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A Biography of John Magee
Chapter Three
by
Becoming A Businessman
While living in Bath, Magee operated a large farm, but he also was involved
in grist milling, and the production of woolen goods.89 How long he
engaged in the milling and woolen goods business is not clear. Apparently,
the introduction of machinery in the community made the woolen operations
unprofitable and unnecessary.90 The milling enterprise was conducted
with his brother T. J., and as this advertisement in the April 22, 1835
issue of Steuben Farmers' Advocate attests, was active then:
"Flour—J. and T. J. Magee will keep on Hand Fine and Superfine Flour
for sale until the opening of navigation, low for cash. Bath, January
1835."
These enterprises, however apparently were minor investments, since it
was the stage and mail routes Magee operated that laid the foundation
for his fortune. It was while he was still sheriff in 1825, that he opened
his stage line called Magee and Company, with his brothers Hugh and T.
J. The four-horse Troy Coaches left Bath at four o'clock AM each day to
carry passengers to Owego, Rochester, and Angelica.91 One Bath resident
described the early morning sight:
These grand carriages, resplendent with plush and paint, drawn
by four mettlesome steeds, as they rattled at early dawn in summer over
Pultney Square and up and down the streets to pick up passengers and mails,
were a sight that richly repaid the loss of a few hours sleep. The driver's
horns heard from a distance gave early notice of their arrival in the
evening.92
John Calvin Bennett, who had arrived in the Canisteo Valley at the age
of twelve when his family moved there from Connecticut in 1824, recalled,
as an elderly man, working for several years on a stage line owned by
John and T. J. Magee, that ran from Centerville (a small town near Painted
Post) to Covington, Pennsylvania.93
A reliable stage was a great improvement for the community since the
first stage that had begun in 1831, was merely a two-seated, two-horse
lumber wagon that ran semi-weekly.94 Stage coaches, before the arrival
of the railroad, were the fastest means of travel; however, they were
also very uncomfortable. Transportation and communication were sorely
needed in the growing nation, and Magee helped western New York State
meet that need. Writer Arch Merrill called Magee's stage line "the
swankiest of the day."9 By hooking up with other stage lines, passengers
could reach New York City in three days.96 Cities such as Philadelphia
and Washington could also be reached from Bath by stage.
Before stages, mail was carried by men on horseback, or if roads existed
and were passable enough, by one-horse wagons or sulkies.97 Until roads
were built that allowed stages to run, mail was delivered by "Post Boys"
on horseback who followed the old Indian trails in the Chemung and Cohocton
Valleys. Bath received mail only every other week if weather permitted.
As the frontier region was developed, communication became more important.
The federal government designated postal routes that were numbered, and
stage operators could bid on contracts to carry the mail for different
routes. Often stages carried not only passengers but the United States
Mail as well. Magee and Company received mail contracts and carried mail
on its routes. "John Magee…together with his brothers, T. J. and
Hugh Magee, were the first contractors for carrying the eastern mail between
Olean and Bath in stages."98
The stage line was expanded as Magee became involved with others. At
some point, John Magee befriended Constant Cook, a farmer and "frontier
horse king" from Cohocton.99 Together, Magee and Cook would become rich
men. Their continuing association in business matters led Constant Cook
to move to Bath in 1843.100
Stage line operators often made agreements with each other which assisted
their passengers in getting to desired destinations that perhaps one particular
stage line did not travel to. When many operators joined in such a deal,
a large company could be formed that could often function as a monopoly.
Magee joined with two gentlemen from Elmira, Levi Cooley and Samuel Maxwell,
to form Cooley, Maxwell, Magee and Company.101 Their stage lines traveled
from Elmira to Bath, south to Williamsport and Northumberland in central
Pennsylvania, east to Owego, north to the head of Seneca Lake, and then
to Geneva.102 The Elmira stage originally was run by John Davis, owner
of the Black Horse Tavern. It had connected passengers to Catherines Landing
(which was in Montour Falls, or Havana as it was known then) and from
there they could travel on Seneca Lake on a steamer.103 Cooley, Maxwell,
Magee and Company bought out Davis and expanded the route immensely.
