USA > New York > A short history of New York State > Part 19
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On lower Manhattan before 1825 a few hundred men dominated the import and shipping houses on South Street, ran auctions and wholesaled textiles on Pearl Street, and ran the small banking houses on Wall Street. The typical countinghouse was a brick structure of three to five stories. Behind its showrooms on the first floor was the office where the merchant was surrounded by clerks making out manifests and bills of lading and posting ledgers. Most countinghouses were partnerships; only a handful were incorporated. Once a day the partners would sally forth to the
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Tontine Coffee House and other meeting places to transact business with neighboring merchants.
Several types of businessmen handled the commerce of the port. Im- ports usually passed through the hands of an exporter in Liverpool, an importer on Manhattan, then a wholesaler or jobber, and a retailer. The development of the auction system deserves special notice because al- most one-half of the total imports were sold in this way between 1815 and 1830. Only a small number of people were granted licenses by the governor and the state Council of Appointment to sell goods at auction. The Hone brothers and John Haggerty made fortunes in this business. (Philip Hone, later mayor, maintained a diary valuable as source material for his times. ) They sold the imports to wholesalers from Pearl Street, who distributed the goods to country storekeepers and to jobbing houses in the interior.
Upstate, the storekeeper was an important figure in his community; his neighbors accorded him the prestige of a professional man. He was the first of a long chain of middlemen sending the flour barrel on its way to the ultimate purchaser in England. For example, a farmer would bring in fifty bushels of wheat to Jedediah Barber's Great Western Store at Homer. After the merchant had made an acceptable offer, the farmer would buy such items as salt, potash kettles, rum, hardware, tea, sugar, and perhaps some calico cloth for his wife. Frequently no money passed hands since Barber, like most storekeepers, kept two accounts-one for the farmer's purchases and one for his deliveries. The storekeeper needed a keen knowledge of the affairs of his customers, since he frequently had to wait until the harvest for his pay. When the farmers had brought in enough goods to fill a canvas-covered wagon, Barber would send it north to Fabius and east over the Great Western Turnpike to Albany. The wagon would bring back a varied consignment of goods for the Great Western Store.
Officials appointed by the cities continued, as in colonial days, to super- vise the quality of firewood, hay, boards, grain, and other products offered for sale. But the spirit of individualism and free competition was mount- ing. The bakers of New York, for instance, protested against the assize which fixed the price of bread. Shortly after 1800 this restriction was re- moved, although the city continued to prescribe the size and weight of the loaf. Similarly, the butchers demanded the right to slaughter animals on their own premises instead of taking them to the public slaughter- house. Another example of the spread of laissez-faire ideas was the de- cline of the freemanship, originally the equivalent of a license, required by those who wished to buy or sell at retail. By 1800 practically anyone who had the capital and energy could engage in the business of his choice. The Common Council of New York City continued to prescribe
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the conditions of sale at public markets. It tried to protect the housewife by prohibiting any purchase for resale before 11 A.M. and by requiring that butchers and handlers of farm produce meet prescribed health and sanitary standards.
The whole structure of trade, both foreign and domestic, rested upon credit. Upstaters lacking sufficient hard money turned to barter, payment in kind, and long-term credit by land agent and storekeeper. Similarly the jobbers, auctioneers, and importers usually bought goods on deferred payments of thirty, sixty, or ninety days. Banks sprang up to expedite and to enlarge these credit arrangements. In 1784 a group of influential citizens sponsored a Bank of New York, which shared the growing boom in business with the New York branch of the Bank of the United States. Unfortunately, bank charters became the plaything of politicians, who could reward friends by granting valuable franchises. For example, in 1799 Aaron Burr spirited through the legislature the charter for the Manhattan Company under the guise of a company to establish a city water-supply works. By 1815 over ten banks competed for the business of the metropolis. A good index of business activity can be seen in the table of banking capital.
Table 2. Banking capital in New York City, 1800-1825.
Year
Capital
1800
$ 3,420,000
1810
7,430,000
1820
21,105,000
1825
25,105,000
The state legislature paid little attention to banking abuses, such as the suspension of specie payment, outright failures, and unstable banknote issues. The requirement of 1804 that all banking corporations have a charter failed to prescribe regulations as to reserves, the amount of loans, or the amount of notes a bank could issue. Not until 1827 did the state begin to exercise strict control of banking practices.
