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POLITICAL CAPITALISM IN THE GILDED AGE: THE TAMMANY BANK RUN OF 1871
Published online by Cambridge University Press: 17 January 2017
Abstract
The Tweed Ring spawned a vibrant financial sector that was integral to its brief success but has never been previously examined. William “Boss” Tweed and his allies employed banks controlled or comanaged by Tammany politicians to embezzle funds, build political alliances, and invest in a wide array of business ventures. The capital of these savings and commercial banks—city money, deposits from Catholic charities, and the savings of immigrant laborers—was accumulated through political channels. During their operation between 1867 and 1871, politician-bankers engaged in a mix of patronage deals and profit-driven financial speculation. In effect, Tammany banks were ground zero for the Ring's conversion of political hegemony into a windfall of economic capital that fueled party activities and buoyed personal fortunes. Importantly, the anti-Ring mobilization by upper-class reformers was more than a revolt of wealthy taxpayers concerned with abstract goals of good government or rescuing city credit; it was also a reaction by old-line bankers in direct competition with Tammany upstarts. A dramatic bank run catalyzed by reformers in November 1871 drove them into bankruptcy, bringing this novel experiment in political capitalism to an end.
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- The Journal of the Gilded Age and Progressive Era , Volume 16 , Issue 1 , January 2017 , pp. 44 - 64
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- Copyright © Society for Historians of the Gilded Age and Progressive Era 2017
References
NOTES
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23 Testimony to the Board of Aldermen, Folder: Account of His Services, Henry Fox Taintor Collection: Correspondence and Papers, 1858–1913 [hereafter HFT], New-York Historical Society.
24 Under receivership only 34 percent of deposits were returned by the Bowling Green Savings Bank. The Guardian paid out all accounts under $200, while larger accounts only received between 45 percent and 50 percent of their original value. Paine, Willis Seaver, A Summary of Savings Banks That Have Failed in the State of New York (New York: The Financier, 1906), 28–31, 35–41Google Scholar.
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27 McBride's safes, paid for by taxpayers, ended up in Tammany bank vaults. They became a focus of litigation after bankruptcy. New York Herald, Dec. 5, 1877.
28 Mushkat, Tammany Hall, 186, 353–55, 361–62.
29 Genet ran the Yorkville Bank. His uptown political base in the 8th Senate District was independent of Tweed but allied with him.
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37 Roche convinced the Sisters of Charity to deposit $92,000 in the Bowling Green Bank. He was a major fundraiser for the Roman Catholic Orphan Asylum and his wife was active with Convent of the Sacred Heart. Owen Brennan was city commissioner of Charities and Corrections. In the Senate, Tweed's Committee on Charitable and Religious Societies appropriated $2.5 million for charities—more in 3 years than the previous 17 combined. See New York Times, Mar. 11, 1872; New York Herald, Jan. 3, 1871; Pratt, “Boss Tweed's Public Welfare,” 403–5, 409.
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45 See, for example Callow, Tweed Ring, 182–3, 198–206.
46 The Ring's percentage of contracts grew over time. Table of Percentages from Warrants, Testimony to the Board of Alderman, Folder: Account of His Services, HFT Collection.
47 Other politicians affiliated with the Ocean Bank were Cornelius Corson, clerk for Tweed's senate committee on municipal affairs; Charles Cornell, city water register; and George Caulfield, a Tammany leader from the 17th Ward.
48 Richard Connolly, Deposit Receipts, Folder: Correspondence 1858–1870, HFT Collection; Andrew Garvey Checks, Folder: Business Papers, 1871–1873, HFT Collection.
49 New York Leader, Dec. 23, 1871; New York Times, Jan. 4, 1872.
50 A. E. Smith to Samuel Tilden, Dec. 19, 1871; A. E. Smith to Lucius Comstock, Dec. 25, 1871; and Cashier of Bank of New York to Lucius Comstock, Dec. 29, 1871. Tweed Ring Correspondence, 1870–1872, Nov. –Dec. 1871 and Undated, Series 1 Correspondence: 1810–1919, Samuel J. Tilden Papers, 1794–1886, New York Public Library.
51 Tweed was chair of this commission. “Report of the Committee Appointed to Investigate Into the Matter of the Alleged Frauds in the Building of the Ninth District Court House, in the City of New York,” Document No. 25, Documents of the State of New York Senate, Ninety-Sixth Session, Vol. 2 (Albany, NY: Argus, 1873)Google Scholar.
52 Ring Frauds, 593–4.
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54 The New York Tribune on Jan. 4, 1872, accused the Bowling Green Bank of allowing state legislators such as Wood to draw unlimited sums from their accounts. There is no such extant evidence.
55 Wood Charges, 48–58, 62, 67–68, 73–76, 81–9, 103, 108–9; see also New York Herald, Mar. 16, 1872.
56 Mr. Tweed's Statements and Promises, Tweed Case, Folder 195–270, Box 1: 1873–1886, Charles S. Fairchild Papers, New-York Historical Society [Hereafter Fairchild Papers].
57 The building contractor James Ingersoll at one point owed $300,000 to the Tenth National Bank, who noted, “I had to pay it all.” Ring Frauds, 598.
58 A similar phenomenon was true of police funds and building contractors.
59 Gill v. Guardian, 198.
60 The Bankers’ Magazine and Statistical Register, Jan. 1872, 491–3.
61 Transfers were made through Reeves Selmes's “secretary account” in both banks. New York Times, Feb. 26, 1874.
62 New York Times, Jan. 25, Mar. 11, 1872.
63 Harry James Carman, The Street Surface Railway Franchises of New York City (PhD diss., Columbia University, 1919), 132–3.
64 New York Times, June 16, 1874.
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73 New York Times, Feb. 26, 1874.
74 The New York Clearing House was “a bank for bankers.” Kessner, Capital City, 20–22.
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76 Foord, Life of Green, 94–98.
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