Albertus C. Van Raalte as a Businessman
[Published in revised form in A Goodly
Heritage: Essays in Honor of the Reverend Dr. Elton J. Bruins at Eighty,
pp. 281-317, ed. Jacob E. Nyenhuis (Grand Rapids: Wm B. Eerdmans, 2007)]
If Albertus Van Raalte had
not followed his father into the Dutch Reformed Church pastorate, he surely
would have been a businessman. He had the instincts of an entrepreneur and was
a risk taker. It was a life-long pattern. Van Raalte had a dynamic view of
money and always tried to put ready cash to work, expecting to earn market
rates of interest on his investments. From his late twenties and continuing
until his last years, Van Raalte was involved in various business ventures in
manufacturing, milling, retailing, newspaper publishing, and especially real
estate and mortgage lending.
Elton Bruins, who has
devoted his scholarly career to Van Raalte’s life and work, notes that many
pious colonists in Holland
considered it “unseemly” for their pastor to be so involved in “worldly
pursuits.” But Bruins insists that the dominie’s business activities were
“absolutely crucial to the success of his pioneering endeavors.” He realized
very quickly, says Bruins, that “there simply could not be a Christian Colony
if this community were not able to develop economically by providing land for
the farm families and business opportunities for the villagers.” So Van
Raalte’s proclivities for business nicely dovetailed with his vision for the
colony.
Ommen factories
In the decade before Van Raalte
emigrated, 1836-46, while planting Seceder congregations throughout his home
province of Overijssel in the Netherlands, he took an active interest in
businesses that hired unemployed Afgescheidenen
(Separatists, members of the Christian Seceded Church), many of whom were
blacklisted or boycotted for their faith. In
1839, the year the young dominie and his family took up residence in the
parsonage at Ommen, he bought a fishing vessel at Scheveningen to help several
men to support their families. In April 1840 he invested funds his wife
Christina had inherited from her well-to-do family, the Benjamin de Moens of Leiden, in several clay works in Ommen and the nearby village of Lemele. The aim was to employ Seceders
in the manufacture of bricks, roof tiles, fine porcelain, and earthen cookware.
The properties included two brick kilns, three houses for workers, an office,
and a barn for horses and wagons. The buildings and lands were valued at fl 50,000
($20,000), a princely price.
Van Raalte bought the factories,
which employed thirty men, women, and children, in partnership with his wife
Christina’s brother, Dr. Carel G. de Moen, a surgeon and gynecologist (and
later a Seceder pastor), and C. Dros, a Leiden soap manufacturer. The contract
was to run for fifteen years and the principals adopted the name “De Moen &
Co.” De Moen moved his medical practice to Ommen to assume management of the
factories, since Van Raalte was frequently away for days at a time “riding the
circuit” as the “Apostle of Overijssel,” ministering to newly-founded
congregations throughout the province. The firm began operations in March 1841,
after the mayor and councilmen of Ommen gave final approval.
Meanwhile, Van Raalte cast about for
additional capital to expand the operation. He first solicited another Seceder
dominie, his fellow Leiden theology classmate,
Rev. Hendrik P. Scholte, who had inherited a successful business in Amsterdam from his
father. Van Raalte requested a loan “for de Moen and me” of fl 5,000-fl 10,000 [$2,000-$4,000] at 5 to 6 percent interest. He noted that
fl 15,000 [$6,000] “of our own money
is out of our reach, and we cannot invest in the business.” Where this money
was tied up is unknown. Van Raalte also noted that he had donated fl 2,200 [$880] for a church building in
Ommen, because the parishioners were too poor to fund it. Finally, should
Scholte be disinclined to invest in the firm, would he intercede with Judith
van IJsseldijk-Zeelt, a wealthy widow friend and Seceder benefactor living on a
country estate near Amsterdam?
In the end, neither one took part in Van Raalte’s venture. Scholte was likely
miffed that Van Raalte only a few months earlier had joined in a vote by the
Seceded Church Synod of 1840 to oust him over church order and theological
issues.
Van Raalte’s problems were
compounded when de Moen in 1841 indicated his desire to sell his interest in
the firm and enter the gospel ministry. Van Raalte could hardly have been
surprised, since he had encouraged de Moen to take this step. He turned to
another brother-in-law, his sister Johanna’s husband Dirk Blikman Kikkert, a
prosperous Amsterdam
shipbroker, who agreed to buy out de Moen, move to Ommen, and take charge of
the firm. De Moen had apparently bought out Dros, the third partner, some time
before. In the contract of December 1841, Blikman Kikkert provided one-half of
the capital, secured by a mortgage on the property, and was entitled to
one-half the profits, plus an extra 5 percent “for the care, execution, and
administration of the affairs of the partnership,” renamed Blikman Kikkert
& Co.
Unfortunately, the business did not
go well, at least in the early years, possibly because of poor management and
the decision of the philanthropic owners to pay wages above prevailing rates.
It was said that the workmen’s pay was “exceptionally high.” Van Raalte’s brother-in-law, Anthony Brummelkamp,
a key Seceder leader who remained in the Netherlands, reported that the profit from the “association with Blikman” was less
than the eventual interest of the capital invested in the company. He advised
him to sell the business before he lost more money. The Bentheim Seceder
preacher, Jan Barend Sundag, who was a critic of Van Raalte in general, noted:
“By establishing a pottery factory, he [Van Raalte] lost most of his money.”
Van Raalte himself admitted more than a decade later that the project had been
“unhappy for me.”
There
are no known documents indicating that Van Raalte sold his interest in the
firm, either before or after he immigrated to Michigan in 1846, which is in sharp contrast
to the five extant documents that carefully detail the founding of the firm and
ownership change in late 1841. The likelihood is, therefore, that Van Raalte
did not sell his interest, but rather left the struggling firm in the hands of
Blikman Kikkert and took very little or no money from the venture.
The Holland
Colony
In the Holland Colony Van Raalte was
first and foremost a dominie, the pastor of the First Reformed Church of
Holland and first president of the Classis of Holland, the regional
ecclesiastical body of the immigrant churches that was formed in 1848. Besides
extensive church administrative work, his main task was to conduct worship
services and baptize, marry, bury, and nurture his congregants. But the survival
of the settlement depended on economic development and Van Raalte as the leader
was increasingly drawn into “worldly pursuits.” He had his hand in everything,
from opening roads and building bridges, starting a sawmill and tannery,
developing Holland harbor, editing the local newspaper the Hollander, and attending to legal and medical concerns, to
directing the local grammar schools and the Holland Academy (later Hope
College) for higher education.
Securing
land for the Colony demanded his primary attention, because speculators, if
given an opening, would buy up all the available land in the Black
River watershed and force the Dutch to pay a premium. Since the
nearest towns—Grand Haven, Allegan, and Grand Rapids—were fifteen to thirty
miles distant, and the settlers lived amid dense forests, they needed sawmills
to rip lumber for homes and barns, and gristmills to grind grain for their
daily bread. Van Raalte, perforce, had to partner with associates to erect
mills. Holland
harbor also had to be developed. Exploiting the woodlands was the primary
source of cash for the poverty-stricken immigrants, but forest products could
not be sold unless ships could get them to outside markets, notably Chicago. Van Raalte drew
up petitions to both the state and federal governments to request public funds
to construct piers and dredge the mouth of Black
Lake (renamed Lake Macatawa
in 1935).
