HISTORY OF THE GREAT AMERICAN FORTUNESCHAPTER VIII
FURTHER ASPECTS OF THE VANDERBILT FORTUNE
The juggling of railroads and the virtual seizure of coal mines were by no means the only accomplishments of the Vanderbilt family in the years under consideration. Colorless as was the third generation, undistinguished by any marked characteristic, extremely commonplace in its conventions, it yet proved itself a worthy successor of Commodore Vanderbilt. The lessons he had taught of how to appropriate wealth were duly followed by his descendants, and all of the ancestral methods were closely adhered to by the third generation. Whatever might be its pretensions to a certain integrity and to a profound respectability, there was really no difference between its methods and those of the Commodore. Times had changed ; that was all. What had once been regarded as outright theft and piracy were now cloaked under high-sounding phrases as corporate extension and high finance and other catchwords calculated to lull public suspicion and resentment. A refinement of phraseology had set in ; and it served its purpose.
Concomitantly, while executing the transactions already described, the Vanderbilts of the third generation put through many others, both large and small, which were converted into further heaps of wealth. An enumeration of all of these diverse frauds would necessitate a tiresome presentation. A few examples will suffice.
The small frauds were but lesser in relation to the larger. At this period of the economic development of the country, when immense thefts were being consummated, a fraud had to rise to the dignity of at least fifty million dollars to be regarded a large one. The law, it is true, proscribed any theft involving more than $25 as grand larceny, but it was law applying to the poor only, and operative on them exclusively. The inordinately rich were beyond all law, seeing that they could either manufacture it, or its interpretation, at will. Among the conspicuous, audacious capitalists the fraud of a few paltry millions shrank to the modesty of a small, cursory, off-hand operation. Yet, in the aggregate, these petty frauds constituted great results, and for that reason were valued accordingly.
AN $8,000,000 AREA CONFISCATED.
Such a slight fraud was, for instance, the Vanderbilts confiscation of an entire section of New York City. In 1887 they decided that they had urgent and particular need for railroad yard purposes of a sweep of streets from Sixtieth street to Seventy-second street along the Hudson River Railroad division. What if this property had been bought, laid out and graded by the city at considerable expense ? The Vanderbilts resolved to have it and get it for nothing. Under special forms of law dictated by them they thereupon took it. The method was absurdly easy.
Ever compliant to their interests, and composed as usual of men retained by them or responsive to their influences, the Legislature of 1887 passed an act compelling the city authorities to close up the required area of streets. Then the city officials, fully as accommodating, turned the property over to the exclusive, and practically perpetual, use of the New York Central and Hudson River Railroad. With the profusest expressions of regard for the public interests, the railroad officials did not in the slightest demur at signing an agreement with the municipal authorities. In this paper they pledged themselves to coöperate with the city in conferring upon the Board of Street Openings the right to reopen any of the streets at any time. This agreement was but a decoy for immediate popular effect. No such reopening ordinance was ever passed ; the streets remained closed to the public which, theoretically at least, was left with the title. In fact, the memorandum of the agreement strangely disappeared from the Corporation Counsels office, and did not turn up until twenty years later, when it was accidentally and most mysteriously discovered in the Lenox Library. Whence came it to this curious repository ? The query remains unanswered.
For seventeen and a half acres of this confiscated land, comprising about three hundred and fifty city lots, now valued at a round $8,000,000, the New York Central and Hudson River Railroad has not paid a cent in rental or taxes since the act of 1887 was passed. On the island of Manhattan alone 70,000 poor families are every year evicted for inability to pay rent a continuous and horribly tragic event well worth comparing with the preposterous facility with which the great possessing classes everywhere either buy or defy law, and confiscate when it suits them. So cunningly drafted was the act of 1887 that while New York City was obliged to give the exclusive use of this large stretch of property to the company, yet the title to the property the empty name remained vested in the city. This being so, a corporation counsel complaisantly decided that the railroad company could not be taxed so long as the city owned the title.1
Another of what may be called for purposes of distinction the numerous small frauds at this time, was that foisting upon New York City the cost of replacing the New York Centrals masonry viaduct approaches with a fine steel elevated system. This fraud cost the public treasury about $1,200,000, quite a sizable sum, it will be admitted, but one nevertheless of pitiful proportions in comparison with previous and later transactions of the Vanderbilt family.