Specialized financial institutions evolved to meet the demand for par- ticular services. A rudimentary stock exchange developed in 1792 when certain merchants found it profitable to devote all their time to buying and selling the securities of the government. Many capitalists were in- vesting in the depreciated securities of the United States and of the vari- ous states, hoping that the government would refund these securities at par, a policy Hamilton endorsed. Activity on the exchange tended to decline after 1795 and did not revive until 1813, when the federal gov- ernment again sought to float loans. By 1817 the brokers decided to set up a formal organization to regulate the conduct of the exchange.
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Another specialized need was for marine insurance. When the Revolu- tion ended the quasi-monopoly granted to two British companies, several native concerns sprang up to underwrite shipping losses. In 1820 the companies established a Board of Underwriters which appointed cor- respondents in the major ports and hired captains to salvage the cargoes of ships that had run aground.
The New York money market during the nineteenth century was only a satellite of the London banking houses, which provided much of the long-term credit to finance the trade in cotton and wheat and, after 1820, to build the canals and railroads. Americans, however, gradually accumu- lated considerable capital resources, investing largely in land. Between 1800 and 1810 some invested in turnpike companies, and during the War of 1812 others put money into manufacturing.
Transportation remained largely waterborne throughout the period between 1783 and 1825. Probably 90 per cent of New York's trade moved over the waters of the Atlantic Ocean, the Hudson River system, and New York Bay. After 1800 highways became increasingly important as arteries of commerce.
Sail-driven vessels were by far the most important agencies of trans- portation. Colliers from Philadelphia, sloops coasting lumber from Maine and tobacco from Virginia, brigs loaded with cotton bales destined for the mills of Lancashire, schooners carrying sugar from Jamaica, and slim packets bearing mails and passengers between New York and Liverpool slipped in and out of the Narrows. Most sailing vessels were tramps with no regular schedules. Monthly packet service to Liverpool, which began in 1817, was later extended to Le Havre and London.
Small sailing vessels handled the bulk of freighting on the Hudson River, Long Island Sound, and New York Bay. Coastal shipping took somewhat larger vessels, usually schooners ranging from seventy-five to 150 tons, and still larger ones-brigs and full-rigged ships-handled trans- atlantic trade. Whalers left each year for the Antarctic from the port of Hudson as well as from Sag Harbor. Most of the four hundred sailing vessels operating on the Hudson River were sloops averaging sixty tons burden.
Steamboats, whose flimsy paddles could not stand the pounding of high seas, found the approaches to New York harbor an ideal shelter. Eighteen years after the voyage of Robert Fulton's Clermont to Albany in 1807, forty-three steamers made New York their home port. The following list indicates the main destinations: 12 ran to Albany and its rival Troy; 2 to Poughkeepsie; 11 to points on Long Island Sound; and 4 to Brunswick, New Jersey. Steamboats likewise appeared on the beautiful upstate lakes:
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Lake Champlain in 1809; Lake Ontario in 1817; Lake Erie in 1818; Lake Cayuga in 1819.
The steamboat quickly outclassed the sloop in competition for passen- gers. The Clermont made the trip to Albany three times a week, while a sloop might take anywhere from three to nine days, depending upon the vagaries of the wind. Passenger fares on steamboats were high until the Supreme Court in the famous Gibbons case of 1824 outlawed the monopoly which the legislature had granted to the Fulton-Livingston combination. Thereafter intense competition drove rates downward.
The Mohawk Valley has always been an important gateway to the inte- rior. Unfortunately, the great falls of Cohoes completely sealed the mouth of the Mohawk River, forcing merchandise, produce, and passengers to transship over the sandy plain lying between Schenectady and Albany. At Little Falls, rapids and cascades formed another barrier to navigation. These obstructions, along with shifting sandbars, dangerous rapids, and low water in the upper river, severely limited the size of the boats and made navigation hazardous, uncertain, and costly.