Tax Deeds
The success of the entire venture to
plant a Christian colony in Michigan
hinged on controlling the surrounding lands, so that the Dutch settlers would
have room to establish farms for themselves and for their children. This
required tremendous sums of hard cash, of which the new immigrants had precious
little. “What I could not do if the association had $3,000,” Van Raalte said in
January 1847. Speculators were already buying up the strategic land at the neck
of Black Lake, Van Raalte reported, but there
were still thousands of acres of federal and state government lands upriver
available cheaply. Obtaining clear titles unencumbered with tax liens,
squatters’ claims, and faulty land surveys was also a challenge, especially to
a foreigner who did not know the intricacies of the American land system.
Besides his leadership duties in
church and colony, Van Raalte devoted most of his time and energy in the first
years to buying, financing, surveying, and titling land. The first major
purchase is the most intriguing: it involved buying delinquent tax certificates
at the Ottawa County courthouse during his initial
scouting trip in January 1847. County treasurers were authorized by an 1845
law, under the direction of the state Auditor General, when owners failed to
pay their realty taxes in a timely way, to sell to willing third parties tax
liens against the property, which included back taxes to 1840, interest
penalties, and administrative costs. The Auditor General, upon the purchaser
presenting the treasurer’s certificate, was bound to execute a quitclaim deed
that “killed” the original title and gave the tax buyer full ownership.
With the help of treasurer Henry
Pennoyer, Van Raalte in January 1847 bought tax liens on forty-three parcels,
totaling 2,750 acres, plus three “water lots” in the village
of Superior on the north shore of Black
Lake, for a total of only $200! These lien
certificates, almost all on lands in Park
Township owned by
non-residents, “ripened” into quitclaim deeds. Subsequently, owners of thirteen
parcels bought their property back from the dominie to his great benefit. In a
typical case, an owner paid Van Raalte $79 on a tract he had bought at tax sale
for only $19 three years earlier, thus quadrupling his money. Van Raalte hired
the Detroit
firm of J. L. Whiting & Adams to do the necessary legal work on his tax
titles.
This “plunge” at the county tax
auctions by a novice investor during his very first month on Michigan soil gave the dominie a leg up on
the road to financial success. In September 1847 Van Raalte returned to the tax
auction and bought another twenty-three parcels, containing 1,044 acres, for $28.59.
He continued to buy tax liens over the next four years. Acquiring “acres for
cents” required careful bookkeeping and attention to taxes and titles, but it
paid handsomely. In a very revealing letter to Brummelkamp in 1852, Van Raalte
noted: “I have more than 1,500 acres of tax titles from six to eleven years [of
delinquent taxes], among which are the most expensive possessions along the
Lake, and among others the lots near the mouth of our Lake where it flows into Lake Michigan. The rest all lie in or near the colony.”
Investing in tax liens was
controversial, especially for a minister of the gospel. Any process that wiped
out property rights by legal fiat, often for pennies on the dollar, had
negative overtones, even though tax lien investors were performing a valuable
service to the county government by ensuring the timely payment of realty
taxes, and the losers were often non-residents for whom locals had little
sympathy. Yet buyers at frontier tax auctions had somewhat the reputation of
vultures.
One owner who lost his title to Van
Raalte went after him with a vengeance and created a “dangerous crisis,” but
the dominie stood his ground. He told
Brummelkamp about the incident in an 1852 letter:
A gentleman from a rich firm, had
years before bought a piece of land across our Lake for 19 dollars per acre,
yet had given it up, or let it go for the taxes because he thought that it
never would be inhabited here, or for other reasons. He learned that I was the
owner by tax title, came here in hopes of having those lands back, and offered
me twenty percent above the money I spent. However, I told him that . . . I
considered titles of a series of years as safe enough and looked upon them as
my possession.
Whereupon
the man tried to scare me, threatening me a lawsuit for every tree that was
chopped down, for which I certainly would have to pay a fine of $5,000.
Outraged, I told him with blazing words that he had miscalculated the person
and the means by which to achieve his objective, and that I did not want to
exchange any words with him. . . . But that gentleman, stirred by a pushy
determination that showed he was never accustomed to be stopped in his course,
found matters different here from what he had expected. Maybe his tough
reception was a blessing for the people (although I got a troubled conscience
for my temper), for such Nimrods don’t usually bring well-being.
Land Purchases
Van Raalte’s most important land
acquisitions came directly from the federal public domain and from Internal
Improvement lands that Congress granted to the State of Michigan to fund river navigation, canals,
and harbor projects. In April 1847 he entered at the U.S. Land Office in Ionia
(the regional office for western Michigan) a 240-acre tract in the south half
of Section 29, Township 5, Range 15 west, which he designated the site of
Holland. He paid $1.25 per acre for the land, the minimum “Congress price.”
This was the first of many so-called “private entries” at Ionia.
From April 1847 to August 1849, the dominie purchased thirty parcels (2,108
acres) of “Congress land” around Holland
at the same minimum price, for a total of $2,600. In a few cases he paid less,
by using Mexican War military bounty land warrants that Congress issued to
reward veterans and made assignable to third parties. Federal land offices
accepted this so-called land paper in lieu of cash on certain restricted
categories of lands and in keeping with specific regulations. Depending on
market forces, land warrants traded publicly at discounts up to 50 percent. Van
Raalte bought warrants from land agent John Ball of Grand Rapids and thereby
acquired government land for as little as 75 cents per acre.
Buying key tracts of land before
speculators did was a major challenge, as Van Raalte found out in the fall of
1847, when the state put on the market lands that Congress had donated to fund
internal improvements. The dominie set
off on foot to Allegan, from where he planned to catch the stage for Kalamazoo and then the train to the State Land Office at Marshall. He pushed
himself to the limit, but missed the stage at Allegan, so he borrowed a horse
that proved so weak he had to walk beside it all the way to the train depot at Kalamazoo. When he
finally reached Marshall
after three harrowing days, he found prices had “terribly risen.” “Worse,” he
told his wife in a letter, “speculators already took all the lands I had in
mind.” With the help of a sympathetic Marshall
lawyer named Clark, Van Raalte learned that a key buyer was a Grand
Rapids contractor on the Michigan
Canal who had claimed the public lands
as compensation for his work under the Internal Improvements land grant to the
State of Michigan.
Van Raalte persuaded Clark to
accompany him to Grand Rapids,
a two-day ride by rented carriage, to dicker with the man. Here they found that
the contractor was willing to sell, but he could not give a good title because
the law required that the project be finished before titles could pass, which
was at least four years away. With the intervention of “some very important
people in Grand Rapids,”
however, Van Raalte and Clark persuaded the contractor to allow the lands to
revert to the state, “which meant that I could then buy them. . . . I have
suffered through days full of worry,” Van Raalte wrote his wife, “but I am
thankful that God has saved our people from such destruction.” The two men then
returned to Marshall
by way of Yellow Springs. Before heading back to Holland,
Van Raalte went on to the State Capitol at Detroit “to do business.” The entire trip
took more than two weeks. But it resulted in his obtaining ten tracts, totaling
744 valuable acres, in Holland
Township for $930 ($1.25
an acre). In May 1848 he purchased another two hundred acres from the State
lying in Zeeland Township,
and in April of 1849 he bought eight more tracts totaling 325 acres in Holland and Laketown
townships. Altogether, he bought more than thirteen hundred acres at the
Marshall Land Office for over $1600.
