BY JAMES P . PROUT
BOOK REVIEW
Before the Gilded Age : W . W . Corcoran and the Rise of American Capital and Culture
By Mark L . Goldstein Georgetown University Press 266 pages with illustrations , notes and index $ 29.95
Students of American financial and business history have no shortage of fascinating characters and sagas to explore . Visionaries and villains , great men and grifters , stunning successes and salacious scandals . Lots to choose from . And lest you think this is all in the past , as I write this two of America ’ s richest men have apparently challenged each other to a cage match !
Amid such silliness , we might forget that business , banking and finance were traditionally identified with steadiness and sobriety . Mark L . Goldstein , a senior US civil servant , in his book Before the Gilded Age : W . W . Corcoran and the Rise of American Capital and Culture , reminds us of such old-fashioned values as he chronicles the life of William Wilson Corcoran . Corcoran grew rich in pre-Civil War Washington , DC , dealing in government debt and real estate . Deeply embedded in the social and political life of the capital , and moving easily between Northern and Southern power brokers , Corcoran amassed a fortune and helped change the cultural face of DC .
After an odd Introduction ( which can be skipped ), Goldstein places Corcoran ( b . 1798 ) in the genteel , slow-moving society of Washington ’ s Georgetown neighborhood . Corcoran started out as a store owner and manager of his family ’ s real estate holdings . The author reminds us rightly that dealing in property in DC at the that time involved an active trade in the buying and selling of humans . Corcoran owned slaves and was comfortable with the institution and profits made therefrom . After a series of business ups and downs through 1820-30s , Corcoran acted in the vacuum created after Andrew Jackson killed the Second Bank of the United States , and he created Corcoran & Riggs , a bank and brokerage .
By the 1840s , Corcoran was at the center of overlapping networks of senators , congressmen , military officers and Treasury Department officials . At one point , Goldstein writes , Corcoran ’ s bank was responsible for receiving and administering a large portion of the salaries of key members of the US government . Corcoran ’ s bank “ forgave ” loans to many big names of the time , including Daniel Webster . Reading about Corcoran ’ s relationship with Secretary of the Treasury Robert Walker — who seems to have forgotten about $ 1 million in bonds left in the basement of Corcoran ’ s bank — gives new meaning to “ crony capitalism .”
War is often good business , and Corcoran was in the perfect spot to profit from the Polk administration ’ s need for fast cash to wage war with Mexico in 1845 . He both advised on ( pumping up the coupon rate ) and brokered the war bonds using his merchant banking contacts in New York , Boston , Philadelphia , etc . Corcoran also convinced investors in Europe , who had been burned by US state defaults in the 1830s , to take up the US paper , essentially re-opening the market for US debt . Goldstein properly positions Corcoran as a forerunner of financing approaches taken later during the Civil War .
Things changed in DC in the 1850s . By that time , Corcoran was wealthy and expanded his real estate holdings , private philanthropies and art collection activities . He began work in 1859 on what would become his most enduring legacy — the Corcoran Gallery — which was among the first bespoke art galleries in the United States .
However , things got too hot for Corcoran in DC as the Civil War opened . He had been close to prominent Southerners like Robert E . Lee and Jefferson Davis , and he remained sympathetic to the Southern Cause . In 1862 , Corcoran sold what he could , packed up his gold and moved to Europe until soon after the War ended . He lived until 1888 , long enough to see the beginnings of the exponential growth in US wealth . Goldstein has done good service , illuminating the life of an interesting financier during a time in American business history that gets too little attention . The author makes it clear many , many times that Corcoran benefitted from being male , white and privileged . This is unsurprising . Corcoran was clearly a risk taker , and able to juggle disparate personalities to his own credit in a town where long careers are a rarity . Monetary “ generosity ” ( read bribery ) certainly helped , but I would have liked to learn more details about his financial and sales skills . The title is a little too grand for the effect that Corcoran actually had on American finance .
In 1871 , Corcoran threw a lavish fundraiser in the soon-to-be-completed Corcoran Gallery . Just a few years after high-tailing it out of town because of his Confederate sympathies , Corcoran ’ s guests included President Grant , General Sherman and a host of other DC glitterati . A remarkable re-invention , yes , but then again that ’ s Washington , DC .
James P . Prout is a lawyer with more than 30 years of capital market experience . He now is a consultant to some of the world ’ s biggest public companies . He can be reached at jpprout @ gmail . com .
www . MoAF . org | Summer 2023 | FINANCIAL HISTORY 39