Here is a List of Those Who Paid for Derby’s Tunnels

Smugglers of Salem

  In 1801 Elias Hasket Derby  Jr., King Derby, extended the old tunnel system in town. The plethora of the extensions to the system he engineered was paid for by the Salem Common Fund Subscribers in the 19th century.  These are tunnels familiar to Webster and Adams.

  The Salem Common Subscriber Fund was a project brought about by Elias Hasket Derby Jr. disguised as a beatification program. A subscription was collected from 159 citizens of Salem, equaled to $2,500 ($35,855.80 roughly today), to on paper take down the hills, grade the common, fill in the 5 ponds and the river, add a whitewash fence, and some poplars.  The sum fell short and an additional fund was created to pay for the project with 66 more subscriptions. Some who had paid for the first would contribute again. Afterward many ship captains would build grand Federalist mansions around the park removing the industrial feel that pervaded earlier. No longer the tanneries, rope walks, foundries, and bakeries dotted the Common.

  Elias Hasket Derby Jr. would rise up as General Derby of Salem’s local militia. He would use these men to carry out the work. Previous the local militia had fallen to disorganization. So what occurred to inspire Derby to reorganize them? Thomas Jefferson.

  Thomas Jefferson had won a silent revolution in 1800 which limited the aristocratic tendencies of the Federalist Party. With Jefferson there was the hope of moving away from the seaboard into the country and buying a farm. Once you were a property owner you would have the ability to have a vote. To help for the interior improvements Jefferson imposed new duties on imports. A move not much favored in Salem.

   To help collect these duties Jefferson had asked the local militias to aid the custom agency in their collection. So Elias, General Derby, housed the militia in Wakefield Place on the location of the Hawthorne Hotel and had them set to work in the Common.  They did indeed carried out the plan that was above board, but they did much more below.

   Under the guise of a beautification program this militia dug a series of tunnels around the Common and hid the dirt in the ponds and the river that led to Collins Cove. The tunnels would connect the new Federalist mansions through their fireplace arches or holes in their basements. So these 159 merchants could smuggle goods from their wharf, to store in their homes, push to their stores, and bring the proceeds into the vaults connected to the tunnels. If they did not want to sell their goods in town, there was an underground railroad station provided by George Peabody, the progenitor of J.P. Morgan.

    These subscribers included  state and federal Senators and Congressmen, half the custom agency, local mayors, the founder of the New England Medical Review Journal, and families related by marriage or business to the Derbys, Peabodys, and Crowninshields. Later the tunnels would connect the homes of a Secretary of the Navy, an Associate Superior Court Justice, the financier behind Daniel Webster, a Secretary of State, and one of the most famous men to be murdered in the 19th century, and more…

     Benjamin Crowninshield (1772-1851)

  Director of The Second Bank of the United States Boston and Philadelphia, Secretary of the Navy, Senator, Collector of the Port of Marblehead, belonged to a family of merchant-seamen in his native Salem, Massachusetts. Served with Thomas H. Perkins as directors of the bank in Boston.

  He was a partner in his father’s firm, George Crowninshield & Sons and its successors, a business that prospered during the War of 1812 but dissolved in 1817. Crowninshield was elected to the Massachusetts House of Representatives in 1811 and to the state senate the following year. President James Madison appointed him Secretary of the Navy late in 1814. Although at first declining the position, Crowninshield soon consented and remained in office until his resignation in 1818.

  Thereafter he returned to his business pursuits, having been elected president of the Merchants Bank of Salem in 1811. Board members Joseph Story (another director The Second Bank of the United States in Philadelphia and Boston), John Dodge, and Stephen White. Joseph Story replaced him as president of Merchant Bank when he became Secretary of the Navy in 1815.  He was president of the following companies and institutions: The East India Marine Society, for 16 years ; (His grandfather was its first president); the Salem Lead Company (where Joseph Dixon got lead for his #2 pencils); the Association for the Relief of Aged and Destitute Women, for 19 years; and the Salem Savings Bank. He was a member of the Board of Aldermen in 1859. He was active and prominent in church work, and was for many years superintendent of the Sunday School of the East Church (Where the Witch Museum stands today), later called the Second Unitarian Church.

  He reentered the political arena with election to the Massachusetts House in 1821, Crowninshield became a director of The Second Bank of the United States in 1822 and remained connected to that institution until its charter expired in 1836.  He sat in the United States House of Representatives, 1823–31, where he aligned himself politically with John Quincy Adams. In 1833 Crowninshield served one final term in the Massachusetts House before retiring to Boston, where he died.

