INDIANA
MAGAZINE OF HISTORY
Volume LIII
JUNE, 1957
Number 2
New Albany: Mid-Nineteenth Century
Economic Expansion
Victor M. Bogle*
New Albany’s transition from pioneer village to urban
community can be traced in the economic developments which
occurred there from 1830 to 1860. From its initial settlement
in 1813 through the 1820’s, New Albany possessed the establishments common to most small frontier towns : a few general
stores, a mill or two, and a number of small shops where blacksmith, saddler, cobbler, and other local artisans plied their
trade on a limited scale.’ With the steady increase of population and extension of the town’s boundaries came a corresponding growth in its economic activities, marked by an increase in the exchange of farm commodities, the acceleration
and variation of mercantile activities, the evolution of a more
elaborate fiscal and banking system, and at least the beginnings of a complex industrial establishment.2
New Albany had its surges of prosperity during these
years, but it was in no sense a boom town; the more durable
strands of its economic fabric were woven slowly and continuously. Yet one cannot peruse the New Albany papers of the
pre-Civil War period without catching some of the confidence
and optimism that local publicists felt for their town. Consistently the opinion was expressed that New Albany was
building, building-that i t was approaching the threshold of
* Victor Bogle is on the faculty of Tougaloo Southern Christian College, Tougaloo, Mississippi.
1 For a description of economic activities in New Albany to the
year 1830 see an earlier article in this series, Victor M. Bogle, “New
Albany: A Flourishing Place,” Indiana Magazine of Histom, XLIX
(1953), 1-15.
2 During this thirty-year period the population of New Albany
increased from 2,080 to 12,647. Fifth Census or Enumeration of the Znhabitants o f the U . S.,1830 (Washington, 1832), 144-145; Eighth Census:
Statistics of the United States in 1860 (Washington, 1866), xviii.
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Indiana Magazine of History
true urban greatness. The United States census reports are
somewhat more sobering, but on the whole they confirm the
fact of New Albany’s steady economic advance through these
formative years.
New Albany early gained a reputation for building fine
steamboats, but its principal economic activity, as in most
settlements in the West, was merchandising-trading, buying,
and selling. The town was not endowed with a particularly
rich rural neighborhood, but its position on the river made i t
a natural rendezvous for farmers of the surrounding counties
and prospective buyers of their goods. A fundamental strategy
of New Albany merchants was the extension of the town’s
hinterland f a r beyond the confines of Floyd County so that
its advantages as a trade center for farm produce could
be fully realized. Prior to 1830 the limitations of transportation had prevented this program from advancing far, but
road improvements and the creation of a rail connection
within the next three decades enabled New Albany’s promoters
to make their town one of the most important commercial
centers on the lower Ohio River.
Three basic stages of New Albany’s commercial development were encompassed within this thirty-year period. In
the early 1830’s the local market house and the general
store dominated the commercial scene; by the late 1830’s
wholesaling had become noticeably important, though not yet
equal to retailing; and by 1860 wholesaling was the dominant
enterprise.
The first market house in New Albany was probably the
one constructed in 1830.3 The market house of the early 1830’s
was a wide, open shed placed in the middle of unpaved Market
Street where farmers from Floyd and neighboring counties
gathered twice a week t o dispose of their produce. The
screaming of hucksters, the symphony of a dozen different
barnyard voices, the atmosphere of smells-some wholesome,
some otherwise-the trampling through refuse and offal, the
scuffle to get the best bargains-all
this was the market
house.’ But there was system t o the congestion. In fact, no
3 Minutes of the Town Council, I, 118. These unpublished records,
beginning with 1830, are in the New Albany City Hall. Charles Woodruff, a local resident, contracted in 1830 to build a market house for
$219.00. There is a reference t o an “old” market house in the Minutes
for December 16, 1830 (I, 142).
4 Ibid., I , 142; Indianapolis News, August 8 , 1899, cited in N e w
A l b a n y T k b u n e , May 17, 1935.
Mid-Nineteenth Century Economic Expansion
129
feature of the young town was more carefully regulated by
civic officials than the market place.5
About fifty stalls were leased to regular vendors for
“not less than ten dollars,” the remaining space being rented
on the basis of sales.G Attempts to short weigh, misrepresent
quality, sell tainted or damaged goods, or otherwise defraud
were subject to fines of five dollars. To prevent eager traders
from buying up the best produce, no articles brought to and
usually sold in market could be sold from twilight on market
eve until sounding of the market bell a t five o’clock the next
morning. During market hours all transactions were restricted to the market area, but there was little to prevent prospective sellers and buyers from meeting outside the town limits
to carry on their exchange uninhibited by town regulations.
The marketmaster was the ruler of this compact commercial
domain. After market hours he might have to sweep up the
debris remaining from the feverish three-hour activity, but
most of his duties were more dignified. He leased the stalls,
opened the market by ringing the courthouse bell, tried to
insure fairness in transactions, and generally presided over
the manifold proceeding^.^
Market house transactions continued to play a significant
role in New Albany for at least the remainder of the century.
Later it was not only necessary to enlarge the original market
house but to construct an additional one in the uptown section
of the expanding city as
But as the town became more
urbanized the public markets served more as convenient retail
shopping centers than as clearing points for town and country
goods.
