Portrait of Louis Windmuller late in life
{From THE COMMERCIAL PROGRESS OF GOTHAM by Louis Windmuller, in Volume 1 of The Progress of the Empire State: A Work Devoted to the Historical, Financial, Industrial, and Literary Development of New York, by Charles Arthur Conant (The Progress of the Empire State Company, 1913)}
Born in 1835, he was 32 when he bought the Woodside property and 78 when death claimed him there. His natural acumen, energy, affability, and prudence brought him success in business and public affairs. He learned hard lessons from mistakes he made, fought tenaciously when others did him wrong, and generally accepted gracefully those untoward events which could not have been avoided.
You can see his prudence and acumen in his actions during the first financial recession he had to survive as a merchant. This account comes from an article he wrote for The Forum in 1908. He says that he took his money out of the bank he used and simply waited out the slump, playing chess, as he says, in his office with his clerk.[2]
In 1857, when the writer [i.e., Windmuller] was already established in business, he learned by the failure of the Ohio Life Insurance and Trust Company how to face difficulties that are apt to confront us on the occasion of almost every panic.Following the panic business was good, as he says, until "when Fort Sumter was bombarded in 1861 and the Civil War began, almost every Northern merchant who traded with the South was ruined. The banks realized that the Government could not borrow sufficient money to bring the war to a successful end, and suspended in December, 1861, except the Chemical, where the writer kept his account. His business had grown and included foreign accounts. Being anxious to protect his European creditors, he called on the bank to inquire about a balance of some $5000 he had on deposit. His mind was relieved when he was promptly assured that this balance had been placed to his credit in gold — 'because it had been as good as gold when deposited.' No other bank was equally considerate. The action encouraged the writer to keep his books on a gold basis, and taught him to abstain from risky ventures."[3]
He drew in current bills some money from a Williamsburgh Bank and $100 in gold from the Bank of New York. When subsequently almost every financial institution this side of the Rockies closed its doors, the writer would play chess in his office with his clerk, while his distracted neighbors chased the fleeting shadows of ephemeral bankers.
Wampum had been discarded... the circulating medium consisted of notes issued by banks in different parts of the country, some under guarantee of a safety fund held by States, others by so-called "free banks." While the former generally passed at their face values, bills of the latter, named also "wild cats," ranged, according to their redemptive qualities, at one-half per cent. to ten per cent. discount. The possibility of their being presented for payment never troubled the banker's mind when he stamped them "Payable at his Counter," and forwarded them for circulation.
An inquisitive New York broker once ventured to send his clerk with a satchel full of such bills to a town in Illinois; he found a log cabin on a prairie road, with a sign of the bank over the door and a "cashier" the only occupant. The "cashier" expressed profuse regrets that the President happened to be in Chicago and that he had taken the cash box with him.
At the outset of the panic of 1857, the remaining institutions of that class became insolvent.
Credit was expensive in 1857; the writer knew traders who had to pay for a single day's accommodation as much as one per cent. Merchants who would not submit to the hardship of such usury failed to meet their engagements; manufacturers were obliged to discharge their workmen and close their mills when their customers defaulted.
Prosperity revived sooner than we anticipated. A large number of the merchants who failed in 1857 were able to resume in 1858; by the credit we extended to deserving customers we laid an early foundation for a long-continued good business.
During the Civil War he was commissioned by military suppliers to import swords and other necessities for the federal armies and did some importing on his own. He also gained a reputation as a reliable agent for obtaining European goods for private parties in the US. By 1865 he had established himself at 20 Reade Street in Manhattan, an office which served as his home base for the next 50 years. Over the next couple of years he managed to save enough to buy ten acres in the Village of Woodside, Queens, on which to build a home for his growing family.[4]
The Panic of 1857 and the outbreak of the Civil War were not the only financial crises he had to survive nor the only challenges to his upward progress as a merchant. In 1862 sabres he was importing for the use of Union armies were rejected as not meeting Federal requirements. He was authorized to have them fixed and did so.[5] A year later merchandise that he was bringing into the country on behalf of customers was seized by a corrupt custom agent who falsely claimed that Windmuller was a smuggler.[6] He fought back and survived that challenge and then in 1864 he got stuck with a warehouse full of swords that he'd imported for Union armies which, as it turned out, didn't need them. His loss was magnified by his obligation to pay tariff duties on the full price despite the diminished value of the merchandise.[7] Then in 1865 he lost money in a shipwreck. The bark Katharine, which he had chartered, was severely damaged by a storm at sea, and although its crew and passengers were saved, it seems the contents of its hold may not have been.[8] In 1870 he again had merchandise seized in customs under the same corrupt system which had troubled him in 1863.[9]
{New York Times, February 1, 1870}
Note in this account the description of his business as a "large German importing firm" and its scale of operations: "agents of some forty manufacturers abroad." It's evident that the setbacks which Windmuller suffered in these early years did not prevent him from prospering. The brief biographies written about him many years later identified this period of his life as one of growing success and there are glimpses of this burgeoning preëminence in the press.
