William Henry Vanderbilt

William Henry Vanderbilt's involvement with early railroad development leads him to being involved in one of America's earliest rail accidents.

On November 11, 1833, he is a passenger on a Camden and Amboy train that derails in the meadows near Hightstown, New Jersey, when a coach car axle breaks because of a hot journal box.

He spends a month recovering from injuries that include two cracked ribs and a punctured lung.

Uninjured in this accident is former U.S. President John Quincy Adams, riding in the car ahead of the one that derailed.

Adams's son is killed in the accident.

Cornelius Vanderbilt had in 1870 consolidated two of his key lines into the New York Central and Hudson River Railroad, one of the first giant corporations in American history.

In 1869, he had directed the Harlem to begin construction of the Grand Central Depot on 42nd Street in Manhattan.

Finished in 1871, it serves as his lines' terminus in New York.

He has sunk the tracks on 4th Avenue in a cut that will later become a tunnel, and 4th Avenue has become Park Avenue.

He also donates to churches around New York, including a gift to the Moravian Church on Staten Island of eight and a half acres (thirty-four thousand square meters) for a cemetery in which he will eventually be buried.

Vanderbilt had relinquished his presidency of the Stonington Railroad during the California gold rush, but during the 1850s had taken an interest in several railroads , serving on the boards of directors of the Erie Railway, the Central Railroad of New Jersey, the Hartford and New Haven, and the New York and Harlem (popularly known as the Harlem).

In 1863, Vanderbilt had taken control of the Harlem in a famous stockmarket corner, and had been elected its president.

He will later explain that he had wanted to show that he could take this railroad, which was generally considered worthless, and make it valuable.

It has a key advantage: it is the only steam railroad to enter the center of Manhattan, running down 4th Avenue (later Park Avenue) to a station on 26th Street, where it connects with a horse-drawn streetcar line.

From Manhattan it runs up to Chatham Four Corners, in upstate New York, where it has a connection to the railroads running east and west.

Vanderbilt had brought his son William Henry Vanderbilt in as vice-president of the Harlem.

William had had a nervous breakdown early in life, and his father had sent him to a farm on Staten Island.

But he proves himself a good businessman, and had eventually becomes the head of the Staten Island Railway in 1862.

Though the Commodore had once scorned him, he is impressed by William's success, and will eventually make him operational manager of all his railroad lines.

In 1864, the Commodore had sold his last ships, concentrating on railroads.

Once in charge of the Harlem, Vanderbilt had encountered conflicts with connecting lines.

In each case, the strife had ended in a battle that Vanderbilt won.

He bought control of the Hudson River Railroad in 1864, the New York Central Railroad in 1867, and the Lake Shore and Michigan Southern Railway in 1869.

He later bought the Canada Southern as well.

American railroad track miles has more than doubled in the twenty-five years after the American Civil War changing the face of America forever.

American railroads allow products made in the East to be shipped to the expanding West less expensively than in previous years.

This allows for an economy of scale—larger, more efficient factories.

The agricultural heartland of America is no longer confined to a market of single day's trip by wagon.

Railroad and railroad construction have become one of the largest industries during this era.

By 1881, one out of thirty-two people in the United States is either employed by a railroad or engaged in railroad construction.

Starting about 1877, two great railroad developers, William H. Vanderbilt and Jay Gould, had begun competing for the railroad traffic along the south shore of the Great Lakes.

By 1878, William Vanderbilt had gained a monopoly on rail traffic between Buffalo, New York; Cleveland, Ohio; Detroit, Michigan; and Chicago, because he owns the only railroad linking these cities—the Lake Shore and Michigan Southern Railway.

In addition, he is the richest man in America at this time.

By 1881, Gould, who is considered the most ruthless financial operator in America, controls about fifteen percent of all U.S. railroad mileage, most of it west of the Mississippi River.

Gould's major railroad east of the Mississippi River is the three hundred and thirty-five-mile- (five hundred and thirty-nine kilometer-) Wabash, St. Louis and Pacific Railway (Wabash).

