Gotham_ A History of New York City to 1898 - Edwin G. Burrows [480]
Hone himself was swept away in March 1836 when he sold his house at 235 Broadway, across from City Hall, to the owner of the adjacent American Hotel, who wanted an annex. Hone received sixty thousand dollars for a building he had purchased fifteen years earlier for twenty-five thousand dollars. “I have turned myself out of doors,” he wrote wryly, “but $60,000 is a great deal of money.”
If the new Merchants’ Exchange was the symbol of the Wall Street financial district, then Astor House, a block from Hone’s former residence and just across from the Park Theater, became the emblem of the expanding commercial sector. Astor had long been attuned to the fortune awaiting those who cultivated the city’s entertainment and hostelry industries. In his prior ventures as landlord-impresario, including the Park Theater, Vauxhall Gardens, and the City Hotel, Astor had let others take the lead, then moved in to absorb a going concern. Now he decided to be an innovator. Even before the great fire accelerated downtown development, Astor had grasped that the area around City Hall, having been on the town’s periphery for two hundred years, was emerging as New York’s new civic and commercial center, with its park and churches, theaters and newspapers. By the mid-1830s, moreover, there was an enormous flow of tourists and visiting businessmen—over seventy thousand annually (nearly half the city’s population of two hundred thousand). Astor would capitalize on this traffic with a mammoth luxury hotel to rival Boston’s Tremont House.
When it opened in 1836 many thought the Greek Revival structure the “grandest mass” in town—not beautiful, but impressive. Five stories of Quincy granite were arranged around a central courtyard. Its 309 rooms at times housed up to eight hundred guests. Each floor offered bathing and toilet facilities—a real novelty, something even the finest mansions and elegant boardinghouses usually lacked. Astor House also featured gas lighting provided by its own plant, as well as a table d’hote eatery at which guests and city merchants could choose from among oyster pie, round of beef, roast wild duck—in all, thirty meat and fish dishes each day. Soon its main hallway was bustling with guests, the street in front was piled with luggage, and a New York institution had launched its long career.
FEVERED FINANCE
The city’s economy did more than simply rebound from the triple blows of cholera, Bank War, and fire; it shifted into overdrive. Peter Cooper had hoped the great blaze—which in his opinion had been a “flagrant providential warning”—would curb the frenzied speculation on Wall Street, but in 1836 the volume of trading on the NYS&EB soared upward. Land transactions in the city set astonishing records. The value of Manhattan real estate, registered at $143 million in 1835, mounted to $233 million within twelve months. Most of this also represented speculation, Governor Marcy warned in 1836, with plots and buildings being purchased “not for the purpose of being occupied by the buyers, but to be again put in the market, and sold at still higher prices.”
The surge was stoked by a tremendous expansion in the availability of credit. Money was cheap and plentiful, inspiring diligent entrepreneurs and speculative manipulators alike to expand their operations with borrowed funds. State banks, freed from Biddle’s fierce scrutiny, pyramided their modest specie bases into mountains of paper credit, and across the country legislatures chartered over two hundred new banks in three years, pushing the total to over six hundred. In New York State the Bank Commission fought to slow the increase, and the legislature refused all new charter proposals in 1835. But 1836 brought a torrent of new banks, many of which quickly issued notes far beyond any reasonable ratio to their holdings of specie. The nation’s specie supply was itself rising, in the form of a fortuitous glut of silver, occasioned by a rising Mexican output