    George Crowninshield & Co.

  Benjamin’s brother’s company founded by their father George Crowninshield.

    Jacob Crowninshield

  Representative in U.S. Congress. Spits up blood in session and dies 5 days later in 1808. The once family lawyer Joseph Story will usurp Benjamin Crowninshield from the seat. Many strange deaths surround Story and his brother-in-law Stephen White. Jacob brought the first elephant to America. He did not understand how much an elephant could drink on board ship, so he preserved what was left for the sailors. In turn he gave her all of the beer on the ship. Once at port in NYC she was slightly pink from the alcohol. Pink elephants…Later the Stoned Elephant, Old Bet,would travel the country drinking bottles of beer she would uncork to drink for a nickel. A dime and she would drink the whole keg.

    William “Billy” Gray Jr.

  Started in Elias Hasket Derby Sr.’s counting house. He moved the Sun Tavern which was Benjamin Brown’s old house to the corner of Liberty and Essex Street. On the spot he will build his fine mansion that would become the Essex House hotel after he makes his leave to Boston. William Brown was also a loyalist who lost his property on Derby Square.  Lucy Brown would retain it so her father-in-law Elias Hasket Derby Sr. could build his wife the grand mansion there.

  After supporting Jefferson in the Embargo Act and keeping the sailors in town who suffered from it well fed, he was forced to remove to Boston.  During such time the country was poor and needed volunteers to gather subscriptions to build ships. Gray and Derby Sr. were behind the efforts to raise the money for the Salem Beverly Bridge, the aqueduct from Danvers with Joshua Ward,  and  for the USS Essex in 1799. During the War of 1812 David Porter would be captain of the ship.

  In his first biography Porter would tell of his genocides of native people in the Pacific and  the massacres of English sailors on whaling ships on the Pacific during the War of 1812. Then the Navy will rewrite his biography and gloss over these facts.

  Yes your history was correct, the War of 1812 was fought on the Atlantic and the west coast of North America was English, Russian, and Spanish. Admiral Farragut who served under Porter would later go on an massacre natives following his example.

  He was appointed a director to the Boston Branch of The Second Bank of the United States in 1815. Previously he was a director in The First Bank of the United Sates with George Cabot. In 1817 Gray was President of Discounts and Deposits of the Boston Branch. Also he was an agent to sell shares with Essex Junto Israel Thorndike and Thomas H. Perkins for the bank. His apprentice Joshua Bates would become a partner in Baring Brothers Bank who was also connected to associate director Thomas H. Perkins. Bates would purchase large amount of shares for his English bank. William Gray  Jr. would continue on to a be a senator from Boston and die the richest man in New England.

   John Treadwell (1738-1811)

  Moved to Salem where he became a state senator and judge of the Court of Common Pleas.

     Joseph Waters

  Appointed Navy agent to build the frigate Essex with Enos Briggs the master builder.

    William Prescott Jr. (1762-1844)

  William Prescott Jr. was a representative from MA who attended the 1814-15 Hartford Convention.  Prescott was the only child of American Revolution leader Colonel William Prescott, who served at  Bunker Hill in 1775. William Prescott, Jr., graduated from Harvard in 1783, and then taught at Brooklyn, Conn. and later at Beverly, MA. He passed the bar exam in 1787 after studying law in Beverly with Nathan Dane. Dane had taught Daniel Webster at Dartmouth.  Webster and Dane attended the secessionist Hartford Convention with him. Prescott founded a law practice in Beverly.

  In 1789, he moved his practice to Salem where he became a well-known attorney. He represented Salem for several years in the MA Legislature.  He was elected a state senator by the Federalist Party in 1806 and 1813.  He twice declined a seat on the bench of the Supreme Court of Massachusetts.  In 1808 he moved to Boston and was for several years a member of the Governor’s Council. In 1815 he became a fellow of the American Academy of Arts and Science.

  His son William H. Prescott became a well known historian and traveling partner to John Quincy Adams in Europe.  In Europe he met Queen Victoria, Robert Peele, and the Duke of Wellington. Prescott was Justice of the Peace with Stephen White and Daniel Webster in Boston in 1835.

