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real estate speculation

Frederic Tudor in 1806 Brings Cocktails and Ice Cream to the Rest of the World

In 1805, Frederic Tudor decided to make his fortune by selling ice to people in tropical climates.

Most people thought the 23-year-old was crazy, but Frederic Tudor knew something most people didn’t. His wealthy family had the luxury of an ice house, and he had experienced the joys of cold mixed drinks and ice cream in the summer. He figured he could get the rest of the world addicted to the stuff.

And so in 1806, he launched his business by sending to Martinique a brig full of ice cut from his family’s pond. He told his sales agent to give it away to bartenders.

“A man who has drank his drinks cold at the same expense for one week can never be presented with them warm again,” Frederic Tudor wrote.

His first venture failed, and so did his second, third and fourth. In the end, Frederic Tudor made his millions and revolutionized the way the world ate and drank.

Frederic Tudor

He was born in to a Brahmin family on Sept. 4, 1783, the day after the signing of the treaty that ended the American Revolution. His father, William Tudor, had studied law in John Adams’ law office, become George Washington’s first judge advocate general and started a lucrative law practice in Boston.

William Tudor liked to live large and followed the new upper-class fashion of drinking alcoholic beverages with ice. His 23-year-old son Frederic seized on the idea of bringing the luxury of ice from Massachusetts lakes and ponds to the tropical masses in the Caribbean.

In 1806, he sent his first shipment of ice to Martinique amid much derision. “No JOKE,” reported the Boston Gazette. “A vessel has cleared at the Custom House for Martinique with a cargo of ice. We hope this will not prove a slippery speculation.”

Ice turned out to be a harder sell than Frederic Tudor imagined. He was trying to sell it to people who had never once experienced anything cold. They didn’t have ice houses, and they didn’t know how to keep ice from melting. He and his partner – his brother William – lost money on the deal. William dropped out of the business, founded the North American Review and co-founded the Boston Athenaeum.

Failure

Frederic Tudor stubbornly persisted, sending another shipment of ice to Cuba. Again he lost money.

So did his father – in a real estate speculation gone disastrously wrong. Frederic Tudor kept shipping ice, losing money but learning ways to keep ice cold. Sawdust, for example, worked better than straw.

But then Frederic Tudor spent parts of 1812 and 1813 in debtors prison after his business partner swindled him.

He kept going. “Let those laugh who win,” he wrote.

He borrowed money, bought ice in Massachusetts and an icehouse in Cuba and set sail for the Caribbean. “Pursued by sheriffs to the very wharf,” he wrote. Finally, he made some money on his crystal blocks of Yankee coldness.

Smash

Frederic Tudor expanded his business to Charleston, Savannah and New Orleans, developing new sales techniques along the way.

He gave bartenders free ice for a year after teaching them how to keep it frozen in a ‘refrigerating jar’ and how to make cocktails like the Smash. He sold ice to Havana coffee shop owners and the keeper of the Tivoli Gardens after teaching them how to make ice cream.

During one mild winter, he faced an ice shortage. So he sent his ship’s captain to take a detour to Labrador and hack off part of an iceberg. Tudor also ventured to the Kennebec and Penobscot Rivers in Maine to find enough ice to ship.

In 1825 came another big turning point: Frederic Tudor met Nathaniel Wyeth, a hotel owner. Wyeth invented a horse-drawn ice plow that cut ice from ponds far more cheaply and efficiently than the laborious hand labor then used. Tudor hired Wyeth as his foreman and expanded his ice-cutting operation.

Harvesting ice

India

In 1833, Frederic Tudor gambled that a shipment of ice would survive the voyage to India. He was right. The arrival of the ice caused a sensation, especially among the colonial British administrators.

Henry David Thoreau heard about it. He watched as Tudor’s men divided Walden Pond into a chessboard pattern and cut ice into square, two-foot blocks. “The pure Walden water is mingled with the sacred water of the Ganges,” wrote Thoreau.

The same year he sent ice to India, Frederic Tudor, 50, met 19-year-old Euphemia Fenno. They married the next year and had six children.

Ice King

Frederic Tudor finally achieved the success he craved, earning the nickname ‘Ice King.’ At one point he owned ice houses in Havana, Jamaica, New Orleans, Charleston, Mobile, Ala., Calcutta, Madras, Bombay, Sri Lanka and Singapore.

But he had created a market for ice too big for one company to serve. By 1855, 12 companies shipped ice from the Boston area.

In the run-up to the Civil War, American ships carried more tonnage of ice than any other commodity except for cotton.

People had come to view ice as a necessity to preserve food and medicine. When the Civil War broke out, two-thirds of Boston and New York households received ice deliveries every day.

And in 1862, a bartender named Jerry Thomas published The Bartenders Guide, with recipes for America’s cocktails – most of which used ice.

Wenham Lake Ice

Between 1844 and the early 1850s, the remarkably pure ice from Wenham Lake in Massachusetts became a fashionable luxury among the British aristocracy. The best London hotels put up signs advertising Wenham ice. It was said you could read a newspaper through a block of Wenham Lake ice two feet thick.

