Alex. Brown & Sons--Second, Third and Fourth Generations

Chapter Five

Alex. Brown & Sons—Third Generation in Baltimore


George Brown (second generation) kept up his partnership in all the Brown family firms until 1852, when he relinquished Brown Brothers & Co. in New York and Philadelphia and Brown Shipley business in Great Britain. In Partners in Banking, John A. Kouwenhoven states he sold his interest in firms headed by James and William in 1839, and they also relinquished their partnership interests in Alex. Brown & Sons. George did, however maintain an interest in the Philadelphia branch until 1859.

George then focused all his activity on the Alex. Brown & Sons firm in Baltimore, training the youngest son, George Stewart (G.S.) Brown, to eventually take over management. G.S. became a partner with his father in 1856, but was not healthy enough to take over fully, leaving much of the business activity to William H. Graham—the husband of his sister, Isabel Brown. They worked closely together after George Brown's death in 1859.

The Southern Strain

The years during and after the civil war caused a strain between the original Alex. Brown firm and the Brown family living north of the Mason-Dixon Line. Kouwenhoven (p. 126 of Partners in Banking) relates that after George Brown retired in 1839, he had kept Alex. Brown & Sons alive for his son, G.S., though relatively inactive. The firm moved to the second floor of the building, allowing a branch of the New York Brown Brothers & Co. to take the ground floor offices. Alexander Brown had trained his brother's sons years earlier, and they had followed James Brown to New York in the mid-1820s, one cousin, Stewart Brown, becoming James' partner. As war approached, Brown Brothers & Co. assigned Stewart's half- brothers — John N. Brown and J. Harmon Brown—to work at its Baltimore branch of Brown Brothers on the ground floor of Alex. Brown's building. George Brown's son-in-law, William Graham, was the branch's manager, while acting also on behalf of Alex. Brown, representative agent for the New York bank. Graham took his orders from James in New York, rather than from Alex. Brown & Sons.

No wonder George had lost interest in banking. Southerners were bitter. They had developed a way of life which had become alien to those merchants from northern cities who were attempting to declare that way of life illegal and extinct. The Brown family was not immune from the dissension. James and John Brown had grown up in Baltimore, but had become businessmen in the same cities which were now warring against the men with whom their brother George engaged in business. One of those men was a farmer named John Merryman (also a dealer in fertilizer), who owned an agricultural estate called Hayfields in the region near Cockeysville. According to "Ex Parte Merryman," Maryland Historical Magazine, Dec 1961, pp.384-398:

On May 25, 1861, U.S. Soldiers arrested John Merryman at his home "Hayfields" in Cockeysville, Maryland. He was a lieutenant in the Maryland State Militia who had (under orders from the Governor) burned rail bridges north of Baltimore to prevent the passage of northern troops through the city. The army confined Merryman at Fort McHenry, and he was held without charges and denied legal counsel.

Hearing of Merryman's plight, Chief Justice Taney intervened. He issued a Writ of Habeas Corpus to Fort McHenry's commanding officer, Major George Cadwalader. However, citing military orders from the President, Cadwalader had the Writ refused at the Forts outer gate. Taney's written opinion, known afterwards as "Ex Parte Merryman," stated that only Congress has the power to suspend the Writ, and then, only in cases of extreme emergency. He admonished the President for overstepping his Constitutional limits; as he had no right to suspend the Writ.

Lincoln read Taney's opinion, but decided not to honor it. He felt the state of affairs warranted emergency action, and since Congress was not in session, he had to act on its behalf. In response to Taney's opinion, Lincoln wrote, "Are all the laws but one to go unexecuted and the government itself go to pieces lest that one be violated." As the war progressed, the arrests continued, and Lincoln suspended the Writ as far north as Maine. On March 3, 1863, Congress authorized the President to suspend the Writ.

In the minds of Lincoln's supporters, these actions were necessary to preserve the Union, and essential to the survival of the United States. The Southern leaders, however, condemned Lincoln, calling him a dictator and a man who would stop at nothing to gain total power.

Was all this necessary? Was he a dictator, or were these actions necessary to hold together the country in its most perilous hour?... (See also Brian McGinty, Lincoln and the Court, pages 66-88.)

