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Eastern Financiers and Institutional Change: The Origins of the New York Life Insurance and Trust Company and the Ohio Life Insurance and Trust Company

Published online by Cambridge University Press:  11 May 2010

John Denis Haeger
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Abstract

This article examines the establishment in the 1830s of the New York Life Insurance and Trust Company and the Ohio Life Insurance and Trust Company. Utilizing manuscript letters, company records, and government reports, the author contends that conservative financiers, exemplified by Isaac and Arthur Bronson of New York City, structured both firms in an effort to reform the speculative practices of commercial banks and to move capital into the agricultural sector, particularly in the West. The trust company's development also marked an important step in the financiers search for more efficient methods of capital mobilization and formation.

Type
Papers Presented at the Thirty-Eighth Annual Meeting of the Economic History Association
Information
The Journal of Economic History , Volume 39 , Issue 1 , March 1979 , pp. 259 - 273
Copyright
Copyright © The Economic History Association 1979

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References

1 There is limited literature on the early history of the trust company in the United States. The best monograph on an early institution is White, Gerald T., A History of the Massachusetts Hospital Life Insurance Company (Cambridge, Mass., 1955)Google Scholar. I have depended on Smith, James G., The Development of Trust Companies in the United States (New York, 1927), pp. 278–82Google Scholar, for the list of companies before 1850.

2 For a somewhat different view of sound moneyfinanciers,see Sylla, Richard, “American Banking and Growth in the Nineteenth Century: A Partial View of the Terrain,” Explorations in Economic History, 9 (Winter 1971-1972), 197–227CrossRefGoogle Scholar.

3 See especially Isaac Bronson to C. C. Cambreleng, 17 October 1831, Bronson Papers, Box 200; (Isaac Bronson), “Propositions Illustrative of the Principles of Banking,” 1829, Bronson Papers, Box 14. There are several collections of Bronson Papers. The principal collection is at the New York Public Library, Boxes 1-199. Boxes 200-215 are available at the Clarke Historical Library, Central Michigan University, Mt. Pleasant, Michigan. Hereafter, references will be to Bronson Papers (BP) and box number. Arthur and Isaac Bronson will be abbreviated IB and AB.

There are two studies of Isaac Bronson: Venit, Abraham, “Isaac Bronson: His Banking Theory and the Financial Controversies of the Jacksonian Period,” this Journal, 5 (11 1945), 201–14Google Scholar; and Morrison, Grant, “Isaac Bronson and the Search for System in American Capitalism, 1789-1838” (Ph.D. dissertation, City University of New York, 1974)Google Scholar. The best summary of Bronson's ideas is by Redlich, Fritz, The Molding of American Banking, Part I: 1781-1840 (New York, 1951), pp. 45–47Google Scholar.

4 An Old Fashioned Man (Bronson, Arthur), “History of the Bank of———,” in The Journal of Banking from July, 1841 to July, 1842: Containing Essays on Various Questions Relating to and Currency, Gouge, William, ed. (Philadelphia, 1842), pp. 209–11Google Scholar. Also see Gouge to AB, 27 December 1841, BP, 204; and , Morrison, “Isaac Bronson,” pp. 123–24Google Scholar.

5 IB, “Propositions Illustrative of the Principles of Banking,” BP, 14. On the family's agricultural investments see, for example, BP, 33-64, 200-201, and AB to Frederic Bronson, 9 March 1825, BP, 203.

6 , AB, “History of the Bank of———,” pp. 210–11Google Scholar.

7 Ibid., E. Jesup and Jesup Wakeman to IB, 22 September 1832, BP, 200; and Letter of IB, 4 May 1837, BP, 6.

8 , White, A History of the Massachusetts Hospital Life Insurance Company, pp. 2–38Google Scholar, 42-54; and , Smith, The Development of Trust Companies, pp. 238–82Google Scholar.

9 New York State, Assembly, Report of the Committee on the Incorporation and Alteration of the Charters of Banking and Insurance Companies, to which was Referred the Petition of William Bard and His Associates, Assembly Doc. 84, 53rd sess., 1830, II, pp. 4–5Google Scholar.

