USA > New York > New York City > The Memorial History of the City of New York: From Its First Settlement to the Year 1892, Volume III > Part 38
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stranger to the people of New-York. There were some of his com- panions in arms still living, who had wel- comed his arrival here in 1784, when he re- ceived the freedom of the city; and it was just ten years since his last visit, when he was again the guest of the city. His death in France, on May 20, was announced by General CHATEAU LA GRANGE.1 Morton in division orders on June 21. The common council ordered the ceremonial proceedings. The city buildings and numerous public and private houses were draped with mourning insignia. A proces- sion, in which the military was specially distinguished for its admir- able tenue, moved from the City Hall to the Castle Garden; in it were carried the urn and the eagle which formed a part of the decorations at the funeral of Washington. At Castle Garden an address was delivered by Frederick A. Tallmadge, and in the evening the urn was removed by torch-light, attended by a solemn civic and military procession.
Still another riot disturbed the peace of the city. This, known as the
1 From an original drawing in the possession of the Editor, who is indebted to Mrs. Julia Clinton Jones for the following unpublished letter ad- dressed to her uncle Charles Clinton, expressing sympathy for the death of his father, De Witt Clinton :
"PARIS, March 30, 1828.
"MY DEAR SIR: Your particular and friendly attentions to me, make you the natural organ of the melancholy and affectionate feelings, which I wish to be conveyed to the family of your la- mented father. I regret the mournful and un- expected event, as an immense loss to the public and a great personal cause of grief to me. Bound as I was to the memory of my two beloved
Revolutionary companions, your grandfather and granduncle, I had found a peculiar gratification in the eminent talents and services of their son and nephew, and in his kind and liberal corre- spondence, until personal and grateful acquain- tance had impressed me with all the feelings of a more intimate friendship. I beg you to be to your afflicted family the interpreter of my deep sym- pathies, and to believe me forever,
"Your most sincere friend, " LAFAYETTE. "Colonel CHARLES CLINTON.
"P. S .- My son and Le Vasseur beg to be mournfully remembered."
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HISTORY OF NEW-YORK
"Five Points riot," broke out in the summer of 1835. It was an. out- come of the election brawls of the two sections of the Democratic party and the fierce antagonism between the Irish and Americans. The an- nouncement that an Irish regiment, under the name of the O'Connell Guards, was to be organized in the city, aroused the native American spirit to indignation. On Sunday, June 21, rioting began simultane- ously in several parts of the city, the principal scene of action being the Sixth Ward, in Pearl street, near Chatham. Many prominent citizens were badly injured in their attempts to keep the peace, but order was at last restored by the police without the aid of the military, to which there had been more recourse latterly than augured well for civil government. The "stone-cutters' riot," which happened in August, 1834, was caused by the employment of the State prisoners at Sing Sing to hew marble with which to construct buildings in this city by the contractors for the University building. The mob was dispersed by the Twenty-seventh Regiment, which for four days and nights lay under arms in Washington parade-ground.
At the spring election of 1835 a most serious question was sub- mitted to the decision of the people. New-York had never enjoyed any proper and reasonably assured water-supply for a population of her extent and promise. The tea-water works, which were put up in 1786 at the Collect pond, or Fresh Water, had supplied the city by casks until 1799, when the Manhattan Company was chartered to bring a supply from the Bronx River. A pump was built near the Collect and wooden pipes laid through the streets, but the Manhattan Company never tapped the waters of the Bronx, and the city was forced to con- tent itself with the old Collect supply, with the additional convenience of the wooden pipes and the street pumps, which were not infrequent. It was now decided by popular vote, by a large majority, to construct an aqueduct from the Croton River, an undertaking of great magni- tude in those days, considering that the distance the water had to be conveyed was forty miles. This project had been carried through the common council by the persistent energy of Samuel Stevens, for many years a representative of the Second Ward as alderman and assistant alderman. His name appears first among those of the com- missioners on the tablet set up at the Forty-second street reservoir in 1842, on the completion of that colossal enterprise.
