The Rise and Fall
of a Mercantile Town:
Family, Land and Capital
in Newburgh, New York
1790-1844
by Mark C. Carnes
A New Era
A new era has dawned ; the tidal wave of pros perity that swe pt over
the village a hundred years ago has returned. T he old turnpikes
have been paralleled with railroads, stretching to us from ever y
direction; and the r iver , too, gives us communication with the Atlantic coast and all the world. Many manufactories are springing up
within our bounds, and the year 189 1 find s us the most thriving
city on the Hudson , with citizens full of the spirit of public enterprise, with public institutions compara tively un equalled , and with
apparently ever y facto r and requisite to ensure its bright future as a
manufacturing and commercial city of importance.
-John J. Nutt, Newburgh-Her Institutions, Industries and Leading
Citizens (189 1)
T he city described by John Nutt towa rds the close of the 19th
century had recently emerged from a merca ntile tradition to become
The Hudson Valley R egional R eview, September 1985 , Volume 2, Number 2
17
a small manufacturing center. Smokestacks creased a skyline that
had once been the domain of boat masts and church steeples. Factory whistles quickened a pace of life formerly regulated by the
subtle vagaries of season, wind and tide. Giant steam boilers, by
expanding the applications of power, altered the dimensions of interpersonal space for thousands of factory workers whose fathers
had endured the more solitary tasks of an earlier era. A new way of
life, at once urban and industrial, had supplanted that of a mercantile village.
Such a portrait, as is the case with most historical generalizations,
necessarily simplifies reality. The transition from mercantile village to
manufacturing city was for the most part continuous, the distinction a
matter of degree. Newburgh maintained some of its earlier functions
as a commercial entrep6t well into the late 1800s. But by 1891 the
pulse of Newburgh's economy ceased to be measured by the flow of
traffic on the Hudson River; the stately homes of the resident
freighters that lined the crest of hills above the city no longer reflected their dominance in the daily affairs of the community. The
new era embraced a series of transformations: from sloop to railroad ,
from storehouse to factory , from merchant to manufacturer.
The consequences of the 19th century urban-industrial revolution
have received the ample attention of the social sciences, giving rise in
many cases to new disciplines and subdisciplines. But lost in the
human drama associated with the problems of industrialization and
urbanization is a clear perspective on the processes themselves.) That
they are connected remains unchallenged . Historians of 19th century America unfailingly interrelate statistics on urban and industrial
expansion while economists often explain economic change as a variation in the urban-rural two sector model. 2 To point out a relationship, however, is not to describe a process. An understanding of
either urbanization or industrialization requires an elucidation of the
exact mechanisms that resulted in the dynamic fusion of both during
the 19th century.
The
economic basis for urban-industrial growth is not an unexplored subject, although the discussion has for the most part been
confined to specialized branches of economics and geography. It is
widely held that the 19th century city was the logical and perhaps
inevitable product of certain economic forces. Industrial producers
who located in cities quickly learned that an urban environment
conferred a number of advantages, including an abundant supply of
labor and managerial personnel, a nearness to markets and related
18
The H udson Valley R egional R eview
producers, and access to informational and financial institutions.
However, several questions remain unanswered. In the absence of
industries, what initiated the process of urban-industrial growth?
Why did some cities of comparable size grow more rapidly than
others? And if industrialization had a major impact on urbanization,
to what extent did the process of urban development influence the
nature of industrialization?
Several models have been proposed to answer these questions, but
there has been little consensus among urban scholars as to their
merits. It is impossible to summarize the theoretical models here, but
the main issues concern whether large or small cities were more
conducive to early manufacturing,3 whether urban growth is best
understood as the result of external or internal processes, and
whether industrialization alone could be the driving force behind
19th century urbanization. 4 Some theorists have summoned the cliometric muse to resolve these issues, but by their own admission the
results have been inconclusive. 5
For the theorist the problem is to find a set of data broad enough
to support meaningful generalizations without aggregating materials
reflecting disparate experiences. Simeon Crowther has observed the
"weakness" of conclusions concerning 19th century urbanization
based on national and regional data, claiming that "the level of aggregation may still be too high. " Crowther then examined a somewhat smaller region but was still surprised by the "idiosyncratic"
nature of urban growth. 6
The present study offers a more limited frame of reference: the
experiences of one small city during the 19th century. Located sixtyfive miles north of New York City on the west bank of the Hudson
River, Newburgh probably was similar to many small cities that underwent an evolution from a commercial to an industrial economy.
While it remains to be seen whether the analysis that follows can be
applied to other such cities/ the insights provided by this approach
compensate for its obvious limitations in applicability. In particular,
it becomes possible to explore the role of the entrepreneur and of
ideology-missing from the regression formulas of the cliometricians-in the process of urban-industrial change.
The theme developed in the following pages is that Newburgh's
urban-industrial growth was not caused solely, or even most importantly, by external economic forces. Of equal significance were the
emergence of a cohesive class of entrepreneurs and the proliferation
of an ideology of localism (defined here as the parochial attraction
of an individual to his current place of residence), both of which
The Rise and Fall of a Mercantile Town
19
marshalled capital into urban growth. Although changing market
forces established the constraints under which Newburgh's economic
structure was to operate, the local response to these forces was
neither predictable nor even comprehensible from the standpoint of
conventional economic precepts.
Newburgh's development during the 19th century was of little
intrinsic significance; it may therefore seem an implausible subject
for a case study in the process of urbanization. As John Nutt understood, however, the important point is not that Newburgh failed to
become a major industrial city, but that it achieved as much as it did.
A Business Place, 1790-1841
What is Newburgh?-What is its distinguishing TI"ait?-It is truly a
business place. Since its origins to the present moment it has received
and sustained that character. There is no place within the bounds
of our knowledge, of which so large a proportion of the inhabitants
are business men. Within its limits are about 200 buildings opened
for the purpose of carrying on some mercantile pursuit, or for
engaging in some public transaction with the community, employing at least 1,000 persons .
