Corporate Law’s Original Sin

By Kent Greenfield

The public be damned,” railroad magnate William Henry Vanderbilt snorted at a reporter in 1882. The impertinent scribe had asked whether Vanderbilt ran his railroads with an eye toward public benefit. At the time, Vanderbilt was among the most powerful men in American business—and by his own estimation the richest man in the world. His figurative middle finger to the American public was big news, appearing on the front page of hundreds of newspapers within twenty-four hours.

The week before his comment, two trains had collided on his railroad inside the Fourth Avenue tunnel in New York City, killing two passengers and injuring hundreds. Many New Yorkers blamed the accident on Vanderbilt’s unwillingness to cut into profits by spending money on safety measures. His contemptuous words, spoken as he dined in his private train car, salted an open wound. The satirical magazine Puck ran a cover cartoon of a ballooned, profligate Vanderbilt wearing a diamond pin, smoking a stogie, and leaning back in a leather chair with a foot on the throat of an eagle dressed in Uncle Sam garb.