The Mead incident-

There has been considerable controversy over an alleged incident that happened at the New York testimonial banquet on May 25, 1859. The confusion originated in a pamphlet on Morphy written by Charles A. Buck entitled Paul Morphy: His Later Life and published by Will H. Lyons in Newport, Kentucky in 1902. The contents of the pamphlet were first printed in the Evening Gazette of Cedar Rapids, Iowa in it's December 29, 1900 issue and reprinted in the American Chess World in it's January 1901 issue. The particular pamphlet has been the source of much misinformation about Morphy and has lead chess many chess writers, including Philip Sergeant and Frances Parkinson Keyes, astray.

        Colonel Charles Mead

Philip Sergeant, in Morphy's Games of Chess, wrote:

Buck, in "Paul Morphy: His Later Life," describes a dramatic incident at this presentation. Colonel Charles Mead, as chairman of the reception committee, made in his address as allusion to chess as a profession, and referred to Morphy as its most brilliant exponent. "Morphy took exception to being characterized as a professional player, even by implication, and he resented it in such a way as to overwhelm Colonel Mead with confusion. Such was his mortification at this untoward event that Colonel Mead withdrew from further participation in the Morphy demonstration."

No such incident occurred. Contrary to Buck's contention, Colonel Mead never characterized Morphy as a professional chess player, nor did he use the word "profession" during the proceedings. Mead introduced the speakers, mentioning where the chessmen were to be seen, and closed the meeting as reported by the New York Times. He was also with Morphy the following evening at another testimonial....

...Mead did not retire in confusion and mortification, but remained as chairman throughout the proceedings as previously stated.

The Century Club -

Located at at 495 Broadway, the Century Club was founded on January 3, 1847 by members of the former Sketch Club.

According to the Historic Annals of the National Academy of Design (Philadelphia, 1865):

THE NATIONAL ACADEMY OF DESIGN
A society of American painters and sculptors, whose headquarters is in New York City. The first Academy of Arts in New York City was founded in 1802 by prominent citizens, among whom was only one professional artist, Trumbull, but it excited little interest until 1825, when a secession of the younger artists occurred. Dissatisfied with the character of the old society,
they formed a new association, called the New York Drawing Association, directed by practical artists. The present name was adopted in 1828, and the society, composed of thirty members, was incorporated. Prof. S. F. B. Morse (q.v.) was the chief organizer of the movement, and was twice president of the National Academy, in 1827-45 and again in 1861-62. In this capacity he delivered the first lecture on the fine arts ever given in America. The Sketch Club, formed by C.C. Ingham, one of the original members of the National Academy of Design, afterwards became the Century Club (1846). The National Academy is founded on the plan of the Royal Academy of London, and its active members are divided into academicians and associates,
the number being limited to one hundred, the only qualification that they be professional artists. There are also honorary members and fellows of the Academy who have certain privileges. The society is governed by a council consisting of its officers and six members, and the instructors in the school of design are chosen from among its ranks. The Academy stands for the
conservative, traditional element in art, as opposed to the more modern sentiments which were represented in the earlier work of the Society of American Artists (q.v.). It held its seventy-eighth annual exhibition in 1903. At these exhibitions the Clarke prize of $300, and the Hallgarten prizes of $300, $200, and $100, respectively, are distributed, and the Inness gold medal for the best landscape. The school of design connected with the Academy has been in existence since 1825, and the instruction
includes classes in the antique, life, still life, anatomy, painting, perspective, composition, etching, and medal and coin engraving. These classes are open from October until May, and are free to students admitted on the evidence of the school committee. The average attendance of pupils is about 300.

Some of the founding members included William Jones Hoppin, diplomatist, writer; Dudley B. Fuller , manufacturer; John Gadsby Chapman, artist.

This Knight belonged to Morphy,  though not from the set presented to him at the New York  Testimonial. According to Philip Sergeant, the chessboard was valued at $2000 (in 1859 money) with ebony and mother-of-pearl squares, while the chessmen, valued at $1500, were of gold and silver: gold representing the forces of civilization and silver representing the forces of barbarism.

Read a detailed description (with sketches) of Morphy's testimonial chessmen and chessboard!

After Morphy's death both the board and pieces were auctioned off and became the property of Walter D. Denegre, a gentleman from New Orleans who acted as a middleman for an unknown client.  For a long time there wasn't any hint of their whereabouts. Then the British Chess Magazine mentioned in it's December 1885 issue that the "gold and silver men were offered for sale to the St. George's Chess Club 'at the rather prohibited price of  £1,000.'"
 

In the early 20th century John Frederick Keeble, a chess player/problem composer/chess historian who lived from 1855 to 1939, made an effort to trace their location. He manage to follow the trail to Count Gasquet (of France, but living in New Orleans) who claimed to have obtained the chessboard but was unaware of the location of the pieces. The trail grew cold after that . The board and pieces are still unaccounted for today.

Morphy had pawned his watch to his friend Arnous de Rivière to finance his lawsuit against his brother-in-law, John Darius Sybrandt.
W. J. A. Fuller claimed that Rivière showed him the watch at the café de Régence in 1885. Augustus Mongredien's son claimed to
have seen the watch in Paris in 1921 where it was offered for sale at the price of 6,000 francs by the heirs of de Rivière.

     "The board, which had mother-of-pearl and ebony squares, was of rosewood inlaid with silver, and at each corner were the letters P.M. in a wreath of gold. On a silver plate on one border was the inscription: To Paul Morphy, a recognition of his genius and a testimony of regard from the friends and admirers in New York and Brooklyn, 1859. On the opposite border was another silver plate, bearing the names of fourteen players with claims to the chess championship of the world.
     The men were of solid gold, representing Romans, and silver, representing Barbarians, and they were mounted on bases of cornelian.
     The watch had a stem surmounted by a coronet, studded with diamonds and the places of the numerals were taken by representations of the chess pieces in red and black. On the case were the initials P.M., the arms of the United States, and the inscription: To Paul Morphy from the testimonial Committee of the New York Chess Club, as their tribute to his genius and worth. New York, May 1859.
     When the presentation had been made, with many flattering words, Morphy expressed his thanks in a speech of which one passage may be quoted:

'A word now on the game itself. Chess never has been and never can be aught but a recreation. It should not be indulged in to the detriment of other and more serious avocations - should not absorb or engross the thoughts of those who worship at its shrine, but should be kept in the background, and restrained within its proper province. As a mere game, a relaxation from the severe pursuits of life, it is deserving of high commendation.'"

Morphy Gleanings by Philip Sergeant