We have seen how, in 1872, Commodore Vanderbilt put through the Legislature an act forcing New York City to pay $4,000,000 for improving the railroads roadway on Park avenue. His grandsons now repeated his method. In 1892 the United States Government was engaged in dredging a ship canal through the Harlem River. The Secretary of War, having jurisdiction of all navigable waters, issued a mandate to the New York Central to raise its bridge to a given height, so as to permit the passing under of large vessels.
To comply with this order it was necessary to raise the track structure both north and south of the Harlem River. Had an ordinary citizen, upon receiving an order from the authorities to make improvements or alterations in his property, attempted to compel the city to pay all or any part of the cost, he would have been laughed at or summarily dealt with. The Vanderbilts were not ordinary property holders. Having the power to order legislatures to do their bidding, they now proceeded to imitate their grandfather, and compel the city to pay the greater portion of the cost of supplying them with a splendid steel elevated structure.
PUBLIC TAXATION TO SUPPLY PRIVATE CAPITAL.
The Legislature of 1892 was thoroughly responsive. This was a Legislature which was not merely corrupt, but brazenly and frankly so, as was proved by the scandalous openness with which various spoliative measures were rushed through.
An act was passed compelling New York City to pay one-half of the cost of the projected elevated approaches up to the sum of $1,600,000. New York City was thus forced to pay $800,000 for constructing that portion south of the Harlem River. If, so the law read on, the cost exceeded the estimate of $800,000, then the New York Central was to pay the difference. Additional provision was made for the compelling of New York City to pay for the building of the section north of the Harlem River. But who did the work of contracting and building, and who determined what the cost was ? The railroad company itself. It charged what it pleased for material and work, and had complete control of the disbursing of the appropriations. The citys supervising commissions had, perforce, to accept its arbitrary demands, and lacked all power to question, or even scrutinize, its reports of expenditures. Apart from the New York Centrals officials, no one to-day knows what the actual cost has been, except as stated by the company.
South of the Harlem River this reported cost has been $800,000, north of the Harlem River $400,000. At practically no expense to themselves, the Vanderbilts obtained a massive four-track elevated structure, running for miles over the city streets. The people of the city of New York were forced to bear a compulsory taxation of $1,200,000 without getting the slightest equivalent for it. The Vanderbilts own these elevated approaches absolutely ; not a cents worth of claim or title have the people in them. Together with the $4,000,000 of public money extorted by Commodore Vanderbilt in 1872, this sum of $1,200,000 makes a total amount of $5,200,000 plucked from the public treasury under form of law to make improvements in which the people who have footed the bill have not a moiety of ownership.2 The Vanderbilts have capitalized these terminal approaches as though they had been built with private money.3
At this point a significant note may be made in passing. While these and other huge frauds were going on, Cornelius Vanderbilt was conspicuously presenting himself as a most ardent reformer in politics. He was, for instance, a distinguished member of the Committee of Seventy, organized in 1894, to combat and overthrow Tammany corruption ! Such, as we have repeatedly observed, is the quality of the men who compose the bourgeois reform movements. For the most part great rogues, they win applause and respectability by virtuously denouncing petty, vulgar political corruption which they themselves often instigate, and thus they divert attention from their own extensive rascality.
A MULTITUDE OF ACQUISITIONS.
Why tempt exhaustion by lingering upon a multitude of other frauds which went to increase the wealth and possessions of the Vanderbilt family ? One after another often several simultaneously they were put through, sometimes surreptitiously, again with overt effrontery. Legislative measures in New York and many other States were drafted with such skill that sly provisions allowing the greatest frauds were concealed in the enactments ; and the first knowledge that the plundered public frequently had of them was after they had already been accomplished. These frauds comprised corrupt laws that gave, in circumstances of notorious scandal, tracts of land in the Adirondack Mountains to railroad companies now included in the Vanderbilt system. They embraced laws, and still more laws, exempting this or that stock or property from taxation, and laws making presents of valuable franchises and allowing further consolidations. Laws were enacted in New York State the effects of which were to destroy the Erie Canal (which has cost the people of New York State $100,000,000) as a competitor of the New York Central Railroad. All of these and many other measures will be skimmed over by a simple reference, and attention focussed on a particularly large and notable transaction by which William K. Vanderbilt in 1898 added about $50,000,000 to his fortune at one superb swoop.
