Copyright
Henry Wysham Lanier.

A Century of banking in New York online

. (page 1 of 43)
Online LibraryHenry Wysham LanierA Century of banking in New York → online text (page 1 of 43)
Font size
QR-code for this ebook


2^fl






1



i



A CENTURY OF
BANKING

IN
NEW YORK



A CENTURY OF

BANKING



8:^2-



1Q:^2



By HENRY WYSHAM LANIER



NEW ^SW YORK
GEORGE H. DORAN COMPANY

1922



^7 LZ



Copyright, 1922, bjr

Henry W. Lanier

New York



Q-^^



Dedicated

to

The FerocioLU City

which devours and forgetd

itj own hidtoty



518603



PREFATORY NOTE



rHiS volume had Its origin in a plan to commemorate the
centenary of a Trust Company — the first corporation ever
authorized to accept trusts.
A study of financial history showed a wealth of material, and an
absence of any general work covering the development of banks
and banking during this century of transformation; so the scope
was enlarged to a comprehensive survey of the business and finan-
cial conditions of a hundred years ago, with special emphasis on
the personal side, and a narrative of the growth of New York to
its present financial position. In the general picture, the intimate
history of the particular trust company offers significant details
of a "sample brick" in the whole edifice that has been built up.

H. \V. L.



=**^



PART I

Chapter page

I The Year the Banks Migrated 3

II The Old Order Begins to Change 25

III Individual Notes as Currency 41

IV The Banker oj 1820 54

V Who Was Who in Finance 75

VI Expansion and Panic 185

VII The Coming oj the Clearing House 207

VIII CUnl War and the National Banking System ... 219

IX A Jlar^'ellous Quarter-Century 240

X The Era oj the Trust Companies 251

XI The Federal Resen'e and the New Era 258

XII Then and Now 271

PART II

XIII An Intimate Record 275

XIV History oj a Downtown Plot 319



^:^'p -



PAGE

A New York Bank on Hammond/ Streel Frontispiece

Broadivai/ and City Hall in 1819 3

" Remo^'al Notices" from the Ei'ening Posi 6

Where the Bowery Joined Broadway 7

Attack upon the Quarantine Station 7

Dutch Cottage in Beaver Street, 1679 22

JFhen Men Sawed IFood on IFall Street 23

Old Dutch Deed to New York Property 38

Federal Hall 39

Bowling Green {JFest Side), 1826 54

Specimens oj Notes 55

Early Banks in Wall Street, 1797 70

The Government House 71

Tontine Coffee House, JVall Street ' 86

Union Square in 1820 87

New York Notables at the Play, 1822 102

Wall Street in 1789 103

IFall Street in 1825 118

Bowling Green {East Side), 1830 119

The First Jflerchants' Exchange 134

The JJIerchants' Room 134

IX



X



A CENTURY OF BANKING IN NEW YORK



PAGE

Ruins oj the Merchants' Exchange 135

"Wealthy Citizens oj New York Cily" 150

First Adi'ertisement oJ the Farmers' Loan Co 187

The Great Fire oJ 1835 198

The New Merchants' Exchange 199

JFall Street in the Forties 214

JVall Street in the Fifties 215

The " Counterfeit Detector" 225

First Published Price-list oJ Stocks 230

Graph of Commodity Prices 245

Curbstone Brokers in 1864 246

Broad Street during the Panic of 1873 247

Modern Wall Street 294

Exchange Place in 1830 295

Broad Street in 1853 295

A Deed of 1719 310

IV here William Street Jleets Beaver 311

Plan of Wall Street in 1822 and 1922 337



PART
I



Chapter I
THE YEAR THE BANKS MIGRATED

The Great Plague of 1822 — The "Boom Town" of Greenwich —
A Stranger's Impressions— Jf^hen Pigs Roamed
JfaU Street — Pumps on Broadway — Condi-
tions that Faced the 1822 Banker^ How
Downtown Looked — The Banks a
Century Ago — The Banks'
Pul)lic in Old New York

^NE day in the early summerof 1822 a smart packet-boat was
standing up New York harbor. The sight of the clustering
houses, filling the whole width of the lower island and
stretching away northward, was welcome enough to the weary
passengers, who had been cooped up on board for weeks.

