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Chapter 10 - Sourcing and Supply Management
10-1
© 2017 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 10
Sourcing and Supply Management
Suggested Answers to Discussion Questions
1. Can you think of an organization that has benefited by extending social responsibility to its
supply chain? What about one whose supply chain practices have hurt its reputation?
A number of organizations provide annual rankings of companies for various aspects of
corporate social responsibility. the most admired and least admired companies for
social responsibility which can be a source of current examples of high and low
performers. For example in 2015, Lego was ranked as one of the top ten companies in
the world for CSR in part because of its efforts to replace the plastic used in its
products with more sustainable materials. (Adams, Susan (2015), “The Companies
with the Best CSR Reputations in the World, Sept. 17,
http://www.forbes.com/sites/susanadams/2015/09/17/the-companies-with-the-best-csr-
reputations-in-the-world/).
2. Consider the purchase of a new mobile phone. How would you determine the total cost of
ownership? What are the costs that you might incur before the purchase, during the purchase,
and after the purchase?
When evaluating the total cost of ownership of a new mobile phone consider the costs
that occur before, during, and after the purchase. Before the purchase, you must
consider the time required to do research and evaluate the different phone and service
plan options. During the purchase, you must consider the purchase price of the phone,
the service plan, as well as the size of the network coverage. The length and type of
service plan must be considered since it affects cost and flexibility. After the purchase,

10-2
issues such as the reliability of the phone, the durability of the phone, the consistency of
network coverage, and the length of time before the phone becomes obsolete affect the
total costs.
3. How would you do a spend analysis if you were the supply manager for a large state
university?
A large state university has many different types of purchases. The first step would be
to identify who in the university is making purchases. For example, it may be that
each College purchases the computers for their faculty. The accounting system would
provide information about who is purchasing what. After this information has been
gathered, you can determine which purchases could be standardized and combined.
For example, by standardizing computer purchases across the university, quantity
discounts are likely.
4. The top management team at your company is considering outsourcing the supply
management function. Do you support this idea? Why, or why not?
Some types of supply management activities may be good candidates for outsourcing.
Those activities that would benefit from specialized expertise or knowledge or can be
done at a lower total cost by a supplier are potential candidates for outsourcing. Before
outsourcing, evaluate potential suppliers to determine their capabilities and
performance. For example, some companies outsource spend analysis and market
research activities. Other strategic activities such as managing a major commodity that
provides a competitive advantage would be important to retain within the company.

10-3
5. Many universities have outsourced dinning services. Do you think this is a good idea? Why
or why not?
A university’s core competency is education not food service. Further, planning and
running food service operations to ensure good quality food and service while
controlling cost can be very challenging. Outsourcing would allow the university to
focus on its core competency. If a qualified supplier were selected, it could obtain
economies of scale by using similar menus and purchasing for a number of universities
in which it provides dining services. A detailed analysis should be done following the
steps in Figure 10.1.
6. Consider Marriott or Hilton corporations, which have hotels around the world. What type of
purchases should be local, national/regional, or global? Why?
To maintain consistent standards and gain leverage, hotel chains try to source many
key items from a single global source. For example, pillows, bedding, and clock radios
would be purchased globally. Fresh food, flowers and produce are items that are often
purchased locally. Produce such as meat are often sourced nationally. Cultural
differences and laws and regulations must be considered when making sourcing
decisions.
7. For an organization that you are familiar with, provide an example of each of the four
categories of purchases shown in Figure 10-4. What sourcing strategy would you use for
each? Why?
The four categories are: 1) non-critical, which are low value, low risk items, 2)
bottleneck, which are low value but high risk items, 3) leverage, which are high value
but low risk items and 4) strategic, which are high value and high risk items. One

10-4
example would be the purchases by an airline such as Delta. Non-critical items would
include the cups and napkins that are used for food service on the plane. The company
might use vendor-managed information for these items. Bottleneck items would include
spare parts that are needed for repair of an aircraft. The company may decide to use
two suppliers to make sure that parts are always available. Leverage items would
include the uniforms that the crew wears. The company might use a single national or
global supplier to keep costs low. The airplane engines are essential high cost items that
affect safety, reliability, and operating costs. The company would develop strategic
partnerships with the key engine suppliers.
8. Why don’t companies seek full partnerships with all of their suppliers?
It is time-consuming to develop and maintain full partnerships with suppliers. Full
partnerships require cross-functional relationships among people in the buyer’s and the
supplier’s organizations, extensive sharing of information, and sharing of risks and
rewards. The buyer and supplier must develop mutual trust and interdependence.
Buyers and suppliers do not have the resources to develop extensive relationships with
all of the companies that they do business with. Instead, they must focus those
resources on the supply chain partners who are most critical for their organizations’
success.
9. When evaluating a supplier’s financial stability, what are some key indicators to consider?
Why?
One of the greatest concerns is that the supplier will go out of business and will not be able to
supply the product. Cash flow is one indicator that the supplier may stop operating.
Liquidity ratios such as the quick ratio (Cash + Receivables)/(Current Liability) can

