The Land Bank
Robert Livingston was a latecomer to the realization that a corporation—and a bank, specifically—could help him gain financial leverage over New York politics. Initially his plan was to wield power and make profits by speculating in Manhattan real estate. Looking around the city, the chancellor saw prices that he believed were too low and would quickly rebound once the city’s population began to grow.21
Livingston whetted his appetite in late 1783 by buying £2,000 of “good substantial brick houses” that he predicted would bring in £350 of rental income per year. But the estates he truly coveted were far more lavish and ambitious investments. One had recently been the seat of the Loyalist DeLancey family; its current owner, the chancellor suspected, could not afford the home’s upkeep or taxes, and he thought it could be bought for five or six thousand pounds sterling. For Livingston, however, there was a catch: although he was certainly a rich man, he was primarily rich in land. Unless he converted that wealth into credit and cash, he was destined to be little more than a spectator in the real estate boom he was so certain would arrive in the next year.
Livingston’s first instinct was not to seek anything as formal as a corporate charter. He wanted partners with capital, and soon after the British evacuation it seemed Livingston might have found some. Circulating among the merchants trying to mend relations between New York’s Whigs and Tories in late 1783 was Stephen Sayre, a former London sheriff and an ally of the radical journalist and parliamentarian John Wilkes, who supported the American cause during the war. Sayre once ran a private bank in London and had returned to Manhattan—his birthplace—in the fall of 1783 seeking to make a new fortune. There he began attending the Whig-Tory “dancing assemblies,” where he met Major General Henry Knox, Chancellor Livingston, and Livingston’s brother-in-law John Stevens, a merchant. Sayre also resumed a past friendship with Isaac Sears, a longtime member of the New York City Chamber of Commerce. Sayre and Livingston quickly began using these social events as they were intended to be used: as venues to generate business relationships that would sow political reconciliation and reinvigorate commerce. They recruited Stevens and Sears to be their partners in real estate speculation.22
According to Livingston, Sayre first proposed that the cadre broker a Dutch loan that would enable New York’s state government to help repay its war debts. At the time, Sayre claimed to have good contacts in Holland but not in New York; therefore, he needed Livingston, Stevens, and Sears to exercise their influence with decision makers in the state and city to make a Dutch loan palatable at home. If the partners could collect fees and commissions for marketing and handling the transaction, Sayre suggested, they could use those proceeds to build the real estate portfolio Livingston had been eyeing.
Chancellor Livingston was never enthusiastic about this plan, and “discouraged” Sayre from pursuing it any further. Livingston did not want New York, or any state, to “contract a foreign debt independent” of the money “borrowed [abroad] by the United States.” Congress’s national debts, he explained, “help[ed] cement a union that separate [state] debts would weaken.” Livingston was therefore unwilling to put profits ahead of principles if it meant jeopardizing the union that existed among the new states.23
In response, Sayre pitched a second idea: why not simply use a Dutch line of credit to make “loan[s] to individuals on real property”? This plan would appeal to Livingston, who was eager to see his vast land holdings become a source of ready, liquid money; it would provide him with cash and make him a patron who could offer credit to others.
Livingston liked the idea. However, he also seemed to believe that his aristocratic name alone could open doors and opportunities that were off limits to others. Before committing himself to support Sayre’s initiative, the chancellor wanted to find out for himself whether Sayre’s Dutch contacts would find it acceptable. He also wanted to see if he could go behind the backs of his partners to carve out a more lucrative side deal for himself. So he wrote to the Dutch minister to the United States, Peter J. Van Berckel, to find out whether he “approved or disapproved” of a credit-for-land idea. He explained to Van Berckel that “in every monied transaction” he preferred to “deal with the Lenders himself than (by a Broker) thru a third person.”
Livingston plainly hoped that he could enlist Van Berckel to use his influence at home and abroad, swaying Dutch investors to support a landinvestment plan and structure their loan in a way that would make Livingston the leading partner by displacing Stephen Sayre. To the Dutch minister, Livingston offered unequivocal support for the propriety and profitability of land investments. The departure of Tories who had “quited the state,” he said, combined with the “little command that any persons among us have of money,” had “opened a large field” for investments in real estate. He predicted that before “ten or twelve months or the restoration of commerce & the arrival of strangers” in New York City, these land purchases could “make immediately” an 8 or even 10 percent profit.
Livingston saw himself buying and selling these properties, he told Van Berckel, rather than working with partners and splitting commissions as he would have to under Sayre’s proposal. He hoped the minister and his “friends” would “think the interest I offer sufficient to enduce you to lend your money … draw[ing] bills upon England or Holland” to “put into my hands;” it would then “be vested in real property.” Offering that he was “not nor ever was engaged in trade” as a merchant and that his “property consists of … land and houses as I live within my income,” Livingston even assured Van Berckel that he would offer a personal bond as security for a Dutch loan of £6,000. “It is impossible,” he boasted, “for any person to offer better securities than I can.” Moreover, if the minister personally became an investor, Livingston could advance him funds for a shared “joint account” that he would personally manage on Van Berckel’s behalf.24
This was a bold and an underhanded offer on Livingston’s part. And he knew that if his letter were shared, its contents would be toxic both to his reputation and to the opportunities at hand. Livingston not only would be betraying his partners but also would be putting their entire scheme at risk by tipping off other investors about gains to be made in New York. Moreover, if Van Berckel shared the letter’s contents, the chancellor feared that people in Philadelphia might initiate “speculations that serve to empower enemies.”
“Enemies” might seem a hyperbolic term to use in the context of real estate speculation, but Livingston was not referring to business rivalries or the scandal of being exposed as a double-dealing partner. Rather, he was worried that faraway Philadelphia investors could “empower” already mobilized factions of mutually suspicious Tories and Whigs in New York City. Thus there would be no better way to “empower enemies” in New York than by revealing that there were large profits to be made from the purchase and sale of Tory estates. Should they learn that out-of-state and foreign investors were pooling their capital to take advantage of the state’s real estate market, New York lawmakers might be tempted to intensify anti-Tory hostilities and adopt even more aggressive laws to punish Tories and seize their property, violating the spirit and letter of the peace treaty between Britain and the United States and upending the revolutionary settlement that Livingston, Jay, and other moderate Whigs hoped to achieve.25
Making matters even more potentially explosive, Livingston was seeking British credit to finance his plans. The chancellor had asked John Jay to “establish … a credit for me upon some good house (either in England or Holland)” that could be used by him and his partners, who were likely spending their time casting about in London, Liverpool, and Amsterdam in search of credit as well. Therefore, as they conspired to profit from anti-Tory hostilities and expulsions by speculating