Fourth Generation in the Post-War South

From Baltimore: Its History and Its People, Vol. II, by Clayton Colman Hall

Between the war years of 1856 and 1865 the Brown Brothers & Co. office in New York sent its own representatives to Baltimore while George's eldest son was in the military. Having served as an officer in the civil war, Alexander Davison (A.D.) Brown seems to have had no interest in banking after his return from battle. George's two daughters Grace and Isabel, had married bankers, and Isabel's husband, William Graham, came into the firm to assist his father-in-law and ultimately preserve the bank for the youngest son, George Stewart Brown.

Needless to say, 1861 was an extremely trying time for normal business activity in Baltimore. George Brown, had died two years earlier, on a year after George Stewart Brown's wife, Harriet Eaton Brown, gave birth to Alexander (photograph), their only son. After the civil war ended, Maryland's Governor Thomas Swann, who had been an early director of George Brown's B&O Railroad, appointed George S. to serve as paymaster for the state, a position which continued for many years. He was also an officer in several corporations, including the Havana Steamship Company.

George Stewart Brown's client list contained many who were descendants of Alexander's earlier clients who had invested in the bank of the United States, hoping to support the cause of the early Federalists. Charles J. Bonaparte, mentioned earlier as grandson of William Patterson, one of Alexander Sr.'s most important clients—would eulogize his friend when he died in 1890. Bonaparte and G.S. Brown had organized a Reform League in Baltimore, following the lead of Theodore Roosevelt in New York in advocating civil service reform. Bonaparte would be appointed Secretary of the Navy in 1905 and later Attorney General in Teddy's administration which ended in 1909.

Since the Browns were Presbyterians and his mother, formerly Harriet Eaton, had been born in New Jersey, it was natural for Alexander to attend Princeton. He graduated in the class of 1878 at the age of nineteen. After traveling to Europe, Alexander joined the bank, becoming a partner on January 1, 1882.

How Alex Met Bessie

Seven months later he traveled to Liverpool, England, boarding the S. S. Cunard in New York; also aboard the ship was General Charles Price Montague and his family—Bessie, Kate and William Ivanhoe Montague, who on their return trip to Baltimore attended a family reunion in Hadley, Massachusetts. One year almost to the day after boarding the Cunard, Alexander would marry Bessie Montague—one of the "big five," the five prettiest girls in Baltimore.

An announcement of their marriage on July 3, 1883 appeared in the Philadelphia Times, stating:

Baltimore - July 3. Miss Bessie Montague and Alexander Brown, Jr., were united in marriage this morning at Christ Episcopal Church. The bride has been an acknowledged belle here for two seasons. She is a daughter of General Charles P. Montague, a retired capitalist. Mr. Brown is a son of General George S. Brown, of the banking firm of Brown Brothers.

Only two years after Alexander's marriage, his uncle William Graham died suddenly, followed in 1890 by his father, thus leaving Alexander Brown as the highest ranking family member in the bank, if not the most experienced. His 1883 marriage to the southern beauty from Virginia would serve to link him to the Warfield banking family through his wife's cousins. Solomon Warfield's bank, the Continental Trust, was situated at Calvert and Baltimore.

Upon George Stewart's death, management of the bank, located at 135 E. Baltimore--the corner of E. Baltimore and Calvert Streets, fell into Alexander's hands. He had become a partner of the firm in 1882 and would be assisted for a time by William Graham Bowdoin, William Graham's nephew, who died in 1905.

Click to enlarge

George Brown had built a residence on Cathedral Street, and another would go up in the same block for George Stewart around 1850. The 1860 census indicates that, after their marriage, William and Isabel Brown Graham lived with her widowed mother in the home designated as 704 Cathedral, while George Stewart and Harriet were next door at #712 with daughter Harriet Stewart Brown, who would grow up to marry first Thomas Suffern Tailer and, after his death, C. Ledyard Blair.

Click to enlarge.

George's residence would pass to their son, Alexander, who grew up there and where he continued to live for a time after his wife, Bessie Montague Brown, died in 1930. At some point just prior to Harriet's marriage to T. Suffern Tailer of New York in 1909, Alexander had built a ballroom "at the rear" of their mansion (see clipping to the right).

Even before Bessie Montague Brown died in 1930, the couple had moved permanently to their country estate, Mondawmin, north and west of Druid Park, where Alexander died in 1949. Many years later the Cathedral Street residence would become home to Baltimore's school for the arts, after first being acquired around 1924 by the Catholic order of Knights of Columbus and called Alcazar Hall. There was a swimming pool in the basement by that time. The brownstone at #704 would be rented out or sold long before 1924. From 1933 to 1935 it was the residence of acerbic Baltimore journalist, H.L. Mencken, and his wife until her death.