While Van Raalte was accumulating
federal and state lands, he tried to gain title to lands around Holland that eastern
investors had purchased before the Dutch came. Nathaniel Silsbee of Salem, Massachusetts,
owned a key 261-acre tract at the mouth of Black Lake,
and the dominie sought to contact him
within two weeks of his arrival with the first contingent of colonists in
February 1847. Van Raalte had his friend, Rev. Isaac Wyckoff of the Second
Dutch Reformed Church of Albany, New York, write an acquaintance in Boston to visit Silsbee
and tell him that “Mr. Van Raalte is anxious to secure these lots” and wants
the first option to buy. Silsbee agreed and sold the land in September 1847 for
$923, or $3.54 per acre, nearly three times the purchase price, but Van Raalte
believed the key tract well worth it and he could buy on time—$100 down and six
years for the remainder. The Village Association paid the down payment and the
annual principal and interest payments of $80 in 1848 and 1849.
That same month Van Raalte bought
320 acres from Peter Schermerhorn of New
York City for $810, or $2.53 per acre, again with $200
down and six years to pay the remainder.
In November 1847 he purchased from insurance agent Courtland Palmer, another New York City land
investor, a huge 1,656 acre-tract for $3,840, or $2.32 per acre, paying down
$400 from Village Trustees funds, with the rest on mortgage at 7 percent
interest. In 1853
Palmer sold the mortgage to merchants James Suydam and druggist Samuel B.
Schieffelin of New York City,
both wealthy laymen in the Marble Collegiate Reformed Church who contributed
much to denominational causes. For several payments Van Raalte sent personal
drafts (akin to modern checks) to De Witt, who cashed them at various
merchants, deposited the funds in a bank, and saw to it that the two men
received their money.
Van Raalte also kept an eye on the
lands of the Ottawa Indians of the Old Wing Mission in nearby Allegan County
and at the Indian “Landing” on Black
Lake, on the assumption
that they would sell their lands and move north to get away from the swarming
Dutch colonists. In September 1847, he asked Pennoyer, “How is it with the
lands of the Indians? I wisch [sic]
that they came for sale. When you can do something to get this ready, I would
be very much obliged.” Within six months, Van Raalte’s wish was granted. The
Indian chief, Peter Wakazoo, decided to relocate to the region of Little
Traverse Bay, and the Indians set about selling their lands. In May 1848 Van
Raalte purchased forty acres at Old Wing Mission from six Ottawas, including Chief Peter Wakazoo, for
$226. He paid the Indians $5.65 per acre for this improved farmland. The same
month Van Raalte paid Wakazoo $26 for the Indian church at the Landing.
Altogether, from 1847 through 1849
Van Raalte purchased, either for himself or on behalf of the Village Trustees,
11,800 acres for $14,000 (Table 2, Table 3).
Most amazing is the range and sophistication of the land dealings. He clearly
received excellent coaching and personal assistance from key government
officials, such as Ottawa County treasurer Henry Pennoyer and John Ball, the Grand Rapids land
surveyor, dealer, and speculator.
When the federal census marshal in 1850 recorded the value of realty in Holland Township, Van Raalte’s lands at $2600
were worth 30 percent more than those of the next wealthiest resident. For his
part, Van Raalte introduced his clerical colleagues, the Reverends Cornelius
Vander Meulen in Zeeland and Seine Bolks in
Overisel, to the intricacies of real estate investing as a way to augment their
meager salaries. The Ottawa
County deed registers
record more than one hundred Vander Meulen transactions between 1848 and 1876.
Sources of
Capital
Where did Van Raalte find the
$14,000 for his land purchases? Public land offices and county treasurers
demanded payment in specie (gold or silver coin), which carried a premium over
bank notes, or buyers could pay with military bounty land warrants that were
available at discount on the open market. But the private eastern
sellers—Silsbee, Schermerhorn, and Palmer—took back mortgages of $4,300. The
Village trustees provided $500 and he borrowed another $2,600; specifically,
$200 from Zeeland farmer-capitalist Jannes Vande Luyster, $700 from Holland ship carpenters
Jan Slag and his son Harm, $400 from farmer Hendrik Hiddink, $300 from Judge John
B. Kellogg of Allegan, and $1,000 from the Rev. Isaac Wyckoff and the Second
Albany (N.Y.) Reformed Church. The Wyckoff loan
was earmarked entirely for building a pier at Holland harbor, which indicates the
complexities of sorting out community development expenses for land purchases.
The Arnhem Emigration Association
raised $2,000 (fl 5,000) before
members embarked for America,
and Brummelkamp personally gave $800 (fl 2,000).
Except for $700 used to buy communal lands, these monies were expended in the
first two years for the needs of the village—constructing crude cabins for
fresh arrivals, opening streets and roads, erecting bridges, surveying lots and
lands, clearing building lots, building and furnishing the log church, real
estate taxes, and the like.
Mortgages and loans (excluding the Wyckoff loan) totaled
$6,400, leaving Van Raalte to pay the remaining $8,100 for land purchases. His
sales of city lots and outlying lands from 1847 through 1849 totaled $5,100
(Table 2), which covered all but $3,000 of his land purchases in those years.
He needed about $500 to cover the family's travel costs and to build a home of
sawed lumber (not a crude log cabin like all the rest). Living expenses in Michigan he presumably
paid from his $600 salary as pastor, although the congregation frequently was
in arrears because of budget shortfalls. I
conclude, therefore, that upon arrival in Michigan Van Raalte required no more
than $3,500 for passage fare, his home, and the costs of real estate purchases,
such as surveying, legal fees, taxes, and other management expenses in the
first twelve to eighteen months, after which sales more than covered his
expenses.
The Village Board of Trustees, of
which Van Raalte was the president, was also involved in buying and selling
city lots to the colonists, nearly half with one-quarter down and three years
to pay the remainder at 7 percent interest. From 1847 to 1849, the Village
Daybook cash account lists income of $1,935 on the sale of 160 lots, less $201
for land purchases, leaving a net of $1,735. [Actual sales of lands and lots
totaled a net of $4,366, but almost all were sold on land contracts with small
down payments (Table 3 and Table 4).] Village expenses of $3,330 for surveying,
clearing lots and streets of trees, and building the Log Church,
among other needs, required all of the income and more, leaving a deficit on
the books of $2,000 in 1849. The $2,600 due on land contracts would more than
cover this deficit, except that most colonists could not meet their payment schedules.
In short, the village treasury could not fund the major land purchases of the
colony.
How much money did Van Raalte carry
with him from the Netherlands?
Historian Albert Hyma of the University of Michigan, the first biographer to
have access to the Van Raalte Collection at Calvin College, asserted boldly
that the dominie carried $10,000 to America as his share in the Ommen pottery
business. Says Hyma in Albertus C. Van
Raalte and His Dutch settlements in America
(1947): “We may presume [italics added]
that upon his departure for America
he sold his interest in the firm and used the capital ($10,000) for his great
adventure.” The
tip-off that this information is suspect is Hyma’s use of the telltale phrase,
“We may presume.” Hyma also notes that in April 1847, barely three months after
arriving in Michigan,
Van Raalte only had $400 left, after paying traveling expenses and buying land.
I conclude that Hyma and other
scholars who have accepted his $10,000 figure have greatly overestimated the
size of Van Raalte’s moneybag.
He likely carried little more than $3,000, with which he gained title to
thousands of key acres in Holland Township, including the town of Holland, and thereby ensured the future of
the entire colony. With a relatively small purse, he gained a treasure in lands
that increased in value to $200,000 ($4 million in today’s dollars). He became
a rich man indeed! But his investments were highly leveraged in the early years
and the strain showed at times.
City Lots
When Van Raalte in 1847 purchased
land for the colony and had the city of Holland
platted into sixty-nine blocks and 687 lots of various sizes, he titled the
land personally and jointly with his wife, because the People’s Assembly, a
town meeting form of government, was not incorporated and could not act in
legal matters. This ensured that colonists would receive clear titles, with no
“clouds” on them. Hence, the chain of title in virtually every deed in Holland City and many surrounding farms carries
Van Raalte’s name at or near the top. Many deeds carried a stipulation barring
on “said premises” the manufacture or sale of liquor and any “gaming, dancing,
or theatrical performance.”
