Tag Archives: William Duer

Stock & Money Market Speculation Today and in the 1790s

STOCK & MONEY MARKET SPECULATION TODAY

AND IN THE 1790s

Question: What do Bernie Madoff and William Duer have in common?

Answer: Both were once respected investors forced into insolvency resulting in stock market (money) deterioration and the collapse of dozens of their investors.

Question: What does Timothy Geithner have in common with Alexander Hamilton?

Answer: Geithner is the current Secretary of the Treasury of the United States. Hamilton was the first Treasury secretary.

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Before continuing I must make a disclaimer: I’m not an economist nor do understand the fine points—or even the non-fine points—of the issue under discussion. I’m writing this post to increase my understanding of William Duer’s role in the first Wall Street crash. This issue is core to the writing of my historic romance novel, in which I must present the issues in a basic manor that can be understood by my future readers. If any of you can add clarification to these issues, feel free to comment in the comment box at the end of this post.

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History doesn’t always repeat itself, but it is often said to rhyme.

Or does it echo?

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Duer and Madoff reflect the root problems of two sudden and dramatic declines in the value of bank stocks: excessive greed.

While Madoff’s name has been sufficiently newsworthy that most Americans recognize his name, Duer is relatively unknown to many of today’s citizens.

I came in contact with him because of his land speculation in Ohio and Maine. The Ohio speculation was done under the guise of the Scioto Associates, a group of military and political personages hoping to make money off the post-Revolution land in Ohio. Duer managed to help a “secret” group purchase a huge tract of land along the Ohio River. Ultimately, Duer, along with Gen. Henry Knox, were responsible for the original French settlement at Gallipolis by a group of French émigrés.

When the Scioto land speculation went foul (another story) Duer and Knox managed to purchase two million acres of land in Downeast Maine. In the midst of all this Duer was involved in manufacturing and banking speculations. All the speculations went far beyond his means and resources.

The multiple speculations he was involved with brought his downfall and, had it not been for Alexander Hamilton’s intervention, it could have destroyed the new country that had yet to reach its toddler age.

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William Duer was a prominent patriot who served as a member of the Continental Congress, a New York judge, and a signer to the Articles of Confederation. After the Revolution, Alexander Hamilton appointed Duer as assistant secretary of the treasury.

In December 1790 Hamilton proposed the establishment of the Bank of the United States, a federally chartered but essentially private corporation. The charter was passed by Congress in February 1791, and on February 25th was signed into law by President George Washington.

In July of 1791 the bank’s stock subscriptions (scrips) went on sale. They sold out within hours, so quickly that many would-be investors could only try to bid them away from those persons who were fortunate enough to have obtained them. The demand was so high for scrips that a frenzied borrowing and buying  occurred. Soon the scrips’ selling price doubled, then went even higher, and people borrowed money to purchase them.

In October 1791, the stock holders of the Bank of the United States held an organizational meeting, which Duer attended. He was elected to a committee to prepare the bank’s by-laws.

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When Duer learned that federal law prohibited Treasury officials from speculating in federal securities he quit the position as assistant secretary  of the treasury—he did this because he sensed an opportunity to Continue reading

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Amish Grace, Thomas Cornell, & Intertwined Love: Risks of Writing Historical Fiction

 

     “…the most disturbing aspect of the upcoming television move “Amish Grace” is the fictional liberties it takes in depicting the aftermath of the 2006 killings of five Amish girls in a Nickel Mines schoolhouse,” according to Herman Bontrager, an Akron man who acted as a spokesman for the Nickel Mines Amish community after the shootings. “Amish tell the truth and are accustomed to telling the truth. When you take an account like this, and make it appear like it happened, and fictionalize it, that’s troubling.”*

     Authors of the book on which the movie is based, “Amish Grace: How Forgiveness Transcended Tragedy,” agree on this point.**

     Fiction based on an actual historical framework is always up for criticism. It’s an issue I’ve been aware of since I began delving in writing my novel, “Intertwined Love.” Its historical framework includes 1790s people, both the well known— Henry Knox, William Duer, William Bingham, Alexander Baring, Thomas Jefferson among them—and the less well known: Franco van Berckle, Madame Rosalie de Leval, Louis des Isles, Mary Googins, and Joseph Swett.

     I encountered the criticism issue  in two situations. First, my in-depth research disproved Continue reading

MADAME ROSALIE BACLER de la VAL: A Character Sketch

 

Since March is Women’s History Month, and March 8 was International (Working) Women’s Day, I developed a character sketch on Madame Rosalie Bacler, a French émigré who came to the United States during the French Revolution, and who was a “working” woman, a “noble” who planned a French refugee colony in the Massachusetts Territory of Maine. Whenever I “introduce” this historical female to people, they become fascinated. Madame is the main character in the historical romance novel that I am attempting to write.

Frederick S. Allis, Jr.* suggests that Madame played a minor chapter in the larger story of the French Revolutionary War emigration from France to the United States. I contend she plays a major role, if not in land speculation and emigration, in the fact that Madame, within two months of arriving in the United States, and minimal knowledge of the English language, was dealing in land speculation with two of the major American land speculators, Henry Knox and William Duer. In less than two years, she was negotiating with William Bingham and Alexander Baring. Although her dreams were not realized, it was not due to her ineptitude in business and skill, but due to the financial over-extension and financial irresponsibility of both Henry Knox and Henry Jackson.

     Madame Rosalie Bacler de la Val, a French émigré who came to the United States to escape the atrocities of the French revolution, was an independent land speculator/settler in what is known today as Hancock County, Maine. In the 1790s, this region was the Maine Territory of the State of Massachusetts, part of the Penobscot Land Tract purchased from the State of Massachusetts by land speculators Henry Knox and William Duer.
     Only about ten percent of the post-American Revolution land speculators worked independently, outside a company. None, as far as I have encountered, were women—much less foreign émigrés. This identifies Madame as a strong and unique woman.
     The novel I am working on is historic romance. Madame the heroine in the first half of my work, will be placed in and developed through the context of actual historic documents. It is my task to demonstrate that her identity is not an extension of the men in her life, but is a result of both her gifts and her flaws.
     The truth be known, Madame was not “into” romance, needing neither marriage nor a relationship with any man to determine her identity. Men were simply a means to an end. However, in her culture, in her times, they were also necessary evil if a strong women wanted to achieve her goals.
     Whether she was married in France or simply had a relationship with the man identified on documents as “her husband” is unclear. What is clear is that she had a relationship with Jean Antoine Gontran Marzel de Leval, one that provided her with a power of attorney which enabled her to purchase land in the United States and may have provided her with an ultimately worthless deed for twelve hundred acres of Scioto (Ohio) land.
     He was also likely the father of her daughter, Saraphine.
     In the United States, the persons Madame connected with were necessarily male, since that was the gender of the land speculators. Within three months of arriving in the country, she had developed a relationship with William Duer, Henry Knox and Henry Jackson, all major players in the Scioto Land grant fiasco and the Penobscot Tract purchase. She was also involved with the Netherlands ambassadors to the United States, father Herre Van Berckle and his son and Franco Van Berckle.
     That she had plans to enter land speculation prior to her leaving France is implied by her intelligence, business acumen, and the speed with which she entered the playing field. After inspecting the land with her partner, Jean Baptiste de la Roche , she completed a contract to purchase land they had viewed from atop Schoodic Mountain, laid out the plans for a colony where French émigrés find refuge, and successfully sought settlers. All her actions awaited her receipt of the deeds. These actions were outside the images and ideas of what women were expected to be in the 1790s.
     Throughout the material available on Madame, little reference is made of her Continue reading