William Henry Vanderbilt (1821–85), president of the New York Central and numerous other railroads, was a quiet, honest, modest, and, above all else, moderate man. Although the most important railroader of his time, he would be almost wholly forgotten today were it not for four simple words he so uncharacteristically and incautiously uttered on October 8, 1882: “The public be damned.”
Within twenty-four hours of its escaping his lips, the phrase had become one of the great public relations disasters in American business history and appeared on the front page of hundreds of newspapers. It provoked editorials, sermons, cartoons, and political speeches by the thousands. Within two days the New York Herald was able confidently to predict that “after he dies posterity will regard it as his epitaph, regardless of what may be carved on his tombstone.” The Herald was right. William Henry Vanderbilt, who had not the slightest ambition to literary fame, is listed in Bartlett’s Quotations.
The reasons his words resounded around the country like a cannon shot are simple. The 1880s saw railroads reach the pinnacle of their power in the American economy, and they were the very epitome of big business. Nor were the railroads shy about using this power, often shortsightedly. Where a railroad possessed a monopoly on long-distance transportation—and most towns and small cities were served by only one railroad—it exacted the highest freight charges possible, while giving favored customers kickbacks. Needless to say, resentment against the railroads and their highhanded behavior was intense and growing. In 1887 it resulted in the creation of the Interstate Commerce Commission, the first federal regulatory agency. Even before Vanderbilt said it, an increasing number of Americans had come to feel that “the public be damned” was the universal motto of the railroad industry.
To make matters even worse, Vanderbilt, who controlled the largest railroad empire on earth, was, by his own admission, the richest man in the world. “I am worth $194,000,000,” he told a friend not long before his death, and said he would not cross the street to make another million. Harper’s Weekly noted that Vanderbilt’s fortune exceeded the total value of all assessed property in Nebraska, Colorado, Nevada, and Oregon combined. Vanderbilt admitted that England’s Duke of Westminster was worth $200,000,000 but pointed out that most of that was tied up in land and didn’t pay even 2 percent. Vanderbilt’s wealth was in government bonds and railroad securities and paid about 6 percent, giving him a take-home income of nearly a million dollars a month at a time when a thousand dollars a year was a decent wage. It is a measure of how large Vanderbilt loomed on the American landscape in the 1880s that when he suddenly died in December 1885, The New York Times carried no other news whatever on its front page the following day and the story was the lead for several days thereafter.
Vanderbilt, in a hopeless attempt at damage control, immediately denied that he had said such a thing at all, but there is little doubt that he did. What varies among accounts is the context in which he said it.
Vanderbilt was on his way to a tour of the West and was traveling in his private railroad car from Michigan City, Indiana, to Chicago. Clarence Dresser, a young free-lance reporter with a reputation as a journalistic agent provocateur, sought an interview. Dresser, according to Melville E. Stone, for many years the head of the Associated Press, “was one of the offensively aggressive types—one of those wrens who make prey where eagles dare not tread. Always importunate and usually impudent.” In his autobiography Stone wrote that Dresser had barged into Vanderbilt’s car on its arrival in Chicago and demanded his immediate attention. Vanderbilt said that he was in the middle of eating but, if Dresser would wait until he had finished, he would give him a minute.
“But it is late,” Dresser said, “and I will not reach the office in time. The public—”
“The public be damned,” Vanderbilt burst out. “You get out of here!”
According to Stone that was all there was to it. Dresser tried to sell the story to the Chicago Daily News, where Stone was then editor, but the night editor was not interested in words provoked from a man whose patience and privacy has been assaulted. Dresser, still according to Stone, then made his way to the Tribune and turned in a different story. The crucial part of the interview printed in the Tribune and reprinted everywhere went like this:
“Does your limited express [between New York and Chicago] pay?” Dresser asked.
“No, not a bit of it. We only run it because we are forced to do so by the action of the Pennsylvania Road. It doesn’t pay expenses. We would abandon it if it was not for our competitor keeping its train on.”
“But don’t you run it for the public benefit?”
“The public be damned. What does the public care for the railroads except to get as much out of them for as small a consideration as possible. I don’t take any stock in this silly nonsense about working for anybody’s good, but our own because we are not. When we make a move we do it because it is our interest to do so, not because we expect to do somebody else some good. Of course we like to do everything possible for the benefit of humanity in general, but when we do we first see that we are benefiting ourselves. Railroads are not run on sentiment, but on business principles and to pay, and I don’t mean to be egotistic when I say that the roads which I have had anything to do with have generally paid pretty well.”
Still a third version comes from Vanderbilt’s favorite nephew, Samuel Barton, who was traveling aboard the train with his uncle that day. He reported quite a different context a few years later to William A. Croffut, who published a biography of Vanderbilt in 1886.
“Why are you going to stop this fast mail-train?” Dresser asked in this version.
“Because it doesn’t pay. I can’t run a train as far as this permanently at a loss.”
“But the public find it very convenient and useful. You ought to accommodate them.”
“The public? How do you know they find it useful? How do you know, or how can I know, that they want it? If they want it, why don’t they patronize it and make it pay? That’s the only test I have of whether a thing is wanted—does it pay? If it doesn’t pay, I suppose it isn’t wanted.”
“Mr. Vanderbilt, are you working for the public or for your stockholders?”
“The public be damned! I am working for my stockholders! If the public want the train, why don’t they support it?”
None of these versions is likely to be wholly correct. Stone must be suspected of sour grapes, for he did, after all, let what turned out to be one of the biggest stories of the year slip through his fingers. Dresser wanted to be sure of selling his story at the Tribune, and Barton wanted to put his uncle’s fatal words in the best possible light. (And it can be safely assumed that all these men were perfectly willing to let historians he damned.”)
Dresser’s and Barton’s versions have enough elements in common to suggest a single origin in fact, even though one has Vanderbilt continuing to run a train and the other has him canceling it. A case could be made for either of the two accounts. Barton’s is more provocative, and certainly Vanderbilt would have had to be provoked into saying what he did, for he was not in the least an arrogant or stupid man but had in full measure the family’s quick temper.
Each version accurately expresses Vanderbilt’s ideas of business principles that he had learned from his father, the Commodore, a man William Henry held in the deepest respect and whose ideas regarding business behavior he followed faithfully. Both the Commodore and his son regarded themselves as fiduciaries for the stockholders, a claim that precious few railroad managers could honestly make in the nineteenth century.
Dresser’s version recalls testimony by the Commodore given to a committee of the New York State Assembly nearly twenty years earlier. “I have always served the public to the best of my ability. Why? Because, like every other man, it is my interest to do so, and to put them to as little inconvenience as possible. I don’t think there is a man in the world who would go further to serve the public than I.”
Barton’s version recalls another occasion when the Assembly asked the Commodore his system for running a railroad. “My system of railroading is … to take care of it just as careful as I would of my own household affairs, handle it just as though it was all mine; … and take good care of its income; that is my aim, you know, and give that to the stockholders.” The Commodore noted that while he was president of three railroads, he took no salary. His compensation, in other words, came only from stock dividends.
In both versions William Henry Vanderbilt’s purported words, while hard-nosed and certainly impolitic, are embedded in inescapable economic truth. Both father and son thought the key to success was to seek profits by giving the public good service, but both knew full well that companies that seek to serve the public rather than make a profit will not be around to do either for very long.
In history, as in so much of life, “you pays your money and you takes your choice,” and that is certainly the case here. But in either version of the most famous interview in American business history, William Henry Vanderbilt, however infelicitously he phrased it, was only repeating a truth first written by that master of economic felicity, Adam Smith.