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The Double Life of Railroad King (and Crook) Robert Schuyler

Robert Schuyler was one of the most respected men of his era, the last person likely to pull off one of the greatest swindles in Wall Street history. But in 1853, that’s exactly what Robert Schuyler did.

Robert Schuyler

He came from an illustrious family, grandson of Gen. Philip Schuyler, hero of the Battle of Saratoga, and nephew of Alexander Hamilton. His relatives included the landowning Beekmans and Van Rensselaers, New York nobility.

When the organizers of the new New York & New Haven Railroad went to look for a president, they chose Robert Schuyler because he represented the last word in respectability and financial responsibility.

Years later all hell broke loose when it turned out that he sold thousands of shares of bogus stock, kept three sets of books and stole $137,527.98.

“If Robert Schuyler is capable of such a wrong,” editorialized a newspaper, “then no one is to be trusted.”

But he was capable of such a wrong, one that ranked with the Bernie Madoff scandal.

Robert Schuyler

Robert Schuyler was born on Sept. 16, 1798 in Rhinebeck, N.Y., to an aristocratic family with vast semi-feudal landholdings in the Hudson Valley. A man of culture and refinement, he cofounded New York’s Union Club.

After graduating from Harvard, Robert Schuyler made the successful transition into commerce, starting his career with steamboats. By 1846 he and his brother George formed R. & G. L. Schuyler, an investment firm specializing in railroads.

At one time, Robert Schuyler served as president of five railroads, including the New York & New Haven Railroad, the Harlem, the Illinois Central, the Rensselaer & Saratoga and the Sangamon & Morgan Railroads. People called him the Railroad King.

The directors of the New York & New Haven completely entrusted the railroad’s financial affairs to him as president and sole transfer agent.

Disasters

In May of 1853, the New York & New Haven Railroad train plunged into Norwalk Harbor and killed about 50 people. The dramatic railroad derailment was by far the country’s worst.

Sketch of the Norwalk Railroad accident

President Robert Schuyler took a little bit of the blame for the disaster. The Connecticut Legislature, assuming Schuyler spread himself too thin, passed a law forbidding anyone to hold more than one railroad presidency at a time. He resigned several of his presidencies, putting his brother in charge of one.

Despite the tremendous loss of life, the Norwalk tragedy didn’t cause the railroad undue financial harm.

Then one year later, a second disaster struck the New York & New Haven when the stock prices began to plunge. In less than five weeks it dropped from $93 to $73.5, suggesting some insiders knew about the stock manipulation going on.

The railroad board tried to contact Robert Schuyler, who claimed he had fallen ill with a bad hemorrhage of the lungs. The New York Herald, though, on July 6, 1854 reported, “Mr. Schuyler has not been confined to his house by sickness lately….He has gone to Canada or some other cool place. New York was too hot to hold him.”

Robert Schuyler had, in fact, fled to France.

Swindler

Schuyler’s lawyer had already handed the railroad directors a letter of resignation. “Your attention to the stock ledgers of your Company is essential as you will find there is much that is wrong,” wrote Schuyler.

It turned out that Robert Schuyler, as sole transfer agent, had sold 19,540 shares in unauthorized stock certificates worth about $54 million today.

At first, the board thought Robert Schuyler had started selling bogus stock after the Norwalk accident. But then the directors learned he’d been doing it much earlier.

He had also maintained three sets of books kept by three different clerks, none of whom knew what the others were doing. He paid damage claims from the Norwalk accident by taking money from railroad accounts in cash and giving out notes signed by him as president.

Allston (New York, New Haven and Hartford Railroad station)

Confusion reigned upon the discovery of the swindle because it was so hard to tell who held the bogus stock and who held genuine shares.

The first official meeting after the discovery of the fraud lapsed into chaos. Anyone who tried to be heard got shouted down by those demanding how many shares he held and where they came from. The meeting adjourned.

Stockholders did manage to elect a new slate of officers. And after 10 years of litigation, the court finally ruled that the railroad had to cover all losses.