-Newburgh Gazette, May 30, 1835
The
editor of the Newburgh Gazette erred in claiming mercantile
origins for his town . In 1765 Newburgh was a farming hamlet of but
seventeen houses and a number of lesser structures; the town was
never destined to commercial greatness. Even the town's beginnings
were unpromising: the instrument of its creation-a 1718 patent
granting a large tract of land to Lutherans from the Palatinatebecame the source of a protracted religious controversy as a growing
settlement of Anglicans began to contest ownership of a large section
of town lands known as the Glebe. In 1751 the English governor
exacerbated religious tensions by rescinding the Lutheran patent and
awarding the Glebe lands to the local parish of the Church of England. With the coming of the War for Independence religious rancor
became superseded by an even more intense political struggle between loyalists and rebels.
The only interruption in the local historians' chronicles of the 18th
century internal strife was the happier story of Newburgh's being
chosen as General Washington's main bailiwick during the closing
years of the war. But if the war provided the town with a claim to
20
The Hudson Valley R egional R eview
distinction, it also brought civilian refugees from New York City,
and soldiers without food or housing, who carried only worthless
military scrip. By the end of the war Newburgh's economy was "so
poor indeed" that special legislative aid was sought and given in
1785. 8 Factious, impoverished, and lacking the institutions that
might have provided a sense of purpose or community, Newburgh
did not seem destined to attain commercial importance.
But if the Gazelle's editor had mistaken the nature of the town's
origins, his description in 1835 of a growing and prosperous mercantile village was substantially correct. Not yet a city (a charter was
still thirty years away), Newburgh quadrupled in population between
1790 and 1840 reaching 6,000 by the later date. Each season an
estimated 84,000 farmers from the interior of Orange County
brought great tubs of butter, pork and milk along turnpikes to docks
and storehouses lining the Hudson at Newburgh Bay. Newburgh's
freighters (usually called forwarding merchants) seasonally sent
nearly five million dollars of produce to wholesalers in New York
City, and their boats returned with clothing, farm implements and
other articles to be sold to the town 's residents and visiting farmers.
A rapidly growing colony of shoemakers, blacksmiths, tailors, chandlers, and shopkeepers fulfilled the remaining needs of the populace.
No longer an impoverished and insignificant farming village, Newburgh had become "a shipping point of consequence."g
Newburgh 's unexpected development as a prosperous commercial
village was caused by the interplay of external and internal factors in
proportions difficult to determine. Central among these factors was
the emergence of a closely-knit group of entrepreneurs. Without
these men and the attitudes they fostered towards Newburgh, the
bustling mercantile village of 1840 would have been inconceivable.
To avoid overemphasizing these and other internal influences, however, it is best to keep in mind the role of forces ex ternal to Newburgh itself.
After all, Newburgh's development was not unique, but part of the
overall economic and demographic transformation of the Northeast
during the half-century after 1790. The impetus for change originated in Europe where the economic disruptions of the Napoleonic
Wars aggravated what had already become a chronic food shortage.
Increasing European demand led to higher prices for American
foodstuffs; within several years farmers in New York and Pennsylvania with access to export markets shifted from a system of diversified
crops for home consumption to one of intensive cultivation of cash
crops, predominantly cereals, for export. 10 Such a transition ocThe Rise and Fall of a Mercantile Town
21
curred in Orange County and the adjacent regions to the west as
farmers began to specialize in wheat production. Newburgh became
a center for the collection and reshipment of their wheat.
C oincident with the rise of commercial agriculture in Orange
County was the arrival of enterprising farmers from New England.
Discouraged by the thin and unproductive soils of New England,
hundreds of thousands of Yankee farmers migrated to the New
York frontier after the Revolutionary War. I I They prized especially
the land west of the Hudson , including Orange County, where the
freehold prevailed in contrast to the manorial land-tenure system in
the counties to the east. 12 Fierce critics of the proverbial lethargy of
the native New Yorkers, the Yankee farmers recognized the potential arising from external demand and were in large part responsible
for the region's transition to commercial agriculture. 13
Yankee merchants and townspeople followed these farmers westward. Whalers from Nantucket founded the town of Hudson, New
York in 1783 while Boston "adventurers" established Troy in 1787. 14
By the turn of the century a "mighty invasion" of Yankee business
and maritime talent to New York City had "swam ped" the established, Knickerbocker merchants. 15 Newburgh, likewise, felt the effect of Yankee enterprise. Prior to the "invasion" of New England
entrepreneurs, Newburgh's forwarding trade was conducted in a
leisurely manner. Several of the area's older patriarchs, including
Isaac Belknap, Robert Ludlow and Hugh Walsh, operated a few
sloops with no particular schedule. But with the coming of the Powells, Carpenters, Reeves, Coffins and Ramsdells-all New Englanders-the forwarding business underwent a significant change. 16
The freighters now adopted schedules, advertised in local newspapers, and extended credit to area farmers, all of which were
indicative of a more aggressive search for business.
In the 1820s and 1830s, however, farmers and shippers throughout the mid-Atlantic perceived that the region's grain production
was faltering. The intensive cultivation of wheat had exhausted the
soil while a variety of crop diseases and infestations-including rust,
Hessian fly and grain worm-further narrowed the farmer's profit
margins. 17 The Erie Canal, completed in 1825, reduced long-distance freight rates and grain from the Old Northwest soon flooded
the eastern seaports. Confronted with the higher yields and lower
production costs of the fertile soils and large farms of Ohio, Indiana
and Illinois, the grain farmers of New York and Pennsylvania cou ld
no longer successfully compete for eastern markets. 18
22
The Hudson Valley Regional R eview
In many areas of the mid-Atlantic this competition precipitated an
exodus of grain farmers to points further west, but in others (including Orange County) a new demand-the growing cities of the eastinitiated an era of agricultural prosperity. From 1790 to 1840 New
York City's population increased ten-fold, swelling the demand for
milk, butter and other perishables that could only be supplied by
farms near the city. Farmers in Orange County shifted from grain to
dairy farming and became major suppliers of the New York City
market. 19 The prosperity of the agricultural hinterlands benefited
Newburgh itself as the sloops and steamboats which had carried
wheat and other cereals now were loaded with butter and milk.