  In 1849 spoke to Daniel Webster to keep Nathaniel Hawthorne’s post in the Custom House. He was on the original board of the Perkins School for the Blind with Israel Thorndike, William Balch Parker, Thomas H. Perkins, and Benjamin Pickman. Many were members of the Salem Common Subscriber Fund. If you were going to make secret tunnels in Boston, I guess it would be great to have a building of blind people not knowing what you were doing…

  In America he met Zachary Taylor and James Polk,  two presidents that would die from Typhoid. As a friend of Daniel Webster, I wonder if  he had access to Polk and Taylor’s food… He did sit next to Taylor and feigned off suggestions about a history of the Mexican War in which Taylor was a hero in 3 months before Taylor was to die of Typhoid. Before he dined with Taylor he was at Henry Clay Sr.’s table. This was in April of 1850. Right before visiting Taylor, Prescott would suffer a stomach ailment before traveling. I believe Taylor might have been ill after his visit, but he would not catch the Typhoid that killed him until July 4th.

    William Carlton

Salem Register was a Republican-Democratic paper that ran against the Salem Gazette which was a Federalist paper. Rev. William Bentley and Joseph Story wrote in it. It started in 1800 and ran till 1911 with different names. The press that was used to print it was paid for by the Crowninshields. He chided the town Federalist for not supporting John Adams enough after the Essex Junto jumped ship to Hamilton. His newspaper led to the failed congressional campaign of the Essex Junto’s leader Timothy Pickering against Jacob Crowninshield of the Stoned Elephant fame.

  He was jailed for libel under the times of the Alien & Sedition Acts for statement against it’s drafter Timothy Pickering stating it was hard to believe he did not take bribes from the British.  He was sentenced to 2 months in prison and 2 years of bonds that secured his silence. He was a hard drinker in poor health and jail did not help matters any.  He succumbed to the stress of 2 more Federalists suits and fines. A fine for having his print shop open on a Sunday. Then another libel suit from Timothy Pickering. All of this would lead to his death 2 years after being released from jail. His wife followed soon afterward. Democratic-Republicans tried to alter the state libel law in 1804 but failed.

    Benjamin Webb

  1851 director of Merchants Bank when it resided in his building.  Owned the Sun Tavern, the tavern the smugglers drank and dined in. Currently the offices of the Peabody Essex Museum on Essex Street.

    Isaac Osgood

  Brewer. Alexander Hamilton petitions congress to grant him a loan for brewing malt liquors. Could he be a member of Essex Junto and provide them with their ale? On the government cuff?

    Joshua Ward

    Member of the Salem Marine Society. Married Edward Augustus Holyoke’s daughter. His mother was a Derby. He lent rooms in his home to the Essex Lodge once they reestablished themselves after the Revolutionary War.  The Mason George Washington would stay in his home on the second floor and walk through his tunnel to the Stearns Building which held the Assembly Hall where a party was given in his honor where the Fountainside Diner resides now on the corner of Washington and Essex.  His house was built on the site of Sheriff Curwin’s home in which he was buried under the stairs until his wife could pay off the lien on his body. Ward was also a distiller.

    Abel Lawrence

  Distillery was in Lawrence Place. A place not haunted but filled with spirits.  He was the 4th captain of the Essex Cadets. He was the Master Mason after Joseph Hiller in the Essex Lodge. His home was across the street from the Lodge and Joshua Ward House. He provided the Mason’s strong drink with duty free molasses…when Ward ran out he just had to run across the street.

    Israel Dodge

  Another distiller.

   John Norris

  Left fortune to Andover Theological Institution. Distiller…

    Jonathan Hodges

  You guessed it… distiller. Father of Benjamin Hodges who founded the Salem East India Marine Society. The society that started the Peabody Essex Museum.

    Nehemiah Adams

  Wood worker who burned down 3 shops. One on the Common that burned down in 1798. Maybe he drank too much fire water from the group above. His son was Nehemiah also. He was a pastor and writer. Many of Senior’s furniture was moved into the Winterthur House after Frank Crowninshield marries Louisa Dupont around WWI. Frank owned Benjamin Crowninshield’s house on Peach’s Point Marblehead. The house is gone but the chasm from the ocean they would smuggle under the house remains.

  Joseph Hiller (147-1817)

  Appointed from 1789 to 1802 as Collector of Customs for Salem and Beverly MA in Salem MA. First Master of the Essex Lodge after the Revolutionary War. Lodge met in Joshua Wards House. Silversmith and watch maker. His father performed electrical experiments near the Old Meeting House in Boston and was a silversmith as well. Married Margaret Cleveland.

    Rev. Charles Cleveland (1772-1872)

  Father of Charles Dexter Cleveland, was born in Norwich, Connecticut. Introduced by an uncle to Salem. He would fulfill his seaman apprenticeship around the Cape of Good Hope. He later served as a deputy collector at the Salem custom house until 1802. He would step down the same year Joseph Hiller was removed from his post.