The Vanderbilt ownership of various railroad systems has been of an intricate, roundabout nature. A group of railroads, the majority of the stock of which was actually owned by the Vanderbilt family, were nominally put under the ownership of different, and apparently distinct, railroad companies. This devious arrangement was intended to conceal the real ownership, and to have a plausible claim in counteracting the charge that many railroads were concentrated in one ownership, and were combined in monopoly in restraint of trade. The plan ran thus : The Vanderbilts owned the New York Central and Hudson River Railroad. In turn this railroad, as a corporation, owned the greater part of the $50,000,000 stock of the Lake Shore Railroad. The Lake Shore, in turn, owned the control, or a chief share of the control, of other railroads, and thus on.
In 1897, William K. Vanderbilt began clandestinely campaigning to combine the New York Central and the Lake Shore under one definite, centralized management. This plan was one in strict harmony with the trend of the times, and it had the undoubted advantage of promising to save large sums in managing expenses. But this anticipated retrenchment was not the main incentive. A dazzling opportunity was presented of checking in an immense amount in loot. The grandson again followed his eminent grandfathers teachings ; his plan was nothing more than a repetition of what the old Commodore had done in his consolidations.
During the summer and fall of 1897 the market gymnastics of Lake Shore stock were cleverly manipulated. By the declaration of a seven per cent. dividend the market price of the stock was run up from 115 to about 200. The object of this manipulation was to have a justification for issuing $100,000,000 in three and onehalf per cent. New York Central bonds to buy $50,000,000 of Lake Shore seven per cent. capital stock. By his personal manipulation, William K. Vanderbilt at the same time ballooned the price of New York Central stock.
The purpose was kept a secret until shortly before the plan was consummated on February 4, 1898. On that day William K. Vanderbilt and his subservient directors of the New York Central gathered their corpulent and corporate persons about one table and voted to buy the Lake Shore stock. With due formalities they then adjourned, and moving over to another table, declared themselves in meeting as directors of the Lake Shore Railroad, and solemnly voted to accept the offer.
Presently, however, an awkward and slightly annoying defect was discovered. It turned out that the Stock Corporation law of New York State specifically prohibited the bonded indebtedness of any corporation being more than the value of the capital stock. This discovery was not disconcerting ; the obstacle could be easily overcome with some well-distributed generosity. A bill was quickly drawn up to remedy the situation, and hurried to the Legislature then in session at Albany. The Assembly balked and ostentatiously refused to pass it. But after the lapse of a short time the Assembly saw a great new light, and rushed it through on March 3, on which same day it passed the Senate. It was at this precise time that a certain noted lobbyist at Albany somehow showed up, it was alleged, with a fund of $500,000, and members of the Assembly and Senate suddenly revealed evidences of being unusually flush with money.4
A very illuminating transaction, surely, and well deserving of philosophic comment. This, however, will be eschewed, and attention next turned to the manner in which the Vanderbilts, in 1899, obtained control of the Boston and Albany Railroad.
THE BOSTON AND ALBANY RAILROAD BECOMES THEIRS.
To a great extent this railroad had been built with public funds raised by enforced taxation, the city of Albany contributing $1,000,000, and the State of Massachusetts $4,300,000 of public funds. Originally it looked as if the public interests were fully conserved. But gradually, little by little, predatory corporate interests got in their delicate work, and induced successive legislatures and State officials to betray the public interests. The public holdings of stock were entirely subordinated, so that in time a private corporation secured the practical ownership.
Finally, in 1899, the Legislature of Massachusetts effaced the last vestige of State ownership by giving the Vanderbilts a perpetual lease of this richly profitable railroad for a scant two million dollars payment a year. During the debate over this act Representative Dean charged in the Legislature that it is common rumor in the State House that members are receiving $300 apiece for their votes. The acquisition of this railroad enabled the New York Central to make direct connection with Boston, and with much of the New England coast, and added about four hundred miles to the Vanderbilt system. Most of the remainder of the New England territory is subservient to the Boston and Maine Railroad system in which the American Express Company, controlled by the Vanderbilts, owns 30,000 shares.
