• J.J. Wheeling

Cornelius Vanderbilt and the ATC-Nicaragua Passage

As eluded to in the last, I was led to this “what the…?" moment by a friend of the family who has traveled extensively in Nicaragua. My farmer-self was completely blown away when I started to dig into why this man felt so passionate about the tip he shared with me. Boy, am I glad that he shared!


It is important to understand that the mid-1800s was a time when the “haves” and “have-nots” were sorting themselves out. The middle class, as we know it today, was a pretty small group and thus, the drive to hit the goldfields, where every struggling clerk, farmer and sailor was sure that their life would be better once they’d struck it rich.


Before I get going here, let me quickly set up the situation. President Polk was busy in the spring of 1846, his agenda full of getting his election promises fulfilled. No sooner than the Mexican-American War was started in April, he negotiated a treaty with Great Britain over Oregon Territory in June. This opened the flood gates for emigrants from the eastern states to begin the westward push to Oregon in 1847. But Polk knew he needed to get some governmental services established to encourage the territory’s rapid population. Getting a postal system set up to deliver mail to the new territory was his first move.


Congress responded to Polk’s urgency by passing two bills: one for postage rates to the Pacific Coast and the other that authorized the Department of the Navy to contract for carriers between Oregon and New York via Panama, as long as those carriers would be able to convert their vessels to warships if needed. The entire route required contracts with three different carriers: the New York to Chagres, Panama carrier; the overland Panama carrier; and the Panama City, Panama to Astoria, Oregon carrier.


For the sake of brevity, I’ll just say here that if you are interested in the details of the founding of the U. S. Postal services from the Atlantic Coast to the Pacific, it is fascinating but I don’t have space or time to devote to it here. The key points to take away are:

  1. Going around Cape Horn with mail for Oregon was going to take too long to satisfy Polk.

  2. Government contracts and all that goes along with them were (are) cumbersome and time-consuming.

By the time the Department of the Navy awarded the three required carriers the postal contracts and the necessary ships were built, the very first load of mail from New York to Chagres, Panama left on December 1, 1848. This was just five days before Polk confirmed for American citizens that gold had been discovered at Sutter’s Mill in Coloma, California – news of which had been frantically passed by word of mouth since January.


Meanwhile, things were changing in Central America. Panama was the choice for crossing from Atlantic to Pacific but it was disease ridden and dangerous. So what about Nicaragua? North of Panama with Costa Rica in between, Nicaragua was a small country. At the same time that Polk and Congress were setting up this postal system, and gold was being discovered in California, the Nicaraguans were figuring out that they had a better passage to the Pacific than Panama.


The eastern coastline of Nicaragua was run by the Miskito Kingdom, a native people who had been passing their governance from brother to brother, with a few exceptions, for 239 years. When the Spanish arrived, the Miskito Kingdom had successfully maintained their independence. When the British showed up in the 17th century, the Miskito kings embraced them, considered themselves British citizens and aided the Brits in their privateering activities and logging in Belize. The British saw their relationship with the Miskito Coast as an important and convenient niche in the Spanish-held Central American coastline.


In January of 1848, the British stepped across a line and occupied the Miskito capital of San Juan del Norte, renaming it Greytown. Then they tried to take control of the country’s central passage from Atlantic to Pacific. The western Nicaraguans would have none of it and overwhelmed the British influence of the Miskito. This British occupation caught Nicaraguans and Americans off-guard, especially given all of the recent actions in Mexico.


Enter Cornelius Vanderbilt. Vanderbilt was a name I learned about in my small western town middle school along with Carnegie, Dupont and others. All were industrialists, empire-builders and eventually philanthropists. All took advantage of opportunities, took risks and in some cases, exploited their circumstances. Since my school education, I’ve had the opportunity, through random life events, to visit the Biltmore in North Carolina, Shelbourne Farm in Vermont and been to Hyde Park, New York, all Vanderbilt family estates. The grandeur and affluence of the buildings and grounds speak to Cornelius Vanderbilt’s business acumen.


Vanderbilt saw the potential in a Nicaraguan canal passage and in August, 1849 secured exclusive right to build a canal across the isthmus of Nicaragua, from San Juan del Norte to Port San Juan del Sur on the Pacific. Until he could complete the canal, Vanderbilt effectively had exclusive control over the transport business from coast to coast. So, Vanderbilt’s American Atlantic and Pacific Ship Canal Company was formed to handle the traffic from New York to San Juan del Norte and the ships from Port San Juan del Sur in the Pacific. Then he created the Accessory Transit Company (ATC) to begin clearing obstructions in the San Juan River and creating passage from Rivas to Port San Juan del Sur. The truth is that this all took a couple of years, so Vanderbilt didn’t commence to business until July, 1851.

Even missing the flood of gold seekers in 1849-50, based on my research, Vanderbilt’s ATC was a huge success. At one point, 2,000 people paid the $300 to travel from New York to California…every month. Quick math to modern values makes it a gross number of $20,700,000 per month or $248,400,000 in its first year. Wow!


There is a whole bunch more to this story including betrayal, government favors to Vanderbilt, undercover assassins, a Confederate filibuster attempt and mass murder of Nicaraguan citizens. It all take place in the mid-1850s but let me assure you friends, it will show up in my future stories!

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