Great Fortunes from Railroads

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Elsewhere, Vanderbilt was much more successful. Out through the
fertile wheat, corn and cattle sections of Wisconsin, Minnesota,
Iowa, Dakota and Nebraska ran the Chicago and Northwestern Railroad,
a line 4,000 miles long which had been built mostly by public funds
and land grants. Its history was a succession of corrupt acts in
legislatures and in Congress, and comprised the usual process of
stock watering and exploitation.

[Illustration: THE ORIGINAL VANDERBILT HOMESTEAD, Near New Dorp,
Staten Island, N. Y.]

[Illustration: PALACES BUILT BY WILLIAM H. VANDERBILT, And Resided in
by Him and His Descendants.]

By a series of manipulations ending in 1880, Vanderbilt secured a
controlling interest in this railroad, so that he had a complete line
from New York to Chicago, and thence far into the Northwest. During
these years he also secured control of other railroad lines.

HE EXPANDS IN SPLENDOR.

It was at this time that he, in accord with the chrysalid tendency
manifested by most other millionaires, discarded his long-followed
sombre method of life, and invested himself with a gaudy
magnificence. On Fifth avenue, at Fifty-first and Fifty-second
streets, he built a spacious brown-stone mansion. In reality it was a
union of two mansions; the southern part he planned for himself, the
northern part for his two daughters. For a year and a half more than
six hundred artisans were employed on the interior; sixty
stoneworkers were imported from Europe. The capaciousness, the
glitter and the cluttering of splendor in the interior were regarded
as of unprecedented lavishness in the United States.

All of the luxury overloading these mansions was, as was well known,
the fruit of fraud piled upon fraud; it represented the spoliation,
misery and degradation of the many; but none could deny that
Vanderbilt was fully entitled to it by the laws of a society which
decreed that its rulers should be those who could best use and abuse
it. And rulers must ever live imperiously and impressively; it is not
fitting that those who command the resources, labor and Government of
a nation should issue their mandates from pinched and meager
surroundings. Mere pseudo political rulers, such as governors and
presidents, are expected to be satisfied with the plain, unornamental
official residences provided by the people; thereby they keep up the
appearance of that much-bespoken republican simplicity which is part
of the mask of political formulas. Luckily for themselves, the
financial and industrial rulers are bound by no circumscribing
tradition; hence they have no set of buckramed rules to stick close
to for fear of an indignant electorate.

The same populace that glowers and mutters whenever its political
officials show an inclination to pomp, regards it as perfectly
natural that its financial and industrial rulers should body forth
all of the most obtrusive evidences of grandeur. Those Vanderbilt
twin palaces, still occupied by the Vanderbilt family, were
appropriately built and fitted, and are more truly and specifically
historic as the abode of Government than official mansions; for it is
the magnates who have in these modern times been the real rulers of
nations; it is they who have usually been able to decide who the
political rulers should be; political parties have been simply their
adjuncts; the halls of legislation and the courts their mouthpieces
and registering bureaus. Theirs has been the power, under cover
though it has lurked, of elevating or destroying public officials,
and of approving or cancelling legislation. Why, indeed, should they
not have their gilded palaces?

A SUDDEN TRANSFORMATION.

The President of the United States lived in the subdued simplicity of
the White House. But William H. Vanderbilt ate in a great, lofty
dining room, twenty-six by thirty-seven feet, wrought in Italian
Renaissance, with a wainscot of golden-hued, delicately-carved
English oak around all four sides, and a ceiling with richly-painted
hunting-scene panels. When he entertained it was in a vast drawing-
room, palatially equipped, its walls hung with flowing masses of pale
red velvet, embroidered with foliage flowers and butterflies, and set
with crystals and precious stones.

It was his art gallery, however, which flattered him most. He knew
nothing of art, and underneath his pretentions cared less, for he was
a complete utilitarian; but it had become fashionable to have an
elaborate art gallery, and he forthwith disbursed money right and
left to assemble an aggregation of paintings.

