Prince of Darkness

Brian Balogh: Major funding for BackStory is provided by an anonymous donor, the National Endowment for the Humanities, the University of Virginia, and the Robert and Joseph Cornell Memorial Foundation.

Ed Ayers: From Virginia Humanities, this is Back Story.

Brian Balogh: Welcome to BackStory, the show that explains the history behind today’s headlines. I’m Brian Balogh.

Ed Ayers: I’m Ed Ayers.

Nathan Connolly: And I’m Nathan Connolly.

Ed Ayers: If you’re new to the podcast, we’re all historians. Each week, we explore the history of one topic that’s been in the news.

Nathan Connolly: Brian and Ed, if I were to ask you two to name famous millionaires from the 19th century, who would you say?

Brian Balogh: Well, first I’d ask you not to, Nathan, but, if I really had to answer the question, I’d say John Jacob Astor, the real estate mogul.

Ed Ayers: I’d say Cornelius Vanderbilt. Even his name sounds like a million bucks.

Nathan Connolly: Well, that’s right. Now, those two are both famous white millionaires, but what if I told you there was actually someone else, someone just as successful, who belongs on the same breadth as a Vanderbilt or an Astor? His name is Jeremiah Hamilton, and he happens to be one of the first African-American millionaires in history. He amassed his wealth in the 19th century in New York City. He was a brilliant businessman and, like many of those businessmen, his dealings weren’t always above board.

Nathan Connolly: We’re going to start off this story off the coast of Port-au-Prince in the 1820s, in Haiti, where Hamilton undertakes a scheme of forging Haitian currency.

Shane White: A consortium of New York merchants in 1828 gets a load of counterfeit currency. Hamilton is only about 20 years old.

Nathan Connolly: That’s historian Shane White.

Shane White: He’s in charge of … He’s Black, so he’s running it down to the Black republic, Haiti.

Nathan Connolly: Right.

Shane White: Ironically, they get caught because the counterfeits are too good. There’s too much silver in the coins, because Haiti is watering down their currency as they’re being sort of …

Nathan Connolly: Squeezed.

Shane White: Screwed, basically, by France.

Nathan Connolly: Right, right.

Shane White: They’re having to pay huge, huge debts. Americans basically … A, they’re trying to make money and, B, in the back of their minds, they know they’re completely and utterly undermining the other republic in the hemisphere, the Black republic. They get Jeremiah Hamilton as their front man.

Shane White: They get caught down there and he sort of runs away, and ends up being sort of sheltered by Black fisherman around Port-au-Prince harbor for a day or two before he gets on a boat and goes back to New York City.

Nathan Connolly: Now, how did he manage to go from this experience into the world of finance?

Shane White: Well, again, you’ve got to … Finance sort of sounds really sort of highfalutin. We’ve got to remember that this is the free market, untrammeled by regulation in any way, shape, or form. You could get away with murder pretty much, financial murder, on Wall Street. He actually … Jeremiah Hamilton struggles when he first … He moves to New York City in probably 1833 or ’34 and he struggles for a bit. He actually finds his financial feet by, again, engaging in what you could argue is a very American enterprise. He over insures boats with insurance companies and then arranges to sink them and claim the insurance.

Shane White: Then, as now, many people thought that, if you ripped off an insurance company, that’s not really theft, but going to the point of insuring and then sinking boats is … Most people would concede that was over the line. In fact, the American insurance industry in New York starts to form an association, in part to stop people like Jeremiah Hamilton sort of ripping off the insurance companies.

Nathan Connolly: So you have insurance companies organizing to basically create their own regulations to keep people like Hamilton out of the game?

Shane White: Yep. There’s actually a court case in 1835 or ’36 in which one of the witnesses plaintively says, “We have met and we got a …” Not a regulation, “We’ve agreed amongst ourselves that no one will insure Jeremiah Hamilton for anything.” Hamilton had arranged through a proxy that they had insured him, and so he was getting around their regulations. It’s primitive, the way these insurance companies are associating with one another, but they’re beginning to try to regulate the industry to stop whole scale fraud, and also they get more and more involved … The insurance company has to agree on who the captain can be on boats and stuff. They’re getting more and more involved in the way the shipping business is being run out of New York.

Nathan Connolly: One of the stories, then, about the origins of regulation actually begin from these small associations, in effect.

Shane White: Yes, it does. I find it interesting that this African-American guy is involved in … These institutions, insurance companies, end up basically black-banning him, the insurance industry. Then, the secondary stock exchange later on, in 1846, it passes a regulation, tries to pass a regulation, saying anyone who buys or sells shares from Jeremiah Hamilton will be expelled from the stock exchange. These … The interesting thing is that the playing field is not level. He’s known as the Prince of Darkness, so he’s known as being Black …

Nathan Connolly: And satanic, by their estimation, I guess, in terms of the double meaning of that world.

Shane White: Yep. Yes. It’s … That’s a retrograde nickname. He had a reputation for being slippery, fast, and loose.