In 1835 the city was visited by one of the most terrible calamities in her history. A fire broke out on the night of December 16 of that year, which raged fiercely for two nights, and was not extin- guished till the third day. In its course along Wall street, the line of the East River, and returning to William and Wall streets, it em- braced a large irregular triangle of ground, an area of thirteen acres, covered by six hundred and ninety-three houses and stores, with
THE BEGINNING OF NEW-YORK'S COMMERCIAL GREATNESS 345
property valued at eighteen millions of dollars.' Among the build- ings was the fine marble Exchange in Wall street, and the South Dutch Church in Garden street. The stores were mostly wholesale. The fire-insurance companies of the city, al- most without exception, went down under the blow. The weather was intensely cold; the insufficient supply of water froze in the pipes and hose, thus paralyzing the labors of the citizens. The horrors and sufferings of this night exceed description. The gen- tlemen of the city were all on the ground, and the properties of the Wall street insti- tutions were moved and moved again before final safety was secured. Yet, as in previ- ous periods of distress, the energy of the citizens was equal to the emergency ; and MASONIC HALL, 1830. New-York, within an incredibly short period, rose from its ashes rebuilt and vastly improved. The buildings erected were of a supe- rior character, and the streets themselves were somewhat changed for the better.
In 1837 the city added another to its series of riots. Various causes had occasioned a short supply and high prices for flour and wheat at this period. A short crop, followed by a speculation in part occasioned by the abnormal condition of the currency, had brought up the price of flour from seven to twelve dollars per barrel. News was circulated of a short crop in Virginia, and of an immediate short supply in New-York. The price of meat went up next, and coal advanced to ten dollars a ton. A public meeting was called to consider the situation, but it was one of those problems that no public meeting can solve. The news that the commission-houses in Washington street were holding back and increasing their stocks caused a bad feeling in the laboring classes. On February 10, 1837, a placard reading, "Bread, Meat, Rent, Fuel! The voice of the people shall be heard and prevail," summoned a meeting at the City Hall park at four o'clock in the afternoon. The placard was signed
1 Mr. Gabriel P. Disosway, an eye-witness of this terrible event, and who has left on record an ex- tended and minute description of it, furnishes the following statement of the exact number of houses burned on the various streets:
Exchange alley
31
William street
44
Old Slip
33
Stone street.
40
Mill (now S. William) street.
38
Wall street.
26
South "
76
Front "
80
Coenties Slip
16
Water "
76
Hanover Square
3
Pearl 79
Cuyler's alley
20
Exchange Place 62
Gouverneur's Lane.
20
Total
693
Jones's "
10
Beaver street
23
Hanover .
16
EDITOR.
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. ' arte which included all but Light of the ninety eight State .my meeting : $0,000 and applicable to make good any de satt ar ange of failure. The oldest bank in the city, the Bank of "i" York, and provided over by Cornelius Heyer as president, and Anthony 1. Halvery wo cashier. Among its directors were Gardner G. Howard, later Heharmothorn, Charles McEvers, John Oothout. Rob- 11 Maitland, Hanry Bookman, Forward R. Jones, and Robert Benson. freqpite Bar ,col). The Bank of America was presided over bis Hoogte Nowhold. Its board of directors were George Griswold, 111/1 Whitney, Jonathan Goodhne, Benjamin L. Swan, Peter Vous, John W tonvitt, and Manuel M. Fox. The capital was
1 the well11 10, 11less Is to waw router of a "History of Trinity Church." and also edited Saludos a loose lo things fall quell lite south too late the works of Bishop Hobart, with a memoir. in 1. pol.1 . lot to.1. 1. to riaslos and trade " and there volumen.
EDITOR
THE BEGINNING OF NEW-YORK'S COMMERCIAL GREATNESS 347
$1,000,000. Mr. Newbold was an autocrat among the bank presidents, and had matters much his own way until the establishment of the Bank of Commerce, in 1839, which gradually took the lead, and after his death, by its great strength, and the ready availability of its funds through a system of short discounts, served as a kind of check upon the banking system of the city.