The Montague/Warfield Connection

Mrs. Alexander (Bessie Montague) Brown, was a first cousin to Alice (or Alys, as she preferred) and Bessie Latane Montague, the daughters of her father's brother, William Latane Montague. Alys would marry Teackle Wallis Warfield and give birth to Bessie Wallis Warfield who would, in 1937, scandalize the British royal family and the world by marrying England's King Edward VIII, after herself being twice divorced. By then Mrs. Alexander Brown, who had hosted a reception for Wallis when she was much younger, had died, though her husband was still alive.

William H. Graham had been born into an old Virginia family with ties to George Washington, but his mother, Lavinia Upshur Teackle, chose to marry a seagoing merchant from Ireland rather than one of Virginia's aristocrats. The Teackle blood in Graham's veins had no family connection to Teackle Wallis Warfield, who had simply been named for a political crony of his father, Daniel Warfield. As mentioned earlier, Alice (Alys) Montague, and her sister Bessie (Mrs. D. Buchanan) Merryman, were daughters of William Latane Montague whose niece became the wife of Alexander Brown, the only son of George Stewart Brown.

George Brown's Children and Grandchildren

The Brown Pattern: Newest Technology for Wealthiest Investors

Chapter Four

Banking Clients in the Second Generation

George, the second of Alexander Brown's sons, was born in 1787 and would remain in Baltimore all his life, first assisting his father in the banking and foreign exchange business and then branching out into establishing companies with his banking clients. George was named president of Alex. Brown & Sons upon Alexander’s death in 1834. When George died a quarter century later—panegyrically praised in his obituary as “the wealthiest man in Baltimore”—he would be succeeded, not by one of the elder sons, but by his youngest son, George Stewart Brown, whose task it would be to steer the Baltimore bank through the difficult years of America’s civil war. But that's getting ahead of ourselves. George had to steer his father's bank through the rough waters that followed the policies of President Andrew Jackson, whose greatest enemy was central banking and whose policies are said to have created the Panic of 1837.

The Brown family bank was able to recover from that recession by receiving a loan from the Bank of England, negotiated by Joseph Shipley, their partner in W & J Brown & Co. and Brown Shipley & Co. Alex. Brown & Sons security its payment of this loan by pledging as collateral the "protested bills of exchange" notes to the Bank of England at a very discounted rate, according to Joseph Shipley's letter. Had the loan not been repaid, the Bank would have had recourse against the promissory notes, if they could be collected. As long as the Bank of the United States was operating, all government funds were on deposit in it, a fact which made the government less nervous about speculation and inflationary lending.

However, when Jackson withdrew the deposits from that bank and spread money into the frontier banks, it stimulated "reckless extension of credit and wild speculation" in loans made to build infrastructure projects that had no cash flow tied to the loan's repayment -- many times the amount of deposits held in reserve. Consequently, when notes went into default, the holders lost whatever had been paid for them unless the U.S. Government was willing to pay them off in specie.

As losses mounted, the fear was that the United States would suspend specie payments. That did not happen, as the trade deficits owed to other countries as a result of discounted bank notes held abroad were covered by the federal government. A debate in the U.S. Senate between Henry Clay and John C. Calhoun clarified both sides of the issue of whether or not the government should involve itself in banking. That debate still remains today.

George Brown’s erstwhile banking client, Charles Carroll, notable in his late years as the “last surviving signer of the Declaration of Independence” died four years after setting the foundation stone for the B & O Rail Road on land west of Baltimore called Mount Clare.[2] Nevertheless, George would find other wealthy patrons to replace Carroll—persons in need of financial advice and management, investors in need of an enterprise that could produce greater income than a deposit in a savings bank.

The Catons of Brookland Wood

Carroll’s eldest daughter Elizabeth, who had married Englishman, Richard Caton, in 1786 and inherited the 2,100-acre Carroll property known as Brooklandwood (or the variation, Brookland Wood) nine miles north of Baltimore, had been known to accompany George Washington to the races during colonial days, before her marriage. [3]  

The Carroll family were close to George Washington.