  Charles next became a clerk in Charlestown for seven years and subsequently launched his own brokerage business in Boston, Massachusetts. He changed careers again to become a senior partner in the dry-goods firm of Cleveland & Dane from 1822 until 1829. Charles then returned to working as a broker for approximately five years, which he followed with his complete abandonment of the business world in order to devote himself full time to charitable works.

     In 1816 he organized the Society for the Moral and Religious Instruction of the Poor at his home. He also labored to collect funds for a mission-house, which was dedicated in May 1821 and in 1830 became a missionary to the Boston poor. Charles received a license to preach in 1835 and was ordained an evangelist on July 10, 1838. Throughout his life, Charles, who eventually became known as “Father Cleveland,” continued to engage in charitable works, including serving as the Chaplain at a House of Correction for both men and women. Rev. Charles Cleveland died on June 5 1872, just sixteen days short of reaching his one-hundredth birthday.  He was the granduncle of President Grover Cleveland.

    Penn Townsend

  Privateer in the war of 1812. Owned the Alexandria from Maryland with Joseph J. Knapp Sr. and Joseph White. Also the Helen and the Dolphin from Georgetown with Joseph “Jr.” White and Joseph J. Knapp Sr.  Owned a few ships without the Whites but with Joseph J. Knapp Sr. His ties were closer to the Knapps than the Whites because he owned 3 more ships with Joseph J. Knapp Sr. without any of the Whites. He was a Mason and a 2nd Lieutenant on a revenue cutter for the Boston Custom House.

    John Gibaut

  Collector for the port of Gloucester.

    Henry Prince

  Bought the Derby House and the West India Good Shop in front of it. His son was a captain of a revenue cutter in the harbor.

    James Cheever

   Jefferson appointed official in the Custom House.

    Elijah Haskell

One arm custom inspector.

    Henry Tibbets

  Inspector of Customs.

  Bartholomew Putnam

  Surveyor of Port who lived where the East Church was built. Now the Salem Witch Museum.

    Edward Augustus Holyoke (1728-1829)

   Third President and founding member of the American Academy of Arts & Sciences. He was president of the Massachusetts Medical Society which created the New England Journal of Medicine which he penned several articles for. He was the first dean of Harvard Medicine. He trained close to 40 doctors. He started the 2nd savings bank in the country. An early proponent of inoculation against smallpox, it is estimated he vaccinated 600 persons during his career against the dreaded disease. Traveling by horseback, chaise, or on foot, Holyoke over the next 80 years would cover an estimated one-and-a-half-million miles and make approximately a quarter-of-a-million house calls.

   He was a founder of both the Social and Philosophical libraries in Salem, and was a driving force in the merger of these two institutions into the Salem Athenaeum in 1810 that also proffered by the Irish chemist’s library that Bowditch loved.  He was also an incorporator of the Essex Historical Society, later the Essex Institute, in 1821.

  Also he looked like my grandmother in drag. My grandmother and him share the succession of Edward’s in their family trees, originate from the same area of England, and both were in the medical profession as my grandmother scored best in her nursing school. So if there is reincarnation, my grandmother beat me to town. I showed his painting in the Essex Institute to my father, he was skeptical. My mother, the daughter-in-law, mouth dropped and she said in a gasp, “Oh Shit! She is back!”

   Jonathan Waldo & Son

  Apothecary owner in the Stearns Building. Major in second Cadets. Renovated Fort Pickering with brick arched corridors. Later uses this experience to help engineer a new tunnel system using brick arches over granite flat tops. Grand Uncle to Ralph Waldo Emerson.

  Benjamin Lynde Oliver Jr. (1760-1835)

  The Rights of an American Citizen: With a Commentary on State Rights, and on Constitution and Policy of the United States 1832…authored. Physician.  Andrew Oliver was his father. His siblings were Peter and Sarah. Studied law under Joseph Story.  1813 tutored Hawthorne. Could have been MA Superior Court Justice and was an excelled chess player. His mansion was built by Justice Lynde whose son would live in it as well before Oliver. It was erected in 1700 taken down in 1836. Dr. Benjamin Lynde lived in that house next till he died in 1835. His estate sells his organ to St. Peter’s Church. Oliver’s Hollow or Cellar, only thing remaining, was standing on the corner of Liberty and Essex from 1836-1844.

  That cellar they filled and made a garden of it. Kids used it as cut across from Essex to Liberty. John Kinsman buys it after Oliver and builds the first Lynde Block…3 stories.