The Bank of the State of New-York was under the management of Cornelius W. Lawrence, with Reuben Withers as cashier, and in the board were Isaac Townsend, John Stewart, Charles A. Davis, Charles Denison, Henry W. Hicks, and Ferdinand Suydam. In the City Bank were Thomas Bloodgood, president, and among the directors Richard M. Lawrence, Benjamin Corlies, Joseph Foulke, David Parish, Abra- ham Bell, Henry Delafield, and John P. Stagg. The Manhattan Company was presided over by Robert Gelston, and in the board were found the names of John G. Coster, Jonathan Thompson, James McBride, David S. Kennedy, William B. Crosby, William Paulding, Thomas Suffern, James Brown, and Recorder Richard Riker. The Mechanics' Bank had John Fleming for president, and for directors Jacob Lorillard, Gabriel Furman, Henry C. Dedham, George Arcula- rius, and Shepard Knapp. The Merchants' was managed by John T. Palmer, president, and Walter Mead, cashier, with Henry I. Wyck- off, James Heard, David Lydig, Peter T. Nevins, Benjamin Lyman, and John D. Wolfe. The National Bank was managed by Albert Gallatin, Jefferson's and Madison's secretary of the treasury, whose financial ability was supreme, and of world-wide fame from his mas- terly management of the national finances. In his board were Wil- liam B. Astor, Seth Grosvenor, Dudley Selden, and Elisha Riggs. The Phenix Bank had Henry Cary for president, and John Delafield as cashier. Among the directors were Henry Parish, James W. Otis, Garrett Storm, Moses H. Grinnell, and Robert Ray. The Union Bank had Abraham G. Thompson for president, and Samuel I. Howland, Morris Ketchum, and Mortimer Livingston in the management. All of these banks were in Wall street. The names here given are those of the men who were at the head of the great commercial and finan- cial enterprises of the day - every one representative, and familiar as the alphabet to every New-Yorker of the passing generation. The Chemical Bank, a private institution, almost a family strong box, was managed by John Mason, president, in person, with his kinsman Isaac Jones, Gideon Tucker, and Thomas W. Thorne at the green table where discounts were made and high finance discussed by a select few. Owing to the fact that the country was developing its material resources in great measure with capital borrowed from Europe,- the balance of trade setting against the United States at this period, yearly increasing our indebtedness abroad,- New-York was at any
348
HISTORY OF NEW-YORK
time liable to a demand for gold from Europe. The value of the strong institutions was then seen, as well as the wisdom of separat- ing the earnings of the laboring class from the general fund.
Mention, therefore, must not be omitted of the several savings- banks which, with their conservative management, played an im- portant part in those days of financial fluctuations. The New-York Bank for Savings, the first in New-York and in the United States, founded in 1819, was still directed by John Pintard, one of its original projectors, with Peter Augustus Jay and Philip Hone as first and sec- ond vice-presidents, and a board of the highest ability, experience, and respectability. There were in this year (1837) 26,427 open accounts, entitled to $3,533,716.88. David Cotheal was the president of the Bowery Savings Bank, George Suckley of the Greenwich, Benjamin Strong of the Seamen's, with Pelatiah Perit as one of the vice-presi- dents and Caleb Barstow as the secretary. The fire-insurance com- panies were twenty-six in number, most of them badly crippled by the losses of 1835, and some lately reorganized by assessments or contributions to stock. The Farmers' Fire Insurance Company was the only trust company in the city, no others having been organized at that time. It is now better known as the Farmers' Loan and Trust Company.
The national election of 1832 turned, in a great measure, upon the question of free trade. The condition of the national finances was favorable to a dispassionate discussion of the principle. The national debt was nearly extinguished. The rapid growth of the country had so increased its revenues that the secretaries of the treasury who fol- lowed Albert Gallatin, adhering to his lines of policy and administra- tion, had been able to extinguish the last remains of the extraordinary expenditure occasioned by the war of 1812. Louis McLane, Secre- tary of the Treasury, in his report of December, 1832, on the finances, announced that the dividends derived from the bank shares held by the United States were more than were required to pay the interest, and that the debt of the United States might therefore be considered as substantially extinguished after January 1, 1833. Mr. Gallatin, the advocate of this policy of extinction, which seems to have been since accepted by our financial ministers irrespective of party, was now a resident of New-York. Soon after his return from his last mission to England he settled permanently in the city, taking a house in Bleecker street in 1829. Here he became one of the leading figures of interest. His long experience of public men and public affairs on the two continents of Europe and America rendered his conversation instructive, and his counsel was eagerly sought on a large variety of subjects, -financial, scientific, literary, and even political, though he had withdrawn from active interest in this direction.
.
