USA > New York > Steuben County > A history of Steuben County, New York, and its people, Vol. I > Part 35
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porated in 1791. This was controlled by Hamilton and his friends, against the Republicans. In 1799 Aaron Burr organized the Man- hattan Company, for the alleged purpose of supplying the city of New York with water for domestic purposes, but adroitly con- cealed in its charter was authority giving this corporation per- petual banking powers and privileges. It drilled a deep well in Reade street, which still supplies water to the citizens desiring it; and the corporation is in existence as a state bank, doing an ex- tensive business. This charter and the bank operated under it gave Burr and the Republicans equal power with their opponents. The Utica Bank was chartered in 1812, with a capital of $1,000,000; in 1815 it was authorized to open a branch at Canandaigua.
The poor landowner and lumberman was at the mercy of the money shark, whose appetite was as greedy and voracious as now.
BANKING LEGISLATION.
During the period from 1791 to 1816 political feeling between the Federalists and Republicans was bitter, and the attaining of a charter for any bank organized duringthis time was usually the occasion of much party strife and intrigue. Upon one occasion Governor Tompkins, in the year 1813, prorogued the legislature, assigning as one reason for his action the attempt to use corrupt means to secure a bank charter. These charters were in the nature of special privileges, granted to particular persons, and all others were specially restrained by law from participating in the business of banking. This condition operated sadly to impede the prosperity of the new settlements and particularly western New York. Pri- vate banking was prohibited under heavy penalties by an act of the state legislature, passed in 1804, and an even more stringent act was passed in 1818. These acts were so drastic that many per- sons dared not buy a note or evidence of debt, or loan money upon a note that could be used as money, and they were not repealed until 1837, one year before the passage of the free-banking act.
The Safety Fund system was authorized in 1829, on the recon- mendation of Martin Van Buren, then governor of New York. Its main feature was the requirement that each bank operating under the system should pay annually to the treasurer of the state a sum equal to ,one-half of one per cent of its capital stock, the payments to be continued until each bank had paid in three per cent of its capital. This common fund was to be used to pay the notes, or other debts, of any bank belonging to the system which might become insolvent. In actual practice the amount required to be contributed was found to he inadequate. Eleven banks be- longing to the system failed and the entire Safety Fund at that time was a little more than five per cent of their debts. The whole sum contributed down to 1848 was little more than seventy- five per cent of the debts of these insolvent banks. The project was an ignominous failure. If an institution was a "Safety Fund hank" it was considered by the uninformed as safe as the national treasury. This same alluring and deceptive scheme seems to have taken a deep and popular hold of the way-faring people, and those unused to the history of banking and finance in Kansas, Oklahoma and neighboring states.
The free-banking system was enacted April 13, 1838, and
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through it all restrictions confining the privilege of banking to certain classes were swept away. Any number of persons were authorized to form banking associations, upon the terms and con- ditions, and subject to the liabilities enumerated in the act. They were authorized to issue circulating notes upon the deposit of state or national stocks equal to five per cent of bank stock; or of bonds and mortgages on improved and productive real estate, worth (exclusive of buildings thereon) double the amount secured by the mortgage, and bearing interest at not less than six per cent. The amount of the circulation could not exceed that of the de- posit. Subsequent amendments required that the securities should be at least one-half of New York stock, and not more than one- half in stocks of the United States, all to be made equal to six per cent stocks and not to be taken at an amount above par or more than their market value. By the New York constitution of 1846 and thereafter the legislature was shorn of power to grant special charters for banking purposes, although such institutions might be formed under general laws. This constitution also pro- vides that after 1850 the stockholders of banks issuing circulating notes should be responsible to the amount of their shares for all debts and liabilities of any kind, and, in cases of insolvency, bill holders should be preferred to all other creditors. This system was in full operation in New York until the enactment of the national banking law, of which more particular mention will be made.
