The hotel was started by a group of local businessmen who had the company of Robinson and Bardwell build it (they were also responsible for the
Alabama State Capitol), with architect Samuel Holt, on the corner of Montgomery and Commerce Streets. The work started in 1846 and was finished in the fall of 1847. When the first State Capitol burned down, on December 14, 1849, the legislature was in session in the Exchange. In 1855, Sterling Lanier (who owned three hotels in the
American South) assumed ownership, and a variety of managers followed. William B. Lanier (one of Sterling's sons), and his sister's husband, Abram P. Watt, operated the hotel for a while, with "meetings of the legislature and party conventions contribut[ing] largely to the business of the hotel". On the eve of the
American Civil War, Watt had eight enslaved African Americans who labored in the hotel. Clifford Lanier, Lanier's grandson and the brother of poet
Sidney Lanier, came into ownership (with an R. L. Watt) in January 1872. Historian Matthew Powers Blue, whose history of the city was published in 1878, noted that "few hotels have as high a reputation, well constructed, well officered, and complete in all of the appointments." During the
American Civil War, when Montgomery (briefly) was the capital of the Confederacy, president
Jefferson Davis had his headquarters (and his living accommodations) at the Exchange. Secessionist
William Lowndes Yancey introduced Davis to the Montgomery citizens from the hotel balcony on Commerce Street, where he said, "the man and the hour have met", a phrase that was later remembered with a plaque in the hotel. Davis continued to patronize the hotel. He was there in April 1879, and spoke there on the piazza. He stopped there again in April 1886, A bronze plaque on the second floor (of the new building) commemorated Davis's sojourn there, and a plaque put up by the
Daughters of the Confederacy in 1913, on the side of Montgomery Street, commemorated his inauguration speech. One of its guests was W. J. Scott, the editor of the Atlanta-based weekly ''
Scott's Monthly'', and after Lanier recognized his name in the register he introduced himself to Scott, who went on to publish a number of Lanier's poems. In 1887, US president
Grover Cleveland visited Montgomery, and spoke from the hotel balcony. The hotel was demolished in 1904. The new Exchange was finished in 1906 (or 1905); the four-story building was replaced by an eight-story building. It was torn down in 1974, at a time when motels were replacing hotels and Montgomery's nightlife had declined. A "handsome polished granite and glass building" owned by the Colonial Company was built on the site in the mid-1980s. == Reputation and demise ==