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Cornell University Library 1993.THE
SPECULATIVE CRAZE OF ’36.
EXTRACT FROM PAPER READ BEFORE THE SOCIETY
FEBRUARY 6, 1863.*
BY GUY H. ^LISBURY.
The year 1836 will long be remembered as one of crisis—
not only in our own locality, but throughout the Nation.	It
dawned upon us radiant with rosy light—with prospects full of
glorious promise; it departed, when dark clouds overcast the
horizon ; that roseate ray deepened into the lurid hue of coming
storm. It came with dazzling visions of wealth and fond
anticipations of the happiness we ever link with golden chains
♦Thefollowing pages are extracted from a paper which was prepared for the Society,
and afterwards utilized as an Introduction to Thomas’s Buffalo City Directory under
the title “ Buffalo in 1836 and 1862.” It was prompted by the apprehension that
Buffalo was then (1863) about to experience a repetition of the experiences of ’36.
“ That the large augmentation of the ordinary volume of our paper circulation,” our
author wrote, “ caused by the issues of the Government, added to the suspension of
specie payment by all the banks of the country, is materially affecting prices, is
conclusively shown by the sensitive barometer of the Stock Market. The advance in
most description of securities there negotiated, has been absolutely enormous. While
they are first to feel the influence of inflation, there can be no doubt that land will be
soon affected in like manner. An unmistakable indication is the fact, that after a long
period of inactivity, transactions in land have become quite frequent among us of late,
although not at high prices.” Yet he felt that “ the tide of Speculation is again heaving
its restless waves around us,” and he dwelt at length on the wisdom of abstaining from
speculative investment. In 1836 Buffalo had less than 16,000 inhabitants ; in 1862 it
claimed 100,000 ; yet the prices of city lots, business as well as residence property, in
*62 and for some years thereafter, were still in many cases far exceeded by the valuation
of those lands in ’36. The phenomenal character of that early inflation is further
illustrated by comparison with present prices which on some streets then (and now)
regarded as desirable, are little if any in advance of the fictitious values put upon
them sixty years ago.—Ed.
3i7
318
THE SPECULATIVE CRAZE OF ’36.
to worldly prosperity ; it left us, with those gay illusions faded,
those budding hopes blasted, those glowing fantasies exchanged
for dull realities, those bright plans for the future sadly marred
by the change that came over the spirit of our dreams. It
opened with universal prosperity apparently covering the land,
giving stimulus to every department of trade, of commerce, of
manufactures; it closed with almost as universal bankruptcy
spread widely around, carrying disaster to thousands, in every
branch of business, in every walk of life, to the high and to the
humble.
Those by-gone scenes to which I allude, are within the
personal experience of some of us; and it may appear presump-
tuous and unnecessary to speak in historic or didactic style, of
times not yet remote enough to have escaped our lively recol-
lections, and the consequences of which came home to so many
in such practical shape, as 'to have been long since, in legal
parlance, ‘4 of record ” !
To seek for positive causes of the universal speculative
movement, which began in ’34, and reached its acme in ’36,
were to invoke elements of political contention, with which it is
wisest not seriously to intermeddle. Whether it was consequent
upon the financial policy of President Jackson, or upon the
action of his great antagonist in politics and in policy, the
United States Bank; or upon the emulative expansions of that
institution and the affiliated Deposit Banks, then filled with the
overflowing surplus of the National Treasury, have long been
mooted questions which each one can decide for himself; but there
can be little controversy as to the actual results, that became tang-
ible, and were read of all men.
However we may differ as to the political causes which
produced the bank inflations, there will probably be few to
controvert the opinion, that a redundant currency of paper, not
based in any safe proportion* upon coin, and issued to a large
extent, by irresponsible corporations, had much to do with the
extraordinary rise in prices, not only of real estate, but of almost
every commodity of use or trade, which was a prominent
symptom of the speculative fever of '36. As money depreciates
in value, from its abundance, the prices of other thingsTHE SPECULATIVE CRAZE OF'36.
319
necessarily advance, and this appreciation of property, inducing
the belief that it is to be progressive, engenders the passion for
speculation, which once let loose, runs riot, until it runs to ruin.
To deny, that as a currency becomes redundant—especially
one of paper — the value of money depreciates in proportionate
ratio with the increase of the circulating medium, would be to
discredit the well known history of the Continental currency,
and of the assignats of Revolutionary France.
Yet, while such a state of things is most commonly to be
predicated of excessive issues of bank paper, we are not without
example of like effects, flowing from a superabundance of the
precious metals. In limited localities, where gold is plentifully
had for the mere digging, prices appreciate in nearly the same
ratio, as when paper exclusively forms the currency. When
California first tempted adventurers with her glittering treasures,
flour at the mines was sometimes sold as high as $200 a barrel,
common shovels at '$14, and a box of Seidlitz powders for $24 !
And, at the newly discovered gold-fields of New Zealand,
ordinary horses now sell for $700, and flour at $75 a barrel. But
this depreciation of gold is comparatively temporary, and
confined to the immediate regions of its production, while the
depreciation of paper is National in extent, and difficult to
be controlled within any assigned limits.