10-5
indicate financial problems. If the supplier’s inventory turnover (cost of goods
sold/inventory) is too low, the supplier also may have cash flow problems. The ability to
take on debt if needed to expand also is another important financial performance
indicator. The debt to equity ratios (total liabilities/equity) and current debt to equity
(current liabilities/equity) indicate levels of debt. If debt ratios are too high, the
supplier may not be able to take on additional debt or to pay its lenders. Profitability
ratios also are important. Net profit margin (profit after taxes/total assets) and return
on assets (profit after taxes/total assets) indicate how well the
supplier is performing. It is important for long-term stability that a supplier be
profitable and retain in business. However, if profitability is too high the supplier’s
prices may be too high.
10. What are the costs and challenges involved with switching suppliers?
The first step when switching suppliers is to find a qualified supplier who is willing to
do business with the company. The supply manager must search for suppliers and then
evaluate their capabilities to see if they are able to meet the buyer’s needs. Supplier
evaluation may include an analysis of the supplier’s financial performance. For
strategic suppliers, a visit to the supplier’s operations will include an assessment of
equipment, processes, employee skills, training, and morale, quality systems and
performance, supply management processes, engineering and technical capabilities, and
logistics systems. Product testing may be required to make the final decision that the
new supplier is qualified. To agree upon the terms of the contract, competitive bidding,
e-auctions, or negotiation are needed. Then the buyer must determine how to phase out
the existing supplier and start the new supplier. The buyer must develop processes for

10-6
communicating, managing the transactions with, and evaluating ongoing performance
with the new supplier.
Problem Solutions
1. The supply manager at a dishwasher manufacturer is assessing the company should purchase
the pump from a supplier or assemble the pump in-house. Forecasts suggest that 15,000 pumps
are needed per year. The annual fixed costs to assemble the pumps are$120,000 per year. The
variable costs per unit to assemble the pump are $25/unit. The pumps can be purchased for
$30/unit. Does the cost analysis support insourcing or outsourcing pump assembly?
Total Cost insource= (Variable Costs X Volume + Fixed Costs) = (($25/unit x 15,000
units/year) + $120,000) = $495,000/year
Total Cost outsource = (Price X Volume ) = ($30/unit x 15,000 units/year) = $450,000/year
The cost is lower to outsource the pumps than to insource the pumps.
2. An online retailer must decide if it should insource or outsource its website maintenance.
The company estimates that 4,000 hours per year will be needed to maintain its website. To
insource maintenance requires $25,000 in fixed costs per year and $27/hour in variable costs.
Quotes from suppliers show that website maintenance can be outsourced for $35 per hour. Does
the cost analysis support insourcing or outsourcing website maintenance?
hours/year) + $25,000) = $133,000/year
Total Cost outsource = (Price X Volume) = ($35/unit x 4,000 units/year) = $140,000/year
The cost is lower to insource website maintenance than to outsource website maintenance.

10-7
3. A furniture manufacturer is assessing if it should make or buy the wooden frames for
upholstered dining room chairs. The forecast is for 100,000 chairs to be produced per year. The
fixed costs per year to make the frames are $150,000 and the variable costs are $5/frame. The
supplier’s bid is $8/frame. Does the cost analysis support insourcing or outsourcing the chair
frames?
hours/year) + $150,000) = $650,000/year
Total Cost outsource = (Price X Volume) = ($ 8/unit x 100,000 units/year) = $800,000/year
The cost is lower to insource the chair frames than to outsource the chair frames.
4. A construction equipment manufacturer is considering outsourcing assembly of
dashboard components. Strategically the company is focusing on design and final equipment
assembly. The company expects to make 75,000 units next year. The total variable costs to
assemble the dashboard components is $270/unit including both direct labor and direct materials.
The fixed costs associated with the assembly process are $500,000 per year. A supplier has
quoted a delivered price of $280/unit for up to 80,000 units per year. What are the total costs to
insource and to buy the assembly from the supplier? Considering cost and strategic factors,
should dashboard assembly be insourced or outsourced to the supplier? Why?
units/year + $500,000) = $20,750,000/year
Total Cost outsource = (Price X Volume) = ($280/unit x 75,000 units/year) = $21,000,000/year
Although the cost is slightly higher ($250,000) to outsource the assembly, the strategic focus
on design and final product assembly suggests that outsourcing is the best decision in this
case. The company must consider the ability of the supplier to provide the quality and

10-8
delivery needed as well as any challenges that may be encountered in working with the
supplier.
5. WatchNU is a company that designs and manufacturers drones for military use. The
supply manager is getting ready to renegotiate the contract with the security service provider that
it uses for its offices and manufacturing plant. Three suppliers responded to the RFP for
security services for the next three years. The current security services provider, SecureIT
quoted $990,000 per year. Two suppliers that have not been used by WatchNU in the past
quoted $890,000 and $965,000 respectively.
The supply manager is also analyzing the costs associated with insourcing security services
rather than using a supplier as a way to reduce costs and provide greater control over security.
The salary and benefits for a full-time security services manager is estimated to be $100,000.
Other fixed costs are estimated to be $30,000/year. Three security guards are needed 24
hours/day, 365 days per year. The salary and benefits for the security guards is $30/hour.
What are the costs to insource the security services? Do you recommend insourcing or
outsourcing the security services? Why?
The variable costs in this case are: 3 guards X $30/hour X 24 hours/day X 365 days/year =
$788,400 per year.
The fixed costs are: $100,000 + $30,000 = $130,000.
The total costs are $788,400 + $130,000 = $918,400
The cost to insource is higher than one supplier’s quotation but lower than the other two
suppliers. However, price alone should not be the deciding factor. Because security
services are not WatchNU’s core competency and there appear to be qualified suppliers,
the security services should be outsourced. Before making the final decision, the new

