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By Root 8322 0

Moses Taylor—segued from commerce to finance. Taylor, like many of his contemporaries who amassed fortunes in business, had been born (in 1806) into relative affluence. His father, Jacob Taylor Moses, was a cabinetmaker who had invested successfully in Manhattan land and become John Jacob Astor’s “general agent.” Young Moses apprenticed as a clerk with G. G. and S. S. Rowland, by 1830 the leading house in the Latin American trade. After he proved himself with diligent wharf and countinghouse service, the Howlands allowed him to trade on his own account. In 1832, with his accumulated profits, a loan from his father, and sterling references from Astor and the Howlands, Taylor set up on South Street as a commission merchant specializing in trade with Cuba.

In addition to arranging the transport of sugar from Havana to New York, Taylor advised Cuban planters on how to invest their excess funds and advanced them credit for land and slaves. In the 1840s Taylor turned much of his mercantile work over to Percy Rivington Pyne—successively Taylor’s clerk, partner, and son-in-law—and concentrated on investing.

Taylor first favored cautious, capital-preserving vehicles like bonds, mortgages, real estate (especially wharves and stores near Manhattan’s shore), and trust companies (like the well-established New York Life Insurance and Trust Company). Taylor branched out into gas and telegraph companies, and in the 1850s he became one of a small group of venturesome merchant-financiers who supplied capital to, and gradually assumed control over, many of the coal mines and blast furnaces in Pennsylvania. Taylor, Belmont, and other New Yorkers also became the nation’s premier railroad financiers, with Taylor concentrating on lines in and out of the eastern coal fields. In 1851 one group established the Illinois Central Rail Road, with blueblood Robert Schuyler, Hamilton’s nephew and the country’s leading railroad tycoon, as its first president.

Taylor also moved directly into banking. In 1837 he had become a director of the City Bank of New York, acting as J. J. Astor’s representative. He and the other directors invested in one another’s ventures, and Taylor brought his own associates into the bank’s management. In 1856 Taylor assumed the bank’s presidency.

Entrepreneurs also turned to New York’s capital markets to raise money, jolting the stock market out of the torpor that had gripped it during the recent depression. By the late fifties, hundreds of new brokerage houses had appeared in the city. These firms helped attract leery European capital—badly burned by American defaults during the panic years—back into U.S. businesses. The Barings had refused to participate the boom as late as 1850, but the discovery of gold fired the imagination (and avarice) of investors, just as the Revolutions of 1848 frightened Euroelites into seeking safely distant havens for their money. By 1853 26 percent of all U.S. rail bonds were in the hands of overseas investors, notably English and German. During a typical week in the 1850s, hundreds of thousands of shares in railroads, banks, canals, and coal mines were traded, making New York one of the largest and most sophisticated capital markets in the world.

Speculators and stock manipulators also zoomed in on the glamorous new railroad issues. Jacob Little, the stockbroker who had already won the nickname “Ursa Major,” the “Great Bear,” now dazzled the city with ever more brazen feats of financial legerdemain. Little rigged prices with fake tips, false rumors, phony accounts, and fictitious sales. He outfoxed short sellers by organizing clandestine pools to corner the market, and he fleeced friends as well as enemies by working through other brokers to screen his movements. Not since the days of William Duer, if ever, had Wall Street witnessed such single-minded predation.

Little’s methods inspired a new generation of wheeler-dealers, most notably a country boy named Daniel Drew. Drew got his start in business as a drover, buying cattle from upstate farmers and herding them down to Manhattan to satisfy