Banks sprang up, in the prolific era of *36, like the mush-
rooms of a summer’s night, and proved as unsubstantial and as
perishing. Hosts of desperate speculators, who by that 4‘hocus
pocus ” best known to skillful financiers, could manage to
galvanize such monetary institutions into legal existence,
with capital stock all paid in by promissory notes, became
suddenly possessed of abundant means, which enabled them to
operate on a grand scale. They bought lots and farms, and
houses and equipage, careless at what cost, so that they paid in
currency of such facile creation.
That prices should remain uninfluenced by this reckless
profusion with which money, or its semblance, was so widely
scattered, would be simply impossible. “ Easy got, easy gone,”
is one of those old maxims that are as true as they are trite, and
applies with peculiar aptness to the large and sudden profits of
successful fraud, or lucky speculation.320
THE SPECULATIVE CRAZE OF'36.
Assuming, then, that the state of the currency had much to
do with the speculative tendencies of ’36, we may be asked to
account for the anomalous fact, that amid all this abundance of
what was called money, the “ street rates” of interest were
from three to five per cent, a month—as tough shaving as is met
with in tight business times, when speculations are the exception
and not the rule.
To explain this seeming incongruity, that prices should
advance under such ruinous rates of interest—and that they
rapidly did so, is an undisputed fact—we must bear in mind that
speculations begot usury, and usury, in its turn, begot specu-
lations. The buyers and sellers who were making thousands
with| magic facility, hesitated not to feed largely the avarice of
the money-lender, who supplied the means for their extensive
operations; while the latter, seeing the colossal profits realized
by others from the use of his funds, thought they could well
afford to pay him higher and higher rates—and so the mutual
process of reasoning had the very natural result of coming to
the same conclusion.
But while ascribing in a great degree the speculative impulses
of the period we speak of to the unwonted issues of bank paper
which flooded the country, it is but just to remark that other
influences must have aided the momentum which sent us forward
with railroad speed, until the crash came that threw the whole
train off the track. There is an eagerness for sudden and easy
gain, ever alive in human breasts, and manifesting itself in all
ages, in enterprises that promise golden returns, but often prove
gilded illusions. This propensity to obtain wealth by some
shorter process than that which Adam taught his race, is not
altogether dependent for its manifestations on the condition of
the circulating medium—although it may be stimulated to won-
derful activity, by the superabundance of money at peculiar
periods, when many causes combine to produce feverish action.
The tulip mania, which nearly two centuries ago prevailed in
Holland, when single roots of that simple flower, sold for the
enormous price of $2,000 ; the famous South Sea Bubble, which
set all England agog, in the beginning of the Eighteenth Cen-
tury; the cotton speculation of 1825, the mulberry fever whichTHE SPECULA TIVE CRAZE OF ’36.
321
raged in this country in 1838-39-40; the railway mania in
England and France, of 1846-47, were not dependent upon the
condition of the currency, but upon their own supposed pro-
creative power of money-making. The purchaser of the tulip
bulb bought it, not for its intrinsic value, but because its
multiplied product could be in time disposed of at similar or
higher prices. So with the propagators of the Moms multicaulis,
who paid a dollar each for mere slips of a shrub of such easy and
rapid increase; they cared little what was paid for the seed, so
that the grain to spring from it was gold in multiplied propor-
tion. But the buyers of South Sea stock in the Eighteenth
Century, and of lands in 1836, mostly fancied there was intrinsic
value in what they held. Some doubtless bought to sell, without
any confidence in the prices paid, in the belief that, to use a
common saying, “ the fools are not all dead ”; and they kept on
in the giddy race, caring little who got the unlucky individuals
who might happen to be “hindmost.’* The purchaser of a lot,
if he could manage to raise enough for the payment down,
literally obeying the Scriptural injunction, took uno thought
for the morrow/ ’ did not trouble himself as to the money to be
paid hereafter, for he confidently calculated soon to sell, at a
profit, to some one else. And so prices went up, at every
transfer, in something like arithmetical progression.
It must have been a curious study for the calm observer to
watch the progress of the speculative mania, and note its effects
upon the individuals who came under its influence. At first,
when land-sellers displayed their maps, with tempting array of
corner or water lots, with prices and terms obligingly laid down
for the information of the anxious public, the cautious man
would listen to no proposition to purchase land that he did not
want, and by which he would incur an indebtedness greater than
he could conveniently pay. He calculated the interest, the
times of payment, and safely concluded such purchases out of
his power. Another/however, with more confidence and less
prudence, bought, and in a few days, or weeks, sold out at a
handsome advance. His cautious neighbor saw that he had
missed a small fortune by his timidity, and to lose no farther
time, blindly bought the next bargain that offered. He, too,
21322
THE SPECULATIVE CRAZE OF'36.
effects a sale that nets him at once, perchance, the profits of a
whole year’s business, and fancies that he has only to repeat the
experiment, on a more extensive scale, to make his fortune with
magic rapidity. He becomes a bold operator—buys large tracts,
and maps them into blocks and lots, for which there is no lack
of eager customers, and the exciting game goes bravely on, until
the reaction comes that arrests these doings in mid career.
