USA > Massachusetts > Suffolk County > Boston > The memorial history of Boston : including Suffolk County, Massachusetts. 1630-1880, Vol. IV > Part 19
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The whole of no community ever readily adapts itself to a far-reaching change of business conditions. In this case the interior of a continent was springing into civilized life. Those who could not realize the fact, or who from habit or slowness of perception were not in harmony with the new order of things, were ruined. Left stranded by the course of events, they disappeared. A wholly new America was meanwhile shaping itself, - an America with which the relations of Boston and New England were yet to be established. New York remained the financial centre of the whole ; but Chicago, in 1835 a mere out-post town on the shores of Lake Michigan,
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THE MEMORIAL HISTORY OF BOSTON.
was transformed into the chief distributing point of an interior, in compari- son with which that region which the foreign trade of Boston once supplied, was lost in insignificance.1 Boston meanwhile developed into the local cen- tre of a busy manufacturing population dwelling and working in all eastern New England. This was its home function. As respects the new interior of the continent and foreign countries, the tendency of railroad development is to reduce all seaboard cities into being mere points of transshipment,- conduits, as it were, of modern trade. They are, indeed, of hardly more account in the process of distribution on this scale than those interior towns through which the freight trains laden with corn and meat pass rapidly on their way to the East, shortly to return carrying the bonded wares of Europe in their unbroken packages to the custom-houses of the West.
Between 1835 and 1880, then, the introduction of the railroad and the development of the railroad system, as it changed every other considerable city, changed Boston also. They changed it both within itself, and in its relations with other countries and other portions of the common country. The former capital of provincial New England had not become one of the great railroad centres of the continent. Geographical position alone probably put this out of the question. It had not, however, developed into nearly so considerable a railroad centre as it might at one time have been made. In this respect opportunities had been lost. Nevertheless, as a rail- road centre of the second class the position of Boston was well defined and considerable. Within its own territory the city was supreme; and that territory was populous, busy, and wealthy. Beyond its territory the railroad enterprise and railroad investments of those dwelling in Boston had sent back to it a tide of wealth, which reduced to insignificance the old-time profits. Meanwhile, so far as foreign commerce and a share in the handling of the great volume of commodities and exchanges passing between the interior and the ports of other nations are concerned, the city had much more than held its own, and its outlook for the future in 1880 was brighter than ever before in its history.
Chares to Adas In
1 In 1820 the Board of Directors of Internal Improvements stated in the report already re- ferred to (see ante.), that "the tract of country which at present can carry its surplus produce to
Boston more easily than to any other sea-port, and which can receive its foreign supplies from thence most conveniently, contains a population not exceeding 300,000 souls " (p. 44).
CHAPTER VI.
FINANCE IN BOSTON.
BY HENRY P. KIDDER AND FRANCIS H. PEABODY.
T 'HE history of the growth of Boston as a centre of financial enterprise and wealth necessarily includes the story of its connection with many undertakings of sufficient magnitude and importance to require separate treat- ment in other chapters of this work. Although shipping and the foreign trade in the early days, and in more recent times the manufacture of goods for the markets of the country, either in Boston or in other cities and towns of New England, and the construction and operation of railroads have given the greatest impetus to enterprise and the greatest additions to the wealth of the city, yet in this place a brief reference only can be made to the devel- opment of these enterprises. But if circumstances require that they shall seemingly occupy a subordinate place, it is necessary that their true impor- tance shall be recognized at the very outset.
Boston was from its foundation comparatively a rich and prosperous town. It was the political and trading centre of the colony, and, as the colonies grew into States, of New England. In these respects it was second only to Philadelphia in all the colonies during the Revolutionary period. When the first census of the United States was taken in 1790, the whole population of the country was a little short of four millions, of whom nearly or quite one fourth were directly dependent upon Boston as their financial and commercial capital. From an account1 written four years later, in 1794, we may obtain an excellent idea of the material condition of Boston just after the close of the Revolutionary War.2 The population at that time was about nineteen thousand. It had two banks, one of them already ten years old, chartered by the Commonwealth, besides a branch of the United States Bank; some eighty wharves and quays, and a large domestic and foreign . trade. Ship-building had been carried on very extensively in former years, but had, at the date of Mr. Pemberton's writing, been for the most part transferred to other coast towns.3 There were at one time twenty-seven
1 "Description of Boston," by T. Pemberton; Mass. Hist. Coll., iii. 241.