The excerpt above, from an article called “Old Baltimore Families,” ran in the December 30, 1879 New York Times, and also described Elizabeth Carroll's marriage as follows:

Louisa Caton

Richard Caton, who married the eldest daughter of Charles Carroll of Carrollton, had four daughters—Marianne, Elizabeth, Louisa Katharine, and Emily. Marianne married first Robert Patterson, and afterward, on Oct. 25, 1825, Richard Colley, Marquis of Wellesley, the eldest son of Garrett, the first Earl of Mornington. The Marquis was Lord-Lieutenant of Ireland, Governor-General of India, and the elder brother of Arthur Wellesley, the Duke of Wellington. Elizabeth married Baron Stafford, and Louisa Katharine married first Sir Felton Bathurst Hervey, Baronet, and after his death, in 1828, she wedded Francis Godolphia [sic] D’Arcy, the seventh Duke of Leeds. Emily married Mr. Mactavish, for a long time the British Consul in Baltimore, and father of Charles Carroll Mactavish, who married a daughter of the late Lieut. Gen. Winfield Scott.

Brooklandwood—old and new

Mrs. Caton’s brother, Charles Carroll, Jr., married Harriet Chew, daughter of Pennsylvania's Chief Justice Benjamin Chew (“a man of loyalist proclivities”). Harriet Carroll's sister Margaret was the wife of Colonel John Eager Howard and lived near the Carrolls on an estate called Belvedere.

Both the Howard and Carroll families were intimately acquainted with President George Washington, who was said to be a frequent visitor to that area of Maryland before the revolution. Washington was, in fact, known to be “extremely partial” to Elizabeth "Betsy" Carroll, “the reigning belle at Annapolis, and Washington often visited her in his post-chaise with four horses, accompanied by Miss Custis and his retinue of servants.” Col. Howard later served as governor of Maryland, then Senator, and declined President Washington’s appointment to serve as Secretary of War.

The Carrolls and Richard Caton were involved in numerous land deals and business transactions with others in the Baltimore area before and after 1800—including the Oliver brothers wholesalers, with whom Stewart Brown was engaged in West Indies trade business. The Carroll family of Baltimore was not only closely tied to the Carrolls of Annapolis, Maryland, but maintained close connections to the Irish aristocracy in Dublin and other parts of Europe, especially French Catholics. This fact is best shown by reference to the marriages made by the daughters of Mary Carroll Caton. 
 

Jerome Napoleon-Patterson

Marianne Caton's husband was Robert Patterson, son of William Patterson and brother of George Patterson of Springfield, as well as the brother of Elizabeth ("Betsy") Patterson. Betsy married Jerome Bonaparte, König von Westphalen, in 1803, the same year Thomas Jefferson bought Louisiana from France. The marriage would be annulled by Emperor Napoleon two years later, in order for Jerome’s brother, Napoleon, to unite the Bonaparte family of France with the Hanoverian royal family in Great Britain.

In 1808 Jerome did marry the granddaughter of the Princess Royal[4]—King George III’s sister! Catharina Frederica of Württemberg was the daughter of Prince Frederick and his first wife, Duchess Augusta of Brunswick-Wolfenbüttel, whose stepmother since 1797 had been Charlotte, the Princess Royal. When Napoleon Bonaparte defeated this province in southwestern Germany (Holy Roman Empire), he named Catharina's father its king, then demanded that Jerome marry the king's daughter to seal the alliance, much to the chagrin of the American Patterson family.

Notwithstanding Napoleon’s unilateral declaration of annulment, Elizabeth, gave birth to a son, Jerome Bonaparte "Bo" (1805-1870), reared in Baltimore and educated at Harvard (Class of 1826). After his marriage to Susan May Williams, daughter of Benjamin May Williams—another of the original investors of the B & O in 1827—Bo and his wife would have two sons, Charles Jerome and Jerome Napoleon Bonaparte. Charles J. Bonaparte would be named Secretary of the Navy and Attorney General under President Theodore Roosevelt.