What was the spectacle presented in our own community
during the memorable times of which we speak ?
The wonderful discovery of Daguerre was then among the
unimagined marvels of the Future, and we therefore can have no
facsimiles of the inimitable tableaux that were then presented,
in private parlors, in public bar-rooms, in places of business, and
at the street corners. There were eager merchants, a goodly
sprinkling of over-smart clerks; there were lawyers, doctors,
editors, with now and then a grave divine to leaven the lump;
there were scores of loitering mechanics, and not a few from the
farming neighborhoods, tarrying from their marketing, all
occupied in the one great pursuit of getting suddenly rich:—out
of each other. The topic of conversation was the exhaustless
theme of land—as if it had been found the “ one thing need-
ful,” and the whole community were determined to become
agrarians at once. The passers-by would catch from the ani-
mated conversation of each knot of busy talkers, with “ specu-
lation in those eyes that they did glare withal,” some such words
as “corner lot,”—-“running back to an alley,” — “water
front,” — “South Channel a sure thing,” — “railroad run by
it,”— “note at sixty days for first payment, balance end of ten
years,” — “worth double in six months,” — “make out your
papers,” etc., etc. yThey chaffered, they negotiated, they
marked out their lots with canes, or umbrellas, or their boot-
toes, upon the doorsteps or the sidewalks—
Their dream of life, from morn till night,
Land—land—still land !
The ladies, too—that is, the spinsters and widows, who could
hold property in their own right-—were not disposed to let the
lords of creation be the only lords of the soil, and they invested
their savings, or the proceeds of homesteads, sold off for theTHE SPECULATIVE CRAZE OF >36.	323
purpose, in making the first payment on purchases, the profits on
which were to render the fair holders perfectly marketable for
fortune-hunters.
It was all-absorbing, that engrossing desire to catch the golden
opportunity, whose swelling tide wafted to wealth. The
physician, intent upon some proffered bargain when asked by
his anxious patient how his medicine was to be taken, answered
abstractedly, “ one quarter down, balance three annual instal-
ments.’’ Mechanics, when their customers wished jobs of work
done, said they had ‘4 other fish to fry”—were in better busi-
ness. One of them, whose name was Pat Smith, the saddler,
when called on to make a harness, replied, “ Why, man, I don’t
do any more business—I’ve bought a lot! ”
Oh! but they were rare groups—those busy, bustling,
sanguine moonshine-seekers of ’36, and ’tis pity they could not
have been immortalized by a Hogarth’s inimitable pencil! As
in his celebrated moral pictorial series, entitled “The Rake’s
Progress,” might have been depicted the varying fortunes of the
actors in that changeful drama. The opening picture might
have shown the honest, industrious mechanic, content with
gradual gain, and happy in the enjoyment of a comfortable
though humble home, ignorant of the feverish hopes or fears of
him whose fortune is staked upon a cast. He next might have
been seen, listening with wondering ears, and excited counte-
nance, his implements of labor lying still the while, to some
recital of the sudden luck of a neighbor, who, by one single hit,
had made hundreds of thousands, w’hile himself had been
earning but a week’s wages. The temptation is too great—he
becomes dissatisfied with his trifling gains, and longs for the
splendid profits he hears of. His snug shop no longer bounds
his wishes, his moderate business has become mean and worthless
in his eyes, and he throws aside his implements, determined to
try his fortune in the same field. He might next be seen eagerly
driving the fraudulent bargain, by which some unsuspecting
friend was made a “ victim of misplaced confidence ”—consort-
ing with sharpers and brokers, to advance his schemes of money-
making. His next appearance might be in the character of a
paper aristocrat, whose splendid equipage, whose grand mansion324
THE SPECULATIVE CRAZE OF ’36.
and seeming wealth, attract the admiration and the envy of the
multitude. He condescends, he patronizes, he becomes oracular,
his opinions are listened to with deference, his jokes are loudly
laughed at, and quoted by the wits about town—and he passes
into that class known in fashionable entomology as “ big bugs.”
But the last scene in these real sketches would, in the hands
of the great master of caricature, have been instructively drawn.
Beggared in fortune, shorn of his honors, and habited >in the
‘4 shabby-genteel,” you find him again at his old business, but
not the same contented man as when he left it. His cheerful air
has changed to sullen despondency; his once busy hand, that
quickly plied his tools of trade, moves listlessly in his now hated
task, and if not making a further wreck of himself, by the intem-
perate draught that promises deceitful solace to' his troubles, it is
a wonder. His family, fallen from that envied sphere in which
so many artificial wants are learned, so many conventional
necessities discovered, are pining in chagrin, and disappointed
ambition is at their heart’s core, rankling like a barbed arrow.
This would have been a series of pictures, faithful to. the life,
here and elsewhere. Ah ! such were some of the results, to
individuals, of those Speculations of ’36 !