  Mary Oliver

  Dies 1807. Her son is Dr. Benjamin Lynde Oliver. It was a family affair, these tunnels…

    Peter Oliver

  Deranged 1821 and gives estate to Col. Abel Lawrence, head Mason, distiller, and another smuggler.

   Samuel Webb

  Deranged silversmith.

   

   Walter Bartlett

  Deranged auctioneer.  Is there a pattern…

   Joshua Orne

  The site where City Hall is on his lot. One of many buildings in town connected to tunnels. Joseph Cabot, gives up the house he inherited through the Orne’s to build City Hall.  Cabot changes the name of Orne’s Point to the Cabot Farm I believe. A place of many tunnels and the brickyard that built them. Timothy Pickering bought 200,000 bricks in one order from there.

   John James Scobie

  Master mariner turned dry goods merchant from Scotland marries Jonathan Mason’s daughter.  Had dry goods store in the Wakefield Place connected to the tunnels on the location of the Hawthorne Hotel.

    Amos Hovey

  Also had a dry goods company in Wakefield Place and prospered from the tunnels connected to the building. A military man who owned a warehouse on Union Wharf.

    John Norris

  Norris hired Jonathan Goodhue. Later Goodhue & Co. were confidential correspondents of Baring Brothers.

    Nathaniel Bowditch  (1773 – 1838)

  An early American mathematician remembered for his work on ocean navigation.  Serendipity aided Bowditch’s autodidact study inasmuch as he found himself able to use the eminent Irish chemist Richard Kirwan’s library;  a privateer from Salem known as the Pilgrim had intercepted the ship carrying the library between Ireland and England and brought the library back to Salem in June 1791.

  In 1795, Bowditch went to sea on the first of four voyages as a ship’s clerk and captain’s writer. In 1799 elected to the Academy of Arts and Sciences. His fifth voyage was as master and part owner of a ship. Following this voyage, he returned to Salem in 1803 to resume his mathematical studies and enter the insurance business.  In 1804, Bowditch became America’s first insurance actuary as president of the Essex Fire and Marine Insurance Company in Salem.

  By 1819, Bowditch’s international reputation had grown to the extent that he was elected as a member of the Royal Societies of Edinburgh and London. He  also was a member of the Royal Irish Academy.

  In 1823, Bowditch left the Essex Fire and Marine Insurance Company to become an actuary for the Massachusetts Hospital Life Insurance Company in Boston. There he served as a “money manager” for wealthy individuals who made their fortunes at sea, directing their wealth toward manufacturing. Towns such as Lowell, MA prospered as a result.

  Bowditch’s move from Salem to Boston involved the transfer of over 2,500 books, 100 maps and charts and 29 volumes of his own manuscripts.

  Bodwitch is often credited as the founder of modern maritime navigation; his book The New American Practical Navigator first published in 1802, is still carried on board every commissioned U.S. Navy vessel.

Daniel Hathorne

  Mason. Father of Nathaniel Hawthorne. Dies at sea in 1805. Same year subscriber David Patten dies at sea.

   William Manning

  Nathaniel Hawthorne’s uncle and benefactor. Owned the stage coach company in town. His brother Robert owned the nursery near Orne’s Point. This Dutch Colonial cottage was built by Nathaniel Hawthorne’s maternal uncle Robert Manning for his widowed sister, and Nathaniel lived there with his mother after his graduation from Bowdoin College. The cottage was then across and down the street from its present location, adjacent to Manning’s own house and famous nursery, orchard and garden which is part of Greenlawn Cemetery now.

   Richard Manning

  Another uncle of Hawthorne. Money lender, captain, and justice of the peace. His house was removed to build the Phillip’s School which was the location for Hocus Pocus scene in which the kids burn the witches in the furnace. My neighbor used to teach in that school. After knowing her for 15 years I realized that she was retired longer than I was alive…

    Jonathan Gardner Jr. (1755-1821)

  Founder of the Salem Marine Society that still retains their clubhouse on top of the Hawthorne Hotel. A property sold to Frank Poor of Sylvania to fulfill his wishes to have a hotel for his business clients in town. They received the Franklin Building which was once called Wakefield Place from the drug lord Thomas H. Perkins.

  Jonathan was a privateer during the French Indian War and commander of minutemen in the Revolutionary War. His ancestor Joseph Gardner died in the Great Swamp Fight during the King Phillip War and his widow Ann Downing will marry Simon Bradstreet, governor,  and move the Gardner home from Gloucester across the street where I wrote a few books. Ann would become America’s first poet.