THE BEGINNING OF NEW-YORK'S COMMERCIAL GREATNESS 349
In advocating the policy of extinction of the national debt and of a corresponding economy in the national expenditure, Mr. Gallatin's purpose was a reduction of the revenue by a lowering of the tariff. As the election of 1832 approached, and parties began to formulate their platforms, the advocates of a protective tariff, with a consequent national expenditure for internal improvements, and of a tariff for revenue only, drew their lines more closely. On September 3, 1831, a convention of the advocates of free trade, without distinction of party, met in Philadelphia. Two hundred and twelve delegates appeared. New-York was represented by Albert Gallatin, Preserved Fish, John Constable, John A. Stevens, Jonathan Goodhue, James Boorman, and Jacob Lorillard. Gallatin was the soul of the convention, and was chairman of the com- mittee of fourteen, one from each State represented, which drafted the "Memorial to the People." Its conclusions were that a tariff of twenty-five per cent. was ample, as experience had proved, for all the legiti- BRIDEWELL, CITY HALL PARK. mate purposes of government. The non-partizan nature of this con- vention appears from the presence of Goodhue and Stevens, of New- York, both of whom were faithful adherents to the great fundamental principles of the Whig party. The recent attempt to make unbelief in or support of an economic doctrine a condition of party fealty had not then been formulated.
In 1832 Mr. Gallatin accepted the presidency of a bank in New- York, the subscription to the stock of which (amounting to seven hundred and fifty thousand dollars) was completed by Mr. John Jacob Astor under stipulation that Mr. Gallatin should supervise its man- agement. This was the National Bank of New-York. The idea of this arrangement was to secure to New-York the benefit of Mr. Gallatin's great experience and intimate connection with financiers abroad. New- York was rapidly becoming the financial center of the commercial system of the United States, and the financial system of the republic was now about to undergo a radical change. In December, 1833, Roger B. Taney, Secretary of the Treasury, reported to Congress that he had directed the removal of the deposits of the government from the Bank of the United States and placed them in banks designated by himself. In his annual report, Taney named as one of the reasons for this removal that the bank had used its money for electioneering purposes, and that he "had always regarded the result of the last election of President of the United States as the declaration of a
350
HISTORY OF NEW-YORK
majority of the people that the charter ought not to be renewed." That election had reelected Jackson to the presidency. Taney said further that "a corporation of that description was not necessary either for the fiscal operations of the government or the general con- venience of the people." Mr. Gallatin, on the other hand, had always been a steadfast friend of the Bank of the United States. He had only recently, in a masterly paper published in 1830 in the " American
Poly 4. 183.
2 may grandfather Denge Clinton Research
Henry Mard wright of my Best Bolt far Mand the han far from hellhere Mak freely
SIGNATURES FROM THE ORDER OF THE CINCINNATI.
Quarterly Review," shown that from the year 1791 the operations of the treasury had, without interruption, been carried on through the Bank of the United States without loss, except in the years 1811 to 1814, when the mismanagement of the State banks had brought on the financial disaster of the latter year, and compelled the re charter of the semi-governmental institution. There was no such thing, how- ever, as resistance to Jackson's views. In December, 1835, Levi Woodbury, Taney's successor in the treasury department, reported "an unprecedented spectacle presented to the world of a government virtually without any debts and without any direct taxation." But the conservative instrument by which this happy condition had been attained was now stripped of its influence. Moreover, the surplus
THE BEGINNING OF NEW-YORK'S COMMERCIAL GREATNESS 351
revenues of the United States, about thirty-seven millions of dollars, had been distributed among the several States .:
On the expiration of its charter in March, 1836, the renewal of which Jackson had imperatively refused, the Bank of the United States accepted a charter from the State of Pennsylvania. It was still the one great financial institution of the country, but its management was no longer the same. It had the power for evil, and no longer the influence for good, in general affairs. In the same manner as in 1811, after the withdrawal of the control of the Bank of the United States, the State banks ran a wild career of specula- tion. From 1830 to 1837, three hun- dred new banks sprang up, with an additional capital of one hundred and forty-five millions of dollars-doub- ling, as twenty years before, the banking capital of the country. The Bank of the United States, of Penn- sylvania, under the direction of Nich- William Say " olas Biddle, was swept along in the resistless tide. As one scheme after another of industrial or land speculation was floated, this institution found itself compelled to dangerous financial expedients. Abandoning its legitimate business of discount and deposit, it sent an agent to New Orleans to buy up the cotton crop of Louisiana, Mississippi, and Alabama as a basis for foreign exchange. The Barings, alarmed for the supply of the Eng- lish cotton manufacturers, sent to New Orleans John A. Stevens of New-York. With the superior facilities of their great credit, Mr. Stevens had no difficulty in securing the choice of the market, and, moreover, righting the ratio of exchange by the purchase of the best Northern and Western notes; the difference in exchange between New York and New Orleans ranging as high as twenty-seven per cent.,- a condition of things impossible in the days of the old Bank of the United States with its established branches.