Lamentable indeed, in this and most other places of any
note, from Maine to Mississippi,was it to witness the withdrawal,
in ’36, from their honest avocations, of tradesmen and mechan-
ics and husbandmen, who sought an easier livelihood through the
chances of speculation. Many who had for a while resisted all
the allurements of the tempting bargains that were going on
around them, came at last to the conclusion that their old-fash-
ioned prudence was but foolishness—and they, too, at the
eleventh hour, plunged with headlong haste into the arena, to
secure the prizes that still awaited the grasp of those who sought
them.
The stages, steamboats and other public conveyances, the
hotels, saloons and all places of general resort, were thronged
with land-sellers and land-buyers. They poured westward like
an army of locusts, to devour the broad acres of the National
domain, in advance of the tide of emigration which was setting
with resistless force in that direction. I was at Detroit for a fewTHE SPECULATIVE CRAZE OF’36.
325
days in July, ’36, and witnessed this incredible eagerness to
make entries of the public lands, for which the issues of the
State Banks were then received by the Government. The Re-
ceiver’s office was literally beleaguered with applicants, until the
sidewalk and street in front of it had the appearance of the polls
at a hotly contested election. Persons intent on locating the
same tract, took fleet horses on the spot, and ran Gilpin races to
the land office, as if for a sweepstakes. To such a fearful extent
did the speculators absorb the public lands, to the injury of the
actual settlers, and the serious detriment of the States in which
the lands were situated, that in July, President Jackson issued
his famous Specie Circular, requiring specie alone in payment,
and checked the evil, by precipitating the ruin that was then
ultimately inevitable. This missive of the Executive, crashing
like a ponderous battle-axe, through the paper helmets of the
Rag Barons, swept them down by hundreds, and spread dismay
and disaster throughout the land. Its effect was electric. Con-
fidence, that creative agent in human society, was stunned, and
reeled, and fell. The vast fabric of credit that had been reared
to the very skies, toppled headlong. Fearful were the anathemas
denounced against that iron-willed old man, by the bankrupted
adventurers who meant to rise winners from the game. The
banks contracted, like boa-constrictors, around their customers,
preparatory to their subsequent suspension of specie payments,
and universal panic pervaded the country. We tumbled from
the zenith to the nadir—and it was a nine days’ fall !
The bubble had burst ! Its gigantic proportions, glittering
with rainbow dyes, no longer mirrored landscapes of pictured
beauty in the golden sunlight, but dissolved into the empty air.
The operations were over; the sharps proved flats at last—the
sparkle of success had flashed and faded—and all terrestrial
things had suddenly become dull, stale and particularly
unprofitable.
But, disastrous as was the pecuniary ruin that the receding
tide had left behind, there was another consequence not less
deplorable—the indifference to moral as well as legal obligations,
which resulted from the utter inability to fulfill them. Although
there was an incalculable sum of indebtedness, arising from bal-326
THE SPECULATIVE CRAZE OF ’36.
ances due on purchases of real estate, where the debtors had
already paid double what the land was worth, and were held on
their bonds for perhaps as much more, the repudiation of which
involved no bad faith, there was likewise a vast amount of honest
and honorable debts, merged in the sweeping insolvency that
followed. And when the Bankrupt Law of ’42—that necessary
evil—wiped out, at once, the enormous liabilities that pressed
like an incubus upon the energies of thousands, there was by far
too general a forgetfulness, that the obligations of honesty are
more imperative than those of law. The moral tone of com-
munities had been deranged by the excesses of the times, and
few, alas ! were able to resist the immunity offered alike to fraud
and to misfortune. , They took the legal Letheon, and all troub-
lesome compunctions were unfelt, or unheeded.
In looking back, from this point of dispassionate observation,
upon the influences that operated upon the public, like the
“encasing air” we breathe, the wonder is, not that so many
fell, but that any stood steadfast. The wisest judgment has not
intuitive wisdom, but is formed by constant and careful observa-
tion of the acts and experiences of other men. Our estimates of
value are based upon the estimates of the community around us.
The adage declares
The true worth of any thing,
Is so much money as ’twill bring,
—and this is true of most material things. The shrewdest man
buys and sells by the estimates of other people, although he may
fancy them greatly modified by his own conclusions. We can-
not be entirely independent of the influence which the example
and opinions of men have upon those within their circle—their
relatives, and friends, and neighbors. We may stubbornly
resist it, and imagine we rely solely upon our own sagacity in
shaping our ends, but we cannot change our natures. The
passions are contagious, and communities are often pervaded by
some strong common feeling, that could not have been excited
simultaneously in so many separate individual minds. Enthusi-
asm is eminently of this contagious character, and enthusiasm is
a main element in the propagation of speculative enterprises.THE SPECULATIVE CRAZE OF ’36.