In late
1849, after the People’s Assembly had fallen several thousand dollars in debt,
the trustees asked Van Raalte to assume all debts and the costs of any future
title issues, and in return the Assembly allowed him to take personal ownership
of 546 city lots then remaining unsold. By this time only 141 lots (20 percent)
had been sold. Van Raalte accepted this huge liability with some reluctance, so
he said, but he realized full well the potential windfall of owning lots that
would rise sharply in value as the town developed. “I figure that I could live
on the income of the Village properties alone,” Van Raalte told Brummelkamp in
1852.
Indeed, over the next twenty-five years, his sales totaled $100,000, and he had
a portfolio worth another $100,000 to bequeath to his children in the months
before his death in November 1876. Taking the risk of ownership of the city
lots provided Van Raalte with the foundation for his family wealth, and the
landed security with which to lure investors for his business ventures.
In Van Raalte’s detailed record of
land sales in the years 1847-51, farmland near the city sold for $3 per acre in
1847 and three-acre city lots for $40. Some lot buyers paid cash, but most put
$10 down and signed a mortgage for the rest at 7 percent interest. As the city
grew and land values increased from normal development, he pushed lot prices up
to $45 in 1849, $48 in 1850, $70 in 1855, $120 in 1865, and $400 by 1874. Raw
farmland nearly tripled from $3 to $8 per acre by the eve of the Civil War and
surpassed $10 an acre after the War. His annual tax bill climbed steadily as
well; it was $146 in 1850, $200 in 1852, $228 in 1856, and $660 in 1868.
The value of the properties climbed
apace. Barely six years after immigrating to the Michigan frontier, Van Raalte had
accumulated a landed estate that was the envy of many. It included more than
five hundred village lots and a thousand rural acres. In 1853 the assessed
valuation of Van Raalte’s real estate, tract by tract, as determined by the
county assessor for tax purposes, totaled $5,500 for Holland
Township lands and $11,600 for Holland city lots, for a
grand total of $17,100.
The market value was considerably larger. Building lots in Holland that he sold for $40 in 1848 were
worth on average $60-$70 in 1852, Van Raalte told Brummelkamp, and they will
“without doubt double their value in four years.” And a “small strip on the
water’s edge” is worth $250. I am amazed, he admitted, in “the peculiar
position in which I see myself as the owner of such really unimaginable
wealth.” Land
sales provided Van Raalte's primary source of income and nicely supplemented
his church salary, which often went unpaid or underpaid, on the unspoken
assumption that his parishioners were in far worse financial straits than he
was.
Raising capital
Van
Raalte was constantly seeking capital for the Colony. In 1849 he sent a
positive report about the successes and challenges to Rev. Carel de Moen, his
wife’s brother in the Netherlands.
It included an appeal for investment capital:
Although taken
as a whole, we are a poor company of people, and the funds of even the
well-to-do among them have dwindled away in supplying the thousands of needs of
a new settlement as in bottomless pits. Financial needs are pressing; thousands
of dollars could be invested with rich returns, even appearing to be
indispensable. Yet we are taught, on the other hand, that it is not money or
capital that helps us grow, but the caring, omniscient, Almighty hand does more
than we can understand.
Two years later, in 1851, Van Raalte
expanded on his economic philosophy in a letter about conditions in the Holland
Colony penned to Rev. Helenius de Cock, another Seceder cleric in the
Netherlands:
Dealings, vocations, or trade opportunities, retail
and wholesale, are not lacking here. At a glance, i.e., an experienced glance,
one can find business everywhere—not just where one can make a living, but
where, as Americans say, one can make money. Twenty-five years ago nothing
could be found around Lake Michigan, except for a log cabin in a couple of
places for the purpose of trading with the Indians. Now there is profit with
the large cities and villages. The people who came here were generally people
who began with nothing, or on credit, or with a couple of thousand dollars at
most. They are capitalists now. It is a common occurrence that people become
propertied in the course of eight to ten years. It is not considered important
if one fails, for one begins with “A” again [i.e., one starts over again], and
is granted credit soon.
Among
the capitalists there are some who have gone bankrupt two or three times in
fifteen years (even if they began with little or nothing, with everything on
credit), and are wealthy again in fifteen years. It is a strange country,
incomprehensible to Europeans who know nothing of growing along with the
development of cities. And yet, that is the key to why the new settlers in the
West could come to prosperity so fast, even though they hardly possessed
anything to start with. The flood of the influx of peoples brings value to the
land in a short amount of time, and the land brings forth much in a short time,
bringing about the necessity for all branches of trade, manufacturing, and
others.
Van Raalte by this time was involved
in a number of business ventures, for which there is little or no documentation
in the extant documents. In the summer of 1847 he became the initiator and
principal owner of a sawmill, along with Messrs. Benham, Brist, and Gibbs,
known as the Colony Mill, which was built along a stream running through the
present-day Van Raalte Farm. The stream was dammed up to provide enough
waterpower to mill four thousand board feet a year for several seasons. Van
Raalte also owned half interests in a tree nursery “with the English,” a potash
(potassium carbonate) and saleratus (baking soda) factory with another Englishman
(Henry D. Post), including a store to sell soap and candles, and a tannery with
Peter Pfanstiehl, named P. F. Pfanstiehl & Co., and then with John Keeler
(Kerler), a Bavarian, renamed Keeler & Co. Van Raalte sold his half
interest in 1854 for $200 to John Scheur (Schurr) of Holland, and the factory
became Scheur & Co.
Francis Denison of Kalamazoo, one of
the supporters of the Dutch colony, urged Van Raalte to set up an ash factory
as early as May 1847. “Procure as many Iron Kettles as you have men to use
them,” Dennison advised. “I know of no other way in which you can clear up the
farms and get a living from the labor of your men at the same time.” Van Raalte
took heed and Post & Co. (Van Raalte was the “Co.”) became the first
manufacturing plant in the Colony. Settlers from up to ten miles around carried
on their backs bundles of ashes to the factory at the head of Black Lake, to
exchange for money for groceries and supplies. Each wooded acre produced $6
worth of ash. With a crew of five or six employees, the factory manufactured a
good quality hard soap and later potash, which was shipped to New York, and
black salt for the Chicago market. The firm made a profit of $10,000 a year,
and the colonists earned their first cash income. The partners sold the ash
factory in 1854 to George Colt of Williamsburg, New York, and later Kalamazoo.
These ventures, all backed by
mortgage security on his lands, and the cash required for paying land mortgages
and annual county taxes, caused the dominie to feel the pressure. “Most
perilous for me,” he wrote his brother-in-law de Moen in May of 1851, “is that
all public land purchases and enterprises with the financial costs are mine to
pay, [as well as] the debts incurred through that. I am burdened by that.
Although it is opined that my duties are enviable, they are too much mixed with
care and danger.” Yet, Van Raalte concluded, “I have been blessed in earthly
means and God has steadily given me abundance.”
The Silsbee mortgage was clearly one of those concerns, because in August Van
Raalte wrote Silsbee’s son and executor of his estate pleading for more time to
make the final payment of $409 until he could sell some other lands. Several
church families lived on the land and Van Raalte did not want to see them evicted.
“This is a singular country,” the dominie explained to the New Yorker. “We have
enough to eat and still to get money back is next to impossible.”