5 The early Minutes of the Town Council, for the year 1830ff., contain many references to the local market house. The formal ordinances
applying to the public market can be found in the New Albany Gazette,
May 13, 1836. These regulations, in a somewhat amended form, can also
be found in Ordinances of the Citg of New Albany (New Albany, 1857)
and Revised Osdinances of the City of New Albany, Indiana (New Albany, 1904).
8 New Albany Gazette, May 13, 1836.
7
Ibid.
8The original market was located on Market between Pearl and
State streets. This, in the earlier years, was referred to as the “upper” market. About 1836 the market space was extended to include the
block between State and Lower (West) First streets, this being termed
the “lower” market. This second area is still used for display and sale
of farm produce. Some time later an uptown market space was laid
out on Upper (East) Market between Tenth and Eleventh streets. This
block is now the site of a local war memorial. New Albany LedgerStandard, January 6,1875; Indianapolis News, August 8,1899.
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Indiana Magazine of
History
The general store, though its importance waned after
1830, continued to have its place in New Albany’s commercial
pattern. It provided the townspeople and their rural neighbors many of their daily needs, ranging from sugar, tea, and
coffee to teakettles, plows, and axes. By 1837 New Albany
was reported to have sixty retail grocery and dry goods stores
and a t least fifteen other stores engaged in both retail and
wholesale marketing.8 Published inventories of some of the
concerns attest to the variety of foodstuffs, beverages, luxury
items, and general conveniences available to New -4lbany
purchasers. Among some one hundred commodities advertised by James Brooks and Henry B. Shields in 1836 were
ginger, soft-shell almonds, chocolate, mustard, Musselman’s
tobacco, Malay “segars,” Havana sugar, Shaker brooms, Java
coffee, Boston nails, window glass, pimentoes, tanner’s oil,
rose soap, smoked herring, and an impressive assortment of
imported rum, wines, and 1iqueurs.lO In 1849 John B. Frentz’s
somewhat more limited stock included “oysters, lemons, nuts,
candies of all kinds, toys in large variety, fireworks, violins,
accordeons [sic] and an assortment of fine cutlery, and other
fine articles too numerous to mention.”l’ Proprietors regularly
replenished their stocks from wholesale markets in the larger
cities along the Ohio and Mississippi, particularly in Louisville, but in the more distant cities to the east and southwest
as well. Calling in outstanding debts for cash in order t o make
wholesale purchases at distant points was a seasonal necessity
for the local merchants.12
While the local market and general store still served
as the framework of New Albany’s commerce in the 1830’s,
wholesaling became relatively more important in this decade.
In the boom years before the Panic of 1837 merchants surprised themselves by the ease with which they disposed of
Q
N e w Albany Gazette, May 19, 1837.
l o Ibid., April 29, 1836.
New Albany Daily Democrat, March 3, 1849.
This notice published by the merchant Isaac Stewart is typical:
“My Friends: You who owe me must absolutely pay me in short order.
My business requires money, and money I must have. You must know
that I cannot wait forever for my debts-I must live as well as others.
I dislike, if it was in my power, to personally dun everyone of you. I
therefore wish everyone that owes me anything that is due to consider
this as a personal dun. I have indulged you as long as I can without
suffering myself more than I can bear. You who fail to accomodate
me at this time, when I am in need, may expect no favors from me
hereafter.” New Albany Gazette, January 22, 1836.
11
12
Mid-Nineteenth Century Economic Expansion
131
their stocks, and they were thus encouraged to make augmented purchases to supply retailers of the area. In 1836 the
editor of the New Albany Gazette reminded his readers of
the unprecedented prosperity : “Those who have been surprised at our business heretofore will be struck with astonishment when they are informed that the supplies for the present
season exceed that of any other season four or five
This degree of prosperity proved temporary, for in the depression of the late thirties and early forties fluctuations in
business continued, old partnerships were dissolved, currency
remained scarce, and bankruptcy was a constant threat. But
undoubtedly expansion continued to be the keynote, with a
growing market and a larger number of merchants to supply
it.14
The early 1850’s mark the real transition from retailing
to wholesaling in the New Albany mercantile pattern. And so
coincidental was this change with the building of the town’s
first rail connection that the improvement in transportation
must be regarded as largely responsible for it.16 In September,
1852, as the New Albany and Salem Railroad penetrated more
deeply into the rural heartland of Indiana, the editor of the
New Albany Ledger wrote: “One year ago there was not
an exclusive wholesale dry goods establishment in this city.
Now there are six.”1e A year later he reported : “We have now
thirty-four houses in this city engaged in an exclusive wholesale and jobbing business, embracing dry goods, groceries,
hardware, queensware, notions, hats and caps, boots and
shoes, etc.”17
This increase, however phenomenal it may appear, was
really a continuation of a trend that had been long under way.
Zbid., September 23,1836.
Because of the lack of extant local newspapers for the 1840’s commercial data for this period are hard to secure. However, the editor of
the New Albany Ledger in reviewing this decade strongly suggests that
the commercial expansion of the mid-1830’s did not continue a t a
comparable rate in the 1840’s. New Albany Ledger, September 28,
1849.
15The railroad was opened to Salem in January, 1851. In 1854,
after its extension through Bedford, Bloomington, and Crawfordsville,
it connected with a line running through Lafayette to Michigan City.
New Albany Ledger, January 18, 1851; December 11, 1855. For a general description of this railroad in its early years see Frank F. Hargrave,
A Pioneer Indiana Railroad (Indianapolis, 1932) ; Victor Bogle, “New
Albany: Reaching for the Hinterland,” Indiana Magazine of History, L
(1954), 146-153.