Williams ancestry

[Side note from author: a Texas connection] Benjamin Williams was the son of Captain Joseph Williams and Susanna May born in 1767 in Roxbury, Massachusetts. Benjamin's sister Martha married a distant relative named William Williams in Roxbury, becoming the parents of Captain H. Howell and Nathaniel Felton Williams. Howell moved to Providence, R.I., while Nathaniel relocated to Baltimore and became a commission merchant before the War of 1812, eventually named to be customs collector of the Port. Howell's son, Samuel May Williams, and most of his siblings spent time in Texas, both before and after the revolution against Mexico in 1836. A brother, Henry Howell Williams, was appointed Texas consul in Baltimore in 1838 and moved to Galveston in 1842 to manage the McKinney & Williams commission house Samuel had established. Their youngest brother, Nathaniel Felton Williams [II], named for the uncle in Baltimore, after his first wife died, married a daughter of this uncle, then took over the business affairs of his cousin/wife's father. These brothers were first cousins of Susan May Williams Bonaparte.

Elizabeth Patterson, mother-in-law of Susan May Williams Bonaparte, became a cynical fixture in Baltimore society and lived to the incredibly old age of 105. Though a woman of great wealth, she resided in a boarding house operated by Miss Gwynn on Cathedral Street, the same street on which Alexander Brown and his wife resided. In fact, she also attended the same church as the Brown family, also the church attended by Daniel Coit Gilman, President of Johns Hopkins University.

Why Baltimore?

Chapter Three

"President Washington first took office in New York City, but, when reelected in 1792, the capital had already moved to Philadelphia where it would remain for a decade. Fittingly, Jefferson was the first president to be inaugurated in the new and lasting capital of Washington, D.C. in March 1801."

See website of Independence Hall Association.

Baltimore was the closest city to the new capital of the United States, carved out of the states of Maryland and Virginia, according to Andrew Ellicott's survey. Washington, D.C., as it was called, was then only a "swampy location" north of the Potomac River and east of the historic city of George Town in Maryland. While about 5,000 transients had taken residence in the new seat of government by 1800, the population of Baltimore had doubled in the last decade of the 18th century to more than 26,000 people. Thanks largely to the efforts of merchant-turned-banker Alexander Brown, by 1850 Baltimore had become the leading foreign exchange center for trade in the United States.[1]

Alexander Brown, having spent many years as an auctioneer in a Belfast linen market, in 1800 followed brothers Patrick and Stewart to America. Importing Irish linens from his Irish trading center, he soon expanded into a variety of other commodities that passed through the harbor in Baltimore.

He loaned out a portion of his profits from linen sales, clearing drafts and bills of lading for other merchants whose goods sat in the harbor awaiting payment, and before long his importing business had become a private bank. With surplus funds on hand for investment, he sought ought other wealthy men in the area to join with him to put their capital into the most promising technology of that day. These aspiring venture capitalists in Baltimore are worth mentioning below.

Charles Carroll, "the Signer" 

Charles Carroll setting the stone for B&O

In 1800, the year Alexander Brown arrived in Baltimore, the city’s wealthiest, and most eminent, citizen was Charles Carroll, the only Catholic signer of the Declaration of Independence, who had retired from politics the year Brown arrived. Until his death in 1832, Carroll focused on business affairs, becoming:

one of the founders of the Chesapeake and Ohio Canal Company and [he] invested in the Bank of Maryland, the Bank of Baltimore and the First and Second Bank of the United States. He held many shares in canal, turnpike, bridge and water companies in the Washington-Baltimore regional area. He purchased $40,000 of state-backed securities to build the Baltimore and Ohio Railroad, serving on its first board of directors.

Charles Carroll, a major shareholder in the Bank of the United States founded in Philadelphia, likely requested Alexander's assistance with his banking business in Philadelphia. As a result, Alexander stationed his two youngest sons there to assist Baltimore clients as well as handle business at the Philadelphia port. There they organized a new private bank, Brown Brothers & Co., in 1818.

A year earlier construction of a man-made canal which would stretch from the easternmost point of Lake Erie across to New York City's port, had begun and by 1825 would link the "western" states bordering both the canal and Lake Erie to the port at New York city. The headquarters of Brown Brothers & Co. was soon relocated by James Brown in New York to take advantage of the ever-increasing shipping trade there. Back in Baltimore, the original bank took bold steps in recognizing another technology which Alexander and George Brown hoped would allow more trade to be carried by land rather than by ships--the first rail road in America.