Den Bleyker
Fiasco
Paulus Den Bleyker, a Dutch
immigrant who settled in Kalamazoo in November 1850, was the epitome of the
kind of capitalist and entrepreneur Van Raalte envisioned for developing
Holland, and early in 1851 the dominie set to work mightily to recruit him.
Historian Henry Lucas called Den Bleyker the “first capitalist” in the West
Michigan Dutch settlement; Hyma dubbed him the “richest Hollander in Michigan.”
He came to America with $30,000.
Van Raalte had capitalist instincts,
but Den Bleyker had actual capital and much of it. He made his money draining
the Eendracht Polder on the Island of Texel and then selling the lands
reclaimed from the Zuider Zee. Den Bleyker sympathized with the Seceder ideals
that had compelled Van Raalte and his followers to emigrate and decided to join
them in the exodus. When he reached Kalamazoo—a city not much bigger than
Holland but with a Dutch contingent of only four hundred—he saw unlimited
opportunities to make money as a land developer. He purchased for $12,000 a
330-acre farm twelve miles from the city with wheat fields ready for harvest,
and another 180-acre farm on the edge of town for an additional $12,000, this
from Epaphroditus Ransom, ex-governor of Michigan and a Kalamazoo capitalist.
The wealthy Dutchman platted part of the Ransom farm as “Den Bleyker's
Addition” and expected the sale of lots to more than recoup his initial
investment.
When Ransom learned that Den Bleyker
had another $20,000 ready for investment, he asked him to be a partner in a
banking and land mortgage company, and he wrote Van Raalte to help entice the
newcomer. At this point Den Bleyker also wrote Van Raalte for a character
reference on Ransom. So the dominie, who knew the governor and had found him
trustworthy, was put in the position of a go-between. He gave Den Bleyker a
positive reference, but could not let the opportunity pass to try to win him
and his money for the Holland Colony.
Van Raalte also visited dominies
Cornelius Vander Meulen of Zeeland, where Den Bleyker’s brother worshipped, and
Hendrik Klyn of Graafschap, a friend from the Old Country, and both clerics wrote
personal letters to Den Bleyker. Vander Meulen urged him to come settle among
his own people and benefit from the lower cost of living. Klyn warned him to be
careful in dealing with strangers and quoted the scriptural injunction, “Be
wise as serpents and innocent as doves” (Matt. 10:16 RSV). Better to invest in
wholly safe and profitable ventures in Holland.
Van Raalte likewise wrote and warned
Den Bleyker against getting too involved financially with Americans, who “scorn
us as an uncivilized, dull, slow people,” and might well take advantage of him
as a greenhorn. “Think: Opportunity makes the thief!!!” Moreover, besides the
great risk, Ransom’s banking venture offered him 10 percent, while Ransom made
15 percent, “keeping 5% of it as his salary.” In Holland, Van Raalte insisted,
“I want to give you that same 10% and will guarantee your interest and capital
in real estate that is double its
worth.”
Further, Den Bleyker “must begin business among the Dutch folk” he could trust,
and in a location with a great future, since Holland harbor is destined to
become the distribution center of the Upper Great Lakes to eastern markets.
Specifically, Van Raalte suggested a
double steam-driven sawmill and gristmill, which would together cost $10,000
and return 20 to 100 percent on the money. The run-down sawmill of Oswald
Vander Sluis was woefully inadequate. And the colonists, now numbering five
thousand, had to drive oxen for two days to get grain ground. They “will shout
for joy” to have a local mill. “I would want to start these with you,” Van
Raalte declared, either as an active or silent partner. “I can show you how
this could be carried out.”
Van Raalte then played the high
notes on his keyboard:
Perhaps you wonder at this language,
not knowing my position. Yes, even I myself am frequently astonished at the
position in which I find myself. Although I did come here with some capital, it
never occurred to me that I would become involved in so many business matters.
But I find that the Lord has wanted to bless me and [he] placed me uniquely as
the possessor of large properties. Otherwise I would not have been able to
stand where I have stood in order to work on laying the foundations for these
people. Especially because of these exceptional blessings and many business
interests, I can invest capital at a high rate of interest, and give security
by way of real estate. . . .
I shall now reveal, confidentially,
something about this. At first I traded in land for and in the name of the
colony. But after all was said and done, no one wished to be involved anymore
for fear of possible loss and other rationales. But this unreasonable
foolishness actually became a blessing to me. . . . This people deserted me and
broke contracts with me. At first this was difficult, but now it is to my
advantage. That is how it went with the village of Holland also.
And besides, I was very fortunate in the purchase of
valuable lands. So that now, without having desired this, I own wonderful land
along the water; besides thousands of acres of farmland, including strips of
cultivated land and a good amount of natural meadowland and hayfields, as well
as lime beds, all the land of the village of Holland, and three water power
sources. Along with the English I began a tree nursery. Three years ago I
began, with another Englishman, a saleratus and potash factory in which soap
and candles are also made. Another Hollander and I are in partnership in a
tannery business, which is an excellent business; all that is made of leather
will be made here. From this and that you can see what my circumstances are and
the basis on which I can talk to you about this.
I am convinced that you can enter
into business here with pleasure and without danger, business that you could
oversee, in which under God’s blessing, you can turn over capital and profit. .
. . And if you choose to live here among Hollanders, you can live under the
privileges and institutions of God’s church. This is important above all, not
only for the benefit of one’s own temporal and spiritual prosperity, but also
for that of his children. . . .
P.S. One more thing, I began with
little capital, which always hinders enterprise. Moreover, in the beginning
there are always problems to be worked through. And yet, the profits were never
less than 30% and 40%. With greater capital, interest is increased much more,
and especially if you can double the capital. This can happen when the business
affairs have developed more and the money market becomes better. The tannery
brings large profits, up to 80%. These percentages would be much higher if
various businesses work in combination. This is our plan and where it also
naturally leads. This actually is the hidden art of American business, by which
capital can be increased in a few years.
This frank letter, which appealed both to Den Bleyker’s
pocketbook and his Christian
conscience,
won over Den Bleyker, but he came to regret the decision. Van Raalte had
downplayed the risks of investing on the American frontier, even in the tight
Dutch colony among fellow believers. In March 1851, Den Bleyker made the
decision to move to Holland and invest in the project, taking a mortgage on Van
Raalte’s lands as security. The dominie provided the mill site along Black
Lake, and his associate, Henry D. Post, Holland merchant and postmaster, agreed
for $200 plus traveling expenses to contract for machinery and build the mill.
Post bought a powerful steam engine built by Gates & Co. of Chicago and
soon joined the firm as a partner. Despite some stumbling blocks in funding the
company, named Post & Co., the gristmill successfully went into operation
in August and the sawmill a few months later.
But Den Bleyker never moved with his
family to Holland, although he purchased a fine house in town. Heavy rains in
May washed out the corn sprouts and sharply reduced the crop, so the Den
Bleyker Mill, as it was called, lost money instead of making generous profits.
Then to his chagrin, Van Raalte wrote that he was unable to repay Den Bleyker’s
loan and help cover the losses.
Post & Co., meanwhile, had to
deal with the financial fallout. In November 1851, the partners Van Raalte and
Post sold the bankrupt company with its “considerable” indebtedness of $5,800
(owed to sixteen creditors) for a token sum of $1 to two of the largest
creditors, [Jonas C.] Heartt & Co. of Troy and George Colt of Williamsburg,
both in New York. The agreement required the partners to turn over the lands
and property put up as collateral, which must have pained Van Raalte greatly.