The volume of the general banking circulation of the country was still further swelled by the deposits of the revenues of the United
1 Judge Jay, son of Chief Justice Jay, born June 16, 1789: died October 14, 1858. He was a distin- guished jurist and author, and took active part in antislavery labors. Horace Greeley said of him : "To Judge William Jay the future will give the credit of having been one of the earliest advocates of the modern antislavery movements, which at
this moment influence so radically the religion and the philanthropy of the country, and of hav- ing guided by his writings, in a large measure, the direction which a cause so important and so conservative of the best and most precious rights of the people should take." EDITOR.
352
HISTORY OF NEW-YORK
States. Secretary Woodbury became alarmed for their safety. In December, 1836, he reported the paper currency of the country to have increased since the removal of the deposits from the Bank of the United States from eighty millions to one hundred and twenty millions of dollars, or forty millions in eighteen months; and the bank capital in the same period to have increased from two hundred to three hundred millions of dollars. The flush times were at the flood. Importations augmented. Suddenly a check came. . The balance of trade turned against the United States to a sum of one hundred and fifty millions, and coin was shipped abroad to liquidate the account. But as the entire amount of specie in the country did not exceed the sum of seventy-three millions, the reaction was sharp. The contrac- tion which set in was still further heightened by the withdrawal by Mr. Woodbury of the government deposits from the selected deposi- taries, or "pet banks," as they were termed. Had there been any government debt to attract a foreign investment, the situation might have been tempered. It must not be forgotten that at this period the United States was not a specie-produc- ing country. It accumulated only as the result of a sound financial policy. It could not be retained when demanded by Europe, except by a general suspension. The result was unavoidable.
On May 10, 1837, the New-York banks suspended. Mr. Gallatin's bank went down with the rest. It is idle to suppose that any single bank can maintain itself against a general suspension. It may liqui- date, become a bank of deposit, paying out in the currency it re- ceives, but it cannot maintain itself on a specie basis when gold is at a premium, or hold its relations with its sister institutions except on a basis of common accord. A general suspension of all the banks of the United States followed. It was under these circumstances and at this period that Mr. Woodbury devised the United States sub- treasury, which he recommended to Congress as a plan of "keeping the public money under new legislative provisions without using the banks at all as fiscal agents." This has been described as "a new departure in treasury management and a further evolution in American finance." Its advantages have been incalculable. In fact, it was the only alternative to a national bank under government control, after the general plan of the great European government institutions.
Mr. Gallatin, unable to prevent the suspension, immediately set himself to work to bring about a partial liquidation and an early resumption. He had the hearty cooperation of the able men who then controlled the banks of the city. On August 15, 1837, the officers of the New-York banks, in general meeting, appointed a committee to call a convention of the principal banks to agree
THE BEGINNING OF NEW-YORK'S COMMERCIAL GREATNESS 353
upon a time for a resumption of specie payments. This commit- tee, on August 18, addressed a circular to the principal banks in the United States, inviting the expression of their wishes as to the time and place for a convention, suggesting New-York as the place, and October, 1837, as the time. The law of the State of New-York dissolving any bank as a legal corporation in case of its suspension for one year, it was imperative that resumption in New-York must take place before March 1, 1838. In the circular the New-York banks committed them- selves to no definite plan nor to any specified day, but expressed the opinion that the fall in the rate of exchange indicated an early return of specie to par, when resumption could be effected without danger. In fact, the collapse of the vast pa- per fabric had been so sudden that it carried with it in its fall the entire scheme of land speculations, which was the particular craze of this exciting period.
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