Background
Harris Charles Fahnestock was born at Harrisburg, the son of Adam K. and Sybil (Holbrook) Fahnestock. He came of German ancestry. His family had lived at Ephrata and Harrisburg, Pa. , since the middle of the eighteenth century.
Harris Charles Fahnestock was born at Harrisburg, the son of Adam K. and Sybil (Holbrook) Fahnestock. He came of German ancestry. His family had lived at Ephrata and Harrisburg, Pa. , since the middle of the eighteenth century.
At an early age he left school for a business career, being at first employed in a Harrisburg bank controlled by an uncle. At the beginning of the Civil War his ability and energy in pushing the sale of the Pennsylvania $3, 000, 000 bond issue attracted the attention of Jay Cooke, the Philadelphia banker, and so favorably impressed him that he offered young Fahnestock an interest in the branch of his banking house which he was about to open in Washington.
As the war wore on and brought increasing financial perplexities to the Lincoln administration, the firm, because of its relations with the Treasury Department, came to be regarded as one of the sheet anchors of the government.
When Secretary Chase was unable to dispose of the 7. 30 war bonds through the usual government agencies, he turned the business over to Jay Cooke & Company, paying a commission of Yi of one per cent, on sales, and thus the entire issue was disposed of.
For Fahnestock, still in his twenties, such an experience—unparalleled up to that time in this country—was doubtless more valuable than a lifetime of ordinary banking routine.
Ability to form independent judgments and to act on them was encouraged and developed in those years.
After the war it was decided to open a New York branch of Jay Cooke & Company, and the burden of this undertaking fell largely on Fahnestock.
His interest was 14 per cent. , and he retained a like share in the Philadelphia and Washington offices.
The New York business was successful from the start.
The branch was opened on March 1, 1866, and in the remaining ten months of that calendar year Fahnestock’s share of the profits was $63, 000.
During the ensuing seven years—an era of post-war speculation and inflation—the Cooke banks generally prospered.
The head of the firm became intensely interested in the building of the Northern Pacific Railroad and took over the bonds of that enterprise.
The road was projected through a region for the most part then unpeopled and could not hope, even when completed, to receive adequate local support.
It became impossible to find a market for the bonds.
He had personally opposed the part taken by the firm in the Northern Pacific bond deals (Oberlioltzer, post, II, 150, 223, 380 ff. , 397, 423).
The assets of Cooke & Company, however, amounted to more than twice the liabilities, and within seven years the entire indebtedness was paid off, but the New York office never resumed business.
Fahnestock had not yet reached middle age and he began to build up a second fortune.
The Charity Organization Society, the Association for Improving the Condition of the Poor, and three New York hospitals —the Presbyterian, St. Luke’s, and the PostGraduate—each received $100, 000.
In the organization of the First National Bank of New York, of which he became a vice-president, he quickly found a post where his abilities could be utilized and rewarded. In the forty years of life that remained to him he accumulated wealth, held directorates in various financial institutions, made large gifts for religious and charitable objects, and in his will disposed of more than $500, 000 for public causes.
In the forty years of life that remained to him he accumulated wealth, held directorates in various financial institutions, made large gifts for religious and charitable objects, and in his will disposed of more than $500, 000 for public causes. The Charity Organization Society, the Association for Improving the Condition of the Poor, and three New York hospitals —the Presbyterian, St. Luke’s, and the PostGraduate—each received $100, 000.
In 1856 he married Margaret McKinley.