2 [See Mr. Hill's chapter in this volume .- ED.]
3 [See the chapter on " Industries," and the references there, and further extracts from Pem- berton in Mr. Hill's chapter. - ED.]
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THE MEMORIAL HISTORY OF BOSTON.
dock-yards, and upwards of sixty vessels had been on the stocks at once. One yard had launched as many as twelve ships in one year.
The foundation of the financial strength which Boston has enjoyed in a peculiar degree during the last century was, without doubt, laid when the banking system was established. The usefulness of the modern instruments for economizing the use of money, by means of combination and concentra- tion of wealth, and for increasing its power by the same means, was recognized at a very early day. The wisdom, or the chance, which led the legislators of the last century to adopt measures which, while they encouraged such con- centration of wealth and energy, served to give security both to the owners of the capital of banks and to depositors in them, supplemented as it has been by a generally consistent adherence to conservative and correct prin- ciples of banking, have done more than anything else to give to Boston the rank as a financial centre which it enjoys; - a rank to which neither its position as a nucleus of population nor its situation with respect to the trade of the country would ever have conferred. The banks of Boston have been safe and strong at times when those of other cities have been weak. They have never led the way in a suspension of specie payments, nor have they ever been backward in resuming. Disasters among them have been rare, and seldom or never attended with serious consequences to sister institutions else- where, or to the commercial world. They have helped greatly in sustaining credit, both public and private ; and reciprocal assistance has been rendered to them in the shape of a strong public sentiment, which was as free from unreasonable jealousy of their power as it was from toleration of dangerous tendencies in banking.
A bank was established in Boston as early as 1689; but neither that nor any one of several successors during the following century had a long life, or was fortunate while it still existed.1 In March, 1782, the Bank of North America, founded in Pennsylvania, was chartered also by Massachusetts, and opened a branch in Boston. Although no record of the operations of this bank has been preserved, it is known that its success was sufficient to lead to the charter of a purely local bank in Boston two years later. This latter institution, the Massachusetts Bank, is still in a state of prosperous existence under a national charter. It began business on July 5, 1784, with an authorized capital of $300,000, of which $253,500 was paid in.2 The
1 [ Professor W. G. Sumner's chapter on "Mon- etary Development," in The First Century of the Republic, cites as the chief contemporary author- ities on colonial matters of this kind two Boston books, - Hutchinson's Massachusetts Bay (very intelligent and correct on finance, he says), and Douglass's Summary (unequal but valuable, as he accounts it). He also esteems of great value a pamphlet published in Boston in 1740, Dis- course concerning the Currencies of the British Plantations. The reader who is curious to trace the instructive history of our currency in the pre- Revolutionary periods may find - beside Felt's
Historical Account of Massachusetts Currency, 1839, and the references noted in Vol. I. p. 354, and Vol. II. p. 467 - something of more or less advantage in the following : Mass. Hist. Soc. Proc., February, 1863, and April, 1870 (by W. S. Ap- pleton) ; Amer. Antiq. Soc. Coll., iii. 148; and Proceedings, March 16 and April 25, 1866; N. E. Hist. and Geneal. Reg., July, 1860, p. 261. The story will serve as an illustrative commen- tary on the financial history of our own day, and needs to be well written. - ED.]
2 [See further on its formation in the chapter by Mr. H. A. Hill, in the present volume. - ED.]
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FINANCE IN BOSTON.
rules 1 adopted for the management of its business were of the most strin- gent character, but were exceedingly wholesome in their operation, and the Massachusetts Bank secured a good amount of profitable business. The dividends fluctuated somewhat during the early years of its existence, but the average of the years 1791 and 1792 was sixteen per cent. Its assured success led, in the latter year, to the establishment of a rival, - the Union Bank; and about the same time a branch of the United States Bank was opened in Boston. The Union Bank was the first of a series of banks organized under charters having some peculiar provisions. Its capital was fixed at $1,200,000, of which one third was subscribed by the State in its corporate capacity. The bank was forbidden to issue any circulating notes for less than five dollars, or to owe more than twice its capital in addition to its deposits,-the penalty for transgressing this last restriction being the personal liability of the directors for the excess. It was provided that one fifth of the bank funds should be appropriated to loans outside of Boston, for the benefit of agriculture, in sums not less than $100 or more than $1,000, secured by mortgages of real estate, and having not less than one year to run.2
Such was the origin of the system which not only rendered available the wealth of Boston merchants, but, becoming metropolitan, absorbed a large part of the banking reserves of New England, and thus made the surplus of the whole group of States helpful in carrying forward Boston enterprises.