Louis Windmuller and Roelker, the business of which he was the main partner, continued to thrive and he was able to set up a subsidiary office in Frankfurt-am-Main. Within a few years, he had funds enough to become a principal investor in the New York Central Rail Road and to begin to diversity his business interests.[10] In 1865 he helped found a safe deposit company for merchants in Manhattan's jewelry district and by the mid-1870s he had also helped found an fire insurance company, a life insurance company, and a national bank.[11] By the early 1880s he had added a title insurance company, a local bank, a savings bank, a magazine, a general insurance company, a realty company, and a bond and mortgage insurance company. He became a director of most these companies and president of the savings bank.[12]
By the mid-1880s, as his business pursuits brought him wealth and social prominence, Windmuller began to turn his attention to political and cultural affairs. As one of the mini-bios puts it, "he has ever been conspicuously active as a reformer for the betterment of the social conditions of this great city."[13] I'll treat this subject in the next post.
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Some sources:
Panic of 1857 in u-s-history.com
Panic of 1857 in wikipedia
Panic of 1857 in ohiohistorycentral.org
Wildcat banking in wikipedia
National Bank Act in wikipedia
Free Banking and the National Banking Act of 1863
Early American Banking: 1791-1863 in about.com
Moieties and Customs Revenue Laws. Evidence Before the Committee on Ways and Means Relative to Moieties and Customs-Revenue Laws. May 2, 1874. in MISCELLANEOUS DOCUMENTS printed by order of the House of Representatives during the first session of the forty-third Congress, 1873-74
Treasury decisions under customs and other laws, Volume 9
"The Commercial Progress of Gotham," by Louis Windmuller, in The progress of the Empire State, a work devoted to the historical, financial, industrial, and literary development of New York (New York, The Progress of the Empire State Company, 1913)
The Successful American, an illustrated monthly magazine, Vol. 1, Part 1 (Press Biographical Co., 1899)
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Wildcat three dollar bill from a Michigan bank.
{source: msu.edu}
Wildcat three dollar bill from a bank in Maine.
{source: coincommunity.com}
Wildcat bill from a Nebraska bank.
{source: wikipedia}
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Notes:
[1] These quotes come from the Newtown Register, New York Sun, Brooklyn Daily Eagle, and New York Times.
[2] The article appears in The Forum, Volume 40 (Forum Pub. Co., 1908). Here's Windmuller's account of the Panic of 1857 in full:
In 1857, when the writer [i.e., Windmuller] was already established in business, he learned by the failure of the Ohio Life Insurance and Trust Company how to face difficulties that are apt to confront us on the occasion of almost every panic.[3] THE COMMERCIAL PROGRESS OF GOTHAM by Louis Windmuller, in Volume 1 of The Progress of the Empire State: A Work Devoted to the Historical, Financial, Industrial, and Literary Development of New York, by Charles Arthur Conant (The Progress of the Empire State Company, 1913)
He drew in current bills some money from a Williamsburgh Bank and $100 in gold from the Bank of New York. When subsequently almost every financial institution this side of the Rockies closed its doors, the writer would play chess in his office with his clerk, while his distracted neighbors chased the fleeting shadows of ephemeral bankers.
Wampum had been discarded; Clearing House certificates had not yet been invented and coin was scarce. The circulating medium consisted of notes issued by banks in different parts of the country, some under guarantee of a safety fund held by States, others by so-called "free banks." While the former generally passed at their face values, bills of the latter, named also "wild cats," ranged, according to their redemptive qualities, at one-half per cent. to ten per cent. discount. The possibility of their being presented for payment never troubled the banker's mind when he stamped them "Payable at his Counter," and forwarded them for circulation.
An inquisitive New York broker once ventured to send his clerk with a satchel full of such bills to a town in Illinois; he found a log cabin on a prairie road, with a sign of the bank over the door and a "cashier" the only occupant. The "cashier" expressed profuse regrets that the President happened to be in Chicago and that he had taken the cash box with him.