Trouble Signs

How had people missed the signs of Robert Schuyler’s misdeeds? In hindsight, warning signs abounded.

The New York Herald had received an anonymous letter asking it to demand the board investigate Schuyler. But the paper ignored the letter because of its anonymous author.

And then there was Schuyler’s personal life. He had lived as a bachelor, but he had a family of six children by a woman he hadn’t married and who lived in a separate household. Then a minister proposed to his oldest daughter. To his horror, he discovered she was illegitimate. Robert Schuyler acceded to the minister’s demands and married the mother of his children.

Soon after the news broke about Schuyler’s swindle, the American Railroad Journal carried an editorial claiming not to be surprised. “His reputation for possessing business qualities of a high order, the influential circle in which he moved, and the unlimited confidence which he enjoyed, gave him a paramount voice in the management of numerous schemes, wrote the Journal.” But, it continued, ‘a blight always seemed to rest on everything he touched.’

In conclusion, the Journal had advised investors to stay away from railroad schemes in which Schuyler was involved. “…we took it for granted that he would rob any project of which he had control of whatever vitality he possessed.”

Death in Paris

Robert Schuyler supposedly died in France on Nov. 15, 1855, a little more than a year after the revelations about his mammoth swindle. But mystery surrounded his death as well. A classmate in 1857 wrote to the Harvard Librarian doubting that he had died. A coffin had arrived from France, and a funeral took place in New York, “but I could not find that anybody saw the body or identified it. It may have been a sham.”

With thanks to The Great Schuyler Stock Fraud by Robert B. Shaw and The Strange Case of Robert Schuyler by Sidney Withington.

Images: Allston station by Adam Moss via Flickr, CC By-SA 2.0.

This story was updated in 2023.

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New England Colonists Thunderstruck by the Lightning Storms of 1768

Terrific lightning storms unsettled New England colonists during the summer of 1768, when rising tensions with Great Britain led to conflict and violence. But unlike the Puritans of a century before, the colonists didn’t view the lightning as a message from God.

Benjamin Franklin

The Age of Enlightenment had arrived, and reason and analysis won over superstition and traditional authority. Or at least began to.

So even as Sam Adams was proselytizing for rebellion against the King, inquiring minds tried to analyze the severe lightning that struck that summer. They were continuing the scientific analysis that Ben Franklin had started. He’d conducted his famous kite experiment 14 years before then.

The 1768 Lightning Storms

The tremendous lightning storms in the summer of 1768 came as the Townshend Acts passed in 1767, took effect and colonists in British North America resisted them.

In February 1768, Sam Adams circulated a letter among the colonies opposing the Acts, calling them taxation without representation.

Agitators in Boston harassed customs inspectors, and in May a British warship with 50 guns sailed into Boston Harbor. In July, Gov. Francis Bernard dissolved the General Court.

Harvard’s second Hollis Professor of Mathematics and Natural Philosophy, John Winthrop. Courtesy Harvard Art Museums.

On July 2, lightning struck Hollis Hall at Harvard College. In a letter to the editors of the Boston Chronicle, John Winthrop wrote that what happened supported the view that lightning was electricity. He described how the violent thunderstorm beat down a chimney top, shattered woodwork and windows and tore several feet of brickwork. Several students felt a blow, which they compared to an electric shock. One students was thrown from his chair, perceiving neither the flash nor the thunder.

And then Winthrop described the lightning rod, which Franklin had invented in 1749:

In my house, that has such an apparatus fitted with bells to give notice of the passage of the lightening along the rods, the bells began to ring as soon as the first thunder was heard at a distance.

The bells continued ringing briskly for about an hour, he wrote. The lightning “frequently flashed from one bell to the other, and with cracks loud enough to be heard in the farther part of the house.”

Boycott

In August, Boston merchants agreed to boycott British goods until the repeal of the Townshend Acts. Tremendous thunderstorms struck from Salem, Mass., to Norwalk, Conn., on the afternoon of August 1. In Roxbury, Mass., lightning shattered a window. In Boston, it knocked a clock case into fragments on a Winter Street home. It also threw clothes around a room in a Water Street home and melted a pewter plate on a mantel in Temple Street. It stunned two children, who recovered.