327
It was indeed difficult to withstand the impulse consequent
upon hearing the judgments of men, of known candor and pro-
verbial caution, deliberately pronounced in favor of purchases at
prices we now know to have been wild in the extreme. Listen-
ing to such authoritative opinions and induced to distrust their
own views as being “behind the times,’* careful men who had
stood aloof during the first stages of the excitement, became
giddy with gazing at the whirl around them and joined the jig
at last. They threw aside their carefulness as an incumbrance
that but clogged their progress to wealth and fancied happiness,
and sought to make up for lost time by being rasher than the
rashest. The example of such men acted upon many, who not
having confidence in their own judgments, waited the lead of
others whose superior sagacity they had been accustomed to
look up to, and now blindly followed in their wake, thinking
that where they led, must be the path of safety and success.
There is, then, great excuse for the errors of individuals
when their misjudgments were sanctioned by the approval of
whole communities. In our daily transactions we are now gov-
erned by the opinions of perhaps some of the very same men
who were so wide of the mark in ’36. I know that one citizen
of great respectability and unblemished integrity, then advised
the purchase of land at $125 a foot that in three years afterwards
could not have been sold for $25. I recollect that another, of
much experience, and relied on as oracular in such matters,
valued unimproved lots at $60 per foot that were subsequently
sold, after twelve years’ interest, taxes and assessments had .been
paid, for $7 !
Let us not, then, while we deprecate the madness of the
Speculations of ’36, too harshly blame the unfortunate men who
were touched with the prevalent malady. The hallucination
which came over them was a species of what Mrs. Partington
would term money-mania. It now seems remarkable that no
commissions of lunacy were then issued, in behalf of expectant
relatives, to restrain the wealthy monomaniacs from making such
havoc with estates that properly belonged to their hopeful heirs
and longing legatees. It is astonishing, too, that the plea of
insanity—generally as available in criminal cases, as was Old328
THE SPECULATIVE CRAZE OF '36.
Tony Weller’s favorite “ alibi ”—was not set up to bar recovery
upon those crazy contracts, by the enforcement of which men
were stripped of their all. Now-a-days the bare evidence that a
man had paid such prices for property as were then readil)
given, would be prima-facie evidence of his craziness. But at
that time the difficulty would have been in obtaining a jury out
of the “ infected district,” for that was as wide as the Union
itself!
Let us, then, tread lightly as possible on the tender toes of
those luckless men who ruined themselves while ruining others.
In their haste to get rich they fell into a snare. Yet, methinks,
the loss of hard-earned property, the business relations of years
deranged or broken up, the shattered credit, the dependence
upon precarious means of livelihood, the spurns and buffets of
the world, were punishment enough for errors as venial as those
chargeable to the Speculators of ’36.
Not that this should in any way excuse the frauds that were
so deplorably common in those operations. Those are without
the palliation that may be allowed to mere rashness. Deliberate
fraud is the offspring of moral turpitude and cannot be justified
because it was the fashion. The obligations of honesty and fair
dealing were as binding then as ever, but they seemed to have
been greatly weakened by the influences which were abroad.
Misrepresentation and falsehood were resorted to in numberless
instances to swindle innocent purchasers, until many of the
extensive operators obtained the significant and deserved cogno-
men of “ land-sharks,” and “ land-pirates.”
The most singular feature of the speculative mania was the
blindness that seemed to have come over the common sagacity
of men, who in the ordinary affairs of life, had sense enough to
look to their own interests. They purchased land of persons
whose responsibility was often unknown, without knowledge of
the goodness of title or protection against prior incumbrances.
Men of straw bought blocks on credit, giving mortgages for the
purchase money, and then sold them out in lots with no provi-
sion for releases from the lien which covered the whole. Many
of those lots, too, were bought or taken as security for debts by
men of substantial property who assumed the fulfillment of theTHE SPECULATIVE CRAZE OF >36.
329
obligations given for them, and went on paying three times as
much as the land was worth for lots to which there was no re-
liable title. Farms were bought far beyond the city limits,
mapped out with “ Squares ” and “ Places ” and the lots sold in
New York and elsewhere to capitalists and business men as desir-
able locations for fashionable residences. Persons who had sold
lots in the early stages of the excitement, bought them back in a
few weeks or months, paying the holders a large bonus to relin^-
quish their bargains.
Adventurers who could manage to get a few gold pieces to
display in their office windows, boldly set up brokers’ shops, or
what are now styled “ banking offices,” and unblushingly
charged from one and a-half to two and a-half per cent, a month
for their mere endorsements of the promissory notes of individ-
ual “ operators,” when, by no process known to modern science,
could even a “ trace” of the precious metals have been found
had they been subjected, with all their effects, to destructive dis-
tillation ! Fatuity had taken place of Reason. Instinct, even,
was gone—for that impels to self-preservation—unless it be that
of the silly moth, who rushes into the gaudy flame that dazzles
and devours her.
A very curious illustration of the recklessness produced by the
wonderful success of some of the operators, who fancied their
luck would turn everything they touched to gold, was the buy-
ing out of individuals by the lump, without inventory or esti-
mate, which was gone into in a few instahces. ‘‘I’ll give you
$150,000 for all your property, except your wife and babies and
household furniture,” would be the bantering proposition over a
bottle of champagne. “ Done,” says the other, and the bargain
was made. The buyer took possession of the lands, tenements,
mortgages, notes, book accounts, choses inaction, etc., and paid
over the small amount of cash agreed on for the down payment,
giving mortgage security on the property for the balance. It had
become tedious to purchase in parcels and nothing but big
figures would answer for big buyers.