Even before the Revolution royal officials had urged the improvement of the Mohawk River, which was so useful in carrying troops and stores to Fort Oswego. After the Revolution, Elkanah Watson revived public interest by agitating for river improvements. In 1792 the legislature in- corporated two companies: the Western Inland Lock Navigation Com- pany to open navigation to Lake Ontario and Seneca Lake, and the Northern Inland Lock Navigation Company to build a waterway from the upper Hudson to Lake Champlain. The Western Company by 1796 had constructed a canal one mile long at Little Falls and had also cleared fallen timbers from the upper Mohawk and Wood Creek leading from Rome to Oneida Lake. The canal permitted boats of ten to eleven tons to pass, in contrast to the former maximum of one to one and a half tons. After 1797 rivermen adopted the Durham boat, which husky men pushed upstream with long poles while the captain used a long sweep oar to steer. Despite all these developments, the Mohawk River could not pro- vide enough safe and cheap transportation to handle the vast increase in traffic and travel accompanying the growth of central and western New York.
The story on the other rivers was much the same. Lumbermen floated arks and rafts loaded with potash, lumber, or wheat down the Genesee, the Susquehanna, and the Delaware. The settlers in western and northern New York floated much of their produce down the St. Lawrence to Montreal.
Frontier farmers were in desperate need of better highways. The roads of 1783 were little more than traces "underbrushed" through the forests.
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A SHORT HISTORY OF NEW YORK STATE
Stumps and roots tripped man and horse, while spring rains turned the deeply rutted earth into impassable quagmires. Pioneers laid log cause- ways across swamps and built primitive bridges across streams. Many farmers had to wait until the winter to sleigh their wheat and other bulky products to the storehouses at Albany. A two-horse sleigh could go twice as fast as a wagon, carry a heavier load, and avoid the dangers of swamps and rivers.
Between 1783 and 1825 several significant changes took place in land transportation. The state inaugurated the policy of building a few key roads, but most highways were constructed by private companies. An- other unplanned development was the laying out of the permanent road pattern of the state.
Why did private rather than public agencies take the lead in building roads during the turnpike era? It was simply that the government could not move fast enough to meet the pressing need. The legislators repre- senting the older communities along the Hudson River, New York Bay, and Long Island Sound were reluctant to raise taxes to spend on frontier roads. They limited state action to the construction of a few routes, such as the Genesee Road, financed partly by lotteries. Moreover, the town- ships upon which the entire burden of roadbuilding rested had neither the financial resources nor the experienced overseers to construct ade- quate roads. Frontier communities obviously lacked both workmen and taxable property, whereas farmers in the older towns, obligated to work several days each year on the roads, felt little desire to keep them in repair for through traffic.
But frontiersmen eager to take their produce to market, large land- holders hopeful of increasing the value of their inland tracts, and river towns ambitious to secure the trade of the interior kept demanding more and better roads. The success of the Philadelphia and Lancaster Turnpike aroused keen interest, and New York merchants began petitioning the legislature for charters to build roads in return for the right to charge a traffic toll. Between 1797 and 1807 eighty-eight turnpike and bridge com- panies, with an authorized capital of $5,556,750, received charters and constructed about nine hundred miles of turnpikes.
Public enthusiasm for toll roads mounted higher during the War of 1812, when the need for supplying the armies at Plattsburgh and Fort Niagara reinforced the demands of the farmers. The legislature handed out charters with a lavish hand, and 278 turnpike companies had con- structed four thousand miles of roads by 1821. Thereafter, the movement slackened, and many of the roads, especially those paralleling canals and railroads, fell into disrepair, although a score of turnpikes serving hill towns in the north country and in the southern tier of counties were in use until after the Civil War.
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The earliest turnpikes terminated at the Hudson River ports. Albany became and remained the turnpike and staging center of the state. Eight turnpikes thrust outward like spokes in a wheel. To the west were two trunk roads-one going to Schenectady and up the Mohawk Valley, the other following present Route 20. From the east a turnpike approached Albany from Lebanon Springs, and from the south came the New York and Albany Post Road, which was particularly useful in the winter when ice choked the Hudson.