He gave orders to agents for their purchase with the same equanimity
that he would contracts for railroad supplies. And, as a rule, the
more generous in size the canvasses, the more satisfied he was that
he was getting his money's worth; art to him meant buying by the
square foot. Not a few of the paintings unloaded upon him were,
despite their high-sounding reputations, essentially commonplace
subjects, and flashy and hackneyed in execution; but he gloried in
the celebrity that came from the high prices he was decoyed into
paying for them. For one of Meissionier's paintings, "The Arrival at
the Chateau," he paid $40,000, and on one of his visits to Paris he
enriched Meissionier to the extent of $188,000 for seven paintings.
Not until his corps of art advisers were satisfied that a painter
became fashionably talked about, could Vanderbilt be prevailed upon
to buy examples of his work. There was something intensely magical in
the ease and cheapness with which he acquired the reputation of being
a "connoisseur of art." Neither knowledge nor appreciation were
required; with the expenditure of a few hundred thousand dollars he
instantaneously transformed himself from a heavy-witted, uncultured
money hoarder into the character of a surpassing "judge and patron of
art." And his pretensions were seriously accepted by the uninformed,
absorbing their opinions from the newspapers.

"THE PUBLIC BE DAMNED."

If he had discreetly comported himself in other respects he might
have passed tolerably well as an extremely public-spirited and
philanthropic man. After every great fraud that he put through he
would usually throw out to the public some ostentatious gift or
donation. This would furnish a new ground to the sycophantic chorus
for extolling his fine qualities. But he happened to inherit his
father's irascibility and extreme contempt for the public whom he
exploited. Unfortunately for him, he let out on one memorable
occasion his real sentiments. Asked by a reporter why he did not
consider public convenience in the running of his trains, he blurted
out, "The public be damned!"

It was assuredly a superfluous question and answer; but expressed so
sententiously, and published, as it was, throughout the length and
breadth of the land, it excited deep popular resentment. He was made
the target for general denunciation and execration, although
unreasonably so, for he had but given candid and succinct utterance
to the actuating principle of the whole capitalist class. The moral
of this incident impressed itself sharply upon the minds of the
masterly rich, and to this day has greatly contributed to the politic
manner of their exterior conduct. They learned that however in
private they might safely sneer at the mass of the people as created
for their manipulation and enrichment, they must not declare so
publicly. Far wiser is it, they have come to understand, to confine
spoliation to action, while in outward speech affirming the most
mellifluous and touching professions of solicitude for public
interests.

ADDS $100,000,000 IN SEVEN YEARS.

But William H. Vanderbilt was little affected by this outburst of
public rage. He could well afford to smile cynically at it, so long
as no definite move was taken to interfere with his privileges, power
and possessions. Since his father's death he had added fully
$100,000,000 to his wealth, all within a short period. It had taken
Commodore Vanderbilt more than thirty years to establish the fortune
of $105,000,000 he left. With a greater population and greater
resources to prey upon, William H. Vanderbilt almost doubled the
amount in seven years. In January, 1883, he confided to a friend that
he was worth $194,000,000. "I am the richest man in the world," he
went on. "In England the Duke of Westminster is said to be worth
$200,000,000, but it is mostly in land and houses and does not pay
two per cent." [Footnote: Related in the New York "Times," issue of
December 9, 1885.] In the same breath that he boasted of his wealth
he would bewail the ill-health condemning him to be a victim of
insomnia and indigestion.

Having a clear income of $10,350,000 a year, he kept his ordinary
expenses down to $200,000 a year. Whatever an air of indifference he
would assume in his grandee role of "art collector," yet in most
other matters he was inveterately closefisted. He had a delusion that
"everybody in the world was ready to take advantage of him," and he
regarded "men and women, as a rule, as a pretty bad lot." [Footnote:
"The Vanderbilts": 127.] This incident--one of many similar incidents
narrated by Croffut--reveals his microscopic vigilance in detecting
impositions: When in active control of affairs at the office he
followed the unwholesome habit of eating the midday lunch at his
desk, the waiter bringing it in from a neighboring restaurant.

He paid his bill for this weekly, and he always scrutinized the items
with proper care. "Was I here last Thursday?" he asked of a clerk at
an adjoining desk.

"No, Mr. Vanderbilt; you stayed at home that day."

"So I thought," he said, and struck that day from the bill. Another
time he would exclaim, sotto voce, "I didn't order coffee last
Tuesday," and that item would vanish.