The Wabash mainline runs from St. Louis, Missouri to Toledo, Ohio where it is forced to deliver its railroad traffic to Vanderbilt's Lake Shore Railroad for delivery to the eastern United States.

Gould and Vanderbilt together oversee all east-west rail traffic in the mid-west.

The Seney Syndicate, owners of a three hundred and fifty mile-mile (five hundred and sixty kilometer) railroad, the Lake Erie and Western Railroad, are interested in tapping new sources of revenue.

The stage is set for the creation of the New York, Chicago and St. Louis Railroad.

The Seney Syndicate, headed by George I. Seney, had met at Seney's New York bank and organized the New York, Chicago and St. Louis Railway Company on February 3, 1881.

The original proposal for the NYC&StL is a three hundred and forty-mile (five hundred and fifty kilometer) railroad west from Cleveland, Ohio to Chicago, Illinois with a three hundred and twenty-five-mile (five hundred and twenty-five kilometer) branch to St. Louis, Missouri.

The New York, Chicago and St. Louis Railway Company buys the Buffalo, Cleveland and Chicago Railway, a railroad that been surveyed from the west side of Cleveland, Ohio to Buffalo, New York running parallel to Vanderbilt's Lake Shore and Michigan Southern Railway, on April 13, 1881.

The idea of an east-west railroad across northern Ohio is very popular with the people of Ohio, who want to break the high freight rates charged by Gould and Vanderbilt.

No one is less popular in Ohio than William Vanderbilt since the December 29, 1876 collapse of Lake Shore and Michigan Southern Railway's Ashtabula River trestle, where sixty-four people had been injured and nninety-two were killed or died later from injuries.

Another reason for the popularity of the New York, Chicago and St. Louis Railway is the positive economic impact on cities that any new railroad goes through at this time.

During a newspaper war to attract the New York, Chicago and St. Louis, the Norwalk, Ohio Chronicle Newspaper referrs to the New York, Chicago and St. Louis as "... double-track nickel-plated railroad."

The New York, Chicago and St. Louis will adopt the nickname and it will become better known as the Nickel Plate Road.

Thomas Edison switches on his Pearl Street generating station's electrical power distribution system, which provides 110 volts direct current (DC) to fifty-nine customers in one square mile of lower Manhattan, on September 4, 1882,

This is considered by many as the day that began the electrical age; the station is the first of many.

Earlier in the year, in January 1882, Edison had switched on the first steam-generating power station at Holborn Viaduct in London.

The DC supply system provides electricity supplies to street lamps and several private dwellings within a short distance of the station.

Edison had formed the Edison Electric Light Company in New York City in 1878 with several financiers, including J. P. Morgan and the members of the Vanderbilt family.

After making the first public demonstration of his incandescent light bulb on December 31, 1879, in Menlo Park, Edison had patented a system for electricity distribution in 1880, which is essential to capitalize on the invention of the electric lamp.

Edison had founded the Edison Illuminating Company on December 17, 1880

The company establishes the first investor-owned electric utility in New York City.

It had been decided to start building the Nickel Plate line along the surveyed route between Cleveland, Ohio and Buffalo, New York rather than build the branch to St. Louis, Missouri.

Five hundred days later, the Nickel Plate's five hundred and thirteen mile-mile (eight hundred and twenty-five kilometer) single-track mainline from Buffalo, New York to Chicago is complete.

The railroad is estimated to require ninety thousand long tons (eighty thousand metric tons) of steel rails, each weighing sixty pounds per linear yard (thiry kilograms per meter)) and one and a half million oak crossties.

Additionally, the railroad requires forty-nine major bridges.

It is characterized by long sections of straight track, mild grades and impressive bridges.

The Nickel Plate runs its first trains over the entire system on October 16, 1882.

During construction, Vanderbilt and Gould had watched with great interest.

If either of them can acquire the Nickel Plate, they can end the threat to their railroads.

If the Nickel Plate remains independent, it will be able to create a substantial dent in both entrepreneurs' railroad earnings.

Vanderbilt had tried to lower the value of the Nickel Plate by organizing a campaign to smear its reputation before a train ever ran on its tracks.