The Steuben County Bank, located at Bath, was the first in- stitution of the kind in the county. It was chartered by an act of the legislature March 9, 1832, to exist thirty years, with a capital of $150,000. The Chemung Canal Bank, at Elmira, was chartered the next year, with a capital of $200,000.
JOHN MAGEE.
Hon. John Magee, who had been a member of the national house of representatives in the twentieth and twenty-first con- gresses (1827-1831), became prominent for his extensive and thor- ough knowledge of finance and banking, and his untiring service on committees having charge of these subjects, then the most im- portant questions pending. He was an active supporter of Gen- eral Jackson in the Bank of the United States, and upon the ex- piration of his congressional terms organized the Steuben County Bank, becoming its president and principal stockholder. The or- ganization of this bank gave a strong impetus to the improvement of the Painted Post and Genesee country, as its officers had all the facilities for knowing intimately the financial condition and business integrity of all of the inhabitants of these localities; the bank discounted and, when necessary, renewed their paper. When these accommodations were required the condition was prompt action. In many instances farmers and lumbermen living in the valleys of the Genesee and Allegheny rivers and the intervening country, when necessary, would make a note, procure an acceptable endorser, and put a boy on horseback with a bag fastened to his saddle. In one end was the provisions for the horse; in the other for the boy, who would thus start for Bath. In due time, accord- ing to the distance traveled. the young messenger would return Vol. 1-17
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with the expected results from the Steuben County Bank. No usury or exorbitant charges were demanded; the business was as accurately and faithfully done as though the makers and en- dorsers had gone in person, instead of the youthful messenger. In all the countryside the Steuben County Bank and John Magee were regarded as a sure harbor of relief in all business embar- rassments, and today their accommodations and relief have made them saints in the calendar of many pioneers and their descend- ants. The career and integrity of such a man as John Magee cannot be too often repeated and urged upon the youth of our country for example and emulation. He was born near Easton, Pennsylvania, September 3, 1794. Henry Magee was his father, Sarah Mulholton his mother. They came to the United States from County Antrim, in the north of Ireland, about 1794. The father came from an ancient family of note, mentioned in the ancient annals of Ireland, and was a cousin of the Protestant archbishop, Rev. William Magee, of Dublin, known also as an author of miscellaneous works. In 1805 John Magee, with his father's family, removed to Groveland, Livingston county, New York. Here his mother died in October, 1805, and in 1808 the re- maining members of the family removed to and settled in the vicinity of Detroit, Michigan.
In May, 1812, John Magee, with his father and brother, Hugh, enlisted at Detroit in a rifle company commanded by Captain Abe- land De Quindra, which company immediately went into active service. It was in several skirmishes with the Indians and par- ticipated in the battle of Brownstown, Canada, on the 5th of Au- gust of that year. His company was part of the American forces surrendered by General Hull ignominiously to the British General Broek, on the 16th of August, 1812. Young Magee, with his com- pany, remained a prisoner on parole until January, 1813, when the captured troops were sent to St. Catherine and thence to Fort George, at the mouth of Niagara river in Canada. In the follow- ing month of March he was exchanged. Thereafter he joined Major Chapin's command of mounted rangers. During his cap- tivity Fort George and Fort Erie had been taken by the Americans under General Dearborn. The British army in its retreat had scattered its supplies over the country, and Major Chapin's com- mand was engaged in gathering up these supplies and making foraging expeditions in the peninsula lying between Lake Erie and Lake Ontario. Magee was again taken prisoner at the battle of Beaver Dam, near the present Welland canal, in June, 1813. He determined to get away, and although discouraged by his com- manding officer, who was in captivity with him, he obtained pos- session of his horse on pretence of caring for it, he mounted it, and set out at full speed across the lines towards Fort George, under a shower of bullets from the guard. He overtook a small boy, who begged so piteously to be permitted to ride behind him and take the chance of eseape, that he told him he could do so. They encountered the fire of their pursuers; Magee's elothes were shot full of holes; the poor boy was killed and his horse was wounded and fell under him just as he passed the American picket lines. He gained the fort with but slight injury and reported to the officer in command the result at the Beaver Dam and the de-