Up to the very last second of his life his mind was filled with a
whirl of business schemes; it was while discussing railroad plans
with Robert Garrett in his mansion, on December 8, 1885, that he
suddenly shot forward from his chair and fell apoplectically to the
floor, and in a twinkling was dead. Servants ran to and fro
excitedly; messengers were dispatched to summon his sons; telegrams
flashed the intelligence far and wide.

The passing away of the greatest of men could not have received a
tithe of the excitement and attention caused by William H.
Vanderbilt's death. The newspaper offices hotly issued page after
page of description, not without sufficient reason. For he, although
untitled and vested with no official power, was in actuality an
autocrat; dictatorship by money bags was an established fact; and
while the man died, his corporate wealth, the real director and
center, to a large extent, of government functions, survived
unimpaired.

He had abundantly proved his autocracy. Law after law had he
violated; like his father he had corrupted and intimidated, had
bought laws, ignored such as were unsuited to his interests, and had
decreed his own rules and codes. Progressively bolder had the money
kings become in coming out into the open in the directing of
Government. Long had they prudently skulked behind forms, devices and
shams; they had operated secretly through tools in office, while
virtuously disclaiming any insidious connection with politics. But no
observer took this pretence seriously. James Bryce, fresh from
England, delving into the complexities and incongruities of American
politics at about this time, wrote that "these railway kings are
among the greatest men, perhaps I may say, the greatest men in
America," which term, "greatest," was a ludicrously reverent way of
describing their qualities. "They have power," he goes on in the same
work, "more power--that is, more opportunity to make their will
prevail, than perhaps any one in political life except the President
or the Speaker, who, after all, hold theirs only for four years and
two years, while the railroad monarch holds his for life." [Footnote:
"The American Commonwealth." First Ed.: 515.] Bryce was not well
enough acquainted with the windings and depths of American political
workings to know that the money kings had more power than President
or Speaker, not nominally, but essentially. He further relates how
when a railroad magnate traveled, his journey was like a royal
progress; Governors of States and Territories bowed before him;
Legislatures received him in solemn session; cities and towns sought
to propitiate him, for had he not the means of making or marring a
city's fortunes? "You cannot turn in any direction in American
politics," wrote Richard T. Ely a little later, "without discovering
the railway power. It is the power behind the throne. It is a correct
popular instinct which designates the leading men in the railways,
railroad magnates or kings. ... Its power ramifies in every
direction, its roots reaching counting rooms, editorial sanctums,
schools and churches which it supports with a part of its revenues,
as well as courts and Legislatures." ... [Footnote: "The
Independent," issue of August 28, 1890.]

HIS DEATH A NOTABLE EVENT.

Vanderbilt's death, as that of one of the real monarchs of the day,
was an event of transcendent importance, and was treated so. The
vocabulary was ransacked to find adjectives glowing enough to
describe his enterprise, foresight, sagacity and integrity. Much
elaborated upon was the fiction that he had increased his fortune by
honest, legitimate means--a fiction still disseminated by those
shallow or mercenary writers whose trade is to spread orthodox belief
in existing conditions. The underlying facts of his career and
methods were purposely suppressed, and a nauseating sort of panegyric
substituted. Who did not know that he had bribed Legislature after
Legislature, and had constantly resorted to conspiracy and fraud? Not
one of his eulogists was innocent of this knowledge; the record of it
was too public and palpable to justify doubts of its truth. The
extent of his possessions and the size of his fortune aroused
wonderment, but no effort was made to contrast the immense wealth
bequeathed by one man with the dire poverty on every hand, nor to
connect those two conditions.

At the very time his wealth was being inventoried at $200,000,000,
not less than a million wage earners were out of employment,
[Footnote: "It is probably true," said Carroll D. Wright in the
United States Labor Report for 1886, "that this total (in round
numbers 1,000,000) as representing the unemployed at any one time in
the United States, is fairly representative."] while the millions at
work received the scantiest wages. Nearly three millions of people
had been completely pauperized, and, in one way or another, had to be
supported at public expense. Once in a rare while, some perceptive
and unshackled public official might pierce the sophistries of the
day and reveal the cause of this widespread poverty, as Ira Steward
did in the fourth annual report of the Massachusetts Bureau of
Statistics of Labor for 1873.

