A railroad journey from New York to San Francisco is a trip through time. It begins like an archeological dig—as I found recently when I crossed the continent on Amtrak’s Lake Shore Limited and California Zephyr, two storied trains that connect in Chicago. When the Lake Shore departs Penn Station, it rolls through Manhattan’s foundations, under steel girders and past concrete walls below the glass-and-masonry forest of buildings. In the heart of the nation’s largest city, everything is built on railroads, physically as well as historically. That was obvious in the 19th century—especially in the decade after the Civil War, when they dominated the economy and daily life as no industry has before or since. When the stakes are that high, people fight for them—and if the prize is a throne, they fight dirty.
Who was America’s railroad king? The great financiers of the 1860s may not have cared about the title, bestowed by newspapers, but they obsessed over the kingdom: tens of thousands of miles of track that combined into a national network after the Civil War. And the Lake Shore Limited offers a fine view of the place where one of their first great rivalries burst into the public eye. Soon after the train emerges from the tunnel that runs up Manhattan’s Upper West Side, the Hudson River appears on the left, a wide tidal estuary between New York’s parks and waterfront buildings and the great cliffs of New Jersey’s Palisades. In 1868, exactly 150 years ago, a paddlewheel steamboat ferry chugged over this waterway toward Jersey City, carrying the panicked directors of the Erie Railway, one of the nation’s largest corporations, who were fleeing the police.
It would be more accurate to say they were fleeing Cornelius Vanderbilt. A tall, lean 73-year-old with long white sideburns, he had started out by working an open boat in New York Harbor, rising to become first a steamship mogul and then a railroad tycoon. Proud and fierce, he looked like a man who, in his younger days, had pounded more than one opponent into unconsciousness. He matched ruthlessness with strategic insight. Charles Francis Adams Jr., grandson of President John Quincy Adams and brother of historian Henry, wrote in 1869, “He involuntarily excites feelings of admiration for himself and alarm for the public... As trade now dominates the world, and railways dominate trade, his object has been to make himself the virtual master of all by making himself absolute lord of the railways.”
In early 1868, he controlled the New York Central, one of two railroads that connected the interior of the United States with New York City. The Erie was the other, and he began to buy all of its stock. Daniel Drew, an old but utterly untrustworthy friend, served as Erie’s treasurer; he concocted a plan to flood the market with new shares, preventing Vanderbilt from buying a controlling stake in the company and diluting the value of his investment. The Erie board approved the plan, which had only one flaw: It was illegal. At Vanderbilt’s request, a judge issued warrants for the directors’ arrest. The New York Herald reported “a stampede” to the docks by the Erie officials, “each one lugging off an account book, desk, [and] drawer.” They also took millions of dollars in cash and securities.
That night, two young members of the board remained behind to dine at Delmonico’s, the most luxurious restaurant in town. One was a slender, silent man with thinning hair and a heavy black beard named Jay Gould. The other was Jim Fisk, a hearty, talkative, corpulent fellow “with luxuriant tufts of hair and a Dundreary mustache,” a reporter wrote. At the sight of a policeman, they darted into a carriage to the Canal Street dock and jumped into a rowboat. They steered out into the Hudson, only to be swamped by a ferry in the darkness. Gould and Fisk grabbed at the ferry’s guardrails and pulled themselves aboard, and eventually joined the other directors, who were holing up in Jersey City’s Taylor Hotel, outside the jurisdiction of New York’s police. It was as if the executives of Apple were to break every law on the books to stop a takeover by Google, set fire to their headquarters, and flee to Mexico with the FBI in hot pursuit. Americans were agog. The press called it the “Erie War.”