A questionable source states that in 1823, Stephen B. Leonard of Owego,
who had stage lines that included one from Owego to Bath, sold out to
a company104 that consisted of a "Lewis Manning and his son Charles,
of Owego; Major Morgan of Chamango sic Point; Cooley and Maxwell of
Elmira; and John Magee of Bath."105 It was called the Great Southern
Tier Mail and Passenger Line. Operating between Newburgh, New York, and
Bath, it was a daily line that was continued until the opening of the
New York and Erie Railroad.106 The date, 1823, is questionable since
it conflicts with other sources. In such a company, usually each stage
line owner acted jointly as proprietors of the company, and they met every
few months to settle matters. Each man put in as many coaches and livestock
as necessary to keep his route or routes functioning.107 While serving
in Congress from 1827 to 1831, Magee must have entrusted the business
to his brother T. J. An advertisement that appeared in the May 11, 1830,
Dansville Village Chronicle informed readers:
New daily line of mail coaches between Owego and Rochester.
New and efficient arrangements have been made to run this line with superior
coaches and horses, careful drivers, and everything for the accommodation
of the public.
This line will leave Owego every day (Sunday excepted) at 2
o'clock in the morning, passing through Tioga Point, Elmira, Painted Post,
Bath, Cohocton, Dansville, Geneseo, Avon to Rochester through in 2 days
and returns in the same manner.
This line passes through a fine healthy and highly cultivated
country along the valleys of the Susquehanna, Chemung and Cohocton Rivers
(a short distance in sight of the route of the Chemung Canal) intersecting
at Athens a line of stages running thrice a week from Ithaca to Towanda,
Tunkhanpock and Wilkesbarre.
At Elmira a line daily to Horseheads, Havana Montour Falls,
head of Seneca Lake and to Geneva. Also a line thrice a week to Ovid,
Penn-Yan, Canandaigua in New York and Towanda, Berwick, Williamsport,
Belfonte, Milton, Northumberland, Harrisburg, York in Penna.; Baltimore
and Washington City. At Painted Post intersecting the above Pennsylvania
line on the opposite days, passing through Lawrenceville, Willardsburg,
and near Wellsborough, the county seat of Tioga, to Blossburg (the site
of the celebrated coal and iron mines). Persons desirous of taking the
above to the south from the west will be sure of meeting it (via Bath)
at Painted Post, on Tuesday, Thursday and Saturdays and the other days
at Elmira, intersecting at Trout Run.
At Bath this line intersects a line, daily to Penn-Yan and Geneva.
Lines thrice a week on Tuesday, Thursday and Saturdays to Hornell, Angelica,
Friday to Olean.
At Geneseo a line daily to Buffalo; a line twice a week via
Moscow, Perry, Warsaw and to Buffalo. A line thrice a week via Mount Morris,
Nunda and Hunt's Hollow to Angelica, intersecting the Olean Line. At Rochester
intersecting several daily lines to Niagara Falls.
The proprietors have spared neither pains nor expense in their
new arrangements and exertions to obtain this extended communication which
has been so much needed by the community, in consequence of the rapid
growth and improvement of the country through which it passes, and they
flatter themselves that a liberal and enlightened public will extend to
them a generous share of patronage. All baggage at the risk of the owner.108
It was dated April 30, 1830, and signed "T. J. Magee and Others, Proprietors."
An advertisement in the January 12, 1831, issue of the Farmers' Advoate
in Bath announced a new line of stages proclaiming:
Stages will leave the Clinton Hotel, in Havana, every Tuesday,
Thursday, and Saturday for Geneva and Ithaca.
Every Monday, Wednesday, and Saturday, for Bath and Elmira,
returning the following days.