At this time, and for many years afterward, Boston was chiefly a com- mercial port. The great fortunes that were made were acquired in the foreign trade, - like those of Russell, Phillips, Perkins, and others, and that of Mr. William Gray, who made his fortune as a Salem merchant, and then came to Boston to enjoy it. In the years from 1786, perhaps a little earlier, down to the time of the second war with Great Britain, the trade of Boston with China and the East Indies, and to a smaller degree with other coun- tries, was the distinguishing feature of the town's commercial enterprise. But there was another movement going on at the same time which exercised even then, and was destined in after years to exert to a greater extent, an influence upon the future of Boston. The very smallness of the area of the town, and its inaccessibility, served to open a field for financial activity and
1 The maximum loan to one person at one time was $3,000 ; no person was allowed to owe the bank more than $5,000 at the same time ; and $7,500 was the largest sum for which any person could be liable to the bank as promisor and endorser. Renewal of notes was absolutely forbidden. The person who failed to meet his note was not only obliged to submit to the im- mediate sale of his security, but he was denied the privilege of having any further notes discounted for a period of eight months thereafter, unless the penalty were remitted by a unanimous vote of the directors. The rules, which were " not
VOL. IV. - 20.
to be deviated from in the smallest instance nor on any pretence whatever," also required that the names of delinquents should be posted in a conspicuous place in the bank.
2 Most of the subsequent charters of Boston banks, until the year 1816, contain provisions similar to these, with some variations in detail. The State subscription became an ordinary feature of the bank charter, so that in 1812 the Commonwealth owned about $1,000,000 in stock of its own corporations, being nearly one eighth of all the banking capital of the State. This stock was all disposed of a few years later.
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THE MEMORIAL HISTORY OF BOSTON.
Jackson presents has respects
the Boston 11 March 100% ...
speculation. Wharf property was more remunerative than almost any other kind of real estate, and vast sums for those times were invested in the filling
1 [Copley painted five likenesses of Mr. Jackson (Perkins's Copley's Life and Paintings, p. 78) : one, a life-size crayon of the head, belonging to Jackson's granddaughter, Mrs. Oliver Wendell Holmes ; a second, painted in 1768, in oils, half-size, belongs to Mrs. Charles Upham of Salem; a third, half-length, painted in England, belongs to a granddaughter, Susan Cabot Jackson ; a fourth, an oval picture, be- longs, with one of Mrs. Jackson, to Francis H. Jackson of Boston ; the last is a pastel (23 X 17 inches), owned by Colonel Henry Lee, a grandson, and by his kind permission is fol- lowed in our cut. It was painted between 1761 and 1773. The morning-gown is of green, with a crimson collar. .
Mr. Jackson was the first president of the Boston Bank, holding office from April, 1803, till his death in 1810. The first board of direc- tors consisted of Thomas C. Amory, Samuel P. Gardner, Joseph Hall, Peter C. Brooks, Thomas K. Jones, James Lloyd, Jr., and James Perkins. The Editor is indebted to Colonel Lee for the following notice of Mr. Jackson : -
The Hon. Jonathan Jackson, descendant in the fourth generation from Edward Jackson, one of the first set- tlers of Cambridge, and afterwards of Newton, - " who brought a good estate to this town, and hath not been wanting to the ministry, or any good work among us, " - and son of Edward Jackson (H. C. 1726) and Dorothy Quincy, was born in his father's house in Queen (now Court) Street, where Tudor's and a portion of Sears's Buildings now stand, June 4, 1743 ; graduated at Harvard
155
FINANCE IN BOSTON.