A lthough Newburgh's commercial development was made possible by external factors , such as the foreign and later urban demand
for local agricultural products and the infusion of Yankee entrepreneurs, outside forces alone did not account for the town's growth.
Nor was Newburgh's advantageous harbor location on the west bank
of the Hudson River solely responsible for its success in exploiting
the demand for the region'S produce. New Windsor, a neighboring
town of comparable size and assets in the 1790s, failed to keep pace
with Newburgh during the first half of the 19th century.20 How,
then, did Newburgh come to monopolize the region 's forwarding
trade?
Towards the close of the 18th century the arrival of ambitious
New England merchants threatened to further divide a factious
community, but competition yielded to an awareness of common
purpose as the town's forwarding merchants-old and new-coalesced into an informal group to advance their interests. They
avoided price competition (the newspaper advertisements for the
freighting firms emphasized advantages in marketing or handling,
but never listed freight rates) , maximized credit resources by entering into trading partnerships, and jointly embarked on expensive
internal improvements. All redounded to their mutual benefit.
To the historian the advantages of mercantile cooperation may
seem self-evident, but often these advantages eluded the provincial
businessmen of the late 18th century. Although merchants were
willing to enter into temporary partnerships or to pool funds for
specific projects, they had difficulty forming enduring business alliances. Newburgh's forwarding merchants solved this problem (as
they would future problems) by imitating their New England forebears who found it expedient to unite mercantile families through
marriage. 21 Intermarriage not only encouraged mercantile cooperaThe Rise and Fall of a Mercantile Town
23
tion, but it also strengthened the capital reserves of the family firms.
And in the absence of formal economic organizations such as banks
and insurance companies, the maintenance of adequate capital for
investment and trading was essential. 22 Accordingly, three of Newburgh's most important freighting families-the Belknaps, Crawfords and Carpenters-became joined as the two daughters of Isaac
Belknap, J r. married the sons of Francis Crawford and Benjamin
Carpenter. Similarly, the main freighter of the nearby town of Cornwall, Isaac Van Duzer, married the daughter of Selah Reeve, an
important Newburgh forwarding merchant, while Reeve's son married Van Duzer's niece. Another prominent freighter, William
Walsh, became aligned to the Van Duzer-Reeve fami lies by marrying
the daughter of Isaac Van Duzer and Katurah Reeve. These and
other mercantile intermarriages (see Figures 1 and 2 on pages 26
and 27) often transcended differences in religion and length of residence. Mercantile intermarriages, engendered by the need for capital and stable business relationships, created the formal ties which
bound together Newburgh's mercantile community .
T he earliest of the freighters' cooperative endeavors was the construction of turnpikes into the agricultural hinterlands to the west.
The lack of decent highways had circumscribed the merchants' efforts to supply the demand for the region's produce, since freighters
found it unprofitable to carry their crops further than twenty miles
over unimproved roads. 23 Therefore, in 1801 a group of freighters
that included Powell, Walsh, John McAuley and several others, built
a turnpike that extended from Newburgh nearly sixty miles west to
the town of Cochecton. Although the turnpike company lost money,
the road conferred "immense advantages" on Newburgh and its forwarding merchants by enabling farmers from a wide area to bring
their produce to the town. The Newburgh and Cochecton Turnpike
was followed by others to New Windsor in 1806 and to Plattekill in
1810 (see Map 1). By 1819 turnpikes radiated from Newburgh
through much of the southern tier of New York State. The Bank of
Newburgh established a branch office in Ithaca in 1820 and within
several months Newburghers were subscribing to operate a steamboat on Lake Cayuga. Through the efforts of the forwarding merchants, Newburgh had become the "shortest and most expeditious
route from the Hudson River to the western country.,,24
Newburgh 's freighters, often dependent on New York City credit
sources, also shared the goal of financial independence and pursued
it collectively. Powell, Reeve , Carpenter, Crawford and Belknap,
24
The H udson Valley Regional Review
Map 1: Newburgh's Turnpike Network, 1807
Albany.
to
,.t
Ithaca
'I",,,,, II
--- - - -
Turnpikes from Newburgh co mp leted by l 807
Turnpikes und e,- co nst ructio n , 1807
Source: David Ell is, Landlords and Fanners in the I-Iudson-Mohawk Region , p.86.
The Rise and Fall of a Me rca ntile Town
25
Figures 1 and 2. Mercantile Intermarriages in Newburgh, late 18th and
early 19th centuries
BELKNAP-CRAWFOR~ARPENTER
B. Richard so n
___ Isaac Belkna p, Jr. _
--M rl:...D...:...f° ffi~
(widow of C. Coffin )
~~.!}~e1kn.!p=-_ _
Francis
Crawfo rd
b. 1762
..1: Colem'!!!.._ (d aug hte r- o f
_I saac Belkn a p, Jr.
b. 1761
Ca pt. Coleman)
~
David Crawfo rd _ _ Fa nn y Belknap
b. 1788
Benjamin Ca rpenter
b. 1730
Derick Am erman
-----
-
- Susa n Smith
(wid ow o f
William H . Smi th)
----
Bridget Belkn ap _ _ _ Leonard
Ca rpente r
William Thaye r _ _ _ _ _~I~b e tl}.
(pa rtn er of B.
Ca rpenter)
26
S:!!: pe nt~
Benj amin
Ca rpenter
The Hudson Valley R egional Review
REEVE-VAN DUZER-WALSH
Selah Reeve
Isaac Va n Ouzer_ _ _ Ka tura h Reeve
Christo he r Van Ouzer
b.I77 3
(the most promine nt
forwa rding me rchant
of
n"'b'rmW'lll
Ma ry Van Ouzer. _ _ William Walsh
Elizabeth Van Ouzer _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Selah Reeve, Jr.