10-9
suppliers’ capabilities should be carefully evaluated to ensure that they can provide the
quality of service needed.
6. The Big Apple Pizza Company, a manufacturer and distributor of frozen food products, is
introducing a new frozen Chicago-style pizza. The new sauce for this pizza is a unique, special
recipe and it resulted in very positive taste test ratings in market research studies. The supply
manager is trying to decide if the company should make or buy this sauce. The current forecast is
for 120,000 total gallons of the sauce to be used over the estimated three-year life of the product.
The first year, 30,000 gallons are forecast with 45,000 gallons each in years two and three.
Currently, Big Apple purchases all of the sauce used in its products, ready-made, from a
single source, Top Tomato. The supplier’s production plant is located 320 miles from Big
Apple’s production plant, and weekly, truckload deliveries are currently used. The company
buys approximately 600,000 gallons of sauce per year from Top Tomato. The sauce supplier has
provided high quality, low-cost standard pizza sauces to Big Apple and other pizza makers for
over five years. The current sauce supplier has quoted a delivered price of $2.85/gallon for the
sauce if a three-year contract is used. Conformance to quality standards for Top Tomato’s sauce
has been 99 percent and on-time delivery has been 95 percent.
Big Apple’s manufacturing manager has stated that a facility and sauce-making
equipment are needed at an investment of $60,000 because the company does not make any
sauces. The manufacturing manager stated that he had been considering laying off several
workers because of lower demand for frozen potpies, so he was in favor of making the sauce.
The following direct costs have been estimated for making the sauce. Typically, overhead costs
for Big Apple’s production facility are allocated to products at a rate of 200 percent of direct
labor.

10-10
Direct labor $ 0.25/gallon
Direct materials $ 2.00/gallon
Apply the eight steps for the insourcing/outsourcing decision. Should Big Apple Pizza make or
buy the sauce? Why?
Step 1. Assess Fit with the Firm’s Core Competencies. Big Apple does not currently make
sauce so this does not appear to be a current core competency of the company. Is sauce-
making intended to be a future core competency, most likely not? Are there economies of
scale to be gained from sauce production that a supplier will realize because they produce
sauce for a wide-range of customers? The fact that the sauce is unique suggests that there
may be some risk of losing intellectual property if the sauce is outsourced but this may be
mitigated by signing a non-disclosure agreement with the supplier. Step 1 favors
outsourcing.
Step 2. Evaluate the Suitability for Outsourcing. The recipe for the sauce is proprietary.
However, the process to make sauce is mature and uses a known technology. The company
is already purchasing sauce from a high quality supplier. Step 2 favors outsourcing.
Step 3. Evaluate the Reasons for Outsourcing. Once the new pizza enters the market, Big
Apple’s competitors will be able to copy the sauce. Thus, the investment in sauce making
equipment and time spend ramping up on process that is new to Big Apple may not be
worth it because of the short time frame of the advantage. Working with an experienced
sauce supplier may enable to company to more quickly enter the market with a higher
volume and thus gain market share. Step 3 favors outsourcing.
Step 4. Assess All Relevant Quantitative Costs.
Year 1 2 3

10-11
Cost to Buy
Forecast (gallons/year) 30,000 45,000 45,000
Total Price ($2.85/gallon) $85,500 $128,250 $128,250
Cost to Make
Direct Labor ($.25/gallon) $7,500 $11,250 $11,250
Direct Materials ($2.00/gallon) $60,000 $90,000 $90,000
Total Direct Costs $67,500 $101,250 $101,250
Equipment Depreciation $20,000 $20,000 $20,000
Other Overhead Costs $15,000 $22,500 $22,500
Total Operations Cost $102,500 $143,750 $143,750
7. Your company has used competitive bidding to select a supplier for janitorial services. Three
suppliers returned acceptable bids within the allotted period. Based on these ratings from the
supplier assessment, which supplier appears to be the best? Why? How would the final
selection decision be made?
Multiple each supplier’s rating in each category by the weight. Sum the score for each
supplier.
Category Weight Supplier A Supplier B Supplier C
Rating Score Rating Score Rating Score
Quality
systems
40% 3 1.2 3 1.2 4 1.6
Financial
stability
25% 2 0.5 3 0.75 1 0.25
Management
experience
20% 2 0.4 3 0.6 3 0.6
Price 15% 4 0.6 4 0.6 5 0.75
Total
Weighted
Score
2.7 3.15 3.2

10-12
All ratings on a five-point scale with 1 = poor, 5 = excellent.
Based on the weighted scores, Supplier C appears to be the best because it has the highest
score of3.2. However, the weighted score for Supply B is very close at 3.15. Judgment
should be used to decide between Supplier B and Supplier C.
8. As the buyer for the city of Perrysburg, you are evaluating a supplier for garbage cans to be
used in the city’s parks. Three suppliers returned acceptable bids within the allotted period.
Based on these ratings from the supplier assessment, which supplier appears to be the best?
Why? How would the final selection decision be made?
supplier.
Category Weight Supplier
A
Supplier
B
Supplier
C
Rating Score Rating Score Rating Score
Design 10% 4 0.4 3 0.3 2 0.2
Delivery 30% 2 0.6 3 0.9 5 1.5
Warranty 20% 5 1 1 0.2 2 0.4
Price 40% 3 1.2 5 2 4 1.6
Total
Weighted
Score
3.2 3.4 3.7
The weighted score is highest for Supplier C suggesting that they may be the best supplier
to choose. However, judgment should be used to make the final decision.