16 New Albany Ledger, September 28, 1852.
1 7 Zbid., September 17, 1853.
13
14
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Indiana Magazine of History
As they became aware that greater profits lay with the middlemen-the wholesaler and jobber-many New Albany storekeepers simply dispensed with their retail departments. Not
only did the wholesale phase of the mercantile business come
to dominate, but it was channeled into several distinct
branches.18 As the selection of stock increased and the volume
of business multiplied, New Albany merchants could compete
more nearly on even terms with rivals in other cities. They
could, in short, aim directly toward that goal which for decades had been before them: to secure for themselves a proportionate share of the business that normally centered in
the large river cities. Rural merchants from an ever-widening
area were encouraged to use the New Albany market, and, as
the Ledger noted, “are numbered among our regular customers, thoroughly satisfied that they can do as well here as at
Louisville or Cin~innati.”’~
Editors of the local papers were not alone in advertising the merits of New Albany as a trading center; those in
interior towns which were economically or sentimentally
attached to New Albany occasionally promoted the cause of
the river town which appeared to be transforming itself into
a thriving city. The comment of the Paoli Eagle is typical of
many which the New Albany papers cited in the 1850’s:
We are pleased to see the efforts of late by a portion of the
New Albany merchants to draw the Indiana trade to their city,
and we hope their efforts may be successful. We find them liberally advertising in the country papers, proffering to sell as good
bargains as can be purchased in Louisville. This we are satisfied
they can do, and we hope the merchants in the interior will give
them a call, and if they will sell as cheap give their custom.
Indianians have no interest in aiding to build up by their trade
cities in other States, when they have cities that possess all the
facilities to accommodate them that could be asked for. And the
only reason that our immense trade crosses the Ohio is that New
Albany merchants let the Louisville merchants overbid them for
their produce and undersell them in goods. This they should not
allow; and as soon as they determine to compete with the Louisville
merchants, they will secure the Indiana trade.20
1s Notices similar t o the following were common in the local papers
of the 1850’s: “Change of business.-By a n advertisement in another
column it will be seen that the old and well known firm of Hurlbut and
Mann have closed out their stock of dry goods, and will hereafter confine
themselves to the carpet and general furnishing business.” Zbid., February 16, 1856.
19Zbid.. Awil 8. 1854.
20 Cited in-ibid.,’ May 13, 1851. For similar items see ibid., March 25,
April 2, 1856.
Mid-Nineteenth Century Economic Expansion
133
New Albany merchants were determined to compete with
those of larger out-of-state cities for the southern Indiana
trade, and by the middle 1850’s their town was recognized as
a wholesale center. Though promoters declared that wholesaling “may be considered in its infancy,” they published these
rather impressive statistics for the year 1856 :
Exclusively wholesale firms
Groceries
Dry goods
Produce and commission
Drugs
Liquor
Clothing
Leather
Jewelry
Number
7
5
3
3
2
2
3
2
Combined wholesale and retail
Hardware
Boots and shoes
Queensware and cutlery
Notions
Saddlery hardware
Carpets and house furnishings
Hats and caps
Salt
Total, retail and wholesale
4
1
2
1
2
1
2
1
Volume of business
$960,000
670,000
250,000
160,000
115,000
60,000
90,000
60,000
[2,365,000]
225,000
100,000
160,000
75,000
55,000
50,000
35,000
35,000
[735,000]
$3,100,0002’
New Albany’s role as an entrep6t for a large section of
southern Indiana is further evidenced in the development of
two other phases of mercantile activity: the first, which
defies exact classification, may be termed “warehousing” ; the
other, a business common in many river towns of this region,
was hog slaughtering. The building of the New Albany and
Salem Railroad was a determining factor in the developing
of both.
Warehousing evolved as a distinct mercantile enterprise
when the volume of farm goods pouring into New Albany
began to exceed the demands of the local market. Many
merchants began to serve as commission and forwarding
agents, maintaining warehouses and charging fees for receiving, storing, and shipping accumulated stores to distant river
markets. As early as the mid-1830’s a few merchants engaged in this practice, probably as a sideline; by the 1850’s
21 New Albany Board of Trade, The Commercial and Manufacturi n g Advantages of New Albany, Indiana (New Albany, 1857), 6.
134
Indiana Magazine of History
it was an important part of the trading picture.22 Because
this form of mercantile activity was so closely associated with
wholesaling, and even retailing, it is difficult to isolate its
significance in New Albany’s economy in the immediate preCivil War period. But it was the kind of business that characterized the large river cities, and its development in New
Albany is further indication of the town’s advanced status
as a commercial
Hog slaughtering and meat packing, in some respects
branches of the commission business, came into prominence
in the early fifties. Two concerns which engaged in this
activity butchered thousands of hogs annually and prepared
meat for shipment on the river.24 Around 1850 each firm
killed from ten to twenty thousand hogs a year. They contracted with farmers to buy the hogs outright, at about $2.50
a head, or to do the butchering and packing on a commission
basis.26 The New Albany and Salem Railroad prepared special cars t o ship the animals from interior counties to New
Albany, and during the first chilly autumn days the hogs
made their appearance in the town as they were driven by
the hundreds through the streets from the depot.2BR. Simpson and Company, the larger of the two firms, had a
“large and commodious” establishment along the river where
the bloody rites were performed. For the curing process they
22 Earlier notices regarding this form of enterprise can be found in
New Albany Gazette, September 23, 1836; October 20, 1837; New Albany
Argus, September 23, 1839; May 6, 1840; New Albany Register, December 23, 1841. New Albany directories of the 1850’s and 1860’s include
advertisements of the commission merchants. For example, see New
Albany Directow, City Guide, and Business Mirror for the Year 1860
(New Albany, 1860), I, 121-122.
