Moses Taylor

American investor, banker, merchant, and industrialist

• Born: January 11, 1806
• Birthplace: New York, New York
• Died: May 23, 1882
• Place of death: New York, New York

Taylor was one of the earliest American investors to amass great wealth through diversification of holdings, and his promotion of the utilities, railroad, and coal industries was instrumental in their growth. His management of City Bank was responsible for its development into one of the country’s most prosperous financial institutions.

Sources of wealth: Banking; investments

Bequeathal of wealth: Spouse; children; medical institution

Early Life

Moses Taylor was born in were chosen in 1806. His father was a successful businessman who served as an agent for John Jacob Astor, the wealthy fur merchant and New York power broker. Taylor completed his formal education at age fifteen and went to work as an apprentice, first for the firm of J. D. Brown and then for G. G. and S. S. Holland, merchants involved in the import and export business. For seventeen years he moved up steadily in the company, learning all aspects of the commodities trading business, so that in 1832, with $15,000 in savings and a $35,000 loan from his father, he was able to start his own mercantile firm. Shortly before he struck out on his own, he married Catherine Wilson; the couple would eventually have six children.

First Ventures

Taylor quickly proved to be a shrewd businessman and an even more competent investor. His import business, largely concentrated on bringing in sugar from Cuba, produced notable profits, and by 1838 he was worth $200,000. Never one to spend carelessly, he invested his earnings in various other businesses, particularly City Bank of New York. In 1837, Taylor was elected a director of the bank, putting him in a position to guide that organization’s moneylending to merchants and allowing him to find appropriate investments for his own growing income. While he continued to work actively in his business, Taylor devoted considerable time to his duties at City Bank, even serving as interim president in 1842. He formally separated his commercial business from his investment activities in that year. Gradually, he became more active in the firms in which he was placing his money. In 1849, he admitted Percy Pyne as a full partner in his business and turned over many of the daily management tasks to him.

Mature Wealth

Free to pursue his interests in companies in which he had significant investments, Taylor gradually moved away from activities involving commodities trading into banking and investments in various industries. City Bank became the hub of his financial empire. His own money was deposited there, as were funds from the companies in which he had controlling interest. In 1856, he became the bank’s president, a position he held until he died. Because Taylor insisted the bank maintain significant cash reserves, there was always “ready money” for loans to various commercial and industrial enterprises. The interest payments made by these enterprises allowed the bank to pay its shareholders (including Taylor, who held a majority of the bank stock) annual dividends of 10-20 percent. His position as a director of Farmers Loan & Trust gave him further opportunities to generate profits from mortgages and loans made to companies in which he was involved. Taylor’s conservative banking policies helped City Bank (renamed National City Bank of New York in 1863) to weather three periods of financial crisis in the United States, each time emerging as a stronger institution.

From his earliest days as a merchant, Taylor invested in local businesses other than his own, usually ones owned by fellow directors at National City Bank. He was heavily involved in the shipping industry until the advent of the Civil War, largely as a means of assuring deliveries between Cuba and his warehouses in New York City. In 1841, he became a principal shareholder in the Manhattan Gas Company, one of the city’s suppliers of a commodity critical to providing light and heat before the rise of electrical power. As a director of this utility, Taylor took an active role in managing its operations and negotiating mergers or working agreements with competitors. He also put money into a number of other utilities in New York and New Jersey, eventually becoming a director of the New York Gas Light Company in 1865.

As early as the 1840’s, Taylor began investing in railroads. By 1856 he was a major shareholder in the Delaware, Lackawanna & Western Railroad, one of the principal lines transporting coal from western Pennsylvania to the East Coast. He also invested in other rail lines in Pennsylvania, New Jersey, the Midwest, and the South. As was the case with most of his forays into enterprises other than his own firm, Taylor’s general practice was to make a modest investment initially, and, if the venture showed promise, he would purchase sufficient shares to exert direct control over the railroad’s operations. As an adjunct to his railroad ventures, he established the Jersey Shore Improvement Company, which improved land along the Hudson River that eventually was sold to the Delaware, Lackawanna & Western line, netting Taylor a profit of $400,000. Sometimes Taylor made money simply through extended loans to railroads in which he did not have controlling interest. For example, his decision to underwrite operations of the Pennsylvania & Reading Railroad brought him a profit of $750,000 in 1871.

