ECONOMIC GROWTH

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ECONOMIC GROWTH AFTER STATEHOOD

 

Immigration and demand for transportation of goods increased dramatically In the early 19th century. As the importance of the ferries grew and the operation became more profitable, the methods of conveyance evolved technologically to handle the growing demand and competition. Piggott used pirogues, canoes made from hollowed-out logs, propelled with oars and poles. Pedestrians rode in the pirogue, and horses, wagons, and other freight were loaded onto platforms placed above two pirogues lashed together (Scharf 1883:1065-1070). Following Piggott's death in 1799, a series of pilots were hired over the next fifteen years to run the ferry for the Piggott survivors with apparently little technological change in the operation during that time.

In 1815, McNight and Brady acquired interest to the ferry and replaced the pirogues with a small keelboat. The keelboat is described by traveler Edwin Draper in 1815:

"The ferry boat on which we crossed was a small keelboat, without upperdeck or cabin, and was propelled by four oars by hand. The wagons, then the only means of land travel, were run by hand on to the boat, across which were placed broad planks transversely, resting on the gunwales of the boat, while the tongue of the wagon projected beyond the side of the boat...The horses, wagon, and saddle, family, slaves, and dogs were stowed in the bottom of the boat between the wagons. (Scharf 1883:1067-1070).

 

By 1820, the thriving ferry business at Illinoistown necessitated a change from keelboats to team-boat ferries. Team-boats worked by means of a horse treadmill that turned the paddlewheels of the boat (Bond 1969: 15). Anthony's Ferry operation to the north could not keep up with the demand placed on it by the flow of immigrants and Matthew Kerr, a merchant from St. Louis, also established a horse ferry in 1826 (Brink 1888: 521). Brink reports that this horse ferryboat was named Brooklyn, a name which apparently became associated with the ferry landing, for the town of "Brooklyn" appears on Robert E. Lee's harbor map (Figure 5) and Winkelmeier's map of 1843 (Figure 6). However, it is probable that the town of Brooklyn, like many early platted towns, was not much more than an idea in the minds of St. Louis realtors, and Brooklyn probably consisted of only the few buildings of the ferry company.

 

While the rival McNight-Brady Ferry and the Anthony Ferry were jockeying for position for the St. Louis transfer business, Samuel Wiggins was initiating moves to consolidate the ferry industry into one powerful monopoly. In 1819, Wiggins purchased part interest in the Piggott family ferry, and for two years operated a ferry in competition with McNight and Brady. That same year, Wiggins appeared before the Illinois General Assembly and was granted a charter giving him a monopoly on two miles of riverfront opposite St. Louis and the right to construct a toll turnpike leading to the landing (Bond 1969:11). The ferry charter granted to Samuel Wiggins further stipulated:. .."that no ferries other than those then existing should be established within one mile of the ferry established by that Act and that any person who, contrary to the provisions of this act, should run any ferry boat, he, she, or they should forfeit any such boat...to Samuel Wiggins, his heirs and assignees" (Reavis 1876:56).

 

 

 

From that point Wiggins moved to capture the rest of the market in the area by going into partnership with Major Nicholas Jarrot and his daughter Melanie, and buying out the rest of the Piggott Ferry interest of McNight and Brady and other ferries in the American Bottoms (Baldwin pers.comm.) The partnership gave Wiggins a large land base from which to work since Jarrot, in his lifetime, had amassed over 25,000 acres of property, much of it in the Illinoistown area (Baldwin n.d.). The operation of Anthony's Ferry obviously continued, because by 1826 the ferry was taken over by Matthew Kerr. Apparently the little ferry in Brooklyn held on despite the maneuvers of Wiggins to establish a monopoly to St. Louis.