10-13
9. Simply Chocolate, a retailer selling gourmet candy, has decided to expand its market by
adding online sales. The supply and marketing managers must select a company to develop a
website. Based on an initial screening, the team has narrowed the list to four potential suppliers.
Based on these ratings which supplier appears to be the best? Why? How would the final
selection decision be made?
supplier.
Company Weight Web-
Tex
Cool-
Web
D.
Designs
Major
Mkt
Rating Score Rating Score Rating Score Rating Score
Number of
sites
developed
45 % 3 1.35 1 0.45 4 1.8 5 2.25
Technical
expertise
30 % 3 0.9 3 0.9 5 1.5 4 1.20
Responsive
-ness
15 % 4 0.6 5 0.75 3 0.45 1 0.15
Price 10 % 4 0.4 5 0.5 3 0.3 1 0.10
Total
Weighted
Score
3.25 2.6 4.05 3.70
D.Designs has the highest overall rating at 4.05 suggesting that they may be the best
supplier to select. However, judgment should be used to make the final decision.

10-14
10. The senior buyer at How Does Your Garden Grow Inc needs to select a supplier for plastic
patio chairs for a one-year contract. The chairs will be shipped to the company’s distribution
center in Toledo Ohio. Three potential suppliers have been identified and the data were gathered.
Develop a weighted-point model. Based on this model, which supplier should be selected?
What other factors should be considered?
Company ABC Molding Perfection Plastics I-Products
Annual sales $ 9 million $ 80 million $ 30 million
Plant location Erie, PA Oakland, CA St. Louis, MO
Purchase price per
unit*
$9.50 $11.39 $11.25
Quality (defective
parts per million)
300 ppm 60 ppm 160 ppm
Delivery (% on
Time)
99.5% 90% 94%
Transportation Time 1 day 5 days 2 days
*Shipping is not included.

10-15
Supplier Assessment Scores
ABC Molding
Perfection
Plastics I-Products
Category Weight Rating Score Rating Score Rating Score
Quality performance
and systems
50% 2 1 5 2.5 3 1.5
Management
capabilities and
attitudes *
10% 3 0.3 5 0.5 3 0.3
Delivery performance
20% 5 1 1 0.2 3 0.6
Purchase price
20% 5 1 2 0.4 2 0.4
Total Weighted Score
3.3 3.6 2.8
*All scores on a five-point scale with 1 = poor, 5 = excellent
Perfection Plastics has the highest weighted score of 3.6 so may be the best supplier to use.
It is the largest company so it may have more resources to grow and expand if needed. One
concern is the location of the company in Oakland CA. The company must hold more
inventory because of the long transportation lead time of five days and the less reliable
delivery performance (late 10% of the time). What are the costs of holding the extra
inventory? How often will the company’s team need to visit the supplier? Travel will
increase costs.
The variable costs are the direct labor and direct materials. Assume that the $60,000 in
equipment will be allocated over the three-year life of the sauce so $20,000 per year in
depreciation costs will be incurred. Other overhead costs are not directly estimated but are

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Managing Operations Across the Supply Chain 3rd Edition Swink Solutions Manual

Hamilton Grange
LEXANDER HAMILTON, although born in another colony, was
identified with the city from boyhood and married into a New
York family.
42
The genuine New Yorker seems always to have had a
certain regard for the memory of Hamilton, ascribable perhaps to his
untimely taking off, to a sentiment of having been, as it were,
robbed of the services of a great man, and to the strong light
thrown upon the contrast between his traits and those of his
distinguished and brilliant antagonist.
He had faults, but they were very human ones, while those of
his adversary tended toward the incarnation of selfishness. His
career is probably more familiar to the people than that of any of the
other characters connected with the State of New York during the
Revolutionary era. The site of the house (named after the estate of
his grandfather in Ayreshire, Scotland) was chosen by him in order
to be in proximity to the house of his friend, Gouverneur Morris, at
Morrisania. The situation at that time, like that of the Jumel house,
commanded an extensive view of the Hudson and Harlem rivers and
Long Island Sound. It was then about eight miles from town, so that
it was his habit to drive in every day. It was not to this house that he
was brought after the disastrous event of July 11, 1804. His friend
William Bayard had received an intimation of the proposed
encounter, and was waiting when the boat containing him reached
the New York shore. Hamilton was carried to his house and died
there the next day. His wife and children were with him. One
daughter, overcome by two such dreadful events in the family within
a short period, lost her reason.
43
The whole city was affected.
Business was suspended. Indignation was universal. Burr’s followers

walked in the funeral procession. Talleyrand said of Hamilton: “Je
considére Napoleon, Fox, et Hamilton comme lest trois plus grande
hommes de notre époque, et si je devais me prononcer entre les
trois, je donnerais sans hesiter la première place a Hamilton.”

The Jumel House
HIS house was built in 1758 by Captain (afterwards Colonel)
Roger Morris of the British army, who had been an aide of
General Braddock. Morris married a daughter of Colonel Philipse. The
Philipse estate embraced a great part of the present Westchester
and Putnam counties. The manor hall erected about 1745 (the oldest
part probably about 1682) now constitutes the City Hall of
Yonkers.
44
In that house, on July 3, 1730, was born Mary Philipse,
and in the drawing-room on Sunday afternoon, January 15, 1758,
she was married to Captain Morris by the Rev. Henry Barclay, rector
of Trinity, and his assistant, Mr. Auchmuty.
A paper on “The Romance of the Hudson,” by Benson J. Lossing,
published in Harper’s Magazine for April, 1876, gives the following
account of the wedding: “The leading families of the province and
the British forces in America had representatives there. The marriage
was solemnized under a crimson canopy emblazoned with the
golden crest of the family.... The bridesmaids were Miss Barclay, Miss
Van Cortlandt, and Miss De Lancey. The groomsmen were Mr.
Heathcote, Captain Kennedy, and Mr. Watts. Acting Governor De
Lancey (son-in-law to Colonel Heathcote, lord of the manor of
Scarsdale) assisted at the ceremony. The brothers of the bride ...
gave away the bride.... Her dowry in her own right was a large
domain, plate, jewelry, and money. A grand feast followed the
nuptial ceremony, and late on that brilliant moonlit night most of the
guests departed.
“While they were feasting a tall Indian, closely wrapped in a
scarlet blanket, appeared at the door of the banquet hall, and with