At the outset of the panic of 1857, the remaining institutions of that class became insolvent.
The bills of almost all banks, even those of doubtful value, were counterfeited. Thompson's Bank Note Reporter, published bi-monthly at No. 2 Wall Street, New York City, carefully described all detected counterfeits and quoted market prices for all discredited money. After the business man, who would rather dispense with Bible and Prayer-book than with the latest Thompson, had made a careful examination of his receipts and obtained the endorsement of a responsible person to every doubtful bank-note, he went at 2.30 P.m. to his broker to change the uncurrent for current money, as his bank would receive only the latter.1
Credit was expensive in 1857; the writer knew traders who had to pay for a single day's accommodation as much as one per cent. Merchants who would not submit to the hardship of such usury failed to meet their engagements; manufacturers were obliged to discharge their workmen and close their mills when their customers defaulted.
The fare to Chicago was reduced to $5, yet the cars were empty; we rarely met on the way a traveller who was not a deadhead. Almost every road passed into receivers' hands; at one time railroad obligations other than receivers' certificates were not recognized.
The writer, on one of those gloomy days, was agreeably surprised by the invitation of a friend to join him in a glass of wine. We went to Delmonico's, at the junction of Beaver and William Streets in New York, and while Longhi uncorked a bottle of his best, friend Andrew unfolded a letter to explain the whimsical reason for his good cheer. In the conventional terms of the times the letter simply announced the insolvency of another firm. As this closed the long list of his debtors no other failures impended to disturb his mind. We celebrated his deliverance, and drank to a speedy resumption of this and of the numerous debtors who had preceded him.
Prosperity revived sooner than we anticipated. A large number of the merchants who failed in 1857 were able to resume in 1858; by tho credit we extended to deserving customers we laid an early foundation for a long-continued good business.
That short panic had been caused by premature expenditure for railroads built to develop new territory. Colonists could not be induced to settle along their lines as fast as promoters expected, and Western merchants had been more lavish than prudent in granting long credits to newcomers.
When the crops were gathered and gold from California and from Europe began to pour into the coffers of banks, confidence returned and the crisis was forgotten.
[4] I've previously outlined some of Windmuller's business transactions. See commission merchant.
[5] From the Commission on Ordnance and Ordnance Stores, 1862:
{source: Executive Documents for the second session of the 37th Congress, 1861-'62, Congressional serial set, Issue 1123, (United States. Government Printing Office, 1862)}
[6] Windmuller was not the only merchant who was victimized. A great deal has been written about customs abuses of the time. See for example Moieties and Customs Revenue Laws. Evidence Before the Committee on Ways and Means Relative to Moieties and Customs-Revenue Laws. May 2, 1874. in MISCELLANEOUS DOCUMENTS printed by order of the House of Representatives during the first session of the forty-third Congress, 1873-74.
[7] This comes from an article he wrote some years later. It gives his reasons why duties should be paid on the current value of merchandise at time the duty is assessed rather than the cost or purchase price.
{source: AD VALOREM SYSTEM THE BEST; Louis Windmueller Urges the Speedy Passage of the Wilson Tariff Bill.}
[8] See MARINE INTELLIGENCE.; Cleared. Arrived. Sailed. Domestic Ports. Foreign Ports. New York Times. May 6, 1865.
[9] Executive Documents for the second session of the 37th Congress, 1861-'62, Congressional serial set, Issue 1123, (United States. Government Printing Office, 1862)
[10] Here is the text of the appeal of the railroad stockholders from the Evening Journal, March 21, 1865.
The Central Rail Road[11] See National Cyclopedia of American Biography (1944). The institutions are, respectively, the Maiden Lane Safe Deposit Co., the German-American Fire Insurance Co., the German Alliance Insurance Co., and the Hide & Leather National Bank. Here is an 1878 ad for the German-American Insurance Co.
To the Honorable the Legislature of the State of New York:
The undersigned, Stockholders in the New York Central Rail Road Company, respectfully represent to your Honorable Body, that the changes occasioned by and incident to a state of war have affected the operations of their road so unfavorably that they have been compelled to appeal to the Legislature for relief; and in support of that appeal we ask leave to submit, very briefly, the facts and figures upon which the appeal is founded —
The expenses actually paid for the first three
months of each of the two years compare as
follows : —
Oct, Nov. and Dec., 1864......... $2,871,526 95
Oct, Nov. and Dec., 1763 [1863].. $2,211,588 51
Increase in 1864................. $ 659,938 44
A similar increase during the rest of the present year would make a total of $2,639,753 76, but, as expenses during the first three months are naturally larger than a proportion of the yearly amount, a deduction should be made, estimated at twenty-five per cent, which would leave the amount, $1,979,815 32.