LUDLOW-POWELL
Robe rt Ludlow
I
~~e-udl~:-
-r
Thomas Powell
b. 1769
Francis Powell _ _ _ _ _ _ Homer Ramsd ell
b.1810
Key
Names und erlined with solid blac k line in d icate that the individu al was a forwarding
mercha nt both before a nd a fte r marriage.
Na mes unde rlin ed with dotted lin e refer to wo men who were either the daughters of
forward in g me rchants or widows of forward ing merchants prior to ma rriage listed in
Figure.
Solid ve rtical li ne denotes parental relationship.
Dotted horizonta l li ne between names denotes marital relationship .
So urces : Cuyler Reyno lds , Genealogical and Family Histm)1of Sou.theastem New Ym'k and
the Hudson Valley, (New York: Lewis Historical Publications, 1914); also Ruttenber ,
His/m) of Orange Cou.nty, passim.
The Rise and Fall of a Mercantile Town
27
among others, snatched the opportunity provided by the expiration
of the Bank of the United States in February, 1811, and the less
restrictive banking rules that followed. In March of that year they
.
established the Bank of Newburgh. 25
A final example of the spirit of cooperation that prevailed among
the forwarding merchants can be found in their response to the challenge of steam-powered navigation. Until the Fulton-Livingston
steamboat monopoly on the Hudson expired in 1825, Newburgh's
forwarding trade was carried on sloops. The availability of steam
transportation signalled an era of competition among Newburgh's
freighters. The forwarding merchants called a meeting in June,
1825, to discuss the situation. After appointing a committee to study
the matter of "building a good and efficient steamboat or boats," the
merchants agreed to postpone the modernization of their fleets for
five years. In this way they avoided the expense of a premature and
costly conversion to steam. 26
Although intermarriage guaranteed the cohesiveness of Newburgh's economic elite, it did not ensure an identification of the
needs of the elite with those of Newburgh. And Newburgh would
have gained little if the forwarding merchants had decided to move
elsewhere (as was often the case in the Northeast during the 18th
century). But they stayed and worked to improve the town's economic foundations, even during the hard times caused by the Em bargo of 1808 and the War of 1812. Their perseverance was all the
more remarkable since most of the freighters were themselves newcomers. William Walsh, for example, originally established his
freighting trade in New Windsor, but upon his removal to Newburgh became a diligent promoter of that town 's interests, serving
as president and trustee of the village and advancing the funds for
the first secondary school. Indeed, the two men most identified
with Newburgh 's development during the 1800s-Thomas Powell
and his son-in-law Homer Ramsdell--came to ewburgh in their
thirties. The steadfast affiliation of the forwarding merchants to
the town cannot be explained by ancestral bonds or provincial traditions. Rather, the spirit of localism in 19th century Newburgh
was rooted in the land.
Real
estate considerations influenced much of Newburgh's history: the struggle over ownership of the Glebe lands during the 18th
century foreshadowed the even more important role of land ownership in the town 's development a century later. As mercantile profits
mounted during the second and third decades of the 1800s, the
28
The Hudson Valley Regional Review
forwarding merchants sought new investment opportunities. Since
their mercantile activities were somewhat risky , the freighters desired security rather than high profits in their non-mercantile investments; stable assets could serve as collateral or reserve ca pital in the
event of a financial crisis or boat accident (there were several of
each). Local real estate-secure, inexpensive, and likely to appreciate-suited their investment needs. Furthermore, land ownership
seemed consonant with the forwarding merchant's newfound social
standing in the community.27
By 1835 the freighters owned a large portion of Newburgh. In
addition to the stores, wharves and warehouses used in the forwarding trade, some merchants, including the Walshes, Carpenters, and
David Crawford, had built hotels near the waterfront. Others, including Powell, Van Duzer, Reeve, Smith, H enry Robinson and
Henry Walsh (William's brother and mercantile successor), had purchased large tracts of farmland in the southern and western sections
of the village (refer to Map 2 on page 30). These expansive estates
(Robinson's covered nearly three hundred acres) girdled the densely
populated section of the village, a twenty-nine block section loosely
bounded by the Hudson River, Western Avenue , Liberty Street, and
South Street.
Although the forwarding merchants originally invested in local real
estate for security, they quickly learned that sizeable profits cou ld be
achieved through the growth of the town. A two-acre lot between
Grand and Liberty Streets that had been purchased for eight hundred dollars in 1833 sold for four thousand dollars two years later.
The key to real estate profits was the extraordinary price differential
between the intensely used commercial and residential properties in
the center of the village and the farmlands and estates of the
freighters towards the periphery. The steep decline in land prices as
one moved away from the riverfront is indicated in Table 1 (page 31);
vacant lots along the riverfront sold for three hundred dollars per
foot while lots located just five or six blocks away were sold for eight to
twenty dollars per square foot. The farmlands purchased by the forwarding merchants were sold by the acre for what amounted to less
than a dollar per frontage foot. Should Newburgh's population continue to increase, the demand for land near the center of the vi llage
would drive up the price of the forwarding merchants' estates.
The
long-term effects of the freighters' real estate investments
are considered later in this essay, but there was one immediate consequence of their landholdin gs: the forwarding merchants became
The Rise and Fall of a Mercantile Town
29
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TABLE 1
The gradient in land prices in Newburgh, 1835
Location of lots
Front Street
Grand Street
Liberty Street
Farmlands and estate lands
Approximate distance
from Hudson
Price per
frontage foot"
0-40 feet
1,300 feet
1,500 feet
3,000-4,000 feet
$3 00
$ 14.25 to $ 17 .25
approxim ately $8.00
approximately $0.60 b
'Most of the lots in ewburgh were one-hundred feet deep, and th e prices cited
referred LO the cos t pe r foot "fronting" on any sll'eet. Accord in gly, a lo t o n From
Street that measured one foot by one-hundred feet would have cost $300.
bAs indicated in Map 2, page 30, few streets had been laid out west of Libcrty Strect.