Wenham Lake today

Wenham ice inspired the popularity of cocktails like sherry cobblers and mint juleps in London. No fancy dinner party was complete without it, and Queen Victoria insisted on it.

A competitor to Frederic Tudor, the Wenham Lake Ice Co., had promoted the stuff.

By 1850, Norway and Sweden began to export ice. One ice company bought Lake Oppegaard in Norway and rechristened it “Lake Wenham.”

Aftermath

Frederic Tudor died in 1864, his fortune said to amount to $200 million in today’s dollars. His estate in Nahant, Mass., became a country club. His great-granddaughter Tasha Tudor illustrated nearly 100 children’s books and received many honors for them.

The ice business thrived, with Massachusetts supplying ice around the world from ponds in Boston, Cambridge, Arlington, Ayer, Stoneham, Wakefield, Woburn, Andover and Lynnfield.

By 1880, 22 icehouses stored 30,000 tons of ice next to Jamaica Pond in Jamaica Plain. In Vermont, 5,000 men cut ice on Lake Champlain.

But artificial refrigeration eventually overtook the need for natural ice. The commercial ice maker, invented in 1854, allowed people around the world to make their own ice for cocktails and ice cream.

How To Make a Smash

Dissolve sugar in water in a cocktail shaker; add mint and spirits. Shake well with ice and strain through a fine strainer into a rocks or old fashioned glass filled with fresh ice. Garnish.

Images: Wenham Lake By Daderot. – Self-photographed, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=1029494. Ice harvesting: Cutting the cross sections with a saw–ice harvesting, Conneaut Lake, Pa. Pennsylvania Conneaut Lake, 1907. Photograph. https://www.loc.gov/item/2018652316/. This story about Frederic Tudor was updated in 2023.

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Andrew Dexter Builds Boston’s First Skyscraper, Causes First Banking Collapse

In 1807, Andrew Dexter began building the tallest building in America, a temple of finance that soared an unheard-of seven stories — and caused the young republic’s first major bank collapse.

The Exchange Coffee House

The skyscraper was the Exchange Coffee House, a product of the commercial ambitions that seized the country. It also resulted from the unregulated banking system that allowed swindlers like Andrew Dexter to flourish and fail.

The Exchange Coffee House went up in smoke nine years after it opened. People could see the fire as far away as New Hampshire and Maine. But even before the flames started, the Exchange Coffee House had caused plenty of damage. It destroyed banks as far away as the Michigan Territory.

Dexter’s failure ‘was one of the most direful events in the economic history of New England,’ wrote historian Horace White in 1911.

Andrew Dexter, Jr.

Born on March 28, 1779, in Brookfield, Mass., Andrew Dexter was named after his father, a prosperous textile merchant. He grew up in Providence, graduated from Brown and moved to Boston to take up the law. Dexter then studied with his uncle, Samuel Dexter, later named the third U.S. Secretary of the Treasury.

In 1808, he married Charlotte Morton, the daughter of Perez Morton and niece of Fanny Apthorp, who committed suicide after giving birth to Perez Morton’s illegitimate child.

Andrew Dexter by Gilbert Stuart

Coffee, a luxury beverage at the time, marked the people who drank it as cosmopolitan, as elite. As Dexter began to amass wealth, an ambition seized him. He wanted to build an enormous exchange that would serve as Boston’s financial nerve center – and serve coffee.

Gospel of Ascent

Jane Kamensky, author of The Exchange Artist: A Tale of High-Flying Speculation and America’s First Banking Collapse, explained the expansionary zeitgeist that influenced Andrew Dexter

“The gospel of ascent seeped into every sphere of life in the early republic, from farm house to schoolhouse to courthouse to countinghouse to meetinghouse,” she wrote. “And wherever it touched, aspiration took shape. In the slaveholding south and the rural north and the ever-expanding backcountry, aspiration pushed relentlessly at the horizontal: a hunger for more acres, farther shores.

In Boston, aspiration was vertical, wrote Kamensky.

Speculators and Swindlers

Back in the early days of the Republic, banks issued notes that customers could exchange for gold or silver. People conducted business by exchanging the notes at a discount, which depended on the bank’s reputation and its distance from the people doing business. A bank note that could be exchanged in Boston, for example, was more valuable to Boston businessmen than a note that had to be exchanged in Providence.

Charlotte Morton Dexter by Gilbert Stuart

Some banks were established far from commercial centers because of the difficulty in exchanging notes for specie. Speculators and swindlers bought or established banks in far-away places so they could issue notes that would take a long time, if ever, to redeem.

The discount rate was set by traders doing business in the street. Dexter intended the Exchange Coffee House to be a place where they could trade bank notes indoors. It would also have a coffee room, reading rooms, conference rooms, a hotel, dining rooms and business offices.