The Baltimore & Ohio Rail Road Company, in which Charles Carroll invested heavily, was organized in 1827 in the home of Alexander’s second son, George Brown, who served as its first treasurer. It was Carroll who laid the railroad’s foundation stone in 1828.[1] The railroad was a bold attempt by Alexander and George, who remained in Baltimore, to capture some of the western trade for their city's port. According to research cited by photographer John Gensor:

Meanwhile, at the busiest harbor in the country, Baltimore, its wealthy shipping merchants are alarmed at the canal craze that was taking place. Not only was Washington building a canal to get the western trade to the ports of Georgetown and Alexandria, but Philadelphia was also building one, linking itself to Pittsburgh to get the western trade for its port. Also, the Erie Canal construction begun in 1817 would also siphon off the western trade to New York City. If they did nothing, all trade from the west would start going to other harbors and none to theirs. The only river running into Baltimore was the Patapsco River and the water flow of this river was not enough to sustain a canal operation. Its source was a spring on top of Parrs ridge at Mt Airy, Maryland, just 36 miles away. The freight hauled by a Conestoga wagon over the Maryland road systems would be mediocre to what one canal boat could haul. But what could they do to save Baltimore’s port? Make a wagonway using a tracked road for the wagons instead of them using the dirt gravel roads?

It was the experiments with a "road of rails," to compete with the canal system that led to the incorporation of the Baltimore and Ohio Railroad in George Brown's home in 1827 where Philip E. Thomas shared his vision to other investors, many of whom like he and Brown, were either officers or directors of the Mechanic's Bank. It seems much of the ideas had come from England, where they had been previously explored by Alexander Brown's eldest son, William, in 1824 who wished to connect Liverpool to Manchester. The B&O would use the concept to connect the Potomac to the Ohio River.

The Carroll and Caton Family

Charles Carroll's daughter, Mary (born 1770), had been leaning toward marrying her cousin Henry Carroll of Duddington, son of her father's cousin Daniel Carroll--like Charles a member of Maryland's Senate to the House of Delegates. However, in 1787 she chose instead Richard Caton, an Englishman from Lancashire, and they would raise four daughters who would, as they say, marry well. Those marriages were described in Sisters of Fortune: America's Caton Sisters at Home and Abroad, a book by Jehanne Wake.

The Catons' daughter Maryanne in 1806 married Robert Patterson, whose sister, Betsy Patterson, was married to Napoleon's younger brother, Jerome Bonaparte, until, that is, his emperor brother had the marriage annulled. William Patterson is said to have been the second wealthiest man in Baltimore at the time.

William Patterson

In 1816 William Patterson, chairman of the newly chartered Baltimore Exchange Company, was another important associate of Alexander Brown. The Exchange Building housed the U.S. Custom House as well as Baltimore's branch of the Bank of the United States, established there in 1792, shortly after the war against Britain had ended. Patterson had been "a vital supplier of General Washington’s impoverished army during the early days of the war for independence," according to Jack White, a blockade runner for the patriot cause, having arrived in Philadelphia from Ireland in 1766:

When the British set out to prevent arms and powder from reaching the colonies at the beginning of the revolution, Patterson invested everything he owned and took off with his ships for France in hopes of arming the rebellion at a time when Washington claimed he hadn’t enough powder to fire a salute. First he supplied Washington’s forces from the Dutch island of Saint-Eustache and then from the French possession of Martinique. He returned to America in 1778 with over a hundred thousand dollars, married 17-year-old Dorcas Spear, settled in Baltimore, bought property, and built ships. He became one of the wealthiest men in Maryland, second only to Charles Carroll of Carrollton, Carroll County namesake and the only Catholic to sign the Declaration of Independence. (Patterson’s son Robert would one day marry Charles Carroll’s granddaughter, Mary Caton.)

When the British set out to prevent arms and powder from reaching the colonies at the beginning of the revolution, Patterson invested everything he owned and took off with his ships for France in hopes of arming the rebellion at a time when Washington claimed he hadn’t enough powder to fire a salute.
First he supplied Washington’s forces from the Dutch island of Saint-Eustache and then from the French possession of Martinique. He returned to America in 1778 with over a hundred thousand dollars, married 17-year-old Dorcas Spear, settled in Baltimore, bought property, and built ships. He became one of the wealthiest men in Maryland, second only to Charles Carroll of Carrollton, Carroll County namesake and the only Catholic to sign the Declaration of Independence. (Patterson’s son Robert would one day marry Charles Carroll’s granddaughter, Mary Caton.)
- See more at: http://www.sykesvilleonline.com/history/182-the-blighted-hopes-of-george-and-prudence-patterson#sthash.C0ZDRB7X.dpuf

a vital supplier of General Washington’s impoverished army during the early days of the war for independence. - See more at: http://www.sykesvilleonline.com/history/182-the-blighted-hopes-of-george-and-prudence-patterson#sthash.C0ZDRB7X.dpufThe Baltimore Exchange began business in 1820, with Alex. Brown & Sons being one of the approved traders in a long list of merchants. It too was an unsuccessful operation which dissolved within ten years.

