Cornelius Vanderbilt. Photo: Matthew Brady. Library of Congress Prints and Photographs Division Washington, D.C.
Cornelius Vanderbilt’s primary contribution to the railway industry was his ability to use his financial resources to develop regional railroads and create more functional and profitable transportation networks. He was born on May 27th, 1794 on Staten Island into a poor family. At age 11 he quit school to help his father in boating. When he was 16, he convinced his mother to loan him $100 to buy a boat to start his own business. He opened a transporting service between New York City and Staten Island. During the War of 1812 he received a government contract to supply the forts around New York. He earned the nickname “Commodore” as commander of the largest schooner on the Hudson River.
He then decided to focus on steamboats and with Thomas Gibbons, started a ferry service between New Brunswick, New Jersey and New York. Vanderbilt continued this for the next 11 years, becoming a very rich man. In 1829 he decided to go on his own, starting a service between New York and Reekskill, followed by a ferry service to Long Island Sound, Providence, Boston and Connecticut locations. By the 1840s he owned 100 steamboats. Between 1862 and 64 he sold or leased most of his vessels to the union government and his fortune rose to $40,000,000.
At age 70 Vanderbilt decided to try and build a railroad empire. Vanderbilt’s son, William, with Cornelius’ backing, was appointed receiver for the Staten Island Railroad, a horse-operated line bankrupted in 1857. William was successful in reviving it, which sparked his father’s interest in railroading. The most significant railway acquisitions started with the purchase of stock in the New York and Harlem Railroad, of which he later became director in 1857. By the end of 1867 he had acquired the Hudson River Railroad and the New York Central Railroad. In 1869 the two railways merged.
Vanderbilt’s only major failure was trying to buy the Erie Railroad from his adversary Daniel Drew. He lost between one and two million dollars before he gave it up. Vanderbilt subsequently purchased the Canada Southern, the Michigan Central and the Lake Shore & Michigan Southern Railroads to create a rail system from New York City to Chicago. Vanderbilt was also responsible for initiating construction of the first New York Grand Central Depot in 1871. When he died on January 4th, 1877 he was the richest man in the world. Most of his money, about $95 million, and possessions went to his son, William.
Many of the railroads he purchased were under-financed and overwhelmed by costs, the difficulties of railroad construction and start-up operations. Vanderbilt had sufficient capital to improve infrastructure and purchase better rolling stock, plus political connections and management abilities with which to create profitable companies. Many of the railways he built are still in existence and were critical in the industrial development of the Northwest United States and Southern Ontario.