It was the start of one of the great American rivalries, with Vanderbilt on one side and, on the other, young Gould and Fisk, who largely pushed Drew aside. The cunning Gould guided the fugitives’ strategy over the coming days, as the chatty Fisk handled publicity. He insisted to the press that the Erie directors fought to prevent a railroad monopoly under Vanderbilt, who already controlled a system that stretched 740 miles from end to end, carrying more than seven million passengers and four million tons of freight annually, a scale unimaginable for any business a generation earlier. Fisk sometimes spoke to reporters as he devoured gourmet meals, declaring that they wanted to keep the cost of food low for “the poorer classes especially.”
Gould knew the key was to legalize all that new stock, so he went to Albany to lobby the legislature. When he showed up in New York State, an officer came to arrest him. “You may go with me,” Gould told him. “I will still be in your custody.” New York lost a fugitive, but Gould gained a well-paid bodyguard. Most of the legislators filed through his hotel room and collected checks, then passed a bill to legalize all the new Erie stock.
Gould and Fisk thought they had won their first round, only to discover that Drew had double-crossed them. The arrest warrants remained in effect, and Drew wanted to go home. So he made a secret deal, returning Vanderbilt’s money for the shares he had bought. The judge agreed to lift the warrants. Drew retired as treasurer, allowing the furious Gould and Fisk to take over as Erie’s president and vice president, respectively. Round one turned out to be a tie.
I took the Lake Shore for the stunning water-level view of the Hudson, but also because the train is named after the Lake Shore and Michigan Southern Railway—the Lake Shore, for short—which was a great prize in this epic rivalry. The train crosses the river into Albany and heads west, rolling through upstate New York’s old industrial heartland overnight. This was the route of Vanderbilt’s New York Central Railroad, which extended to the state’s western boundary. Unfortunately for him, the Erie Railway terminated nearby, creating a direct conflict. On the great chessboard of the nation’s rapidly growing railways, Gould and Fisk maneuvered against Vanderbilt to control a connecting line to Chicago, the capital of America’s burgeoning interior and the hub of dozens of railways that spread like a spiderweb throughout the Midwest.
In 1869, the year after the Erie War, a chain of railroads between Chicago and New York consolidated into the Lake Shore Railway. Vanderbilt bought a large block of its stock; if he didn’t control it outright, neither did his rivals, and he was content. That changed when he discovered that Gould and Fisk had made a secret agreement with the most influential Lake Shore executive, treasurer LeGrand Lockwood, to send all its passengers and freight exclusively over the Erie. But Vanderbilt knew Lockwood had bought a huge number of Lake Shore shares on margin—that is, on credit—which made him vulnerable. The New York Central’s chief patiently waited until the fall, when the financial markets grew shaky, then dumped all his Lake Shore stock. It helped to cause a panic known as Black Friday, and it bankrupted Lockwood. Then Vanderbilt used the newfangled transatlantic telegraph to borrow money from Baring Brothers in London and bought control of the Lake Shore at a bargain price. In fact, his massive purchases helped to stabilize Wall Street and prevent a recession. Round two to Vanderbilt.
In 1870, Gould and Fisk struck back by slashing rates on cattle cars from Chicago to New York. Vanderbilt’s New York Central matched them. They kept cutting, until the price fell from $125 per car to just $1. As soon as Vanderbilt followed suit, they announced to reporters that they previously had purchased 6,000 head of livestock in Chicago, and had shipped them nearly for free over the Central. Vanderbilt was personally humiliated. Round three to Gould and Fisk.
The rivalry delighted the public. It put faces on the new corporate economy, and it was often hilarious, as these insanely rich men laid traps and mocked each other to reporters. But it didn’t last. In 1872, a rival for Fisk’s mistress shot him dead on the steps of Manhattan’s Grand Central Hotel. Soon after, Gould lost control of the Erie to a hostile takeover, though he went on to greater things. Vanderbilt, aided by his capable son William, managed his business adroitly, amassing one of the most important transportation systems in history. The final round was no contest. He remained America’s railroad king until his death as the nation’s richest man in 1877.