"It is the enormous profits," he pointedly wrote, "made directly upon
the labor of the wage classes, and indirectly through the results of
their labor, that, first, keeps them poor, and, second, furnishes the
capital that is finally loaned back to them again" at high rates of
interest. Unquestionably sound and true was this explanation, yet of
what avail was it if the causes of their poverty were withheld from
the active knowledge of the mass of the wage workers? It was the
special business of the newspapers, the magazines, the pulpit and the
politicians to ignore, suppress or twist every particle of
information that might enlighten or arouse the mass of people; if
these agencies were so obtuse or recalcitrant as not to know their
expected place and duty at critical times, they were quickly reminded
of them by the propertied classes. To any newspaper owner, clergyman
or politician showing a tendency to radicalism, the punishment came
quickly. The newspaper owner was deprived of advertisements and
accommodations, the clergyman was insidiously hounded out of his
pulpit by his own church associations, the funds of which came from
men of wealth, and the politician was ridiculed and was summarily
retired to private life by corrupt means. As for genuinely honest
administrative officials (as distinguished from the _apparently_
honest) who exposed prevalent conditions and sought to remedy them in
their particular departments, they were eventually got rid of by a
similar campaign of calumny and corrupt influences.

HIS FRAUDS IN EVADING TAXES.

As in the larger sense all criticism of conditions was systematically
smothered, so were details of the methods of the rich carefully
obscured or altogether passed by in silence. At Vanderbilt's death
the newspapers laved in gorgeous descriptions of his mansion. Yet
apart from the proceeds of his great frauds, the amounts out of which
he had cheated the city and State in taxation were alone much more
than enough to have paid for his splendor of living. Like the Astors,
the Goelets, Marshall Field and every other millionaire without
exception, he continuously defrauded in taxes.

We have seen how the Vanderbilts seized hold of tens of millions of
dollars of bonds by fraud. Certain of their railroad stocks were
exempted from individual taxation, but railroad bonds ranked as
taxable personal property. Year after year William H. Vanderbilt had
perjured himself in swearing that his personal property did not
exceed $500,000. On more than this amount he would not pay. When at
his death his will revealed to the public the proportions of his
estate, the New York City Commissioners of Assessments and Taxes made
an apparent effort to collect some of the millions of dollars out of
which he had cheated the city. It was now that the obsequious and
time-serving Depew, grown gray and wrinkled in the retainership of
the Vanderbilt generations, came forward with this threat: "He
informed us," testified Michael Coleman, president of the commission,
"that if we attempted to press too hard he would take proceedings by
which most of the securities would be placed beyond our reach so that
we could not tax them. The Vanderbilt family could convert everything
they had into non-taxable securities, such as New York Central,
Government and city bonds, Delaware and Lackawanna, and Delaware and
Western Railroad stocks, and pay not a dollar provided they wished to
do so." [Footnote: The New York Senate Committee on Cities, 1890,
iii: 2355-2356.]

The Vanderbilt estate compromised by paying the city a mere part of
the sum owed. It succeeded in keeping the greatest part of its
possessions immune from taxation, in doing which it but did what the
whole of the large propertied class was doing, as was disclosed in
further detailed testimony before the New York Senate Committee on
Cities in 1890.

HIS WILL TRANSMITS $200,000,000.

Unlike his father, William H. Vanderbilt did not bequeath the major
portion of his fortune to one son. He left $50,000,000 equally to
each of his two sons, Cornelius and William K. Vanderbilt.
Supplementing the fortunes they already had, these legacies swelled
their individual fortunes to approximately $100,000,000 each--about
the same amount as their father had himself inherited. The remaining
$100,000,000 was thus disposed of in William H. Vanderbilt's will:
$40,000,000, in railroad and other securities, was set apart as a
trust fund, the income of which was to be apportioned equally among
each of his eight children. This provided them each with an annual
income of $500,000. In turn, the principal was to descend to their
children, as they should direct by will. Another $40,000,000 was
shared outright among his eight children. The remaining $20,000,000
was variously divided: the greater part to his widow; $2,000,000 as
an additional gift to Cornelius; $1,000,000 to a favorite grandson;
sundry items to other relatives and friends, and about $1,000,000 to
charitable and public institutions.

He was buried in a mausoleum costing $300,000, which he himself had
ordered to be built at New Dorp, Staten Island; and there to-day his
ashes lie, splendidly interred, while millions of the living
plundered and disinherited are suffered to live in the deadly
congestion of miserable habitations.