The Wiggins Ferry was well integrated into the economic sphere of St. Louis by 1820. John Paxton, writing for the St. Louis Enquirer in 1821, described the ferry operation across the river:

"Mr. Samuel Wiggins is the proprietor of two elegant and substantial team-ferry boats, that ply regularly and alternately, from the bottom of North H. Street near the Steam boat Warehouse, to the opposite shore. The great public utility of this mode of conveying persons and property across the Mississippi needs no comment, but gives the enterprising owner of them, a high claim to the patronage of his fellow citizens. The River at the ferry is I and an 8th mile in width. Opposite the upper part of the town and above the ferry, is an island about one mile and a half in length, containing upwards of 1000 acres; it belongs to Mr. Samuel Wiggins" (McDermott 1952:71).

However, the prosperity and optimism noted by Paxton as well as other historians and promoters of the day in St. Louis and environs was belied by the overall poor condition of the state of Illinois. In most parts of the state, trade was just beginning to develop. In fact, in some areas deer hides and raccoon skins were still serving as the medium of exchange. The barter system, successful during the early periods, was not sufficient for the kind of capital required to competitively enter the national market dominated by wealthy centers in St. Louis and the East. It was found that agricultural products brought little on the New Orleans market and the little currency available was going into land acquisition and funneled back into the eastern banks. The shortage of money severely hampered the success of merchants and new enterpreneurs in the state.

The early failures of private banks prompted the Illinois legislature to form a state bank in 1821. The bank was authorized to issue three hundred thousand dollars in 2 percent notes and to quickly distribute the money on a first-come, first-served basis with each county getting its share. This system, by which people could borrow money without security was soon abused, and by 1830 liquidation was unavoidable. The legislature was forced to borrow one hundred thousand dollars from Samuel Wiggins to redeem the depreciated currency on a pledge that it would be redeemed from taxes on land owned by nonresidents. For years afterward, the Wiggin's loan was a campaign issue by taxpayers who believed the state had sold out to Wiggins; and as a result, many legislators who supported the Wiggins loan lost their seats at election day (Howard 1972:121-125, 202).

The disastrous consequences of the first state bank were forgotten in the wave of Jacksonian Democracy and condemnation of the national bank system. By 1832, state bank systems again came into favor with the belief that the state bank could pay for railroads and other improvements (Howard 1972:203).

The state bank was re-created in 1834 with capital of $1,500,000, of which $100,000 was to be subscribed by the state and the remainder by individuals with preference to residents and small subscribers. In spite of the caution to prevent abuse of the state bank by non-residents and corporations, representatives of special interest capitalist blocks in the east acquired control by using the names of Illinois citizens on subscription blanks for small amounts. Comprising the contingency seeking to gain control was Benjamin Godfrey and W.S. Gilman of Godfrey, Gilman, and Company; John Tillson; Thomas Mather; T.W. Smith; and again Samuel Wiggins. Wiggins acquired, along with 15 other representatives, a majority of the bank shares, as well as additional shares later as payment for the 1821 loan (Pease 1922:304,305).

By 1835, the state bank credit was extended and stock was increased in order to finance internal improvements within the state. However, the over-extension caught up with the system, and in 1837 the banks were hit hard by the panic of 1837, forcing them to suspend payment on stock owed. Legislative investigations revealed that corporate groups had misused bank stock in ambitious schemes to build commercial enterprises in the Midwest by northeastern business firms. In particular, it was discovered that New England investors had used their shares to fund a venture to turn the lead trade from St. Louis to Alton, Illinois. In addition, Samuel Wiggins had unethically used his bank stock as collateral for a loan with which to make payment of interest on his bank stock. The disasters of the state banks turned popular opinion against state banking and the use of nonmetal specie (Pease 1922:306-315).