To pay interest and dividends on the hundreds of millions of dollars of inflated bonds and stock which three generations of the Vanderbilts had issued, and to maintain and enhance their value, it was necessary to keep on increasingly extorting revenues. The sources of the profits were palpable. Time after time freight rates were raised, as was more than sufficiently proved in various official investigations, despite denials. Conjunctively with this process, another method of extortion was the ceaseless one of beating down the wages of the workers to the very lowest point at which they could be hired. While the Vanderbilts and other magnates were manufacturing law at will, and boldly appropriating, under color of law, colossal possessions in real and personal property, how was the law, as embodied in legislatures, officials and courts acting toward the working class ?
THE GOVERNMENT AN ENGINE OF TYRRANY.
The grievances and protests of the workers aroused no response save the ever-active one of contumely, coercion and violent reprisals. The treasury of Nation, States and cities, raised by a compulsory taxation falling heavily upon the workers, was at all times at the complete disposal of the propertied interests, who emptied it as fast as it was filled. The propertiless and jobless were left to starve ; to them no helping arm was outstretched, and if they complained, no quarter given. The State as an institution, while supported by the toil of the producers, was wholly a capitalist State with the capitalists in complete supremacy to fashion and use it as they chose. They used the State political machinery to plunder the masses, and then, at the slightest tendency on the part of the workers to resist these crushing injustices and burdens, called upon the State to hurry out its armed forces to repress this dangerous discontent.
In Buffalo, in 1890-189I, thirty-one in every hundred destitutes were impoverished because of unemployment, and in New York City twenty-nine in every hundred.5 Hundreds of millions of dollars of public funds were given outright to the capitalists, but not a cent appropriated to provide work for the unemployed. In the panic of 1893, when millions of men, women and children were out of work, the machinery of government, National, State and municipal, proffered not the least aid, but, on the contrary, sought to suppress agitation and prohibit meetings by flinging the leaders into jail. Basing his conclusions upon the (Aldrich) United States Senate Report of 1893 a report highly favorable to capitalist interests, and not unexpectedly so, since Senator Aldrich was the recognized Senatorial mouthpiece of the great vested interests Spahr found that the highest daily wage for all earners, taken in a mass, was $2.04.6
More than three-quarters of all the railroad employees in the United States received less than two dollars a day. Large numbers of railroad employees were forced to work from twelve to fourteen hours a day, and their efficiency and stamina thus lowered. Periodically many were laid off in enforced idleness ; and appalling numbers were maimed or killed in the course of duty.7 Injured or slain largely because the railroad corporations refused to expend money in the introduction of improved automatic coupling devices, these workers or their heirs were next confronted by what ? The unjust and oppressive provisions of worthless employers liability laws drafted by corporation attorneys in such a form that the worker or his family generally had almost no claim. The very judges deciding these suits were, as a rule, put on the bench by the railroad corporations.
MACHINE GUNS FOR THE OVERWORKED.
These deadly conditions prevailed on the Vanderbilt railroads even more than on any others ; it was notorious that the Vanderbilt system was not only managed in semi-antiquated ways so far as the operation was concerned, but also that its trainmen were terribly underpaid and overworked.8 In reply to a continued agitation for better hours on the part of the Vanderbilt employees, the New York Legislature passed an act, in 1892, which apparently limited the working hours of railroad employees to ten a day. There was a gleam of sunshine, but lo! when the act was critically examined after it had become a law, it was found that a little joker had been sneaked into its mass of lawyers terminology. The surreptitious clause ran to this effect : That railroad companies were permitted to exact from their employees overtime work for extra compensation. This practically made the whole law a negation.
So it turned out ; for in August, 1892, the switchmen employed by various railroad lines converging at Buffalo struck for shorter hours and more pay. The strike spread, and was meeting with tactical success ; the strikers easily persuaded men who had been hired to fill their jobs to quit. What did the Vanderbilts and their allies now do ? They fell back upon the old ruse of invoking armed force to suppress what they proclaimed to be violence. They who had bought law and had violated the law incessantly now represented that their property interests were endangered by mob violence, and prated of the need of soldiers to restore law and order. It was a serviceable pretext, and was immediately acted upon.