It included five lots and forty acres, together with their ashery and saleratus
factory and all fixtures, a house and steam mill, 600 bushels of ashes, 15,000
pounds of black salts, 120 saleratus boxes, a team of oxen and lumber wagon,
and 200 cords of wood. A few weeks later, Van Raalte indemnified Post by giving
him nine mortgages on ten Holland village lots, valued at $420. Van Raalte
pegged his total losses in the venture at $2,000 to $3,000. This was Den Bleyker’s first and last business
venture in Holland, much to Van Raalte’s keen disappointment.
Going bankrupt in the Den Bleyker
venture was a sobering experience for Van Raalte and he learned how easy it was
to lose property put up as collateral. The early 1850s were also personally
dark ones for Van Raalte and his family. His wife Christina was sickly and two
babies died in infancy, the local newspaper editor charged him with
highhandedness in colonial affairs, and conflict began in the Classis of
Holland that culminated in 1857 in a church split.
Mortgage troubles
The disastrous milling venture
weighed heavily on Van Raalte and threatened the financial future of his family
for several years. “One dark storm or other darker clouds are packing together
above me, threatening me with destruction,” he wrote his colleague, Rev. John
Garretson, Secretary of the Board of Domestic Missions of the Reformed Church
in New York City. His indebtedness in late 1852 was $4,000 and losses on the
Den Bleyker Mill likely pushed the total to $5,000.
Most critical were the annual mortgage payments due on the valuable tracts of
lands he had purchased in 1847 from Silsbee and Schermerhorn. Final payments on
these mortgages were due in 1853 and he lacked the monies. He might even have
to sell his home and farm to cover these large financial obligations. This
predicament forced him to write pathetic letters pleading for more time to
avoid foreclosure. He owed the Silsbee estate $900 and Schieffelin (who had
purchased Schermerhorn’s mortgage) $1,600. Van Raalte assured Silsbee’s son and
executor: “I will surely pay you just as fast as possible. I hate debts.”
To gain concessions from
Schieffelin, who still owed money on the land contract with Courtland Palmer,
Van Raalte had his ministerial colleagues, Garretson and Rev. Thomas De Witt,
pastor of the Marble Collegiate Church, act as intermediaries. He asked both to
use their “influence” on Schieffelin to find a way to avoid foreclosure. “I am
willing to make every sacrifice to avoid this forced sale,” Van Raalte implored
Garretson. “It would hurt my position, it would be ruinous to my family . . . I
beseech you to work and pray for me.”In
a follow-up letter a month later, Van Raalte detailed the wider implications of
his predicament. If Schieffelin foreclosed, it would wipe out the titles of several
immigrant families who had bought parts of the tract from Van Raalte and begun
farms. He was willing to give up his home and farm for “these ruined families,”
despite the distress it would cause “my dear wife,” but “it can not make up
their loss, it can not heal the breach, it can not cure the evil.” Worse yet
was the spiritual cost. “It will crush the hearts of the pious and strengthen
the hands of the ungodly; the evil heart and Satan will make use of the
ignorance of the many to undermine my influence as a minister of the Gospel.”
If Schieffelin could not make any concessions, Van Raalte as a last resort
offered to come to New York, deeds in hand to Holland village lots, to give to
Schieffelin, who could then “hunt up” some sixteen friends to buy them cheap at
$100 apiece, and thereby cover the debt.
In
both cases the dominie found the
lenders sympathetic to his cash squeeze and willing to give more time. Suydam
and Schieffelin paid off the Palmer mortgage, which ended the immediate threat
of foreclosure, and they agreed to take interest only on Van Raalte’s note.
“They have done a most noble act towards me,” the dominie wrote to Garretson.
“Last summer I was in great danger of a most ruinous destruction on account of
a mortgage over a great deal of lands which I could not pay in time. They have
taken the mortgage and did pay them to Mr. Palmer. May God reward them
abundantly with temporal and spiritual blessings.” A year later Garretson
offered Van Raalte financial help from Mission Board funds, but he declined
“because my creditors, the brothers Suydam and Schieffelin, are very patient
with me and are so patient to receive only the interest for the present.”
Van
Raalte paid off the Silsbee mortgage in 1855. In 1857 he gave Suydam and
Schieffelin a new mortgage note on his own eighty-acre farm as security for
$874 still owed on the original loan, with interest of 7 percent per annum. In
1864 Van Raalte still owed the note plus interest, amounting to about $1,000.
At this point Schieffelin took back two new $500 mortgages bearing 7 percent
interest, one each signed by Albertus and Christina, and he then assigned them
to John Brower, treasurer of the General Synod of the Reformed Church. The
$1,000 debt was now placed on the church books and Van Raalte thereafter paid
annual interest on the notes to the denominational treasurer. In 1872 the
denominational treasurer paid off Schieffelin and the mortgage was cancelled,
but Van Raalte continued to make periodic payments to the denomination on his
and Christina's bonds until his death in 1876, and his son Dirk continued to
pay interest and principal until the notes were finally paid off in 1885! So
the Courtland Palmer mortgage of 1847 essentially evolved into a forty-year
loan on the dominie’s home and farm!
Subsequently, both Suydam and
Schieffelin contributed to Van Raalte’s signal project, endowing Hope College
and placing the fledgling school on a firm fiscal foundation. After Van
Raalte’s colony at Amelia Courthouse, Virginia, failed in 1871, Schieffelin
came to his rescue a second time and purchased 162 acres from him for $5,160.
The tract, known as the “court house property,” was a choice piece of land well
worth $31.85 an acre. Van Raalte had purchased the land in November 1869.
The financial setbacks that Van
Raalte experienced in the early 1850s impacted his preaching negatively and
this became a subject of concern in his congregation. In 1853 his elders felt
it necessary to tell him that “the power of his preaching seems to have
disappeared,” and they advised him to “lay aside some other activities . . . in
order to be more active within the congregation.”
This admonition and the financial
problems dissuaded him from new business ventures for six years. Then he was
drawn in again by Albertus, his firstborn son, who inherited his father’s
entrepreneurial instincts but not his capabilities. In 1859 the dominie bought
for Albertus, then twenty-two years of age, the Holland Nursery tree farm of
Homer Hudson in Georgetown Township for $1,060, including “all the fruit trees
standing thereon.” Father Van Raalte made the final mortgage payment on the
property in 1865.
In 1863 Albertus began a second venture by entering into partnership with
Warren Wilder, a Grand Haven millwright, in a lumber and shingle mill in Olive
Township, under the company name Wilder & Van Raalte. A year later, in
March 1864, the dominie joined the firm, and each partner invested $1500. Van
Raalte’s share came by buying land in Olive Township from Wilder. The junior
Van Raalte raised some of his capital by selling two thousand acres of land to
Wilder for $400, and the pair pledged to “devote their whole time to the
business.” The dominie was only responsible “to put in his place a person (a
Competent Bookkeeper) at his expense to be his representative in the business,”
renamed Wilder & Company.
Less than four months later, the
dominie bought out Wilder’s interest for $1700 ($500 down and three years for
the remainder at 10 percent interest), and Albertus was on his own. But his
business acumen was questionable. The younger son Ben, then serving in the
Civil War, called the decision to go into the mill business during wartime “a
silly thing.” Albertus might succeed if “he is lucky,” but “I am sometimes
afraid that he feels like a man standing on ice—a little unsteady. I personally
do not like the mill business but, if it is handled right, a good living can be
made at it.” Whether Albertus made a go of the mill is doubtful; five years
later he abandoned his wife and five children and was never heard from again.
Serving two masters?