Travelers taking seats in this line of stages in Ithaca, can
reach Elmira and Bath the same day. They connect at Geneva with stages
running to Albany and Buffalo, Catskill, Newburgh, and New York; and at
Elmira with stages running to Philadelphia, and at Bath with the Angelica
stages.109
This appears to be some of the routes included in the Great Southern
Tier Mail and Passenger Line. If so, T. J. Magee would have still been
managing the Magee lines, since the advertisement was dated February 10,
1830, and John's term in Congress did not end until early 1831.
Once home from Congress with his new bride, Arabella, John Magee continued
the operations of Magee and Company. In 1831, the company bid for and
received the postal contracts for thirty-eight routes at a contracted
compensation of $13,608 per year.110 The contract went into effect in
1833, and ran for four years. However, in 1835, during a United States
Senate investigation of the operations of the Post Office, it was divulged
that the Magee contract had been recorded in the 1833 Biennial Register
as $23,761 per year, and was reported by the Postmaster General in March,
1834, to be $25,886 annually.111 Magee argued that the increase was
due to improvements made on the routes (more towns delivered to and more
stage deliveries instead of a Postboy on horseback), and that figure of
$25,886 was incorrect. One route was assisgned to another person, deducting
$196 from the amount of $26,082, which was what the contract was originally
increased to, thus reducing it to $25,886.112 Then, five other routes
were transferred to others, further reducing the figure of $25,886 by
$2,125.113 This brought the compensation down to the recorded figure
of $23,761.
Some people claimed as it was reasserted in the 1861 election for State
Senator in which Magee was a candidate, that Magee had purposely bid extremely
low to secure the contract against a competitor, and then had a friend
in the Postal Department in Washington, raise the compensation. The Elmira
Advertiser and Republican, which was against Magee in the 1861 election,
presented its account of the transaction:
When John Magee was a United States mail carrier, he found
himself obliged to bid, on one occasion, very far below his usual and
previous pay in order to get the contract. Some other Democrat and friend
of Jackson had smelt out that John was having a fat thing, and concluded
he had as good a right to mail contracts as John Magee. But John had a
friend at court, who kept him posted as to how he must bid in order to
retain the spoils of democracy, to which it was generally conceded he
had a patent right. The contract was finally awarded to John Magee, but
at a price which was likely to make him sweat. He took it knowing it to
be too low, but relying upon his influence with the "powers that were,"
to increase it by extra allowances, and he was not disappointed. The Postmaster
General Barry, allowed him $13,000 a year extra for years. So honest John
managed to trick his unsuspecting rival out of the contract, and to bag
in the end a larger compensation than he had ever received before.114
The Senate committee investigation questioned that the original proposal
with Magee and Company called for servicing thirty-eight routes, but they
only carried mail on thirty-three routes, and at $10,153 more than they
offered to service the thirty-eight routes tendered in the original proposal.115
During the proceedings, many witnesses were called before the Senate Committee.
They included sub-contractors of Magee and Company and Congressman Edward
Howell from Bath, who Magee endorsed for Congress in 1832, and who later
worked with Magee in establishing the Steuben County Bank. Howell, testified
that improvements made by Magee and Company had made mail delivery more
efficient, and that the service was surely better for the public "at 26
or $27,000, than the routes advertised at $14,000."116
The majority of the committee members, however, were not convinced. It
was felt that many improvements were fabricated in an attempt to justify
the excesses of the contract. The committee decided that the actual improvements
were valued only at $797.70, and that the Magee and Company agreement
was overpriced by $11,338.301.117
The Magee contract was conducted as an "improved bid." This meant that
the mail carrier that discharged the duties on that route, could make
a bid with the understanding that he would improve the service, and that
he would be compensated at higher than the contract rate for increasing
the amount of miles on his postal routes. The Senate committee condemned
the loose and inefficient manner in which the Post Office conducted the
granting of mail contracts. Its summation stated, "The letter of a contractor,
suggesting an improvement, and soliciting an extra allowance, not unfrequently
served the double office of an authority for the grant, and or a record
of its existence. Some dark corner of a contract, or loose scrap of paper,
is commonly the only official evidence for large disbursements of money
under the name of extra allowances."118 Little was being done by the
Post Office to corroborate the claimed improvements or to put a legitimate
value on those that were made. It appeared the postal laws designed to
avoid fraud were to little avail, and needed reassessment. At one point
in the investigation, the Senators on the committee felt, "The genius
of mail contractors has been more amply rewarded than that of the discoveries
in science and the arts."119
The evidence presented indicated that Magee was simply following a practice
common to other mail carriers. As far as is known, the contract continued
through 1837 without any adjustments as a result of the Congressional
findings. The postal contract seems to have gone to another contractor
when the contracts were let again in 1836.