The difficulty Wiggins had in meeting his payments of stock possibly explains why he sold the ferry company in 1832 to a syndicate headed by his brother William and by Samuel Christy (Bond 1969:12). Documentation so far is silent on the exact reasons why Samuel Wiggins would sell a seemingly profitable business. The references to Wiggins' over-extended activities in the state bank system suggest that he had overstepped the bounds of ethical and prudent business practice in his abuse of bank stock and had undermined the confidence of lenders, investors, and important political ins?

contacts through his wild speculation. The double-edged nature of Wiggins' close political ties to Whig leaders in the legislature was of no help in the tide of moderate democratic reform, divorcing the state from the banking system and subordinating the banks to the will of the majority. Resolutions were passed in the wake of the bank scandal against the "danger of monied oligarchies," and Governor Carlin declared that "channels of business ought not to be filled up and controlled by a circulating medium susceptible to expansion and contraction at the pleasure of the few (Pease 1922 :308, 309)

The political and economic shifts following the panic of 1837 signaled a growing popular concern for the evolving corporate system that was emerging in the early 19th century. This system was thought to be under-

mining free enterprise and serving special interests at the expense of the public welfare. However, the practices of entrepreneurs like Wiggins were the model of many such successful business operations in the early 19th century. That is, success often hinged on the ability of an entrepreneur or partnership to acquire enough capital to be first in establishing a venture, to beat out competition, to hang on during economically unstable times, and to adapt to changing demand and technology. This contest for economic survival was by no means unusual for a society with a strong tradition of "privatism," the essence of free enterprise, where the focus was on the individual and the individual's search for wealth (Warner 1970:32).

In the emerging years of the old Northwest Territory, privatism was probably the most important element in the growth of the economy and the city. This meant that the city depended for its wages, employment, and overall prosperity upon the successes and failures of individual enterprises, not community action. The local politics and social and economic environment were shaped by the focus of private economic activities with the mode being that "if each man would look to his own prosperity, the entire town would prosper" (Warner 1970:33).

Interwoven with this tradition of privatism was the belief that conditions in early American cities offered the promise of opportunity for all levels of the society. This belief in American egalitarianism is perhaps best expressed by Alexis de Toqueville in his Democracy in America: "...in a democracy like that of the United States, fortunes are scanty (because) the equality of conditions (that) give some resources to all the members of the community ... also prevent any of them from having resources of great extent" (Chudacoff 1981:50-51). Recent studies have prompted many historians to dismiss this as the "egalitarian myth". The American system of free enterprise gave the advantage to the wealthy. The old adage that one needs money to make money might be a more appropriate characterization of 19th century enterprise. For example, in Boston four percent of the population owned 59 percent of the wealth in 1833 and 64 percent by 1848; in New York 4 percent controlled 49 percent of the wealth in 1828 and 6 percent in 1845 with similar proportions of wealth to population in Philadelphia, Brooklyn, Baltimore, St. Louis, and New Orleans (Chudacoff 1981:51).

In Illinoistown the physical form of the city and its economic base was predominately the outcome of a market for profit-seeking builders, land speculations, and large investors based in St. Louis and other established cities. Figures like Piggott, McNight, Brady, Jarrot, Wiggins, and Reynolds were men with both a vision and the capital and contacts to back their enterprises. They did not spring upward out of the humble class of frontiersmen immigrating across the continent; they were businessmen at the forefront of a growing market. The state bank experiment to provide access to capital evenly among those without was a failure. It was found that the prevailing trend of business in the Illinois territory had gone far beyond what could be corrected by an egalitarian bank system, and in fact had succeeded in increasing the gulf between the elite class of entrepreneurs and the lower economic levels of society. Along with this was the growth Of outside influence in Illinois politics and economics by New England and St. Louis speculators who used the state as an arena for business ventures that provided little for the local welfare (Pease 1922: 308-310).

In the wave of reform, the Illinois legislature turned to the Wiggins Ferry Company and declared that the monopoly on transportation between St. Louis and Illinois was detrimental to healthy trade and commerce. The legislature pointed out that the ferry could not handle properly the growing demand, thus causing delays of several hours in the fall season and that the monopoly in the hands of St. Louis stockholders was causing great injury to the residents of Illinois. An act passed in 1839 required the St. Clair County Commissioners to locate another ferry in the same area to be leased for five years. The Wiggins Ferry Company took the case to the United State Supreme Court, but in vain (Baldwin pers. comm.). The second ferry in Illinoistown was located at the old site of Washington, where years before the upper ferry had succumbed to the Mississippi River.

 

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