2SIn 1860 there were eighteen firms in New Albany engaging in
the commission and forwarding business. New Albany Directow . for
the Year 1860, I, 121-122. In Louisville (1865) there were more than
eighty such firms; in Jeffersonville (1859) there were three. Edward’s
Annual Directoq to . . . the City o f Louisville o r 1865-6 (Louisville,
1865), 632-633; G . W . Hawes’ Jeffersonville City irectory and Business
Marror f o r 1859 (New Albany, 1869), 247.
24New Albany Ledger, November 28, 1849; November SO, 1850.
Though the company names changed from time to time, there were
usually two firms engaged in pork packing in New Albany throughout
the 1850’s. (George) Gresham and (Vincent) Kirk Company was succeeded by R. Simpmn and Company about 1856; the other firm was
earlier known as (J.S.) McDonald and (Theodore?) Day, later a s
McDonald and (J.M.) Rawlins. See city directories for this period, .particularly Grooms and Smith New Albany City Directow and Buszness
Mirror f o r 1856-57 (New Albany, 1856), 41, 61, 83, 95.
26 New Albany Ledger, November 30, 1850.
28 Ibid., October 21, 1853.
..
b
Mid-Nineteenth Century Economic Expansion
135
had a large smokehouse, divided into four compartments,
“the whole entirely firepro~f.”~‘
But the added convenience of the railroad did not make
New Albany a major meat packing center. Even if it were
inconvenient to ferry hogs from the Indiana shore to Louisville, and then dray barrels of pork four or five miles
around the Falls for shipping south on steamboats, Indiana
farmers persisted in doing it.Z8 Too, New Albany packers
were confronted, as in the earlier years, not only with
Louisville competitors but with those in Madison, Jeffersonville, and other river towns as
Small businesses developed along with the large ones
in the three decades preceding the Civil War. By mid-century
the business section along High (today’s Main), State, and
Pearl streets boasted a fair array of small shops catering to
the needs and vanities of the townspeople. Tailors, confectioners, cobblers, druggists, bakers, jewelers, barbers, hatters,
booksellers, insurance agents, daguerrotypists, and others
found sufficient patronage to maintain profitable establishm e n t ~ . Newspaper
~~
advertisements show what the New
Albany shopper of this period was interested in and what
means were used to get patronage. John Lott, proprietor of
the Temple of Taste and Fashions Hall, respectfully informed
the gentlemen of New Albany-particularly those who were
fond of smooth chins and slick heads-that
they would
find it much to their advantage to give him a call “as his
mode of shaving faces is peculiar to himself.”31 The firm of
Chadwick and Tate gave the highest prices for human hair
and kept constantly on hand “an assortment of Wigs, Scalps,
etc.’13* Ogle and Green kept open their coffee house, the
Social Hall, on market nights, and they promised to do their
utmost to accommodate all who felt disposed to give them a
call.ss L. R. Reeves advertised “watches of all kinds carefully
Zbid., November 21, 1856.
The editor of the Ledger incorrectly predicted in 1852 that this
practice would very shortly end. Zbid., May 7, 1852.
29 See tabulations on meat packing for Indiana counties in Eighth
Census: Manufactures of the United States in 1860 (Washington, 1865),
114-145.
30New Albany Gazette, April 1, 22, 1836; January 27, March 10,
1837; September 29, 1842; New Albany Tri-Weekly Argus, May 6, 1840;
New Albany Ledger, October 31, 1855.
31 New Albany Gazette, March 10, 1837.
3* Zbid., July 7, 1837.
33 Zbid., January 27, 1837.
27
28
Indiana Magazine of History
136
repaired and warranted,” and Thomas Collins offered for
sale a new cooking stove, the “Queen of the West,” which was
supposed to combine “more useful and good qualities than
any other stove ever before offered to the
One of the most perplexing problems affecting commercial activities in New Albany, as in hundreds of other
western communities in this era, was the acute shortage of
money. There was simply not enough negotiable currency
in the Northwest to keep pace with the rapid expansion within
the region. So long as exchanges of goods were on a relatively minor scale the money shortage could be somewhat
alleviated by the extensive use of barter. As late a s the
1830’s and 1840’s New Albany tradesmen still took a large
portion of their pay in produce, especially in such non-perishable items as flax and tow linen, ginseng, beeswax, feathers,
and dried fruit. But by the 1850’s the volume of trade had
outmoded this practice, and transactions were almost exclusively for cash.s5 As barter disappeared paper money came
more into prominence, and the question of what was “good”
and what was “bad” paper plagued buyer and seller alike.
Part of a state-wide program to bring some relief from
the fiscal difficulties was the establishment in 1834 of the
Second State Bank of Indiana.3G The local branch of this
system, one of twelve, was New Albany’s first formal banking house. It served principally as an exchange office, but
its initial prosperity shortly gave i t a significant place in
the commercial affairs of the town.sT As was its intent, this
bank doubtless fostered business and brought a kind of order
out of the fiscal chaos. On the other hand, the means by
which it achieved its early success were frequently open to
criticism because much of its profit came from discounting
bills from interior branches of the state system. Often
when a farmer or other outsider brought his own currency
to New Albany he discovered that the local merchants would
~
New Albany Register, December 23, 1841.