The farmlands LO the west were sold by the acre, and th e price listed in th e table is
simply a conversion LO frontage cost based on LOta l area. This is, of co urse, somewhat
deceptive since mu ch of the va lue of any lot ca me from its siting on a stree t, an
improvement the fannl ands for the most part lac ked .
Sources: The Newbwg h Gazelle, lovember 2 1, Ma y 30, and ovember 7, 1835; the
Newblngh Telegram, November 5, 1835 . On th ese occasions, ewburgh's newspapers
cited the price of la nd as indica ted by public auction s, the most co nvemional means of
selling land.
rooted to Newburgh. If the town grew, the ir stores, hotels a nd
landed estates wou ld appreciate in valu e; if it failed their properties
would become relativel y worthless. They found it necessary, the refore , to watch over the in terests of the town as well as their ow n
businesses, for the two had become inse parable.
Thus, the spirit of coo peration and collective g uida nce-formalized
through intermarriage-interacted with the parochial attachment of
the freighters towards Newburgh. Through this combination of cohesive entrepreneurship and localism, Newburgh o utdistanced its 18th
century commercial rival- ew Windsor, wh ich was beset with divisiveness a nd j ealousy amon g the res ide nt freighters. One observer
concluded that this factionalism "dried up the springs of action which
impel communities to undertakin gs in which mutual prosperity is
involved. From their presence enterprise and the enterprising Aed
away.,,2
In 1840 ewburgh 's future as a major commercial center was
assured. New York City was rapidly becoming one of the largest
cities in the world and the prospect for an ever-increasing demand
The Rise and Fall of a Merca ntil e T o wn
31
for local foodstuffs buoyed Newburgh's forwarding merchants.
Under their guidance, Newburgh was destined to become a business
place of even greater significance. Or so it seemed.
A Continued Sabbath, 1842-1845
What has been experienced in ewburgh by the opening of the
Erie railroad? Rents have fallen 50 per cent; two thirds of their
steam boat passengers have gone, their hotels are empty and everything indicates the approach of desolation and ruin!
Speech given in Poughkeepsie as reponed in the NewburghJournal,
March 12, 1842
Such were the deadening influences of the construction of th is
road that it prostrated the businesses of Newburgh-houses were
tenantless, men shut up their shops and removed to more favorable
localities, and the whole trade of the mechanical arts stood still with
it. The effect was blighting in the extreme, and the streets were
empty as if it were a continued Sabbath.
Samuel Eager, An Outline Histmy ofOmnge County (1846)
The urban biographers of the nineteenth century resorted to a
recurring metaphorical imagery to explain the growth of their cities:
although an aggregation of many peoples, a city was itse lf a person,
with collective human goals and attributes. The rapidly growing city
was "vigorous" or "energetic"; that with limited prospects was "somnolent" or "sleepy"-as if a loud noise cou ld startle it into a more
prosperous or expansive state. The metaphor suggested coherence
and unity: a mass of people striving or stumbling as one towards a
common goal. For the individual as well as the city, that goal was
progress, and progress was measured in numerical terms: how big,
how much, how many.
But the usefulness of the metaphor fades when exposed to historical scrutiny. The nineteenth-century city was not a functional unity,
but a heterogeneous aggregation of transients who boiled rather
than blended in the urban melting pOt. 29 If the rewards of the economic system were unevenly distributed , so were the aspirations and
expectations of the participants. And if progress was commonly defined in quantitative economic terms, few people were willing to
bridge the metaphorical gap between their personal goals and the
elusive collective goals of a particular city. Some people, however,
32
The Hudsoll \lal/e)1R egional R eview
encountered no such obstacle. Their aspirations for personal wealth
were consonant with and dependent on the growth of a city.
Newburgh's forwarding merchants were such men. In pursuit of
profit they created a city; they left it to a later generation of city
historians to rearrange the causal sequence. The merchants constructed the wharves and turnpikes, erected the stores and warehouses, and established the institutions and personal fortunes that
became the economic foundation of the city. As the agricultural
hinterland expanded and prospered, so, too, did Newburgh. The
freighters, moreover, quickly responded to the financial opportunities that arose from internal growth. By the 1830s their fortunes
were inextricably tied to those of Newburgh .
But the Erie Canal, completed in 1825, severed Newburgh's western hinterlands, as the farmers of the Finger Lake region chose to
take their produce north to the canal rather than east to Newburgh.
The Ithaca branch of the Bank of Newburgh closed shortly after the
opening of the canal, and Newburgh's prospects for becoming the
eastern terminus-via turnpike-for the trade with the Old Northwest evaporated.
In 1828 the completion of the Delaware and Hudson Canal further constricted Newburgh's hinterland. Following the contour of
the Shawangunk mountains northeast to Kingston, the Delaware
and Hudson provided a Hudson River outlet for the coal of eastern
Pennsylvania. Although Newburgh 's forwarding merchants resignedly accepted the success of the Erie Canal , they immediately made
plans "to counteract the detrimental effect" of the Delaware and
Hudson Canal. Thomas Powell, David Crawford, Christopher Reeve
(Selah's son), William Walsh and several others received a charter in
April , 1830 to build a railroad from Newburgh to the Delaware. 3o
The plans to construct a railway to the west proved unnecessary.
Few Orange County farmers sent their produce to market via the
Delaware and Hudson Canal. 3 J Moreover, high agricultural prices
and the successful transition from cereal cultivation to dairy farming
marked a period of sustained agricultural prosperity in Orange
County during the 1830s. 32 This business, Newburgh's freighters
soon realized, more than compensated for the loss of the western
hinterlands; from 1830 to 1840 Newburgh's population increased
from 3,800 to 6,000.