The stagecoach epoch began to die out when the railroad began to offer
a faster and more comfortable mode of transportation. By the late 1840s,
the stages were fading fast in New York State. The stage lines of Cooley
and Maxwell of Elmira, who at one time had teamed with Magee, had failed
in the late 1830s. They sold all their routes, except for the one to Jefferson
(Watkins Glen was called Jefferson beginning in 1842 and later was changed
to Watkins about 1851), to a company called Manning, Gates, Fish, and
Hamilton.120 Under this company, the route between Bath and Owego became
a through route, Eliminating the stop in Elmira. Cooley and Maxwell sold
the Jefferson line in 1841. Manning, Gates, Fish, and Hamilton ended their
stage enterprises when the Erie Railroad was completed.121
Exactly when John Magee ended his stage days is not clear. The date of
the termination of the company is not known. It would probably be safe
to say that by 1845 Magee and Company was no more, being bought out by
others, Magee had other interests that had coincided with stagecoaching.
He helped organize and managed the Steuben County Bank, and he was working
with many others in endorsing a project that would make stagecoaches a
poor investment in western New York—the New York and Erie Railroad.
In 1831, Steuben County lacked a financial institution that could facilitate
the conduct of business affairs and aid in the growth of industries in
the region. Through the efforts of Magee and others, the Steuben County
Bank was incorporated by an act of the New York State Legislature on March
9, 1832.122 The charter was for thirty years with $150,000 of capital.123
For a time, the Steuben Bank bill was held up in the State Senate when
it was claimed that a vote of eighteen in favor to ten against did not
constitute a constitutional majority.124 Although the bank must have
been a welcome institution, apparently many residents of Steuben County
were opposed to the manner of the stock distribution.125 Possibly the
objection was raised because certain wealthy individuals held much of
the stock. John Magee was the principal stockholder.126
An announcment about the organization of the bank, dated November 19th,
was placed in the Steuben Farmers' Advocate on November 28, 1832.