That storm extended to Connecticut, where lightning knocked over a tree in Hartford, killing two cows, and set a barn in Norwalk on fire.

The fierce lightning flashes inspired a citizen in Salem, Mass., to send a poem to the Essex Gazette:

What grumbling Noise comes thro’ the yielding Air!
Is it the Cannon’s Roar! The Din of War?
No! — ‘Tis the Voice of God; he Thunder rolls,
And flashes Lightnings to the distant Polls.

British warships arrive in Boston Harbor.

Sulfur and British Soldiers

In September, 4,000 British soldiers arrived to keep order and set up permanent residence in Boston. A few weeks before the British began their military occupation, lightning tore a large oak tree to pieces in Wrentham, Mass.

But the next evening, September 8, brought the weirdest lightning strike of all.

It struck Daniel Mann’s tavern, where ladies and gentlemen sat around a tea table. A flash of lightning came into the room, followed by an explosion, apparently as loud as the discharge of a cannon. Large sparks were seen, and the air in the room smelled like sulfur, which gave one person an intense headache. A windowpane broke, a clock injured, the ceiling and floors damaged. One man felt a violent shock on top of his head, another felt pain in his shoulder and found his coat scorched.

“All the inmates were filled with terror,” reported Essex historian Sidney Perley in Historic Storms of New England.

In Rehoboth, Mass., lightning killed a 10-year-old boy. A barn in Mendon, Mass., burned to the ground when struck. In Uxbridge, lightning tore up the heart and floor of a house and stunned several family members.

“This shower was not as local as thunder showers generally are,” Perley wrote, “but it extended over a large territory, and the lightning was sharper and more frequent and disastrous than it was remembered to have been before in many parts of the region.”

This story was updated in 2022.

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Madame Knight Rides the Post Road Home

Madame Knight was the name ultimately given to the 38-year-old adventuress who rode the Boston Post Road alone on horseback in 1704 from Boston to New York and back.

Women just didn’t do that then.

Her diary of the trip is an unrivaled account of the difficulties of travel in the early 18th century.

Map of Sarah Kemble Knight’s journey

Madame Knight

Sarah Kemble Knight left her home in Boston on Oct. 2, 1704, headed for New Haven. The daughter of Puritans, Thomas Kemble and Elizabeth Trerice, she was a 38-year-old widow with a daughter. Madame Knight assumed responsibility for her household, running a boarding house and copying legal documents.

She agreed to help settle her cousin’s estate. That meant a long horseback ride to New Haven along the Boston Post Road.

During her journey, she generally hired guides or accompanied the post rider to show her the way, as the road had no navigation aids. Connecticut then was a foreign country to the Massachusetts colonists, and Madame Knight had much to say about it.

She arrived in New Haven, but unfinished business forced her to go to New York. So on Dec. 6, 1704, she set out for New York after a two-month stay in New Haven.

Sarah Kemble Knight

She Loves New York

Madame Knight liked New York’s neat brick houses, pleasant manners and fashionable dress, and she left reluctantly on Dec. 21.

She set out for New Rochelle, where she would have been content to settle because of its “good handsome houses.” It also had “clean, good and passable roads.” She rode through Stamford to Norwalk, where she spent “the most perplexed night” she had ever had. In Fairfield, Conn., she noticed an abundance of sheep “whose very dung brings them great gain.” She noted the citizens of Fairfield paid their parson in sheep dung — grudgingly.

Madame Knight was kindly received in New Haven by her friends and relations. She commented favorably on Connecticut.

It is a plentiful Country for provisions of all sorts and its Generally Healthy. No one that can and will be diligent in this place need fear poverty nor the want of food and Rayment.

With the help of James Pierpont, the New Haven minister who founded Yale, Madame Knight finally came to an agreement in February on the distribution of her cousin’s estate.