AS YOU APPROACH Chicago today on the Lake Shore Limited, rolling through midwestern farmland and the mills of Gary, Indiana, the city’s gleaming skyscrapers appear in the distance across Lake Michigan. You pass by freight trains and crowded rail yards on the last few miles before reaching Union Station, with its historic and palatial great hall. It’s a commercial powerhouse of a town, ideally located in the center of the country—which is why it’s still the great intersection of Amtrak’s intercity passenger service. It’s telling that Vanderbilt reached his greatest height of wealth and power by connecting New York to Chicago, because he always had a keen sense of America’s economic center of gravity. The midwestern city tripled in population from 1850 to 1860, then doubled again by 1870, reaching 300,000. Even after the great fire of 1871 left 100,000 people homeless, Chicago grew to 500,000 residents by the end of the decade.
Here, no less than in New York, ambitious men battled for great stakes. Two years after Gould lost control of the Erie and left the field to Vanderbilt, another railroad rivalry was about to ensnare Chicago’s greatest private detective. This was no struggle over stock certificates and freight rates; it involved revolvers, shotguns, incendiary devices and undercover agents. Before it ended, a half dozen people would be killed, and the great question was whether one of them would be the famous detective himself.
His name was Allan Pinkerton. A squint-eyed, bearded immigrant from Scotland, he had started Pinkerton’s National Detective Agency in Chicago before the Civil War. Pinkerton worked for banks and railroads, dispatching agents to infiltrate gangs of counterfeiters, safecrackers, pickpockets and con artists, with great success. But his deadliest enemy had little in common with these urban criminals: Jesse James, who, with his brother Frank and their partners, the Youngers, formed the most famous and perhaps most successful bandit gang in American history.
The California Zephyr rolls just north of Missouri, through southern Iowa, after crossing the Mississippi from the broad, flat fields of Illinois around sundown. The James-Younger Gang held up their first train in Adair, Iowa, on July 21, 1873, just 30 miles north of the Zephyr’s route. Pinkerton was hired to hunt them down.
For their second train robbery, they chose Gads Hill in southeastern Missouri on the Iron Mountain Railway, which ran from St. Louis to Arkansas. On January 31, 1874, five of the bandits rode into the isolated village on horseback, put the handful of residents under guard, and flagged down a southbound train. They forced the Adams Express messenger on board to open the safe in the baggage car as one of the bandits cheerfully signed the waybook with “Robbed at Gad’s Hill.” Disappointed in the take, they took the unusual step (for this gang) of robbing the passengers. They demanded to see everyone’s hands. “They stated that they did not want to rob workingmen or ladies, but the money and valuables of the plug-hat gentlemen were what they sought,” the St. Louis Republican reported. One of the gang’s leaders asked a minister to pray for him; the other quoted Shakespeare. Indeed, the selection of the spot may have been a Shakespearean joke, since Gad’s Hill is where Prince Hal robs Falstaff after Falstaff robs the pilgrims in Henry IV, Part 1. Certainly the bandits had flair. After they rode away, the train crew found they had left a press release. “The most daring robbery on record,” it began. It described the operation accurately, with a blank for the amount stolen.
Frank James, older brother of Jesse, was exceptionally fond of Shakespeare, and Pinkerton soon identified the James and Younger brothers of Missouri as the culprits. To break up the gang, he used his usual methods, dispatching three of his men to infiltrate the group. One of the detectives rode a freight train to Kearney, Missouri, went to the farmhouse of the James brothers’ mother, Zerelda Samuel, and asked for work. The next day he was found on a country road, dead from three bullet wounds.
