Until his death, Donald McKay asserted that Great Republic would have beaten any other ship afloat. “Long cherished dreams were undoubtedly rent asunder,” wrote his grandson, “for he built his mammoth clipper to conquer the wind and waves, as well as for financial gain and fame.”26
The California clippers that had made McKay famous, those “monuments on the ocean,” were now beautiful anachronisms. California now had robust manufacturing and agricultural sectors, which enabled it to produce more of its own foodstuffs and consumer goods and sell them at lower prices than those shipped in haste from the East Coast. With the state increasingly self-sufficient, the public (and the merchants) demanded not sheer speed but also regular and reliable service. As a result, by the mid-1850s, steamships had conquered the passenger and mail routes. William Henry Aspinwall, perhaps the most aggressive and visionary of all New York ship operators, had leveraged government subsidies to achieve the dream of seamless, steam-powered passage between New York and San Francisco. The Panama-Pacific Railroad had opened with great fanfare in January 1855. The 46.7-mile railroad cost in excess of $8 million to build, eight times the original stock floated by Aspinwall and his business partners five years before. Six thousand men lost their lives in the undertaking, mostly from disease. Yet the railroad proved to be an extremely profitable investment for all concerned, cutting travel time across the isthmus from several days by mule to a mere four hours by locomotive.27
Among these investors was William Henry Webb, who had built so many of Aspinwall’s steamships for the California trade. Webb’s shrewd deployment of capital allowed the naval architect to weather the upcoming financial crisis in ways that his greatest rival, Donald McKay, could not. In fact, Webb’s investment in the Panama railroad made him a very rich man. By the end of the decade, he had about $400,000 in the bank.28
Delano’s old business partner Abbot Low was less diversified when it came to investing his China fortune. Rather than international railroads or Kentucky coal mines, Low put his opium-and-tea fortune in two projects that intimately involved his native Atlantic seaboard. Both revolutionized US commerce.
The first was the Baltimore & Ohio Railroad, which had been chartered in 1827 to connect the riches of the Midwestern heartland to the port city of Baltimore, much as the Erie Canal had done for New York. By the 1850s, its dozens of steam-powered locomotives were hauling American coal, lumber, and grain for consumption in burgeoning American metropolises or for export to Europe.
Abbot wasn’t alone among the Canton bachelors when it came to investing in American railroads. John Murray Forbes had long been involved in both the Chicago, Burlington, and Quincy Railroad and the Michigan Central Railroad Company, greatly expanding his family’s fortune.29 The railroads allowed both Forbes brothers, John Murray and Robert Bennet, to turn away from the sea as a means of commerce, although they continued to embrace it as a form of recreation. Both became avid yachtsmen, racing sleek sailing boats off their breezy Naushon Island compound. As John Murray’s daughter Sarah remembered of her father, “All ships were deeply interesting to him, and dashing through the waves on a ship or yacht in a ‘wholesail breeze’ made his spirits rise.”30 Only this time it was in the safe confines of Buzzards Bay, not the rolling deep of the South China Sea or the treacherous eddies of the Pearl River.
But Low’s second project was his real coup: an investment in an electrical marvel that proved faster than any clipper or steam-powered locomotive: the transatlantic cable. On August 16, 1858, after months of laying and splicing across more than two thousand miles of sea floor, engineers telegraphed the following message from Queen Victoria in Morse code: “The Queen is convinced that the President will join her in fervently hoping that the electric cable, which now connects Great Britain with the United States, will prove an additional link between the nations, whose friendship is founded upon their common interest and reciprocal esteem.”
President James Buchanan cabled back: “May the Atlantic telegraph, under the blessing of Heaven, prove to be a bond of perpetual peace and friendship between the kindred nations, and an instrument destined by Divine Providence to diffuse religion, civilization, law, and liberty throughout the world.”31
It would be another decade before the Atlantic cable was reliable, but its ramifications were enormous. News and financial transactions could be sent across the Atlantic electronically in a matter of seconds rather than two or more weeks by sailing packet or passenger steamer.
Just as Low’s clippers allowed his tea to be the first to arrive in the marketplace, his transatlantic cable gave him a decided advantage when it came to financial information (and access to credit) from the Old World.
