Atlanta And Its Builders, Vol. 1 - A Comprehensive History Of The Gate City Of The South. Thomas H. Martin
The year 1857 was memorable for the great panic that ruined so many merchants in the larger cities of the country, closed most of the banking institutions, and plunged the masses of the people into want and distress. The panic of 1857 was felt the hardest in the north, but those cities of the South the basis of whose trade was credit, felt it severely also. Atlanta, in the full flush of her remarkable progress and prosperity, was little affected by the terrible financial stringency and business depression that was working sad havoc with other communities. We will leave Wallace Putnam Reed to tell the reason:
"The great panic of 1857, which was felt so disastrously in many parts of the union, especially in the northern states, was felt but little in Atlanta, for the reason that it was felt but little anywhere in the South. The main reason for this fact was that the cotton crop that year was exceptionally large and the price high, notwithstanding the large crop. The price of cotton was high because there was an unusual demand for it abroad, and it was thus controlled by the market price in Liverpool, England. The heavy demand for it abroad caused payments to be made in cash, and thus there was an abundant supply of specie in the Southern states, though there was very general suspension of specie payments North. The unusually large amount of specie, which that year flowed into the South, rendered it practicable for the banks of this section to avoid suspension, and thus merchants were not affected by the stringency in the money market. It cannot be remembered that any merchant failed in Atlanta during that panic.
"The above is presented as the general reason for the continued prosperity of Atlanta during that period of distress in other parts of the country. There are, however, two other reasons for that uninterrupted prosperity — one of which may be termed a special reason, and the other a peculiar reason. The former of these two was, that at that time the merchants of the South, including, of course, those of Atlanta, owed much less than the usual amounts to Northern merchants, and hence were not called upon for the payment of debts they could not pay? The latter reason was that the first merchants of Atlanta, as a very general, if not a universal thing, were so limited in their capital that they could not give credit without incurring the risk of almost immediate failure. The business they did was therefore from necessity conducted on a cash basis. Being thus compelled to transact business on a cash basis, they were also compelled to conduct it on the smallest practicable margin of profits in order to attract customers, or, in other words, they were obliged to undersell their competitors in neighboring towns and cities. By thus underselling their competitors, they soon attracted to Atlanta not only the trade of the merchants from other towns and cities, but also very largely that of the majority of private families who could pay cash for their supplies; of private families living in surrounding cities as well as of those living in the surrounding country.
"In this way was the cash basis for the transaction of business adopted and established in Atlanta, adopted from necessity and established from choice. It was so beneficial, it was so conducive to the individual interests and to the combined interests of the business men, it gave Atlanta such an impetus in the direction of prosperity, such a prestige and advantage over her rivals, that it has been adhered to, in the main, ever since, and has, in all probability, been the main principle of the city's growth and success as a community. Even up to the present time business is conducted in Atlanta either on the "spot cash" principle, or on the "cash" principle, the former plan requiring cash to be paid on delivery of the goods purchased, and the latter requiring it to be paid in thirty days. Thus long credits, always dangerous, have been avoided, and thus the city acquired and sustained the reputation of being a cheap place to trade: and thus, also, has it attracted cash customers and driven the time customers to other cities which either could not adopt, or did not believe in a cash trade, coupled with small profits and safety.
"While the remarks just made are in the main correct as applied to the retail trade and to the smaller class of wholesale dealers, yet they require slight modification when the larger wholesale dealers in dry goods are taken specifically into account. These generally give a credit of sixty days; but this slight modification has no perceptible effect on the volume of business transacted, except to increase it, and no effect on the kind of custom attracted to the city."
In the municipal election at the beginning of 1857, William Ezzard was elected mayor, and Messrs. Lawshe, Sharpe, Simpson, Holcombe, Peck, Glenn and Farnsworth, councilmen. The remaining city officers were: Clerk and tax receiver and collector, James McPherson; treasurer, Cicero H. Strong; superintendent of streets, William S. Hancock; first lieutenant of police, Willis P. Lanier; second lieutenant of police, Daniel C. Venable; clerk of the market, John D. Wells; sexton, G. A. Pilgrim; city surveyor, H. L. Currier.
On the 6th of January, 1857, before the old council went out, an ordinance was passed subscribing to $100,000 worth of the stock of the Georgia Air Line Railroad, the long talked of new line which was to connect Atlanta with Richmond, Va., Baltimore and the North by the most direct route possible. The survey extended in almost a straight line from Atlanta to Charlotte, N. C. When this conditional subscription to the stock of the Air Line road was made by the city of Atlanta, many citizens were skeptical of it being anything but a "paper railroad."
On the 13th of the same month council entered into a contract with Winship Brothers to supply the city with twenty-five lamp posts, with lamps and burners, for $500.
The inaugural address of Mayor Ezzard is interesting in throwing light upon some public matters that still concern the city of Atlanta, and in disclosing the financial status of the municipality at the opening of 1857. Extracts are taken from it in part as follows:
"In 1855 tne mayor and council entered into a contract with William Helme, of Philadelphia, for the erection of gas works in the city of Atlanta, and subscribed $20,000 to the capital stock of the Atlanta Gas Light Company. They had also contracted for the purchase of fifty streetlamps and lamp posts for lighting the streets of the city, at a cost of $1,050, which has not been paid. The stock of said company has been paid for in city bonds payable in twenty years, bearing interest at the rate of seven per cent, per annum, payable semi-annually. Early in that year the city council, thinking it doubtful whether this stock would prove to be a profitable investment to the city, and being anxious to discharge some of its debts, passed a resolution authorizing the mayor to sell one-half of said stock for the purpose of liquidating the outstanding debts of the city. Under this resolution stock to the amount of $1,000 was disposed of at par value for city checks; when, it becoming apparent that the stock would prove a profitable investment, the resolution was repealed. According to the terms of the contract with the gas company, the streetlamps were to be lighted with gas for the sum of $1,500 per annum, but as the lamps were not all in operation the first year, only $1,458.20 was demanded by the company. At the expiration of the first six months after the commencement of their operation, the company declared a dividend of four per cent, par; for the next six months a dividend of eight per cent, was declared, making the whole amount of dividend received by the city upon its stock for the year, $2,280, leaving a balance of $821.80, which has been paid into the treasury.
"In view of the fact that gas pipes have been laid down in many parts of the city which had not been supplied with street lamps, the council authorized me to contract with Messrs. Winship Bros. & Sons for twenty-five additional lamps, which has been done, the lamps to cost $500. During the summer, the citizens of Roswell, Cobb county, being anxious to have a bridge erected across the Chattahoochee river, on the road leading to this place, and having ascertained that a suitable bridge could be built for $7,000. they organized a company for that purpose, to the capital stock of which they, together with two of the citizens of Atlanta, subscribed the sum of $4,000, and the city council, having been petitioned by a large number of the citizens of this place, subscribed for the remaining $3,000 of the stock, to be paid in bonds payable twenty years after date. From the most reliable information which we were able to obtain on the subject, we believed that the tolls arising from said bridge would be sufficient to pay, not only the interest on the bonds that might accrue, but that also by the creation of a sinking fund, judiciously arranged, to extinguish the principal also by the time it should fall due.
"In compliance with the petition of a large number of our citizens, the city council passed an ordinance directing the mayor to subscribe $100,000 to the capital stock of the Georgia Air Line Railroad Company, all of which, except $1,000, is payable in bonds