  Jonathan Gardner Jr. would suffer financial losses and sells 2 properties that were connected to the tunnels in town to Joseph White who would be murdered in the second house he purchased.

    John Watson

  Maternal great-grandfather of the Parker Brothers. I used to live on his old farm lot and found a marble his great-grandsons could of played with.  Beacon Street was once East Watson Street. One of the many properties he had owned off Bridge Street.

    Joseph Knapp Sr.

  Sons will be hanged for the murder of Joseph White. The game Clue will include rope as a murder weapon to represent his innocent sons hanging. Also the lead pipe is for the real murderer’s weapon Stephen White used and the Scottish dagger his accomplice and blackmailer used to stab White 17 times producing no bloodstains on the sheets in the bed his uncle was murdered in. Knapp will try hanging himself during his son’s trial. His wharf was Union Wharf. He had bought the murdered man’s ship the Revenge years before. He had owned many ships with Joseph White and his nephews.  Then the  Pirate Phillips took the ship Revenge. An insult Joseph White could not stand for, as a widower he treated that boat as his only child and was jealous that Knapp had a child who would continue  his name.  As well as White’s other business partner Richard Crowninshield Sr. had insulted him. His son will be found in his cell hanging from a low window with his knees almost on the ground. One of Richard Crowninshield’s sons would be hanged for White’s murder and two of Knapp’s sons.

   Joseph White

  His murder is the premise of the Parker Brother’s version of Clue. The rooms of his mansion appear on the board and the secret passages represent the tunnels leaving the house. He was Salem’s first privateer, a man who loved revenge, and a slave trader who would sell anyone of any color. Owned many shares in The Second Bank of the United States his nephew Stephen will inherit. Once partner to Joseph Knapp Sr. and Richard Crowninshield Sr.

    Benjamin Hodges

  Was a master of the Essex Lodge of Masons. He was the first president of the Salem East India Marine Society, the society whose collection is part of the Peabody Essex Museum now.  His father’s house on the corner of Orange and Essex Street had a tunnel running from the Derby House and another down to Union Wharf which is Pickering Wharf today. The trapdoor in the kitchen might be the last open connection to the vast tunnels in town.

  Also the distance between his house and the Derby’s is the length between his house and Brigg’s and Silsbee’s mansion on the Common. The same distance from Silsbee’s to Cook-Kimball and David Lord’s houses on Pickman Street. Two mansions of great size will be built next to each other all over Salem separated by that distance. The size of the mansions would be used to hide the extra purchases of the bricks to go that stretch.

  Most members of the Salem East India Marine Society were members of the Salem Marine Society. A friendship that still continues for if you want liquor at the Peabody Essex East India Marine Hall you have to have it supplied by the hotel below the Salem Marine Society’s clubhouse.

  Joseph Vincent

  First Steward of renewed Lodge in the Joshua Ward House. Elias Hasket Derby Jr. Senior Warden.  William Bentley Junior Warden. Joseph Hiller Master Right Worshipful and Head of Customs. Vincent owned a ropewalk on the Common next to Thomas Brigg’s ropewalk. If the project called for it they would join ropes from one ropewalk to  the other as they did when they made the rope for the anchor of the USS Essex. Grand parties would be held in the Common for the rope walks and buffets would be stretched the grand distance of their establishments for their employees.  First brought Henry Clay Sr. to New England to discuss the economic advantages of hemp over jute or sisal in making rope for riggings. This visit might of introduced him to John Quincy Adams who he serves under as Secretary of State. He was a Revolutionary War Hero. His son Joseph K. Vincent becomes a judge in Idaho.

    Jeduthan Upton Jr.

  Upton was exchanged for another prisoner and returned to Salem, Mass. on July 9, 1813.  Marries Jessie Smith’s daughter. Smith was the last of Washington’s bodyguards to die.

    Israel Williams

  First captain of Friendship. Captain of the Cadets.

    Aaron Waite

  Partners with Jerthmael Pierce in the ship Friendship. Their wharf was off the old North Street Bridge. Carlton’s bridge washed up against their wharf from Felt Street during the Great High Tide.

  Jerthmael Pierce

  Partner in Pierce & Waite

   Samuel Skerry

  Kicked in head by a horse in 1808 in  his 36th year.

   Nathaniel West

  Suffered one of the worst divorces in history. He wished he was kicked in the head by a horse instead.

To find out more and other fabulous stories about how Salem, MA shaped American History read Sub Rosa by Christopher Jon Luke Dowgin published by Salem House Press.