It informed readers that:
"The Stockholders of the Steuben County Bank are hereby notified
that an Election of thirteen Directors of that corporation will be held
at the house or Isaac W. Newkirk, innkeeper in the village of BATH, on
Thursday the sixth day of December next, at two o'clock in the afternoon
of that day."127
The notice also listed the names of William S. Hubbell, John Magee, John
D. Higgins, Andrew B. Dickinson, and Magee's stagecoach associate, Constant
Cook, as the commissioners. The result of the Board of Directors election
was that John Magee was chosen President of the bank, and William B. Storm
was selected as cashier.128 The other twelve directors of the bank were
Ansel St. John, William McCay, Reuben Robie, Edward Howell (who had testified
favorably for Magee and Company during the Senate investigation), William
Hubbell, Constant Cook, James Faulkner, Charles Butler, Andrew B. Dickinson,
Chauncey Hoffman, Henry B. Gibson, and Henry S. Williams.129 The bank
began new operations in the old Land-Office building on October 24, 1832,
until a new bank building was erected in 1833.130
The bank "gave a strong impetus to the improvement of the Painted Post
and Genesee country, as its officers had the facilities for knowing intimately
the financial condition and business integrity of all the inhabitants
of these localities; the bank discounted and, when necessary, renewed
their paper."131 Banking procedures were far more relaxed than those
of today. "In many instances farmers and lumbermen living in the valleys
of the Genesee and Allegheny rivers and the intervening country, when
necessary, would make a note, procure an acceptable endorser, and put
a boy on horseback with a bag fastened to his saddle. In one end was the
provisions for the horse; in the other for the boy, who would thus start
for Bath…the young messengers would return with the expected results
from the Steuben County Bank."132
From 1831 to 1852, Magee was very active in the banking business. He
served as cashier of the Steuben County Bank when elected to that post
on January 15, 1835, after William Storm resigned to serve as cashier
at another bank.133 William M. McCay was chosen president. On July 1,
1851, Magee again accepted the position of bank president.134 Although
he lacked much formal schooling, Magee acquired a keen understanding of
finance. At one time the bank paid out annual dividends of 11% on its
stock and had a surplus of $96,000.135
In 1861, with the nation engulfed in a Civil War, the Union suffered
for lack of a uniform system of banking and banknote currency.136 In
the state of Illinois alone, the Secretary of the Treasury reported in
December, 1861, there were twenty different currencies.137 Chase suggested
that a system of national banking associations be established, whereby
the state banks could issue bank notes based on U. S. Bonds and backed
by the promise of the U. S. Government. It would force the banks to buy
U. S. bonds, thus helping to finance the war effort. According to Irwin
Near's History of Steuben County, New York, this plan was not
the brainchild of Salmon P. Chase, rather it was based upon a suggestion
made to Chase by John Magee through a New York congressman. Near claimed
that the plan, as suggested, concluded with the hopes that the program
would generate "A currency of uniform security and value, protected from
losses in discount and exchanges; increased facilities to the government
in obtaining loans; a diminution of the rate of interest, or a participation
by the people in the profits of circulation; an avoidance of the perils
of a great money monopoly, and a distribution of the bonds of the nation
to the leading monetary associations of the country, thus identifying
their interests with those of the government."138 Near added that this
statement was used by Chase nearly word for word in his address to Congress
in December, 1861. The text of that address was published on page two
of the December 10, 1861, New York Times (Vol. XI No. 3188) and
included this evaluation of the national banking association proposal:
In this plan the people, in their ordinary business, would find
the advantages of uniformity in currency; of uniformity in security; of
effectual safeguard, if effectual safeguard is possible, against depreciation;
and of protection from losses in discounts and exchanges; while in the
operations of the government the people would find the further advantage
of a large demand for government securities, of increased facilities for
obtaining the loans required by the war, and of some alleviation of the
burdens on industry through a diminuation in the rate of interest, or
a participation in the profit of circulation, without risking the perils
of a great money monopoly.
Much of the wording is similar. Also in 1861, Secretary Chase, a Republican,
appointed Magee, a Democrat, and at that time again President of the Steuben
County Bank, an agent to take subscriptions to the "new Loan to the government
for Treasury Notes bearing an interest of seven and three-tenths per cent
per annum, payable semi-annually."139 It appears that perhaps there
was some connection between Chase and Magee, and that possibly Magee had
a hand in the formation of a national banking policy during the Civil
War.
Secretary Chase's proposals to Congress were adopted on February 25,
1863. The National Banking Associations were formed under the direction
of the Treasury Department, and each bank had to buy no less than $30,000
(no less than one-third of its capital) in United States bonds.140 However,
something new was added that Chase objected to. A new form of currency
was created known as National Bank Notes or "greenbacks." They were issued
to the national banks and were equal to ninety percent of the bonds received.141
Chase argued that these "greenbacks" were unconstitutional, but they continued
for half a century until the Federal Reserve Act was passed.
Magee also objected to the final provisions of the national banking law.