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tails of his escape. In view of the situation Magee was made a messenger to carry dispatches for the government between the Niagara frontier and Washington, and discharged this duty, at- tended by many hardships and dangers, with a degree of skill and physical endurance rarely equalled, winning the special commenda, tion of the war department. On one occasion, when dispatches of great importance were forwarded through Magee from the com- inander at Niagara to the war department at Washington, he was in his saddle continuously for forty-eight hours, procuring fresh horses until he reached Northumberland, Pennsylvania. There he became completely exhausted, so that he could not proceed farther, but he obtained a reliable person to complete the journey to Wash- ington with the papers and obtain the requisite answers, which, as returned to him, he conveyed to General Wilkinson, then in command on the Niagara frontier. On arriving at headquarters the general refused to believe that this special service had been completed with such celerity. The details of the journey were re- lated to the general, who expressed his admiration and took from his military chest five hundred dollars in gold, which he pre, sented to the faithful and plucky messenger. Every dollar of this money was generously given by him to the poor widows and needy children whose husbands and fathers had been killed by Indians and Canadians. In the future career of John Magee, in the heat and venom of political campaigns, it was frequently as- serted by his political opponents that this money "was the germ of his subsequent fortune and great wealth."
Leaving the service of the United States in the early spring of 1816 John, with his brother, Jefferson Magee, made the journey from Buffalo to Bath on foot, their route being principally by paths marked or blazed on the trees of the forests. On their ar- rival at Bath John's first employment was cutting cordwood for Captain William Bull, at twenty-five cents per cord. The ad- verse circumstances prevailing in his father's family, the want of school facilities and other privations then abounding in a new country compelled him to enter upon the work of life almost desti- tute of education. This situation he deeply regretted, but with the same determination and courage that had so far attended him and which was his best endowment, he resolved to apply himself to reading and study. In 1816 and 1817 he was employed on the farm of Adam Haverling, a name that grows in respect and ad- miration with the people of Bath and the surrounding country as the years go by, and generations past, present and future grow useful and strong from the quaffs of knowledge drawn from the fountain of the Haverling school. Magee's compensation for his labor on this farm was eight dollars per month. In 1818 he was elected to the office of constable and collector of the town of Bath. In 1819 he was appointed deputy sheriff by George MeClure, and held this position until 1820, when he was appointed marshal for Steuben county to take its fourth census. On January 6, 1820, he was married to Sarah MeBurney, a daughter of Hon. Thomas McBurney, who died May 15, 1828. No children were born of this marriage. He performed the arduous duties of census man generally on foot and through the present territory ex- tending to Ontario county on the north, the state of Pennsylvania
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on the south, Livingston and Allegany counties on the west and Tompkins county on the east. At the present time this territory embraces one census district and is more than double the present tinits and territory of the county of Steuben. Upon the comple- tion of his report he received the public thanks of the bureau for the remarkable faithfulness and accuracy of his returns, with a handsome set of table silver. He was, after serving out the term of Henry Schriver leaving a vacancy caused by his death, elected to the office of sheriff of Steuben county, and served until 1826. During the last named year he was elected a member of the Twen- tieth congress, and in 1828 was reelected to represent his con- gressional district in the Twenty-first congress. During both of these terms in congress he took a prominent position. General Jackson was then president, and Mr. Magee was an unsleeping advocate and supporter of the president's position on the United States bank question, then a subject causing the most determined and bitter controversies. The president regarded Representative Magee, of New York, as a man of extraordinary sagacity, sound- ness of judgment, and unflinching courage and honesty, and made him his confidential friend and adviser. He often consulted him upon important questions relating to the policy and position of his administration, and offered him a seat in his cabinet, which was declined. President