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By Root 7484 0

In 1813 Congress authorized a loan of sixteen million dollars, but selling the bonds proved hard going with so many New York merchants opposed to the war. Secretary Gallatin therefore turned to a small syndicate organized by the country’s two wealthiest capitalists, John Jacob Astor (an old friend of Gallatin’s) and Stephen Girard of Philadelphia. They invented the practice of American loan contracting by purchasing the bonds wholesale (at enormous discounts), then selling them retail to friends in the States and associates in Europe. In 1814 the syndicate agreed to grant the government an additional eight to ten million dollars—if it gave them generous discounts, and if it created a second national bank. They wanted a new bank on the theory that it would stabilize the economy by curbing reckless speculation; they also expected to make tidy profits for themselves by purchasing bank stock with depreciated federal bonds, at full face value. In the final desperate months of the war, with the treasury bare, congressional resistance crumpled. Presented with an ultimatum from a “deliberate concert among the Capitalists,” the government agreed to charter a new bank in exchange for emergency loans, chiefly from New Yorkers and Philadelphians.

Manhattan shipbuilders were less grudging in their contributions to the war effort. Henry Eckford, Christian Bergh, and Noah Brown led teams of ship’s carpenters from Corlear’s Hook to the shores of Lakes Erie and Ontario. There, over the winter of 1812—13, the New York artisans helped build the brigs and gunboats with which Captains Isaac Chauncey and Oliver Hazard Perry would defend the Niagara frontier with Canada. When Perry smashed a British squadron in the Battle of Lake Erie in September 1813, the city celebrated with abandon. It subsequently accorded Perry a hero’s welcome, gave him the keys to the city, and named a street in his honor.

Eckford, Bergh, Brown, and other New York shipbuilders had plenty to do in Manhattan as well. In 1814 Adam and Noah Brown built for the U.S. Navy the world’s first steam-driven vessel of war— Fulton the First, or Demologos. The New York yards also constructed, outfitted, and repaired privateers. Enemy warships blocked the Narrows, but Long Island Sound remained open, and hastily armed merchant vessels of every description were soon streaming out to prey on British commerce. In the first year or so of the war, some 125 privateers operated out of New York alone, employing nearly six thousand men and returning with seven hundred prizes.

As in past wars, however, the profits of privateering were elusive. The typical privateer was fitted out and owned on shares, and if she returned with a prize, there were court costs, fees, and duties to be paid even before her shareholders, officers, and crew took their cuts. So few investors came out ahead, much less struck it rich, that New York merchants petitioned Congress to make the business more lucrative. Offer a twenty-five-dollar bounty for every enemy national captured or killed, they asked; give pensions to disabled privateersmen and their widows. Congress agreed, but it made no difference. By the end of 1813 the Royal Navy had extended its blockade along the entire New England coast, including the entrance to Long Island Sound. For the remainder of the war nothing under sail could get in or out of the port.

Importers of finished wares coped with the blockade by moving cargoes up the Delaware River to South Trenton, overland to the Raritan River, and thence across the Hudson to the city. The volume of traffic was considerable—in November 1813 some fifteen hundred wagon teams reportedly worked the South Trenton-Raritan leg of the journey—but it was no substitute for direct access to the port’s wharves and warehouses. Nor did it appeal to exporters of bulky agricultural products, increasing numbers of whom found it easier (and a lot more profitable) to sell their goods to the British forces poised just across the Canadian border. New York’s business with the enemy would in fact grow so rapidly in the course