Welfare Capitalism- Part Two- Vanderbilt

Robber Barons or Captains of industry?
The Gilded Age- 1870-1900

The Gilded Age was coined by Mark Twain. Gilded Age was a pejorative term for a time of materialistic excesses combined with extreme poverty. Portrayed as an era of serious social problems masked by a thin gold gilding of economic expansion.

The most successful were often labeled positively as captains of industry and negatively as robber barons. The term "self made man" was also a term that was thrown around a lot.

https://youtu.be/ZE_XeLjq0oI

Cornelius Vanderbilt (1860-1877)
Trains & Shipping

Son to Dutch immigrants, he struggled to read and write in English. His father ran a ferry service which is where he first learned about transportation. He loaned $100 from his parents to buy a single small ferry. When the war of 1812 broke out Vanderbilt had gained a good reputation and his boats were used heavily in transporting troops around New York harbor. He gained the nickname 'The Commodore".

His secret was that he took his profits and reinvesting them in the company instead of taking it as profits. He eventually had a fleet of ships. Vanderbilt saw an opportunity to ship goods across land, so he invested in railroads. He bought up his competitors rail lines.

Vanderbilt owned the only bridge across the Hudson river out of New York. Once, as part of a negotiation with New York City Central. His rivals struggled without the bridge so much that stockholders began selling stocks. Vanderbilt took this opportunity to buy up stocks until he owned his rival company.

These successful industrialists weren't the only ones using sneaky tactics. Next time Vanderbilt tried buying a rival company, the owners printed more and more stocks so that eventhough Vanderbilt spent millions of dollars on ownership, he got no closer to owning the entire company. This is illegal today but at the time was a clever ploy to cheat Vanderbilt.

This didn't damage Vanderbilt but only embarrassed him.

Personal Life

He was successful commercially, but with his family he did not seem to have a good reputation. He decide to move to Manhattan from Staten Island and informed his wife of the move. Sophia was simpler and preferred to stay in Staten Island. The Commodore committed Sophia in an asylum until she finally decided to move to Manhattan! He was verbally cruel with is children, very demeaning to his sons.

Vanderbilt had grown up poor and struggled to get where he was. His children, however, were born rich and privileged. The grew up in The Breakers, Rhode Island and never had to do physical work.

Cornelius Josiah Vanderbilt

In 1849, in order to 'toughen him up', his father sent the then 18-year-old Corneel off to be a sailor aboard a three-masted schooner which was making its way to California and its gold fields. However, Corneel was stricken ill when he arrived in San Francisco and drew a draft on his father in order to pay for his return to New York. Upon his return, his father had him arrested for drawing the draft and committed him to the Bloomingdale Insane Asylum. Corneel's records from the asylum state: "Form of mental disorder: (supported by father)".

He was finally discharged from the asylum on February 20, 1850.

Cornelius married a woman from Connecticut and invested in a fruit farm which proved a bad investment as it soon went bankrupt. That year his mother died and two years later so did his wife in 1872.

Upon his father's death in 1877, his elder brother William inherited the vast majority of the Vanderbilt estate and holdings (around $100,000,000), becoming the wealthiest man in the United States. According to his father's will, Corneel was only to inherit the income of $200,000 held in trust which was distributed by trustees who were cautioned to oversee his behavior. Additionally, should Corneel try to advance funds from the Trust, he would lose it altogether.

His father's 2nd wife used a portion of Vanderbilt's estate to found Vanderbilt university in Tennessee.

The widowed Cornelius Vanderbilt spent his later years living in New York apartments with a close friend, named Terry. On April 2, 1882, reportedly after a night spent at a gambling house, the 51-year-old C.J. Vanderbilt committed suicide by firing his Smith & Wesson revolver into his left temple.

Never having children, he left all that he had to his close friend, Terry.

William Henry Vanderbilt

Jonah's brother instantly became the riches man in America upon their father's death. His children would inherit this wealth and build the Biltmore estate, still owned by the Vanderbilt's to this day. It's the biggest privately owned home in the USA.