The Governor of New York State obediently ordered out the entire State militia, a force of 8,000, and dispatched it to Buffalo. The strikers were now confronted with bayonets and machine guns. The soldiery summarily stopped the strikers from picketing, that is to say, from attempting to persuade strikebreakers to refrain from taking their places. Against such odds the strike was lost.
If, however, the Vanderbilts could not afford to pay their workers a few cents more in wages a day, they could afford to pay millions of dollars for matrimonial alliances with foreign titles. These excursions into the realm of high-caste European nobility have thus far cost the Vanderbilt family about $15,000,000 or $20,000,000. When impecunious counts, lords, dukes and princes, having wasted the inheritance originally obtained by robbery, and perpetuated by robbery, are on the anxious lookout for marriages with great fortunes, and the American money magnates, satiated with vulgar wealth, aspire to titled connections, the arrangement becomes easy.9 Romance can be dispensed with, and the lawyers depended upon to settle the preliminaries.
TEN MILLIONS FOR A DUKEDOM.
The announcement was made in 1895 that a marriage had been arranged between Consuelo, a young daughter of William K. Vanderbilt, and the Duke of Marlborough. The wedding ceremony was one of showy splendor ; millions of dollars in gifts were lavished upon the couple. Other millions in cash, wrenched also from the labor of the American working population, went to rehabilitate and maintain Blenheim House, with its prodigal cost of reconstruction, its retinue of two hundred servants, and its annual expense roll of $100,000. Millions more flowed out from the Vanderbilt exchequer in defraying the cost of yachts and of innumerable appurtenances and luxuries. Not less than $2,500,000 was spent in building Sutherland House in London. Great as was this expense, it was not so serious as to perturb the duchess father ; his $50,000,000 feat of financial legerdemain, in 1898, alone far more than made up for these extravagant outlays. The Marlborough title was an expensive one ; it turned out to be a better thing to retain than the man who bore it ; after a thirteen years compact, the couple decided to separate for good and sufficient reasons, into which it is not our business to inquire. All told, the Marlborough dukedom had cost William K. Vanderbilt, it was said, fully $10,000,000.
Undeterred by Cousin Consuelos experience, Gladys Vanderbilt, a daughter of Cornelius, likewise allied herself with a title by marrying, in 1908, Count Laslo Szechenyi, a sprig of the Hungarian feudal nobility. The wedding, naively reported a scribe, was characterized by elegant simplicity, and was witnessed by only three hundred relatives and intimate friends of the bride and bridegroom. The elegant simplicity consisted of gifts, the value of which was estimated at fully a million dollars, and a costly ceremony. If the bride had beauty, and the bridegroom wit, no mention of them was made ; the one fact conspicuously emphasized was the all-important one of the bride having a fortune in her own right of about $12,000,000.
The precise sum which made the Count eager to share his title, no one knew except the parties to the transaction. Her father had died, in 1899, leaving a fortune nominally reaching about $100,000,000. Its actual proportions were much greater. It had long been customary on the part of the very rich, as the New York State Board of Tax Commissioners pointed out, in 1903, to evade the inheritance tax in advance by various fraudulent devices. One of these was to inclose stocks or money in envelopes and apportion them among the heirs, either at the death bed, or by subsequent secret delivery.10
Like his father, Cornelius Vanderbilt had died of apoplexy. In his will he had cut off his eldest son, Cornelius, with but a puny million dollars. And the reason for this parental sternness ? He had disapproved of Cornelius choice in marriage. To his son, Alfred, the unrelenting multimillionaire left the most of his fortune, with a showering of many millions upon his widow, upon Reginald, another son, and upon his two daughters. Cornelius objected to the injustice and hardship of being left a beggar with but a scanty million, and threatened a legal contest, whereupon Alfred, pitying the dire straits to which Brother Cornelius had been reduced, presented him with six or seven millions with which to ease the biting pangs of want.