New Albany Gazette, January 22, 1836; April 14, 1837; April 4,
14, 1844; New Albany Board of Trade, The Commercial and Manufacturing Advantages of New Albany, 5.
38 For a general account of the organization and operation of this
banking system see John D. Barnhart and Donald F. Carmony, Indiana:
From Fv-ontier to Industrial Commonwealth (2 vols., New York, 1954),
I, chap. 19.
37 This bank reportedly paid stockholders a semi-annual dividend
of 4 per cent in May, 1836, and one of 5 per cent in January, 1837. New
Albany Gazette, May 27,1836; January 27, 1837.
34 Ibid.;
35
Mid-Nineteenth C e n t u r y Economic E x p a n s i o n
137
accept nothing but notes on the New Albany branch; he was
therefore obliged to exchange his money for the local currency at a discount of about 2% per cent.38 Though such
practices were nowise confined to New Albany, they did little
to enhance the town’s popularity as a trading center. During
the depression of the late 1830’s and early 1840’s the
bank was accused of contributing to the general slowdown in
business. Prevented by charter regulations from charging
more than 4 per cent for discounting notes, the New Albany
bankers were reluctant to exchange their own notes for
those of other localities. As a result money became tighter
and local business was hampered. “Unless the Bank shall
discount quite liberally in a very short time,” admonished
the editor of the N e w A l b a n y Argus in 1839, “the pressure
in the money market will be oppressively ~ e v e r e . ” ~The
~
Jeffersonville Journal at the same time condemned the New
Albany bank for manipulating currency exchange so that it
could almost double the amount it “shaved
The dearth of capital available for local enterprises was
another phase of the money problem during this period.
Shortly after the founding of the state bank in 1834 two
other institutions, for a while at least, helped to alleviate this
situation. These were the Farmers’ and Mechanics’ Savings
Institution and the New Albany Insurance Company.41 The
former succumbed to the depression of these years, but the
New Albany Insurance Company managed to survive. It
insured against fire and accident, much of its patronage
coming from steamboat owners. The capital of the company was never large ($200,000 in 1856), but many of the
boats turned out by the local builders had at least partial
coverage by it.42 It made a share of its profits from exchang38New Albany Argus, September 23, 1839. Some idea of the
variety of currency around New Albany at this time can be obtained
from the reported contents of a lost wallet. It contained 2 one-dollar
bills “Indiana money,” a five-dollar note on the New Albany branch of
the state bank, a five-dollar note on the Indianapolis branch, a fivedollar note on the Evansville branch, two “notes on hand,” one for
$1,100, the other for $50.00, and seventeen dollars in “money,” i.e., cash.
New Albany Western Union Democrat, October 1, 1842.
39 New Albany Argus, September 23, 1839.
4 0 Cited in ibid.
41 New Albany Gazette, February 24, May 19, 1837.
42New Albany Ledger, December 31, 1856. When the steamboat
“Empire” sank in the summer of 1856, $4,000 of her $9,000 insurance
was with this company. Ibid., August 20, 1856.
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Indiana Magadne o f History
ing and discounting paper money and was generally considered to be one of the town’s banking
With the overall prosperity of the 1850’s came a noticeable expansion of New Albany’s banking facilities. As authorized by the new Indiana constitution (1851) and subsequent legislation, the Third State Bank was organized in
1855 with one of its sixteen branches a t New Albany.44
Meanwhile, the older state bank was permitted to live out its
chartered time.45 The establishment of a branch of the
Ohio Insurance Company and other concerns engaging in
banking contributed to the substantial increase in local capital. At the close of 1856 the banking picture in New Albany
was summarized &s follows:
New [Third] State Bank
Old [Second] State Bank (under the
new arrangement with the Bank of
Salem a t New Albany)
Ohio Insurance Company
Ohio Insurance Company stock of the
Jeffersonville branch of the
State Bank
New Albany Insurance Company
New Albany and Salem Railroad bills
E. Sabin and Company (about)
[Capital]
$400,000
200,000
200,000
500,000
200,o00
50,000
50,000
$1,600,0004~
The Third State Bank was probably New Albany’s foremost banking house in the late 1850’s, but it had a somewhat
stormy career. On one occasion, when the New Albany and
Salem Railroad paid its Lafayette employees with New Albany branch notes, its officials were bitterly attacked by the
Lafayette American for circulating “rags of disreputable
During the bank panic of 1858 there were runs on
the bank. One was halted only after the cashier patiently
43 I n July, 1837, this company reported a six-months dividend of
two dollars on each hundred-dollar share of its capital stock. New
A l b a n y Gazette, July 21, 1837.
44Barnhart and Carmony, I n d i a n a , 11, 79.
“ T h e Second State Bank officially went out of existence in 1858.
Zbd., 11, 82.
46New Albany L e d g e r , December 31, 1856. The Ledger mentions
the organization of the Merchants’ and Mechanics’ Bank in 1854, with
Washington C. DePauw as its president. By 1856 this bank may have
become affiliated with the Second State Bank and carried the designation
“Bank of Salem a t New Albany.” Zbid., January 5, 1854.