Jackson's position respecting the United States bank was very popular in the state of New York, and es- pecially so in the congressional district represented by John Ma- gee. But jealousies were aroused among aspiring seekers for the congressional nomination in Mr. Magee's district, but how to un- horse him was not clear. Magee's sentiments and position were in sound accord with the political sentiment of the district extend- ing from the east line of Tioga county to the west line of Allegany and from the Pennsylvania line to Ontario county. It was at a time when intelligence and news were disseminated only by the stage coach mails. In the town of Bath, in an unfrequented ra- vine, lived another John Magee with his numerous family, who subsisted mainly by making splint baskets, brush brooms, chair seats of splint, and pieking berries in their season. Some versatile, capable and adroit spirits prepared an address to the electors of the district, purporting to come from Representative Magee, in which he claimed he had been deceived by and misapprehended the president's position on the bank question, and denounced him for the deception, declaring that from that time on he should con- fess his error and endeavor to make amends for his wrong judg- ment and position. The John Magee of the unfrequented ravine was induced to sign the manifesto, and in order to give the paper greater faith and force the signature was in due form acknowl- edged before a justice of the peace, to which was affixed the cer- tificate of the country clerk attesting the genuineness of the officer taking the acknowledgment. This paper was printed with great seerecy, many copies struck off and their circulation so arranged that the voters saw it on only the day before the election. All this was so adroitly managed that neither Mr. Magee or his party had time to contradict the slander or furnish an antidote for the mischief accomplished. The scheme was not made public in Bath until the afternoon of the day of the election at that place. Then
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Samuel H. Hammond, a genial, accomplished and fun-loving law- yer, from the tail end of a farmer's wagon, with an air of great surprise, read the position of John Magee on the bank question. It was received with shouts of approval, derision, laughter and cheers. The result was the defeat of Mr. Magee, accomplished by a disreputable trick, and the election of Hon. Grattan H. Wheeler to represent the Twenty-eighth district in the Twenty-second con- gress.
Mr. Magee never recovered from or forgot his defeat or for- gave those who applauded. More than thirty years after a consin. applied to him for some financial assistance. He gave an em- phatic "nay," adding, "you were one of the fellows that laughed and shouted when Sam Hammond read that miserable old basket- maker's letter in front of the Mansion House in Bath." How- ever, he relented and granted the financial aid sought.
Mr. Magee remained a widower from May 15, 1828, when his wife died, until February 22, 1831, when he married Miss Arabella Stewart, of Maryland. She died May 16, 1864, and ten children were born of this union, none of whom now survive.
The intense troubles fomented by the Kansas-Nabraska bill in 1854, creating the territories of Kansas and Nebraska and giv- ing their people the right of deciding whether or not slavery should exist in the states organized therefrom, which was called "squatter sovereignty," abrogated the Missouri Compromise, dis- rupted the Whig party, gave rise to the Republican party, and was the active origin of the war between the states. The historical political campaign in the state of Illinois, led by Senator Stephen A. Douglas for the Democrats and Abraham Lincoln for the Re- publicans, resulted in the return of Mr. Douglas to the senate. The Charleston and Baltimore conventions of 1860, the split in the Democratic party and disorganization for twenty-four years, and the election of Abraham Lincoln, followed by the war between the states, found Mr. Magee an active and unrelenting member of the Democratic party. This position he did not attempt to conceal, much to the chagrin and disgust of his former dependents, friends and pensioners upon his kindness. In the fall of 1861, against his good judgment and most earnest protest, he was nomi- nated unanimously by the convention of his party for senator from the Twenty-seventh senatorial district of the state of New York. The Republican convention nominated for the same office Hon. Charles Cook, a banker of Havana, Schuyler county. After an acrimoni- ous campaign, attended by personal insults, abuse and all man- ner of ingratitudes, which do no credit to the county of Steuben, the Cohoeton valley or the town of Bath, Mr. Magee was ernelly and brutally defeated. Mr. Cook was triumphantly elected. Un- der normal conditions the results would have been different. It would seem that his record ought, at least, to have protected him from insult.