Until the Bank of the U.S. met its demise in 1813, Brown's close business associates, Carroll and Patterson, were also shareholders of the central bank set up by Alexander Hamilton. Rechartered again in 1816, the Second Bank of the U.S. saw a number of Baltimore's businessmen indicted for fraudulent activity, especially in connection with Dennis A. Smith and the Mechanic's Bank in that city. Alexander Brown, who first became a director of the bank in 1807, was called as a witness against Smith, who had been central to a scheme with

stock taken in such a way 'that a Baltimore clique, taking advantage of a rule about voting, got votes enough to control the organization. By subscribing as attorneys, they got 22,187 votes out of 80,000, and they subscribed only $4,000,000 out of $28,000,000.'[2]

Thus this "clique" (which included Alex. Brown, his son George, and, later, his grandson, George S. Brown), received almost 36% of the branch's votes, while only putting up about 14% of the capital. The goal was obviously to keep those who supported federalist policies from having control of the Baltimore branch of the Second Bank of the U.S.

John Thomas Scharf, author of History of Baltimore City and County, from the earliest period to the present day (1881), indicated that one of the most active purchasers of the bills issued by the Baltimore branch of the Bank of the U.S. was an institution called the Bank of Maryland, which became insolvent in 1834 upon the revocation of the charter of the Bank of the U.S., and that Alexander Brown was among its creditors appointed as a committee of receivers, with William Patterson chairman.

This same Baltimore branch of the Second Bank was integral to the 1819 landmark Supreme Court case, McCulloch v. Maryland, in which the Court interpreted the Constitution's "necessary and proper" clause to expand the listed powers of Congress under the Constitution in favor of federalism: i.e., the federal government had the implied authority to pass legislation not expressly provided for if deemed necessary in executing the powers that were so authorized.

The information below indicates stockholder information regarding the Second Bank, widely disseminated at the time, indicating the shareholder percentages by state, as well as by foreign country, in January 1832. The U.S. government owned 70,000 shares, while 470 foreigners owned just over 84,000. There were 3,602 "domestic" stockholders who controlled about 195,600 shares in the bank that year. Charles Carroll was the second largest with 2,633, falling significantly short of Stephen Girard's 6,331 shares in the bank.

The Brown banks and clients Carroll and Patterson owned significant stock in Bank of U.S. (click to enlarge).

---

ENDNOTES:

[1] Gary L. Browne, "Business Innovation and Social Change: the Career of Alexander Brown after the War of 1812," Maryland Historical Magazine 1974 69(3): 243-255.
[2] Theodore Dwight Woolsey, The First Century of the Republic: A Review of American Progress (Harper & Brothers:1876), 244.

An Octopus is Born

Chapter Two

The branches of the family of Alexander Brown stretch like the tentacles of an octopus into every conceivable type of money-making enterprise growing out of the Anglo-American establishment that existed in 1800, a generation after America's revolution against the the colonial regime. In order to understand how the original network has grown, we must return to the Liverpool of that day and meet the members of the linen-trading network who became so prosperous. We will study the Browns living in the Baltimore region, the investments made with the textile profits, and the aristocratic Southern lifestyle they established in Maryland and Virginia.

The American Brown brothers

Alexander Brown was born in Ireland only a generation after the birth of Mayer Amschel Rothschild in Germany, but both men followed a very similar pattern in establishing their family banking businesses.  Rothschild having five sons and Brown four, each man created diverse branches of his bank in order to capitalize upon a knowledge of currency exchange and commodity trading over a wide expanse of territory, covering two or more continents.

