Gotham_ A History of New York City to 1898 - Edwin G. Burrows [361]
Above all, it was the state-run Erie Canal that secured New York City’s position as the nation’s entrepôt, galvanizing its commerce, its banking, its stock market, and its manufacturing sectors: in 1825, the year the Erie commenced operation, five hundred new mercantile operations opened their doors in the city. Government aided entrepreneurs in many other ways as well. Fulton and Livingston perfected their steamboat under the aegis of a state monopoly without which they would not likely have spent the time, money, and energy it took to bring the project to completion. A similar monopoly encouraged the New York Gas-Light Company to illuminate the streets—by warding off competitors, subsidizing construction, and guaranteeing an initial market. State law also undergirded the monopolistic auction system, which generated some of the largest fortunes of the era, and its Safety Fund assured local bankers of the most stable operating environment in the nation. Finally—the ultimate boon—the New York legislature dispensed, in ever-increasing numbers, the privileges of incorporation, a grant of limited liability originally intended to achieve public purposes, which now became a device to undergird private profitability.
Federal initiatives, too, provided an extensive support system for Manhattan’s risktakers. Washington dispensed shipbuilding contracts, dispatched the navy to protect city merchants in hostile waters, maintained forts to safeguard the harbor, banned foreign vessels from the American coastal trade, and, by charging the same postage for long- as for short- haul mailings, helped New York publishers undersell their regional competitors.
Municipal government continued to serve as custodian of the economic order by exercising a broad regulatory authority. In 1828 the Common Council licensed or appointed nearly seven thousand people—including the cartmen, porters, longshoremen, dray carriers, and hackney-coach drivers who moved commodities and people around the port—and municipal regulations had an impact on 255 occupations. Manhattan also maintained an expanding public market system. Though the old Fly Market closed in 1821, the Franklin Market opened that same year at Old Slip, the Fulton Market arrived in 1822, and in 1828 Washington Market was expanded by filling in adjacent wetlands, becoming by the end of the 1830s the leading revenue producer of the city’s twelve venues.
The city corporation, moreover, while continuing to run its own “estate” (with some ancient franchises, notably the ferries, now more lucrative than ever), focused more attention on providing a planned and predictable public environment within which market actors could operate and invest. Waterfront improvements and mandated low wharfage rates kept the docks competitive. The grid underwrote real estate development by making clear where property-enhancing roads would run. The new administrative agencies created back at the turn of the century worked to abate public nuisances and speed the flow of commerce. And tax policies favored capital accumulation: real and personal property were flagrantly underassessed, while bank stocks, bonds, and mortgages were not taxed at all until 1823.
Laissez-faire rumblings did emerge from several quarters. The Rev. John McVickar, professor of moral philosophy at Columbia and scion of a leading mercantile family, was a disciple of David Ricardo and a stout opponent of government intervention in the economy. “I cannot but reverence the claims of free commerce as something holy,” he declared. Yet even McVickar, in his Outlines of Political Economy (1825), admitted there was a role for government in executing expensive infrastructure projects, and he specifically praised the Erie Canal.
It was easier for most Manhattan businessmen to hew to mercantilist convictions inasmuch as, given their continuing hold on political power, public projects were in effect overseen by the merchants themselves. Beyond that, the