Merchants in Newburgh and Catskill promoted turnpikes to the west. The Newburgh and Cochecton Company and the Susquehanna Turn- pike, the latter from Catskill to Unadilla, had western extensions which permitted travelers to reach Ithaca. From Ithaca a traveler could also reach Bath, an important commercial and transportation center. The turnpikes mentioned here are only the more important of the scores covering the state.
Wagons, stagecoaches, herds of cattle and sheep, Yankee peddlers, itinerant artisans, and farm vehicles formed an ever-moving pageant on these roads. Teamsters, as proficient with their tongues as with the long whiplash, walked beside the wagons, which carried wheat, flour, cheese, potash, and whisky. Twenty miles was the daily goal of many drivers. The heavy wagons wore deep ruts even in the few macadam- surfaced roads. The tollhouses often granted special low rates for wagons having wheels more than six inches wide on the theory that they were less wearing on road surfaces.
Taverns for the wagoners and stagecoach passengers dotted the road- side much as gas stations, tourist cabins, and restaurants fringe our modern highways. The innkeeper was often a man of importance, and many were former army officers or judges. One observer noted that to become a lawyer or tavern keeper was the "surest road to public honours and riches."
The stagecoach was the queen of the old turnpike and kept a firm grip on the passenger traffic until the decade of the 1830's, when the railroad stole her customers away. The staging business employed thou- sands of agents, drivers, hostlers, porters, and division superintendents. Promoters linked together several local companies into larger firms and made traffic arrangements between companies. Stagecoach routes antici- pated many of the bus routes of the twentieth century.
But neither the turnpikes nor the Mohawk River could solve the crucial problem of providing cheap transportation for heavy goods. Throughout the frontier region arose the demand for more roads and canals. Leading figures began to point out that the topography of the state was the most favorable in the nation for building a canal from the Atlantic to the waterways of the interior.
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Several notables share the credit for promoting the greatest piece of engineering attempted within the United States up to that time. Gouver- neur Morris, in 1800, was perhaps the first to advocate building a canal from the Hudson to Lake Erie. James Geddes, a land surveyor of Onon- daga County, made a survey in 1809, laid out a practicable route, and in the next year assisted the state survey commission headed by De Witt Clinton. Thence began the drive to secure financial support. A delegation approached Congress but came back empty-handed.
When peace came in 1815, Clinton, then mayor of New York, wrote a famous pamphlet describing the advantages which the canal would bring. Up and down the line of the proposed route citizens echoed his appeal and petitioned the legislature for aid. Many Federalists joined the cam- paign because they believed the canal would increase trade, raise land values, and promote manufacturing. Representatives from New York City were in general skeptical of the project because taxes would increase and upstate communities would benefit at their expense. De Witt Clinton brushed aside their objections and in 1817 the legislature authorized construction.
The Erie Canal was pushed forward with a vigor and a speed not commonly associated with public enterprise. Most of the contractors were well-to-do farmers who built short sections. The middle portion, running for almost a hundred miles west of Little Falls, was in operation as early as 1820, and three years later boats could pass from the Hudson to Rochester. In October 1825 New York celebrated the completion with a state-wide jubilee, as the first boat prepared to make the journey from Buffalo to New York. Buffalo gave the official party a gala send-off. Its departure was the signal for a grand salute from a battery five hundred miles long, each cannon echoing the report of its neighbor. New York City witnessed another impressive ceremony when Governor Clinton poured a keg of Lake Erie water into the ocean.
The watercourses and topography between Lake Champlain and the upper Hudson made it possible for another canal to be dug, connecting the two waterways by 1823. A channel four feet deep and forty feet wide-the same as that of the Erie-connected Whitehall on Lake Champlain with the Hudson at Fort Edward and later was extended to Waterford. The Champlain Canal gave a great stimulus to the lumber- ing operations in the eastern Adirondacks.
Although the success of the canal program was evident before 1825, its full effect upon the cities, state, and nation was most marked in the following quarter century and will be examined in a later chapter.
Signs of New York's future supremacy in manufacturing were clearly visible in 1825. In textiles New York's manufacturers trailed those of
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Rhode Island and Massachusetts. In iron and steel Pennsylvania took the lead. But in hundreds of manufacturing enterprises New Yorkers were the pacesetters for the nation.