Alexander Brown, from Ireland to Baltimore

What was to become Deutsche Banc Alex. Brown, Inc. resulted from a merger in 1999 between the German bank and a private investment bank established in Baltimore, Maryland, by Alexander Brown, who first arrived in America in 1800. His parents were William and Margaret Davison Brown, of Ballymena, Ireland where Alexander was born in 1764. His birth came 120 years after Scottish linen weavers had begun to settle around Belfast in 1641. Fifty years later the population exploded when the government’s encouragement of Protestant Northern Ireland to further develop its linen trade led to an influx of Huguenots who had fled France during their persecution by Louis XIV. For more than a century the flax and linen industry would be Northern Ireland’s main source of wealth.

Before leaving Ireland, Alexander worked as an auctioneer in the linen market in Belfast where he had a profitable business. He joined his brother Stewart Brown in Baltimore, leaving behind in London another brother who worked with Alexander in an import-export business.  

William Brown, Alexander’s eldest son, would return to England after living ten years in Baltimore, and he set up a brokerage firm that operated first as W. and J. Brown and later as Brown, Shipley & Co.  A large part of William’s role in the business would be to find wealthy British investors to buy the commercial paper issued in America.

Alexander’s linen trade did so well in Baltimore, that his two youngest sons, John and James, moved first to Philadelphia—James later moved to New York—to open a private investment bank called Brown Brothers & Co. John A. Brown’s first wife and an infant died in 1820 and he returned to Baltimore for several years while his father was engaged with others there in setting up the Board of Exchange. 

In 1823 John married Grace Brown, daughter of Dr. George Brown of Baltimore, and he drifted out of banking during the panic of 1837, leaving James to consolidate the Philadelphia concern into his New York office. The Philadelphia office had initially been opened, it seems, primarily to accommodate clients in Baltimore who had business interests in the former capital city, which had housed the Bank of the United States. Once the bank ceased operations, thanks to President Andrew Jackson, John A. Brown continued in business related to dry goods until 1839.

By 1825, when the New York office opened, America had begun to boom. The opening of the Erie Canal resulted in New York’s becoming the dominant commercial and financial center in America. In addition, the country had paid off the debt created to fund its wars—thus increasing the marketability of new stock and bonds being issued by the Brown family and their competitor, George Peabody. William Brown was able to secure placement of the paper issued by his father and brothers through his contacts in Britain.  

How do we know who bought the stock and bond issues? One way is to examine William’s family tree. Researchers have discovered that banking families frequently marry their not-too-distant cousins and relations of their father’s business associates. It helps to keep the money—and the secrets—in the family. Researching genealogies is, therefore, a very useful tool in understanding confidential financial relationships.

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William Brown, Liverpool

William has been described as a somewhat staid, even pompous, man who, though elected to Parliament to represent Lancashire, never achieved popularity among his constituents. His wife, formerly Sarah Gihon, was the daughter of Alexander Brown’s Belfast linen supplier, a cousin. William and Sarah reared two children to maturity:

Courtesy of Esther M. Zimmer Lederberg

• Their son, Alexander (1817-1849), grew up to marry his “American cousin,” Sarah, the daughter of William’s youngest brother James. 
• Their only daughter, Grace, married John Hargreaves, of the same name as the inventor of the spinning jenny a century earlier (the very invention which had resulted in the Brown family fortune, arising from the boom in the linen industry).

The Brown name survived under Alexander’s three sons:

• Sir William Richmond Brown (1840-1906), who inherited the title granted to William upon his grandfather’s death in 1864.
• James Clifton Brown (Colonel), a military man, who died in 1863.
• Sir Alexander Hargreaves Brown (1844-1922), who married Henrietta Agnes Terrell Blandy, from a wine merchant family in Madeira, Spain. That marriage made him a brother-in-law of the famed Sir William Thomson (Lord Kelvin), inventor of the binnacle known to seamen as "Lord Kelvin's Balls".

The Hargreaves tree also links back to the Brown family tree by virtue of marriages between Grace Brown Hargreaves’ great-granddaughter Violet Cicely Wollaston (daughter of Ann Hargreaves Wollaston)  to Grace’s brother (Alexander’s) grandson, Douglas Clifton Brown.

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The period of time covered above began in the period of peace between the two wars against Britain and carries us up to the decade following the loss of the Presidency by John Quincy Adams to Andrew Jackson. Alexander Brown died in 1834 and was succeeded in Baltimore by son George, who died in 1859. After the death of eldest son William in England, the youngest, James, operated the banking business on his own until his own demise in 1877. In the next chapter we will review what happened in those last few years and how the bank carried on following the civil war.