Yet despite his success in other ventures, Low did not remove himself entirely from clipper ships, his first expertise. He even built a series of small clipper barques for the Japanese trade to augment his bigger Chinese fleet.32 That his younger brother Charlie still needed a job as a captain may have been a minor part of the equation. Miraculously, amidst the general slump in the shipping business, the House of Low had the financial acumen to keep its fleet of extreme clippers sailing profitably, mainly because of its continued business focus on China rather than on California. The American demand for tea was just as strong as it had been a decade earlier, and the opium trade was booming thanks to the terms of the Treaty of Nanking. Unlike the other operators, Abbot Low saw the San Francisco trade as a profitable but short-lived business opportunity. He didn’t have much interest in building medium clippers to compete in the California trade.
The firm’s ships were built to last for the long-term, and Low maintained them well. In 1856, while other owners were selling or laying up their clippers, Abbot Low purchased a second-hand extreme clipper, the three-year-old Jacob Bell, which at 1,300 tons was a reasonable-sized vessel but no Sovereign of the Seas or Great Republic. Captain Charlie Low commanded the ship (named after the New York shipwright who designed her) for one voyage. Used to the comfort and elegance of his custom-built N. B. Palmer, Low was circumspect about his new command, writing: “She was a fine ship, of the same size as the N. B. Palmer, but she did not have as fine accommodation.”33 Like many sailors, Low bonded with the ships that he sailed, but Jacob Bell, as fine a ship as she was, could never replace “the Yacht.”
After an unremarkable 114-day trip from New York, Jacob Bell dropped anchor in Hong Kong harbor. After greeting all of the captains of the vessels in port, the thirty-six-year-old Captain Low experienced a shock: he was the oldest master in the China trade. For this, he was jovially appointed commodore of the fleet then in Hong Kong. Every morning at eight o’clock, he fired a gun from Jacob Bell, the sounds of which boomed and echoed off the bluffs of Hong Kong Island.
Yet among the forest of masts, Captain Low could not have helped but notice the growing number of funnels spewing coal smoke into the air, soiling the canvas of many a sailing ship. By the late 1850s, steamships finally had the range to make the opium run between India and China, although they had to pause for coal along the way. For now, the long, oceanic run between New York or London and China still seemed secure. But within a decade, Alfred Holt & Company (popularly known as the Blue Funnel Line) would launch the steamship Agamemnon, the first of three vessels that would sail regularly between Liverpool and Hong Kong, with a coaling stop at Mauritius, an island in the Indian Ocean. The voyage would take a mere fifty-eight days.
It was probably then that Captain Low realized that he was an old man in a young man’s game, and that his days at sea were numbered. Besides, he missed his growing family, now safely ashore in Massachusetts. “Do you recollect,” he wrote his wife, “how I drove you out last year along Boston Road [most likely in Billerica, Massachusetts], and we saw the children and young ladies coming home … driving down to Salem, stopping at Aunt Porter’s and hurrying you away from ever [sic] place that I might be alone with you … I can imagine I hear the old bell ringing in Blubber Hollow as we drive past the Engine House at two o’clock homeward bound
. Oh how I wish I was with you behind the old roan mare.”34
What was especially troubling, however, as Captain Low looked over his professional shoulder, was the fewer and fewer young men who wanted to run away to sea, as he had twenty years before. When he scanned the ranks of his sailors, the captain was hard-pressed to spot a future commander among them. Finding a good first mate to execute a captain’s orders and keep the men in line had become a problem, with or without the lash. Low’s first mate aboard Jacob Bell, a New Bedford native who had come off a whaler, was “perfectly worthless on a merchant ship.”35 Low could have demoted the man. Instead, he fired him and left him in Hong Kong to find his own way home. Low then promoted his second mate to take the whaler’s place.