10 A list of the original incorporators is found in New York Life Insurance and Trust Company, Act of Incorporation, Passed March 9, 1830 (New York, 1850), p. 1Google Scholar. Hereafter cited as NYLTC Charter.

11 NYLTC Charter, pp. 1-7; New York State, Assembly Doc. 84, 1830, II, pp. 1-8; and New York State, Assembly, Report of the Bank Committee, on the Resolution Relating to the Life Insurance and Trust Company, Assembly Doc. 331, 54th sess., 1831, II, pp. 20–26Google Scholar.

12 New York State, Assembly Doc. 84, 1830, II, pp. 5-6; and , Smith, The Development of Trust Companies, pp. 250–54Google Scholar.

13 NYLTC Charter, pp. 3-5.

14 New York State, Assembly Doc. 84, 1830, II, pp. 2-7; Roger Sherman to William Bard, 7 May 1830, and Power of Attorney granted to Isaac Bronson, 4 May 1830, BP, 202. A complete list of the company's stockholders can be found in New York State, Assembly, Communication from William Bard, Assembly Doc. 279, 57th sess., 1834, IV, pp. 1–4Google Scholar.

15 Roger Sherman to IB, 5 March 1830, BP, 80; NYLTC Charter, pp. 3-7; New York State, Assembly Doc. 331, IV, 1831, pp. 34-35. Also see William Bard to J. N. Woodsworth, 28 September 1830, New York Life Insurance and Trust Company Papers, Baker Library, Harvard University, Let-terbooks, Vol. I. Hereafter cited as NYLTC, LB, Vol. No.

16 New York State, Assembly Doc. 331, 1831, IV, pp. 16-17; New York State, Assembly, Communication from the Chancellor, Relative to the New York Life Insurance and Trust Company, Doc. 284, 58th sess., 1835, IV, p. 54; and New York State, Assembly, Communicationfrom the Chancellor Relative to the New York Life Insurance and Trust Company, Assembly Doc. 143, 59th sess 1836,111, pp. 4-11.

17 NYLTC Charter, p. 3.

18 New York State, Assembly Doc. 331, 1831, IV, pp. 24-25; and William Bard to Edward Kno-well, 31 May 1832 and 11 September 1832, NYLTC Papers, LB, II.

19 New York County and Albany County, the two exceptions, appeared on the list of 14. The company was required by charter to place a half of the capital stock in New York County whereas Albany County was important as the embarkation point for the Erie Canal. See New York State, Senate Doc. 59, 1834, II, pp. 3-6; and New York State, Assembly Doc. 143, 1836, III, pp. 3-6.

20 List of New York Life Insurance and Trust Company Agents, (1834), NYLTC Papers, LB, IV. The company's most important agent was Charles Butler, and his papers at the Library of Congress contain valuable material on the company. Hereafter cited as Butler Papers, Box Number.

21 Bard to N. Randall, 25 October 1830, NYLTC Papers, LB, I; and “Instructions to Persons Applying for Loans to New York Life Insurance and Trust Company, 1830,” Butler Papers, III.

22 Bard to N. Randall, 25 October 1830, NYLTC Papers, LB, I.

23 Bard to Edward Knowell, 31 May 1832, NYLTC Papers, LB, II; “Reminiscences of Charles Butler on the New York Life Insurance and Trust Company,” Butler Papers, IV; and Charles Butler, “Copy of a Communication to the New York Life Insurance and Trust Company, 1832,” Butler Papers, III.

24 Bard to Lot Clark, 14 November 1832, NYLTC Papers, LB, II. Also see NYLTC Charter, p. 3.

25 , Butler, “Copy of a Communication,” pp. 6–7Google Scholar; Bard to Lot Clark, 8 August 1832; Bard to Edward Howell, 11 September 1832, NYLTC Papers, LB, II.

26 Bard to E. Mack, 5 November 1832, NYLTC Papers, LB, II.

27 An important observerof the trust company's impact was Charles Butler. See , Butler, “Copy of a Communication,” pp. 1–7Google Scholar.

28 For an overview of the NYLTC's dividends and deposits see the Annual Reports cited in Table 1. On the New Yorkers involvement in other trust companies, see Frederic Bronson to Thomas Ol-cott, 13 March 1835, Thomas Olcott Papers, Columbia University Library, New York, New York; and J. B. Gallagher to AB, 2 June 1835, BP, 100.