A Marvel

The Exchange Coffee House took two years to build. As it rose from Salter’s Court, so did Dexter’s ambition. In the end he built a vast exchange floor, a 40-by-60-foot atrium framed by pillars on each floor that grew more ornate as they rose to the ceiling. A sumptuous Coffee Room was furnished with imported mahogany furniture, velvet draperies, china from Canton and silver from the Andes. Even the privy was a marvel: It was four stories high with windows on every floor.

The Rev. William Bentley

People came long distances to see the fantastic building. The Rev. William Bentley recorded in his diary on Nov. 14, 1808:

For the first time saw the Exchange but the naked front, without anything but its own surface on the line of the street, is not capable of affording a view but of a very large building.

Exposure and Flight

There were more tales than customers. Traders preferred to do business on the sidewalk, even when it rained. Then President Thomas Jefferson’s embargo slowed commerce in New England. Dexter could rent only a third of the offices. The bar stood empty, and the hotel barely had an occupant.

That wasn’t Andrew Dexter’s problem any more. To finance his dream, he had started or taken control of the Berkshire Bank in Pittsfield, Mass., the Farmers’ Exchange Bank in Gloucester, R.I., the Penobscot Bank of Bucksport, Maine, the Coos Bank of Haverhill, N.H., and the Detroit Bank, housed in the first brick building in Michigan. He issued hundreds of thousands of dollars in bank notes while building his ever-more-grandiose skyscraper.

Nathan Appleton and other Boston merchants grew suspicious of Dexter’s ‘country’ bank notes. In 1808, they took their story to the press. Shopkeepers began refusing banknotes from Dexter’s banks. Appleton and his friends sent agents to Dexter’s far-away banks to redeem the notes that Boston shopkeepers had accepted as currency. The banks couldn’t exchange the notes for gold or silver, and the extent of Dexter’s fraud began to be realized. Dexter could no longer pay his workmen, and hundreds, if not thousands of them were wiped out.

Avoiding Disgrace

When the Farmer’s Exchange collapsed, it turned out Dexter had issued $760,000 in bank notes. The bank had a total of $86 in gold and silver on hand.

Andrew and Charlotte Dexter slumped off to Nova Scotia in 1809 to avoid prosecution. During the War of 1812 they moved to Athens, N.Y., to take advantage of that state’s lenient bankruptcy rules. By 1817, Dexter’s father had died and Dexter used his inheritance to speculate in Alabama real estate. He founded Montgomery, moving his family there in 1819. Charlotte Dexter died shortly after they arrived. Andrew Dexter continued his real estate speculation in Texas and Mexico, but died broke on Nov. 2, 1837, in Mobile, Ala.

The Exchange Coffee House had long gone by then. New owners completed it, but it never achieved the success Dexter anticipated. It then changed hands several times until Nov. 3, 1819, when a fire totally destroyed it. The remains of America’s first skyscraper smoldered for months. Three years later, another, less grand coffee house exchange was built on the site.

This story was updated in 2022.

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Flashback Photo: P.T. Barnum Turns a Jail Sentence Into a PR Coup

P.T. Barnum was so good at promoting himself he turned a 60-day jail sentence into a publicity campaign that made him a statewide celebrity.

He actually didn’t get into the circus business until he was 61 years old. He pursued a number of business and political ventures before founding the Greatest Show on Earth, including real estate speculation and a term as mayor of Bridgeport, Conn.

Barnum was born July 5, 1810 in Bethel, Conn., to an innkeeper, storekeeper and tailor, Philo Barnum, and his second wife, Irene Taylor. His father died when he was 15, leaving him to settle his debts and care for four siblings under the age of seven. Barnum went to work as a store clerk, and in 1828 set up his own fruit and confectionary store with help from his grandfather. He was soon running a successful lottery business, speculating in real estate and auctioning books. In 1831 he started a newspaper, the Herald of Freedom.

It was the newspaper that landed him in jail. Barnum published an editorial accusing a prominent local church deacon, Seth Seelye, of charging exorbitant interest to an orphan. Seelye accused him of libel. The judge – a ‘lump of superstition,’ according to Barnum – sided with Seelye. Barnum was fined $100 and sentenced to 60 days in jail.

For Barnum, it was a great career move. Subscriptions increased to the Herald of Freedom. Though he had a comfortable cell, ate well and received visits from many friends, Barnum was viewed as a martyr. When he was released from jail, 40 horsemen and 60 carriages escorted him home as a band played during the entire three-mile parade.

Decades later, in a conversation with Ulysses S. Grant, Barnum speculated that the former U.S. president and Civil War hero was ‘the best known American living.’ Grant disagreed: “You beat me sky-high, for wherever I went, in China, Japan, the Indies, &c., the constant inquiry was, ‘Do you know Barnum?’ I think, Barnum, you are the best known man in the world.”

For 13 more things you may not have known about P.T. Barnum, click here.

With thanks to The Colossal P.T. Barnum Reader: Nothing Else Like it in the Universe by Phineas Taylor Barnum and Humbug: The Art of P.T. Barnum by Neil Harris. This story was updated in 2017.

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