Marriages with titled foreigners have proved a drain upon the Vanderbilt fortune, although, thanks to their large share in the control of laws and industrial institutions, the Vanderbilts possess at all times the power of recouping themselves at volition. The American marriages, on the other hand, contracted by this family, have interlinked other great fortunes with theirs.
One of the Vanderbilt buds married Harry Payne Whitney, whose father, William C. Whitney, left a large fortune, partly drawn from the Standard Oil Company, and in part from an industrious career of corruption and theft. The elder Whitney, according to facts revealed in many official investigations and lawsuits, debauched legislatures and common councils into giving him and his associates public franchises for street railways and for other public utilities, and he stole outright tens of millions of dollars in the manipulation of the street railways in various cities. His crimes, and those of his associates, were of such boldness and magnitude that even the cynical business classes were moved to astonishment.11 Cornelius Vanderbilt, jr., married a daughter of R.T. Wilson, a multimillionaire, whose fortune came to a great extent from the public franchises of Detroit. The initial and continued history of the securing and exploitation of the street railway and other franchises of that city has constituted a solid chapter of the most flagrant fraud. William K. Vanderbilt, jr., married a daughter of the multimillionaire Senator Fair, of California, whose fortune, dug from mines, bought him a seat in the United States Senate. Thus, various multimillionaire fortunes have been interconnected by these American marriages.
DIVERSITY OF THE VANDERBILT POSSESSIONS.
The fortune of the Vanderbilt family, at the present writing, is represented by the most extensive and different forms of property. Railroads, street railways, electric lighting systems, mines, industrial plants, express companies, land, and Government, State and municipal bonds these are some of the forms. From one industrial plant alone the Pullman Company the Vanderbilts draw millions in revenue yearly. Formerly they owned their own palace car company, the Wagner, but it was merged with the Pullman. The frauds and extortions of the Pullman Company have been sufficiently dealt with in the particular chapter on Marshall Field. In the far-away Philippine Islands the Vanderbilts are engaged, with other magnates, in the exploitation of both the United States Government and the native population. The Visayan Railroad numbers one of the Vanderbilts among its directors. This railroad has already received a Government subsidy of $500,000, in addition to the free gift of a perpetual franchise, on the ground that the railroad was necessary to the development of the archipelago.
But the Vanderbilts principal property consists of the New York Central Railroad system. The Union Pacific Railroad, controlled by the Harriman-Standard Oil interests, now owns $14,000,000 of stock in the New York Central system, and has directors on the governing board. The probabilities are that the voting power of the New York Central, the Lake Shore and other Vanderbilt lines is passing into the hands of the Standard Oil interests, of which Harriman was both a part and an ally. This signifies that it is only a question of a short time when all or most of the railroads of the United States will be directed by one all-powerful and all-embracing trust.
But this does not by any means denote that the Vanderbilts have been stripped of their wealth. However much they may part with their stock, which gives the voting power, it will be found that, like William H. Vanderbilt, they hold a stupendous amount in railroad, and other kinds of bonds. As the Astors and other rich families were perfectly willing, in 1867, to allow Commodore Vanderbilt to assume the management of the New York Central on the ground that under his bold direction their profits and loot would be greater, so the lackadaisical Vanderbilts of the present generation perhaps likewise looked upon Harriman, who proved his ability to accomplish vast fraudulent stock-watering operations and consolidations, and to oust lesser magnates. The New York Central, at this writing, still remains a Vanderbilt property, not so distinctively so as it was twenty years ago, yet strongly enough under the Vanderbilt domination. According to Moody, this railroads net annual income in 1907 was $34,000,000.32 In alluringly describing its present and prospective advantages and value Moody went on :
To begin with, it has entry into the heart of New York City, with extensive passenger and freight terminals, all of which are bound to be of steadily increasing worth as the years go by, as New York continues to grow in population and wealth. It has, in addition, a practically `water grade line all the way from New York to Chicago, and, therefore, for all time must necessarily have a great advantage over lines like the Erie, the Lackawanna and others with heavy grades, many curves, etc. It has a myriad of small feeders and branches in growing and populous parts of the State of New York, as well as in the sections further to the west. It touches the Great Lakes at various points, operates water transportation for freight to all parts of the lakes ; enters Chicago over its own tracks and competes aggressively with the Pennsylvania for all traffic to and from all parts of the Mississippi Valley and the West and Southwest. It is in no danger from disastrous competition in its own chosen territory, therefore, and constantly receives income of vast importance through a network of feeders which penetrate the territory of some of the largest of its rivals.
