Bio and Industry

Cornelius Vanderbilt, a magnate in shipping and railroads, was born in 1794 in New York, the son of a ferryman and farmer. He received little formal schooling which led to him having poor grammar and writing. While he was a simple man who lacked polish, he was an exceptional businessman.

By age 16, he was transporting people and cargo around New York harbor. During the War of 1812, he secured a government contract to deliver supplies to posts throughout the area.

Vanderbilt eventually controlled most of the ferry traffic in New York waters and during the 1830s, Vanderbilt's line became the dominant steamship presence on the Hudson River, due largely to low pricing and comfortable accommodations.

Cornelius Vanderbilt entered the railroad business in 1857 and eventually gained control of the New York and Harlem Railroad. Vanderbilt managed to expand his empire through purchase and consolidation. He gained control of the New York Central in 1869. By 1873, he successfully linked New York to Chicago by rail.

Workers and Competition

During the Panic of 1873 and the resulting depression, Vanderbilt began construction of Grand Central Terminal in New York City, offering employment to thousands who otherwise would have been unemployed. The New York Central was one of the few railroads that posted profits during the depression. During this time be bought up many other railroad companies, a process known as horizontal integration. His goal was to consolidate like companies and monopolize the railroad industry in the northeast.

Vanderbilt was able to put many of his competitors under by keeping his costs low which benefited the customer. His business practices and wealth did not help his workers. He prevented any worker input or membership in a union. Wages were kept low, working hours were long, and the working conditions were poor.

Investing Money

Vanderbilt invested his profits in new technology like steamboats, he lent his money to other businessmen, he bought real estate, and he purchased stock in private corporations. He personally invested millions in building Grand Central Station, one of the largest train depots in the world.

Ruthless in business, Cornelius Vanderbilt was said by some to have made few friends in his lifetime but many enemies. His public perception was that of a vulgar, mean-spirited man who made life miserable for everyone around him, including his family. At the time of his death, aged 82, his fortune was estimated at $100 million. In his will, he left 95% of his $100 million estate (approximately $200 billion today) to his son William and to William's four sons. 

Philanthropy

Unlike the Gilded Age titans who followed him, such as steel magnate Andrew Carnegie (1835-1919) and Standard Oil founder John D. Rockefeller (1839-1937), Vanderbilt did not own grand homes or give away much of his vast wealth to charitable causes. In fact, the only substantial philanthropic donation he made was in 1873, toward the end of his life, when he gave $1 million to build and endow Vanderbilt University in Nashville, Tennessee. (In a nod to its founder’s nickname, the school’s athletic teams are called the Commodores.)

The Vanderbilt mansions associated with the Gilded Age, including the Breakers in Newport, Rhode Island and the Biltmore in Asheville, North Carolina, were built by Cornelius Vanderbilt’s descendants. (The 250-room Biltmore estate, constructed in the late 19th century by one of Vanderbilt’s grandsons, is the largest privately owned home in the United States today.)