Detectives Louis J. Lull and John Boyle were sent to St. Clair County to investigate the Youngers—Cole, Jim, John and Bob. Former deputy sheriff Edwin Daniels was guiding the agents through the wooded, hilly county on horseback when Jim and John Younger galloped up behind them. John Younger leveled a double-barreled shotgun and ordered the trio to stop. Detective Boyle, a little ahead of the others, immediately spurred his horse and escaped. The Youngers ordered the other two to unbuckle their pistol belts. As Daniels tried to talk his way out of the situation, Detective Lull reached behind his back and grasped a small Smith & Wesson No. 2 pistol. He whipped it out and fired at John Younger. The bullet tore through his throat, but in John’s dying moment he pulled the trigger of his shotgun, firing a blast into Lull’s right arm. Jim Younger shot Lull in the side, then fired at Daniels, hitting him in the throat as well. Only Jim Younger survived.
Pinkerton had never suffered such losses. “I know that the Jameses and the Youngers are desperate men, and that when we meet it must be the death of one or both of us,” he said, on learning of the killings. “My blood was spilt, and they must repay. There is no use talking; they must die.”
He waited more than a year to strike back. “Now for the battle,” he wrote to a local contact. “It makes us feel like laughing at the great preparations we are making to tackle 2 or 3 men. Still, they have many friends. We may set them down as legion.” By now he grasped that the James and Younger brothers were no ordinary criminals. They were former Confederate guerrillas, survivors of a murderous neighbor-against-neighbor struggle. They were ruthless, and had the loyalty of Missourians who also had fought for the South.
After dark on January 25, 1875, a special train dropped off a party of detectives near Zerelda Samuel’s house. They lit a cloth wick wrapped around an iron ball that was filled with a combustible liquid, smashed a window and threw it in, hoping to start a fire that would drive the James brothers outside. But Jesse and Frank had left earlier that night—and the sphere superheated and exploded. One metal fragment mangled Zerelda’s arm, and another killed eight-year-old Archie Samuel, Jesse and Frank’s half-brother. The startled Pinkertons quickly retreated.
It was a public relations nightmare. Legislators thundered that Missouri had been “invaded,” and nearly passed amnesty for the bandits. The James brothers learned that a neighbor, an old Unionist, had provided a base to the detectives. They shot him dead in his yard. “I must say, I am considerably disheartened,” Allan Pinkerton wrote. “It’s too much for me.” He never chased the gang again.
Jesse James, on the other hand, never forgave the attack on his family. Bent on revenge, the outlaw began to hunt the detective. “Pinkerton, I hope and pray that our Heavenly Father may deliver you into my hands,” he wrote to a newspaper later that year. He told acquaintances that he had trailed Pinkerton in Chicago, but never found the right moment to strike. “I want him to know who did it,” he said. “It would do me no good if I couldn’t tell him about it before he died.”
Fortunately for Pinkerton, Jesse never got the chance. A disastrous 1876 bank robbery in Northfield, Minnesota, left every member of the gang dead or captured except for the James brothers. It sidetracked him for years, though he still obsessed over Pinkerton to his friends. He was trying to rebuild the gang in 1882 when a new recruit, Robert Ford, shot him in the back of his head.
The feud seems like a classic Wild West story, a tale of masked, revolver-wielding horsemen on the frontier. In fact, it was one of the birth pains of America’s integrated financial system. The network of railroads was extensive enough in the 1860s to allow Congress to create a national bank system and a legal-tender paper currency to meet the demands of fighting the Civil War. There was no Federal Reserve yet, so banks connected by rail, sending bundles of cash across the country by express messenger. For bandits, it made sense to rob trains in the settled states, where there were more railroads carrying more money. As for Pinkerton, he filled a gap in interstate law enforcement, one that eventually led to the FBI. He took train robberies seriously; they cut into the arteries of the national economy. It was a lucky thing for banks that the bandits overreached in 1876 and never fully recovered.
ON THE CALIFORNIA ZEPHYR, somewhere deep in western Nebraska, I peered out the window in the middle of the night at the vast expanse of the Great Plains, lit by a nearly full moon. If Lt. Col. George Armstrong Custer were alive today, he might be happy that passengers tend to sleep through this area on their way to Denver, instead of observing the scene of his humiliation.