The sad sequel to the career of that wholesale purchaser in
the transaction above referred to, remains to be told. I met him
day before yesterday on his way to the Poor-house with a certi-330	. THE SPECULATIVE CRAZE OF *36.
ficate in his hand from the Overseer of the Poor, entitling him
to the shelter of that last refuge of the unfortunate! Yet he
figured, in *36, as worth three-quarters of a million; and so ex-
tensive were his transactions, that he kept a branch office on
Broadway, in New York, for his business in that city, furnished
with all the luxury of mahogany and Brussels, and a splendid
piano for the musical tastes of his “ hosts of friends.” It should
not be forgotten, that in the affluent season of his prosperity, he
supported, for five years, a free school for orphan boys and girls,
of whom twelve from each of the five wards of the city, had thus
the privilege of a good education, and were furnished with
books and stationery without charge. How striking an illustra-
tion of the mutability of human things is thus afforded us, and
we may well add, “ ’Tis true, ’tis pity, and pity ’tis ’tis true.”
It is impossible to make even an approximate estimate of the
aggregate amount of speculative purchases then made in this city
alone, as but a portion of the conveyances were by deed, and
placed upon record. A vast number of articles, or contracts,
were issued and transferred from purchaser to purchaser—the
number and amount of which transactions cannot be known.
’But, so far as the records show, there were some twelve thousand
deeds, mostly for city property, recorded during the period
spoken of—being about three thousand more than had been
made in the entire county, since its organization, a quarter of a
century previous. If we assume that there were as many transfers
by contract as by deed—and the estimate would be below the
mark—we have an aggregate number of conveyances reaching to
nearly twenty-five thousand. The entire amount of these pur-
chases could have been little less than $25,000,000. Several of
the single purchases amounted to $100,000 and even $200,000,
The enormous demand for money which these immense
operations created, was still insufficient to stagger prices, in that
unnatural condition of things, and men bought and built as if
reckoning day would never come. The buildings erected in
this city during *35 and *36, were estimated at the time, to have
cost $2,830,000. Some of them were palace-like mansions,
costing from $20,000 to $30,000, exclusive of their extensive
and valuable grounds. In vain did the sensible admonition of331
THE SPECULATIVE CRAZE OF '36.
good old Dr. Watts, “build not your house too high/’ preach
prudence to the confident builders, who went swimmingly on,
rearing those castles of folly. They yet stand, in imposing
magnificence, yet seldom inhabited by those who built them.
They were haunted by spectres of the “ Elephant ”—ghosts that
their luckless proprietors could easier raise than lay—and they
fled from the disturbing visions, to humbler and more peaceful
homes. .	.	.	.
From a Land Register which was kept in ’36, I have taken
the then ruling prices of fifty unimproved lots on thirty-seven
streets in different sections of this city, and carefully compared
them with those which the same property would bear now, and
find that, tried by this test, our prices at this time are, by aver-
age, less than one-half as high as they were in ’36—the disparity
being greatest in locations farthest removed from the business
portions.
A few instances of those prices of ’ 36, will suffice to show
their visionary character. The wildest of all were outside the
old city limits, but I have no time to go beyond its then borders
for samples. Within its limits, the advance made upon lands
purchased by the quantity, was most incredible. I knew one
tract, bought at the rate of |2a foot* or about $500 an acre, in
the early part of ’35, sold and resold in parcels, until some of
the sales made within a twelve-month afterwards, were at the
rate of $40 a foot, or $10,000 an acre ! And these last buyers
purchased not for occupancy, but to get a still farther advance
of the next customers! The same land is now worth $18 per
foot.
As the tendency of disastrous reactions is to go as far below
the ordinary level of a natural state of things, as the feverish
condition had risen above it, we reached in *41 and ’42, the
lowest point of which the sliding scale was susceptible. Lands
were then a drug on the market, and could hardly be disposed
of at any price. Sales were actually made, mostly of outer lots,
however, at from one-tenth to one-twentieth of the price they
bore in *36—that is, lots which had sold as high as $35 and $40
a foot, were then purchased for $1.75 to $2 a foot! Their
present worth would be say $16 per foot—showing a considerable
but healthy increase.332	THE SPECULATIVE CRAZE OF >36.