THE SORT OF ABILITY DISPLAYED.
The particular kind of ability by which one man, followed by his descendants, obtained the controlling ownership of this great railroad system, and of other properties, has been herein adequately set forth. Long has it been the custom to attribute to Commodore Vanderbilt and successive generations of Vanderbilts an almost supernatural constructive genius, and to explain by that glib phrase their success in getting hold of their colossal wealth. This explanation is clumsy fiction that at once falls to pieces under historical scrutiny. The moment a genuine investigation is begun into the facts, the glamour of superior ability and respectability evaporates, and the Vanderbilt fortune stands out, like all other fortunes, as the product of a continuous chain of frauds.
Just as fifty years ago Commodore Vanderbilt was blackmailing his original millions without molestation by law, so to-day the Vanderbilts are pursuing methods outside the pale of law. Not all of the facts have been given, by any means ; only the most important have been included in these chapters. For one thing, no mention has been made of their repeated violations of a law prohibiting the granting of rebates a law which was stripped of its imprisonment clause by the railroad magnates, and made punishable by fine only. Time and time again in recent years has the New York Central been proved guilty in the courts of violating even this emasculated law. From the very inception of the Vanderbilt fortune the chronicle is the same, and ever the same legalized theft by purchase of law, and lawlessness by evasion or defiance of law. With fraud it began, by fraud it has been increased and extended and perpetuated, and by fraud it is held.
1 Minutes of the New York City Board of Estimate and Apportionment Financial and Franchise Matters, 1907: 1071-1085. It will thus be seen, reported Harry P. Nichols, Engineer-in-Charge of the Franchise Bureau, that the railroad is at present, and has been for twenty years, occupying more than three hundred city lots, or something less than twenty acres, without compensation to the city.
2 The facts as to the expenses incurred under the act of 1892 were stated to the author by Ernest Harvier, a member of the Change of Grade Commission representing New York City in supervising the work.
3 The New York Central has long compelled the New York, New Haven and Hartford Railroad to pay seven cents toll for every passenger transported south of Woodlawn, and also one-third of the maintenance cost, including interest, of the terminal. In reporting an effort of the New York, New Haven and Hartford Railroad to have these terms modified, the New York Times stated in its financial columns, issue of December 25, 1908 : As matters now stand the New Haven, without its consent, is forced to bear one-third of the charge arising from the increased capital invested in the Centrals terminal.
4 The author is so informed by an official who represented New York Citys legal interests at this session and successive Legislative sessions, and who was thoroughly conversant with every move. See Chapter 80, Laws of 1898, Laws of New York, 1898, ii : 142. The amendment declared that Section 24 of the Stock Corporation Law did not apply to a railroad corporation.
5 Encyclopedia of Social Reform, Edition of 1897: 1073.
6 The Present Distribution of Wealth in The United States.
7 The report of the Wisconsin Railway Commissioners for 1894, Vol. xiii., says: In a recent year more railway employees were killed in this country than three times the number of Union men slain at the battle of Lookout Mountain, Missionary Ridge and Orchard Knob combined. ... In the bloody Crimean War, the British lost 21,000 in killed and wounded not as many as are slain, maimed and mangled among the railroad men of the country in a single year. Various reports of the Interstate Commerce Commission state the same facts.
8 Semi-antiquated ways. Only recently the Railway Age Gazette, issue of January, 1909, styled the New York Centrals directors as mostly concentrated absurdities, physically incompetent, mentally unfit, or largely unresident and inattentive.
9 More than 500 American women have married titled foreigners. The sum of about $220,000,000, it is estimated (1909), has followed them to Europe.
10 See Annual Report of the New York State Board of Tax Commissioners, New York Senate Document, No. 5, 1903:10.
11 For a detailed account see that part of this work, Great Fortunes from Public Franchises.
12 Moodys Magazine, issue of August, 1908.