In 1867, seven years before Pinkerton faced off with James, back when Vanderbilt had just started to assemble his empire, Custer’s first year in the West took him right along the Zephyr’s route, and it had gone disastrously. He had led the 7th Cavalry on a mission to protect the transcontinental railroad, still under construction, and to punish hostile Natives. Instead, he had shot his own horse while hunting a bison, was hoodwinked by a Lakota war leader named Pawnee Killer, and endured a court-martial and subsequent suspension from duty for a year. He had returned to fight a controversial battle against the Southern Cheyennes in 1868, but the 1870s found him in serious need of redemption.
His chance came in 1873, on a mission to escort the surveyors of the Northern Pacific Railroad, part of a second wave of transcontinentals authorized by Congress. Just 33 years old, Custer wore a fringed buckskin outfit and blond hair that hung down to his shoulders as he led 10 companies of cavalry alongside thousands of soldiers, engineers, civilian workers, Native scouts, and hundreds of wagons that crept west across the Dakota and Montana territories.
On August 4, 1873, Custer rode ahead of the main column with 90 men to find a campsite for the expedition. He dismounted his troops in a stand of cottonwoods next to the Yellowstone River. Suddenly six mounted Lakota warriors dashed in among them, trying to stampede their horses. Custer pursued, only to pull up short. He guessed that it was a trap—an attempt to lure them on a chase into an ambush. He was right. Some 250 warriors rode out of the woods a short distance away and descended on the cavalry. Custer arranged his outnumbered troops in a semicircle, backed by the river, and held the Lakota off during hours of fighting in temperatures that exceeded 100 degrees.
When Col. David S. Stanley finally arrived with the main column, the Lakota withdrew. He ordered all 450 cavalrymen to pursue. Custer followed their trail, only to find that they had crossed the Yellowstone at a point where the heavy army horses could not swim. Stymied, he made camp for the night and awoke to the sounds of gunfire before dawn. The Lakota leader Sitting Bull had called in allies and organized a mass attack. Accurate rifle fire strafed the troops from across the river. To save ammunition, Custer ordered only the best marksmen to shoot back—including his own orderly, John Tuttle, who hit three warriors before taking a bullet to the forehead. But the biggest threat came as the Lakota swam their horses across the river on either side of Custer’s position. He organized defensive lines on both flanks, shifting reinforcements to the hard-pressed men upstream, who got there just in time to drive back a determined charge led by the famed warrior Gall. Unexpectedly, the sound of artillery fire boomed through the valley; Col. Stanley had arrived with the main column. Seizing the moment, Custer mounted his men and charged, driving off the attackers.
It was the beginning of a fateful rivalry between Custer and Sitting Bull, one driven less by the kind of personal hatred that existed between James and Pinkerton, or that divided the tycoons, but far more deadly. And the battles showed them to be well matched. The Lakota leader had inspired and organized attacks on an impressive scale. Custer restored some of his reputation by leading his men with shrewdness and restraint—qualities rarely associated with him. And it was the railroad that pitted them against one another.
In order to connect the Pacific Northwest with the rest of the United States, Congress had granted Northern Pacific a strip of land that, as historian Richard White writes, equaled the entire area of New England. The Lakota, also called the Western Sioux, claimed much of this terrain. Their resistance added to the railroad’s troubles, which sparked a panic on Wall Street later in 1873, ringing in one of the worst depressions in American history. This chain of events drove Custer and Sitting Bull toward an even greater confrontation.
In 1874, to help counter Lakota power, Gen. Philip Sheridan sent Custer to scout a site for a fort in the Black Hills, a region of great economic and spiritual significance for Native tribes. Custer found gold—a substance that was itself money in the 1870s. It was like finding a cash machine that spat up $100 bills; depression-wracked prospectors rushed in. The Lakota refused urgent demands that they sell the region, and no leader was more adamant than Sitting Bull. In 1876, President Ulysses S. Grant’s administration decided to seize the region by provoking a war. It ordered the Lakota to give up nomadism and report to federal agencies.