29 Huntington, C. C., “A History of Banking and Currency in Ohio Before the Civil War,” Ohio Archaeological and Historical Quarterly, 24 (1915), 352–71Google Scholar; and Shade, William G., Banks or No Banks, The Money Issue in Western Politics, 1832-1865 (Detroit, 1972), pp. 25–26Google Scholar.

30 See particularly AB to Butler, 28 May 1833, Butler Papers, III; Lot Clark to Micajah Williams, 6 June 1833, Micajah Williams Papers, Ohio State Library, Microcard. No. 28; Olcott to Williams, 22 May and 23 May 1833, Williams Papers, 28; and Butler, “Diary of a Journey, 1833,” Butler Papers, IV.

31 G. Tomilson to IB, 9 February 1832, BP, 215; C. C. Cambreleng to IB, 24 April 1832, BP, 215; New York City Citizens, Outline of a Plan for a National Bank, With Incidental Remarks on the Bank of the United States (New York, 1833), pp. 1–14Google Scholar; Roger Sherman to IB, 16 April 1833, BP, 84; and AB to Williams, 30 September 1837, Elisha Whittlesey Papers, Western Reserve Historical Society, Cleveland, Ohip, Container 5.

32 An Act to Incorporate the Ohio Life Insurance and Trust Company (New York, 1834), pp. 1–7Google Scholar; Report of the Special Master Commissioner in the Matter of the Ohio Life Insurance and Trust Company (Cincinnati, 1836), pp. 33–51Google Scholar; and The Second Annual Report of the Ohio Life Insurance and Trust Company (Cincinnati, 1836), pp. 19–20Google Scholar.

33 The First Annual Report of the Ohio Life Insurance and Trust Company (Columbus, 1835), p. 35Google Scholar; and OLTC Charter, pp. 10-12.

34 Butler to AB, 8 February 1833, BP, 99; and AB to Williams, 18 October 1833, Williams Papers, 28.

35 Butler to AB, 24 April 1833, BP, 99; AB to Butler, 28 May 1833, Butler Papers, III; and Lot Clark to Williams, 6 June 1833, Williams Papers, 28; and Williams to AB, 4 May 1833, Williams Papers, 28. Also see Scheiber, Harry, “Entrepreneurship and Western Development: The Case of Micajah T. Williams,” Business History Review, 37 (Winter 1965), 345–68CrossRefGoogle Scholar.

36 AB to Williams, 18 February 1834 and 11 March 1834, Williams Papers, 29; Butler to AB, 8 February 1833, BP, 88; and Frederic Bronson to Williams, 28 May 1834, BP, 208. A handwritten list of the eastern stockholders, 23 July 1834, is in the BP, 203. The Ohio stockholders were listed in the Ohio Monitor, 14 March 1836.

37 OLTC Charter, pp. 5-8; List of stockholders to the OLTC with the power of attorney transferred to AB, 23 July 1834, BP, 203.

38 Elisha Whittlesey to Simon Perkins, 8 October and 28 October 1834, Whittlesey Papers, 41; AB to Olcott, 27 October 1834, and 8 November 1834, Olcott Papers.

39 OLTC First Annual Report, 1835, pp. 26–38Google Scholar; Report of the Special Master Commissioner, 1836, pp. 5–11Google Scholar.

40 Report of the Special Master Commissioner, 1836, pp. 12–14Google Scholar, 22-23; OLTC First Annual Report, 1835, pp. 10–12Google Scholar; 28-31; 38-39; i-xxv.

41 See, for example, J. B. Gallagher to AB, 2 June 1835, BP, 100; Frederic Branson to Olcott, 18 March 1835, Olcott Papers; AB to Elon Famsworth, 21 November 1834, BP, 203; and J. Bryant to AB, 26 August 1836, BP, 19.

42 IB to Elisha Whittlesey, 1 May 1836, Whittlesey Papers, 5; Williams to IB, 7 July and 7 May 1836, BP, 87; AB to Williams, 30 September 1837, Whittlesey Papers, 5; and Letter of IB, 4 May 1837, BP, 6; and Letter of AB, 30 May 1837, BP, 19.