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Limited Collector’s Preview Edition

Sub Rosa The Sequel to Salem Secret Underground: The History of the Tunnels in the City

 

Don’t miss your opportunity to get these rare copies. Be the first to find a typo, a smudge, or a section of type that might not make it to the final copy of the book. Strange as it sounds, people love the books in which they can find a flaw.

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It is the luck of the draw and you only have two weeks from the date this post was…posted. Read the latest posts in our blog to get a taste of the stories in the book. So Good Luck and enjoy the book!

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Cover to the book Sub Rosa which is about Tunnels in Salem and those who built them.

George Peabody: Panics and Financial Collapses

George_Peabody

George Peabody

George Peabody born in South Danvers in what is now Peabody in 1795. He was born into a large poor family he struggled throughout his life to keep up with. His first business foray was with his brother David in a dry goods shop in Newburyport. Then he traveled to Georgetown in Washington D.C. with his Uncle John in 1812 to set up another dry goods company. In 1814 he partners with Elisha Riggs to form Riggs, Peabody, & Co. wholesale dry good dealers. In 1815 they move to Baltimore to get closer to the slave market. Riggs retired in 1829, and the firm became Peabody, Riggs & Co., with the names reversed as Peabody became the senior partner. There stock entailed prizes from American privateers.  They also ventured heavily in slaves, wool, and garment goods from Europe sailed in from the north. They remained in partnership till 1835.

In 1827 Peabody would start sailing to Liverpool in England to introduce American wool to new markets. Through his connection with his two friends from Baltimore, William and James, he finds many doors open for him. The Brown Brothers were managing their father’s Liverpool office at the time of Alex. Brown & Sons. The bank that would in time become Brown Brothers, Hairrman, & Co.  Another influential friend would be Lord Nathan Mayer Rothschild.

East_India_Marine_hall_B

Peabody Essex Museum an Institute Filled with Tunnels and secrets.

In 1837 Peabody became a citizen living in London. In between that year and the next he ventured into merchant banking conducting business on his own account. Prior to then he also started selling state securities within Europe. George Peabody was in “High Finance” which consisted to catering to governments, wealthy individuals, and large companies. His entree into the field was to be the mouth piece for Rothschild who was despised by the other lords. It was no secret that Nathan ran the Bank of England along with Barings Brothers & Co., but his Jewish heritage limited him from doing more. So he established Peabody in high fashion as a lavish host whose entertainments would soon be the talk of London. Rothschild would, of course, pay all the bills. Peabody accepted the offer, and soon became known as the most popular host in London. His annual Fourth of July dinner, celebrating American Independence, became extremely popular with the English aristocracy, many of whom, while drinking Peabody’s wine, regaled each other with jokes about Rothschild’s crudities and bad manners, without realizing that every drop they drank had been paid for by Rothschild.

Kinsman Block secret train station tunnel entrance.

Tunnel leaving a building built by the superintendent of the Eastern Railroad to a secret train station. Peabody owned the railroad and some mills in Lowell in which good were smuggled to.

In 1836 Andrew Jackson let the charter of the Second Bank of the United States to lapse complaining that it was a private institution and foreign buyers purchased ownership shares of the bank until the 70 percent of the bank was owned outside our borders. This was worrisome to American politicians but this high share of foreign ownership was not unusual in the American financial system. Britain had been supplying capital to the U.S. economy for some time. Much of the financing was from Rothschild who helped charter the bank through his American agents the Phillip Brothers.  In fact oversight was real lax, especially in the Baltimore branch that came under the control of individuals who looted it of a million dollars before they were caught. The Baltimore branch went into receivership and the whole Bank was close to bankruptcy. This was the branch where Peabody and the Alex. Brown & Sons worked out of. Also the branch director was the future president James Buchanan. In Washington the branch director was Elisha Riggs son, Peabody’s old partner. In Boston the board was filled with Peabody’s Salem friends Daniel Webster and Benjamin Crowninshield. If it was not private institution before 1836 the Second Bank of the Untied States and its remaining 24 branches did indeed run as a private venture afterward until its failure in 1841.

The Bank of England responds to Jackson through Rothschild’s order. The Second Bank of the United States is now a private company. The bank instituted a 2 part plan. First they issued an order to extend almost unlimited credit for good security, placing plenty of money into circulation. Creating the fear of too much gold flowing to America in June 1836 by the Bank of England. Then when enough people took the bait, orders were issued to restrict credit, call in outstanding loans, and reduce the overall money supply. Then the Second Bank of the United States owned by foreigners bought up depreciated stocks for pennies on the dollar. One of which was George Peabody working for Nathan Mayer Rothschild.