Mr. Magee was one of the projectors of the New York and Erie Railroad, devoting himself with characteristic energy to the carrying forward and completing of this great enterprise. He was the projector and largely instrumental in the building of the Cohocton Valley Railroad, now the Rochester division and part of the Buffalo division of the Erie Railroad, from Corning to Buffalo,
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an enterprise in which the citizens of Steuben county and the territory contiguous to that railroad have ever been vitally con- cerned. His efforts and personal sacrifices were well known, but were illy repaid.
By reason of the war between the states and the preparations made for the defense of the Union and protection of its property, the business of the country became stagnant and failures were on every hand. Money had suddenly disappeared; "shinplasters" and tokens, with a promise of redemption signed by anybody, com- prised the only circulating medium. On December 28, 1861, a general suspension of specie payment took place by the banks and government depositories. The free-banking system of the state of New York, devised several years before, was the first system of banking in the United States which required securities to be de- posited for bank issues. A system for the establishment of na- tional banking had been devised by an obscure individual banker in Steuben county, New York. Through a member of congress from the state it had been submitted to Secretary Chase in the following language: "A currency of uniform security and valne, protected from losses in discount and exchanges; increased facili- ties to the government in obtaining loans; a diminution of the rate of interest, or a participation by the people in the profits of cir- culation ; an avoidance of the perils of a great money monopoly, and a distribution of the bonds of the nation to the leading mone- tary associations of the country, thus identifying their interests with those of the government." Secretary Chase embodied this, word for word, but without credit, in his report to the president and to congress in December, 1861, and a bill was prepared and printed in accordance with these views. It went to the committee of ways and means, and was by its chairman, Hon. Thadeus Stev- ens, reported adversely. The pressing necessity of the government compelled the issue of legal tender notes, instead of national bank issue, and the consideration of the secretary's bank act was de- ferred for future consideration. In March, 1863, the national bank act, as recommended by the secretary, became a law; on the 1st of July of that year the authorized legal tender notes ("green- back") amounted to nearly four hundred and twenty-five million dollars. This greenback system has been approved by many emi- nent economists, financiers and excheckeries as the most perfect and complete circulating medium ever used in this country. The legal tender note was vigorously denounced by the secretary as not within the scope of the powers delegated in the constitution. That question became acute and vital years after the constitu- tionality of the greenback came before the supreme court of the United States. Chase then was chief justice and under his lead the court, by a majority of one, held the issue unauthorized; but by reason of the importance of sustaining the legality of the issue the court was re-organized, re-argument of the question ordered, and the constitutionality of the law sustained. A study of the situation, the final results and causes, why it became necessary to take the "bull by the horns" and resort to heroic treatment, is one of the interesting problems connected with the history of our country.
fle methods and results of the state election of 1861 did not
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add to the desire of Mr. Magee for a further residenee in Bath, and the charter of the Steuben County Bank expired by its own terms and limitations on January 1, 1862. The circulation of the state banks was taxed out of existence. By reason of his assoeia- tion with General Jackson during his congressional life Mr. Magee despised the idea of organizing under the national banking law; therefore he resolved to liquidate the affairs of the bank, sell his house, leave the county and forget the past.
The officers and employes of the Steuben County Bank were all well grounded and thoroughly equipped in the foundation principles of finance and banking, as laid down and adhered to by Mr. Magee. Daniel C. Howard, who from early life had been an employe, afterwards became the cashier of this bank, and had so high a reputation for his financial knowledge that Governor John T. Hoffman appointed him superintendent of the banking department of the state of New York, which he held for the full term of three years.
Mr. Magee's residenee in Bath was a large and commodious brick house, built by him for his home. After leaving the town it was sold to Senator Ira Davenport, with the spacious yards, lawns and gardens surrounding it, by whom it was presented to the Davenport Library Association. With its well stocked and selected library, relies, manuscripts and articles of worth the institution is the pride of the people of Bath, who hold in grateful remem- brance the memory of the munificent donor, who presented his splendid gift free of the entangling and bewildering conditions which are often attached to such gifts, and which make them more burdensome than beneficial to the public.
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