47 Cited in ibid., February 21, 1857.
Mid-Nineteenth Century Economic Expansion
139
counted out $14,000 in gold to redeem its notes ; another ended
in a brawl at the cashier’s window with some of the town’s
most respected citizens participating in it.48
Except for the one pursuit of boatbuilding, New Albany
could scarcely be considered an outstanding industrial town
during the decades preceding the Civil War. Indiana was
overwhelmingly agricultural and contained within its
boundaries no real manufacturing centers until the latter
quarter of the century. But among the half dozen places in
Indiana where manufacturing was concentrated New Albany
did hold a leading position; in fact, from about 1830 to 1860
it competed with its nearest rival, Madison, for the distinction of being the most important manufacturing town in
the
This relative importance of New Albany as a manufacturing center did not mean that there had been any fundamental changes in industrial activities since the 1820’s.
Though the number and variety of “manufactories” or craft
shops did increase steadily through the thirties and forties,
operations remained on the same restricted scale-small
capital investment, few hands employed, and output limited
acc~rdingly.~
Wool
~
carding, garment making, furniture
40Zbid., July 2, 1858.
49 United States census reports for 1840 and 1850 supply commercial
and industrial statistics for counties rather than for cities. Because of
this, as well as the lack of uniformity in the presentation of statistics
from one census report to another, the census reports do not give the
final answer as to whether New Albany or Madison led in these categories. The 1860 census, which does list statistics by city as well as by
county, indicates that New Albany was the top manufacturing center
in Indiana and 67th in the nation. However, this report applies only to
cities with a population of 10,000 or more, and Madison, with a population
short of this, is not listed. That Madison might have been the chief
manufacturing center in 1860 is suggested by statistics given for the
counties : Jefferson County (Madison), capital invested-$1,145,775,
value of product$2,473,884; Floyd County (New Albany), capital invested-$571,020, value of product-$1,833,416. See United States census
reports for these years, particularly the compendium entitled Manufactures o f the United States in 1860 (Washington, 1865), 142-143.
50 There a r e a variety of abstracts and compendiums of the United
States census for these years; the variations in contents and g a g e
arrangements may lead to confusion. The ones used here are zzth
Cenms: Compendium o f the Enumeration of the Inhabitants and Statistics of the United States (Washington, 1841), 289ff.; Sixth Census:
Enumeration of the Inhabitants o f the United States as Corrected at the
Department o f State (Washington, 1841), 351; Seventh Census: Statistical View of the United States (Compendium) (Washington, 1854),
229ff.
140
Indiana Magazine of History
manufacture, and leather processing still were prominent.61
1840 census
There were several milling establishments-the
listed for Floyd County nine flour mills, two grist mills, an
oil mill, and thirteen sawmills-but there were counties in
the state where milling was much more highly concentrated.
New Albany had the lead in soap and candle manufacture, in
1840 turning out 200,000 pounds of soap and 52,000 pounds
of candles. Also in the town were shops for manufacture of
stoves, pianofortes, and carriages.52 Particularly conspicuous
in the pre-Civil War period were the metal-working shops
where sheet iron, tin, copper, and brassware were produced in
limited q ~ a n t i t i e s . These
~~
concerns, like the foundry business, were closely allied with steamboat building.
No industries in the town up to 1850, aside from those
directly associated with the building of steamboats, employed
a large number of hands. The 1840 census lists fifty-eight
engaged in making furniture, sixteen in printing and binding, eight in soapmaking, and five in the construction of
carriages. The largest amount of capital invested in a single
industry (milling) in 1840 was $30,800.64
During the decade of the 1850’s the beginning phases of
New Albany’s “industrial revolution” a r e discernible, the value
of local manufactures almost doubling within this ten-year period.6S The increase resulted in part from the acceleration in
steamboat building, but the development of other enterprises
was also responsible for it. Several new establishments made
their appearance, some of which were on a considerably large r scale than anything seen in New Albany before. The
most impressive of these were the machine shops of the
New Albany and Salem Railroad which employed 200 to 300
workers. These shops not only repaired and maintained
51 N e w Albany Gazette, April 14, 1837; New Albany Daily Demom a t , March 3, 1849; New Albany Register, December 23, 1841; New
Albany Western Union Democrat, November 1, 1842.
52 Sixth Census: Compendium, 296-297; N e w Albany Gazette, September 15, 1837; New Albany Register, December 23, 1841; N e w Albany
Gazette, April 23, 1837.
63New Albany Gazette, March 3, September 15, 1837; New Albany
Ledger, October 2, 1849.
“ S i x t h Census: Compendium, 293, 295, 296, 297.
55 Value of New Albany manufactures in 1850 was $922,911; in
1860 it was $1,833,416. Seventh Census, 229ff.; Eighth Census: Statistics of the United States in 1860 (Washington, 1866), xviii-xix.
Mid-Nineteenth C e n t u r y Economic Expansion
141
rolling stock of the railroad but they built cars and occasionally turned out a l o c ~ m ~ t i ~ e . ~ ~
An industry which appeared and disappeared in the
1850’s was the manufacture of straw-cutting machines. New
Albany might have had some future as a manufacturing center for mechanical farm equipment had this enterprise been
developed. By 1855 the John B. Ford Company had produced five thousand Sanford Strawcutters which sold for a
total of $75,000. I t employed forty workers and had a weekly payroll of $350.00. Agencies of the company, all of which
were supplied from the New Albany shop, were established
in seven midwestern states. Ford and his colleagues planned
to add the manufacture of several other agricultural implements to the business and intended “making it, if they meet
proper success, one of the largest factories in the west.”57
The factory did not become one of the largest in the West, but
John B. Ford eventually took up other pursuits and became
one of the nation’s most successful i n d u s t r i a l i ~ t s . ~ ~
Another trade which reached near-factory proportions
by the late 1850’s was coopering, which became a subsidiary
enterprise of Simpson and Company, the town’s leading meat
packer. In 1858 this concern established a shop where workers built 50,000 barrels and several thousand hogsheads a year.