Thousands of Natives rallied around Sitting Bull, the symbol of resistance, and gathered in a village of unprecedented size on the Little Bighorn River. Ironically, Custer got himself into trouble yet again, and nearly missed the war; he had to plead with Grant to be allowed to lead his regiment into battle. Before he set out on his campaign, a telegram arrived from Sheridan: “You must rely on the ability of your own column for your best success. I believe it to be fully equal to all the Sioux which can be brought against it, and only hope they will hold fast to meet it.”
They held fast. On June 25, 1876, Custer led the 7th Cavalry right into Sitting Bull’s camp. In one of the most hotly debated decisions in history, he divided his regiment into three detachments, along with a mule train carrying supplies. Sitting Bull himself joined the fighting against one battalion; Gall and the legendary warrior Crazy Horse led a counterattack against Custer himself, who led five of the 12 total companies of troops. Custer and every man in those five companies died that day. But the scale of the loss drove the army to seek victory at all costs. Sheridan kept regiments in the field all winter, hounding the Lakota and their allies into surrender in 1877.
IT WAS AN EPIC AND TRAGIC struggle that grew directly out of the expansion of the railroad system. In a growing country desperate for long-distance transportation, railways comprised the biggest businesses, the biggest federal projects and the biggest pieces of economic infrastructure. In the East, the enormous capital in play generated business rivalries greater than any before. In the Midwest and border states, the railways’ role in the financial system attracted the most ambitious criminals, igniting a duel that followed the lines of Civil War loyalties. And in the West, the early transcontinental lines represented mammoth engineering achievements, creating infrastructure that allowed the West to flourish, yet they came at a great cost. Federal policy pushed tracks to mining towns in the Rockies and to distant ports on the Pacific, which provoked Native nations that stood outside of the United States yet were within its borders. Custer went west to protect a project of national integration, which set him against Sitting Bull, the voice of independence and the Native world system.
On the last day of the California Zephyr’s journey, it climbs over the breathtaking peaks and valleys of the Sierra Nevada and descends toward San Francisco Bay, where the digital sector finds its home. Today’s tech industry is not as far from 19th-century railroads as it may seem. Through their colorful rivalries, our world emerged. Vanderbilt battled Gould and Fisk in sophisticated financial markets that didn’t even exist when Vanderbilt was born. They developed new ways to structure corporate debt, shares and governance that are still in use. Our financial world, in which a payment in Portland is instantly accepted in Charleston, in which the savings of millions are redirected into productive loans, rose on a national railway network. Today the Federal Reserve has removed banks’ need to pay each other with physical cash, but express companies like Wells Fargo and American Express remain, having transformed from shippers of banknotes into lenders and financial institutions in their own right. Even the tragic Indian Wars speak to the role of the federal government in building the nation’s transportation infrastructure, much as it established the framework of the internet itself.
When the California Zephyr winds up into the Rockies out of Denver, there’s a moment when it runs parallel to the Great Plains, offering a glimpse of the vast distances Americans covered with rails 150 years ago. It’s quite a sight. The hardware naturally draws our attention—locomotives, tracks, depots. It still matters, too; railroads carry 40 percent of America’s freight, a thriving legacy of that history. But railways also gave us our economic software, which we run day and night. They introduced large-scale business corporations, financial markets, an integrated banking system, a professional middle class—even time zones. It wasn’t all pretty, but the railroads so define our lives that it’s hard to imagine the world without them.
T. J. Stiles received the 2016 Pulitzer Prize for History for his most recent book, Custer’s Trials: A Life on the Frontier of a New America, and the 2010 Pulitzer Prize for Biography and 2009 National Book Award for Nonfiction for The First Tycoon: The Epic Life of Cornelius Vanderbilt.