If Vanderbilt had been successful, he could have scared the Seney Syndicate into selling to him or driven the railroad company into bankruptcy.

However, Vanderbilt's plan had come with two important risks.

If he slandered the line, he risked chasing the Seney Syndicate into an alliance with Gould.

The other risk was that his plan to smear the Nickel Plate's reputation might fail and it could quickly grow.

Vanderbilt had claimed the road was being built with substandard materials and it would use unsafe practices once completed.

He had succeeded in creating long-standing rumors about the line, but had failed to devalue the company or scare the investors.

The cost of construction had been higher than expected and the Seney Syndicate had begun to negotiate with Gould to purchase the railroad, but, unlike Vanderbilt, Gould lacks the capital.

Frustrated at the failing talks, Gould had broken off negotiations and had given up on his attempt to break Vanderbilt.

In early 1881, Vanderbilt could have had the Nickel Plate for one million dollars, equal to $24,082,759 today.

He realized if he allowed Gould to gain control of the Nickel Plate his monopoly on rail traffic from Toledo, Ohio, to the east would be broken.

He had decided he will do anything to keep the Nickel Plate out of Gould's hands.

On October 25, 1882, (a few days after the first trains ran) the Seney Syndicate sells the Nickel Plate to Vanderbilt for 7.2 million dollars, equal to $173,395,862 today.

Vanderbilt transfers it to his Lake Shore and Michigan Southern Railway.

However, Vanderbilt has a problem: he cannot run the business into the ground or it will fall into receivership and someone else will buy it.

He cannot close the Nickel Plate either, because it had cost a fortune to buy.

So, the Nickel Plate Road does business, but just enough to keep it solvent.

By the advent of the 1920s, the Nickel Plate will be an obscure line that earns its keep through the transfer of freight from other rail connections.

During the same period, Vanderbilt's Lake Shore and Michigan Southern will prosper and expand.

The United States Congress creates the Interstate Commerce Commission, which is tasked with enforcing equal rates for all railroad freight, in 1887, but by now Standard is depending more on pipeline transport.

Standard Oil has passed its peak of power over the world oil market by the 1880s, despite the formation of the Standard Oil Trust in 1882 and its perceived immunity from all competition.

Rockefeller finally gives up his dream of controlling all the world’s oil refining, admitting later, “We realized that public sentiment would be against us if we actually refined all the oil.” (Segall, Grant (2001). John D. Rockefeller: Anointed With Oil. Oxford University Press. p. 67.)

Over time foreign competition and new finds abroad will erode Rockefeller’s dominance.

Rockefeller had created one of his most important innovations in the early 1880s.

Rather than try to influence the price of crude oil directly, Standard Oil had been exercising indirect control by altering oil storage charges to suit market conditions.

Rockefeller now decided to order the issuance of certificates against oil stored in its pipelines.

These certificates had become traded by speculators, thus creating the first oil-futures market, which effectively sets spot market prices from now on.

The National Petroleum Exchange had opened in Manhattan in late 1882 to facilitate the oil futures trading.

Even though eighty-five percent of world crude production is still coming from Pennsylvania wells in the 1880s, overseas drilling in Russia and Asia has begun to reach the world market.

Robert Nobel has established his own refining enterprise in the abundant and cheaper Russian oil fields, including the region’s first pipeline and the world’s first oil tanker.

The Paris Rothschilds have joined the fray, providing financing.

Additional fields have been discovered in Burma and Java.

Even more critical, the invention of the light bulb has gradually began to erode the dominance of kerosene for illumination.

But Standard Oil adapts, developing its own European presence, will soon expand into natural gas production in the U.S., then into gasoline—formerly considered a waste product—for automobiles.

Standard Oil has moved its headquarters to New York City at 26 Broadway, and Rockefeller has become a central figure in the city’s business community, buying a personal residence in 1884 on 54th street near the mansions of other magnates such as William Vanderbilt.

Rockefeller takes the new elevated train to his downtown office daily despite personal threats and constant pleas for charity.