Ben_Crowninshield_House

Secretary of the Navy and board member of the Second Bank of the United States home in Salem. One of many connected to the tunnels in town.

By October a run on the banks in Ireland occurs. Then in August The Bank of England refused to discount bills drawn on houses active in American trading In one day The Bank of England threw out all the paper connected with the United States. Rothschild divested itself of all its American holdings. The purpose of this action was to create an immediate financial panic in the United States, cause a complete contraction of credit, halt further issues of stocks and bonds, and ruin those seeking to turn United States securities into cash. Why? Not only did President Jackson promptly withdraw government funds from The Second Bank of the United States when he refused its charter, but he deposited these funds, $10 million, in state banks. The immediate result was that the country began to enjoy great prosperity. This sudden flow of cash caused an immediate expansion of the national economy, and the government paid off the entire national debt, leaving a surplus of $50 million in the Treasury.

The Panic of 1837 was to begin affecting America as well as Europe. In fact George Peabody through Rothschild finds guarantees so his friends Brown Brothers & Co. are ensured of $10 million pounds to keep them from defaulting on their loans. Others in England will feel the bite as well.  By 1842 eight states and one territory defaulted or repudiated their debts on state securities they had sold into the European Market. Many of these state securities are ones Peabody had sold. By 1861 Peabody will be the largest seller of state securities. To put pressure on the Lincoln government during the Civil War, he began unloading them and driving prices down. At the same time, his future business partner, Junius Morgan was depleting the American gold supply by shipping it to England. Morgan and Peabody were also brokering cotton sales to Europe to buy weapons and supplies for the South. The Panic of 1837 would last through to 1845 with several bubbles along the way.

Now what about future panics? In the 1848 Panic Corcoran & Riggs took a $16 million loan to by $14 million of the $18 million bond issued by America to pay for the Mexican War. The deficit was $30 Million. They received an advance on proceeds by sharing the debt with Barings, Peabody, Overend, Gurney & Co., and Rothschild; with Rothschild handling the majority. In 1844 Tyler had turned their firm into a federal depository and they handled a majority of influential politicians including James Polk, Henry Clay, Stephen Douglas, James Buchanan, Daniel Webster, and young Congressman Abraham Washington. Its safe to say that Peabody had a hand in the profit and control of the son of his old partner. Riggs told Peabody, “Our position and standing with the Executive heads of departments gives us advantages in transactions with the government not enjoyed by others. Also he told him,“Our position and standing here gives us many advantages, having the earliest information in relations to matters and things.” In the Panic of 1857 they pulled the same plan from the 1837 Panic from the old playbook.

Train Tunnel heading toward Station. Just long enough to hide one train.

Train tunnel heading toward secret station built by Peabody’s railroad. Just long enough to hide one train.

In the panic of 1857, when depreciated securities had been thrown on the market by distressed investors in America, Peabody and the elder Morgan, being in possession of cash, had purchased such bonds as possessed real value freely, and then resold them at a large advance when sanity was restored. After the panic had been engineered, one firm came into the market with one million pounds in cash, purchased securities from distressed investors at panic prices, and later resold them at an enormous profit. That firm was the Morgan firm, and behind it was the clever maneuvering of Baron Nathan Mayer Rothschild. George Peabody & Co. was founded in 1851. By 1854 it will become Peabody, Morgan, & Co. after recruiting Junius Spencer Morgan. 1864 J.S Morgan & Co. upon Peabody’s retirement.

The Great Depression? Sir Montagu Norman, Governor of the Bank of England for many years, was a partner of Brown, Shipley & Company. Sir Montagu Norman was organizer of “informal talks” between heads of central banks in 1927, which led directly to the Great Stockmarket Crash of 1929.  Brown, Shipley & Co. formed by Peabody’ friends the Browns of Baltimore.  2008 Financial Scandal? “JPMorgan Chase put profits ahead of responsibility by recklessly churning out thousands of defective mortgage loans, failing to inform the government of known problems with those loans and leaving the government to cover the losses when the loans defaulted,” as the New York Times quotes Preet Bharara, the United States Attorney in Manhattan. They have been fined the most for their engineering this current depression, $4 Billion. In their second quarter of 2015 JP Morgan and Chase made $6.3 Billion with an overall worth of $24.5 Billion. Its about time we slapped the hand that George Peabody fostered…