in of docks and the construction of piers. At the beginning of this century, too, ideas of the future greatness of Boston were strongly entertained by many of the wisest men of the town, and they took upon themselves the task of making preparations for the increase of business which they fore- saw. Among the enterprises of this period, which can be barely alluded to in this chapter, were the connection that was made by means of bridges with Cambridge, Charlestown, and South Boston, the cutting down of Beacon Hill, so as to fit it for purposes of residence, the annexation of South Bos- ton, and, later, the construction of the Mill-Dam, for the double use of a
College, 1761 ; moved afterwards to Newburyport, where he married Hannah, daughter of Patrick Tracy, Esq., an opulent merchant, and built by the side of the house of his friend Judge Lowell a splendid mansion, afterwards ren- dered absurd and notorious as "Lord " Timothy Dexter's house. Mr. Edward Jackson inherited £30,000 from his father, and increased it by commerce in partnership with his wife's brothers, Josiah and Edmund Quincy.
His son Jonathan, upon coming of age, received twenty thousand golden guineas. This and his wife's fortune were lost in commerce, or having been loaned to the Government were hence irrecoverable at the close of the Revolution, and from that time to his death he was dependent upon his salary. His public record is a long and honorable one : member of the Provincial Congress, 1775 ; representative, 1777; delegate to the Essex Convention, held in Ipswich, in 1778, whose report was the famous Essex Result ; dele- gate to the convention to frame a Constitution for Massa- chusetts, and one of a committee to draft one; member of the Old Congress, 1782 ; State Senator, 1789; appointed by Washington marshal of the district of Massachusetts, a position held till 1791 ; inspector, then supervisor of ex- cise, 1791-1802 ; treasurer of Massachusetts, 1802-1806 ; treasurer of Harvard College, 1807 till his death, March 5, 1810 ; also first president of the Boston Bank. He was one of the founders of the American Academy of Arts and Sciences, also of the Humane Society ; one of the founders and treasurer of the Society for the Promotion of Agri- culture. Caleb Cushing says of him : "He was one of the eminent Patriots of Essex during the Revolution and the early periods of our Constitutional history. He wrote some of the best political tracts of the day, etc." The- ophilus Parsons, in his life of his father, the Chief-Justice, says : " From my boyhood I was accustomed to hear my father speak of him in terms which placed · him before me as the embodiment of sound sense and absolute in- tegrity, etc." In the Memoir of John Bromfield, he is thus spoken of : " Hon. Jonathan Jackson, the father of Mrs. Francis Cabot Lowell and Mrs. Henry Lee, a man dis- tinguished in his day for his many excellencies of head and heart. He was educated at Harvard College, Cambridge, and was one of the most accomplished and elegant speci- mens of old-school manners known among us, or, as was once said of him by a friend, in the words of Sir Walter : ' He was, indeed, a princely knight and courtly gentleman.' Quincy, in his History of Harvard University, thus al- ludes to him : " The Hon. Jonathan Jackson was elected his (Storer's) successor, and retained the office until his death, which occurred in March, 1810 ; on which occasion the Corporation passed a vote of sympathy with his friends and the public in the loss of a man of talents, integrity, amiable and courteous manners, who discharged the duties of Treas- urer and member of the Corporation with reputation to himself and distinguished utility to the University and the public." President Kirkland, writing to Josiah Quincy, April 12, 1810, notices the death of Mr. Jackson : " You have observed and know of the loss of Mr. Jonathan Jack- sou. A great loss So true, so upright, so amiable a spirit cannot take its flight without leaving a melancholy chasm."
Two incidents in the life of this gentleman illustrate his chivalric spirit. The first is narrated by the historian of Newton, and is singularly omitted in Livermore's book : " He took an early and zealous part in the Revolution, was an ardent friend of liberty, and the owner of a slave. Seeing his inconsistency, he placed on record in the Suf- folk Probate Office the following document, a noble testi- mony : -
"' Know all men by these presents, that I, J. Jackson, of Newburyport, in the County of Essex, gentleman, in consideration of the impropriety I feel, and have long felt, in holding any person in constant bondage, - more especi- ally at a time when my country is so warmly contending for the liberty which every man ought to enjoy, - and having some time since promised my negro man Pomp that I would give him his freedoni, and in further consideration of five shillings, paid me by said Pomp, 1 do hereby liber- ate, manumit, and set him free ; and I do hereby remise and release unto said Pomp all demands of whatever na- ture I have against Pomp. In witness whereof 1 have hereunto set my hand and seal, this 19th June, 1776.