The Ledger reported that “nearly all the operations a r e performed by r n a ~ h i n e r y . ” ~ ~
The principal manufacturing activities in New Albany
in 1860, as summarized from the United States census reports
f o r that year, were as follows:
Manufacturing activity
Flour and meal
Provisions, pork, etc.
Machinery, steam engines, etc.
Soap and candles
Ship and boat building
Boots and shoes
Marble and stone work
Value of finished product
$291,500
260,508
221,900
156,500
142,800
98,428
87,500
New Albany Ledger, October 31, 1860.
57Zbid., September 24, 1855. The Sanford Strawcutter was a table
arrangement with a cutting device on top.
56
E* Ford was later associated with the manufacture of glass, first in
the Falls cities, later in the Pittsburgh area. For a summary of his
achievements see Allen Johnson and Dumas Malone (eds.) , Dictionary
of A m e r i c a n B i o g r a p h y (20 vols., New York, 1928-1936), VI, 516-517.
5 9 New Albany Ledger, September 17, 1858.
Indiana Magazine of Historg
142
Clothing
Furniture and cabinet
Tin, copper, and sheet-iron ware
Saddlery and harness
Sash, doors, and blinds
Bookbinding
Iron forging
Millinery and dressmaking
Cooperage
Others
Total
85,500
71,000
64,500
35,100
29,000
27,500
25,000
24,000
21,150
191,680
$1,833,56600
Since the founding of New Albany i t had been the conviction of civic leaders that their town had natural assets
which would some time make it a truly great manufacturing
center. In the middle 1850’s came the first genuine efforts
to make this belief a reality. Citizens hoped to continue
the prosperity that had come with an expanded boat-building
program and an improved wholesale trade. They realized
that New Albany’s position among the cities of the West
could be further enhanced only if it became a center for factories, large and diversified.61
As an initial step in the campaign to make New Albany
an industrial center several leading merchants met in 1853
to form a local board of trade.62 Though few if any of these
men had enough capital to launch large scale manufacturing
on their own, many had accumulated sufficient profits from
commercial ventures to participate as investors. The general
plan was to attract outside capital to New Albany to get
industries started ; New Albany’s geographic advantages and
the managerial talents of its leading citizens were to do the
rest. “Money is the great Archimedean lever that moves the
world,” wrote their spokesman in 1857, “and we need a little
more of it . . . t o move Old Fogyism out of his boots, and
give Young America an inward impulse. O u r Yankee friends
a t the East have enough of i t and to spare, and here is the
field to plant it, with the promise of a profitable yield.”63
60
Eighth Census: Manufactures of the United States in 1860, 120.
This awareness is indicated in many items in the local papers of
the 1850’s. See New Albany Ledge?., December 7, 1853; February 21,
1854; April 16, 1856.
Zbid., November 15, 1853. Officers were: president, Joseph Caldwalader; vice president, William S. Culbertson ; secretary, John Nunemacher; treasurer, Walter Mann. Zbid., December 7, 1853.
63New Albany Board of Trade, The Commercial and Manufacturing Advantages of New Albany, 24.
61
Mid-Nineteenth Century Economic Expansion
143
The prospectus for the campaign to attract manufacturers was embodied in a pamphlet entitled T h e Commercial
and Manufacturing Advantages of New Albany, Indiana.
This booklet received many favorable contemporary reviews.
It deserves special attention because it represents the hopes
of the people of New Albany at a crucial period in their
economic history. It was prefaced with this resolution :
Resolved, That a number of pamphlets be published and distributed setting forth the advantages our city presents as a manufacturing point, our various communications with the South and
West by railroads and river, our superior Free Schools, our well
paved and well lighted streets, our healthy location; and in fact,
everything desirable we possess to induce manufacturers and
mechanics to come among 116.64
Writers of the pamphlet compared New Albany with
other points which were already acknowledged manufacturing centers and then proceeded to show how favorably New
Albany came out in the comparison. Pittsburgh seemed to
them the ideal city with which to make comparison, and the
writers attempted to show that New Albany had most of the
advantages of Pittsburgh without its disadvantages. For
example, New Albany’s river position was even better than
Pittsburgh’s :
At all times when a boat can get out of Pittsburg, New
Albany can reach any point by water that is accessible to our
up country neighbors. But very often in the course of the year,
New Albany enjoys an uninterrupted water navigation of 10,000
miles, while Pittsburg is as completely shut out by physical impediments from these facilities as if she was cooped up in the
very heart of China. The great difference between the two points
is that one is at the head of river navigation above the Falls, the
other at the head of navigation below the Falls.65
According to the promoters, New Albany’s access to
raw materials was at least as good as Pittsburgh’s. Regarding the supply of timber they wrote:
64 Zbid., 1. The resolution concluded with this statement: “Whether
this missive will accomplish !he end whereunto it is sent remains to be
seen. The Good Book says: Cast thy bread upon the waters, and thou
shalt find it after many days.’”