measured words said: ‘Your possessions shall pass from you when
the eagle shall despoil the lion of his mane.’ He as suddenly
disappeared.... The bride pondered the ominous words for years ...
and when, because they were royalists in action, the magnificent
domain of the Philipses was confiscated by the Americans at the
close of the Revolution, the prophecy and its fulfillment were
manifested.”
45
While in New York in 1756 Washington stayed at the house of
his friend, Beverly Robinson, who had married a sister of Miss
Philipse, and there is no doubt that her charms made a deep
impression upon him, but there is no evidence that she refused him.
Manor Hall, Yonkers, 1682
After the Revolution Colonel Philipse withdrew to Chester,
England, died there in 1785, and was buried in Chester Cathedral,

where there is a monument to his memory. Some of his descendants
are now living in England, as well as descendants of Colonel and
Mrs. Morris. “A part of the Philipse estate was in possession of
Colonel Morris in right of his wife, and that the whole interest should
pass under the (confiscation) act, Mrs. Morris was included in the
attainder.”
46
It is believed that Mrs. Morris and her sisters were the
only women attainted of treason during the Revolution. “In 1787 the
Attorney General of England examined the case and gave the
opinion that the reversionary interest was not included in the
attainder,” and was recoverable, and in the year 1809 Mrs. Morris’s
son, Captain Henry Gage Morris, of the royal navy, in behalf of
himself and his two sisters, sold their reversionary interest to John
Jacob Astor for twenty thousand pounds sterling. In 1828 Mr. Astor
made a compromise with the State of New York by which he
received for these rights five hundred thousand dollars, with the
understanding that he should execute a deed with warranty against
the claims of the Morris family, in order to quiet the title of the
numerous persons who had bought from the commissioners of
forfeitures. This he did.
In 1810 the property was bought by Stephen Jumel, a wealthy
French merchant. There he entertained Louis Philippe, Lafayette,
Joseph Bonaparte, Louis Napoleon, and Henry Clay. After Jumel’s
death it came into the possession of his widow. Aaron Burr, in his old
age, married Madame Jumel. After he had made away with a good
deal of her money, she got rid of him. He withdrew to other fields of
action and died somewhere on Staten Island.
During the Revolution Washington had his headquarters here
from September 16 to October 21, 1776, and revisited it,
accompanied by his cabinet, July, 1790.
The house is now in the control of the Department of Parks and
is shown to the public.

Gracie House—East River Park
RCHIBALD GRACIE, a native of Dumfries, Scotland, of an old
Scotch family, came to this country about the time of the
close of the Revolutionary War and established himself as a
merchant. He became one of the largest if not the largest ship owner
in the country, his ships visiting, it is said, every port in the world. He
was a man of the highest character. Oliver Wolcott said of him: “He
was one of the excellent of the earth, actively liberal, intelligent,
seeking and rejoicing in occasions to do good.” Washington Irving
wrote (January, 1813): “Their (the Gracies’) country place was one of
my strongholds last summer. It is a charming, warm-hearted family
and the old gentleman has the soul of a prince.” Mr. Gracie lost
greatly as a result of the Berlin and Milan decrees, over a million
dollars, it is said. It is believed that he was the largest holder of the
celebrated “French Claims,”
47
which Congress with outrageous
persistence refused or neglected to pay for generations. He married
Esther, daughter of Samuel Rogers and Elizabeth Fitch, daughter of
Thomas Fitch, Governor of Connecticut.
There was an old house at Gracie’s Point belonging to Mrs.
Prevoost, and this he either altered and enlarged or else removed
entirely and built the present structure, but at what time it is not
known. In the year 1805 Josiah Quincy was entertained there at
dinner. He describes enthusiastically the situation, overlooking the
then terribly turbulent waters of Hell Gate. He said: “The shores of
Long Island, full of cultivated prospects and interspersed with
elegant country seats, bound the distant view. The mansion is
elegant in the modern style and the grounds laid out in taste with
gardens.”
48
Among the guests at that dinner were Oliver Wolcott,

Judge Pendleton, Hamilton’s second, and Dr. Hosack, who later
married Mrs. Coster.
William Gracie, the eldest son, married the beautiful Miss
Wolcott, daughter of Oliver Wolcott, Secretary of the Treasury under
Washington. A great reception was given by Mr. and Mrs. Archibald
Gracie to the bride at this house. All the bridesmaids, groomsmen,
and a large company were assembled when the bride died suddenly
of heart disease. His daughter Hester was married in the parlor of
the house to William Beach Lawrence, afterwards Governor of Rhode
Island. Another daughter married James Gore King, the eminent
banker, and another Charles King, afterwards president of Columbia
College, both being sons of Rufus King of Revolutionary fame. On
one occasion during the Napoleonic wars, a French vessel was
chased by an English frigate into the neutral harbor of New York.
The Englishman lay in the lower bay ready to attack the Frenchman
when he should return through the Narrows. Being sure of his prize
he was off his guard. The French captain, taking a skillful pilot,
slipped up the East River, a feat believed impossible for so large a
vessel. In rounding Gracie’s Point a sailor on a yardarm was swept
from his perch by the overhanging branches of a great elm that was
standing on the lawn as late as 1880. With wonderful agility, the
sailor seized the limbs and swinging from one to another reached the
trunk, down which he slid to the ground. Charles King, calling to the
Frenchman, rushed to the other side of the Point, put him in his boat
and followed the man-of-war, although it had then swung over to the
other side of the river. By skillful management he reached the vessel
and the sailor scrambled aboard. Anyone who remembers the waters
of Hell Gate before the rocky bottom was blown up by the
Government will admit that Mr. King did some vigorous rowing. The
man-of-war escaped by way of the Sound, much to the chagrin of
the English.
Many distinguished people were entertained in this house. When
Louis Philippe was here in exile he was invited to dine with Mrs.
Gracie. The carriage and four were sent to town to bring the royal
visitor, and when he arrived the family were assembled to receive