It is touching, almost, to dwell upon the generous, trusting
confidence which the speculators of ’36 manifested. Nothing
was too impossible for them to believe in, or to promise. Those
who doubted, were literally damned, and stigmatized as “croak-
ers ,” and no true friends to Buffalo and its interests. They
prophesied, those speculators, like the inspired Pythoness, of the
Future, and casting aside the things that were behind, pressed
forward for those which were before. They gave all the evi-
dence which men could give, of their sincerity and their earn-
estness, for they backed up their belief by buying. They built,
on paper, the splendid Perry Monument, of white American
marble, one hundred feet high (which you can’t see), in front of
the Churches. They in like visionary manner, erected the
noble College edifice on North Street, for the University of
Western New York, which was so magnificently endowed (by
subscription) with professorships that rivalled the princely
largesses of the Lawrences and the Appletons. They gazed with
pride and satisfaction upon the massive foundations which
Rathbun had commenced of that stupendous Exchange, whose
lofty dome was to tower two hundred and twenty feet above the
pavement on the Clarendon Square ! Their fond error was, that
they lived a generation too soon ! Like many of the philoso-
phers and reformers of the world, they were in advance of their
age—or, in other words, “decidedly ahead of their time ! ”
Were they all wrong in their enthusiastic estimate of what we
shall yet be? No—no—it was only, after all, a question of
time. The day-dreams of ’36 shall yet become realities—but it
will be after this.........
That era of ’36 was the carnival of the usurers—those
“ Knights of the Golden Fleece“Wheresoever the carcass
is, there will the eagles be gathered together ”—and they
resembled that king of the feathered tribes in certainly one
characteristic—they were birds of prey. They flocked hither
from afar, greedy for gain, and swooped for the golden harvest
that waved before them. In the regular broker shops, enormous
amounts of promissory notes were shaved as with a jack-pi?ne,
at such rates that on “long paper” thus converted, there was
about as proportionate an amount going to the hapless holder, as333
THE SPECULATIVE CRAZE OF'36.
was realized by the farmer whose corn was so carefully tolled by
the thrifty miller that it was hard to tell which was the toll and
which the grist. Beside these wholesale dealers, there was an
army of “street brokers,” who made a petty capital of a few
hundred dollars support them, without any other labor than that
of “shinning” for cash and customers.
The effect of thus diverting the money capital needed for
regular business purposes, was, of course, injurious in the last
degree to the merchant and the mechanic. They could ill
afford to raise money in competition wiih speculators, whose
notes mainly represented large profits. But, in the winding up
of those financial operations which promised such easy fortunes
to the rapacity of the money-dealers, many of those enterprising
citizens came to a realizing sense of the predicament of those
spoken of in the old proverb, who “ went out to shear and came
home shorn.” The borrowers had mostly become bankrupt.
There was extensive repudiation, too, among the solvent debtors,
of paper, that, although usurious? had been regularly taken up or
renewed as long as the bubbles of profit were floating above us
and eager pursuers after them—paptr that proved then as value-
less as the idle air.
When the delusion could dc lude no longer and men all
unwillingly were brought to their senses, as insane patients are
made to have lucid intervals by the c- id shower-bath, then
followed the revulsion that inevitably succeeds high-wrought
excitement, and the depression was a perfect cavity. The
aeronaut whose upward flight is checked by the collapsing of his
gas-filled balloon, is not more sudden 1\ 'brought to Mother
Earth than were the speculators hurh d from tho>e giddy heights
where they were busily building castles in dreamy cloudland.
“ They went up like a rocket, and came down like the stick.”
Then revelled the legal profession, 'riven came grists to
their mills, that were ground by the upp r and nether millstones,
of which the luckless tustomers got the *4 bran and shorts.”
Then the sheriffs and the masters in chain er\ brcame the great
conveyancers of the landed int rest, and a busy trade they
drove. The newspaper publishers, hke^i>e. looked upon the
solid columns of legal notices that or \\< < d iheir sheets, as a334
THE SPECULATIVE CRAZE OF ’36.
special dispensation of Providence. In short, as it is truly “ an
ill wind that blows nobody any good,” there were a few classes
who were pecuniarly advantaged by the attendant consequences
of the speculations.
But that the large property owners who held extensive tracts
before the fever developed itself, which they sold off at great
prices during the excitement, were very materially benefitted, wTas
by no means the case except in a few individual instances. True,
they made sales at large prices of much real estate, but mostly
for small payments in hand, taking bonds and mortgages for the
balance, as was the prevalent custom. Before the subsequent
instalments became due, prices were all down, and the pur-
chasers, mostly declining farther payments, let the lots go back
to the original proprietors, saddled with the heavy cost of fore-
closure, often equalling or exceeding the amount received on the
sale of the land. But, granting them to have even realized
large amounts on their sales, they, too, did not escape the
universal mania, and reinvested their money in other localities—
often in distant paper cities which they hoped to build up to
great emporiums, or in the purchase of vast tracts of wild land
in the Western States, which their fertile imaginations saw
doubling, trebling and quadrupling in the not far-off prospective.
These schemes, the wildest of the wild, were entered into,
heart, hand, and purse, by men who, while selling out as rapidly
as possible their Buffalo lots at Buffalo prices, were too shrewd
and too cautious to buy other property here. They preferred
going abroad to exercise their keen discrimination and cool
judgment in selecting locations which would inevitably grow
into future Buffalos, and pile up for them new fortunes in each
spot of promise. They poured out without stint or hesi-
tancy, their spare cash, and mortgaged their credit at such
places as Irving, Dunkirk, Van Buren, Erie, Ohio City, Man-
hattan, Green Bay, Manitouwoc, New Buffalo, etc., etc.,— to
say nothing of Black Rock, whose whole territory, nearly, was
swallowed up by a gigantic stock company of Buffalonians, who
made a clear million or two of dollars—by paper estimate. As
a sample of these enterprises—to give the history of them all
would swell this paper to a volume—take that of the some-timeTHE SPECULATIVE CRAZE OF’36.