Among these was an English gentleman, William Newnham
Blanc, who was of that breed of Islanders who love to travel far
and near —

"For to admire and for to see.
For to be' old this world so wide."

He was using his keen eyes and mind now to their fullest capac-
ity as his vessel approached the lusty young giant-city of the
West.

"The entrance to the bay of New York," he presently noted in
his journal, "is one of the most beautiful sights in the world. On
each side of the Narrows, where the steep and almost perpendicu-
lar cliffs of Staten Island are only two miles distant from the shore
of Long Island, the forts and fortifications that defend this cele-
brated harbor" (it was but seven years after the War of 18121)
"seem to frown upon the vessels that enter. We passed close to
the formidable batteries of Fort La Fayette, which advances into
the water with four tiers of guns, one of which tiers is occupied by
a large kind of carronade, called Columbians" (he meant Colum-
biads), "each throwing a hundred-pound shot.

"After passing the Narrows, we entered the Bay which, ex-
panding immediately, is about nine miles in width in the broadest
part. On each side the shore, though wooded down to the



4" ' A 'C'E'N T UK Y O F B A N K I N G IN NEW YORK

water's edge, is thickly studded with farms, villages and country-
seats. At the upper end are seen the spires of the city; and in
the distance the bold, precipitous banks of the Hudson. The
day was beautiful, the sky without a cloud, and the vast sheet
of water was covered with inward and outward bound vessels,
the white sails of which were illuminated by the sunbeams.

"We anchored just below the Battery, at the point of the island
on which New York is built, and getting into a boat rowed to
Greenwich, which, though once a separate town, now forms part
of the city.* Looking up the streets that run down to the water,
I perceived they were all barricaded at the upper ends, and
strewed with lime. The houses, of course, were all shut up and
deserted; and out of a population of 120,000t inhabitants not
more than 7,000 or 8,000 remained in the city; and those only in
the higher and more healthy parts." (In point of fact, there
was nobody left but some negroes, nurses, doctors and under-
takers, and the poor folk who could not manage to get away,
from illness or lack of funds.)

"I do not know a more sombre spectacle than a large deserted
city. We are so accustomed to associate the idea of a town with
that of an active and noisy multitude, that to see a number of
houses quite deserted and hushed in perfect silence impresses the
mind with the deepest melancholy.

"Nothing endued with life was to be seen in any of the streets
or neighboring quays, except here and there a cat; for these
animals, in the hurry and confusion of moving from the town,
had been left behind in considerable numbers, and formed at
that time the only inhabitants of a great part of the city."

And what was it that had caused over 125,000 out of the
135,000 citizens of the greatest American city to forsake their
homes and business and flee, leaving New York to homeless cats?
In iMay of that year, in spite of the rigid quarantine established
at Staten Island the preceding summer, the community had been
thrown into consternation by the news of an outbreak of yellow
fever in Rector Street. This section of the city had been con-
sidered immune: every previous epidemic had started in the
lower quarter east of Broadway, and very few cases had been
chronicled from the Rector Street neighborhood, even when the
scourge was at its height.

This happening produced a general panic. Manhattan knew
only too well what yellow fever was: it had ravaged the city a

* It was really quite outside of the cit\ — which was the reason wh^- the
fugitives went there.

t There were actually from 130,000 to 135,000 in that year.



THEGREATPLAGUEOF1822 5

score of times. Every grown resident still recalled the frightful
visitation of 1798, when 2,086 persons (a tenth of the population)
had been slain by this invisible enemy,* who heeded the colum-
biads of Fort La Fayette as little as the Columbiad of Joel Barlow
or the vociferous admissions of newspapers, orators and "Stran-
gers' Guides" that we had the healthiest, most progressive, most
marvellous city of the civilized world.

Now, it happened that there was at the city's very door a safe
refuge. From the time of the "epidemical distemper or plague"
reported by Mayor John Cruger in 1742, New Yorkers had
discovered they could escape the infection by fleeing to the village
of Greenwich, only two or three miles away. This haven was
considered almost proof even against smallpox, for Lieutenant-
Governor Clarke writes to the Duke of Newcastle, in 1739, beg-
ging leave "to inform your Grace that the Smallpox being in
town, and one-third part of the Assembly not having had it, I
gave them leave to sit at Greenwich."!

