GREAT NEW YORK CITY FIRE OF 1835 AND INSURANCE

The fire struck lower Manhattan in the City’s commercial and financial district on December 16, 1835. The area contained many packed warehouses. 

It was a very cold and windy night. The fire lasted into the next day. It simply could not be extinguished straightaway. People stood looking over the East River at Manhattan. The fire destroyed 600-700 buildings and 17 blocks covering 13 acres.  Fighting the fire in the then normal ways was impossible. It was so cold the firemen couldn’t get the needed water hoses to the rivers–burned too fast. Still, firefighters tried to contain and leveled at least one building by blowing it up. (Of course, other warehouse buildings exploded on their own. The presence of saltpeter in a building can do that.)

Even the newly erected building of the Merchant’s Exchange was destroyed. The city was growing and booming, partly because of the completion of the Erie Canal a decade or so earlier. So the fire didn’t slow the city down much for long. 

Two interesting and contrasting facts regarding property insurance have grown out of the disaster. 

On the negative side, 23 of the city’s 26 insurance companies were put out of business. Robert McNamara, “New York’s Great Fire of 1835,” THOUGHTCO (April 20121)[an internet source].

On the positive side, the President of Aetna informed its board of directors that the companies losses, anticipated to be $115,000, would likely exhaust its resources. Board members apparently asked the President what he intended to do. He is reported to have said, “I will go to New York and payout every dollar of our losses, and if the company runs out of money, I shall pay them myself.” The directors apparently joined him in his commitment, and the rest of the story is lore, history, and well-done advertising. “The Great New York Fire of 1835 and the Marketing of Disaster,” New-York Historical Society, http://blog.nyhistory.org/the–great-new-york-fire-of-1835-and-the-marketing-of-disaster.  (As one might imagine, Aetna publicized its act of business heroism for many years. See also F.C. Oviatt, “Historical Study of Fire Insurance in the United States,” THE ANNALS OF THE AMERICAN ACADEMY OF POLITICAL AND SOCIAL SCIENCE, 155, 162 (1905)

Having nothing to do with insurance, it is worth knowing that the incident resulted in a number of solid catastrophe paintings well worth seeing, including several by Nicolino Calyo. Lewis P. Clover also created a terrific map.  These also were aggressively publicized, and much sooner than Aetna made its moves. 

Speaking of insurance and business history: 

one cannot help but wonder if this Great Fire did not have something to do with the Panic of 1837; similarly, the third of New York City’s “great fires” occurred in 1845, and it is said to have reconfirmed the building codes that the City has already begun to create pertaining to wooden buildings.

Of course, none of this has really anything to do with the wartime fire which occurred in the City during the American Revolution, each side accusing the other side of arson. This happened before there was much fire insurance in America, although Ben Franklin had imported it 25 or so years before.

Finally, maybe the oddest insurance-related fact at all arose out of the famous and deadly Triangle Shirtwaist Factory Fire of March 25, 1911 (4:30 pm Saturday afternoon). This fire involved the death of 143 garment workers on several upper floors created huge scandals of several sorts and is “celebrated” to this day as a key moment in the “progressive” fight for the rights of workers and the downtrodden. None of the many accounts of this disaster says anything about insurance on the building that partially burned or worker’s comp insurance, or something like it, on the lives and injuries of those workers, 123 of whom were women and girls.  One wonders why not. 

 

Michael Sean Quinn, PhD, JD, CPCU, Etc

Michael Sean Quinn, PhD, JD, CPCU, Etc. (530)

One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.

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