Friday, May 25, 2007

Off to Alaska, A History of New York City

I'm headed off to Alaska for two weeks and I'm not sure how often I'll be able to update the blog, so I thought I'd post something to read until I can make an update.

Mark Twain once said that "the man who doesn't read good books has no advantage over the man who can't." I take this to heart, and beside the occasional book I try to watch as many documentaries as I can. I mentioned a few months ago an amazing series I ran across on the history of New York city. If you have any interest in New York, please check out these notes, which I took while watching the series. It is a quite fascinating history.

New York


In 1609, an English explorer hired by the dutch to find a trading route, steered his 80 ton ship off the currents and into a sheltered bay. Sailing to the mouth of the mile-wide river that flowed into it from the north, he pushed 100 miles up stream. Hoping it lead to China. Henry Hudson had stumbled onto one of the best harbors in the world.

Unlike Philadelphia or other cities, New York wasn't founded for religious freedom. The Dutch established a trading post to make a buck. It was a business proposition from the beginning. Manhattan was owned by the Dutch West India Company (a subsidiary of the Dutch East India Company) which averaged a 10% return per year for 200 years. When New York was founded at the dawn of the modern age, London and Paris were already 1500 years old. Rome and Beijing, 2000. Jerusalem, 4,000. Called New Amsterdaam, it was bought for 60 guilders. Much more than the $24 of legend, but still less than $600 for 14,000 acres. The settlers were so devoted to making a profit, they didn't get around to building the first church for 17 years.

The Dutch finally got the city into shape, and the English took it. Two days later in 1656, it was renamed to "New York" for King Charles I's brother the Duke of York. The colony was promised to him as a birthday present. A wall had been erected to keep out the British. It was torn down to make room for houses. A new paved lane was put in called Wall Street.

By 1740, 1 in 6 New Yorkers were owned by other New Yorkers.

War in 1756 was great for business and great for merchants. When it was over in 1763, the city fell on hard times. A depression that helped fuel the revolution. During the revolutionary war, the city was defenseless against British Guns. 80% of the city fled Manhattan. At the end of the war, the British surrendered in the same fort where the Dutch had 119 years before.

Alexander Hamilton was a genius. After the war, he moved to Wall Street, opened a law firm, setup a society for emancipated slaves, then organized and started the Bank of New York. New York was America's capital. Washington was inaugurated there at the renamed Federal Hall. Hamilton was the first Secretary of the Treasury at 33. He shaped New York away from an agrarian society. He brilliantly saw its future in manufacturing and finance. Thomas Jefferson demanded they move the capitol to the country, where he thought the agrarian future lie -- across the river from his native Virginia. It was the beginning of a great rift. Pitting south against north. Country against city.

Jefferson didn't understand money at all. Born into money, he died deeply, deeply in debt. Hamilton had an idea to aggregate all the uneven debt of the colonies from the Revolutionary War and have the federal government pay it. But southerners didn't want to pay northern debt. He met with Jefferson who said he'd only do it if they move the capitol from its natural site to a swamp on the banks of the Potomac which turns malarial in April. Almost immediately, Hamilton issued $80 million in bonds to pay off the huge new debt the government had assumed. Money flooded into New York, as the trade in government bonds soared. In 1792, two dozen stockbrokers gathered under a buttonwood tree on Wall Street to figure out how to handle the enormous amount of business Hamilton had generated. It was the beginning of the New York Stock Exchange. After the capitol left, New York had the greatest run any city has ever had. Almost single-handedly, Hamilton had kicked into life the most powerful economic engine on earth.

Dewitt Clinton was the most important man to come out of New York ever. He had ten terms as mayor and three as governor. He was an admirer of Hamilton, and shared his commercial vision of New York. His grid plan envisioned one million people when it only had 100,000. Clinton's grid was one of the greatest instances of foresight ever conceived, but it was nothing compared to the Eerie Canal. New Orleans should have been the greatest port in the world because of the river system, but New York made its own geography. No politicians supported it -- it was Clinton's idea. At the time, the longest canal was 27 miles. Most were less than two. This was more than 350. Jefferson rejected it outright as madness. Clinton himself came up with an ingenious way to pay for it -- promising bankers they would be rich. It was a public works project that didn't have a cost overrun, finished ahead of schedule, and paid for itself before it was even completed by opening some parts early.


The canal changes everything. New York gets the first district in the world for commerce, where people don't live. By the Civil War, it was the biggest industrial city in the world. Newspapers began cropping up, creating modern journalism.

Massive immigration, and everyone hated whichever group was coming in at the time. The Irish famine caused the "great migration." 1/8th of the Irish nation came into South Street in a ten year period. (1845). They took the roughest jobs. Digging sewers, etc. Irish and blacks were competing for the worst jobs and the worst slums. There were many riots of every kind. Working class against upper, anti-catholic, anti-black,nativist against foreign born, anti-Irish, anti-English. Catholics and Protestants battled for control of the streets.