Closely aligned with Taylor’s investments in railways were his ventures in the coal and iron industries. In 1843, his involvement with the gas company led Taylor to invest in coal. Realizing that great profit could be made in businesses that served the needs of a growing industrial society, Taylor gained controlling interest in the Lackawanna Iron & Coal Company. In addition to mining, this company was involved in manufacturing rails for the growing railway industry. This enterprise alone brought Taylor significant revenues during the Civil War years, when the federal government took an active role in improving railway transportation in order to move troops and equipment. Taylor purchased stock in other coal companies and iron manufacturers and invested in other industries, such as zinc mining and manufacturing, further diversifying his holdings in businesses that were fueling the country’s growth as an industrial power.

Throughout his career, Taylor invested in insurance companies, many of which provided underwriting for the companies in which he was a shareholder. In 1854, Taylor put money into Cyrus West Field’s venture to lay a cable across the Atlantic, and in 1866 he saw his decision to back that enterprise come to fruition with the successful installment of a transatlantic cable. When Fields’s Anglo-American Telegraph Company merged with Western Union Telegraph Company in 1866, Taylor became a director of this company.

This diversified portfolio of investments generated increasingly large profits for Taylor. By the mid-1850’s his annual income exceeded $250,000; a decade later it had risen to $1.4 million. These figures do not take into account the value of his investments, which ran well into the millions of dollars. He always had significant funds available for investment because he and his family lived comfortably but modestly. He did move several times to increasingly fashionable houses, eventually building a mansion on Fifth Avenue near Eighteenth Street in New York City and a vacation home in Long Branch, New Jersey. Nevertheless, his annual living expenses never exceeded $100,000, leaving him as much as $1 million in new income each year to loan out at interest or purchase stocks and bonds in companies he thought showed promise.

Although he was never a prominent figure on either the social or the political scene, Taylor occasionally became involved in both arenas. From time to time he donated modest sums and sometimes lent his name to committees raising funds to support civic causes. During the Civil War he was instrumental in getting the New York banking community to loan money to the federal government in order to support the war effort. Sadly, his involvement as a member of an audit committee in 1870 tarnished his reputation. One of three prominent financiers asked to examine the books of the city of New York just prior to an important mayoral election, Taylor provided an endorsement for the current administration, which had been portrayed by the media as exceedingly corrupt. He and his fellow committee members were immediately pilloried in the press as stooges of the Tweed Ring and Tammany Hall, which was believed to be controlling politics in the city for its personal profit. Even Taylor’s reputation as an honest tradesman, financier, and industrialist could not save him from opprobrium.

Legacy

Estimates of the value of Taylor’s estate made at the time of his death in 1882 varied widely, from a low of $30 million to a high of $50 million. Later valuations suggest the number was closer to $40 million (the equivalent of approximately $40 billion in 2000). Just before he died, Taylor donated approximately $270,000 to establish a hospital in Scranton, Pennsylvania, to care for workers at the Delaware, Lackawanna, & Western Railroad and the Lackawanna Iron & Coal Company. The remainder of his fortune passed to his wife and children.

His greatest legacy as a businessman, however, was his development of City Bank into one of the largest and most important financial institutions in New York City. From the foundations put in place by Taylor, this organization continued to grow in size and influence throughout the twentieth century. By the twenty-first century, the bank had become Citibank, one of the world’s leading financial institutions.

Bibliography

Beckert, Sven. The Monied Metropolis: New York City and the Consolidation of the American Bourgeoisie, 1850-1896. Cambridge, England: Cambridge University Press, 2001. Briefly describes Taylor’s career in the context of a larger examination of the rise of the wealthy class in New York City.

Cleveland, Harold, and Thomas Huertas. Citibank, 1812-1970. Cambridge, Mass.: Harvard University Press, 1985. Detailed history of the bank that Taylor ran for decades; outlines his contributions in making it a giant among American financial institutions and discusses his management philosophy.

Hodas, Daniel. The Business Career of Moses Taylor: Merchant, Finance Capitalist, and Industrialist. New York: New York University Press, 1976. Comprehensive biography of Taylor describing in detail his career and contributions to the business life of New York City and the nation.

Johnson, Hazel J. Banking Alliances. River Edge, N.J.: World Scientific, 2000. A brief summary of Taylor’s career at City Bank and his efforts to diversify his personal holdings is included in a volume outlining the growth of America’s financial institutions.

Kessner, Thomas. Capital City: New York City and the Men Behind America’s Rise to Economic Dominance, 1860-1900. New York: Simon & Schuster, 2003. Explores the significance of Taylor’s achievements within a larger examination of the rise of the United States as a world economic power.