"'JONATHAN JACKSON.
** * Witness :
" ' MARY COBURN,
" ' WILLIAM NOYES.'
"This document is dated just two weeks before the glorious Declaration of Independence was issued, pro- claiming all men to be born free. Pomp enlisted in the army as Pomp Jackson, served through the War of the Revolution, and received an lionorable discharge. He af- terwards settled in Andover, near a pond still known as Pomp's Pond."
The other incident exhibits the inviolability of his friend- ship, and the degree of his disinterestedness. Mr. Jackson, like many more, having lost his vast acquired and inherited fortune by capture of his ships and by loans to the Govern- ment during the war, was compelled to apply for an office to eke out his support. The evening before he was to leave home, his friend, General Lincoln, requested a private in- terview, and imparted his anxiety for the future, having come home from the war penniless, and expressed his de- sire to obtain the office of collector of the port of Boston. This was the office upon which Mr. Jackson had set his heart, but this did not affect his resolve. He went to New York, waited upon the President, and, after some days' attendance, was admitted to an interview. Washington, taking out his watch, said curtly : " I will give you, Sir, fifteen minutes." Mr. Jackson began to set forth General Lincoln's needs and claims, when he was peremptorily stopped by, " You need not tell me about General Lincoln, Sir." He then explained why he spoke in his behalf, and the interview ended without a word spoken for liimself, and General Lincoln was appointed collector. Judge Charles Jackson, Dr. James Jackson, and Mr. Patrick Tracy Jack- son, sons of Jonathan, occupied as large and as high a position in their respective professions and in the esteem of their neighbors as any three men who ever lived in Boston. - ED.]
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THE MEMORIAL HISTORY OF BOSTON.
highway, on which tolls were collected, and the creation of a tidal water- power.1
The enumeration of these undertakings shows that Boston was even then an enterprising town. The money accumulated by merchants was well em- ployed in improving and beautifying the place. That was before the time of foreign investments. There were no railroads to absorb accumulated earnings, no organized manufactures, no great corporate or municipal loans to serve as investments of trust funds. Even if there had been such, the time was now at hand when there was to be no large surplus for investment in any new enterprise. The first twenty years of the present century were trying times for business. The poverty caused by the war, aggravated by a wretchedly deranged currency, was soon increased by the interruption which the embargo and a second war gave to foreign commerce. Considering what that commerce was to Boston, - its life-blood almost, -the wonder is not that the suffering which was experienced was as" great as it was, but that the evils of the time were so bravely borne and so speedily recovered from.2
Among those who devoted themselves at this time to the improvement of Boston with full faith in its future, none deserves more prominent notice or higher honor than Uriah Cotting. Mr. Cotting was the projector and the guiding spirit in nearly every enterprise involving the development of the town for business during the first twenty years of this century. He obtained the charter of the Broad Street Association, by which a large district, pre- viously covered with small, inconvenient, and dilapidated buildings, was made available for purposes of commerce. He also led the way in the Central Wharf and India Wharf improvements. He devised the opening of Brattle Street and Cornhill. He was the largest proprietor of the Wheeler's Point estate, through which Sea Street, now Federal Street, was extended. He was, moreover, a large owner of lands on and near Leverett Street, and at the Neck. He acquired property consisting of flats near Lewis Wharf, where he planned the Marginal Wharf speculation, which was substantially carried out a quarter of a century later under Mayor Quincy, when the new streets east of North (then Ann) Street, were laid out, and the long market- house built. His greatest work, however, was the Mill-Dam, which he pro- jected, and of which he was the first engineer, but which he did not live to see finished. He died in 1819 of consumption.
Mr. Cotting deservedly enjoyed during his life a reputation second to that of no other citizen of Boston. Mr. N. I. Bowditch, in a notice of him, printed in the Boston Courier of May 27, 1852, a week after the death of Mr. Cotting's aged widow, said that he was " a man to whom Boston is more indebted than to any other of her citizens. His sagacity, enterprise, and public spirit were truly unrivalled. . .. He was a man of the strictest integrity, in whose talents and judgment the most unbounded confidence
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