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The First Global Economic Crisis, and An Easily-Overlooked Greenwich Village House

Today, global economic crises are all too familiar and common. A bad day on Wall Street, or a troubling decision by China or the European Union, can send markets tumbling around the world, with the effects felt swiftly and pervasively. That’s because, in the 21st century, news can reach virtually anywhere almost instantaneously, and our economies are so utterly intertwined and interdependent.

68 Fifth Avenue today

Of course in the not-too-distant past, neither of these were true, and so global economic crises were simply unheard of. News of economic developments might take weeks or months to travel to other countries if it reached them at all, and the economy of those far-away places operated much more independently, or even completely separately, from the rest of the word.

But with the industrial revolution, the global expansion of colonial empires, and the introduction of the telegraph in the mid-19th century, all that changed. Suddenly important news could travel quickly, even across the ocean. And what happened in the United States, or Great Britain, or Russia, might have a ripple effect across he world.

That’s exactly what happened in 1857, with what was arguably the first global economic crisis, known as the Panic of 1857. It began in the United States that year, and then spread throughout the world. Among the many consequences of this almost unprecedented event was, by many accounts, pushing the nation towards the Civil War. And this historic crisis bears a surprising connection to a still extant-house in Greenwich Village — one for which we are seeking landmark status, along with its surroundings.

Contemporary cartoon illustrating the run on the banks from the Panic of 1857

The underlying causes of the Panic are almost too varied to enumerate. Most historians believe that the discovery of gold in California in the late 1840s, and those sources of gold then drying up in the 1850s, led to an unstable expansion of the money supply. The March 1857 Dred Scott decision by the Supreme Court compounded this problem, as it led western states and territories to assume that slavery might be introduced there, lowering land prices in the West and causing further economic instability. Another factor was the end of the Crimean War in 1856, in which many of the great European powers and the Ottoman Empire were involved. Because so many agricultural workers in Europe and the Near East were pressed into service, during war years these countries depended upon the United States to supply agricultural products. Once the war ended, that reliance, and that economic boost to the United States, ended.

This leads us to one of the main immediate precipitating factors for the Panic of 1857, and to our Greenwich Village house. N.H. Wolfe and Co. was the oldest flour and grain company in New York, and one of the largest in the United States. On August 11, 1857, after this significant reduction in worldwide purchases of American food crops, it failed. This sent shockwaves through American markets. Less than two weeks later, the Ohio Life Insurance and Trust Company’s New York Office was found to have embezzled almost all of the firm’s assets to maintain its stock market operations; this led to further panic, including the bank’s New York office suspending payments and its failure, which precipitated a run on the banks. Markets plunged, the run on the banks gained momentum, and soon a cascade of bank failures swept across Europe.

The economic downturn lasted for years, and the United States economy didn’t really fully recover until after the Civil War. Because this was largely a financial crisis, in spite of its roots in a contraction of the market for American agricultural products, its impact was felt disproportionately in the North, with the South left relatively unscathed. Demand for cotton continued to grow, and was one of the only bright spots in the American economy. While Midwestern factories were shuttering, Western railroad expansion halting, and Northern banks failing, Southern cotton producers saw some of their best years, and gave Northern exporters some of their best business. This led in 1858 to South Carolina’s James Hammond delivering his infamous “King Cotton” speech on the floor of the U.S. Senate, which embodied the increasingly pervasive view in the South that their system and way of life was right, and that they did not need the North — economically, culturally, or politically. Less than two years later, in the middle of this unequal economic spiral, South Carolina would become the first state to secede from the Union, leading to the formation of the Confederacy. The rest, as they say, is history.

Returning to Greenwich Village, in the mid-19th century, the neighborhood was having a major expansion of its own. What was once a suburb north of the city became New York’s most prestigious residential address for a while, particularly Washington Square North and the stretch of Fifth Avenue leading from it up to 14th Street. The city’s grandest houses were built on these Lower Fifth Avenue blocks, with mansions constructed by railroad and coal magnates, and familiar New York names like the Lenoxes or the Brevoorts.

68 Fifth Avenue (l. to r.) in the 1920s or 30s, in 1940, and today.

Into this mix around 1840 came 68 Fifth Avenue, between 12th and 13th Streets, one of many grand houses constructed here at the time. Our research shows the original builder was John H. Cornell of Wall Street’s Mechanic’s Banking Association. Cornell likely never lived here, however, because our research also shows that before the house was even completed, it was sold to one Nathaniel H. Wolfe, the founder and owner of the aforementioned N.H. Wolfe and Co. Wolfe remained here through the early 1850s, but before his luck took a turn for the worse in 1857, he moved on to greener pastures elsewhere.

Scene from the Music Door Canteen, April 7, 1943.
Scene from the Music Door Canteen, April 7, 1943.

Looking at 68 Fifth Avenue today, one might not guess this was once the house of one of the richest men in New York, whose company was so important that its failure could help precipitate a global economic meltdown. But historic images give a little better sense of the house’s original grandeur and domesticity. In fact photographic evidence indicates thaft the house retained much of its original look for almost a hundred years after it was built, even as this stretch of Lower Fifth Avenue became increasingly commercial in the late 19th and early 20th centuries, and filled with apartment buildings and hotels in the 1920s and 30s,

By 1940, however, 68 Fifth Avenue gave in to the trends of commercialization around it. But this did not mean that its colorful or significant history ended there. During World War II, this former mansion of 19th century industrialists welcomed the proverbial everyman (and woman) from around the globe — the building housed the Music Box Canteen, a celebrated World War II entertainment venue for GIs described at the time as “one of the most famous metropolitan service centers, and…‘a home away from home’ to thousands of servicemen.” The Canteen was known not just to American GIs, but was popular among allied military men from across the world. The caption for an April 1943 photo of servicemen singing boisterously around a piano at The Music Box Canteen
described the scene thus:

Music hath no boundaries” is an adage that still holds good at the Music Box Canteen, on New York’s Fifth Avenue, where long, lanky Australian RAAF aces, grinning American tars, and rosy-cheeked French sailors of the Tricolour’s ships, the Richelieu and Le Terrible, all make merry around a Piano, singing “Le Marseillaise.” It’s coffee the boys are drinking out of paper cups, not champagne.

In 1943 the great Chinese-American modernist artist Yun Gee staged an exhibition to raise funds for the Music Box Canteen. The Canteen’s administrator was Minna Regina Falk, who would in 1963 become the first female historian to become a full professor at NYU. Later the space would become home to The Gondolier Restaurant, which billed itself as “the only authentic Italian Supper Club in New York City.” Today, the building is owned by The New School, which maintains offices there.

Paining by artist Yun Gee.

This information comes out of research we are conducting about the rich history of the unprotected area south of Union Square. Each time we dig, more fascinating stories like these emerge (you can see all our research here — just click on “landmark proposals”). Village Preservation is waging a campaign to seek landmark designation for this and about two hundred other historic and unprotected buildings in this area . Help us make this happen — click here to send a letter to city officials urging them to support landmark designation for the area.

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