James Pierpont

Homeward Bound

Her mission accomplished, she mounted her horse and crossed the river at New Haven over the ice and arrived at New London. There she stayed with Mr. Gurdon Saltonstall. Gov. Fitz-John Winthrop insisted she stay an extra day and take supper with him.

Gurdon Saltonstall

The next day she took the ferry to Groton with Winthrop’s daughters and others. That night she stayed in Stonington and had ‘Rost beef and pumpkin sause’ for supper. And then she encountered a terrifying river crossing:

…the next day wee come to a river which by Reason of Ye Freshetts coming down was swelled so high wee feared it impassable and the rapid stream was very terrifying–However we must over and that in a small Cannoo. Mr. Rogers assuring me of his good Conduct, I after a stay of near an how’r on the shore for consultation went into the Cannoo, and Mr. Rogers paddled about 100 yards up the Creek by the shore side, turned into the swift stream and dexterously steering her in a moment wee come to the other side as swiftly passing as an arrow shott out of the Bow by a strong arm. I staid on ye shore till Hee returned to fetch our horses, which he caused to swim over himself bringing the furniture in the Cannoo. But it is past my skill to express the Exceeding fright all their transactions formed in me.

Once Madame Knight made it across the river she was in Massachusetts, where she spent the night at an inn. The next day she had a difficult ride through the “sloughy ways thawed by the sun.”

Madame Knight Arrives Home

She met Capt. John Richards of Boston, who agreed to accompany her home. Eager to reach Boston, they rode harder than usual. Just as they reached Dedham, her horse dropped ‘as if dead’ while charging up a steep hill. She got another horse and they tried to reach Boston that night. The roads were still too sloughy and they stayed at an inn instead.

Boston around 1730,.

And then, on March 3, Madame Knight wrote in her journal:

…the next day being March 3d wee got safe home to Boston, where I found my aged and tender mother and my Dear and only Child in good health with open arms redy to receive me, and my Kind relations and friends flocking in to welcome mee and hear the story of my transactions and travail I having this day bin five months from home and now I cannot fully express my Joy and Satisfaction. But desire sincerely to adore my Great Benefactor for thus graciously carrying forth and returning in safety his unworthy handmaid.

This story last updated in 2023.

Image: Map of Madame Knight’s journey By Lindsay Anderson – http://puritansandpetticoats.blogspot.com, Public Domain, https://commons.wikimedia.org/w/index.php?curid=35843888.

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Alexander Hamilton Bids Farewell to Connecticut and Its Ragged Money

Alexander Hamilton had a rough night of sleep before leaving Connecticut in August 1744, and that may have colored his farewell to the colony’s “ragged money, rough roads and enthusiastick people.”

He had traveled with his slave, Dromo, from Annapolis, Md., since May 30, 1744, reaching all the way to York, Maine. By late August, he was on his way back home.

Alexander Hamilton was a Scottish doctor who had immigrated to the colonies. He had yet to be married, and took the long journey for his health. Historians are glad he did. His travel diary, which he published under the name Itinerarium, gives a rare insight into colonial life between 1730 and 1745.

Norwalk, Conn.

On the way back through Connecticut they stayed at an inn in Norwalk run by a man named Taylor. Dromo attracted children’s attention. Wrote Hamilton:

While I was at Taylor’s the children were frightened at my negro. Slaves are not so much in use as with us, their servants being chiefly bound or indentured Indians. The child asked if that negro was acoming to eat them up. Dromo indeed wore a voracious phiz, for, having rid twenty miles without eating, he grinned like a crocodile, and showed his teeth most hideously.

Alexander Hamilton and Dromo left Norwalk on Aug. 30, had breakfast in Stamford and headed toward New York.

“FAREWELL, Connecticut” (said I, as I passed along the bridge), “I have had a surfeit of your ragged money, rough roads, and enthusiastick people.” The countries of Connecticut and New England are very large and well peopled, and back in the country here, upon the navigable rivers, as well as in the maritime parts, are a great many fine large towns. The people here are chiefly husbandmen and farmers. The staples are the same as in the Massachusetts Province. They transport a good many horses to the West Indies, and there is one town in this Province that is famous for plantations of onions, of which they send quantities all over the continent and to the islands, loading sloops with them. Many of these onions I have seen nearly as large as a child’s head.