Financial pressures from his
generally poor business affairs continued to consume Van Raalte. His land
holdings made him a wealthy man on paper, yet he complained of being “land
poor,” because his money was tied up in unproductive land and he had to raise
cash for the annual tax bill. In 1860 he was by far the wealthiest man in
Holland Township, which made him one of the few men subject to the temporary
Civil War income tax law in 1862.
He admitted the pressure in a
confidential letter to Rev. Giles Van de Wall, his former associate and teacher
at the Holland Academy, who was serving as a missionary in South Africa.
I am burdened with temporal
difficulties that are great and that demand all of the time of a strong person.
. . . On the one hand, I have to see to it that idle property yields a return
or I will have to sell it to pay the taxes. On the other hand I say, “Is it
proper for me to busy myself with worldly matters, since I should devote myself
to preaching the Gospel?” And still I am responsible for the needs of my
family. I am in a quandary. . . . [This] often leads me to say, “Is it not my
duty to look for another field of labor, where I am not hampered by earthly
difficulties?”
A decade earlier, Van
Raalte expressed even more angst about wealth in a letter to Brummelkamp:
I came here naked, but I
have been able to live with a large family and was able to spend as one who had
capital. But despite my continual resistance, yes, bitterness toward God and
man, I find myself placed with possessions, which if it pleased God could make
me a capitalist. And yet, they were thrown around my neck for my lack of trust
and to kill me. They are possessions that the worldling by turns praises and
envies, and still those same possessions seem to become my grace or my
destruction because of the debts connected to this and from my position, at
least to be for me a source of distressing cares. Often I ask Why? Why? Yet I
have the root of all devilish evil in me and also the root of the desire to
become rich. . . . Sometimes I say in impatience, let everything break up and
go to pieces as it will. However, in a calmer moment, I see it is not without
God’s providence that I was placed in this important position.
These
telling letters shows that Van Raalte wrestled with his calling as a minister
of the gospel and his desire to enjoy a standard of living above that of
most of his parishioners. He was torn between serving “two masters.” Yet, he
was the only university-educated man among thousands of immigrants, and this
alone justified an upper-middle-class lifestyle, according to his Old World
standards.
More
Land
Although land
dealings brought complications in his life, Van Raalte could not resist
buying more, despite the debt to the
denomination still owed on his home. Between 1859 and 1874, he invested $10,000
in more land (Table 1). In February 1865, he purchased all the swamplands held
by the Harbor Board for $3,500, with $200 down and the remainder in three years
at 7 percent interest.
Improving the harbor had been a priority from the outset. The second purchase
of swamplands was “for my boys,” the dominie noted. The same year he paid
Holland merchant Peter Pfanstiehl $2,160 for six parcels totaling 1,440 acres.
To seal the deal, Pfanstiehl demanded two choice town lots in return, for which
he paid $290. Van Raalte sold several other town lots to raise more cash, but
not enough to pay off the Pfanstiehl contract. Within days the he was writing
Philip Phelps, president of his favorite endeavor, the Holland Academy, and
complaining that the “pledge of the Pfanstiehl lots drives me to a corner.” He
hoped Phelps could induce the trustees to buy eight half lots located adjacent
to the campus for “Professorial residences” at a price of $140 each. “This
chance never comes back,” Van Raalte reminded Phelps, “once the lots are sold
and occupied by a miserable mixture of houses of every description. . . . Is it
possible in some way to secure them for the object?” The school trustees did
not bail him out.
Van Raalte was so entrepreneurial-minded that he
viewed colleges such as Hope in broad economic terms. Colleges, he said,
produce the greatest indirect profits
and benefits. . . . [They] make property values rise. They promote the growth
of a community. They create markets and life. They attract capital and the best
kind of inhabitants to such a place. Imagine for a moment of how much capital
would this place have been deprived annually if the educational work of late years
had not been promoted? What would our characters be worth? What would real
estate prices be?
How prescient this view was. Hope
College has done that and much more for Holland.
Van
Raalte helped the college wring profits from its landed endowment. In 1869
James Suydam donated $5,000 for the college to buy a choice tract, the Point
Superior Farm on Black Lake (now Marigold Lodge). When Van Raalte learned of
the gift and the possibility of $2,000 more to clear all debts on the property,
he suggested renaming it the Suydam Farm. He also asked his son Ben to go into
partnership with him to raise peach trees on a high-lying portion of the
property. He offered Ben $30 a year to manage the project, plus all expenses
for seed pits, fertilizer, and fencing. If done properly, in three years the
Van Raaltes would have peaches aplenty for their table and even more to sell
for the benefit of the College.
After
Van Raalte retired in 1867 as pastor of First Reformed Church, until his death
in 1876, he was free as a private citizen to devote more time and energy to
financial matters. This was especially the case after his return to Holland in
1869, following an unsuccessful attempt to plant a new Dutch colony at Amelia
Courthouse, Virginia, which caused him to lose several thousand dollars. He had
financed that venture in large part by selling for $5,000 in 1867-68 three
building lots and a steam-powered sawmill to Thomas Padgett of Rochele,
Illinois, director of the Port Sheldon Lumber Company.
The
largest transaction in his entire life took place in 1871 when the Michigan
Lake Shore Railroad paid $11,000 for forty-five choice lots for a new depot and
right-of- way alongside the college campus. Van Raalte was inclined not to sell
when the railroad first came calling, but Holland residents were caught up in a
fevered campaign to bring rail service to town and had even voted to bond
themselves to entice the company not to bypass the town. In the years from 1870
to 1876, Van Raalte sold seventy-nine town lots and one thousand acres of
farmland for $50,000 (Table 2). The largest sale, for $10,000, three months
before his death, was to son Dirk B. K. Van Raalte for the purchase of the
dominie’s homestead and farm, with the proviso that the two youngest daughters,
Maria and Anna, could continue to live in the house until their marriages.
A Proposed Bank
In his
business activities, the biggest problem Van Raalte and his partners faced was
the lack of capital for development, which was a ubiquitous problem on the
American frontier. For manufacturing and trade to flourish, Holland needed a
bank to issue reputable (rather than “wildcat”) bank notes, and for some time
he considered chartering a bank under the aegis of the state banking act of
1857. Nathan Kenyon had opened the first private bank in Holland in 1856 and
Kommer Schaddelee followed suit in 1871 with an exchange bank. Both accepted
savings deposits, paid in currency on merchant’s drafts and private bank notes
submitted for exchange, and issued notes (paper money). But private bank notes
lacked credibility and were worth no more than the reputation of the issuer.
Van Raalte hoped to form a local bank that could tie in to the national banking
system created by Congress during the Civil War, which was empowered to issue
to bank notes, dubbed Greenbacks.
The
disastrous Holland Fire of 8 October 1871 forced Van Raalte to seek to
implement his banking plan. The flames spared his home, church, and college,
but the entire business district and the residential heart of town was lost.
Holland could not be rebuilt without capital. “I must go ahead or give up,” he
told Phelps, then in New York City to raise money for Hope College. Van Raalte
envisioned a National Bank capitalized at $50,000 to $100,000, but the way to
reach that goal was unclear. If he sought help to obtain a charter from
Americans in Grand Haven, such as U.S. Senator Thomas F. Ferry, the news would
get out and “sharpers” and “society-enervating leeches or blood suckers” would
try to take over.
