Cornelius was born in Port Richmond, Staten Island, New York in 1794. His parents were poor and his father earned his living by providing low level transportation service. Cornelius went to work at age 11, and was employed by his father. He married his first cousin, Sophia Johnson when he was 19 and she 18 years old.
Between the years 1805 and 1810 Cornelius worked for his father and for the ferry services serving Staten Island. In 1810, when he was 16 years old, he convinced his parents to lend him $100 so he could buy a sailboat to start his own ferry and freight business between Staten Island and New York City. There was a lot of competition in the ferry service business, but Vanderbilt competed on the basis of lower fares, asking as little as 18 cents per trip. He was quite successful and was able to repay the $100 loan to his parents within one year.
During The War of 1812, forts around New York City expanded and Vanderbilt obtained a government contract to supply them. Between 1814 and 1818 he expanded with additional schooners for freight and passenger services in Long Island Sound and in the coastal trade from New England to Charleston, South Carolina.
In 1818 he sold all his sailing vessels and became a steamboat captain, partnering with Thomas Gibbons who operated a ferry service between New Brunswick, New Jersey and New York City. The Vanderbilt-Gibbons partnership charged only a quarter of the competitive fares. It soon became the dominant ferry service on the busy Philadelphia-New York City route. During the 1818-1829 time period the partnership made a fortune.
In 1829 Vanderbilt decided to go on his own and began passenger and freight service on the New York City-Peekskill Hudson River route. Again he competed on the basis of price and quickly eliminated the competition. He then expanded his service to Albany, New York. He also opened passenger and freight service to the Long Island Sound, Providence and Connecticut areas. By the 1840s Vanderbilt had a fleet of 100 steamships and he had become the largest employer in the United States. At that point he not only competed on the basis of price but also on the basis of comfort, size, speed, and luxury.
In 1849, during the California gold rush, Vanderbilt began steamship service to San Francisco by way of Nicaragua. His competitors used the Panama route, which was longer. Vanderbilt was able to cut two days off the length of the trip to San Francisco. This part of his transportation business netted him over one million dollars per year.
In the 1860s he realized the future for the transportation industry was not by way of water, but by rail. Instead of building new railroads, he began buying existing ones. He acquired the Long Island Railroad, followed by the New York and Harlem Railroad, and the Hudson River Railroad. In 1867 he also acquired the Central Railroad and merged it with his other railroads. As he had done with his shipping ventures, he focused on improving service, and on upgrading capital equipment while maintaining low fares. He eventually merged all his initial acquisitions into what became known as the New York Central Railroad. It is estimated that he made $25 million in the first five years of his railroad venture.
His son, William Henry Vanderbilt, convinced his father to expand rail service towards Chicago. To do so they acquired the Lakeshore and Michigan Railway, the Michigan Southern, the Canadian Southern and the Michigan Central Railroad, creating for that time the America’s largest railway system.
Vanderbilt had never engaged in philanthropy, but in 1875 perpetuated his name through a gift of $1 million ($260 million today) to Nashville’s Central University. The Nashville Central University became the Vanderbilt University in Nashville, Tennessee.
Vanderbilt died in 1877 at the age of 83. He left the bulk of his estate to his son William H. Vanderbilt and gave modest amounts of half a million dollars to each of his other nine surviving children. The value of the Vanderbilt estate in today’s dollars would have been about $26 billion. Three daughters and a son contested the will on the grounds that their father was of unsound mind and under the influence of his son William and the spiritualists he regularly consulted on. The court battle lasted more than a year and was ultimately won outright by William Henry Vanderbilt, who then increased the bequests to his siblings and paid their legal fees.
Editor Phil Robertson is an award-wining journalist and graphic designer. With a degree from the University of Florida’s School of Journalism, his career in journalism and publishing spans over 30 years, and includes positions as editor and publisher for several newspapers and magazines. During his career he has received a first-place award for investigative journalism from the Society of Newspaper Editors, and five ADDY awards for advertising design.