It is reported that in Connecticut alone they can raise fifty or sixty thousand men able to bear arms. One Mr. Law’ is present Governour of the Province. It is but a deputy Government under that of New England or the Massachusetts.

This story last updated in 2022.

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1853 Norwalk Railroad Accident – The First American Railroad Bridge Disaster

Dr. Gurdon Wadsworth Russell spent more than 50 years working for the Aetna insurance company as medical director, leaving the company in 1902. But his tenure there almost ended in 1853 when he miraculously survived the Norwalk railroad accident.

Russell belonged to a group of physicians returning from the sixth annual convention of the American Medical Association in New York. The train, travelling north, began to lurch and shake.

Sketch of the Norwalk Railroad accident

From his seat in the third passenger car, Russell couldn’t immediately see what was happening. But he would quickly find out. His train car abruptly snapped in two. The front end dropped down. The back end, where he sat, remained suspended hanging off the edge of the Norwalk rail bridge across the Norwalk Harbor. And so he witnessed firsthand the first major railroad bridge accident in the United States.

Norwalk Railroad Accident

Railroading was still relatively new at that time, and accidents and derailments were part of the business. Many safety features we know today had not been invented.

The Norwalk drawbridge had a signal to warn approaching trains when it opened to allow a ship to pass. A red metal ball suspended by the side of the track where the engineer could see it well before he neared the bridge.

The ball worked on the morning of May 6, 1853 at about 10:00 when the bridge opened to let the steamer SS Pacific pass. With the 281-foot vessel clear, the bridge had not yet swiveled back into place as the train from the New York, New Haven Railroad rounded a bend. The engineer then saw the open bridge.

By that point, it was too late. Investigations concluded the train’s engineer, Edward Tucker, had failed to check the signal. He had only recently returned to the line after suffering an injury in another accident. Tucker was not overly familiar with the route. Some accounts of the event say he filled in for another engineer on the train that day. The train was supposed to be travelling at no more than six miles per hour when it crossed the bridge, but Tucker had it travelling at least 30 miles per hour.

By the time Tucker threw on his brakes and reversed the engine, the result was inevitable. He and the fireman jumped from the cab of the train just before it crashed.

Investigation

The engine hurdled across the opening in the bridge and slammed into the abutment in the harbor. The first car broke apart and submerged into the water and the second came down on top of it. In the third car, where Russell was riding, the force of the impact snapped it in two. One woman passenger catapulted out of the gaping opening at the front of the car and down onto the cars in the river. She miraculously survived with relatively minor injuries.

Those in the cars in the water were not so fortunate. A reported 46 to 50 people perished, among them seven physicians and a new bride headed to Boston for her honeymoon. Dr. Russell assisted in rescuing as many passengers as he could and attempted to resuscitate those being pulled from the water who weren’t breathing. He reported in a published account of the accident that one victim was successfully resuscitated.

In the wake of the accident, the Connecticut Legislature determined that trusting the engineer’s eyes to notice a signal was not adequate. It passed a law that declared all trains had to come to a complete stop before proceeding across any drawbridge.

This story was updated in 2022.

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Norwalk

The Double Life of Railroad King (and Crook) Robert Schuyler

Robert Schuyler

Disasters

Swindler

Trouble Signs

Death in Paris

New England Colonists Thunderstruck by the Lightning Storms of 1768

The 1768 Lightning Storms

Boycott

Sulfur and British Soldiers

Madame Knight Rides the Post Road Home

Madame Knight

She Loves New York

Homeward Bound

Madame Knight Arrives Home

Alexander Hamilton Bids Farewell to Connecticut and Its Ragged Money

Norwalk, Conn.

1853 Norwalk Railroad Accident – The First American Railroad Bridge Disaster

Norwalk Railroad Accident

Investigation

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