Having been an old Andrew Jackson Democrat, he disdained a national banking
system with rigid control of the state banks by the Treasury Department.
The state bank notes were being eliminated. The charter for the Steuben
County Bank ran out on January 1, 1862. Rather than re-organize under
the national banking law, Magee chose to dissociate himself from the bank
while others worked towards restructuring it under a new charter.142
As stagecoach magnate and banker, Magee's wealth had grown immensely.
He was looking for another opportunity to add to his fortune. The New
York and Erie Railroad proved to be a wise investment.
Notes to Chapter Three
89 & 90 Schuyler County Historical Society, Magee genealogy
folder, "Article Fifty-one."
91 & 92 Nora Hull, ed., Centennial Celebration, Bath,
New York, p. 132.
93 1875 Atlas and 1883 History of Tioga County, Pennsylvania,
(NY: W. W. Munsell and Co., 1883), p. 134.
94 Nora Hull, Centennial Celebration, Bath, New York,
p. 131.
95 Arch Merrill, Stagecoach Towns, (Rochester:
Gannett Co., 1947), p. 118.
96 Nora Hull, Centennial Celebration, Bath, New York,
p. 132.
97 Ausburn Towner, A History of the Valley and County
of Chemung, (Syracuse: D. Mason and Co., 1892), p. 132.
98 L. H. Everts, History of Cattaraugus County, New
York, (Philadelphia: J. B. Lippincott, 1879), p. 163.
99 Arch Merrill, Stagecoach Towns, p. 118.
100 Millard Roberts, ed., Historical Gazetteer of
Steuben County, p. 158.
101 & 102 Elmira City Directory, (Elmira: A.
B. Galatian and Co., 1868), p. 73.
103 Ausburn Towner, History of the Valley and County
of Chemung, p. 133.
104 Chemung County Historical Society, file folder on
transportation, newspaper article dated Jan. 7, 1944, and titled "The
History of the Early Stage and Mail Routes in the Southern Tier."
105 & 106 Chemung County Historical Society, tranportation
folder, "Early Turnpikes and Stage Lines" by William Arnold. dated December
11, 1930.
107 Chemung County Historical Society, "History of the
Early Stage Routes and Mail Routes."
108 Dansville Village Chronicle, May 11, 1830.
109 The Farmers' Advocate, Jan. 12, 1833.
110, 111, 112, & 113 The Farmers' Advocate,
March 18, 1835, p. 1.
114 Elmira Advertiser and Republican, Nov. 2,
1861, p. 2.
115 & 116 The Farmers' Advocate, March 18, 1835,
p. 1.
117 Ibid., p. 2.
118 & 119 Ibid., p. 1.
120 & 121 Elmira City Directory, 1868, p. 74.
122 Clayton, History of Steuben County, p. 177.
123 Near, History of Steuben County, p. 257.
124 The Farmers' Advocate, May 4, 1831.
125 Hull, ed., Centennial Celebration, Bath, New
York, p. 133.
126 Near, History of Steuben County, p. 257.
127 Steuben Farmers' Advocate, Nov. 28, 1832.
128 Clayton, History of Steuben County, p. 177.
129 The Farmers' Advocate, Dec. 12, 1832.
130 Clayton, History of Steuben County, p. 177.
131 Near, History of Steuben County, p. 257.
132 Ibid., p. 258.
133 Steuben Farmers' Advocate, Jan. 21, 1835.
134 Clayton, History of Steuben County, p. 177.
135 Hull, ed., Centennial Celebration, Bath, New
York, p. 133.
136 James G. Randall, The Civil War and Reconstruction
(Boston: D. C. Heath and Co., 1961), p. 350.
137 The New York Times, Dec. 2, 1861, p. 1.
138 Near, History of Steuben County, p. 262.
139 Corning Democrat, Oct. 31, 1861, p. 2.
140 & 141 James G. Randall, The Civil War and
Reconstruction, p. 351.
142 Near, History of Steuben County, p. 263.
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