Van
Raalte’s “ripe plan,” as he called it, was brilliant. He would partner with
Arent Geerlings, a “practical miller” with a solid reputation, whose City Mills
and feed store (Werkman, Geerlings & Company) were both destroyed by the
fire. With $16,000 to $20,000 in start-up capital, half coming from mortgages
on Van Raalte’s farmlands, he and Geerlings could begin a small bank that might
be able to attract capital from “eastern friends,” i.e., Dutch Reformed
capitalists in New York. They would “take stock in it” by depositing government
bonds, from which they would continue to clip 6 percent coupons. With the bonds
as collateral, the bank would issue bank notes as loans to farmers and
manufacturers. This would increase the local money supply and “bring business
life back” after the fire. Hope College could also invest its endowment monies
in the bank and borrow from it to erect buildings.
The bank
could operate out of a rebuilt feed store in Holland, with branches in outlying
villages. Supplying feed and other necessities to farmers is “a safe and good
business,” Van Raalte reasoned, and the bank could piggyback on that cachet and
expand into banking and investment services. “We could expect the first years
more than barely to keep alive,” but the business would expand “as fast as
small deposits grow on the hands,” Van Raalte told Phelps. “All my property is
given to it, even self preservation compels me. . . . Most sickening will be
our situation without capital.” Van Raalte then came to the bottom line. “If
you could effect a loan for me of 20 m [thousand] on ample security on real
estate, this would perhaps provide matters. They tell me Life insurance
companies are doing this sometimes.” Despite the dominie’s desperate tone and
the bleak situation facing the city, his appeal to “eastern friends” went
unheeded. No money for a charter bank in Holland was forthcoming until 1889,
although relief funds for the townspeople did arrive.
Conclusion
In his
economic endeavors, Van Raalte can better be described as a promoter and
fundraiser than a businessman. He raised tens of thousands of dollars in the
East for colonial lands, Holland harbor, the Colonial Church, Hope College, and
various business ventures.
His prime goal at the outset was to ensure the success of the Colony, not to play
the role of capitalist and accrue wealth. Yet his entrepreneurial mindset,
capitalistic attitude toward money, and eagerness to take risks in various
enterprises inevitably drew him into business life. Only his duties as pastor
constrained him from taking a more hands-on role; he could be a partner and
co-investor but not the person in charge.
Lots and
lands, however, did lend themselves to his direct management, since he could
squeeze sales, legal work, and tax payments in between his pastoral duties. His
dabbling in factories and mills did not prove profitable, whereas real estate
dealings made him a fabulously wealthy man. Land in and around Holland gained
value while he slept, due to the rapid and steady development of the community.
He got in “on the ground floor” and parlayed a modest investment in land into a
portfolio worth $5 million in today's dollars. It was Van Raalte, not Den
Bleyker, who deserves the title of “wealthiest Hollander in Michigan.”
Table 1: A. C. Van Raalte Land Purchases,
1847-76
|
Year
|
$ Total*
|
No. Buys
|
Acreage
|
Lots
|
|
1847
|
7346
|
80
|
7288
|
0
|
|
1848
|
2536
|
41
|
3010
|
0
|
|
1849
|
3981
|
18
|
1349
|
1
|
|
1850
|
103
|
5
|
720
|
0
|
|
1851
|
393
|
14
|
840
|
0
|
|
1852
|
35
|
13
|
1024
|
0
|
|
1853
|
0
|
0
|
0
|
0
|
|
1854
|
50
|
1
|
83
|
0
|
|
1855
|
0
|
0
|
0
|
0
|
|
1857
|
0
|
0
|
0
|
0
|
|
1858
|
11
|
1
|
320
|
0
|
|
1859
|
1180
|
2
|
17
|
2
|
|
1860
|
950
|
3
|
240
|
2
|
|
1861
|
660
|
3
|
120
|
1
|
|
1862
|
9
|
3
|
0
|
3
|
|
1863
|
910
|
3
|
1582
|
0
|
|
1864
|
1480
|
13
|
1040
|
0
|
|
1865
|
2160
|
12
|
1440
|
0
|
|
1866
|
400
|
1
|
0
|
0
|
|
1867
|
540
|
2
|
0
|
2
|
|
1868
|
0
|
0
|
0
|
0
|
|
1869
|
0
|
0
|
0
|
0
|
|
1870
|
300
|
1
|
0
|
1
|
|
1871
|
1100
|
2
|
80
|
1
|
|
1872
|
0
|
0
|
0
|
0
|
|
1873
|
0
|
0
|
0
|
0
|
|
1874
|
400
|
1
|
40
|
1
|
|
1875
|
0
|
0
|
0
|
0
|
|
1876
|
0
|
0
|
0
|
0
|
|
Total
|
24,504
|
219
|
19,193
|
14
|
*Van
Raalte bought some lands, especially in 1847,
with
small cash down payments, and sellers took
back
mortgages for the remainder. The mortgage
payments
of principal and interest are not included.
Table 2: A. C. Van Raalte Land
Sales, 1848-76
|
Year
|
$Total*
|
No. Sales
|
Acreage
|
City Lots
|
|
1848
|
1984
|
27
|
1211
|
2
|
|
1849
|
2158
|
20
|
563
|
14
|
|
1850
|
923
|
19
|
70
|
22
|
|
1851
|
2558
|
26
|
454
|
36
|
|
1852
|
3844
|
44
|
146
|
98
|
|
1853
|
1511
|
18
|
730
|
18
|
|
1854
|
995
|
8
|
199
|
10
|
|
1855
|
2540
|
18
|
234
|
17
|
|
1856
|
1130
|
11
|
40
|
13
|
|
1857
|
2619
|
19
|
212
|
36
|
|
1858
|
710
|
7
|
0
|
15
|
|
1859
|
750
|
6
|
110
|
5
|
|
1860
|
4070
|
28
|
59
|
67
|
|
1861
|
2559
|
18
|
80
|
20
|
|
1862
|
1993
|
20
|
112
|
53
|
|
1863
|
2440
|
25
|
70
|
32
|
|
1864
|
4016
|
29
|
120
|
46
|
|
1865
|
4866
|
25
|
40
|
30
|
|
1866
|
2250
|
3
|
1571
|
2
|
|
1867
|
10701
|
32
|
16
|
66
|
|
1868
|
5390
|
13
|
120
|
21
|
|
1869
|
4485
|
12
|
105
|
15
|
|
1870
|
3620
|
8
|
0
|
43
|
|
1871
|
16567
|
17
|
192
|
92
|
|
1872
|
4035
|
12
|
0
|
12
|
|
1873
|
3630
|
9
|
350
|
12
|
|
1874
|
3010
|
8
|
220
|
4
|
|
1875
|
5075
|
13
|
80
|
16
|
|
1876
|
14981
|
12
|
160
|
24
|
|
1878
|
240
|
1
|
0
|
1
|
|
Totals
|
116,650
|
509
|
7264
|
842
|
* These sums
are the gross amount of land sales. On
an
unknown number of sales, Van Raalte accepted
down
payments and extended credit at interest for
several
years. This interest income is not included here.
Table 3: Village Board of Trustees Land
Purchases, 1847-51
|
Year
|
$ Total
|
No. Buys*
|
Acreage
|
Lots
|
|
1848
|
201
|
3
|
140
|
1
|
Table 4:
Village Board of Trustees Land Sales, 1847-51
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
$ Total
|
No. Sales*
|
Acreage
|
Lots
|
|
1847
|
1810
|
35
|
0
|
38
|
|
1848
|
2230
|
49
|
0
|
59
|
|
1849
|
548
|
12
|
0
|
68
|
|
1850
|
618
|
8
|
0
|
8
|
|
1851
|
563
|
3
|
80
|
1
|
These
sums are the gross amount of land sales.
In
twenty-one sales, the Trustees accepted down payments
and
extended credit at 7 percent interest for several
years.
The subsequent payments of principal and interest
are not
included.