The Hong Kong in which Low found himself in 1856 was not like the mysterious Canton he and his brothers had known. Gone was the sense of adventure and danger, of living on the edge of a vast and alien land. Rather than an outpost, it felt more like an extension of Great Britain. The opium trade, now conducted with near impunity, had attracted droves of fortune-seeking Englishmen (including relatives of the venerable China traders Robert Jardine and James Matheson) who sought to replicate the comforts of their home island while getting filthy rich. They bet on horses at the Happy Valley Racecourse. The midday meal, or tiffin, was a sacred ritual, as were evening feasts fit for Houqua’s banquet hall, only with beef Wellington replacing plovers’ eggs. “No lack of good dishes or of pleasant iced drinks at a Shanghai tiffin,” noted a correspondent of the London Times. “Everyone is able, and is indeed obliged to have a lordly indifference to expense. They cannot control it, and they must let it go. There is no struggling or contriving to keep up appearances. The profits are large and the expenditure—laissez aller.”36 The Times reporter neglected to mention that the ice for the Englishmen’s drinks came from frozen ponds in Low’s native Massachusetts, courtesy of the Boston “ice king” Frederic Tudor.
Low sailed back to New York with a cargo of tea and resumed command of his beloved N. B. Palmer.
*
The rivalries between American and British houses, especially in the clipper trade, had subsided over the years, as American capital shifted away from the bitter sea and toward gold-flecked California and the agriculturally rich western territories. European investors, especially London-based Baring Brothers & Co., similarly funneled British capital into the railroads that stitched together the expanding United States. The old China trade had been about keeping it in the family, but in this new landscape of international investment, it was best to keep it within a tightknit group of friends. The “special relationship” between the Americans and British in the Canton Factories—heralded years before by Robert Bennet Forbes as “Union—not merely political, not merely commercial, but the union of principle, the union of heart & soul”—had blossomed into a true gentlemen’s agreement.37 To the American and British international elites, it had become clear that cooperation in the China trade was much better for everyone than competition. In terms of wealth and taste, they realized that they had more in common with each other than with most of their own countrymen.
The formalized union of British and American high finance had come in 1851, when Baring Brothers—the London bank that had dealt with Houqua for decades—tapped Russell Sturgis to become its first non-British partner. The unflappable, courtly Sturgis, Warren Delano’s first boss in Canton, took to British aristocratic life immediately and never returned to his native New England.
The relationship between Barings and the old Russell & Company coterie proved exceedingly powerful. From the European side of the Atlantic, Sturgis saw that France was experiencing a serious shortage of grain. So he wrote his old friend John Murray Forbes—president of the Michigan Central Railroad—to buy up fifty thousand barrels of wheat and ship it across the Atlantic. To prevent wheat prices from spiking, Forbes and Sturgis had to keep the huge transaction a complete secret, which they did. Both men knew that a bread shortage in France could lead to a revolution, so it was in their best interest to ship Emperor Napoléon III as much wheat as they could and profit immensely from the transaction.38
Another beneficiary of the “union of heart & soul” was Warren Delano, who had spent his childhood hating the British and had derided Canton as a “most stupid place.” The once-thrifty whaler’s son from Fairhaven was now raising his family in the style of the British nobility he had once mocked, in a country house stuffed with mementoes of China. Yet he was destined to return to the Middle Kingdom, not by choice but because of personal calamity. Unlike the “woodchopper” Donald McKay, who could make money only by building things, Warren Delano had access to a commodity that satisfied baser human needs.
CHAPTER 16
SURPRISE AND DANGER
I suppose it was altogether terrifying to my mother to give up her beautiful home and its peaceful security.
—SARA DELANO1
By the mid-1850s, many of the laid-up extreme clippers on New York’s waterfront had been sold to foreign owners or had their rigs cut down drastically to save on crew costs. The saddest case of all was Flying Cloud. After her record-setting eighty-nine-day passage from New York to San Francisco in 1854, the ship had continued on its last, round-the-world voyage under the remarkable Captain Josiah Creesy and his navigator wife, Eleanor. Saved by Creesy after grounding on a reef in the South China Sea, the great ship had arrived back in New York in dire need of a refit. Instead, she was sent on to California under Captain William H. Reynard. The new captain seems not to have had the same chemistry as his predecessor, and the battered ship took a pathetic 186 days to reach port—although on one day, the ship reportedly showed a touch of her former speed by making 402 miles in 24 hours.2 Upon her return, Moses Grinnell ordered Flying Cloud laid up.
Only six years old, her spars were rotten, her hull leaky, and her brass work corroded. Her owners had no interest in providing money for renewal. She had proved to be a profitable ship in her time, as well as fast, but the truth behind her sad condition was that Captain Creesy’s hard driving had worn her out. Grinnell, Minturn’s other clipper ship, Sea Serpent, never set records, but the company kept her in the China trade for another two decades. That Captain Howland was easier on her than Captain Creesy on Flying Cloud made her cheaper to operate.