The home remained by far the most important unit of production. The family continued to produce most of its own foodstuffs; it clothed its members; furnished them with handmade tools, and made most of the household equipment. Nevertheless, there was a noticeable drift of many operations to village shops manned by such artisans as millers, shoemakers, blacksmiths, coopers, weavers, and tanners. Furthermore, the tiny gristmills tended to vanish as a few large mills grew up near the major waterfalls. Similarly, local tanneries gave way to the rather large establishments centering in the Catskill region. Gradually oper- ations in the manufacture of clothing moved outside the family. After 1800 small carding mills arose in almost every township where a water- driven wheel could pull the tangled fibers through the combs. Fulling mills often "dressed" and dyed the cloth, which was still usually woven in the home. The growth in the number, size, and complexity of these establishments lying in the twilight zone between the home and the factory was perhaps the most significant development in this period.
Industry in factories, i.e., those equipped with machines and manned by workers performing specialized functions, had scarcely emerged from swaddling clothes at this time. The census of 1820 lists only 6,409 men, 927 women, and 2,423 children as employed in manufacturing. This number was a minute fraction of the total population of 1,372,812. Many factors helped to stunt industrial growth. Few Americans had any money to invest, and those who did usually preferred to buy wild lands, to set up a commission house, or to buy shares in a shipping venture. Be- sides, the British manufacturers were well established and undersold their American rivals. Few native Americans knew how to operate or repair textile machinery. It is significant that a majority of our early enterprisers and foremen in the textile industry were English im- migrants. Many Americans were suspicious if not hostile to the erection of factories. The followers of Jefferson and George Clinton extolled the independent farmer as a much superior citizen to the propertyless urban worker. Even Federalists, with notable exceptions such as Alexander Hamilton, regarded manufacturing as less safe and certainly less genteel than landholding, agriculture, shipping, or merchandising. This uncon- genial atmosphere no doubt discouraged many from entering manu- facturing.
Despite these handicaps, a small thriving textile industry had become firmly established by 1825. At least three companies got under way in the early 1790's in New York, but they soon failed. The Napoleonic Wars and the conflict with Britain in 1812 reduced imports and brought
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about an upsurge of American nationalism which enabled the textile industry to gain a permanent foothold. By 1813 forty-three companies were manufacturing cotton or woolen cloth. Most of these factories sought the fine watersites in Oneida, Columbia, and Dutchess counties and below the falls of the Mohawk at Cohoes.
The development of the textile industry in Oneida County deserves special mention because it foreshadowed the future importance of the Mohawk Valley in the manufacture of cotton and woolen cloth and knit goods. Dr. Seth Capron and Benjamin Walcott, both familiar with the cotton manufacture in Rhode Island, organized the Oneida Manufactur- ing Company in Whitestown in 1809 in association with local and Albany capitalists. In 1811, encouraged by handsome profits, the stockholders established a woolen factory at Oriskany which was among the few to survive the postwar collapse. To underscore the nonindustrial character of the state, one should note that in 1827 fewer than eight hundred people worked in the textile mills of Oneida County-less than 2 per cent of the population of the county.
The government showed some willingness to befriend industry, espe- cially during the period of ill feeling and war with England. In 1815 state legislators, noting the distress of textile manufacturers, urged New York congressmen to place a high tariff on imports. They also exempted textile mills from taxation and relieved textile workers from jury and militia service.
The followers of Jefferson in New York withdrew special favors from industry after the War of 1812 because they preferred to stimulate manufacture in the homes. The protection movement, however, won much support not only among the remnants of the Federalists but also among wool growers and manufacturers of woolens. Naturally enough, these groups supported the tariffs of 1816 and 1828, which protected native products.
The enactment of the first general incorporation law for manufacturers in 1811 was a great boon to industry. It enabled enterprisers to take advantage of the benefits of the corporate form: limited liability, corporate personality before the courts, long or perpetual life, and distribution of shares to an ever-widening group of investors. The legislature extended the act in 1816 for another year, revived it in 1818 for a period of five years, and in 1822 made it permanent.
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