335
port of Van Buren, near Dunkirk. A tract was there purchased
of three hundred acres, at $25 an acre, which was converted
into stock—seventy-five shares, at $100 each. Operations were
commenced on a large scale. The speculators went ahead, and
being “ fast men,” soon ran the shares up to $3,000 each—thus
swelling the original value of $7,500 to'$225,000! It is
unnecessary to add that the collapse which soon followed that
high fever was a very cold stage, and nearly fatal to the patients
of sanguine or choleric temperaments.
Nearly all of the investments thus made abroad by those who
had been lucky enough to sell out at home, proved even more
visionary than were the purchases so recklessly going on here, in
which they knew too much to participate. Without real
importance of position, the forced growth of the paper cities
stopped with the short-lived stimulus imparted by the expendi-
ture of foreign capital in building their wharves, warehouses,
hotels, stores, etc., and like punctured bladders, they subsided
into remarkable repose. Every sign-board over their deserted
inns and silent shops and empty storehouses, was like an epitaph
over buried hopes that have no resurrection. The plow again
went over the lots and through the streets that had been mapped
out so alluringly with squares named after the princely propri-
etors, and the harvest of golden grain once more waved where
that of golden gain was sowed in promise, yet blasted ere it was
ready for the reapers.
Thus, like the fabled apples of the Dead Sea, fair to look on,
yet turning to ashes on the lips, were the fruits of even the suc-
cessful operations. The cash was scarcely in possession ere it
vanished, in one way or another. Those who, too wise or too
timid to make new purchases when they had themselves sold out,
were either tempted to loan their money upon promissory paper
that proved to be purely promissory, or to endorse grievously for
their friends, relatives and neighbors; of which innocent indis-
cretions they were generally reminded by the notary, and for
which they could only receive absolution from the attorney or
the sheriff. Others who escaped those ordeals which environed
the wealthy, built them fine town houses or grand country seats,
that soon proved a little too large for their diminished fortunes336
THE SPECULATIVE CRAZE OF ’36.
and were sold, after a brief experiment of nabob life, for about a
quarter of their cost, or if retained, involved their proprietors in
pecuniary embarrassments from which the struggles of years were
necessary to extricate them.
Thus evenly were the accounts balanced among the traffickers
on the thronged and busy stage where the doings of ’36 were
done. The books of the Universe are kept by double entry, and
not an act or purpose, material or mental, but has its debit and
its credit. Like the poised beam, one end cannot go up without
the other conies down. There must be an equivalent in the
exchanges of the world or the deficiency is made up some-
where before we get through with the account. That measure
which we mete out to others shall, in some shape, assuredly be
measured to us again.
Are we here asked, did no good grow out of all this evil ?
were there no enduring benefits realized from that extraordinary
enterprise which sought to develop the resources of the country,
to extend commerce, to build up manufactures, to bid cities
flourish where the wilderness had been ? Did not the works of
these mistaken men remain, even though themselves were
wrecked on the rocks of folly ?
There were, indeed, stately edifices built, innumerable stores,
warehouses and mammoth hotels erected, canals dug, railroads
projected, ships and steamboats put afloat under the impulses of
’36, which remained and were of some after use. But what was
gained by this precocity of growth, this anticipating by b^alf a
generation the wants and prospects of the future? The same
efforts, judiciously and reasonably put forth during a more
extended period, would have been vastly more beneficiaLand
been followed.by no revulsion, bringing pecuniary distress and
stagnation of business in its train. The preternatural exertions
inspired by artificial stimulants leave the bodily frame exhausted
by the violence of unwonted action and nothing is gained by the
labor performed und,er such excitement that is not paid for by
the subsequent prostration of the system. So with the results of
excessive enterprise. And, so far as labor was withdrawn from
its accustomed avocations, and men sought to “live by their
wits ” instead of their work, there was a great positive loss. TheTHE SPECULATIVE CRAZE OF'36.
337
wealth of a country consists in nothing but its labor—that of its
living generation or of the former generations, who have left
their surplus earnings behind them in property or money, which
is its representative. If the entire labor of this Nation were to
be now suspended for a single year, there would be a total loss of
over $2,000,000,000 to the country. And the tendency in ’36
to live without work was rapidly impoverishing the Nation, while
individuals were amassing fancied wealth.
With all the recuperative energy which is a characteristic of
our people, Buffalo for a long time suffered deeply from the
effects of the unnatural stimulation of * 36. Notwithstanding the
large and substantial increase of trade and population that has
since-come to us, we have not—so to speak—begun to reach the
prices which real estate bore at that time, nearly a generation
ago. And we should not aspire to reach them faster than may
be warranted by the gradual progress of a prospering and healthy
growth. Let us hope never again to witness any periodic return
of such eccentric comets as that which here reached its perihelion
in ’36.
22