65For the comparisons of New Albany and Pittsburgh see ibid.,
26-27. Statistically nearby Louisville, Kentucky, was a more important
manufacturing center at this time than was Pittsburgh. Nevertheless,
Pittsburgh was chosen for purposes of comparison. See E i g h t h Census:
Statistics of t h e United States, xviii-xix.
144
Indiana Magazine of History
So f a r a s pine lumber is concerned, the Allegheny river certainly does afford to Pittsburg very desirable facilities for transportation. But when it comes to timber for boat building, for
wagons, ploughs, and other agricultural implements, they must
seek it, for most part, at points below Pittsburg. And whenever
that is the case, New Albany possesses superior facilities for its
reception, just a s f a r as i t is easier to float a r a f t of timber
downstream than it is to float it up.
Concerning iron they wrote :
Nor has Pittsburgh much the advantage of us in supplying the
raw material of iron. She boasts that the Ohio River gives her
cheap facilities for receiving the products of the Tennessee and
Does not this metal pass by New Albany
Kentucky furnaces.
in its transit. .? And how much easier it would be t o stop here.
.
...
The New Albany publicists conceded that Pittsburgh
was superior to their own town in its power to run factories ;
but they claimed that their town would be able to compete
favorably in this respect too when the dream of the Sci4bners
and other pioneers had a t last been realized:
In the great advantage arising from cheap supply of fuel, we
cheerfully yield the palm of superiority to Pittsburg. Rut our
deficiency in this respect is more than counterbalanced by the
immense water power that may be brought into requisition, by the
judicious application of a little capital, in improving the Falls.
The pamphlet included a list of industries for which the
writers thought New Albany was particularly suited. Among
these was the manufacture of textiles. According to the
pamphlet, even Lowell, Massachusetts, would have to concede
New Albany’s potentiality as a textile center :
Does New Albany not possess advantages equal, if not superior
t o Lowell itself a s a manufacturing point? She is certainly much
nearer the point where the cotton is grown than Lowell, and her
facilities for getting i t are certainly superior.
And then a s
a market for her goods, she is just a s much nearer to i t than Lowell
a s she is that much nearer to the Great West, whither the star
of Empire is rapidly tending.66
...
Among other enterprises proposed was a n iron-rolling
mill. Since fifteen thousand tons of iron were used annually
for repairs on Indiana railroads, three thousand on the New
Albany and Salem alone, the promoters saw no reason why
66 New Albany Board of Trade, The Comnsercial and Manufacturing
Advantages of New Albany, 16-17.
Mid-Nineteenth Century Economic Expansion
145
this material could not be supplied from New Albany. Other
suggestions were made for the establishment of a factory for
making cedar buckets and one for manufacturing bagging
and bale rope, the latter to use the large crop of hemp which
was grown in the region. An invitation was extended also
for industries making starch, glue, edged tools, hubs and
spokes, brooms, and paper, as well as “an extensive button
factory [which] would certainly be a god-send to many poor
idle boys and girls of this city.”67
This elaborate presentation may sound like so much
puffing by a group of “town pushers,” but it turned out to
be more than this. In many respects it was an authentic blueprint of the manufacturing development that was actually
to take place within the next few decades. Whether i t was
the catalytic effect of this pamphlet, the “natural advantages” of New Albany finally being recognized, or just a
phase of the industrialization that was spreading westward,
the town was to have a golden age of industry in the years
following the Civil War. The people of New Albany were
to have their opportunity to learn firsthand of factories,
mass employment, labor disturbances, and entrepreneurs.
Much of the old economic fabric of the earlier decades would
be torn away; some of i t would remain in a highly modified
form. Whether or not these changes were on the whole good
or bad for the town’s future is debatable. But there was no
apparent doubt on the part of those who considered themselves in these years the custodians of the town’s destiny.
The decades from 1830 to 1860 mark New Albany’s youthful, perhaps adolescent, years. The small river town was
swept by the events and trends, mostly uncontrollable, which
were molding the state of Indiana and the Old Northwest
some hundred years ago. In retrospect, much of New Albany’s growth and economic expansion of these years was
inevitable, for its location a t a key point on the Ohio was an
enviable one in a period when the river counted for so much.
But however striking and impressive New Albany’s progress may have been to contemporaries-particularly the
town’s boosters-this was in reality a period of small operations. Commercial activities and opportunities were geared
to a sparsely populated and relatively undeveloped hinterland.
67
Ibid., 20.
146
Indiana Magazine of History
Local investment capital was scarce-for customarily it was
not the rich man who gambled on a trek to the frontier to
pit his future with a youthful community. Mechanization and
factories, at least in this region, were almost a generation
removed. In these years New Albany could boast that it was
one of the largest “cities” in Indiana; yet it had as late as
1860 only about 12,000 inhabitants. I t could justly claim to
be one of the important emporiums of the state; yet its
business was never more than a small fraction of that of its
cross-river neighbor, Louisville. It possessed dozens of small
manufacturing shops; but their total output, judged by modern standards, was almost negligible. It was New Albany’s
role to be a leader in the state of Indiana when there was
not much to lead. And though there was a keen desire on
the part of its directing citizens to maintain this pre-eminence for their city, unforeseen obstacles were to prevent these
ambitions from being carried out in the exact manner their
holders anticipated.