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History richer than money in Bank of New York vault
Sunday, May 06, 2007

NEW YORK -- Next door to the New York Stock Exchange stands an art-deco tower overlooking the corner of Wall Street and Broadway that holds the ink-stained proof that The Bank of New York's pending takeover of Mellon Financial Corp. is not the first Western Pennsylvania foray for the nation's oldest financial institution.

What the document shows, in fact, is that the bank's initial journey westward took place almost 213 years ago.

A Sept. 28, 1794, letter from the office of U.S. Treasury Secretary Alexander Hamilton spells out the need for $200,000 from The Bank of New York to quell the "insurrection which has unfortunately taken place in the Western part of Pennsylvania" -- a reference to the rural uprising of grain farmers protesting a tax on distilled spirits sold in the newly formed United States.

Western Pennsylvania revenue officials already had been tarred and feathered, and the home of a regional tax inspector had been burned. Thus Mr. Hamilton's assistant, Oliver Wolcott, made it clear the request was urgent: "My confidence in the public spirit of The Bank of New York and in its disposition to aid the government at a critical juncture leads me to have recourse to your body for the further supply of which the Treasury stands in need."

That fall, with the New York money in hand, a force of 13,000 led by President George Washington, Mr. Hamilton and Revolutionary War hero Henry "Lighthorse Harry" Lee rode as far as Monongahela to put down the Whiskey Rebellion in the first show of American force against its citizens.

The Whiskey Rebellion letter is one of countless historical treasures on file at The Bank of New York's 50-story headquarters at 1 Wall Street. It soon will be the new home of Mellon Financial Corp. if shareholders agree to a merger of the two companies on May 24, uprooting Mellon's headquarters from Pittsburgh after 138 years.

The combination of Mellon and The Bank of New York brings together two of the most storied financial institutions in the United States. Mellon can claim a critical role in the financing of the Industrial Revolution through its investments in aluminum, oil, steel and coal. Many still consider Andrew Mellon the second-greatest U.S. Treasury secretary in history.

But The Bank of New York may be able to claim a more impressive lineage -- its connection to Alexander Hamilton, the man on the $10 bill, buried across the street from Bank of New York's headquarters following an 1804 pistol duel with rival Aaron Burr.

Before he became the first secretary of the U.S. Treasury and the nation's first central banker, before he fought for a new Constitution, before arguing for its ratification in a series of public letters that became known as The Federalist Papers, Mr. Hamilton was a 27-year-old Manhattan lawyer when he took part in the founding of The Bank of New York in 1784, just weeks after the British troops had left this island. He also had a hand in authoring the bank's new constitution, hoping it would bring some stability to the American monetary system and assist a new cash-strapped nation with its shortage of capital.

Many of the nation's founding officials opened accounts, and The Bank of New York has the ledger books to prove it. Mr. Burr, a future U.S. vice president and Mr. Hamilton's killer, was an early customer (a Burr-signed check for "seventy two and 96" is still on display), as was John Jay, the first chief justice of the U.S. Supreme Court, and Henry Knox, the man in charge of Washington's famous crossing of the Delaware River.

When the bank's part-time historian and curator, Christine McKay, dug through the archives in 1999, she also found records for John Adams, the nation's first vice president and second president, under the heading of "V'' -- for vice president. When a museum asked her if George Washington had an account, she looked again. "It wasn't under 'W,'" she said. "Then I found Adams under V, for vice president. I thought, oh, 'P' for president. It wasn't there. But we think it is under 'L' for Tobias Lear," Washington's friend and secretary. "There are entries every day," she said. "We feel that was probably, probably Washington's account."

One of the few early cabinet members without an account at The Bank of New York was Thomas Jefferson, who did not like big cities and "kept his accounts at home," in Virginia, Ms. McKay said.

It will be up to Ms. McKay, the descendant of coal miners from Carnegie, to merge the histories of Mellon and The Bank of New York following the expected closing on July 1. On a recent tour of the company's executive floor, where Mellon Chief Executive Officer Bob Kelly (an American history buff) already uses an empty office on his days in Manhattan, Ms. McKay points to some oddities -- a rusty vault key that may have belonged to a Bank of New York cashier and a pair of spectacles that look as if they belong on the face of Bob Cratchit -- as well as some historical items that connect The Bank of New York to the earliest days of a fledgling republic.

The most significant document, perhaps, is the first loan made to the U.S. government, the original paper rendered in iron gall ink, displayed behind a pane of glass. The $20,000 warrant was part of $200,000 provided by The Bank of New York to the "Secretary of War," with Mr. Hamilton's signature as Treasury secretary in the lower-right corner. The loan was made in September 1789 -- the U.S. Treasury was still only a few weeks old.

"We're not 100 percent sure what it was for," said Ms. McKay, noting that some records were lost to fires during the War of 1812. "The guess is that it was to pay the Army and early upkeep for the War Department. The army had not been paid in some time" by a cash-poor government.

Another item on file here is among the bank's most prized -- and potentially most valuable -- possessions. It is a detailed, glass-enclosed miniature portrait of the bank's world-famous founder, measuring 31/2-inches high, the glass cracked across his chin and left ear. On the reverse side is a lock of Hamilton's hair. The Bank of New York acquired it from the Hamilton family, but Ms. McKay is still not sure when the portrait was produced or by whom. No doubt about its relative value, though: a similar-size miniature of George Washington recently sold at auction for $1.2 million.

The unexpected death of Mr. Hamilton at age 47, felled by a bullet from Mr. Burr, left seven children, a widow and not much money to pay debts accumulated on land and property in western New York. The Bank of New York still has on file a trust drawn up by Mr. Hamilton's friends -- including John Jacob Astor, the first U.S. millionaire -- used to sell off the real estate and retire the debts. A page opened during Ms. McKay's tour shows a property sale dated April 25, 1806 -- Ms. McKay noted that the trust would remain a secret for 125 years.

Later, Ms. McKay takes an elevator up to the 49th floor, showing the sweep of an executive dining room, a lounge and observation-deck views of the gaping Wold Trade Center site (only blocks away), a Bank of New York operations center damaged on 9/11 (the company lost three people that day), the Statue of Liberty, Ellis Island and the old Bank of New York headquarters at 48 Wall Street, now being converted to house the Museum of American Finance, the eagle atop its spire currently under renovation.

Gazing across the New York Harbor, the site of so many immigrant crossings, Ms. McKay explains that her own history spans the distance between Pittsburgh and New York. One side of her family passed through New York on their way to a Chicago suburb, before returning to New York again. The other side (her father's) emigrated from Ireland to Carnegie in the late 1800s, with her great-grandfather and grandfather working as coal miners. Her grandfather, Patrick Gibbons, attended Carnegie High School and even played on an offseason basketball team with the legendary Honus Wagner.

Thus, she is looking forward to a Western Pennsylvania trip, potentially this summer, to learn more about Mellon's contributions to American finance. "I have roots there," she said. And "I have a personal interest in incorporating the history of Pittsburgh."

First published on May 5, 2007 at 8:09 pm
Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752.