William Kissam, the two oldest boys who had been running the New York Central Railroad system since their father's retirement in 1883, received $80 million and $60 million respectively. Frederick William (1856-1938), the third son and sixth child, received $10 million. At the time of his father's death, Frederick already served as the director of several railroads. Continuing in his grandfather's and father's footsteps, he wisely invested in railroads, coal, oil, steel, and tobacco. Worth $78 million when he died at the age of 82, Frederick accumulated more money than all his siblings combined. Less than half of his fortune remained, however, after paying estate taxes to the federal and state governments. Even so, he left such an enormous amount of money that ordinary people of the time could scarcely imagine what it would be like to be so rich.

Questions for Reading 1

1. How did Cornelius "Commodore" Vanderbilt make his fortune?

2. Why do you think he chose to sell a successful shipping empire and begin a new career in railroads?

3. Why did the Commodore leave most of his fortune to one son?

4. What factors helped some individuals to amass huge fortunes during the Gilded Age?

5. Why did Frederick Vanderbilt inherit much less money than his brothers, Cornelius II and William Kissam?

Reading 1 was adapted from Bronwyn Krog, "Vanderbilt Mansion National Historic Site" (Dutchess County, New York) National Register of Historic Places Registration Form, Washington, D.C.: U.S. Department of the Interior; National Park Service, 1979; the National Park Service visitor brochure for Vanderbilt Mansion National Historic Site; and John Foreman and Robbe Pierce Stimson, The Vanderbilts and the Gilded Age: Architectural Aspirations, 1879-1901 (New York: St. Martin's Press, 1991).

¹William A. Croffut, The Vanderbilts and the Story of Their Fortune (Salem, N.H.: Ayer Company, 1985),49.

Continue