him. One of the little girls exclaimed aloud, “That is not the king, he
has no crown on his head,” at which the guest laughed good-
naturedly and said: “In these days, kings are satisfied with wearing
their heads without crowns.” An early picture shows an ornamental
balustrade on the roof of the house and also on that of the piazza,
relieving the present rather bare appearance.

The Gouverneur Morris House
49
OUVERNEUR MORRIS was one of the most interesting
characters of the Revolutionary era, interesting because he
had an individuality that distinguished him from the other worthies
of the time. Though crippled,
50
his versatility and activity of mind
and body were very great. An orator of the first rank, when but a
few years past his majority he swayed the Continental Congress with
his views upon matters of finance, a subject for which he had an
especial aptitude throughout his career. Resolving, when a young
man, to be the first lawyer in the land, he became so. By reason of
his connections, his education and abilities, during his long stay
abroad he associated on intimate terms with a vast number of the
most influential personages living at the time. The unfortunate King
and Queen of France sought his advice and aid in their troubles, as
did Lafayette and many others.
His diary published in 1888 (now out of print), written in Paris
during the early days of the French Revolution, although evidently
for his own use, is comparable with those other letters and memoirs
of the eighteenth century when writing of the sort was cultivated as
a fine art.
His father’s will states: “It is my desire that my son, Gouverneur
Morris, may have the best education that is to be had in England or
America.” Great pains were taken that this should be carried out, so
that he should be fitted for any career that might open to him.
51
He
was a member of the Provincial Congress of New York, in 1775,
“serving on the various committees with such well-balanced
judgment as to command the respect of men of twice his age and
experience.” Twice elected to the Continental Congress, he was a

chairman of three committees for carrying on the war,
52
wrote
continually on all subjects, especially that of finance, and at the
same time practiced law, doing all this before he was twenty-eight
years of age. After five years of devotion to public affairs, he became
a citizen of Philadelphia and settled down to the practice of his
profession.
In 1787, as a delegate from Pennsylvania, he took his seat in the
convention which met to frame the Federal Constitution. He had
been connected in certain financial ventures with William Constable
of New York, which had been eminently successful, and in
November, 1788, led partly by matters relating to these and partly
by the desire to travel, he decided to visit France. His life on the
other side became so crowded with interesting and important events
that this visit was prolonged far beyond his intention. It was ten
years before he returned. He was furnished by Washington with
letters to persons in England, France, and Holland. He was present
at the assembling of the States-General at Versailles, which has been
called the “first day of the French Revolution,” and from that time on
was au fait with all the important events of that exciting period. At
times he was in almost daily communication with the Duchess of
Orleans, Madame de Staël, Talleyrand, and hosts of others equally
important.
He was soon recognized as applying a clear brain to the solution
of any important question submitted to him, and we find him writing
a memoir for the guidance of the king and the draught of a speech
to be delivered before the National Assembly. The Monciel scheme,
usually mentioned in the biographies of Morris, was a well-conceived
plan to get the king out of Paris. Monciel, one of the ministry,
consulted Morris as to the details of the plan, and the king deposited
with him his papers and the sum of seven hundred and forty-eight
thousand francs. Everything was discreetly arranged and success
nearly assured when, on the morning fixed for the king’s departure,
he changed his mind and refused to budge. Later the money was

nearly all withdrawn, leaving a small balance in Morris’s hands which
he returned to the Duchess d’Angoulême.
53
In 1789 Washington had written him a letter requesting him to
visit England and endeavor to facilitate the carrying out of the terms
of the treaty between the two countries, but the English governing
class at that day had no desire to facilitate anything in which this
country was interested. He had many interviews with Leeds and Pitt,
but was always met with a policy of vagueness, postponement, and
unlimited delay, so that he accomplished little. It was partly on this
account that when Washington nominated him as Minister to France
in 1791, the nomination was opposed. His views also regarding the
condition of France were well known. He did not deem that country
fitted for a radical change of government nor for the development of
the wild theories of government that were there rampant.
54
The
sanity of these views was proved by subsequent events, but many
senators did not regard him as suitable to represent this republic. He
was, however, confirmed by a moderate majority. He continued to be
Minister until Genet was recalled at the request of Washington. Then
France requested his recall on the ground of “reciprocity.”
Monroe arrived in Paris in August, 1794. Morris intended to
return, but changed his plans and decided to spend another year in
Europe visiting some of the principal courts and traveling
55
through
various countries, but events were so interesting and produced so
much stir and excitement that it was fully four years before he
returned.
While in England he was presented at court, November 25,
1795.
56
Finally in October, 1798, he sent his steward to New York
with all his “books, liquors, linens, furniture, plate and carriages,”
and soon after followed himself.
On his mother’s death in 1786, the estate of Morrisania devolved
on his eldest brother, Staats Morris; but he, having no intention of
living in this country, willingly sold it to him, including his father’s
house, in which he was born. The house he found in poor condition,

