plows or selling the more expensive ones manufactured in New England to Southern planters kept the agricultural merchants employed.
Eventually, the New York brokers gave in to the complaints of Southern growers who sometimes watched the price of cotton fall while their crop was still languishing on a New York dock when it could have been already spun into cloth had it sailed directly from Charleston.
The tonnage of cotton actually passing through New York declined in the mid-1850s, but cotton remained the mainstay of Northern trade. The shipowners were New Yorkers; the bankers who advanced Southern plantation owners the cash to plant and raise cotton were New Yorkers; the men who insured the ships and the cargo were New Yorkers; and the merchants who sold Southerners expensive goods and furnishings once the cotton was sold were New Yorkers. About the only New Yorkers who lost out on the slow shift of direct shipping from grower to spinning mill owner were the city’s dockworkers. Everyone else continued to make money on the fiber.
Giddy New Yorkers and grumpy Southerners both estimated that as much as forty cents of every dollar exchanged for cotton went to New Yorkers. New Yorkers had not planted, cultivated, picked, or baled any cotton, nor had they taken on any of the risk of flood, drought, wind, hail, or insects destroying that year’s crop, but they reaped the lion’s share of the profits from cotton.
New York bankers defended their involvement by insisting that were it not for wise New Yorkers handling the financial transactions, the babes-in-the-woods Southerners would be taken advantage of by the wily British textile manufacturers.
“Without the intervention of the great capital and demand at New York, the producer would be entirely at the mercy of the buyer in whatever port abroad his cotton might land, and he would in no case find a greater economy than at present,” observed one banking insider.
Other Northerners insisted that Southerners should thank their lucky stars that Northern bankers deemed cotton growers worthy of receiving Northern loans.
“The growth in wealth in the cotton states may be traced almost entirely to eastern capital. Everybody knows that the cotton planters of the Southwestern states procure large supplies of clothing for their slaves and of every article required for their own consumption, upon credit from the neighbouring merchants, in anticipation of the next year’s crop,” wrote one economist.
And it was not just from raw cotton passing through the city both literally and figuratively that New Yorkers were getting profits. The New York Journal of Commerce, a New York City publication, estimated that just in 1849 alone, Southerners had purchased more than 76 million dollars’ worth of goods from New York merchants. A decade later, another economist estimated that figure had nearly doubled, and the five major cotton states of the South (Georgia, South Carolina, Florida, Mississippi, and Alabama) had contributed more than $200 million in business for New Yorkers.
Even that considerable sum may be underestimated, as later economists believed that nineteenth century economists had not figured indirect financial benefits such as New York’s in-transit trade with New England and Midwestern states. These regions also manufactured considerable goods and foodstuffs that passed through New York on their way to the South. Inevitably, Northern culture and Southern culture began to touch each other, though both would have rejected merging either outright.
Southerners began to think of New York City as a vacation destination to see live theater, buy furnishings, shop for diamonds at Tiffany and Company (founded in 1853), and eat at famous restaurants such as Delmonico’s (founded in 1837).
In 1836, a Southern novelist sounded like a member of the New York Chamber of Commerce when he wrote: “Every southerner should visit New York. It would allay provincial prejudices, and calm his excitement against his Northern countrymen. The people here are warm-hearted, generous, and enthusiastic, in a degree scarcely inferior to our own southerners.”
Getting a tour of duty at New York’s Fort Hamilton was considered a plum assignment for all young officers. Lieutenant Robert E. Lee, U.S. Army, would often take the ferry from Brooklyn to New York City because he enjoyed riding his horse down Broadway.
Lieutenant Thomas J. Jackson would be less interested in the bright lights of Broadway, but more interested in studying religion at his stay at Fort Hamilton. Jackson would be baptized at St. John’s Episcopalian church in Brooklyn. Twenty years later when he was a professor at the Virginia Military Institute in Lexington, Virginia, Jackson, twice married, would bring both of his wives at different times to New York City. On one trip, he visited a famed New York hydrotherapist at 47 Bond Street (today’s Il Boco restaurant in NoHo). On another honeymoon, Jackson and his second wife climbed Trinity Church’s steeple to get a good look at the city.
Professor Jackson remained impressed with New York City for the rest of his life. When he bought a house in Lexington, Virginia, he ordered furniture from a New York City merchant.
In July 1861, Professor Jackson would win the nickname of Stonewall at the Battle of Manassas, Virginia.
Business interests occasionally sent New Yorkers south where they, too, felt welcome. Scotsman Archibald Gracie settled in New York in 1784 where he first found employment as a merchant. Later, he saw the value of New York’s harbor and launched a shipping line. Gracie’s son, Archibald II, moved to Mobile, Alabama, in order to feed the cotton better from the South to his father’s shipping line in New York. His son, Archibald III, continued in the family business of raising and shipping cotton.
The Gracie family made so much money in the cotton trade that they built a large mansion overlooking the East River. In 1942 the City of New York bought the Gracie Mansion that cotton built and made it the official residence of the mayor of New York City.
The business instincts of New Yorkers wanting to please long-term customers came into play whenever there was trouble in the South. When hot climate diseases such as malaria or yellow fever swept through Southern cities that were close to their cotton customers, New Yorkers organized relief missions or sent money. Those gestures were recognized and honored by Southerners who could curse greedy New Yorkers one year and praise the generosity of those same New Yorkers the next year. When yellow fever struck New Orleans in 1853, New York merchants sent money, resulting in a New Orleans city resolution saying, “We thank you for those generous exertions which have enabled us to comfort our sick and bury our dead. May you never need a return of our sympathy, but rest assured our hearts are throbbing with gratitude, and will ever be open to the call of humanity.”
It was during the Panic of 1857 that New Yorkers realized how important the South was to the city. A mild nationwide recession in 1856 turned into a nasty and deep recession in 1857. The international causes included a drop in American grain prices when England and Russia reentered the market after ending the Crimean War. Another cause was England pulling most of its cash investments out of U.S. banks to pay its war debts. Domestically, American banks and railroads failed after a rash of land speculation on future rail routes. The final straw came in September when the SS Central America, a ship loaded with more than three tons of gold coins, sank off the coast of North Carolina. The loss of that gold, which had been on its way to New York City banks, cast doubt in the minds of investors and merchants that the United States could back up its paper money with hard assets.
Within weeks of the start of the panic, every region of the country was affected except the South. Businesses and banks were failing all over the nation, but cotton prices on the world market remained stable, so the South’s economy remained solidly in the black. Southerners continued buying from New York merchants and dealing with New York banks and cotton brokers as if nothing was happening in the economy that could affect their spending.
The successful cotton planters essentially sat out the short-lived severe recession. That meant that the steady infusion of Southern cash kept New