During the decade Newburgh's merchants were disconcerted
over rumors of a major railroad extending through the southern tier
of New York. 33 Designed to link New York City with Buffalo and
The Rise and Fall or a Mercantile Town
33
markets further west, such an undertaking would necessarily pass
through Orange County, potentially disrupting Newburgh's turnpike-based transportation network. The freighters' fears were soon
confirmed. In December, 1831 several of the most prominent
farmers and businessmen of the central and western sections of
Orange County attended a meeting in support of the proposed railroad, and some volunteered to serve on a committee of correspondence to draft legislation to further those ends. 34 In 1832 the New
York State Legislature chartered the New York and Erie Railroad,
fixing its capital at ten million dollars. Listed among its incorporators were important farmers and businessmen throughout the southern tier as well as several formidable New York City merchants.
Despite these connections, however, the Erie Railroad had difficulty raising the large sum of money required in the charter.
Businessmen were well aware that the railroad was developmental in
nature and avoided heavy commitments to the enterprise. An initial
survey reported that Goshen (twenty-two miles west of Newburgh),
with a population of five hundred , was the largest town the railroad
was to pass through. The terrain was difficult, the grades steep, and
the railroad would have to compete with the enormously successful
Erie Canal for through-traffic to the west. Under these conditions,
few capitalists were willing to invest in the Erie Railroad. 35
Legislatures, however, often find it difficult to reseal pork barrels. Arguing that the southern tier counties had been neglected by
the State, the proponents of the Erie Railroad demanded public
funds for internal improvements in that region. In April, 1836 the
New York State Legislature authorized the acquisition of three million dollars of Erie Railroad stock. Although the stock purchases
were initially contingent upon the completion of specified sections
of track, subsequent legislation liberalized the terms of sale. 36
During the same session of the legislature, Newburgh's forwarding
merchants renewed the long-dormant charter of the Hudson and
Delaware Railroad Company.37 Their ostensible purpose was to compete with the Erie Railroad which, as expected, announced plans to
lay track through the central and western portions of Orange
County. By bisecting the agricultural heartland of the county, the
Erie would disrupt the forwarding merchants' trade (see Map 3).
This could not be allowed.
In 1837 a majority faction of the trustees of the Village of Newburgh (which included Benjamin Carpenter, David Crawford and
Christopher Reeve) voted public monies to fund the Hudson and
Delaware Railroad . The following year Newburgh allocated
34
The Hudson Valley R egionaL R eview
Map 3: The Erie Railroad in Orange County
Kingston
1111111111111
Er ie Railroad in 1844 Be rge n Coullly
Dela wa re a nd Hudso n Ca nal
-------. Newburgh 's major turnpikes
/1;
(S haded area) Markel a rea of lh e New York a nd Erie Railroad as based on a repon of
lhe New York and Erie Railroad Company ( 1844); Source : Edward 1-1 . MOll, Th e SIOI),
uf f:rie, ma p facing page 78.
The Rise and Fall o f a Mercantile Town
35
$150,000 for purchase of railroad stock and spent an initial $10,000
to survey the best route.38 But the funding was insufficient, the
proposal ill-conceived. Newburgh's freighters failed to halt the Erie.
It began to lay track in 1838 and by the fall of 1841 track stretched
from New York City to Goshen. The first train that departed from
Goshen carried 44,600 pounds of butter, 16,000 pounds of pork and
1,500 pounds of leather. The editor of the Goshen newspaper immediately hailed the railroad a success-a realization of "the brightest anticipations of those who have watched over this work from its
inception."39 The farmers of central Orange County called for a
second track, noting that even the "spirited exertions" of the railway
were inadequate to handle existing demand. During its first three
months of operation the Erie carried 5,900,000 pounds of freight,
predominantly butter and pork, from Goshen to New York City with
nearly equivalent tonnage on the return trips. Nearly 12,000 passengers traversed the route as well. 40 Furthermore, the railroad
brought about the rapid growth of the formerly insignificant towns
of Goshen, Chester, Middletown and Port Jervis.41
T he gain of the villages in the central and western portions of
Orange County was Newburgh's loss: the effect of the Erie Railroad
on the town's forwarding business was calamitous. Steamboat freight
traffic declined by fifty percent, passenger traffic by nearly twothirds. 42 In newspaper advertisements Newburgh's freighters reminded the farmers of Orange County of "past favors" and pleaded
for a "continuance" of their business. 43 One Newburgh freighter
moved to Goshen to act as a marketing agent for agricultural produce shipped on the railroad. 44 After the first "autumn of the Erie,"
the Newburgh Gazette outlined a dismal future for Newburgh.
If the Erie Railroad continues to do the business that it has done
this fall, the business of Newburgh will not support more than half
its present business men, half our freighting establishments will be
needed, half the mel'chants will leave the place , half the stores will
empty, half the dwellings will remain unoccupied .'15
Change, however, is seldom as dramatic as historians--or newspaper ed itors-tend to make it. One year after the Erie Railroad
began operation, the Newburgh Journal reported that "wagons from
the remote districts of old Orange and from New Jersey , heavily
loaded with firkins and tubs of butter, have come by the dozens into
our village. Thus, it seems, many prefer the old channels of trade."46
While the statement attests to the importance of the credit and marketing services of Newburgh's forwarding merchants, it is equally
36
The Hudson Valley Regional Review
significant that Newburgh's freighting was already regarded as an
"old channel of trade."
More to the point was a n editorial entitled "The Poor-The Railroad" which proposed Newburgh's first system of public charity to
counteract the effects of "the general stagnation of business of all
kinds."47 By February, 1843 it became apparent that the impact of the
Erie Railroad on Newburgh's economy was not temporary.48 From
1840 to 1845, Newburgh's population declined; shops were closed,
freighting lines discontinued, and real estate valu es plummeted. 49
The people of Newburgh correctly attributed the town's econom ic
difficulties to th e Erie Railroad. They reasoned, less cogen tly, that
rail connections would restore prosperity, and the following decade
was marked by efforts to convince railroads to r un their tracks
through the town . But the railroad agitation obscured a more fundamental and intractable problem. From 1790 to 1840 Newburgh had
grown because it was located at a juncture between wagon and water
transportation. But the Erie Railroad, which directly connected the
agricultural areas of the county to New York City markets, made
Newburgh superfluous. A rail connection from Goshen (or anywhere else in the center of the co unty) to Newburgh added ten to
thirty miles plus a transfer cost to the trip. In short, the forwarding
trade from Newburgh constituted the most costl y and expendable
leg of a competitive triangular trade. ewburgh's future as a commercial center-a business place-was nonexistent.
