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By Root 7746 0

Westchester County. By the mid-fifties the Harlem Line had opened a feeder from its Melrose station in the Bronx (at 162nd Street) to Port Morris on the East River near Riker’s Island, and at Woodlawn it had linked up with the New York and New Haven coming down from Connecticut. This vigorous expansion shortened the commute to Manhattan from the Bronx, Connecticut, and Westchester suburbs like White Plains. Harlem Line locomotives ran down the East Side, along Fourth Avenue and through the Murray Hill tunnel. At 32nd Street, passengers switched to horsecars for the short ride to Madison Square Depot, a grand, multitowered station in the newly popular Italianate manner the line had erected in 1845 in the block bounded by Madison and Fourth avenues and 26th and 27th streets. From that point passengers could catch a horsecar directly to Astor House while freight continued on south to a terminal occupying the blocks between Center, Franklin, Elm, and White streets. Built in 1853, it was thought to be the largest structure in the city at the time.

By 1852 the Hudson, Harlem, and New Haven lines were channeling 2.5 million passengers a year into the city. At the same time, carriers like the New Jersey Railroad funneled traffic from Philadelphia and elsewhere into Jersey City. There, at a new terminal built in 1858, people and vehicles transferred to the Sso-ton ferries that carried two thousand passengers plus horses, wagons, and carriages back and forth across the Hudson every ten minutes all day, every fifteen minutes all night. To the east, travelers could ferry across the East River and hook up with the Long Island Rail Road for a railsea voyage to Boston—until 1848, when the New York and New Haven established a direct and far more expeditious overland service.

DOLLARS AND DRY GOODS

Building railroads, clippers, and steamships took money—and money was something New York had plenty of. Between 1851 and 1854 alone, $175 million in gold reached the city from California. A good part of it was brought in by the new American Express Company, organized in 1850, or by Henry Wells and William G. Fargo, who left American Express in 1852 and set up their own company “to forward Gold Dust, Bullion, Specie, Packages, Parcels & Freight of all kinds, to and from New York and San Francisco.”

This western bounty induced an upsurge in the banking business, which the state had opened to all comers back in 1838. New banks flowered even more profusely than railroads: twelve in 1851, another thirty by 1853, sixty in all before the middle of the decade. These institutions, in turn, served as depositories for six hundred of the nation’s seven hundred commercial banks, which maintained permanent balances in New York to expedite domestic and foreign transactions.

The efficiency of the banking system improved as well. For years now, it had been the practice of the city’s banks to close their accounts every day by settling up with one another directly—squadrons of clerks and porters rushing to and fro in an atmosphere of comic-opera frenzy, here with checks or notes for payment, there with hand trucks piled high with satchels of specie. But as the number of banks mounted, the financial system, like the streets, approached gridlock, and the need for a more rational approach became apparent. In 1853, accordingly, local bankers created the New York Clearing House, which enabled clerks to do in minutes what had previously taken hours.

More capital, more banks, and more efficient banking enabled New York to pull far ahead of its nearest competitor, Boston, in the moneylending business. By August 1857 local banks carried better than forty million dollars in outstanding loans on their books, a deep reservoir of credit that lubricated the expansion of trade, transportation, and manufacturing throughout the United States. Banking evolved from being an adjunct institution, created and controlled by merchants to facilitate their trading operations, into a distinct business enterprise, with a profit motive all its own.

Growing numbers of merchants—men like