Gotham_ A History of New York City to 1898 - Edwin G. Burrows [716]
A Citizens Association was founded. Presided over by popular War Democrat Peter Cooper, it included industrialists and merchants of different party backgrounds, from Democrat August Belmont to conservative Republicans Hamilton Fish and William Dodge. The association, picking up on prewar approaches, called for environmentalist reforms like housing legislation, noting that the rioters had come from overcrowded quarters, but these initiatives would not really begin to take effect until after the war was over.
BACK TO BUSINESS
The draft riots would leave long-term scars, but in the short run their impact was overriden by the war boom, which roared on unabated, offering countless ways of making fabulous amounts of money.
Trading with the enemy—an old New York City staple—again became big business. Congress had legalized trading in cotton with the rebel states, and by late in the war, despite outcries from Union generals, cotton purchased in the Confederacy for twelve to twenty cents a pound in gold was selling in the North for $1.90 per pound. The Treasury Department licensed factors to do the deals. Thurlow Weed, the powerful Republican politician, could ensure that licenses flowed to traders willing to cut him in. Weed also helped those who shipped bales illegally, and eventually hundreds of thousands of them flowed into New York from captured Confederate towns like Memphis, Vicksburg, and New Orleans.
Land speculation reaped great bounties. The Homestead Act permitted the sale of unsurveyed land at $1.25 an acre, and syndicates of New York businessmen took up millions of acres. The government also handed out vast tracts of public land to railroad corporations to encourage development; General Dix’s Union Pacific did particularly well in this regard.
Stockbrokers engaged in frenzied profit-taking. “Money is pouring into Wall Street from all parts of the country,” wrote the Herald, a scant two weeks after the draft riots. By 1864 the old system of auction trading could no longer accommodate the flood of business. A breakaway group of brokers established the Long Room on Broad Street, where stocks could be traded continuously and hundreds of transactions could take place simultaneously. In addition, “curb brokers” (also known as “guttersnipes”) traded in the streets from after the New York Stock Exchange’s five P.M. closing until the sun went down. One businessman opened an Evening Exchange, providing the only place in the world where securities could be traded twenty-four hours a day.
Stock manipulation reached new heights, best exemplified by the great Harlem Corner, which culminated just after the riots. Commodore Vanderbilt had discovered that the charter of the old Harlem Railroad gave it the right (with the approval of the Common Council) to lay tracks anywhere in the city. Vanderbilt took control of the company and set out to build a line down the full length of Broadway. Secret negotiations brought the aldermen on board: they bought chunks of Harlem stock, approved the franchise, and watched happily as their shares surged from 60 to 116. But then, foolishly, the aldermen decided to doublecross the Commodore. They sold Harlem short—betting that the stock would go down—then rescinded the franchise, and the price plummeted. Before they could take their profits, however, Vanderbilt and his partner, Leonard Jerome, reentered the market and bought up every share of Harlem in sight until they had it all—had “cornered the market.” In August, when Harlem peaked at 179, the bleeding bears were forced to take disastrous losses.
Great profits were made gambling on stocks. “We fellows in Wall Street had the fortunes of war to speculate about and that always makes great doings on a stock exchange,” recalled Daniel Drew fondly: “It’s good fishing in troubled waters.” But far greater fortunes were to be won by gambling on gold.
With government greenbacks unsecured by precious