For most of its residents , Newburgh's econom ic collapse signalled
yet another migratio n in search of an elusive if not illusory opportunity for steady employment. But the forwarding merchants could
abandon the town only at great financial loss. They decided instead
to create a new city.D
(The second part of this study will be continu ed in the next issue of
HVRR)
Notes
Introduction: A New Era
See Eric Lampard, "American Historians and the Study of UI'banization," Ameri( 1961), pp. 49-62.
2 J effrey C . Williamson, "Antebellum UI-banizalion in the American
o rtheast,"
Joumal of Economic History, Vol. 25, ( 1965), p. 592.
3 Alan R. Pred, The Spatial Dynamics of u.s. Urban-Indusllial Growth, (Cambridge:
M.l.T. Press, 1966) ; J e ffrey C. Williamson , "U rbanization in the American Northeast,
I
can Hislolical R eview,
The Rise and Fall of a Mercantile Tow n
37
1820- 1870," in Robe rt W. Fogel a nd Stan ley L. Engerman , ed s., The R einterpretation
of A merican Economic H istory, (New York : Ha rper a nd Row, 197 1). Whi le Pred argues
th at the la rge r comme rcial sea ports had an "initial advantage" in aLLractin g industries
a nd co mm e ncin g industri al growth, Williams believes that industri a li za tion in 19th
ce ntury America fil'st occ ulTed in the smaller inl a nd cities (p. 434).
·1 See Douglass C. North , " Loca tio n T heo ry a nd Regional Economic Grow th ,"
J ourll.al of Political Ecol/ omy, Vo l. 63 ( 1955), pp. 243-58 . Also Ha rvey S. PeriofT, et al,
R egions, R esou rces, and Economic Gmwth (Baltimo re: J o hn s Hop kin s Press, 1960), pp.
49-6 1.
5 J effrey G. Wi llia mson and J oseph A. Swanson, "A Model of
rban Capita l
Formation a nd th e G rowth of Cities in History," Explora tions in Economic H istory, Vol.
8, (W inte r 1970/ 197 1). After a d eta iled eco nom e tri c stud y Wi llia mso n and Swan so n
repo n ed that "We have been able to ex plain o nl y a ver y small perce ntage o f the
va ri ati o n in city g rowth rates." (p. 67).
6 Simeo n J. Crow th e r, " Urba n Growth in th e Mid-Atlantic States, 1785- 1850,"
J ournal of Economic HisIOI)', Vol. 36 ( 1976), pp. 624-625 .
7 Burton W. Folsom, Jr. presents a sup u rb co mparative stud y of e ntreprene urship
in Urban Capitalists: Entrepreneurs and City Growth in the Lackawanna and Lehigh Va lleys,
1800- 1920 (Ba ltimore: Johns Hopkins Press, 198 1).
A Business Place, 1790-1841
8 E. M. RULLenber a nd L. M. Clar k, H istol)' of Orange Coun ty (Philadelphia: Evens
and Pec k, 188 1), pp. 245-259, 265-266, 276.
9 1bid., p. 116. Th ese estima tes were made for th e yea rs 1835- 1837; presumably
th ey d eclined so mew hat a fte r the Pa ni c of 1837 .
10 David M. Ellis, Landlords and Farmers in the Hudson-Mohawk Region, 1790-1 850
(Ithaca, N.Y .: Cornell Uni vers ity Press, 1946), pp. 14- 15,77-78 .
II Dav id M. Ellis, "The Ya nkee In vasion of New York , 1783- 1850," N ew Yo rk
History, Vol. 32 ( 195 1).
12 Ellis, Landlords all.d Farmers, pp. 18-2 1.
I:S Ellis, "Yankee Invas io n," p. II .
1·1 1bid., pp. 11 - 12.
15 Robe rt Albion, The Rise of New York Port (Ha md en , Conn: Archo n Books, 196 1),
p . 24 1.
16 Several o f th e "Yankee" forwarding mel-c ha nts actua ll y we re fro m eas tern Lo ng
Isla nd , wh ich at th at tim e maintain ed much closer econom ic a nd cultural ties with
New Engla nd than ew York City. In pos itin g "Ya nkee" attributes to the Long Isla nd e rs, th e a uth o r is fo llow in g the practi ce suggested in Ellis, Landlo)'ds and Fanners,
p . 3 fn .
17 Percy Bidwell a nd J o hn Falconer, H istol)' of Agriculture in the Northern United States
(New York: Kelley Press, 195 1), pp. 228-229, 326- 327.
18 Ibid., pp. 237, 306.
19 The first reli able ag ricultural ce nsus of New York State was co ndu cted in 1855 .
Of Orange County's 308 ,600 acres o f improved farm la nd o nl y 8 1/2 ac res we re sow n in
sprin g wheat, a nd 7,076 1/2 in winter wheat th at yea r. By co ntrast 83 ,77 1 acres were
planted in hay, 15,242 in oats, a nd 17,860 in rye, all of whi ch wel-e essential for dairy
farmin g. Cens us of N ew York State, 1855, Agricu ltural Sta tistics, pp. 287-290.
20 In 1782
ewburgh's population was 1,487, ew Windsor's 1,132. By 1855 , however, th e Vi ll age of e wburgh co ntain ed 9,256 inh abitants whi le ew Windsor-both
town a nd village-had o nly 2,555 . RULLe nbe r, H istory of Orange County, pp. 11 6, 2 17.
38
Th e H udson Valley Regional R eview
21 Bernard Bailyn, New England M erchants in the Seventeenth Centmy, (New York:
Harper and Row, 1964), p. 135.
