Red-Blooded Risk: The Secret History of Wall Street

Andrew Dexter

Andy has the honor of being America's first great overleveraged real estate developer. He had great vision. He built the Boston Exchange Coffee House. This was not a Colonial Starbucks; it was a 200-room hotel, financial exchange, and business office. It cost $500,000 and was among the tallest buildings in the New World. Unfortunately, it was more than twice as tall as any available ladders, so when a fire broke out on the seventh floor there was no way to prevent it from burning to the ground. Dexter also founded the city of Montgomery, Alabama, boldly reserving a plot for the state capitol building although Alabama was not a state and Mobile had been the capital of the French territory for over a century while Montgomery was a brand-new town. Years later, the Alabama state capitol was indeed built on that site.

The thing is, Andy never had any money to support these big ideas. But he did have another big idea instead. He gained control of two banks, the Bank of Detroit and the Farmers Exchange Bank of Gloucester, Rhode Island. Detroit was a newly incorporated frontier outpost at the time, near the site of a recent major Indian battle. Oh, and it had just burned to the ground. There were no roads to Gloucester; you had to walk through the woods to get there. The two banks were 600 miles apart (800 if you don't go through Canada).

What if you print $100,000 worth of ...