and at once set about the task of repairing and adding to it. After its
restoration, he settled there, and for the rest of his life the house
became the scene of a continuous hospitality, not only to the most
eminent Americans of the day, but to nearly every foreigner of
distinction that came to this country.
He was elected a United States Senator and was always
interested in public affairs. He is said to have been the originator of
the Erie Canal. In December, 1809, he married Miss Randolph of
Virginia. In May, 1804, he was present at the deathbed of his friend,
Alexander Hamilton, and later delivered the funeral oration.
Sparks
57
says: “The plan of his house conformed to a French
model, and though spacious and well contrived was suited rather for
convenience and perhaps splendor within than for a show of
architectural magnificence without.” To a friend he wrote: “I have a
terrace roof of one hundred and thirty feet long,
58
to which I go out
by a side or rather back door, and from which I enjoy one of the
finest prospects while breathing the most salubrious air in the
world.” The parquet floors of all the rooms were brought from
France. The library, wainscoted and ceiled with Dutch cherry panels,
also imported, was in the early days hung with white and gold
tapestry. The room contained the mahogany desk, still preserved,
trimmed with brass (said to have been a present from one of the
royal family), at which he carried on his correspondence with so
many distinguished personages, correspondence often relating to
loans of money to the Duchess of Orleans, Madame de Lafayette,
Louis Philippe, and hundreds of others.
The reception room, twenty-two by thirty feet and fourteen feet
high, was also a paneled room with mirrors set in the wall in the
French style. It contained a number of pieces of gilt furniture,
originally covered with white silk embroidered in gold, with designs
from Boucher which he had brought with him from France. The
dining room of peculiar shape (a half octagon) was paneled in dark
wood and contained a curious reminder of life during Revolutionary

days, a dumbwaiter placed near each guest so that servants need
not be admitted to overhear the conversation.
59
Morris died on November 6, 1816, in the room in which he was
born. Almost the last letter he wrote was to plead with the Federal
Party to “forget party and think of our country. That country
embraces both parties. We must endeavor therefore to save and
benefit both.” What statesman to-day would put forth such a
sentiment?
60

Van Cortlandt House
HE property on which the house stands belonged in the
seventeenth century to the Hon. Frederick Philipse and was
sold by him in the year 1699 to his son-in-law, Jacobus Van
Cortlandt, who had married his daughter Eva. The house was built in
1748 by Frederick Van Cortlandt, only son of Jacobus, who married
Frances Jay, daughter of Augustus Jay, the Huguenot. His will, dated
October 2, 1749, states: “Whereas I am now finishing a large stone
dwelling house on the plantation in which I now live, which with the
same plantation will, by virtue of my deceased father’s will, devolve,
after my decease, upon my eldest son, James,” etc.
61
During the Revolutionary War the neighborhood was constantly
the scene of conflicts. Washington visited the house in 1781, and on
the hill to the north disposed part of his army, which lighted camp
fires while he was quietly withdrawing the rest of his troops to join
Lafayette before Yorktown. There was a bloody engagement near
the house on August 31, 1778, between the British, under
Lieutenant-Colonel Simcoe, and a body of Stockbridge Indians. The
Indians fought with great bravery and desperation, dragging the
cavalrymen from their horses, but were ultimately dispersed, their
chief being killed.
62
Washington slept here the night before the evacuation of the city
by the British, November 25, 1785. The estate has been bought by
the city and is now known as Van Cortlandt Park. It contains 1,070
acres. There is a lake covering sixty acres and a parade ground for
the National Guard on a level meadow of 120 acres.

The house is used as a museum and is crowded with interesting
relics.

The Bowne House—Flushing
HIS house was built in 1661 by John Bowne, a native of
Matlock, Derbyshire, England, in whose church he was
baptized in the year 1627. About 1672 George Fox, founder of the
sect of Quakers or Friends, visited Flushing and held meetings there.
Bowne’s wife
63
frequently attended the meetings, and after a time
joined the sect. As a result of this, Quakers were often entertained at
the house. Governor Stuyvesant had Bowne arrested for “harboring
Quakers,” and he was thrown into jail. Prior to this Henry Townsend,
of Oyster Bay, had been subjected to the same treatment. Bowne,
being a man of considerable independence, remained obdurate. He
was then banished to Holland. He presented his case to the Dutch
West India Company in such a manner that he was returned in a
special ship with the following rebuke to the Governor and Councils
of the New Netherlands, 1663: “We finally did see from your last
letter you had exiled and transported hither a certain Quaker named
John Bowne, and although it is our cordial desire that similar and
other sectarians might not be found there, yet, as the contrary
seems to be the fact, we doubt very much if vigorous proceedings
against them ought not to be discontinued, except you intend to
check and destroy your population, which, however, in the youth of
your existence ought rather to be encouraged by all possible means,
wherefore it is our opinion that some connivance would be useful
that the conscience of men, at least, ought ever to remain free and
unshackled.
“Let everyone be unmolested as long as he is modest, as long as
his conduct, in a political sense, is irreproachable, as long as he does
not disturb others or oppose the Government.” Signed, “The
Directors of the West India Company, Amsterdam Department.”

The house has always remained in the possession of the
descendants of the first owner. House and furniture are in a good
state of preservation; they are in charge of a caretaker and shown to
visitors.