Panic hit the financial markets in 1857. An estimated 25,000 lost their jobs.

By the 1850s, there was basically no park space because of the grid system. New York was a concrete wasteland with no escape. The city bought a sparsely populated tract of land and evicted the poor blacks and Irish living on it. They introduced a contest for the design of a central park in the midst of a panic/recession. It was man made nature. It was a vision for spiritual revival -- that classes would commingle and assimilate. It was 19th century America's greatest work of art. It was constructed with vistas to experience as you move through its 840 acres.

A man named Abraham Lincoln came to New York to bolster his slim chances. When he arrived, no one came to greet him. He got his serious start after a speech here at the Cooper Institute against slavery. Just days later, South Carolina held a special session to consider seceding form the union. New York City was apprehensive to cut ties with the south because of trade and $40 million worth of southern debt, but after the Confederates fired on Ft. Sumter, there was a huge pro-Union surge. 150,000 New Yorkers fought for the union cause. When the first draft was instituted, there was an enraged riot (of mostly Irish) at the draft house just as the south was getting close and Gettysburg fell. They attacked the rich and politicians. Wall street was defended by naval boats trained on the crowd, and people on roofs with barrels of hot water.
Union troops finally arrived to put down the riot.


Between 1865 and 1898, New York would become home to the greatest concentration of wealth in human history. It would also become home to the greatest concentration of poverty. Not one city, but two.

New York made enormous money from industrial demand from the Civil War.

There were no rules on Wall Street. People were doing whatever they wanted (printing stock certificates in basements and selling them until worthless).

One time, the river froze over for weeks and commerce stopped between Brooklyn and New York. A bridge was needed. Not to get to Manhattan, but for Manhattan to get to Brooklyn. It would be half again as long as any bridge in existence. But there was corruption. Right near the bridge was Tammany Hall, reaching out to poor Irish immigrants. It had a courthouse in its 12th year of construction with no end in site. Boss Tweed was the most corrupt politician in U.S. history. Over 6' tall and 300 pounds. He stole $50 million from various projects while helping still others like Fisk and Gould get more. People finally began questioning where Tweed's lavish lifestyle came from. All eyes turned to the still unfinished courthouse...a special project of Tweed's. Begun in 1858, it was supposed to have cost $358,000. 12 years later, the price had reached $13 million. And kept right on rising. Tweed eventually died in a jail he himself had built.

1873 was the greatest crash of the 19th century. There was reckless overbuilding of railroads, NYSE shut down trading for the first time in history. It was called "the great depression" at the time. J.P. Morgan was determined to save Wall Street from itself. He forced railroads to stop undercutting each other. Eventually, he began buying them himself and consolidating them. It was called "morganizing." Edison built the first power plant in the world with 14 miles of underground cable. When the switch was thrown, Edison wasn't there. He was in J.P. Morgan's office. Morgan had financed Edison's project and made sure his offices were the first in the city to be illuminated by electricity.

The Brooklyn bridge was completed in 1883. The steel and electricity that went into it marked the beginning of the future -- the beginning of the vertical city. New York consolidated. It annexed Brooklyn, itself the third largest city in America, along with Queens, etc. Smaller cities overwhelmingly supported consolidation. In Brooklyn, it won by only 277 votes out of more than 129,000. New York was now bigger than any city in the world except London. It was twice as big as Chicago.


Moving pictures were invented. Edison's company started filming short 30 second clips of the city...called "actualities." People were enthralled. By 1900, new York had become the greatest show on earth.

Ellis Island (1900), built to accommodate 500,000 per year, was soon handling twice that number. Sometimes as many as 12,000 a day. In 30 years, 12 million people would stream through the great echoing registry room hoping to find sanctuary and a new beginning in America. More than 4 million of them would settle permanently in New York, tripling the population in less than a single lifetime. There were more Italians than in Naples. More Irish than in Dublin. More Germans than in Hamburg.

transforming moments in how we live on Earth as human Because of steel and electric elevators, buildings turned from crustaceans which are supported by their walls, to vertebrates supported by their skeletons. "It's one of great transforming moments in how we live on Earth as human beings." -- David McCullough. In old masonry buildings, the thickness of the walls are a factor of how high you can build the building. If you get very high, the walls are so thick at the base that there is no room for using the building. It's like a pyramid, which by the way was the tallest building in the world until the end of the 19th century. With the advent of the elevator, and steel framed construction, the low slung four story skyline of New York shot up with startling speed, beginning with the 11 story Tower Building. Called "the idiotic Building" by critics, who on stormy days during its construction gathered at a safe distance and waited for it to collapse. It did not. And less than a year after it opened in 1888, it was surpassed by the World Building, which climbed to the unthinkable height of 18 stories. Stepping out onto the top floor, one awestruck visitor called out loudly, "is God in." "Americans have practically added a new dimension to space," one Scottish visitor wrote. "when they find themselves a little crowded, they simply tilt the street on end, and call it a 'skyscraper.'"

