We take it for granted today that New York City is the nation's financial capital. But why New York? Why not Boston or Philadelphia, Baltimore or Charleston -- or any of the other East Coast cities? In "Capital City" Thomas Kessner tells the story of how an undistinguished port city rose to become the center of finance in the United States -- and the world.
With the opening of the Erie Canal and access to the Great Lakes and the Midwest, New York became the principal port and chief trading center of a growing nation. Some of New York's merchants -- most notably the all-but-forgotten Moses Taylor -- discovered that lending money to shippers was more profitable than shipping itself. As shipping prospered and money accumulated in New York, a growing banking center emerged. By the time of the Civil War, New York was the chief financier of the Union cause.
From across the land, New York attracted the driven, ambitious men who would direct the post-Civil War expansion of the nation, underwriting the development of the West and the building of the world's largest railroad network. Cornelius Vanderbilt, Jay Gould, Andrew Carnegie, J. P. Morgan, and John D. Rockefeller were drawn to New York's business culture of daring capital, bold investment, and economic venture. New York banks set the interest rates for the nation. New York's stock exchange fixed the price of securities. New York investors financed and dominated the large new corporations, and Wall Street became synonymous with the power of money. Despite panics and depressions, labor movements and populist crusades, Wall Street converted American industry from family-owned businesses to integrated corporations that drew on banking, accounting, and legal services all located in new office buildings in a booming downtown business district. New York was literally reconstructed by business interests that determined the location of parks, transportation, and museums. A new upper-class culture developed and influenced other leading cities.
When John Pierpont Morgan first arrived on Wall Street, not a single industrial concern was listed on the New York Stock Exchange. By the time he completed the U.S. Steel consolidation, the NYSE listed more than 1,000 companies, including the foundation businesses of the twentieth-century economy.
"Capital City" is the story of how Morgan, Carnegie, Rockefeller, and colleagues no less colorful helped transform New York and change the nation in the process.