22 Peter D: Hall ,"Marital Selection and Business in Massachusetts Me rchant Families, 1700- 1900," in R. L. Coser, ed. , The Family: Its StructuTes and Functiolls (New
York: St. Martin's Press, 1974), p. 226.
23 Percy Bidwell , Rural Economy in New England at the Beginning of the 19th Centv.1Y
(New York: Kelley Press, 1916), cited in Ellis, Landlords and Fannen, p . 80.
2. Ruttenber , H istolY of Orange County, p . 116. The stage ro ute fro m
ew Yor k City
via Newburgh to Buffalo required sixty-five ho urs in I 834,inciuding the steamboat
trip along Lake Cayuga.
25 Ibid., pp. 287-288.
26 Ibid., pp. 107-109.
27 The same process ca n be found in othe r co mmuni ties. In his slUd y of 17th ce ntury
New England , Bailyn observed: " ... it is a n unmista ka ble fact that the mercha nts we re
extraordinarily in volved in th e bu yin g and sellin g ofland . The bala nce ofl a nd transaction s in the total record ed business life of Va le ntin e Hill a nd the Boston Hutchin sons is
so high as to suggest that they were primaril y rea l esta te age nts, not me rchants at all.
What explains their endless traffi cking in land is the satisfaction it gave to certain
powerful d esires which they co uld fulfill in no other way . . . Seein g in rea l pro pe rty a
means of social fulfillm e nt, a form of transferab le pro pe rty, a nd a promising o bject of
specu lation , the New England merc hants bou g ht and sold , bequ eathed and inhe rited ,
mortgaged and released la nd in a bewilde ring ma ze of transactio ns. By 1660 th ey were
so involved in the ownership of la nd th a t th e least d isturba nce of valu es or titles wou ld
bring them instantly forw a rd in defense ortheir rig hts." Bai lyn, New England M erchants,
pp. 101 - 103. See also. Albion, R ise of New York, pp. 236ff.
28 Rultenbel-, Histmy of Orange County, p. 2 17.
A Continued Sabbath, 1842-1845
29 See, for example, Stephen T he rnstrom , Poverty and P rogress (New Yo rk: Ath eneum , 1972), and Humbert S. Nelli , " Ethnic Group Ass imilatio n: The Italian Expe rience," in Kenneth j ac kson , ed. , Cities in American H istO'lY (New York: 1972).
:10 Ruttenber, H istolY of Orange County, pp. 117- 11 8.
:11 Coal was the main product shipped alo ng the Delaware a nd Hudson Ca nal.
"Merchandise a nd provisio ns" constituted less than five percent of its lOla I freig ht
tonnage in 1840. Annual R epoTt of the Boa'rd of Di'l'ectors of the Delawa re and H udson Canal
Co. (New York: 184 1), cited in SlUart Blumin, The Urban Thl'eslwld (C hicago: Uni v. of
Chicago Press, 1976), pp. 52- 54.
32 Bidwell and Falcone r , History of Agriculture, p. 422 .
33 Newburgh Gazelte, j a nuary 3 1, 1835 wa rned ," . . . it mig ht be just as well for o ur
citi zens to kee p th eir eyes upon what may cha nce to be proposed a t Albany res pectin g
the Great Erie and Ne w York Railroad. If the State is to advance th e public funds in
aid of the project we o ught to take ca re tha t it be not don e in such a ma nn e r as to be
an injury to those in this qu a rte r."
:S4 Edward H. Mott, The Story of Erie ( ew York: J. S. Collins, 1899); also Rutle nber ,
HistDlY of Orange County, p. 54 1. Among th ose listed from Orange Co unty were Col.
George D. Wickha m and judge Seward (Goshe n) , Abraham Cudd eback (Po rt J e rvis) ,
and Stacy Beaks (M iddletown) .
35 Mott, Ibid., pp. 15, 19-24. The 1835 fire in Ne w Yo rk City that destroyed mu ch
of th e commercial section of Manhatta n wea ke ned th e financia l pos itio n of that town 's
merchants, makin g it mu ch mo re diffi cult to rai se in vestment capital fo r the Erie.
The Rise and Fall of a Me rca ntile Town
39
Ibid. , pp. 39-40.
Ibid., p. 71. See also Ruttenber, H istOlY of Orange County, pp. 119ff.
38 Mott, Ibid., p. 78.
39 Reported in the Goshen Independent, cited in th e Newbwgh Journal on October
9,1841, ovember 13,1841.
40 MOll, StOlY of Erie, p .61, citing "The Schedule of the Receipts and Business of th e
Eastern Division on the New York and Erie Railroad , from September 23, 184 1 to
December 31, 184 1."
4 1 Goshen achieved sufficient growth as a result of the Erie Railroad to become
incorporated as a vi llage in 1843, Chester, "the village at th e d e pot" in 1845, Middletown in 1848 and Port Jervis in 1853. "The co nstrucLion of the Erie Railroad gave to
Middletown its first decided impulse, and led to its rapid growth, and to its stirrin g
business activities." RUllenber, H istory of Orange County, pp. 443-444 , 6 16, 711.
42 Newburgh Gazelle, December 15, 184 1; Newburgh J ounwl, March 12, 1842 .
43 Newburgh J oumal, October 30, 1841.
.. Ibid. Same a rticle.
45 Newburgh Gazelle, December 15, 184 1.
46 NewbwghJoumal, November 19, 1842.
47 Newbulgh J oumal, January 23, 1843. The writer observed that "there has bee n less
employment for our laborin g population than at any prev ious year within our
remembrance."
48 Newbu.rghJoumal, February 18, 1843 .
49 Appendix A, Population of Newburgh. See especiall y Samuel Eager, An Outline
History of Orange County, (Newburgh: 1846), p. 77. The slac kening in the demand for
housing was noted by the Newburgh Gazelle, November) 2, 1845: "Since 1839 few new
buildings have been erected in the village though previous to that period th e average
number of buildings per year was over fifty."
36
37
40
The Hudson Valley Regional R eview