By 1905, four out of five New Yorkers were either the children of immigrants or immigrants themselves. No fewer than 70% of the city's public schoolchildren had been born outside the country.

The subway opened after just four years, in 1904.

Heavy strikes had begun. Tammany Hall did nothing, because of connections to the manufacturers. The Triangle Waist Company locked its fire exits to keep out union officers. When a big fire hit, young women jumped to their deaths. 146 died, mostly teenagers. the owners were found not guilty. They setup shop three weeks later, blocking the fire door with sewing machines. A flood of progressive legislation followed in 1913.

COSMOPOLIS 1919-1931

For almost two years, the stock market had been spiraling upward. Shattering records. Month by month. Only a few years before, analysts had been stunned, when for the first time, two million shares had been traded, in a single day. Now, five million share days had become routine. Herbert Hoover's landslide had triggered a buying spree that topped seven million. And brokers on the New York Stock Exchange often fell to the floor in exhaustion following the three o'clock gong. John Raskob announced that as he had devised a way to buy cars on credit, so to should people be able to buy stocks on credit. By the end of August, brokers were routinely lending small investors more than two thirds of the face value of the stocks they were buying. Over 8 and a half billion dollars was already out on loan -- more than the entire amount of currency circulating through the entire United States.

There's an old story about Bernard Baruch, that he had his shoes shined every morning by the same shoe shine boy. And one morning, the shoe shine boy gave him a stock tip. And Baroque went to his office, called his broker, and said "sell me out. When the shoe shine boys are giving stock tips, it's time to get out."

October 23, 1929. The visitors gallery of the New York Stock Exchange was cleared. In less than two hours, nearly ten billion dollars invested in stocks was simply wiped out. October 29, 1929, brokers fought to get out. 16 million shares traded that day. The trading record was not bested until 1969. In the worst single day in the history of the New York Stock Exchange, the market lost 14 billion dollars in value, bringing the week's loss to more than 30 billion dollars. Ten times more than the entire annual budget of the federal government, and far more than the U.S. had spend in all of World War I.

The Empire State Building begins. It was the building that should have never been built. Rising in the wrong place, at the wrong time. Propelled skyward by the same speculative impulse that had just been so severely chastised on Wall Street. An yet, up it went. In the deafening silence that followed the crash, built in just 13 months. One of the greatest feats in construction since building began.


On the eve of the crash, fewer than two million people were unemployed in the United States. Less than two years later, the number had risen to more than eight million. And a year after that, to 13 million -- nearly a third of the nation's workforce. Roosevelt was among the first to finally respond for the state of New York, but the money couldn't get to the people because of Tammany Hall. Franklin Roosevelt began an investigation that finally kicked out the corrupt Mayor Walker. It put Roosevelt on a path to the White House. LaGuardia was an unlikely candidate, but Judge Seabury (who led the investigation) wanted a non-Tammany man. LaGuardia was animated and had to be restrained from hitting other city officials. "If you were any dumber, I'd make you a commissioner." He starved Tammany and reformed the city. He had close ties with Roosevelt and got lots of funding from him during the New Deal.

Robert Moses is the most important man to come out of New York in the 20th century. He was a public works developer. He built a road system to get New Yorkers to the beach. He saw the automobile as the future. It was the predecessor to the highway system, the first in the world.


The apex of New York was after World War II. LaGuardia was worn out. He left after his thrid term, and died two years later from cancer. He used to work for countless hours on end.

The World's Fair of 1939 showed the car filled future to New York and the world

The United Nations came to New York.

New York is the leader of the world, but industry started leaving. Moses used Title 1, with terrible results. He came up with "urban renewal" which meant "slum clearance." He tore up communities for highways. Everyone became segregated and isolated. The middle class fled to the suburbs. Penn Station was torn down, and was a tragic loss. Moses was finally stopped when he tried to run an expressway through the middle of the city to destroy Greenwich city. 1965 represents the final end of urban renewal. The city drops into despair for the next decade, as bills came due and its tax base had left. The biggest industry in the Bronx was arson. The Bronx was burning. Things descended into chaos. By 1973, more than 2,000 city blocks had burned to the ground. More than 43,000 apartments had been destroyed. The south Bronx became a symbol around the world of urban decline. There was a fiscal crisis. By 1975, more than $2 billion per year were going simply to service New York's' enormous $11 billion debt. The President even refused a loan guarantee to New York. Headlines read: "Ford to City -- Drop Dead." Less than a month later, Ford changed his mind after advisers warned of a domino effect. Officials got to work balancing the budget. In the end, federal government made millions of dollars out of the arrangement.

What followed was a great revival and another immigration revival.


It had moved in the course of its first 300 years form the far edge of empire to the very center of the world.

9/11: In the end, it had been the second deadliest day in American history. Surpassing the casualties of Pearl Harbor, D-Day, and all the battles of the Civil War, except Antietam.

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