CHAPTER VII

THE VANDERBILT FORTUNE IN THE PRESENT GENERATION

With the demise of William H. Vanderbilt the Vanderbilt fortune
ceased being a one-man factor. Although apportioned among the eight
children, the two who inherited by far the greater part of it--
Cornelius and William K. Vanderbilt--were its rulers paramount. To
them descended the sway of the extensive railroad systems
appropriated by their grandfather and father, with all of the allied
and collateral properties. Both of these heirs had been put through a
punctilious course of training in the management of railroad affairs;
all of the subtle arts and intricacies of finance, and the grand
tactical and strategic strokes of railroad manipulation, had been
drilled into them with extraordinary care.

Their first move upon coming into their inheritance was to surround
themselves with the magnificence of imposing residences, as befitted
their state and estate. A signatory stroke of the pen was the only
exertion required of them; thereupon architects and a host of
artisans yielded service and built palaces for them, for the one at
Fifth avenue and Fifty-second street, for the other at Fifth avenue
and Fifty-seventh street.

Millions were spent with prodigal lavishness. On his Fifth avenue
mansion alone, Cornelius expended $5,000,000. To get the space for
three beds of blossoms and a few square yards of turf, a brownstone
house adjoining his mansion was torn down, and the garden created at
an expense of $400,000. George, a brother of Cornelius and of William
K. Vanderbilt, and a man of retiring disposition, spent $6,000,000 in
building a palatial home in the heart of the North Carolina
mountains. For three years three hundred stonemasons were kept busy;
and he gradually added land to his surrounding estate until it
embraced one hundred and eighty square miles. His game preserves were
enlarged until they covered 20,000 acres. So, within thirty years
from the time their grandfather, Commodore Vanderbilt, was extorting
his original millions by blackmailing, did they live like princes,
and in greater luxury and power than perhaps any of the titular
princes of ancient or modern days. But the splendor of these abodes
was intended merely for partial use. At their command spacious,
majestic palaces arose at Newport, whither in the torrid season some
of the Vanderbilts transferred their august seat of power and
pleasure.

Hardly had they settled themselves down in the vested security of
their great fortunes when an ominous situation presented itself to
shake the entire propertied class into a violent state of uneasiness.
Hitherto the main antagonistic movement perturbing the magnates was
that of the obstreperous and still powerful middle class. Dazed and
enraged at the certain prospect of their complete subjugation and
eventual annihilation, these small capitalists had clamored for laws
restricting the power of the great capitalists. Some of their demands
were constantly being enacted into law, without, however, the
expected results.

THE GREAT LABOR MOVEMENT OF 1886

Now, to the intense alarm of all sections of the capitalist class, a
very different quality of movement reared itself upward from the
deeps of the social formation. [Footnote: It may be asked why an
extended description of this movement is interposed here. Because,
inasmuch as it is a part of the plan of this work to present a
constant succession of contrasts, this is, perhaps, as appropriate a
place as any to give an account of the highly important labor
movement of 1886. Of course, it will be understood that this movement
was not the result of any one capitalist fortune or process, but was
a general revolt to compel all forms of capitalist control to concede
better conditions to the workers.]

This time it was the laboring masses preparing for the most vigorous
and comprehensive attack that they had ever made upon capitalism's
intrenchments. Long exploited, oppressed and betrayed, starved or
clubbed into intervals of apathy or submission, they were again in
motion, moving forward with a set deliberation and determination
which disconcerted the capitalist class. No mere local conflict of
class interests was it on this occasion, but a general cohesive
revolt of the workers against some of the conditions and laws under
which they had to labor.

In 1884 the Federation of Trades and Labor Unions of the United
States and Canada had issued a manifesto calling upon all trades to
unite in the demand for an eight-hour workday. The date for a general
strike was finally fixed for May 1, 1886. The year 1886, therefore,
was one of general agitation throughout the United States. With
rapidity and enthusiasm the movement spread. Presently it took on a
radical character. Realizing it to be at basis the first national
awakening of the proletariat, progressive men and women of every
shade of opinion hastened forward to support it and direct it into
one of opposition, not merely to a few of the evils of wage slavery,
but to what they considered the fundamental cause itself--the
capitalist system.

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