Within a few years, Moses Grinnell sold his once-prized Flying Cloud to British interests, who cut down her rig and put her into the lumber trade.
Although sailing ships continued to make the Cape Horn route, steamships and railroads had created a seamless and reliable network between the two coasts. Then the unthinkable happened: a disaster at sea that would bring the American economy to its knees. On September 3, 1857, the paddlewheel steamship SS Central America—designed by William H. Webb—departed the port of Aspinwall, Panama (named for William Henry Aspinwall), bound for New York. The flagship of the United States Mail Steamship Company, she was only five years old; and at 2,100 tons, she was about the size of McKay’s Sovereign of the Seas. On board were 477 passengers, 100 crew, and more than 9 tons of California gold coins and specie worth about $2 million. Six days after departing Panama, as she was steaming northward off the Carolinas, a hurricane struck the ship at full force. SS Central America was no match for the storm. Leaks flooded the boiler room, and the engines and the pumps ground to a halt.
Those on board reacted with disbelief; this was supposed to be a routine voyage. The ship was essentially a bigger, stronger version of a Hudson River steamer, equipped with powerful engines that eliminated the vagaries of winds and tides. Her sails were an auxiliary measure, there to give assistance in case of an engine breakdown or to provide an extra bit of power if sailing with the wind. But now, with power gone and rudimentary sails ripped to shreds, Central America was helpless in the tempest. Her captain’s only hope was to fly her flag upside down, signaling distress to a passing vessel. The ship drifted farther and farther away from the American coast. As seas broke over her bulwarks, she slowly set
tled at the stern, despite the best efforts of an all-hands bucket brigade. The women and children aboard were rowed to a nearby ship that had emerged from the storm. On September 12, Central America sank to the bottom of the Atlantic, taking more than 420 male passengers and crew with her.
The sinking of the SS Central America was the worst passenger ship disaster in American history up to that time. And the loss of the ship’s gold sent shudders through Wall Street. Bankers in New York, eagerly awaiting the specie from the ship, now found themselves staring at empty vaults and piles of devalued paper money. The American economy was already in trouble. A month before the sinking, the Ohio Life Insurance and Trust Company had collapsed. Worse still, land values in the western states had been falling throughout the summer, as European demand for American foodstuffs declined. Railroads, which had been eagerly building lines to service the new territories, found themselves unable to service their loans from the banks.
There was nothing the US Treasury Department could do to stem the panic; the North’s economy was in free fall. Many rich men who had invested heavily in western lands and railroads were ruined. Among those hit by the crisis was Warren Delano. Although his pioneering clipper ship Memnon was a memory (stripped by pirates after running aground years before), he almost certainly still had a financial stake in A. A. Low & Brother, as well as holdings in mining and real estate. He was rich enough that he felt there was plenty of room to gamble. Yet as commodity prices dropped through the fall of 1857, so did the revenues coming from almost all of his far-flung speculative holdings. Those banks that survived the carnage refused to lend money. Coal was hit especially hard, as reduced demand from ironworks and other manufacturers wiped out once-fat profit margins.3
Delano’s Midas touch had deserted him. His stock holdings had collapsed, and what dividends he did collect were not enough to maintain his family or his lifestyle. “The monetary situation from New York [is] worse than ever,” Delano wrote in his diary, as Houqua’s face loomed down at him from the portrait above his desk. “Stocks, bonds, and money tighter. Failures abundant and confidence diminishing. The New York Times reports further depression in stocks. I find if I had deferred settlement of my stock purchases, I would have paid over $900 more than I settled for.”4 As their financial prospects darkened, Warren and Catherine contemplated the shame of bankruptcy. Still, in the best of the Yankee tradition, they did their best to put on a good face in public. Even in front of family, Warren seems to have hidden the stress and sleepless nights caused by things gone out of his control. “Warren is looking as well as before the disasters to his fortunes,” wrote one of his brothers, most likely Franklin, “and says he feels tolerably well and has a better appetite. He spoke of disastrous financial things in a general way, remarking that there had been a great change since I saw him.”5
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