The Billop House
OR more than a century Staten Island was practically in the
control of the Billop family. The Billops for several generations
had led active and valiant careers in the service of the sovereign.
One, James, in the sixteenth century, is said to have won the
friendship of Queen Elizabeth by risking his own life in order to save
hers. They had favors also from the Stuart line.
Christopher, born in 1638, received a naval training by command
of Charles I. He was commissioned captain and made important and
adventurous voyages, in one of which he was wounded, captured by
Turkish pirates and abandoned, to be later rescued by a passing
ship. In 1667, whether by order of Charles II or on his own account
it is not known, he sailed from England in his vessel, the Bentley,
and came cruising in the waters of the New Netherlands. The
tradition is that the Duke of York, to determine the ownership of the
islands in the bay, decided that any island that could be
circumnavigated in twenty-four hours belonged to the province of
New York, and Billop, having proved that Staten Island was so
included by sailing around it in the required time, was presented
with 1,163 acres in the southern part of the island. On this tract he
built in 1668 the stone house here presented. The stones and
lumber were obtained in the vicinity, but the cement was brought
from England and the bricks from Belgium.
In the early records his name appears as showing that he had
several public positions, but apart from that little is known about him
except that he held a military command and had a controversy with
Governor Andros to his disadvantage at first, but later he succeeded
in having the governor recalled to England.

In the year 1700 he sailed for England in the Bentley, but was
never heard of again. By some writers it is thought that he was
ordered back, inasmuch as a pension was assigned to his widow by
the king. Captain Billop married a Miss Farmer, sister of a Supreme
Court judge in the neighboring province of New Jersey. They had
one child, a daughter, who married her cousin, Thomas Farmer, and
he, succeeding to the manor of Bentley, changed his name to Billop.
Both died young and their tombstones are to be seen at the house
to-day. Christopher Billop, their only son, born 1735, was a
prominent man in public affairs throughout his life. In the Revolution
he was intensely loyal to the crown, and became a colonel in the
British army. Twice he was captured. The New Jersey colonists were
especially bitter toward him, and once by keeping men stationed in
the steeple of St. Peter’s Church at Perth Amboy they observed him
going into his house. Immediately they took boats, crossed the river
and made him prisoner. By order of Elisha Boudinot (Com. Pris. of
New Jersey) he was thrown into jail at Burlington, hands and feet
chained to the floor and fed only on bread and water. Here his
companion in captivity was Lieutenant-Colonel Simcoe of the
Queen’s Rangers, probably the same Simcoe who was in the
engagement near the Van Cortlandt house. Billop was exchanged for
a captain who had been on the prison ship. The second time he was
taken he was released by Washington at the solicitation of Lord
Howe, commander in chief of the British forces.
After the battle of Long Island, Howe thought it an opportune
time to offer favorable terms to the colonists if they were willing to
lay down their arms. Accordingly he dispatched General Sullivan
(then a prisoner) to Congress requesting them to send a committee
to negotiate. This committee, composed of Benjamin Franklin,
Edward Rutledge, and John Adams, met Howe at the Billop house.
“Along the sloping lawn in front of the house, long lines of troops
that formed the very flower of the British army were drawn up
between which the distinguished commander escorted his no less
distinguished guests.”
64
The conference was held in the northwest
room on the ground floor. It resulted in nothing, the colonists

refusing to accede to any terms not involving their independence.
About 1783–84 Billop withdrew to New Brunswick, and joined that
army of estimable persons who, despoiled of their possessions, were
driven from the land for their loyalty to their king. There for years he
held prominent offices in the Assembly and in the Council and died
at St. John, March 23, 1827, at the age of ninety-two. At his funeral
the highest honors of the town were paid to his memory.
Billop was evidently a complete type of the country gentleman
and tory squire. According to Mr. Morris, in his “Memorial History of
Staten Island,” the following description of him was given by a
friend: “Christopher Billop was a very tall, soldierly looking man in
his prime. He was exceedingly proud and his pride led him at times
to the verge of haughtiness. Yet he was kind-hearted, not only to
those he considered his equals, but to his slaves as well as to the
poor people of the island. No one went from his door at the old
manor hungry. It was his custom to gather the people of the island
once a year on the lawn in front of his house and hold a ‘harvest
home.’... Passionately fond of horses, his stable was filled with the
finest bred animals in the land. He was a magnificent rider and was
very fond of the saddle. He was an expert shot with the pistol, which
once saved his life when he was attacked by robbers. Christopher
Billop was not a man to take advice unless it instantly met with his
favor.... Lifelong friends pleaded with him to join the cause of
independence at the commencement of the Revolution, but he chose
to follow the fortunes of royalty. He was a good citizen, a noble
man!”
Before the Revolution the house was noted for its hospitality and
gayety in the Colonial society of the day. The owner entertained
lavishly and at the time of the war he received there Generals Howe,
Clinton, Knyphausen, Cleveland, Cornwallis, Burgoyne, and many
others. The interior of the house is extremely plain. Presumably in
the year 1668 the house decorator had not made his appearance.
The walls are three feet thick and the woodwork as sound as on the
day it was built. There is of course a ghost room, with “that spot on
the floor that cannot be washed out” where murder is said to have

been done. Below there is a dungeon with massive iron gate, and
the marks are still visible where prisoners, American and then
British, tried to cut their way out through the three-foot wall and
arched ceiling.
65
It is said there was an underground passage
leading to the river.
In the basement Fenimore Cooper laid one of the scenes in his
novel of the “Water Witch.”
The grounds, once laid out with parklike lawns and flower beds,
are now in the last stages of dilapidation.

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