Certainly, odd as it seems, there is no record that yellow fever
ever "crossed the swamp and the meadows between the town and
the village." (Though it's hard to guess why not, since the slego-
niyla mosquito, whom we now know to be the assassin that
spreads yellow fever, could hardly fail to have been blown that
far when the winds were right.)

Anyhow, Greenwich became as important to New York as a
"Sanctuary" to a medieval law-breaker; the farmers brought
their produce thither instead of to the town during the scares,
and many people remained as permanent residents after the
danger had passed, since it was often impossible for long after-
wards to get fresh food in the city markets.

To this City of Refuge, then, did terrified New Yorkers begin
to repair early in June, 1822, when the reports of the fever's
rapid spread revived memories of the terrible scenes of twenty
years before — all except those fortunate magnates who had
estates and manors in the adjacent real country.

James Hardie, another English visitor in that year, saw some
unforgettable sights when this hegira was at its height:

"On the same day, the 24th August, our city presented the
appearance of a town besieged. From daybreak till night, one
line of carts, containing boxes, merchandise and effects, were
seen moving towards Greenwich Village and the upper part of

* "Felix Oldbo^-" relates that one of the earHest victims happened to be a
bookkeeper in the Bank of New York.

t And William Hamilton, shipmaster, left his home at 14 Broadway, in
1812, and moved thither to escape the British shells which people feared
would presently destroy the lower part of the town.



6 ACE NTURYOFBANKINGINNEW YORK

the city. Carriages and hacks, wagons and horsemen were
scouring the streets and filling the roads; persons with anxiety
strongly marked on their countenances and with hurried gait
were bustling through the streets. Temporary stores and offices
were erecting, and even on the ensuing day (Sunday) carts were
in motion and the saw and hammer busily at work. Within a
few days thereafter, the Custom House, the Post Office" (even
the Port Warden), "the Banks, the Insurance Offices and the
printers of Newspapers located themselves in the village or in the
upper part of Broadway, where they were free from the imjjend-
ing danger, and these places almost instantaneously became the
seat of the immense business usually carried on in the great
metropolis."

The poison of its great neighbor was necessarily meat to Green-
wich Village. "The fever of 1822 built up many streets with
numerous wooden buildings for the use of the merchants, banks
(from which Bank Street took its name), offices, etc., and the
celerity of putting up these buildings is better told by the Rev.
Mr. Marcellus, who informed me that he saw corn growing on
the present corner of Hammond and Fourth Streets on a Saturday
morning and on the following JLonday 'Sykes and Niblo' had a
house erected capable of holding three hundred boarders. Even
the Brooklyn ferryboats ran up there daily."*

From a "quiet, dreamy village where the magnates of the city
loved to come for rural retirement and repose," old Greenwich
was thus overnight transformed into something resembling a
Western "boom town" on just-opened Government land. Banks,
insurance companies, lotteries, merchants, auction-rooms, stores,
warehouses, grog-shops, barber-shops — all the busy activities of
the proud metropolis — were housed in anj^thing that could be
picked up, some hundreds of businesses occupying a mushroom
growth of small wooden booths "exactly resembling those at an
English fair." The markets were moved to Chatham Square
and Hudson Street, near St. John's Park — but even here they
were little patronized, the country folk naturally preferring the
air of Greenwich Village, where all their customers were.

Some bankers and others had been more foresighted. As
noted, one of the first deaths in the scourge of 1798 was a book-
keeper in the Bank of New York. "Fearing another visitation
of the pestilence, the bank made arrangements with the branch
Bank of the United States to purchase two plots of eight city lots
each, in Greenwich Village, far away from the city proper, to
which they could remove in case of being placed in danger of

* Devoe: "Market Book."






II lo 4BurjMj6rtnr,>»li

11* H-uiimon.1.1 e I Ore vt rh
1 V C o. *0 Br, 1 1 .
"Mlree.B 1

1 ohn iCI Hwr y

ittl A ''JOIr.aUav

J«fVl. n



Online LibraryHenry Wysham LanierA Century of banking in New York → online text (page 1 of 43)