In the Commercial, Manufacturing and Agricultural business of the country, these advances in the cost of products and materials adjust themselves; while, as is known, rail roads are held to Peace Fares, in other words, we are required to pay Gold for all we purchase, without being at liberty, as individuals are, to demand an equivalent in currency. In paying twice, and twice and a half, for all that is required to operate our road, with no increase of Fare, we receive less than fifty per cent of the amount realized when Currency represented Gold!
These facts, applicable to all our rail roads, furnish a strong argument in favor of a general increase of rail road fares; but when the facts are presented merely to sustain our application to be relieved from a disability, are they not conclusive? We simply ask to be placed on an equality with other roads — to receive for our passenger business the same fares lawfully demanded by and cheerfully paid to all other companies.
In the equity of this appeal, there is, we understand, a pretty general concurrence of sentiment. Standing upon its merits, disconnected with other questions, it would, it is supposed, commend itself to legislative favor. Stockholders, anxious only for the safe investment of our capital, we desire to see a wise, discreet, impartial management of the affairs of the company; and without inquiry, as to the past, is it not safe to assume, that the Legislature, remembering only what is just and right, should relieve the New York Central Rail from an onerous burthen, its officers, with a corresponding magnanimity, would, in the future, endeavor to avoid any just ground for popular complaint?
In behalf of ourselves, and of the widows and orphans who constitute a large claim of stockholders, we earnestly pray that your Honorable body will pass a law giving the New York Central Rail Road the rates of tare to which other companies are entitled.
[Signatories include Louis Windmuller, William Astor, Cornelius Vanderbilt, and some of the residents of Woodside where Windmuller would soon build his house. Here are some of then names: M. Morgan's sons, Howes & Macy, Chas. P. Leverich, Henry A. Slone & Son, John H. Harbeck, Louis Windmuller, Harriet Taber, Cornelius Vanderbilt, Cornelia F M. Taber, John Riker, Henry S. Leverich.]
{Long Island Traveler, May 2, 1878}
[12] In order: Title Guarantee & Trust Co., Newtown Savings Bank, Maiden Lane Bank for Savings, Forum Publishing Co., German Alliance Insurance Co., South Manhattan Realty Co., and Bond & Mortgage Guarantee Co.
[13] The Successful American, an illustrated monthly magazine, Vol. 1, Part 1 (Press Biographical Co., 1899). Here's the text of the entry for Windmuller:
LOUIS WINDMUELLER.
AS a useful illustration of the high degree to which noble principle and unselfish devotion to duty can be carried into a successful business life with the preservation of absolute consistency of Christian character, the career of Louis Windmueller is noteworthy.
Louis Windmueller is a native of Westphalia, Germany, and received a collegiate education at Munster, which had the honor of being founded by Charlemagne. He emigrated to the United States in 1853, and entered into the mercantile business with exceptional success. He has also been a director of many companies, and is still associated with the Title Guarantee and Trust Company, the German-American Insurance Company, the Hide and Leather National Bank, and the Bond and Mortgage Guarantee Company. He has ever been conspicuously active as a reformer for the betterment of the social conditions of this great city, and was one of the founders of the Reform Club, and has served as its Treasurer since 1887. He is also a member of the German-American Reform Union, and, as one of its Executive Committee, aided the election of William L. Strong, as Reform May-or of the City of New York. Mr. Windmueller's interest in public affairs is shown by his active work with municipal and State associations. He is Chairman of the Committee on Internal Trade and Improvements, of the Chamber of Commerce, and Head of the Executive Committee for the Improvement of the State Canals. He is, in addition, Auditor of the Business Men's Relief Committee, and an earnest worker with many charitable institutions.
Mr. Windmueller was married in 1859, and has a family of three children. His home is at Woodside, Long Island, and possesses a fine collection of modern paintings and a valuable library. He is a founder and Vestryman of St. Paul's Episcopal Church, of Woodside.
Mr. Windmueller is also a contributor on the liberal discussions of public affairs to the Forum, Harpers' Weekly, and other important publications. He is also a member of the Merchants', German, Lotus, Insurance, and Athletic Clubs, the New York Historical Society, Treasurer of a fund for the erection of a monument to Goethe, and Vice-President of the Heine Monument Society, and others too long to enumerate.
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